Internet Corporation for Assigned Names and Numbers

Preliminary Report for Special Meeting of the ICANN Board of Directors

14 August 2007

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

A Special Meeting of the ICANN Board of Directors was held via teleconference on 14 August 2007. Chairman Vinton Cerf called the meeting to order at 2:05 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, Rita Rodin, Njeri Rionge, Vanda Scartezini, Bruce Tonkin and President and CEO Paul Twomey. The following Board Liaisons participated in all or part of the meeting: Vittorio Bertola, ALAC Liaison; Steve Crocker, SSAC Liaison; Janis Karklins, GAC Liaison; Thomas Narten, IETF Liaison; Francisco da Silva, Technical Liaison Group Liaison; and Suzanne Woolf, RSSAC Liaison. The following Board Members were not present on the call: Joichi Ito, Rajasekhar Ramaraj, and David Wodelet.

The following staff participated in part or all 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, Operations Manager, IANA; Donna Austin, Manager, Governmental Relations; Tina Dam, IDN, Program Director; Kim Davies, IANA Technical Liaison; and, Mike Zupke, Regional Liaison Manager.

The Board discussed and took action on the following matters:

Paris Designated as ICANN Meeting Location for Europe 2008

Susan Crawford advised that two proposals had been received for ICANN’s meeting in Europe in June 2008: Paris, France and Belgrade, Serbia. The Meetings Committee proposed that the Board approve Paris as the venue for the European meeting; this is based on a recommendation from staff who had conducted site visits. The Paris venue provides easier access for members of the ICANN community and has the more traditional style venue that participants prefer. Susan noted that she hoped ICANN would find another occasion to visit Belgrade and thanked both for their proposals.

The Chair proposed a motion to accept the Meeting’s Committee recommendation to approve Paris as the venue for the European meeting in 2008. Seconded by Steve Goldstein. The resolution reads as follows:

Resolved (07.59), the Board accepts the recommendation of the Meeting’s Committee and approves Paris as the venue for the ICANN Meeting in June 2008, and directs staff to move forward with negotiations and plans for that ICANN Meeting.

A voice vote was taken and all Board Members present approved unanimously by a vote of 10-0. In addition to those members that did not participate in the meeting, Njeri Rionge and Rita Rodin were not present at the time of voting.

Approval of Legal Expenses

John Jeffrey advised that pending legal bill from Jones Day may be considered to exceed staff authority for approval due to their total amount. Vint Cerf suggested that we should consider the possibility of having actions like this approved by the Executive Committee and there was general agreement by the Board.

John Jeffrey advised on this particular approval matter, that ICANN has had significant needs during April, May and June 2007 for legal services, relating to general legal advice, labor matters, new registry agreements for TLDs, corporate governance/committee matters, and various litigation matters in which ICANN is involved, including the activity in ICANN v. RegisterFly. John reported that Jones Day has provided highly-skilled legal services to meet those needs and seeks payment for those services of $295,833.

Steve Goldstein asked about how growth of legal services are managed. Doug Brent advised that the General Counsel manages the legal expenses and that a recent operational review of various departments led Doug to believe that the General Counsel’s office has adequate processes and controls in place relating to legal expenses. Vint Cerf noted that these bills represent a substantial reduction in bills compared to two years ago. John Jeffrey additionally reported that these bills were all within budget for their relevant period.

Steve Goldstein moved and Vanda Scartezini seconded the following resolution:

Whereas, ICANN has had significant needs for legal services during the months of April, May and June 2007;

Whereas, Jones Day has provided extensive legal services to meet these needs;

Whereas, ICANN has received invoices from Jones Day totaling US$295,833.05 in connection with legal services provided during April, May and June 2007; and

Whereas, the General Counsel and the Chief Financial Officer have reviewed the invoices and determined that they are proper and should be paid;

Resolved (07.60), the President is authorized to make payments to Jones Day in the amount of US$295,833.05 for legal services provided to ICANN during April, May and June 2007.

A voice vote was taken and all Board Members present approved unanimously by a vote of 11-0. In addition to those members that did not participate in the meeting, Njeri Rionge was not present at the time of voting.

Approval of the Board Finance Committees Recommendation regarding Marina del Rey Sub-Lease Amendments

Kevin Wilson advised that the proposed resolution is to authorize the CEO or COO to enter into sublease amendment to extend 3rd floor tenancy until mid 2012 as well as 8th floor to provide additional space.

