Council Minutes 15/02/03

DRAFT Minutes of the General Meeting of the Council of InternetNZ Held at the InternetNZ Council Room, L4, 4 Bond Street, Wellington Saturday 15 February 2003 at 10 a.m.

Note - for links to papers etc, see the Agenda.

Status: Accepted at Council Meeting 030404

1. WELCOME FROM CHAIR

Keith Davidson (President) opened the meeting at 10.14 a.m. and welcomed all Councillors. He also welcomed new Executive Director, Peter Macaulay, to his first Council meeting.

2. ATTENDANCE

a. Present

• Keith Davidson (President), David Farrar (Secretary), Chris Streatfield (Treasurer), Rick Shera (Vice President), Jonathan Ah Kit, Richard Bourne, Roger De Salis, Bert Felt, Howard Frederick, Bill Parkin, Simon Riley, Joop Teernstra, Nick Wallingford, and Peter Macaulay (Executive Director)

b. In Attendance

• Frank March, Chair, NZOC, for item 6.
• Debbie Monahan, Domain Name Commissioner, for item 6.
• Ann Urlwin and Merv Delaney, NZDNRL, for item 6b.
• Zofia Krawczyk, Office Administrator - audio recording
• Angela Sheehan, Minute Taker.

c. Apologies

• Absence: Grant Forsyth, Jennifer Northover, Drew Whittle. A leave of absence had previously been extended to Michael Wallmannsberger.

MOVED: (President/Farrar) THAT the apologies be accepted.

CARRIED U

Potential Conflict of Interest

The President declared a personal interest. He said that Wise Net had applied to become a registrar under the SRS to the extent that it would be an approved registrar. He said that at the moment Wise Net had 200 names. Cr Farrar suggested that the President talk to Frank March, as Chair of NZOC, about what items he might be required to absent himself on. The President asked that the Executive Director update his details on the website accordingly.

Action: Executive Director

3. MINUTES OF THE PREVIOUS MEETING

MOVED: (Streatfield/Farrar): "THAT the minutes of the Council Meeting held on 14 December 2002 be accepted as a true and correct record".

CARRIED
Abstentions: Shera, De Salis, Bourne, Ah Kit, Felt

4. MATTERS ARISING FROM THE MINUTES

Presentation on Research:
Cr Teernstra pointed out that in item 5(a), eighth bullet point, a word was missing from the end of the sentence. Cr Farrar said that it would make sense to add the word "value".

Policy on Confidentiality of Society Documents:
Cr De Salis said that any implication in the wording that all InternetNZ documents were owned by InternetNZ should be resisted. The President suggested that the reference related more to working papers. It was agreed that Cr De Salis raise the matter later during the monthly .nz Oversight Committee report.

International Affairs Committee Review:
Cr Teernstra referred to item 10(b) and asked when nominees would be called for. Cr Farrar suggested that the matter be raised later during the monthly .nz Oversight Committee report.

5. DOMAINZ LTD : Board Report [Confidential to Council]

The report was discussed In Committee.

MOVED: (De Salis/Farrar): "THAT the report of the Domainz Board be received".

CARRIED U

6. ADMINISTRATION COMMITTEE

(Agenda item 3)

The President said that the committee had met on 22 January, and apologised for not notifying Council of that meeting. However, the meeting had been more of a welcome to the new Executive Director. The meeting had discussed the budget, the strategic plan, and the business plan. It had been resolved that Richard Bourne would join the committee to replace Jordan Carter, and that Simon Riley would replace Jordan as chair of the Outreach Committee. Also discussed briefly had been the planning of a summit/conference on issues the committee would like put in front of the public - for example, ICANN representation, second-level domain policy, and domain name disputes resolution, amongst others. It was hoped such an event could be arranged for late April / early May. He asked to be advised of any other issues that people would like on an agenda. Councillors then discussed their ideas for such a conference.

The next Administration Committee meeting would be held at the InternetNZ Council room at 3 p.m. on 21 February 2003.

