Board Consideration of the Auction Proceeds Report



The Cross-Community Working Group on New gTLD Auction Proceeds (CCWG-AP), formed in January 2017, was tasked with developing a proposal on the mechanism to allocate the proceeds generated from auctions of last resort used to resolve string contention in the New gTLD Program. The CCWG-AP submitted its Final Report to the ICANN Board for its consideration in September 2020 following review by its Chartering Organizations.

On behalf of the Board, I wish to congratulate the CCWG-AP on reaching this important milestone and thank the group’s leadership, members, and participants, who worked diligently to develop this important report. This demonstrates the strength of the multistakeholder model in action.

Given the significance of this work, I want to highlight the key elements of this proposal and update the community on next steps in the Board’s consideration of the report and recommendations.

The CCWG-AP Final Report

The Final Report includes 12 recommendations for the Board’s consideration, along with implementation guidance and related materials. The scope of the group’s work focused on the processes that will be developed in distributing the auction proceeds, not on approving specific uses or projects for allocation.

The Report recommends that the Board choose between two different mechanisms as a vehicle for the next stage in this work:

Mechanism A: A department dedicated to the allocation of auction proceeds is created within the ICANN organization.

Mechanism B: A department dedicated to the allocation of auction proceeds is created within the ICANN organization and works in collaboration with an existing non-profit.
Regardless of the mechanism chosen, the CCWG recommends several universal characteristics. These include ensuring that funds are released in tranches over a period of years, that processes are in place to ensure proceeds are used in a manner consistent with ICANN’s mission, and that the ICANN Board has legal and fiduciary oversight responsibility. A key component of the recommendations includes the establishment of an independent panel of grant-making experts who will be responsible for evaluating and selecting project applications.

Board Consideration

Now that the Board has received the Final Report, it must carefully consider the recommendations. This is the first time that the Board is considering recommendations of this nature. There is no precedent or roadmap. The Board requires additional information from ICANN org to fully understand the implications of the recommendations, as well as the differences between the proposed mechanisms.

The areas identified as key information needed to support the Board’s review of the report include:

Role and responsibilities of the ICANN Board in the proposed process.
Public interest considerations and service to the stated rationale for the use of the auction proceeds.
Transparency to, and involvement of the community in the process.
Risk identification and mitigation.
Operational needs, including needed expertise and estimated resources.
Process considerations, such as managing conflicts of interests, assuring ICANN’s mission is upheld, and building appropriate review and auditing functions.
At the Board’s request, ICANN org will work to answer these questions and provide additional feasibility information as part of an operational design phase over the coming months. This will inform the Board’s consideration of the Final Report.

The eventual distribution of auction proceeds presents an exceptional opportunity to make a difference in the Internet ecosystem and positively impact people across the globe in furtherance of ICANN’s mission. Along with my Board colleagues, I look forward to receiving the output of this design phase so that we can review the report formally and will continue to update the community as this work progresses towards the implementation phase of the advice given. The Board will review these recommendations and options carefully and transparently, so that next steps can be made toward the eventual distribution of the proceeds to the right recipients in an open and accountable way, in line with ICANN’s mission.

 



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