The COOK Report on Internet

Octiber 27, 1998 (Extra Edition)

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(c) COOK Network Consultants (You may distribute this extra edition in full to anyone whom you chose.)

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New IANA Formation Ending Amidst Uncertainty, Congressional Inquiry of Magaziner & the Death of Jon Postel

ICANN Supporters Use Closed Process to Create and Sell Corporation That Now Must Operate Without Jon - Modification of ICANN Bylaws is Likely Outcome

The Mighty Five Install One of Their Own as Interim President and Ignore Magaziner's Wishes

Editor's Note: We have put a large number of hours into this piece and we expect to be severly criticized for stepping on the toes of a lot of powerful folks. Make no mistake about it. We are partisan. (We explain the nature of that partisanship in Appendix Three of this document.) But we have also tried to look at the totality of information out there and attempted to make some sense of it. We have tried to paint the big picture here in all its global complexity and to flush the players out from behind their closed doors.

We appreciate and respect the unique role that Jon Postel played in the creation of the Internet. As we watched the gap this summer between the IFWP process and the IANA drafts we, like Larry Lessig, became very frustrated at what looked like Jon's Olympian detachment. But as we have spent the past ten days in preparing this work, we had concluded that to the extent there is blame, the blame belongs to Jon's lawyers and those advising them and not to Jon. All of these other people have assuredly been acting from the point of view of what they believe to be the good of the Internet. But we believe that some of them have errorred in abandoning the principles of openess that have given the net its unique strength.

A "Prequil" 10/27/98: The "Mighty Five" Institute Their Board

A Confused Picture

As I get ready to fly to Nepal tonight I am continuing to be deluged with new information from senior net people whom i have known mostly for five years or longer. Needless to say the information they give me is with the assurance of anonymity.

It is not a pretty picture. The Mighty Five: Mike Roberts, Vint Cerf, Dave Farber, Larry Landweber and Scott Bradner people are saying began planning their benevolent coup d'etat a year ago. These are the internet old guard, or as it were god fathers of the net. Well meaning benevolent dictators. They are all either founding members of ISOC, present or past presidents of ISOC or current ISOC board members. They have all been supporters of the MOU, IAHC, CORE POC and PAB. And now they are about to have the last laugh on 18 months worth of Ira Magaziners involvement.

As i documented in the article I published on October 20th, these five - working they claim with Jon postel - choose the ICANN board in a series and oversaw the establishment of by laws that render that board accountable to no one. This board selected by this self-appointed mighty five then turned around and obligingly selected Roberts - one of the five two whom they owe their seats as interim president. How cosy.

Mike Roberts Management Style

This mornings' email brings detailed complaints about Mike Roberts modus operandi.... from senior internet people....

That he mixes a combination of self righteousness and disdain for those who don't see the world his way. his response to me a month ago when I expressed dismay that ICANN backers with no indication of support from the US government had gone ahead and completed the process of incorporation..... was in effect darn right....what did you expect? why should you be surprised?

That when he is given something to run, he runs it as he pleases without oversight and without accountability from membership.

That he pretends to listen and then does whatever he wants.

That he has an unwavering belief in his ability to always make the right decision and is unwilling to listen to criticism or to views of those who see things differently.

Not something that should make those of views differing the from the MOUvement very comfortable. We have gone through 18 months of federal government led debate that ICANN is now fully prepared to thumb its nose at Ira Magaziner has I have concluded been made a fool of by the mighty five. Ira wants this resolved now. He wants changes in the bylaws NOW. The mighty Five having selected Jones, Day Reavis and Pogue to be the law firm to create ICANN and give them guidance have come up with one tactic of delay after another. here is the lates one. After more than a weeks delay the board without by laws chooses Esther Dyson as its chair and mike roberts as its president. And this morning Esther sends a message to ORSC and BWG and the entire board. The message says essentially the board will meet you in an open meeting on or about November 15th in either Boston or LA to discuss with the moderation of the Berkman Center the by laws.

No meetings before then, no telecons, no nothing. The board it would seem is treating Becky Burr's letter with the greatest levity. Perhaps it can afford to because either it has a pre-cooked deal, or with Jones Day on its side and the GIP ready to hand out money it doesn't need any federal government money to carry on with? I would however like to know who is paying the salary of the IANA staff presently? I have been told that they received layoff notices from ISI.

A Call from Ira Magaziner

At 4pm Ira Magaziner returned my call with some very interesting and apparently contradictory information. He had been called by Esther dyson within the last 24 hours. Esther assured him that ICANN WAS NEGOTIATING NOW WITH BWG AND ORSC. That ICANN would have a new set of draft by laws into ira next week and that they would use the time between then and the Berkman Center meeting to further refine them. That the Berkman Center meeting would be it was hope and final wrap-up consensus agreement session.

This is an interesting contrast to what I have been told by other sources. I make no judgements except to report that what I hear from credible people directly involved, people whom I know well, is different than what Ira is told. let is be said that Ira again stated that without full consensus on the bylaws ICANN would *NOT* get USG approval.

ICANN as the PAC of the GIP?

Meanwhile lets look at the GIP. IBM's John Patrick in the thick of things.... having grabbed Mike Nelson, long time governmental friend of IBM, from his position at the FCC. Mike obviously has and will continue to provide knowledge of the federal process, that John Patrick can use in furthing the corporate aims of his employer. And then Vint Cerf, Mighty Five member, standing there with Jon Patrick several months ago in announcing the formation of the GIP for the greater good of the global internet. To date GIP has raised $160,000 of the $500,000 goal for ICANN with contributions from IBM, MCIWorldcom, Cisco, Ascend and a small email shop. Can I be blamed for thinking of ICANN as the PAC - the political action committee of the GIP and ITAA's?

I need to ask again how can a board elect a president in the absence of by laws? Although, the board I am sure could adopt the "draft five" non sueable non accountable bylaws at a moments notice.

If the might Five had wanted to give American big business an unaccountable, non sueable PAC for making the internet dance to their tune, could they have done a better job? A master stroke that leaves Ira Magziner and the US Government looking extremely foolish.

I ask the Mighty Five to come forward and state what is wrong with an open and accountable mechanism of internet governance? In looking at the ORSC by laws, what do they fear? What do they find repugnant to the open nature of internet self governance in the ORSC by laws. One of the five said to me that this was something very new and very important that they were trying to bring off and that if it worked there would be other moves to copy ICANN.

Some Requests for our Benevolent Dictators

Well, sorry, it should not be allowed to work. The "end" does not and never should be used to justify any means as it has here. What gives the Mighty Five the right to function BY STEALTH as the designers of internet governance for the entire world? They say they are benevolent, but they have deceived the rest of us to create an ICANN that clearly fails the tests that the US government has set for it. They believe that they have all the answers. Their view of the net is undoubtedly genuinely held. but it is a narrow and biased view. It is a view where if you are a constituent you will be looked after but if you have a different outlook then you have a problem. We want and need reasonable people who will listen and engage their critics. Who will grow and learn with their critics but so far this has not been the case. And now Esther Dyson sits there just daring anyone to do anything about the coup d'etat that she and the five have just executed.

Let the Main Narrative Begin

October 19th -- Who's In Charge?

Until the bombshell of the Congressional inquiry hit on October 16 and the sad news of Jon's death arrived on the morning of the 17th, it looked like we had arrived at the finish line for a decision that will irrevocably shape the future of the Internet.

And now, after talking with various people including twice with Ira Magaziner on October 19 the following is clear. Sources say that Magaziner believes that he has tried to run an open, fair, and honest process. He believes that the letter to be issued in the morning will enable the award of a cooperative agreement to ICANN that will be the result of a process by which ICANN adopts the most critical portions of the BWG and ORSC bylaws. He further expects to have a clause in the agreement that will ensure that the selection of the final board will truly be open. Finally he hopes that this will pave the way this weekend to the acceptance by all parties of the true consensus agreement that he says he has always been seeking.

However, they say that he was caught off guard by the events that flowed from his belief that, having said the private sector should create the entity, he could afford only to suggest to the participants that they should do certain things. He believed that he had their commitments and trusted them to live up to those commitments. But he found out only after carrying out the discussions aimed at finding the necessary consensus with the Boston Working Group and ORSC, among others, that many requests he had made to Joe Sims to negotiate with these groups and seek consensus were ignored by Joe. Neither group had ever received any contact from Joe. Also Ira is said to be very displeased the results of asking IANA and Joe Sims to have a list of board candidates out for public discussion by the second half of August. When this date was missed he then called loud and clear for the 23rd of September.

That although Ira expected draft five, and had demanded the removal of clause 4.1 (d) and (e), Ira did not know that it would no longer be a consensus draft between IANA and NSI. That he talked with both Jon Postel and Joe Sims on Friday September 25 and Tuesday the 29th. That the onset of Jon's final illness occurred a day or two after the conversation on the 29th. That not only did Sims fail to bring any names as nominees out before September 30 but, of course, that when they came out on October 2, the board was a fait accompli. That this was a major failure for the process that Ira had asked Sims to assure him that he would not allow to happen.

When today I asked why the government was giving the agreement to Joe Sims since Joe's client, Jon Postel was no longer alive, I was told that Sims has a letter of agreement for his legal pro bono services signed with Herb Schorr the Director of ISI (Jon Postel's home institution) on behalf of the "IANA function." That Sims was always the attorney for the IANA function and never functioned as Jon Postel's attorney. That ISI is now the client and will be the receiving entity for the cooperative agreement, if Sims negotiates in good faith. (We hope that ISI has provided Ira with a copy of its agreement properly dated. Some readers may remember that this is the same ISI who effectively with drew its legal umbrella from Jon in its letter of April 4, 1997.)

Several sources I then talked with found this to be shocking news. So I have made two calls to Sims' office to get his response. The first call left the message with the secretary. The second time I asked whether there was a response. No. Did you talk with him? Yes. So he got my message? I didn't say that he got your message, Mr. Cook. Well did he? Do you have anything else that you want me to tell him? Yes, that I would appreciate an answer. Goodbye. I made a call to Herb Schorr the director of ISI. Does ISI have a contract (letter of agreement) with Sims? Yes or no? My call was never returned.

This whole dodge and feint process is an example of what is wrong with the whole process the entrance of Joe Sim's. What we have is the appearance of a pro bono attorney where the circumstances of his relationship with Jon Postel were kept (one must assume by ISI and Sims) effectively hidden. I asked Sims earlier in the summer on several public lists when I pointed out that Sims was working without charge for Postel to reveal whether he had a letter of agreement with Jon. He did not answer. I am only sorry now that I did not press him for it.

I have heard some extraordinary assertions from the US government about Joe's lack of cooperation with the same US government. In this case it appears that Sims has arrogated to himself the primary responsibility for negotiating further changes to the agreement. (Another uncertainty is the question of who signs on for the fiscal responsibility involved in the transfer of government assets.)

I am very glad that Ira has made it very clear that the letter to be sent to Herb Schorr of ISI in the morning will explain that Joe's bylaws are deficient in a lengthy list of issues involving of political transparency, fiscal accountability and many other areas common to the complaints of both the BWG and ORSC. That this letter will make clear that, if the US government is to work with Schorr and ISI in handing over US assets to the ICANN corporation, Sims must agree to enter negotiation with ORSC and BWG. That these negotiations must be rapidly completed if Sims is to demonstrate that he is working this time in good faith with the government. That when the negotiations are complete both ORSC and BWG will be asked by the government whether or not they accept the bylaws that Sims puts forward. Only then will the government begin to negotiate the completion of the agreement with ISI and Sims.

Ira, it seems, has appeared to be operating in bad faith because things have gone differently than he had been led to believe they would by Joe Sims. What Ira said he expected to happen did not always happen, especially last month and this. We have had perhaps 15 conversations with him since November 1, 1997 and perhaps six of those since September 21, 1998. One thing that we find very striking is the unwavering consistency of the process that Ira has said that he has attempted to follow. Others have noted this consistency as well. We have said some harsh things about him recently. If he can bring off what he has outlined today that he intends to, the Internet will owe him a debt of gratitude.

For the unthinkable has come very close to happening. Ira can not permit the man who presided over such a non responsive process as the one we have seen to walk off with the first legal charter of the internet that would have been essentially accountable to no one except the attorney general of the state of California. Stop and think. Joe's firm will in all likelihood become corporate counsel to ICANN. The Technology Issues Practice (TIP) of Jones, Day could have been then in the singular position of having created a governing entity especially amenable to the desires of the large corporate clients of Jones Day -- the very clients that the TIP is positioning itself to serve.

Can one believe that the first set of these unaccountable bylaws were completely divorced from the interests of Jones, Day, Reavis and Pogue's present and future clients? For example given that Jones Day's intellectual property practice is among the largest in the world, it is likely that many of them would not like to have ICANN approve new TLDs since they will then have to defend their marks. And is not there at least the danger of a conflict of interest in Jones, Day being likely to represent both ICANN and those who may want to challenge it? It is troublesome to know that Sims, who is such a prominent player of late in this negotiation, comes from a law firm that would stand to benefit enormously if the ICANN deal goes through unchanged. And that Sims, having been just the pro bono attorney, with Postel gone, appears to be the principal with whom others are negotiating. Maybe part of the final agreement should be that the legal contract for ICANN representation should be put out for bid?

Only the End of Stage One

However, even if Ira's startegy succeeds, this is really only stage one. During the first year its interim board members must select a president, and then chart a course by which permanent board members are chosen. It must make a contract with Network Solutions to determine what will happen to NSI on October 1, 2000, select a names "supporting organization" (council) and then contract with it. They are likely to have multiple choices for many of the organizers of POC and CORE are meeting under the banner of Domain Names Supporting Organization in Spain on October 16 and 17th. In addition, the organization must also make contracts with the three IP number registries. It must also solve the problem of what kind of membership it will create and further define the responsibility of the board to the membership. It must do this without Jon Postel as CTO who died during the night of October 16 - 17th.

ICANN, The Internet Corporation for Assigned Names and Numbers, has a board of nine mostly business people that can certainly not afford huge amounts of time to devote to a task that to have much hope of success should require a full time effort. It must fill the CTO job. People like Scott Bradner and John Curran would have the technical qualifications. The problem is that the commercial industry would prefer someone like a Curran who best understands the needs of the industry. But Curran and the better known of these people at other major ISPs are in positions paying far more that this one could be expected to pay. Then there is the difficult question of the CEO himself. A search firm will obviously be used and a huge amount will be dependent on the outcome.

The Congressional Inquiry

To complicate matters further, on October 15 Tom Bliley, Chairman of the US Congress House of Representatives Committee on Commerce, sent five page letters to Ira Magaziner and Commerce Secretary Daley, asserting his disappointment that IANA "did not meaningfully participate in the IFWP process," and that it developed its "proposal behind closed doors with little consultation from the broader Internet community." Bliley complains [very much out of context] that even Jon Postel's 10/07/98 testimony stated that the selection process for the ICANN Board was "undemocratic and closed." He is concerned about the absence of "a solid American majority" on the interim board. He complains that the comment period was inadequate. He expresses doubts that the Commerce Department had the legal authority to take the cooperative agreement from the NSF.

