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Minutes | Board Finance Committee (BFC) Meeting

BFC Attendees: Harald Alverstrand, Becky Burr, Ron da Silva, Danko Jevtović (Chair), Mandla Msimang, Ihab Osman and Tripti Sinha

Other Board Member Attendees: Avri Doria, Lito Ibarra, Göran Marby, León Sánchez and Matthew Shears

ICANN Org Attendees: Michelle Bright (Board Content Coordination Director), Xavier Calvez (SVP, Planning and Chief Financial Officer), Franco Carrasco (Board Operations Specialist), David Conrad (SVP, Chief Technical Officer), Kirsten Crownhart (Manager, Financial Planning & Analysis), Kim Davies (VP, IANA Services and President, PTI), John Jeffrey (General Counsel and Secretary), Vinciane Koenigsfeld (Senior Director, Board Operations), Elizabeth Le (Associate General Counsel), Alex Morshed (Finance Manager), Becky Nash (VP, Planning), Shani Quidwai (Sr. Director Finance), Amy Stathos (Deputy General Counsel)


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

  1. BFC Workplan – The BFC reviewed its Workplan for FY21 which is on target.
  2. Proposed Approval of FY22 IANA Budget - The BFC received an update from ICANN org about the FY22 IANA budgeting process, which includes the PTI budget, and which identifies the planning objectives and deliverables. ICANN org reported that the IANA budget was published for public comment from 8 October to 27 November 2020; a report of public comments was published on 19 December 20120; and the PTI Board adopted the PTI operating plan and budget on 13 January 2021. ICANN org reported that 41 comments from eight organizations related to similar themes present from the previous year: financial data and format, PTI or IANA structure and information, the public comment process, a request for a glossary of terms, and general comments. All the comments received were taken into consideration and several of them were incorporated into formatting changes. No substantive changes were required to the IANA budget as a result of the comments. The FY22 funding of the IANA Functions is USD 10.3 million provided solely from ICANN and driven by the FY22 Expenses. The FY22 IANA Expenses of USD 10.3 million includes .5 million of contingency. The Committee noted that the FY22 forecast of expenses has decreased versus the FY21 Budget, driven primarily by one less head count and lower direct shared and shared services for support of the IANA Functions. The FY22 IANA services amounts totally funded by ICANN of USD .6 million is the same as FY21. The IANA Functions contingency remains flat, which is calculated at approximately ten percent of the direct dedicated costs. The BFC discussed the public comment received regarding the relationship between IANA and ICANN, and asked ICANN org to ensure that the comment is sufficiently in the public comment report. After discussion, the BFC voted unanimously to recommend that Board approve the FY22 IANA Operating Plan and Budget.

    • Actions:

      • ICANN org to ensure that public comment report sufficiently addresses the comment received regarding the relationship between IANA and ICANN.
      • ICANN org to prepare materials for Board consideration.
  3. Supplemental Fund for Implementation of Community Recommendations (SFICR) and allocation to the Reserve Fund – The Committee continued its discussion regarding the possible SFICR. The SFICR would support the funding of large and multi-year implementation projects that are approved by the Board. The activities of ICANN, including the projects that could potentially be funded by the SFICR, are all part of ICANN's activities that are all the subject to ICANN's budgeting and planning processes. The proposal suggests that projects that have been approved by the Board or are soon to be adopted and cannot fit within the annual budget due to size and length could be candidates for the Fund. ICANN org also provided information regarding the SFICR governance terms, creation, and operation. ICANN org proposed that the creation and governance of the SFICR be inserted in the Investment Policy, which governs ICANN funds. The BFC reviewed and discussed the proposed SFICR governance, which is to fully incorporate the SFICR process into the ICANN annual planning process. The Committee noted that incorporating the SFICR process into the ICANN annual planning process provides transparency to the community on the funds that would be allocated to the SFICR annually and the types of projects what would be utilizing those funds. This would also provide the opportunity for community feedback during the public comment process. While a draft of the revised Investment Policy was presented to the Committee as part of the discussion, the BFC did not take any action on the proposed revised Investment Policy.

    Replenishment of the Fund would be evaluated annually during the planning process, which is also when ICANN org proposes to make recommendations to allocate any excess from the Operating Fund into the SFICR. The balance of the SFICR would be driven by the list of projects under review on an annual basis pursuant to the planning process, with no remaining excess in the SFICR. The BFC Chair will brief the full Board on the SFICR at the upcoming Board Workshop session. Following discussion, the BFC approved a recommendation to the Board to approve the creation of the SFICR. In addition, all voting and non-voting members of the BFC approved a recommendation to the Board to approve an allocation of USD 10 million from the Operating Fund to the Reserve Fund.

    • Actions:

      • ICANN org to prepare materials for the BGC Chair's presentation to the full Board at upcoming Board Workshop session.
      • ICANN org to prepare relevant materials for Board consideration on the recommendations to approve the creation of the SFICR and the allocation of the USD 10 million from Operating Fund to the Reserve Fund.

Published on 11 March 2021

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."