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The Insult and Injury of the U.S. Government’s Failure to Enforce ICANN’s Contractual Obligation

Someone recently observed that many stakeholders have fallen victim to a “chilling effect” resulting from fear of retaliation by the rich and powerful bullies currently infecting the multistakeholder community, ICANN, and Internet governance. I related to what I was hearing because I’ve been personally targeted and libelously attacked and it is deeply dismaying enough having to worry about threats to revenue and reputation along with other harmful effects of such thuggery. I can’t imagine also having employees and being forced into the “Sophie’s Choice” dilemma of deciding between calling out the multitude of abuses and rampant misbehavior by ICANN and legacy registry operators or remaining silent in order to stay in business and make payroll.

But this is the choice that is foisted regularly upon many registrars, many of whom are small businesses and privately express deep concern about the consequences of calling out the anti-competitive and predatory misdeeds of the monopolist bullies plundering the public interest DNS.

The 20th-century moral philosopher Hannah Arendt observed that, “(g)enerally speaking, violence always arises out of impotence. It is the hope of those who have no power.” Thus, the plain, simple truth is this: the legacy registry operators inflicting their peculiar form of corporate violence—onto small-business owners, entrepreneurs, job creators, creatives, makers, idealists, technologists, investors, and any manner of other stakeholder seeking to make their own contribution for benefit of the public interest Internet—or even just to make a living—are doing so because they know better than anyone else that their illegitimate self-interested stranglehold on our public interest Internet is living on borrowed time.

Readers can be certain of this because of the simple reality that legacy registry operators are merely contracted parties for operating Internet infrastructure which they did not create and which they do not own. Therefore, their ability to continue plundering depends entirely on a coercive strategy of predatory tactics that are designed to control governance, contracting, and policy-making while also deflecting attention away from the extant legal agreements that are being violated. Their entire aim is to create an impression that they possess rights when only concession privileges have been conferred.

What gets overlooked in all of this is that ICANN is arbitrarily and capriciously violating agreements with the U.S. government. The InterNIC licensing agreement between the Commerce Department and ICANN—which merges the Memorandum of Understanding by direct reference—prohibits ICANN from being a registrar. Yet, by its own admission, ICANN is doing precisely that by warehousing and cybersquatting on single-character labels in the legacy Internet registries. What makes this bad-faith behavior all the more absurd is that this prohibition has been incorporated verbatim into ICANN’s Bylaws and ICANN has cited it previously to support arguments that an antitrust complaint should be dismissed. In that judicial filing, ICANN stated that, “ICANN’s Bylaws prohibit it from operating as an Internet registry or registrar. ICANN does not sell anything or make anything; its functions are noncommercial and in support of the public interest.”

If this were true, then ICANN’s iana.org website wouldn’t state that, “(w)e act as both the registrant and registrar for a select number of domains which have been reserved under policy grounds.” Nor would ICANN be engaged in warehousing and cybersquatting on single-character .com labels and further collaborating with Verisign to auction off these labels to the highest bidder in violation of user-based fee restrictions set forth in the NTIA-Verisign Cooperative Agreement, to which both Verisign and ICANN—by virtue of the InterNIC license agreement and merged MOU—are bound.

The cybersquatting and warehousing of single-character labels in legacy registries is just one glaring example of ICANN’s arbitrary and capricious misbehavior, but there are others. While these contractual obligations may have motivated ICANN’s rejection of the failed billion-dollar .org registry sale by the Internet Society (ISOC) to Ethos Capital, a close reading of the extant agreements raises questions about whether ICANN improperly acted by removing the consumer pricing safeguards from the .org registry agreement shortly before the .org sale was publicly announced.

These extant agreements also call into question the entire WHOIS debacle of the last several years—particularly since the InterNIC licensing agreement grants the U.S. government the right to inspect ICANN’s use of its service mark to ensure “proper quality.” Considering the license agreement’s explicit assertions that “the term “InterNIC is a concept for an integrated network information center that was developed in cooperation with the U.S. Government and provides public information on technical management of the Internet valuable to users worldwide….” The Commerce Department might want to check in on ICANN’s use of its service mark because the late 1990’s are calling and wants the current internic.org website back. Regardless, ICANN’s self-deprivation with respect to accurate, complete, and timely WHOIS information should be seen as unacceptably damaging the U.S. government’s InterNIC service mark and not in any way keeping with “proper quality” of information that the U.S. government expected to be provided under the guise of InterNIC.

But an unavoidable part of the problem is that the U.S. Department of Commerce is improperly waiving specific performance of ICANN’s contractual obligations. There is ample and extensive precedent going all the way to the U.S. Supreme Court which unambiguously affirms that the U.S. government may not forego receiving what it is owed from contractual counter-parties. According to the U.S. Government Accountability Office (GAO), “...Article IV (of the U.S. Constitution) requires agencies to have statutory authority before they may ‘dispose of’ their contractual rights to full performance.” In that same 2016 report, GAO listed a plethora of case law precedent which supports this principle while also citing an earlier report from 1965:

The courts have held that once a contractual right has become vested in the United States…to demand performance of a valid and otherwise legal contract,...there exists no authority…gratuitously to waive or surrender such right…. It is a well-established principle of law that valid contracts are to be enforced and performed as written….