"Pursuant to Rules X and XI of the US House of Representatives" he requests by November 5, 1998 every shred of information relating to Magaziner's knowledge of these events and his justification for actions taken. The rest of the letter reads like a subpoena and we can imagine that the data will fill several boxes. One observer commented that the Bliley investigation was the result of Ira's allowing the process to go behind closed doors at the beginning of September. Another said he hoped that it would be explained as nothing more than a process of miscommunication, wondering aloud what force that had enough power to do this wound up being so dissatisfied by the outcome that it would use its leverage with the committee. A third suggested that lack of an American majority on the board was the real motive. Commerce intercedes for big business. [For the text of Bliley's letter see Appendix One. Note also that Bliley sent the same letter to Commerce Secretary Daley - with the same set of demands.]

Readers should take no comfort from the intervention of the Commerce Committee. It is positioned as an attack on the authority and competency of the Executive Branch's handling of the situation. It may become a lever to force the issue into the hands of Congress. Although we have been critical of both Becky and Ira, we believe that Congress is all too likely to make a bigger mess should it try to wrest control from the Executive Branch. Bliley's statement that: "I am concerned that the lack of a solid American majority on the interim board fails to reflect the leading role of American business investment and consumer-use in the growth of the Internet," is as close as his letter comes to stating a real motive behind Bliley's actions. The question of whose intervention could have been a strong enough one to create such an attack on the Administration's authority comes to mind. Who might have despised what Ira and Becky were doing to them enough to want to bring down the wrath of Congress on Magaziner? We have heard from third parties that the tension and bitterness between Ira and Becky on the one hand and NSI on the other was extreme. From the Wall Street Journal article that ran on October 8th, we know that NSI employed some major lobbyists. Such circumstantial evidence of course proves nothing.

So Wither Magaziner and the Executive Branch?

As we go to press the situation is this. Sources have told us that letters from the Commerce Department may go to ICANN and the other applicants by Monday evening October 20. These letters will describe the conditions under which the Commerce Department is prepared to make an award. From an October 15th interview with Ira Magaziner, we are optimistic that US government's conditions will repair the major deficiencies of the ICANN draft by insisting on a Board that is accountable to ICANN membership and has adequate fiscal accountability as well as several other conditions. Bliley's investigation will increase the pressure on Ira to put pressure on ICANN to adopt the ORSC (Open Root Server Confederation) by-laws and hopefully to find a new Board.

Of course, with Jon Postel's passing we must stop and ask: Just who is ICANN? Joe Sims and Mark Weinberg of Jones, Day, Reavis, and Pogue? Right now they are the essence of ICANN. While Joyce Reynolds, Bob Braden and Bill Manning (IANA employees) are respected and competent, they lack Jon's moral authority. Sims and Weinberg certainly have nothing to offer the Internet community beyond a set of bylaws that have been harshly criticized both before and during the most recent six day comment period.

Ira can be very glad that ORSC drafted its own set of articles and by laws and its proposal to become the new IANA Corp. after it realized the heretofore hidden rules by which ICANN was playing. Ira really needs to find a way of showing Bliley that his accusations are ill founded. Telling him that the philosophy was to let the private sector figure out on its own how to create the new IANA may not cut the mustard any longer. Ira could decide in favor of the ORSC proposals outright. But what is more likely is that he will go with ICANN on the condition that it accept the ORSC by-laws. He has very strong leverage to assert this by saying to ICANN: "if you choose not to agree, I will have no choice but to turn government resources over to ORSC." He could also stipulate conditions of real openness for the choice of a final board. He could then require the interim board to meet them as a condition of final remission of government resources in advance of October 1, 2000.

Now a careful read of the endorsements for ICANN documents shows that bulk of them come with significant reservations. If one takes the reservations and categorizes them, one gets a picture of by-laws that look very much like ORSC's. The by laws can be fixed. One critical question is, given the way in which the board was chosen, and absent the moral authority of Jon Postel, is the ICANN shell still viable? The next critical question is (if we assume that Ira must insist on changes) since legally he cannot force Sims to agree and cannot be too blunt about telling Sims what he wants done, will Sims resist the suggestions that he can expect to receive on Monday the 19th of October?

Bylaws Must Be Changed

What evidence is there for the assertions that we have just made -- in addition to what Ira told us directly on October 15th? Consider the 10/16/98 comment to IFWP by Milton Meuller of Syracuse University and the CATO institute. "An interesting pattern emerges from the NTIA comments. In many cases, one sees in the beginning a qualified endorsement of ICANN, and then when one reads down into the meat of the comments, one finds powerful criticisms of the ICANN proposal which make it clear that what they really want to see is something much closer to the BWG draft; that is, they want: --a requirement of membership --a more restricted role for the supporting organizations --an improved interim board.'

"Here, for example, are Verio comments. First, they say: 'With some modifications, the proposal of the Internet Assigned Numbers Authority ("IANA") will accommodate the need for Internet community participation and accountability without risking undue delay in the establishment of the new corporation.' Then they say: 'The IANA proposal should be modified to direct the Board to structure the DNS Corporation as a membership corporation -- a decision that the present IANA proposal leaves to the Board's discretion. Also, the IANA proposal should be modified so that the Supporting Organizations, which IANA would permit to dictate decisions of the Board, have the power only to advise the Board.'"

"CIX follows the same pattern. A seeming endorsement followed by devastating criticisms: Beginning: 'The Commercial Internet eXchange Association (CIX) is pleased to submit a statement endorsing in principle the transfer of the IANA functions to the new ICANN Corporation.' Later:'1. The current bylaws of the Internet Corporation for Assigned Names and Numbers do not provide for an elected board but a self-perpetuating board accountable to the State of California rather than a membership. To be sure, the fifth revision provides for a possible membership corporation to which the board would be responsible and accountable, but at this time such a relationship is not guaranteed.

The absence of true accountability and responsibility is a fundamental deficiency that vitiates transparency and openness...' '2. If independent judgment and diversity are crucial to the board members' qualifications, how do the proposed nominees satisfy these criteria? While the nine proposed at-large board members are all distinguished citizens with admirable professional qualifications, CIX is unaware of how these individuals were chosen. We note, however, that commercial interests are under-represented, especially from commercial users and the crucial Internet service provider sector that provides access to the Internet for institutions, businesses, and individual consumers.'

CIX's recommendations: The proposed bylaws should be amended to prohibit employees of the SOs from serving on the board of directors; The nominating process must be opened up, and no SO names should be accepted until that occurs; The bylaws should be amended to require that the new corporation should be a membership corporation with the final election procedures and membership entails to be determined by the permanent board'"

"'Similar criticisms come from the European ISP associations, from APIA, etc.' Apparently, relatively few commentators are willing to come out directly and endorse BWG or ORSC, but the substance of their comments indicate that they are in complete support of their dissent."

As if all of the above weren't enough, organizationally we are also in for a change in government leadership. Magaziner is expected to leave in January. Elliot Maxwell has just moved back to the Commerce Department from the FCC. He reports to the Chief Counsel of the Department who in turn reports to the Secretary. Still Ira Magaziner reports directly to the President. Elliot, although highly respected, is now three layers removed from the President. Key players are uncertain whether this demotion within the power structure will harm the interests of the commercial net.

ICANN: The Secrecy and Arrogance Continues - Oct 23

See http://www.techweb.com/printableArticle?doc_id=TWB19981022S0009

COOK Report: 48 hours after the US government letter went to Herb Schorr we have a response of sorts from Joe Sim's. Sims, once the attorney for Jon Postel, at some point signed a letter of agreement with Herb Schorr, the Director of ISI, so that his effort would still have legal standing after Jon's untimely death. It turns out now that Sims is following the instructions of the USG that he negotiate changes with ORSC and BWG by announcing that "it would not be successful to accept ideas from small groups of people [ORSC and BWG] and then lose the support of large [unnamed]groups."

Secrecy is Not the Answer

COOK Report: Mr. Sims: at some point I hope you will have the decency to identify your clients. Right now they can only be seen to be for an undisclosed and unannounced cabal of "large groups" of supporters of ICANN. For you to suggest that you may have to ignore the instructions of the United States government lest, in obeying, you alienate "the support of large [unnamed] groups," is quite frankly an insult to the wishes of the US government and I suspect to the wishes of the majority of the users of the internet.

When Jon Postel was alive, you could say that it was he who wanted the content of the early drafts. Now that he is gone.........you no longer have that opportunity. So instead of speaking for Jon Postel, you now speak for a "cabal" of "large groups" who apparently want an ICANN and a board that they can control and who would look to be unwilling to let the rest of the world know who they are. Such reticence alone renders them extremely suspect.

We don't know:

2. who chose the board,

3. who is now acting through you to block changes to the bylaws that the US government is asking for.

Unfortunately the White Paper didn't promise an open process. As such it made it possible for you and your mentors to do your deals in secret and out of sight. It did, however, demand a body that met open criteria of operation when constituted and functioning. As NTIA pointed out to you, your bylaws have not created such an organization.

Jon Englund Returns Our Call

The closest those of us who are not sufficiently privileged to have your level of access have gotten to figuring out who is behind this is that Jon Englund of the Information Technology Association of America has cited his Association's support for what you are doing.

See: http://www.pathfinder.com/money/latest/press/BU/1998Oct07/736.html

I would like to ask Jon Englund: If the "cabal" is a group of ITAA members and folk from the GIP (like the IBMers John Patrick and Mike Nelson) which ITAA also administers, I hope they will step forward. If they do not step forward, I hope Congressman Bliley will send them subpeonas to appear before the Commerce Committee. ICANN must be accountable to something besides a shadow government of the biggest IT companies of the world.

Having said this, let me also add that Jon Englund just returned my phone call. We had a reasonable conversation. Jon assured me that there was "no ulterior motive from the Association or its members" other than "what was best for the internet." That ITAA represents "a large group of companies that has generally been supportive of the ICANN with some provisos..." When I asked: "well is ITAA one of those large groups to which Sims is referring?", he said that "ITAA had not said anything to suggest that if there are modifications that we would no longer be supportive of the process."

We talked for perhaps 10 minutes when Jon had to go to a conference call. A bit longer of a call would have been useful. Certainly, trade Associations are there to lobby and they are not used to having to do it in public. With the Internet ITAA will find increasing pressure to be more public. If the motives of Jon's Englund's members are as virtuous as he says they are, then it would seem reasonable to see fuller and more open disclosure by ITAA of whatever role that it is playing. Jon didn't know the answers to my three questions either. (Who chose Sims, who chose the Board, who is acting to block changes in by laws.)

Another Opinion from the Commercial World

The director of another association returned my call and commented as follows: He saw nothing in the NTIA letter to indicate any expectation what-so-ever that Schorr or Sims was expected to sit down with the BWG or ORSC. He believed that the letter called for the ICANN to get organized and for the ICANN BOARD to make some changes to the bylaws to satisfy NTIA's complaints. Internet mail lists, after all, weren't where the fate of the net would be decided.

Eric Weisberg of the Boston Working Group on October 24: This is to bring everyone up to date on what is happening.

It appears that Postel was the ICANN. Without him, ICANN must be recreated almost from scratch. This has caused a schizophrenic situation where the invitation to enter into negotiations went to ISI, which apparently has had very limited institutional participation in the process.

At any rate, Joe Sims purports to represent ISI and not ICANN, whose board, we are told, has not been seated and will not be involved. Schorr, btw, is out of town next week, and Sims just met with an ISI representative on Friday to discuss how to proceed. Thus, we have no knowledge as to the identity of the people who are actually making the decisions. Nor, do we have any indication that they actually have a plan or direction.

Sims has not approached the other parties, but has responded to e-mails and there have now been telephone exchanges with one of his associates setting up a tentative discussion between him and Karl on Monday. The conversations have been friendly and the need for openness of process is agreed to by all, though as yet is undefined. Further, there has yet to be any substantive discussion of how to proceed.

So Who Is Joe Sims?

We have identified Jon's inner circle of advisors (apart from the ITAG) who played the critical collaborating role in selecting the US members of ICANN Board. The 'mighty five,' are: Vint Cerf, Dave Farber, Mike Roberts, Scott Bradner and Larry Landweber. At least one from this inner circle played an important role in recruiting Jones and Day as Jon's pro bono law firm and Joe Sims as his attorney.

Jones, Day, Reavis and Pogue is one of the five largest law firms in the United States with over 1200 attorneys and one of the largest intellectual property practices in the world. According to a telecom policy knowledgeable source, Jones, Day has had many RBOCs as clients.

Joe Sims was born in Phoenix Arizona in February 1944. He was admitted to the bar in Arizona in 1970 and in Washington DC in 1978. In the Antitrust Division, U.S. Department of Justice he worked as Deputy Assistant Attorney General for Policy Planning and Legislation between 1975 and1977; and Deputy Assistant Attorney General for Regulated Industries and Foreign Commerce between 1977 and 1978. He joined Jones Day in 1978 where he has focused on antitrust and government regulation since then. He and Jeff LeVee of Los Angeles are members of the Technology Issues Practice of Jones, Day (TIP). Jeff had been assisting John Postel in Los Angeles. The stakes for all concerned are highlighted by the fact that it was Joe Sims in Washington who took the lead.

The following is a paraphrase of official information about the Technology Issues Practice of Jones, Day. The Technology Issues Practice of Jones, Day has been created to give the firm a head start in identifying and dealing with the legal issues surrounding emerging new technologies. It is made up of approximately 25 lawyers, from 12 of Jones Day's offices throughout the world. Members of the TIP tend to be partners and associates whose future careers have high stakes in the goals of this effort and who were selected for the passion of their interest in this area. The goal of the TIP is to serve as a means of expanding Jones Day's ability to deal with technology-related legal issues and technology companies.

I am told that what Joe has done for Jones, Day is common practice in many law firms. If you are going to do pro-bono work for someone, you might as well do it in an area of critical interest to the firm. So while both the interests involved and the powerhouse of resources available to Joe Sims are by no means unusual - given the stakes, I have spent some time digging this information out because it is certainly relevant to those who are interested in evaluating some of the possible motives for Sims involvement.

One legally knowledgeable observer offered me the following evaluation. "At this point Sims is left high and dry. His client was Postel. With Postel gone, he has no relationship with anyone, and Jon's and Joe's ICANN has no special standing whatsoever."

While the mighty five may not have intended for it to turn out this way, Sims and his firm have gained enormous potential power and influence in the Internet in writing a set of by-laws that create an unaccountable and unsueable shadow government for the Internet. The major claim to legitimacy that the ICANN draft has is that it was allegedly put together under the guidance and support of Jon Postel.

The Inner Circle and the Closed Process

It is tragic that Jon, who has been unfairly abused during this process, has just passed away. In 1991 Jon's aortic valve was replaced. Recently the valve began to fail. It was leaking. Information about when the replacement occurred is conflicting. On the basis of assertions by those with direct knowledge it was not later than Sunday the 5th and may have been earler. On October 8th there was a mail list assertion that he had had surgery. We recieved confirmation of this from those with direct knowledge on October 11. According to these people, Jon was on his way to recovery when an infection developed. The physicians had to intervene again to deal with the infection which they successfully did. Then from an October 13 conversation with Ira Magaziner we learned that he was on his way to recovery and expected to be able to retain the CTO position." (ISI issued on October 14 a press release about the ICANN proposal that mentioned Jon's surgery only at the end and said nothing about the infection.)

