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ICANN the Machine…

ICANN’s new gTLD expansion is really quite an ingenious ploy to grow the once small California non-profit into an unstoppable machine, worth hundreds of millions of dollars, which soon plans to finally be free from any external oversight. I have no doubt that ICANN pats itself on the back for pulling the wool over so many eyes, including stakeholders, new gTLD applicants, politicians, and the global general public.

When I applied for the community gTLDs .INC, .LLC, .LLP and .CORP, here is what I and other community applicants were told, in both written and verbal communications and at numerous ICANN meetings since 2011: Pay an application fee of $185,000 per application, post a 3 year Continuing Operations Instrument (“COI”), plus pay an additional Community Priority Evaluation fee of $22,000 (originally told it would be $10,000) per application, and we will treat your applications fairly and transparently evaluate your applications using an “independent” expert body that will evaluate your applications and make a recommendation to ICANN on your community priority status. In exchange for the above-mentioned fees, applicants were required to waive all legal rights against ICANN and ICANN Affiliated Parties.

This waiver is as broad, overreaching, and extreme as a waiver gets; however, there was no choice but for applicants to accept ICANN’s unconscionable contractual provisions if they wanted to submit an application, even if they were a brand and owned the trademark rights to their extension. One would think that, if ICANN was requiring such a broad waiver of fundamental applicant rights, they would go above and beyond to ensure its staff and third party contractors follow the rules and procedures precisely and implement a quality review and training program to ensure consistency in approach and scoring of all applications. That didn’t happen and we see a glimpse at the tip of the iceberg in Dot Registry LLC v. ICANN Independent Review Process (“IRP”) Panel Declaration.

In fact, what ICANN has done is to make itself literally untouchable and effectively accountable to no one. In exchange for the unconscionable litigation waiver, applicants are allowed to use any ICANN appeal mechanism contained in the ICANN Bylaws, which are designed and weighted in ICANN’s favor. The first step of the appeals process is filing a Reconsideration Request with ICANN’s Board Governance Committee (“BGC”). Out of the last 100 plus Reconsideration Requests, ICANN’s BGC only granted two requests, one of which was turned back over and denied a second time. So, in essence, an applicant has a less than 1% chance of prevailing on a Request for Reconsideration before ICANN’s BGC. Why you ask? It’s because ICANN’s General Counsel and his growing staff of lawyers tell the Board what to say and do and the Board “Rubber Stamps” those recommendations to limit ICANN’s liability in the utmost non-transparent way. In addition, the General Counsel funnels all of the Board communications through his office to claim legal privilege in order not to have those communications qualify to be produced to the aggrieved.

The next step is the Cooperative Engagement Process (“CEP”), which ICANN and the aggrieved party are supposed to use to narrow the issues so as to avoid the costly burden of Independent Review Process (“IRP”). In my case, ICANN did not participate in CEP claiming the reason they did not respond to my request was due to administrative error after staff opened my email request dozens of times. So, if all else fails, an applicant’s only remedy is to file for IRP under the International Centre for Dispute Resolution (“ICDR”), which is severely supplemented by ICANN’s own conditions of proceeding parameters. Basically, the already narrow appellate options just got squeezed even more. As a matter of fact, the possibility of a favorable outcome for an IRP is approximately a 17% or less success rate, it takes about a year and a half to two years to complete, and will cost an applicant well in excess of $1,000,000.00 USD, not including $500,000.00 USD in ICDR fees. Even if an applicant prevails in an IRP, the ICANN Board reserves for itself a final say on whether or not they will accept the final Declaration of the IRP Panel. So, in essence, the ICANN Board has every opportunity to shield itself from all liability.

It’s worth mentioning the ICANN Ombudsman is another option for review of New gTLD disputes with ICANN. However, as a new gTLD applicant, the Bylaws restrict Ombudsman Review if ICANN’s Bylaws, Article IV, Section 2 are invoked (i.e., Independent Review). The ICANN Ombudsman is a highly compensated individual, whose performance the ICANN Board reviews and whom can only be removed by 3/4 of the Board. Given those facts, it’s plain to see that the ICANN Ombudsman is a far cry from being an independent “neutral” but rather an extension of the ICANN Board itself.

