2009/09/23 Minutes

Minutes of the Meeting of the CIRA Board of Directors held at the InterContinental Hotel, Toronto, on September 23, 2009 at 9:00 a.m. Ottawa time.

Directors attending:  Paul Andersen, Richard Anderson, Kerry Brown, John Demco (ex-officio), Heather Dryden (ex-officio), Christopher Goodfellow, Byron Holland (ex-officio), Ron Kawchuk, Lynne Mackan-Roy,  Ross Rader (via teleconference), Bill Reid, Jeff Rybak, Barry Shell, Rick Sutcliffe, Tom Williams

Corporate Secretary:  Michael Stewart

Guests: David Fowler, Ken Leese, Nancy Philip, Norm Ritchie

Recording Secretary: Lynn Gravel    

1. Approval of Agenda

The Chair proposed that the agenda be amended to include the following items: 1) Registration Reduction: An Analysis; 2) WHOIS Consultation Update; 3) Registry Rewrite Update; and 4) under Other Business – Election Update and Director Participation at ICANN Meetings. Item 12.5 Report from the Nomination Committee was removed from the agenda. It was also proposed that the Board Compensation Review be reported under the Report from the Governance Committee.  

Be it resolved that the agenda be adopted with these amendments.

(Moved: L. Mackan-Roy, seconded: K. Brown)

2. Chair’s Remarks

On behalf of the Board of Directors and staff, the Chair conveyed CIRA's thanks and appreciation to retiring Directors C. Goodfellow and B. Reid for their time, efforts and expertise dedicated to CIRA as Directors to the Board and Committees.

D. Fowler, L. Gravel, N. Philip, N. Ritchie and M. Stewart withdrew from the meeting.

3. CEO Update
 

The CEO and Board of Directors held an in camera session.

Following the in camera session, D. Fowler, L. Gravel, N. Philip, N. Ritchie and M. Stewart rejoined the meeting.

4. Registration Reduction: An Analysis

B. Holland provided to the Board of Directors an analysis on the registration trends.  It was noted that when comparing the Gross Domestic Product (GDP) from 2007 to 2009 projected year end with other ccTLDs, all showed a downward path.  However, the dot-ca Registry has done relatively well compared to other leading Registries.  The ccTLD and gTLD growth rate since 2007 to the projected end of December 2009 also showed a downward path.  Overall, the dot-ca Registry has not only maintained its market share, but actually increasing it slightly in the last eight quarters, while dot-com’s market share has steadily decreased over the last six quarters.  Although dot-com domains remains dominant in the Canadian market, its market share has slipped below 60% the last three quarters.

A material portion of the decline in the dot-ca growth rate can be attributed to the drop off in registration by “mega rants”, those registrants holding more than 200 dot-ca domains.  

B. Holland noted that staff continues to monitor the net new growth and are prepared to implement any spending cuts to maintain our break-even position.  Some discussions ensued regarding market saturation and penetration and it was agreed that the Board of Directors would discuss during their strategic planning session scheduled for early next year.

5. Registry Services

N. Philip provided an update to the Board of Directors on the introduction of the new gTLDs.  She noted that this presented an opportunity for the organization in a new market since one of the application requirements for new gTLDs is to identify a registry operator.  

The deadline to submit new gTLDs applications with ICANN is currently in the first quarter of 2010, with the land rush period slated during the first quarter of 2011.  As well, ICANN is planning to launch subsequent gTLD application rounds, likely to begin within one year of the close of the application submission period for this round.  The expected number of applications is 500 plus or minus 400 with an estimated market size of $3.5M to $70M.

N. Philip further explained the market segmentation.  It has been suggested that some of the current gTLDs, especially those that were designed to be alternatives to .com or those that have failed to capture the public imagination may lose market share.   Some have argued that only a minority of individuals really need to register domain names to create national (ccTLD) or international (gTLD) identities which match their needs or support their identity online. Local and regional requirements are not addressed by the current Top-Level-Domain names.  City TLDs could be the missing link to millions of small to medium enterprises and individuals which are acting locally.  This is also an opportunity for organizations to provide new branded services and secure generic names.

Overall the Board of Directors discussed the launch of a new product and the organization’s priorities at the moment. B. Holland noted that, based on the current timelines, the organization would not be able to participate in the sunrise period because of the dot-ca rewrite project and other priorities. Directors commented that the deadlines to introduce these new gTLDs will most likely be delayed since many implementation issues remain unresolved.   