Cr Farrar referred to the recently circulated discussion paper on committee chairs. It proposed four options on the relationship between committee chairs and Council. He proposed that the discussion be floated on the members' mailing-list and that the Administration Committee gather and assemble feedback, and bring a recommendation to the April Council meeting. Then the decision would be implemented for the June Annual General Meeting.

Cr Riley asked whether any of the four options would require a change in the bylaws/Constitution. Cr Farrar said no changes would be required with any of the options, although a policy change might be required.

MOVED: (President/Streatfield: "THAT the Administration Report be accepted."

CARRIED U

7. PRESIDENT'S REPORT

(Agenda item 4)

The President referred to his previously circulated report. He said there was nothing further of significance to add.

Cr Streatfield asked for confirmation of the next Council meeting date. It was agreed to change that date from 28 March to 4 April.

MOVED: (President/Streatfield): "THAT the President's Report be accepted."

CARRIED U

8. EXECUTIVE DIRECTOR'S REPORT

(Agenda item 5)

The new Executive Director felt it was too soon for him to give a full report to Council. Instead he gave a PowerPoint presentation on his background and his thoughts for the future of InternetNZ as he saw them at this stage.

9 .nz OVERSIGHT COMMITTEE

(Agenda item 6a)

Monthly Report

NZOC Chair, Frank March, highlighted the following points:

• The committee had moved to a new reporting structure and the report for January would be circulated in the coming week.
• The December 2002 report was tabled.
• Despite it being well understood policy to the contrary, the committee had adopted a new policy in terms of the Domain Name Commissioner being a registrar. He gave the background to the decision and said that, in the circumstances, creating the DNC as a registrar within a subgroup seemed to be the reasonable thing to do, with the additional caveat that it applied only to the three or four restricted domain names involved in the incident. Also all of the DNC's work came under the purview of the committee.
• The membership of the review team on Second Level Domains Policy had been discussed during a telephone meeting. Membership of that team had been considered very carefully, and he was confident that the small team would make good progress.
• The committee had agreed on the logo "Authorised Registrar", and all authorised registrars would be encouraged to use it. It would fulfil the requirement on registrars to provide some material about InternetNZ and its role. Feedback had shown that registrars would use it.
• He apologised that the International Review had not yet got underway. He would be inviting each member of the committee who had a specific area of responsibility to write a perspective within a framework he would be setting. That would form the basis of a zero level draft for circulation and comment amongst the committee. When the committee was satisfied with it as a first draft, it would be presented to Council at the next meeting. After that he presumed there would be feedback from Council and a public document. It was hoped that a public forum would be held in late May or early June.

Cr Shera commented that in such a large group there would almost certainly be divergent views, and asked how it was proposed consensus could be achieved to enable the review to move forward. The NZOC Chair said he did not see it as necessary, at least in the early stages, for the group to achieve consensus. He wanted all strands of thought on the table for discussion. He had no fear about divergent views as long as they were fairly reflected in the early draft. All options would be on the table, and he would act as editor. Divergence would always emerge in one form or another, so it was better to have it up front and hopefully, as the document progressed, there would be convergence and consolidation.

Debbie Monahan said that things were going well, and added the following comments:

• 12 registrars were connecting to the SRS - 11 competitive and Domainz as the stabilising registrar. She expected more to come on board before March.
• Free Parking had come over in February and had taken a large number of names.
• She had declined her first application.

Cr Riley asked whether it was the DNC's intention in future reports to report on disputes. Debbie Monahan said she would report on only the key ones and ones involving a directive.

Cr Farrar asked whether a second fee had to be paid on a reapplication. Debbie Monahan said the answer was yes.

Cr Riley asked for the DNC's comment on the healthy state of the finances. Debbie Monahan said that up to now expenditure had revolved around just running the office. However, the office had started to be called upon and lawyers were being consulted. The spend on staff salaries would increase as more registrars came on board. What happened in the next few months would be the key to how the overall budget would be. Hannah Seeley had commenced work in January as support analyst.

Cr Shera asked whether there was anything to report on the creation of a default registrar or some other kind of fallback. Debbie Monahan said that the concept of having a caretaker registrar had been accepted by NZOC, and over the next months she would work on the process involved. A proposal would then be brought back to Council.

