[ga] SBA tells ICANN to shape up

["Antony Van Couvering" <avc@interport.net>]

Please note, if you haven't already, that ICANN is trying to get rid of its
duty to be transparent and accessible.  The SBA is unflinching in its
criticism.

Antony


http://www.sba.gov/advo/laws/comments/icann99_1027.html

October 27, 1999

Ms. Esther Dyson
Internet Corporation for Assigned Names and Numbers
4676 Admiralty Way
Suite 330
Marina Del Ray, CA 90232

Re: Request for a Procedural Policy

Dear Ms. Dyson:

Introduction

The Office of Advocacy, U.S. Small Business Administration, ("Advocacy")
submits this letter to request that the Internet Corporation for Assigned
Names and Numbers ("ICANN") adopt and publish a policy statement on major
issues that affect domain name holders. ICANN has not issued a formal policy
statement on such crucial matters as notice and comment, openness, and
transparency. Procedural questions have arisen at almost every stage of
ICANN’s activities throughout its existence and are undermining the
consensus needed for ICANN to operate effectively. Furthermore, Advocacy
believes that procedural policies are mandated by ICANN’s Memorandum of
Understanding with the U.S. Department of Commerce ("DoC" or "Commerce
Department") and through ICANN’s Bylaws for the Interim Board.

Advocacy recommends that ICANN open a proceeding at its Los Angeles meeting
in early November to solicit proposals and submissions on possible
procedural policies. After receiving submissions, ICANN should issue a
proposed procedural policy for public comment and then adopt a policy that
incorporates the comments received. This process for drafting a policy
should allow sufficient time for public input on all matters affecting
material interests.

Also, ICANN should base its procedural policy on the Administrative
Procedure Act. Regulatory actions by the Commerce Department are subject to
the APA. Because of ICANN’s close and particular relationship with the DoC,
any procedural policy should be based on the APA and incorporate the same
duties and protections.

Finally, a little over two weeks ago ICANN proposed amendments to its Bylaws
and allowed 14 days for comment. These amendments would remove the only
meaningful section in the Bylaws that deal with transparency and procedures.
In that section’s place, ICANN is proposing a vapid sentence that
essentially removes all openness and transparency requirements on ICANN.
Advocacy considers this proposal and the insufficient notice and comment
period all the more evidence that a procedural policy is needed and needed
now.

Background

The United States Congress established the Office of Advocacy in 1976 by
Pub. L. No. 94-305, codified as amended at 15 U.S.C. §§ 634(a)-(g), 637, to
represent the views and interests of small business within the U. S. federal
government. Its statutory duties include serving as a focal point for
concerns regarding the government’s policies as they affect small business,
developing proposals for changes in U.S. Federal agencies’ policies, and
communicating these proposals to the agencies. 15 U.S.C. § 634(c)(1)-(4).

Small businesses are a crucial element of the U.S. economy and the Internet.
In 1998, there were 23 million small businesses in the United States, which
represent more than 99 percent of all businesses in this country. Small
businesses employ 52 percent of private workers and employ 38 percent of
private workers in high-tech occupations. Virtually all of the net new jobs
created in the United States in the past few years were created by small
businesses.

Small businesses use of the Internet is rapidly expanding. In the past two
years, small businesses with access to the Internet have doubled from 21.5
percent to 41.2 percent. Thirty-five percent of small businesses maintain a
Web site and one in three maintain business transactions through their site.
Any policy that detrimentally affects the ability of these small businesses
to use the Internet would have a significant impact on this nation’s economy
and limit the effectiveness of the Internet as a tool of business, commerce,
and communication.

