[soac-newgtldapsup-wg] JAS Request for information letter

[Evan Leibovitch <evan@xxxxxxxxx>]

Hello everyone.


In advance of today's call, here is the proposed request-for-information
letter as developed by the drafting team of Andrew, Avri, Cintra and myself,
as previously discussed.

I might be a few minutes late in joining the call but will be there.


- Evan



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Cost Questions from the JAS on gTLD Application Fees

The Joint Applicant Support Cross-Community Working Group (JAS) has been
chartered by the ALAC and GNSO to research methods which  reduce obstacles
and provide solutions for potential gTLD applicants in less developed
economies.

In response to the JAS’ Second Milestone Report, released in advance of the
ICANN Board’s Istanbul meeting, the JAS has received numerous community
requests to provide additional detail regarding its cost-reduction
proposals. In order to properly consider costs and effectively respond to
the ICANN community, it is important to understand the assumptions,
motivations and the structure of the $185,000 fee which ICANN has set for
all gTLD applications based on staff estimates.  Part of the JAS’ ongoing
research involves reviewing the rationale for specific expenses comprising
the $185,000 fee, in order to provide options regarding the suitability and
fairness of some of those expenses being passed on to JAS-qualified TLD
applications.

The JAS has reviewed the information contained in the several documents
already released by the ICANN Staff discussing the gTLD application fee
structure, including:

   -

   Cost Considerations DAGv1 dated 23 October
2008;<https://community.icann.org/download/attachments/16220501/cost-considerations-23oct08-en.pdf?version=1&modificationDate=1307147310000>
   -

   Cost Considerations DAGv3 dated 4 October 2009;
   
<https://community.icann.org/download/attachments/16220501/cost-considerations-04oct09-en.pdf?version=1&modificationDate=1307147323000>
   -

   New gTLD Budget DAGv5 dated 28 May
2010<https://community.icann.org/download/attachments/16220501/new-gtld-budget-28may10-en.pdf?version=1&modificationDate=1307147343000>;
   
and<https://community.icann.org/download/attachments/16220501/cost-considerations-04oct09-en.pdf?version=1&modificationDate=1307147323000>


While we appreciate the information contained in these documents and the
steps taken towards fulfilling the mandate for transparency and
accountability, we believe the information provided is insufficient and
lacks the required detail to propose solutions. It is therefore crucial that
the JAS ask several follow-up questions on the material contained in the
Budget and Cost Considerations in order to allow effective execution of its
mandated tasks.

In terms of the Cost Considerations of October 2009, the questions focus on
models and assumptions utilised in deriving figures for development and risk
mitigation, specifically:

   1.

   It is understood that the gTLD program development cost of previous years
   is reflected as a final figure of $13,475,000 given by staff. Once recovered
   from the gTLD program, this figure will be added to the reserve fund. We
   require a breakdown of the previous years’ cost in order to understand how
   the final figure was derived. Further, the WG hopes to determine the
   appropriateness and extent that this final figure be applied to communities
   not included in the gTLD program development process.


   1.

   Risk Costs are discussed as the result of the “scenario modeling
   quantitative technique that incorporates Monte Carlo simulation modeling and
   regression analysis, the Willis team identified risk elements and calculated
   the probabilities and severity of impact for each risk element. The analysis
   generated a risk profile map for the overall New gTLD Program“ is
   estimated as $30,000,000. In order to fully appreciate these results and the
   degree to which these risks are applicable to JAS qualified applicants, we
   require detailed information on the risk profile-map.

   This information is needed to assist the JAS research into reducing the
   risk cost component of JAS-qualified applications. It is considered by some
   in the JAS that the applications themselves may inherently entail less risk
   than conventional applications, therefore some tests might not be
   appropriately applied to JAS-qualified applicants, specifically related to
   due diligence and controls (eg. for contention). The JAS is also exploring
   whether costs can be saved (and fees reduced) by “offloading” risk to
   applicants, for example through insurance.


In terms of the Budget there are issues related to the subsection on
Application Processing. Particularly, in relation to the Figure 3 Model,
shown in Cost Accounting, we request a detailed breakdown of the expected
cost for each evaluation listed, specifically the JAS must understand the
cost models for:

   -

      Financial capability
      -

      Technical and Operational Capability
      -

      Registry Services evaluation
      -

      DNS stability check
      -

      String Similarity check
      -

      Geographical Names inquiry


Without review of the costing model used on each evaluation tassk (both
initial and extended) it is difficult to accurately assess whether a
particular expense may be appropriately applied to a JAS qualified
applicant.

Finally we require details on annual continuity operation cost models and
estimates, and how these numbers are derived (through assumptions,
weightings, formulas, etc.), as well as any special cost considerations
related to IDNs. For instance, has any feasibility research been done to
date on the incremental costs of processing multiple IDN scripts (expressing
the same string) within a single application?