<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40"><head><meta http-equiv=Content-Type content="text/html; charset=utf-8"><meta name=Generator content="Microsoft Word 15 (filtered medium)"><!--[if !mso]><style>v\:* {behavior:url(#default#VML);}
o\:* {behavior:url(#default#VML);}
w\:* {behavior:url(#default#VML);}
.shape {behavior:url(#default#VML);}
</style><![endif]--><style><!--
/* Font Definitions */
@font-face
{font-family:Helvetica;
panose-1:2 11 6 4 2 2 2 2 2 4;}
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0cm;
margin-bottom:.0001pt;
font-size:12.0pt;
font-family:"Times New Roman",serif;}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:purple;
text-decoration:underline;}
p
{mso-style-priority:99;
mso-margin-top-alt:auto;
margin-right:0cm;
mso-margin-bottom-alt:auto;
margin-left:0cm;
font-size:12.0pt;
font-family:"Times New Roman",serif;}
span.EmailStyle18
{mso-style-type:personal-reply;
font-family:"Calibri",sans-serif;
color:#1F497D;}
.MsoChpDefault
{mso-style-type:export-only;
font-family:"Calibri",sans-serif;
mso-fareast-language:EN-US;}
@page WordSection1
{size:612.0pt 792.0pt;
margin:72.0pt 72.0pt 72.0pt 72.0pt;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]--></head><body lang=EN-CA link=blue vlink=purple><div class=WordSection1><p class=MsoNormal><b><span lang=EN-US style='font-size:11.0pt;font-family:"Calibri",sans-serif'>From:</span></b><span lang=EN-US style='font-size:11.0pt;font-family:"Calibri",sans-serif'> Dave Farber [mailto:dave@farber.net] <br><b>Sent:</b> May 28, 2015 12:09 AM<br><b>To:</b> ip<br><b>Subject:</b> [IP] John Gilmore on ICANN.<o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p><p>I believe this is not an inaccurate description from a historical standpoint. I also attend to agree with many of the points John takes.<o:p></o:p></p><p>Dave<o:p></o:p></p><div><p class=MsoNormal style='margin-bottom:12.0pt'>---------- Forwarded message ----------<br>From: "John Gilmore" <<a href="mailto:gnu@toad.com">gnu@toad.com</a>><br>Date: May 27, 2015 6:46 PM<br>Subject: Re: [IP] How global DNS could survive in the frozen lands outside US control<br>To: <<a href="mailto:dave@farber.net">dave@farber.net</a>><br>Cc: "ip" <<a href="mailto:ip@listbox.com">ip@listbox.com</a>><br><br>ICANN has built itself a nice monopoly, with very little outside<br>influence or control. Now it wants to reduce that to "zero" outside<br>influence or control. The community and the US Government should<br>decline to do so. (PS: The community has little or no say over this.)<br><br>Back when ICANN was formed in 1998, EFF proposed that ICANN's<br>"nonprofit" corporate charter should include some basic protections<br>for freedom of speech and press, due process, international human<br>rights, transparency, and such. See:<br><br> <a href="https://w2.eff.org/Infrastructure/DNS_control/ICANN_IANA_IAHC/19980923_eff_new_iana.bylaws" target="_blank">https://w2.eff.org/Infrastructure/DNS_control/ICANN_IANA_IAHC/19980923_eff_new_iana.bylaws</a><br> <a href="https://w2.eff.org/Infrastructure/DNS_control/ICANN_IANA_IAHC/19980924_eff_new_iana_pressrel.html" target="_blank">https://w2.eff.org/Infrastructure/DNS_control/ICANN_IANA_IAHC/19980924_eff_new_iana_pressrel.html</a><br><br> "... any foundation for governance of a communications system, such as<br> the Internet, should stand on the fundamental human right of free<br> expression. ... What was suppossed to be an excercise in Internet<br> democracy has become an excercise in Internet oligarchy" - Barry<br> Steinhardt, EFF President<br><br>and see generally:<br><br> <a href="https://w2.eff.org/Infrastructure/DNS_control/ICANN_IANA_IAHC/" target="_blank">https://w2.eff.org/Infrastructure/DNS_control/ICANN_IANA_IAHC/</a><br><br>ICANN's management and lawyers refused to include any such provisions,<br>on the theory