Doug Brent advised that there are not a lot of options and certainly none that were better for the ICANN office space. The amount is slightly more than Board authorized for the lease, while contemplating the need to relocate the offices, but when you look at total cost and the distraction of not staying in same place there are definite benefits. USC-ISI is shrinking to make this space available in the Marina del Rey facility. Kevin Wilson advised that this had been discussed with Finance Committee and that many of them had recently toured 8 th floor space when they were in Los Angeles.

Raimundo Beca moved, and Peter Dengate Thrush seconded the following resolution:

Whereas, the lease for facilities for ICANN’s Marina del Rey operations terminate in 2007, and

Whereas, the board approved in April 2007, the Staff to negotiate a new facility lease for ICANN for a term of three to six years and for a cost of up to $56,000 per month, and

Whereas, the current sublease at 4676 Admiralty Way, Marina Del Rey building on the 3rd floor is with USC who is a major tenant of the building, has a master lease agreement with the owners of the building until June 30, 2012, and is willing to work with ICANN to negotiate extensions and expansions to the current subleases, and

Whereas, staff has determined that additional space is available to ICANN in the 4676 Admiralty Way Building on the 8th floor and the rental rates will be similar to those charged on the 3rd floor space, and

Whereas, staff has determined that ICANN’s operations can be most efficiently executed by extending the sublease on the 3rd floor space, and subleasing the 8th floor space, and

Resolved (07.61) that ICANN Board authorizes the CEO and COO (or either of them) to negotiate and execute sublease amendments for extending the 3rd floor space until June 30, 2012 and expand on to the 8th floor from January 2008 until June 30, 2012.

A voice vote was taken and all Board Members present approved unanimously by a vote of 11-0. In addition to those members that did not participate in the meeting, Njeri Rionge was not present at the time of voting.

Authorization to Enter Into Agreement for Data Escrow Service Provider

Kurt Pritz spoke to this agenda item and advised that this item is on the agenda because the amount of contract exceeds staff signing authority and also exceeds the amount set out in the budget for the proposed data escrow related services, but indicated that these excess costs will be recovered as saving elsewhere in the budget. Kurt indicated that his group consulted with the Registrar constituency. The proposal to enter into an agreement with an escrow service provider sets out contractual compliance plans, data testing, and analysis of potential conflicts of interest.

Kurt provided additional information regarding the process for locating a data escrow service provider and provided an evaluation of candidates in a matrix. On review of the criteria two front-runners emerged. The potential for conflict of interest was reviewed and an eight-page questionnaire was developed, responded to by the lead applicant and posted for registrar and staff review. This questionnaire was provided to Iron Mountain and in parallel registrars were contacted directly and asked if they had any concerns regarding potential conflicts. The registrars contacted included GoDaddy, Tucows, eNom, and NSI, among others. All registrars contacted did not object to ICANN’s selection of Iron Mountain due to potential conflicts of interests and all supported the selection generally. A few written comments were received including one negative comment from a registrar. ICANN responded to that one comment and a letter of support for selection of Iron Mountain was received from GoDaddy. As a result, the negative commenter sent a letter in support of the choice. ICANN does not believe that the selection of Iron Mountain will result in a negative reaction from registrar constituency.

Bruce Tonkin asked about the length of the contract concerned about the year-to-year renewal prospect and the staff expense involved in running the tender evaluation. Kurt Pritz advised that the contract is renewable each year and he estimated that the process of evaluation took around 3 to 4 person months, and additional involvement from legal.

Rita Rodin noted that it is important to note that ICANN is offering this service for free, but that registrars are still free to use their own. Iron Mountain is clearly a leader in the industry. In addition, she suggested that as staff negotiates the final terms of the contract for a relatively a short term (e.g., one year) with a reasonable notice period (i.e. 90 days) for termination would be preferable.

Vittorio Bertola raised questions about the transfer of information following privacy legislation, for example it might be necessary that information out of Europe must stay on European servers. This may need to be addressed when implementing. Kurt Pritz advised that one of the reasons for the selection of Iron Mountain is because they undertake business across the world and have servers in different locations. Mike Zupke added that in considering applications, Iron Mountain impressed staff with their preparation and dealing with customers in every country that can be thought of across the world and their ability to deal with privacy laws.

