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

Fri Jan 23 13:58:35 UTC 2015

Interesting one indeed...and i like to thank Chris for at least giving this
a short, i am sure we can improve upon this

On Fri, Jan 23, 2015 at 10:15 AM, Guru Acharya <gurcharya at gmail.com> wrote:

>
> In the AUDA proposal and from the discussions on this thread, I identify
> the following entities:
>
> 1) Trustee - IANA Functions Operator (IFO) - Presently ICANN
> 2) Author/settlor/grantor - Guardian - Community - Respresented through a
> CCWG
> 3) Beneficiary - Community/customers of IANA
>
On the contrary, I understood the auDA to mean the following:

1) Trustee - IANA Functions Operator (IFO) - Presently ICANN
2) Author/settlor/grantor - NTIA
3) Beneficiary - Community/customers of IANA/Guardian - Represented through
a CCWG

However, what may need to be clarified is whether the CCWG can "legally"
challenge the Trustee without requiring the settlor and whether the settlor
will not at any-time exercise a unilateral power. Inview of this, will be
good to consider another option as below:

1) Trustee - IANA Functions Operator (IFO) - Presently ICANN
2) Author/settlor/grantor - IETF (IAOC/ISOC) on the basis that the IAOC
could be trusted to corporate
3) Beneficiary - Community/customers of IANA/Guardian - Represented through
a CCWG

I will also suggest we look at "the IETF trust"[1] model to also create
some insight that can be further developed

Regards
1. http://tools.ietf.org/html/rfc4371

> Please correct me if I'm wrong.
>
> Im curious to know:
> 1) Will the Guardian be a legal entity?; if not, how is it represented in
> the trust?
> 2) Will the Beneficiary also be a legal entity?; if not, how is it
> represented in the trust?
>
>
> Thanks.
>
> On Fri, Jan 23, 2015 at 11:55 AM, Greg Shatan <gregshatanipc at gmail.com>
> wrote:
>
>> Thanks, and safe travels.
>>
>> Greg
>>
>> *Gregory S. Shatan *
>>
>> Partner | *Abelman Frayne & Schwab*
>>
>> *666 Third Avenue **|** New York, NY 10017-5621*
>>
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>>
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>>
>> *gsshatan at lawabel.com <gsshatan at lawabel.com>*
>>
>> *ICANN-related: gregshatanipc at gmail.com <gregshatanipc at gmail.com> *
>>
>> *www.lawabel.com <http://www.lawabel.com/>*
>>
>> On Fri, Jan 23, 2015 at 1:24 AM, Chris Disspain <ceo at auda.org.au> wrote:
>>
>>> But really quickly -
>>>
>>> Just to confirm, the registries (and not the larger multistakeholder
>>> community)  are the beneficiaries of the trust.  This has some downstream
>>> consequences (see below).
>>>
>>>
>>> Not necessarily. That is a matter for the community to discuss and come
>>> to consensus on. Certainly the proposal envisages that the Guardian would
>>> be multistakeholder.
>>>
>>> Cheers,
>>>
>>> Chris Disspain | Chief Executive Officer
>>> .au Domain Administration Ltd
>>> T: +61 3 8341 4111 | F: +61 3 8341 4112
>>> E: ceo at auda.org.au | W: www.auda.org.au
>>>
>>> auDA - Australia's Domain Name Administrator
>>>
>>> On 23 Jan 2015, at 16:53, Greg Shatan <gregshatanipc at gmail.com> wrote:
>>>
>>> Chris,
>>>
>>> Please see below.
>>>
>>> Greg
>>>
>>>
>>>
>>> On Thu, Jan 22, 2015 at 11:52 PM, Chris Disspain <ceo at auda.org.au>
>>> wrote:
>>>
>>>> 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.
>>>>
>>>
>>> Chris:  I think there are nuances here that are beyond both of us (hence
>>> the need for targeted legal expertise).  Here is an excerpt from the US
>>> government website (www.usa.gov), describing trusts:
>>>
>>>  Creating a trust (or trust fund) establishes a legal entity that holds
>>> property or assets for the person who created it. The person who creates
>>> the trust can be called a grantor, donor, or settlor. When the grantor
>>> creates the trust he or she appoints a person or entity (like the trust
>>> department of a bank) to manage the trust. This person or entity is called
>>> a trustee. The grantor also chooses someone who will ultimately benefit
>>> from the trust, this person is the beneficiary.
>>>
>>> http://www.usa.gov/topics/money/personal-finance/trusts.shtml
>>>
>>> Further research reveals apparently contradictory statements regarding
>>> the legal and juristic standing of trusts, as well as instances in which
>>> trusts are legal entities for certain purposes (e.g., tax) and not others
>>> (e.g., standing to sue).  I can only conclude that some real expertise in
>>> trust law is needed to sort this out.
>>>
>>>> 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.”).
>>>>
>>>
>>> Justin to confirm, the registries (and not the larger multistakeholder
>>> community)  are the beneficiaries of the trust.  This has some downstream
>>> consequences (see below).
>>>
>>>>
>>>>
>>>> The Trustee also has higher fiduciary obligations, which require them
>>>> to always act in the best interests of the beneficiaries (not just for
>>>> themselves).
>>>>
>>>
>>> What if the interests of the beneficiaries (i.e., the registries)
>>> diverge from the interests of the multistakeholder community generally or
>>> the public interest?  Wouldn't that require the Trustee (i.e., ICANN) to
>>> act in the registries' interest, even if it is to the detriment of other
>>> stakeholders?  That seems at odds with the idea of accountability to
>>> stakeholders, generally.  We would need to find a way to deal with this.
>>>
>>>>
>>>> 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.
>>>>
>>>
>>> Thanks for the further explanation.  It is an interesting proposal, with
>>> some issues (as others have as well).  I look forward to working through
>>> it, getting the necessary legal advice, and seeing if this will work.
>>>
>>> Greg
>>>
>>>>
>>>>
>>>>
>>>> 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
>>>>>
>>>>> T: +61 3 8341 4111 | F: +61 3 8341 4112
>>>>>
>>>>> E: ceo at auda.org.au | W: www.auda.org.au
>>>>>
>>>>> auDA – Australia’s Domain Name Administrator
>>>>>
>>>>>
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>>>>>
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>>>>>
>>>>>
>>>>
>>>>
>>>
>>
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