[CCWG-ACCT] FW: Lawyer's High Level Review re Proposal to Refer to 2004 ASO MOU in Mission Statement (Annex 5, Third Proposal)

Rosemary E. Fei rfei at adlercolvin.com
Thu Jan 21 03:05:13 UTC 2016

Dear CCWG ACCT Co-Chairs, Members, Participants and ICANN Staff:

In response to our high-level concern presented in an email from Holly Gregory and me on January 19, 2016 (included below), we received an email from Izumi Okutani on behalf of the ASO proposing an alternative intended to address our concern (also included below).  We thank the ASO and Izumi for the thoughtful response.  This email responds to the ASO's proposal; please treat this as an addendum to our high-level concern.

The ASO has proposed the following alternative language for the description of ICANN's mission with respect to the numbers function:

Coordinates the allocation and assignment at the top-most level of Internet Protocol ("IP") and Autonomous System ("AS") numbers.  Further, it ratifies, at the global level, policies related to these IP and AS numbers and developed according to the ASO-MoU.

We think this approach is helpful, and adequately solves the problem of referring to the MOU to define ICANN's mission.

However, we don't understand how ICANN's mission can be to "ratify" something, so we would change "ratifes" to "implements".  To ratify implies the power to NOT ratify, and we do not understand that to be what ASO has proposed or the CCWG has agreed to.

We are comfortable with ICANN's mission including implementation of policies developed under the MOU, understanding that those are narrow, technical policies within the ASO's expertise, which will be developed under a process the community has found appropriate to the need.

We think the reference to the MOU needs to be more specific.

Reflecting these comments, our high-level concern will be fully addressed if the ASO proposal is modified as follows and adopted by the CCWG:

Coordinates the allocation and assignment at the top-most level of Internet Protocol ("IP") and Autonomous System ("AS") numbers. Further, it implements, at the global level, policies related to these IP and AS numbers and developed pursuant to the Memorandum of Understanding between ICANN and the ASO dated [most recent version date], as it may be amended from time to time in accordance with its terms.

Rosemary and Holly

Rosemary E. Fei
Adler & Colvin
235 Montgomery Street, Suite 1220
San Francisco, CA 94104
415/421-7555 (phone)
415/421-0712 (fax)
rfei at adlercolvin.com

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From: Izumi Okutani
Sent: Tuesday, January 19, 2016 12:59:10 AM
To: Gregory, Holly; 'Mathieu Weill'; thomas at rickert.net<mailto:thomas at rickert.net>; León Felipe Sánchez Ambía; accountability-cross-community at icann.org<mailto:accountability-cross-community at icann.org>; acct-staff at icann.org<mailto:acct-staff at icann.org>
Cc: Sidley ICANN CCWG; Greeley, Amy E.; Grapsas, Rebecca; ICANN at adlercolvin.com<mailto:ICANN at adlercolvin.com>
Subject: Re: [CCWG-ACCT] Lawyer's High Level Review re Proposal to Refer to 2004 ASO MOU in Mission Statement (Annex 5, Third Proposal)
Dear Holly and all,

Thank you for this analysis.

I note the strong concern here is that with reference to the ASO about the Mission, the ICANN Mission on the number resources can be changed, with agreement between ICANN and RIRs, without going through the standard process of changes in the Bylaws.

We had further discussions in the ASO and to address this concern, we would like to suggest the alternative text below:

"Coordinates the allocation and assignment at the top-most level of Internet Protocol ("IP") and Autonomous System ("AS") numbers. Further, it ratifies, at the global level, policies related to these IP and AS numbers and developed according to the ASO-MoU."

 - While it still appears to reference the ASO MoU, the important difference from the previous text is that it is *not referenced to describe ICANN's Mission*.

 - What it basically says is that ICANN's Mission on the number resources is to ratify global policies according to the ASO MoU.
   i.e., If there are changes ICANN's Mission in its relation to ratification of global policies, expansion of its Mission, or deleting this part of the Mission, it will need to go through the standard process of the changes in the Bylaws. It will not change, expand or remove ICANN's Mission without the agreed process proposed in the CCWG, just like any other parts of the Mission Statement.

 - Given the reference to the ASO MoU on the alternative text is limited to the ratification of global policies, even if the MoU can be changed based on agreement between ICANN and RIRs (as it is today), the scope of change is limited to how ICANN ratifies the global policies on the number resources.