that if they were included, then people could succeed in<br>suing ICANN if it violated freedom of speech or the press, did things<br>to domain holders without due process, or was not transparent about<br>its activities. ICANN management wanted the right to violate those<br>human rights and public oversight provisions -- and they ultimately<br>got it. No court can decide whether ICANN's actions violate<br>international human rights law, because ICANN is not required to<br>follow international human rights law; it isn't a government and it<br>never signed those treaties. It isn't required to follow the US Bill<br>of Rights, because it isn't a government. It isn't required to follow<br>basic transparency policies like Freedom of Information or Open<br>Meetings, except to the extent that the US Government currently<br>requires that under their contract with ICANN. It isn't required to<br>follow anything but California and US nonprofit law (which it<br>deliberately violated anyway, see below). Yes, the sole substantive<br>rules that govern ICANN are the same ones that control the struggling<br>2-person environmental group or underfunded health clinic doing a bake<br>sale in a nearby park. The creation of an unaccountable ICANN was all<br>handled by ICANN's "unpaid volunteer" lawyer, Joe Sims of the Los<br>Angeles firm Jones Day, who later, once the gravy train was set up,<br>started charging ICANN a good chunk for his ongoing advice. As of<br>2014, ICANN pays Jones Day almost $4 million annually for legal<br>services.<br><br>ICANN soon started charging domain registrars a fee of 20c per year<br>per domain, for doing nothing except protecting itself from outsiders<br>and paying itself large wages. ICANN sets the amount of this fee<br>itself, and there is nothing that outsiders, or ICANN's customers, can<br>do to challenge it or change it. It is currently 18c per transaction,<br>and raises about $80 million dollars per year, all of which ICANN<br>finds some way to spend on itself and its lawyers. By 2014 it had<br>more than 300 employees churning around looking for ways to spend<br>money on themselves and their contractors. More than 30 of these<br>"nonprofit" employees make more than $250,000 a year or are "paid<br>directors", with the CEO wasting $900K/year. It also spent about<br>$575K of your domain fees lobbying the government on its own behalf<br>("a staff registered lobbyist and two government affairs firms"). See<br>pages 7-9 and 30 and 52-53 of:<br><br> <a href="https://www.icann.org/en/system/files/files/fy-2014-form-990-31mar15-en.pdf" target="_blank">https://www.icann.org/en/system/files/files/fy-2014-form-990-31mar15-en.pdf</a><br><br>At one point a single outside critic, Karl Auerbach, slipped onto the<br>ICANN Board of Directors. ICANN is (was?) a California nonprofit, and<br>the Directors of a nonprofit have responsibility for the acts of the<br>nonprofit -- and have rights to oversee its acts. They can inspect<br>the physical premises at any time, and can see and copy any documents<br>that the business has. Otherwise the theory that the Board is in<br>control is a hollow mockery, and California law doesn't allow that.<br>ICANN claimed that its Board members could not actually access basic<br>information like the financial statements of the organization (how<br>much money comes in, how much goes out, and for what reasons). Not<br>only did ICANN management refuse. The rest of the ICANN board,<br>including Chairman Vint Cerf, refused, and circled the wagons to<br>protect ICANN from actual transparency. In 2002, EFF helped Karl file<br>a lawsuit under California law to enforce his rights. ICANN contested<br>the lawsuit, and Vint filed a declaration with the court in support of<br>their position. ICANN lost that lawsuit, and Karl got to look at the<br>financial reports -- but did not get to show the finances of this<br>"nonprofit" to the public. ICANN immediately revised the procedures<br>for electing their board, to make sure that no critic would ever get<br>on the board again. However, they did start being more transparent<br>about their finances, since these would have to come out in their<br>publicly available income tax returns anyway. See:<br><br> <a href="https://www.eff.org/cases/auerbach-v-icann" target="_blank">https://www.eff.org/cases/auerbach-v-icann</a><br> <a href="https://www.eff.org/press/releases/icann-director-seeks-court-order-review-records" target="_blank">https://www.eff.org/press/releases/icann-director-seeks-court-order-review-records</a><br> <a href="https://www.icann.org/resources/pages/fiscal-2014-09-15-en" target="_blank">https://www.icann.org/resources/pages/fiscal-2014-09-15-en</a><br><br>Fast forward another few years, and ICANN decided to sell new<br>top-level domains. The bidding process was completely rigged to<br>ICANN's benefit; bidders sent in a non-refundable $185,000 per<br>proposed domain and were guaranteed exactly nothing in return. Domain<br>speculators sent in a frenzy of money, as expected, and ICANN raked in<br>a one-time profit of $350 million. Some of those domains have gone<br>live since, and as expected, they have mainly benefited ICANN.<br>Recently in 2015 ICANN auctioned off ".app" for $25 million, which it<br>says went into a "designated purpose" fund, which ICANN of course has<br>sole control over. As with the about $80 million in recurring revenue<br>from domain registrars and registries, they have struggled mightily<br>but succeeded in finding ways to waste almost all of these hundreds of<br>millions on themselves and their buddies. As of 2014, they estimate<br>that all but $100M has been spent, and that is carefully hoarded in a<br>"Risk Reserve" for "future costs that cannot be estimated" (up to now,<br>only $1M in "risk reserve" has been actually spent). In 2014 they<br>spent or wasted $17M with Ernst & Young, $16M with KPMG, $8M with "JAS<br>Global Advisors", $4M with Interconnect Communications, $2.8M with<br>Price Waterhouse, and $2.6M with Chambre de Commerce Internationale,<br>all for the new top-level domains program. See:<br><br> <a href="https://www.icann.org/en/system/files/files/financial-report-fye-30jun12-en.pdf" target="_blank">https://www.icann.org/en/system/files/files/financial-report-fye-30jun12-en.pdf</a><br> <a href="https://www.icann.org/en/system/files/files/adopted-opplan-budget-fy14-22aug13-en.pdf" target="_blank">https://www.icann.org/en/system/files/files/adopted-opplan-budget-fy14-22aug13-en.pdf</a><br><br>ICANN recently decided that the money it receives for each domain name<br>registered does not obligate it to do anything in particular; or as the<br>lawyers put it on page 75 of:<br><br> <a href="https://www.icann.org/en/system/files/files/fy-2014-form-990-31mar15-en.pdf" target="_blank">https://www.icann.org/en/system/files/files/fy-2014-form-990-31mar15-en.pdf</a><br><br> ICANN HAS DETERMINED THAT THE REGISTRY AND REGISTRAR AGREEMENTS DO<br> NOT INCLUDE ANY OBLIGATIONS FOR ICANN THAT PERTAIN TO EACH SPECIFIC<br> REGISTRATION OF A DOMAIN NAME. ICANN CONSIDERS THAT ITS CONTRACTUAL<br> OBLIGATIONS ARE UNRELATED TO A SPECIFIC DOMAIN NAME REGISTRATION,<br> WHICH THEREFORE DOES NOT CREATE SPECIFIC PERFORMANCE OBLIGATIONS<br> WHICH WOULD REQUIRE A DEFERRAL OF REVENUE OVER THE DURATION OF THE<br> REGISTRATION. AS A RESULT, ICANN HAS CHANGED ITS REVENUE RECOGNITION<br> METHOD SO THAT THE TRANSACTION-BASED FEES ARE RECOGNIZED AS REVENUE<br> WHEN EACH TRANSACTION OCCURS.<br><br>In other words, they specifically state that you are paying them for<br>NOTHING when you pay them every year (via your registrar and registry)<br>to renew your domain name. The reason you have to pay? Because they<br>control the root and they demand payment, not because they are doing<br>anything for you.