[CWG-Stewardship] Strickling Remarks from 4 December re IANA Transition and Accountability

[Alan Greenberg]

At 10/12/2014 02:53 PM, Greg Shatan wrote:
>Maarten:
>
>My answers are inline below.
>
>Greg
>
>On Mon, Dec 8, 2014 at 5:46 PM, Maarten Simon 
><<mailto:maarten.simon at sidn.nl>maarten.simon at sidn.nl> wrote:
>
>Hi Greg,
>
>Although I personally have not made up my mind 
>as yet if the contract co or an internal ICANN 
>solution is preferable, I have posted a very 
>rough idea for an internal solution  in another 
>thread that I have not seen your response to. I 
>repeat it here as I am interested to here from 
>you if you think it would be legally possible 
>(apart from the fact that you probably do not support it for other reasons):
>
>“If we could arrange via the bylaws that the 
>ICANN board explicitly has to follow orders from a MRT-like structure,
>
>GS:  This is a pretty big "if."  Unlike Contract 
>Co., which would be built from the ground up to 
>be a corporation with very limited purpose and 
>goals and limitations upon its directors and 
>officer, and thus lends itself to this 
>"following orders" model, ICANN is an existing 
>organization with a large board and officer 
>group and many activities. At best, this type of 
>organization does not lend itself to such a 
>model.  At worst, it's not even possible.  But 
>let's assume, solely for the sake of argument, 
>that the ICANN bylaws can be modified in this 
>fashion.  I am assuming that the MRT will be 
>"internal-to-ICANN" like the current SOs and ACs 
>(and in contrast to the ICG).  Is that 
>correct?  If so, how do you involve the global 
>multistakeholder community (beyond ICANN) as required by the NTIA?

AG:
I will no doubt echo some of what Olivier has 
said, despite Milton having explained that he is wrong.

Yes, it is more difficult to retrofit such 
measures into the existing ICANN, but then the 
ICANN board has a rather powerful reason for being flexible and accomodating.

It is not clear how "internal" an MRT would be. 
It would be organized under the auspices of 
ICANN. Whether it "reports" to ICANN is something 
else altogether. The relationship between the 
IETF and ISOC might be a good model. ISOC 
provides funding and perhaps legal protection but 
I don't think that we could say that the IETF is 
internal to ISOC or controlled by it.

The ICG and the Stewardship CWG have 
representation from outside of ICANN. Yes, Milton 
points out that they were created due to pressure 
and conditions set by the NTIA. As above, the 
desire to retain IAINA is a mighty big carrot to 
continue the tradition.ICANN partially funded 
NetMundial, and completely different form of MS 
event and it did so without US government pressure.

It is SO attractive to label ICANN as unchanging 
and inflexible, but current evidence does not bear that out.


>we might not need a contract but have an (internal) MoU/SLA or whatever.
>
>GS:  There really is no such thing as an 
>internal MoU/SLA.  Both of these are agreements 
>(just like the IANA Functions Contract), and 
>need to be made between two or more legal 
>entities capable of contracting.  If the 
>MRT-like structure is internal to ICANN, it 
>can't have a contract with ICANN -- that would 
>be ICANN contracting with itself.  The 
>"whatever" would have to be an internal document 
>of a non-contractual/non-agreement 
>nature.  Conceivably, it could be a policy.  If 
>it is a policy, it would most likely have to go 
>through an ICANN Policy Development 
>Process.  Would this be done separately by the 
>ccNSO and the GNSO under their separate PDP 
>guidelines?  Or would we try to put together a 
>joint PDP Working Group?  And how long would 
>this PDP take to develop an "IANA Functions Policy"?
>
>The other thing the IANA Functions Contract 
>establishes is that the right to run the IANA 
>Functions ultimately resides in Contract 
>Co.  ICANN's right to do it is purely 
>contractual; essentially, ICANN is a licensee, 
>and the MRT is a a licensor.  Under this 
>scenario, the current IANA Contract goes away, 
>and ICANN is left holding the right to perform 
>the IANA Functions.  This means that the IANA 
>Functions are now an inherent right of 
>ICANN   This is a very different overall set-up, 
>with different consequences.  Losing a right one 
>has by contract is a very common problem, and is 
>as old as contracts.  Losing an inherent right 
>and sector of services because a committee says 
>that you have failed to live up to internal 
>policies is both very uncommon and very novel, 
>creating considerable uncertainty even if it is a technical possibility.

