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Minutes | Board Finance Committee (BFC) Meeting

BFC Attendees: Maarten Botterman, Ron da Silva (Chair), Chris Disspain, and Khaled Koubaa

Other Board Member Attendees: Cherine Chalaby, Avri Doria, and Göran Marby

BFC Member Apologies: George Sadowsky

Invited Observers: Tripti Sinha

ICANN Org Attendees: Susanna Bennett (Chief Operating Officer), Michelle Bright (Board Content Coordination Director), Xavier Calvez (Chief Financial Officer), Aaron Jimenez (Board Operations Sr. Coordinator), John Jeffrey (General Counsel & Secretary), Vinciane Koenigsfeld (Director, Board Operations), Elizabeth Le (Associate General Counsel), Becky Nash (VP Finance), Wendy Profit (Manager, Board Operations), Lisa Saulino (Board Operations Sr. Coordinator), and Amy Stathos (Deputy General Counsel)

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

  1. BFC Work Plan – The BFC reviewed the Committee's work plan, which is on target.

  2. FY18 Financials/FY19 Budget – The BFC received an update on the FY18 financials. The BFC noted that some of the key highlights include the fact that ICANN operations generated an operational net excess of US$2.3 million for the year-ending on 30 June 2018, based on actual funding of US$134 million and cash expenses of US$131.7 million. The BFC further noted that the operations funding for FY18 was US$600,000 lower than the FY17 actuals and US$8.8 million lower than the FY18 adopted budget. During the course of FY18, there was a significant drop in the funding forecast against the adopted budget mainly due to the slower-than-anticipated growth of new gTLD registrations. Based on the change in FY18 forecast, ICANN was successful in managing the FY18 actual expenses and ended up with US$2.2 million lower than FY17 and US$14.3 million lower than the adopted budget. The BFC noted that the significant amount of savings is in large part due to the reduction in trips during the fiscal year as well lack of increase in headcount despite the budget plan to do so.

  3. Reserve Fund Replenishment Strategy Discussion - The BFC reviewed the snapshot of the FY19 budget overview as compared to the FY18 actuals. The BFC noted that the budget does not account for any excess that would be used to allocate to the reserve fund. The BFC engaged in a discussion regarding replenishment strategy for the Reserve Fund. The BFC agreed that the strategy document for replenishing the reserve fund needs to be expanded to explain the process by which the replenishment will be accomplished before submitting to the Board for approval.

    • Actions:
      • ICANN org propose path forward for the replenishment of the Reserve Fund over the next five years.
  4. Approval of Legal Fees (above $500k USD) – The Committee approved a recommendation for Board approval of a payment of an invoice for legal expenses that was in excess of US$500,000.

    • Actions:
      • ICANN org to prepare the relevant materials for Board consideration.
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"""" is not an IDN."