[ALAC] ALAC Statement on Reserve Fund

Wed Nov 29 08:48:28 UTC 2017

Colleagues, my understanding of the "reserve fund" is deeply connected with
risks. Because by meaning it is echoed to "unexpected trouble". Healthy
organization should not have any "we don't know why we need reserve, but
lets have it"
 environment. If we consider risks to be covered by reserve fund, first we
need to have a clear and understandable list of risks. Such as (only as
example):
- asteroid hits the HQ of ICANN and we need to reallocate office to backup
location;
- Mr.Trump assigns the governmental order to make ICANN state-driven
organization;
- N.Korea rocket hits Verisign technical facility and we need to move
primary root to other technical facility;
- ICANN gets deadly legal liability and spends all money for lawyers to
keep operations running;
- Godaddy go bankrupt and ICANN need money to deal with millions of
registrants;
- Russia, China, Brazil and India launches alternative root and ICANN needs
financial instruments to fix it on global fora.

The size of reserve fund (and formula to keep it running) depends on type
and probability of the risk. Many of us went through this exercise while
dealing with "business continuity" question in new gTLD application. I
don't think the process of defining the reserve fund is much different. For
instance, technical risks to PTI must be separated from
operational/legal/business risks, etc.

Yours, --andrei
PS> Last Adobe connect was terrible

2017-11-28 23:23 GMT+03:00 Judith Hellerstein <judith at jhellerstein.com>:

> Hi Alan and Sebastien,
>
> Thank you for posting this comment and I look forward to the discussion.
> I too agree that the ALAC needs to strongly support having an adequate
> reserve fund, however, I think we should identify more than 2 sources for
> funds as the Auction proceeds is a one time possibility and the problems
> with the reserves need something that is a more concrete and longer term
> option.  I would like to see more suggestions for sources of funding.  I
> would also prefer that we switch around the order of the sources of
> possible funds to put Auction Proceeds as the last item and a levy on any
> future new GTLDs as the first item on the list.  Also I was a bit confused
> by your statement in that Auction Proceeds is the surplus from the last
> round of gtlds but in this sentence it looks to be a different item.
>
> Best,
>
> Judith
>
> _________________________________________________________________________
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>
> On 11/28/2017 2:26 PM, Alan Greenberg wrote:
>
>> See https://community.icann.org/pages/viewpage.action?pageId=71602968.
>>
>> Sebastien identified a number of important issues related to the reserve
>> fund, following discussion with him, I have drafted the following short
>> statement (also posted to the Wiki). As the PC closes on Thursday, and I
>> believe it is essential that we make a strong statement, I would like to
>> discuss this on the ALAC call in a few hours.
>>
>> Alan
>>
>> ----------------
>>
>> The ALAC strongly supports having the Reserve Fund at the level of 12
>> months expenses, and higher if there is a practical way of achieving that
>> without unduly impacting ICANN's ability to provide necessary services,
>> ensure the current and ongoing security, stability and resiliency of the
>> DNS, and adequately support its ACs and SOs.
>>
>> Since the Reserve Fund level is clearly tightly coupled to the level of
>> ICANN operational expenses, any discussion of the reserve should have
>> included a recent history and projection of ICANN operational expenses
>> along with the employee/contractor levels and the Reserve Fund levels over
>> the same period.
>>
>> At whatever level the Reserve Fund target is set, ICANN must publish a
>> plan on how and when this will be achieved. Given that the proposed target
>> level(s) are significantly above the current Reserve Fund level, and it is
>> unrealistic to believe that we will sustain or exceed this year's
>> return-to-reserve of $5m, ICANN should expeditiously investigate
>> alternative methods of building the reserve to ensure ICANN's future
>> stability. Sources such as the Auction Proceeds, the surplus from the last
>> round of new gTLD, or a levy on any future new gTLD fees should be
>> considered.
>>
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>>
>>
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-- 
Andrey Kolesnikov
RIPN.NET
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