Re: [ifwp] Re: Raising money for the NewCorp

[Jeff Williams <jwkckid1@ix.netcom.com>]

Harold and all,

Harold Feld wrote:

> On 09/10/98, "Milton Mueller <mueller@syr.edu>" wrote:
> > Yes, I second Chris's concern here. If IBM and MCI want to form a private
> > strategic alliance to promote some kind of coordinating entity for the
> > Internet on their own, let them do so. Let's assume that they mean well and
> > are simply trying to get the New Corp over the initial start-up hump. Even
> > so, the offer should be refused. A broadly based, globally representative
> > corporation should not be dominated by them.
>
> I agree, for two reasons.  First, as Milton says, a gift this generous has
> the potential to make Newco beholden to its sponsors.  This is sadly true
> even of a "no strings attached" one time gift.

  Yes it is possible but not necessarily the case dependent on what form
thatgenerous gift donation takes.  If you set it up in a perpetual trust, that
must be
self supporting by a given time frame, you eliminated most of the concern to
which you reference.

> Even if the directors of
> Newco could rise above the natural inclination to be grateful to someone
> who gave them a half a million bucks, and could ignore the possibility that
> the same group might do so again in the future, the gift would create the
> *appearance* of impropriety.

  THis is showing you level of paranoia Harold.  THough I certainly understand
you concernsin this regard.  BUt as i said above these type of concerns can
fairly easily be
handled from any or all entities that wish to contribute if set up in a blind
self perpetuating
non revocable trust.  We have done this many times.  The Java Fund is one such
recent
example for instance.

> -small snip -
>
> Second: I believe there is value in keep the corporation cash-starved.

  This is a terribly bad policy to start out the NewCo on.  It breads
desperation, whichusually leads to bad decision making.

> Free money I a powerful motivator to mischief.

  So is poorly financed a powerful motivator for mischief.

> It also relieves the
> corporation of one more constraint on its behavior.  Better Newco should
> not acquire expensive habits at the beginning of its life.

  If you have a good board and a very good CFO these kinds of situations willbe
rare.

>
>
> Granted some "seed money" is necessary, but why not wait until the
> corporation is formed and figures out its needs?

  Well we already know the what Van cref is recommending ($500k) is
hardlysufficient for seed capitol.

> This will encourage
> economic operations and thriftyness.  A large gift of money now will prompt
> Newco to develop a budget that fits its purse.

  Not necessarily so Harold.

>
>
> > I do find it ironic that many of the IANA,  ISOC and CORE.... supporters
> > who have successfully capitalized on the "anti-US-centric" rhetoric now,
> > when push comes to shove, find that themselves supporting a US military
> > contractor with funds from IBM and MCI.
>
> Yes, and even more amusing that they are doing it without gaurantees.
> Nothing under the current IANA proposal could prevent the establishment of
> a US centric board, an anti-business board, an anti-trademark board, etc.

  Agreed.  And these are only some of the reasons that the current 3rd
iterationof IANA bylaws and first iteration of articles of incorporation are very
poor indeed.

> Yet these groups back the current proposal because it seems to put
> unlimited power in the hands of those who have been favorable to their
> interest (anti-NSI, "internationalist," pro-TM, whatever).
>
> Even if the initial Board is everything its supporters wish, nothing stops
> it from changing over time -- long after those who have supported lack the
> power to stop the changes or reverse the course.

  Yes exactly!  ANd this is why it is our belief that the IANA's draft bylawsand
articles of incorporation are inappropriate for the task at hand.

>
>
> Always remember that Earl Warren (a famous liberal justice of the Supreme
> Court, and responsible for many of its most liberal decisions) was a
> conservative when he was appointed for life by President Eisenhower.  Once
> he revealed his true judicial colors, there wasn't anything that could be
> done about it.

  Well I was an Earl Warren supporter.  He had the wisdom to change his view
as the needs of the country changed.

>
>
> Harold
>
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 Regards,

--
Jeffrey A. Williams
DIR. Internet Network Eng/SR. Java/CORBA Development Eng.
Information Network Eng. Group. INEG. INC.
E-Mail jwkckid1@ix.netcom.com