8.2 The International Forum on the White Paper

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But the White Paper had broadcast a profoundly mixed message. Read from a viewpoint less cognizant of the insiders' bargain, the White Paper seemed to embody a sincere commitment to self-governance and a willingness to accept whatever the broader Internet community decided to do. Many people involved in Internet governance took the call for a private sector-led consensus at face value and welcomed the challenge. They interpreted the White Paper as an opportunity to come together on neutral territory and forge an unconstrained consensus on what would be the new corporation's structure, powers, initial board members, and management. The U.S. government actively encouraged that perception. It 'repeatedly and publicly encouraged all Internet stakeholders . . . to participate in an open, consensus-driven process.' ^{[22 ]}That optimistic spirit led to the series of truly self-organized meetings known as the International Forum on the White Paper.

8.2.1 Bringing the Parties Together

The first to respond to the White Paper's call for private initiative were Anthony Rutkowski, who had become a consultant for Network Solutions, and Kathryn Kleiman of the Domain Name Rights Coalition (DNRC). Both represented interests outside the dominant coalition. They proposed a Global Incorporation Alliance Workshop in Reston, Virginia. ^{[23 ]}Tamar Frankel, someone with experience in mediating corporate governance and industry self-regulation negotiations, was tapped to lead the workshop. Members of the Internet Society and CORE initially balked at participating in the event. The concept of an open process that brought all the contending parties together, however, gained support and momentum. In mid-June, trade associations of ISPs publicly came out in favor of the workshop and proposed to expand it to a series of face-to-face meetings around the world. ^{[24 ]}The incorporation workshop was renamed the International Forum on the White Paper (IFWP). A steering committee for the IFWP was organized that, rather remarkably, managed to seat representatives of nearly all the warring parties. ^{[25 ]}In July the European Commission organized a European consultative meeting to prepare for the IFWP meetings, resulting in the establishment of the EC Panel of Participants, a group of stakeholder representatives to advise the commission and develop a common position in the IFWP process. By the second meeting in Geneva, the Harvard University Law School's Berkman Center was helping to moderate meetings and archive its activities. In Latin America, a new Internet association was formed partly in response to the Buenos Aires IFWP meeting. Country code top-level domain name administrators also began to organize in its wake.

In parallel with the IFWP process, however, IANA and ISOC pursued their own agenda. Following the advice of his IANA Transition Advisory Group, Postel had acquired the services of a lawyer, the prominent Washington antitrust counsel Joe Sims of Jones, Day, Reavis and Pogue. Sims worked with Postel to draft articles of incorporation and bylaws for the new corporation. Sims proposed a closed corporation dominated by the technical community. It would incorporate under California law as a nonprofit public benefit corporation, a structure typically used for educational and charitable organizations. Half of the board would be self-selected by the initial board members. The other half would be appointed by functional constituencies called Supporting Organizations. Two of the three Supporting Organizations (addresses and protocols) would be controlled by the technical community. The composition of the third Supporting Organization, devoted to domain names, was not specified, but presumably was intended to represent business and user stakeholders in line with the criteria of the White Paper.

Sims attended most of the IFWP meetings, and Postel himself appeared briefly at the Geneva meeting, which overlapped with the Internet Society's annual convention. It gradually became evident, however, that the interests lined up behind IANA did not consider the IFWP process to be the real arena for arriving at a decision. Instead, Postel and Sims made it clear that they intended to use their own draft articles and bylaws as the basis for incorporation and would decide unilaterally whether to amend them or not based on comments submitted to the IANA Web site and informal consultations among their acquaintances in the dominant coalition. Postel's refusal to fully participate in IFWP began to grate on the groups and individuals involved, who believed that IFWP incorporated the consensual process called for in the White Paper. Frustration with IANA's refusal to modify its draft led to the drafting of an alternative proposal in August.

