Re: [soac-newgtldapsup-wg] ALAC statement on the GAC scorecard

[Alan Greenberg <alan.greenberg@xxxxxxxxx>]

I am not Evan, but let me try to answer. As you will see, I do have a 
particular interest in this.
ICANN has no cashflow problem so no external loan was taken out.

ICANN does have a policy under which it is attempting to build a 
certain cash reserve to make sure that it can continue to function if 
its revenues took a sudden hit. Although one can debate the size of 
the reserve needed, the principle is one used by many organizations.
The theory (and I have never studied it in any depth) is that in 
order to fund the new gTLD program, ICANN deliberately lowered the 
amount that it was contributing to its reserve over the last years. 
So in essence, we DID take out a loan with the lender being our 
reserve. The intent was that the initial round of applications would 
repay that "loan". In practice, the new gTLD program had taken far 
longer than planned to develop, and the costs have risen. A decision 
was taken somewhere around DAG2 or 3 that the application cost would 
not be increased to cover this overrun, but rather the repayment of 
the reserve would not only be from round 1 but further rounds as well.
So, if you discount the issue of the reserve, then the already sunk 
costs were spent out of previous year budgets and do not need to be 
repaid, and therefore charging new applicants for those costs is in 
effect double-billing.
If you accept that ICANN needs to build its reserve, then repayment 
is indeed reasonable. The point that I have been making all along 
(and I was the one to originally raise the issue of waiving repayment 
for our applicants) is that I accept this position and do believe 
that ICANN needs to build a reserve at whatever level the Board 
decides. But there is no cast-in-concrete rule about how fast that is 
done, and we can afford a minor perturbation by waiving the repayment 
for whatever we deem to be needy applicants.
Alan

At 21/05/2011 12:18 AM, Alex Gakuru wrote:
> Hello Evan,
>
> "Cost recovery" was again featured during our last call. Could 
> anyone hlep me understand if to conduct the historical work ICANN 
> took a loan - repayment now outstanding or if they merely used up 
> monies collected from global consumers and channeled through 
> contracted parties? I need to understand this to be clear whether or 
> not the "cost recovery" principle is not in fact a double collection 
> argument that should not be used against our applicants?
> regards,
>
> Alex
>
> On Tue, Mar 29, 2011 at 7:17 AM, Evan Leibovitch 
> <<mailto:evan@xxxxxxxxx>evan@xxxxxxxxx> wrote:
> Hello JASsers
>
> I will try to make it to the conference call in 10 hoiurs, but it 
> will be difficult as I have a doctor appointment.
> Whether or not I can make it, I want to make the JAS group aware of 
> the ALAC Statement on the GAC Scorecard, which was released this 
> evening. The statement -- which is still subject to ALAC endorsement 
> -- has been sent to the GAC and the ICANN Board at their requests.
> Of specific interest to this group is the ALAC response to GAC 
> Scorecard Item 10, which refers to the JAS issue:
> Regarding applicants from developing economies requiring relief 
> (#10): The ALAC has long been of firm belief that ICANN should offer 
> a beneficial pricing to applicants who meet rigid criteria regarding 
> location, local ownership, community service and financial need. We 
> continue to charter and encourage the "JAS" working group to explore 
> ways to reduce barriers within the ICANN application framework, and 
> advocate cost reduction for eligible applicants. The effort of ICANN 
> to empower applications from all parts of the world must not be one 
> of charity; it must not pit applicants against each other to 
> demonstrate who is most "worthy" for a limited pool of subsidy 
> funds. ICANN staff's refusal to even discuss the concept of 
> differential pricing, reflecting an inappropriate philosophical 
> approach to the issue, has seriously impeded efforts to research 
> potential areas of cost saving within the current application 
> framework. And while the Board response to (#10) is to await the 
> final work of the JAS, we note that it has already explicitly 
> rejected early JAS appeals for lowered pricing at the Trondheim 
> meeting. We are certain this posture is inimical to the global 
> public interest for an Internet ecology that is representative of 
> the peoples of the world, and we strongly endorse the GAC's effort 
> to request the ICANN Board to reconsider this regressive and 
> anti-competitive position. We also encourage ongoing monitoring of 
> the costs to administer the gTLD program to determine where price 
> reductions may be enabled for these applicants while maintaining 
> general principles of overall cost-recovery
>
> - Evan