P. Andersen turned the chair to the Vice-Chair L. Mackan-Roy.

The Board of Directors agreed that not enough information was provided to make a decision and that staff should come back to the Board of Directors with a clear rationale and the technical requirements to launch a new Registry, as well as a full cost analysis and required resources. There should also be an analysis of the potential impact on the dot-ca and appropriate safeguards should be identified.

P. Andersen resumed the Chair.
 
6. External Relations

6.1 Internet Governance Forum

B. Holland informed the Board of Directors that he will be attending the next Internet Governance Forum (IGF) in mid-November.  IGF is a UN organized endeavour with multi stakeholders and it is important that CIRA participate in this environment. In regards to the proposal that CIRA hold an IGF in Canada, staff will be conducting a survey to engage various stakeholders to obtain their quantitative insight in holding such a meeting.

6.2 ICANN

B. Holland reported that he had the opportunity to meet with ICANN’s new CEO during the ICANN Sydney meeting held in June 2009.  The key issues at the ICANN meeting were the fast track process for IDN ccTDLs, the introduction of the new gTLDs and the JPA agreement which expires shortly.

J. Rybak and B. Shell withdrew from the meeting.

7. Elections Update

M. Stewart informed the Board of Directors that Lynne Perrault, a candidate on the member slate, would be withdrawing from the 2009 Board Election, as well as background information regarding such event.

J. Rybak and B. Shell rejoined the meeting.

K. Leese joined the meeting.

8. Registry Rewrite Update

B. Holland introduced K. Leese to the Board of Directors as the Project Manager for the Registry rewrite project.  K. Leese reported that the project goals and project management priorities were to improve Registrant and Registrar experience while maintaining security, ensure long-term sustainable growth and minimize risk. In addition, CIRA believes that every Registrant should enjoy a consistent experience independent of their selected Registrar; at any time a single set of policies must apply to all Registrars and all Registrants.

K. Leese indicated that a survey of 2000 Registrants was held between June 30 and July 22, 2009 and several Registrar consultations were also held during this period.  The majority of Registrants supports the proposed changes and believes the organization is eliminating confusing and time-consuming steps.  As for the Registrars, discussions resulted in significant design improvements although the Registrars were somewhat difficult to engage and had conflicting opinions.

K. Leese reminded the Board of Directors that the current architecture is 10 years old and the new system requirements will improve scalability, stability, performance, and maintainability of the dot-ca registry system infrastructure.

CIRA considered implementing planned changes incrementally in current systems before converting to Extensible Provisioning Protocol (EPP). This approach would require multiple Registrar system modifications over time. A significant majority of Registrars rejected the incremental approach, instead stating a preference for a single transition to EPP. As with past evolutions of the dot-ca registry, this principle prohibits CIRA from concurrently operating “old” and “new” systems in production due to differences in the behaviour of these systems. A well-planned full system transition for all Registrars is therefore required on a specific date.  The migration to EPP would occur in 13 months from now and Registrars would have an EPP-based OT&E environment for approximately 9 months.

To mitigate risks associated with such a change, Registrars would be required to participate in a mandatory accreditation program before the new EPP-based systems was deployed for production use. This accreditation program would verify that Registrar systems correctly interoperate with CIRA systems. The accreditation program also includes steps to verify that at least one Registrar representative understands CIRA policy revisions.

 K. Leese further explained that the migration to the new registry system would be completed at an agreed date and time with Registrars to minimize disruption during the transition. A well executed transition would take the Registry approximately 2 to 3 hours he believed.  

P. Andersen turned the chair to the Vice-Chair L. Mackan-Roy.

The Board of Directors raised concern on a number of issues regarding the transition. The Board of Directors urged staff to make sure that Registrars were well understood and refer the transition to the Technical Oversight Committee to identify any risks to the organization.  

K. Leese withdrew from the meeting.
P. Andersen resumed the Chair.

9. DNS Injection

Due to the absence of time, this item was deferred to the next meeting.

10. WHOIS Consultation Update

Due to the absence of time, this item was deferred to the next meeting.

11. Financial and Operational Updates

11.1 Report on all Statutory Obligations

This report was provided to the Board of Directors as information and tabled at the meeting.

11.2 Management Report

This report was provided to the Board of Directors as information and tabled at the meeting.
 