Current Procedural Difficulties
ICANN has been troubled from the beginning with questions about procedure
and process. Commenters have repeatedly raised questions about ICANN’s
openness, accountability, and transparency, particularly since ICANN’s
actions in Singapore to adopt specific language for the registrar
accreditation despite serious objections. Advocacy believes that these
procedural concerns are legitimate, and, to the extent they are being
ignored, de facto barriers are being erected to meaningful participation of
small businesses and individuals in the ICANN decision-making process.
Advocacy has broken these procedural concerns down into four different issue
areas.

a. Notice to the General Public Insufficient

Many of ICANN’s notice deadlines are too short for small businesses and
individuals to respond in a timely and informative manner. Far-reaching
policy thus far has been adopted after very brief comment periods – which
can be as short as a week. These brief comment periods were particularly
noticeable at ICANN’s latest public meeting in Santiago. For example: a
proposal to lengthen the term of the initial at-large directors was posted
August 18 with comment due by August 26; the staff report on at-large
membership was posted August 11 with any comments due by August 26; bylaw
amendments were posted September 16 and the deadline for public comment was
Sept 27; comments on the Uniform Dispute Resolution Policy was posted on
September 29 and was due on October 13, comments for another set of Bylaw
amendments were posted October 8 with comments due on October 22, and just
last week on October 21 ICANN posted a draft charter for the Ad Hoc Working
Group on Convergence with comments due before the meeting on November 2 - 4.

Furthermore, it is difficult for small businesses to monitor all of ICANN’s
activities as they are posted on several different Web pages without any
organization or central list. In order to keep appraised of all the
different actions and activities of ICANN, the Domain Name Supporting
Organizations, and the constituency groups, an interested party must visit
on a daily basis: icann.org, dnso.org, ipcc-meetings.com, www.ncdnhc.org,
and bcdnso.org. Often times, these sites are poorly organized and notices of
important actions are hard to find unless you are intimately familiar with
the layout.

b. Handling of Comments Problematic

Procedural difficulties also extend to ICANN’s handling of comments after
they are received, including the posting of comments and consideration of
comments. Comment posting is an important step in the overall process as it
allows participants to view other submissions and to respond to them. The
current organization of posted comments is jumbled and difficult to follow.
The listings provide sparse information and that does not facilitate quick
review of comments. Also, comments from several different proceedings are
merged together into a single list, adding to the confusion.

On a related note, ICANN does not have any means of recognizing receipt of
comments, as Advocacy discovered when its comments regarding the UDRP, which
were filed on time, were not posted on ICANN’s Web page. Upon further
inquiry, Advocacy learned that ICANN had no record of the comments, even
though Advocacy’s e-mail program said that the comments had been sent and
the office received no notification that the e-mail was not delivered.

c. Scope of Authority Questioned

Industry representatives, consumer advocates, and members of the U.S.
Congress have questioned ICANN’s scope of authority. Questions of authority
have arisen during the adoption of the UDRP, the consideration of the
proposed $1 fee on all domain name registrants, ICANN’s ability to enforce a
definition of a "famous trade mark", and ICANN’s ability to impose contracts
upon all domain name registrants enabling them to take away the domain name
at any time. These questions of authority and legitimacy are especially
troublesome, because they are beginning to undermine the validity of ICANN’s
proceedings and eroding support for its efforts. It is imperative that
boundaries be drawn on ICANN’s authority so that its ability to strike a
consensus is not impugned.

d. Openness and Transparency Concerns

Participants also have raised concerns about ICANN’s consideration of
comments once they are received. Because ICANN does not address comments
directly nor refer to them in its decision-making process, many commenters
believe that their comments were not given adequate consideration or were
ignored out of hand. Regardless of the veracity of this claim, ICANN makes
no meaningful effort to offer evidence that a process exists to ensure that
all comments are considered.

Congressman Thomas J. Bliley, chairman of the House Commerce Committee, also
brought attention to ICANN’s closed board meetings. While some of the board
meetings are now open, most board decisions seem to be made during private
meetings with the discussions announced at public board meetings. Other
meetings also remain closed, including special committees on IP address
convergence and new generic TLDs. Advocacy understands that complete
openness and transparency at all levels may not be feasible. However,
decisions made at closed closed-door meetings and backroom dealings raise
suspicions about ICANN’s fairness – suspicions that are undermining ICANN’s
credibility.

