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FW: what ICANN is up to: the financial arrangements for paying IANA salaries; why the NIST solicitation for ICANN contracts is illegal and can be stopped with an ORSC protest letter; why its a waste of board member's ti

FYI.  Interesting stuff.

-----Original Message-----
From: Owner-Domain-Policy [mailto:owner-domain-policy@INTERNIC.NET] On
Behalf Of Gordon Cook
Sent: Thursday, January 14, 1999 1:02 AM
To: DOMAIN-POLICY@LISTS.INTERNIC.NET
Subject: what ICANN is up to: the financial arrangements for paying IANA
salaries; why the NIST solicitation for ICANN contracts is illegal and
can be stopped with an ORSC protest letter; why its a waste of board
member's time t


For the past 48 hours I have done nothing but research and write the
following.

Keeping IANA Paychecks Coming

The process last summer of setting up newco (IANA) essentially ran out of
time.  Details like the coming October 1 unemployment of the IANA staff,
including Jon Postel, went into the month of September unsettled. They did
so presumably because the parties putting things together assumed that
Magaziner would have no choice but to bless ICANN on October 1 and hand
over keys to the kingdom to them as well as money for them to start doing
their work.  When it became clear that this likely would not happen,
something had to be done about the paychecks of IANA employees.

Mike Roberts on behalf of ICANN made a deal with USC and ISI whereby they
(ISI) would enter a transition agreement with ICANN so that ICANN would pay
the salaries of the IANA employees (six people) effective October 1.
(Where ICANN gets the money is anyone's guess - likely from GIP - ie IBM.)
Thus Mike Roberts found himself in a situation where he had to scurry at
the end of September to file ICANN's incorporation papers so that as of
October 1st ICANN would exist as a legal entity  and be able to sign an
agreement with ISI whereby the IANA employees remained legally ISI/USC
employees with full benefits (health care etc). This was conditional on
ICANN sending ISI a monthly check to cover the cost of their benefits
through Dec 31, 1998.  IANA expenses for office support, network
connectivity etc would be paid from the DARPA Teranode network contract
with ISI through 12/31/98.

When they realized that 12/31/98 would come and go without a legally
constituted and functional ICANN to take responsibility for the IANA
employees, the December 24 agreement mentioned in the NIST solicitation in
the January 6 Commerce Business Daily was struck to handle both functions.
It supposedly is nothing more than a continuation of the agreements that
were reached last summer with ICANN to continue to pay salaries and
Terranode to cover network and other expenses. Solicitation Number
52SBNT9C1020 from NIST is to formalize these informal agreements by giving
ICANN a NIST contract by which they will be responsible for paying for the
IANA functions.

ON Going Mechanics such as NIST Contract Versus NTIA MOU of 11/25/98

The on going needs which, like it or not, ICANN is now legally constituted
to fill create a situation where it becomes very difficult for Becky Burr
on the one hand and Elliot Maxwell to hold ICANN's feet to the fire on the
issues of its unaccountable bylaws and openness. The reason why is that
ICANN knows that IANA salaries must be paid and that other parts of the
Magaziner constructed house of cards like the requirement for NSI to
develop a shared database by April 1, 1999 with specs subject to review by
an ICANN (NewCo) appointed review panel.  (If memory serves me correctly
Becky gave ICANN permission to appoint such a panel of experts.)  The
problem is that with each step of the way and each action or approval
granted ICANN purely for administrative reasons, NTIA is in effect tacitly
recognizing and transferring authority to IANA.  The intent of the 11/25/98
MOU may have been good, but the fact of the matter however is that it looks
like IANA can erode the good intent by simply out waiting NTIA.  I suspect
that legal action will be required to VOID the sole source solicitation or
to sue the US Gov't and the ICANN board before we will see any change in
ICANN's behavior. Given the direction of events ICANN will either open up
its operations to public scrutiny or it will find itself in court.
IOdesign is likely to sue again and given the course of events, we'd
welcome that.

