[CCWG-ACCT] Legal question

Wed Apr 29 23:30:07 UTC 2015

This is consistent with my understanding too.

Cheers
Jordan

On 30 April 2015 at 11:28, Greg Shatan <gregshatanipc at gmail.com> wrote:

> Chris,
>
> Please let me try to clarify my understanding of what is currently being
> proposed (in draft).  The SO/ACs will not be "converted" into legal
> entities.  Rather, a "mirror" or "alter ego" entity will be set up for each
> SO/AC, likely as a unincorporated association (which is a recognized legal
> entity under California law).  Each SO/AC will control its alter ego. This
> is quite similar to the relationship between the ASO and the NRO.  The
> SO/ACs will continue to exist and will perform and operate as they
> currently do.  The legal entities will be the members (or designators,
> should that route be chosen) of ICANN, with the specific rights and powers
> ascribed to them in that capacity by statute and bylaw.
>
> Technically, the unincorporated associations only need a minimum of two
> members, so any "members" of a SO/AC who don't wish to be members of the
> alter ego won't need to be.  The control arrangements between the SO/AC and
> the alter ego will ensure that all "members" of the SO/AC (and even
> non-members, such as non-ccNSO ccTLDs, if desired) get the appropriate
> "say" in any decisions that are to be carried out by the alter ego.
>
> Best regards,
>
> Greg
>
>
>
> On Wed, Apr 29, 2015 at 6:40 PM, Chris Disspain <ceo at auda.org.au> wrote:
>
>> Jordan,
>>
>> Apologies for taking so long to respond!
>>
>> Nobody is proposing converting the SOs and ACs to anything - at all -
>> anywhere.
>>
>>
>> I'm confused. Greg seems o think that's exactly what was being proposed.
>> Do we have clarity on this yet?
>>
>> I'll respond to the balance of your points later today.
>>
>>
>>
>> Cheers,
>>
>>
>> Chris
>>
>> On 22 Apr 2015, at 16:02 , Jordan Carter <jordan at internetnz.net.nz>
>> wrote:
>>
>> Hi all, hi Chris:
>>
>> On 22 April 2015 at 11:07, Chris Disspain <ceo at auda.org.au> wrote:
>>
>>> Hi Keith,
>>>
>>> As promised I set out in brief below some of the reasons why, in respect
>>> to the membership model and any model requiring the SOs and ACs to convert
>>> to legal entities, I have serious concerns and why I referred to
>>> significant sacrifices.
>>>
>>
>> Nobody is proposing converting the SOs and ACs to anything - at all -
>> anywhere.
>>
>> The only proposal that I've seen from the lawyers is that if membership
>> was the model chosen, legal personality would need to be created. The
>> actors in the various SOs and ACs would, in exercising membership
>> prerogatives, act through the unincorporated associations.
>>
>> The lawyers have also been clear that even in a designator model, it's
>> preferable to create legal personality along those lines.
>>
>> I think it is really really really important for everyone involved in
>> this effort to be very precise and clear about what we are discussing and
>> what we aren't. So I am writing this so directly in order that if my
>> understanding is wrong, it gets picked up pronto! :-)
>>
>> GAC
>>>
>>> The current recommended model does not provide any viable solution for
>>> dealing with the GAC. It seems obvious to me that the governments involved
>>> in the GAC are not going to agree to form an unincorporated association
>>> under Californian law. If I'm right then presumably the GAC would remain as
>>> an advisory committee and would not be able to have a vote in any of the
>>> escalation mechanisms. That may be fine as the GAC may not want to have a
>>> vote anyway.
>>>
>>
>> Indeed it may not. Being able to offer advice on public policy issues to
>> the ICANN Board and to appoint a non-voting liaison member to the Board. I
>> am looking forward to hearing their views on this (and many other
>> questions).
>>
>>
>>> However I see a serious incompatibility between the members' powers and
>>> the standing of GAC advice to the Board. It's not that GAC advice is or
>>> indeed should be invariably followed but currently where GAC advice is at
>>> odds with the position of others in the community the advice carries
>>> significant weight and there is a bylaw mandated process for rejecting the
>>> advice through a process which takes around 6 months. The change to a
>>> members based structure would mean that for certain issues the actions of
>>> members will trump GAC advice. So there is a significant shift in the
>>> carefully constructed balance of power. Now, many of us may think that such
>>> a shift is no bad thing but I wonder whether the governments of the world
>>> are going to agree?
>>>
>>
>> I don't understand this. I have not seen any hint of anyone suggesting
>> that a power that Members should have includes overriding decisions on
>> matters of public policy, which is the advice that the GAC gives the Board
>> and which the bylaws would continue to require it to give due deference to
>> (perhaps with an adjustment about when that reconciliation process has to
