Re: [soac-newgtldapsup-wg] RESENT Proposal for application fee reduction

[Mike Silber <silber.mike@xxxxxxxxx>]

Cintra

A couple of questions if you don't mind - in-line below. I apologise if 
some of these are pedantic, however I do not believe it behoves this WG 
well if language is used loosely.
Regards

Mike

On 22/03/2011 23:07, Cintra Sooknanan wrote:
> ---------- Forwarded message ----------
> From: *Cintra Sooknanan* <cintra.sooknanan@xxxxxxxxx 
> <mailto:cintra.sooknanan@xxxxxxxxx>>
> Date: Mon, Mar 21, 2011 at 10:17 PM
> Subject: Proposal for application fee reduction
> To: SOAC-newgtldapsup-wg@xxxxxxxxx <mailto:SOAC-newgtldapsup-wg@xxxxxxxxx>
>
>
> Dear All,
>
> Following Peter Dengate Thrush's statement at the GAC/Board meeting in 
> March that a fee reduction will be considered for needy applicants.
I have no recollection of such a statement being made. Can you please 
point us to the transcript?
> I propose that we suggest a fee removal/reduction
Can you please explain the use of the term removal/reduction?
Are you proposing the fee be waived in its entirety by the term "removal"?
What is the preferred choice?
If reduction - by what amount and how is this justified? If on a sliding 
scale - then using which criteria?
> to apply to the legal part of the application cost.
Having just rechecked the DAG and the supporting documentation, I cannot 
find any reference to a "legal fee". Possibly that is shorthand that has 
been used in the group for another component of the application fee - in 
which I apologise for my ignorance and ask to be better informed.
Are you referring to the Risk Costs?

I quote from the cost considerations document 04 October 2009:

"3.    Risk costs. Uncertain costs and costs that are harder to predict, 
or risks, include unanticipated costs such as variations between 
estimates and actual costs incurred. These costs expected value amount 
to $30,000,000, or $60,000 per application."
> The legal part will instead be covered
Covered by whom?
> by the needy applicant by -
>
> a) Passing our criteria for needy applicants;
Again - will this be a full waiver, a partial waiver or a sliding scale 
contribution.
> b) Taking out and maintaining Indemnity Insurance to some minimum 
> coverage amount e.g. US$5million; and
Who will take out and maintain the insurance? In whose favour? In 
respect of which incidents / occurrences?
> c) Contributing annually to the body evaluating the criteria for need
Who will make this contribution?
> (suggest ICANN Non profit company created for this purpose)
I am not sure what this means? Are you suggesting that ICANN plays this 
role or a new entity? If a new entity - who will take the responsibility 
for the new entity including establishment costs, appointment of a Board 
(or similar), staff and salaries, tax exemption (if applicable), 
location of establishment (USA or elsewhere), audit and audit costs and 
other running costs?
> a specific amount to ICANN'S gTLD Compensation Fund. This fund is to 
> be managed for the payment of losses in excess of that covered by 
> insurance or for other purposes and is to be disbursed and managed 
> solely by the body evaluating the needy criteria. See 
> http://www.sra.org.uk/sra/regulatory-framework/solicitors-compensation-fund-rules-2009.page 
I see absolutely no equivalence between grants to persons who have 
suffered losses or damage due to the actions of solicitors and the 
current situation.
If you are suggesting the creation of a compensation fund for consumers 
- that is a massive exercise (which could be quite interesting) but 
would involve a policy change at gNSO (and possibly ccNSO) level.
If you read the DAG - ICANN enforces certain rules against registries 
but does NOT step in to compensate anyone who has suffered damages. 
There is no element of the application fee that relates to 3rd party 
damage. The fees relate to ICANN's costs and risks.
> The aim of indemnity insurance is to allow aggrieved parties to 
> directly claim against the gTLD owner through their insurance provider.See
> http://www.insuranceprofessionalindemnity.org/
> http://en.wikipedia.org/wiki/Professional_indemnity_insurance
> http://ezinearticles.com/?How-Professional-Indemnity-Liability-Insurance-Works&id=2658423 
> <http://ezinearticles.com/?How-Professional-Indemnity-Liability-Insurance-Works&id=2658423>
> http://www.bytestart.co.uk/content/20/20_3/hiscox-professional-indemnity-insurance.shtml
> http://www.sra.org.uk/siir/
> Interestingly, we may also cater for matters dealt with by the 
> Ombudsman e.g. as set out in the link above
> 1/.8/
>
> /Award by regulatory authority/
>
> /The Insurer will indemnify each Insured against any amount paid or 
> payable in accordance with the recommendation or determination of the 
> Legal Services Ombudsman, the Legal Complaints Service, the Office for 
> Legal Complaints (including the Legal Ombudsman pursuant to sections 
> 137(2)(c) and section 137(4)(b) of the Legal Services Act 2007) or any 
> other regulatory authority to the same extent as it indemnifies the 
> Insured against civil liability provided that the Insurer will have no 
> Liability in respect of any determination by the Legal Ombudsman 
> pursuant to section 137(2)(b) of the Legal Services Act 2007 to refund 
> any fees paid to the Insured./
> This also has the benefit of taking ICANN out of the equation as the 
> party being sued and in fact may allow ICANN to join the aggrieved 
> party in its claim if it is found that the gTLD holder also caused 
> some damage to ICANN's reputation etc.
ICANN has never been IN the equation.

I am not sure how this proposal adds anything as it seems to be totally 
unrelated to the any version of the DAG to date or current practice in 
any TLD?
> This is just a framework I am suggesting, we will have to modify it to 
> the gTLD process. But I think it is applicable and a good way to 
> reduce fees and build some assurance that ICANN will not have to 
> constantly be on guard for litigation.
I really do not see how this is applicable or how it can reduce fees. 
The ICANN concern about litigation does NOT necessarily relate to 3rd 
parties.
In addition - ICANN cannot force anyone to use such a process. At best 
ICANN can take out insurance - but will have to pay for it and hand over 
litigation to the insurance company.