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Court of Appeals Avoids "Doomsday Effect" in Iran ccTLD Decision

Philip S. Corwin

Earlier today the U.S. Court of Appeals for the DC Circuit issued its decision in Weinstein vs. Iran, a case in which families of terror victims sought to have ICANN turn over control of Iran's .IR ccTLD to plaintiffs. In a unanimous decision the three judge panel stated, "On ICANN's motion, the district court quashed the writs, finding the data unattachable under District of Columbia (D.C.) law. We affirm the district court but on alternative grounds."

In reaching its decision, the Court opined (but did not decide) that a top level domain constitutes an attachable property interest. Nonetheless, the Court used its statutory authority to avoid a result that could have led to a "doomsday effect" for ICANN and all Internet users by creating technical instability in the DNS, as well as undermining confidence in ICANN and possibly leading to an end of voluntary participation in its root zone by many entities, who might then go on to establish an alternate DNS and thereby "split the root".

In my view, this result avoids the possibility of a major erosion of confidence and participation in ICANN by ccTLD operators by making clear that a respected Court of Appeals in the U.S. possesses adequate technical understanding of the DNS to avoid a legal decision that could lead to technical and political instability — many nations would not wish to continue in a DNS coordinated by a U.S. non-profit corporation if it could be ordered by a U.S. court to transfer control of any nation's ccTLD. This decision will also hopefully tamp down calls by some parties for ICANN's place of incorporation to be moved outside of the U.S. by demonstrating that ICANN's jurisdiction does not create a threat to other nation's ccTLDs. Remaining jurisdiction issues will be addressed in work stream 2 of ICANN's ongoing accountability process.

While the plaintiffs could seek Supreme Court review of the decision, the Supreme Court would likely be unwilling to take the case given the rarity of the legal question it presented, and the lack of any split in Circuit Court decisions on it.

The operative portion of the decision states:

We assume without deciding that the ccTLDs the plaintiffs seek constitute "property" under the FSIA and, further, that the defendant sovereigns have some attachable ownership interest in them. Nonetheless, pursuant to the terrorist activity exception, the court has the "authority" to "prevent appropriately the impairment of an interest held by a person who is not liable in the action giving rise to a judgment" — i.e., we are expressly authorized to protect the interests of ICANN and other entities. 28 U.S.C. § 1610(g)(3). Because of the enormous third-party interests at stake — and because there is no way to execute on the plaintiffs' judgments without impairing those interests — we cannot permit attachment.

The plaintiffs demand, in effect, that ICANN delegate management of the ".ir" ccTLD28 so that they can "sell or license the operation of the ccTLD[] to a third party." Appellants' Reply Br. at 26. As explained, the power to operate a ccTLD includes the power to register (or remove) domain names from that registry. Thus, an entity seeking a ".ir" domain name will have to register through the plaintiffs or their designee — a process in which the ccTLD manager can extract a fee. The plaintiffs' plan plainly impairs the interests of "person[s] who [are] not liable in the action giving rise to [the] judgment" in myriad ways. 18 U.S.C. § 1610(g).

First, requiring ICANN to delegate ".ir" to the plaintiffs would bypass ICANN's process for ccTLD delegation, which includes ensuring that the incoming manager has technical competence and a commitment to serving the Iranian Internet community's interests. The plaintiffs and, more importantly, their prospective designee may not possess that technical competence or commitment. Granted, the plaintiffs are "aware that the . . . court can — and should — protect the interests of third parties" and they "welcome the opportunity to work together with the district court and ICANN to ensure a smooth transition." Appellants' Reply Br. at 26. But even if the plaintiffs are able to show adequate competence and commitment, the act of forced delegation itself impairs ICANN's interest in "protect[ing] the stability . . . [and] interoperability . . . of the DNS." Decl. of John O. Jeffrey, App'x 24.2 ¶ 5.

Recall that a change in the root zone file will only affect the routing of a search for ".ir." But a change in the root zone file does not also transfer the information stored on the ccTLD server. To ensure that any delegation occurs seamlessly, ICANN requires that the incoming manager provide a plan to preserve the stability of the ccTLD, which plan explains how existing registrants will be affected. According to ICANN, the current ccTLD managers in the defendant countries will not voluntarily transfer information regarding their registrants and, because the relevant servers are located abroad, we are powerless to so require them. If ICANN is required to direct an end-user looking for ".ir" web pages to the plaintiffs' server but the plaintiffs are unable to direct them to the requested SLD, the Internet's stability and interoperability are undermined.

