Subject: AdminRest Scenario C: An IETF Administrative Support Foundation a s an Independent Nonprofit Corporation

From: "Wijnen, Bert (Bert)" <[email-masked]>
Date: Mon, 20 Sep 2004 19:14:24 +0200

As Leslie announced earlier today in here posting
with subject: upcoming: futher thoughts on where from here

> Accordingly, some people volunteered to write down some text
> for each, drawing on and extending Carl's documents.  The
> outcome of that writing exercise will be circulated here
> later today -- i.e., a note describing a possible implementation
> of Scenario C in more detail, and a separate note describing
> the derived scenario (dubbed "Scenario O").
> 
> One thing that is important to note about these notes
> is that there is a lot of commonality in their structure,
> and a number of places where the text could have been
> copied from one to the other.  For example, both have
> some form of oversight board or committee.  The details as
> written, however, *do* differ between the notes.  This
> is because the contexts are slightly different for the
> 2 scenarios, and because the differences amount to details
> we can debate and fix if we pick one of these to move
> forward with.  I.e., "who is a voting member of the oversight
> group" should not be a deciding factor in whether you
> think the revised Scenario C is better than Scenario O, or
> vice versa.
> 
> The IAB and IESG have not discussed these extensively, but have
> helped to try and get better and clarified documentation of each
> of those Scenarios.  The IESG and IAB are now reviewing them
> in detail. We are also following your discussions/comments
> very carefully, and based on that they will evaluate to try
> and come to a recommendation.  So we are eagerly awaiting your
> thoughts and inputs on whether either of these seems to be
> a viable path or what further work needs to be done.
> 
> 
> Leslie.
> 

So here is the current description of Scenario C in the form of a note.

Bert

Not an Internet-Draft                                          B. Wijnen
                                                     Lucent Technologies
                                                           H. Alvestrand
                                                           Cisco Systems
                                                              P. Resnick
                                                   QUALCOMM Incorporated
                                                      September 20, 2004

 AdminRest Scenario C: An IETF Administrative Support Foundation as an
                   Independent Nonprofit Corporation

Abstract

   This document defines a proposal for an IETF Administrative Support
   Foundation (IASF) as an independent not-for-profit corporation as a
   means for providing focused support for IETF community activities.
   It proposes the creation of an IASF Board of Trustees (BoT) that is
   mainly selected by and accountable to the IETF community and would
   provide oversight for the IETF Administrative Support Foundation.
   The IASF will also establish and maintain a strong relationship with
   the Internet Society (ISOC) and the current relationships between
   IETF and ISOC will basically be left unchanged.

   In order to allow the community to properly evaluate this scenario,
   some draft Articles of Incorporation and draft Bylaws for the IASF
   are included.  Some draft BCP wording for the IASF, IETF and ISOC
   relationships is also included.

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AdminRest Scenario C      AdminRest Scenario C            September 2004

Table of Contents

   1.  Overview of Scenario C . . . . . . . . . . . . . . . . . . . .  4
   2.  Work Plan for the IETF Administrative Support Foundation . . .  6
     2.1   Workplan goals . . . . . . . . . . . . . . . . . . . . . .  6
     2.2   Incorporation process  . . . . . . . . . . . . . . . . . .  6
     2.3   Contract establishment . . . . . . . . . . . . . . . . . .  7
     2.4   Performance evaluation . . . . . . . . . . . . . . . . . .  8
     2.5   Budgeting for 2006 . . . . . . . . . . . . . . . . . . . .  8
     2.6   Reporting  . . . . . . . . . . . . . . . . . . . . . . . .  9
   3.  Details of the IETF Administrative Support Foundation  . . . .  9
     3.1   Organizational Form and Legal Domicile . . . . . . . . . .  9
     3.2   Draft Core Principles  . . . . . . . . . . . . . . . . . .  9
       3.2.1   Principles of Establishment and Governance . . . . . . 10
       3.2.2   Principles of Operation of the IETF Administrative
               Support Foundation . . . . . . . . . . . . . . . . . . 11
   4.  Draft MoU between ISOC, IETF and IETF Administrative
       Support Foundation . . . . . . . . . . . . . . . . . . . . . . 11
     4.1   Form and Scope of the Agreement  . . . . . . . . . . . . . 11
     4.2   Cooperation mechanism  . . . . . . . . . . . . . . . . . . 12
     4.3   Promises Not to Do Things  . . . . . . . . . . . . . . . . 13
     4.4   Initial contribution . . . . . . . . . . . . . . . . . . . 13
     4.5   Termination, law and so on . . . . . . . . . . . . . . . . 14
   5.  Notes and Explanations . . . . . . . . . . . . . . . . . . . . 14
     5.1   Type of legal instrument . . . . . . . . . . . . . . . . . 14
     5.2   Power Balance  . . . . . . . . . . . . . . . . . . . . . . 14
     5.3   Budget figures . . . . . . . . . . . . . . . . . . . . . . 14
   6.  Draft Incorporating Documents for the IETF Administrative
       Support Foundation . . . . . . . . . . . . . . . . . . . . . . 15
     6.1   Draft Articles of Incorporation  . . . . . . . . . . . . . 15
     6.2   Draft Bylaws of the IETF Administrative Support
           Foundation . . . . . . . . . . . . . . . . . . . . . . . . 15
       6.2.1   Article I: Organization  . . . . . . . . . . . . . . . 16
       6.2.2   Article II: Purpose  . . . . . . . . . . . . . . . . . 16
       6.2.3   Article III: Members . . . . . . . . . . . . . . . . . 16
       6.2.4   Article IV: Offices  . . . . . . . . . . . . . . . . . 16
       6.2.5   Article V: Board of Trustees . . . . . . . . . . . . . 16
       6.2.6   Article VI: Officers . . . . . . . . . . . . . . . . . 20
       6.2.7   Article VII: Amendments  . . . . . . . . . . . . . . . 22
       6.2.8   Article VIII: Dissolution  . . . . . . . . . . . . . . 22
       6.2.9   Article IX: Miscellaneous Provisions . . . . . . . . . 23
   7.  Acknowledgment of Contributions and Reviews  . . . . . . . . . 23
   8.  IANA Considerations  . . . . . . . . . . . . . . . . . . . . . 24
   9.  Security Considerations  . . . . . . . . . . . . . . . . . . . 24
   10.   References . . . . . . . . . . . . . . . . . . . . . . . . . 24
   10.1  Normative References . . . . . . . . . . . . . . . . . . . . 24
   10.2  Informative References . . . . . . . . . . . . . . . . . . . 24
       Authors' Addresses . . . . . . . . . . . . . . . . . . . . . . 25

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   A.  Justification, Reasoning and Motivations . . . . . . . . . . . 26
     A.1   Changes to the name of the administrative entity . . . . . 26
     A.2   Domicile . . . . . . . . . . . . . . . . . . . . . . . . . 26
     A.3   Changes to the composition of the BoT  . . . . . . . . . . 26
   B.  Domicile of the IETF Administrative Support Foundation . . . . 27
   C.  Risk Analysis  . . . . . . . . . . . . . . . . . . . . . . . . 28
     C.1   US Domicile risks  . . . . . . . . . . . . . . . . . . . . 28
     C.2   Non-profit status risk . . . . . . . . . . . . . . . . . . 29
     C.3   Execution risks  . . . . . . . . . . . . . . . . . . . . . 29
     C.4   Insolvency risk  . . . . . . . . . . . . . . . . . . . . . 30
     C.5   Legal risks  . . . . . . . . . . . . . . . . . . . . . . . 30

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1.  Overview of Scenario C

   This document follows from two previous documents.  [RFC3716] defined
   the overall parameters and criteria for an administrative
   restructuring.  [I-D.malamud-consultant-report] provided an analysis
   of the implications of several of the suggested strategies.  This
   document picks one strategy and develops it further.