MOVED: (Shera/Streatfield): "THAT the Chair of NZOC chair the International Review, and the review team comprise the President or his nominee, the chair or nominee of the International Affairs Committee, the chair or nominee of the Technical Committee, the chair or nominee of the Legal and Regulatory Committee, the chair or nominee of NZ Registry Services, Roger Hicks, Sue Leader, David Farrar, Jennifer Northover, the staff and Executive Director, and the Domain Name Commissioner."

CARRIED
Against: Teernstra

MOVED: (Farrar/Wallingford): "THAT the December report of the .nz Oversight Committee be adopted."

CARRIED U

MOVED: (Shera/President): "THAT Council thank the .nz Oversight Committee and the Domain Name Commissioner for having successfully rolled out the SRS".

CARRIED U and with acclamation

10 NZDNRL

(Agenda item 6b)

Ann Urlwin and Merv Delaney joined the meeting to present the NZDNRL report and third-quarter report. They conveyed an apology from Carol Stigley.

Third quarter report
Ann Urlwin said that NZDNRL was very pleased with the financial position to date. She said that since 7 December 2002 things had been going smoothly. Current forecasts indicated that NZDNRL would do slightly better than break even for the first full year. However, at such an early stage there still was uncertainty about the level and timing of costs. She said that she and Merv would be happy to answer questions.

Cr Riley referred to the matter of premises and Council's assumption that whatever synergies could be gained from the various companies sharing resources would be done. He reiterated that, of course, how that would be achieved was an operational matter. Ann Urlwin said that there was a great deal of contact between the companies, and they understood Council's expectations that some infrastructure would be shared between them, but it would not be to the point where it interfered with their individual operations. Cr Farrar added that the likely timeframe might not be too far in the future as the leases expired in March 2004.

Cr Frederick asked how much of the loan had been repaid so far. Ann Urlwin said that repayments were on track.

Cr Frederick asked what the timetable was for the process of choosing whether to outsource or insource administration of the SRS. Merv Delaney said that the considerations were primarily economic ones, tempered with concerns about security and confidence. At present there was a 6-month temporary outsourcing arrangement, which allowed time to assess how it worked operationally and whether it provided the required level of service but still enabled NZDNRL control. Another possibility was second-level or third-level support from a funder, whilst allowing the staff within the registry to provide first-level support. The agreed process for making a decision was that Nick Griffin had Board approval to find an analyst who would do the necessary analysis then report back. If the recommendation were for outsourcing, by March tenders would be sought from interested parties.

Cr Shera said that the decision should not be based solely on economic issues; there were also philosophical issues and Council was responsible for stewardship. He believed that Council would want to be directly involved in the decision-making and not just be reported to. At the end of the day, if you assigned to someone else responsibility for an integral part of your operation you were taking a risk. However, it may be a lesser risk than doing it yourselves if the organisation itself did not have the expertise. Those issues all go into the mix when making a decision.

Cr Farrar referred to the service level agreement Council had with the registry in which a decision whether or not to hire contractors was an operational one.

Merv Delaney said that a disaster recovery process was in place and reviewed annually. He added that discussion now was pre-emptive as the spadework had not yet been done.

Cr Streatfield said that now was exactly the time to discuss what should happen when the decision point was reached.

Cr Felt said he believed it was primarily an operational matter and very much a specialist job not to be taken lightly.

Cr Wallingford said there was an overarching philosophical issue beyond liability and failsafe. Those were things you could face whether the work was insourced or outsourced. The society had to acknowledge that a philosophical approach was needed. Council should probably ensure that if it were to be outsourced it be seen to be done in such a way that not only was it technically, operationally, and economically sound but it fitted in with the philosophies of why the SRS was set up in the first place.

Cr Bourne said he echoed Cr Wallingford's comments. Care had to be taken about the political implications of outsourcing.

Cr Parkin said that a chain of responsibility and authority had been put in place and that chain should report to Council to establish its comfort.

