- Subject: [IFWP] ICANN NEWS UPDATE, 7-19-99: ICANN'S RESPONSE TO THE DEPARTMENT OF COMMERCE'S LETTER OF JULY 8
- From: "Sheffo, Joe" <jsheffo@alexanderogilvy.com>
- Date: Mon, 19 Jul 1999 15:03:21 -0700
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- Sender: owner-list@ifwp.org
July 19, 1999
J. Beckwith Burr
Associate Administrator
Office of International Affairs
U.S. Department of Commerce
Room 4701
1401 Constitution Avenue, N.W.
Washington, D.C. 20230
Dear Becky:
We received your letter of July 8, 1999, and very much
appreciate the kind words for ICANN's progress to date. As you are
fully aware, it is a significant challenge to create a global,
consensus-development body, not to mention one that is both effective
and consistent with the objectives of the White Paper. We think we
have made very significant progress, notwithstanding the obvious
difficulties, and we are pleased that you recognize and appreciate
the very hard work that has been required.
In this first six months, as we outlined in detail in our Status
Report, we have seen the beginnings of a working
consensus-development process. We are optimistic that once the ICANN
structure is completed and fully operational, it will be able to meet
the ambitious objectives set forth for it in the White Paper and the
Memorandum of Understanding.
In response to the four points that you identified as areas
where there was still room for improvement, we certainly accept the
fact that this process should improve as it matures; by definition, a
consensus-building process starts with discussion of different views,
and over time ideally produces convergence of those views into a
consensus. While the Board has not yet had the opportunity to
discuss all these issues in full detail, we have had a brief
discussion, and I believe I can fairly represent the general reaction
of the Board. The Board will no doubt be giving further attention to
some of these issues in the future, but let me offer this initial
response:
1. ICANN's top priority must be to complete the work necessary
to put in place an elected Board of Directors on a timely basis.
We agree completely with this point, and we have been working
diligently to accomplish this objective as soon as possible. This is
our highest priority, but given the bottom-up process for organizing
the Supporting Organizations and the complexities of the At Large
membership issue, it has not been possible to move as quickly as you
or we would have liked. Nevertheless, we have already publicly
stated that we expect the Supporting Organizations to elect their
Board members in time for them to be seated and active at ICANN's
Annual Meeting in Los Angeles in November. The election process for
selecting the At Large Directors is much more complicated, but now
that the Board has received the report of the Membership Advisory
Committee, the Board expects to begin to implement that process at
our meeting in Santiago. Our goal, which I know you share, is to
replace each and every one of the current Board members as soon as
possible, consistent with creating a process that minimizes the risk
of capture or election fraud and that will lead to a truly
representative Board.
2. ICANN should eliminate the $1 per-year, per-domain
registration user fee.
We have decided to defer the collection of the $1 registrar fee,
for the reasons set forth below. We have also decided to form a task
force of the DNS infrastructure entities -- the registries and
registrars with whom ICANN has or is likely to have contractual
relationships -- to recommend to ICANN and the Internet community a
fair and workable allocation of the funding necessary for ICANN cost
recovery.
This was a difficult decision to come to, since your suggestion
on this point raised a number of very significant issues. ICANN must
recover its costs, and while there are probably a variety of
cost-recovery formats that would work, this approach -- where the
competitive registrars participate in the cost-recovery process based
on the volume of their registrations -- seemed to the Internet
community a fair and workable way to spread the costs among the
registrars according to the benefits they are receiving from the
newly introduced competitive environment. It was adopted following a
thorough process of notice and comment, and was broadly supported by
a consensus of the community. We note that the Coalition of Domain
Name Registrars, a group consisting of most of the registrars that
would actually be responsible for paying those fees, has written to
Congress indicating that they have no objections to paying their fair
share of ICANN's costs in this way. Thus, we continue to believe
that this is a fair and appropriate way to spread the cost-recovery
burden.
We note that, in your responses to the questions asked of you by
the Commerce Committee, you agreed that this was a rational and
appropriate approach that was the result of full notice and comment,
was consistent with the White Paper, and was fully authorized by the
Memorandum of Understanding. Nevertheless, you suggest that, because
it has become controversial, we should suspend this approach until
there are elected Board members. Of course, many issues dealt with
by this Board are controversial, including most of the duties
described in the White Paper and the MOU. If they were not
controversial, there would be little need for a consensus-development
organization like ICANN.
The construction of ICANN cannot be completed without funding.
Clearly we need a stable financing mechanism for ICANN's necessary
functions -- including the costs that will be required to create and
implement an At Large election system that will produce a broadly
representative elected Board. The United States Government has asked
us to do an important job, but it has not provided the means by which
to carry it out, leaving the job of providing funds to the Internet
community itself. To date, ICANN has relied on voluntary donations,
and a number of people and organizations have been very generous.
But this is neither an equitable way to allocate the recovery of
costs nor a process that can work for more than a relatively short
period, given the range of tasks requested of ICANN. Thus, if ICANN
is to continue, it is simply not possible to abandon the
cost-recovery mechanism that has been produced by the
consensus-development process and replace it with nothing.
