[AfrICANN-discuss] Preliminary Report for Special Meeting of the ICANN Board of Directors - 16 October 2007

[Anne-Rachel Inné]

Preliminary Report for Special Meeting of the ICANN Board of Directors

[Formal Minutes are still to be approved by the ICANN Board]

16 October 2007

A Special Meeting of the ICANN Board of Directors was held via
teleconference on 16 October 2007. Chairman Vinton Cerf called the meeting
to order at 1.11 P.M. U.S. Pacific Daylight Time (PDT).

The following Directors participated in all or part of the meeting: Raimundo
Beca, Chairman Vinton G. Cerf, Susan Crawford, Peter Dengate-Thrush, Vice
Chairman Roberto Gaetano, Demi Getschko, Steven Goldstein, Joichi Ito, Njeri
Rionge, Rita Rodin; Vanda Scartezini; President and CEO Paul Twomey; Bruce
Tonkin; and David Wodelet. The following Board Liaisons participated in all
or part of the meeting: Steve Crocker, SSAC Liaison; and, Janis Karklins,
GAC Liaison. The following Board Members and Liaisons were not present on
the call: Vittorio Bertola, Thomas Narten, Rajasekhar Ramaraj, Suzanne
Woolf, and Francisco da Silva. The following individuals who have been
nominated for board service as directors commencing with the 2007 Annual
General Meeting, were present as observers: Harald Alvestrand and
Jean-Jacques Subrenat, as Nominating Committee Nominees to the ICANN Board
of Directors; and, Wendy Seltzer, ALAC Liaison designate.

The following ICANN Officers and Staff participated in all or part of the
meeting: John Jeffrey, General Counsel and Secretary; Doug Brent, Chief
Operating Officer; Kevin Wilson, Chief Financial Officer; Kurt Pritz, Senior
Vice President, Business Operations; Barbara Roseman, General Operations
Manager, IANA; Denise Michel, Vice President, Policy Development; David
Conrad, Vice President of Research and IANA Strategy; and, Donna Austin,
Manager, Governmental Relations.

The Board discussed and took action on the following matters:

*Approval of Board Minutes from Special Meeting of the ICANN Board, 11
September 2007 *

The Chair introduced the proposed Board Minutes from the meeting of 11
September 2007 which had been circulated to the Board earlier and posted to
the website as a preliminary report.

Steve Goldstein moved and Demi Getschko seconded to adopt the Board minutes
of 11 September 2007 without correction.

Resolved (07.80), the minutes of the Board Meeting of 11 September 2007 are
approved.

A voice vote was taken of all Board Members present, and the motion was
approved unanimously by a vote of 13-0. In addition to the Board Member not
present for the meeting, there were technical difficulties relating to
joining Raimundo Beca to the call in time to cast his vote.

*IANA Related Issues: *

*Redelegation of the .BM ( Bermuda) Domain*

Barbara Roseman advised that the request from Bermuda for redelegation was
well supported. On 8 May 2007, IANA received a request for the redelegation
of the .BM ( Bermuda) top-level domain. The .BM domain was originally
delegated in March 1993 to Bermuda College. A request for the delegation of
.BM was submitted in August 2003. A letter from the Government of Bermuda
supported the request, however the request was ultimately closed in March
2005 due to a lack of supplemental documentation. The change does not
involve changes to the authoritative name servers for .BM, as the proposed
recipient of the delegation, which is the Registrar General of Bermuda, is
already the *de facto* manager of the .BM domain. Staff recommended that the
Board approve the re-delegation.

Steve Goldstein moved and Bruce Tonkin seconded the following resolution:

Whereas, the .BM top-level domain is the designated country-code for
Bermuda;

Whereas, ICANN has received a request for redelegation of .BM to the
Registrar General of Bermuda;

Whereas, ICANN has reviewed the request, and has determined that the
proposed redelegation would be in the best interest of the local and global
Internet communities.

It is hereby resolved (07.81), that the proposed redelegation of the .BM
domain to the Registrar General of Bermuda is approved.

