Operating Plan Workshop Wednesday 13 February 2008 ICANN Meeting New Delhi, India >>DOUG BRENT: Okay. Can everyone hear me? I take that as a yes. I'll try -- my name is Doug Brent. I'm chief operating officer at ICANN. I'll try not to be the scourge of the transcriptionists and the translators and pace my normal fast-paced English a little bit more appropriately. We have now a little bit less than an hour to talk about the current state of the, you know, very initial kick-off of operating plan and budget for ICANN this year. I don't think this is going to be -- this first part of this session is not going to be a big public input session. I want to take this opportunity in this 50 minutes we have remaining to bring everyone up-to-date on where we are on the budget. You'll see we have about five months left in the process to get -- you know, actively solicit feedback. We've done it this week with the registrars, have some planned with registries, and I'm sure other proactive follow-up coming later. I just want to give you all a feeling. Probably we'll fill up 50 minutes just in talking today. So the purpose is to kick off this whole planning process. It's a little bit different this year than in the past. I'm going to take people through that. We're trying to inform a debate that doesn't say, you know, is the budget too big, too small. I must say I'll -- you know, we've already talked in the context of translation. There will be many demands on this budget, but to try to get it to be a more informed conversation, really engage the community as early as possible, and the driver of all this is take the strategic plan that was approved in December and, from that, build an operating plan that will deliver on the strategies the community agreed to. I think many of the people in this room are familiar with this. By the way, every time we show this slide, Kurt Pritz gets a little, you know, fee because he originally designed this. There's an annual planning cycle for ICANN. In the first six months of the fiscal year, we do a strategic plan. In the second six months of the fiscal year, we begin to work on the operating plan. That fiscal year, by the way, begins July 1st, so we're in that second six months and we're now just starting the operating plan process. I'm going to take a minute on this slide and try to describe what's the differences between what we've done in the past and what we're doing this year. In the past, about this time of the year, if you look along the top of this time line, about this time of year what we do is in February/March time frame post a list of activities. Last year it was, I think, about a 26-page Excel spreadsheet, detailed list of activities, that identified everything ICANN was going to be working on. Then in about May of this -- of that time cycle, mid-may, post an initial budget that would get discussed with the community, and then finally discussed in person at the June meeting, and considered and approved by the board. That was the typical process. What we're trying to do -- I think what we've found in the past is the community really gets engaged in this process once we start putting numbers on these activities. Once we start saying, "Here's how much ICANN is intending to spend" or, "Here's what the fees are" or revenue. So we're trying to move that process up very, very early. Instead of waiting to May for the first time that the community sees these numbers, we're doing it now in February, with five months left of consideration on those numbers. What that means is, ideally that this should provide the community as a whole with a lot earlier and more extensive opportunity for feedback. That's the goal. It is definitely a work in process. In fact, you'll see at the end -- this -- I would not call this a proposed budget for ICANN. It's not a proposed budget for ICANN. It's an initial starting point, a budget framework, and if you hang in with me till the end, you'll see that actually the -- if you take revenue minus expenses and reserve, it sort of doesn't all add up. And we're not that bad on accounting. We actually can do, you know, A plus B equals C, and so this is an initial proposed framework and that's what we're talking about today. It's a work in process. There's an attempt in this year to make the operating plan activities more accessible. We often talk about transparency and openness, and obviously those are critically important, but the third part of that is transparent and open in a way that people can understand, that's accessible. And so there's an attempt to provide operating plan details in both a summarized way and more outcome-oriented so you can quickly scan through and see what it is we're trying to do. I won't talk about this full costing now. I will say there's also an attempt in this initial operating plan to provide a multiyear view for ICANN, looking out actually into fiscal year 2011. What are the challenges? Well, first I can tell you from an ICANN point of view, there was just not enough weeks between the L.A. meeting and now to do all the work that we wanted -- am I cutting in and out? Is it okay? Yeah. Thank you. So we always just have loved more time to do the work but, you know, sort of that was one challenge. I think everyone should recognize that -- I'm going to give up on this. Is it fine? Boy, it just keeps