We mention our knowledge in this degree of detail only because of our concern about the tight lid that was kept on news of his condition. Right up to the announcement of his death on the morning of October 17th, the assertion by all those with direct knowledge of his condition, whom we were able to contact, was that he would recover and assume the duties of CTO. Given what had occurred to Jon, it seemed to us that these assertions would be very unlikely to come true. But we realized, if this were the public position of those supporting the ICANN proposal, it would be easier for the government to give it the nod. It was pointed out to us that a tight lid was being kept on things at the wishes of Jon's family and, given recent vicious attacks on the privacy of public officials, we felt torn between a feeling that we should comply and a sense of profound unease that the motives for asking for silence were something beyond a concern for Jon's privacy.

The sad point is that Jon was being used by the forces surrounding him. He deserves far better than the treatment he has gotten. Any shred of legitimacy in the ICANN proposal is founded on its being built on Jon's wishes and on the assumption that he plays a pivotal role. Now that he is unable to do this, the idea of turning the future of the Internet over to an unaccountable board, structured by Joe Sims to be as immune from suit as possible and with Joe Sims as the likely legal counsel becomes appalling. An observer with direct knowledge of the negotiations states that what has been crafted is based 80% on Sims' input, 15% on that of Mike Weinberg (a second Jones Day attorney in Austin, Texas. Weinberg kept the authoritative text and did the drafting at the instruction of Sims.) and 5% on that of Jon Postel.

Jon's Testimony

Jon's most recent testimony is found at http://www.house.gov/science/postel_10-07.htm

"My name is Jon Postel. . . . I also administer the Internet Assigned Names Authority, . . . At this point, it might be useful to speak to the charge that some have made that IANA, by directly offering its thoughts and suggestions to the Internet community and inviting comments on them, was somehow subverting a true public process. Most of this criticism comes from a small number of loud voices, including a small minority of those who were involved in one of the consensus-building efforts that took place over the last several months, the International Forum on the White Paper. Their complaint, as I understand it, is that anything that was done outside of the IFWP process is necessarily illegitimate, because the IFWP was the only legitimate consensus-building forum. Since IANA, in addition to participating in every IFWP meeting, also produced its own multiple draft documents, posted them publicly and sought comments on them from anyone, these critics argue that the IANA effort was an attempt to undercut the only "true" public process."

"It is hardly surprising that the IFWP did not produce any specific proposals or documents. Corporate documents, like football game plans, are not easily drafted in a stadium, with thousands of very interested fans participating, each with their own red pencil, trying to reach a consensus on every word. Group discussion is very valuable; group drafting is less productive. The IFWP served its intended purpose, and it served it well. Most of those who organized and participated in the IFWP process recognize and accept this fact, and indeed most are strong supporters of the ICANN proposal submitted to the Commerce Department. But a small minority, for whatever reason, have chosen not just to disagree with the proposal, which of course is their right, but also to characterize its very existence as evidence of some global conspiracy to prevent a truly open process. This is disappointing, but perhaps it is inevitable that there will be a small fringe of extreme views when the subject is something that touches (at least potentially) every person on the planet."

The Mighty Five & Sims Made Postel a Figurehead Without Meaningful Power

From our knowledge, we believe that Postel would not have knowingly made the highly partisan statements that were in his testimony. These were statements that, if they could not have been objectively shown to have been false, could be shown to have been made in the face of substantial opinion that reality was precisely the opposite of what he alleged. To us they read like the closing arguments of Joe Sims to the jury of Ira Magaziner - saying, in the face of substantial evidence to the contrary: mission accomplished - consensus demonstrated - give us the reigns of power.

Also we would ask whether Jon would have turned in a document saying that he directs the Internet Assigned NAMES Authority? Several prominent figures have told us that when they testify, their attorneys often write the testimony for them. Readers would do well to remember that Jon Postel never before had the services of his own attorney. It is very likely that that Sims took on the task and that given his medical problems, Jon may never have read the testimony that was turned in under his name.

On October 15 on the IFWP list, Einar Stefferud added: Those remarks do not, to me, sound like what Jon would say in such a situation. They do however sound like what someone else in the ICANN camp would say. But, all this is idle speculation. The only key data point that will help us to understand what is going on is to know when Jon became ill and went into the hospital. In any case, we should all wish him a speedy and full recovery, and at the same time, recognize that we should be organizing the NEWCO around principles of organization and not around mortals.

ICANN without Jon Postel

Those supporting ICANN need to stop and think what they are getting with that support. They have assumed it was Jon Postel. Unfortunately this is not now the case. What they get is a "black box" drafted by Joe Sims and a board selected by the Larry Landweber, Dave Farber, Vint Cerf, Mike Roberts and Scott Bradner. These folk - the Mighty Five - are basically followers of the IAHC and MOUvement and the European POC/CORE public trust domain name model. By the time I publish this, the POC/CORE folk will have held a meeting in Spain to anoint themselves as the new Domain names support organization.

Given what I knew about the seriousness of Jon's medical condition I expressed doubt last week that he would be able to fill the CTO role. In response to my concern about this issue Vint Cerf responded on 10/14/98: "There is enough technical talent in the Internet Community that the ICANN proposal can work, either with a single person in the CTO role or an advisory group (such as the ITAG). Jon has endured unfair criticism in the midst of his serious health crisis; I hope you will try to make right the wrongs done to him."

Vint is clearly so committed to what he has won in ICANN and its Board that he feels that it is viable with or without Jon.

The Mighty Five Respond

Now the only public call for board nominees that I can remember was in mid September when word was put out on mail lists to send nominations either to IANA or to Don Telage of NSI. Conversations with my sources showed that input to ICANN had come from varied sources -- even Gabe Batista and Don Telage had been allowed to think that they could give Larry Landweber suggestions. Nevertheless my sources are in basic agreement on the identity of the "mighty five" as the principal agents that ran the board selection process for Joe Sims. Therefore on October 13 I wrote to all five:

"I have obtained verification of your role as IANA's principal agents in the selection of the US members of the ICANN board and in the on-going process of finding an interim president for ICANN. Of course you are, as far as I can tell, perfectly entitled to do this. What I object to is your doing it NOT in public. And in such a way that it is not clear whether Ira does or does not know what you are doing. I am working on an extensive revision of materials on this subject for publication in my December issue next week. I intend to make your roles public there and do so as objectively as possible."

"I am also striving to find out more about Jon's capability to perform his duties. I understand that he had surgery to repair a leaky aortic valve implant from several years ago and that not long after the surgery, an infection developed which was quite serious but now seems to have been brought under control. On the one hand, I am told that he is being deemed quite capable of carrying on his duties as ICANN CTO and as the spirit and 'glue' that may be expected to give some cohesiveness and direction to the new organization. On the other hand I have also heard some second hand opinions that judge this outcome unlikely. I ask you: If he is unable to perform his dutuies - who will?"

"I am beginning to realize that his health may have played a role in his ability work with his attorneys and produce drafts that would be better respected than what was put out in his name and that therefore one should be careful about throwing direct blame at him for his apparently Olympian attitude of detachment this summer. And so I certainly wish him well."

"But the fact of the matter is that if Jon cannot fully participate in the day to day development of ICANN, his proposal looses a huge amount of legitimacy since you and Jon have chosen the board members from the generally not terribly internet clueful and since the proposed interim president is not expected to be a significant internet figure."

"This then is a major issue regarding which I request your assistance in coming to a sound judgement on. Namely how can we possibly expect that after such serious medical problems that Jon can jump back in to the fray? And especially that he do so immediately -- which is critical. If he cannot fully function during this critical time what do you propose to do?"

"If there is any shred of doubt about his ability to function NOW, then, in my humble opinion, public knowledge of your roles becomes even more important. Finally another very critical question. When you incorporated ICANN, did you do so on your own without the knowledge or blessing of Ira? Ira had promised that the selection of the board would be an open process. However many, including myself, are very concerned that the process has in fact been predetermined."

On October 14th Vint Cerf replied: There was a public call for suggestions for board members and I responded along with many others. That's it. I didn't participate in the final selections, etc. None of the people I suggested were named to the board.

There is enough technical talent in the Internet Community that the ICANN proposal can work, either with a single person in the CTO role or an advisory group (such as the ITAG).

Jon has endured unfair criticism in the midst of his serious health crisis; I hope you will try to make right the wrongs done to him.

vint

On the 14th Scott Bradner added: I'm in exactly the same position as Vint - I was asked for names, suggested some and commented on others - like Vint, none of the names I suggested were on the final list (and counter to what you wrote once before) I never showed any list of names to anyone -I never had a written list to show. [Editor's Note: I checked again with my source who asserted that Scott had certainly said he "knew" the identities of the folk on the final list. This when the rest of us didn't even know that there was a list and that Larry Landweber was the list keeper.]

Scott

Mike Roberts October 14th response: Gordon - it is no secret that I have represented EDUCAUSE and its members over the course of the summer in matters related to the white paper. I helped organize and fund IFWP and participated in its Steering Committee as long as that was useful. I moderated a panel in Geneva, I drafted policy positions for EDUCAUSE management, I have had dozens and dozens of bilateral and multilateral conversations about every aspect of the topic, including conversations about the desirable characteristics of Board members, interim and permanent, and who might fulfill those characteristics best. If that makes me guilty as charged, then I plead guilty.

When Larry Landweber responded, I replied to his response as follows: "Larry, is this the on record reply that you wish me to print? Jon is a public figure with the weight of great expectations on his shoulders. The exercise of due diligence for the creation of an ICANN that is not subject to capture and control by persons operating outside the confines public knowledge demands that the public be aware of the issue of whether or not Jon can perform the functions for which you have created ICANN."

"Or on the other hand do you think his condition should be kept secret and if so for how long? There could have been and should have been the press conference yesterday [about Jon's health]. . . . . I understand from multiple sources that you collected the names for the board and coordinated the process of contacts, discussions etc."

Larry replied stating that his initial response was off record. He did not challenge my assertion about his role as coordinator of the selection process.

Dave Farber offered an innocuous statement on the 16th. And in a later message added, as an afterthought, that his reply was off record. Neither he nor any of the remaining four of the mighty five challenged my general description of the process.

Part One

Creation of the New IANA: What Happened?

The June 5, 1998 White Paper was very cagey about what was promised. Its guiding principles were: stability; competition; private, bottom-up coordination; and representation. (See sidebar one). Nowhere did the White Paper itself promise an open process. During the first 30 days after the Paper's release this important detail became thoroughly lost.

The first step on the road to the present debacle came on June 5th with the NTIA press release titled "COMMERCE DEPARTMENT RELEASES POLICY STATEMENT ON THE INTERNET DOMAIN NAME SYSTEM." In that release, Becky Burr said:

" . . . the policy statement describes a process whereby a new, not-for-profit corporation formed by the private sector would assume various responsibilities for DNS administration that are now performed by or on behalf of the U.S. Government, or by third parties under agreements with the U.S. Government. We invite Internet stakeholders from around the world to work together to form this new entity." She also said: "We are looking for a globally and functionally representative organization, operated on the basis of sound and transparent processes that protect against capture by self-interested factions, and that provides robust, professional management. The new entity's processes need to be fair, open, and pro-competitive. And the new entity needs to have a mechanism for evolving to reflect changes in the constituency of Internet stakeholders."

So, on the one hand, the government said what it wanted: a stable, competitive, that should as far as possible reflect the bottom-up governance that has characterized development of the Internet to date and that should have diverse representation from around the globe on its board. The White Paper talked of an entity with open processes. It did not however talk about how this entity would be formed. Either by inadvertence or design, it left one of the very most critical questions untouched. Now that we are seeing the chaotic heavy-handed conclusion of events, it has become clear that the process issues were left out by design. One reasonable hypothesis is that Ira Magaziner, given his apparent willingness to endorse outcomes that were not part of any open process, remained interested only in the outcome. Unfortunately this interest only in the result resulted in false expectations that have sowed much distrust. In the absence of any further efforts to redeem himself, it is reasonable to assume that his intentions were to serve interests that could not withstand the scrutiny of an open process motivated by any standards of public interest. [Not surprisingly he denied this interpretation in my October 15th interview. And I fervently hope that as I finish writing this on Sunday the 18th, he is preparing to take redemptive action on Monday.]

In her October 12 comments to NTIA Laina Raveendran Greene, a well respected attorney with many positions of responsibility in the Asia Pacific region, got it exactly right: TRULY AN OPEN PROCESS OR NOT?- THAT IS THE REAL QUESTION. Laina went on to say that it was "weaknesses of the White Paper which merely caused much of the problems."

She added: "You had from March 1998 to make these pronouncements, and yet you waited till June 5th to make the pronouncements and then gave industry only the summer to come up with solutions. [Editor: What Laina likely does not realize is that until late May, according to inside sources, it looked like Magaziner was going to impose a solution.]

Liana continued: Imagine how many of us had to make changes to our summer plans and to support you in the attempt to do global industry self-regulation. It now appears to be a un sincere attempt to get true global participation, but rather to use the process to support any proposals you may choose to adopt. Rather than give industry more time, and ensure global input, you seem to have opted in favor of US Congressional Hearings and closed door negotiations. All this is VERY disturbing indeed.

The White Paper was weak in that it merely pronounced that private sector was going to create the new entity. Who this private sector was, how they were to form this entity, how you would recognize the entity etc were never stated. This left a black hole, and since the announcement of the White Paper, many entities began the self-proclaim themselves as part of this effort, and announced meetings. That is why, it was very reassuring to have the IFWP process as a means to coordinate these various efforts, and the US government, IANA, NSI's seeming support of this process, made people rally their effort behind it at their own expense. It was only after it became clear that perhaps NSI and IANA with the US government were the real players, that the IFWP process broke down and people began positioning themselves. I am glad that there are at least some proposals on the table from people who have been involved in that process.

By not having a clear procedure in place, you have actually given it the opposite effect of due process, not to mention wasting everyone else's time and money. I do hope the US government will take cognizance of their own mistakes."

We are in complete agreement with Liana. What follows is our attempt, using many sources who would talk only on condition of anonymity, to piece together what has happened since the spring of this year. While we are reluctant to devote too much space to this subject we think it important to put our knowledge on record because we are now about to get the IANA corporation whose decisions will affect the most critical aspects of the Internet's operation. We believe a clear understanding of what happened will be useful to those who must now began to plan operations for the new era. Readers should note that from here on I shall abandon the use of the editorial "we".

Setting False Expectations

In response to the White Paper's comments, a broad based and geographically diverse group of Internet stakeholders came together at the end of June under the IFWP banner (The International Forum on the White Paper). A group calling itself the GIAW announced plans for a meeting to begin work on shaping the new corporation. Domain Name Rights Coalition Chair Kathy Klieman in mid- June broadened the number of people involved and obtained the agreement of her old law school professor Tamar Frankel to act as a facilitator in a series of meetings during the summer designed to establish the new IANA corporation by a process of consensus building. At the end of June Barbara Dooley of the CIX moved into and took over what Kathy had started renaming it the International Forum on the White Paper (IFWP).