As the IFWP meetings progressed, it became clear that the open process was producing consensus around an organizational model sharply different from the one proposed by Sims and Postel. The public benefit corporation proposed by Sims vested significant power in the board and management, and gave the board sweeping powers to unilaterally change its structure by amending the bylaws. Accountability to a community of stakeholders was minimal. As Tamar Frankel (1998) observed,

A public benefit organization does not insure a balance of power among the different stakeholders. In fact, it negates the existence of stakeholders, and the need for a balance of power among them. . . . It is assumed that the board and the president . . . know what is good for all these groups and for the [community] as a whole. Further, the corporation by definition negates the need for protection against capture. Captured altruism and idealism are welcome. In short, this type of organization vests in its board virtually unrestricted powers to manage, structure, and restructure the corporation. Whether the corporation will fulfill its declared and future mission depends on . . . the good will and trustworthiness of the members of the board, not on the constitutional documents that vest power in the board. (2)

The IFWP process, in contrast, proposed a nonprofit, membershipbased organization managed and controlled by an elected board representing various interest groups. This model was based on the assumption that the participants in the new organization would serve not because they were altruistic, but in order to advance their business, professional, or personal interests; hence, the organization was set up like a business corporation that substituted members for shareholders.

8.2.2 The Process Breaks Down

Tensions between these two parallel processes-the open, democratic proceedings of the IFWP and the private, informal networking of IANA- steadily mounted during the summer of 1998. The growing gap between the technical community's loyalty to Postel and the legal and political concerns of the IFWP was dramatized at the Forty-Second IETF meeting in Chicago on August 26. Postel and the IFWP's Frankel were both present at the plenary session. With IAB chair and IBM employee Brian Carpenter in control of the agenda, an emotional endorsement of the Postel-Sims draft was orchestrated. Carpenter read a 'draft declaration of IAB support and IAB endorsement' for the Postel-Sims draft and asked the meeting for a 'rough consensus' endorsement of it. A member of the audience stood up and asked the attendees to give Jon Postel a standing ovation 'for all his good work over the last 20 years and his work on his latest ‘new IANA' draft.' Postel's efforts were endorsed by acclamation, with a few notable exceptions. ^{[26 ]}Nearly all of those present had never read either proposal. ^{[27 ]}

Matters came to a head in late August, when the supporters of the IFWP tried to finalize their process. Two additional meetings were proposed: a restricted session that would bring the key stakeholders together in a closed negotiating session to finalize a constitution and interim board for the new corporation, and a public ratification meeting that would review those decisions and assess community input on them. There was also talk of an online voting process among IFWP participants to elect the initial board and to extend the ratification process to those who could not attend the meeting. Harvard's Berkman Center offered to host and mediate the meetings in Boston. The negotiating session was scheduled for September 12-13, and the ratification meeting was set for September 19.

Most stakeholders, including Network Solutions, had indicated their willingness to participate in the negotiating session. But IANA refused. Although most IFWP participants were unaware of it, their attempts to make IFWP into an authoritative arena for collective action posed a serious threat to the expectations and plans of the dominant coalition. It was one thing for the IFWP meetings to formulate resolutions and consensus points about broad issues. If IFWP hosted a real 'constitutional convention,' however, it threatened the hegemony of IANA and GIP over the incorporation process. As one participant in the negotiations recalled, '[Joe] Sims resisted the idea of a [final] meeting; he wanted to bypass IFWP completely.' ^{[28 ]}To subject Sims's and Postel's incorporation proposals and interim board selections to approval and modification by an open, international forum that included many opponents and critics would be to risk losing control over the results.

As a loosely organized, informal group, the IFWP steering committee was in no position to resist centrifugal pressures. The committee contained several supporters of the IANA faction who obstructed attempts to push the IFWP process forward to authoritative decisions. In late August, prodded by Sims, the pro-IANA members of the steering committee withdrew their support for IFWP in order to allow IANA to take charge of the incorporation process. Mike Roberts of EDUCAUSE was particularly adamant about closing down the IFWP. ^{[29 ]}Only later did it become known that Roberts had already been tapped to serve as the first president of ICANN. Lacking sufficient backing and participation, Harvard and the IFWP steering committee canceled the final meetings, and the IFWP itself fell into disarray. From this point on, IANA became the undisputed focal point of the incorporation process. With control secure, the Global Internet Project held a press conference a few days after the IFWP had been disposed of, announcing its plans to raise start-up funding for the new nonprofit organization. ^{[30 ]}

