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ICANN close to becoming $200 million gift-giver

Kevin Murphy, July 27, 2020, 17:53:49 (UTC), Domain Policy

Remember how ICANN raised hundreds of millions of dollars auctioning off new gTLD contracts, with only the vaguest of ideas how to spend the cash? Well, it’s coming pretty close to figuring out where the money goes.

The GNSO Council approved a plan last Thursday that will turn ICANN into a giver of grants, with some $211 million at its initial disposal.

And the plan so far does not exclude ICANN itself for applying to use the funds.

The plan calls for the creation of a new Independent Project Applications Evaluation Panel, which would be charged with deciding whether to approve applications for this auction cash.

Each project would have to fit these criteria:

  • Benefit the development, distribution, evolution and structures/projects that support the Internet’s unique identifier systems;
  • Benefit capacity building and underserved populations, or;
  • Benefit the open and interoperable Internet

Examples given include improving language services, providing PhD scholarships, and supporting TLD registries and registrars in the developing world.

The evaluation panel would be selected “based on their grant-making expertise, ability to demonstrate independence over time, and relevant knowledge.” Diversity would also be considered.

While existing ICANN community members would not be banned from being on the panel, it’s being strongly discouraged. The plan over and over again stresses how there must be rigorous conflict-of-interest rules in place.

What’s less clear right now is what role ICANN will play in the distribution of funds.

The Cross-Community Working Group that came up with the proposal offers three possible mechanisms, but there was no strong consensus on any of them.

The one being pushed, “Mechanism A”, would see ICANN org create a new department — potentially employing as many as 20 new staff — to oversee applications and the evaluation panel.

Mechanism B would see the same department created, but it would work with an existing independent non-profit third party.

Mechanism C would see the function offloaded to a newly created “ICANN Foundation”, but ICANN’s lawyers are not keen on this idea.

The Intellectual Property Constituency was the lone dissenting voice at Thursday’s GNSO Council vote. The IPC says that support for Mechanism A actually came from a minority of CCWG participants, depending on how you count the votes.

It thinks that ICANN should divorce itself as far as possible from the administration of funds, and that not to do so creates the “unreasonable risk” of ICANN being perceived as “self-dealing”.

But as the plan stands, ICANN is free too plunder the auction funds at will anyway. ICANN’s board of directors said as long ago as 2018:

ICANN maintains legal and fiduciary responsibility over the funds, and the directors and officers have an obligation to protect the organization through the use of available resources. In such a case, while ICANN would not be required to apply for the proceeds, the directors and officers would have a fiduciary obligation to use the funds to meet the organization’s obligations.

It already took $36 million from the auction proceeds to rebuild its reserve fund, which had been diminished by ICANN swelling its ranks and failing to predict the success of the new gTLD market.

The CCWG also failed to come to a consensus on whether ICANN or its constituent parts should be banned from formally applying for funds through the program.

Because the plan is a cross-community effort, it needs to be approved by all of ICANN’s supporting organizations and advisory committees before heading to the ICANN board for final approval.

There also looks to be huge amount of decision-making and implementation work to be done before ICANN puts its hand in its pocket for anyone.

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