RFC 4089
IAB and IESG Recommendation for IETF Administrative Restructuring
Pages: 55
Informational
Informational
Part 2 of 3 – Pages 7 to 36
Appendix: Scenario C
This Appendix reproduces the contents of an Internet-Draft defining Scenario C, as it was posted on 20 September 2004. A table of contents has been removed from this copy and the text has been reformatted to fit within IETF publication guidelines. Each line is prefixed with "C>>". C>> B. Wijnen C>> LucentTechnologies C>> H. Alvestrand C>> Cisco Systems C>> P. Resnick C>> QUALCOMM Incorporated C>> September 20, 2004 C>> C>> AdminRest Scenario C: An IETF Administrative Support Foundation as C>> an Independent Nonprofit Corporation C>> C>> Abstract C>> C>> This document defines a proposal for an IETF Administrative C>> Support Foundation (IASF) as an independent not-for-profit C>> corporation as a means for providing focused support for IETF C>> community activities. It proposes the creation of an IASF Board C>> of Trustees (BoT) that is mainly selected by and accountable to C>> the IETF community and would provide oversight for the IETF C>> Administrative Support Foundation. The IASF will also establish C>> and maintain a strong relationship with the Internet Society C>> (ISOC) and the current relationships between IETF and ISOC will C>> basically be left unchanged. C>> C>> In order to allow the community to properly evaluate this C>> scenario, some draft Articles of Incorporation and draft Bylaws C>> for the IASF are included. Some draft BCP wording for the IASF, C>> IETF and ISOC relationships is also included. C>> C>> 1. Overview of Scenario C C>> C>> This document follows from two previous documents. [RFC3716] C>> defined the overall parameters and criteria for an administrative C>> restructuring. [I-D.malamud-consultant-report] provided an C>> analysis of the implications of several of the suggested C>> strategies. This document picks one strategy and develops it C>> further. C>>
C>> In order to provide the most focused and effective administrative C>> support to the IETF community, this updated scenario C proposes a C>> new and well-defined legal entity to support the IETF C>> administrative functions. The name of that new entity is "The C>> IETF Administrative Support Foundation" (IASF). C>> C>> First, it is important to understand that the IETF has been C>> organized as an Activity of the Internet Society (ISOC) and as C>> such represents the "Standards and Protocols" pillar of ISOC. C>> Under this proposal, the IETF would continue to be an integral C>> part of the Standards and Protocols pillar of ISOC. ISOC C>> currently provides these important functions to the IETF: C>> C>> 1. Standards Process Functions. ISOC plays a fundamental role in C>> the IETF Standards Process, including appointment of the C>> Nominating Committee (Nomcom) chair, confirmation of IAB C>> members, confirmation of documents that describe the C>> standards processes, and acting as the last resort in the C>> appeals process. These Standards Process Functions are C>> defined in [RFC2026], [RFC2028], [RFC2031], and [RFC3677]. C>> C>> 2. IETF Fund Raising Functions. ISOC provides the fund raising C>> function as one source for financial support the IETF. C>> C>> 3. Administration Functions. ISOC provides administrative and C>> financial functions, managing the contract with the RFC C>> Editor, providing insurance for selected IETF participants, C>> and administering a discretionary fund for use by the IAB and C>> the IETF Chairs. C>> C>> The administrative restructuring of the IETF proposed in this C>> document keeps that basic relationship between IETF and ISOC. C>> Specifically, the recommendation does not propose any changes to C>> the "Standards Process Functions" or to the "IETF Fund Raising C>> Functions". C>> C>> Under the "Administration Functions", ISOC both funds and C>> administers some (as stated above) parts of the IETF C>> Administrative Support Functions. Some of the funds (like for C>> the RFC-Editor) go directly to the contractor who executes the C>> administrative function. The streamlining of the administrative C>> support for the IETF ultimately intends to put the complete C>> Administrative Support Functions under the newly recommended C>> IASF. This means that we recommend that ultimately, ISOC funds C>> for the IETF will be transferred to the IASF, which will then C>> administer all the contracts and payments according to an
C>> approved yearly budget. The details of that process will be C>> documented in a Memorandum of Understanding (MoU) between ISOC, C>> IETF and IASF. C>> C>> This updated AdminRest Scenario C aims to provide the following: C>> C>> o A continued close relationship between IETF and ISOC. C>> C>> o A well defined legal entity within which the IETF can define C>> the administrative activity in terms of IETF community needs. C>> C>> o A Board of Trustees with operational oversight that is C>> accountable to the IETF community. C>> C>> o Continued separation between the IETF standards activity and C>> any fund-raising for standards work. C>> C>> o A close and well defined relationship between IASF and ISOC, C>> documented in a BCP (or MoU). C>> C>> o Appropriate ISOC oversight of its standards activities funds C>> via a yearly budget approval and open reporting of funds C>> spent. C>> C>> In scenario C, it is intended that the IETF Administrative C>> Support Foundation will be a tax-exempt not-for-profit C>> corporation as defined by Articles of Incorporation and a set of C>> Bylaws. These will describe the scope and purpose of the IASF C>> and they also define the structure and responsibility of the C>> Board of Trustees (BoT), a body that is mainly selected by the C>> IETF and which is responsible for overseeing the IASF. A draft C>> of the Articles of Incorporation and Bylaws is included in the C>> next sections of this document. C>> C>> Scenario C allows us (IETF) to establish IETF control over our C>> administrative support functions in terms of determining that C>> they meet the community's needs, and adjusting them from time to C>> time using IETF processes. This is to address the pressing C>> administrative issues outlined in [RFC3716]. C>> C>> Scenario C also encourages us (the IETF) to regularly evaluate C>> that we do want to continue the relationships with ISOC and the C>> contracts with our services providers (contractors). It is based C>> on the premise that we prefer to actively maintain relationships C>> with other organizations and service providers instead of being C>> bound to such relationships based on poorly defined and poorly
C>> documented historical facts. A draft BCP for the relationship C>> between ISOC, IETF and IASF is included as a separate section in C>> this document. C>> C>> Scenario C does however bring the burden of creating a new legal C>> entity (IASF) and such an undertaking is also not without risks. C>> It will need careful planning and execution. Migration from the C>> current structure to this new structure is probably also somewhat C>> more costly and time and labour consuming. The sections below C>> try to show how that would be achieved and outlines what further C>> steps are needed to provide more detail if this scenario is C>> chosen. C>> C>> 2. Work Plan for the IETF Administrative Support Foundation C>> C>> This section gives the work plan for the IETF Administrative C>> Support Foundation (IASF) for the remainder of 2004 and the year C>> 2005. C>> C>> 2.1 Workplan goals C>> C>> The work plan below is intended to satisfy three goals: C>> C>> o Satisfy the IETF's need for support functions in 2005 C>> C>> o Operate with a positive account balance throughout 2005 C>> C>> o Start building up a fund inside the IASF to serve as a buffer C>> against budgetary emergencies in later years (such as meetings C>> with a severe cost overrun, or force-majeure cancellations). C>> C>> The fund target is 6 months of operating revenue, and the target C>> for building up the fund is 3 years. The budgeted set-aside for C>> the fund should thus be approximately 17% of operating revenue. C>> C>> 2.2 Incorporation process C>> C>> There are 3 things that need to be in place before that C>> corporation can be considered viable at all: C>> C>> o IETF consensus on the plan C>> C>> o ISOC agreement on a reasonable support contract C>> C>> o Assurance that the corporation will have tax-exempt status C>>
