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MINUTES of the Annual General Meeting of members of Canadian Internet Registration Authority held at the Vancouver Convention Centre, Vancouver, British Colombia, on September 20, 2011 at 3:00 p.m.

MINUTES of the Annual General Meeting of members of Canadian Internet Registration Authority held at the Vancouver Convention Centre, Vancouver, British Colombia, on September 20, 2011 at 3:00 p.m.

1. Call to Order and Approval of the Agenda: Paul Andersen, the Chair of CIRA, called the meeting to order and acted as Chair of the meeting, and Michael Stewart, Secretary of CIRA, acted as Secretary of the meeting. The Chair declared that notice of this meeting had been duly given to all CIRA members in good standing in accordance with CIRA’s By-law No. 1, that there was a quorum present and that the meeting was duly constituted for the transaction of business.

2. Verification of the 2010 Annual General Meeting Minutes: There being no corrections or additions to the minutes of the Annual General Meeting held on September 21, 2010, the Chair noted that the minutes stood as approved.

3. Report of the Board of Directors: Paul Andersen, CIRA’s Chair, delivered the report of CIRA’s Board of Directors. The Chair reported that whereas the 2010 fiscal year was one characterized by change, this past year was one characterized by progress and connection. CIRA has made significant progress in putting in place the policies, procedures and technologies needed to be among the world’s leading registries.

CIRA is quickly becoming a widely regarded and respected thought leader in Canada and internationally on many Internet-related issues. CIRA’s Board of Directors continues to play an important role in leading CIRA’s growth and development. As well, CIRA has made significant progress in the following areas: CIRA’s mandate; the leadership role CIRA has taken in Canada and around the world; Corporate governance; and Community engagement.

With respect to CIRA’s mandate and activities, the core of the work is the management of the .CA registry, and to maintain the underlying Domain Name System, or DNS infrastructure that supports .CA. CIRA is involved in activities that go beyond the technical maintenance of the registry. It undertakes activities that give back to the Canadian Internet community, and is also involved in the governance of the Internet.

To be a leading registry, it is critical that CIRA continues to represent Canada at the international level. Contributions of technical resources, experience and financial support has positioned CIRA in a role of significant influence within the global Internet. CIRA currently has a number of key international roles: the Chair is a member of the American Registry for Internet Numbers (ARIN) Advisory Council; CIRA’s CEO Byron Holland is Vice-Chair of the Country Code Names Supporting Organization (also known as ccNSO) for the term of 2009-2012 as well as the Chair of ICANN’s Strategic and Operational Planning Working Group; Board Member Heather Dryden, from Industry Canada, was appointed Chair of ICANN’s Government Advisory Committee, the key link between governments and the ICANN Board.

CIRA operates the .CA domain space as a key public resource on behalf of all Canadians. And, since the Internet belongs to all of us, CIRA believes that its future should be driven by the many people and groups who have a stake in it. Globally, the Internet is governed by a loose-knit group of NGOs, governments and the private sector. In essence, the people who have a stake in making sure the Internet is successful are the ones who run it. This multi-stakeholder approach works. It is critical that it remains this way for the Internet to grow as an economic, cultural and social resource. In the past year, CIRA has taken a leadership role in guiding the conversation around Internet governance in this country.

In July 2010, then Industry Minister Clement announced the Digital Economy consultation, a national consultation on the future of Canada’s online economy. CIRA made a thorough submission, and made 19 recommendations, including the development of a DNS-CERT, government wide adoption of IPv6 and ongoing support of the international Internet Governance Forum.

The recent federal election has slowed the process regarding the release of the Digital Economy Strategy, but this year’s Speech from the Throne made reference to it.

CIRA is hopeful that it will see the strategy soon, and confident that it will include at least some of the recommendations.

A few changes were made in the way of communicating and engaging with its Members. CIRA is a Member-driven organization, and that means that Members are at the very heart of all of our activities.

In the past year, CIRA expanded the value of being a .CA Member, and began listening to its Members more actively. The results have been astounding. Applications for seats on the Board of Directors increased five-fold from 2009 to 2010. And, attendance at CIRA’s AGM in Toronto last year was 125 per cent higher than it was in 2009.

On the technical side, some very significant steps were made toward becoming a leading edge registry. .CA – – became IPv6 compliant for World IPv6 Day in June, positioning CIRA as a leader in Canada with regard to IPv6 adoption. Moving forward, CIRA’s IT operations team will be working to make the remainder of our systems IPv6 compliant.

Progress has also been made with implementing DNSSEC to the DNS. DNSSEC is a set of extensions used to add an additional layer of security to the DNS. When complete, users will have greater assurance that .CA websites and email addresses are who they claim to be. CIRA will also be working over the coming year to implement DNSSEC.

