Internet Corporation for Assigned Names and Numbers

Minutes of Board Meeting

25 September 2010

A Special Meeting of the ICANN Board of Directors was held on 25 September 2010 in Trondheim, Norway.

Chairman Peter Dengate Thrush promptly called the meeting to order.

In addition to Chairman Peter Dengate Thrush the following Directors participated in all or part of the meeting: Rod Beckstrom (President and CEO), Dennis Jennings (Vice Chairman), Harald Tveit Alvestrand, Steve Crocker, Gonzalo Navarro, Rita Rodin Johnston, Raymond A. Plzak, Rajasekhar Ramaraj, George Sadowsky, Mike Silber, Jean-Jacques Subrenat, Bruce Tonkin, Katim Touray, and Kuo-Wei Wu.

The following Board Liaisons participated in all or part of the meeting: Heather Dryden, GAC Liaison; Ram Mohan, SSAC Liaison; Thomas Narten, IETF Liaison; Jonne Soininen, TLG Liaison; and Vanda Scartezini, ALAC Liaison.

1. New gTLD Program Budget

The Chair introduced this agenda item. Rajasekhar Ramaraj moved and George Sadowsky seconded the following resolution:

Whereas, the Board Finance Committee considered the New gTLD Deployment Budget at its meeting on 20 September 2010 and unanimously recommended that the Board adopt the Deployment Budget <link to be inserted when available>.

Whereas, the Board considered and discussed the New gTLD Application Processing Budget at its 24-25 September 2010 retreat in Trondheim, Norway.

Resolved (2010.09.25.01), that the New gTLD Deployment Budget and the New gTLD Application Processing Budgets are approved. The Deployment Budget is to be released in order to enable the launch of the program on a timely basis upon Board approval of the Applicant Guidebook. The Application Processing budget should be released upon the approval of the final Applicant Guidebook.

Resolution 2010.09.25.01 was approved unanimously, 15-0.

2. New gTLDs – Directions for Next Applicant Guidebook

The Chair introduced the next resolution noting that the it is a result of the two-day Board workshop in Trondheim on the introduction of new gTLDs.

Ray Plzak then moved and Jean-Jaques Subrenat seconded the following resolution:

Whereas, ICANN's primary mission is to coordinate, at the overall level, the global Internet's systems of unique identifiers, and in particular to ensure the stable and secure operation of the Internet's unique identifier systems.

Whereas, ICANN's Core Values include "depending on market mechanisms to promote and sustain a competitive environment" where feasible and appropriate, and "introducing and promoting competition in the registration of domain names where practicable and beneficial in the public interest."

Whereas, in June 2008, the ICANN Board adopted the GNSO policy recommendations for the introduction of new gTLDs <http://gnso.icann.org/issues/new-gtlds/pdp-dec05-fr-parta-08aug07.htm>, and directed staff to develop detailed implementation plans in communication with the community.

Whereas, one of the goals of the New gTLD program is to establish a clear and predictable process.

Whereas, ICANN seeks to mitigate risks and costs to ICANN and the broader Internet community to the extent possible.

Whereas, meeting these goals require tradeoffs and balancing of competing interests.

Whereas, in Brussels the ICANN Board resolved <http://www.icann.org/en/minutes/resolutions-25jun10-en.htm#11> to dedicate its retreat scheduled for 24-25 September for the consideration of all the outstanding issues relating to the implementation of the New gTLD program.

Whereas, the Board held a retreat in Trondheim, Norway on 24-25 September 2010, and talked through the outstanding issues relating to the implementation of the New gTLD program in order to identify potential ways forward.

Whereas, the Board has identified certain directions to the CEO regarding items for inclusion in the forthcoming version of the Applicant Guidebook for the New gTLD program.

Whereas, the forthcoming version of the Applicant Guidebook will be posted for public comment, and ICANN will take into consideration all public comments before making final decisions on all these remaining issues by approving the final version of the Applicant Guidebook.

Whereas, on 23 September 2010, the Governmental Advisory Committee (GAC) provided comments on version 4 of the draft Applicant Guidebook.

Resolved (2010.09.25.02), staff is directed to determine if the directions indicated by the Board below are consistent with GAC comments, and recommend any appropriate further action in light of the GAC's comments.

