[registrars] FW: ICANN Budget Briefing document

["Bruce Tonkin" <Bruce.Tonkin@xxxxxxxxxxxxxxxxxx>]

-----Original Message-----
From: Bruce Tonkin 
Sent: Wednesday, 30 November 2005 6:23 PM
To: GNSO Council
Subject: ICANN Budget Briefing document

From:  http://www.icann.org/announcements/budget-briefing-29nov05.pdf

BRIEFING REGARDING OPEN BUDGET ITEMS FOR FISCAL YEAR 2005-06 
 
The ICANN Board adopted the fiscal year 2005-06 budget at the Luxembourg
meeting (see, http://www.icann.org/minutes/resolutions-15jul05.htm#p3). 

The adoption provided that: 
 
"the community consultation process has also made it clear that there
are categories of expenditures that remain under discussion within the
ICANN community, particularly support for the creation of a new
non-profit organization to facilitate DNSSEC deployment; spending from
segregated funds (with the exception of funding for the Technical
Standing Panel, and initiatives on IDN and registry failover); and the
establishment of new regional offices,"
 
and 
 
"the Board Finance Committee is requested to itemize the expenditures in
the expense categories still under discussion, including those in
Resolution (05.[C]) above in order to ensure that such expenditures will
continue only at the run rate from fiscal year 2004-2005 while community
discussions continue. "
 
The purpose of this memo is to provide a description in detail of the
budget line items frozen at current run rates and, where appropriate, a
report on community input regarding those items so that the Board can
decide whether to adopt these line items along with the previously
adopted budget. This memo recommends approval of those items. 
 
As a result of the Board action on the budget, staff has performed three
sets of analyses: 
 
1) The burn rates during the last fiscal year. Monthly spending was
analyzed to ensure that last year's activity rates can be funded and
sustained. 
 
2) Detail explanation for each line item amount under consideration. 
 
3) In the cases of planned expenditures for the two line items for
translation and establishment of regional presences, examination of
public comment for each line item including meeting transcripts in
Luxembourg and Mar del Plata in order to provide an overview of which
portions of the community supported or objected to these items. (See
Appendices "A" and "B" respectively.) 
 
The line items in the current budget
(see,
http://www.icann.org/financials/adoptedbudget-12aug05.html#EXPENSEREVENU
EPROJECTION),
currently held to "run rates" by the board vote are spending on: 
(1) DNSSEC;
(2) Translation,
(3) At-Large and Community Projects;
(4) Regional meetings participation; and (5) Establishing regional
presences. 
 

These materials were presented to the Board Finance Committee and
discussed in the Committee meeting held 28 September 2005. Committee
recommendations follow discussion of each line item. 
 
A. DNSSEC
=========
==========

Description
===========

ICANN, along with other contributors, intend to fund a not-for-profit
concern that will work to promote, and then implement DNSSEC.
Disbursement of funds to a different entity is contingent upon the
presentation of the new concern's operating plan and approval by the
ICANN board. 
 
Line item amount: $300k 
 
Run rate: $0 
 
Task Description and Status
===========================

This line item falls under the funding for "Stability and Security
Projects" in the adopted budget. It falls directly under ICANN's mandate
to ensure the ongoing security and stability of the DNS. The formation
of this entity has not taken place. Steve Crocker, SSAC Chair, has been
providing advice regarding the project, taking advice from others
regarding entity formation and precise role. It is expected that the
entity will receive sources of funding from others besides ICANN. 
 
Discussions with Steve and others indicate the full implementation of
DNSSEC will require considerable funding. Regardless of the timing of
this planned entity or whether it is determined by staff and Board that
this proposed entity is the appropriate mechanism for the deployment of
DNNSSEC, this funding is required so that ICANN can take a visibly
supportive role in this area. 
 
