Seun A quick observation; the legal separation option does not seem to include advantages/disadvantages like the functional separation. MM: Actually it does. The discussion draft makes it clear that the legal separation is used as the benchmark, and then compared to functional separation. Thus, the “advantages” of functional separation are the “disadvantages” of legal separation, and the “disadvantages” of functional separation are the “advantages” of legal separation. After reviewing these pros and cons, I think the only substantive advantage of functional separation is this one: “Avoids the need to create another layer of governance and accountability at the IANA level and associated complexity; the focus can be on ICANN governance and accountability.” But this alleged advantage is a mirage. It would be nice to avoid governance problems. But of course, the easiest way to avoid complexity and governance would be to have no accountability at all. This ‘disadvantage’ of legal separation is really its chief advantage. The reforms of ICANN governance and accountability that come from the CCWG will be reforms oriented to its policy making process, not IANA operations. ICANN is dominated by the policy making process for domain names and the administration of its contracts with registries and registrars – it accounts for 95% of its budget. IANA is a tiny part of ICANN’s overall enterprise. Internal reforms of ICANN governance and accountability are going to be focused on making sure that the policies passed by the board reflect the preferences of its stakeholder groups. Unless there are governance and accountability reforms _specifically targeting IANA operations_ the general ICANN CCWG process will do nothing for IANA. And if those specific governance and accountability reforms for IANA are put into place in an internal solution – voila – you have the same additional “complexity” and additional layers of governance that you have in the legal separation. So there is really no gain in simplicity from an internal option. Let’s bite the bullet and do it right. Legal separation is a requirement.

Let me build on some of the questions Andrew asked. A later message will add a few questions of my own.

In I.A, particularly in numbers 4 and 6, I can't tell whether the assumption is that there are new agreements between PTI and the RIRs, and PTI and IETF. I think the fact that PTI is a new legal entity means that new agreements would be required. Is that correct?

I think that's not necessarily correct, but agree that this is a question worth resolving. If the PTI is an affiliate of ICANN and is created by means of a transfer of the assets of the existing IANA department to the PTI affiliate, why couldn't ICANN's IANA department's existing contracts go along with it? Corporations with contracts change ownership all the time, and divest entities all the time; I suspect that this does not require them to re-negotiate every contract they have. But let's let the lawyers answer that.

reason I ask this is because there is a possible risk of things coming apart if the other operational communities need to be engaged in a new negotiation. If PTI just takes the existing agreements and does a global search and replace for ICANN with PTI, that's nice, but it doesn't solve everything. For instance, the IETF would have to publish a new version of RFC 2860.

I would note that the CRISP proposal requires a new MoU or contract anyway, so I don't see any inconveniences there. So we are really only talking about protocols community.

Hi, One of my comment for the Sidley report is this assumption that the contracts would move to IANA. I see no reason for this to happen unless the IETF/IAB & RIRs/CRISP want them to. It seems to me that the contracts could remain with ICANN and that ICANN would use the affiliate to do the work. avri On 07-Apr-15 15:29, Andrew Sullivan wrote:

Hi,

On Mon, Apr 06, 2015 at 11:04:14AM +0200, Lise Fuhr wrote:

...

Please see the attached initial discussion draft of the two models from our legal counsel. Thanks for this. I've read it. I have some questions. Questions for Sidley are listed, and then some observations for our own discussion (which needn't take up Sidley's time) follow when appropriate in square brackets.

In I.A, particularly in numbers 4 and 6, I can't tell whether the assumption is that there are new agreements between PTI and the RIRs, and PTI and IETF. I think the fact that PTI is a new legal entity means that new agreements would be required. Is that correct? [The reason I ask this is because there is a possible risk of things coming apart if the other operational communities need to be engaged in a new negotiation. If PTI just takes the existing agreements and does a global search and replace for ICANN with PTI, that's nice, but it doesn't solve everything. For instance, the IETF would have to publish a new version of RFC 2860. It's worth remembering that every grievance everyone has with an existing document comes into play once the document is opened for editing.]

