Minutes - Special Meeting of the PTI Board | 21 September 2018

A Special Meeting of the PTI Board of Directors was held telephonically on 21 September 2018 at 15:00 UTC.

The following Directors participated in all or part of the meeting: Lise Fuhr (Chair), Akram Atallah, David Conrad, Kim Davies (PTI President) and Wei Wang.

PTI Secretary: Samantha Eisner (PTI Secretary).

The following Executives and Staff participated in all or part of the meeting: Michelle Bright (Board Operations Content Manager (ICANN (Internet Corporation for Assigned Names and Numbers)); Aaron Jimenez (Board Operations Senior Coordinator (ICANN)); Becky Nash (PTI Treasurer); Wendy Profit (Board Operations Specialist (ICANN)); Lisa Saulino (Board Operations Senior Coordinator (ICANN)).

The PTI Secretary called the meeting to order and introduced the agenda.

1. Minutes of Prior Meeting

   The PTI Board approved the following resolution:

   Resolved PTI2018.09.21.01 the minutes of the 24 June 2018 meeting are approved.

   All Board members in attendance approved of Resolution PTI2018.09.21.01. Wei Wang was not present to vote on this agenda item.

2. Appointment of Kim Davies as PTI Point of Contact to IANA Naming Function Review Team (IFRT)

   By way of background, the PTI Secretary provided the PTI Board with a brief overview of the first IANA Naming Function Review (IFR). Under the ICANN Bylaws, the ICANN Board is expected to have initiated the first IFR on 1 October 2018. Under Section 18.8(e) of the ICANN Bylaws, the PTI Board is being asked to name a PTI staff member to serve as a point of contact to facilitate formal lines of communication between the IFRT and PTI.

   The PTI Secretary confirmed that the ICANN Board approved the initiation of the first IFR; and Trang Nguyen has been appointed as the ICANN point of contact between the IFRT and ICANN organization. Currently, the appointing organizations are also in the process of appointing members and liaisons to the IFRT, in accordance with the ICANN Bylaws.

   The Chair requested that, as and when available, the PTI Board is apprised of ongoing developments and the status of the IFR, and what may be expected from the PTI Board in that regard.

   The PTI Secretary informed the meeting that the PTI's recommendation is to appoint the PTI President as the point of contact between the IFRT and PTI. David Conrad inquired about the potential workload for the chosen PTI point of contact to the IFRT. The PTI President clarified that role of the PTI liaison to the IFRT is anticipated to be minimal, as additional PTI staff members will contribute on specific areas, as necessary. The PTI Secretary emphasized that given the substantive amount of questions directed at PTI, PTI is expected to cooperate significantly in the IFR, in terms of interaction and providing information to the IFRT.

   The PTI Board then took the following action:

   Whereas, the ICANN Bylaws require "The [ICANN] Board, or an appropriate committee thereof, shall cause periodic and/or special reviews (each such review, an "IFR") of PTI's performance of the IANA naming function against the contractual requirements set forth in the IANA Naming Function Contract and the IANA Naming Function SOW to be carried out by an IANA Function Review Team ("IFRT") established in accordance with Article 18 of the ICANN Bylaws."

   Whereas, §18.2.a of the ICANN Bylaws requires that the first Periodic IFR shall be convened no later than 1 October 2018.

   Whereas, §18.8(e) of the ICANN Bylaws specifies that "[t]he PTI Board shall select a PTI staff member to serve as a point of contact to facilitate formal lines of communication between the IFRT and PTI."

   Resolved PTI2018.09.21.02, the PTI Board hereby names PTI President Kim Davies to serve as the point of contact between PTI and the IFRT.

   Resolved PTI2018.09.21.03, the PTI Board hereby directs the PTI President to provide regular updates on the status of the IFR.

   RATIONALE FOR RESOLUTIONS PTI2018.09.21.02 – PTI2018.09.21.03.

   The ICANN Board convened the first periodic IANA Naming Function Review ("IFR") to satisfy the requirement under §18.2 of the ICANN Bylaws that the first periodic IFR be convened no later than 1 October 2018. The IFR is a new accountability mechanism created as part of the IANA stewardship transition to ensure that PTI meets the needs and expectations of its naming customers by adhering to the contractual requirements set forth in the IANA Naming Function Contract and the IANA Naming Function Statement of Work.

   In accordance with §18.8(e) of the ICANN Bylaws, the PTI Board has been directed to provide a staff member point of contact, or his designee(s), to support communication between the Review Team and PTI.

   This action is within PTI's mission as it supports PTI's performance of the IANA Functions and is also meeting a requirement from the ICANN Bylaws on ICANN's mission relating to coordination of the allocation and assignment of names in the root zone, and directly supports the public interest.

   All members in attendance approved of Resolutions PTI2018.09.21.02 and PTI2018.09.21.03. Wei Wang was not present to vote on this agenda item.