Resolved (2010.09.25.03), the Board gives the CEO the following directions relating to the forthcoming version of the Applicant Guidebook for new gTLDs, which is intended to be posted for public comment before the ICANN meeting in Cartagena in December 2010:

2.1 Geographic Names

Sub-national place names: Geographic names protection for ISO 3166-2 names should not be expanded to include translations. Translations of ISO 3166-2 list entries can be protected through community objection process rather than as geographic labels appearing on an authoritative list.

Continents and UN Regions: The definition of Continent or UN Regions in the Guidebook should be expanded to include UNESCO’s regional classification list which comprises: Africa, Arab States, Asia and the Pacific, Europe and North America, Latin America and the Caribbean.

Governments that file objections should be required to cover costs of the objection process just like any other objector; the objection process will be run on a cost-recovery and loser-pays basis (so the costs of objection processes in which governments prevail will be borne by applicants). Also, the Board notes that the GAC proposal for free government objections is not specific as to particular objection grounds or particular government objectors (for example whether both national and local government objectors would be covered).

2.2 New gTLD Applicant Support

Support to applicants will generally include outreach and education to encourage participation across all regions, but any direct financial support for applicant fees must come from sources outside of ICANN.

Staff will publish a list of organizations that request assistance and organizations that state an interest in assisting with additional program development, for example pro-bono consulting advice, pro-bono in-kind support, or financial assistance so that those needing assistance and those willing to provide assistance can identify each other and work together.

Owing to the level of uncertainty associated with the launch of new gTLDs, the fee levels currently in the Applicant Guidebook will be maintained for all applicants.

2.3 Root Zone Scaling

Real-world experience in root zone scaling has been gained as a result of the implementation of IPv6, DNSSEC and IDNs and the hard work of RSSAC and SSAC members in tackling the underlying stability question. Staff is directed to publish its analysis of the impact of IPv6, DNSSEC and IDN deployment on the root zone so far.

Staff has also developed a model and a rationale for the maximum rate of applications that can be processed over the next few years. Staff is directed to publish this model and rationale and to seek Board support for the judgments embodied in this model, thereby providing a firm basis for limiting the rate of new delegations. Based on the discussions to date, this limit is expected to be in the range of 1,000 new delegations per year, with this number to be defined precisely in the publication.

The Board notes that an initial survey of root server operators' ability to support this rate of growth has been conducted successfully, and directs staff to revisit the estimate on a regular basis and consider whether a further survey should be repeated .

Further, ICANN will periodically consult with root zone operators regarding a procedure to define, monitor and publish data on root zone stability. As part of the regular interaction with the root server operators, ICANN will invite inputs from the root server operators and other interested parties regarding any signs of stress in the system and advice as to what actions or changes in process might be appropriate.

Finally, in the event that the number of applications exceeds the maximum rate, an objective method for determining the order of application processing that conforms to the limited delegation rate (not relying primarily on time-stamping) will be defined in the Applicant Guidebook.

2.4 String Similarity

Similar strings should not be delegated through the New gTLD Program absent an in-depth policy examination of the issues, including a clear, enforceable set of operating rules to avoid possible user confusion. Community-suggested modifications raise a complex set of policy issues and cannot be considered as a straightforward implementation matter for the first round of applications. Further policy work in this area is encouraged.

2.5 Variant Management

No changes will be made to the next version of the Applicant Guidebook with respect to the handling of gTLDs containing variant characters. I.e., no variants of gTLDs will be delegated through the New gTLD Program until appropriate variant management solutions are developed.

The recent delegation of Chinese-language ccTLDs does not yet provide a generally workable approach for gTLDs; there are serious limits to extending this approach at this time. ICANN will coordinate efforts to develop long-term policy and technical development work on these issues.

The Board notes that the following scenarios are possible while evaluating variant gTLD strings:

1. Applicant submits a gTLD string and indicates variants to this string. The applicant, if successful, will get the primary string. The indicated variant strings are noted for future reference, and these variant strings will not be delegated to the applicant; the applicant has no rights or claim to those strings. ICANN may independently determine which strings are variants of each other, and will not necessarily acknowledge that the applicant's list of purported variants be treated as variants under the process.

