Is ICANN Staff Misleading the Board Into Violating Contractual Obligations to the U.S. Government?
Recently, I had time to reflect on various matters after the alternator in my vehicle decided that the middle of a mountain pass was the appropriate time and place to go to that great big pick-and-pull scrapyard in the sky while leaving me stranded with no cell signal on the side of the road in the middle of nowhere. Until that point, I had been seriously considering applying to ICANN’s Nominating Committee for one of the three open seats on ICANN’s Board of Directors. My motor vehicle misadventure helped me see that doing so would be voluntarily signing up for the same sort of predicament which I had found myself involuntarily subjected to.
Understanding what I mean requires a brief but simple thought exercise that contrasts two different actions of the ICANN Board — one of which was taken under proverbial klieg lights of scrutiny that was conducted by the public and California’s Attorney General and another which was perpetrated behind an opaque veil.
The first, of course, is the Board’s rejection of the Internet Society’s (ISOC) attempted billion-dollar .org sale to Ethos Capital, a private equity firm with undisclosed investors and involving several former senior ICANN executives, including former ICANN CEO Fadi Chehade, who was initially billed as a consultant but was later revealed to be co-CEO of Ethos after the attempted acquisition was eighty-sixed.
The second, which has been the subject of almost no scrutiny whatsoever, is the ICANN board’s approval of the Second Amendment to the .com Registry Agreement on March 14, 2019 in Kobe, Japan. This Amendment — which ignores both standard practice and the formal advice of ICANN’s own Intellectual Property Constituency — would arbitrarily allow Verisign to auction off o.com to the highest bidder with the proceeds being distributed to a now-redacted list of non-profit organizations by a trustee that is hired and fired solely by Verisign. ICANN’s board voted to approve Verisign’s proposal during a pro forma vote on a package of items that, as I’ve noted previously, several board members had no recollection of ever considering. On June 3, 2019, a mere three months after this highly consequential board vote, I wrote:
ICANN's questionably selective deal-making capabilities became even more suspicious when VeriSign's O.COM proposal was approved by the ICANN Board in Kobe, Japan during a March 14, 2019 vote on a consent agenda — essentially a package of items represented as non-controversial and pro forma. Suspicion turned to alarm upon discovering — during discussions with multiple Board members — that they appeared not to be aware that they had voted to approve a proposal for O.COM nor did they have any understanding of the outstanding issues of controversy and concern related to O.COM.
I have previously and extensively documented the seriously wrong nature of the Second Amendment to the .com Registry Agreement and I won’t rehash those issues here. However, what most fail to realize — and what the Board seems to have overlooked entirely — is that, with the single-character .com labels, ICANN is violating contractual promises and obligations to the U.S. government. This is because of a little-known licensing agreement between the U.S. Department of Commerce and ICANN for the use of the InterNIC® trademark. Section 14 of this licensing agreement states that:
This License is intended to coexist with other written agreements between the parties, including the Memorandum of Understanding. This License sets forth and contains the entirety of representations, understandings, and agreements of the parties hereto and merges all prior representations, understandings, and agreements with respect to this License.
The referenced Memorandum of Understanding (MOU) was the vehicle by which the U.S. government delegated to ICANN the responsibilities for overseeing the technical management of the Internet’s Domain Name System (DNS). This agreement itself expired in September 2009 and the base InterNIC® licensing agreement was originally intended to be coterminous with it. But the licensing agreement — with all of the merged prior representations, understandings, and agreements that include the MOU — has been extended twice by mutual consent, most recently until January 2025.
These merged prior agreements include Section D of the MOU, helpfully titled Prohibitions, which affirms, “ICANN shall not act as a domain name Registry or Registrar or IP Address Registry in competition with entities affected by the plan developed under this Agreement” (emphasis added). But despite this long-standing prohibition, ICANN’s own iana.org website states that, “We act as both the registrant and registrar for a select number of domains which have been reserved under policy grounds” (emphasis added). ICANN’s impropriety is corroborated by a simple WHOIS search that reveals o.com and most of the other single-character .com labels are registered in the name of IANA — which is either a department of ICANN or a wholly-owned subsidiary of ICANN, depending on which blend of hocus-pocus you choose to subscribe to.
By failing to release these single-character .com labels, ICANN is violating its agreements with the U.S. government to which it remains bound. Presumably, the ICANN Board isn’t aware of this and ICANN org staff and lawyers don’t appear to have bothered to tell them.