Cr Riley said that Council could say it had all the processes in place, but the reality was that the buck stopped with Council.

The President said that Council had set up strictures and organisations to do the work for it and it should not be re-entering the fray.

Ann Urlwin said that the NZRS board had not set the criteria for evaluating any decision or recommendation on insourcing versus outsourcing, but the approach would be very much one of risk management and learning from past lessons.

[Council went Into Committee to discuss the issue of tax treatment of NZDNRL.]

Action: Treasurer and Executive Director to look into the matter

Setting of Domain Name Fees
There was considerable discussion on the proposal contained in the 31 January 2003 letter by the Chair of New Zealand Domain Name Registry Limited (and the attached proposed framework) that NZDNRL have the responsibility for the setting of domain name fees.

Cr Frederick said he felt uncomfortable having a profit-making entity making such commercial decisions without consideration of philosophical and other issues. He would like to see built into the formula parameters of movement in price similar to the Reserve Bank giving certain parameters of 3 percent or 5 percent upward movement. That would give Council some input into the decision.

Cr Felt said he agreed, but still was reluctant that Council get involved in operational matters.

Cr Farrar said that three bodies had a significant stake: InternetNZ for the major source of its income; registries for their operating costs; and Domain Name Commissioner's Office management fee. On top of that there needed to be enough profit for the registry to pay the required dividend to InternetNZ. All three bodies had to be involved in the discussion, but only one body that made the final decision. The directors of a company had a fiduciary duty under the law to set the fee at a level to support the company.

Cr Streatfield said that the consultation process should happen very much as laid out in the proposed framework- in other words, the board should take to Council for approval a recommended fee, with reasons why it supported that fee. Council had a responsibility to all domain name holders to be seen to be acting responsibly by having the final approval of the fee.

Cr Teernstra agreed that Council must have the final approval of the fee.

Cr Shera said that recourse to the argument about fiduciary duties ignored the question of who the duty was owed to, and he totally refuted any suggestion that they would take a decision possibly leading to insolvency. He disagreed that the issue was just an operational one. Deep philosophical issues were also involved. Conversely, the registry company's primary focus should be on technical issues. Clearly Council would not usurp the Board's role in deciding on a recommendation; all Council would want would be a check and balance whereby the board should come back to Council, as the shareholder, and ask whether what it recommended was satisfactory. Also, despite the role of .nz Oversight Committee, the board and management were probably in the best position to understand what the fee should be. It was their role to make a recommendation to Council. It would need to be a highly unusual situation for Council to change the recommended fee, but it must reserve that right. In summary, he would agree to giving the board the primary responsibility for bringing forward a recommendation and for allowing the board, within a certain range of parameters, to set the fee after consultation. Outside those parameters, the Council would need to approve any decision. Additionally, he would like to hear the opinion of .nz Oversight Committee and the Domain Name Commissioner, given that they were stakeholders in the process.

Ann Urlwin said that the paper was a vehicle to discuss the issue of setting the domain name fee levels. There was no need to increase the fee this year, so it became an issue for the following year. There was no need for an immediate decision. She agreed that there were deep philosophical issues and a myriad of stakeholders.

Cr Wallingford referred to the proposed framework and said that the process, the timeframes, and the robust consultation were excellent and should be followed. Ultimately all users of the system needed to see that the final decision was made by the Council of InternetNZ.

Cr Parkin said that the board should build a case for the fee level for approval by Council.

Cr Riley said that the two main options were: first, the board, after exhaustive consultation, recommended a fee to Council, and Council can either accept it or not; second, the board actually set the fee after consultation with the Council. He proposed as a possible third option that they take up the challenge of finding some formula to give the board that flexibility.

MOVED: (Wallingford/Shera): That the Council of InternetNZ:

1. receives the report;
2. notes that a separate proposal concerning the responsibility for setting of domain name fees was being forwarded to Council;
3. agrees in principle to consider further the concept of InternetNZ and NZDNRL co-locating from March 2004 and to consider a formal proposal from NZDNRL at an appropriate later date;
4. notes that NZDNRL will, at the commencement of the 2003/.04 year, be seeking advice from InternetNZ on the likely dividend requirements for the three years commencing April 2004;
5. advises NZDNRL of the tax structure of the group, the background to the current situation, and whether it might wish to consider a review of tax across the group of entities;
6. advises NZDNRL of all necessary information in the process of the sale/disposal of Domainz that would have any potential impact on SRS or NZDNRL.