>> happen, should GAC change its operating principles).
>>
>> If GAC advice on public policy matters led to changes in the bylaws, or
>> the inclusion by the Board of business or strategic plans or budgets, then
>> the new powers might have an impact. But all that would require the Board
>> and the GAC to do is to persuade the broader ICANN system, or at least some
>> of it, that their ideas are ones that should be pursued.
>>
>> Does that feel like a fundamental issue to you? It doesn't to me.
>>
>>
>>> ccTLDs
>>>
>>> When we set up the ccNSO and when we did the structural review of it
>>> some time thereafter there was considerable discussion about how it could
>>> be structured precisely to avoid the need for ccTLDs to join anything.
>>> There was even significant concern about having to fill out a form and
>>> whether that implied the existence of some organisation. The concerns
>>> included joining something in the jurisdiction of the US and whether that
>>> would make a ccTLD manager in any way subject to US law, the possibility of
>>> being sued in the US because the manager would be deemed to have a presence
>>> there, how such a structure would be funded (especially if it was sued),
>>> whether there was any liability on 'officers' of the entity and so on. I
>>> believe that many of these concerns will still exist for many ccTLDs.
>>>
>>
>> They may or may not. But in that fifteen-years-ago debate, were there any
>> facts on the table about those questions? Or was it all a bit of a mess on
>> many fronts? Because ICANN in 2015 is, better or worse, a very different
>> beast to ICANN in ~ 2000.
>>
>> Perhaps more importantly, exercising some rights through an
>> unincorporated association would remain a choice for every ICANN
>> participant. Nobody would be forced to be involved. It isn't like a "Join
>> ICANN and have no say" - all the current structures for the "business of
>> the business" would remain in place.
>>
>> From the legends I have heard about this early phase in ICANN's history,
>> the fundamental concern was of a power-grab on the corporation's part.
>> Since these reforms make such a power-grab harder (and let's remember that
>> the end of the NTIA contract makes it easier...), I'd expect ccTLDs and
>> others to look at them with quite some interest.
>>
>>
>>
>>> Further, quite a number of ccTLD managers are departments of the
>>> relevant government or quasi-government bodies. Not everyone runs their
>>> ccTLD with the degree of freedom that .au, .ca, .uk and .nl are privileged
>>> to enjoy. I consider it highly unlikely that sovereign governments will
>>> permit a government department to join an association in the US (or any
>>> other country for that matter).
>>>
>>
>> They won't have to, to do what they do in ICANN today.
>>
>> The suggestion is they might have to if they want to take part in
>> exercising the accountability powers set out in our report that's going for
>> public comment.
>>
>> That said, there's a bit of an objective legal question here - which is
>> whether the decisions of these uninc associations can be forced to take
>> account of the views expressed in the ICANN bodies they shadow in making
>> their decisions. If they can (which I would analogise to the ccNSO taking
>> on board the views of non-member ccTLDs - and so I assume it is possible),
>> much of this debate becomes moot.
>>
>>
>> Finally -- I do think this is a really useful and constructive
>> discussion. As someone who is warm to the member approach, but who sees
>> huge benefits if we can manage a "no structural change" outcome, this is
>> just the convo we need to have.
>>
>> cheers,
>> Jordan
>>
>>
>>> At Large
>>>
>>> I don't know the answer to this but it strikes me that the structure may
>>> also be problematic for At Large community as opposed to ALAC. On that one
>>> over the ALAC folks to comment.
>>>
>>> There's more but I'm rushing for my flight now. Hope this gives you a
>>> flavour.
>>>
>>>
>>>
>>> Cheers,
>>>
>>>
>>> Chris
>>>
>>> On 21 Apr 2015, at 20:46 , Chris Disspain <ceo at auda.org.au> wrote:
>>>
>>> Hi Keith,
>>>
>>> Thanks for the below. You ask a valid question and Kavouss has sent me
>>> an email asking the same.  I will respond in detail in the next 7 hours or
>>> so.
>>>
>>> Chris Disspain
>>> CEO - auDA
>>>
>>> On 21 Apr 2015, at 20:16, Drazek, Keith <kdrazek at verisign.com> wrote:
>>>
>>>  Thanks Chris, no apologies necessary...this is exactly the kind of
>>> dialogue needed to advance our work.
>>>
>>>  Can you be more explicit about the "significant number of sacrifices
>>> that would need to be made in a membership scenario" that ccTLDs face?
>>> Particularly if any are unique to ccTLDs?
>>>
>>>  Sacrifices may be needed (including from the Board) if we are to
>>> accomplish the community's broader goal of ensuring the ICANN Board and
>>> Staff are truly accountable to the ICANN community for the next decade. As