2. Multiple applicants apply for strings that are variants of each other. They will be in contention.

3. Applicant submits a request for a string and does not indicate that there are variants. ICANN will not identify variant strings unless scenario 2 above occurs.

The CEO is directed to develop (in consultation with the board ES-WG) an issues report identifying what needs to be done with the evaluation, possible delegation, allocation and operation of gTLDs containing variant characters IDNs as part of the new gTLD process in order to facilitate the development of workable approaches to the deployment of gTLDs containing variant characters IDNs. The analysis of needed work should identify the appropriate venues (e.g., ICANN, IETF, language community, etc.) for pursuing the necessary work. The report should be published for public review.

The CEO is directed to produce for the board by the next Board meeting (28 October 2010):

1. A Work plan for developing the issues report.

2. An identification of the skills and capabilities needed by ICANN to complete the issues report and further develop ICANN's organizational ability to continue the strategic rollout of IDN TLDs.

2.6 Trademark Protection

Substantive Evaluation: The Applicant Guidebook will provide a clear description of "substantive evaluation" at registration, and retain the requirement for at least substantive review of marks to warrant protection under sunrise services and utilization of the URS, both of which provide a specific benefit to trademark holders. Specifically, evaluation, whether at registration or by a validation service provider, is required on absolute grounds AND use of the mark.

Substantive evaluation upon trademark registration has essentially three requirements: (i) evaluation on absolute grounds - to ensure that the applied for mark can in fact serve as a trademark; (ii) evaluation on relative grounds - to determine if previously filed marks preclude the registration; and (iii) evaluation of use - to ensure that the applied for mark is in current use.

Substantive review by Trademark Clearinghouse validation service provider shall require: (i) evaluation on absolute grounds; and (ii) evaluation of use.

URS timing: In response to public comment, change the time to respond to a complaint from 20 days to 14 days , with one opportunity for an extension of seven days if there is a good faith basis for such an extension.

The Board notes that the suggestion for a globally-protected marks list (GPML) was not adopted by the Board (in 2009), including for the following reasons: it is difficult to develop objective global standards for determining which marks would be included on such a GPML, such a list arguably would create new rights not based in law for those trademark holders, and it would create only marginal benefits because it would apply only to a small number of names and only for identical matches of those names.

The Board recognizes that additional policy development through the GNSO could lead to further mechanisms for enhanced protection for trademarks.

2.7 Role of the Board

The Board intends to approve a standard process for staff to proceed to contract execution and delegation on applications for new gTLDs where certain parameters are met.

Examples of such parameters might include: (1) the application criteria were met, (2) no material exceptions to the form agreement terms, and (3) an independent confirmation that the process was followed.

The Board reserves the right under exceptional circumstances to individually consider an application for a new gTLD to determine whether approval would be in the best interest of the Internet community, for example, as a result of the use of an ICANN accountability mechanism. The Board approves the inclusion of a broad waiver and limitation of liability in the application terms and conditions.

2.8 Mitigating Malicious Conduct

While efforts to mitigate malicious conduct will continue, the implementation work completed to date by the community and staff to address the mitigation of malicious conduct issue is sufficient to proceed to launch the first New gTLD application round. The remaining issues should not delay launch with the following specific directives incorporated:

Background check: The background check should be clarified to provide detail and specificity in response to comment. The specific reference to terrorism will be removed (and the background check criteria will be revised). These clarifications regarding the background check criteria and process shall be included in the forthcoming version of the Applicant Guidebook.

Orphan glue records: Current provisions in the guidebook require each applicant to describe proposed measures for management and removal of orphan glue records for names removed from the zone. This requirement should remain in place, and will be adjusted if SSAC makes a new recommendation in its report on this issue.

High Security Zone (HSTLD) concept: The HSTLD concept is a voluntary concept being developed by a cross-stakeholder group including the financial services industry for use in TLDs wishing to provide services on a high-security basis. Thus, the development of the concept does not impact the launch of the gTLD application process. Any publication of this concept will be shared freely with other organizations that might be interested in development of such a concept.

ICANN will not be certifying or enforcing the HSTLD concept; ICANN is supporting the development of a reference standard for industry that others may choose to use as a certification standard of their own. ICANN will not endorse or govern the program, and does not wish to be liable for issues arising from the use or non-use of the standard.