11.3 Review of Q1 2010 Financial Results

This report was provided to the Board of Directors as information and tabled at the meeting.

12. Update on Committees

12.1 Report from the Governance Committee

The Chair of the Committee reported that the Committee had met the previous day to review the terms of reference for all the Board Committees and, based on the feedback received, had agreed to put forward a set of revised terms of reference at the next Board of Directors meeting, for review and approval.  Some of the proposed changes included a limit of 3 to 5 Directors per Committee and clarification to specific responsibilities and mandates of the different Committees.

12.1.1 Board Compensation Review

The Committee also reviewed the results of the Board Compensation survey and noted that making recommendations on the specific amounts of Director compensation was beyond the mandate of the Committee. The Committee was, however, recommending that the Board of Directors adopt a specific framework on Director Compensation. To ensure that the compensation paid to Directors was consistent with the reasonable remuneration paid to Directors in similar industries and in organizations of similar size, the consultant’s primary research efforts were focused on comparable high-tech companies and industry-focused NFP organization.

It was therefore moved by R. Rader and seconded by R. Sutcliffe that the Board of Directors adopt the framework as recommended by the consultant, to consist of a 50% / 50% composite of NFP and private sector (high tech) marketplace, and to prepare a future recommendation on the compensation based on this framework.

A discussion ensued regarding the framework as well as the specific compensation recommendations made by the consultant.

C. Goodfellow proposed that the motion be amended to the following:

Be it resolved that the Board of Directors approve the compensation recommendation from the consultant, and that a consistent compensation policy be prepared and adopted by the Board of Directors.

(Moved: C. Goodfellow, seconded: R. Sutcliffe, unanimously carried)

12.2 Report from the Audit Committee

The Chair of the Committee reported that the Committee had met the previous day to review the International Financial Reporting Standards (IFRS).  It was the consensus of the Committee to adopt these standards and staff continues their work to implement the IFRS.

The Committee also reviewed a consultant’s report on maintaining CIRA’s not-for-profit status.  Staff will be preparing the recommended documentation and steps necessary to preserve such status when appropriate.

The Committee also examined the Q1 2010 financial statements and did not find any irregularities.

N. Philip thanked C. Goodfellow for his contribution to the Committee and especially his expertise on the investment policy.

12.3 Report from the Technical Oversight Committee

The Chair of the Committee reported that the Committee had met via teleconference on September 14, 2009 to review the terms of reference.  The Committee also agreed not to change the name of the Committee given that the mandate would be amended to include risk reporting. The Committee also discussed DNS related activities and key projects.

12.4 Report from the Executive Committee

The Chair reported that the Committee had met several weeks ago to set the agenda for today’s meeting.  The Committee also reviewed the registration analysis as presented at the meeting and discussed the President and CEO’s annual review.

13. Other Business

13.1 Director Participation at ICANN

B. Holland proposed that the Chair of the Board of Directors and perhaps one Director attend an ICANN meeting once a year. It was noted that Directors would appreciate what is going on and also build a contact base.

Be it resolved that the Board of Directors direct staff to write a policy regarding Directors attending ICANN meetings and report back to the Board.

(Moved:  R. Sutcliffe, seconded: B. Shell, unanimously carried)
The Board of Directors also suggested that, should an ICANN meeting be held in North America, CIRA may want to consider inviting all Board Members to attend.

The Board of Directors also requested that staff look into arranging at least two local meetings in the upcoming year.

14. Next Meeting

The next meeting of the Board of Directors will be held in Ottawa on October 15, 2009.
D. Fowler, L. Gravel, B. Holland, N. Philip, N. Ritchie and M. Stewart withdrew from the meeting.  

15. In Camera Session

The Board of Directors held an in camera session.

Following the in camera session, D. Fowler, L. Gravel, B. Holland, N. Philip and M. Stewart rejoined the meeting.
 
K. Brown withdrew from the meeting.

16. Object 3

This report was provided to the Board of Directors as information and tabled at the meeting.  B. Holland noted that several initiatives were underway and further discussion on the subject will be held at the next Board of Directors’ meeting and during the strategic planning session.  The Board of Directors reiterate that they support the ongoing community initiatives taken so far and look forward to developing more.

17. Adjournment

There being no further business, on motion by R. Rader and seconded by R. Kawchuk, the meeting was concluded at 3:55 p.m.