Re: [soac-newgtldapsup-wg] continuity of operations funding requirement

[Richard Tindal <richardtindal@xxxxxx>]

My thoughts on that.

I think it's more accurate, and smarter, for us to argue that a reduction in 
the three years should happen for all applicants, not just needy applicants.

If we concede that 3 years is suitable protection for most registries,  its 
hard for us to then argue that needy registries should have an exception to 
this.    Some will see 
needy registries as being more at risk of financial failure than the average 
registry,  and hence more likely to need the 3 year buffer.     

If we think 3 years is an overlong period of protection  (and I do)  I believe 
we will have more success arguing for a reduction for all applicants.

I don't think there's any great science behind the 3 year number.   What we're 
really talking about is the amount of time it could take a domain holder to 
completely rebrand themselves in a different
TLD.     My gut tells me a 2 year number is politically acceptable,  but we 
could argue for less.

RT





 


On Aug 12, 2010, at 2:31 PM, Avri Doria wrote:

> 
> Hi,
> 
> Do you specifically mean that 6 months is OK for those who have financial 
> hardship or do you mean it should be enough for any applicant?
> 
> If you are referring this only to those with financial hardship, why are 
> these applicant special in this regard?
> 
> thanks
> 
> a.
> 
> 
> 
> On 12 Aug 2010, at 16:59, Tijani BEN JEMAA wrote:
> 
>> Richard,
>> 
>> I still think that 6 months is a sufficient period, taking into account the 
>> failover plan prevision of 1 to 3 months.
>> 
>> ------------------------------------------------------------------
>> Tijani BEN JEMAA
>> Directeur exécutif
>> Fédération Méditerranéenne des Associations d'Internet
>> Phone : + 216 70 825 231
>> Mobile : + 216 98 330 114
>> Fax     : + 216 70 825 231
>> ------------------------------------------------------------------
>> 
>> De : owner-soac-newgtldapsup-wg@xxxxxxxxx 
>> [mailto:owner-soac-newgtldapsup-wg@xxxxxxxxx] De la part de Richard Tindal
>> Envoyé : jeudi 12 août 2010 18:27
>> À : soac-newgtldapsup-wg@xxxxxxxxx
>> Objet : Re: [soac-newgtldapsup-wg] continuity of operations funding 
>> requirement
>> 
>> 
>> The actual Q50 on page 107 provides a fairly detailed explanation of the 
>> Continuity Instrument.  The amount does have to be designated in US dollars 
>> but it doesn't have to be issued by a US bank: 
>> 
>> "The LOC must be issued by a reputable financial institution insured at the 
>> highest level in its jurisdiction. This may include a bank or insurance 
>> company with a strong international reputation that has a strong credit 
>> rating issued by a third party rating agency such as Standard & Poor’s (AA 
>> or above), Moody’s (Aa or above), or A.M. Best (A-X or above)."
>> 
>> I think the main point is that reducing the requirement from 3 years to, 
>> say, 2 years would provide important cost savings to applicants while still 
>> protecting registrants.
>> 
>> RT
>> 
>> 
>> 
>> On Aug 12, 2010, at 9:49 AM, Eric Brunner-Williams wrote:
>> 
>> 
>> Hi Richard,
>> On 8/12/10 11:10 AM, Richard Tindal wrote:
>> 
>> 
>> My understanding of the Financial Continuity Instrument is an amount
>>> of cash, or an irrevocable cash instrument, which the registry places
>>> under the control of ICANN.
>> 
>> The term is defined in the evaluation criteria, p94 of 312 in the 
>> draft-rfp-clean-28may10-en.pdf, para 2, which reads:
>> 
>> "In the Continuity question in the financial section (see Question #50), up 
>> to 3 points are awarded if an applicant provides, at the application stage, 
>> a financial instrument that will guarantee ongoing registry operations in 
>> the event of a business failure. This extra point can serve to guarantee 
>> passing the financial criteria for applicants who score the minimum passing 
>> score for each of the individual criteria. The purpose of this weighting is 
>> to reward applicants who make early arrangements for the protection of 
>> registrants and to accept relatively riskier business plans where 
>> registrants are protected."
>> 
>> What is being provided, and where, is not defined.
>> 
>> Assume an application by a cooperative located in Korea for an IDN string 
>> related to agriculture and rural food marketing which creates
>> a financial instrument denominated in KRW at the (Korean) National 
>> Agricultural Cooperative Federation, NH Bank [1].
>> 
>> The proposed facilities-based registry operation is in Korea, and the 
>> proposed operating costs, the costs that are the actual expense to be 
>> continued by some instrument, are proposed to all be paid in KRW to Korean 
>> accounts, individual (staff) and corporate (vendor).
>> 
>> I think it is difficult to conclude that the financial instrument only meets 
>> the continuity purpose if it is in dollars in a bank in Los Angeles.
>> 
>> At p186 of 312 there is a prior to or concurrent with the execution of the 
>> registry agreement reference, and the definition refers back to the quoted 
>> text above, from p94.
>> 
>> At p200 there is "... Registry Operator ... has duly executed and delivered 
>> to ICANN an instrument that secures the funds required to perform registry 
>> functions for the TLD in the event of the termination or expiration ..." 
>> Here the language addresses the instrument, what the currency 
>> instrumentalized is, and what institution the instrument is drawn upon, is 
>> undefined.
>> 
>> That's all we know from draft-rfp-clean-28may10-en.pdf.
>> 
>> Eric
>> 
>> [1] http://www.nonghyup.com/Main/main.aspx
>> 
> 
>