[CCWG-ACCT] Legal question

Fri May 1 04:30:07 UTC 2015

If the SO/ACs created ICANN, it might apply.  Unfortunately, it's the other
way around.

On Fri, May 1, 2015 at 12:28 AM, Chris Disspain <ceo at auda.org.au> wrote:

> Thanks Greg.
>
> I'll consider the points you make on policy and indeed the fundamental
> underpinnings of the ICANN model and respond in the next day or so.
>
> However, on the legal question:
>
> Finally, I have to say I disagree with your contention that each SO/ACs
> would need to become an unincorporated association ("UA") rather than
> merely create one.  Admittedly, the issue of how each SO/AC can control its
> "alter ego" has not been fully fleshed out.  However, I believe this was
> discussed at some length on the legal sub team call and it seems that
> between the bylaws of the UA and the charter of the SO/AC there should be
> very tight control by the SO/AC over any actions of the UA.
>
>
> I look forward to hearing how a combination of the bylaws of the UA and
> the SO/AC charters will work to provide very tight control by the SO/AC. If
> they do then surely the same would apply to the ICANN bylaws and the SO/AC
> charters providing a similarly tight control over the actions of ICANN.
>
> Cheers,
>
> Chris
>
> On 1 May 2015, at 13:50, Greg Shatan <gregshatanipc at gmail.com> wrote:
>
> Chris,
>
> Here are my preliminary thoughts:
>
> First, though you said you don't want to debate the example itself, the
> example troubles me and I think it goes deeper than the example.   I think
> that the establishment of a "TMCH for IGOs" would be new gTLD policy, and
> almost certainly Consensus Policy, and thus should not be adopted as the
> example states.  Instead, it should be directed down the PDP path to the
> GNSO.  Indeed, if I am not mistaken, that is what happened and resulted in
> the IGO/INGO Curative Rights Working Group, which may or may not make
> policy recommendations consistent with the GAC advice.  So, I think the
> premise that the example was meant to demonstrate -- that GAC advice is due
> more deference than any other input to the Board and that only the Board
> can set a course contrary to GAC advice -- seems faulty.
>
> This also highlights that the point is not unique to the GAC; it is
> equally true of the GNSO (or rather, it is true of Board decisions that
> emanate from the GNSO's processes).  The Board could adopt policy
> recommendations from the GNSO that are reflected in the budget, only to
> have a supermajority of the Membership send the budget back.
>
> Fundamentally, whether there is a Board action that results from GAC
> Advice or from a GNSO Recommendation (or from the ccNSO or from the Staff
> or elsewhere), it is a Board action.  And a fundamental premise of the
> CCWG's work is that certain Board decisions will now be subject to certain
> specified constraints being placed in the hands of the Membership.
>
> To answer your direct question -- this is not a fundamental shift in the
> standing of GAC advice and thus a fundamental change in the GAC’s interface
> with the rest of ICANN; it's something more wide-ranging than that.  It is
> a fundamental shift in the standing of certain Board decisions (whatever
> their provenance) and thus a fundamental change in the Board's interface
> with the community.
>
> Frankly, if we were to propose that a multilateral organization gets the
> last word over the global multistakeholder community (as represented by the
> proposed Membership), we would have failed by most yardsticks -- not least
> the yardstick set forth by the NTIA for the IANA stewardship transition.
>
> Finally, I have to say I disagree with your contention that each SO/ACs
> would need to become an unincorporated association ("UA") rather than
> merely create one.  Admittedly, the issue of how each SO/AC can control its
> "alter ego" has not been fully fleshed out.  However, I believe this was
> discussed at some length on the legal sub team call and it seems that
> between the bylaws of the UA and the charter of the SO/AC there should be
> very tight control by the SO/AC over any actions of the UA.
>
> Greg
>
> On Thu, Apr 30, 2015 at 10:11 PM, Chris Disspain <ceo at auda.org.au> wrote:
>
>> Jordan, Greg,
>>
>> I would like to focus upon two of Jordan’s responses in his note of 22
>> April. Greg you asked me a similar question re the GAC point -
>>
>> GAC:
>>
>> *CD: 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?*
>>
>> *JC: 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.*
>>
>> I’m saying is that it might well be a fundamental issue for GAC members.
>> Using an example is the best way to illustrate my point, though I don’t
>> want to get into a debate on the likelihood or otherwise of the example
>> itself. The ICANN Board receives (and will continue to receive) advice from
>> the GAC that potentially affects the ICANN Budget.
>>
>> Consider a situation where the GAC advises that ICANN should create a
>> repository, much like the TMCH, for the acronyms of IGOs. The repository
>> would be used to advise the relevant IGO that their acronym has been
>> registered in a given gTLD and also to advise the registrant that their
>> registration matches a name in the repository.
>>
>> Assuming that the Board accepts this advice, it would then be required to
>> make a budgetary allocation for establishment of the repository and an
>> annual operating budget.
>>
>> In the scenario we are discussing regarding members’ powers, it would be
>> possible for the community to veto the Budget on this point. This then
>> creates a conflict between the public policy advice from the GAC and the
>> powers of members. Should such a situation occur, how would you see it
>> being resolved? Is this not a fundamental shift in the standing of GAC
>> advice and thus a fundamental change in the GAC’s interface with the rest
>> of ICANN?
>>
>> SOs/ACs generally:
>>
>>
>> *CD: 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).*
>>
>> *JC: 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.*
>>
>> You make a good point about the legal question. It is one I have yet to
>> see an answer to.
>>
>> This relates to the comment I made yesterday.
>>
>> The only way I can see to ensure that the views of ICANN bodies are taken
>> into account is if those SO/ACs become the unincorporated associations
>> themselves. Creating shadow organisations gives rise to the question you
>> raise and significant concerns regarding the accountability of these “alter
>> egos”. To me, this seems like an attempted solution that simply adds
>> another layer of complexity. But maybe counsel’s response to the question I
>> raised yesterday will answer the point.
>>
>>
>>
>>
>>
>> Cheers,
>>
>>
>> Chris
>>
>> On 30 Apr 2015, at 09:38 , Chris Disspain <ceo at auda.org.au> wrote:
>>
>> Thanks Greg. Clear and understood.
>>
>> What will the control mechanisms be between the ccNSO and its alter ego
>> and how will they be enforced?
>>
>>
>>
>>
>> Cheers,
>>
>> Chris
>>
>> On 30 Apr 2015, at 09:28 , 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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