At 05:32 PM 8/4/2016, Mueller, Milton L wrote:

Steve Crocker: Further, the idea that a court-ordered transfer of control could be carried out in a way that leaves the registrants unharmed sounds nice but I don’t know how to implement it. It seems to me to be wishful thinking, tied to a theoretical construct but unrelated to reality.

MM: Let me acquaint you with some business and legal reality then. Why are the plaintiffs attempting to seize the domain? Because they are owed $300 million + in damages. How do they propose to recover those damages? By garnishing an asset which has economic value. Why is the .IR domain valuable? Because people pay money to rent subdomains under it. What is the best way to benefit from that economic value? Obviously, by retaining all the existing customers and collecting their payments as before, and by growing the number of renters. So the winner of such a case has every incentive to avoid harming registrants. And a court could extract commitments to do that from the winner of such a case.

I'm not sure I agree with you on this. The question of incentives is likely to be much more complicated than this; I am not at all sure that the plaintiffs in this case, or in some future case, necessarily are seeking to seize the domain purely for economic gain; they may be seeking to wrest control from the current operator for any number of other reasons. And it's not at all clear that "a court could extract commitments" from the new owner not to harm existing registrants. When transferring ownership of some asset from X to Y, courts very rarely will impose post-transfer conditions on the new owner, for very good reasons: they don't want to have to define exactly what it means to "avoid harming current registrants," and they do not want to get involved in an ongoing series of disputes about whether the new owner is or is not doing that. David

Now, I agree with you that that sequence of events is highly unlikely _in this case_ for a variety of reasons – the fact that Iran is unlikely to cooperate with Israeli-American terrorism victims, or with ICANN; the fact that ICANN or any other cooperative third party does not possess the data required to maintain the lower-level zones, etc.

But there might be another way. The value might also be captured not by the new owners running the domain, but by inducing Iran’s government to pay the terrorism victims a certain amount in order for the plaintiffs to relinquish their court-ordered right to the domain. All fine and good if Iran agrees to the bargain, but if it does not the decision could indeed be holding the local registrants hostage to a blackout of their internet access. I guess one’s evaluation of this depends on one’s assessment of the equities of paying penalties for state-sponsored terrorism vs. that of the internet identities of many innocent Iranian internet users. In this respect I think the court made the right decision.

The .IR case is more fraught than most because of the international politics involved. If one thinks of more normal cases – say the delegee of .uk prooves to be a criminal enterprise and the court (under UK law) orders a redelegation under controlled circumstances, it seems perfectly feasible for a court-ordered property transfer to take place without harming the registrants. In fact, I am sure that court-ordered property transfers of real estate or other enterprises where customers are involved take place all the time.

NB: I am not arguing for the plaintiffs in this case, I am merely pointing out that your idea that it is _impossible_ for a court-ordered property transfer to result in anything but harm to the tenants is a somewhat dogmatic claim.

Dr. Milton L. Mueller Professor, School of Public Policy Georgia Institute of Technology

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