It is important to recognize that DNSSEC efforts are moving ahead,
regardless of ICANN's decision to participate. The Sweden TLD has
deployed a version of DNSSEC, other groups have formed task forces to
study and ultimately implement it. The proposed ICANN contribution in
the 2005-06 budget is "the price of admission" to keep ICANN in the
visibly supportive role that is required if ICANN is to continue to be
recognized as effective. 
 
If the Board approves this line item, there are two additional controls
in place to ensure reasoned and consensus-based investments are made: 
 
* if it is determined that all or much of this $300,000 should be
invested in a single effort, the bylaws require that the Board approve
that expenditure even after the line item in the budget is approved by
the board; and 

* ICANN staff will consult with Vint, Steve and other technical liaisons
to the Board prior to making any investment in this area. 

Recommendation 
===============

It is recommended that the Board approve this line item. It is
recommended that the 
Board consult with the Chair, the CEO and the Technical Liaisons in
order to gain a full understanding of DNSSEC related issues and ICANN's
role. The Finance Committee 
asked that in approving this line item, the board request a detailed
spending plan for additional approval prior to making major expenditures
(exceeding $50,000 per ICANN controls policy) and that staff provide
periodic reports to the Committee regarding the efficacy of spending
after it has been made. 
 


B. Translation 
==============
==============

Description 
===========

This line item falls under "Developing Country Internet Community
Projects" in the 
adopted budget. The ICANN brochure and other materials are now
translated into 17 
languages. An increased comprehensive translation program has been
budgeted for the 
fiscal year 2005-06 to assist with those stakeholder groups who do not
operate in English as their first language. Included will be
facilitation of participation at ICANN meetings in multiple languages. 
 
Run rate: $75K annually. 
[$0 was spent in the first quarter of last fiscal year as expenditures
were tailored to match the slower than planned revenue increases. 
$52K was spent during the last three quarters after revenue flow was
ascertained,
 a $75K run rate.] 
 
Line item amount: $300K 
 
Detailed spending (approximation): 
==================================
 
- $100,000 - Outsourced translation services to provide accurate,
syntactical 
translations of ICANN literature; 
 
- $50,000 - Outsourced translation services to broadcast real-time
translations 
in the primary regional languages of the key events at ICANN's meetings;

 
- $100,000 - Outsource translation services to provide accurate,
syntactical 
translations of key elements of ICANN's website; 
 
- $50,000 - Outsourced translation services to support ICANN efforts
with 
regional media, and with editing, archiving and posting recordings for
access 
by key Internet communities. 
 
Task description 
================

The MoU with the U.S. Government calls for ICANN to "develop and
implement an 
appropriate and effective strategy for multi-lingual communications." 
 
The translation budget of $300,000 will be used to target a variety of
Internet 
stakeholders in each region using some or all of the following
mechanisms: 
 
- Regional media - providing ICANN information, press briefings,
interviews, 
public service announcements and video news releases in multiple
languages to 
numerous, regionally-based, multi-lingual publications and media
outlets; 
 
- ICANN literature - including hard copy, CD, and online distribution,
in each 
region in multiple languages, describing ICANN's mission, structure, how
to get 
involved, recent activities and regionally-specific developments, and
information 
of interest to specific constituency groups; 
 
- ICANN website - translating principle documents into nine different
languages; 
 
- Regional ICANN meetings - broadcasting real-time translations in the
primary 
regional languages of ICANN's public forum, Board meetings and other key

events, distributing multi-lingual literature to attendees, and
conducting multilingual interviews for regional press; 
 
- Audio/video archives - maintaining visual and/or audio recordings of
various 
international meetings, seminars and speeches that will be accessible to
the 
international community in English, French, Spanish, Portuguese, and
other 
languages; 
 
- Editing, archiving and posting donated translation services from
members of the 
Internet community to reduce costs and improve utility of materials for
key 
Internet communities. 
 