CIRA also continued to contribute to the development of Bind10, the software that essentially holds the Internet together.

The Chair recognized the leadership the CIRA Board has shown over the past year, and continues to show.

4. President’s Report: Byron Holland, CIRA’s President and CEO, reported that last year CIRA celebrated its 10th anniversary of registering .CA domain names. In many industries, 10 years would not be considered a significant amount of time, but in the Internet world, it could very well be an eternity. Over the past 10 years, a lot has changed.

Back then, CIRA was operating out of a boardroom at the CANARIE offices in Ottawa. There were a whopping 140,000 .CA domain names registered. The Internet, while certainly showing its promise, had not reached its status as one of the greatest economic drivers in the history of humankind.

Today, CIRA has more than 1.7 million domain names registered, and will reach two million before the end of the current fiscal year. The Internet has become a critical piece of infrastructure, not just in Canada but around the world.

The growth in the number of users on the Internet, number of websites and in its importance to all aspects of society is extraordinary, and it has been CIRA’s role to not just keep pace with that growth, but to try to stay at least a few steps ahead of it and we have been successful.

Anniversaries of any sort, especially those with some significance, are often characterized by a bit of introspection – a taking stock of where we’ve been and looking forward to where we’re going. This is certainly the case for CIRA.

We know where we want to be. We are striving to make .CA the number one domain choice for Canadians. We know how to get there. And, last year we made great progress in putting in place the tools we need to get there.

We operate in an incredibly fast-paced environment in one of the most connected countries in the world. In fact, according to a recent comScore white paper, Canadians’ Internet usage is nearly double the world average.

With this in mind, it is not surprising that .CA has been experiencing incredible growth. In a very competitive environment, .CA has achieved an annual growth rate of 14 per cent, and a renewal rate of 79 per cent in fiscal year 2011.

Tremendous growth such as CIRA has been experiencing over the past few years means that sometimes we have to make changes to the way we operate. What does it take to become the best at what you do? What will it take for CIRA to become the preferred top-level domain choice for Canadians? I believe it takes four things: the right tools, the right people, the right focus, and the right policies and procedures.

CIRA is an evolving organization. We are making changes to allow us to be on the leading edge of Internet technologies. CIRA has made significant progress toward making sure we have the right tools in place. At the core of our business is the registry.

In October 2010, we streamlined the processes and policies for registering a .CA domain name and launched a new registry system for .CA. This was all done in consultation with our .CA customers and channel partners so that their needs were reflected in the end product.

Our former registry system was built 10 years ago, and simply could not accommodate the level of growth .CA has been experiencing. The new registry – an EPP-based system – is a robust, scalable and user-friendly platform, and conforms to industry best practices.

CIRA is effectively positioning itself as a world class registry. In 2010 work continued on implementing IPv6, a critical technology initiative for CIRA. In February, the final blocks of IPv4 addresses were allocated and it is now critical that we all work towards adopting IPv6.

CIRA, in short, is becoming one of the world’s leading country code top-level domains.

If you have been following CIRA for a few years, you will likely have noticed that we are a lot more visible than we have been in the past. Why? Because we want to enhance our corporate reputation. This means becoming a thought leader in our industry, and better engaging our audiences. Last year CIRA launched a new brand identity, part of which you can see on these slides. This brand identity carries through all of our materials, and includes a new website, and an advertising campaign. CIRA also reached out to our stakeholders, improved our communications to Members, and made sure to tell you more than ever about what we are working on and how they can get involved.

CIRA also developed a new look and feel, exclusively for our Member communications. In January, CIRA sent out the first quarterly Member e-newsletter, which brings together the latest news from CIRA and our work on the international stage. And, CIRA launched a new Member portal, where Members can manage their information and access a weekly summary of the latest CIRA and Internet-related news stories from around the web.

CIRA also held its first regional Member event. This popular networking and information event was held in Calgary in June. CIRA also led the first-ever Canadian Internet Forum, or CIF, a national consultation on the link between the digital economy and digital literacy and the Internet. Regional consultations were held in communities across Canada. We also facilitated an online discussion about Internet-related issues of interest to Canadians.

Some of the key issues we heard a lot about were online safety and security, the development of a ‘Canadian vision’ for the Internet and the cost and speed of broadband.

The consultations wrapped up with a national event held in Ottawa and webcast across the country in February 2011. The results of the CIF are to be presented to the United Nations coordinated Internet Governance Forum in Nairobi, Kenya.

CIRA will continue the conversation it started with the CIF last year – in just a couple of weeks CIRA be launching the 2012 CIF. This time, there will be a greater emphasis on engaging Canadians online in a new, fully interactive discussion forum.