The breakdown of the IFWP process concerned Magaziner and Burr. They urged IANA and Network Solutions to resolve their outstanding differences in some other way. The two parties' legal teams entered into private negotiations, and on September 17 released draft articles of incorporation and bylaws for an Internet Corporation for Assigned Names and Numbers (ICANN). The Internet's 'constitutional convention' had been reduced to two government contractors-each a holder of de facto property rights over critical parts of the Internet's name and number space-negotiating in private. Even the IANA-Network Solutions agreement did not prove to be stable, however. The draft contained two clauses intended to protect Network Solutions against expropriation. ^{[31 ]}That made the proposal unpopular with many key backers of the dominant coalition, notably gTLD-MoU members and technical organizations outside the United States. IANA quickly backed away from the deal and on September 30 submitted to the Department of Commerce a fifth version of its proposed corporate documents with those clauses removed, and a list of interim board members (see section 8.2.3).

In the meantime, a small band of diehard IFWP-process supporters refused to accept the cancellation of the September 19 ratification meeting. They met on that date in Boston anyway to draft an alternative to the Postel-Sims proposal. ^{[32 ]}The resulting Boston Working Group (BWG) draft, as it came to be known, made the new corporation accountable to a membership that would elect the nine at-large board members. The group criticized the IANA draft for its 'vague lines of accountability, limited, if any, means for individual participation, . . . a high degree of susceptibility to capture by companies and organizations, and [the absence of] a membership structure.' ^{[33 ]}Another proposal was submitted under the banner of an alternative root server system called the Open Root Server Confederation (ORSC). ^{[34 ]}ORSC also proposed a membership corporation, but one composed primarily of organizations. Two other widely circulated documents proposed modifications of their own. ^{[35 ]}All these proposals claimed support from significant, but by no means dominant, segments of the ' Internet community.'

8.2.3 Captured from the Start

Perhaps the most serious blow to the White Paper's goal of building the new corporation upon a consensual foundation came with the appointment of ICANN's initial board and management. Almost everyone outside the IANA-GIP inner circles expected the initial board and management to be selected through some open, iterative process. Magaziner himself had told an interviewer on September 21 that he had expected 'broad public discussion' of the names of proposed board members. ^{[36 ]}On October 5, however, Postel and Sims released a complete list of their nine interim board selections and made it clear that it was not subject to modification.

The interim board selections were the product of private negotiations and consultations among core members of the dominant coalition: Postel and Sims, Postel's friends at ISOC and IAB, IBM and other GIP members, the European Commission, and the Australian government. The IBM lobbyist Roger Cochetti, who began to assemble a list of names the first week in August, played a particularly active role and recruited the future board chair Esther Dyson. ^{[37 ]}The EC's Wilkinson directly nominated and ' insisted upon' certain candidates to Sims in line with a tacit agreement with Magaziner and Burr that Europe would be given three seats on the board. ^{[38 ]}The Australian government also advanced a name and later pronounced itself satisfied with the results.

During the summer, Postel had stated that he intended to deliberately avoid selecting initial board members who were actively involved in DNS issues or associated with any particular faction. While this was true of most (not all) of the selections, the board members' lack of familiarity with the issues and the absence of any strong ties to involved constituencies meant that the board could not serve as an effective check upon policy directions set by the management.

And it was the core group's total control over the management of the new corporation, not the board selections per se, that proved most significant in the long run. Sims was in control of legal policy. Postel was predesignated as chief technical officer. At the same time as they selected the initial board, Sims and Postel designated EDUCAUSE's Mike Roberts as president; his ratification by the board October 25 was a mere formality. Roberts was no 'neutral.' He was a charter member of the Internet Society, a supporter of gTLD-MoU, a strong opponent of Network Solutions, and the man many viewed as directly responsible for sabotaging the IFWP. Real operational control of the corporation, therefore, was entirely in the hands of one faction. A neophyte, unpaid board selected by the management itself would be in no position to countermand it.