Comments from the community 
===========================

During both the Luxembourg and Mar del Plata ICANN meetings, translation
was 
addressed in multiple public discussions. In the public forums and
during public 
discussions of ICANN's strategic plan, statements by members of the
ICANN community 
supported increased translation efforts as a critical component to
international 
participation in ICANN. This position was encapsulated in a statement by
ICANN 
consultant, Patrick Sharry, who identified
internationalization/translation as the most important issue
consistently raised by participants in the strategic planning small
group discussions he conducted in Luxembourg: 
 
"...Internationalization...came up in a number of ways in a 
number of those forums. Internationalization in the sense 
that people wanted ways of working that wasn't in 
English... That's also to do with the way that business 
processes are conducted in ICANN, and that's meetings and 
the documents and translations that might be useful for 
that.... So I think that that would be the number one issue. "
 

A full listing of community commentary regarding translation can be
found in 
Appendix A. 
 
Recommendation 
==============

Performing translations where economical and meaningful enjoys wide
community 
support. ICANN's first translation efforts of the past fiscal year have
indicated that the increased amount planned is reasonable for the effort
defined. ICANN has also learned lessons and received offers regarding
economical methods to obtain translations. It is recommended that the
Board approve this line item. 


 
C. At Large and Community Projects 
==================================
==================================

General Description 
===================

This line item falls under "Developing Country Internet Community
Projects" in the 
adopted budget. At-Large activities include expenses to improve upon the
significant 
progress that has been made on the creation and involvement of ICANN
At-Large. As 
ICANN attempts Regional At-Large Organisations, additional start-up
funds are needed. 

To increase the likelihood of establishing the At-Large framework
envisioned in the 
bylaws, additional ICANN support is required for At-Large
organizing/outreach, 
including staff support to secure the involvement of a significant
number of At-Large Structures in each region in ICANN policy activities,
and face-to-face interactions at ICANN meetings of At-Large community
leaders. 
 
Line item amount: $381K 
 
Run rate: $188K [The run rate varies from month to month. Higher levels
of expenditures are made during the ICANN meetings due to travel
expenses. During this period, ALAC will hold activity levels and meeting
travel at rates consistent with last year.] 
 
Detailed spending: 
==================
 
- $133,500 - Development and distribution of informational materials,
support for 
RALO organizing meetings, secretariat support for RALO formation
efforts, and in-
region staff/consultant services to support At-Large organizing and
outreach 
objectives; 
 
- $235,000 - Travel for ALAC members and key At-Large leaders to ICANN
meetings 
to conduct ALAC policy development and outreach activities, and travel
for ALAC 
members and/or At-Large leaders to attend 2 key outreach events in each
region; 
 
- $12,500 - Administration expenses to support At-Large efforts,
including regular 
conference call meetings. 
 

Task description
================
 
The At-Large and Community Projects budget of $381,000 will be used to
build upon the significant progress that has been made in the creation
of a global framework of "At-Large" user groups and their involvement in
ICANN, including the work of the At-Large Advisory Committee. To
increase the likelihood of fully establishing the At-Large framework
envisioned in the bylaws, these funds will support: 
 
- At-Large organizing and outreach, including staff support to inform
and educate 
the global At-Large community and secure the involvement of a
significant 
number of individual Internet user groups (At-Large Structures) in each
region in 
ICANN; 
 
- Community efforts to create Regional At-Large Organizations (RALOs)
(as 
called for in the bylaws), including support for RALO planning and
formation 
meetings, efforts to develop RALO MoUs and supporting documents, support

for At-Large representatives' participation in meetings and events to
advance 
RALO formation and involvement in ICANN issues; 
 
- At-Large Advisory Committee policy development and communication
efforts, 
including resources to help the ALAC coordinate with At-Large Structures

globally and communicate their activities to the At-Large community, and
to 
support the ALAC's efforts to develop policy advice that promotes
individual 
user community interests. 
 

Recommendation 
==============

ALAC enjoys broad community support. Additional funding is required in
order to 
provide the resources necessary to finalise the formation of RALOs. It
is recommended 
that the Board approve this line item. 
 

