Another Congressional rock hurled at the transition; misses the mark

A few Republican congressmen are still waging a futile campaign against the reform of ICANN. Yesterday four of them sent a letter to the Justice and Commerce Departments casting fear, uncertainty and doubt (FUD) upon the transition. The letter does not raise any new, specific legal or policy concerns that should conclusively prevent the transition. Instead, it pretends that there are all kinds of “unresolved questions” about it, which the letter tries to leverage to impede progress.

But to what end? The Congressmen have nothing concrete to say about what the Commerce Department should do to resolve their concerns. All they ask is that the administration “reconsider” the decision.

The congressmen – like virtually all opponents of the transition – seem to have overlooked the fact that the decision to  end U.S. control was linked to a comprehensive accountability reform plan. Those reforms, which took two years to design, have already been approved, and have widespread support. They were based on an elaborate public process involving multiple congressional hearings, thousands of people in hundreds of organizations and businesses, and a global consensus among the directly affected stakeholders. The U.S. has determined that the proposal generated by the Internet community meets its clearly stated criteria. If the U.S. reneges now, it would destroy its own credibility and throw the whole nongovernmental model upon which the ICANN regime is based into chaos and uncertainty. And ICANN would remain the same, the same bad old ICANN that it was before. So what’s the point of this 11th hour game?

The letter is self-contradictory in its use of the concepts of Internet freedom, accountability and transparency.

It vaguely suggests that the transition might create “an opportunity for an enhanced role for authoritarian nation-states in Internet governance,” but provides no evidence as to how or why it does. In fact, if the U.S. is forced to abort the transition now it would play right into the hands of authoritarian states. Killing ICANN’s reforms through impulsive and arbitrary American action would fatally undermine the global Internet governance model rooted in nonstate actors. It would strengthen the case for national sovereignty-based Internet models favored by authoritarian states. “Look,” they will say, “the U.S. wants to control the Internet, why can’t we?” ICANN’s independence from unilateral U.S. government control is a logically and politically necessary consequence of its independence from all governments. By getting in the way of that, it is the Congressmen, not the Commerce Department, who are creating an opportunity for authoritarian states to enhance their influence in Internet governance.

The Congressmen suggest that “this irreversible decision could result in a less transparent and accountable Internet governance regime.” But how? No reference is made to the actual reform plans. In fact, the transition brings with it major corporate governance changes that would significantly improve ICANN’s accountability and transparency.  The transition brings with it a new set of bylaws that gives the public enhanced rights to inspect ICANN’s books, the right to remove board members, and the power to prevent the board from unilaterally modifying its bylaws. Under U.S. government supervision for the past 18 years, ICANN has been almost completely unaccountable – yet this is the status quo they want to retain. By opposing the transition, the Congressmen are getting in the way of reforms that address the very things ICANN critics have been complaining about.

The congressmen claim that “Questions have been raised about ICANN’s antitrust status.” Well, what questions, and what are their implications for the future of Internet governance? No answer. This is a phony issue. ICANN is not, and never has been, exempt from antitrust liability. The 1998 Statement of Policy that led to the creation of ICANN considered both sides of this issue, and explicitly ruled that:

Applicable antitrust law will provide accountability to and protection for the international Internet community. Legal challenges and lawsuits can be expected within the normal course of business for any enterprise and the new corporation should anticipate this reality.

And yet, in what appears to be a deliberate attempt to cloud the issue and mislead people, the congressmen’s letter refers to a “2000 federal appellate court decision that concluded that ICANN’s predecessor, Network Solutions, Inc., was immune from antitrust scrutiny because it was acting under the authority of the federal government.”

This is a real whopper. First, if the transition goes through, ICANN obviously will not be acting under the authority of the federal government anymore – so it would surely be a private actor subject to antitrust law. It is the status quo, in which ICANN makes no changes to the root without U.S. government approval, that might allow it to claim an exemption. The Republicans’ argument actually shows that the transition is a good thing. Or do the congressmen want ICANN to be exempt from antitrust?

Second, ICANN is not comparable to Network Solutions, Inc. (NSI). NSI was a commercial enterprise that inherited a dual role: making money by selling.com, .net and .org domains while also maintaining the public DNS root zone. There was a clear conflict of interest there, because new competitors had to ask NSI to add their new domains to the root before they could enter the market. (It was this conflict of interest, by the way, that first led the Commerce Department to assert control over root zone file changes – not a desire to protect “Internet freedom” from foreign governments.) Post-transition, if ICANN started to act like a commercial registry it would be – and should be – subject to antitrust challenges. There is no uncertainty here.

Same goes for the jurisdiction issue. ICANN’s new accountability reforms are firmly rooted in U.S. jurisdiction (California law, to be specific). Yet the letter states that the Congressmen:

…are concerned that matters left for Work Stream 2 regarding the jurisdiction of contracts and dispute settlements will not be resolved before the proposed October 1, 2016 handoff of the IANA functions to ICANN.

But Work Stream 2, by its very definition, refers to reforms that happen after the transition takes place. It does not make sense to claim that there is uncertainty because secondary issues that don’t need to be resolved before the transition will in fact be resolved after the transition.

Let’s review the facts about jurisdiction. The transition doubled down on ICANN’s ties to U.S. jurisdiction. The new, post-transition IANA (PTI) will also be a California Corporation. The new rights of the empowered community are based on California law. The idea of a new jurisdiction was resoundingly rejected in the reform process. The stakeholders who fought hard for accountability reforms dependent on California corporation law are not about to give them up by letting ICANN pack its bags and move to Geneva or some other locale, not unless much better accountability features and equally predictable corporate laws are in place there. Also, the hundreds of businesses who have signed contracts with ICANN based on U.S. jurisdiction are not interested in destabilizing things. ICANN would be unable to amend its bylaws and articles of incorporation without approval by its stakeholders anyway. While the jurisdiction debates in Work Stream 2 may explore ways to harmonize conflicts of law and find new ways to prevent political manipulation of ICANN by virtue of its location in the U.S., the likelihood of a massive, disruptive change of jurisdiction is vanishingly small. But here again, the Congressmen are their own worst enemy. What could do a better job of convincing the world that the Internet shouldn’t be in U.S. jurisdiction than the shenanigans of Senators Cruz, Goodlatte, et al?

Finally, the letter raises one of the thinner straws that the opponents of the transition are grasping at, namely the idea that the root zone is “U.S. government property” and cannot be transferred. We have already refuted this claim. But note that the Congressmen are no longer arguing that it is government property, they are saying that the failure of the Government Accountability Office to produce a report on this issue means that the transition cannot go forward, because there is uncertainty about it. We find this to be a disingenuous claim. The GAO was given the mandate to report on this issue more than a year ago. If it has not resolved the issue by now, there must not be anything to report. Indeed, back in 2000 the GAO concluded that

The Department undertook its domain name system management responsibilities to carry out the President’s directive to support efforts to privatize the domain name system. Under these circumstances, neither the Department nor any other federal agency is under an explicit statutory obligation to manage the domain name system including control over the authoritative root server

Given that the GAO is a creature of Congress, we wonder whether its paralysis is a byproduct of the partisan gridlock in Congress itself. At any rate, the fact that the GAO has not weighed in is a strike against those who maintain that it is government property.

Clearly, the latest Congressional rock hurled at the transition misses the mark. The administration should resist this campaign of intimidation and FUD and proceed with the reforms. Tech sector interests and public interest groups who support the transition need to make their views known. Even our allies  are fed up with the absurd twists and turns in Congress’s approach to ICANN. Congress would do untold damage to American credibility and global Internet compatibility if it continues to act like a dog in the manger.