Given this serious conflict between your request and the reality
that ICANN must have funding in order to do the work that you and the
rest of the Internet community want it to do, we have struggled to
determine an appropriate response to your request. We have decided
to defer the collection of the registrar fee, and to create a task
force consisting of those entities that make up the DNS
infrastructure -- the name registries, the address registries, and
the registrars -- to review the options for fair and workable
cost-recovery mechanisms, and to provide its recommendations for how
to deal with this problem by October 1, 1999, with an interim report
(if possible) prior to the Santiago meeting in late August. We will
then post those recommendations for public comment, so that the Board
(which will then consist of a full complement of 19) will be able to
consider those recommendations at its November Annual Meeting.
Unfortunately, this approach does not deal with ICANN's
immediate financial problem. If the United States Government is
serious about the progress that ICANN has made and its desire to see
this process mature, short-term funding must be made available
quickly. We urge you to do everything possible to help solve this
problem.
3. ICANN should immediately open its Board Meetings to the
public.
We understand the circumstances that prompted this suggestion,
and we have again struggled to determine the appropriate response.
ICANN is supposed to be a global, consensus-driven entity. We do not
see a global consensus demanding that ICANN hold all its meetings in
public, although there clearly is controversy. Thus, the
determination to adopt this suggestion cannot be based on ICANN's
identification of an Internet community consensus. Nevertheless, we
will hold the Santiago Board meeting as a public meeting, for the
reasons set forth below.
The Board believes very strongly that it has carried out its
responsibilities transparently, recognizing community consensus when
it exists and encouraging its development when it does not, and all
in full view of the global public. The agendas of its meetings are
posted in advance of each meeting; at each quarterly meeting, the
agenda is open for full public discussion in advance; any resolutions
adopted by the Board or decisions taken are announced and released
immediately following those decisions; and the full minutes of every
Board meeting are posted for public review. The Board takes care to
engage in public discussions of its efforts; it both encourages and
considers public input, and fully discloses its own decision-making
criteria.
The only Board activity not now fully public is the interaction
between it and its staff, and the discussion among the Board members
of those staff recommendations, at the exact time that it happens --
since the full minutes of that interchange, of course, are posted
publicly shortly after the meeting. Several members of the Board
feel strongly that the ability to have private discussions with staff
and other Board members is a very important contribution to the fact
that, with only one exception, every decision by this Board has been
unanimous. This Board personifies effective consensus
decision-making, and many of its members feel that losing the ability
to discuss matters in decisional meetings in private will adversely
affect the candor of those discussions, and potentially the ability
to come to working consensus quickly, especially on some of the very
complicated issues that remain for this Board to deal with.
Nevertheless, it is clear that this issue has taken on great
political significance. It has become a distraction that interferes
with dealing with the significant challenges that ICANN has been
given responsibility for, and it threatens to delay the completion of
the consensus development process is ICANN's basic objective.
Therefore, we will hold the Santiago meeting as a public meeting, and
deal with all pending issues publicly (except for personnel or legal
matters, if any, that might require an executive session). Following
Santiago, nine elected Board members will join the current
complement, and we will defer to that full Board any decisions on
future meeting procedures, since the experience in Santiago will then
be available to inform their decisions. As you know, ICANN's bylaws
provide that the Annual Meeting (in Los Angeles in November) is a
public meeting.
4. There is concern in the Internet community about
over-regulation.
On this point, we certainly understand the concern, but it seems
misplaced, given the clear limitations in ICANN's articles and bylaws
on the scope of its permissible activities. It seems misplaced in
another respect as well: ICANN is nothing more than the reflection
of community consensus. It is, of course, theoretically possible
that such a consensus could develop around some proposed ICANN
position that others would regard as overly regulatory, but the
presumption in such a circumstance should be, we would imagine, that
the community consensus was by definition not "overly" regulatory.
Thus, to the extent some see this as a problem, it is easy to
deal with and we are happy to do so. It seems perfectly acceptable
to include in the various contracts with registrars and registries
language that says that no ICANN policy is being agreed to in those
contracts that is not fully consistent with, and reasonably related
to, the goals of ICANN as set forth in the White Paper, which are
replicated in ICANN's bylaws. We do not see that it actually changes
in any material way the legal rights of any parties to these
contracts -- which, after all, are themselves the subjects of both
the consensus development process and individual negotiations -- but
neither do we believe that it will interfere with any appropriate
objectives of the consensus development process. Therefore, we have
no problem making these representations, since they fully reflect
both the original concepts that gave birth to ICANN and this Board's
understanding of ICANN's proper role.
I hope this is responsive to both the letter and the spirit of
your suggestions. We certainly do appreciate the complexities of
this task -- even more so now than we did when we began this journey.
We do think we have made great progress despite significant (and to
some extent unexpected) obstacles, and we are glad to see that you
agree. We hope that we can, with your support and assistance, make
even faster progress in the future. This Board looks forward eagerly
to the day when it can tell you that it has completed its work
successfully.
Sincerely,
Esther Dyson