D. Regional Meetings 
====================
====================

General Description 
===================

This line item falls under "Developing Country Internet Community
Projects" in the 
adopted budget. ICANN will sponsor attendance at regional meeting for
the world's least developed countries. Meetings will include seminars
describing IANA services, DNS structure and operations and opportunities
available through widespread connectivity and an interoperable Internet.

 
Line item amount: $450K 
 
Current run rate: $0 
 
Task description and costing 
============================

This line item falls under "Developing Country Internet Community
Projects" in the 
adopted budget. One of ICANN's four key priorities, as reflected in the
strategic plan, is to ensure global stakeholder participation. ICANN's
work to date in relation to developing country participation has focused
on outreach and developing partnerships in respective regions. This work
has been well received and will be built upon. This new line item in no
way seeks to replace this. However, ICANN's current work has been
limited because ICANN has not been able to help sponsor regional
meetings and participation therein, nor focus resources to improve the
ability for developing countries to participate in ICANN. All efforts to
date rely on the resources of others. 
 
The budget item proposed is in response to the growing need for ICANN to
improve (and increase) developing country awareness the organization and
its areas of responsibility, increase participation, and improve ICANN's
responsiveness to developing country needs. 
 
ICANN is undertaking much work in outreach and building partnerships in
different 
regions. However, ICANN's current work needs to be enhanced with a
mechanism to 
help sponsor and support the world's developing countries participate in
regional 
meetings, and ICANN, within areas of ICANN's mandate. It is not
appropriate for 
ICANN to solely rely on other international organizations (governmental
or not) for this. 

If ICANN fails to continue to improve its developing country outreach
and participation work, it will put at risk its own structure and
ability to say with credibility that it is working to ensure
participation of all stakeholders, from all regions, in
particulardeveloping countries. 
 
ICANN has not been able in the past to help sponsor regional meetings
within the areas of its responsibilities for the world's least developed
countries. Nor has it been able to provide resources to help
participants from developing countries partake in ICANN. 
 
The importance of ensuring participation from all regions, in particular
developing 
countries, is not new. It is reflected, in part, in the MoU between
ICANN and the US 
Department of Commerce (14)(e), where it states that ICANN should
"develop a 
collaborative program with private and intergovernmental parties to
conduct outreach to governments and local Internet communities in
targeted regions, including key 
constituencies". Additionally, in discussions on Internet governance,
the World Summit on Information Society, and in particular the report of
the Working Group on Internet Governance (WGIG), have noted that
participation from developing countries is often limited and expensive.
[WGIG report, para 19]. 
 
The WGIG report specifically noted that there were "two overarching
prerequisites to 
enhance the legitimacy of Internet governance processes," those being: 
 
*  The effective and meaningful participation of all stakeholders,
especially from 
developing countries. 

*   The building of sufficient capacity in developing countries, in
terms of knowledge and of human, financial and technical resources."
[Para. 74] 

The WGIG report furthermore identified a number of priority
recommendations, which 
include in paragraph 82: 
 
"Meaningful participation in global policy development: 
 
* International organizations, including intergovernmental organizations
where relevant, should ensure that all stakeholders, particularly from
developing countries, have the opportunity to participate in the
determination of policy decisions that affect them, and promote and
support such participation. 

*   Specific efforts should be made to address the lack of funds of the
different stakeholders of developing countries, which impedes them from
actively and 
consistently participating in international Internet governance
processes." 


ICANN proposes to use the funds to improve developing country
participation in two 
ways: 
 
(a) To support, where appropriate in partnership with other
organizations, the 
participation on a rotational basis of developing country participants
(government, 
private sector, technical community, civil society) in ICANN meetings. 

*   Total of approximately US$ 250,000 for 50 developing country
participants @ 
US $5,000 each (the U.N. rate), to attend one of three ICANN meetings.
This 
equates to supporting approximately 16 participants to attend one ICANN 
meeting (a cost of approximately US$ 83,000 for each meeting). 

*  If possible to do in partnership with other organizations, this could
contribute to additional support for participants from developing
countries, in particular least developed countries. 


