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For ICANN, a New Path Toward an Old Goal

R. Shawn Gunnarson

The DNS White Paper has stood the test of time remarkably well. More than a decade after it was published, its principles of stability, competition, and private-sector-led DNS management remain the gold standard for DNS governance. ICANN is struggling to achieve that standard, however, and a dramatic change in direction may need to be considered.

ICANN's weaknesses are depriving it of the institutional confidence it needs. A broad consensus of ICANN constituents wants ICANN to continue striving for the principles laid out in the White Paper, as indicated by comments published during last year's evaluation of the Joint Project Agreement. But the same diverse body of constituents found that ICANN is falling considerably short of these principles by failing to develop sufficient accountability, transparency, and legitimacy. Comment after comment bemoaned these institutional weaknesses in terms that echo criticisms voiced since ICANN's beginnings. These criticisms mean, sadly, that after 12 years ICANN still does not hold the trust of the people and organizations that it serves.

Solving this problem without harming ICANN's capacity to act effectively has proven to be a daunting challenge. Some reform proposals won't work. Replacing supervision by the United States with supervision or control by a governmental organization, or by transforming ICANN itself into a governmental organization, would exacerbate ICANN's weaknesses by increasing the risk of bureaucratic sclerosis, capture, and corruption. ICANN needs institutional confidence to survive, but some changes might make matters worse.

In a new white paper [PDF], I propose a different solution. For ICANN to exemplify the principles set forth in the White Paper, its corporate structure should be reconfigured to ensure accountability. That new structure and ICANN's fundamental commitments should be reduced to a written charter and presented to a representative body of ICANN constituents for ratification.

This is the fresh start ICANN needs. For the first time, a genuinely representative group of constituents would consider ICANN's most basic governance document and vote as a body whether to adopt it. Democratic legitimacy would finally attach to ICANN's exercise of power over the Internet DNS. Obtaining the Internet community's consent to ICANN's continuing exercise of its unique powers would lend ICANN authority and enable it to maintain its independence.

Key provisions of the charter should include:

  • Limit ICANN's authority to the narrow mission of performing the technical management and coordination of the Internet DNS. ICANN's powers need to be held within the narrow technical purposes for which it was created to prevent mission creep, where ICANN tries to resolve matters over which it has no authority.
  • Put ICANN's core obligations from the Affirmation of Commitments into the Charter, to give those obligations greater permanency. Require ICANN to maintain the security and stability of the Internet DNS without qualification or trade-off.
  • Enumerate and check the powers of the board of directors. Board decisions need to be subject to reversal, not merely reconsideration. Board members should be bound by the charter and the (revised) bylaws and removable if unfaithful to them.
  • Remove the president as an ex officio member of the board of directors. Make him independent of the board, instead, with power to veto decisions that are manifestly inconsistent with the charter and bylaws.
  • Create corporate members of record, place directors under fiduciary duties to those members, and authorize the members as a body to remove any director found to have violated the charter or bylaws.
  • Restrain ICANN's budget growth to 10% per year and its net uncommitted assets to the total annual budget of four years before. Require excess revenues to be redistributed for infrastructure and security improvements, WHOIS and contract compliance, and remote meeting facilities and a travel allowance for participation in ICANN's meetings and proceedings by ICANN constituents from developing countries.
  • Establish a Board of Review with authority to adjudicate disputed decisions of the board of directors and to reverse them if repugnant to the charter or bylaws.
  • Make bylaws subject to amendment by a 2/3 vote of the board of directors and the charter subject to amendment by a 2/3 vote of all members of record.

Ratifying a charter with these attributes would strengthen ICANN's accountability, transparency, and legitimacy while achieving the principles on which it was founded. ICANN then would be more likely to develop the institutional confidence indispensable to its success.

A copy of the white paper, entitled "A Fresh Start for ICANN," is available here [PDF].

By R. Shawn Gunnarson, Attorney at Law, Kirton & McConkie
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Double the budget every 7 years is "restraint"? George Kirikos  –  Jun 02, 2010 12:56 PM PDT

When you wrote "restrain ICANN's budget growth to 10% per year", I had to laugh. If you think a budget that doubles every 7 years is "restraint", you should study economics instead of law. That's the kind of statement one of the 16 ICANN staffers making more than $200,000 per year would even be embarrassed to put into a charter so visibly, so transparently ravenous and greedy.

After reading that sentence, I'm not going to invest the time to read the white paper, sorry. I'm sure ICANN staff will put it on their Xmas wish-lists, though.

Restraint is relative R. Shawn Gunnarson  –  Jun 02, 2010 1:04 PM PDT

You're right that ICANN has been spending more than its core mission justifies.  That's one of the points I argue in the paper.  Ten percent might not be enough, but it would have prevented the tripling of ICANN's annual budget since 2005.  If the number 10 is too high, propose another.  Putting some cap on the budget is certainly an improvement over the status quo.  Don't you agree?

My least verbose comment ever? 3 letters.... George Kirikos  –  Jun 02, 2010 1:08 PM PDT

CPI

The soul of wit R. Shawn Gunnarson  –  Jun 02, 2010 1:22 PM PDT

Brevity itself, George.  But please explain why CPI rather than ICANN's actual cost in carrying out its core mission is the right benchmark.  ICANN's mission creep and its expanding budgets are directly related; the paper suggests that narrowing and hardening its mission statement is indispensable to making the organization more accountable.  How does that idea strike you as an indirect restraint on ICANN's finances?

Devil in details Michael Roberts  –  Jun 02, 2010 7:36 PM PDT

Maybe they are buried in the paper, but it would be useful to know:
- where would you establish the renovated ICANN's legal home, and how would this give it more flexibility than it has under Calif public benefit corporation law?  E.G., I know of no legal venue that allows Directors to surrender their fiduciary responsibilities to any entity that could reverse their decisions.
- how would you propose to vet and assign votes to members?  ICANN tried Internet voting once and it was a disaster.  ICANN has struggled since its beginning, with little success, to resolve the inherent conflicts of interest between and among registries, registrars, other DNS business interests, business users of the DNS, and the Internet public at large.

The details R. Shawn Gunnarson  –  Jun 03, 2010 9:08 AM PDT

Good questions, Michael.  ICANN's legal home would remain in California and its legal form would remain a public benefit not-for-profit corporation.  Directors would not surrender their fiduciary responsibilities: they would be legally bound to them.  Chief among those responsibilities would be fidelity to the charter and bylaws.  Rather than a free-floating "duty to act for the greater good," specific fiduciary duties would be owed by directors to members.  Members, acting as a body, would have a limited authority to reverse board decisions manifestly inconsistent with the charter or bylaws. No provision of California public benefit corporation law that I'm aware of specifically prohibits the arrangement I describe.  To the contrary, section 5310(a) authorizes the creation of corporate members--something ICANN has declined to do from the beginning--and section 5710 permits members to bring derivative actions.  A charter and bylaws placing directors under specific fiduciary responsibilities to members would be valid if adopted.

Determining the composition of the members presents a very tricky problem, as you point out.  My paper recommends that they be appointed by the governing boards of the various SOs and ACs, thereby keeping the corporate membership strongly representative without repeating the mistake of operating Internet-wide elections.

Do those details strike you as workable?

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