sounding to me like it's cutting in and out. That this is a less precise view. As people are involved in their own business planning, we're actually talking about planning out 18 months from now in a year where we're halfway through the current fiscal year. There's still a lot more work to do so it's early. We're also still in the process, as a community, of making decisions about ICANN practices that will impact the budget. The workshop after this is to discuss travel expense support policies, and -- boy, it's sort of exciting this way -- and, you know, definitely decisions we make there could have an impact on the budget. So this is -- this, as I say, is a work in progress. If you want to look at this operating plan theme -- and by the way, there's a 25-page or so narrative document posted on the Web. Today, by the way, it was translated into several languages. I think six languages. I'm not exactly certain. Maybe Pablo could even check for me. There was a posting today in many languages. Much of this material is covered there, but I wanted to extract the themes for you. Yeah, I'll switch. The first theme is really the reality of IDNs and new gTLDs. I don't think you have to go to many different meetings in the proceedings here this week to see how much that impacts how we're thinking and, you know, what's happening in the ICANN community. From a budget point of view, you'll see significant up-front investment happening in fiscal year 2009 to make that happen, and it adds -- you know, there's a lot of answers that haven't yet been determined. There's uncertainty in that environment. I think, you know, probably this is more of an ICANN staff internal point of view, but certainly has an impact on the community that if you imagine this future world where ICANN is, you know, sort of doing customer support or operations of many new TLDs, operational efficiency and effectiveness becomes a lot more important, as opposed to, you know, smart people doing firefighting. Just like IANA is really a process-driven organization, other parts of ICANN have to become that same kind of process-driven organization and have appropriate tools to support that. You know, this was sort of relevant to the previous session. You know, increase in global participation is only going to increase. We have built in, for example, into this initial budget framework a million dollars for the translation policy that was just discussed. Now, we haven't yet adopted that policy. We haven't, you know, decided that that's the right number, but, you know, that is in this initial budget framework. Some important things in terms of registrant protections for 2009 and really driven by the strategic plan: ICANN is, based on that plan, positioning itself to publish and sign the root. That doesn't mean that -- you know, many decisions have to be made before ICANN would be doing that, but be operationally ready to perform those tasks. And in combination with this country code community, look to providing some security, some substantial security training in 2009 as well. I think the number right now of registrars signed up for data escrow is mid-700s. I see Tim nodding. So it will be full funding of that program for participation and data escrow and a ramp in compliance. This is a simple diagram to try to explain how we thought about explaining this budget, this budget and operating plan for 'fiscal 2009. If you look at that blue bar on the left, that represents ICANN's daily operations. We then took out separately and identified key initiatives. You'll see there's actually 18 separate key initiatives identified here, some of which are particular -- are particularly relevant to IDNs and new gTLDs, and we've categorized the spending into three buckets: Daily operations, key initiatives, and new IDNs and -- IDNs and new gTLDs. This is sort of an incomplete chart as it stands, and it was in response to a comment Bruce Tonkin made and we will be fleshing this out as we proceed down the path. And by the way, I'm sure these documents will go through many revisions as we get to a final budget. But to try to give everyone some sense in a concrete way what those base activities consist of, what does sort of opening the door look like independent of the -- of these key initiatives. You know, so it would be -- you know, I know we've had a lot of teleconference problems and I'm sure we'll hear about that again in the next session as well, but for example we spend right now more than $10,000 a month on some series of teleconference calls. "L" root connectivity and expenses to keep our multiunit "L" root operations going and in place. Ombudsman expenses, sort of finance/HR/I.T. expenses. Sort of the normal expenses of keeping the doors open as well as things like base IANA services. The key initiatives that we've used to identify expenses for 2009, again, with the goal of making it a little easier for you to identify where the expenses are, are shown on this page. I'm certainly not going to go through all of them, but I think you see how these break out. And what we've done is gone through at a -- at a more detailed level. I'll show you an example. And tried to identify operating plan outcomes for each of these areas. So we used as an example compliance. And this would just show you -- and you'll see in the text document posted on the Web -- a series of these kind of charts looking at outcomes in each of these areas. For compliance, for example, it says annual audit, that top line, that's an ongoing activity. Site visits for compliance, expanding up to 100 per year. You can read down the page. So the idea is: What is this incremental and -- staffing, you know, Asia staffing, what is this incremental money buying us and what is ICANN signing up to deliver for that incremental money? As I said, the details on all 18 of those areas are already published, now published in multiple languages, and is available online. We'll be actively seeking consultations with, you know, many of the constituencies who typically have an interest in budget input. I would really encourage anyone who wants to further dig into this to send me or Kevin Wilson an e-mail note and we will follow up to get that consultation going. But we'll be proactive about setting up a number as well. So let's talk about the expenses in context of these, you know, budget building blocks. On the top of this slide is fiscal year 2008 and bottom, fiscal year 2009. You can see that in fiscal year 2009, initially -- this initial framework would call for a very significant increase in ICANN's expense budget. For key initiatives, it would be increasing by about $6 million. Increasing by more than $10 million for expenses related to new gTLDs. So next question is: Where's that money being spent and why? Let's start with the new gTLD and IDN line. There's three different kinds of expenses, and you probably could break this up in an even more fine-grained way, but three different kinds of expenses in talking about new gTLDs and IDNs. One are finishing off the implementation work that must be done before we can turn on the application process. Examples of that would include dispute resolution providers getting -- you know, getting that all working. Contract and the contract process for new TLDs. So there's a piece of work there. The second bucket of work are start-up expenses related to getting sort of the customer support or operational side of supporting new TLDs going. You know, that's staffing, that's systems, integration with IANA, for example, a variety of systems. The third bucket are costs related to taking applications. In this budget as it stands right now, we make no effort to model the expenses for new gTLDs related to application processing nor do we include any revenue for application fees. GNSO recommendation was that this broadly should net to zero. There's a community discussion going on right now, "Well, sort of what does that mean? What start-up expenses would you include or not include? What does that mean?" We're not addressing that today in this budget. This just looks at the first two kinds of costs, which are finishing off the implementation process and being ready to provide the customer support, operational support, for new TLDs. Last point on this slide that may be worth mentioning is, you know, Kevin Wilson and I -- Kevin is the CFO of ICANN -- and Kurt sat around a room with sort of every department manager at ICANN saying, "What is this future going to look like where we may be operating hundreds or, you know, thousands of TLDs." When I say "operating" sort of the customer support side of those. And practically each person we talked with said, "Well, I'm going to need a new computer system to do this." You know, the registrar constituency -- "Here's what I'm going to" -- you know, the support -- "Here's what I'm going to need for radar enhancements," which is our registrar tool. The registry people said, "Here's the enhancements we need for the registry tool." Compliance said, "Here's what we need for complaint management." The IANA guys says, "Here's what we need for integration with our automated root zone management tool." ICANN should not be building seven computer systems and certainly not I think the way anyone would want to see us doing it. So part of this expense budget is -- sounds like Marilyn wants to make a comment right now. Just let me finish this slide, Marilyn. That one of the thoughts here is that we wouldn't want to, you know, massively invent a lot of new systems but we will need operational streamlining to do this work. Marilyn, you want to make a comment? >>MARILYN CADE: I want to ask a question. >>DOUG BRENT: Go ahead. >>BRUCE TONKIN: [Speaker is off microphone] >>DOUG BRENT: That was a virtual question. Yes, go ahead. >>MARILYN CADE: Doug, this is a fantastic -- >>BRUCE TONKIN: [Speaker is off microphone] >>MARILYN CADE: This is a fantastic amount of detail and exactly the kind of thing that I think we all want to be able to discuss. >>DOUG BRENT: Right. >>MARILYN CADE: So my question is: When do we get to discuss it? >>DOUG BRENT: Well, so I -- you know, I can stop talking right now and we can discuss it. I just don't know how much time. Since it was posted Monday, I don't know how much time people have had to review it. We can -- my view is, we have five months to discuss it, Marilyn, and that the purpose of doing this presentation now is to kick off that five-month consultation process. >>MARILYN CADE: I think this -- I think, though, that as you go through this, Doug, that there are going to be times when it may be helpful for us -- and I wanted to ask this now because I -- I have read -- I have read it, so I do