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The Irritating Irresolution of ICANN Jurisdiction

Philip S. Corwin

The ICANN community review and Board approval of the draft Bylaws intended to implement the Work Stream 1 (WS1) recommendations of the Cross-Community Working Group on Accountability (CCWG-ACCT) are nearing completion. As we approach that marker, it is worth remembering that a major impetus for the approaching transition of IANA functions control away from the U.S. Government (USG) to the multistakeholder community was the notion that termination of the remaining "clerical function" performed by the USG within the context of the current IANA contract would dampen criticism of ICANN's relationship with the USG and increase support for its multistakeholder model (MSM) — in which governments play a complementary, advisory role to business, academic, and civil society actors.

However, even as the transition draws closer, ICANN's continued status as a non-profit corporation subject to U.S. law — its jurisdictional locus — is rapidly replacing the IANA contract as the new focus for displeasure by those who would have ICANN relocate to another jurisdiction — or even be transformed into a multilateral international intergovernmental organization (IGO), an outcome specifically prohibited under NTIA's approval criteria. The resolution of this extended debate will have profound ramifications for the future viability of the MSM of Internet Governance (IG), as well as for Internet speech free from governmental interference exercised from the top level of the domain name system (DNS). Until this matter is resolved with finality it will remain a scab to be constantly picked at, always threatening to become a festering sore on the body politic of IG.

For those not inclined to wade through the full 10,688-words version [PDF], the following sums up the gist.

Synopsis

One of the key selling points for NTIA's decision to relinquish its residual clerical role of reviewing and approving ICANN's proposals for DNS root zone changes — a role performed in the context of the current arrangement whereby ICANN contractually coordinates IANA root zone functions, and one that the USG has never used to block a proposed change — was that the "irritation" resulting from that residual U.S. contractual relationship with ICANN discouraged broader embrace of the MSM by a middle group of nation-states.

However, despite the fact that ICANN has been a California non-profit corporation subject to U.S. law since its creation in 1998, its U.S. jurisdictional locus is replacing the IANA contract as a source of similar "irritation" as the impending fall 2016 transition of control from NTIA to stakeholders draws closer.

The revised Bylaws that will accompany the transition send a very mixed message on jurisdiction. On one hand, the overall accountability plan is geared to function optimally within the framework of California non-profit law. The new Empowered Community (EC) that will exercise accountability powers, and the Post-Transition ICANN (PTI) that will perform root zone functions, are both required to be chartered as separate California non-profit entities. Further, those requirements are both found within Fundamental Bylaws that require a higher threshold for amendment, and with any such amendment required to be communicated to the California Secretary of State.

On the other hand, the current Bylaws provision that requires ICANN to maintain its principal office in Los Angeles County has not been made a Fundamental Bylaw, leaving it more vulnerable to change. Additionally, although the revised Bylaws now include the three periodic reviews required under the 2009 Affirmation of Commitments (AOC) between ICANN and the U.S. (in contemplation of the likely termination of that agreement), they fail to incorporate the AOC requirement that ICANN itself remain a non-profit corporation headquartered in the U.S. That absence was a conscious decision of the CCWG-ACCT, where members who attempted to settle the jurisdictional question of ICANN's permanent locus were countered by others who maintained that it was not a core issue to be settled pre-transition, and should remain open for further discussion and decision-making.

Those are the results of WS1 of the Accountability process. WS2 includes a continued discussion of jurisdiction — and an explanatory Annex to the Accountability Proposal makes clear that consideration of the place of ICANN's incorporation, and potential alternatives, will be in order.

Meanwhile, developments in various multinational forums illustrate that the issue of jurisdiction has replaced that of the IANA contract for nation-states and other entities that wish to see ICANN change the locus of its jurisdiction — or even have the IANA functions transferred to an IGO (e.g., the ITU), or have ICANN take on that organizational guise.

It is in this political context that leaving ICANN's jurisdiction open for continued debate creates a possibility for dangerous mischief, given that increased governmental control over the coordination of IP addresses and DNS resources would confer accompanying control over the offering of Internet services, and that in turn can abet pervasive information censorship.

The issue is also surfacing within the context of U.S. politics. Congressional appropriators are threatening to extend a spending ban on facilitation of the IANA transition, and Senators are requesting that the NTIA delay relinquishment of U.S. control until the transition and accountability framework can be road tested — and WS2 issues, including ICANN's permanent jurisdiction, are resolved.

While it is too late to close out the jurisdiction debate in WS 1, this matter should be concluded as soon as possible in WS2 through adoption of a Fundamental Bylaw that commits ICANN to remaining a California non-profit corporation headquartered in the U.S. Such a resolution would be consistent with the existing requirements for the EC and PTI, and with the overall contextual framework of the accountability plan. It would also embrace ICANN's historic roots — and recognize the U.S. as a jurisdiction in which the rule of law can be relied upon and which, most importantly, is firmly committed against governmental information censorship by the First Amendment of its Constitution.