Ira Magaziner kicked off the first Reston, Virginia meeting, endorsed the open IFWP process, and left the impression that he gave its full blessing to IFWP efforts. All though the White Paper didn't promise an open process, Ira raised expectations by giving everyone there the impression that he was fully committed to that. When at the beginning of September the IFWP process broke down and everyone went behind closed doors trust in Magaziner evaporated.

Jon Postel Gets a Lawyer

After Jon Postel's redirection of the root servers, in early February of 1998 some of Jon's friends decided he needed a lawyer of his own. For the attorney at USC was there to serve USC not Jon. Given the magnitude of the task, a pro bono attorney was necessary. Friends asked friends and, before long the law firm of Jones, Day, Reavis and Pogue percolated to the top of the list. This is a major law firm wanting to get into the internet business. Mike and especially Joe have been Jon's lawyers since the spring. An opportunity to draft the articles and by laws for ICANN was one of the prime points of interest that would propel Weinberg and Sims and Jones, Day, Reavis and Pogue into the heart of the Internet world.

Unfortunately for all concerned what made the internet the internet was a learning experience for Joe and Jon, as an engineer, was more interested in making the protocols run on time than arguing with his attorney. As someone rather intimately involved in the process has told me, the by-laws have taken the form that they have because Sims and Weinberg decided to do the lawyerly thing and write them from the point of view of making it as difficult as possible to sue the new organization. Another source who was closely involved said his perception what was motivating Sims was his desire to cut down on the hassle factor and make it easier for ICANN to function without outside interference.

Board members with no accountability except to themselves? The harder to sue. No provision for freedom of speech or open expression? The harder to sue. Add fiscal constraints in the by laws? You have to be kidding. If they were there, someone could sue alleging improper enforcement. Jon Postel, feeling put upon from many quarters, apparently lacked the skills and motivation necessary to intervene. Very likely he simply couldn't conceive that he had any need to explain himself to anyone besides his immediate technical constituency which simply wished these alien political and legal processes would vanish.

Persons familiar with events have told me that as far as they can tell Sims -- a Washington attorney to begin with -- introduced himself to the key players in DC to get a sense of the lay of the landscape. To cover himself Sims would, of course, run his drafts by Magaziner. In the meantime, he built a small tight, "trust-me," insiders controlled organization crafted to be as impervious to outside challenge as possible. While sources tell me that Jon definitely stayed very involved in the selection of the Board, Sims gained enormous power by walking into what was a power vacuum -- and what with Postel's passing is now even more of a vacuum.

The September 98 NSI/IANA Negotiations

After the CIX and AIM and ISOC announced the termination of the IFWP process at the end of August it seemed that IANA and ISOC, which had not given an inch (see Larry Lessig's Standard article) had won. Then suddenly, after Ira, in an interview, had complained to me that he wanted IANA and NSI at the negotiating table ASAP, IANA and NSI found themselves in face-to-face talks in early September.

A joint Draft 4 resulted and was published on September 17th. For the first time those of us who were not followers of IANA and who had been angered by Jon's apparent unwillingness to listen to anyone but his two attorneys and small inner circle of advisers had reason to hope that the White House would insist that the consensus points of the IFWP meetings be respected.

While Jon's attorneys had ignored them, NSI had drafted a set of bylaws that were admired by those of us not happy with the IANA's detached position, and now it seemed that NSI had gained an opportunity to negotiate and force Postel into a more open and democratic position. The IANA - NSI Draft 4 was admired. It was the only draft that paid serious attention to the consensus points of the IFWP meetings -- meetings which many people took seriously thanks to Ira's endorsement of them.

On Monday September 21st Ira Magaziner, in an interview with me, said that progress was being made but added that the two sides had to keep at the table and produce one more draft before the requisite consensus would be there. However, during the week of the 21st the Australian government and EC exploded. (The Australians whose anger had been less well known were allegedly having fits because of Adam Todd's rogue Australian root servers.)

Day after day went by without the publication of a new draft. Don Telage was trying to handle both the negotiations with the IANA and DOC. I was given the impression that negotiations went on during the weekend of the 26 and 27th. Then in the late evening of the 28th IANA dropped a bomb shell and put out draft five alone with clauses (d) and (e) of Section 4: Powers of the by laws removed. These clauses, in the opinion of some, were critical to NSI's interests but also protected the interests of other (smaller) U.S. players such as IO Designs and Iperdome.

Postel, in his solo introduction to Draft Five, said: "NSI is actively engaged in the final negotiations with the United States Government over the transition of its contractual relationship with the United States Government. That is, understandably, its highest priority at the moment. Given the shortness of time, it as not possible to wait for the conclusion of those negotiations to release these new drafts. Many of the changes contained in these new drafts have been discussed with NSI, as they have been with many other stakeholders, but NSI bears no responsibility for these changes."

I and others accused Jon of hi-jacking the process, and of taking out what NSI had fought for when NSI's back was turned. Joe Sim's, Postel's attorney, would only tell me my conclusions were erroneous. Sims it turned out was correct. I have since ascertained that Sims and Postel were ordered to remove clauses (d) and (e). I state this unequivocally. What I infer from this information is that since NSI had not yet been sufficiently compliant with the wishes of DOC and Becky Burr, the US government retaliated against Telage and NSI by telling Sims to go forward with draft five as an IANA-only product.

If this did not happen, the only other rational possibility is that Jon and his lawyers went ahead and broke with NSI on their own initiative without telling Ira. One source close to the events insisted to us that our second hypothesis is correct and that Sims very likely put out draft 5 on his own. "Operating in the DC environment often involves showing a little 'muscle' just to let the other sides know you aren't afraid."

In any event, when the open process was followed, clause (d) and (e) were put in the document. When foreign governments and inveterate NSI haters screamed, any last shred of openness disappeared. What the main stream press failed to note was that ripping out (d) and (e) also deprived other (smaller) U.S. entrepreneurs such as IO Design's .web and Iperdome's .per of any standing.

I asked both to comment:

Christopher Ambler, founder of Image Online Design has pointed out that "removing IV-1(e), the section that many have called "NSI protection" also removes any protection that Image Online Design and other prospective registries (like Iperdome and CORE, for example) might have, and tramples the rights that Ira assured would be there."

Ambler continued that he felt that "IV-1(e) being removed now clears the way for the ICANN (Internet Corporation for Assigned Names and Numbers) Board (a board about which we know nothing, and the selection process of which is still undefined) to make arbitrary decisions about how new TLDs will be created without taking into account existing work. IANA gave the direction to a number of entities, including Image Online Design and CORE, to create systems and infrastructure for new registries. Without IV-1(e), the ICANN board need not take this into account, and can, instead, choose to ignore these existing entities. This can cause direct damage to these entities, which have been relying on the original directives of IANA since 1995. For a system that is supposed to promote competition and fairness, my view is that it seems to have none of either."

Jay Fenello, President of Iperdome added: "I concur with Chris. In addition, the failure of the Clinton administration to abide by the goals as stated in the White Paper will surely result in Congressional intervention. At this pace, we'll be lucky if we ever see new TLDs -- or complete this transition process."

White House Spin Picks up Speed

At 6:15 PM Eastern time, September 30 News.com posted an article by- lined by Courtney Macavinta. "We expect to receive the [IANA] proposal tomorrow for the new organization. We'll post that for comment for a week," Magaziner said today. "Then we will consult with other governments in that period. If there is just one proposal, we'll negotiate recognition of that organization and then we will begin transitioning to it," he added.

Now I find this statement quite fascinating. "If there is just one proposal" It wins he says. Ira had every reason to understand that there were three proposals. The first is the officially blessed proposal from Jones and Day - that is to say draft 5 of September 28, 1998. The second proposal is draft four the NSI/IANA draft - the one that many of those who could tolerate NSI liked. This draft was removed from the IANA web page when it was disqualified by the alleged "open" process. To my knowledge NSI has never disavowed it. The third draft is the Boston Working Group Draft, a final version of which was published on the NTIA web pages on October 1. This draft prefers the NSI IANA draft to Postel Draft 5. However it feels that it is too favorable to NSI in some ways.

On September 30 Ira presumably considers the NSI/IANA draft to be dead. But Ira has no right to consider the Boston Working Group draft dead. The drafters say that they have informed Ira that they wish him to recognize its existence. The irony is that the Boston draft is the product of the only fully open process had occurred up to this summer date.

ORSC Steps Forward

Hindsight indicates that what Ira presumably meant is not just draft bylaws but a full proposal from an incorporated organization behind a set of by laws which indicated to the Department of Commerce that it is legally prepared to accept the transfer of the governments assets. After seeing what ISI handed into Commerce on October 1 on behalf of Postel and ICANN, the Open Root Server Confederation (ORSC) realized the unstated rules that ICANN was playing by. As a result on October 8th it handed in its own set of bylaws (a revison of the Boston Working Group's bylaws) and proposal to Commerce to establish and run its own ICANN board of trustees. Ira now (October 14) clearly has two full fledged proposals to choose from. To my pleasant surprise in talking with him on October 15, I found out he was seriously interested in ORSC. Given the events of the 16 and 17th he has even more reason to grasp the life raft ORSC threw him.

First Signs of the Board Emerge

Courtney Macavinta wrote on October 1: "The ICANN board is supposed to be neutral and include people who have not been involved in the ongoing heated debate over the future of the domain name system. There will be four members from the Americas, three from Europe, two from Asia, and a representative-at-large." She went on to list seven names, two of which were actually chosen for the final board when it appeared two days later.

Ira had told me on September 21st that he expected to see a slate of board members floated by the 23rd when I published my November issue. According to him, they would be nominees only. The purpose would be to find out whether there was consensus for them. But this consensus never materialized.

What was pervasive was a deep distrust of board members that Postel was felt to have chosen, and a fear that the names would be presented as a fait accompli. This fear was heightened when EFF issued a press release saying that one of its board members had agreed to serve on the new IANA board. This announcement astounded those of use who had been assured that NO invitations had been made. However at the end of September, a POC/CORE supporter met a colleague on the east coast and told the colleague that a board with a heavy international representation had been chosen sometime ago.

Since I wrote the above three paragraphs, I found out about and have documented the role of the 'mighty five'. The Postel/Sims testimony of October 7 explains: "And the fact is that we had a deadline to meet, and an organization to create; we could not wait for someone to invent something new, or to convince the world that it would work. So we did the best we could under the circumstances: we sought out highly qualified individuals around the world and tried to convince them to accept this unpaid post where they could participate in very contentious debates over very complex issues with highly partisan advocates, and once they had done their job they could not continue on as board members (in order to avoid even the hint of self-dealing). Not surprisingly, there was not a surfeit of volunteers for this job description, but after lots of hard work and arm-twisting by lots of people, we were able to convince nine exceptionally qualified people to volunteer for this important but, I'm sorry to say, almost surely thankless job." The testimony offers the following lame explanation: "We of course recognize that this process is easily criticized as undemocratic and closed. But the simple fact is that neither we nor anyone else to our knowledge was able to devise any other plan for selection of the interim (what is called in the ICANN proposal the "Initial") board that was workable and acceptable to the broad majority of Internet stakeholders." http://www.house.gov/science/postel_10-07.htm

This remember, the US Department of Commerce alleges, is an open process. I find it to be a fraud.

Chosing the New IANA Board - One Point of View

As the summer went by various Internet old-boys working through Jon's ITAG group discussed what steps to take next. Then, toward the end of August Dave Farber, Scott Bradner, Vint Cerf, Larry Landweber and Mike Roberts 'self-selected' in order to choose the US representatives to the ICANN board. Jon's ITAG (IANA Transition Advisory Group made its suggestions.) It is highly unfortunate that they worked behind closed doors. Jon, as IANA incumbent, certainly had an edge in the selection process and they as Jon's helpers exerted in private a major influence over the future development of the Internet during a period in time where apparently with the governments blessing no one else knew what an inside track they had. By September with Jon's medical problems mounting, those close to the process believe that the Board selection mechanism was now resting mainly on the shoulders of Joe Sims and Larry Landweber.

However, Ira Magaziner, on behalf of the US government, was almost certainly aware of this group of Sims and the 'mighty five'. Perhaps we should call them the mighty six? Foreign "governments" were told that they should decide whom they wanted. In the case of the three European nominees, it was the EC who decided and whose first nominees were rejected -- delaying the appearance of the final list. In the case of Japan, it was not the government who chose Jun Murai, but rather the Ministry of Posts, Telephones and Telegraph (MPTT). Japan got a seat as the largest Internet user in Asia. Australia a seat as the second largest.

Presumably, Ira as the official agent of the US government set the policy. However, the process has been so well hidden that I cannot be sure. Ira may well have told the foreign governments to communicate directly with Sims. I remember that the leaked email that I published was from the EC's Christopher Wilkinson. In the email Wilkinson was complaining about the contents of Draft 4. The email was sent to Joe Sims and not to Ira. With Larry Landweber, Vint Cerf, Mike Roberts, Dave Farber and Scott Bradner as the self-selected board nominating and screening mechanism, Ira could afford to sit back, pretend openness and take the high road so that the mighty six "after lots of hard work and arm-twisting" could claim success.

Collapse of IFWP Process

Think back to the sudden collapse of the IFWP process at the beginning of September including, the otherwise inexplicable, abandonment by Barbara Dooley and the CIX and then Sernowitz and AIM following Barb's lead? In his interview with me the CIX board member made it clear that the only way CIX could "keep its seat at the table" was to do what it did. Did the 'self selected' board chosers invited CIX to join them and made the ticket of admission the abandonment of the Berkmann Center plans for a wrap up meeting. A natural move for these "fixers" having as they did no faith in the viability of an open meeting.

An authoritative spokesperson for the CIX responded: "CIX was never offered a Board seat and we wouldn't have thought it was appropriate anyway. We submitted names and suggested other associations, for example CABASE and APIA submit names.

There were a number of factors which determined CIX's position to support an evolution of the IANA 3.0 draft. The Steering Committee process was broken and not working from our perspective. We don't believe "group" drafting processes work--since part of CIX's core expertise is reviewing and drafting legislative language and interpreting and pleading regulatory language, we have some experience in this. We saw no fair, open, transparent way for the Berkman Center to decide who should be admitted to a drafting/negotiating session. It was our judgement that if IANA chose not to attend such a meeting in a negotiating capacity, which appeared likely, the meeting would result in a division that perhaps could only be breached by USG or Congressional intervention, which we did not want. CIX believed that by giving feedback into the IANA draft and withholding endorsement until we saw the changes we needed we could best represent our members' interests.

It seems that there are three classes of internet decision makers. First, the good old boys who have manipulated ICANN into existence. Second, a more peripheral circle of participants like ORSC and the BWG who were foolish enough to take Ira and Becky at their word and played as though the process was open when in fact, unless Ira is going to have a last minute change of heart, it was closed. Third, the remainder of the internet using public.