To be meaningful the NTIA needs to revisit the ICANN MoU and spell out
milestones and due dates for deliverables.  If Becky and Elliot do not do
this we may begin to wonder whether they mean for the MOU to be taken
seriously.

Lack of Trust, Suspicion and Paranoia Reaching new Highs

I have seen a credible assertion that claims IANA staff are being
restricted in technical communications they can have with with NSI.  I have
reached the appropriate people at NSI who have assured me that as far as
they can tell all necessary channels of technical communication are fully
open with IANA and with everyone else for that matter.  I also reached Mike
Roberts on his cell phone. Mike, in the middle of a business meeting,
graciously took a very few minutes to hear my concerns.  Mike said that he
could unequivocally assure me that neither he, nor Esther, nor the ICANN
board, nor any ICANN lawyers had placed any restrictions on the IANA staff.
He added that he believed that it was only rumor and said that if there
were any shred of truth to it would be Ron Ohlander, the ISI administrator
who would know.  (Legally ISI still is the employer of the IANA staff, so
if any orders were given Ohlander would be in a posityion to know.  I have
a call into him but suspect that he will be unreachable before tomorrow.)

On balance, I suspect - given that I have reached directly or indirectly
virtually everyone involved - that the rumor was likely based on a
misunderstanding and has no real substance.  The probing however proved to
be a useful exercise, because time and time again I was told that the
amount of fear, distrust, and paranoia on the part of all was running
extremely high.

I conclude that two things are at fault.  One ICANN's continued insistence
on closed board meetings and secrecy, and two that the actions of the
MIGHTY Five taken with Sims Cochetti and Magaziner to form ICANN last
summer were deeply flawed

ICANN Policy as a Destroyer of Trust

I have documented elsewhere the widespread disgust with the ICANN Policy of
closed board meetings

Dave Farber - however well intentioned he may have been is one of the
creators of this mess.  On Monday, perhaps like the Sorcerer's apprentice
horrified by what had transpired Dave stuck his neck out on the IFWP list
and said:

It is time to raise the issue yet again of the distressing fact that the
Board meetings of ICANN are closed. Many moons ago several of us strongly
suggested that it would be appropriate for the ICANN Board to operate under
the same set of rules that US Federal Advisory Boards operate under as well
as NotForProfit Boards like EFF and ISOC. Namely all meetings are open to
the public to attend and listen. Often observers do not have the right to
talk except for a set aside period during the meeting when 5 minute
positions can be requested. The Board has the right to convene in Executive
Session but in all cases the subjects that can be discussed at exec session
are limited, sometimes by law and more often by good faith and the fear of
law.

I strongly suggest that this be the principle that ICANN adopt rapidly. Why
am I bringing this up. I was told that the ICANN Board meeting in Singapore
is closed and that there will be a open "meeting" the day before. That is
not the same thing. Open meetings are a good way to gather opinions and an
OPEN BOARD meeting is a necessary way to insure openness and the respect of
the community WHICH THE ICANN BOARD MUST SERVE.  (caps intentional).

If there is a reason why this is not appropriate for ICANN but is for the
others , I think the ICANN Board owes it to the community to tell us now
those reasons in detail.[End quote of Farber message.]

Esther Dyson chose to answer not Farber but Jeff Williams saying: Yes. It
is in our bylaws and in all the public statements we have made.  Basically,
we could have had "open" board meetings with executive sessions that were
closed, but we figured (the Initial Board voted) that this (below) is the
best way to do it.

Dave Farber to his great cerdit came back and wrote to the IFWP list:
"Esther, There is no real problem scheduling an Exec Session for a Board
meeting. The PITAC and all other federal Advisory Boards do that ALL the
time. An open NON-Board meeting is not an OPEN BOARD Meeting.  The public
has a right to see how the issues are handled etc in such an organization
and the best way to ensure that is to have OPEN Board meetings. Sorry, Dave"

Farber made a third comment about how the logistics of such could be
handled.  Esther answered *NONE* of Farber's three comments.  Unfortunately
no list members spoke up on Farber's behalf.