A Procedural Policy Is Necessary and Proper
ICANN needs to adopt a written and enforceable procedural policy. It is not
just a good thing to do; it is essential. Advocacy believes that ICANN’s
Bylaws for the Interim Board and the Memorandum of Understanding ("MoU")
with the Commerce Department require it to adopt such a policy. Furthermore,
a definite policy will further ICANN’s goal of consensus. Without a definite
policy, ICANN will continue to be hounded by questions of procedure,
openness, and transparency, which will cast doubts on it’s ability to
perform the tasks assigned to it by the Department of Commerce.

a. A Procedural Policy Is Required by ICANN’s Authority

Advocacy is of the opinion that ICANN is required to create a procedural
policy by its authoritative documents. Both the Memorandum of Understanding
and ICANN’s Bylaws for the Interim Board require the organization to develop
and adopt procedural policies that will ensure openness and transparency.

The Memorandum of Understanding was intended to "promote the design,
development and testing of mechanisms to solicit public input . . . into a
private-sector decision making process." Section II.C.4. The MoU also
directed ICANN to create a private-sector management system that reflects a
bottom-up management, Section II.C.3. Both parties are to design, develop,
and test procedures, Section II.B. V.A.1, and to manage the functions listed
in the MoU in a transparent, non-arbitrary, and reasonable manner. DoC will
provide expertise and advice on methods and administrative procedures for
conducting open, public proceedings concerning policies and procedures,
Section V.B.2.

ICANN’s Bylaws, before the recently proposed amendments, echo the MoU’s
emphasis on process. An entire article is dedicated to transparency and
procedures. Advocacy finds the language of the first section, which has been
targeted for deletion, particularly compelling:

ICANN shall operate to the maximum extent feasible in an open and
transparent manner and consistent with procedures designed to ensure
fairness. In addition to the specific procedures set forth in these Bylaws,
the Initial Board shall investigate the development of additional
transparency policies and transparency procedures designed to provide
information about, and enhance the ability of interested persons to provide
input to, the Board and Supporting Organizations. Any such additional
transparency policies and procedures shall be widely publicized by the Board
in draft form, both within the Supporting Organizations and on a
publicly-accessible Internet World Wide Web site maintained by the
Corporation (the "Web Site"). Any such additional transparency policies and
procedures may be adopted only after a process of receiving and evaluating
comments and suggestions has been established by the Board, and after due
consideration of any comments or suggestions received by the Board.

Article III, Section 1

This language clearly and specifically directs ICANN to initiate and adopt a
procedural process that facilitates meaningful public involvement. It
provides a functional roadmap as to how ICANN should conduct itself while
adopting a procedural process. Advocacy is gravely concerned by ICANN’s
recent proposal to strike this provision. This section is the only
meaningful section in the Bylaws on transparency and openness, and ICANN is
suggesting it be deleted, only allowing a 14-day comment period and
scheduling the decision for a telephone meeting shortly thereafter. This
entire process leads Advocacy to the conclusion that ICANN has already made
its determination and has no intention of addressing, much less responding
to, public comment.

b. A Procedural Policy Is Necessary for Consensus

Separate and apart from the procedural requirements of the Bylaws and the
MoU, a process is necessary to reach the consensus necessary for ICANN to
function. To arrive at a consensus, ICANN will need participation from
industry, government, and Internet users. If people feel their participation
is acknowledged and considered, they will be more willing to accept the
decisions of ICANN. Many parties that wish to contribute to the ICANN
process are not large corporations, individuals with flexible schedules, or
English-speakers. A procedural policy will assist all of these people to
give their input to ICANN. For example, a procedural policy will allow
adequate time for response to ICANN proposals, which will improve comments
and encourage participation. It is important for consensus that ICANN be
accessible and its procedure is clear and predictable.