2.9 GNSO New gTLD Recommendation 6 Objection Process

The Board acknowledges receipt of the Rec6CWG report. This is a difficult issue, and the work of the community in developing these recommendations is appreciated. The Board has discussed this important issue for the past three years.

The Board agrees that ultimate responsibility for the new gTLD program rests with the Board. The Board, however, wishes to rely on the determinations of experts regarding these issues.

The Board will accept the Rec6 CWG recommendations that are not inconsistent with the existing process, as this can be achieved before the opening of the first gTLD application round, and will work to resolve any inconsistencies. Staff will consult with the Board for further guidance as required.

2.10 Registry Agreement

Required Notice and consent for increased or premium renewal prices: The current provision is necessary to protect registrants from predatory pricing upon renewals and the term should be retained.

Limitation of liability: The limitation of liability should remain as is. The remedies for registry operator are limited but appropriate given that ICANN is a non-profit entity that cannot afford to be open to unlimited liability.

Collection of variable transaction fee from registries if registrars decline to pay ICANN directly: The provision for the pass-through of fees is necessary to ensure that ICANN receives adequate funding in the event that ICANN accredited registrars (as a group) fail to approve the variable accreditation fees and should remain in the agreement.

Searchable Whois: Refer to the Board Data Consumer Protection Working Group to study issues and provide information to the Board relating to access and privacy to develop recommendations for possible inclusion in the forthcoming version of the applicant guidebook.

Indemnification of ICANN: The indemnification right should remain. ICANN staff has invited the Registry Stakeholder Group to propose language more precisely defining the exceptions to registry operator’s indemnification obligations for inclusion in the next version of the Draft Registry Agreement, and such a proposal should be considered for inclusion if received in a timely fashion.

2.11 Vertical Integration

The Board will send a letter to the GNSO requesting that the GNSO send to the Board, by no later than 8 October 2010, a letter (a) indicating that no consensus on vertical integration issues has been reached to date, or (b) indicating its documented consensus position. If no response is received by 8 October 2010, then the Board will deem lack of consensus and make determinations around these issues as necessary. At the time a policy conclusion is reached by the GNSO, it can be included in the applicant guidebook for future application rounds.

Resolutions 2010.09.25.02 and 2010.09.25.03 were approved unanimously with a 15-0 vote, with the following exceptions. Gonzalo Navarro abstained from voting in relation to Section 2.6 (14-0, 1 abstention), Harald Alvestrand, Rita Rodin Johnston and Bruce Tonkin abstained from voting in relation to Section 2.10 (12-0, 3 abstentions), and Harald Alvestrand and Bruce Tonkin abstained from voting in relation to Section 2.11 (13-0, 2 abstentions). The Resolutions carried.

Gonzalo Navarro noted his abstention on the portions relating to Trademark Protection because of his employment of chief of staff of the Trademarks Authority of Chile.

Harald Alvestrand noted his abstention from the portions relating to Vertical Integration and the Registry Agreement because of his employement by an organization with a Registrar Accreditation Agreement with ICANN.

Rita Rodin Johnston noted her abstention from the portions relating to the Registry Agreement because her law firm represents a registry.

John Jeffrey confirmed that, in compliance with Conflicts of Interest procedures, during certain portions of the workshop discussions, Board members and liaisons abstained from participation in the discussion or left the room and did not participate in the discussion.

3. Data and Consumer Protection Working Group

Dennis Jennings moved and George Sadowsky seconded the Resolution, and the Chair opened the floor for discussion.

Dennis Jennings noted that the Working Group (WG) was formed with a goal of reporting to the Board at the workshop in Trondheim, and that goal was not met. Dennis requested that the WG be allowed to continue as a result of being charged with new work.

Rita Rodin Johnston commented that the WG should remain mindful that the Board is not making policy in this area. Rita noted that she is looking forward to the work of the WG.

Dennis confirmed that the draft Charter to be consided by the WG make clear that this is not a policy-making group, but a group to gather information on data and consumer protections in registry agreement and consider what protections may be requested from the perspective of the end user. This work is for the advice of the Board.