A voice vote was taken of all Board Members present and the motion was
approved unanimously by a vote of 14-0.

*Discussion of the Applications for Delegation of the .EH ( Western Sahara)
Domain*

Barbara Roseman advised that there has been no further progress on the
delegation of .EH and Staff has reached the point where they are unable to
take any further action.

Staff explained that there are currently two applicants for the delegation
of the country code top-level domain (ccTLD) .EH ( Western Sahara). Both
requests meet the technical criteria for managing a top-level domain. In
cases like this, IANA has a long-standing policy of requesting that the two
contesting applicants work together to find a mutual solution that will
serve the needs of the local Internet community in the best possible
fashion. ICANN does not see a way to approve the .EH ccTLD delegation to one
of the applicants without violating its long-standing policy unless the
contesting parties are able to reach an agreement, either through their
current negotiations, or through some alternate means.

Paul Twomey noted that according to existing procedure in this circumstance
Staff would close the ticket, until such time as the issue regarding
multiple applicants is resolved.

The Chair closed off this session requesting that it be noted in the meeting
that a report was received from Staff on this matter, and that Staff will
continue to act according to procedures.

*Discussion of Registry Services Proposal from Telnic (.TEL) re: Public
Display of WHOIS information *

Kurt Pritz advised that this is submitted for information only to acquaint
Board with issues regarding the Telnic proposal and in preparation for a
possible board vote at a later meeting. The Telnic proposal contains a
complex set of issues. Two major questions arise: by what standard should
proposal be measured and how should this proposal be evaluated against that
standard.

Telnic submitted a proposal to limit the public display of Whois
information. This is of interest to constituencies who have an interest in
access to full Whois information such as the Intellectual Property
constituency who seek to protect the rights of their clients.

Kurt Pritz indicated further, that issues were raised regarding what the
proposed change should be measured against, and cited three available tools:
1) the process for considering registry services (funnel process); 2) the
Whois Procedure for Conflicts with National Laws; and 3) a request for
registry contract change. In this case the staff is using all three
standards.

The registry services funnel process provides a threshold question to
evaluate whether there are stability or security issues associated with the
proposal. In this case no such issues were identified.

The Whois Procedure for Conflicts with National Laws is not yet implemented
pending GAC input, however, interim GAC advice on this procedure was
published at the ICANN San Juan meeting. This draft procedure suggests
public consultation and requires Board approval. This evaluation is not
complete, and is expected to be discussed at the upcoming Los Angeles ICANN
Meeting.

Finally, the proposal is being evaluated as a material contract change,
requiring public posting and Board approval. As a result of public
consultations, there have been a number of iterations of the proposal.

With respect to the Whois Procedure for Conflicts with National Laws there
are two issues in the evaluation of the proposal that require careful
analysis.

First, is an evaluation of whether there is government action that might
conflict with ICANN contractual Whois requirements? Telnic is not scheduled
to start registry operations until early 2008 and there is a question as to
whether there is a government action absent an actual violation of a
national law.

The second issue is whether the modifications to the proposal made by Telnic
sufficiently address concerns raised by members of the community. As a
result of comment in reaction to their first proposal, Telnic has
significantly modified its request. The 13-step procedure for an interested
party with a reason to gain access to full information has been eliminated.
It has been replaced with a streamlined process where qualified individual
have full access through a user name and password issued by Telnic. In
another change, Telnic abolished a fee for the service, replacing it with
some additional authentication procedure. With this and other changes, the
test is whether the modifications to the proposal made by Telnic
sufficiently address concerns raised by members of the community and whether
the changes preserves the ability to comply with contractual obligations to
the greatest extent possible. To answer those questions, ICANN has held
follow-up consultations with the UK Information Commissioner's Office and
the IP constituency. The next step will be to post the amended proposal by
Telnic and weigh community response as part of this analysis.

After that, the procedure calls for a General Counsel report to the Board
(essentially a Board paper) asking the Board to consider the Telnic
procedure. Noting this was for information and not looking for Board action,
the Chair asked what is the expectation for next steps.