This morning however Esther Dyson did call me from the airport.  We had an
extremely useful 10 minute conversation before she had to run for her
plane.  She did not say it was off record. At the end I asked if there was
anything off record, adding that I felt what she said needed to be accurate
and wanted to try to ensure that.  "Well why not send it to me before you
put it out?"  I hesitantly said yes and asked what kind of turn around I
would get.  36 hours (she would be on net when she got the chance) was the
reply as she dashed off.  This leaves me with an unpleasant problem.  I am
going ahead with my notes on the call.  I believe I can be quite accurate.
If I am not I invite Esther to send me corrections of or do the correcting
herself.  Time here is important and her information, while not a huge
surprise, is very helpful in understanding the dynamics of what is
happening. Now for the details of the conversation:

Dyson: I understand and am sympathetic to Dave Farber's call for open Board
meetings.  But you have got to understand that half our board is not
American and they think the US federal open meetings law is something they
should not have to subject themselves to.   These are business people who
don't have their board meetings in public.  When they were invited to be on
the ICANN board, they could read in the ICANN by laws that ICANN board
meetings would be closed.  This was something they felt comfortable with.

COOK:  But if you are saying that after Farber's posting you polled the
board again and the board is STILL voting to keep board meetings closed,
then some of the American members must also be voting despite the flack you
are getting to keep the meetings closed?

Dyson:  Yes.  Now when we get members, if the members vote for open board
meetings, we will have to have open board meetings.  So stick with us a
while and the board meetings will eventually become open.  You must
understand: These are business people.  Corporate boards don't have public
board meetings.

Cook: But this *IS* the internet for heaven sakes ....internet business is
done in the open.

Dyson:  That's what the mail lists claim.  But the mail lists are a self
selected minority of the people that we must serve.  Those not on the mail
lists are quite happy with what we are doing.  [Cook: I believe this to be
almost a verbatim quote of Esther's words.]

I have a thick skin so I am willing to subject myself to abuse.  But why
should the board members be forced to waste their time listening to and
dealing with the wild accusations that abound on these lists?

Cook:  Agreed that it can get quite abusive, but the abuse comes with the
territory.  What if IFWP were run on a server where civil discourse rules
apply and are ENFORCED!

Dyson:  Sounds attractive.

Cook:  I am very hopeful that this will happen.  Please join us there.
Talk to us.  With substance.  With fair answers to questions designed to
establish some common values and build some trust.

Dyson:  perhaps.  Let me consider it.

Cook:  please do.  Let me just say that the board suffers from the same
disease that NSI management did in assuming that Internet mail lists are
and irritant.....something that doesn't matter.  I was told that twice last
year by Don Telage as I tried to explain that NSI's refusal to allow any
NSI employee had help to cement hatred of NSI on the network.  Perhaps the
show down with Becky last September, gave NSI second thoughts because NSI
has changed its policy.  Sounds like the board is going to have to learn
the same lesson that NSI learned.

Dyson:  I hear what you are saying but unfortunately there's not time to
respond....gotta run, bye.

Jock Gill (holder of the first major internet policy position in the
clinton administyration) wrote me privately a day ago and captured the
essense of what Esther was saying.  (Used with Jock's permission).

The issue, I think, is that the good folks you (Gordon) inquired about come
from, for the most part, old industrial/educational hierarchies which are
famous for being autocratic, top down, feudal fiefdoms with all the
management style that implies. As well as no requirements to run open
meeting in a democratic way -- they do not come from the world of elected
public servants who assume such rules. Thus why would we expect them to act
in any way other than what they have been successful at? New tricks for old
dogs? Not too likely. Let's not ask for miracles.  Who on the board in
question really understands the concept of stupid networks and smart edges
and the new management paradigm it is enabling? Who on the board
understands management by dialogue, not monologue?

