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[gtld-strategy-draft] Lack of oversight or compliance with bylaws, sponsorship agreements, or the MOU

  • To: gtld-strategy-draft@xxxxxxxxx
  • Subject: [gtld-strategy-draft] Lack of oversight or compliance with bylaws, sponsorship agreements, or the MOU
  • From: Edward Hasbrouck <edward@xxxxxxxxxxxxx>
  • Date: Tue, 5 Oct 2004 09:38:17 -0700

The ICANN report "Strategy: Introduction of New Generic Top-Level Domains" 
<http://www.icann.org/tlds/new-gtld-strategy.pdf> does not actually 
contain a strategy.  Instead, it is a list of issues that need to be 
addressed, and decisions that need to be made, in order to define a 
strategy -- but that have not yet been completed.  

As such, it does not -- contrary to the false claim on the ICANN Web site 
at <http://www.icann.org/topics/gtld-strategy-area.html>, "fulfill...  the 
ICANN Board resolution of October 2003", or the MOU with the USA 
Department of Commerce (DOC).  Instead, it serves only to define some of 
the issues that ICANN had committed itself under the MOU to have completed 
by now, but has not yet completed.  In that sense, the "Strategy" paper is 
primarily an itemization of ICANN's failure to fulfill its commitments, 
and should be part of the grounds for the DOC to revoke the MOU.

In particular, the "Strategy" report states on pp 11-2:

"ICANN will develop the procedure for designation of new gTLD registries. 
Those steps include:  

"1. Reviewing and synthesizing outputs and developing recommendations 
regarding new gTLD introduction processes... 

"b. Consideration of public comment on studies and draft recommendations,

"2. Monitor implementation results, feedback, and development of new 

It's important for the DOC, ICANN, and  other stakeholders to notice that 
these essential steps are described in the future tense ("ICANN will"). 

ICANN has, to date, created no process for monitoring or oversight of sTLD 
sponsors, or of their compliance with their agreements with ICANN.

ICANN has entirely ignored repeated comments made directly to the ICANN 
Board of Directors, during the public forum sections of their meetings (in 
the absence of any other forum or process for considering them), 
concerning the (lack of) monitoring or oversight of the new gTLD process,  
including my comments linked from <http://hasbrouck.org/icann>.  I also 
note for the record that the issues I have raised in those comments 
remain: sTLD sponsors have taken no action whatsoever to bring their 
decision-making activities into compliance with their agreements with 
ICANN or with the limitations inherent in ICANN delegations of authority.

The report commissioned by ICANN from Summit Strategies International, 
"Evaluation of the New gTLDs: Policy and Legal Issues" 
<http://icann.org/tlds/new-gtld-eval-31aug04.pdf>, specifically excluded 
any actual monitoring or oversight of sTLD sponsors.  Footnote 61, pages 
77-78 of that report, notes that I had repeatedly raised this issue, but 
says that, "The monitoring phase recommended by the Task Force Report is 
separate from this Evaluation."  

ICANN's own consultants, in the only evaluation ICANN has commissioned 
(ICANN conducted no evaluation of its own) of the new gTLD process, thus 
acknowledged that their evaluation was not comprehensive or complete, and 
that part of the process recommended by ICANN's own "New TLD Evaluation 
Process Planning Task Force" has not yet been carried out.

ICANN cannot, therefore, truthfully claim that the Summit Stretegies 
International report was "comprehensive" with respect to the relevant and 
outstanding issues, or that the recommendations of the New TLD Evaluation 
Process Planning Task Force have been carried out.

I reiterate my urgent request that ICANN take immedaite action to (1) 
either bring sTLD sponsors into compliance with their ageeements with 
ICANN, and with ICANN's bylaws, particularly with respect to openness, 
transparency, community participation, and bottom-up consensus process, or 
terminate those agreements for material breach by sTLD sponsors, and (2) 
create an ongoing structure and process for oversight of sTLD sponsors' 
compliance with their agreements and ICANN"s bylaws, and their exercise of 
decision-making authority delegated to them as agents of ICANN.

If ICANN continues to fail to do this, I request that the California 
Secretary of State revoke the charter of ICANN for failure to act in 
accordance with its bylaws, and that the DOC terminate its MOU with ICANN 
for material breach of its commitment to the principles of openness, 
transparency, community participation, and bottom-up consensus process, 
all of which are violated by delegations of decision-making authority to 
sTLD sponsors or other agents that do not abide by those principles.

Article, 3, Section 1 of ICANN bylaws provides that, "ICANN and its 
constituent bodies shall operate to the maximum extent feasible in an open 
and transparent manner and consistent with procedures designed to ensure 
fairness."  ICANN has the authority to delegate -- to an sTLD sponsor or 
anyone else -- only that decision-making power which ICANN itself 
possesses.  This clause requires more than just "some" degree of openness, 
transparency, and procedural assurance of fairness.  It explicitly 
requires this, "to the maximum extent feasible".

ICANN has *completely* failed to enforce this provision of its bylaws, 
with respect to either its own direct decision-making or its delegations 
of authority to agents, particularly its agreements delegating decision-
making authority to sTLD sponsors.

ICANN has *completely* failed to exercise oversight over the exercise by 
sTLD sponsors of decision-making authority delegated to them.  (Under 
Article 14 of ICANN's bylaws, ICANN is committed to indemnify "any ... 
agent of ICANN".  Since an explicit delegation of decision-making 
authority creates a relationship in which ICANN is the principal and the 
sTLD sponsor is ICANN's agent, ICANN is liable for the acts of sTLD 
sponsors.  ICANN's failure to exercise any oversight over sTLD delegated 
decision-making is thus a material breach of fiduciary responsibility, and 
grounds for the removal of the ICANN board of directors and appointment of 
a trustee to manage the corporation, if it is not dissolved.)

If the "proof of concept" round of new sTLD's has proved anything, it is 
that, in the absence of oversight and enforcement, sTLD sponsors will not 
comply with ICANN's requirements for the maximum extent feasible of 
openness, transparency, and procedures designed to ensure fairness.

I urge ICANN not to approve any more sTLD's until it has acted on this 
lesson of the sTLD experiment, brought existing sTLD sponsors into 
compliance or terminated their sponsorship agreements, and established 
open, transparent, procedures for oversight and enforcement of compliance 
by sTLD sponsors with their agreements with ICANN and ICANN bylaws 
governing the exercise of delegated decision-making authority.

And I urge the DOC to recognize in the failure of the "proof of concept" 
the failure of ICANN to meet its commitments in the MOU with the DOC.


Edward Hasbrouck

ICANN, Internet, and ".aero" stakeholder

further supporting and background documents are linked at:

Edward Hasbrouck

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