------- Forwarded Message

Date:    Mon, 24 Aug 1998 17:11:43 -0700
From:    Jon Postel <postel&#167;ISI.EDU>
To:      iana-announce&#167;ISI.EDU
cc:      postel&#167;ISI.EDU
Subject: The IANA ByLaws - Third Iteration



Hello.

For several months now, we at the IANA have been working with many
others in the Internet community to create a beginning structure for a
New IANA, capable of taking on the somewhat broader responsibilities
envisioned in the White Paper.  We have had too many conversations to
count, participated in one way or another in nearly all of the
meetings held around the world to discuss this subject, and received
comments and suggestions via e-mail from hundreds of individuals and
organizations.

We have tried faithfully to serve as an "honest broker", seeking to
combine all this input into concepts and documents that would have the
broadest possible acceptance from all parts of the Internet community.
We are now coming to the end of this long process.  I believe the
result is a proposal for a New IANA that does have the support of a
substantial majority of the Internet community.

The third iteration of draft bylaws produced by the IANA is now
available on the IANA web site.  We hope and believe that this third
version is essentially the final version and that it will be endorsed
and supported by nearly all of those stakeholders that are
participating in this process, and will protect the legitimate
interests of the millions of individuals and groups that have an
interest in the outcome of this process but have not been able to
directly participate in it.

There have been a number of changes made from the second iteration in
direct response to specific comments and suggestions, including the
following:

	-- several comments suggested there should be specific
	guidelines to insure that the Supporting Organizations (SOs)
	were in fact open and inclusive.  Additional specific criteria
	were added.

	-- proposed language that made it clear that every Board
	member, no matter how selected, owed his or her legal and
	fiduciary duty to the Corporation, rather than to a particular
	SO, employer or other entity, was added.

	-- in response to concerns that industry users were not
	sufficiently represented, specific language was added to make
	it clear that industry and other users are an important
	constituency whose input must be given appropriate weight in
	both the Corporation and particularly in the Names Supporting
	Organization and Council.

	-- the transparency requirements were expanded in response to
	specific suggestions to require more notice of meetings,
	disclosure of payments to directors, disclosure of reasons why
	any particular Board action is not publicly disclosed (for
	example, sensitive personnel matters) and to add a specific
	timing requirement for the public posting of Board minutes.

	-- the prohibition against governmental officials becoming
	members of the Board was clarified and narrowed in response to
	concerns that it would inappropriately exclude knowledgeable
	people from many parts of the world, and the geographic
	diversity requirement was clarified by adopting a specific
	suggestion.

	-- the funding provisions were adjusted to make it clear that
	the Board sets the funding mechanism and levels, and to make it
	clear that the SOs are a primary (but not necessarily
	exclusive) source of funding.

	-- two specific Advisory Committees (for Governments and the
	Root Server) were established in response to specific
	suggestions.

It is clear from some of the comments we received, and some of the
public statements that have been made, that some of the provisions of
earlier drafts were not understood by all who read the document.
Thus, we also have specifically answered some of the most common
questions that have been asked about the draft bylaws, immediately
following this statement.  In addition, we have annotated the third
iteration of the draft bylaws so as to help the reader to understand
both the reasons for a particular approach and to highlight changes
from previous versions.

It is important to remember that the goal is to produce an
organization that will be recognized around the world as the
legitimate body to undertake the coordination tasks that the White
Paper sets forth as necessary to the continuing stability and security
of the Internet.  The New IANA must have legitimacy -- that is, it
must be supported by a consensus of what the White Paper calls the
"stakeholders".

This requires compromise, and it also means that few (if any) of the
most contentious issues that are so important to so many people will
(or could be) resolved at this time.  Those issues -- new TLDs,
trademark dispute resolution procedures, profit vs. non-profit
registries, the precise role of the various stakeholders in the new
body and its subordinate organizations, and many others -- are
important and difficult.  But they are problems that the New IANA will
have to address, not issues that can be resolved during the very short
time that we have to actually form the new organization.  The critical
goal -- the one that cannot be postponed -- is the creation of a
consensus organization sufficiently ahead of September 30, 1998, that
it can take its proper place in the discussions between the United
States Government and relevant parties over the shape and content of
the transition over time of the various activities that have been
carried out by the IANA, NSI and others.

This limited objective is difficult enough; "global" and "consensus"
are two very difficult concepts in this context.  But it cannot
possibly be accomplished if the various stakeholders are not willing
to, in good faith, create what can and must be done now -- a
legitimate consensus organization -- and defer for the Board's later
consideration those issues which require additional open dialog both
with and within the Supporting Organizations and the broader Internet
community.  This has been the objective of the IANA drafts from the
beginning and it continues to be the objective now -- to find the
common ground around which a sufficient number of stakeholders can
coalesce so that it can fairly be described as a consensus
organization.