>>> such, it would be good to know, as early as possible, what those sacrifices
>>> might be.
>>>
>>>  In simple terms, I agree that determining what can and cannot be
>>> accomplished within the existing structure is a worthwhile exercise and
>>> will help to inform the community.
>>>
>>>  Based on our work and the relevant independent legal analysis to date,
>>> it appears to me that the current construct has significant gaps and
>>> shortcomings and won't deliver on our goals, but I support seeking further
>>> advice on the topic from our independent legal advisors.
>>>
>>>  Thanks and regards,
>>> Keith
>>>
>>> On Apr 21, 2015, at 5:08 AM, Chris Disspain <ceo at auda.org.au> wrote:
>>>
>>>   Thanks Keith.
>>>
>>>  I apologise for pinging back and forth on this but I hope the list
>>> will appreciate that it as an indication of how important auDA believes
>>> this point is.
>>>
>>>  As I said on the CCWG call last week, I have serious concerns about
>>> the viability of the lawyers' recommended structural changes (at least from
>>> a cc point of view) and want to be crystal clear about what we can do or
>>> cannot do within the current structure.
>>>
>>>  For a ccTLD there are a significant number of sacrifices that would
>>> need to be made in a membership scenario and I don't believe the cc
>>> community can decide whether those sacrifices are worth making unless we
>>> can weigh them against what we would be able to achieve using the current
>>> structure.
>>>
>>>  I think that is essential that our output to the community contains a
>>> clear explanation of what the status quo can achieve. If it does not then
>>> IMO it is impossible to judge the other scenarios.
>>>
>>>  I appreciate your second para and, as a lawyer, I know that time for a
>>> response is required. I also appreciate the time constraints under which we
>>> are operating. But we will lose more time if the result of our document is
>>> a series of questions about whether there really is a need to make the
>>> significant changes being recommended.
>>>
>>>  In simple terms 'not nearly enough' is not an acceptable response. How
>>> can I know that "it" is not nearly enough unless I know what "it" is?
>>>
>>>  Chris Disspain
>>> CEO - auDA
>>>
>>> On 21 Apr 2015, at 18:37, Drazek, Keith <kdrazek at verisign.com> wrote:
>>>
>>>
>>>  Chris,
>>>
>>>  I believe the answer to your question regarding the "no change
>>> scenario" and "what the current configuration can achieve" is, "Not nearly
>>> enough."
>>>
>>>  That said, I think it's a reasonable question and it should be
>>> referred to the CCWG's lawyers and they should be permitted reasonable time
>>> to consider and respond.
>>>
>>>  Regards,
>>> Keith
>>>
>>>
>>>
>>> Sent from my iPhone
>>>
>>> On Apr 21, 2015, at 4:09 AM, Chris Disspain <ceo at auda.org.au> wrote:
>>>
>>>   Greg,
>>>
>>>  Thanks. At the risk of repeating myself, whilst I understand what you
>>> are saying, it is precisely the no change scenario that I am seeking
>>> clarity on. I accept that the current configuration may not be "a very good
>>> vehicle for many of the enhanced powers" but I want clarity on what the
>>> current configuration CAN  achieve. I don't believe we have that yet.
>>>
>>> Chris Disspain
>>> CEO - auDA
>>>
>>> On 21 Apr 2015, at 17:35, Greg Shatan <gregshatanipc at gmail.com> wrote:
>>>
>>>  Chris,
>>>
>>>  The simple answer is that the SOACs as currently configured are not
>>> a very good vehicle for many of the enhanced powers we seek. Once you make
>>> them into members and give them legal personhood everything else becomes
>>> much easier.
>>>
>>>  However, you assumed no change to the SOACs, which made the answers
>>> much harder.
>>>
>>>  Greg
>>>
>>> On Tuesday, April 21, 2015, Chris Disspain <ceo at auda.org.au> wrote:
>>>
>>>> Greg, All,
>>>>
>>>>  With respect, I think we are overcomplicating the issue. I simply
>>>> want to gain a base line for the discussion about any changes necessary  to
>>>> achieve what we want. We agreed on jurisdiction that if we can get
>>>> acceptable escalations and remedies without changing jurisdiction then we
>>>> should leave well alone for now, I think we should apply the same principle
>>>> here. I am clear what the lawyers recommend we do BUT I am not clear about
>>>> what we can do or what compromises we need to make if we were to maintain
>>>> the current structure. I think that is a key part of our deliberations.
>>>>
>>>>
>>>>
>>>> Cheers,
>>>>
>>>>
>>>> Chris
>>>>
>>> --
>> Jordan Carter
>>
>> Chief Executive
>> *InternetNZ*
>>
>> 04 495 2118 (office) | +64 21 442 649 (mob)
>> jordan at internetnz.net.nz
>> Skype: jordancarter
>>
>> *A better world through a better Internet *
>>
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>

-- 
Jordan Carter

Chief Executive
*InternetNZ*

04 495 2118 (office) | +64 21 442 649 (mob)
jordan at internetnz.net.nz
Skype: jordancarter

*A better world through a better Internet *
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