   In order to provide the most focused and effective administrative
   support to the IETF community, this updated scenario C proposes a new
   and well-defined legal entity to support the IETF administrative
   functions.  The name of that new entity is "The IETF Administrative
   Support Foundation" (IASF).

   First, it is important to understand that the IETF has been organized
   as an Activity of the Internet Society (ISOC) and as such represents
   the "Standards and Protocols" pillar of ISOC.  Under this proposal,
   the IETF would continue to be an integral part of the Standards and
   Protocols pillar of ISOC.  ISOC currently provides these important
   functions to the IETF:

   1.  Standards Process Functions.
       ISOC plays a fundamental role in the IETF Standards Process,
       including appointment of the Nominating Committee (Nomcom) chair,
       confirmation of IAB members, confirmation of documents that
       describe the standards processes, and acting as the last resort
       in the appeals process.  These Standards Process Functions are
       defined in [RFC2026], [RFC2028], [RFC2031], and [RFC3677].

   2.  IETF Fund Raising Functions.
       ISOC provides the fund raising function as one source for
       financial support the IETF.

   3.  Administration Functions.
       ISOC provides administrative and financial functions, managing
       the contract with the RFC Editor, providing insurance for
       selected IETF participants, and administering a discretionary
       fund for use by the IAB and the IETF Chairs.

   The administrative restructuring of the IETF proposed in this
   document keeps that basic relationship between IETF and ISOC.
   Specifically, the recommendation does not propose any changes to the
   "Standards Process Functions" or to the "IETF Fund Raising
   Functions".

   Under the "Administration Functions", ISOC both funds and administers
   some (as stated above) parts of the IETF Administrative Support
   Functions.  Some of the funds (like for the RFC-Editor) go directly

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   to the contractor who executes the administrative function.  The
   streamlining of the administrative support for the IETF ultimately
   intends to put the complete Administrative Support Functions under
   the newly recommended IASF.  This means that we recommend that
   ultimately, ISOC funds for the IETF will be transferred to the IASF,
   which will then administer all the contracts and payments according
   to an approved yearly budget.  The details of that process will be
   documented in a Memorandum of Understanding (MoU) between ISOC, IETF
   and IASF.

   This updated AdminRest Scenario C aims to provide the following:

   o  A continued close relationship between IETF and ISOC.

   o  A well defined legal entity within which the IETF can define the
      administrative activity in terms of IETF community needs.

   o  A Board of Trustees with operational oversight that is accountable
      to the IETF community.

   o  Continued separation between the IETF standards activity and any
      fund-raising for standards work.

   o  A close and well defined relationship between IASF and ISOC,
      documented in a BCP (or MoU).

   o  Appropriate ISOC oversight of its standards activities funds via a
      yearly budget approval and open reporting of funds spent.

   In scenario C, it is intended that the IETF Administrative Support
   Foundation will be a tax-exempt not-for-profit corporation as defined
   by Articles of Incorporation and a set of Bylaws.  These will
   describe the scope and purpose of the IASF and they also define the
   structure and responsibility of the Board of Trustees (BoT), a body
   that is mainly selected by the IETF and which is responsible for
   overseeing the IASF.  A draft of the Articles of Incorporation and
   Bylaws is included in the next sections of this document.

   Scenario C allows us (IETF) to establish IETF control over our
   administrative support functions in terms of determining that they
   meet the community's needs, and adjusting them from time to time
   using IETF processes.  This is to address the pressing administrative
   issues outlined in [RFC3716].

   Scenario C also encourages us (the IETF) to regularly evaluate that
   we do want to continue the relationships with ISOC and the contracts
   with our services providers (contractors).  It is based on the
   premise that we prefer to actively maintain relationships with other

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   organizations and service providers instead of being bound to such
   relationships based on poorly defined and poorly documented
   historical facts.  A draft BCP for the relationship between ISOC,
   IETF and IASF is included as a separate section in this document.

   Scenario C does however bring the burden of creating a new legal
   entity (IASF) and such an undertaking is also not without risks.  It
   will need careful planning and execution.  Migration from the current
   structure to this new structure is probably also somewhat more costly
   and time and labour consuming.  The sections below try to show how
   that would be achieved and outlines what further steps are needed to
   provide more detail if this scenario is chosen.

2.  Work Plan for the IETF Administrative Support Foundation

   This section gives the work plan for the IETF Administrative Support
   Foundation (IASF) for the remainder of 2004 and the year 2005.

2.1  Workplan goals

   The work plan below is intended to satisfy three goals:

   o  Satisfy the IETF's need for support functions in 2005

   o  Operate with a positive account balance throughout 2005

   o  Start building up a fund inside the IASF to serve as a buffer
      against budgetary emergencies in later years (such as meetings
      with a severe cost overrun, or force-majeure cancellations).

   The fund target is 6 months of operating revenue, and the target for
   building up the fund is 3 years.  The budgeted set-aside for the fund
   should thus be approximately 17% of operating revenue.

2.2  Incorporation process

   There are 3 things that need to be in place before that corporation
   can be considered viable at all:

   o  IETF consensus on the plan

   o  ISOC agreement on a reasonable support contract

   o  Assurance that the corporation will have tax-exempt status

   Once this document has been discussed in the IETF, and the IESG and
   IAB gauges that rough consensus seems reached, the IETF leadership
   will take the following actions:

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   o  Publish a Last Call on this document (to determine plan
      consensus).

   o  Choose a negotiating team to negotiate the ISOC contract.

   o  Choose an executive search team to find the IASF Administrative
      Director (IAD).

   o  Consult with legal counsel to determine how best to achieve
      tax-exempt status; this will affect the bylaws and articles of
      incorporation.

   When the Last Call is over, the IESG will consider whether there is
   still consensus, and if there is, approve this document for
   publication.  Once that happens, it will take the following steps:

   o  As soon as negotiations conclude, publish a Last Call on the ISOC
      contract.

   o  As soon as drafting of legal documents is completed, publish a
      Last Call on the Bylaws and Articles of Incorporation, and ask the
      Nomcom to start the process of selecting Nomcom-selected board
      representatives.

   These Last Calls are "speak now" Last Calls - if someone wishes to
   challenge the IETF consensus to go ahead with these actions, knowing
   what the formal documents will look like, this is their last chance.

   When these Last Calls are over, the IETF chair, the IAB chair and the
   ISOC President will jointly file the articles of incorporation, and
   the IESG, IAB and ISOC will fill their board seats.