Selecting ICANN's President

According to a representative of the Mighty Five the process of choosing a one-year interim president for ICANN is underway right now. It is being done in private by the same group that chose the board. The task of the initial president will be to establish and fund ICANN; and to set up procedures for the Board's approval for the selection of the first permanent President. All very neat and tidy and all done, according to Ira Magaziner, without his sanction. For as he pointed out in an October 15 interview, the interim Board is supposed to pick the interim president after it is seated.

Summary: Does What Has Been Accomplished Depend Jon Postel's Personal Credibility?

The process so far has been nothing to be proud of. It has created an organization where many of the allies of the IAHC process have skillfully manipulated the situation so that they working with Jon and his two attorneys have been able to pick the key members of the interim board and will likely pick the interim president. But as Jay Fenello of Iperdome pointed out: "Several weeks ago, the IFWP process broke down as many of the original supporters decided to negotiate directly with the IANA. [See article in our November issue.] The result was the ICANN draft, a draft that is in our opinion, deficient in the following ways:

- The draft was finalized behind closed doors. - The draft does not include many of the consensus points from the IFWP process. - The interim board suggested by the draft was presented without any open nomination process or discussion. - It fails to meet Ira Magaziner's mandate of accountability, as the ICANN board is only accountable to itself. - It fails to meet the terms as stated by Becky Burr, specifically the desire for sound and transparent processes, protection against capture, and fair, open and pro-competitive processes."

The ICANN edifice to which the White House must decide whether to make an award has been created by Jon working with two non internet savvy corporate attorneys and five key old boys from the IAHC MOUvement days. The mighty five has kept its role hidden. And has created an interim board of successful business people with little internet knowledge to run the organization. They are also about to pick a interim and care taker president. Jon Postel's ACTIVE PRESENCE in the establishment of ICANN and its initial meetings was really the only thing that can give it a shred of legitimacy. The tragedy is that he is no longer with us.

PART TWO: THE NSI PROBLEM

Consider Some of the Events that Preceded the Summer

Before things reached the crisis point of late September 1998 NSI had made a detailed technical response on the subject of shared databases to the Commerce department NOI of July on August 18, 1997. It is to be found at http://www.netsol.com/policy/noi.html

And on March 23, 1998 in NSI's response to the Green Paper http://www.netsol.com/policy/rfc32398.html it has the following comments on government desired outcomes.:

D. Qualified Competitive Registrars The Green Paper proposes that each TLD registry should be equally accessible to any qualified registrar, so that registrants may choose their registrar competitively on the basis of price and service. Any entity will be permitted to provide registrar services as long as it meets the basic technical, managerial, and site requirements in Appendix 1 of the Green Paper. Registrars will be allowed to register customers into any TLD for which the customer satisfies the eligibility rules, if any.

NSI supports this approach to competition in registration services. As promised, NSI is currently making the technical preparations to allow additional competitive registrars in the .COM, .NET and .ORG registries. These activities, which will be basis for discussions with the U. S. government, as specified in the Green Paper, include: the specification and development of an open interface between registrar and registry; the physical and electronic separation of NSI registration systems into registry and registrar subsystems to assure equal access by all registrars; the development of operational procedures between registry and registrars; and an investigation of the legal issues associated with registrar and registry operations.

The NSI Terms Sheet

For reasons that are still not satisfactorily clear to us, the Department of Commerce wasn't interested in discussing any of this with NSI. Instead it waited until the second week of July to sit down with NSI. When the meeting occurred, NSI was handed a 'terms sheet'. The terms essentially informed NSI that it would be treated as a LEC and forced to unbundle its services and price them to competitors at the same prices as to itself. The only problem was that, unlike the CLEC world where CLEC attorneys have to negotiate endlessly with LEC attorneys, terms and conditions of interconnection, NSI software systems would have to be given to the US government with full warranties that the software would work when placed on their competitor's computers. What may never have occurred to Becky and Ira -- as they are imposing their public authority, top down model on the Internet -- is that the very reason unbundling was forced on the RBOCs was that the RBOCs are big enough so that the alleged competitive solution would not seriously effect them. NSI does not have the financial depth to survive if it were forced to endure the bizarre solution of being required to warranty and maintain on behalf of its competitors the systems that it developed.

The White Paper called for "negotiations", which normally implies an element of discussion involving some exchange of ideas.. NSI returned comments on the "terms" to NTIA which said, "No thank you. The terms are NOT NEGOTIABLE" and returned the paperwork to NSI with the instructions to dismember the 80% of its business represented by the .com, .org and .net registries. Ira asserted, in a July interview with me, that the government's aim was NOT to deprive NSI of .com or put it out of business but only out to ensure that it share .com registrations. What I am told happened does not seem to me to be consonant with that assurance. When NTIA refused to negotiate about any of the terms, NSI decided that the best way it could maintain its fiduciary responsibility to its stock holders was to simply refuse to sign the extension of the cooperative agreement that was being demanded of it. Come September 30 it figured that the cooperative agreement would expire.

As far as I know there has never been a situation where the holder of a cooperative agreement was forced by the US government to continue the cooperative agreement against its will. Only in a case of formal "takings" under the doctrine of "eminent domain" (which implies an overriding government interest that would appear inconsistent with the announced White House intent to disengage from involvement) can the government compel the use of private property for a public purpose and in such cases compensation must be paid.

Consequently, NSI reasoned that if it simply declined NTIA's offer, it could probably survive. After all, if NSI did not chose to cooperate, could the Department of Commerce take over its database and go on to register and bill for 140,000 new registrations per month? Not likely. Meanwhile the government rested its case on the belief that since, during the cooperative agreement NSI had always accepted the authority of the US gov't as exercised by the NSF, all it needed to do was tell NSI that the gov't was now exercising its authority that NSI dismantle 80% of its business and that it expected obedience.

Things dragged on until Monday September 28 when something new happened. When NSI was unwilling to accept what looked to be a demand for nationalization by Magaziner and Burr, the DOC and DOJ walked out of the room, left NSI cooling its heels for 2 hours and walked back in handing NSI an ultimatum. NSI still didn't sign. Therefore the crisis session spilled over into Tuesday and by Tuesday afternoon Magaziner had used some kind of "club" such that, rather let the Coopertative Agreement (CA) expire, NSI signed a one week extension, an act that most of it friends considered unwise and an action that its enemies considered tantamount to suicide if it refused. NSI did not refuse. One wonders what weapon the White House and NTIA hung over NSI's head? Of course it's also possible that SAIC (a major government contractor) was willing for NSI to be eviscerated to maintain their "good relationship" with the United States Government.

As the Yom Kippur holiday began everyone agreed that if NSI doesn't sign and accept the government's "nationalization" of the 80% of NSI's business represented by .com, .org and .net represented by the non negotiable "terms" that the two parties will wind up in court. This is an action that would certainly destabilize the Internet. The question is what is NTIA's motivation? Why would the White House be willing to take the internet to the brink for the sole purpose of ending the "NSI monopoly" when it is effectively ended already at the registrar level and other companies are selling thousands of .coms per month? The response that one hears is a doctrinaire: "they still have a financial advantage - one which we simply cannot permit." And besides.... why the secrecy? What are NTIA and the White House hiding? After I started revealing what they were doing to NSI, I have never heard so many doors slam in my face so quickly. Someone has been made very afraid. Fear not withstanding, on October 6, Magaziner and Burr successfully bent NSI to their will and forced their signature on an unprecedented two year extension of the cooperative agreement. (See text box on the next page.)

By What Legal Authority Can the Commerce Department Take Over Supervision of the NSF Cooperative Agreement?

I made a quick scan, of the October 7th hearing charter, http://www.house.gov/science/charter_br_10-07.htm and I noted in particular the quote:

"One major change made by the White Paper is that as of October 1, 1998 the Department of Commerce will have sole governmental authority over the DNS. The White Paper's transition of the DNS to the private sector will be conducted under the Department of Commerce's "joint project authority" which will give the government and the new entity much more flexibility."

I asked a knowledgeable legal source: While I'm familiar with NSF Cooperative agreements and the requirements thereof, I'm not sure what the implications are of this statement. What specific powers are conveyed via a "joint project authority"? It appears authority for administering the Cooperative agreement was transferred to Burr at the Dept of Commerce (Amendment 10) and that via Amendment 11, the Cooperative agreement is extended for 2 years. How can one now imply that this transition now falls under the Dept of Commerce's bureaucratic umbrella when it appears the NSF cooperative agreement is still in place?

The legal source whom we consulted commented: The entire discussion of "Joint Project Authority" seems to be a Dept. of Commerce semantic. Loosely stated, it's their assertion that NSF and ARPA, by transferring their awards to them have transferred their programmatic as well as administrative "authority" to Commerce as well. An interesting question is, would this hold up in court? It is clear that US Government intransigence is motivated in part by the Europeans. More on that in a moment. In the meantime the grade school level of preparation on the part of the administration is made clear by the issue of the root servers. Ira has made many statements as far back as last winter that his goal was to find a new home for the root servers and to harden them and enhance them. And yet in the final hours nothing has been accomplished and NTIA asked NSI for documentation on how to run a root server--presumably the A server. Told that no documentation existed, Becky Burr then instructed NSI to write it and give it to her with a warrantee that it would work! I ask what if the FCC had gone to AT&T in the 1984 divestiture and said: develop an operations manual for your competitors?

Becky Burr's Role

Let's look further at Becky. I finally ascertained the source of the US government involvement. In December 1996 the Patent and Trademark Office in DOC prevailed upon the agency to send to OMB a request for the publication of an NOI on DNS from the point of view of trademark issues in the Federal Register. OMB had to follow the rules of circular A119 before going forward. Consequently it assembled the interagency task force on DNS. Ira became aware of the PTO concern in December and in January he also became aware that NSF was unhappy with the turn that IHAC was taking and that NSF was seeking internal authorization to end the Cooperative Agreement on April 1, 1997. He decided that intervention was called for to keep the internet from future destabilization.

In one of the first meetings of the interagency task force, a participant remembers that a commerce department representative bragged that she had gotten the PTO to recognize the importance of DNS and had also taken it upon herself to go to WIPO and brief them in order to be sure that they staked their claim. In 1995, 1996, and 1997 the PTO aggressively pursued an agenda of expanding trademark rights over domain names by working in lock step with WIPO. The PTO work was done without any public notice or comment in the US. PTO representative Lynn Beresford chaired the WIPO consultative meetings on trademarks and domain names during 1997 in constant consultation with Al Tramposch an IAHC member and the WIPO staff member responsible for these issues. The December 1996 Department of Commerce - PTO draft notice of inquiry was essentially Lynn Beresford's stacked deck in line with the agenda above.

Meanwhile in January 1997 someone, whom I have not as yet been able to identify reached out and grabbed J. Beckwith Burr from the FTC. Burr was brought first into OMB where in February and March she worked for Sally Katzen before being shipped on to NTIA in the spring where she and Brian Kahin took charge of the interagency task force. It is not hard to imagine that big corporations liked the idea of taking an enforcer from FTC and moving her to Commerce to be their agent for trademarks. However, for me it is an interesting discovery to hear from a trusted inside source that when Ira Magaziner got involved and started working with Becky Burr at NTIA, the combined effort of these two people did take the process from the closed-door bias of PTO into NTIA, which is a somewhat more neutral forum. And at NTIA they began to look at a wider set of issues. With the result that in the summer of 1997 NTIA did issue the well known NOI which garnered widespread public input.

At any rate, for the Patent and Trademark Office there was the smell of big bucks in the air. For WIPO the payoff was a seat at the table of Internet governance to protect their traditional publishing interests. Remember WIPO as the source of the "database treaty" and demand of payments for browser hits. In comparison DNS can be seen as trivial. DNS was a tool that WIPO could use to embed itself into Internet governance. Furthermore, the Europeans like the WIPO dispute resolution process. WIPO is another UN organization like ITU. It looks as though the administration, in its enthusiasm for WIPO and its global economics model, is siding with huge businesses who are eager to protect their vested interests against upstarts like NSI, IO Design, Iperdome and the Open Root Server Coalition.

Part Three Electronic Commerce and Privacy on a Global Battlefield

DG-4 Versus NSI

The European Commission anti-trust watch dog DG - 4 has taken a strong interest in dismantling the NSI "monopoly". In the opinion of one observer DG-4, the European Commission Directorate General on anti-trust insisted that clause (d) and (e) come out of section 4.1 of draft four of the ICANN by laws. According to him: We bowed to DG4 and took the clauses out. DG-4 has been the entity insisting on the dismantling of network solutions. Why have we found it necessary to pay so much attention to DG-4? One observer offered the following hypothesis. The Directorates General of the European Commission must exert their power rigorously so that you know they are there. For every time a European government changes, some people wonder if the change means the EU is still in place. Loud assertions on policy by the Directorates are the EU's way of letting the rest of us know that it is still strong and healthy.

Some people are suggesting that we have painted ourselves into such a corner on the privacy question that Becky Burr and her technology-ignorant attorney have wittingly gone *outside the conditions* of the cooperative agreement in demanding whatever will satisfy DG-4.

NSI and the Europeans

NTIA went after NSI with an especially doctrinaire vengeance. The question is, in addition to DG-4, why? After publishing my first complaints on the net on October 1 I began to receive some comments from sources who offered some answers for Ira's willingness to push NSI to the brink. These sources pointed out that the NSI IANA struggle had a global dimension that should not be ignored.

Here is an informed hypothesis based first on a 90 minute conversation with an expert source in these areas who has a heavy international background and then reality checked with a cross section of American and foreign insiders. I have also documented it with articles drawn from the web.) Ira, I fear, is using the Onternet as a pawn in a far bigger game. The game is inextricably linked with the privacy statutes of the EU and OECD and the coming October 24th deadline for American companies doing business in Europe and data mining on European citizens as part of their ordinary activities. It is also inextricably linked with the international encryption debate which has resulted in policies that hamper European ability to build competitive software for e-commerce in general. This hypothesis is increasingly reinforced by my private conversations with European press and senior figures in the American internet who are not pleased at what is happening.

1. Since 1995 Ira has shaped the policy mechanisms being used to turn the internet into an American-controlled, strategic vehicle for conducting global economic commerce on American terms.

2. He has done so in the face of the October 25th implementation of the 1995 European Privacy Commission Directives prohibiting export of data from EU countries to countries such as the United States who have privacy laws that do not measure up to European standards. While the statutes were expanded EU wide in 1995, for the past 10 or so years some governments in Europe have kept US companies from bringing personnel data back to the US from Europe due to the lack of controls in the US.

3. Ira has been saying to the Europeans since the release of his electronic commerce paper in July 97 that the answer is industry self-regulation. And asking that we should trust the data mining companies to regulate themselves despite the fact that the global internet gives them the power to leverage the results and impact of their data mining by an order of magnitude.

4. In May 1998 he promised the Europeans and Asians that he would prove to them that industry "self-regulation" would be the way to go by saying that he would deliver an industry formed and driven consensus model for the new IANA corporation by Oct 1..

5. As we crashed into the October 1 deadline, he had no choice but to pull out all the stops in order to achieve what he had promised to deliver -- even if it meant perverting the process and acting behind the scenes to pick winners.