The Chair called for a vote, and the Board took the following action:

Whereas, the Board asked the Board Governance Committee (BGC) to make recommendations to the Board regarding establishment and membership of a working group to address data and consumer protection issues (DCP-WG).

Whereas the BGC has recommended the establishment and membership of the DCP-WG.

Resolved (2010.09.25.04), the Board hereby establishes the DCP-WG, with its membership as follows: Harald Alvestrand, Dennis Jennings (Chair), Mike Silber, Bruce Tonkin, and Ram Mohan (non-voting member).

Resolution 2010.09.25.04 was approved unanimously, 15-0.

4. Board Global Relationships Committee

The Chair introduced this item regarding the Board Governance Committee’s recommended slating of the new Board Committee.

Ray Plzak moved and Mike Silber seconded the proposed resolution:

Whereas, the Board asked the Board Governance Committee (BGC) to make recommendations to the Board regarding the membership of a Board Global Relationships Committee (BGRC).

Whereas the BGC has recommend the membership of the BGRC.

Resolved (2010.09.25.05), the Board hereby sets the membership for the BGRC as follows: Peter Dengate-Thrush (chair), George Sadowsky, Jean-Jacques Subrenat, Katim Touray, Kuo-Wei Wu, Vanda Scartezini (non-voting member).

Resolution 2010.09.25.05 was approved unanimously, 15-0.

5. Nominating Committee Chair

The Chair requested that the Board Governance Committee (BGC) provide information regarding the process by which the BGC reached the recommendation. The Board agreed that any discussion regarding specific candidates were not appropriate for public distribution and should not be reflected in the minutes.

Dennis Jennings, the Chair of the BGC, explained that the BGC initiated a call for expressions of interest, which was extended an ended in September. When the call ended, the BGC discussed the merits of the candidates identified through the call for expressions of interest, and resulted in a unanimous recommendation.

Mike Silber inquired as to timing of the notice of the BGC’s recommendation, and Dennis responded that the recommendation was finalized at the BGC meeting on 20 September, and provided to the Board at the earliest opportunity.

Ram Mohan noted that the BGC faced a selection from among very qualified candidates, and the selection is not to anyone’s detriment.

George Sadowsky inquired as to the status of the implementation of the Nominating Committee review Working Group regarding appointing a ‘chair in training’ to replace the past-chair advisor position.

John Jeffrey noted that no change to the bylaws had been formally proposed to date.

The Chair noted that such a change should be done, and could possibly be done in time before the start of the next Nominating Committee.

The Chair called for a vote, and the Board took the following action:

Whereas the Board Governance Committee is tasked each year with recommending to the Board a candidate to serve as the Nominating Committee (“NomCom”) Chair.

Whereas the BGC called for expressions of interest from all who would be interested in serving as the 2010-2011 NomCom Chair.

Whereas the BGC considered and discussed all legitimate expressions of interest.

Whereas the BGC recommends that the Board appoint Adam Peake as the 2010-2011 NomCom Chair.

Resolved (2010.09.25.06), that Adam Peake is appointed as Chair of the 2010-2011 NomCom, to serve until the conclusion of the ICANN annual meeting in 2011, or until the Chair’s earlier resignation, removal, or other disqualification from service.

Resolution 2010.09.25.06 was approved unanimously, 15-0.

6. March 2011 International Public Meeting

The CEO provided a short description of how San Franciso was selected as the proposed meeting site for the March 2011, meeting, including efforts to hold the meeting in Montreal, and to locate alternative sites throughout the region. The CEO noted that due to the short time-frame for planning the March 2011 meeting, San Francisco appeared to be the best location.

The Chair inquired as to staff’s use of the new meeting selection process to identify this location.

Jean-Jacques Subrenat noted that as chair of the Board’s Public Participation Committee (PPC), he would have appreciated advance notice be provided to the PPC of the selection, given the PPC’s work in identifying the criteria for the new meeting selection process resulting in the selection of San Francisco.

The Chair noted Jean-Jacques’ concern and directed staff to make sure that there is some reporting back to the PPC on how the process worked.

Mike Silber echoed Jean-Jacques’ comments, and further questioned the completeness fo the supporting documentation.