These Bylaw loopholes allow the ICANN Board to escape accountability for pretty much everything and the U.S. Department of Commerce and NTIA oversight is laughable, at best. Indeed, if we look just at the role the current NTIA Associate Administrator plays in the oversight process, her personal and professional conflicts of interest are staggering and very likely her emails would be just as revealing as those that ICANN was forced to hand over in the Dot Registry LLC v. ICANN IRP proceeding.

The blatant disregard for ICANN’s Articles of Incorporation, Bylaws, including discrimination as well as a lack of accountability and transparency, should not be acceptable to any applicant, ICANN Community Stakeholders, or the general public who use and rely on the safety, security and resiliency of the Internet. Discipline or guidance is not the answer and the severity of the Dot Registry LLC v. ICANN IRP Panel Declaration should result in the immediate termination of all involved, namely the entire Board Governance Committee in attendance at Dot Registry’s Reconsideration Request Denial hearing, ICANN Board Support Coordinator, and ICANN’s General Counsel and his staff. As drastic as this may seem, it’s the only way for ICANN to survive and truly operate as a credible independent transparent non-profit, free from government oversight. Enough is enough, it is time that someone force ICANN to follow the rules, and required it to run the new gTLD program as it was intended to be ran.

On the precipice of the ICANN’s final transition from NTIA oversight, I find it important to clarify that this piece is not an anti-transition piece, as I am sure ICANN will claim. This piece is a depiction of real life experiences as an adversely affected new gTLD Community Applicant by the ICANN Board’s vagrant failure to do its job, to follow its own Articles of Incorporation and Bylaws, and to act in an open and transparent manner to ensure the public trust. All of ICANN’s actions and inactions have occurred under the “un” watchful eye of the NTIA, and if anything this piece will show that the NTIA is as close to reproach as ICANN.

It has become clear to me over the last four years that ICANN is not burdened by a sense of ethics or to ensure public trust. In fact, its overarching disregard for right vs. wrong seems to be infectious, now trickling out of the Board Governance Committee, the ICANN Ombudsman, ICANN staff, and ICANN contracted third parties. ICANN’s immoral and unethical behavior is a cancer impacting literally every facet of the organization’s operations, both internally and externally. ICANN has amassed its efforts to function in a seemingly untouchable paradigm of lies and self-serving mandates. I wish I could say the corruption came from a single source, or that Dot Registry’s experiences were unique to others in the New gTLD program, but that is entirely not the case. While we seem to have experienced an extraordinary amount of obstacles and injustices, I am sure that when asked many of our peers could attest to similar or perhaps worse experiences throughout the first round of the new gTLD program, some of which are in litigation proceedings with ICANN.

In the beginning, ICANN’s failings seemed to be a product of disorganization and could even be seen as somewhat amusing if it hadn’t cost all the participants so much time and money. But now, a little over four years later, I look back on all of these events and see less haphazard coincidences and more carefully planned and orchestrated speeches, actions, presentations, and positions which have helped to line the pockets of ICANN at the expense of hundreds of companies on a global scale.

So why speak up now? That’s simple, on July 29, 2016 the Dot Registry LLC v. ICANN IRP panel found that the ICANN Board, the ICANN Board Governance Committee, ICANN Staff and ICANN’s third party contracted Community Priority Evaluator (the Economist Intelligence Unit) failed to exercise proper due diligence and care and discriminated against me and my applications. ICANN staff and ICANN in-house legal counsel’s tortiously interfered with the community evaluation process, they conspired to fail my applications, and then dragged me through a two year multi-million dollar arbitration process weighted in their favor. ICANN even tried to auction Dot Registry’s community extensions out from underneath me before our IRP Panel could be fully convened, which required the appointment of an emergency arbitrator who issued an injunction until the conclusion of the IRP. Well, it should come as no surprise by now, to anyone familiar with ICANN, that having created the rules of the IRP process, ICANN does everything in its power to tilt the playing field in its favor, doing all that it can to limit any proper review of its actions.