C>> Once this document has been discussed in the IETF, and the IESG C>> and IAB gauges that rough consensus seems reached, the IETF C>> leadership will take the following actions: C>> C>> o Publish a Last Call on this document (to determine plan C>> consensus). C>> C>> o Choose a negotiating team to negotiate the ISOC contract. C>> C>> o Choose an executive search team to find the IASF C>> Administrative Director (IAD). C>> C>> o Consult with legal counsel to determine how best to achieve C>> tax-exempt status; this will affect the bylaws and articles of C>> incorporation. C>> C>> When the Last Call is over, the IESG will consider whether there C>> is still consensus, and if there is, approve this document for C>> publication. Once that happens, it will take the following C>> steps: C>> C>> o As soon as negotiations conclude, publish a Last Call on the C>> ISOC contract. C>> C>> o As soon as drafting of legal documents is completed, publish a C>> Last Call on the Bylaws and Articles of Incorporation, and ask C>> the Nomcom to start the process of selecting Nomcom-selected C>> board representatives. C>> C>> C>> These Last Calls are "speak now" Last Calls - if someone wishes C>> to challenge the IETF consensus to go ahead with these actions, C>> knowing what the formal documents will look like, this is their C>> last chance. C>> C>> When these Last Calls are over, the IETF chair, the IAB chair and C>> the ISOC President will jointly file the articles of C>> incorporation, and the IESG, IAB and ISOC will fill their board C>> seats. C>> C>> Note: This document does not say when a Request for Information C>> (RFI) for IETF support services such as meeting planning is sent C>> out. Advice is sought on the earliest point where this can be C>> done. C>>
C>> 2.3 Contract establishment C>> C>> The most important activity for late 2004/early 2005 is to C>> finalize contracts for the support of the IETF. This includes: C>> C>> o Funding C>> C>> o Technical infrastructure C>> C>> o Meeting management C>> C>> o Clerk's office C>> C>> o RFC Editor C>> C>> o IANA C>> C>> There appears to be consensus in the IETF community that these C>> functions, whether they are offered for free, remunerated or C>> arranged for other consideration, should be under contract. C>> C>> The contract for funding is expected to be with ISOC, and should C>> be finalized before IASF is established. C>> C>> The contract for technical infrastructure is expected to be an C>> RFP, published in November of 2004, with responses being C>> evaluated in December 2004, and services rendered from a mutually C>> agreed date early in 2005. C>> C>> The contract for meeting management will be influenced by the C>> need to have stable agreements for the 2005 meetings at an early C>> date. This indicates that IASF will honor a pre-IASF agreement C>> to have these meeting contracts signed by Foretec (if that can be C>> achieved). C>> C>> It is not clear how the contract for the clerk's office is to be C>> managed at the time of this writing. C>> C>> The contract for the RFC Editor is expected to be with ISI, and C>> is expected to be a continuation of the current contract with C>> ISOC, which runs until the end of 2005. C>> C>> The contract with IANA will replace or augment the current MoU C>> between the IETF and ICANN. In its simplest form, it would C>> simply be a reconfirmation of the duties of ICANN under the MoU. C>>
C>> 2.4 Performance evaluation C>> C>> The second task of the IASF is to make sure the IETF gets the C>> support it needs. The IASF will work together with the IETF C>> community to make an effort to identify whether or not the IETF's C>> needs are being met, and to coordinate improvements with the C>> contractors. This is an ongoing activity. C>> C>> 2.5 Budgeting for 2006 C>> C>> In June 2005, the IASF will start the yearly budgeting process C>> with ISOC, as specified in the ISOC contract, leading to a work C>> plan and budget for 2006. C>> C>> 2.6 Reporting C>> C>> The IASF will present monthly updates on its economic status. C>> These will be delivered to ISOC as part of the ISOC contract, and C>> also be made publicly available so that the IETF community can C>> inspect them. C>> C>> 3. Details of the IETF Administrative Support Foundation C>> C>> This section contains details about the proposal to change how C>> the day-to-day IETF administrative support functions are C>> provided. This recommendation is based on the initial C>> description of "Scenario C" in the "Administrative Support C>> Analysis" [I-D.malamud-consultant-report] provided by Carl C>> Malamud. It is further based on discussion in the IESG and IAB C>> and on feedback on Carl's document as received on the IETF C>> mailing list. Further justifications, reasoning and motivations C>> are given in Appendix A. Risk Analysis is done in Appendix C. C>> C>> This document recommends to create a well defined and legal C>> entity called "The IETF Administrative Support Foundation" C>> C>> (IASF). The name intends to clearly express that this new legal C>> entity has only one single function, namely to provide the C>> administrative support of the IETF Standardization and Protocol C>> Development activities. This entity will ultimately manage and C>> administer all the administrative functions that are needed to C>> support the IETF - the Standardization and Protocol Development C>> activity of ISOC. C>>
C>> 3.1 Organizational Form and Legal Domicile C>> C>> The consultant report [I-D.malamud-consultant-report] contains a C>> writeup on various choices in terms of how and where to C>> incorporate. This recommendation has made the choice to C>> incorporate in the US in the state of Virginia. Some detail can C>> be found in Appendix B. C>> C>> In this scenario, administrative support functions for the IETF C>> are legally housed in a focused, incorporated institution C>> (although the Administrative Director might be physically housed C>> within the Internet Society). C>> C>> This scenario defines a number of concrete linkages with the C>> Internet Society, which supplement the current close C>> interconnection of the IETF community with ISOC. The C>> relationship is to be documented in a MoU (initial text is in C>> Section 4). C>> C>> 3.2 Draft Core Principles C>> C>> 3.2.1 Principles of Establishment and Governance C>> C>> The following principles are to be respected for the C>> establishment and governance of the IETF Administrative Support C>> Foundation (IASF) and are the basis for the Draft Articles of C>> Incorporation as in Section 6.1 and the Draft Bylaws as in C>> Section 6.2: C>> C>> 1. The IASF shall be governed by a Board of Trustees (BoT), who C>> shall be responsible for the fiscal, legal, and C>> administrative infrastructure that supports the activities of C>> the IETF. C>> C>> 2. The governance of the IETF, the standards process, and all C>> other aspects of how we make our standards are defined in the C>> procedural Best Current Practice (BCP) RFC series, which will C>> be explicitly referenced in the organization documents of the C>> IASF. C>> C>> 3. The IASF shall be transparent and responsible to the IETF. C>> C>> 4. The BoT shall appoint a Secretary and a Treasurer, who need C>> not be members of the BoT. The IETF Administrative Director C>> (IAD) of the IASF shall provide staff support to the BoT. C>>