The Chair noted that if the Board felt unable to vote on this item now, the matter could be delayed, though there would be impacts on ICANN’s ability to announce the site, enter into agreements for meeting logistics, and for the community to book travel.

Steve Crocker commented that the ICANN’s desired time frame for announcement of meeting sites – 12 months in advance – was long past for the March 2011 meeting, and that the June 2011 site was also not yet available.

The Chair noted his disappointment with not meeting the 12-month rule, and stated his hope that the CEO and COO could bring the organization back to the cycle.

The CEO confirmed that staff will notify the PPC of the outcomes fo the selection processes prior to notifying the Board. He also noted that due to the call for meeting sites for the next several meetings, there was an opportunity to get further expressions of interest prior to a selection being made, and the future planning is getting underway.

Harald Alvestrand inquired as to whether there was a formal resolution of the Board regarding the revision of the meeting selection process.

The Chair clarified that the PPC guides the process, not the selections, and the PPC should receive reports on how the process is working, to determine if changes need to be made. As this was the first meeting site selection made, a detailed explanation to the PPC is likely warranted.

The CEO confirmed that staff will conduct a review of the process for meeting selection, and clarify what the current understanding is of the process, and report back, and bring back through the PPC for recommendation of a formal resolution to the Board. The CEO also noted that there would not be a local host noted in the resolution.

George Sadowsky then moved, and Dennis Jennings seconded the following resolution:

Whereas, the BFC reviewed the budget for the North America ICANN meeting, compared it to prior meeting budgets, and recommend that the Board approve the budget not to exceed $1.941 million.

Resolved (2010.09.25.07), the Board approves San Francisco, California as the location of the ICANN 2011 North America Meeting to be held from 13-18 March 2011, with a budget not to exceed US$1.941M.

Resolution 2010.09.25.07 was passed unanimously, 15-0.

7. Appointment of Akram Atallah as Chief Operating Officer

John Jeffrey presented the framework in which ICANN as a California-based nonprofit entity approves compensation of officers and executives, and presented the recommedation of the Compensation Committee regarding the level of compensation for the Chief Operating Officer.

Jean-Jacques Subrenat moved and Rajasekhar Ramaraj seconded Resolution 2010.09.25.08 regarding the appointment of the Chief Operating Officers.

The Chair then polled each Board member for a specific acknowledgement that the be member does not have a relationship with the candidate being named to the position and no conflicts directly related to his hiring. All Board members had no relationship or conflict to declare. The Chair then called for a vote on Resolution 2010.09.25.08, which was approved unanimously, 15-0.

Rajasekhar Ramaraj then moved and Bruce Tonkin seconded Resolution 2010.09.25.09 regarding the compensation package recommended for the COO. The Chair then called for a vote on Resolution 2010.09.25.09, which was approved unanimously, 15-0.

The full text of the Board actions is:

Whereas, the attraction and retention of high calibre staff is essential to ICANN’s operations and ICANN desires to ensure competitive compensation for staff.

Whereas, Akram Atallah has been identified through a vigorous global search and senior management agrees that he is the right candidate to fill the role of Chief Operating Officer.

Whereas, independent market data provided by the outside compensation consultants indicates that the base compensation for a Chief Operating Officer would fall between [redacted] at the 50th percentile and [redacted] at the 75th percentile.

Whereas, independent market data provided by the outside compensation consultants indicates that the overall compensation for a Chief Operating Officer would fall between [redacted] at the 50th percentile and [redacted] at the 75th percentile. [redacted]

Whereas, the Compensation Committee has recommended that the Board appoint Akram Atallah as the Chief Operating Officer and approve the suggested compensation package.

Resolved (2010.09.25.08), the Board hereby appoints Akram Atallah as an Officer of the Company in the position of Chief Operating Officer effective 20 September 2010.

Resolved (2010.09.25.09), the Board authorizes a starting compensation package for Akram Atallah to consist of: (i) a base salary of $350,000 USD per year; (ii) a bonus opportunity of 30% of base salary per year to be paid in a manner consistent with other U.S. based staff and in accordance with the company’s bonus program; and (iii) the standard benefit programs made available to all other regular full time U.S. based staff.

8. Executive Session

The Board conducted an Executive Session, without staff present, in confidence.

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