ICANN - Letter to Becky Burr - July 19, 1999


Letter from Esther Dyson (ICANN) to Becky Burr (US DoC)
(July 19, 1999)

July 19, 1999

J. Beckwith Burr
Associate Administrator
Office of International Affairs
U.S. Department of Commerce
Room 4701
1401 Constitution Avenue, N.W.
Washington, D.C. 20230

Dear Becky:

We received your letter of July 8, 1999, and very much appreciate the kind words for ICANN's progress to date. As you are fully aware, it is a significant challenge to create a global, consensus-development body, not to mention one that is both effective and consistent with the objectives of the White Paper. We think we have made very significant progress, notwithstanding the obvious difficulties, and we are pleased that you recognize and appreciate the very hard work that has been required.

In this first six months, as we outlined in detail in our Status Report, we have seen the beginnings of a working consensus-development process. We are optimistic that once the ICANN structure is completed and fully operational, it will be able to meet the ambitious objectives set forth for it in the White Paper and the Memorandum of Understanding.

In response to the four points that you identified as areas where there was still room for improvement, we certainly accept the fact that this process should improve as it matures; by definition, a consensus-building process starts with discussion of different views, and over time ideally produces convergence of those views into a consensus. While the Board has not yet had the opportunity to discuss all these issues in full detail, we have had a brief discussion, and I believe I can fairly represent the general reaction of the Board. The Board will no doubt be giving further attention to some of these issues in the future, but let me offer this initial response:

1. ICANN's top priority must be to complete the work necessary to put in place an elected Board of Directors on a timely basis.

We agree completely with this point, and we have been working diligently to accomplish this objective as soon as possible. This is our highest priority, but given the bottom-up process for organizing the Supporting Organizations and the complexities of the At Large membership issue, it has not been possible to move as quickly as you or we would have liked. Nevertheless, we have already publicly stated that we expect the Supporting Organizations to elect their Board members in time for them to be seated and active at ICANN's Annual Meeting in Los Angeles in November. The election process for selecting the At Large Directors is much more complicated, but now that the Board has received the report of the Membership Advisory Committee, the Board expects to begin to implement that process at our meeting in Santiago. Our goal, which I know you share, is to replace each and every one of the current Board members as soon as possible, consistent with creating a process that minimizes the risk of capture or election fraud and that will lead to a truly representative Board.

2. ICANN should eliminate the $1 per-year, per-domain registration user fee.

We have decided to defer the collection of the $1 registrar fee, for the reasons set forth below. We have also decided to form a task force of the DNS infrastructure entities -- the registries and registrars with whom ICANN has or is likely to have contractual relationships -- to recommend to ICANN and the Internet community a fair and workable allocation of the funding necessary for ICANN cost recovery.

This was a difficult decision to come to, since your suggestion on this point raised a number of very significant issues. ICANN must recover its costs, and while there are probably a variety of cost-recovery formats that would work, this approach -- where the competitive registrars participate in the cost-recovery process based on the volume of their registrations -- seemed to the Internet community a fair and workable way to spread the costs among the registrars according to the benefits they are receiving from the newly introduced competitive environment. It was adopted following a thorough process of notice and comment, and was broadly supported by a consensus of the community. We note that the Coalition of Domain Name Registrars, a group consisting of most of the registrars that would actually be responsible for paying those fees, has written to Congress indicating that they have no objections to paying their fair share of ICANN's costs in this way. Thus, we continue to believe that this is a fair and appropriate way to spread the cost-recovery burden.

We note that, in your responses to the questions asked of you by the Commerce Committee, you agreed that this was a rational and appropriate approach that was the result of full notice and comment, was consistent with the White Paper, and was fully authorized by the Memorandum of Understanding. Nevertheless, you suggest that, because it has become controversial, we should suspend this approach until there are elected Board members. Of course, many issues dealt with by this Board are controversial, including most of the duties described in the White Paper and the MOU. If they were not controversial, there would be little need for a consensus-development organization like ICANN.

The construction of ICANN cannot be completed without funding. Clearly we need a stable financing mechanism for ICANN's necessary functions -- including the costs that will be required to create and implement an At Large election system that will produce a broadly representative elected Board. The United States Government has asked us to do an important job, but it has not provided the means by which to carry it out, leaving the job of providing funds to the Internet community itself. To date, ICANN has relied on voluntary donations, and a number of people and organizations have been very generous. But this is neither an equitable way to allocate the recovery of costs nor a process that can work for more than a relatively short period, given the range of tasks requested of ICANN. Thus, if ICANN is to continue, it is simply not possible to abandon the cost-recovery mechanism that has been produced by the consensus-development process and replace it with nothing.