The dominant role of management became even more problematical when Postel died suddenly of complications from a heart attack, on October 18, 1998. One of the architects of the Internet's name and address spaces, and a man who commanded deep respect among the technical community, Postel had been the new corporation's most valuable asset. His death robbed the organization of its moral center, a good part of its institutional memory, and most of what remained of its legitimacy.

8.2.4 Network Solutions and Amendment 11

Network Solutions was excluded by the dominant coalition; indeed to many coalition members its market power was the focal point of the process. To the technical community it represented an unwelcome and threatening intrusion of commercial and proprietary interests into the core of Internet administration. To prospective entrants it represented a highly skewed distribution of wealth, which is unlikely to survive most collective action processes. To trademark owners its willingness to profit from an open, first-come/first-served domain name market was a major irritant.

Nevertheless, Network Solutions had significant bargaining power. It knew how to lobby in Washington and had the financial resources to do so. It controlled the gigantic .com zone and the authoritative root server.

A refusal by Network Solutions to participate in any new regime might result in the de facto privatization of the root in its hands.

Network Solutions' Cooperative Agreement with the U.S. government, which authorized it to operate the A root server and serve as the registry for the generic top-level domains, was set to expire September 30, 1998, the same date as Magaziner's deadline for forming the new corporation. But the possibility of terminating the contract did not give the U.S. government significant leverage over the company. Network Solutions claimed to have intellectual property rights in the database of .com, .net, and .org registrants; thus, it recognized no obligation to turn over the crucial zone files and registrant data to the U.S. government or to any new contractor when the Cooperative Agreement terminated. It claimed to own the zone files and therefore could continue to resolve names using them, with or without a contract. If its intellectual property claim was not upheld, the company had a fallback position: it would provide the government with a copy of the zone files when its contract expired, but it had a legal right to retain a copy for itself and continue operating a .com, .net, and .org registry on its own.

In either case, simple termination of the agreement would leave NSI in unsupervised or unregulated control of nearly three-fourths of the global domain name market. Most of the world's name servers already pointed at NSI for authoritative information about .com, .net, .org, and .edu domains. If Network Solutions continued to operate its own gTLD registries, sheer inertia would ensure that most of the world's name servers would continue to point at them. Network Solutions could even use its leverage over the dominant TLDs to create the critical mass needed to establish a viable alternative root under its own control. This was real privatization of DNS, and when confronted with the prospect of it, the U.S. government blanched. The government faced an unappetizing choice between contesting NSI's property claims in court, leading to prolonged uncertainty, or trying to move the root to another contractor to operate in competition with an unreconstructed NSI, risking fragmentation of the Internet.

At this juncture neither side seemed eager for a confrontation. On October 6, 1998, the Commerce Department and Network Solutions came to an agreement that would pave the way for the White Paper transition while leaving the hardest issues to be resolved at a later time. In Amendment 11 to the NSI Cooperative Agreement, Network Solutions agreed to design a shared registry system that would allow competing registrars to market domain name registrations in .com, .net, and .org. The company would separate its registrar (retail) operations from its (wholesale) registry functions into separate divisions. The Commerce Department fixed the price of NSI's wholesale registry at US$9 per name-year. The U.S. government would get a copy of the second-level domain name registration data controlled by Network Solutions. Moreover, NSI promised to make no changes to the root without written authorization from the U.S. government. Finally, Commerce extracted from Network Solutions a promise to recognize and enter into a contract with the new corporation contemplated by the White Paper.

8.2.5 The Failure of Consensus

The White Paper's attempt to facilitate open, private sector collective action had failed. Magaziner had called for a single proposal representing a broad consensus of the extended 'Internet community.' What the Commerce Department got by September 30 was four or five different proposals with important substantive differences about membership, the nature of the Supporting Organizations, protection of freedom of expression, and the composition of the interim board. Key bargaining parties had not even come to agreement on a common negotiating arena (IFWP vs. IANA). Although U.S. government officials, particularly Magaziner, were genuinely committed to an inclusive process, their decision to remove themselves from the incorporation process (and the tight time line they imposed) made it difficult to rectify the situation. The only card the U.S. government could play was to recognize or refuse to recognize a corporation. And its contract renewal deadlines had put itself in a position where it had to recognize some corporation very soon.