   Note: This document does not say when a Request for Information (RFI)
   for IETF support services such as meeting planning is sent out.
   Advice is sought on the earliest point where this can be done.

2.3  Contract establishment

   The most important activity for late 2004/early 2005 is to finalize
   contracts for the support of the IETF.  This includes:

   o  Funding

   o  Technical infrastructure

   o  Meeting management

   o  Clerk's office

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   o  RFC Editor

   o  IANA

   There appears to be consensus in the IETF community that these
   functions, whether they are offered for free, remunerated or arranged
   for other consideration, should be under contract.

   The contract for funding is expected to be with ISOC, and should be
   finalized before IASF is established.

   The contract for technical infrastructure is expected to be an RFP,
   published in November of 2004, with responses being evaluated in
   December 2004, and services rendered from a mutually agreed date
   early in 2005.

   The contract for meeting management will be influenced by the need to
   have stable agreements for the 2005 meetings at an early date.  This
   indicates that IASF will honor a pre-IASF agreement to have these
   meeting contracts signed by Foretec (if that can be achieved).

   It is not clear how the contract for the clerk's office is to be
   managed at the time of this writing.

   The contract for the RFC Editor is expected to be with ISI, and is
   expected to be a continuation of the current contract with ISOC,
   which runs until the end of 2005.

   The contract with IANA will replace or augment the current MoU
   between the IETF and ICANN.  In its simplest form, it would simply be
   a reconfirmation of the duties of ICANN under the MoU.

2.4  Performance evaluation

   The second task of the IASF is to make sure the IETF gets the support
   it needs.  The IASF will work together with the IETF community to
   make an effort to identify whether or not the IETF's needs are being
   met, and to coordinate improvements with the contractors.  This is an
   ongoing activity.

2.5  Budgeting for 2006

   In June 2005, the IASF will start the yearly budgeting process with
   ISOC, as specified in the ISOC contract, leading to a work plan and
   budget for 2006.

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2.6  Reporting

   The IASF will present monthly updates on its economic status.  These
   will be delivered to ISOC as part of the ISOC contract, and also be
   made publicly available so that the IETF community can inspect them.

3.  Details of the IETF Administrative Support Foundation

   This section contains details about the proposal to change how the
   day-to-day IETF administrative support functions are provided.  This
   recommendation is based on the  initial description of "Scenario C"
   in the "Administrative Support Analysis"
   [I-D.malamud-consultant-report] provided by Carl Malamud.  It is
   further based on discussion in the IESG and IAB and on feedback on
   Carl's document as received on the IETF mailing list.  Further
   justifications, reasoning and motivations are given in Appendix A.
   Risk Analysis is done in Appendix C.

   This document recommends to create a well defined and legal entity
   called "The IETF Administrative Support Foundation" (IASF).  The name
   intends to clearly express that this new legal entity has only one
   single function, namely to provide the administrative support of the
   IETF Standardization and Protocol Development activities.  This
   entity will ultimately manage and administer all the administrative
   functions that are needed to support the IETF - the Standardization
   and Protocol Development activity of ISOC.

3.1  Organizational Form and Legal Domicile

   The consultant report [I-D.malamud-consultant-report] contains a
   writeup on various choices in terms of how and where to incorporate.
   This recommendation has made the choice to incorporate in the US in
   the state of Virginia.  Some detail can be found in Appendix B.

   In this scenario, administrative support functions for the IETF are
   legally housed in a focused, incorporated institution (although the
   Administrative Director might be physically housed within the
   Internet Society).

   This scenario defines a number of concrete linkages with the Internet
   Society, which supplement the current close interconnection of the
   IETF community with ISOC.  The relationship is to be documented in a
   MoU (initial text is in Section 4).

3.2  Draft Core Principles

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3.2.1  Principles of Establishment and Governance

   The following principles are to be respected for the establishment
   and governance of the IETF Administrative Support Foundation (IASF)
   and are the basis for the Draft Articles of Incorporation as in
   Section 6.1 and the Draft Bylaws as in Section 6.2:

   1.  The IASF shall be governed by a Board of Trustees (BoT), who
       shall be responsible for the fiscal, legal, and administrative
       infrastructure that supports the activities of the IETF.

   2.  The governance of the IETF, the standards process, and all other
       aspects of how we make our standards are defined in the
       procedural Best Current Practice (BCP) RFC series, which will be
       explicitly referenced in the organization documents of the IASF.

   3.  The IASF shall be transparent and responsible to the IETF.

   4.  The BoT shall appoint a Secretary and a Treasurer, who need not
       be members of the BoT.  The IETF Administrative Director (IAD) of
       the IASF shall provide staff support to the BoT.

   5.  The BoT shall be composed to strike a balance between "outside"
       and "inside" directors.  The IESG and IAB will each select a
       representative to serve as a voting member of the BoT.
       Mechanisms such as the Nominating Committee (Nomcom) and the
       appointment of certain seats by the ISOC fulfill the outside
       director obligations.

   6.  IAB, IESG and ISOC will have liaisons to the BoT in order to have
       a good basis for interaction.

   The BoT will have strong governance over a limited scope of
   activities (e.g., the fiscal, legal, and administrative
   infrastructure that are the charter of the IASF) but will have no
   authority over the IETF standards process.  In this board
   composition, the ISOC and Nomcom appointments ensure that outside
   directors with no perceived conflicts of interest are on the board.

   All nominating bodies should make strong fiscal, legal, and
   administrative acumen essential selection criteria for this position.

   IAB and IESG representatives will serve for one year.  For other
   appointments, a term proposed for the nominated positions is three
   years with staggered appointments.  However, the nominating body
   might have the power to change their appointee during their term.

   All members of the BoT selected by the IETF are subject to the same

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   recall procedures in effect for the IETF leadership such as members
   of the IAB and IESG.

3.2.2  Principles of Operation of the IETF Administrative Support
      Foundation

   The following are general principles for the operation of the IASF:

   1.  The IASF shall employ an IETF Administrative Director (IAD) of
       the IASF, who shall be hired by the BoT with the advice and
       consent of the IESG and IAB.

   2.  All support services shall be contracted in an open and
       transparent manner.

   3.  The IAD shall submit a proposed annual budget to the BoT at least
       90 days before the beginning of the fiscal year.  Such budget
       shall be developed with the advice and consent of the IAB and
       IESG.

   4.  The IAD shall serve on the BoT as a non-voting, ex-officio
       member.

   5.  The BoT shall select a professional audit firm and shall
       commission an audit immediately upon the close of each fiscal
       year.

   6.  The IASF will conduct financial reporting in a fully transparent
       fashion.  Audits shall be conducted promptly and published.  Tax
       returns shall be published.  Detailed financial statements will
       be published on a regular basis, including timely reports on the
       financial results of IETF meetings.

4.  Draft MoU between ISOC, IETF and IETF Administrative Support
   Foundation

4.1  Form and Scope of the Agreement

   This section presents some principles to be incorporated in a draft
   MoU/Contract between the Internet Society (ISOC) and the IETF
   Administrative Support Foundation (IASF), detailing the work each is
   expected to perform, the responsibilities each has, and the means by
   which these functions are accomplished.  This MoU/Contract shall be
   published as an RFC.