What Then is the Solution?

Although I haven't asked Dave Farber directly, I suspect and certainly
*HOPE* that he is horrified by what he and the remainder of the Mighty Five
have done.  Lets assume Esther gave a fair rendition of what the reasons
are for ICANN's silence in front of the rest of the Internet.  Farber,
Cerf, Roberts, Landweber and Bradner are smart enough to know that in
working with Sims and Cochetti and Magaziner in the summer and in agreeing
to create a board of business people who knew nothing about the internet
they were creating a potential monster - certainly that they were creating
an entity that in being haughty and closed to the open discussion culture
of the net would be asking for recrimination and conflict.  Because they
acted as a cabal to provide adult supervision to the Internet, they may
well now have created an entity that will be still born because it simply
cannot get enough trust from anyone involved to do its job.

Dave Farber is to be commended for speaking out on Monday.  But with no one
crawling out on the limb behind him he has fallen silent.  I hope he spoke
out because he is looking at what he helped to create and is horrified by
what he sees. It seems that the best way for Dave to show that he was
serious is to keep up the pressure..  IF THE MIGHTY FIVE JUST MADE AN
HONEST MISTAKE LAST SEPTEMBER NOW IS THE TIME FOR THEM TO SHOW THAT SUCH IS
THE CASE.

The NIST Solicitation on Behalf of NTIA

Meanwhile we must ask what Becky Burr is doing with NTIA solicitation on
behalf of ICANN?

I spoke late Tuesday afternoon to Teresa Reefe, contracts specialist at
NIST.

COOK:  Why to NIST?  Why not NTIA?

Reefe: because while NTIA has a grants and cooperative agreements office,
it does not have a contracts office and this is a contract with ICANN.

COOK: who decided it would be a contract and on what grounds?

Reefe:  I'd like to know that myself.  it was our lawyers down town.  they
just delivered intrustions out here.  When NTIA does a contract they have
to use our office (Nist)

COOK:  Does the FAR apply?

Reefe:  yes

COOK:  the CBD said Nist intends to award a sole source contract to ICANN
for operation of the Internet Assigned Numbers authority.

What is meant by "operation"....??   How is the IANA defined?  Are we
talking about paying the salries of Joyce reynolds bill manning and others?

Reefe:  don't know.... that will be part of the solicitation being prepared.

Cook:  Ahh....solicitation.  when's it available?

Reefe:  probably the week of the 19th of jan

Cook:   with response due feb 18th?

Reefe:  Yes.

Cook:  Sole source?

Reefe:  Yes.

Cook:  on what grounds?  How could they justify it in view of the 11/25 mou.

Reefe:  had a lot of people calling today complaining about that very
thing.  if you wish to join them in protesting a sole source award to ICANN
send email to teresa.reefe@nist.gov.

(Cook:  She gave me the impression that if enough people bitch they may
have to change the solicitation from sole source to open source.)

Solicitation 52SBNT9C1020 The ICANN NTIA End RuN

Because Esther and Mike don't think we matter enough to be told we found
out about the following solicitation from jim Flemming.

This material comes from "Commerce Business Daily, January 6, 1999 PSA-2256
INTERNET ASSIGNED NUMBERS AUTHORITY Category : <D  (Automatic Data
Processing and Telecommunication Services) Address  : National Institute of
Standards & Technology, Acquisition & Assistance Div.,100 Bureau Drive Stop
3572, Bldg. 301, Rm B117, Gaithersburg, MD 20899-3572Sol. no. :
52SBNT9C1020 Contact  : Teresa A. Reefe, Contract Specialist (301) 975-6364
or Lisa K. Jandovitz, Contracting Officer (301) 975-6344  Due: 18 Feb,1999

[Snip]

NTIA is initiating this contract action to fulfill its need for continuity
of services related to the technical management of Internet Names and
Addresses during the transition described in the Statement of Policy and
the JPA. This particular aspect of the technical management, the Internet
Assigned Numbers Authority (IANA), is currently covered in a contract
between the Defense Advanced Research Projects Agency (DARPA) and the
University of Southern California (USC) in project known as Teranode
Network Technology (TNT). On December 24, 1998, USC, entered a transition
agreement under which ICANN acquired the expertise and resources to perform
the IANA function described in the TNT contract.

