Network Solutions' Comments

["Nevett, Jonathon" <jnevett@xxxxxxxxxxxxxxxxxxxx>]

Network Solutions agrees that the Memorandum of Understanding (MoU)
between ICANN and the U.S. Department of Commerce should be renewed and
modified.  A great deal of work still is needed regarding how ICANN
operates and its commitment to fulfill its core principles before it is
ready to reach full privatization.  To this end, Network Solutions
offers the following comments and recommendations for action.

 

Bottom-up representation, participation, and transparency are core
values to which ICANN is obligated to comply under the terms of the MoU
and its Bylaws.  Effective involvement of all Internet stakeholders
requires not only that their comments be solicited, but also that ICANN
consider those comments as part of a transparent decision-making
process.  It is often difficult to determine what information ICANN
Board members considered in making a decision.  Recent examples of
ICANN's failure to meet these obligations include approving the proposed
.com Agreement despite broad-based opposition; approving the final .net
Agreement without public review; ignoring the Generic Names Supporting
Organization's (GNSO's) recommended Bylaw change to require public
review of material contracts prior to execution; and creating policy
though contract negotiations, thereby circumventing the established
policy making process.  To remedy such shortcomings, ICANN should:

*        Implement and comply with certain basic decision-making
procedures, including public deliberations, the disclosure of staff
advice to the ICANN Board, and timely publication of complete minutes of
Board meetings.  ICANN's decisions also should include an analytical
component that explains how comments were factored into a decision.

*        Amend the ICANN Bylaws to require publication of all material
contracts for comment before approval.  

*        ICANN also should not use renewals of registry agreements to
effectuate policy changes that would circumvent policy review by the
GNSO.

 

Accountability and oversight are important components to ICANN's
reaching full corporate maturity.  Structures like the Office of the
Ombudsman and the existing review procedures alone are insufficient.
Indeed, all of the review mechanisms are just mechanisms to advise the
Board.  There should be an equivalent of a shareholder's ability to
overturn a Board decision or to take action, as is the case with a
public corporation in the United States.  The ICANN Board's voting
record, and lack of dissenting votes, calls into question its ability to
act independently of Staff recommendations.  New mechanisms - such as
super-majority votes - are needed to ensure accountability.  Also, a
viable Reconsideration Policy and an Independent Review Policy (IRP)
could serve as effective counterweights to the substantial deference
typically given by the Board to Staff decisions.  They also would
provide a check on Board decisions, such as those made in violation of
ICANN policies or without broad Internet community support.  Thus, ICANN
should:

*        Require supermajority votes for important Board decisions and
provide a vehicle for the overriding Board decisions (e.g. Board
decisions could be vetoed by a super-majority of Supporting
Organizations.)

*        Improve the existing Reconsideration and IRP processes to
provide a realistic vehicle for challenging Board decisions.
Reconsideration should be more than a procedural review, and the IRP
should be more than an advisory opinion to the Board.  

 

Similarly, adequate budget oversight is a critical component to ICANN's
self-governance capabilities.  Budgetary oversight - including through
external review - should be increasing, not decreasing (as it would if
the proposed .com contract is approved).  Such a function also should be
shared with more members of the community, not just registrars.
Additionally, there should be more linkage between ICANN's Strategic
Plan and the budgetary process, so funding is taken into account when
determining future plans.  To address these concerns, ICANN should:

*        Conduct and release the results of audited financial reports of
ICANN's management of its financial resources.  

*        ICANN should reconstitute a constituency-based Budget Working
Group, which would have more than advisory power and could replace the
current system of registrar fee approval. 

*        Provide a closer link between the Strategic Plan and the budget
process, i.e. Staff should calculate costs and funding mechanisms at the
same time as determining goals and ideals for the future.

 

Under the MoU and pursuant to its Bylaws, one of ICANN's core values is
to promote competition.  ICANN's ability to foster the checks and
balances of a competitive marketplace should be an integral component of
ensuring that technological safeguards are in place to preserve the
stability and security of DNS operations.  It is telling that the
President's Strategy Committee never mentions the word "competition" in
its consultation request.  Perhaps this is because while ICANN was
successful in bringing competition to the registrar space, it has failed
to bring any real level of competition to the registry space.  By
including auto-renewal clauses and limiting its termination rights in
recent and pending gTLD agreements, and failing to employ its greatly
expanded budget to police bad actors and predatory practices in the
domain name space, ICANN is discouraging competition and failing to
ensure stability and security.  To this end, ICANN should take the
following steps:

*        Ensure competition is brought to the registry space.  This
would include a presumption against automatic renewal terms in registry
contracts that remove ICANN's ability to seek competitive bids at a
future date, especially in the face of demonstrated "bad behavior."

*        Seek review and evaluation of changes to registry agreements by
the Department of Justice's Antitrust Division to ensure that
competition values are maintained.

*        Take a proactive role in compliance efforts to limit abuses,
particularly in light of the budgetary resources allocated in this area
and ICANN's claim that with a larger budget it could address these
abuses.

Thank you for the opportunity to provide these comments.  Implementing
the recommendations above would help ICANN to be in a position to reach
full corporate maturity and privatization.