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Thanks, this is very useful.<br>
Stephanie Perrin<br>
<div class="moz-cite-prefix">On 15-05-28 1:05 AM, Michael Gurstein
wrote:<br>
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<p class="MsoNormal"><b><span
style="font-size:11.0pt;font-family:"Calibri",sans-serif"
lang="EN-US">From:</span></b><span
style="font-size:11.0pt;font-family:"Calibri",sans-serif"
lang="EN-US"> Dave Farber [<a class="moz-txt-link-freetext" href="mailto:dave@farber.net">mailto:dave@farber.net</a>] <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 moz-do-not-send="true"
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 moz-do-not-send="true"
href="mailto:dave@farber.net">dave@farber.net</a>><br>
Cc: "ip" <<a moz-do-not-send="true"
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 moz-do-not-send="true"
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 moz-do-not-send="true"
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 moz-do-not-send="true"
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 moz-do-not-send="true"
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 moz-do-not-send="true"
href="https://www.eff.org/cases/auerbach-v-icann"
target="_blank">https://www.eff.org/cases/auerbach-v-icann</a><br>
<a moz-do-not-send="true"
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 moz-do-not-send="true"
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 moz-do-not-send="true"
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 moz-do-not-send="true"
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 moz-do-not-send="true"
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>
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