What is the Meaning of what NTIA is Doing with the ICANN Solicitation?

I must ask whether in signing the 12/24 "transition agreement under which
ICANN acquired the expertise and resources to perform the IANA function
described in the TNT contract", NTIA and Becky have given ICANN the
credibility it needed for NTIA to come back two weeks later and have NIST
publish the proposal for an award to ICANN of the IANA functions -- sole
sourced through September 2000? I have talked to several experts in
contracting over the last two days.

They tell me that credibility is not all that is needed.  NTIA has no
standing to enable it to legally contract with ICANN.  They see the 11/25
MoU as put in place largely so that NTIA could begin to transfer some
assets to ICANN. We saw an instance with their secret Christmas eve
extension for ICANN of the September arrangement between ICANN AND ISI. We
saw another instance with their failure to breath a word about this or
about the January 6 CBD announcement of the NIST solicitation.  Actions
like these are indicative of their siege mentality. In the context of Dave
Farber's reminder that the net is what THEY ARE HERE TO SERVE, their
attitude that the net is the enemy rather than their service constituency
is revealing.

Let's look at what is being offered ICANN: namely a contract:

Under FAR, and FAR clearly applies here, a contract is used for two
purposes.  One purpose is to acquire goods or services for the government.
One could reasonably assume that, in such a case, the government is the
primary user of the goods or services. In the instant case, IANA is
providing a service for the entire global Internet community (of which the
USG is merely an incidental user). Under the second purpose, a contract may
be used when the delivery of a governmental service to the public may be
most effectively made by a contractor rather than directly by the
government itself. In such a case (i) the contractor becomes an agent of
the government and subject to the administrative procedures act, and (ii)
the contractor may not perform inherently governmental functions (such as
establishing the policies which determine the distribution of the benefits
in which it is involved). Note that (i) the recipient community extends
beyond the US it is hard to argue that IANA is "a governmental function"
especially absent any statutory basis for such a claim (ii) clearly ICANN
is NOT subject to FACA and other administrative procedures to which an
agency would be, and (iii) ICANN WILL be responsible for establishing
policies which will determine the distribution of the services over which
it will have purview.

Now a procurement contract must meet conditions of being responsive and
responsible. (Unfortunately responsible cannot be defined as Roeland meyer
did earlier.) In OTCOBER Magaziner clearly said that ICANN, ORSC and BWG
were responsive..... Indeed BWG and ORSC MORE so than ICANN. Otherwise the
letter to ICANN would not have advised it to make changes in its bylaws.

Responsible means three things: character, capacity, and credit. Character
- a record as ethical and responsible business person. Capacity is
technical ability. Until the christmas eve transfer of IANA to ICANN, ICANN
clearly had no capacity and was ORSC was just as well qualified. Credit -
none of three responsive applicants has a great credit record. If they hang
it on responsibility, and they have, to there are two and perhaps 3 equally
responsible groups.

THIS IS something that USC had better have CYAed themselves on. Are the
September and Christmas eve transfers a legal and legitimate way for the
regents of the university to transfer taxpayer paid for facilities from the
university Regents to ICANN??

To summarize:

1. The term "responsible" as used in the announcement has to do with the
fact that in order to be considered for a contract award, a firm must
submit a proposal which is "responsive" to a solicitation (that is it must
propose to do what was required by the solicitation to which it is
responding) and the organization submitting it must be "responsible" ( that
is, it must meet reasonable and established criteria for "responsibility"
which means having adequate "character, capacity and credit" to provide the
Contracting Officer with reasonable assurance that organizationally it can
perform as proposed.