have questions. >>DOUG BRENT: Okay. Well, you know, so all I -- >>MARILYN CADE: Okay. >>DOUG BRENT: I'm not doing this for my benefit. >>MARILYN CADE: Okay. So I just wanted to clarify that if people do have questions, we should just raise our hands or come to the mic? >>DOUG BRENT: I mean, I think that's the right way to do it. And then we have a half an hour and we'll see if we get to the end of the presentation first or the or the answers to the questions. I guess what I had thought but I was to be responsive to what people want to hear, what I had thought was that we'd use this as an initial sort of a report and then set up specific follow-ups for people to comment and get their questions going. There is a public forum going right now, but we will set up, you know, proactively telephonic consultations. So I think I've covered these points, but if somebody has a burning question, I really encourage you to come up and I'll stop talking and try to answer the question or take the comment. In terms of -- I don't know, this is a big room, I don't know how legible that is from the back of the room, but these are those -- of those 18 activities, these are the other 15, the non-IDN or new gTLD-related. I'm just going to pick out a couple of these, but again, sort of to Marilyn's point, I think one of the interesting things for us to do over the next several months is dig into these in more detail. And the point of this kind of presentation -- actually, I missed something on the previous slide that I'll come back to. The point of this kind of presentation is we're actually trying to draw out -- staff is trying to raise up, surface the large-dollar amount items in our budget so we can debate them. To that point, talking about something a little debatable, on the previous slide, you know, we called out over $3 million budget for sort of an outreach and awareness PR program for new TLDs. Why would we do that? There's been a lot of discussion that says we wouldn't want just ICANN insiders to be the ones or -- you know, the world to be surprised around this new TLD process and I must say, you know, even talking to some people at the cross-constituency -- some business people at the cross-constituency meeting yesterday, I think we're still really early in the awareness of this. This is -- but why put a number like this out there? It's not some staff idea that, you know, we want to go run a big Super Bowl ad, but rather, you know, we think we're following through on policy recommendations. Chuck, go ahead. >>CHUCK GOMES: I'm glad you came back to this, Doug. You made a statement a little bit ago that you haven't included in this budget the -- I'm not quoting you accurately, I'm sure -- >>DOUG BRENT: Right. >>CHUCK GOMES: -- the costs and the revenue associated with the application process for new TLDs. Does that mean that none of those dollars on either the cost side or the revenue side are included in this budget? >>DOUG BRENT: That's right. >>CHUCK GOMES: Okay. >>DOUG BRENT: Although, Chuck, I guess you could debate should -- should a start-up expense like this be modeled into the costs of applications. And I think that could be a healthy debate. What we've tried to do is say, "While providing a 3-year look, really what we're going to end up doing at the end of this year is asking the board -- we, the community, are going to be asking the board to approve a budget for fiscal year 2009." We have some expenses that we'd call relatively certain expenses related to the gTLD start-up. We're modeling those in. For actually processing applications or revenue associated with applications, we haven't modeled those. >>CHUCK GOMES: And in the final budget, will that be done. >>DOUG BRENT: Well, it's a real challenge and I think we're going to have to figure out how to do that. You know, one thought that's come up is maybe like some companies say in the next year, we're going to be engaged in significant merger and as quick as activity. As that begins, we'll separately add on that budget. >>CHUCK GOMES: Yeah, okay. And it's not as big an issue for me because I -- >>DOUG BRENT: Right. >>CHUCK GOMES: You know, having been involved in the recommendations I know that it's supposed to be a usual what. >>DOUG BRENT: Right. >>CHUCK GOMES: So that's not a big issue. But I would suggest in future versions of your communication, and in the document itself, that you make that clear. I automatically assumed that they were in there, and even though they weren't itemized -- >>DOUG BRENT: Right. >>CHUCK GOMES: -- wrong assumption, I know now, and that I -- I knew it was a wash, so it wasn't a big deal for me, so -- okay. >>DOUG BRENT: Well, so, I mean, we tried to but clearly didn't succeed, so that's a good -- that's great feedback. Engine, by the way, I just want to point out I'm not standing up her, you know, furiously scribbling notes because I'm going to use the transcription to help us next. >>ZAHID JAMIL: Hi there. My name is Zahid Jamil. I'm a lawyer for -- I represent ccTLD interests in Pakistan. I saw the global outreach budget. 