CARRIED
Abstention: Farrar

The President said that, on the matter of the setting of domain name fees, he would talk with both the .nz Oversight Committee and the Chair of NZDNRL. Following that he would circulate to Council a draft response to NZDNRL.

Action: President

Cr Shera congratulated the company and management on the development and role-out of the SRS, and he looked forward to that success continuing. The President asked that those good wishes be conveyed to staff.

11. INTERNATIONAL AFFAIRS COMMITTEE

(Agenda item 7)

In the absence of Chair of the International Affairs Committee, Peter Dengate Thrush, Cr Farrar, and made the following points:

• The committee had forwarded to Council recommendations for attendance at Apricot, the Annual General Meeting of APTDL, and the Ipv6 forum. Sue Leader would attend the APTDL AGM in place of Peter Dengate Thrush.
• Peter Dengate Thrush had been renominated for the Asia Pacific Board of which he had been Senior Vice-Chair for the past 2 years.
• Three days of CCTLD meetings had been scheduled before the ICANN meeting in Rio de Janeiro, so there would be a large session in terms of getting the CCTLDs united on what their bottom lines were. Final recommendations were expected from ICANN before the end of the month.
• Vinton Cerf, Chairman of ICANN, would be visiting New Zealand to attend the Knowledge Wave conference. He would not be here in his capacity as Chair of ICANN but as co-creator of the Internet.

12. AT LARGE REPORT

(Agenda item 8)

Cr Teernstra referred to his tabled report . He then left the meeting while it discussed a matter of interest to him.

MOVED: (De Salis/Frederick): "THAT Council instruct the Executive Director to pay the US$1,000 invoice of Imachination Ltd for Icannatlarge web work dating back to March last year."

After considerable discussion on the implications of making such a payment, Cr De Salis and Cr Frederick withdrew the motion.

Motion withdrawn.

MOVED: (De Salis / Streatfield): "THAT Council make a donation to Imachination of US$1,000 in recognition of the work that Imachination had done in furtherance of the At Large cause; and, in recognition of the current uncertain status of the At Large organisation, once that organisation was firm it was welcome to approach Council for a further donation."

CARRIED
Against: Farrar

Cr Teernstra returned and was told of Council's decision. He agreed to withdraw the Imachination invoice.

13. LEGAL AND REGULATORY COMMITTEE

(Agenda item 9)

Cr Shera said there was very little to report.

Submissions on the Ministry of Economic Development's discussion document on the Digital Technology and Copyright Act 1994 review were due on Friday, 21 February 2003. The section of most relevance to InternetNZ was probably that relating to ISPs.

He asked those Councillors who wanted to be on the committee to express that interest. Crs Wallingford, Teernstra, and Ah Kit said they would like to be on the committee, and it was noted that Cr Forsyth had previously expressed an interest.

MOVED: "THAT Crs Shera, Wallingford, Teernstra, Ah Kit, and Forsyth be appointed to the Legal and Regulatory Committee."

CARRIED U

14. TREASURER'S REPORT

(Agenda item 10)

Monthly Reports for November and December

The Treasurer said that the accounts were running well, with a good current account balance. A report for January would be put on the list in the next three days.

Cr Riley asked for an update on expenditure on the SRS implementation. Cr Streatfield said that that expenditure had now ceased.

Cr Riley asked when the final evaluation report on the SRS implementation would be to hand. It was agreed that the Domain Name Commissioner would be asked to produce that final report.

Cr De Salis referred to page 1 of the profit and loss statement and to the third item under Income- NGI capability study $50,000. He questioned where the accounts showed that $50,000 as an outgoing, as per the arrangement to use InternetNZ as a placeholder. Cr Streatfield referred Cr De Salis to page 2 of the Finance Report under Council Expenses.

