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Minutes – Board Finance Committee (BFC) Meeting

BFC Attendees: Rajasekhar Ramaraj – Chair; Sébastien Bachollet; Cherine Chalaby; George Sadowsky;

Apologies: Gonzalo Navarro (Observer); Katim Touray (Observer)

Other Board Attendees: Rod Beckstrom – President and CEO

Staff Members Present: Akram Atallah – Chief Operating Officer; Kurt Pritz – Senior Vice President, Services; Samantha Eisner, Juan Ojeda, Diane Schroeder and Amy Stathos


The following is a summary of discussions, actions taken and actions identified:

  1. FY11 Performance: The BFC received a brief staff report on the FY11 Financial performance for BFC review, including a forecast for the remaining months within the year, and the current efforts to manage to budget. The BFC also discussed the forecast of use of special budget allocations approved by the Board during FY11, including meeting the ATRT recommendations. The BFC also received an update on the FY12 Operating Expense Framework and the move towards defining core operations and project budgets. The BFC discussed the need for broader identification of resources for undertaking office internationalization efforts, as well as plans for recognition of revenue if the New gTLD program launches within FY12.

    • Action:

      • Staff to schedule time before March meeting to review the framework with interested BFC members.

  2. Investment Management: The BFC received a brief staff report the status of the request for information to be issued to management firms, and the work towards providing the BFC with a recommendation for selection of a management firm prior to the Silicon Valley/San Francisco meeting.

    • Action:

      • Staff to include approval of investment manager as potential item for the Board’s meeting in March.

  3. FY12 Budget Development Update: The BFC received a staff report on the work done to development the FY12 Budget, including the work with staff and senior management, in preparation for the posting of the budget by 18 February. The BFC discussed the scope of Board involvement in budgeting for Board activities. Staff also presented the timeline for continued discussion of the budget, through to adoption at the Board’s meeting in June, including continuation of community engagement on budget discussions and identification of resource needs. The BFC again discussed the revised cost accounting framework, dividing between core costs and projects, and the BFC discussed the need for additional information to understand exactly what is within projects and what is within core operations, and how to identify recurring activities (such as ICANN meetings) for year-to-year comparison. Also discussed contractual impacts on revenue and received a status on the .NET Agreement renewal discussions.

    • Actions:

      • Staff to schedule time at the SVSF meeting to have broader discussion on Board identification of budget requirements for Board activities, possibly as part of the Board workshop.

      • Staff to modify budget document in line with BFC comments regarding consistency of identification of revenue and expense identifications and separation of items related to the New gTLD program.

      • Staff to prepare spreadsheet to identify Board-related expenses for the BFC meeting in March.

  4. Real Estate: The BFC received a staff report on the strategic financial questions faced by ICANN in light of the expiration of the Brussels office space lease and the need to identify new Brussels office space. The organization can choose between leasing and purchasing based upon initial financial analysis. The BFC identified that a strategic decision to purchase real estate would be subject to the Board’s agreement on the development of internal guidelines regarding the formation of a real estate strategy, and that a purchase in Brussels could serve as a test.

    • Action:

      • BFC members to provide questions to staff to prepare for further discussions on this topic in March, including potential discussion among the full Board.

  5. Reserve Fund Policy: The BFC received a brief staff report on the development of a reserve fund policy, which could be decision on the creation of a real estate strategy. The BFC noted that a paper on the reserve fund is necessary to guide further decisions regarding a reserve fund policy, as well as a paper regarding potential handling of excess funds that could be generated through an auction process in the New gTLD program.

    • Actions:

      • Staff to provide paper discussing options related to handling of surplus funds for BFC discussion either in March or May along with the discussion of the investment fund manager.

      • Staff to provide paper discussing options for a reserve fund policy for BFC discussion in May at retreat.

  6. BFC Workplan: The BFC agreed to review the workplan prioritization over email.

    • Action:

      • Staff to circulate workplan to BFC members for response.

Domain Name System
Internationalized Domain Name ,IDN,"IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet ""a-z"". An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European ""0-9"". The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed ""ASCII characters"" (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of ""Unicode characters"" that provides the basis for IDNs. The ""hostname rule"" requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen ""-"". The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of ""labels"" (separated by ""dots""). The ASCII form of an IDN label is termed an ""A-label"". All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a ""U-label"". The difference may be illustrated with the Hindi word for ""test"" — परीका — appearing here as a U-label would (in the Devanagari script). A special form of ""ASCII compatible encoding"" (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an ""LDH label"". Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as""icann.org"" is not an IDN."