Over the course of the last four years I have paid ICANN directly over $806,000 in relation to my .INC, .LLC, .LLP, and .CORP extensions and here is what I have to show for it:

  1. ICANN’s data breaches exposed confidential proprietary information about my applications to one of my direct competitors.
  2. ICANN failed two of my four applications in the initial evaluation process claiming that I had not submitted a Continuing Operations Instrument (“COI”) even though the COI in place covered all four of the applications under review. I had to wait an additional four months for these applications to undergo Extended Evaluation, after all Initial Evaluations were completed, as a result of ICANN’s error.
  3. ICANN failed to provide the EIU with the retracted statement of opposition posted against my applications by the European Commission (“EC”) even though it was specifically instructed to do so by the EC and various other regulators. What’s even more grievous is that the EC’s initial comment of opposition was only posted because the EC’s GAC representative was provided with false statistics by one of our competitors (ironically the same competitor that gained access to our confidential financial information in ICANN’s data breaches).
  4. ICANN conspired to fail my applications in the Community Priority Evaluation (“CPE”) process in order to ensure that the applications were sent to an ICANN auction.
  5. ICANN blatantly disregarded our efforts to participate in all appeals mechanisms afforded to me as an applicant by engaging in things like:
    1. Denying our Request for Reconsideration based off the position that the “reconsideration process does not call for the BGC to perform a substantive review of CPE reports, only a procedural review.”
    2. Failing to respond to our request to participate in the Cooperative Engagement Process by indicating that they “lost” our submission even though our email tracking records indicate that our submission was opened nothing short of 12 times by 4 different departments within ICANN.
    3. Insulting our intelligence further by informing us on a conference call (which was not considered to be a CEP call), two week past the CEP deadline, that “we really didn’t understand the point of CEP and that we should probably just withdraw our request so we don’t look stupid.”
    4. Failing to produce the EIU’s Contract with ICANN during our Document Information Disclosure Policy Request (“DIDP”) because the contract included a confidentiality clause barring ICANN from disclosing the agreement claiming that the release of the contract could impair ICANN’s contractual relationships and have a significant operational impact on the organization. For fear that Dot Registry would post the EIU’s contract, discovered and produced in the Dot Registry LLC v. ICANN IRP, ICANN posted the redacted EIU contract on their New gTLD CPE page as if to show that they somehow voluntarily produced the document for the good of all, even after denying many DIDP Requests to produce it.
    5. Attempting to auction our strings out from underneath us while we were in the middle of arbitration, contrary to Auction Rules.
    6. And finally, showing little to no regard for the very concise ruling issued by our IRP panel just one week ago. No set timeframe to decide, no further comments, no transcript of the meeting published, basically same old ICANN, different day.

I paid $22,000 per application for our Community Priority Evaluations in order to ensure an independent, non-biased, and professional review of each application. What my $66,000 actually bought me was a series of harassing emails sent to my supporters, namely government regulators, which belittled their positions as Secretaries of State in the U.S. and questioned their mental wherewithal to make statements of basically any kind and a pre-written report fed to evaluators by the ICANN Staff and legal counsel which was then copied and pasted three times over to ensure we received an identical failing score on all three applications.

The ICANN to EIU internal communication exposed during the Dot Registry LLC v. ICANN arbitration is appalling and shows direct interference with the scoring of our applications by the current VP of gTLD operations, the Director of GDD Operations and the Sr. Manager of GDD Operations, making it clear that ICANN had no intention of us ever passing CPE. But, as if that wasn’t egregious enough, the icing on the cake was, that for almost every point the EIU deducted in Dot Registry’s CPEs, it granted the same point to another application that bore the same identical evaluation criteria.

When a community such as .SPA, which proposes no tangible verification or validation mechanisms in its application and offers admittance to an indefinite number of members, is allowed to now exist as a community thanks to the EIU, there is something infinitely wrong and with the current flawed processes in place at ICANN.

While our applications are clearly defined and verifiable communities, which were also red-flagged by the GAC early on as requiring additional safeguards, they were all seen by standard applicants for the same strings as communities which were “construed merely to get a sought-after generic word as a gTLD string.” The phrase “game (or gaming) the system” for submitting community applications was used many times in our Accountability Mechanisms and also surprisingly in the Dot Registry LLC v. ICANN IRP Dissenting Opinion. Funny, but the only time we could find that this odd phrase first originated was in the Applicant Guidebook Version 1 Public Comments, submitted December 15, 2008 by one of Dot Registry’s strings standard competitor.

If “gaming the system” was in fact remotely the case, I would not have spent countless hours meeting with Secretaries of State to understand entity formation and consumer safeguards, nor would I have spent millions of dollars in Research & Development to build a verification system that can real time cross verify entity registration in the U.S. with an application for a domain in our community.