AG:
I have no clue as to the legal issues involved, 
but apparently ICANN can sign a MoU with an 
internal body. The relationship between ICANN and 
the At-Large regional At-large Organizations 
(RALOs) are established through MoUs. And 
although you presume that the MRT would be wholly 
internal to ICANN, that is a premise in your mind, but not mine.

Yes, without Contract Co, ICANN has the right to 
continue performing IANA functions. That provides 
a level of stability that the possibility of 
moving it (potentially every 5 years if some 
people have their way). But if the MRT can direct 
how that is done, that may not be so bad. And It 
is not inconceivable that the MRT could direct 
ICANN to divest itself of IANA in extreme situations.


>If the ICANN board would at a certain moment in 
>time still decide not to follow orders of the 
>MRT, I would assume it may be sued by affected 
>parties for violating its own bylaws.
>
>GS: Litigation should be a last resort, not a 
>first resort, when it comes to 
>enforcement.  Contract Co. can terminate the 
>contract (or decide not to sign another one when 
>it expires). The MRT has no such ability.  That 
>is why you are suggesting litigation -- which is 
>not an "internal-to-ICANN" solution at all.  In 
>addition to not being "internal-to-ICANN," 
>litigation (in any jurisdiction) is expensive, 
>lengthy and consumes great time and resources, 
>and may not produce a result in any kind of 
>useful timeframe.  In any event, who are the 
>"affected parties" that would sue?  Is it only 
>one registry, or is it many?  What if it's a 
>stakeholder group, such as "civil society"?  If 
>there are many litigants, they would need to 
>enter into some sort of joint litigation 
>agreement, form a coordinating group and deal 
>with a whole host of other things.  And not 
>every affected party has a litigation war chest 
>to go up against ICANN -- unlike Contract Co., 
>which will be indemnified. I don't think there's 
>any way that ICANN would agree to indemnify, 
>defend and hold harmless every "affected party" 
>that might challenge a decision relating to IANA 
>Functions.  So, litigation funding would be a very real issue.
>
>Finally, I'm not at all sure that the "affected 
>parties" will have the standing to sue ICANN for 
>violating its bylaws.  This might be a right 
>that a shareholder would have if ICANN had 
>shareholders (but nonprofits don't have 
>shareholders).  Third parties may not have a 
>cause of action here on that front, and would 
>need to find some other theory that supports a 
>lawsuit.  By contrast, breach of contract 
>litigation is fairly straightforward (not that 
>I'm supporting litigation before other forms of escalation are exhausted).
>
>We further may dictate in the bylaws that ICANN 
>has to give up the IANA function if decided by 
>this MRT and of course seal it by dictating that 
>these specific articles may only be changed with 
>the explicit consent of the MRT.”
>
>GS: Again, I'm not at all sure we can dictate in 
>the bylaws that ICANN has to "give up the IANA 
>function if decided by the MRT."  (By contrast, 
>it's quite clear that ICANN can enter into 
>enforceable obligation if it signs an agreement 
>with a third party.) But again, let's assume it 
>for the sake of argument.  In your scenario, it 
>is implicit that the right to perform the IANA 
>Functions is an inherent right of ICANN, not a 
>right granted to it by a third party.  So 
>instead of Contract Co. terminating an 
>agreement, we have the ICANN Board being 
>instructed to cause ICANN to cease part of its 
>services.  I am much more skeptical that this is 
>a realistic assumption, especially since it 
>could run counter to the fiduciary duty of the 
>Directors to ICANN.  (By contrast, I don't see 
>the MRT instructing Contract Co. to do something 
>counter to Contract Co.'s interests, given the 
>limited scope and purpose of Contract Co.)  But 
>let's go on.  The concept of ICANN "giving up" 
>the IANA functions is quite nebulous.  Since 
>it's an inherent right of ICANN's, ICANN would 
>have to run the RFP to find the next IANA 
>Functions Operator.  Are you assuming that the 
>MRT will do this as well, rather than ICANN? 
>That seems like another big assumption.  And 
>what exactly would ICANN be transferring?  If it 
>is an asset of ICANN, it may expect compensation 
>for it (indeed there could be fiduciary duty 
>issues if the Board "gives it away."
>
>Also, once the IANA Functions are transferred 
>away from ICANN, how will oversight and 
>accountability continue (since all of the 
>oversight and accountability is 
>"internal-to-ICANN") -- this seems like quite a 
>big issue in terms of "separability," 
>actually.  Will the new IANA be required by the 
>RFP to amend its bylaws and replicate the MRT 
>and the CSC and the IAP (and the IRB) to match the current set-up?
>
>Another big difference (and I think a 
>disadvantage) is that there is no periodic 
>expiration of the IANA Contract, with the 
>implicit or explicit promise of an RFP or at 
>least a re-examination of the terms of the 
>agreement.  In essence, this now becomes ICANN's 
>right in perpetuity, unless it fails to properly 
>perform the IANA Functions in a very significant and ongoing way.
>
>Finally, while there are ways to limit bylaw 
>changes that i am aware of under US law (e.g., 
>supermajority voting combined with board 
>structuring), I really don't think that this 
>power can be put into the hands of the MRT 
>without a host of other governance changes to 
>ICANN.  Of course, without research I can't be 
>sure, and it may be that some significant 
>reworking of ICANN's overall Board and 
>governance structure could elicit this 
>result.  But that would require further research and consideration.
>
>Overall, this seems a lot more complex and 
>uncertain than the set-up in the Draft 
>Proposal.  This also does not deal with 
>operational aspects of replacing NTIA.  In 
>addition to an MRT-like structure, are you also 
>assuming a CSC-like structure to provide basic 
>operational oversight of the IANA Functions and 
>an Appeals Panel for disputes regarding how the 
>IANA Functions are carried out?  If so, there's 
>no real advantage in terms of the level of 
>complexity (and probably a disadvantage, at 
>that).  In any event, any proposal has to deal 
>with more than just separability.