(b) To regularly hold, where appropriate in partnership with regional
governmental and non-governmental organizations, workshops on specific
areas of ICANN's 
responsibility and emerging issue areas. The purpose of these workshops
is to: 

*  To better provide information to developing country participants on
issues of 
interest as they relate to ICANN's mandate; 

*   To better understand specific needs of respective developing country
regions on 
their needs from ICANN so ICANN can better ensure full global
participation in 
ICANN's processes and deliverance to all regions of ICANN's work. 

- Total of approximately US$ 200,000. 

- Proposing 2 meetings per region @ $20,000 each. For developed country 
regions, the focus should be on the least developed areas (e.g. North 
America/Caribbean, focus in Caribbean; for Europe focus is former
EasteEurope). 
 
- The regional meetings will focus on IANA/ccTLD issues, DNS and other 
ICANN related issues, of particular interest/concern to the specific
region. 
 
- The meetings will occur where possible in partnership with other
regional 
events to ensure improved attendance. Funds would go in part to support 
travel for participants from the developing country, and in part to
support the 
local event. 
 
With work in any region it is important to not just 'parachute in', but
rather to build partnerships and help build capacity and knowledge that
remains in the region. This program aims to do exactly that - focusing
on specific regional needs, building local awareness, and delivering to
local needs. Also noted is the importance of understanding how things
work in respective regions, as well as reaching out to constituencies
and partners not yet involved in ICANN. 
 
Recommendation 
==============

For the reasons stated above and the sense of urgency ICANN must bring
to this 
situation, it is recommended that the Board approve this line item. The
Finance 
Committee asked that in approving this line item that staff provide
periodic reports to the Committee regarding the efficacy of spending
after it has been made. 
 


E. Regional Presences 
=====================
=====================

Regarding the establishment of regional presence, there is $40,000 in
seed money per 
location for each of four global regions (Asia-Pacific, Africa, Latin
America and the Middle East) to conduct appropriate study in to order to
determine the most effective manner in which to effectuate regional
presences. The operational study and plan may result in the
establishment of an office, the use of existing presence by another
entity, periodic meetings or some other form of presence. 
 
Line item amount: $200K 
 
Current burn rate: $0K 
 
Description 
===========

This expense line item is contained ICANN's Global Partnerships budget
and is within 
the capital expense line item in the published budget. This effort will
be supported 
primarily by the Regional Liaisons and the Global Partnerships General
Manger. The 
budget for regional presences is beyond that of the liaisons; the
liaison positions were also included in the prior year's budget.
Recruiting for these positions is nearly completed. The original
publication of the operational plan indicated that concrete steps were
to be taken to establish regional offices in specific locations. After
consultation with the community, this objective was modified to use the
funds to determine the most effective way to conduct outreach. 
 
The original objective: 
 
"Establish regional presences, to implement ICANN's 
outreach to the local Internet community. Retain regional 
liaisons and in cooperation with outside entities that 
contribute staff, infra-structure and logistics to establish 
offices in Africa, Asia, Latin America, and the Middle East. 
Establish regional presences in cooperation with outside 
entities that provide logistical, staffing or infrastructure 
support. These presences should provide: 
 
* Education in a manner consistent with other 
objectives, 

* ICANN operational support so that local stakeholders have a contact
point in the same time zone. "

Was modified to: 
 
"Establish regional presences through the hiring of regional 
liaisons to implement ICANN's outreach to the local 
Internet community. These presences should enable local 
personnel (not ICANN staff) to work with regional 
populations to bring: 
 
* Education in a manner consistent with other objectives, 

* ICANN operational support so that local stakeholders have a contact
point in the same time zone. "

As a result of these changes, there was positive feedback from the
community. In 
particular, in the meeting in Luxembourg the follows comments were made
in public 
meetings: 
 
"I love how this particular item has been rewritten. As you 
know, my constituency and myself in particular have been 
very suspicious of this particular item that sits in the 
strategic plan. And I think that the input that ICANN, the 
board and the staff, got for this particular item that appears 
in the strategic plan has been redrafted and reoriented in a 
very positive way. I like a lot of the way that things have 
been reworded here in terms of the liaisons and the way 
that the emphasis is on presence, the presence in those 
places." 
 
and 
 
"I want to express my appreciation for the changes that I 
see reflected in the overview that's presented here based on 
the input that you all have received both in Mar del Plata 
and since then. And I think that we all really ought to say 
thank you for that and how much we appreciate that." 
 