A final round of public comments on the multiple proposals put before the Commerce Department confirmed the divisions among the participants and the tenuous support for the ICANN proposal. ^{[39 ]}ICANN won praise from predictable sources-the Internet Society, CORE, IAB, the European Commission, and the GIP-led business interests. But only 28 of the 70-odd comments submitted provided an endorsement. The majority of the comments voiced complaints about the composition of the interim board and its method of selection, or favored letting IANA/ICANN lead the incorporation process but demanded membership and accountability provisions similar to the alternative proposals. Nearly 20 of the comments endorsed the BWG or ORSC proposals, or flatly rejected the ICANN proposal. On October 30, Frankel released a detailed 'analysis of the proposed structures for the new corporation' claiming that the ICANN proposal 'flaunts the principles established in the White Paper [and] the open IFWP process' and 'makes a mockery of the trust people put in the process' (Frankel 1998, 3).

After reviewing the comments, the U.S. government announced that it intended to move forward with the ICANN proposal, but Magaziner and Burr made it clear that they agreed with many of the criticisms. They asked Sims and the newly anointed interim board to enter into negotiations with the Boston Working Group and the Open Root Server Confederation. ^{[40 ]}These negotiations, carried out in late October, resulted in a significant concession: the bylaws were amended to make it clear that the board had an 'unconditional mandate' to create a membership structure that would directly elect the nine at-large directors. ^{[41 ]}ICANN agreed to establish an advisory committee on membership to pave the way for the creation of a global membership structure. It also was required to improve the transparency of its operations.

The Commerce Department entered into a memorandum of understanding with ICANN on November 25, 1998. ICANN agreed to 'jointly design, develop, and test the mechanisms, methods and procedures' needed to transfer management of the root to a private sector, notforprofit entity. ^{[42 ]}A few months later, ICANN entered into an agreement with the University of Southern California, the institutional home of the Information Sciences Institute (ISI), to take over the IANA functions. The Commerce Department officially recognized ICANN as the White Paper's private sector, not-for-profit entity on February 26, 1999.

Only a few months later the new chairman of the board, Esther Dyson, was able to declare without a trace of irony, 'ICANN is nothing more than the reflection of [Internet] community consensus.' ^{[43 ]}

^{[22 ]}John Sopko, Chief Counsel for Special Matters, U.S. Commerce Department, to Rep. Thomas J. Bliley, November 5, 1998.

^{[23 ]}Rutkowski's June 9, 1998 email to Jon Postel, Vint Cerf, Dave Farber, Scott Bradner, and John Gilmore, entitled 'Incorporation Workshop,' said in part, 'It's critical now to really bring everyone together to construct a corporation or trust with the right attributes-that provides for diversity, balance, safeguards, and meets the interests and expectations of everyone. This workshop happened because a lot of people were talking with a lot of other people about how to proceed if the government wasn't going to itself form a corporation, and what form of legal creature should be brought into existence.'

^{[24 ]}ISP/C news release, June 18, 1998.

^{[25 ]}The IFWP steering committee included representatives of the following organizations: Catalonian Foundation for Research (. ES), Image Online Design (. US), Information Technology Association of America (. US), Canadian Association of Internet Providers (. CA), Association for Interactive Media (. US), Camara Argentina de Bases de Datos y Servicios en Linea (. AR), Association Usarias de Internet (. ES), Open Root Server Confederation (. US), EuroISP Association-UK, EuroISP Association-Germany, Council of Internet Registrars (. CH), ISOC Australia, Mexican TLD, Domain Name Rights Coalition (. US), Harvard Berkman Center (. US), ISP/C (. US), DENIC (. DE), Internet Society (. US), Commercial Internet eXchange (. US), European Telecommunications Standards Institute (. EU), Asia Pacific Internet Association (. AP), EDUCAUSE (. US), ISOC-Geneva (. CH), Asia Pacific Networking Group (. SG), International Chamber of Commerce (. UK).

