Comments on Proposed IANA By Laws

["Jim Fleming" <JimFleming@unety.net>]

Dr. Jon Postel
University of Southern California
Information Sciences Institute
Suite 1001
4676 Admiralty Way
Marina del Rey, CA 90292 


Dear Dr. Postel:

I read with interest your proposed By Laws for a Nonprofit
Public Benefit Corporation. I am not sure that your proposed
company will be compatible with the United States Government's
Internal Revenue Service (IRS) code. You might want to get
a letter ruling from the IRS before your proceed or consider
forming a for-profit company. I suggest that you consult an
attorney regarding your proposed Corporation.

As you will note below, according to the IRS your proposed
company can not be "organized to engage in an activity ordinarily
carried on for profit". Several of the activities that you mention
in ARTICLE I: PURPOSES, are currently carried on by for profit
companies in the U.S. For example:

    1. "(ii) managing and performing functions related to the
    coordination of the Internet address space" is carried on
    by many ISPs and companies such as @Home which
    performs a similar function for the Cable TV industry.

    2. "(iii) managing and performing functions related to the
    coordination of the Internet domain name system, including
    overseeing policies for determining the circumstances under
    which new top-level domains are added to the root system;"
    is carried on by many of the Root Name Server operators
    around the world, many of whom are for-profit companies
    including the companies that operate eDNS, AURSC, etc.

    3. "(iv) overseeing operation of the authoritative Internet
    root server system;" is currently performed by Network
    Solutions Inc., a for-profit company that is publicly traded.
    Other for-profit companies are also involved, such as PSI Net
    and the Internet Software Consortium (ISC) appears to
    be converting from a non-profit to a for-profit operation.

You might want to consider whether these activities are essential
to your proposed corporation. They might be better handled
by for-profit companies. As specified by the IRS, non-profit
companies are not intended to compete with for-profit
companies, instead, they are supposed to be organized
to provide community services not normally supplied
by for-profit companies. Your proposed Corporation seems
to lack that sort of purpose, yet seeks the advantages of
the non-profit structure. I suggest that you carefully review
your proposal in the light of U.S. laws and tax codes.


Jim Fleming
Unir Corporation - http://www.unir.com



REFERENCE MATERIAL

@@@@@@@@ http://www.iana.org/bylaws.html

"ARTICLE I:  PURPOSES

     This corporation (the "Corporation") is established for the purposes
specified in its Articles of Incorporation.  These purposes include
maintaining the operational stability of the Internet by:  (i) coordinating
the assignment of Internet technical parameters as needed to maintain
universal connectivity on the Internet; (ii) managing and performing
functions related to the coordination of the Internet address space; (iii)
managing and performing functions related to the coordination of the
Internet domain name system, including overseeing policies for determining
the circumstances under which new top-level domains are added to the root
system; (iv) overseeing operation of the authoritative Internet root server
system; (v) engaging in any other lawful activity in furtherance of items
(i) through (iv); and (vi) engaging in any other lawful act or activity for
which a corporation may be organized under the Nonprofit Public Benefit
Corporation Law."

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

http://www.irs.ustreas.gov/prod/bus_info/eo/index.html

http://www.irs.ustreas.gov/prod/bus_info/eo/bus-orgs.html

@@@@ http://www.irs.ustreas.gov/prod/bus_info/eo/bl-req.html

"No part of its net earnings may inure to the benefit of any private
shareholder or individual and it may not be organized for profit or
organized to engage in an activity ordinarily carried on for profit
(even if the business is operated on a cooperative basis or produces
only sufficient income to be self-sustaining)."

@@@@@@@@@@@@@@@@@@@@@@