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

[Maarten Simon]

Hi Guru,

Interesting idea but until this moment my thinking did not go further than to give MRT the power to decide on this. I guess the basis for the existence of the MRT should be somewhere and I assume that in the internal to ICANN approach that basis should be in the bylaws of ICANN so that would fit sort of with your idea.

With regard to a later separation we currently have a number of options for example:

  *   leave it up to the MRT at the time that it comes up
  *   prescribe now what should happen (where your solution might be an option, or a contract co with the MRT in its bylaws (which we even could set-up already), or something completely different)
  *   do not prescribe now what should happen but only define the process the MRT has to follow to decide on what should happen.

I think I personally would opt for a combination where you leave it up to the MRT to decide but have at least one concretely worked out plan available so that the MRT may act (relatively) fast if necessary.

Best,

Maarten




From: Guru Acharya <gurcharya at gmail.com<mailto:gurcharya at gmail.com>>
Date: Thursday 11 December 2014 17:54
To: SIDN SIDN <maarten.simon at sidn.nl<mailto:maarten.simon at sidn.nl>>
Cc: Chuck Gomes <cgomes at verisign.com<mailto:cgomes at verisign.com>>, Alan Greenberg <alan.greenberg at mcgill.ca<mailto:alan.greenberg at mcgill.ca>>, Greg Shatan <gregshatanipc at gmail.com<mailto:gregshatanipc at gmail.com>>, "cwg-stewardship at icann.org<mailto:cwg-stewardship at icann.org>" <cwg-stewardship at icann.org<mailto:cwg-stewardship at icann.org>>
Subject: Re: [CWG-Stewardship] Strickling Remarks from 4 December re IANA Transition and Accountability

Hi Maarten,

In the internal-to-ICANN approach that you suggest, I talk about the scenario that the MRT orders/requires ICANN to give up IANA. I assume ICANN peacefully agrees to give up IANA. The MRT would select a new IANA operator through the RFP process. In this case, would there would be a IANA Functions Contract between the new IANA Functions Operator and MRT (legal vehicle for MRT being ICANN)? Would ICANN be allowed to compete in the RFP in the next round? Everytime ICANN wins the RFP, there is an internal-to-ICANN approach and everytime ICANN loses the RFP, there is a external contract approach? I am understanding you correctly?

Regards,
Guru

On Thu, Dec 11, 2014 at 10:09 PM, Maarten Simon <maarten.simon at sidn.nl<mailto:maarten.simon at sidn.nl>> wrote:
Hi Chuck,

I like to respond with regard to your first comment: see below

Best,

Maarten



From: Gomes, Chuck [mailto:cgomes at verisign.com<mailto:cgomes at verisign.com>]
Sent: donderdag 11 december 2014 16:29
To: Alan Greenberg; Greg Shatan; Maarten Simon
Cc: cwg-stewardship at icann.org<mailto:cwg-stewardship at icann.org>
Subject: RE: [CWG-Stewardship] Strickling Remarks from 4 December re IANA Transition and Accountability

Allan,

I want to comment on a few of the points you make in the exchange below.


1.       “. . . the ICANN board has a rather powerful reason for being flexible and accomodating”.  Am I correct that that reason is the risk of losing the IANA functions?  If so, I would agree but I would also point out that for that risk to be real it seems to me that there must be some entity that could reassign those functions.  For now that is NTIA.  What would it be if NTIA goes away?

MS: If the bylaws of ICANN would dictate so, the MRT could be given the authority to decide that ICANN has to give up the IANA function and hand it over to any new or existing structure MRT comes up with. The ICANN board (nor the community, nor the GAC) would not have any further say in this and ‘simply’ has to execute. This may sound unlikely but in fact works exactly the same as with the proposed Contract co. The board of the Contract co. will also have no say over the content of the contract, the contracted party or the term and termination of the contract and this will have to be arranged in its bylaws. If we seem to trust that the board of Contract co. will follow orders of the MRT (even in the far future) it is, I assume, because we think that we can find the legal measures to in the end if necessary force the board of Contract co. to do so. If that is possible within Contract co., and I guess we all count on that, I do not see why it than can’t be done (technically) within ICANN.


2.       “It is SO attractive to label ICANN as unchanging and inflexible, but current evidence does not bear that out.”  Can you share any cases where ICANN has been flexible about giving the Board the final say on a decision?

3.       “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 hope you are correct but I have serious doubts that that will happen unless there is a real risk of them losing the IANA functions and a refer back to 1 above.

Chuck



From:cwg-stewardship-bounces at icann.org<mailto:cwg-stewardship-bounces at icann.org> [mailto:cwg-stewardship-bounces at icann.org] On Behalf Of Alan Greenberg
Sent: Wednesday, December 10, 2014 9:32 PM
To: Greg Shatan; Maarten Simon
Cc: cwg-stewardship at icann.org<mailto:cwg-stewardship at icann.org>
Subject: Re: [CWG-Stewardship] Strickling Remarks from 4 December re IANA Transition and Accountability

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 <maarten.simon at sidn.nl<mailto: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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