3. Approval of Posting FY20 PTI Budget for Public Comment

   The PTI President and the PTI Treasurer jointly presented the PTI Board with the PTI FY20 Operating Plan and Budget. The PTI President noted that a series of engagements and presentations were held with the community to identify the priorities for the FY20 PTI Budget. The PTI received minimal feedback, and all feedback received demonstrates support for the PTI's proposed priorities.

   The PTI President also provided an overview of the PTI FY20 planning timeline. Some of the key dates include having a draft approved for publication for public comment around the middle of September, with an anticipated PTI Board approval around December 2018.This will allow the PTI budget work to conclude before the broader ICANN consolidated budget planning. This timeline is earlier than the FY19 cycle.

   The PTI President informed the PTI Board that the FY20 PTI Operating Plan is informed by and aligns with the ICANN Strategic Objectives developed by a community-driven bottom up process. The adopted version of this Plan will become a component of ICANN's FY20 Operating Plan and Budget. Within the strategic structure, PTI's work is structured into two groups of activities:

   1. PTI Operations:
      • Operational Activities
      • Operational Improvement Activities
   2. PTI Technical Systems Enhancements

   The PTI President provided a brief overview of the PTI Operating Plan and Budget Structure. Additionally, he also highlighted the difference between the PTI Operating Plan and Budget and the IANA Operating Plan and Budget, which will also be out for public comment at the same time.

   The PTI President explained that the PTI FY20 Operating Plan and Budget comprises the core IANA services (day-to-day delivery of services, developing enhancements, reporting, etc), which includes all of the naming, numbering, and protocol parameter functions. Internally, these services are divided into the types of costs:

   1. Direct Dedicated: cost of IANA department staff.
   2. Direct Shared: costs of staff for whom an explicit amount of time of their work is allocated to supporting PTI (e.g. PTI Secretary and the PTI Treasurer).
   3. Shared Services: communal services that are used by the whole ICANN organization, of which PTI is also a beneficiary (e.g. HR, Communications, rent of office space, etc).

   Responding to a question from the Chair on Shared Services, the PTI Treasurer clarified that "headquarters" is listed under Shared Services with reference to the overall management structure of ICANN i.e. all the functions that are considered shared services, to both PTI and ICANN. To avoid confusion, PTI will make certain adjustments to the presentation for public consumption.

   David Conrad inquired as to which category would IANA-related activities fall under (e.g. KSK Rollover), to which the PTI President confirmed that it would fall under the "Direct Shared" category. The PTI President also noted that the PTI FY20 Budget has made some allocation for potential future research required associated with the KSK Rollover.

   The PTI Treasurer further provided an overview of the trends for cash expense (contingency is excluded, as the trend provides a view of what the core figures in the budget are).

   The Chair sought clarification as to why the PTI FY20 budget is flat. The PTI President elaborated that PTI developed its budget independently based on its own requirements for FY20; which happens to be in line with ICANN's estimate for IANA function. He confirmed that the resources will be satisfactory to PTI's FY20 goals.

   The PTI Treasurer continued the presentation with the FY20 PTI Budget Summary, highlighting the following areas:

   1. PTI Funding/ ICANN Funding – FY20 Funding of PTI form the ICANN Subcontracting agreement is USD10 million;
   2. PTI baseline cash expenses – FY20 Expenses of USD10 million (including USD0.5 million contingency) remained flat to FY19 Budget with higher professional service costs (USD0.4 million) offset primarily by lower Travel and Meetings, Administration, and Capital expenses (- USD0.3 million);
   3. PTI contingency – Contingency of USD0.5 million remains flat in FY20 as compared to FY19. Contingency is 10% of the direct dedicated costs and represents an amount of budgeted expense unallocated to specific activities or departments ; and
   4. Capital Budget – Capital for FY20 is for a Hardware Security Module (HSM) Replacements and Key Management Facility (KMF) improvements.

   The PTI Treasurer continued the presentation with a breakdown of the PTI FY20 Budget by cost category. The table demonstrates that funding for personnel for FY20 as compared to FY19 remains almost the same. The cost for travels and meetings are expected to be lesser in FY20 compared to FY19, owing to less travel expense expected for PTI Board meetings and community representatives for the key ceremonies. Professional services costs increased USD0.4 million, 31.1% due to incremental testing and increased Shared Services resources for language services and the Office of the Chief Technology Officer. Administration costs decreased USD0.1 million, due to lower rent allocation costs. Capital decreased USD0.1 million, 47.5% due to fewer Key Management Facility (KMF) improvements needed in FY20.

   The Chair inquired whether the PTI engages Language Services for any translation; and to explore the possibility of translating the Operating Plan. The PTI President and the PTI Treasurer explained that whilst the PTI does not have a big demand for Language Services, it relies upon them for ad hoc translation of documents e.g. transfer requests, government decrees, reports, etc. Language Services is one of the components of support for meetings and shared services cost pool; and this component has increased as a result of an overall increase in the cost of language services.