<br><br>One minor drag on ICANN's ability to do exactly what it wants has been<br>the original US Government contract to run the domain name system.<br>Whenever ICANN got a little too crazy, the government would gently<br>suggest that perhaps it would re-bid that contract to somebody a<br>little less crazy. As far as I can tell from outside, the USG has<br>used a very light touch in this process. Anyway, the USG has never<br>been particularly unhappy about creating monopolies for the private<br>benefit of the monopolies. But nevertheless, the structure galled<br>other countries, especially those who want to use international<br>institutions dominated by governments to impose their own kind of<br>cultural baggage (censorship, wiretapping, etc) on global Internet<br>users. Or kleptocrats who could see how any international institution<br>that managed to wangle control of ICANN could start extracting free<br>money from the Internet; ICANN would just pass the costs down to all<br>of us, in a way that we already have no way to contest. So "Get the<br>US out of domains" became a rallying cry for a kind of misguided<br>leftists in alliance with third world autocrats. That is the current<br>"debate" in the multi-decade debacle of ICANN.<br><br>To sum it up? If domain users have zero control over ICANN, if<br>ordinary domain owners have zero control over ICANN, if ISPs have zero<br>control, if domain registrars have zero control, if governments have<br>zero control, if even its sinecure board members have zero control,<br>then who will have any control over what ICANN does with the domain<br>name system that billions of people rely upon? The answer is pretty<br>simple: ICANN management and lawyers will have full control, fat<br>personal salaries, a pot of hundreds of millions that they're sitting<br>on, recurring revenues that are totally set by their fiat, and the<br>rest of us will have zip. Any questions?<br><br> John Gilmore<br> (speaking for myself, not for the Electronic Frontier Foundation)<o:p></o:p></p></div><div style='border:none;border-top:solid #CCCCCC 1.0pt;padding:4.0pt 0cm 0cm 0cm' id=listbox-footer><table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width="100%" style='width:100.0%;background:white'><tr><td style='padding:0cm 0cm 0cm 0cm'><p class=MsoNormal><span style='font-size:7.5pt;font-family:"Helvetica",sans-serif;color:#333333'><a href="https://www.listbox.com/member/archive/247/=now" title="Go to archives for ip"><span style='color:#669933;text-decoration:none'>Archives</span></a> <a href="https://www.listbox.com/member/archive/rss/247/22720195-c2c7cbd3" title="RSS feed for ip"><span style='color:#669933;border:solid windowtext 1.0pt;padding:0cm;text-decoration:none'><img border=0 width=100 height=100 id="_x0000_i1025" src="cid:~WRD000.jpg" alt="Image removed by sender."></span></a>| <a href="https://www.listbox.com/member/?member_id=22720195&id_secret=22720195-8fdd4308" title=""><span style='color:#669933;text-decoration:none'>Modify</span></a> Your Subscription | <a href="https://www.listbox.com/unsubscribe/?member_id=22720195&id_secret=22720195-97c5b007&post_id=20150527190840:4BEADCFA-04C5-11E5-AA9B-E26F2882AD14" title=""><span style='color:#669933;text-decoration:none'>Unsubscribe Now</span></a> </span><o:p></o:p></p></td><td valign=top style='padding:0cm 0cm 0cm 0cm'><p class=MsoNormal align=right style='text-align:right'><a href="http://www.listbox.com"><span style='border:solid windowtext 1.0pt;padding:0cm;text-decoration:none'><img border=0 width=100 height=100 id="_x0000_i1026" src="cid:~WRD000.jpg" alt="Image removed by sender."></span></a><o:p></o:p></p></td></tr></table><p class=MsoNormal><o:p> </o:p></p></div></div></body></html>