C>> 5. The BoT shall be composed to strike a balance between C>> "outside" and "inside" directors. The IESG and IAB will each C>> select a representative to serve as a voting member of the C>> BoT. Mechanisms such as the Nominating Committee (Nomcom) and C>> the appointment of certain seats by the ISOC fulfill the C>> outside director obligations. C>> C>> 6. IAB, IESG and ISOC will have liaisons to the BoT in order to C>> have a good basis for interaction. C>> C>> The BoT will have strong governance over a limited scope of C>> activities (e.g., the fiscal, legal, and administrative C>> infrastructure that are the charter of the IASF) but will have no C>> authority over the IETF standards process. In this board C>> composition, the ISOC and Nomcom appointments ensure that outside C>> directors with no perceived conflicts of interest are on the C>> board. C>> C>> All nominating bodies should make strong fiscal, legal, and C>> administrative acumen essential selection criteria for this C>> position. C>> C>> IAB and IESG representatives will serve for one year. For other C>> appointments, a term proposed for the nominated positions is C>> three years with staggered appointments. However, the nominating C>> body might have the power to change their appointee during their C>> term. C>> C>> All members of the BoT selected by the IETF are subject to the C>> same recall procedures in effect for the IETF leadership such as C>> members of the IAB and IESG. C>> C>> 3.2.2 Principles of Operation of the IETF Administrative Support C>> Foundation C>> C>> The following are general principles for the operation of the C>> IASF: C>> C>> 1. The IASF shall employ an IETF Administrative Director (IAD) C>> of the IASF, who shall be hired by the BoT with the advice C>> and consent of the IESG and IAB. C>> C>> 2. All support services shall be contracted in an open and C>> transparent manner. C>>
C>> 3. The IAD shall submit a proposed annual budget to the BoT at C>> least 90 days before the beginning of the fiscal year. Such C>> budget shall be developed with the advice and consent of the C>> IAB and IESG. C>> C>> 4. The IAD shall serve on the BoT as a non-voting, ex-officio C>> member. C>> C>> 5. The BoT shall select a professional audit firm and shall C>> commission an audit immediately upon the close of each fiscal C>> year. C>> C>> 6. The IASF will conduct financial reporting in a fully C>> transparent fashion. Audits shall be conducted promptly and C>> published. Tax returns shall be published. Detailed C>> financial statements will be published on a regular basis, C>> including timely reports on the financial results of IETF C>> meetings. C>> C>> 4. Draft MoU between ISOC, IETF and IETF Administrative Support C>> Foundation C>> C>> 4.1 Form and Scope of the Agreement C>> C>> This section presents some principles to be incorporated in a C>> draft MoU/Contract between the Internet Society (ISOC) and the C>> IETF Administrative Support Foundation (IASF), detailing the work C>> each is expected to perform, the responsibilities each has, and C>> the means by which these functions are accomplished. This C>> MoU/Contract shall be published as an RFC. C>> C>> The MoU/Contract will specify the responsibilities of the C>> Internet Society, including: C>> C>> o Reaffirmation of the Standards Process Function that ISOC C>> performs for the IETF. C>> C>> o Continuation of the Fund Raising Function that ISOC conducts, C>> in which a single, unified campaign is used to solicit C>> corporate, individual, and other organizational donations for C>> funding of the 3 Pillars. C>> C>> o Disbursement of funds to the IASF according to the agreed-upon C>> budgets and processes as specified in this agreement. C>> C>> o Verification that IASF spends these funds to support the work C>> of the IETF, within the scope described in the IASF bylaws. C>>
C>> Responsibilities of IASF: C>> C>> o Determine, in cooperation with the IETF, the support functions C>> that are needed for the IETF, and can be achieved within C>> available funds. C>> C>> o Enter into contracts for these support functions. C>> C>> o Supervise these contracts and ensure that they are being C>> performed in the best interest of the IETF, within a C>> reasonable budget and with agreed-upon performance. C>> C>> 4.2 Cooperation mechanism C>> C>> IASF and ISOC agree that they will perform a budgeting procedure C>> each year, comprising the following steps: C>> C>> o IASF puts together a budget proposal to ISOC, and presents it C>> in June. This will specify the functions that need to be C>> performed, the cost of each, the expected revenue from IETF C>> meeting participation, and how much is being requested for C>> ISOC to contribute. C>> C>> o By the end of August, ISOC will give a budget number to IASF C>> that says how much ISOC is willing to contribute to support C>> the functions described in the IASF budget. C>> C>> o Before November 1, ISOC and IASF will agree on a budget, an C>> ISOC contribution, and a disbursement schedule. C>> C>> o If either party sees that there is reason to change the C>> budget, they can start a negotiation to do so at any time. On C>> mutual agreement to a change, payments are modified C>> accordingly. C>> C>> o ISOC may withhold funds if IASF fails to account for its C>> expenditures, if it determines that IASF has departed C>> significantly from its budgeted expenditures without agreement C>> with ISOC to do so, or if ISOC determines that IASF is C>> spending funds in violation of its bylaws. C>>
C>> 4.3 Promises Not to Do Things C>> C>> This section lays out things that would constitute interference C>> in each others' business, or things that are Just Plain Wrong. C>> C>> In legal terms, these are called "covenants." C>> C>> ISOC will not place requirements on how IASF does business, C>> except on reporting. It will, for instance, not attempt to C>> influence IASF choice of contractors or choice of meeting C>> sponsors. This restriction is meant to enforce the separation C>> between fund raising and the actual operation of the standards C>> process. C>> C>> IASF will not ask companies for money. IASF may ask for sponsors C>> for IETF events, per tradition, and may accept zero-cost provider C>> contracts or in-kind donations, but ISOC is the organization C>> charged with fundraising. C>> C>> Neither ISOC nor IASF will attempt to influence technical C>> decisions of the IETF standards process. C>> C>> 4.4 Initial contribution C>> C>> The Internet Society has already allocated $700,000 in transition C>> funds. As part of the formation process, this section sets out a C>> way that a 2005 allocation of funds and an initial contribution C>> for startup can be decided upon. NOTE: This section is a GUESS! C>> Its purpose is to give some sense of where we're at. C>> C>> If this plan is pursued, one of the first activities is to put C>> together a detailed 2005 budget, including an analysis of cash C>> flow and balance sheets to make sure that the organization is C>> properly funded and will be solvent throughout the year. This C>> planning process should project out 3 years and show how the C>> organization will be able to accumulate the appropriate cash C>> reserve to make sure operations can continue in a stable manner. C>> C>> An initial estimate is for an on-going annual contribution of USD C>> 900.000 to IASF in 2005. In addition, ISOC will contribute an C>> additional USD 600.000 as an initial fund to start up IASF, C>> payable after the Board of Trustees is seated and this contract C>> is signed and approved by the IETF. C>> C>> ISOC commits to this ongoing level of contribution (USD 75.000 C>> per month) for the lifetime of this contract, unless modified by C>> mutual agreement. C>>
C>> 4.5 Termination, law and so on
C>>
C>> This agreement may be terminated by either party for any reason
C>> on 12 months' notice.