But ICANN isn’t just passively holding these single-character .com registrations — which, itself, violates commitments to the U.S. government — it is also actively trying to sell them and, in order to do so, has approved an amendment proposed by Verisign that likely violates the NTIA-Verisign Cooperative Agreement. This is especially problematic because, according to Amendment 3 of the MOU:
…in the event of any inconsistency between the terms of (1) the .com Registry agreement ... and (2) Cooperative Agreement NCR-9218742 between the DoC and VeriSign, ... the Cooperative Agreement shall take precedence ....
Therefore, pursuant to this extant contractual obligation, ICANN is also bound to observe and defer to the terms of the NTIA-Verisign Cooperative Agreement. However, it has failed to do so and, in fact, ICANN and Verisign have already amended the .com registry agreement to permit the o.com auction while NTIA recently raised objections to the planned auction precisely because of concerns that it would violate the Cooperative Agreement.
The stark contrast revealed by the .org and o.com episodes is easily explained: the former received public and regulatory scrutiny and, consequently, the board of directors did their job while, in the latter, there was no scrutiny and, as a result, ICANN board members allowed ICANN org staff and attorneys to lead them around by the nose before voting to throw contractual obligations, IPC recommendations, standard procedure, the public interest and everybody except Verisign under the bus followed immediately by forgetting the whole thing. This is slightly surprising because at least one board member should be expected to know everything that I’ve laid out here considering that the MOU was originally signed by then-Associate Administrator of NTIA and current ICANN board member Becky Burr.
Reviewing all of this, it is nearly impossible to conclude differently than Justin Lepp did in a 2012 paper, “ICANN’s Escape From Antitrust Liability,” which said:
Courts should look past ICANN’s maze-like organizational structure and its complicated relationship with the U.S. government and examine its conduct like any other private entity. If scrutinized properly, ICANN will be more likely to effectively promote competition in the domain name market—an objective it shares with the antitrust laws.
For those who are contented to sit stalled on the side of the road and with all communication cut off, a seat on the ICANN board may be ideal. For the most part and for a little while, it is probably safe inside the bubble of a disabled vehicle, if a bit unsatisfying. But remaining too long becomes risky because of the increased probability of being struck by another vehicle and other unlucky possible events — in other words, becoming a victim of circumstances.
But this isn’t about a broken down vehicle, this is about governance of the technical management of the global Internet’s root. It seems to be forgotten that we are endowed by our Creator with inalienable rights of individual agency and self-determination that also are sacred obligations to ourselves and each other. Governance that is of the people, by the people, and for the people isn't sustainable when these obligations aren't faithfully carried out, particularly when it's a fundamental matter of right and wrong. The Internet isn't just a global communications medium or an interoperable network of networks — it is an extension of humanity and the manifestation of a new digital realm forged in the furnace and ferment of human ingenuity.
In a 1946 speech at Westminster College to an audience that included President Harry Truman, Sir Winston Churchill observed that, “(f)rom Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the Continent.” Churchill was describing a formidable wall of Soviet armor that tangibly sequestered Central and Eastern Europe from the rest of the Continent, but also the ambiguous yet palpable border separating the free world of the West from Soviet tyranny in the East.
Similarly, today, a digital curtain increasingly is dividing humanity into distinct spheres — an invisible frontier of uneasy coexistence separating irreconcilable philosophies of being human. Engineered with 1’s and 0’s, this instrument of 21st century repression is deployed in a renewed campaign of the ancient war between tyranny and freedom. In the 20th century, tyrants were constrained by a preoccupation with territorial occupation — Nazi Germany’s quest for Lebensraum, for example, or the Soviet Union’s paranoid obsession with a defensive buffer against attacks from the West.
The modern totalitarian aspires to dominion over the provinces of the mind and threatens free people by seeking the extinguishment of Liberty underneath shackles of dependency. This form of domination requires the severing of familial and fraternal bonds while pursuing absolute control of the bits and bytes of information that form the lens through which we perceive reality.
A weaponized mix of propaganda and censorship, therefore, has replaced nuclear-tipped ICBMs as the preferred tool for subjugation. Apathy is an essential precondition for totalitarian control, but rather than fearsome nightmares of mushroom clouds and nuclear winter, the evidence of totalitarian aggression will be erased almost as quickly as it is made so that what is left will appear to be the same as before but, in real life, is entirely different.
This is what’s at stake — whether ICANN, its staff, board, or global multistakeholder community can realize it or not, the barbarians are at the gate and the bulwarks which we have depended on have become corrupted and are rotting from within, aided and abetted by apathy and the wholesale substitution of self-interest for the public interest.
Enough is enough.
This is not their Internet — this is our Internet. Tomorrow, more than a billion people worldwide will celebrate a resurrection — the restoration of life — as a symbol of revival and hope. In a similar vein, we can and must demand better from ICANN and those who serve the public interest — there’s not a moment to spare.