Kurt Pritz advised that the revised proposal would be posted for public
comment to help determine if the modifications have addressed community
concerns. After this discussion and an additional staff report, the Board
will be prepared to take a vote.

The Chair inquired whether this would be included on the Los Angeles Meeting
Agenda. Kurt replied that Telnic has made recent changes to the proposal in
response to additional feedback. There is not time for a public comment
period between now and the LA meeting.

Steve Goldstein asked if law enforcement requirements had been examined and
their need to access. The Chair asked if he could interpret the
statement—the information collected by a registry or registrar is not made
public but avenues exist for law enforcement agencies to obtain information
but not through public display. Law enforcement has long had the ability on
a national basis to obtain other information considered private. Law
enforcement access is not impaired. There is a strong IP interest in
obtaining data.

Steve Crocker noted that he has come to understand that for United States
law enforcement authorities, that if a law enforcement agency is given
non-public access without using a warrant they cannot use this information
in a court process.

Susan Crawford noted that there will be a report in Los Angeles on Whois
issues in general and all of these concerns can be aired then.

Janis Karklins advised that GAC agreed that we would try to accomplish the
work relating to GAC advice on the conflicts policy during the Los Angeles
Meeting. He noted that there has been an active exchange among GAC members,
with the European members relatively optimistic to reach agreement. The GAC
will be working in Los Angeles on a draft that has been circulated but he is
not optimistic that the GAC will be able to complete this work because of
serious difference in approach to data protection in different countries.

Janis noted as a personal comment on Telnic—no responsible business would
engage on any operation that would lead them to the court. Instead they
would try to find a solution to get the procedure right from the start.
ICANN should be sensitive to this approach.

Bruce Tonkin noted in this debate is what a lot of lawyers want to see is
written advice from a privacy commissioner and then challenge this advice. A
privacy commissioner does not want to publish what could be used in court.
Staff has done a lot of due diligence, spoken to UK GAC representative who
has confirmed it is normal procedure that the Commission would provide
advice in confidence. A lot of information relied on here is private. Bruce
raised the issue of how to handle such confidentially provided information
going forward.

The Chair noted that it might be that we will have difficulty in
establishing a uniform policy for Whois data and may end up with regional or
national policies. The policy would depend on where the data is stored. This
would not be unlike what we have with other industries that have private
information. Rita Rodin completely agreed with that principle. She has
concern if we continue to seek to have something uniform, then ICANN will
have officials debating this forever.

*Financial Approvals and Finance Committee Recommendations *

*Advanced Approval of Consolidated Travel Expenditures exceeding Officer
Authority *

The Chair advised that this is a question of approving consolidated travel
expenses, noting that the Executive Committee recently had to approve a very
large payment to American Express because we are consolidating all travel on
one credit account. Although this provides better financial controls, it
also means that the a recent payment due in October 2007 (which was
$467,000) exceeds the authority limit of any officer or group of officers of
ICANN to approve, even though the expenditures are within the currently
approved ICANN Budget. Accordingly, the Chair requested that authority be
provided to allow payments for budgeted travel expenditures to be made and a
proposal has been received from staff and discussed in the Finance
Committee. Doug Brent advised that a prepared resolution had been prepared
with the assistance of General Counsel. Doug set out the proposed language,
which is set out below as the approved resolution.

The Chair noted that this is a sensible thing to do and clears off the
Executive Committee calendar. Steven Goldstein was very much in favor of the
proposal, but inquired as to whether $600,000 was going to be enough.

Doug Brent advised that there may come a bill that's bigger than that. The
question is what number staff and Board are comfortable with. If a bill is
received for more than the amount approved, Staff would return to the Board
for approval.

The Chair offered an alternative to an absolute limit, would be to authorize
to make a payment so long as the amount did not exceed the budget. The
authority for the travel budget has already been generated.

Doug Brent advised that this could be managed. Paul Twomey agreed that he is
comfortable with that as a resolution, but would like reporting back from
management to the Finance Committee that payment has been made, and Doug
Brent agreed. The Chair suggested staff might report regularly on travel
expenses to the Board Executive Committee.