6. At the same time he has created an ICANN with a Board that has no real checks in its ability to set prices and policy for names (DNS), numbers (IP) and protocols. (A dissenting point of view says that while this may be true, the IETF has already served notice on ICANN, that should it interfere with IETF processes, it will take its protocol work elsewhere. It adds that, if it demanded an unreasonable amount of money from ARIN for IP space, ARIN would be screwed, but that the other two registries - RIPE and APNIC could do just fine without complying for 18 to 24 months.)

7. That ICANN has been established with a public authority financing model subject to no outside fiscal restraint and with largely unknown corporate board members with interests more in electronic commerce than in the Internet itself. (The opposing point of view says that it effectively has a foreign majority and that there are inherent possibilities built in for disobedience on the part of the supporting organizations to policies of fiscal profligacy.)

8. Thus Ira would like to present the Board and the by laws in Ottawa as a fait accompli to the OECD. (The opposing point of view feels that we are right in the focus on the danger of the October 24th deadline and on Ira's wanting to show that self regulation can work. It adds a warning that in a year or two many critical decisions on the conduct of e-commerce with likely gravitate to and be made within ICANN.)

Background on the Privacy Statutes Dispute

From an Australian privacy newsletter-- The now-completed 1995 European Union Directive on privacy and free flow of personal data . . . prohibits the transfer of personal data from EU countries to any countries which do not have 'adequate' data protection laws. . . . . The Directive requires all EU member states to implement a Europe-wide standard of data protection. http://www.austlii.edu.au/au/other/plpr/Vol2No06/v02n06b.htm

"What's the single most important issue threatening worldwide electronic commerce today? The stalemate between the U.S. and the European Union over policy on online consumer privacy protection, according to U.S. Commerce Secretary William Daley. Daley, testifying today at a House Commerce Committee hearing on global e-commerce, said that despite the differing stances, he is confident that the Europeans, who have issued a directive that calls for strict protections over the transport of private data, will ultimately be convinced that American companies "adequately" protect consumer privacy. The European directive goes into effect Oct. 25. It calls for adequate privacy protections but doesn't define how that standard will be measured. Meanwhile, the Clinton Administration has adopted a policy favoring industry self-regulation regarding the notification of online collection and usage of personal data. "This could have an impact on millions of transactions," Daley testified. "It could have an impact on the free flow of information." IDG, Sept 20, 1998

In other words the European Union is saying to the US based corporations like IBM and AOL and many others, if you want to do business in Europe after October 25th 1998, your companies information systems *MUST* not transfer personal data from EU countries to any countries which do not have 'adequate' data protection laws. You do not have adequate data protection laws.

This has been an issue since 1995. It is likely that major redesign of our companies information technology systems would be entailed. It is also likely that many wouldn't be able to collect the data here if they did not in Europe. They have assumed that the Europeans are bluffing. They are not. And we are less than 30 days from it becoming illegal to transfer 'personal data" from the EU to the US.

Now since the American response is: "self-regulation will do therefore the EC statutes are unnecessary," Ira stuck his neck out last May 29 in an interview when he said that: v If the Internet can be pushed into "effective self-regulation" in the next few months, then the United States can appeal to the European Union to make a case that such regulation can succeed. Because of that, Magaziner is not terribly worried about what might happen come October when the European Privacy Directive is to take effect, particularly because the various nations involved will administer and enforce the directive differently. "Infoworld Electric, May 29 98"

Therefore Ira needs to deliver full blown "self-regulation of the internet" and he needs to do so quickly.

However there exist some additional complicating problems linking the administration's flawed crypto policies with the privacy issues. As one of those who reviewed this ar ticle for us reminded us on October 19: "the privacy data-flow requirement can not be met without strong encryption, even if the required privacy laws were enacted yesterday, they can not be implemented without strong encryption. ITAR gets in the way of that. Everyone involved realizes this."

ICANN With All Powerful Board Unknown to Most Of the Senior People Who Run the Net

Consider the new board that has also been handed down with the Postel proposal to Commerce yesterday. No one I have spoken to knows anything about any of the board members save for Jun Murai and Esther Dyson. George Conrades is of course well known. However a couple of the most savvy, long time, well-connected people in the net have told me that they have no idea from where Conrades will be coming on key issues. The Dun and Bradstreet nominee is seen as a staunch defender of intellectual property rights in the best Lynn Beresford WIPO and PTO tradition. The Australian is utterly unknown and as one of the two from Asia is perceived as a second insult to Asians who view the Aussies as Europeans. I have heard a perception from more than one source that, though irrational as it may seem to us, that having a Japanese serve on the board is a particular insult to the other Asian nations.

The Europeans are unknowns in the United States and the President of Radcliffe, though regarded as a nice person, is seen as knowing nothing about the issues on which she will have to decide. This is an interim board generally stacked with people who can not be expected to have any appreciation of the decisions necessary to keep the Internet from falling completely under the sway of American commercial, data gathering and privacy invasive interests. One must ask whether is a board that may be counted on to be compliant to the interests of AIM, the GIP, and the Internet Alliance. Conrades, for example, is an ex IBM vice president. See http://cyber.law.harvard.edu/ifwp/icannboard.html for biographies of the candidate

White House Uses ICANN To Placate The EC & Fails To Influence US Corprate Behavior On Privacy -

Some are credibly suggesting that, ICANN's bureaucratic, non-accountable, non-membership design is in place because the White House is desperate to toss any kind of a bone possible to the European commission in a last ditch effort to avoid an October 25th privacy statutes implemented trade war with United States at a time of extreme grave risk for the world economy.

ICANN At The End Became Strictly A Closed Door Deal Between Governments. All the officially nominated board members of ICANN were nominated by their respective governments. I do not know if the EC was given a veto power over American nominees, but I am reliably told that one reason the Board came out so late is that earlier nominees by EC for the European slots were totally unacceptable to the American side.

One very knowledgeable observer anticipates that on October 25th individual Privacy advocates will file suit in the United Kingdom to force local courts to implement the European Privacy commission directives. Such that while the British government might wish to hold off, its citizens actions would give its courts no choice. Now we are talking about physical transborder in formation flows. In other words not only would network-based financial transactions be stopped but that use of services like Federal Express to deliver payments would be forbidden. Thus what is at stake is not only transborder flows of information whether electronic or physical but also all American commerce carried on with European Union countries. (For a number of years some US companies have been barred from returning the physical personnel records of their employees to US.)

This outcome has been known to the players for years. That we are now in a situation where each side is engaged in a high risks game of chicken in no small part due to the intransigence of American companies like America Online, Dunn and Bradstreet, IBM, TRW and its compatriots in the credit industry, Mastercard, Visa, American Express and generally unknown third parties who do direct marketing. These companies have assumed that, thanks to American economic muscle and technology prowess, they could continue business as usual indefinitely and ignore issues of European national sovereignty with impunity. The role of lobbying groups like the GIP, Internet Alliance and Association for Interactive Media which just merged with the Direct Mail Association needs close examination.

The Sovereignty Of The Data Miners - "Safe Harbor"

Now that we have walked right up to the brink from which there may be no stepping back, these American corporate behemoths have gotten nervous. They have held a meeting at the State Department last week and put together a "safe harbor" plan whereby the they would certify, presumably to some arm of the American government, that they were respecting European Data Privacy concerns. The idea is that the EC might grant them exemption from the October 25th enforcement of the privacy directives.

One problem is that it has been almost impossible to agree on verification -- in other words, if IBM joined, how would the Europeans know that IBM was really doing what it was committed to do? Another problem has been one of agreeing on a means by which EC citizens could see what was held about them and demand any kind of corrections or purges of data. Furthermore the safe harbor plan is something that would have to be published in federal register and, even if all other problems could be solved, would, therefore, never be ready in time to save us from the October 25th from drop dead date. It is further said that this weekend's G-7 a meeting in Washington has brought home to both sides the absolute urgency and of finding an immediate solution and not stepping over the brink on October 25th.

Not much can be done, given the average American's ignorance of the harmful domestic impact of data mining by American companies, and the Congress' mindless infatuation with the President's sex problems. Since on the issue of data privacy we have been for years blatantly offensive to the European Union's concepts of sovereignty, we are now trying to make amends by letting them design into the ICANN bylaws an unaccountable, public authority structure that bears some resemblance to the ITU. In penance for belated recognition that our data mining companies have led the Clinton Administration into a very dangerous showdown, are we prepared to throw to the EC undue influence over ICANN?

Consider Bill Burrington, Director of Law and Public Policy and Assistant General Counsel at AOL, a company which has huge data holdings as well as transactionactional information. He is the chair of the Washington DC Interactive Services Association which went on to form the Internet Alliance with membership very similar to GIP. Burrington is manning the barricades of the companies involved in the privacy dispute with the OECD. (Why should Burrington care? Consider AOL's electronic profiles on its 12 million members) Consider also Andy Sernovitz of AIM whose members have the same general interests and who exited the IFWP process right after the CIX. Sernowitz's AIM announced a merger with the Direct Mail Association this week. DMA is, of course, quite dependent on the data miners.

But action in Europe that is illegal, is legal in the US so what can Magaziner do if his Administration did not make it a high priority to change American law on privacy? Aside from making sanctimonious noises in public, the White House and Al Gore did nothing leaving US as virtually the only country in the world without adequate privacy protection for our citizens.

The Commerce Department has been asked by people, with the authority to do so, what solution it has cooked up to prevent a trade war on October 25th. "We have a solution trust us" came down from the highest echelons of the department. The people who asked the question are waiting with considerable interest and growing fear to see what the solution is. They are also aware of the safe harbor plan which, even if, the Europeans would accept it, cannot be put in place in time. The deadline of October 25th 1998 has been in place since October 24, 1995 when the accord was signed into law in Europe. So for three full years everyone has known precisely what's coming down the track. Expectations are that European civilians will file suit and force action. Initial American targets are thought to be insurance and pharmaceutical companies.

Appendix One Commerce Committee Inquiry

October 15, 1998

Mr. Ira Magaziner Senior Advisor to the President for Policy Development Executive Office of the President The White House Washington, DC 20500

Dear Mr. Magaziner:

I am writing to express my concerns about the Administration's role in the transfer of the Internet's Domain Name System (DNS) from the public sector to the private sector.

On June 10, 1998, the Subcommittee on Telecommunications, Trade and Consumer Protection held a hearing on the future of the Domain Name System. Associate Administrator of the National Telecommunication and Information Administration (NTIA) for International Affairs, J. Beckwith Burr, testified on the Administration's recently released policy statement on the future management of the DNS. This policy statement, known as the White Paper, outlines the Administration's proposal to turn over responsibility of the management of the DNS from the government to a newly created non-profit corporation. This new private corporation is intended to provide for competition in domain registration and global participation by all interested parties in the future management of the DNS.

I welcomed the White Paper's proposal for the new corporation to be "governed on the basis of a sound and transparent decision-making process, which protects against capture by a self-interested faction." The White Paper reiterated the need for openness when it stated that: "The new corporation's processes should be fair, open and pro-competitive, protecting against capture by a narrow group of stakeholders."

At the hearing, I underscored the importance of private sector leadership and the need for stability and continuity in the operation of the Internet during the transfer of DNS management to the private sector. I believed that an open, consensus-based process to develop the new self-governing structure, embodied in the White Paper, was a promising approach. At the meetings over the summer of the International Forum for the White Paper (IFWP), a broad-based consensus was reached among the participants which echoed the principles of the White Paper.

To further the goals of the White Paper, it would seem incumbent upon the Administration to encourage all key Internet stakeholders to participate in an open, consensus-driven governance process, and, in particular, to encourage meaningful participation of one important stakeholder, the Internet Assigned Numbers Authority (IANA). As you know, IANA, a Department of Defense contractor, establishes technical protocols and allocates Internet Protocols (IP) addresses to regional IP numbering authorities, two functions that are critical to the operation of the Internet. I was disappointed to learn that IANA apparently did not meaningfully participate in the IFWP process.

Instead of participating in that process, IANA, under the leadership of Dr. Jon Postel, apparently developed its own DNS reform proposal behind closed doors with little consultation from the broader Internet community. The final IANA proposal, which was delivered to the Department of Commerce on October 2, only represented the position of IANA and no other parties.

Concurrent with IANA's release of its proposal for the new DNS corporation, known as the Internet Corporation for Assigned Names and Numbers (ICANN), IANA named nine individuals to serve as interim members of the board of directors of ICANN. I am concerned about the lack of openness in the consideration and selection process for ICANN's interim board members. In fact, Dr. Postel's written testimony recently before a House Committee acknowledged that the selection process for members of the interim board of directors of the new corporation to administer the DNS, was "undemocratic and closed." Further, I am concerned that the lack of a solid American majority on the interim board fails to reflect the leading role of American business investment and consumer-use in the growth of the Internet.

The Commerce Department has provided a comment period of just six business days (which began with the receipt of the proposals late on October 2, and ended on October 13, 1998), for the public to respond to the four proposals submitted to NTIA pursuant to the White Paper's request for proposals to establish a private sector entity. I am concerned that this limited time period is inadequate for all interested parties to provide meaningful comment on these proposals that are crucial to the future of the Internet and electronic commerce.

Finally, I have concerns regarding the legal authority upon which the Department has undertaken the process to transfer DNS management from the National Science Foundation (NSF) to a newly created non-profit corporation. As you know, the NSF took the lead in commercialization of the Internet through its operation of the NSFNET and its 1993 cooperative agreement with Network Solutions Incorporated (NSI) to register domain names and manage the root server system. It is my understanding that the NSF/NSI cooperative agreement was transferred to the Department of Commerce in September 1998.

I am concerned about the manner in which the process of privatizing the governance of the DNS has apparently unraveled. I was hopeful that the Administration would bring leadership to this important effort. We are at a critical juncture in the efforts to establish a workable governance structure that will guide the future of the Internet and electronic commerce. The success or failure of this current undertaking will have a profound impact on the growth of electronic commerce as well as future Internet governance debates. It is vitally important that this first attempt at self-governance be undertaken in a deliberate, open and fair manner, so that it is not subject to capture by "a narrow group of stakeholders." A loss of credibility in the Internet community at large will seriously undermine the ability of the new corporation to administer the Domain Name System and the stability of the Internet itself.

Pursuant to Rules X and XI of the U.S. House of Representatives, I request that you provide the following information to the Committee by November 5, 1998.

1. Please provide the Committee with an explanation, including citations to relevant statutes, of the Administration's authority over management of the Internet. In particular, please explain: (1) the Department of Commerce's authority to assume the NSF cooperative agreement with NSI; and (2) the Department of Commerce's authority to transfer responsibility for the management of the DNS to the private sector.

2. Given IANA's historical role in the operation of the Internet and its role in establishing a new management structure, please describe your efforts to encourage IANA's meaningful participation in the IFWP process. Additionally, please describe your knowledge and/or involvement in IANA's decision to submit its own proposal. Please provide all records relating to IANA's participation in the IFWP or IANA's decision to submit a separate proposal.

3. Did you support the Department of Commerce's decision to limit the public comment period on the DNS proposals to six full business days? Please provide all records relating to the comment period, including but not limited to all records of communications (whether written, electronic or oral) between the Executive Office of the President and the Department of Commerce relating to the comment period.