C>>
C>> The parties may reach mutual agreement on a shorter termination
C>> period.
C>>
C>> All conflicts under this agreement are to be adjudicated under
C>> the laws of the United States and the State of Virginia, however
C>> the parties may also agree to arbitration, mediation or any other
C>> conflict resolution mechanisms.
C>>
C>> 5. Notes and Explanations
C>>
C>> This is where we put down why things are the way they are.
C>>
C>> 5.1 Type of legal instrument
C>>
C>> This document is styled as a contract - an agreement between two
C>> parties, enforceable under law. An alternate formulation would
C>> be a Memorandum of Understanding - but we want it to be clear to
C>> everyone that the parties stand behind their responsibilities
C>> under this document. At the moment, the authors see no
C>> compelling arguments for not making it a contract. In either
C>> case, the document is published as an RFC.
C>>
C>> 5.2 Power Balance
C>>
C>> As written, it is designed to make it easy to do the right thing
C>> as long as the parties agree what that is, to make it clear that
C>> ISOC will continue to pay money as long as IASF does the Right
C>> Thing (and reports what it's doing), and that ISOC can stop the
C>> show quickly if it's clear that IASF is not doing the Right
C>> Thing.
C>>
C>> 5.3 Budget figures
C>>
C>> The main purpose of the numbers is to make it clear that there
C>> WILL be numbers in this contract, and that it WILL represent a
C>> solid commitment by ISOC. The numbers are "subject to change
C>> without notice" while this contract is negotiated.
C>>
C>> 6. Draft Incorporating Documents for the IETF Administrative C>> Support Foundation C>> C>> 6.1 Draft Articles of Incorporation C>> C>> This section contains standard, pro-forma Articles of C>> Incorporation. Note well that tax lawyers often make significant C>> alterations to standard Articles as they consider a 501(c)(3) C>> application. They are included here merely as a sample for C>> illustrative purposes only. C>> C>> 'Commonwealth of Virginia -- State Corporation Commission'| C>> 'Articles of Incorporation -- Virginia Nonstock Corporation'| C>> Form SCC819, 07/ 03 [1] ------ C>> C>> The undersigned, pursuant to Chapter 10 of Title 13.1 of the Code C>> of Virginia, [Virginia] state(s) as follows: C>> C>> 1. The name of the corporation is The IETF Administrative C>> Support Foundation. C>> C>> 2. The corporation shall have no members. C>> C>> 3. The purpose of the corporation is to manage and administer C>> all the administrative functions for the IETF - the C>> Standardization and Protocol Development activity of the C>> Internet Society. C>> C>> 4. The Trustees of the corporation shall be elected or appointed C>> as specified in Article IV (Section 6.2.5) of the Bylaws. C>> C>> 5. Name and agent: C>> C>> A. The name of the corporation's initial registered agent C>> is: XXX C>> C>> B. The initial registered agent is a domestic or foreign C>> stock or nonstock corporation, limited liability company, C>> or registered limited liability partnership authorized to C>> transact business in Virginia. C>> C>> 6. The initial Trustees are: XXX C>> C>> 7. The incorporators are: XXX C>>
C>> 6.2 Draft Bylaws of the IETF Administrative Support Foundation C>> C>> As with the Draft Articles, the Draft Bylaws included here are a C>> pro-forma, standard version. Substantial alteration may be C>> required as legal counsel reviews the specific nature of an C>> incorporation. C>> C>> 6.2.1 Article I: Organization C>> C>> The name of the Corporation shall be The IETF Administrative C>> Support Foundation (which is hereinafter also referred to as the C>> "IASF"). C>> C>> 6.2.2 Article II: Purpose C>> C>> *Section 1: Purpose.* The IASF shall be operated exclusively for C>> nonprofit educational, charitable, and scientific purposes, C>> including, without limitation, the purposes stated in the IASF's C>> Articles of Incorporation. C>> C>> *Section 2: Restrictions.* No part of the net earnings of the C>> IASF shall inure to the benefit of, or be distributable to, C>> private persons, except that the IASF shall be authorized and C>> empowered to pay reasonable compensation for services rendered, C>> and to make payments and distributions in furtherance of the C>> purposes set forth in Article II, Section 1 hereof. Any other C>> provision of these Bylaws to the contrary notwithstanding, the C>> IASF shall not carry on any activities not permitted to be C>> carried on by a corporation exempt from Federal Income Tax under C>> Section 501(a) and Section 501(c)(3) of the Code. These Bylaws C>> shall not be altered or amended in derogation of the provisions C>> of this Section. C>> C>> 6.2.3 Article III: Members C>> C>> The IASF shall have no members and no stockholders. C>> C>> 6.2.4 Article IV: Offices C>> C>> The office of the IASF shall be as determined from time to time C>> by the Board of Trustees (BoT) within or outside of the State of C>> Virginia. C>> C>> 6.2.5 Article V: Board of Trustees C>> C>> *Section 1: Authority and Responsibilities.* The power, C>> authority, property, and affairs of the IASF shall at all times C>> be exclusively exercised, controlled, and conducted by or under
C>> the authority of the Board of Trustees (BoT) subject to any C>> limitations set forth in the Articles of Incorporation and in C>> accordance with the Virginia Nonstock Corporation Act as it now C>> exists or hereafter may be amended. C>> C>> *Section 2: Board of Trustees Composition.* The Board of Trustees C>> shall consist of seven (7) Trustees. C>> C>> One (1) Trustee will be selected by the IAB. C>> C>> One (1) Trustee will be selected by the IESG. C>> C>> Two (2) Trustees will be selected by the Internet Society. C>> C>> Three (3) Trustees will be selected by the IETF community. C>> C>> The IAB chair and IETF chair will functions as liaisons from the C>> IAB and IESG respectively to the Board of Trustees. The chair C>> and president of the Internet Society will function as liaisons C>> from the ISOC to the Board of Trustees. C>> C>> *Section 3: Terms.* The term of office of IESG and IAB Selected C>> Trustees shall be one (1) year or until their successors have C>> been selected and assume office. The term of office of otherwise C>> Selected Trustees shall be three (3) years or until their C>> successors have been selected and assume office. Selected C>> Trustees may be selected to serve multiple terms. C>> C>> *Section 4: Selection of the Board of Trustee* C>> C>> 1. *Selection of IESG and IAB Selected Trustees.* The IESG and C>> IAB shall each select one representative Trustee, who is not C>> at the same time an IESG or IAB member. C>> C>> 2. *Selection of otherwise Selected Trustees.* Three (3) IETF C>> Selected Trustees shall be selected by the IETF nominations C>> process (as defined in [RFC3777] or its successor) and C>> confirmed by the IESG. Two ISOC Selected Trustees shall be C>> selected by the Internet Society using means of their own C>> choosing. C>> C>> 3. *Resignation.* A Selected Trustee may resign by delivering C>> his resignation in writing to the IASF at its principal C>> office or to the Secretary of the IASF. Such resignation C>> shall be effective upon its receipt or upon such date (if C>> any) as is stated in such resignation, unless otherwise C>> determined by the Board. C>>