Bruce Tonkin suggested a report for each Board meeting that reports
expenditure against the plan. Travel budget is x and year to date is y, so
if half way through year and almost spent travel budget questions could be
asked. Susan Crawford supported Bruce Tonkin idea for regular reporting.
Doug Brent advised that such reporting could include a broad monthly
financial reporting at the board level, as well.

The Chair asked if we could separate reporting out. There was
acknowledgement by a number of Board Members that the Board is interested in
reporting on a monthly basis.

The proposed resolution was offered for a vote by the Chairman, with regard
to action on this resolution to allow expenditure not to exceed a cumulative
approved budget for travel, Susan Crawford noted that the proposed
resolution is set for a very limited time, to February 2008. Kevin Wilson
confirmed that this would allow time for the Staff to submit revisions to
the authorization policy to the Board Finance Committee and the Board. Doug
Brent advised that he would like to come back with thorough proposal to
cover all authorization issues so that we don't have to take up additional
board time on an ad hoc basis around this.

The resolution read as follows:

Whereas, ICANN has significant travel expenditures each month, which are
included in the FY07-08 board approved budget;

Whereas, ICANN's airfare and hotel booking costs were recently consolidated
onto one primary American Express credit card;

Whereas, ICANN now receives invoices monthly of amounts in the mid six
figures from American Express, which can easily exceed disbursement limits
of ICANN staff;

Whereas, late payment of the American Express bill can cause ICANN to be
forced to pay late fees, and possibly be declined coverage;

Whereas, department heads, the COO, and the CFO review all staff expense
reports and the American Express bill in detail,

Whereas, within 6 months staff will propose a new disbursement policy for
ICANN that will maintain adequate financial controls, allow more efficient
processing of disbursements, and allow the board to focus on more meaningful
and significant matters,

Resolved (07.82), the COO and/or CFO are authorized to make disbursements to
American Express for invoices up to US$600,000 per month through February
2008 for travel related costs that are within budget guidelines.

A voice vote was taken of all Board members present and the motion was
approved unanimously by a vote of 14-0.

*Approval of Sydney Office Lease *

Doug Brent advised that this matter comes to the Board from a recommendation
of the Board Finance Committee. The existing facility lease has been brought
to a close with fairly short notice by the existing landlord and it has
always been part of the plan to relocate; however, our landlord has become
adamant about moving us out of the existing temporary office space in
Sydney. A number of alternative approaches were considered, and, the
proposed option makes the most sense. This has been reviewed with the
Finance committee and it is above budget, but the overage is not substantial
and can be contained within the overall existing budget.

The Chair noted that Doug Brent has asked us to move expeditiously on this.
He would like to entertain a motion to adopt the proposal to sign the
contract for the Sydney office as proposed by staff.

Vanda Scartezini moved and Steven Goldstein seconded the following
resolution:

Whereas, The ICANN Board of Directors approved opening an ICANN office in
Sydney, Australia in November, 2006.

Whereas, ICANN intends to have a continued presence in Sydney Australia for
the foreseeable future, and that this presence requires a physical office
location.

Whereas, ICANN staff has evaluated alternative locations and options for
office space in Sydney, Australia.

Resolved (07.83), the COO and/or CFO are hereby authorized to enter into a
lease for office space in Sydney, Australia with monthly costs of up to
US$10,000.00 (AUD 11,115.60 at current exchange rates) for a term of five
years or less.

A voice vote was taken of all Board Members present and the motion was
approved unanimously by a vote of 13-0.

John Jeffrey asked for a clarification of who was voting as two Board
Members had dropped off the call during the discussion of this matter. It
was determined and recorded for the record, that Peter Dengate Thrush was
not available for this vote due to technical reasons, but rejoined during
the discussion of the following matter.

*Approval of Foreign Exchange Contracts *

Kevin Wilson advised that this is a two-part resolution for foreign exchange
contracts with Union Bank, which have been discussed and was being
recommended by the Board Finance Committee. The first part is wording
required by Union Bank allowing ICANN to enter into foreign exchange
contracts; the second is simply reaffirmation of disbursement rules, and not
based on risky hedging of currency.