By way of comparison, in II.B, does using Functional Separation permit ICANN to continue working under its existing MoUs? I'd assume yes, because AFAIK none of the existing agreements specify the internal arrangements of how ICANN delivers the service. [Notwithstanding Milton's point about getting it "right", given the timeline there is a significant advantage to not having to negotiate, I think, no?]

III.C talks about CSC. In the case of a full legal separation with independent governance, would the CSC be needed at all? Presumably the arrangements between PRI and their customers would be a contractual one, and as such the management of such contractual disputes ought to be via those contracts, and not through an extra body. Or is the point that the way such a contractual arrangement would solve such disputes ought to be along the lines of the CSC?

In III.D.2 there is a question about "ultimate accountability over ICANN's stewardhip". I'm not entirely sure which cases this applies to. If there is a legal separation, how is this question relevant for CWG? Under the legal separation described, PTI becomes the new IANA functions operator. If there's full independent governance of PTI, for instance, isn't ICANN's stewardship completely gone -- it has only responsibility for policy, and not for IANA operation at all, right? Is that part of the point of this question?

On III.I, I'm not sure what the difference is between CSC and IRP. Why are both things needed?

Best regards,

A

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Let me reiterate an important detail that many seem to be overlooking. The RIRs CRISP team proposed the following: “The Internet Number Community proposes that a new contract be established between the IANA Numbering Services Operator and the five RIRs. The following is a proposal to replace the current NTIA IANA agreement with a new contract that more directly reflects and enforces the IANA Numbering Services Operator’s accountability to the Internet Number Community…. It is expected that the RIRs, as the contractual party of this agreement, will draft the specific language of this agreement.” New. Contract. Therefore it would not be difficult at all for the RIRs to develop this new contract in a way that named PTI, rather than ICANN Inc., as the contractor. Since the proposed PTI is the same unit as the current ICANN IANA department, and they are happy with that service, I see no reason why the RIRs would have a problem with this. --MM 1. ICANN retains the contracts with the RIRs and IETF, with a minor amendment allowing ICANN to offer the service, but have the service fulfilled by its wholly-controlled affiliate (or wholly-owned subsidiary) PTI. 2. ICANN enters into an "assignment and assumption" agreement whereby PTI takes over ICANN's position in the agreements. 3, ICANN and the RIRs/IETF terminate the current agreements, and PTI enters into new agreements with the RIRs and IETF. The first option fits the principle of "change as little as possible (and explain any change you make". The second option fits the principle of "make PTI as easily separable from ICANN as possible." The third option fits the principle of "let's make everything messy and complicated." ​Greg​ On Tue, Apr 7, 2015 at 7:16 PM, Avri Doria <avri@acm.org<mailto:avri@acm.org>> wrote: Hi, One of my comment for the Sidley report is this assumption that the contracts would move to IANA. I see no reason for this to happen unless the IETF/IAB & RIRs/CRISP want them to. It seems to me that the contracts could remain with ICANN and that ICANN would use the affiliate to do the work. avri On 07-Apr-15 15:29, Andrew Sullivan wrote: Hi, On Mon, Apr 06, 2015 at 11:04:14AM +0200, Lise Fuhr wrote: Please see the attached initial discussion draft of the two models from our legal counsel. Thanks for this. I've read it. I have some questions. Questions for Sidley are listed, and then some observations for our own discussion (which needn't take up Sidley's time) follow when appropriate in square brackets. In I.A, particularly in numbers 4 and 6, I can't tell whether the assumption is that there are new agreements between PTI and the RIRs, and PTI and IETF. I think the fact that PTI is a new legal entity means that new agreements would be required. Is that correct? [The reason I ask this is because there is a possible risk of things coming apart if the other operational communities need to be engaged in a new negotiation. If PTI just takes the existing agreements and does a global search and replace for ICANN with PTI, that's nice, but it doesn't solve everything. For instance, the IETF would have to publish a new version of RFC 2860. It's worth remembering that every grievance everyone has with an existing document comes into play once the document is opened for editing.] By way of comparison, in II.B, does using Functional Separation permit ICANN to continue working under its existing MoUs? I'd assume yes, because AFAIK none of the existing agreements specify the internal arrangements of how ICANN delivers the service. [Notwithstanding Milton's point about getting it "right", given the timeline there is a significant advantage to not having to negotiate, I think, no?] III.C talks about CSC. In the case of a full legal separation with independent governance, would the CSC be needed at all? Presumably the arrangements between PRI and their customers would be a contractual one, and as such the management of such contractual disputes ought to be via those contracts, and not through an extra body. Or is the point that the way such a contractual arrangement would solve such disputes ought to be along the lines of the CSC? In III.D.2 there is a question about "ultimate accountability over ICANN's stewardhip". I'm not entirely sure which cases this applies to. If there is a legal separation, how is this question relevant for CWG? Under the legal separation described, PTI becomes the new IANA functions operator. If there's full independent governance of PTI, for instance, isn't ICANN's stewardship completely gone -- it has only responsibility for policy, and not for IANA operation at all, right? Is that part of the point of this question? On III.I, I'm not sure what the difference is between CSC and IRP. Why are both things needed? Best regards, A ________________________________ [Image removed by sender. Avast logo]<http://www.avast.com/> This email has been checked for viruses by Avast antivirus software. www.avast.com<http://www.avast.com/> _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship

That, though, is not for us to decide but them. MM: No one said it was for us to decide, certainly not me. However, just as it would be unacceptable for us to presume anything about what the other operational communities will do, it would also be unacceptable for the other operational communities to tell us to not adopt a preferred option because they might not like it. And it is the ICG that needs to deal with that detail. We have already had our virtual wrists slapped for presuming anything about what the other operational communities might or might not be willing to do. Any proposal we come up can have options, but we cannot presume that they will do anything.

On Tue, Apr 07, 2015 at 11:38:10PM +0000, Milton L Mueller wrote:

New. Contract. Therefore it would not be difficult at all for the RIRs to develop this new contract in a way that named PTI, rather than ICANN Inc., as the contractor.

That's probably true. The IETF, however, is in a different boat, as it doesn't think it needs such an agreement, so that is a cost of some forms of the legal separation that are not present for other forms. I made this argument about some of the different hybrid-model proposals before, and it still seems to me to be a factor worth considering. To some extent, a proposal has to present both low risk to transition and low risk to the long-term goals. Balancing this is a delicate act, I think. Best regards, A -- Andrew Sullivan ajs@anvilwalrusden.com

Hi, I apologise that I didn't come across as clearly as I should have. Let me try again. On Wed, Apr 08, 2015 at 09:38:07PM +0000, Milton L Mueller wrote:

...

-----Original Message----- The IETF, however, is in a different boat, as it doesn't think it needs such an agreement, so that is a cost of some forms of the legal separation that are

Really? It already has such an agreement, so it must think it needs one.

My point is that the IETF already has an agreement with which it is satisfied. It has identified a couple small changes -- as far as it can tell entirely consistent with the spirit of its MoU and the annual SLAs that have been negotiated -- that ought to be made as part of a new SLA in order to tighten things up on the assumption that ICANN's agreement with NTIA will go away. But in effect, the IETF's position has been that it needs no new agreement. That is not what the RIRs have said, so that was the difference I was trying to talk about.

The only change would be that its IANA has a slightly different corporate form.