Advocacy Requests that ICANN Initiate a Process to Adopt a Procedural Policy
at the November Meeting in Los Angeles
Advocacy requests that ICANN initiate a process, as required by ICANN’s
Bylaws for the Interim Board and the MoU with the DoC, to adopt a procedural
policy. This process should begin immediately, at ICANN’s meeting in Los
Angeles at November 2 - 4. Time is of the essence; ICANN has operated too
long already without procedure firmly in place. Therefore, Advocacy proposes
the following schedule:

At its November meeting, ICANN should request submissions for a procedural
policy. It should accept those comments up until two weeks before its first
public meeting in 2000. At its first public meeting in 2000, ICANN should
issue its own proposal on a policy statement and ask for comments up until
two weeks before a second public meeting in 2000, scheduled for a time that
would allow adequate opportunity for public comment (certainly no less than
60 days). At the second public meeting in 2000, ICANN Board should adopt a
specific procedural policy, explaining reasons for its decision and replying
to suggestions received during the comment period.

Advocacy believes that meetings scheduled to discuss these issues should
allow sufficient time for adequate comment. A thorough and deliberative
process is necessary to consider a procedural policy that will affect every
action ICANN takes and impact every participant to the ICANN process.

At this time Advocacy only makes this one recommendation to ICANN on the
specifics of a procedural policy. ICANN should model its procedural process
after the APA. DoC is subject to the APA and because of the relationship
between ICANN and DoC, Advocacy believes that it is necessary and
appropriate to extend it to ICANN as well. The APA has been tested and
proven as a "checks-and-balances" process that protects the rights of
parties while giving those parties a meaningful opportunity to participate.
Furthermore, DoC is charged under the MoU with providing expertise and
advice on methods and administrative procedures. DoC is intimately familiar
with the APA and can provide better advice and expertise on a procedural
policy that will work for ICANN if it is based on the APA.

Advocacy understands that the international nature of ICANN will require
that it consider and adopt policies to accommodate international concerns
but a policy based on the APA should facilitate that. A full comment period
initiated by ICANN will bring these issues to the fore, and ICANN should
consider additional procedures to respond to comments. The APA should remain
the base line for the policy.

Conclusion

Small businesses throughout the world have a major interest in how domain
names are governed. No one believes the task is easy, but no organization
should assume to itself power to govern an international system without
meaningful participation by those entities which have a major stake in the
issue – not if it wants to remain credible and avoid becoming a target for
an international investigation. What Advocacy is recommending here are some
first steps for engaging stakeholders in ICANN’s work. To summarize:

ICANN should adopt a procedural policy to address four issues: notice to the
general public, handling of comments, scope of authority, and openness and
transparency. A procedural policy is required by the ICANN’s MoU with the
Commerce Department and by ICANN’s Bylaws for the Interim Board and is
necessary for ICANN to reach the consensus it needs to meet its duties under
the MoU.
ICANN should start the process of constructing procedural rules at its
meeting in November in Los Angeles. Any delay would further exasperate the
problem and would undercut ICANN’s ability to fulfill its mandate under the
MoU, namely, that ICANN accommodate the broad and diverse interest groups
that make up the Internet community.
ICANN should not adopt the proposed amendment that would reduce Article III
Section 1 to a single vague sentence, as it runs counter to ICANN’s duty
under the MoU. Furthermore, a notice and comment period of 14 days did not
allow sufficient time for meaningful public comment. Should ICANN reduce
this section as proposed, it will serve as a signal to all interested
parties, that ICANN does not consider openness and transparency a condition
precedent to fair and informed decision making.
Sincerely,

/s/ _____________________
Jere W. Glover
Chief Counsel for Advocacy

/s/ _____________________
Eric E. Menge
Assistant Chief Counsel for Telecommunications