C>> 4. *Removal.* A Selected Trustee selected by the IETF C>> nominations process may be removed from office at any time C>> using the procedures specified in [RFC3777] or its successor. C>> A Selected Trustee selected by the Internet Society may be C>> removed by the Internet Society using means of their own C>> choosing. C>> C>> 5. *Vacancies.* Any vacancy in the Board of Trustees shall be C>> filled using the procedures set forth above on the C>> composition of the Board of Trustees. The Trustees shall C>> have and may exercise all of their powers notwithstanding the C>> existence of one or more vacancies in their number. C>> C>> *Section 5: Quorum.* A majority (i.e. fifty (50) percent plus C>> one (1)) of the Trustees shall constitute a quorum for the C>> transaction of business. Unless otherwise stated in these C>> C>> Bylaws, decisions of the Board of Trustees shall be made by the C>> concurrence of a majority of members of the Board of Trustees C>> present and voting. If at any meeting there is no quorum C>> present, the Board must not transact business. C>> C>> *Section 6: Compensation and Reimbursement.* No member of the C>> Board of Trustees may receive compensation for his or her C>> services as a Trustee. A Trustee shall, at their request, be C>> reimbursed for actual, necessary and reasonable travel and C>> subsistence expenses incurred by them in performance of their C>> duties. C>> C>> *Section 7: Meetings.* The Board of Trustees shall meet at least C>> twice annually. C>> C>> 1. *Written notice, waiver, action.* Wherever the text below C>> speaks of "written" it is also permitted to use e-mail. C>> C>> 2. *Annual Meeting.* The Board of Trustees shall hold a public C>> Annual Meeting at a time and place associated with the first C>> IETF meeting each year. This Annual meeting shall be open to C>> all IETF attendees except that the parts of the meeting C>> dealing with personnel issues may be held in executive C>> session. C>> C>> 3. *Meeting Types, Methods, and Notice.* Meetings of the Board C>> may be held from time to time at such intervals and at such C>> places as may be fixed by the Board. Meetings of the Board C>> may be held only in person or via teleconference. Notice of C>> all regular meetings of the Board shall be delivered to each C>> Trustee by e-mail or by postal mail and announced on the
C>> IETF-Announce list at least ten (10) calendar days before the C>> meeting. Special meetings of the Board may be called for any C>> purpose at any time by the Chairman of the Board or by any C>> three (3) Trustees. Notice of any special meeting shall state C>> the purpose of the meeting. A Trustee may waive notice of a C>> meeting of the Board of Trustees by submitting a signed, C>> written waiver of notice, either before or after the meeting. C>> A Trustee's attendance at or participation in a meeting C>> waives any required notice of the meeting unless at the start C>> of such meeting or promptly upon arrival the Trustee objects C>> to holding the meeting or transacting business at the C>> meeting, and does not thereafter vote for or assent to action C>> taken at the meeting. C>> C>> 4. *Actions Taken By the Board of Trustees Without Meeting.* Any C>> action required or permitted to be taken at any meeting of C>> the Board of Trustees may be taken without a meeting if all C>> C>> Trustees consent in writing to such action. Such action C>> shall be evidenced by written consents approving the lack of C>> a meeting, signed by each Trustee. C>> C>> *Section 8: Board Committees.* The Trustees may elect or appoint C>> one or more committees (including but not limited to an Executive C>> Committee) and may delegate to any such committee or committees C>> any or all of their powers, provided that any committee to which C>> the powers of the Trustees are delegated shall consist solely of C>> Trustees. Committees shall conduct their affairs in the same C>> manner as is provided in these By Laws for the Trustees. The C>> members of any committee shall remain in office at the pleasure C>> of the Board of Trustees. C>> C>> *Section 9: Trustee Member Conflict of Interest.* C>> C>> 1. As set forth in Section 9(3) below, a Trustee of the IETF C>> Administrative Support Foundation (IASF) who has a personal C>> interest in a transaction, as defined below, may not C>> participate in any discussion of that transaction by the C>> Trustees of The IASF and may not vote to determine whether to C>> authorize, approve, or ratify that transaction except as C>> specifically described below. For purposes of these Bylaws, a C>> "personal interest" is defined as any act that will provide, C>> directly or indirectly, a financial benefit or a disparate C>> benefit individually to the Trustee, or to a company he or C>> she is employed by, has a significant financial interest in, C>> or represents in any fashion. However, policies under C>> consideration by the IASF are likely to have an impact on the C>> business of every Trustee. It is expected that most policy
C>> decisions will have a direct or indirect impact on the C>> Trustee's company, but such a non-individualized interest C>> does not constitute a "personal interest" as used in these C>> Bylaws. A "transaction" with The IASF for purposes of these C>> Bylaws is a contract or consultancy in which the Trustee has C>> a direct or indirect financial benefit, or a policy under C>> consideration that will have a disparate and unusual impact C>> on a business with which the Trustee is directly or C>> indirectly associated. C>> C>> 2. The mere existence of a personal interest by a Trustee of The C>> IASF in a transaction with the IASF shall not invalidate the C>> IASF's ability to enter that transaction so long as the C>> following conditions are met: (i) the material facts of the C>> personal nature of the transaction with The IASF and the C>> Trustee's interest in the transaction with the IASF are fully C>> disclosed to the Board of Trustees of the IASF, either by the C>> Trustee having a direct or indirect personal interest in the C>> C>> transaction with the IASF, or are brought to the attention of C>> the Board by a third party; or (ii) the BoT of the IASF, by a C>> vote of the Trustees (without a conflict of interest) of the C>> IASF vote to authorize, approve, or ratify a transaction with C>> the IASF; or (iii) the transaction with the IASF in which the C>> direct or indirect personal interest of a IASF Trustee was C>> disclosed to the BoT of The IASF and was determined by the C>> BoT of the IASF entitled to vote on the matter is determined C>> by the BoT voting to be in the IASF's interests, C>> notwithstanding the personal interest of the non-voting C>> Trustee. C>> C>> 3. In determining whether a conflict of interest exists, the BoT C>> of the IASF has the prerogative, upon review of all facts and C>> circumstances, to make its own determination of whether a C>> conflict of interest exists and how it is appropriate to C>> proceed. A Trustee who perceives the possibility of a C>> conflict of interest for him or herself, or for another Board C>> member, may raise this issue at any point prior to a vote on C>> any issue. Any Trustee who perceives a possible conflict of C>> interest may present justification with respect to whether or C>> not a conflict of interest exists, but the entire Board, with C>> the exception of the Trustee having the potential conflict of C>> interest, shall make the final determination to proceed in C>> such a matter. If the BoT finds there is a conflict of C>> interest, the Trustee with the conflict may be excluded by C>> the Chair of the Board from that portion of any meeting where C>> a substantive discussion or decision to engage or not in such