"Maybe," is my point. Under some of the forms, IANA is still just a department of ICANN. ICANN could argue plausibly that it could maintain its agreements with other bodies and then use an administrative mechanism to separate the provision of those functions by having IANA do it. This is certainly the case when IANA remains a department of ICANN with a bunch of new ICANN-internal rules around how IANA is to be treated within ICANN the corporation. It is possibly the case under an arrangement in which PTI is an affiliate of ICANN, and ICANN is the sole member of PTI. It seems much less plausible under the case where PTI is some more-independent organization with a board composed of members other than just ICANN. So it could be that an agreement between IETF and PTI would need to be negotiated. For the purposes of transition, it is hard for ICANN to argue to the IETF that a significantly altered agreement between ICANN and IETF is necessary for the transition to happen: the IETF has available to it the argument from stability: "Here is the agreement we're operating under, and the transition is supposed not to affect any of the operations, so what is the reason to change the terms?" But a completely new organization has its own changed circumstances available as a premise in a counter-argument, which means that the terms between the IETF and an independent PTI could well need to be different. For instance, perhaps PTI's funding model would depend on a continued unity of IANA; and if that were to fail, PTI would become unsustainable. In such a case, PTI might not agree to the 6 month termination that the IETF currently has, or might not agree that the IAB has final say in dispute resolution, or whatever. I do not know whether any such case is plausible or a real risk. My point is that, the further we move from "non-names communities' arrangements remain with ICANN," the more we are changing as part of the transition. Each additional change incurs some amount of risk. That risk might be worth trading against other gains we might think we're making, but the engineer in me says that when you are changing things you want to change as little as you can get away with in order to encourage stability of the whole system. Perhaps you're right in saying that that, if the IETF walks away from the current arrangement, it's no big deal. I think a unified IANA is valuable, but I agree that it's not a must-have. On the other hand, losing one of the "three legs" of IANA as part of the transition also seems like a fairly large change, and so one that seems to me undesirable if we can avoid it.

But here's the bottom line: there is no way the IETF can reasonably demand that the entire names community abstain from choosing its optimal solution because such a solution would create what is, after all, a very minor inconvenience for IETF.

I don't think that was what I was saying. I was observing that adding a new entity does not appear to offer a way to ensure that the pre-existing arrangements will automatically carry through to new organizations. It's worth noting that the MoU text in RFC 2860 does not have a successors and assigns clause. So there is some risk in trying to move the agreement to a new organization, particularly if that move entails changes to the agreement or if one of the parties thinks that it's an opportunity to try to renegotiate. Given that several people seem to have taken the transition itself as an opportunity to forge new arrangements for ICANN, it doesn't seem impossible that someone might attempt similar renegotiation of agreements. Best regards, A (speaking as ever for myself) -- Andrew Sullivan ajs@anvilwalrusden.com

Avri, I agree. We could communicate with the other operational communities before this goes to the ICG, or let the ICG sort it out. If we do the latter, we may want to put these alternatives in the proposal, to save them the step of thinking them up. Greg *Gregory S. Shatan **ï* *Abelman Frayne & Schwab* *Partner* *| IP | Technology | Media | Internet* *666 Third Avenue | New York, NY 10017-5621* *Direct* 212-885-9253 *| **Main* 212-949-9022 *Fax* 212-949-9190 *|* *Cell *917-816-6428 *gsshatan@lawabel.com <gsshatan@lawabel.com>* *ICANN-related: gregshatanipc@gmail.com <gregshatanipc@gmail.com>* *www.lawabel.com <http://www.lawabel.com/>* On Tue, Apr 7, 2015 at 10:30 PM, Avri Doria <avri@acm.org> wrote:

Hi,

Yes, I should have said apparent assumption.

I think only option 1 is viable unless the other operational communities inform us otherwise.

avri

On 07-Apr-15 19:24, Greg Shatan wrote:

I don't believe they assumed that the contracts would move to IANA. I read the language in I.A.7 as a bit of a "fudge"/ambiguity. In any event, I think that all 3 options are open:

1. ICANN retains the contracts with the RIRs and IETF, with a minor amendment allowing ICANN to offer the service, but have the service fulfilled by its wholly-controlled affiliate (or wholly-owned subsidiary) PTI. 2. ICANN enters into an "assignment and assumption" agreement whereby PTI takes over ICANN's position in the agreements. 3, ICANN and the RIRs/IETF terminate the current agreements, and PTI enters into new agreements with the RIRs and IETF.

The first option fits the principle of "change as little as possible (and explain any change you make". The second option fits the principle of "make PTI as easily separable from ICANN as possible." The third option fits the principle of "let's make everything messy and complicated."

​Greg​

On Tue, Apr 7, 2015 at 7:16 PM, Avri Doria <avri@acm.org> wrote:

...

Hi,

One of my comment for the Sidley report is this assumption that the contracts would move to IANA.