I hope that we have accurately collected and set forth in this latest
iteration the ideas and concepts that will earn the endorsement and
support of all who read them.  We have certainly tried very hard to
include in each of our documents the best thinking of the community as
we understood it at the time, and this latest version benefits from
considerable public and private discussions over the last several
weeks.  Because we do not have much time left, it is now time to come
to closure on the structural issues of the New IANA, and move on to
deal with the actual creation of the New IANA and the necessary
discussions and negotiations leading to a smooth transition of various
responsibilities on September 30, 1998.

Of course, we continue to welcome suggestions and comments for
improvement in this latest draft, but we would also encourage those of
you who are willing to support and endorse this effort to go on the
record to that effect, so it will be clear to all relevant parties that
this effort does have the strong consensus support of the Internet
community.

Please see the new bylaws on the IANA web pages at

		http://www.iana.org/bylaws3.html

- --jon.




                        FREQUENTLY ASKED QUESTIONS


1.  Why don't the draft bylaws simply provide for a single world-wide
membership of Internet users?

     This entity is basically an administrative entity, not a governance
entity.  Its primary purpose will be to preserve the stability and security
of the Internet, and that purpose will involve technical coordination
issues to a very significant extent.  Thus, a major -- arguably the most
important -- task of the New IANA will be to do what the old IANA has done:
ensure that the Internet functions efficiently from a technical
perspective.  The practical reality is that universal suffrage -- at least
in all the ways we have seen proposed so far -- would significantly
increase the risk of preventing or impeding the New IANA from efficiently
carrying out its critical administrative functions, and some great risk
that the entity could be either paralyzed by process or easily captured by
narrow interests that do not represent the Internet community as a whole.

     Having said that, it is clear that the New IANA is also likely to have
a role, perhaps an important role, on issues that are not purely technical,
such as dispute resolution policies and the number and kind of TLDs.  While
these issues may have technical aspects, they clearly also have policy and,
in some cases, commercial implications that go beyond technical issues.  In
this context, it seems clear that those who are likely to be affected by
decisions of the New IANA should have some way to influence those decisions
to ensure that their voices are heard in the policy debates.  Thus,
commercial interests (including but not limited to trademark holders),
individual entrepreneurs, even individual users or their representatives
(who could theoretically be private organizations or governmental bodies),
in addition to the various entities (address and name registries, etc.)
that actually directly contribute to the operation of the Internet -- all
these "stakeholders" have a legitimate interest in how this New IANA is
structured and will function.

     Unfortunately, that conclusion is the easy part; creating the
processes and structures that will accomplish all these objectives -- which
can be summarized as accountability and effective operations -- without
creating the dangers noted earlier is very hard.  Simply having a single
world-wide membership, with the logistical difficulties that necessarily
entails, might make it impossible for the entity to respond to technical
needs as they arise, and could endanger the stability and security of the
Internet.  By instead creating as the working part of the New IANA several
SO's, which will be required to have open and inclusive membership rules
and will be principally responsible for the development of policies, the
New IANA will be able to keep the technical aspects of the Internet stable
and secure in a manner that is responsive to the stakeholders.

2.  Why did the most recent drafts of the IANA bylaws omit a Supporting
Organization for Industry and Users?

     The original IANA draft bylaws called for the creation of four
Supporting Organizations (Protocols, Addresses, Names and Industry/Users)
that were intended to represent the various stakeholders populate the New
IANA's board.  There seemed to be a general consensus in favor of the first
three of these SO's, but widespread criticism of the Industry/User SO.
Although there was universal recognition that industry and other users were
a very important constituency, the concerns about the proposed
Industry/User Supporting Organization boiled down to an uncertainty about
how such an SO would get established, and whether it could possibly
represent the potentially diverse interests of all users and commercial
interests.  In short, almost no one who expressed a view liked that
solution to the problem of giving a voice to industry and other users.

     As a result, more recent drafts have replaced the Industry/User
Supporting Organization with At Large Board members, on the belief that At
Large members would represent the public interest, including particularly
any interests of commercial and individual users that were not adequately
dealt with in the other SO's.  In addition, the number of At Large members
was increased from the 6 originally to be nominated by the Industry/User SO
to 9, to provide a stronger voice and representation to industry and other
users and thereby balance the more specialized board members selected by
the other three SO's.  Since it was clear that it was not possible to
actually produce an immediate consensus on how those At Large members would
be selected in the future, the Initial Board was given the specific charge
to devise the methodology for that selection process.  Of course, should it
find it useful or desirable, the Initial Board could also create a
Supporting Organization to represent users.

     In addition, the IANA draft bylaws have always contemplated that the
Supporting Organizations, whose Councils would be the working level
entities of the New IANA,  would be membership organizations, with open and
inclusive membership rules.  Since, for the reasons noted earlier, it was
not immediately obvious how individual (as opposed to organizational)
memberships could be practically managed without interfering with the
effective functioning of the important technical and policy decision making
of the SO's, they and the Initial Board were specifically charged with
considering this issue.  Thus, the approach used in the IANA draft bylaws
was to have half of the Board selected by the SO's, which are clearly
membership organizations, and the other half be At Large members, charged
with representing the broad public interest, and to assign to the Initial
Board the difficult job of figuring out what means of Board selection and
SO membership would best balance the need for proper accountability and the
need for an effectively functioning organization.