C>> a transaction is made, except that he or she may provide any C>> information that will assist the Trustees in such a matter C>> before leaving such a meeting. C>> C>> *Section 10. Approval of Meeting Minutes.* Minutes of the BoT of C>> the IASF must be approved by a procedure adopted by the board and C>> published on the IASF web site. C>> C>> 6.2.6 Article VI: Officers C>> C>> *Section 1: Number.* The officers of the IASF shall consist of a C>> Chairman of the Board, a Treasurer and a Secretary, and such C>> other inferior officers as the BoT may determine. C>> C>> *Section 2: Election Term of Office and Qualifications.* All C>> officers shall be elected annually by the vote of a majority of C>> the Board of Trustees present and voting (excluding abstentions) C>> at the Annual Meeting. The Treasurer and Secretary need not be C>> members of the Board. The Chair of the IETF nor the chair of the C>> IAB shall be the Chairman of the Board of the IASF. C>> C>> *Section 3: Resignation.* An officer may resign by delivering his C>> written resignation to the IASF at its principal office or to the C>> Chair or Secretary. Such resignation shall be effective upon C>> receipt or upon such date (if any) as is stated in such C>> resignation, unless otherwise determined by the Board. C>> C>> *Section 4: Removal.* The BoT may remove any officer with or C>> without cause by a vote of a majority of the entire number of C>> Trustees then in office, at a meeting of the BoT called for that C>> purpose. An officer may be removed for cause only if notice of C>> such action shall have been given to all of the Trustees prior to C>> the meeting at which such action is to be taken and if the C>> officer so to be removed shall have been given reasonable notice C>> and opportunity to be heard by the BoT. C>> C>> *Section 5: Vacancies.* In case any elected officer position of C>> the IASF becomes vacant, the majority of the Trustees in office, C>> although less than a quorum, may elect an officer to fill such C>> vacancy at the next meeting of the BoT, and the officer so C>> elected shall hold office and serve until the next Annual C>> Meeting. C>> C>> *Section 6: Chairman of the Board.* The Chairman of the Board C>> shall, when present, preside at all meetings of the BoT of the C>> IASF. If the Chairman is not available to preside over a C>> meeting, the majority of the Trustees present shall select C>> another Trustee to preside at that meeting only.
C>> C>> *Section 7: Treasurer.* The Treasurer shall have the custody of C>> all funds, property, and securities of the IASF, subject to such C>> regulations as may be imposed by the Board of Trustees. He or C>> she may be required to give bond for the faithful performance of C>> his or her duties, in such sum and with such sureties as the BoT C>> may require or as required by law, whichever is greater. When C>> necessary or proper, he or she may endorse on behalf of the IASF C>> for collection, checks, notes and other obligations, and shall C>> deposit same to the credit of the IASF at such bank or banks or C>> depository as the BoT may designate. He or she shall make or C>> cause to be made such payments as may be necessary or proper to C>> be made on behalf of the IASF. He or she shall enter or cause to C>> be entered regularly on the books of the IASF to be kept by him C>> or her for that purpose, full and accurate account of all monies C>> and obligations received and paid or incurred by him or her for C>> or on account of the IASF, and shall exhibit such books at all C>> reasonable times to any Trustee on application at the offices of C>> the IASF incident to the Office of Treasurer, subject to the C>> control of the BoT. Certain duties of the Treasurer as may be C>> specified by the BoT may be delegated by the Treasurer. C>> C>> *Section 8: Secretary.* The Secretary shall have charge of such C>> books, records, documents, and papers as the BoT may determine, C>> and shall have custody of the corporate seal. The Secretary C>> shall keep, or cause to be kept the minutes of all meetings of C>> the BoT. The Secretary may sign, with the Chairman, in the name C>> and on behalf of the IASF, any contracts or agreements, and he or C>> she may affix the corporate seal of the IASF. He or she, in C>> general, performs all the duties incident to the Office of C>> Secretary, subject to the supervision and control of the Board of C>> Trustees, and shall do and perform such other duties as may be C>> assigned to him or her by the BoT or the Chairman of the BoT. C>> Certain duties of the Secretary as may be specified by the BoT C>> may be delegated by the Secretary. C>> C>> *Section 9: Other Powers and Duties.* Each officer shall have in C>> addition to the duties and powers specifically set forth in these C>> By Laws, such duties and powers as are customarily incident to C>> his office, and such duties and powers as the Trustees may from C>> time to time designate. C>>
C>> 6.2.7 Article VII: Amendments C>> C>> *Section 1: By Laws.* These By Laws may be amended by an C>> affirmative vote of a majority of the Trustees then in office C>> (excluding abstentions) at a regular meeting of the board or a C>> meeting of the board called for that purpose as long as the C>> proposed changes are made available to all trustees and posted to C>> the IETF Announce list at least 30 days before any such meeting. C>> C>> *Section 2: Articles of Incorporation.* The Articles of C>> Incorporation of the IASF may be amended by an affirmative vote C>> of two-thirds of the BoT then in office at a regular meeting of C>> the board or a meeting of the board called for that purpose as C>> long as the proposed changes are made available to all trustees C>> and posted to the IETF Announce list at least 30 days before any C>> such meeting. C>> C>> 6.2.8 Article VIII: Dissolution C>> C>> Upon the dissolution of the IASF, the IASF, after paying or C>> making provisions for the payment of all of the liabilities of C>> the IASF, dispose of all of the assets of the IASF exclusively C>> for the exempt purposes of the IASF in such manner or to such C>> organization or organizations operated exclusively for social C>> welfare or charitable purposes. Any such assets not so disposed C>> of shall be disposed of by a court of competent jurisdiction of C>> the county in which the principal office of the organization is C>> then located, exclusively for such purposes. In the event of a C>> C>> sale or dissolution of the corporation, the surplus funds of the C>> corporation shall not inure to the benefit of, or be C>> distributable to, its Trustees, officers, or other private C>> persons. C>> C>> 6.2.9 Article IX: Miscellaneous Provisions C>> C>> *Section 1: Fiscal Year.* The fiscal year of the IASF shall be C>> from January 1 to December 31 of each year. C>> C>> *Section 2: Execution of Instruments.* All checks, deeds, leases, C>> transfers, contracts, bonds, notes and other obligations C>> authorized to be executed by an officer of the IASF in its behalf C>> shall be signed by the Chairman of the Board or the Treasurer, or C>> as the Trustees otherwise determine. A certificate by the C>> Secretary as to any action taken by the BoT shall as to all C>> persons who rely thereon in good faith be conclusive evidence of C>> such action. C>>