3 million seems very good. But you said it was only for new TLDs. There is a concern at -- you know, maybe it's not, and I'd just like a clarification on that. >>DOUG BRENT: Right. >>ZAHID JAMIL: Because just to sort of put a point across that certain countries like, you know, Pakistan and others are basically feeling that there's not a lot of awareness on ICANN issues and we would like to promote that to have a better understanding, and I just wanted to know whether there's any fiscal funding for that kind of process. Thank you. >>DOUG BRENT: No. That's great. And again, I think it's going to take us a while to sort of crunch through this -- crunch through the information. Actually, this page of information is intended to be for everything other than the new TLDs -- you know, new gTLDs and IDNs page, so this would cover definitely outreach to cc's as well. I'm just going to pick out a couple of these. In a half an hour, we're not going to, you know, have time to work through these. One of the ones I mentioned at the beginning was compliance, and this budget would have compliance increasing by about a million dollars. This would say 902,000, which is a level of precision that is not in this budget. But, you know, the idea behind that kind of increase in compliance activities is that, you know, to avoid problems for registrants before they occur, and I think be responsive to community members who said that ICANN needs to be more active in compliance. To pick out a couple more, I mentioned DNSsec implementation, root zone publishing, country code outreach around security programs. That's about 1.2 million increase over last year. You know, in salesmanship, this may not have been the best presentation, but you'll actually see a dollar reduction on this list as well where it says "technical leadership." ICANN is not providing to provide less technical leadership. That's not the goal. But in fact, "L" root -- ICANN spent a significant amount of money in the first half of this year on instantiating a second instance of the "L" root root server and we're not going to spend that money again next year. So as we refine the way we talk about the budget, just like if you're doing a project at home, you'd expect there to be a beginning, middle, and an end, and when that project ends, you stop spending money and, you know, we'd like to represent that budget this way as well. >>CHUCK GOMES: Can I get -- Doug, can I -- >>DOUG BRENT: Yeah. Chuck, go ahead. Sorry. >>CHUCK GOMES: This is Chuck Gomes again. Could you back up that slide again? >>DOUG BRENT: Sure will. >>CHUCK GOMES: I was kind of letting you go to ones you want to pick out. I wanted to pick out one myself and that's the policy development. >>DOUG BRENT: Right. >>CHUCK GOMES: When I looked at that and I see a $20,000 increase and I consider the GNSO improvements that are considered -- >>DOUG BRENT: Right. >>CHUCK GOMES: -- where is the funding for that? Because it's huge. >>DOUG BRENT: Right. So it's -- it's really interesting. Again, I think over time, we're going to have to figure out the right categories to communicate well to everybody. So if you see on this chart, and you -- I literally don't know if you can see it well from where you're standing, Chuck, it calls out organizational improvement and organizational review as two separate line items of significant expense in this budget. >>CHUCK GOMES: So it's under organizational improvements. >>DOUG BRENT: It's under organizational improvement, with about a $348,000 increase in fiscal year 2009. I know you're shaking your head but that's where it is. >>CHUCK GOMES: Okay. No, that's helpful. That's a lot better than 20,000. >>DOUG BRENT: And then the second thing is that there's built into this budget about $250,000 of constituency support that, again, doesn't show up in the policy budget. A little bit the way we've done things in the past is around ICANN's functional organization, which is, we have a policy department run by Denise Michel. She's had a lot of these activities. This is trying to provide sort of a project-oriented look at the budget. >>CHUCK GOMES: Well, wouldn't you consider GNSO improvements a project? >>DOUG BRENT: Well, and it shows up under organizational improvement. >>CHUCK GOMES: Okay. All right. >>DOUG BRENT: Okay? So I'm going to keep going. I think. Yeah. Good. So in terms of revenue, I'm going to cover this relatively quickly, but again, would welcome questions. This is an area we could -- the spreadsheet behind this has its 30 tabs on it and we could fire up the 30 tabs on the spreadsheet to talk about as well. In terms of fiscal year 2009, the major assumption about revenue for ICANN, where are the funds going to come from, is the same place as it comes from in fiscal year 2008. So that is primarily the generic registries, registrars, some ccTLD contribution, RIRs, et cetera. There's a very modest assumption that there would be revenue from the -- from some new registries that were operating in 2009. An important assumption in this budget as well, and I know it's been another hot topic of discussion at the meeting is from a budget model point of view, not a policy or policy implementation point of view. From budget model. Assuming that the transaction fee, the ICANN fee, is applied to all transactions including the add grace period. This is the one that's probably more exciting, and I know -- I am sort of looking over at Chuck when I say this. I think for the whole group, probably a different forum than this will want to dive into some detail and understand the assumptions. I know I am repeating myself, but I think it is very important to consider again budgets don't make policy. Budgets don't make implementations of policy. This is a financial model of a lot of uncertainty of some policy decisions and lot of implementation decisions that have not yet been made. We are not trying to in any way presuppose the answers to those things. This budget exercise is trying to be responsive to the request of give us a look that's more than a one-year look on how you think the future might be. So we're in this budget model, which is not a prediction or a forecast, if I haven't said that enough already. We're assuming 100 new TLD applications in fiscal year 2009, 300 in fiscal year 2010 and 500 in fiscal '11. I would say practically every registrar and registry and anyone, I meet I ask them this question: How many will there be? And you get answers from 50 to 1,000 or more. The answer I love the best is, "I think there will be 50 applications." And then when we ask, "How many are you going to do?" the answer is 40. It ranges all the over the map. So this 100, 300, 500 is not a prediction. It is a model for us to look at. Further, for this model is the assumption that very few of these TLDs would become operational in 2009. We looked back at the sTLD round and saw when those went to contract and from contract into operation, and there is an assumption built into this that says the first registries, 15% of the registries come up to operation six months after an application is approved. It goes 15% per quarter thereafter. It also says that registries will generate about on average $106,000. What's the logic behind that? The thought is that of these new registries, many would be non-traditional registries where with lots of registration at the second level so that you would have traditional kinds of registries that were high volume transaction registries and non-traditional. Again, as we discussed a couple times now, the assumption is that revenue and cost from applications would net to zero. So a couple of lines I'd ask you to focus on here. If you start out looking at the very top line and Kevin Wilson, our CFO, would be the first to say this is not the way the accounting records would show it but this is from a budget model, we are showing that the application revenue and costs net out to zero, so, again, to Chuck's point that that's sort of taken off this model. Secondly, that for fiscal year 2009, we're forecasting about $61 million of revenue for ICANN. That forecast assumes that there's very little revenue from new gTLDs. In fact, you could take out the $400,000 that's predicted in this model and it wouldn't really have a significant impact on revenue for ICANN. That is really the current revenue sources. The total expenses given the increases I talked about previously would be about 57 million. That means revenue net expenses is about 4 1/2 million. If you look at the strategic plan, it doesn't come quite out and say a number but it talks about growing the reserve to one year's operating expense over a three to five-year time frame. That would probably say the contribution to resolve should be 10 to $15 million in fiscal year 2009. And putting a number of 10 million would say we are about $5.5 million off. That would mean by the time we are done with the whole budget process, we will either reduce our expenses by $5.5 million, we'll increase the revenue or decrease the reserve contribution. Those are the three variables. So that's why I say when it doesn't add up today, those are the things we will have to look at. The next line I would sort of direct you to is where it says total revenue between the double lines. We're forecasting an increase in total revenue as new gTLDs come online. You can see if you look in the sort of top right part of this chart or look online, the revenue, if we were to apply existing fee structures to new TLDs could grow to be quite substantial relatively fast. You know, the goal for ICANN is to within its charter and mandate provide, you know, a set of capabilities to the community around our mission and that at there would be some notion of fee reduction in there to sort of make it in line with what we see the increases in operational expenses necessary to make the organization run. One last thing I want to point out on this slide is that actually for fiscal year 2010, the forecast would be for total expenses to go down. And I think that's consistent. One of the reasons why the board and the community has asked us to provide a multiyear view is if you have to understand the startup expenses of the new gTLDs in the context of what does that mean on an ongoing basis. I think what it means on an ongoing basis is many of these expenses we have in 2009 aren't needed in 2010 and the expenses drop off. I'm not going to go through these charts right now. These are posted online. I think we will have some time for questions and comments, so I'm just going to keep driving. These charts are available online and you can take a look. As I've said a couple times, this three-year view is not intended to be a forecast. It is not a prediction. It is a planning model. What we've found especially as we've discussed this in smaller groups with the Board Finance Committee, amongst staff, among the board, with registrars -- I am sure it will be true with the registries, with every other constituency that we talk to -- it really energizes the discussion around what will the implementation model be, what are the assumptions around fees, timing, cost recovery, all these things. So I think it is very positive in that sense, but it doesn't try to be an answer to those questions. It is a financial model. I don't want to skip over the last point on this slide. This is a time -- I personally have had experience in startup companies, and you have that kind of uncertainty when you are introducing a new product or you are going into a market that you've never been before. For ICANN, this will be a big departure in terms of risk and uncertainty. And I think, you know, in some ways probably we can't even forecast today. So that another important discussion to have at the community level, what the risks? What are the uncertainties? Could ICANN incorporate that to make sure we are an ongoing viable entity in the future? There are unknowns. As I said at the beginning, since we're doing this really early in the cycle, there is a bunch of decisions -- and this is probably a subset of the list, open items in the community right now that could have budget impact. Board member remuneration has been something that's been put on the table and discussed that I think we'll have to address in this planning cycle. That's not built into the budget right now. Obviously, that would have some impact. We're going to be discussing for those who are interested just at 5:30 a start of a discussion around possible changes to travel support and there is no changes built into this model. I just picked out one that I happen to know. I am sure there is a longer list. But ALAC is considering a possible summit in fiscal year 2009. That proposal is something under discussion -- sounds like Sebastien doesn't agree with that. Okay, so maybe I'm not completely right about that. But one of the things is that there is a discussion of an ALAC summit, and that could have a budget impact. And, you know, I think something that I've heard practically at every breakfast, lunch, dinner that I've participated in is, you know, what's the meeting structure? Are we running meetings the way that best serves the community? How might that have an impact on cost? And then, finally, as we discuss changes in expenses, fees, revenues, et cetera, all those things would have budget impacts. Next steps is clearly community consultation. As I said, we've done one formal one here at the meeting this week with many offers for more. I think people have just been too busy with other work. We have one planned in March already and would really welcome -- we'll be meeting with ALAC tomorrow as well, but really welcome anyone else who wants to make a comment. Now that staff has performed this sort of top-down estimate, now we have all the hard work to do to build that up from the bottom, just like if you were going to do a budget for yourself. We have to really sharpen the pencils and these estimates that have zero, zero, zero at the end don't work anymore. We will be working with the priorities through the board committee -- I see Raimundo ready to comment -- and the community as a whole, do a lot more detailed analysis on the new gTLD model. The result of all that will be probably several revisions of this document, but certainly in May an actual proposed budget and operating plan with six weeks to go before ultimately a review and approval, we hope, in Paris. So with that, I'll stop talking and give the floor to Marilyn for some questions. >>MARILYN CADE: Would you -- could you reverse -- >>DOUG BRENT: Just tell me where to stop. >>MARILYN CADE: One more. Yeah, stop there for just a minute. >>DOUG BRENT: Okay. >>MARILYN CADE: My name is Marilyn Cade, and I am a part of the business constituency. I'm going to make my comments in two parts. The first part is on behalf of the business constituency. The business constituency has four, five of our members including myself have formed a small group to try to prioritize looking at the strategic plan and the operating plan. And I'd like to propose that we come back to you and invite you to a conference call with our members in order to go in more detail through some questions at a time mutually convenient. >>DOUG BRENT: That's great. >>MARILYN CADE: So I put that offer on the table. So now let me speak as an individual. One of the things I didn't hear in the discussion, Doug, is something that I referred to before at various times. I'm pleased to see this list. There are items on that list that I think are incredibly important to address in the near term, and I'll mention one of them and in the public comment period tomorrow for the board when I talk about accountability, I am going to mention this item again. And that is remuneration for board members. I think it is very important to prioritize addressing a pragmatic and responsible and accountable remuneration mechanism for board members and to also establish that as a part of our accountability processes to the community, our board members work incredibly long hours. We expect a lot from them. Becky Burr and I took a look at practices from a number of other organizations. I'm sure people have all sorts of reasons for why it will be difficult and why ICANN is unique and not all board members can accept it, et cetera, et cetera. I think we have to be