<div dir="ltr"><div class="gmail_default" style="font-family:verdana,sans-serif">Some follow-up on the hypotheticals below, removing my rapporteur hat for the purpose, but still trying to use objective legal analysis, rather than seeking any particular result.</div><div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif">Greg</div><div class="gmail_extra"><br><div class="gmail_quote">On Sun, Oct 16, 2016 at 1:54 AM, parminder <span dir="ltr"><<a href="mailto:parminder@itforchange.net" target="_blank">parminder@itforchange.net</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex">
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<p><font face="Verdana">Milton,</font></p>
<p><font face="Verdana">Thanks for your engagement with these issues</font><font face="Verdana"> . Some responses below. <br>
</font></p><span class="gmail-">
<div class="gmail-m_-2654243898812256234moz-cite-prefix">On Tuesday 11 October 2016 10:21 PM,
Mueller, Milton L wrote:<br>
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<p class="gmail-m_-2654243898812256234MsoListParagraph"><span>1.<span style="font-style:normal;font-variant-ligatures:normal;font-variant-caps:normal;font-weight:normal;font-stretch:normal;font-size:7pt;line-height:normal;font-family:"times new roman"">
</span></span>What happens if the concerned
US court holds .xxx to be against US's competition law?
Describe the steps that will follow, and how can ICANN avoid
bending its policy making process and authority to the will
of the US state.<span style="color:rgb(31,73,125)"><u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,78,121)"><span style="color:windowtext">MM: I don’t think that’s a
problem for ICANN. It’s a problem for the entity that
was delegated .XXX. Since XXX holds a tiny sliver of
the domain name market, even in the porn space, this is
a very remote risk.</span></span></p>
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Is there not problem even if .xxx was not a US company owned, which
has no reason to like/ accept being governed by US laws? Milton,
when we frame regimes for rule of law, and of justice, we do not
say, well that is small fry, a small 'sliver of the market', rules
and justice has to be the same for all - small or big. It is a
question of principle -- can US law force ICANN polices, or their
operationalisation ? If they can, as you seem to agree here, it is
problem that we must find a solution to.<br>
<br>
Annex 12 says "At this point in the CCWG-Accountability’s work, the
main issues that need to be investigated within Work Stream 2 relate
to the influence that I<i><b>CANN ́s existing jurisdiction may have
on the actual operation of policies </b></i>and accountability
mechanisms." (emphasis added)<br>
<br>
This is directly an issue where ICANN's existing jurisdiction has
influence on actual operation of its policies -- in this case its
policies under which .xxx was delegated. <br></div></blockquote><div><br></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">GS: If .xxx was not a US company, but it does business in the US, it subjects itself to US laws; that has nothing to do with ICANN. Some things are unclear from your hypothetical: </font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">1. Is the US government the plaintiff alleging effects in US commerce, or is the plaintiff a private party that alleges that it has been harmed by .xxx's anticompetitive acts? </font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">2. What actions by .xxx have allegedly violated competition laws? Have they engaged in price fixing or bid rigging or predatory pricing or price discrimination? </font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">3. If this was unilateral activity, what is the product market in which .xxx has monopoly power or sufficient market power for this to be an antitrust violation? (As Milton points out, the answer is likely to be "none," as individual TLDs are extremely unlikely to be considered "markets" and .xxx would have only a small sliver of the total SLD market, and thus would not be capable of violating the antitrust laws. That is why Milton mentioned that .xxx was "small fry." Indeed antitrust laws are not applied equally to companies with small market shares and large market shares, nor should they be; companies with small market shares have no market power, and thus can do things like price below cost, that companies with high market shares and market power cannot do (e.g., a company with market power pricing below cost for a sustained period of time in order to drive smaller competitors from the market is engaged in "predatory pricing," a company with a small market share pricing below cost for a sustained period of time is committing business suicide or sacrificing profit for market share, but they are not violating the antitrust laws.) </font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">4. If this was collusive activity, with whom were they colluding, and in what market, and are they co-defendants (and if not, why not)? </font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">5. Are you assuming that the only way .xxx was brought into US court is because ICANN "issued" the gTLD, and that every other test for <i>in personam</i> jurisdiction failed? Since the "minimum contacts" for <i>in personam </i>jurisdiction are quite low (transacting business within the state; committing a violation of law in the state, committing a violation of law outside the state that causes injury within the state, or having or using real property within the state.), it is extremely unlikely that .xxx would fail them. If it did fail these test, it's essentially impossible for their to be a competition law violation, since the minimum contacts test is aligned with the type of activity that would be required to show that an antitrust violation occurred. So, if a plaintiff attempted to hail .xxx into court in the US, but there was no activity that could serve as the basis of jurisdiction or a claim, the case would be tossed, and it's reasonably likely the plaintiff and their lawyers would be sanctioned. </font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff"><br></font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">On the other , if .xxx has violated US antitrust laws (which would require both business activity and harm in the US), why shouldn't they be subject to suit (by the government or a private party) in the US? .xxx is just a Registry business; it's not entitled to any particular immunities.</font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff"><br></font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">In the end, I see no connection between this hypothetical and ICANN's policies or ICANN's jurisdiction of incorporation or HQ location.</font></div></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div bgcolor="#FFFFFF"><span class="gmail-"><font color="#0000ff">
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<p class="gmail-m_-2654243898812256234MsoListParagraph"><span>2.<span style="font-style:normal;font-variant-ligatures:normal;font-variant-caps:normal;font-weight:normal;font-stretch:normal;font-size:7pt;line-height:normal;font-family:"times new roman"">
</span></span>Same about .africa.<span style="color:rgb(31,73,125)"><u></u><u></u></span></p>
<p class="MsoNormal"><u></u> <u></u></p>
<p class="MsoNormal"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,78,121)"><span style="color:windowtext">Same response.<br>
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Same response from me as well - other than that here, unlike for
.xxx, those who claim the gTLD, and thus will be affected by an
adverse decision of the US court, are parties not belonging to the
US and thus should not be dictated to by US courts. <br></div></blockquote><div><br></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">GS: In the .africa case, DCA sued ICANN and ZACR in the US. They could have chosen to try and sue elsewhere, since there are other places where ICANN can be sued, but they chose the US. DCA is seeking adjudication by a court, and they chose the US courts, so this is not in any way a situation in which DCA does not want to be "dictated to by US courts." As for ZACR, they could have sought to be removed from the case due to lack of minimum contacts with the US, and they may well have succeeded -- but then they would be on the sidelines in a case where their ability to run .africa was at stake, and that wouldn't be a very good choice. It's an essential factor of being a defendant that you don't get to choose the court in which you're sued, at least not initially -- you can try to get out of the case, or have the case dismissed for jurisdictional reasons, or have the case removed to a different court with a greater interest in the case, after you are sued. </font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff"><br></font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">Again, I see no connection between this hypothetical (or actual case) and ICANN's policies or ICANN's jurisdiction of incorporation or HQ location.</font></div></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div bgcolor="#FFFFFF"><span class="gmail-"><font color="#0000ff">
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<p class="gmail-m_-2654243898812256234MsoListParagraph"><span>3.<span style="font-style:normal;font-variant-ligatures:normal;font-variant-caps:normal;font-weight:normal;font-stretch:normal;font-size:7pt;line-height:normal;font-family:"times new roman"">
</span></span>With 100s of new gTLDs getting
operational, many of them private closed ones with generic
names (but that is hardly the only issue, there could be
many others), is it not obvious that we will be seeing many
court cases around them... What would ICANN do the moment an
adverse judgement comes?<span style="color:rgb(31,73,125)"><u></u><u></u></span></p>
<p class="MsoNormal"><u></u> <u></u></p>
<p class="MsoNormal"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,78,121)"><span style="color:windowtext">See above. Not an issue for
ICANN. Most of these court cases are between private
parties, but even regulations or antitrust actions would
be directed against the holder of the gTLD, not ICANN.