Raimundo Beca moved and Steve Goldstein seconded the following the
resolution. There was additional discussion as the Chair noted it sounds
like a very sensible move on the part of Staff, and inquired as to the
additional currencies in which ICANN currently makes payments to Staff.
Kevin Wilson advised that yes, predominantly in Euros, Australian and
Canadian currencies. The Chair asked if there are limitations on currencies,
and Kevin Wilson advised that there were not.

The resolutions read as follows:

Whereas, ICANN processes a significant number of disbursements denominated
in foreign currencies such as Euro, Australian dollars, and Canadian dollars
in the normal course of business.

Whereas, ICANN's disbursements, including those denominated in foreign
currencies, are in compliance and will continues to be in compliance with
the disbursement requirements set forth by the board of directors.

Whereas, ICANN has historically purchased foreign currency contracts on a
spot basis (i.e., settled within 2 business days) in order to make
disbursements in the requested foreign currency.

Whereas, ICANN desires to purchase foreign currency contracts on terms of up
to 60 days in order to purchase the foreign currency at a lower cost to
ICANN.

Whereas, ICANN desires to enter into foreign currency contracts through
Union Bank of California.

First, it is hereby resolved (07.84), in order to meet the requirements of
Union Bank of California's foreign exchange department, that

* any one of the following: *

   - * Chief Operating Officer *
   - * Chief Financial Officer *

 * acting alone, is authorized in the name and on behalf of ICANN from time
to time, by telephonic, electronic, oral or written means (a) to execute on
behalf of ICANN and deliver to Union Bank of California, N.A. ("Bank"), the
foregoing Foreign Exchange Agreement, and (b) to delegate the agents or
employees of ICANN ("Authorized Representative") the authority, acting alone
or in combination, to take any or all of the following actions: (i) to enter
into, execute or modify, upon such terms as such Authorized Representatives
shall approve, any spot or forward purchase or sale of foreign exchange, any
swap or option on foreign exchange, or any combination thereof ("FX
Transaction"), (ii) to confirm any FX Transaction, (iii) to accept or direct
the transfer to Customer or to any third party, or the disposition, of any
funds payable to ICANN or to any third party, or the disposition, of any
funds payable to ICANN pursuant to an FX Transaction and (iv) to verify any
Payment Instruction. *

* Further resolved (07.85), that the authority given under this Resolution
shall be retroactive and any and all acts so authorized that were performed
prior to the formal adoption hereof are hereby approved and ratified. In the
event two or more resolutions of Customer are concurrently in effect, the
provisions of each shall be cumulative, unless the most recent shall
specifically provide otherwise. The authority given hereby shall remain in
full force and effect, and Bank is authorized and requested to rely and act
thereon, until Bank's Global Markets Group shall have received a certified
copy of a further resolution of ICANN amending, rescinding or revoking this
Resolution. ** *

 Also Second, it is hereby resolved (07.86), that the CFO and COO are
authorized to enter in foreign currency contracts with the Union Bank of
California: (i) using due care and strong internal controls; (ii) not to
exceed the specific existing actual or predicted foreign currency
denominated obligations due in the period of the contract; (iii) in no
instance to exceed a term of 60 days; (iv) and in no instance to exceed the
amounts for specific disbursements that the Board has authorized the CFO to
make (currently set at US $25,000 alone, US $50,000 with a second officer,
and $75,000 with the COO).

A voice vote was taken of all Board Members present and the motion was
approved unanimously by a vote of 14-0.

*Update on Annual General Meeting Tasks *

The Chair advised that Board members that the General Counsel and Secretary
wished to remind them that 1) they should be providing information to the
Board Governance Committee relating to which Committees they are interested
in serving on during the next board term, before the AGM, and 2) that Board
Members should submit their conflicts of interest statements before the Los
Angeles Meeting so that they can be reviewed by the Board's Conflicts of
Interest Committee.