I see no reason for this to happen unless the IETF/IAB & RIRs/CRISP want them to. It seems to me that the contracts could remain with ICANN and that ICANN would use the affiliate to do the work.

avri

On 07-Apr-15 15:29, Andrew Sullivan wrote:

Hi,

On Mon, Apr 06, 2015 at 11:04:14AM +0200, Lise Fuhr wrote:

Please see the attached initial discussion draft of the two models from our legal counsel.

Thanks for this. I've read it. I have some questions. Questions for Sidley are listed, and then some observations for our own discussion (which needn't take up Sidley's time) follow when appropriate in square brackets.

In I.A, particularly in numbers 4 and 6, I can't tell whether the assumption is that there are new agreements between PTI and the RIRs, and PTI and IETF. I think the fact that PTI is a new legal entity means that new agreements would be required. Is that correct? [The reason I ask this is because there is a possible risk of things coming apart if the other operational communities need to be engaged in a new negotiation. If PTI just takes the existing agreements and does a global search and replace for ICANN with PTI, that's nice, but it doesn't solve everything. For instance, the IETF would have to publish a new version of RFC 2860. It's worth remembering that every grievance everyone has with an existing document comes into play once the document is opened for editing.]

By way of comparison, in II.B, does using Functional Separation permit ICANN to continue working under its existing MoUs? I'd assume yes, because AFAIK none of the existing agreements specify the internal arrangements of how ICANN delivers the service. [Notwithstanding Milton's point about getting it "right", given the timeline there is a significant advantage to not having to negotiate, I think, no?]

III.C talks about CSC. In the case of a full legal separation with independent governance, would the CSC be needed at all? Presumably the arrangements between PRI and their customers would be a contractual one, and as such the management of such contractual disputes ought to be via those contracts, and not through an extra body. Or is the point that the way such a contractual arrangement would solve such disputes ought to be along the lines of the CSC?

In III.D.2 there is a question about "ultimate accountability over ICANN's stewardhip". I'm not entirely sure which cases this applies to. If there is a legal separation, how is this question relevant for CWG? Under the legal separation described, PTI becomes the new IANA functions operator. If there's full independent governance of PTI, for instance, isn't ICANN's stewardship completely gone -- it has only responsibility for policy, and not for IANA operation at all, right? Is that part of the point of this question?

On III.I, I'm not sure what the difference is between CSC and IRP. Why are both things needed?

Best regards,

A

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Greg Some brief comments on the SIDLEY paper. In regards of roles of CSC and MRT/”members group” I think it is crucial to have a very clear understanding and description of what we define as escalation, and that this is not only used as a term relating to the role of the CSC. In our CWG discussions Escalation has been referring to the Multistakeholder component of the oversight function, - what used to be called the MRT. In the current structure the MRT function has been merged with the work of the CCWG - referred to as «members group” with legal personhood. It might look like necessary detailing, but I think we should keep the wording clear and underline that the escalation happens when it is sent over to MRT/”members group”/Multi-Stakeholder community Organisation. H. Fundamental bylaws What will these be?- While this is primarily an issue for CCWG, considerations should be given by CWG to whether there are any bylaws matters upon the model is conditioned. YES, - any model based on sort of “golden bylaw” arrangements as the last sort of action towards IANA function operator (PRI) must be based on the CWG giving clear conditions on bylaws and how they should work in regards of decisions in the ICANN community and inside the ICANN company. We can`t push this bylaws arrangements to be solved by the CCWG - even if the link between the CWG and the CCWG is strong, and the communications between the chairs are very good, we are working in parallel and aim to finish at the same time, - so CCWG haven’t got the time or detailed knowledge to design specific bylaws that will fit a new company structure for the IANA function and the oversight/stewardship of IANA. Regarding the question from Andrew Sullivan III.C talks about CSC. In the case of a full legal separation with independent governance, would the CSC be needed at all? Presumably the arrangements between PRI and their customers would be a contractual one, and as such the management of such contractual disputes ought to be via those contracts, and not through an extra body. Or is the point that the way such a contractual arrangement would solve such disputes ought to be along the lines of the CSC ? Do you mean PTI ? It’s fundamental from a governmental perspective (and also for the ccTLDs I think..) that we don’t create a model with requirements for establishing a contractual relationship between the IANA functions operator (PTI) and the ccTLDs. This is an absolute no go. Fra: cwg-stewardship-bounces@icann.org [mailto:cwg-stewardship-bounces@icann.org] På vegne av Greg Shatan Sendt: 9. april 2015 01:50 Til: Andrew Sullivan Kopi: Client; cwg-stewardship@icann.org Emne: Re: [CWG-Stewardship] Initial Discussion Draft on Transition Models Andrew, I'm copying your email to the Client Committee email list for consideration by Sidley and the Client Committee. Greg Shatan Gregory S. Shatan • Abelman Frayne & Schwab Partner | IP | Technology | Media | Internet 666 Third Avenue | New York, NY 10017-5621 Direct 212-885-9253<tel:212-885-9253> | Main 212-949-9022<tel:212-949-9022> Fax 212-949-9190<tel:212-949-9190> | Cell 917-816-6428<tel:917-816-6428> gsshatan@lawabel.com<mailto:gsshatan@lawabel.com> ICANN-related: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com> www.lawabel.com<http://www.lawabel.com/> On Tue, Apr 7, 2015 at 3:29 PM, Andrew Sullivan <ajs@anvilwalrusden.com<mailto:ajs@anvilwalrusden.com>> wrote: Hi, On Mon, Apr 06, 2015 at 11:04:14AM +0200, Lise Fuhr wrote:

