[CWG-Stewardship] Another alternative proposal - addressing some questions

Fri Jan 23 04:52:13 UTC 2015

Hi Greg,

Thanks for your comments. My apologies for mischaracterising contract co as having ‘shareholders’. To your other comments and generally:

> Also, trusts are separate legal entities, so it is similar to Contract Co in that regard (and thus prey to many of the same "complexities.")

A trust is not a legal entity. A trustee is a legal entity. 

> It's my understanding that trusts are created to hold property.  Shouldn't the Trust (and not the Trustee) own the IANA function?  If the Trust doesn't hold the IANA Functions, what assets are held by the Trust?

Because the trust is not a legal entity, the trustee holds the property for the benefit of the beneficiaries. The asset is the right to run the IANA function and that is what is held by the trustee.

> I'm not familiar with this "guardian" concept (unless it was created uniquely for this proposal).  Is this an Australian law concept?  Do you know if this is similar to the "trust protector" concept in the US? 

It’s not an Australina concept however the word may be different. It is used synonymously with protector, appointor, supervisor and the like.

I believe this proposal simplifies the contract co proposal, by removing the creating of Contract Co. - the Contract Co. here is not “ICANN”. ICANN is performing the IANA naming functions, for the benefit of the “customers” of the IANA naming functions (who are the stated beneficiaries of the trust, replacing the need to create “Contract Co.”). 

The Trustee also has higher fiduciary obligations, which require them to always act in the best interests of the beneficiaries (not just for themselves).

The Trust can be “settled” by the NTIA passing on the “right to perform the IANA naming functions” to ICANN as the trustee. So, two parties: NTIA as settlor; ICANN as trustee.

Trustee can always unilaterally declare a trust - but this would be a redundant question now in light of explanation above.

The beneficiaries of the trust would be the “customers” of the IANA naming functions - as described in the ICG RF.

The guardian is the “protector” of the beneficiaries. It can’t be the entire pool of beneficiaries, but it can be someone, or some group of people, who represents  the beneficiaries.

All of the above is subject to confirmation by the relevant legal experts that this is workable under Californian law.

Cheers,

Chris

On 23 Jan 2015, at 08:00 , Greg Shatan <gregshatanipc at gmail.com> wrote:

> Chris,
> 
> A few quick comments, inline below:
> 
> Greg
> 
> On Thu, Jan 22, 2015 at 3:13 PM, Chris Disspain <ceo at auda.org.au> wrote:
> Greetings All,
> 
> Earlier today Paul Szyndler from auDA sent to RFP3 another alternative proposal (attached).
> 
> I have received a number of questions off list from some ccTLD colleagues and others and thought it might be helpful to address them all in this email to the CWG.
> 
> 1. Are there legal issues with the Trust solution? I am not an expert in Californian law but as a lawyer I do know a fair bit about trusts and their structure. The proposal is workable in general terms but there may be nuances of Californian law generally, or specifically as it applies to Californian corporations like ICANN, which would make the proposed structure overly complicated or problematic. Like the 'contract co’ proposal and auDA’s original ‘golden by-law’ proposal I expect this to be put to independent legal experts who can advise on the merits of each of the proposals. 
> 
> 2. Isn’t creating a trust just creating 'contract co' by another name? No. My understanding of 'contract co’ is that it would be a separate legal entity owned by some, yet to be identified, group of shareholders.
> 
> Chris:  This is not correct. The proposal was that Contract Co would be a not-for-profit corporation, which don't have shareholders (or any kind of owner).  Also, trusts are separate legal entities, so it is similar to Contract Co in that regard (and thus prey to many of the same "complexities.") 
>  
> With the trust, ICANN would own the IANA function but declare in a legally binding document that it did so on trust for the relevant stakeholder community.
> 
> It's my understanding that trusts are created to hold property.  Shouldn't the Trust (and not the Trustee) own the IANA function?  If the Trust doesn't hold the IANA Functions, what assets are held by the Trust?
> 
> And the Guardian of the Trust (see the proposal for details) would control the process by which ICANN could be replaced as trustee in a defined set of circumstances. This is thus an inherently ‘internal to ICANN’ approach.
> 
> I'm not familiar with this "guardian" concept (unless it was created uniquely for this proposal).  Is this an Australian law concept?  Do you know if this is similar to the "trust protector" concept in the US? 
> 
> 3. Why would ICANN be the trustee? In simple terms because auDA believes in an 'internal to ICANN’ approach. We believe that ICANN should run IANA but that there should be the ability to move the IANA function away in certain defined circumstances. That is what this proposal (and our first ‘golden by-law' proposal) achieve and that’s what differentiates them from the ‘contract co’ proposal.
> 
> I know I don’t need to say this but for the avoidance of doubt, this is an auDA proposal. I have not discussed it with my fellow ICANN directors 
> 
> I will not be on the RFP3B call Friday as I’ll be somewhere mid-air between Dubai and Melbourne. However, Paul Szyndler will be on the call and will happily enter into any discussion on the proposal and answer (or undertake to get answers to) any questions that may be raised.
> 
> I hope this is helpful.
> 
> Cheers,
> 
> Thanks,
> 
> Greg 
> 
> 
> 
> Chris Disspain | Chief Executive Officer
> 
> .au Domain Administration Ltd
> 
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> 
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> 
> auDA – Australia’s Domain Name Administrator
> 
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