Statement by Tamar Frankel
Professor, Boston University School of Law, and Faculty Fellow, Berkman Center

About a year ago, many of the participants in this Conference convened in Reston, Virginia to ponder the mysteries of Newco or new IANA, as it was called then.  The purpose of that meeting was to put the flesh of details over the bare-bone outline of the White Paper issued by the government a month earlier, and diffuse the overwhelming mistrust that permeated the various persons and factions deeply involved in the Internet's naming system.  This meeting was a link in a chain to contacts that continuously widened the coalition of participants in shaping this corporation. Face-to-face meetings and open discussions among the factions have helped bring opponents together.  In parallel, meetings behind closed doors brought together additional interest groups.

At the Reston meeting and the meetings that followed, effort was made to exclude discussion of substantive policy issues that ICANN was expected to resolve in the future.  These included: NSI's status, privacy, and trademark rights.  Although the issues were not completely avoided, they were not aired in a direct and confrontational manner, but indirectly, as reflected in ICANN's power and control structure.

ICANN emerged with an Interim-Initial board, facing unresolved, very difficult and important issues.  ICANN and its board have critics and supporters.  But most of the support is not unqualified.  I assume that the U.S. Department of Commerce supports what ICANN does.  But the endorsement is soft-voiced, perhaps for legal reasons.  Others support ICANN by actions or informally.  Many supporters seem to be sitting on the fence.  They would not claim its demise and refuse to declare it a failure, but would not offer full approval and allegiance either.  They have taken a "wait and see" attitude; a "show me" attitude.  The issues of this Conference center around what critics and these supporters wish to see and what they want to be shown.  Some of these issues are open-ended, with few clear proposed solutions.  I list them and comment as to some.

I.  ICANN's Missions Have Remained Unclear

It is important to clarify these missions to help determine ICANN's authority and type of process that ICANN's Board should follows.  Different functions justify different processes.

1.  "Doing" -- Ongoing, Operating, Non-Policy Management.

Filling the functions of the late Dr. Postel, some of ICANN's activities involve "doing."  The definition of a "doing mode" may be controversial.  It would be helpful to agree on at least some of the activities that fall under this category.  One test can be the following:  decisions that can be evaluated by visible actions and results can be called "doing" or operational.

2.  Restructuring ICANN and Establishing Accountability

When ICANN declared itself to exist, the U.S. Department of Commerce asked the ICANN Board to establish accountability mechanisms.  To this very day, ICANN and its Board are formally accountable under a contract with the U.S. Department of Commerce, and could be charged with violations of the law by the Attorney General of the State of California.  The problem is deep seated.  Those in control are greatly concerned with capture.  Naturally, there is the conflict between a desire to maintain full control and the need to be accountable, which in fact means conceding to the powers of others.  There is however, progress.  Much work has been done for months by committed members of the Internet communities to design a voting membership structure for nine at-large directors.  In addition, Supporting Organizations are considering their representatives.

Lack of formal accountability does not mean necessarily freedom from pressure.  Informally, ICANN and its Board are subject to many great pressures; they oscillate with these pressures which makes them appear opportunistic and unprincipled.  In fact, if ICANN were accountable formally to a specific body, it would be more protected than it is now.  There would be an expected process to be followed and a formal body to which appeal may be brought.  ICANN may gain far more legitimacy this way.

In sum, the issue of accountability has not been resolved as yet.  Apart from the users' votes, could there be an established independent and authoritative body to which ICANN should be accountable especially in  and its Board account to different bodies with respect to different activities (e.g. raising funds, taking positions with respect to qualifications of registrars and registries and others)?  Should ICANN be accountable to a court-like body?

3.  ICANN's Financing

To the best of my knowledge this subject was not discussed in detail in the White Paper and was not fully examined openly.  In Reston, and in subsequent meetings, corporations and individuals were encouraged to contribute towards the expenses but a cap was put on how much they could contribute.  This is the dilemma.  You need financing but one source financing creates dependence and consequently control.  To this dilemma is added the problem of fee-imposition backed by monopoly power.  This is an issue that requires open discussion.

4.  Policy Making: General

ICANN's bylaws call its Board "Interim" and "Initial."  These words are closely related but give a different image and emphasis.  Initial means the first, with all the powers of any subsequent Board.  Interim means the transitory -- in between -- functioning as the tie between nothing and the first.  I assumed that the main function of the Interim-Initial Board is to put ICANN's structure and house in order.  But as an Initial Board, the Board starting acting as the first, undertaking not only a restructure mission but all missions that any ICANN Board might have.  The Board thus became involved with policy issues before it put its house in order.  The question is whether these activities are within the Board's authority, and whether regardless of formal authority, it is wise to undertake policy decisions at this stage.

5.  NSI's Monopoly Status and the Management of Services Contracts

While the White Paper charged ICANN with encouraging competition to substitute for NSI's monopoly, few details were added to the charge.  How should ICANN approach NSI's monopoly?  Should it encourage NSI to share its monopoly with others; provide a scheme for such sharing; acquire NSI's monopoly to provide the service itself as a monopolist?  Separate NSI's functions?  Encourage the creation of different structures to diffuse NSI's monopoly?

It seems that ICANN's Interim-Initial Board has moved towards central control over the naming system by substituting itself for NSI and others.  In addition, ICANN's Board has established criteria and rules for qualification of Registrars and Registries and for the service contracts.

This method of complying with the White Paper raises serious questions.  First, should this type of Board make the decision?  Second, does this approach encourage competition?  Third, is central control a good solution for developing a communication system such as the Internet?  Fourth, is uniformity a good solution for service contracts of the Internet, or should ICANN wait for market solutions and interfere only when problems arise?

The tension between central control and uniformity on the one hand, and free development of forms and patterns that gain acceptance on the other hand is not new.  It appears in every context of management (government and business, professional and non-profit).  In this day and age, with a fast changing economic, financial and technological environment, governing bodies in business and in governments tend to let go and loosen their controls.  They focus on closely monitoring market developments, and interfere selectively, when problems -- according to well-defined criteria -- emerge.  ICANN might consider this mode of operation.

6.  What Should Be ICANN's Role in the Trademarks Conflicts?

While the White Paper mandated a role for ICANN in this difficult area, ICANN may wish to reconsider this issue.  Clearly, some of ICANN's supporters have strong interests in the trademarks and intellectual property issues, and those should be heard and considered.  The question is the extent to which these interests should have an impact on ICANN's other policies, especially since Congress and the courts are actively involved in these issues.

7.  Creating Additional Domain Names

This issue was at the forefront of Dr. Postel's agenda, and was mentioned in the White Paper.  While ICANN's Board has dealt with the issues described above, it has not moved to ease the pressure for new domain names.  The question is why?  The speculation that trademark interests block the way, undermines the ICANN Board's legitimacy.  As mentioned below, established and explained priorities may ease pressures on the ICANN Board and enhance its legitimacy.

8.  Encouraging Technology to Resolve Problems of the Naming System

This issue is not mentioned in the White Paper but is of great importance.  It is unclear whether ICANN and its Board intend to call for and support technical innovations that would eliminate the hierarchical structure of the naming and numbering system, and reduce the need for central management of the type that ICANN is now building.  The question is of great importance to ICANN's structure.  Does ICANN's Board work toward the elimination of ICANN's governance -- resource allocation functions -- and vest these functions in the markets?  Does ICANN's structure provide sufficient flexibility to transition with changing technology?  The question is even more crucial with respect to the policies that ICANN is currently putting in place.  Do these policies tend to inhibit the development of such technology?

The developments of the past year raise general issues:

1.  Priorities

The [ICANN] Board cannot deal with all issues at once.  So, what are its priorities, and how does it set them up?  We should judge priorities by ICANN's objectives: to maintain the stability of the Internet; to achieve credibility and legitimacy (e.g. fair allocations of resources); to provide flexible rules and structures that could be changed with technology or political requirements.  Which activities to advance these objectives are more urgent than others?

2.  Identifying the Right Processes

If the [ICANN] Board classifies the functions it performs, it could adjust its processes accordingly.  What functions require ICANN's Board to employ judicial-like principles and procedures, and what functions allow the [ICANN] Board to employ corporation operation-like principles and procedures?

When ICANN acts in a "doing mode" it can be viewed as an operating corporation.  The results of their doing can be easily evaluated and implementing the decisions cannot wait long.  That is why corporate managers can act without making proposals, asking for comments, or explaining their decisions.  But if the product involves policy in the private sector (to merge with another corporation, go public or private), or in government (to impose fees or establish qualifications or trade activities) the decision cannot be tested until after the fact, and also affects many constituents.  Therefore, decision makers must disclose their intention, explain their proposals, consider comments, and obtain approval by the affected parties or their representatives, in many cases, the government.

How does ICANN's process measure up as policy makers?  It is progressing.  But it could refine its process.  ICANN's Board [???] publish proposals and invite comments.  Some comments were made at the open meetings; some in writing.  Yet, there are no mechanisms to assure the public that the comments were read and considered.  People are not offended if their suggestions are not accepted.  They are offended when it seems that their comments are thrown in the waste-paper basket unread, or not seriously considered.  Respectful attention is what people expect in exchange for the time and effort they have committed.

Courts and other bodies that command legitimacy satisfy that expectation in two ways:  they mention the parties' arguments, and state the reasons for accepting or rejecting them.  Even the losing parties feel that they "had their day in court."  Congress meets the same demand in reports that accompany legislation.  These reports explain the reasons for congressional action.  As time consuming as it might be, ICANN's board might consider explaining its policy proposals and decisions and addressing comments on its proposals.  While the "doing" decisions cannot wait, policy decisions can usually wait.

3.  The Board's Authority

There are questions about the authority of the Interim-Initial Board's authority.  Should it make policy decisions, or should it wait until ICANN's legitimate structure and process are established?  Can it impose payments on users?

After reading four pages of a theoretical discussion, one may say that academics can engage in these intellectual games, but in the real world decisions must be made quickly, taking into account the political reality.  We know about the danger of "analysis paralysis" where everything is analyzed to death and nothing is being done.  I agree that analysis can be carried too far.  But I have also seen how political reality and quick decisions ruin potentially promising organizations.  By rushing into policy making before ICANN's house was set in order and acquired solid legitimacy, the Board took a serious risk that these policies will not be followed.  For such policy decisions, process must be slower:  prorities must be set and self-limitations must be imposed, a movement of followers must be created.

This does not mean that the Board can map the route it will take.  Sometimes, when no precedent exists and we cannot think the issues through, we must "muddle through."  If ICANN gets out of line, there are enough people and organizations watching to press for reconsideration.  Technology may render the current format of ICANN obsolete or force it to change its structure.  So I am quite optimistic.

I have a concern, however.  I worry that the Board's policies may undermine a better future structure of the naming system.  Therefore, I ask the Board to encourage technological changes.  Its policies should not impose costs on introducing new technology, and should not be tightly tied to the structure of the current naming system or to ICANN's structure.  As importantly, I hope that ICANN will not establish uniform rules, contracts, and qualifications, and then enforce them by withdrawing the benefits that it bestows.  "Muddling through" does not mean only trying to see how far one can push before being pushed back.  "Muddling through" means also encouraging experiments and offering the freedom to make many mistakes rather than one.  As Esther Dyson has often reminded us: "Never make one mistake".  ICANN should heed this motto.  The future of ICANN may not be a central management modeled after our industrial corporation or not for profit charities, but a focal point for discussion and consensus among all interested parties.  That, in fact, will make it truly unique.

[In concluding her opening remarks, Professor Frankel noted that controversies were a fact of life.  However, since ICANN had not yet established trust, initiatives such as ICANNwatch were a good thing.  She observed that the future ICANN may be more like an "Exchange".  An Exchange has a structure and rules of interaction; its purpose is to facilitate cooperation among members through the mechanism of self-imposed rules.  Commenting about "trust," which she stated was the area of her expertise, she recalled that David Farber had told her several months ago that she did not understand the Internet.  Professor Frankel said that she now realized that Mr. Farber was right:  she did not understand the corroding distrust, the irrational ad hominum attacks, and the passionate love of the Internet, that leads to intrigue and a lack of cooperation and compromise.  Above all, Professor Frankel remarked that she could not understand how people who share so much feeling and commitment to the Internet, cannot create a "bridge" of respect, self-limitation, and reciprocity that would lead to a [global] community.  She felt that individuality and self interest could be united, so that everyone would benefit from the [expected] better general system and community that would be the result.
Harish Bhatt, CPSR]