Please see the attached initial discussion draft of the two models from our legal counsel.

Thanks for this. I've read it. I have some questions. Questions for Sidley are listed, and then some observations for our own discussion (which needn't take up Sidley's time) follow when appropriate in square brackets. In I.A, particularly in numbers 4 and 6, I can't tell whether the assumption is that there are new agreements between PTI and the RIRs, and PTI and IETF. I think the fact that PTI is a new legal entity means that new agreements would be required. Is that correct? [The reason I ask this is because there is a possible risk of things coming apart if the other operational communities need to be engaged in a new negotiation. If PTI just takes the existing agreements and does a global search and replace for ICANN with PTI, that's nice, but it doesn't solve everything. For instance, the IETF would have to publish a new version of RFC 2860. It's worth remembering that every grievance everyone has with an existing document comes into play once the document is opened for editing.] ​GSS: As I've noted elsewhere, the RIRs and IETF have 3 options: They can remain under contract with ICANN and ICANN can arrange with PTI to provide the services. Depending on the existing agreements, an amendment to those agreements may or may not be required. Alternatively, ICANN can assign any or all of the agreements to PTI, so that PTI stands in ICANN's shoes in the agreement. Again depending on the existing agreements, the consent of the RIRs​ By way of comparison, in II.B, does using Functional Separation permit ICANN to continue working under its existing MoUs? I'd assume yes, because AFAIK none of the existing agreements specify the internal arrangements of how ICANN delivers the service. [Notwithstanding Milton's point about getting it "right", given the timeline there is a significant advantage to not having to negotiate, I think, no?] III.C talks about CSC. In the case of a full legal separation with independent governance, would the CSC be needed at all? Presumably the arrangements between PRI and their customers would be a contractual one, and as such the management of such contractual disputes ought to be via those contracts, and not through an extra body. Or is the point that the way such a contractual arrangement would solve such disputes ought to be along the lines of the CSC? In III.D.2 there is a question about "ultimate accountability over ICANN's stewardhip". I'm not entirely sure which cases this applies to. If there is a legal separation, how is this question relevant for CWG? Under the legal separation described, PTI becomes the new IANA functions operator. If there's full independent governance of PTI, for instance, isn't ICANN's stewardship completely gone -- it has only responsibility for policy, and not for IANA operation at all, right? Is that part of the point of this question? On III.I, I'm not sure what the difference is between CSC and IRP. Why are both things needed? Best regards, A -- Andrew Sullivan ajs@anvilwalrusden.com<mailto:ajs@anvilwalrusden.com> _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship