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Minutes – A Special Meeting of the PTI Board | 9 September 2021

A Special Meeting of the PTI Board of Directors was held telephonically on 9 September 2021 at 16:00 UTC.

The following Directors participated in all or part of the meeting: Lise Fuhr (Chair), David Conrad, Kim Davies (PTI President) and James Gannon (PTI Board Audit Committee Chair).

PTI Board Apologies: Jia-Rong Low

PTI Secretary: Samantha Eisner (PTI Secretary)

The following Staff participated in all or part of the meeting: Kirsten Crownhart (Manager, Financial Planning & Analysis (ICANN)), Marilia Hirano (Director, IANA Strategic Programs), Aaron Jimenez (Board Operations Specialist (ICANN)), Becky Nash (PTI Treasurer) and Shani Quidwai (Senior Director, Finance (ICANN)).

The Chair called the meeting to order and introduced the agenda.

  1. Approval for Posting PTI Draft FY23 Operating Plan & Budget for Public Comment

    The Treasurer began the presentation to the Board with a process overview of the planning process steps involved in the overall ICANN process, and shared the planning requirements under the PTI and ICANN Bylaws in connection with the PTI Strategic Plan, the PTI Operating Plan and Budget, and the IANA Operating Plan and Budget.

    The Treasurer reiterated that the PTI and IANA Operating Plans and Budget (OP&B) are components of the ICANN Operating Plan and Budget, which comprises the following:

    • PTI Operating Plan & Budget (OP&B) + ICANN Funded Contract Oversight: Costs incurred by ICANN to oversee PTI's performance of IANA Functions, plus cost solely incurred to enable IANA Functions (e.g., Root Zone Maintainer Agreement, IANA Function Review, and Customer Standing Committee); and
    • Core IANA Services: Delivery of the IANA Services, including developing enhancements, reporting performance, and continuous improvement activities (comprised of the naming, number and protocol parameter functions).

    Marilia Hirano provided a brief summary of the budget assumptions for FY23:

    • Strategic objectives remain unchanged – the 2020-2024 strategic plan correctly captures FY23 objectives.
    • Ongoing customer satisfaction remains high, but there is a need to incrementally improve PTI's services to maintain customer satisfaction.
    • Funding for IANA remains a priority and ICANN will continue to support all expected expenses.
    • Although there remains uncertainty, for planning purposes, FY23 plans assume business travel, face-to-face meetings and other engagement activities will resume.
    • For community recommendation work, implementation work will be planned only as recommendations and policies move forward and reach the stage of Board consideration.

    Marilia provided some examples of anticipated activities which are not included in the FY23 Draft Plans (as they may be coming in throughout the fiscal year), such as:

    • TLD variants;
    • Increased cadence of KSK rollovers;
    • ICANN org Reviews: Recommendation implementation (e.g., SSR2 Review, RZM evolution study); and
    • Policy implementation (e.g., Subsequent Procedures for New gTLDs (under study), ccTLD Review Mechanism implementation (under study), Policy on IDN ccTLD Strings (under study), RZERC (no active work impacting IANA operations) and Root Server Governance (depends on selected model).

    Responding a question from James Gannon on these anticipated activities, Marilia clarified that, in line with ICANN's Operating Plan, the FY23 Draft Plans only included activities and projects that are already approved (resolutions that are already adopted); and does not include activities that have not been approved by the Board or approved from the project management aspect of the activities to move forward. Therefore, when an activity that is not in the Plans move forward (approval by the Board/Executive team), then such an activity would be funded by sources that are available (e.g., a contingency and/or reallocation from other activities should those activities have been delayed).

    James further commented that while the approach to the budgeting process makes logical sense, if too many of the anticipated activities that are not included in the Plan moves forward in one fiscal year, PTI may face some issues.  The Treasurer noted James' comments and clarified that PTI has sufficient contingency to manage the workflow.

    David Conrad noted that projects which require significant resources can generally wait until the next budget cycle to be allocated budget (e.g., SSR2 Review and RZM evolution study).  Given that this is the budget cycle for FY23, the Chair commented that the PTI Board will need to consider how to handle this uncertainty. The President echoed David's comment; and mentioned that an anticipated activity which may require significant amount of funding and short notice is in relation to disaster recovery (in one of PTI's key management facilities).

    James commented that going forward, it would be worthwhile for the PTI to consider evaluating a mechanism for out-of-bound budget requests which necessitates an investment from PTI (so as not to touch the contingency fund which is there for emergencies).

    Further to the comments from the Board, the Treasurer clarified that from an operating plan and budgeting standpoint, the contingency is described as expense that is budgeted for unforeseen items (items which at this time are not included in the detailed plan) and therefore, it is not necessarily for "emergencies".

    James explained that there is an expectation from the community that there will be emergency funding scenarios where PTI will be required to incur expenses on a critical activity. Responding to a comment from the Chair, Marilia agreed that it would be helpful to make some modification to the PTI OP&B to clarify the approach, which is consistent with ICANN's broader approach, and to illustrate some examples of the activities which are not included in the Plan and PTI's approach towards such activities.

    Marilia continued with a presentation on some of the changes that were made to both the PTI and IANA plans, which are mostly structural in nature. The objective of the changes was to better demonstrate the cohesiveness of the relationship between the PTI and the IANA plans with the ICANN plan as well as to avoid any confusion and duplication of sections by aligning the Plans with the structure and language of the strategic plan.

    James noted that the new structure is easier to understand, and made some suggestions to the "highlight" section, that it should be written more from a PTI perspective (rather than from an ICANN perspective).  The President agreed to amend the document based on the feedback received from the Board on this section.

    The Board also made some observations on page 9 (Planning Assumptions) and requested for some changes to be made. For instance, James suggested, and the President agreed, that it would be worthwhile to include a statement on service volumes, so as to inform the reader on whether the PTI is expecting to triple the amount of service requests it fulfils and thus requires more money, or whether the PTI is seeing a gradual increase in service volumes, etc.

    The Chair noted that in general, more explanatory information on the PTI should be included in the Plan.

    On page 12, James commented that further details should be included to explain what and how project management capabilities are being done in relation to Operational Excellence. On page 13, James enquired as to whether OCTO or the PTI is in responsible for carrying out the research to develop an operational approach for the new crypto algorithms in the DNS. The President responded that an engagement strategy is currently being designed to finalize the details of the research.

    In relation to the key signing key rollover, the President provided some clarification on the two kinds of rollovers: (i) KSK rollover – which is a process to be repeated once every three to five years; and (ii) algorithm rollover – this involves changing the cryptographic rollover, which has never been done before.  Cryptographic algorithms ultimately will fall out of use as they become weaker over time as computers become more powerful or vulnerabilities are discovered in the algorithm. Thus, it is a common understanding that the system needs to have the agility to be able to change the algorithm.  David commented that in terms of resource availability, the IANA team is in charge of the key rollover, while the OCTO team handles the exploration of the algorithm rollover.

    The President further elaborated that in relation to the key signing key rollover, the community is well informed on future key rollovers, and the timing of future key ceremonies have been suspended (due to the COVID-19 pandemic).

    The Treasurer and Kirsten Crownhart provided some clarification to the Board on the allocation scheme in the operating plan and budget – the headcount listed in the direct shared includes support from functions, not a cross-charge of particular officer duties, per se.  The Secretary added that the legal support that ICANN provides to the IANA team is more heavily weighted compared to the Board support.

    Kirsten provided a summary of the FY23 PTI Budget, highlighting the following areas:

    • PTI Funding/ ICANN Funding: Funding for the PTI Budget is provided solely from ICANN and is driven by the work performed or expenses.
    • PTI Budget cash expenses: Expenses are driven by the main cost categories of Personnel, Travel & Meetings, Professional Services, Administration, and Capital.  Expenses are segregated into three cost pools: Direct Dedicated, Direct Shared, and Shared Services.
    • PTI Budget contingency: Contingency represents an amount of budgeted expense unallocated to specific activities or departments.

    The FY23 Budget can also be viewed from a breakdown by the cost pools.

    James sought clarification as to how the budget for contingency and support services allocation were derived.  Kirsten elaborated that the contingency of USD 0.5 million remained flat in FY23 as compared to the previous couple of years; and that the amount for support services allocation is derived by selecting the departments within ICANN that provide support in a communal way (e.g. Human Resources, Language Services), and it is derived as a percentage based on total PTI costs versus total ICANN costs.

    Responding to a query from the Chair, Kirsten explained that Direct costs/Dedicated resources relate to audit fees, community studies, etc. On the other hand, Direct costs/Shared resources include legal and professional costs. Professional services include professional services from ICANN to PTI.

    Kirsten continued the presentation with a breakdown of the PTI FY23 Budget by cost type:

    • Direct Dedicated: cost of IANA department staff
    • Direct Shared: costs of staff for whom an explicit amount of time of their work is allocating to supporting PTI (e.g., key ceremony roles, staff support from Legal, Board operations, Finance, etc.)
    • Shared Services: communal services used by whole ICANN org, of which PTI is also a beneficiary (e.g., HR, Global Communications and Language Services and Ombudsman).

    Kirsten further provided an overview of the FY23 PTI Budget by cost category.  Funding for personnel for FY23 are about USD 0.2 million higher than in FY22 (due to the standard 3% inflationary costs for standard of living, promotions, cost of living that occurs across all organizations and industries in the US). Travel and meeting costs, professional services and administration costs all remain relatively flat. Contingency and capital costs remain flat to the FY22 budget. Depreciation is lower and is in line with FY21 actuals, due to a lower fixed asset balance that has been occurring.

    Kirsten noted the Chair's query as to why the Administration budget has not increased since FY22, and she will provide a response to the Board after the meeting.

    Shani Quidwai further clarified that the 3% inflationary costs is a high-level assumption, as it relates to each individual employee and their role/location.  For certain regions, there may be higher increases due to inflation or other economic issues, and those are factored in when the actual changes occur. HR's Compensation team conducts an annual assessment of the inflation cost.

    Kirsten continued the presentation with an overview of the FY23 IANA Budget.  The IANA support activities component is USD 0.1 million lower compared to the FY22 IANA Budget due to the mix of personnel support.  Overall, the services remain the same to the FY22 Budget.

    James sought clarification as to why the IANA Budget remained flat for FY23.  The Finance team will review this section; and the President added that the costs associated to the IANA Naming Function Review was very minor and did not make a material difference to the FY23 IANA Budget.

    Kirsten continued the presentation by providing an overview of FY23 PTI Budget by Client Service and noted that the FY22 budget is quite similar to the FY23 Budget.  James commented that during a question was posed on this breakdown during a community webinar session, and thus this specific request should be addressed during the public comment.  The Chair noted that the particular slide is extremely helpful and should be included in the Plan itself.

    The Chair noted that the IANA Draft FY23 OP&B was also circulated to the Board, for informational purposes only.

    The Treasurer concluded the presentation by providing an overview of the anticipated timelines and next steps.

    Following the discussion on the PTI FY23 Operating Plan and Budget, the Finance team will proceed to incorporate the changes suggested by the Board into the document, where relevant, and circulate the finalized document to the Board and ICANN's Board Finance Committee (BFC). The public comment period for both the PTI and IANA Budgets is currently scheduled for 14 September through 24 October 2021.  Thereafter, it is anticipated that the PTI Board will meet in early December 2021 to adopt the PTI Plans, and then the IANA Plans will be submitted to the ICANN BFC for recommendation to the ICANN Board for adoption. The Empowered Community will have an opportunity to consider the IANA OP&B after ICANN Board's approval.

  2. PTI's Five-Year Anniversary

    Given that PTI will be celebrating its fifth-year anniversary on 1 October 2021, it is timely for the Board to assess its progress and achievements.

    The President commented that during the previous Board meeting, the Board discussed that the five-year anniversary would be a good opportunity to surface some broader strategic discussion with the community regarding the strategic plan; and to reflect on what has worked/ not worked in the last five years.  It would be advantageous for the Board to receive the community's feedback and input.

    In terms of outreach and engagement, James suggested to have a face-to-face event during ICANN73 (subject to ICANN73 being held physically in San Juan); and the Board echoed James' suggestion. The Chair and the President also agreed to co-author a blog to engage the community on the anniversary date.

    The President mentioned that the Board may wish to explore potential engagement methodologies post COVID-19; and to consider webinars as a method of engaging the community groups. Given PTI's limited resources, the President also noted that PTI can look at ways to leverage its relationships to expand its outreach and engagement efforts.

    From the security perspective, the President highlighted that it may be worthwhile to consider whether the key ceremonies can be done differently (e.g., fully virtual).

    In terms of the delivery of services, a point for the Board to consider is IANA's future plans, whether it has the intention of doing and achieving more in the next five years. Headcount would potentially need to be increased in the coming few years; and IANA's customer relationship practices may need to be re-evaluated.

    From the governance aspect, the Board should also consider ways to better improve and work towards the alignment of the five-year planning cycle; as well as the issue of the IANA terminology to ensure consistency with the community.

  3. Update on the second Security, Stability and Resiliency (SSR2) Review

    At the previous Board meeting, Steve Conte (Director, IROS Operations (ICANN)) provided an overview of the SSR2 Review recommendations and the potential impact of the recommendations on the IANA functions. Since then, the ICANN Board took action on the recommendations in the SSR2 Review Team Final Report, as enumerated in the Scorecard titled "Final SSR2 Review Team Recommendations – Board Action".

    The President noted that, out of the 63 recommendations, there were eight which the IANA team would likely lead on implementation or be significantly involved in implementation and  these recommendations are aligned with the PTI planning.

    Responding to a query from James, the Secretary stated that any recommendation which has been accepted by the ICANN Board is able to enter the implementation planning phase, subject to prioritization. At this juncture, ICANN org is in the process of setting up and designing a collaborative prioritization process. 

    The President will provide an update on the SSR2 Review at the next Board meeting in December 2021.

  4. Operational Updates

    PTI Operations:

    Prior to the meeting, the President had circulated a written update to the Board members on IANA performance and ongoing activities.

    Responding to a query from the Chair on the PTI performance for the reporting cycle, the President noted that spikes are common, and it usually happens when a portfolio operator does a DNS key roll.  The President agreed to check on this issue and provide a definitive answer to the Board.

    KSK Rollover:

    In relation to KSK rollover, the Chair enquired as to why the KSK ceremony on 14 October 2021 will have attendees only from the US.  The President responded that pursuant to an in-depth discussion with ICANN's Travel Safety Committee (TSC), it was agreed that for the upcoming key signing ceremony, only participants in the US would attend, given the high risks involved for international travel during the COVID-19 pandemic.  He further informed the Board that he will coordinate with the Communications team to convey the right message to the community on the decision made.

    Finance Update:

    No additional questions were raised by the Board, apart from an earlier question raised by the Chair regarding the budget, and this will be addressed by the Finance team.

    Planning: Board Workshop

    The President is of the view that it would be timely and beneficial to initiate planning for the next Board workshop via email.  Given that no face-to-face meeting will be conducted in the foreseeable future, a virtual workshop may be an option for the Board to consider. Both James and the Chair commented that the Board should start planning for a potential in-person meeting for January 2023, subject to prevailing travel restrictions, etc.

    The Board agreed to continue its discussion on this topic via email.

  5. Any Other Business

    Next Board meeting in December 2021: The Chair requested for the next Board meeting to be set for a 90-minute duration to ensure that the Board has sufficient time to discuss all the relevant agenda items.

    The Chair thanked the Board for a constructive and informative meeting.

    The Chair called the meeting to a close.

Domain Name System
Internationalized Domain Name ,IDN,"IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet ""a-z"". An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European ""0-9"". The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed ""ASCII characters"" (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of ""Unicode characters"" that provides the basis for IDNs. The ""hostname rule"" requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen ""-"". The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of ""labels"" (separated by ""dots""). The ASCII form of an IDN label is termed an ""A-label"". All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a ""U-label"". The difference may be illustrated with the Hindi word for ""test"" — परीका — appearing here as a U-label would (in the Devanagari script). A special form of ""ASCII compatible encoding"" (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an ""LDH label"". Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as""icann.org"" is not an IDN."