   The PTI President commented that the most material change is the increase in the direct dedicated costs for personnel (mainly as a result of market corrections for salaries of PTI member staff), which is offset by a reduction in the direct costs. In this regard, the Chair queried as to whether a full benchmarking process have been conducted across PTI staff. The PTI President confirmed that ICANN's HR department conducts a full benchmarking process across the organization. The PTI Secretary remarked that the PTI have specific obligations to make its compensation package reasonable; to ensure that it is not operated for the benefit of private interests; and to ensure that its compensation packages do not provide excess benefit to its employees (as per Section 501(c)(3) U.S. Regulations). ICANN's compensation philosophy document will be recirculated to the PTI Board, for its reference.

   Additionally, the PTI's capital costs have reduced. Pursuant to undergoing many years of capital improvements on its KMF, it is not envisaged that any significant capital improvements are required in the near future.

   In relation to costs associated with the names, numbers, and protocol parameters, there is very little variance between FY20 and FY19.

   In relation to costs associated with headcount by client services, the Chair suggested that it would be useful to state a comparison between FY20 and FY19.

   The PTI Treasurer concluded the presentation by providing an overview of the anticipated timelines and next steps. The PTI Chair requested for the slide to be revised to demonstrate that the PTI Board will review and adopt the FY20 Operating Plan and Budget prior to its adoption.

   Following the discussion on the FY20 PTI Operating Plan and Budget, the PTI Board agreed that it is ready for public comment.

4. Operational Updates

   The PTI President provided a report to the PTI Board.

   PTI Operations:

   The PTI President provided an update on PTI performance and ongoing activities.

   First with the numbering functions, the PTI President reported that PTI met its SLAs 100% of the time for the reporting cycle.

   For the protocol parameters functions, there is a monthly SLA that has been met 100% of the time.

   For the naming faction, there have been three performance reports since the last PTI Board meeting - the performance was less than 100%, with variances related to the time it takes for the automated technical checks to perform tests. The PTI President reiterated that this has previously been identified as an issue with the CSC, which agrees that the SLA is too tight, and CSC is reviewing how to update those SLAs. If the SLA were set at the proposed new measure, PTI would have satisfied the SLA.

   Root Zone Management System:

   The PTI President informed the meeting that the launching of the new version of the Root Zone Management System is delayed, owing to an issue which prevented the PTI from conducting last minute testing prior to the deployment of the update. It is expected to be rolled out on 11 October.

   Internal Staffing:

   The PTI President reported that two staff resigned from the PTI team in the past month. PTI will work with HR to fill these positions, as well as to fill two other open positions. HR will take the necessary steps to advertise for these positions with a goal to fill the open positions within the coming months.

   KSK Rollover:

   The ICANN Board approved the rollover date to be 11 October 2018. PTI has a minor role in the KSK rollover and has all the systems and procedures in place for the eventuality of the rollover. The PTI President continued that the PTI team will assist in monitoring events and communicating decisions in the event that there is an emergency root zone change required during the rollover event.

   Trusted Community Representative (TCR) Replacement

   The PTI President discussed the TCRs, the community volunteers that work in the key ceremonies. Volunteers were selected in 2010, and most of these original volunteers continue to participate. Recognizing that some have resigned, an evergreen process of calling for volunteers was initiated last year, and there are now over 100 applicants that have submitted statements of interest. The team is currently developing a scoring formula and identifying a fair process to fill the vacancies, and this development should be done by October. There are currently four vacancies in the back-up pool, a group of pre-vetted individuals that can step into active roles. HR is currently conducting background checks on 19 shortlisted candidates and intends to finalize the process and make a selection in the coming weeks.

   Transition Deliverables

   The PTI President discussed the status of meeting the contractual requirement that the employees currently seconded to PTI be transferred to be directly employed by PTI by October 2019. ICANN's HR department is working on this, and the PTI President has regular update meetings to confirm status. The PTI President reported that the transition of the remaining employees is targeted to be completed by 1 January 2019, unless there still remains some concerns from the community. Subject to any change in direction from the community, HR has begun preparation for the process to take place and will move forward with the proposed cutover date.

5. PTI and ICANN Roles and Responsibilities

   The PTI Secretary informed the meeting that PTI will coordinate with Board Operations team to organize an informal meeting/workshop at ICANN63 for the purpose of discussing this agenda item, and other issues that need to be discussed by the PTI Board.

   Now that the final version of the document has been circulated to the PTI Board, Wei Wang inquired whether the document will be published for public consumption. The PTI Secretary responded that once the PTI Board has completed its review, the PTI team will discuss the best method to share the document publicly, to enable them to understand how ICANN and PTI work together in the post-transition environment.

6. Any Other Business

   Wei Wang updated the PTI Board that he has joined Google as of early September 2018. The Chair reported that she has been appointed as the Chair of the PIR Board. The PTI Secretary will do the necessary to ensure that the relevant changes will be reflected appropriately on the PTI website.

   The Chair called the meeting to a close.