C>> *Section 3: Severability.* Any determination that any provision C>> of these By-Laws is for any reason inapplicable, illegal or C>> ineffective shall not affect or invalidate any other provision of C>> these By-Laws. C>> C>> *Section 4: Articles of Incorporation.* All references in these C>> By Laws to the Articles of Incorporation shall be deemed to refer C>> to the Articles of Incorporation of the IASF, as amended and in C>> effect from time to time. C>> C>> *Section 5: Gender.* Whenever used herein, the singular number C>> shall include the plural, the plural shall include the singular, C>> and the use of any gender shall include all genders. C>> C>> *Section 6: Successor Provisions.* All references herein: (1) to C>> the Internal Revenue Code shall be deemed to refer to the C>> Internal Revenue Code of 1986, as now in force or hereafter C>> amended; (2) to the Code of the State of Virginia, or any Chapter C>> thereof, shall be deemed to refer to such Code or Chapter as now C>> in force or hereafter amended; (3) the particular sections of the C>> Internal Revenue Code or such Code shall be deemed to refer to C>> similar or successor provisions hereafter adopted; and (4) to the C>> Request for Comment Series shall be deemed to refer to the C>> Request for Comment Series as they are now in force or hereafter C>> amended. C>> C>> 7. Acknowledgment of Contributions and Reviews C>> C>> A lot of text was taken from the report from Carl Malamud. C>> C>> Further review was done by various IESG and IAB members. Carl C>> Malamud also reviewed this document and helped with making the C>> text better English and easier to read. C>> C>> This document was created with "xml2rfc" C>> <http://xml.resource.org/> using the format specified C>> in [RFC2629]. C>> C>> 8. IANA Considerations C>> C>> This documents requires no action from IANA. C>>
C>> 9. Security Considerations C>> C>> This document describes a scenario for the structure of the C>> IETF's administrative support activities. It introduces no C>> security considerations for the Internet. C>> C>> Safety considerations for the integrity of the standards process C>> are outlined in Appendix C. C>> C>> 10. References C>> C>> 10.1 Normative References C>> C>> [RFC2026] Bradner, S., "The Internet Standards Process -- C>> Revision 3", BCP 9, RFC 2026, October 1996. C>> C>> [RFC2028] Hovey, R. and S. Bradner, "The Organizations Involved C>> in the IETF Standards Process", BCP 11, RFC 2028, C>> October 1996. C>> C>> [RFC2031] Huizer, E., "IETF-ISOC relationship", RFC 2031, C>> October 1996. C>> C>> [RFC3677] Daigle, L. and Internet Architecture Board, "IETF ISOC C>> Board of Trustee Appointment Procedures", BCP 77, RFC C>> 3677, December 2003. C>> C>> [RFC3716] Advisory, IAB., "The IETF in the Large: Administration C>> and Execution", RFC 3716, March 2004. C>> C>> [RFC3777] Galvin, J., "IAB and IESG Selection, Confirmation, and C>> Recall Process: Operation of the Nominating and Recall C>> Committees", BCP 10, RFC 3777, June 2004. C>> C>> [Virginia] State of Virginia, "Title 13.1: Corporations, Limited C>> Liability Companies, Business Trusts", Undated, C>> C>> <http://leg1.state.va.us/cgi- C>> bin/legp504.exe?000+cod+TOC1301000> . C>> C>> 10.2 Informative References C>> C>> [I-D.ietf-xmpp-core] Saint-Andre, P., "Extensible Messaging and C>> Presence Protocol (XMPP): Core", draft-ietf-xmpp- C>> core-24 (work in progress), May 2004. C>>
C>> [I-D.malamud-consultant-report] Malamud, C., "IETF Administrative C>> Support Functions", draft-malamud-consultant-report-01 C>> (work in progress), September 2004. C>> C>> [RFC2629] Rose, M., "Writing I-Ds and RFCs using XML", RFC 2629, C>> June 1999. C>> C>> URIs C>> C>> [1] <http://www.state.va.us/cgi-bin/scc- C>> clerkdl.pl?scc819&Articles_of_Incorporation_-_Nonstock_Corpo C>> ration> C>> C>> Authors' Addresses C>> C>> Bert Wijnen C>> Lucent Technologies C>> Schagen 33 C>> 3461 GL Linschoten C>> Netherlands C>> Phone: +31-348-407-775 C>> EMail: bwijnen at lucent.com C>> C>> Harald Tveit Alvestrand C>> Cisco Systems C>> Weidemanns vei 27 C>> Trondheim 7043 C>> Norway C>> EMail: harald at alvestrand.no C>> C>> Peter W. Resnick C>> QUALCOMM Incorporated C>> 5775 Morehouse Drive C>> San Diego, CA 92121-1714 C>> US C>> EMail: presnick at qualcomm.com C>>
C>> Appendix A. Justification, Reasoning and Motivations C>> C>> C>> Quite a bit of the proposals from the consultant report have been C>> incorporated in this recommendation. However, a number of C>> changes have been made. In this section we try to explain which C>> changes were made and why. C>> C>> A.1 Changes to the name of the administrative entity C>> C>> In order to make it very clear that the new and legal C>> administrative entity is separate from the ISOC IETF activity C>> that deals with standardization and protocol development, this C>> recommendation uses "The IETF Administrative Support Foundation" C>> as the name for the corporation to be created. C>> C>> A.2 Domicile C>> C>> Various questions have been raised if the choice of Domicile C>> should be further investigated. In order to make progress this C>> document recommends to make a definite choice now and go for a US C>> based not-for-profit corporation in the state of Virginia. C>> Further investigation would most probably delay the whole process C>> by at least half a year. C>> C>> A.3 Changes to the composition of the BoT C>> C>> The consultant report had a proposal for Position-based Trustees, C>> which would automatically make the IAB chair and the IETF chair C>> voting members of the Board of Trustees (BoT) of the IETF C>> Administrative Support Foundation. There was discussion on the C>> IETF mailing list that those people are not selected because of C>> their business acumen but rather for their technical leadership. C>> We do not want to change those criteria. Another concern was C>> that this might generate a conflict of interest as well. So this C>> recommendation has made the IAB and IETF chairs liaisons to the C>> BoT. C>> C>> Instead of making IAB and IESG chairs voting Trustees, this C>> recommendation specifies that IAB and IESG can each select an C>> outside (i.e. not a member of IAB or IESG) person as a voting C>> Trustee. C>> C>> The selection of three (3) IETF selected Trustees has not changed C>> in this recommendation. However, there is a concern that the C>> current composition of the Nomcom is not tailored to selecting C>> people for this position. So over time a different process may C>> need to be defined for selecting those Trustees.