I believe many positive opportunities can come from a community application process that recognize the ability for Internet users to identify the quality and integrity of a domain name by the extension to the right of the dot, such as .INC, .LLC, and .LLP, that will have gravitas behind it as a trusted validator of the corporation who uses such a domain name. This can only happen if ICANN does what the Generic Names Supporting Organization (“GNSO”) community has asked of it to do and give preference to community applications that build a known authenticated presence into the use of the next generation of domain name technology. The GNSO, in their final Report on the Introduction of New Generic Top Level Domains dated 8 August, conveyed to the ICANN Board a much different view of what a “community” should look like than what eventually made its way into the Applicant Guidebook. So to be clear, ICANN’s long touted phrase “The Applicant Guidebook was the work of many years of community drafting” is very misleading as ICANN reserved for itself the ability to make the final edits to the Applicant Guidebook, not necessarily what the GNSO recommended or the public provided comments on. There were many edits to the Applicant Guidebook along the way, even one after application submission deadline, so competitors had a chance to provide public comments in their favor.

It’s time for the ICANN Board to admit it’s deficiencies, cure them, and make ICANN a credible organization. All the work performed by the Cross Community Working Group (“CCWG”) does not make a bit of difference when ICANN can unanimously and blatantly disregard their Articles and Bylaws and act in contravention of what the community has requested. ICANN simply can no longer lay blame on the applicant rather than abiding by the agreed upon process.

The outcome of the Dot Registry LLC v. ICANN IRP for the .INC, .LLP and .LLC strings are clear. Even with the playing field tilted against us, Dot Registry won, and the Board should give effect to the decision in good faith. What does this mean? The ICANN Bylaws, Article IV, Section 3.2 states that:

“Any person materially affected by a decision or action by the Board that he or she asserts is inconsistent with the Articles of Incorporation or Bylaws may submit a request for independent review of that decision or action. In order to be materially affected, the person must suffer injury or harm that is directly and causally connected to the board’s alleged violation of the Bylaws or the Articles of Incorporation, and not as a result of third parties acting in line with the Board’s action.”

I am not a lawyer, but I understand that what the Dot Registry LLC v. ICANN IRP Panel majority determined is that Dot Registry suffered real injury and harm, directly and causally, by the ICANN Board’s actions and inactions. The injury and harm to Dot Registry must now be addressed swiftly, fairly and in good faith. How? By the Board adopting a resolution requiring ICANN to immediately enter into registry agreements with Dot Registry for the .INC, .LLC, and .LLP community strings, as the evidence before them states. I beseech the Board to own up to their mistakes and do the right thing by immediately proceeding to contracting with Dot Registry for .INC, .LLC, and .LLP as a community.

ICANN’s next actions in the Dot Registry LLC v. ICANN IRP Declaration will dictate whether the machine is ready and/or capable to self-govern. ICANN must be held to the highest standards in order to coordinate, at the overall level, the global Internet’s systems of unique identifiers, and in particular to ensure the stable and secure operation of the Internet’s unique identifier systems.

By Shaul Jolles, CEO at Dot Registry, LLC

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Possible Actions Anthony Rutkowski  –  Aug 15, 2016 11:00 PM

Many organizations and people share your concerns.  There are several obvious potential actions possible once the transition is complete.

One is for a group of plaintiffs to bring a cause of action against ICANN in the U.S. under antitrust law.  Another is to get antitrust bodies in other nations to bring actions against ICANN.  Another is for a stronger government governance component in ICANN to begin controlling its excesses.

Governments are a big part of the problem Milton Mueller  –  Aug 23, 2016 5:12 PM

Tony, asking GAC or governments to rein in ICANN's accountability problems is like asking the fox to guard the chicken coop. Most of the adverse IRP decisions ICANN has suffered occurred because ICANN was trying to rig the results in ways that would make them more politically acceptable to governments and other powerful interests. This was true in the .XXX case and the .AFRICA case for sure. I am not sure about whether the Dot Registry case follows this pattern, but the other two cases don't give me a lot of confidence about a "stronger government governance component." Indeed, the reason ICANN kept changing its rules during the process was largely because of the GAC wanting a discretion-based outcome rather than a rules-based outcome. I'd encourage you to become more informed about what's really going on in this space; you've been absent for a while.

Great 'capitalistic' view on how ICANN is transforming itself Alan Levin  –  Aug 16, 2016 1:05 PM

Thanks Shaul, interesting point of view and well written explanation of your observations :) sending warm regards!

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