Conclusion: The Jurisdictional Debate Needs Near-Term Resolution

So has the impending extinguishment of the IANA functions contract between ICANN and the USG, and the transition of the IANA functions to control of the multistakeholder community (to the extent it is embodied within ICANN), lessened the "irritation?" As this article documents, several proposed revisions of ICANN's Bylaws enmesh it more deeply within ICANN's framework of California nonprofit business association law, and thereby U.S. jurisdiction. At the same time, rather than logically and decisively resolving the question of ICANN's permanent grounding in U.S. jurisdiction and law, the CCWG-ACCT kicked the can down the road by retaining the issue of jurisdiction as a matter to be further addressed in WS2, without in any decisive way limiting what jurisdictional matters remained to be settled by taking ICANN's own jurisdictional locus off the table.

For the sake of legal clarity and organizational stability, it is incumbent upon WS2 participants to resolve this matter as soon as feasible — and to come down decisively in favor of a permanent link between ICANN and U.S. jurisdiction. If this were a matter of first impression then impartial consideration of an alternative national jurisdiction might be in order. But it is a not a matter of first impression, and multiple factors weigh in favor of enshrining ICANN's permanent status as a California non-profit corporation in a Fundamental Bylaw:

  • ICANN has embodied California non-profit status since its founding in 1998
  • With the EC and PTI required to be California non-profits by revised Fundamental Bylaws, an inconsistent status for ICANN itself could raise confounding legal and policy issues for both accountability and control
  • The accountability plan has been designed to be maximally effective in the context of California law
  • The U.S. legal system is well regarded for its dedication to objective determinations under the rule of law
  • Perhaps most importantly, the First Amendment of the U.S. Constitution guarantees that the U.S. government cannot take actions that would coerce ICANN into using its root zone control to abridge free speech.

Reaching final resolution on the jurisdictional question will be no easy task. The ICANN community makes decisions on the basis of consensus, which translates into a determined and vocal minority being able to exercise effective veto power over the will of a majority (noting that this author is no way prejudging whether the majority of ICANN stakeholders, who are not from the U.S., would press hard for a Bylaws change locking ICANN into U.S. jurisdiction on a permanent basis). ICANN's Board has not demonstrated any inclination to fight for much beyond preservation of its own powers and prerogatives, and would likely be unwilling to confront a sizeable segment of the community and GAC opposed to final settlement on U.S. jurisdiction when those same actors could someday be deciding on the ejection of one or more Board members for official acts.

So the inclination will be to keep kicking the jurisdictional can down the road. But the problem with that approach is that the MSM is only compatible with a nonprofit public benefit organization akin to ICANN, and such an organization must be grounded in some national jurisdiction, as the alternative is an IGO — an outcome specifically rejected by NTIA evaluative criteria. So long as the question remains unresolved, ICANN's U.S. jurisdiction, despite the fact that it makes the most sense for the many reasons cited above, will be cited as a cause of "irritation" by all the forces who would prefer to see ICANN's root zone control transferred to a multilateral IGO, where it could then be politicized and employed for censorship and other nefarious purposes. Of course the same parties will be equally, if not more, critical if U.S. headquarters and jurisdiction are enshrined in a Fundamental Bylaw — but taking that step will at least make it much more difficult for them to further the goal of governmental dominance of IG in the DNS context.

It is most unfortunate that WS1 did not resolve the critical matter of ICANN jurisdiction. The only way to ensure that ICANN does not devolve into an IGO is to enshrine ICANN's permanent status as a California non-profit in a Fundamental Bylaw during the course of WS2. That would not only be consistent with one of NTIA's key principles but is the only means to assure that business, civil society, and the technical and academic sectors remain the stakeholders in charge of the critical root zone functions — rather than have them fall under the sway of governments, with all the dangers that would accompany a future transition of ICANN's status from the MSM to an IGO.

By Philip S. Corwin, Founding Principal of Virtualaw LLC, a Washington, DC Law and Public Policy Firm He also serves as Of Counsel to the IP-centric law firm of Greenberg & Lieberman. Views expressed in this article are solely his own. Visit Page
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There are some other concerns as well Karl Auerbach  –  May 24, 2016 1:42 PM PDT

There are some other concerns that you did not mention.

First is that ICANN now has some large financial assets.  Any unusual transmogrification of ICANN would raise issues of how those assets can be transferred, particularly given that ICANN-of-today has tax exempt status under US Federal (501(c)(3)) and California law.

ICANN is also at the apex of a large pyramid of contractual relationships.  One of the presumptions in those contexts is the applicability of California law to those contracts.  If ICANN were to re-cast itself it might be necessary to re-negotiate those contracts (and raising the question of whether one non-re-negotiated contract could be a veto.)

>>raising the question of whether one non-re-negotiated Charles Christopher  –  May 25, 2016 4:48 PM PDT

>>raising the question of whether one non-re-negotiated contract could be a veto.

I do not recall the last time ICANN sent us a voting email that contained the option to vote no. They only ever give us the option to vote yes. Email reminders to vote continue until the needed yes votes (in the absence of no votes) are achieved.

There will be no possibility of a "veto".

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