   The MoU/Contract will specify the responsibilities of the Internet
   Society, including:

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   o  Reaffirmation of the Standards Process Function that ISOC performs
      for the IETF.

   o  Continuation of the Fund Raising Function that ISOC conducts, in
      which a single, unified campaign is used to solicit corporate,
      individual,  and other organizational donations for funding of the
      3 Pillars.

   o  Disbursement of funds to the IASF according to the agreed-upon
      budgets and processes as specified in this agreement.

   o  Verification that IASF spends these funds to support the work of
      the IETF, within the scope described in the IASF bylaws.

   Responsibilities of IASF:

   o  Determine, in cooperation with the IETF, the support functions
      that are needed for the IETF, and can be achieved within available
      funds.

   o  Enter into contracts for these support functions.

   o  Supervise these contracts and ensure that they are being performed
      in the best interest of the IETF, within a reasonable budget and
      with agreed-upon performance.

4.2  Cooperation mechanism

   IASF and ISOC agree that they will perform a budgeting procedure each
   year, comprising the following steps:

   o  IASF puts together a budget proposal to ISOC, and presents it in
      June.  This will specify the functions that need to be performed,
      the cost of each, the expected revenue from IETF meeting
      participation, and how much is being requested for ISOC to
      contribute.

   o  By the end of August, ISOC will give a budget number to IASF that
      says how much ISOC is willing to contribute to support the
      functions described in the IASF budget.

   o  Before November 1, ISOC and IASF will agree on a budget, an ISOC
      contribution, and a disbursement schedule.

   o  If either party sees that there is reason to change the budget,
      they can start a negotiation to do so at any time.  On mutual
      agreement to a change, payments are modified accordingly.

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   o  ISOC may withhold funds if IASF fails to account for its
      expenditures, if it determines that IASF has departed
      significantly from its budgeted expenditures without agreement
      with ISOC to do so, or if ISOC determines that IASF is spending
      funds in violation of its bylaws.

4.3  Promises Not to Do Things

   This section lays out things that would constitute interference in
   each others' business, or things that are Just Plain Wrong.  In legal
   terms, these are called "covenants."

   ISOC will not place requirements on how IASF does business, except on
   reporting.  It will, for instance, not attempt to influence IASF
   choice of contractors or choice of meeting sponsors.  This
   restriction is meant to enforce the separation between fund raising
   and the actual operation of the standards process.

   IASF will not ask companies for money.  IASF may ask for sponsors for
   IETF events, per tradition, and may accept zero-cost provider
   contracts or in-kind donations, but ISOC is the organization charged
   with fundraising.

   Neither ISOC nor IASF will attempt to influence technical decisions
   of the IETF standards process.

4.4  Initial contribution

   The Internet Society has already allocated $700,000 in transition
   funds.  As part of the formation process, this section sets out a way
   that a 2005 allocation of funds and an initial contribution for
   startup can be decided upon.  NOTE: This section is a GUESS! Its
   purpose is to give some sense of where we're at.

   If this plan is pursued, one of the first activities is to put
   together a detailed 2005 budget, including an analysis of cash flow
   and balance sheets to make sure that the organization is properly
   funded and will be solvent throughout the year.  This planning
   process should project out 3 years and show how the organization will
   be able to accumulate the appropriate cash reserve to make sure
   operations can continue in a stable manner.

   An initial estimate is for an on-going annual contribution of USD
   900.000 to IASF in 2005.  In addition, ISOC will contribute an
   additional USD 600.000 as an initial fund to start up IASF, payable
   after the Board of Trustees is seated and this contract is signed and
   approved by the IETF.

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   ISOC commits to this ongoing level of contribution (USD 75.000 per
   month) for the lifetime of this contract, unless modified by mutual
   agreement.

4.5  Termination, law and so on

   This agreement may be terminated by either party for any reason on 12
   months' notice.

   The parties may reach mutual agreement on a shorter termination
   period.

   All conflicts under this agreement are to be adjudicated under the
   laws of the United States and the State of Virginia, however the
   parties may also agree to arbitration, mediation or any other
   conflict resolution mechanisms.

5.  Notes and Explanations

   This is where we put down why things are the way they are.

5.1  Type of legal instrument

   This document is styled as a contract - an agreement between two
   parties, enforceable under law.  An alternate formulation would be a
   Memorandum of Understanding - but we want it to be clear to everyone
   that the parties stand behind their responsibilities under this
   document.  At the moment, the authors see no compelling arguments for
   not making it a contract.  In either case, the document is published
   as an RFC.

5.2  Power Balance

   As written, it is designed to make it easy to do the right thing as
   long as the parties agree what that is, to make it clear that ISOC
   will continue to pay money as long as IASF does the Right Thing (and
   reports what it's doing), and that ISOC can stop the show quickly if
   it's clear that IASF is not doing the Right Thing.

5.3  Budget figures

   The main purpose of the numbers is to make it clear that there WILL
   be numbers in this contract, and that it WILL represent a solid
   commitment by ISOC.  The numbers are "subject to change without
   notice" while this contract is negotiated.

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6.  Draft Incorporating Documents for the IETF Administrative Support
   Foundation

6.1  Draft Articles of Incorporation

   This section contains standard, pro-forma Articles of Incorporation.
   Note well that tax lawyers often make significant alterations to
   standard Articles as they consider a 501(c)(3) application.  They are
   included here merely as a sample for illustrative purposes only.

   'Commonwealth of Virginia -- State Corporation Commission'| 'Articles
   of Incorporation -- Virginia Nonstock Corporation'| Form SCC819, 07/
   03 [1]
   ------

   The undersigned, pursuant to Chapter 10 of Title 13.1 of the Code of
   Virginia, [Virginia] state(s) as follows:

   1.  The name of the corporation is The IETF Administrative Support
       Foundation.

   2.  The corporation shall have no members.

   3.  The purpose of the corporation is to manage and administer all
       the administrative functions for the IETF - the Standardization
       and Protocol Development activity of the Internet Society.

   4.  The Trustees of the corporation shall be elected or appointed as
       specified in Article IV (Section 6.2.5) of the Bylaws.

   5.  Name and agent:

       A.  The name of the corporation's initial registered agent is:
           XXX

       B.  The initial registered agent is a domestic or foreign stock
           or nonstock corporation, limited liability company, or
           registered limited liability partnership authorized to
           transact business in Virginia.

   6.  The initial Trustees are: XXX

   7.  The incorporators are: XXX

6.2  Draft Bylaws of the IETF Administrative Support Foundation

   As with the Draft Articles, the Draft Bylaws included here are a

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   pro-forma, standard version.  Substantial alteration may be required
   as legal counsel reviews the specific nature of an incorporation.

6.2.1  Article I: Organization

   The name of the Corporation shall be The IETF Administrative Support
   Foundation (which is hereinafter also referred to as the "IASF").

6.2.2  Article II: Purpose

   *Section 1: Purpose.* The IASF shall be operated exclusively for
   nonprofit educational, charitable, and scientific purposes,
   including, without limitation, the purposes stated in the IASF's
   Articles of Incorporation.

   *Section 2: Restrictions.* No part of the net earnings of the IASF
   shall inure to the benefit of, or be distributable to, private
   persons, except that the IASF shall be authorized and empowered to
   pay reasonable compensation for services rendered, and to make
   payments and distributions in furtherance of the purposes set forth
   in Article II, Section 1 hereof.  Any other provision of these Bylaws
   to the contrary notwithstanding, the IASF shall not carry on any
   activities not permitted to be carried on by a corporation exempt
   from Federal Income Tax under Section 501(a) and Section 501(c)(3) of
   the Code.  These Bylaws shall not be altered or amended in derogation
   of the provisions of this Section.

6.2.3  Article III: Members

   The IASF shall have no members and no stockholders.

6.2.4  Article IV: Offices

   The office of the IASF shall be as determined from time to time by
   the Board of Trustees (BoT) within or outside of the State of
   Virginia.

6.2.5  Article V: Board of Trustees

   *Section 1: Authority and Responsibilities.* The power, authority,
   property, and affairs of the IASF shall at all times be exclusively
   exercised, controlled, and conducted by or under the authority of the
   Board of Trustees (BoT) subject to any limitations set forth in the
   Articles of Incorporation and in accordance with the Virginia
   Nonstock Corporation Act as it now exists or hereafter may be
   amended.

   *Section 2: Board of Trustees Composition.* The Board of Trustees

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   shall consist of seven (7) Trustees.

      One (1) Trustee will be selected by the IAB.

      One (1) Trustee will be selected by the IESG.

      Two (2) Trustees will be selected by the Internet Society.

      Three (3) Trustees will be selected by the IETF community.

   The IAB chair and IETF chair will functions as liaisons from the IAB
   and IESG respectively to the Board of Trustees.  The chair and
   president of the Internet Society will function as liaisons from the
   ISOC to the Board of Trustees.

   *Section 3: Terms.* The term of office of IESG and IAB Selected
   Trustees shall be one (1) year or until their successors have been
   selected and assume office.  The term of office of otherwise Selected
   Trustees shall be three (3) years or until their successors have been
   selected and assume office.  Selected Trustees may be selected to
   serve multiple terms.

   *Section 4: Selection of the Board of Trustee*

   1.  *Selection of IESG and IAB Selected Trustees.* The IESG and IAB
       shall each select one representative Trustee, who is not at the
       same time an IESG or IAB member.

   2.  *Selection of otherwise Selected Trustees.* Three (3) IETF
       Selected Trustees shall be selected by the IETF nominations
       process (as defined in [RFC3777] or its successor) and confirmed
       by the IESG.  Two ISOC Selected Trustees shall be selected by the
       Internet Society using means of their own choosing.

   3.  *Resignation.* A Selected Trustee may resign by delivering his
       resignation in writing to the IASF at its principal office or to
       the Secretary of the IASF.  Such resignation shall be effective
       upon its receipt or upon such date (if any) as is stated in such
       resignation, unless otherwise determined by the Board.

   4.  *Removal.* A Selected Trustee selected by the IETF nominations
       process may be removed from office at any time using the
       procedures specified in [RFC3777] or its successor.  A Selected
       Trustee selected by the Internet Society may be removed by the
       Internet Society using means of their own choosing.

   5.  *Vacancies.* Any vacancy in the Board of Trustees shall be filled
       using the procedures set forth above on the composition of the

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       Board of Trustees.  The Trustees shall have and may exercise all
       of their powers notwithstanding the existence of one or more
       vacancies in their number.

   *Section 5: Quorum.* A majority (i.e.  fifty (50) percent plus one
   (1)) of the Trustees shall constitute a quorum for the transaction of
   business.  Unless otherwise stated in these Bylaws, decisions of the
   Board of Trustees shall be made by the concurrence of a majority of
   members of the Board of Trustees present and voting.  If at any
   meeting there is no quorum present, the Board must not transact
   business.

   *Section 6: Compensation and Reimbursement.* No member of the Board
   of Trustees may receive compensation for his or her services as a
   Trustee.  A Trustee shall, at their request, be reimbursed for
   actual, necessary and reasonable travel and subsistence expenses
   incurred by them in performance of their duties.

   *Section 7: Meetings.* The Board of Trustees shall meet at least
   twice annually.

   1.  *Written notice, waiver, action.* Wherever the text below speaks
       of "written" it is also permitted to use e-mail.

   2.  *Annual Meeting.* The Board of Trustees shall hold a public
       Annual Meeting at a time and place associated with the first IETF
       meeting each year.  This Annual meeting shall be open to all IETF
       attendees except that the parts of the meeting dealing with
       personnel issues may be held in executive session.

   3.  *Meeting Types, Methods, and Notice.* Meetings of the Board may
       be held from time to time at such intervals and at such places as
       may be fixed by the Board.  Meetings of the Board may be held
       only in person or via teleconference.  Notice of all regular
       meetings of the Board shall be delivered to each Trustee by
       e-mail or by postal mail and announced on the IETF-Announce list
       at least ten (10) calendar days before the meeting.  Special
       meetings of the Board may be called for any purpose at any time
       by the Chairman of the Board or by any three (3) Trustees.
       Notice of any special meeting shall state the purpose of the
       meeting.  A Trustee may waive notice of a meeting of the Board of
       Trustees by submitting a signed, written waiver of notice, either
       before or after the meeting.  A Trustee's attendance at or
       participation in a meeting waives any required notice of the
       meeting unless at the start of such meeting or promptly upon
       arrival the Trustee objects to holding the meeting or transacting
       business at the meeting, and does not thereafter vote for or
       assent to action taken at the meeting.

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   4.  *Actions Taken By the Board of Trustees Without Meeting.* Any
       action required or permitted to be taken at any meeting of the
       Board of Trustees may be taken without a meeting if all Trustees
       consent in writing to such action.  Such action shall be
       evidenced by written consents approving the lack of a meeting,
       signed by each Trustee.

   *Section 8: Board Committees.* The Trustees may elect or appoint one
   or more committees (including but not limited to an Executive
   Committee) and may delegate to any such committee or committees any
   or all of their powers, provided that any committee to which the
   powers of the Trustees are delegated shall consist solely of
   Trustees.  Committees shall conduct their affairs in the same manner
   as is provided in these By Laws for the Trustees.  The members of any
   committee shall remain in office at the pleasure of the Board of
   Trustees.

   *Section 9: Trustee Member Conflict of Interest.*

   1.  As set forth in Section 9(3) below, a Trustee of the IETF
       Administrative Support Foundation (IASF) who has a personal
       interest in a transaction, as defined below, may not participate
       in any discussion of that transaction by the Trustees of The IASF
       and may not vote to determine whether to authorize, approve, or
       ratify that transaction except as specifically described below.
       For purposes of these Bylaws, a "personal interest" is defined as
       any act that will provide, directly or indirectly, a financial
       benefit or a disparate benefit individually to the Trustee, or to
       a company he or she is employed by, has a significant financial
       interest in, or represents in any fashion.  However, policies
       under consideration by the IASF are likely to have an impact on
       the business of every Trustee.  It is expected that most policy
       decisions will have a direct or indirect impact on the Trustee's
       company, but such a non-individualized interest does not
       constitute a "personal interest" as used in these Bylaws.  A
       "transaction" with The IASF for purposes of these Bylaws is a
       contract or consultancy in which the Trustee has a direct or
       indirect financial benefit, or a policy under consideration that
       will have a disparate and unusual impact on a business with which
       the Trustee is directly or indirectly associated.

   2.  The mere existence of a personal interest by a Trustee of The
       IASF in a transaction with the IASF shall not invalidate the
       IASF's ability to enter that transaction so long as the following
       conditions are met: (i) the material facts of the personal nature
       of the transaction with The IASF and the Trustee's interest in
       the transaction with the IASF are fully disclosed to the Board of
       Trustees of the IASF, either by the Trustee having a direct or

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       indirect personal interest in the transaction with the IASF, or
       are brought to the attention of the Board by a third party; or
       (ii) the BoT of the IASF, by a vote of the Trustees (without a
       conflict of interest) of the IASF vote to authorize, approve, or
       ratify a transaction with the IASF; or (iii) the transaction with
       the IASF in which the direct or indirect personal interest of a
       IASF Trustee was disclosed to the BoT of The IASF and was
       determined by the BoT of the IASF entitled to vote on the matter
       is determined by the BoT voting to be in the IASF's interests,
       notwithstanding the personal interest of the non-voting Trustee.

   3.  In determining whether a conflict of interest exists, the BoT of
       the IASF has the prerogative, upon review of all facts and
       circumstances, to make its own determination of whether a
       conflict of interest exists and how it is appropriate to proceed.
       A Trustee who perceives the possibility of a conflict of interest
       for him or herself, or for another Board member, may raise this
       issue at any point prior to a vote on any issue.  Any Trustee who
       perceives a possible conflict of interest may present
       justification with respect to whether or not a conflict of
       interest exists, but the entire Board, with the exception of the
       Trustee having the potential conflict of interest, shall make the
       final determination to proceed in such a matter.  If the BoT
       finds there is a conflict of interest, the Trustee with the
       conflict may be excluded by the Chair of the Board from that
       portion of any meeting where a substantive discussion or decision
       to engage or not in such a transaction is made, except that he or
       she may provide any information that will assist the Trustees in
       such a matter before leaving such a meeting.

   *Section 10.  Approval of Meeting Minutes.* Minutes of the BoT of the
   IASF must be approved by a procedure adopted by the board and
   published on the IASF web site.

6.2.6  Article VI: Officers

   *Section 1: Number.* The officers of the IASF shall consist of a
   Chairman of the Board, a Treasurer and a Secretary, and such other
   inferior officers as the BoT may determine.

   *Section 2: Election Term of Office and Qualifications.* All officers
   shall be elected annually by the vote of a majority of the Board of
   Trustees present and voting (excluding abstentions) at the Annual
   Meeting.  The Treasurer and Secretary need not be members of the
   Board.  The Chair of the IETF nor the chair of the IAB shall be the
   Chairman of the Board of the IASF.

   *Section 3: Resignation.* An officer may resign by delivering his

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   written resignation to the IASF at its principal office or to the
   Chair or Secretary.  Such resignation shall be effective upon receipt
   or upon such date (if any) as is stated in such resignation, unless
   otherwise determined by the Board.

   *Section 4: Removal.* The BoT may remove any officer with or without
   cause by a vote of a majority of the entire number of Trustees then
   in office, at a meeting of the BoT called for that purpose.  An
   officer may be removed for cause only if notice of such action shall
   have been given to all of the Trustees prior to the meeting at which
   such action is to be taken and if the officer so to be removed shall
   have been given reasonable notice and opportunity to be heard by the
   BoT.

   *Section 5: Vacancies.* In case any elected officer position of the
   IASF becomes vacant, the majority of the Trustees in office, although
   less than a quorum, may elect an officer to fill such vacancy at the
   next meeting of the BoT, and the officer so elected shall hold office
   and serve until the next Annual Meeting.

   *Section 6: Chairman of the Board.* The Chairman of the Board shall,
   when present, preside at all meetings of the BoT of the IASF.  If the
   Chairman is not available to preside over a meeting, the majority of
   the Trustees present shall select another Trustee to preside at that
   meeting only.

   *Section 7: Treasurer.* The Treasurer shall have the custody of all
   funds, property, and securities of the IASF, subject to such
   regulations as may be imposed by the Board of Trustees.  He or she
   may be required to give bond for the faithful performance of his or
   her duties, in such sum and with such sureties as the BoT may require
   or as required by law, whichever is greater.  When necessary or
   proper, he or she may endorse on behalf of the IASF for collection,
   checks, notes and other obligations, and shall deposit same to the
   credit of the IASF at such bank or banks or depository as the BoT may
   designate.  He or she shall make or cause to be made such payments as
   may be necessary or proper to be made on behalf of the IASF.  He or
   she shall enter or cause to be entered regularly on the books of the
   IASF to be kept by him or her for that purpose, full and accurate
   account of all monies and obligations received and paid or incurred
   by him or her for or on account of the IASF, and shall exhibit such
   books at all reasonable times to any Trustee on application at the
   offices of the IASF incident to the Office of Treasurer, subject to
   the control of the BoT.  Certain duties of the Treasurer as may be
   specified by the BoT may be delegated by the Treasurer.

   *Section 8: Secretary.* The Secretary shall have charge of such
   books, records, documents, and papers as the BoT may determine, and

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   shall have custody of the corporate seal.  The Secretary shall keep,
   or cause to be kept the minutes of all meetings of the BoT.  The
   Secretary may sign, with the Chairman, in the name and on behalf of
   the IASF, any contracts or agreements, and he or she may affix the
   corporate seal of the IASF.  He or she, in general, performs all the
   duties incident to the Office of Secretary, subject to the
   supervision and control of the Board of Trustees, and shall do and
   perform such other duties as may be assigned to him or her by the BoT
   or the Chairman of the BoT.  Certain duties of the Secretary as may
   be specified by the BoT may be delegated by the Secretary.

   *Section 9: Other Powers and Duties.* Each officer shall have in
   addition to the duties and powers specifically set forth in these By
   Laws, such duties and powers as are customarily incident to his
   office, and such duties and powers as the Trustees may from time to
   time designate.

6.2.7  Article VII: Amendments

   *Section 1: By Laws.* These By Laws may be amended by an affirmative
   vote of a majority of the Trustees then in office (excluding
   abstentions) at a regular meeting of the board or a meeting of the
   board called for that purpose as long as the proposed changes are
   made available to all trustees and posted to the IETF Announce list
   at least 30 days before any such meeting.

   *Section 2: Articles of Incorporation.* The Articles of Incorporation
   of the IASF may be amended by an affirmative vote of two-thirds of
   the BoT then in office at a regular meeting of the board or a meeting
   of the board called for that purpose as long as the proposed changes
   are made available to all trustees and posted to the IETF Announce
   list at least 30 days before any such meeting.