4. Did you have any involvement in the consideration or selection of ICANN's proposed interim board members? If so, please describe your involvement and list and describe any communications you had with the following people or entities regarding the consideration or selection of the proposed interim board members prior to the announcement of the proposed interim board members: (1) IANA or its representatives; (2) the proposed interim board members; (3) representatives of foreign governments, international organizations, or non-governmental organizations; or (4) other individuals and organizations outside the US government. Please provide all records relating to such communications (whether written, electronic or oral).

For purposes of responding to this request, the terms "records," "relating," "relate," and "regarding" should be interpreted in accordance with the Attachment to this letter.

Should you have any questions regarding this request, please contact me or have your staff contact Mark Paoletta, Chief Counsel for Oversight and Investigations, or Paul Scolese, Professional Staff Member, at (202) 225-2927.

The House Commerce Committee intends to monitor the consideration of the draft proposals and the transfer of DNS management to the private sector very closely for the remainder of the 105th Congress and throughout the 106th Congress. As the Administration undertakes this effort, I ask that the Committee be kept informed of and consulted on the process in a timely fashion. Sincerely, Tom Bliley Chairman

Appendix Two: Datamining

With limited time I tried to do some research on who the dataminers are. Concluding after some phone calls that "The culprits are TRW, who deal in credit records of citizens world wide and also in widespread American inter-corporate trading of consumer information." I received the following correction from an acquaintance: TRW Credit has not existed for four of five years. It was sold to an American group who renamed it Esperion. They in turn sold it to a British group a little over a year ago who proceeded to merger their European Credit Bureau into it. Esperion is now a wholly owned subsidiary of a British Publicly held company and is therefore fully required to conform with any rules, regs and statutes under current AND future UK law.

A check of TRW's web site was revealing. http://www.trw.com/healthcare/index.html shows Strategic Alliances and Partnerships with: Arbor Software HUBLink Inc. Informatica DC Networks, Inc. By following the attached web links it becomes clear that 3 of the 4 are dataminers and one a maker of wireless LANs and tracking devices.

For example: HIE is The Integration Solutions Company, Columbus Ohio 43235 HIE has over 1,000 customer sites and 200 employees. HIE is The Integration Solutions Company. Integration tools are a prerequisite to as well as an enabler of information integration.

Today's enterprises live in a disparate information systems world. No matter how proactive an IT department, few enterprises are fortunate enough to live in a one-vendor/one-platform environment. Mergers, acquisitions, affiliations, new business models and new technology all drive the need for information integration. Enterprise integration technology tools like integration engines, message brokers, enterprise master person indexes (EMPIs), and data loaders don't just facilitate the tasks of integrating vital information: they are a basic requirement for it. These tools cope with the wide variety of application-, vendor- and platform-specific communications protocols necessary to allow information to flow throughout the enterprise, and are enablers for Enterprise Resource Planning (ERP) applications, Straight Through Processing (STP), Customer Service and Call Center Operations, Clinical Data Repositories, Enterprise-wide Data Warehouses, Supply Chain Management applications, and Electronic Medical Records, to name a few. They also protect investments in the legacy systems that enterprises will continue to rely on even after they have implemented new technologies and applications.

Then there is Hyperion Solutions: the Global Leader of Analytic Application Software

Analytic Applications Defined Analytic application software collects and integrates data from a wide range of sources including ERP (enterprise resource planning) systems, packaged and internally developed transaction-processing systems, external data feeds, and data warehouses. Analytic application software then extends the value of this data through sophisticated analytic processing and rapid delivery and presentation of accurate information to executives, managers, analysts, and other knowledge workers.

Analytic applications, either packaged or custom-built using OLAP server technology and tools, help decision-makers quickly develop and revise plans to dramatically improve the effectiveness of the enterprise. Analytic applications support all aspects of the management cycle including reporting, analysis, modeling, and planning.

Informatica Corp., a leading provider of software for deploying enterprise business intelligence and analytic applications, today 8/21/98 announced an initiative with IBM to deliver scalable data warehousing solutions to users of IBM's DB2 Universal Database, the industry's first multimedia, Web-ready relational database management system.

Readers unfamiliar with datamining are advised to consider the following case study: Carlson Wagonlit Travel, with world headquarters in Fort Lauderdale, Fla., is one of the world leaders in business travel management. Carlson Wagonlit Travel is co-owned by Accor, based in Paris, and Carlson Companies. The Carlson Wagonlit Travel network for business travel has more than 3,000 locations in 141 countries and generates over $9.5 billion in annual sales.

In order to remain a leader in the highly competitive corporate travel and hospitality industry, Carlson Companies and Carlson Wagonlit Travel identified the increasing need to share knowledge across many corporate entities around the globe. To support and grow geographically dispersed business units managing large amounts of mission-critical data, a system was needed to move and manage corporate data between operational systems and business units, building pools of information to leverage for competitive advantage. Carlson Wagonlit Travel, the world's most widespread business travel network, particularly needed to increase its ability to perform on-line analytical processing (OLAP) in order to build its Global Business Advisory Services' travel consultancy business. Working hand-in-hand with end-users from Business Advisory Services, a project team from Carlson's Information Technology division designed a flexible decision-support system based on data marts, architected to be incrementally integrated into an enterprise data warehouse.

The data mart project team's first goal was to investigate how to architect a framework that would bridge the gap between transactional systems and analytical systems, allowing business analysts to quickly access and manipulate data without placing a heavy programming burden on staffers from Information Technology. The team required a software product that could easily extract data from multiple sources, transform it into a unified, usable format, and load that data into a target repository-in this case a data mart. After close investigation of products from the leading data warehousing vendors, Carlson Companies and Carlson Wagonlit Travel turned to Informatica Corp.'s industry-leading PowerMart software suite, based on its powerful extraction and transformation engine, easy-to-use graphical user interface, scalable feature set, and networking capabilities.

In a matter of days, Carlson Wagonlit Travel was using PowerMart to build its first data mart, extracting data from four different source databases housing information on air travel, rental cars, hotels, and credit card services. Based on a set of business rules supplied by analysts in the Industry Relations department, the data was then transformed and loaded with PowerMart into an Oracle relational database. Information Technology staffers then create Cognos PowerPlay cubes, which allow business analysts in Industry Relations to "slice and dice" data in multiple dimensions to analyze, compare and contrast findings for clients and suppliers. PowerMart's short learning curve allowed the project team to quickly get their data mart off the ground, while giving them the flexibility to go back and make changes as business requirements were edited by end-users.

With a vast pool of uniform data at their fingertips in the Business Advisory Services data mart, the business analysts at Carlson Wagonlit Travel are now able to quickly uncover key trends in corporate travel and the logic behind those trends. More than two years' worth of historical and current data is available to analysts in the data mart for forecasting and making accurate decisions based on a wide variety of business factors. Analysts can now focus on specific markets and their associated and potential market shares, leveraging invaluable information to provide support to clients, which in turn saves money for them by providing superior travel options, producing a win-win situation for all involved.

Appendix Three: My Views on NSI

Not surprisingly, my views on NSI in this position paper have caused some accusations: Ivan Pope complained on the com-priv list when I published and early draft of this paper there: I'd like to ask Gordon Cook if he has ever been in the pay of Network Solutions? I respond: Absolutely not and you can check that yourself. NSI does have a single subscription to my newsletter. I don't consider that to be in their pay. Now let's be clear about your biases Ivan...Netnames, UK, a DNS registry business that gains from any loss by NSI? You have been a MOUvement supporter. Are you a also CORE registrar? I don't claim to know your vita. Certainly you have your own bias.

Now as to the real issues. Do you buy into the "public authority model" of the Internet that the American government is getting ready to give the world? You must understand that the new IANA could easily impose egregious charges for names and numbers. That would make us look back fondly on "evil, NSI", wouldn't it?

It may now be dawning on NSI that they have had (still have) bumble- headed, arrogant leadership whose act of ignoring the issues of substance on these mail lists was a grievous mistake which allowed their enemies to succeed in painting them as evil incarnate. And the ineptitude of their PR activity in dealing with the Internet world is legendary.

Their trademark policy, while rational from their point of view when first instituted, is now especially egregious, and ought to be changed so that at the first sign of a challenge by a trademark owner they do not capitulate and throw the rights of their customers to the challenger. If they do not have the good sense to do this on their own, I would support pressure on them to do so.

However, NSI has built up a viable credible business with an infrastructure that works. At $35 a year per domain, their names are cheaper than those of almost every other registry on earth. In my opinion, when would-be competitors aggressively and persistently slam NSI, you have to wonder whether their motivation is a desire to do a genuine public service or simply greed?

Now lets look at the .com issue. The National Science Board as the oversight body of the NSF approved in Feb 97 the end of the cooperative agreement on April 1, 1997. Under this approval NSI would have kept .com. The initial award was made to support a service for the research community (the NSFnet and NREN), the demands of which grew beyond the bounds of that community. However, this growth did not change the legal foundation on which the award had been made. The award was not made as a government function. The general conditions of the award specified that the intellectual property developed under the award became that of the awardee. I make no judgement as to whether or not intellectual property was developed. That may now be adjudicated in court. It was the nature of the award up front that dictated the disposition of the intellectual property and gave NSF the right to walk away at the end and leave NSI in control. The famous clause whereby NSF can ask for a copy of the database was put there ONLY to protect NSF in the event that it did have to rebid the contract at the end of five years. But given the growth of the commercial internet, NSF saw no need to rebid - just as it saw no need to rebid the NSFnet back bone in 1993. NSF's intention NOT to rebid was clear long before NTIA and the White House intervened.

I object to the following:

(1.) The decision of an agency of US Government to pursue the destruction of a private business, to the point of nationalizing 80% of their operations (the percentage is the amount of income provided by .com, org. and .net registration. While NTIA has embarked on such a course, in the opinion of another agency of the US Government, namely the NSF, the destruction of NSI's business was not justifiable. I have explained above why this is the case.

(2.) I cannot sit comfortably with the naked power that the US government is using to destroy such a business. Power exercised in camera, with no justification other than NSI "has a monopoly which it should not have" and "we are going to divest them." Especially when the US government does this in such a manner as to deprive smaller US firms (which clearly do not have a monopoly) of any and all legal property rights which they may have. Ira made clear the "official" rationale to me for the first time in an interview in July. I am not persuaded by the depth of his argument which does not show why the NSF decision to end the NSI award a year early was in error. If I am going to sign on to the "get NSI posse," it will be only when I am shown evidence that the NSF process that I have just outlined was erroneous and that the policies being pursued in camera against NSI by the White House are fair. I have not seen such evidence. If it exists and I am shown it I could possibly change my mind.

You may remember that in the spring of 97, when Tony Rutkowski and Barbara Dooley were after the scalp of IAHC, POC, CORE etc, I demurred from attacking IAHC, POC and CORE. Indeed, I did not make my mind up until last September October 97, by which time, I had come to understand the issues much better and had an opportunity to watch the IAHC/POC/CORE behavior and be repelled by it.

I am fiercely independent. But I also take stands and take sides when I see the little guys being shafted and the big guys using their power behind closed doors to get their way. Up until this post there have been folk who considered me to be a shill for Ira Magaziner. I guess now they will change their tune. I call them as I see them. Have since April 1992. Since I have no advertisers I can afford to do this. I have taken stands before. I am taking a stand now. Independence without taking a stand in the face of an egregious display of governmental power is not, in my book, a virtue.

(3.) Secrecy. If commerce has such a strong case against NSI let it go public. If NTIA really is so sure of its position vis-a-vis NSI let it state its case and publish its terms. The only consistent goal in NTIA's position has been a desire to punish NSI. This is a privately conducted mugging conducted in camera by the feds against a company that is certainly not loved and is certainly far from perfect, but a company that has done nothing to merit such treatment. Throughout my seven years of publication I have had above all else the credo of openness. To the extent that the internet's business is done behind closed doors I have consistently put in the public domain what information I receive when, in my opinion, a more powerful entity is using its power against a weaker entity and doing so behind locked doors to which the public has no access. In this case my mission is to bring into the public light that information those processes which have purposefully been kept from public scrutiny.

To conclude: I do my damnedest to keep an open mind. Between 1992 and 94 I was a royal pain in the behind to the NSF. I have learned a helluva lot since 1994 and I am surprised that I am not accused of being an "NSF shill" as well as an "Ira shill." But gosh! Let me put your mind at rest. Not only have I never done any work for NSF, including uncompensated work. Those "so and sos" have never even expressed an interest in subscribing to my newsletter - let alone actually paying for one.

Gordon Cook Editor and Publisher

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Text Box 1

White Paper's Four Principles

Principles for a New System. In making a decision to enter into an agreement to establish a process to transfer current U.S. government management of DNS to such a new entity, the U.S. will be guided by, and consider the proposed entity's commitment to, the following principles:

1. Stability

The U.S. Government should end its role in the Internet number and name address system in a manner that ensures the stability of the Internet. The introduction of a new management system should not disrupt current operations or create competing root systems. During the transition and thereafter, the stability of the Internet should be the first priority of any DNS management system. Security and reliability of the DNS are important aspects of stability, and as a new DNS management system is introduced, a comprehensive security strategy should be developed.

2. Competition. The Internet succeeds in great measure because it is a decentralized system that encourages innovation and maximizes individual freedom. Where possible, market mechanisms that support competition and consumer choice should drive the management of the Internet because they will lower costs, promote innovation, encourage diversity, and enhance user choice and satisfaction.

3. Private, Bottom-Up Coordination. Certain management functions require coordination. In these cases, responsible, private-sector action is preferable to government control. A private coordinating process is likely to be more flexible than government and to move rapidly enough to meet the changing needs of the Internet and of Internet users. The private process should, as far as possible, reflect the bottom-up governance that has characterized development of the Internet to date.

4. Representation.

The new corporation should operate as a private entity for the benefit of the Internet community as a whole. The development of sound, fair, and widely accepted policies for the management of DNS will depend on input from the broad and growing community of Internet users. Management structures should reflect the functional and geographic diversity of the Internet and its users. Mechanisms should be established to ensure international participation in decision making.

http://www.ntia.doc.gov/ntiahome/domainname/6_5_98dns.htm`

ICANN as Implemented by "Mighty Six" Has No Fiscal Accountability

Editor's Note: Magaziner is facing a decision on whether to approve an Organization with no fiscal constraints. A public authority that can tax and spend as it wishes. [Editor's Note: While considering the Sims version of the ICANN by laws, readers should note that on October 12 Elllen Rony posted a full-text, side-by-side, color-coded comparison of the three bylaws proposals submitted to the Department of Commerce (ICANN, BWG and ORSC) is posted at: http://www.domainhandbook.com/comp-bylaws.html ]

Bill Semich is the country code TLD manager for Niue. His public critique of the fiscal irresponsibility of the Jones Day crafted ICANN by laws follows. for the kind of critique he is making Semich has some impressive credentials. Formerly: (1) Director of Financial Analysis for the City of Boston, (2) Chairman, Finance Committee, Massachusetts Bay Transit Authority Advisory Board (The MBTA's Budget Review and Approval body) (3) Financial Adviser to the Mayor of Boston for Tax Policy and Planning (4) Assistant to Collector-Treasurer, City of Boston (5) Deputy Director and Executive Secretary to the Board, Boston Economic Development and Industrial Commission.