Susan Crawford noted that this is a major responsibility for ICANN and that she is delighted with the progress and that this will likely go some way to resolving security risks. Questions were also raised about the price variable among some of the bids and staff responded with possible reasons.

Kurt Pritz advised that the Iron Mountain price was in line with the majority of the bids received. He believed that Iron Mountain understood the required data transmission rate, and that the disparity in some of the bids was not resulting from lack of knowledge for the bidder selected.

Vint Cerf speculated that it would be harder for some of the bidders who are not in the data escrow business to perform the service as it would be a new service for them and that may relate to the variance in cost. He also wanted added to the record that the process by which this was done and consultation with the community was extraordinary and may provide a precedent that we can practice in the future.

Bruce Tonkin asked what would be communicated to the community in terms of the expense to the community of conducting this process. He does not consider that we need to disclose actual figures but it would be useful for the community to understand what is involved to improve security. Staff time and legal costs should be identified and should reflect in the annual report the dollar amount of establishing escrow. Kurt Pritz agreed that much of that information should be publicy shared in terms of ICANN’s acting to provide additional security to registrants with the assistance of the responsible registrar community. Kurt Pritz noted that this should be followed up with the Finance Committee. Vint Cerf suggested that some of the costs, will be start up costs, so that the total annual costs will be a function of registrars and registries taking advantage of the service.

Steve Goldstein wanted to note that he felt the report prepared by staff was excellent, and wanted this acknowledged in the minutes.

Vint Cerf moved for a vote on the following resolution, and Steve Goldstein seconded the motion.

Whereas, ICANN's 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 has developed a Registrar Data Escrow program to protect registrants and ensure stable and secure operation of the domain name system;

Whereas, ICANN's Registrar Data Escrow program requires ICANN to receive, validate, and store registration data deposited by registrars;

Whereas, ICANN has conducted a Request for Proposals to identify a qualified and competent agent to perform these responsibilities and has identified Iron Mountain Intellectual Property Management, Inc. (Iron Mountain), as the most qualified and capable potential RDE provider through the competitive bidding process;

Whereas, ICANN Staff has consulted with registrars regarding the potential conflicts of interest raised due to Iron Mountain's domain name-related businesses, including its status as an ICANN-accredited registrar;

Whereas, Iron Mountain has demonstrated efforts to prevent and avoid abuse of its position as ICANN's RDE provider, given potential conflicts of interest;

Whereas, the cost to ICANN to retain Iron Mountain may exceed the amount allocated in the 2007-08 fiscal year budget because: the level of participation by registrars in ICANN's service is unpredictable and the program will now operate through most of the fiscal year due to acceleration of the program's implementation;

Whereas, ICANN will cover Registrar Data Escrow cost in the existing 2007-08 expense budget;

Whereas, the contracted dollar amount will exceed Staff signing authority;

Whereas, discussions between ICANN Staff and Iron Mountain regarding potential conflicts and other risks, pricing, and other key issues will continue through a contract negotiation process;

Resolved (07.62), the ICANN Board authorizes Staff to negotiate with and, upon reaching an agreement that will adequately protect the interests of registrants, registrars, and other stakeholders, and not exceed $800,000 in first-year costs, engage Iron Mountain Intellectual Property Management, Inc. to perform Registrar Data Escrow services on ICANN's behalf.

A voice vote was taken and all Board Members present approved unanimously by a vote of 11-0. In addition to those members that did not participate in the meeting, Njeri Rionge was not present at the time of voting.

Approval of GNR Contract Renewal

Kurt Pritz advised that the Registry Agreement for .NAME expires on 4 January 2008, and the restricted gTLD contract is being renegotiated. The ICANN fee agreement is changed from the old to the new model and as such it will be based upon the same form as the .BIZ, .ORG, and .INFO agreements. The only departure for .NAME is a proposed new business model, at third level, to sell names in bulk for low prices. There is no restriction for lowering prices in contract, but the standard ICANN fee has a floor of 15 cents per registration. .NAME asked if it would be possible for ICANN fees to accommodate according to the business model. Therefore, the agreement has been written that, for bulk sale of names at third level only, ICANN would waive the minimum fee. The rest of the agreement is unremarkable. The agreement was posted for 30 days and the key points (including this new business model and the fee agreement) were bulleted in the announcement. No public comments were received.

Susan Crawford moved for the following resolution to be approved and it was seconded by Peter Dengate Thrush:

Whereas, ICANN staff conducted good-faith negotiations with Global Name Registry Limited, operator of the .NAME generic top-level domain, for the renewal of their registry agreement.