In previous writings and discussions with the community regarding the
establishment of regional presences, ICANN has described offers-in-kind
to assist in the establishment of offices or presences. These offers
have been described in public fora and writings without providing
detail. Some of those offers include: 
 

Latin America: 
 
- Offers of support have been received from organizations in Uruguay and
Brazil. 
 
Asia Pacific (including Middle East): 
 
- Offers of support have been received from organizations in Japan,
Singapore, 
Thailand, India, Egypt, Jordan and the United Arab Emirates. 
 
Africa: 
 
- Offers of support have been received from organizations in Ghana,
Ethiopia, Kenya, 
and Mauritius 
 
In addition, one country, requesting that it remain confidential, has
offered office space, infrastructure, etc. Other countries and
organizations have offered aid. 
 
Regional presences are also important for all the reasons stated in the
section describing Regional Meetings, supra. One of ICANN's four key
priorities, as reflected in the strategic plan, is to ensure global
stakeholder participation. The regional presence proposal is in response
to the growing need for ICANN to improve (and increase) developing
country awareness the organization and its areas of responsibility,
increase participation, and improve ICANN's responsiveness to developing
country needs. 
 
The MoU between ICANN and the US Department of Commerce states that
ICANN 
should: 
 
"develop a collaborative program with private and 
intergovernmental parties to conduct outreach to 
governments and local Internet communities in targeted 
regions, including key constituencies. "

Additionally, in discussions on Internet governance, the World Summit on
Information 
Society, and in particular the report of the Working Group on Internet
Governance 
(WGIG), have noted that participation from developing countries is often
limited. 
 
Success in both the U.S. Government MoU and in WSIS/WGIG requires
outreach in the 
form of regional presences. The Internet community has told ICANN that
before opening offices in any area, ICANN should undertake the study
necessary to and enable local entities determine the most efficacious
way in which to conduct that outreach. This is what this funding is
intended to do. 
 
Community feedback 
===================

There has been substantial discussion in ICANN meetings and in
discussion for a posted on the ICANN site. There have been expressions
both for and against the establishment of regional offices. There were
expressions of appreciation when ICANN altered its objective in this
area to use the funding to enable local entities to accomplish outreach.


As stated above, several members of the community have made offers of
financial or 
other support to establish regional presence in their area. This is a
very strong indication that many who would be directly affected by ICANN
regional participation support it. 
 
A full listing of community commentary regarding regional presences can
be found in 
Appendix B. 
 
Recommendation 
==============

Nearly every corner of the ICANN community has provided commentary in
this area. 
ICANN has conducted substantial community consultation regarding the
implementation 
of outreach. ICANN has substantially changed its objective regarding
regional presences in response to this commentary. The current plan is a
conservative approach that engages the outreach "recipient" in the
process in order to ensure the outreach is delivered an effective form.
It is recommended that the Board approve this line item. The Finance
Committee asked that in approving this line item that staff provide
periodic reports to the Committee regarding the efficacy of spending
after it has been made. 
 

F. Conclusion 
=============
=============

In this analysis, ICANN has set out to provide insight into the thought,
planning and detail that went into the budget formulation in these
specific instances. Also described is the consultation and feedback
ICANN has received from the community on some of these issues. 
 
It is recommended that the Board approve these budget line items. In
each case the funds will enable required efforts to support ICANN
efforts regarding the MoU, WSIS and, most importantly, performing our
core mission.