Given this serious conflict between your request and the reality that ICANN must have funding in order to do the work that you and the rest of the Internet community want it to do, we have struggled to determine an appropriate response to your request. We have decided to defer the collection of the registrar fee, and to create a task force consisting of those entities that make up the DNS infrastructure -- the name registries, the address registries, and the registrars -- to review the options for fair and workable cost-recovery mechanisms, and to provide its recommendations for how to deal with this problem by October 1, 1999, with an interim report (if possible) prior to the Santiago meeting in late August. We will then post those recommendations for public comment, so that the Board (which will then consist of a full complement of 19) will be able to consider those recommendations at its November Annual Meeting.

Unfortunately, this approach does not deal with ICANN's immediate financial problem. If the United States Government is serious about the progress that ICANN has made and its desire to see this process mature, short-term funding must be made available quickly. We urge you to do everything possible to help solve this problem.

3. ICANN should immediately open its Board Meetings to the public.

We understand the circumstances that prompted this suggestion, and we have again struggled to determine the appropriate response. ICANN is supposed to be a global, consensus-driven entity. We do not see a global consensus demanding that ICANN hold all its meetings in public, although there clearly is controversy. Thus, the determination to adopt this suggestion cannot be based on ICANN's identification of an Internet community consensus. Nevertheless, we will hold the Santiago Board meeting as a public meeting, for the reasons set forth below.

The Board believes very strongly that it has carried out its responsibilities transparently, recognizing community consensus when it exists and encouraging its development when it does not, and all in full view of the global public. The agendas of its meetings are posted in advance of each meeting; at each quarterly meeting, the agenda is open for full public discussion in advance; any resolutions adopted by the Board or decisions taken are announced and released immediately following those decisions; and the full minutes of every Board meeting are posted for public review. The Board takes care to engage in public discussions of its efforts; it both encourages and considers public input, and fully discloses its own decision-making criteria.

The only Board activity not now fully public is the interaction between it and its staff, and the discussion among the Board members of those staff recommendations, at the exact time that it happens -- since the full minutes of that interchange, of course, are posted publicly shortly after the meeting. Several members of the Board feel strongly that the ability to have private discussions with staff and other Board members is a very important contribution to the fact that, with only one exception, every decision by this Board has been unanimous. This Board personifies effective consensus decision-making, and many of its members feel that losing the ability to discuss matters in decisional meetings in private will adversely affect the candor of those discussions, and potentially the ability to come to working consensus quickly, especially on some of the very complicated issues that remain for this Board to deal with.

Nevertheless, it is clear that this issue has taken on great political significance. It has become a distraction that interferes with dealing with the significant challenges that ICANN has been given responsibility for, and it threatens to delay the completion of the consensus development process is ICANN's basic objective. Therefore, we will hold the Santiago meeting as a public meeting, and deal with all pending issues publicly (except for personnel or legal matters, if any, that might require an executive session). Following Santiago, nine elected Board members will join the current complement, and we will defer to that full Board any decisions on future meeting procedures, since the experience in Santiago will then be available to inform their decisions. As you know, ICANN's bylaws provide that the Annual Meeting (in Los Angeles in November) is a public meeting.

4. There is concern in the Internet community about over-regulation.

On this point, we certainly understand the concern, but it seems misplaced, given the clear limitations in ICANN's articles and bylaws on the scope of its permissible activities. It seems misplaced in another respect as well: ICANN is nothing more than the reflection of community consensus. It is, of course, theoretically possible that such a consensus could develop around some proposed ICANN position that others would regard as overly regulatory, but the presumption in such a circumstance should be, we would imagine, that the community consensus was by definition not "overly" regulatory.

Thus, to the extent some see this as a problem, it is easy to deal with and we are happy to do so. It seems perfectly acceptable to include in the various contracts with registrars and registries language that says that no ICANN policy is being agreed to in those contracts that is not fully consistent with, and reasonably related to, the goals of ICANN as set forth in the White Paper, which are replicated in ICANN's bylaws. We do not see that it actually changes in any material way the legal rights of any parties to these contracts -- which, after all, are themselves the subjects of both the consensus development process and individual negotiations -- but neither do we believe that it will interfere with any appropriate objectives of the consensus development process. Therefore, we have no problem making these representations, since they fully reflect both the original concepts that gave birth to ICANN and this Board's understanding of ICANN's proper role.

I hope this is responsive to both the letter and the spirit of your suggestions. We certainly do appreciate the complexities of this task -- even more so now than we did when we began this journey. We do think we have made great progress despite significant (and to some extent unexpected) obstacles, and we are glad to see that you agree. We hope that we can, with your support and assistance, make even faster progress in the future. This Board looks forward eagerly to the day when it can tell you that it has completed its work successfully.



Esther Dyson