Whereas, on 29 June 2007, ICANN announced that negotiations with Global Name Registry Limited had been successfully completed, and posted the proposed .NAME renewal agreement for public comment http://icann.org/announcements/announcement-29jun07.htm.

Whereas, the Board carefully considered the proposed renewal agreement and finds that approval of the proposed renewal agreement would be beneficial for ICANN and the Internet community.

It is hereby resolved (07.63), that the proposed .NAME agreement is approved, and the President is authorized to take such actions as appropriate to implement the agreement.

A voice vote was taken and all Board Members present approved unanimously by a vote of 11-0. In addition to those members that did not participate in the meeting, Njeri Rionge was not present at the time of voting.

Redelegation of .DM — Dominica

Kim Davies advised that the redelegation of .DM is straightforward and that the applicant had met all of the requirements for such a redelegation consistent with IANA processes for a change of administration from the University of Puerto Rico to DotDM Corporation who has been the operator of the TLD for the past fives years. Kim also reported that this redelegation is not contested and has consent from local government.

Vanda Scartezini moved that the proposed redelegation of the .DM domain to DotDM Corporation be approved and Steve Goldstein seconded the motion.

Whereas, the .DM top-level domain is the designated country-code for Dominica.

Whereas, ICANN has received a request for redelegation of .DM to DotDM Corporation.

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 (07.64), that the proposed redelegation of the .DM domain to DotDM Corporation is approved.

A voice vote was taken and all Board Members present approved unanimously by a vote of 12-0.

Approval for Delegation of Eleven Evaluative Internationalized Domains

Vint Cerf suggested that as there had been considerable discussion of this issue at the recent Board retreat. There was general discussion regarding the involvement of Root Server operators in the discussions and other community approvals. Tina Dam outlined that a process had been established for removal of the names if there was any issue at the root level.

Bruce Tonkin moved for the following resolution to be approved and Peter Dengate Thrush seconded it:

Whereas, on 19 July 2007 a revised version of the IDN Evaluation Plan was posted after full consultation with the Internet community.

Whereas, the Plan recommends the evaluation of eleven Internationalised Domain Names in the DNS root zone, representing the term “test” translated into Arabic, Persian, Chinese, Russian, Hindi, Greek, Korean, Yiddish, Japanese and Tamil.

Whereas, on 29 June 2007, the ICANN Board accepted the IANA Root Zone Procedures for Test IDN Deployment.

Whereas, on 22 July 2007, the method for invoking the emergency removal procedure was finalised taking RSSAC’s recommendations into consideration.

Whereas, ICANN has reviewed the IDN Evaluation Plan, and has determined that the proposed delegations would be in the best interest of the local and global Internet communities.

It is resolved (07.65), that the proposed delegation of the evaluative domains xn--kgbechtv (representing the term “test” in Arabic), xn--hgbk6aj7f53bba (representing the term “test” in Persian), xn--0zwm56d (representing the term “test” in Simplified Chinese), xn--g6w25ld (representing the term “test” in Traditional Chinese), xn--80akhbyknj4f (representing the term “test” in Russian), xn--11b5bs3a9aj6g (representing the term “test” in Hindi), xn--jxa1pd1p (representing the term “test” in Greek), xn--9t4b11yi5a (representing the term “test” in Korean), xn--deba0ad (representing the term “test” in Yiddish), xn--zckzah (representing the term “test” in Japanese) and xn--hlcj6aya9esc7a (representing the term “test” in Tamil) to IANA is approved.

It is further resolved (07.66), that the Board directs ICANN Staff to implement the IDN Evaluation Plan, and report back to the ICANN Board following the conclusion of the evaluation.

A voice vote was taken and all Board Members present approved unanimously by a vote of 12-0.

Peter Dengate Thrush asked if we need to talk about the presentation of this resolution to the Country-Code and GAC communities. Vint Cerf suggested that this is a question that should be directed to Paul Levins. Tina Dam advised that there is a communications plan and an announcement will be made that explains the evaluation plan of the test which has been approved and will be send to SOs and ACs.

Discussion of IANA Delegation and Redelegation Requests

Kim Davies updated the Board from previous briefings on an application for delegation of .KP from the Democratic People’s Republic of Korea and on redelegation requests with regard to .YU. ME. And .RS (which are interrelated). The Board agreed to continue to discuss these matters at the next ICANN Board Meeting.

Approval of Board Governance Committee’s Recommendations for Adjustments to the Board Committee Assignments

Roberto Gaetano, Chairman of the Board Governance Committee advised the Board that the Board Governance Committee had met to discuss the composition of some Board committees, which have been triggered by the end of Alejandro Pisanty’s term from the Board. After polling different members of the Board, and each of the Committee Chairs, the BGC recommended: 1) that Steve Goldstein be added to the Conflict of Interest Committee and the Meetings Committee; 2) that Rita Rodin be added to the Executive Committee and, 3) that Bruce Tonkin be added to the Finance Committee. The BGC has identified a possible conflict of interest in adding Bruce to the Finance Committee, related to Bruce’s employment of one of the leading registrars, which may be related to the financial situation of his employer. In order to play it safe on this issue, clearance is sought of the Conflict of Interest Committee.

Bruce Tonkin advised that he would be willing to serve on the Committee and in response to the potential conflict of interest, which he had himself identified, he would abstain from discussions relating to the setting of fee amounts for registrars.

Paul Twomey asked Bruce Tonkin whether he considered the balance of contributions from stakeholders a possible area for conflict of interest. Bruce Tonkin advised that with regard to the balance between registrars or registries, ccTLDs, and others he doesn’t see a direct conflict. It was agreed to let the Conflict of Interest Committee discuss Bruce’s appointment to the Finance Committee before confirming it, but to move ahead to confirm the other appointments as advised by Roberto.

Roberto Gaetano moved and Peter Dengate Thrush seconded the following motion:

Resolved (07.67), the Board hereby approves the recommendations of the Board Governance Committee to make the following appointments to Board Committees: 1) Steve Goldstein is hereby added to the Conflict of Interest and Meetings Committees; and, 2) Rita Rodin is hereby added to the Executive Committee.

A voice vote was taken and all Board Members present approved unanimously by a vote of 12-0.

Review of Terms of Reference for Board of Directors Review

Vint Cerf advised that as agreed at the Board Retreat, the Board will await revision of the terms of reference by staff before further consideration. Staff were asked to revise the proposed Terms of Reference to enable discussion online and anticipate approval at the next Board meeting.

Other business

Review of possible actions relating to Ombudsman’s Report 7-317

Vint Cerf indicated that he had already circulated a revised version of the board response and rather than a discussion about editing he asked Board members to send back further changes and if heard noting by end of week he will declare it final and send to Ombudsman.

Vittorio Bertola advised that ALAC had a conference call and decided to reconsider the applicant's demand for accreditation under the new general criteria that the ALAC approved at the San Juan meeting, which also streamline the process and revise it after the establishment of the Regional At Large Organizations. He added that the Board will soon be asked to amend the Bylaws to the extent necessary to support this revised process. Vint Cerf noted that Ombudsman would likely be pleased to know that the ALAC issue is being resolved.

Approval of Executive Committee’s Recommendation regarding IGF Participation

Paul Twomey advised that Vint has received a request from the organization committee of the IGF in Rio to attend the IGF meeting and that the Executive Committee had discussed this matter at their meeting to set the agenda for this meeting. The question to the Executive Committee was whether it is appropriate for ICANN to pay for Vint’s attendance given he would no longer be a member of the Board at that time. The Executive Committee agreed to pay for Vint’s attendance but felt that it is an issue to be considered by the full Board. Vint Cerf advised that the cost of expenses would be in the order of $5000.

Steve Goldstein moved and Vanda Scartezini seconded the following resolution:

Resolved (07.68) that Vint Cerf be authorized to speak on behalf of ICANN at the upcoming IGF Meeting in Rio as its Past-Chair and that expenses related to his travel will be paid by ICANN.

A voice vote was taken and all Board Members present approved unanimously by a vote of 12-0.

Steve Goldstein raised in the interest of transparency the issue of publishing the code of ethics. Steve Goldstein also indicated that he had spoken to Kevin Wilson regarding IRS Form 990 and his request that it be published in ICANN’s Annual Report.

Vint Cerf advised that he would be unable to attend the October 16 Board meeting as he will be in Korea and occupied at the time of the call. He asked Roberto Gaetano, Vice Chairman to run this meeting in his absence.

The Meeting was adjourned at 3.38 PM PDT.

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