C>> C>> In order to balance the ISOC and IETF people present at the BoT C>> meetings, this recommendation also specifies that the chair and C>> C>> president of ISOC also function as liaisons to the BoT of the C>> IETF Administrative Support Foundation. C>> C>> Appendix B. Domicile of the IETF Administrative Support Foundation C>> C>> A U.S. non-profit, non-member corporation is being recommended. C>> This recommendation is based on simple considerations of C>> expediency and pragmatism: a transition will be simplest and C>> least risky (in the short term). The reasoning is as follows: C>> C>> o Administrative support for the IETF is currently enmeshed in a C>> series of relationships with other institutions, most of which C>> are also U.S.-chartered non-profit organizations. Any change C>> in the institutional status of administrative support C>> functions will require familiarity with U.S. nonprofit law. C>> Incorporation in another country would require familiarity C>> with those laws as well. Thus, the incorporation expenses C>> would be higher and the process would take longer. C>> C>> o U.S. law has a strong concept of "nexus," which is a C>> determination of when a foreign organization has enough C>> relationship to U.S. law to fall under the jurisdiction of a C>> U.S. court. Because of a long history of operating in the C>> U.S., numerous meetings in the U.S., and the large number of C>> U.S. residents who are participants and leaders, we feel it is C>> likely that U.S. courts would find nexus in relation to our C>> US-based activities, even if the IETF administrative support C>> organization was incorporated in another country. In other C>> words, incorporating in a country besides the U.S. does not C>> necessarily free the support organization from any perceived C>> vagaries of U.S. law. C>> C>> o Incorporating in a country other than the US may have tax C>> implications if the Internet Society is providing funding C>> support. C>> C>> o It is very likely that the IETF Administrative Support C>> Foundation would be deemed to clearly fall under the C>> "scientific" and "educational" grounds for classification as a C>> tax-exempt charity under section 501(c)(3) of the IRS code, so C>> a tax-exempt application should be quite straight-forward. C>> C>> o The incorporation laws of the U.S. states being considered do C>> not require that any members of the Board of Trustees be of a
C>> certain nationality or state residency (e.g., there are no C>> "local director" requirements). The U.S. Dept. of Commerce C>> foreign-controlled organization reporting requirements apply C>> only to "business enterprises", and do not apply to non-profit C>> C>> entities such as an IETF administrative support organization. C>> C>> Since this document recommends incorporating in the U.S., C>> Virginia is the logical pick as the state of domicile to allow C>> the IETF administrative support organization to make use of ISOC C>> headquarters to house its single employee (though the employee C>> might be able to be housed at the Internet Society even if the C>> incorporation were elsewhere, for example the ISOC Geneva C>> office). C>> C>> Appendix C. Risk Analysis C>> C>> This scenario (as do all scenarios) has some risks. This section C>> tries to enumerate the sort of risks that we recognize and C>> summarizes why we think we can accept the risk or what kind of C>> action we think we can take if the risk indeed materializes into C>> a problem. C>> C>> C.1 US Domicile risks C>> C>> As explained in [I-D.malamud-consultant-report], incorporating in C>> the US carries two specific risks: the perception of the IETF C>> being a US-based organization and the potential for (or C>> perception of) governmental interference. C>> C>> The IETF is an international organization. However, even now, C>> the fact that the IETF standards processes are run in English and C>> that many of its current support organizations are US-based C>> leaves an impression that the IETF is too US-centric. C>> Incorporating the new administrative entity in the US may add to C>> that perception. C>> C>> Also, the IETF history is based in US federal government research C>> and funding. Though IETF is long separated from those C>> beginnings, even in the past few years there have been C>> interactions between the US government and the IETF that have C>> concerned people. Incorporating the administrative entity in the C>> US may invite more US governmental interference in the standards C>> activity of the IETF, or at the very least may leave the C>> perception that the US government might get involved. C>> C>> Both of these are serious problems, but we think there is C>> justification for and at least one mitigation to these risks. Of
C>> course, the primary reason to consider US incorporation is C>> expedience (See section 4.4.1.1 of [I-D.malamud-consultant- C>> report]). We agree that the expedience makes US incorporation C>> worth the risk. But incorporating in multiple domiciles would C>> significantly mitigate the risk. Assuming we go down the path of C>> C>> US incorporation, we would like legal counsel to advise on the C>> possibility of incorporating in other domiciles (specifically C>> Switzerland and The Netherlands) at a later date after US C>> incorporation has been completed. If this is (as we suspect) C>> indeed possible, we think this would be the best way to go C>> forward. C>> C>> C.2 Non-profit status risk C>> C>> One of the risks pointed out to incorporation was the potential C>> that we would not get non-profit status, and that we must C>> therefore preserve some money in escrow for tax liability C>> purposes. Estimates for the time it will take to get such status C>> can be several months or even longer in some cases. C>> C>> It is important to point out that the tax liability is based on C>> profits, not on gross revenues. If the IASF is only taking in C>> enough money to cover expenses, there would be very little tax C>> liability. However, if more revenue is brought in than is spent, C>> for example to build up an endowment or operating reserve, that C>> "profit" is potentially taxable if non-profit status is not C>> granted. C>> C>> To mitigate this risk, the corporation could be created and non- C>> profit status applied for first, and operation of the corporation C>> would only begin after non-profit status was obtained. The IETF C>> would use an interim plan for continued operations until that C>> time. This way, no money would need to be in escrow during the C>> process of applying for non-profit status. However, that seems C>> an excessively cautious path to take given what appears to be the C>> fairly clear non-profit nature of the IETF. C>> C>> Commencing operations while the non-profit application is being C>> considered, but being careful about balancing revenue with C>> expenses and keeping an appropriate escrow account seems like a C>> prudent task. Further, any fund raising campaigns that result in C>> shifts to the balance sheet of the IASF should be conducted C>> cautiously until non-profit status is granted. C>>
C>> C.3 Execution risks C>> C>> It is important that the execution goes well. Risks that we are C>> aware of include: C>> C>> o we can't hire a good IAD C>> C>> o we fail to project cash flow properly and go insolvent C>> C>> o we can't cut a deal with Foretec and have no 2005 meetings C>> C>> o we get bad lawyers and they take too long and charge too much C>> C>> o isoc runs out of money and doesn't tell us early enough C>> C>> In order to mitigate these problems we have a proposed work plan C>> included in this document. It is important that we get review of C>> this work plan by as many eyes as we can get, to make sure we C>> have considered all the possible steps that need to be taken. C>> C>> C.4 Insolvency risk C>> C>> Improper management controls and procedures or other imprudent C>> fiscal or administrative practices could expose the IETF to a C>> risk of insolvency. Careful selection of trustees, a process of C>> budget approval, and a methodical system of fiscal controls are C>> necessary to minimize this risk. C>> C>> C.5 Legal risks C>> C>> Improper formulation of the legal framework underlying the IETF C>> may expose the institution and individuals in leadership C>> positions to potential legal risks. Any such risk under this C>> plan appears to be equivalent to the risk faced by the community C>> under the current legal framework. This risk is further C>> mitigated by a thorough review by legal counsel, and by use of C>> insurance coverage. C>> C>> The legal exposure is best minimized by a careful adherence to C>> our procedures and processes, as defined by the Best Current C>> Practice Series. A carefully stated process, such as the BCP C>> documents that govern the selection of leadership positions and C>> define the standards process are the best insurance against legal C>> exposure, provided care is taken to stick to the process C>> standards that have been set. Adherence to a public rule book and C>> a fully open process are the most effective mechanisms the IETF C>> community can use.