*Other Business *

The Chair advised that Steve Crocker had requested to raise the item of a
'stability and security fund'. Steve Crocker said that the matter was
directed to Paul Twomey, and is triggered by a note from SSAC on another
matter on single letter domains, that the proceeds should go towards a
'security and stability fund'. He noted that Paul has talked about this from
time to time and if this is now being put forward as part of a specific
proposal he would like to move it into the core of the organizations
dialogue.

Paul Twomey advised that there was no proposal for such a fund formally on
the table. He advised that the Board would see in the planned public posting
of the strategic plan later this week, that there had been a lot of focus by
the community on security and stability issues during the consultation
process and in that consultation the exploration of resources and skills and
interacting with other stakeholders had been raised as point for further
exploration. It remained to see what further input was received on the issue
in the next round of consultation on the Strategic Plan draft. Separate to
this there was a public consultation on following the GNSO work on a call
for the establishment of single letter second-level domain names. Paul
indicated that there had been suggestions made during private conversations
with registrars over the last 12 months or more that at least some of the
proceeds from such a process should be dedicated to augmenting ICANN's
security and stability function and the idea of a fund to meet this targeted
proceeds had been discussed. Paul also indicated that ICANN had received a
fair amount of additional questions and interest about cyber-security,
including Unique Identifier issues with botnet operations, and ICANN's role
in recent weeks and months.

Kurt Pritz advised that the GNSO Reserve Name Working Group established as
part of work on new gTLDs, made a recommendation that single letters be
released and proposed possible uses of revenue. Public consultation will be
sought at the request of council. The Chair reflected that it seems that
there would be significant opportunity to expend funds on security and
stability, if we are in a position to enable progress in that dimension.

Susan Crawford raised concerns, in that it is not clear if it's part of
ICANN's role to delve into issues about botnets, which seems to be being met
by private actions in other parts of the world. If there is a fund, it
should be considered openly.

The Chair said that it would helpful to have clarity on the tasks associated
with such a fund.

The last item on the agenda has to do with status of various reviews.

Denise Michel advised that with regard to the GNSO review: the Board
Governance Committee has a final draft of GNSO improvements final reports.
Report was finalized and posted and there will be a workshop on Monday in LA
to layout the recommendations.

On Nominating Committee review: Interisle is completing their report to
Board and will be posted for comment as soon as this week. Interisle will be
in LA and presenting their review at a workshop on Wednesday. They will also
be available to brief the Board and other constituencies.

On ALAC review: the Board Governance Committee is considering applications
from three responses to the RFP and will make decision soon. The ALAC Review
Working Group will be a small group of current and former Board members who
will manage the review. The charter and working group membership will be
available soon.

With regard to the RSSAC review: a draft is currently with RSSAC, the Board
Governance Committee will have a draft terms of reference posted for public
comment at the end of this month.

The Chair noted that there is a lot of progress.

Steve Crocker noted that this is last telephonic Board meeting that the
Chair will be leading under his tenure and in recognition of this occasion
and event, he proposed formal recognition of Vint's significant
contributions by calling for 5 seconds of silence, noting that this will
also be discussed in Los Angeles.

Peter Dengate-Thrush suggested acclamation would be appropriate for what is
an extraordinary contribution by the Chair, particularly the telephonic
meetings, where we always think you're sitting at board room surrounded by
staff, but understand that the conditions are generally not ideal and that
the Chair gets through great deal of work from various parts of the world.
Steve Crocker agreed noting that Vint was currently traveling in Asia, where
it was just coming up on 6.00 AM.

Jean-Jacque Subrenat noted that this is his first teleconference and he is
impressed by the precision and depth of knowledge and resourcefulness of the
Chair and thanked him.

The Chair thanked the Board Members and Staff for their words and noted that
none of this works without them. The Chair looks forward seeing everyone
face-to-face in LA.

*Adjournment *

Steve Goldstein moved a motion to adjourn and the Chairman Vint Cerf called
for objections, of which there were none, and formally adjourned the
meeting.

Meeting closed at 2.33 PM U.S. Pacific Daylight Time (PDT).
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