The impairment does not end there. As the plaintiffs recognize, ICANN occupies its position only because "the global community allows it to play that role." Appellants' Br. at 34 (emphasis added). "[T]he operators of . . . top level domains" can "form a competitor to ICANN and agree to refer all DNS traffic to a new root zone directory." Id.; see also Br. for United States as Amicus Curiae at 13 ("As a technological matter, nothing prevents an entity outside the United States from publishing its own root zone file and persuading the operators of the Internet's name servers to treat that version as authoritative instead."). This result, known as "splitting the root," is widely viewed as a potentially disastrous development; indeed, some regard it as the beginning of "ultimate collapse of Internet stability" — a "doomsday scenario for the globally accessible" network and, thus, for ICANN. Harold Feld, Structured to Fail: ICANN and the 'Privatization' Experiment, in WHO RULES THE NET?: INTERNET GOVERNANCE AND JURISDICTION 351 (Cato Inst. 2003). Whether that description of a split root is accurate need not concern us; ICANN's interests, as a third party "not liable in the action giving rise to [the] judgment," 18 U.S.C. § 1610(g)(3), are sufficient for us to protect them pursuant to section 1610(g)(3) of the FSIA. See Appellee's Br. at 34 ("[F]orced re-delegation of the Subject ccTLDs would . . . wreak havoc on the domain name system."); see also Br. for United States as Amicus Curiae at 13 ("[T]he result would be devastating for ICANN, for the [current] model of Internet governance, and for the freedom and stability of the Internet as a whole.").

But given that the ICANN-administered DNS is the beneficiary of substantial network effects, how could such a doomsday scenario arise? And why would forced delegation hasten its arrival? In light of the plaintiffs' recognition that ICANN's control "stems only from the fact that the global community allows it to play that role," Appellants' Br. at 34, and considering that the delegation of the three defendant sovereigns' ccTLDs could likely antagonize the global community, see Br. for United States as Amicus Curiae at 13 ("It is not difficult to imagine that a court-ordered change to the authoritative root zone file at the behest of private plaintiffs would prompt members of the global Internet community to turn their backs on ICANN for good."), we believe the doomsday scenario is not beyond imagining.

For the foregoing reasons, the judgment of the district court is affirmed. (Emphasis added)

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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Good summary but one quibble Greg Shatan  –  Aug 02, 2016 9:23 PM PST

Phil,

Good summary of the outcome of the case, and an interesting outcome it is. One quibble with the article: you state that "the Court opined (but did not decide) that a top level domain constitutes an attachable property interest." As I read it, the Court neatly avoided opining on this issue.  The Opinion states, "We assume without deciding that the ccTLDs the plaintiffs seek constitute "property" under the FSIA." The court needed to make this assumption in order to get to their holding on third party interests.  The Court makes several of these "assume without deciding" statements.  If the Court doesn't assume for the sake of the decision that there is attachable property at issue, they can't reach the issue of whether third party interests (in avoiding "doomsday") outweigh the interests of the plaintiffs.

But the Court is clear that these are just assumptions for the sake of argument (as they as the Court says at one point, they are "assuming arguendo") and are not in anything that the Court has decided is true (or has decided at all).  As such this is nothing the Court opined — it's really a statement without any weight; just a means to an end. 

It's probably fair to say that the lower court decision that ccTLDs are not attachable property still stands, since that ruling was overturned on other grounds.  Of course, that does not apply outside of the geographical area where that district court's ruling applies.

Not that big a quibble Philip S. Corwin  –  Aug 03, 2016 5:33 AM PST

Greg:
Thanks for the positive review of a hastily composed article. You are correct that the court expressed an assumption that a ccTLD constituted an attachable property interest, but did not decide that it was. While that assumption might be cited in a future case involving TLD matters it certainly has little to no weight. Further, courts might well decide that a nation's interest in its ccTLD, which is independent of any contractual relationship with ICANN, differentiates ccTLDs from gTLDs, which are dependent on being awarded such a contract by ICANN and can be lost if the registry operator commits a material breach of the registry agreement. Finally, whether or not ccTLDs or gTLDs constitute some type of property interest is a separate question from whether second level domains constitute a form of property.
So yes, it was a very interesting outcome but in no way determinative on the TLD as property issue.
Best, Philip

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