The language of the Federal Contracting is precise in it's semantic. If
there were were "100 bidders", they would have submitted their "bids" in
response to an Invitation for Bids" in which case the award would be made
to the lowest priced "responsive and responsible" offeror. There is an
appropriate formal process associated with the use of an invitation for
bids.

2. The MOU between ICANN and NTIA was an arrangement having no clear
relevance to or basis under the Federal Acquisition Regulations. (Was it
instead a grant or cooperative agreement issued by NTIA?)

3. NIST ON BEHALF OF NTIA in Commerce Business Daily (CBD) said: On
December 24, 1998, USC, entered a transition agreement under which ICANN
acquired the expertise and resources to perform the IANA function described
in the TNT contract.

The key here is the attempt in the last sentence to state that UNDER THEIR
MOU with NTIA, ICANN has magically gained the necessary capacity
("resources plus expertise") to do the work required by the contempleted
contract. While this may arguably be true, it would be interesting to know
what actual expertise and resources were acquired by ICANN under the MOU.

4. CBD said: Pursuant to its agreement with USC, ICANN now possesses the
unique attributes and characteristics specific to the IANA functional
tasks. To ensure the success of the transition described in the Statement
of Policy and the JPA, the Department must ensure the continuity of the
services necessary to support the IANA function.

I say: This appears to be an attempt to assert the "uniqueness" of ICANNs
"responsibility" which doesn't necessarily follow from their past
performance and putative ability to do the required work. Normally, some
survey of available and interested market sources would be required at this
point. Furthermore in looking at the language "Continuity of services
provided under..." I have to ask was the agreement an appropriate award or
is the new determination to use a contract correct? If the former, why the
change, if the latter, why was the former used if not as an arbitrary
preselection technique to allow the placement of a non-competitive
follow-on.

5.the CBD said: ICANN has unique attributes to fulfill these tasks in
compliance with the principles in the Department's Statement of Policy,
including comprehensive, public, and transparent processes, mechanism and
structures for making policy determinations that the U.S. Government seeks
to have performed during the transition.

I say: Again, the assertion of uniquenes is not established by foregoing
information in a manner that would satisfy the most cursory review. Nor is
there evidence (beyond assertion) of their ability to "fulfill tasks in
compliance with ....".

What seems unusual in the process is that there is no assertion that other
proposals (ORSC/BWG) may not have been equally "responsive" to their
request. Rather, the assertion is that BECAUSE of their previous MOU with
NTIA, ICANN is now the ONLY organization demonstrating the ecessary
"responsibility"... NTIA has thus created this ICANN monopoly based on
their MOU (which was supposed to be only a conditional thing in the first
place).

This appears to be an attempt to assert the "uniqueness" of ICANNs
"responsibility" which doesn't necessarily follow from their past
performance and putative ability to do the required work. Normally, some
survey of available and interested market sources would be required at this
point.

Now since I have ascertained that ICANN has been leasing the IANA employees
from USC since September, one needs to ask whether this gives them enough
of a track record to establish credit worthiness under the terms of
deciding whether they can be a responsible awardee?  The answer is surely
no because, as we have seen, ICANN has no source of income other than the
GIP.  Thus if a protest is made and the proper review undertaken by the
GAO, it looks like IBM as the prime mover of the GIP is the finacially
responsible party for ICANN.  It seems I wasn't so far off mark when a
couple of months ago I asked if the GIP was the PAC (political action
committe) for ICANN.

A protest has to be timely.  Thus a protest against this sleight of hand
will have to be made, very likely, before the issue of the formal
solicitation the week of Jan 19.  The protest must be made by someone with
standing.  Very likely ORSC is the only entity with standing because the
BWG is not incorporated.  In the opinion of my sources it will take a
single letter from the ORSC attorney Dan Steinberg, and Chair Einar
Stefferud to stop this sole source action by NIST cold.

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