What do I mean by ‘the right people’? It means we are striving for operational excellence. This means creating a high performance workplace culture.This also means a greater focus on areas in which CIRA did not have expertise in the past. How did we do this? By ensuring CIRA is a leading technical and not-for profit employer in the Ottawa area. By tightening up our recruiting procedures to make sure we are finding the right people.

CIRA is also in the process of changing its policies and procedures. With the rewrite of the .CA registry, CIRA took the opportunity to review and recreate the corresponding business rules. This means that .CA Registrars and Registrants have a more streamlined and simpler process for registering .CA domain names. In fact, CIRA was able to dramatically reduce the number of contact points with customers.

What is the result? In CIRA’s 2008 customer satisfaction survey, 36 per cent of respondents indicated that the process to register a .CA domain name was very easy. Post redesign, 53 per cent of respondents found the process very easy.

CIRA has the focus, the vision, the tools, and the policies in place to be the number one choice of Canadians, and I know we are going to do it.

5. Summary of the Financial Statements for fiscal year ending March 31, 2011: Byron Holland, CIRA’s President and CEO presented the financial statements for the fiscal year March 31, 2011, copy of which is included in the Annual Report or it could be viewed on CIRA’s web site at

B. Holland noted that changes were made in the past year to the way the organization accounts for its investments and revenue earned from .CA domain name registrations.

B. Holland explained that in the early days of the modern Internet it was appropriate to expense investments in a registry, such as CIRA’s in the period incurred given there was uncertainty this investment would have longer term value. The Internet has changed – it has become an integral part of modern society.

CIRA now recognizes that its most recent investment in the .CA registry represents an asset that will serve our business for several years. As such, CIRA analyzed the development costs pertaining to the internally generated registry software, incurred in the 2010 and 2011 fiscal years and capitalized them as an intangible asset to be amortized and brought into expense over its’ estimated useful life of five years.

As well, one more major change was made. Since its inception, CIRA has recognized upfront a full 12 months of service revenue when a .CA domain name is registered, renewed or on its anniversary date. This is not what one would call a ‘best practice’. CIRA adopted a more accurate and conservative approach, an approach, in fact, that is required by Canadian Generally Accepted Accounting Principles. Other leading registries, including VeriSign followed similar accounting policies.

CIRA now recognizes revenue rateably over the particular term of the service as denoted in the registration or renewal. This new approach better reflects when CIRA actually earns revenue. As a result, the revenues had to be restated and resulted in the following changes:

• a decrease in our registration revenues, to more slowly recognize revenue;

• a decrease in our accumulated net assets, as in past years we had over-recognized revenue; and

• an increase in our deferred revenue, or unearned revenue.

In each case, the accounting policies adopted will change the recognition, or allocation, of the expense and revenue, but have absolutely no impact on CIRA’s cash position. These changes are fully consistent with the accounting treatment used by world-class registries.

6. Presentation of the Auditors’ Report: Byron Holland, CIRA’s President and CEO presented, delivered the Auditor’s report for the fiscal years ending March 31, 2011.

B. Holland reported that CIRA had received an unqualified opinion from the auditors, that CIRA’s financial statements were favourable and clean, and fairly presented.

7. Appointment of Auditors: It was moved by Robert Smits, seconded by Marita Mall, and motion carried, that KPMG be appointed as Auditors of CIRA, to hold office until the next Annual General Meeting or until their successors are duly appointed and that the Board of Directors be authorized to fix the remunerations of the Auditors.

8. Questions from Members:

Question – Andrew Escobar

Why did it take this long to restate? Common GAAP practice is to recognize revenue and expenses.

Answer – Byron Holland

That’s a very good question. I think the issue is that as soon as we uncovered the issue we dealt with it immediately. So Paul Havey, is our new head of finance and KPMG is our new auditor as of last year, they worked together and in working through the process of the restatement and effectively as soon as it was determined that we should move towards revenue recognition process we have right now, we engaged in it immediately.

Question – Curtis Davy

I am a non-Member, however I’m curious to know what efforts, if any, CIRA is making to consult or work with the conservative government about their newly proposed plan being pushed through this fall regarding Internet security and the privacy of Canadians in the anti-spying bill.

Answer – Byron Holland

Clearly that will likely impact us all. However, we have a very specific mandate to run the Registry and the DNS and that is the core of our mandate, so we are focused really just on those issues. We are not an advocacy organization, so many of the issues in there are not elements that specifically pertain to what we actually do on a day to day basis. We watch and monitor it obviously with significant interest but generally speaking it’s not impacting the domain space that we manage and operate.

9. Adjournment

On motion by Stuart Hart and seconded by Graham Laverty, the meeting was concluded at 4:05 p.m.