Achievements: (1) Co-author, "Inside the Shadow Government," Boston Magazine, November, 1989, selected as one of the "Top 10 Magazine Investigations of 1989," by Investigative Reporters and Editors, Inc. (IRE); (2) Lead investigator and financial consultant, WBZ-TV Boston's "I-Team," in-depth 1995 investigative report on the Mass. Turnpike Authority's actions over a ten year period to extend it's life using fiscal manipulations; (3) Co-author, "The Money Pit," Boston Magazine, September, 1986, investigative article on abuses by the Mass. Convention Center Authority in its redevelopment of the Hynes Convention Center

Semich writes: "If the bylaws are approved unchanged by the White House as the basis for the Internet's first independent governance mechanism, the new Internet Authority would be able to set a wide range of Internet- related fees of any amount without constraint, float bonds of any amount which must be funded by future revenues, as well as collect additional fees of any amount to invest for undefined possible future needs, all such to be paid for by you, me and our children, the Internet's users of today and tomorrow, without their review, approval or control.

The new version of the proposed bylaws for the new Internet Authority will likely be submitted today to Ira Magaziner of the White House, under the terms of the White House "White Paper" released last January, to create the replacement for the US Government's current contractual arrangement for management of the Internet, which is set to expire today ( Sept. 30, 1998). But the new bylaws are completely devoid of any provisions to create any type of fiscal accountability for this, the Internet's first all- powerful, government sanctioned independent Authority.

Although the new bylaws make it clear that the source of the new Internet Authority's revenues will be the Internet's end users and service providers, it leaves all spending, borrowing, investment and other financial decision-making solely in the hands of the Corporation's board of directors, who's members specifically "have the duty to act in ... the best interests of the Corporation and not as representatives of their Supporting Organizations, employers or any other organizations or constituencies." (Article V, Section 8) Nowhere in the bylaws is the Board of Directors required to consult with any outside groups, experts, or other interested parties on how best to set its fees or plan its budget.

Nowhere in the bylaws is there any provision for any kind of independent budget review or hearing mechanism or approval process for the budget, borrowing, or any other fiscal decisions; And nowhere in the bylaws is there any provision for any kind of independent fee setting review process or approval mechanism, either by those who must pay the fees (the Supporting Organizations, who represent the consumers of the services to be provided by the new Corporation) or by any independent body of fiscal experts.

All these fiscal decisions are made solely by the new Internet Authority's own Board of Directors. [Remark by Gordon Cook the in ordinate power given the ICANN board of directors has been a steady criticism that has fallen on deaf ears all summer long.]

The relevant language in the proposed new bylaws makes this absolute power of the Board clear: FIRST, it gives the board absolute control over any spending or borrowing decisions: "Article IV, Section 1 (a) Then: "the powers of the Corporation will be exercised, its property controlled and its business and affairs conducted by or under the direction of the Board." SECOND, it gives the board absolute control over the fee setting decisions: "Article IV, Section 2. FEES AND CHARGES

The Board shall set fees and charges for the services, rights and benefits provided by the Corporation to the Supporting Organizations and others, with the goal of fully recovering the reasonable costs of the operation of the Corporation and establishing reasonable reserves for future expenses and contingencies reasonably related to the legitimate activities of the Corporation."

And THIRD, it gives the Board the sole authority and absolute control over setting its annual budget, with no requirement that it actually meet that budget or that the budget pass any kind of review process, all this in one simple line of the new Bylaws: "Article V, Section 25. ANNUAL BUDGET The Board shall prepare an annual budget, which shall be published on the Web Site."

These three phrases are the total extent of any language in the new bylaws that might be construed as setting ANY spending, fee setting and raising, budgeting, borrowing, investing or any other fiscal constraints on the board of the new Internet Authority which will be the primary manager of the single most important communications resource in the world.

Such an all-powerful and fiscally unaccountable organization as would be created by the new bylaws is a classic textbook "Public Authority" in its structure, and that is the crux of my problem with the fifth set of IANA bylaws released on Sept. 29.

White Paper Gives Us A "Public Authority" With Absolute Power And Without Any Accountability

Look closely at any publicly-funded independent Authority in the US and you will find a self-perpetuating, quasi-governmental organization whose spending decisions cannot be challenged, who spends the public's money like water, who has absolute power over its particular area of activity, but no accountability to the public.

In the present case of the bylaws for the new Internet Authority, there is minimal accountability for its policy decisions, and that is cause enough for concern. But there is NO accountability for its borrowing, spending and fee setting structure. There needs to be some kind of mechanism in the new entity that will create a counter- force to the typical Public Authority's inevitable desire to grow and to spend more and more money and increase its sway in the world. .

The counter-force to spending increases could be a Budget Review Committee solely comprised of the groups that will fund the new Internet Authority. Or it could be a Finance Committee made up of independent, world-renowned fiscal experts who have no vested interest in the new Internet Authority or the Internet per se. Or it could be a committee of government finance experts with experience bringing public spending into line. Or it could be some combination of the above.

It would be a real tragedy if, in its first efforts at self- government, the Internet community were to hand over management of the Internet to yet another quasi public Authority, who's essence is perhaps best defined in an article I co-authored nearly ten years ago:

"Authorities constitute a permanent, expansionist government, collecting and spending more and more public money, running up more and more public debt, and making more and more critical decisions on the public's behalf with each passing day. And because authorities do all this out of site - and beyond the control - of the general public, they constitute, finally, a Shadow Government."

"Inside the Shadow Government," by John Strahinich and J. William Semich, cover article, Boston Magazine, November, 1989.

Text Box 3

NSI Accedes to US Government Demands

Herndon, Va., October 6, 1998 - Network Solutions, Inc. (NASDAQ: NSOL) and officials from the Department of Commerce's National Telecommunications and Information Administration (NTIA) have agreed to a two-year extension of the Cooperative Agreement between the US Government and Network Solutions with provisions to transition relevant US Government authority to a new non-profit corporation for coordination of some domain name system functions. As part of the agreement, Network Solutions and NTIA have agreed to a plan for the transition to a shared registration system in a phased approach beginning March 31, 1999 with full implementation by June

1, 1999. Network Solutions will build a shared registration system to support multiple licensed, accredited registrars offering registration services. Network Solutions and other domain name registrars will function as retailers of domain name registration services through Network Solutions' shared registration system. Network Solutions will also continue in its role as the registry -- or wholesaler -- of .com, .net and .org domain name registrations. Network Solutions has registered more than 2.3 million domain names, or Web addresses, in .com, .net , .org and .edu. Network Solutions has worked with the US Government pursuant to a five year Cooperative Agreement to develop and maintain some of the key administrative functions of the Internet including the domain name registration system. This new amendment extends the Cooperative Agreement through September 30, 2000.

Other highlights from the extension include the following: (1) Network Solutions will submit a copy of all software and data generated under the Cooperative Agreement through September 30, 1998 to the US Government. (2) Once a shared registration system is implemented, pricing for Network Solutions' shared registry services for .com, .net, .org and .edu will be a specific dollar amount per registration, per year, and will be specified in a further amendment reflecting Network Solutions' costs and a reasonable return on its investment. (3) Following the finalization of the US Government's agreement with a new non-profit corporation - also known as Newco -- that will act as a coordinating body for domain name system administrative functions, Network Solutions will negotiate a contractual relationship with Newco. (4) Network Solutions will continue to function as the administrator for the primary root server -- known as root server A -- for the root server system and as a root zone administrator until such time as the US Government instructs Network Solutions to transfer either or both of these functions to Newco or a specific alternate entity.

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Text Box 4

Some European Views on Opening GTLDs to Competition

Excerpt from Eurecom, the monthly newsletter of the European Union. http://www.eurunion.org/news/eurecom/1998/ecom0998.htm

SEPTEMBER 1998 -- GROWING CONSENSUS ON THE INTERNET MANAGEMENT Now the EU, the US and the international community agree that all pending decisions on Internet governance should be referred to the new private sector, self-regulatory Internet Assigned Numbers Authority (IANA), which will be created in the next few months. The US White Paper calls for the creation of the new body, at least on an interim basis, by the end of September 1998. Although this timetable is extremely tight, the Commission is supporting the objective because there is an interest in Europe to open the existing generic Top Level Domains to competition as soon as possible.

Moreover, the US has endorsed the principle ñ and the Commission's view -- that IANA should have a balanced, internationally -constituted membership and board, and that the World Intellectual Property Organization (WIPO) should continue to play a central role in the development of dispute resolution and trademark policy for the Internet. Consequently, the Commission is urging the European private sector to participate actively in the implementation phase.

See also From:

http://europa.eu.int/comm/dg04/speech/eight/en/sp98006.htm

Competing for the Internet by Kevin Coates, DG IV- C-1,

published in the EC Competition Policy /DGIV/speech/eight/en/sp980xx.htm, February 1998

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Text Box 5

PRIVACY: WHAT IS AT STAKE?

From a Scott Bradner Network World column: "You have no right to privacy. There is nothing in the US Constitution that guarantees that you have any ability to protect yourself from those who want to know everything about you and disclose it to the world. From the local supermarket chain that requires a special card to get discounts and requires your social security number to get the special card (then keeps track of everything you purchase after you get the card) to credit card companies that sell the history of your purchases to anyone with a few dollars -- personal information is now a basic part of big business.

The potential for abuse was bad before the Internet explosion, when corporations had isolated machines that did "data mining" to try and figure out if you like pistachio ice cream, now with these machines linked the implications are ominous indeed.

A simple case of potential privacy invasion on the Internet is the ability of web servers to store facts about your web use in "cookies" in your browser. Many people regularly run programs on their machines to remove these cookies but Christian Huitema, the former chair of the Internet Architecture Board (IAB) has proposed an alternate approach designed to let histories be built up but to make them useless. You send any cookies you get off to an Internet-based cookie bank, the bank returns a random cookie to be used next time you connect to the web server, thus the histories of many people get jumbled together, negating the reliability of the information.

The Clinton administration's A Framework For Global Electronic Commerce (http://www.iitf.nist.gov/eleccomm/ecomm.htm) argues against legal protection for privacy as is done in many European countries. It argues in favor of some vaguely defined industry "self- regulation." Somehow I do not find it comforting to know that the data mining industry is in charge of protecting my privacy. I'd rather make it so that people that improperly disclose information go to jail. It would seem to me that a government prosecutor would have a somewhat better chance against a billion dollar corporation that I would in trying to right a wrong.

Those who claim that its all for our own good and enables corporations to better target advertising that we want to see and, anyway, if you have nothing to hide what are you worried about should take a lesson from recent events. It was a general acquiesce to an environment of no individual privacy rights that caused Diana and her companions to be hounded, literally, to death in a tunnel in Paris. This may seem overly dramatic but imagine what its like for someone who tests positive to a disease such as HIV when that information leaks from the corporate doctor to management. This type of thing is at the bottom of the slope we are going down as we accept the assertion that an individual has a limited right to privacy. See: http://golem.sobco.com/nww/1997/36-privacy.html

From another Bradner Network World column (late 1997): In general I'm closer to the European point of view in most cases. The first big difference is in the area of privacy. The European document supports the "fundamental right to privacy and personal and business data" and calls for laws to protect this right. The US view is quite different and implies that privacy is subservient to business "needs" and only asks for a "voluntary framework" to protect , at some level, individual privacy. See: http://golem.sobco.com/nww/1997/29-e-commerce.html

SECURITY ISSUES: Sources of European Distrust of American Cryptography Policy

European Companies Threatened by US Export Controls on Encryption Technology (undated 1997 press release)

EEMA is actively lobbying the European Commission in Brussels to improve competition in the Global Information Society. . . EEMA has identified that European companies are being severely disadvantaged by not being able to use secure messaging transmission techniques in conducting legitimate electronic trading. EEMA recognizes that the principal reasons for this are the disparate European legislation controlling the use of encryption and the fact that inter-working with dominant US-based computer software (operating system and application software) is subject to US legislation and restrictions. **These Controls have inhibited European industry access to effective security products and even worse, block European suppliers from competing on equal terms with their non-European competitors. Even more damaging is that EU suppliers are prohibited from supplying their own products into their national markets.**

A large proportion of the products and services which support the Information Society are of American origin. In order to integrate their products into popular applications originating from the US (for example those supplied by Microsoft), European companies currently need a Software Development Kit containing the Application Programming Interface (API) or Cryptographic API (CAPI). If this kit is to be used to produce a product outside of the United States or Canada it is subject to export controls by the US government.

The consequence of these controls is that European suppliers are disadvantaged in comparison with US and Canadian suppliers because their access to the necessary Software Development Kits is inhibited. European suppliers must develop detailed plans for approval by the US government, even if they plan to sell their products into the EU market only, prior to obtaining the necessary Software Development Kit. There are no guarantees that EU companies would actually receive such permission. Likewise there are no indications of how long it might take to obtain such a permission.

Alex Drobik, Chairman of EEMA, comments: "If this is not solved it will have severe implications for European companies ability to do business in the international marketplace. Vendors are unable to develop effective products and as a result users will not get the benefit of secure products. This has serious knock-on effects right across the supply chain." http://www.eema.org/prenc.html

European Business in Danger of Being Left Behind in Electronic Commerce Digital Certification Taskforce Set to Drive European Market

"Amsterdam, June 3rd 1998 - EEMA, the leading forum for advanced business communications, has today launched the European Certification Authority Forum (ECAF) at its annual conference in Amsterdam. The main objective for ECAF is to steer the European Digital Certification market to enable European businesses to compete effectively in the global online marketplace. Digital certificates, private and public keys are being used more and more and are an essential ingredient in the future of Electronic Commerce, however, until ECAF there was no co-ordinating body. ECAF's main remit is to establish harmonized European Digital Signature Legislation by getting the pan-European certification authorities to sign up to a common way of working.

Roger Dean, Executive Director of EEMA, comments: "Digital certification will open up real eCommerce opportunities for European businesses, however, without proper control it will end up as lots of propriety systems that don't talk to each other as vendors develop their own standards. ECAF will prevent this by driving common standards across Europe. This is fundamental if European businesses are to avoid slipping further behind their US counterparts."

The Internet - American Controlled And Accessible To Snooping Of Intelligence And Law Enforcement - As Premier Vehicle For Economic Commerce?

At the same time Ira has for the past three years focused on his mission with Tom Kalil and working through the National Economic and Security Council to setting up the internet as a mechanism for global economic commerce..... touting the net as a means on which, in a few year's time, the majority of the world's economy will depend. All this makes the Europeans very uncomfortable. Editor's Note: "Gartner Group analyst David Smith predicts that by 2003, the Internet will become the predominant mechanism for conducting business -- either to consumers or between businesses." from Edupage 10/15/98]

So Ira needs to demonstrate that he has enough power to have rammed through a solution at home. That is why things have turned nasty during the last week and why the iron fist is becoming seen with the incorporation of ICANN , and ISI's submission of the ICANN proposal yesterday -- even though, by Ira's own allegedly free process, ICANN should not yet be seen as the winner.