realistic about where we are as an organization and the demands we place not only on people to do the work but our demand for very high quality board members. So let me just say that I'll say more tomorrow on my view of this on our contribution of our ability to ensure that we can build the right platform of leadership and ensure the right platform of leadership as the challenges for the organization will only continue. On the issue of travel support. We're going to talk about that shortly. I'll just preface my comments by saying, I do think ICANN needs a transparent and accountable travel support policy that is not a subsidy but is a -- just demonstrates the ability to provide support on a principles-based, needs-based approach. And I think that needs to be developed by a broad group of representatives from the parties from the community from the constituencies and not by the parties who themselves immediately expect to benefit from the travel policy. I think that is the best way to ensure that there is a neutrality in consideration of the implications. There is a way perhaps to think about a way addressing, ensuring that funds are identified for items like this, that decisions haven't been made about yet and need to be made about in very short order. And that would be to identify funding in a contingency fund that suggests, well, we could at least get started because we've created this contingency fund that we could draw against. >>DOUG BRENT: Marilyn, I have absorbed all those comments and you got the first word in on the travel policy discussion which is great. I think two things, first of all, in the existing 2008 budget we actually, at the behest of the finance committee, built in about a 5% contingency budget with a goal obviously of not spending that. We certainly -- I would assume we will put in some similar mechanism into this budget so that's a likely outcome. I would -- the reason I put this list up here is I would hope maybe I'm an optimist we could work through this and decide where they fit in the budget and do this at this time. Raimundo? >>RAIMUNDO BECA: I will speak in Spanish. >>DOUG BRENT: Okay, if you don't mind I will read over here. Is it okay? Can you hear me? >>RAIMUNDO BECA: I'm going to make four comments. I will not surprise you in any way because you've already heard them on four occasions this week. The first comment is that when we see the figures of this budget, we should have two figures in this thing, in Euros as well as dollars, because there's a very significant appreciation of the dollar at this moment. And I think in the next three years this is going to continue. And the second comment that I want to make deals with, that I would like that we make -- and I want to make this not as the president of the finance committee. The second comment is that it is related with the key activities, and that the key activities should be referred to the strategic plan and they should be grouped by categories and principally because -- because the strategic plan is a follow-up of the exhaustion of the -- of IANA and the display of -- and this exists in the strategic plan and it cannot -- and all the people cannot be present here. It is not the point that we need funds for this, but they're not in the budget and that's why we can't do anything. And third comment that I want to make has to do with the net income of the new TLDs and the new (inaudible). It is not impossible that there be -- that there be lack of income. We should tell the community very early that the objective -- that these can exist and leave a foundation so that the directory of the new foundation decides what has to be done with the principles that exist. Because we cannot create a phenomenon that, for example, we see -- that we are going to work with the tariffs of the registrars or anything like that. And, for example, that the Dutch disease that made a whole nation fall, we cannot take income -- we cannot have extraordinary income and have -- and join them to the expenses. And the last comment that I want to make deals with the fact that I want to put in the model an eventual reduction as far as the tariffs are concerned. I think that it is better to say what is the additional volume that are going to be added to the normal tariffs. And if this volume produces a net, we have to discuss with the community what does the community want. Do they want the same kind of tariffs? Or if it has happened that they want to reduce services? Should we maintain the tariffs or should we improve services? We should not have a priority discussion about only reducing tariffs. Thank you. >>DOUG BRENT: And I have heard those comments before. Any other questions or comments at this time? With two minutes to spare. You know, again I really appreciate the chance to just kick this process off. We have five months before we have to finalize this budget. I think it couldn't sort of be a more interesting time for ICANN to be going through this work and would really encourage people if they want to actively be involved in a consultation on this drop me an e-mail or Kevin an e-mail. Mine is Doug.Brent. It is on this presentation, I'm pretty sure, Doug.Brent@ICANN.org. We will welcome the opportunity to do that. So I think we're done. But I'm going to stay up here because I get to be involved in the next one, too.