 - Until today, the ratification of global number resources policies has been based on agreement between ICANN and RIRs per what is described in the ASO MoU, which does not affect the wider ICANN communities outside the ASO.


On 2016/01/19 5:27, Gregory, Holly wrote:
> Dear CCWG ACCT Co-Chairs, Members, Participants and ICANN Staff,
> We are writing to raise with you a high-level concern regarding the proposal to reference the 2004 Address Supporting Organization MOU (the "MOU") in ICANN's Mission Statement (Bylaws Article I, Section 1), which was discussed on CCWG-ACCT Call #77 (January 14).
> In defining ICANN's role in coordinating allocation and assignment at the top-most level of IP and AS numbers, Annex 05 from the Third Proposal provided as follows: "ICANN's Mission is described in the ASO MoU between ICANN and RIRs."
> We recommend against trying to further define ICANN's Mission through cross-reference to the MOU in the Bylaws and suggest that any specific language that you deem of critical import to defining ICANN's Mission be actually incorporated.  (We could not find a clear statement of the ICANN Mission in the MOU.)
> As a general matter, referencing all or part of an external agreement in bylaws presents a number of problems.  For example:
> ·         The bylaws may require a different process, parties, and threshold for amendment than the referenced agreement, and it is unclear legally which rules apply.  This problem is certainly present here.  Although the Mission will be a fundamental bylaw, the parties to the MOU could amend it on their own, circumventing the fundamental bylaw amendment process entirely.  Alternatively, perhaps the MOU's amendment provisions would be superceded by the fundamental bylaw amendment process.  At a minimum, if the reference remains despite our advice, this issue should be addressed explicitly.
> ·         Referencing an outside agreement in bylaws may have the legal effect of incorporating it into the bylaws, putting all its terms on an equal footing with the bylaws, which can create problems if its provisions conflict with the bylaws in any way.  This issue has a greater chance of arising  where an entire agreement is incorporated by reference, and is clearly a problem here.  For example, ICANN's Bylaws are ultimately governed by California law, but the MOU provides that it will be governed by International Chamber of Commerce rules in Bermuda.  Again, if the reference remains despite our advice, the CCWG should decide which document governs in case of conflict (either generally or on a topic-by-topic basis).
> ·         Although we generally recommend against it, clients have insisted on incorporating an entire existing agreement in their governing documents, essentially freezing the agreement as incorporated.  It was suggested on the CCWG call that the Bylaws could reference the version of the MOU as of a specific date, excluding from the Bylaws future amendments to the MOU unless the community amended the Bylaws to update the reference in the Mission.  While this strategy partially solves one problem, it leads to others.  Assuming that the MOU incorporated in the Bylaws continues to evolve over time outside of the Bylaws, there will be two versions of the MOU -- the one in the Bylaws, and the one that documents the current understandings between the ASO and ICANN.  At a minimum, this would be confusing; in a worst-case scenario, it could undermine the enforceability of the post-reference MOU.
> ·         Any outside agreement to be referenced in bylaws must be carefully reviewed to assess and address the sorts of consequences noted above.  We have briefly reviewed a version of the MOU, and note that the MOU itself incorporates other documents by reference, including the earlier 2003 version of the ICANN Bylaws, creating a circularity in terms of providing legal advice on this provision in the future.
> While we originally thought it might be possible to work around these problems by inserting text from the MOU into the Bylaws describing this aspect of ICANN's Mission, after our brief review of the MOU, it is not clear to us where or how it describes ICANN's mission in any narrative text.  As we read it the MOU sets out processes and mechanisms for developing policies but does not itself describe substantive limits on ICANN or purport to define ICANN's Mission.
> Bylaws may of course include a process for developing a scope of corporate activities within the bounds of a larger mission, and the mission can be updated as appropriate to reflect developments that come out of this process, but the process itself cannot logically become part of the mission.
> We hope further CCWG discussion in light of our concern, regarding the goal that the ASO and the community seek by referencing the MOU in the Mission Statement, may provide a way forward without referencing the MOU itself in the Bylaws.
> Holly and Rosemary
> Partner and Co-Chair
> Global Corporate Governance & Executive Compensation Practice
> Sidley Austin LLP
> +1 212 839 5853
> holly.gregory at sidley.com<mailto:holly.gregory at sidley.com<mailto:holly.gregory at sidley.com%3cmailto:holly.gregory at sidley.com>>
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