MOVED: (Streatfield/Wallingford): "THAT the Treasurer's Report and November and December Financial Statements be received."

CARRIED U

Draft 2003/2004 Budget

Cr Streatfield said that, in the absence of expenditure requests from committee Chairs, the committee budgets (with the exception of the Audit Committee and Domainz Future Taskforce) had been set at $3,000 each. He urged that committee Chairs act quickly if they wanted any additional expenditure incorporated in the draft budget. He would bring a revised draft budget to Council for approval at its meeting on 4 April.

MOVED: (Streatfield/Farrar): "THAT council adopt the following:

1. That the draft 2003/04 budget be received;
2. That members' comments on the budget be sought with a deadline of 14 March 2003;
3. That all committees of Council be requested to consider relevant parts of the budget and to forward comments and requests to the Administration Committee by 21 March 2003;
4. That the Administration Committee be requested to propose to Council a revised budget by 28 March 2003."

CARRIED U

15. STRATEGIC PLANNING TASK FORCE

(Agenda item 11)

Cr Riley said that the Strategic Planning Task Force had not met.

16. CONSTITUTION REVIEW WORKING GROUP / GOVERNANCE AND CONSTITUTION COMMITTEE

(Agenda item 12)

Cr Streatfield said that there was no longer a Constitution Review Working Group but rather a Governance and Constitution Committee.

Cr Farrar spoke to his paper about holding on-line annual general meetings.

Cr Parkin said that he would be concerned to change to an electronic Annual General Meeting without having first put the suggestion to a "genuine" face-to-face Annual General Meeting.

Cr Streatfield said that the Annual General Meeting was not proving to be a successful forum for positive debate, and one of the best ways to resolve that problem was throughout the year to hold more conferences on specific topics. The legal aspects of the Annual General Meeting could then be decided electronically.

Cr Farrar said that the policy of members being able to hold Council to account at a face-to-face meeting would be preserved. He added that electronic votes tended to have higher member participation than votes taken at face-to face meetings.

Cr Teernstra suggested including in the Constitution a rule that no two subsequent Annual General Meeting would be held on line.

MOVED: (Farrar/Streatfield): "THAT Council agree:

1. That the Governance and Constitutional Committee be asked to formulate rule changes that would allow Annual General Meetings to be held on line but also allow Council or a specified number of society members to force a face-to-face Annual General Meeting;
2. That consultation with members be undertaken to ascertain their views on holding Annual General Meetings purely on line;
3. That the proposed rule change be received by 31 March and, if acceptable, an Annual General Meeting be scheduled for April to vote on that."

CARRIED U

Cr Streatfield said that committee membership was now down to two people, and asked for expressions of interest.

17. DOMAINZ FUTURE TASK FORCE UPDATE

(Agenda item 13)

The President said that the task force had not met since the last meeting so there was no formal report. However, a meeting was scheduled for the following Friday when it would discuss the recently received valuation of Domainz sought from PriceWaterhouseCoopers.

18. TECHNICAL COMMITTEE

(Agenda item 14)

Cr Bourne said that there was nothing to report other than to say that the committee remained reasonably focused on IPv6, and Cr De Salis had been nominated by the Administration Committee to attend the APRICOT meeting in Taipei this month. The committee had also discussed sending a letter to the NGI Capability Study group to suggest a joint IPv6 strategy to encourage New Zealanders to move across to IPv6.

The committee had also been investigating holding some of its meetings on line.

19. NEW INITIATIVES

(Agenda item 15)

This matter was discussed In Committee from 3 p.m. to 3.10 p.m.

20. GENERAL BUSINESS

NGI Group

Cr Riley said that the NGI group would meet the following Thursday, and it would include the first real meeting of the board. He believed that there were some issues on which InternetNZ and the NGI board could work closely together.

Next Council Meeting

4 April 2003.

Meeting Finish

The President thanked everyone for their attendance and declared the meeting closed at 3.13 p.m.

Note - for links to papers etc, see the Agenda.

© 2001 InternetNZ
Last updated 24 February 2003