3.  Why doesn't the IANA support a single world-wide membership open
to all interested persons, with "nominal" dues, voting by proxy, and
with the right of any member to appeal decisions that are made.  Isn't
that approach preferable?

     We do not believe that any of the proposals we have seen so far
adequately address the problems that are inherent in such an approach.
First, such unstructured  membership provisions could rather easily be
manipulated by a determined minority to capture control of the New IANA.
The combination of "nominal" dues, a relatively small  quorum requirement
(which would probably be essential to ever allow any business to take
place) and the use of proxies would make it very easy to stack any
particular meeting simply by paying the nominal membership fees of a large
number of people and then obtaining their proxies.  In addition, the
practical difficulties in keeping records relating to individual members
from all around the world, and authenticating their votes (and proxies),
would be very substantial -- and undoubtedly very expensive.

     In addition, the proposals we have seen combine broad membership with
notice and "due process" features that seem completely unworkable.  Under
one plan, a proceeding could be initiated by any member, and while it is
not clear as to exactly what the Board would have to do with each of these
"proceedings" -- which given the "nominal" dues could easily amount to the
thousands or even hundreds of thousands -- the potential for the Board to
be inundated and prevented from doing its real work is very real.  Since
under this proposal notice would have to be given to "any affected party,"
which could easily number in the millions or more, and any "affected party"
could appeal any Board decision with which he or she disagreed, this
process could literally be endless.

     These points are illustrative of the kinds of problems with very broad
and open membership rules.  The "bottom up" process set forth in the IANA
draft bylaws -- where open and inclusive Supporting Organizations are the
primary source of policy initiatives and half of the Board is selected to
represent those interests not directly involved in the Supporting
Organizations -- balances the need for openness and accountability with the
absolute necessity that the New IANA be able to function effectively.  To
the extent that there are different or additional procedures that could be
established that would be consistent with these objectives, the Initial
Board is charged to investigate those possibilities and make whatever
changes are consistent with the purposes of the Corporation.

4.  What authority do the IANA draft bylaws give to the Supporting
Organizations, and what authority do they give the Board?

     The IANA draft bylaws place the primary responsibility for developing
policy and making recommendations in the Supporting Organizations and their
Councils.  The Board reviews any recommendations from the SO's/Councils,
and either approves them or returns them with comments for further
consideration.  The Board must approve any such recommendations if they (1)
comply with the Articles and Bylaws, (2) were arrived at through fair and
open processes (including permitting participation by other SOs), (3) are
not opposed by any of the other SOs,  and (4) further the purposes of the
New IANA.  Only in the extraordinary circumstance where, after reasonable
efforts, the Board does not receive a proposal that meets these standards
or there is a conflict between the SOs can the Board act on its own
initiative.  This procedure was intended to preserve the need for the
Board, which is the legally responsible entity, to act if it needs to, but
to make clear that except in unusual circumstances policy decisions by the
Board will be based on recommendations from the SO's/Councils.  This should
ensure the New IANA is accountable and responsive to stakeholders, can deal
effectively with technical issues as they arise, and preserves the
stability and security of the Internet.

     Once the policy decisions have been made, they would be carried out by
the staff of the New IANA, which would be hired and directed by the Board.
The Board would set the budget and carry out the other administrative
duties of the New IANA.  Thus, in operational details the Board has the
principal authority, while on policy matters the principal authority lies
with the Supporting Organizations and their Councils, all of which must be
open, inclusive membership organizations as set forth in the draft bylaws.

5.  Why do the draft bylaws provide for incorporation in California?  Since
most companies are incorporated in Delaware, isn't that a better choice?

     There has been surprising amount of attention to this subject, which
would seem to be a technical matter of little importance.  There seems to
be general agreement that, as set forth in the White Paper,  the New IANA
should be a U.S. non-profit, tax exempt corporation.  This follows a
well-known pattern for service organizations of this kind.  If such an
entity is incorporated in the U.S., one must choose one of the states.
Delaware is the most popular state for for-profit corporations, because its
laws governing for-profit corporations are well-developed and generally
favorable to the prerogatives of management.  The Delaware law on
non-profit corporations, however,  is not as well developed.  In fact,
Delaware does not even have a specific non-profit corporation code, and
instead relies on its general corporation law for the formation and
operation of non-profit corporations.  This reliance has led to litigation,
and some uncertainty, as to the applicability of certain provisions of the
general corporate law to non-profits.  California, on the other hand, is a
large and populous state with a specific non-profit corporation code and a
very well-developed body of law dealing with non-profit organizations.  In
addition, because of the high concentration of high technology companies
and other scientific activities in California, the California courts may be
more aware of and knowledgeable about technology issues than the courts in
many other states.  Thus, California seems a logical choice.  We are
unaware of a compelling argument for any other state, even though we have
solicited that information on several occasions.  If such a compelling
argument exists, we would be glad to consider it, and if it is indeed
compelling, we would certainly have no objection to taking advantage of
that preferable jurisdiction.


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