6.2.8  Article VIII: Dissolution

   Upon the dissolution of the IASF, the IASF, after paying or making
   provisions for the payment of all of the liabilities of the IASF,
   dispose of all of the assets of the IASF exclusively for the exempt
   purposes of the IASF in such manner or to such organization or
   organizations operated exclusively for social welfare or charitable
   purposes.  Any such assets not so disposed of shall be disposed of by
   a court of competent jurisdiction of the county in which the
   principal office of the organization is then located, exclusively for
   such purposes.  In the event of a sale or dissolution of the
   corporation, the surplus funds of the corporation shall not inure to
   the benefit of, or be distributable to, its Trustees, officers, or
   other private persons.

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6.2.9  Article IX: Miscellaneous Provisions

   *Section 1: Fiscal Year.* The fiscal year of the IASF shall be from
   January 1 to December 31 of each year.

   *Section 2: Execution of Instruments.* All checks, deeds, leases,
   transfers, contracts, bonds, notes and other obligations authorized
   to be executed by an officer of the IASF in its behalf shall be
   signed by the Chairman of the Board or the Treasurer, or as the
   Trustees otherwise determine.  A certificate by the Secretary as to
   any action taken by the BoT shall as to all persons who rely thereon
   in good faith be conclusive evidence of such action.

   *Section 3: Severability.* Any determination that any provision of
   these By-Laws is for any reason inapplicable, illegal or ineffective
   shall not affect or invalidate any other provision of these By-Laws.

   *Section 4: Articles of Incorporation.* All references in these By
   Laws to the Articles of Incorporation shall be deemed to refer to the
   Articles of Incorporation of the IASF, as amended and in effect from
   time to time.

   *Section 5: Gender.* Whenever used herein, the singular number shall
   include the plural, the plural shall include the singular, and the
   use of any gender shall include all genders.

   *Section 6: Successor Provisions.* All references herein: (1) to the
   Internal Revenue Code shall be deemed to refer to the Internal
   Revenue Code of 1986, as now in force or hereafter amended; (2) to
   the Code of the State of Virginia, or any Chapter thereof, shall be
   deemed to refer to such Code or Chapter as now in force or hereafter
   amended; (3) the particular sections of the Internal Revenue Code or
   such Code shall be deemed to refer to similar or successor provisions
   hereafter adopted; and (4) to the Request for Comment Series shall be
   deemed to refer to the Request for Comment Series as they are now in
   force or hereafter amended.

7.  Acknowledgment of Contributions and Reviews

   A lot of text was taken from the report from Carl Malamud.  Further
   review was done by various IESG and IAB members.  Carl Malamud also
   reviewed this document and helped with making the text better English
   and easier to read.

   This document was created with "xml2rfc"<http://xml.resource.org/>
   using the format  specified in [RFC2629].

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8.  IANA Considerations

   This documents requires no action from IANA.

9.  Security Considerations

   This document describes a scenario for the structure of the IETF's
   administrative support activities.  It introduces no security
   considerations for the Internet.

   Safety considerations for the integrity of the standards process are
   outlined in Appendix C.

10.  References

10.1  Normative References

   [RFC2026]  Bradner, S., "The Internet Standards Process -- Revision
              3", BCP 9, RFC 2026, October 1996.

   [RFC2028]  Hovey, R. and S. Bradner, "The Organizations Involved in
              the IETF Standards Process", BCP 11, RFC 2028, October
              1996.

   [RFC2031]  Huizer, E., "IETF-ISOC relationship", RFC 2031, October
              1996.

   [RFC3677]  Daigle, L. and Internet Architecture Board, "IETF ISOC
              Board of Trustee Appointment Procedures", BCP 77, RFC
              3677, December 2003.

   [RFC3716]  Advisory, IAB., "The IETF in the Large: Administration and
              Execution", RFC 3716, March 2004.

   [RFC3777]  Galvin, J., "IAB and IESG Selection, Confirmation, and
              Recall Process: Operation of the Nominating and Recall
              Committees", BCP 10, RFC 3777, June 2004.

   [Virginia]
              State of Virginia, "Title 13.1: Corporations, Limited
              Liability Companies, Business Trusts", Undated,
              <http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+TOC1301000>
              .

10.2  Informative References

   [I-D.ietf-xmpp-core]
              Saint-Andre, P., "Extensible Messaging and Presence

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              Protocol (XMPP): Core", draft-ietf-xmpp-core-24 (work in
              progress), May 2004.

   [I-D.malamud-consultant-report]
              Malamud, C., "IETF Administrative Support Functions",
              draft-malamud-consultant-report-01 (work in progress),
              September 2004.

   [RFC2629]  Rose, M., "Writing I-Ds and RFCs using XML", RFC 2629,
              June 1999.

URIs

   [1]  <http://www.state.va.us/cgi-bin/
        scc-clerkdl.pl?scc819&Articles_of_Incorporation_-_Nonstock_Corporation>

Authors' Addresses

   Bert Wijnen
   Lucent Technologies
   Schagen 33
   3461 GL Linschoten
   Netherlands

   Phone: +31-348-407-775
   EMail: [email-masked]

   Harald Tveit Alvestrand
   Cisco Systems
   Weidemanns vei 27
   Trondheim 7043
   Norway

   EMail: [email-masked]

   Peter W. Resnick
   QUALCOMM Incorporated
   5775 Morehouse Drive
   San Diego, CA  92121-1714
   US

   EMail: [email-masked]

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Appendix A.  Justification, Reasoning and Motivations

   Quite a bit of the proposals from the consultant report have been
   incorporated in this recommendation.  However, a number of changes
   have been made.  In this section we try to explain which changes were
   made and why.

A.1  Changes to the name of the administrative entity

   In order to make it very clear that the new and legal administrative
   entity is separate from the ISOC IETF activity that deals with
   standardization and protocol development, this recommendation uses
   "The IETF Administrative Support Foundation" as the name for the
   corporation to be created.

A.2  Domicile

   Various questions have been raised if the choice of Domicile should
   be further investigated.  In order to make progress this document
   recommends to make a definite choice now and go for a US based
   not-for-profit corporation in the state of Virginia.  Further
   investigation would most probably delay the whole process by at least
   half a year.

A.3  Changes to the composition of the BoT

   The consultant report had a proposal for Position-based Trustees,
   which would automatically make the IAB chair and the IETF chair
   voting members of the Board of Trustees (BoT) of the IETF
   Administrative Support Foundation.  There was discussion on the IETF
   mailing list that those people are not selected because of their
   business acumen but rather for their technical leadership.  We do not
   want to change those criteria.  Another concern was that this might
   generate a conflict of interest as well.  So this recommendation has
   made the IAB and IETF chairs liaisons to the BoT.

   Instead of making IAB and IESG chairs voting Trustees, this
   recommendation specifies that IAB and IESG can each select an outside
   (i.e.  not a member of IAB or IESG) person as a voting Trustee.