Only if ICANN itself were accused of fostering a
monopoly would it be the target of such litigation.
</span></span></p>
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Again, you seem to be fully unaffected by how global parties -
companies, and people - who expect ICANN to be a global governance
body and thus do thing just-fully, and they able to partake equally
of the rights and benefits of a global domain name governance
systems are unable to fulfil this legitimate, and democratic,
expectation. If this means nothing to you, and only such actions
that directly affect ICANN's organisation etc are meaningful, I have
not much more to say here... My principal case is of how ICANN's
current jurisdiction affects the global DNS, its governance, its
legitimacy, justfullness, etc -- and not just now it affects ICANN's
organisation.<br>
<br>
Perhaps lets separate these two issues then, treat them separately.
(1), impact of ICANN jurisdiction on ICANN's organisation, (2) its
impact on ICANN governance and operation of global DNS, including
allocation of gTLDs/ ccTLDs, and managing the relationship with
them. <br>
<br>
For the me (2) is by far more important, but if (1) is your focus,
we can consider them both, separately.<br></div></blockquote><div><br></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">GS: First, it's not obvious that we will be seeing many court cases around new gTLD registries. Second, if there are court cases, I assume that the plaintiffs will bring them in a jurisdiction where the registry can be "found", like any other business. I doubt they will be sued in the US solely on the basis that the company that granted them the right to operate the gTLD is located here; and if suit is brought here, it's not at all likely that this basis for jurisdiction will succeed (look at how the .ir situation has resolved, and consider that .ir was involved as a TLD asset, not as a registry business). If there's an adverse judgment, ICANN typically wouldn't be involved -- unless the judgment called for a transfer of the gTLD, and that would only occur in very limited circumstances. If that were the case, it wouldn't matter where the case was brought -- the winning party would request that ICANN honor the court's ruling that the plaintiff and not the defendant was entitled to the gTLD. ICANN could agree, or it could contest the award. If the case was brought in France, ICANN could contest it in the French court. Alternatively, the plaintiff could seek to enforce the judgment by suing ICANN in the US (but this would happen in any jurisdiction where ICANN could be sued -- nothing unique to the US). Again, I see no issue. There was a private dispute between two parties, brought somewhere in the world. This has nothing to do with ICANN's current place of incorporation or HQ.</font></div></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div bgcolor="#FFFFFF"><span class="gmail-">
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<p class="gmail-m_-2654243898812256234MsoListParagraph"><br>
4. What if OFAC doesn’t give licence to ICANN for dealing
with a particular country due to great deterioration of
relationships with the US.<br>
<br>
<span style="color:rgb(31,73,125)"><u></u><u></u></span></p>
<p class="gmail-m_-2654243898812256234MsoListParagraph" style="margin-left:0in"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,73,125)">Now,
you have hit on a real issue. I believe however that NTIA
has taken some precautions here, but I don’t recall what
they are.
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NTIA's 'precautions' - even more so, the unrecollected ones :) -
are meaningless for non US people/ businesses who really are looking
to get out of NTIA's 'protection' - isnt that all this oversight
transition is supposed to be about ?</div></blockquote><div><br></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">GS: I assume you are referring to "great deterioration of relationships" between ICANN and the US, since "great deterioration of relationships" between a country and</font></div><font color="#0000ff"> <div class="gmail_default" style="font-family:verdana,sans-serif;display:inline">the US is the reason one needs an OFAC license in the first place. First, this is truly hypothetical -- OFAC licenses are granted based on their merits, not on relationships. Second, without examining the precautions Milton mentions, it's premature to dismiss them. Third, if the US government did in fact withhold an OFAC license from ICANN out of spite, it would severely damage the US's ability to serve as an appropriate home for ICANN, and could lead to legitimate calls for an examination of ICANN's location; this serves as a very significant deterrent against any such behavior.</div></font></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff"><br></font></div></div><div><font color="#0000ff"><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline">As to what the oversight transition was supposed to be about: The purpose of the IANA transition was not to make ICANN no longer subject to the rule of law under US law. </div><span style="font-family:verdana,sans-serif">It was about removing the unique relationship between the US and ICANN embodied in the IANA contract, and allowing the global multistakeholder community to oversee ICANN's activities, rather than the US government.</span><span style="font-family:verdana,sans-serif"> Indeed, the "enforceability" aspects of the Empowered Community's actions </span><u style="font-family:verdana,sans-serif">depend</u><span style="font-family:verdana,sans-serif"> on ICANN being subject to the jurisdiction of courts, and count on the availability of US courts to enforce any action by the Empowered Community where ICANN refused to comply.<div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"> If ICANN no longer had any contacts with the US, then ICANN would still need to be subject to being sued in court somewhere for the accountability mechanisms to work fully. I understand that there are some who would like to remove ICANN from the United States. If, now or in the future, ICANN cannot carry out its policies or the accountability mechanisms do not work because of ICANN's location, and the only remedy is moving ICANN so that it can function, then there are methods to seek such a change inherent in iCANN's governance structure (i.e., methods for changing the Articles, where ICANN's jurisdiction of incorporation is set forth, and the Bylaws, where ICANN's HQ location is set forth). If this subgroup determines that there is an issue where ICANN is currently unable to carry out policies or the accountability mechanisms are impeded, we will look at all potential remedies (and all of the consequences of such potential remedies).</div></span></font></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div bgcolor="#FFFFFF"> <br><span class="gmail-">
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5. What if the FCC revises its decision of forbearance about
its authority over Internet addressing system (as it did on
the issue of whether Internet was title one or title two)?<span style="color:rgb(31,73,125)"><u></u><u></u></span></p>
<p class="gmail-m_-2654243898812256234MsoListParagraph" style="margin-left:0in"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,73,125)"><u></u> <u></u></span></p>
<p class="gmail-m_-2654243898812256234MsoListParagraph" style="margin-left:0in"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,73,125)">MM:
This would require legislation, because nothing in the
existing Communications Act gives the FCC any authority
over DNS or IP addressing. So this is just another example
of “what if the US legislates to regulate ICANN in some
way?” Which of course is a risk if ICANN were in ANY
jurisdiction.
</span></p>
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This is not true -- in the same way as, without any new legislation,
FCC revised its stand on forbearance over seeing Internet as a
telecom utility, and made it title 2. 'Forbearance' has this legal
meaning of legal authority being there but not being exercised --
FCC's chair has clearly used the term 'forbear' in recent utterances
about FCC's authority over Internet addresses. And in any case, what
if as you say such a thing will require a legislation from the US
legislature -- that is no comfort to non USians/ <br></div></blockquote><div><br></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">GS: I'm not going to wade into the complexities of FCC policy and scope. If the US or any country or group of countries (e.g., the EU) actually sought to usurp ICANN's role in DNS and IP addressing, that would be something to deal with and consider remedies at that time. As Milton notes, this is a risk regardless of ICANN's location (and a risk that is not necessarily tied to ICANN's physical location). </font></div><font color="#0000ff"> </font></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div bgcolor="#FFFFFF"><span class="gmail-">
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<p class="gmail-m_-2654243898812256234MsoListParagraph"><br>
6. There are almost as many US agencies that can exercise
mandate over ICANN's domain name policies as there are
sectors that the Internet and thus its naming system
impacts. (ICANN allowed some 'regulatory policies' to buyers
of .pharmacy, and going forward as it also does this with
many other sectoral domain names, all of these can be
challenged, in the courts, as well as with sectoral
regulatory bodies). What then?<span style="color:rgb(31,73,125)"><u></u><u></u></span></p>
<p class="gmail-m_-2654243898812256234MsoListParagraph" style="margin-left:0in"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,73,125)"><u></u> <u></u></span></p>
<p class="gmail-m_-2654243898812256234MsoListParagraph" style="margin-left:0in"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,73,125)">MM:
These dangers are greatly diminished post-transition.
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I see now way how the danger of any US executive authority
exercising mandate over ICANN have diminished post transition other
than your word for it..... And then I do not want them diminished
(even that they havent), I want them extinguished. Statutory US
bodies need to and will do whatever they can to further their
policies and law, and would order any US body accordingly - nothing
has changed, one may just be imagining that it has. <br></div></blockquote><div><br></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">GS: This is far too generalized to be considered as a scenario. What agencies do you think have a scope of authority over ICANN, and under what legislation? If it's DOJ/FTC under antitrust law, this is actually an accountability feature and not a bug. The intent is that the antitrust law be available in the event ICANN allegedly violates US antitrust laws. (The whole "antitrust immunity" discussion was completely misguided.) As for .pharmacy (or other TLDs) having certain safeguards, that is entirely a policy and business decision by that TLD. The new gTLD program was intended to foster different business models, so this should be considered a successful implementation. Technically, it could be "challenged" -- but under what cause of action? What law is being violated that could lead to either US government enforcement or a private party action? And what does ICANN's location have to do with the registry being capable of being sued in the US, since any business or harm in the US is sufficient to sue the registry in US courts, regardless of ICANN's location?</font></div><font color="#0000ff"> </font></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div bgcolor="#FFFFFF"><span class="gmail-">
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<p class="gmail-m_-2654243898812256234MsoListParagraph"><br>
If you even begin trying to deal with these questions, you
will realise what a volcanic earth we are sitting upon, in
refusing to see the public law jurisdiction issue.<span style="color:rgb(31,73,125)"><u></u><u></u></span></p>
<p class="gmail-m_-2654243898812256234MsoListParagraph" style="margin-left:0in"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,73,125)"><u></u> <u></u></span></p>
<p class="gmail-m_-2654243898812256234MsoListParagraph" style="margin-left:0in"><span style="font-size:11pt;font-family:calibri,sans-serif;color:rgb(31,73,125)">MM:
Don’t agree we are sitting on a volcano, but do agree
there are issues that need to be anticipated, a kind of
“stress test”</span></p>
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<br></span>
Yes, thanks, exactly that. We need to follow through each of these
scenarios to possible logical conclusions - looking at all plausible
ways they can go.</div></blockquote><div><br></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">GS: First, I don't see the hypotheticals regarding suing third parties in US courts as really "stress tests" of ICANN's location, since there will almost inevitably be other bases for being able to sue that party in a US court, given the similarity between the minimum contacts required for that purpose and minimum requirements to have a viable cause of action. As such, ICANN's location simply doesn't seem to be relevant to those scenarios. In those scenarios where the US government hypothetically seeks to interfere with ICANN policy or with ICANN's accountability mechanism, I think the overall "stress test" is whether ICANN could take steps <u>at that time</u> to oppose such actions or, failing that, seek to remove itself completely from US jurisdiction (and whether moving out of the US would have that intended effect)? I'm not aware of any reason that ICANN could not try to do so, but it would need the global multistakeholder community's agreement to do so. A related question is whether the Empowered Community, as the agent of the global multistakeholder community, could force ICANN to move out of the US against ICANN's will -- and whether there are safeguards against such an action so that it would only occur if there were a proper basis for such a drastic act? It's something we may need to look at, but based on the escalating powers of the Empowered Community (up to and including "spilling" the board, I think the community has the necessary power to move ICANN under such exigent circumstances.</font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff"><br></font></div></div><div><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"><font color="#0000ff">Greg </font></div><font color="#0000ff"><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"></div> </font></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div bgcolor="#FFFFFF"><span class="gmail-HOEnZb"><font color="#888888"><br>
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