Legal separation of IANA gains steam

The past two weeks have seen a whirlwind of activity regarding the IANA transition. During two days of face to face meetings in Istanbul and continuing discussions online, the Community Working Group on IANA Stewardship Transition (CWG) winnowed down the models it was considering to an IANA that was either legally or functionally separated from ICANN. CWG’s legal counsel (Sidley Austin LLP) has now returned with its initial analysis of those alternatives in a discussion draft. And in a surprising and important move, former Congressman Rick Boucher, who now works for Sidley Austin, advised the CWG that legal separation would be the preferable option, both for accountability reasons and to improve the plan’s prospects for acceptance by the U.S. Congress.

Under legal separation, a post-transition IANA (PTI) would be created. As Sidley describes it (a high level summary diagram is also available):

• Post-Transition IANA (“PTI”) would be a wholly owned subsidiary of ICANN; or, in legal terms more appropriate for a non-profit corporation without owners, an affiliate of ICANN.
• The existing IANA naming functions department, administrative staff and related resources, processes, data and know-how would be transferred into the PTI affiliate. This would help to ensure continuity, stability, security and resiliency, while at the same time ensuring that the names-related IANA functions are “ring fenced” from the ICANN entity.
• ICANN would assume the current role of the NTIA under the IANA Functions Contract and PTI would assume the current role of ICANN under the IANA Functions Contract. In other words, ICANN would contract with PTI to perform the IANA functions for domain names. The issues addressed in the NTIA-ICANN functions contract and related documents will be covered either in the ICANN-PTI contract or by ICANN bylaws and governance documents. Policy making responsibilities will reside within ICANN, with accountability mechanisms that are developed by the CCWG Accountability work stream.
• The Post-transition IANA would continue to support the numbers- and protocols-related IANA functions under MoUs or other arrangements.
• ICANN would provide funding and agreed upon resources to PTI through a budget that is approved by the PTI Board, and potentially by the multi-stakeholder community (the “Member Group” as defined below).

This basic model still needs to have some details fleshed out. For instance, what would be the composition of the PTI Board? How independent of ICANN will it be? Who has the power to appoint or remove it, how is that done? What would be the content of the ICANN-PTI contract? Other questions concern the team to perform periodic review of the PTI and the Customer Standing Committee (CSC). How would the Periodic Review Team (PRT) be organized? How often would it conduct a review? How would the outcome of its review affect ICANN (who holds the contract with the PTI)?  How would the CSC escalate operational issues with the PTI, what dispute mechanism might it use? Finally, what is the role of the community members or member groups? The memo suggests that a legally-cognizable community would have some active role in overseeing the ICANN board, but what about the PTI board? These questions can be answered, however, and the convergence on a common structure represents real progress.

The Sidley-Austin report then compares the legally distinct affiliate model to a purely internal model, in which IANA remains a department of ICANN. It says that the only advantage of the internal model is that it “Avoids the need to create another layer of governance and accountability at the IANA level,” and that it would avoid the initial costs of separating out the IANA assets now. But it noted three strong disadvantages of this purely internal model:

1. If there is a future need to move the IANA functions away from ICANN, the work of identifying and segregating assets will need to be done at the time of separation, which may be at a time of dispute and conflict making the separation more challenging.
2. Does not include an independent governance body at the IANA level with the potential to provide more oversight.
3. There would be no formal contract between ICANN and IANA. Other means of establishing expectations regarding performance levels and related terms would need to be identified, which would likely be less formal and less enforceable than through a contractual relationship. Recourse for a “breach” of those terms and conditions would be limited to internal redress mechanisms.

Boucher’s intervention

A few days later, former U.S. Rep. Rick Boucher and Sidley partner sent an email to the CWG’s client committee suggesting that stronger structural separation would “enhanc[e] the prospect for congressional acceptance of the transition proposal.” In Mr. Boucher’s words:

1. It’s far better for the PTI to be a separate nonprofit public benefit corporation. While this approach may add to structural complexity, it underscores the extent to which there is a clear separation between ICANN’s DNS policymaking function and the performance of the IANA functions. …

3. The PTI board should be truly independent from the ICANN board, not ICANN board-designated or controlled. It should be member group appointed, and there should be very limited if any overlap in membership between the ICANN Board and the PTI board.

4. The Periodic Review Team (PRT) should be chosen by and answerable to the member group. It is the main way members have of being certain the IANA functions are being satisfactorily performed.

Like it or not, the U.S. Congress is going to have an influential voice in whether or not NTIA can move forward with the final proposal it receives. Aside from making Congress’s intentions clearer, Boucher’s intervention raises valid concerns about the need for a clear separation between ICANN policy making and IANA implementation and the need for independent oversight of the IANA functions. The CWG has been firmly pointed in the direction of the legal separation model.

The CWG will meet for the 35th time this coming Monday to discuss the legal advice.