^{[26 ]}Einar Stefferud raised procedural and substantive objections to the plenary's actions. See Stefferud to IETF list, September 2, 1998, 'Tamar's IETF appearance.'

^{[27 ]}Stefferud's report, corroborated by others present, notes that he stood up and asked the plenary attendees, Who has read the proposals? Only about one-quarter of the attendees raised their hands.

^{[28 ]}Email, Lawrence Lessig to Michael Sondow, September 6, 2000; on file with author.

^{[29 ]}A widely publicized, caustic email from Mike Roberts announcing his refusal to participate in the ratification meeting signaled the demise of the final meeting proposals. Mike Roberts to IFWP-discuss list, August 28, 1998, 'Ratification- the IFWP Emperor Has No Clothes.'

^{[30 ]}Paul Festa, 'Raising Funds for New Names Body,' CNET News, September 9, 1998.

^{[31 ]}The first subclause stated that the new corporation must recognize any agreements between the U.S. government and IANA or Network Solutions. The second subclause stated that the corporation should not knowingly destroy any contractual or property right of a particular party.

^{[32 ]}The BWG members included Karl Auerbach, Internet technologist since 1974, IETF participant since the mid-1980s, California attorney, and chief technical officer of InterWorking Labs; Peter Dengate Thrush, patent attorney, solicitor, and barrister, counsel to ISOCNZ (New Zealand) and its subsidiary, the NZ registry, Domainz; David Schutt, chief information systems manager for a manufacturing company; Patrick O'Brien, CEO of Domainz, the NZ registry; Eric Weisberg, principal and general counsel for a rural Texas ISP, Internet Texoma; Diane Cabell, of the law firm Fausett, Gaeta & Lund; Jorge Contreras, Hale & Dorr (host, representing the Berkman Center for Internet and Society at Harvard Law School). Most had purchased nonrefundable airline tickets to Boston.

^{[33 ]}Letter from the Boston Working Group to Ira Magaziner, senior advisor to the President for policy development, September 28, 1998.

^{[34 ]}The Open Root Server Confederation was formed in July 1997 by Richard Sexton, Einar Stefferud, and Brian Reid. It was incorporated in Delaware in the summer of 1998.

^{[35 ]}The Electronic Frontier Foundation urged IANA to include protections for freedom of expression in the articles, and a proposal submitted by the European ISP Association proposed a structure similar to ORSC's.

^{[36 ]}'I am assuming that by midweek at the latest, there will be some names of board members emerging. I am assuming this because we will need to have some broad public discussion of those names before October first.' Gordon Cook, interview with Ira Magaziner, September 21, 1998, posted to Domain Policy list, September 22, 1998.

^{[37 ]}John Sopko, Chief Counsel for Special Matters, U.S. Commerce Department, to Rep. Thomas J. Bliley, November 5, 1998.

^{[38 ]}Ibid.

^{[39 ]}Comments responding to the ICANN incorporation proposal are still posted at <http://www.ntia.doc.gov/ntiahome/domainname/proposals/comments/comments.html.

^{[40 ]}'Overall, the submissions we received supported moving forward with the ICANN structure. We note, however, that the public comments received on the ICANN submission reflect significant concerns about substantive and operational aspects of ICANN. The submissions of the Boston Working Group and the Open Root Server Confederation, among others, articulate specific concerns, many of which we share. As you refine your proposal, we urge you to consult with these groups and others who commented critically on your proposal to try to broaden the consensus.' Burr letter to ISI, October 20, 1998.

^{[41 ]}Letter of Esther Dyson, interim board chair, to J. Beckwith Burr, Department of Commerce, November 6, 1998.

^{[42 ]}Memorandum of Understanding, Department of Commerce and ICANN, November 28, 1998.

^{[43 ]}Letter from Esther Dyson, ICANN, to J. Beckwith Burr, Department of Commerce, July 19, 1999.

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