AG:
Perhaps it is time for us to stop talking about 
what we think might not be possible (as the above 
paragraphs do several times) and get some facts.

ICANN regularly accepts the concept that an 
external body can tell it exactly what to do - 
many of its contracts specify binding arbitration 
which leave the ICANN Board with no wriggle room. 
ICANN considers this preferable to litigation, 
and it accepts the consequences that it will be 
bound to honour what an external party dictates.

I actually have faith that the Accountability 
CCWG can come up with effective accountability 
measures that ICANN will be obliged to accept if 
it is exchange for keeping the IANA function.


>I know it is (still) very rough and I directly 
>agree that separating the IANA function will in 
>a legal sense probably be a lot more difficult, 
>I think it would be possible under my legal system at home.
>
>GS:  I am not sure that this is impossible, but 
>there are a number of very fundamental "ifs" and 
>assumptions here that seem to make this 
>speculative and uncertain in the extreme, with 
>no virtue other than to be 
>"internal-to-ICANN."  I also don't see the 
>advantages of this set-up, but perhaps I am missing something.

AG:
Then we agree to disagree. I see stability, 
working with a known entity, lower costs 
(potentially a LOT lower) and not adding 
significant complexity and processes as being a 
large benefit. I see not having to deal with 
lawsuits over failed RFP bids to take the IANA 
contract as a benefit (in many cases, suing after 
a failed bid is almost automatic. I value a 
higher degree of certainty that the three core 
IANA functions will stay together instead of 
being fractured as the result of mandatory RFPs. I could go on.

Alan


>Greg
>
>Appreciate your response.
>
>Best,
>
>Maarten
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