   The selection of three (3) IETF selected Trustees has not changed in
   this recommendation.  However, there is a concern that the current
   composition of the Nomcom is not tailored to selecting people for
   this position.  So over time a different process may need to be
   defined for selecting those Trustees.

   In order to balance the ISOC and IETF people present at the BoT
   meetings, this recommendation also specifies that the chair and

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   president of ISOC also function as liaisons to the BoT of the IETF
   Administrative Support Foundation.

Appendix B.  Domicile of the IETF Administrative Support Foundation

   A U.S.  non-profit, non-member corporation is being recommended.
   This recommendation is based on simple considerations of expediency
   and pragmatism: a transition will be simplest and least risky (in the
   short term).  The reasoning is as follows:

   o  Administrative support for the IETF is currently enmeshed in a
      series of relationships with other institutions, most of which are
      also U.S.-chartered non-profit organizations.  Any change in the
      institutional status of administrative support functions will
      require familiarity with U.S.  nonprofit law.  Incorporation in
      another country would require familiarity with those laws as well.
      Thus, the incorporation expenses would be higher and the process
      would take longer.

   o  U.S.  law has a strong concept of "nexus," which is a
      determination of when a foreign organization has enough
      relationship to U.S.  law to fall under the jurisdiction of a U.S.
      court.  Because of a long history of operating in the U.S.,
      numerous meetings in the U.S., and the large number of U.S.
      residents who are participants and leaders, we feel it is likely
      that U.S.  courts would find nexus in relation to our US-based
      activities, even if the IETF administrative support organization
      was incorporated in another country.  In other words,
      incorporating in a country besides the U.S.  does not necessarily
      free the support organization from any perceived vagaries of U.S.
      law.

   o  Incorporating in a country other than the US may have tax
      implications if the Internet Society is providing funding support.

   o  It is very likely that the IETF Administrative Support Foundation
      would be deemed to clearly fall under the "scientific" and
      "educational" grounds for classification as a tax-exempt charity
      under section 501(c)(3) of the IRS code, so a tax-exempt
      application should be quite straight-forward.

   o  The incorporation laws of the U.S.  states being considered do not
      require that any members of the Board of Trustees be of a certain
      nationality or state residency (e.g., there are no "local
      director" requirements).  The U.S.  Dept.  of Commerce
      foreign-controlled organization reporting requirements apply only
      to "business enterprises", and do not apply to non-profit entities
      such as an IETF administrative support organization.

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   Since this document recommends incorporating in the U.S., Virginia is
   the logical pick as the state of domicile to allow the IETF
   administrative support organization to make use of ISOC headquarters
   to house its single employee (though the employee might be able to be
   housed at the Internet Society even if the incorporation were
   elsewhere, for example the ISOC Geneva office).

Appendix C.  Risk Analysis

   This scenario (as do all scenarios) has some risks.  This section
   tries to enumerate the sort of risks that we recognize and summarizes
   why we think we can accept the risk or what kind of action we think
   we can take if the risk indeed materializes into a problem.

C.1  US Domicile risks

   As explained in [I-D.malamud-consultant-report], incorporating in the
   US carries two specific risks: the perception of the IETF being a
   US-based organization and the potential for (or perception of)
   governmental interference.

   The IETF is an international organization.  However, even now, the
   fact that the IETF standards processes are run in English and that
   many of its current support organizations are US-based leaves an
   impression that the IETF is too US-centric.  Incorporating the new
   administrative entity in the US may add to that perception.

   Also, the IETF history is based in US federal government research and
   funding.  Though IETF is long separated from those beginnings, even
   in the past few years there have been interactions between the US
   government and the IETF that have concerned people.  Incorporating
   the administrative entity in the US may invite more US governmental
   interference in the standards activity of the IETF, or at the very
   least may leave the perception that the US government might get
   involved.

   Both of these are serious problems, but we think there is
   justification for and at least one mitigation to these risks.  Of
   course, the primary reason to consider US incorporation is expedience
   (See section 4.4.1.1 of [I-D.malamud-consultant-report]).  We agree
   that the expedience makes US incorporation worth the risk.  But
   incorporating in multiple domiciles would significantly mitigate the
   risk.  Assuming we go down the path of US incorporation, we would
   like legal counsel to advise on the possibility of incorporating in
   other domiciles (specifically Switzerland and The Netherlands) at a
   later date after US incorporation has been completed.  If this is (as
   we suspect) indeed possible, we think this would be the best way to
   go forward.

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C.2  Non-profit status risk

   One of the risks pointed out to incorporation was the potential that
   we would not get non-profit status, and that we must therefore
   preserve some money in escrow for tax liability purposes.  Estimates
   for the time it will take to get such status can be several months or
   even longer in some cases.

   It is important to point out that the tax liability is based on
   profits, not on gross revenues.  If the IASF is only taking in enough
   money to cover expenses, there would be very little tax liability.
   However, if more revenue is brought in than is spent, for example to
   build up an endowment or operating reserve, that "profit" is
   potentially taxable if non-profit status is not granted.

   To mitigate this risk, the corporation could be created and
   non-profit status applied for first, and operation of the corporation
   would only begin after non-profit status was obtained.  The IETF
   would use an interim plan for continued operations until that time.
   This way, no money would need to be in escrow during the process of
   applying for non-profit status.  However, that seems an excessively
   cautious path to take given what appears to be the fairly clear
   non-profit nature of the IETF.

   Commencing operations while the non-profit application is being
   considered, but being careful about balancing revenue with expenses
   and keeping an appropriate escrow account seems like a prudent task.
   Further, any fund raising campaigns that result in shifts to the
   balance sheet of the IASF should be conducted cautiously until
   non-profit status is granted.

C.3  Execution risks

   It is important that the execution goes well.  Risks that we are
   aware of include:

   o  we can't hire a good IAD

   o  we fail to project cash flow properly and go insolvent

   o  we can't cut a deal with Foretec and have no 2005 meetings

   o  we get bad lawyers and they take too long and charge too much

   o  isoc runs out of money and doesn't tell us early enough

   In order to mitigate these problems we have a proposed work plan
   included in this document.  It is important that we get review of

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   this work plan by as many eyes as we can get, to make sure we have
   considered all the possible steps that need to be taken.

C.4  Insolvency risk

   Improper management controls and procedures or other imprudent fiscal
   or administrative practices could expose the IETF to a risk of
   insolvency.  Careful selection of trustees, a process of budget
   approval, and a methodical system of fiscal controls are necessary to
   minimize this risk.

C.5  Legal risks

   Improper formulation of the legal framework underlying the IETF may
   expose the institution and individuals in leadership positions to
   potential legal risks.  Any such risk under this plan appears to be
   equivalent to the risk faced by the community under the current legal
   framework.  This risk is further mitigated by a thorough review by
   legal counsel, and by use of insurance coverage.

   The legal exposure is best minimized by a careful adherence to our
   procedures and processes, as defined by the Best Current Practice
   Series.  A carefully stated process, such as the BCP documents that
   govern the selection of leadership positions and define the standards
   process are the best insurance against legal exposure, provided care
   is taken to stick to the process standards that have been set.
   Adherence to a public rule book and a fully open process are the most
   effective mechanisms the IETF community can use.

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