While it has been presented—incorrectly and dangerously—that the U.S. government’s laissez-faire approach to oversight of public interest Internet registries somehow serves larger purposes, it cannot be argued that it was “always envisioned” that coercive and predatory anti-competitive corporate bullies would be allowed to shirk their contractual obligations and injure the public interest by their single-minded and self-interested plundering of the DNS. If ICANN, legacy registry operators, and most especially the malefactors of great wealth which control them both are satisfied with benefitting from such coercive and predatory anti-competitive bullying then they will reap the inevitable consequences of such behavior; if they aren’t then it shouldn’t—and wouldn’t—be happening.

Governance is a bit like child-rearing in that it’s most effective when non-arbitrary. This is especially true since accountability deficits in one part of a system have derivative downstream effects. Thusly, if the Commerce Department doesn’t enforce its InterNIC licensing agreement and merged prior agreements with ICANN, then ICANN has no real impetus for enforcing its contracts with registries and registrars, and registries aren’t motivated to enforce their agreements with registrars, and so on. The entire WHOIS fiasco is prima facie evidence of this phenomenon and which occurs when an entire governance model has become conditioned to believe that contractual obligations are merely suggestions and consequences for non-compliance are just a phantasmagorical bedtime story that profiteering monopolist bullies tell to give everyone nightmares.

Regardless, I’m not spooked by their ghost tales nor should anyone else be. This isn’t their Internet—this is our Internet—and enough is enough.

By Greg Thomas, Founder of DNSDecrypt

Greg Thomas is founder of DNSDecrypt and author of How to Save the Internet in Three Simple Steps: The Netizen’s Guide to Reboot the Root. The views expressed in this article are solely those of Greg Thomas and and are not made on behalf of or for any other individual or organization.

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ICANN & US Gov John Poole  –  Apr 14, 2021 6:43 PM

Greg, have you read the AFILIAS DOMAINS NO. 3 LIMITED’S POST-HEARING BRIEF (redacted pdf) in the .WEB IRP? It is certainly interesting reading (all 132 pp.) as much of the alleged malfeasance occurred prior to the IANA transition (Oct 1, 2016):

55. Accompanying Ms. Willett’s 16 September 2016 was a detailed questionnaire, which we now know was prepared entirely for pre-textual purposes (i.e., a sham). As we have previously explained, ICANN prepared the questionnaire to create the impression that it was engaging in a fair and process—when in fact what it was doing was creating cover for itself and stacking the deck in favor of Verisign and NDC.109 In this regard, the Panel need only consider that two of the questionnaire’s recipients (Verisign and NDC) knew precisely why certain questions were being asked and therefore what to answer, and two of the recipients (Afilias and Ruby Glen110) could only speculate about what was being asked and why—because these two recipients had not reviewed the DAA and had no idea that ICANN had it in its possession. Indeed, as we have previously shown, ICANN compounded the information deficit issue by asking purposefully vague questions or questions that intentionally misrepresented the actual terms or effects of the DAA.111” (Afilias brief supra, emphasis added)

John, thanks for your comment. The Greg Thomas  –  Apr 14, 2021 8:43 PM

John, thanks for your comment.  The timeframe you are referencing falls within close proximity of my previous employment with Verisign — I have not and will not contravene my NDA agreement with Verisign.  Accordingly, I must refrain from commenting beyond an observation that the body of your comment appears to be incongruous with its title — unless you are confusing Verisign for the U.S. government.

No confusion John Poole  –  Apr 14, 2021 9:02 PM

Your reply (re: NDA) duly noted, and no confusion of Verisign for the U.S. government intended, the comment title merely meant as a reference to that time period BEFORE the IANA transition was effective Oct 1, 2016.

John, you have raised concerns in several Greg Thomas  –  Apr 19, 2021 1:54 PM

John, you have raised concerns in several comments posted to my articles that ICANN is “captured.” Who or what specifically do you believe has “captured” ICANN? Hannah Arendt, who I quoted in this article, also said that, “(w)here all are guilty, no one is; confessions of collective guilt are the best possible safeguard against the discovery of culprits, and the very magnitude of the crime the best excuse for doing nothing.” This seems a fairly accurate description of the mindset that has befallen ICANN, the stakeholder community, and Internet governance. ICANN is violating its own Bylaws, to say nothing of extant legal obligations to the U.S. government, yet the community remains mostly silent. Essential IP Rights Protection Mechanisms (RPMs) that were hard-won are being disregarded and IP Constituency advice ignored, yet crickets from IP interests. Where is INTA and it’s members? These protections are being disregarded so that ICANN and its largest ratepayers can illegitimately speculate in the domain name secondary market with specious auctions of single-character labels. Where is the ICA and its members? Don’t these groups exist to defend against exactly this sort of illegitimate encroachment? Wasn’t the community of stakeholders supposed to work together to serve as the accountability backstop following the IANA transition? Yes, that’s exactly what they are supposed to be doing. But too many stakeholders define their interests narrowly and parochially and are doing themselves, the community, and the Internet an immense and shameful disservice with their silence and apathy. ALL legitimate stakeholders have an interest in an ICANN that adheres to its own Bylaws, procedures, protections, and extant contractual obligations. But the silence and apathy persists. So my question is, who and what has so captured ICANN with such power to cause the organization to violate its own Bylaws and contracts while foregoing community advice and standard procedures and also pacifying stakeholders so comprehensively? You seem to have a bead on that dark force — so name it.

ICANN Multistakeholderism is a SCAM John Poole  –  Apr 19, 2021 7:55 PM

ICANN is an incompetent, corrupt and captured organization that has FAILED the global internet community (including registrants) in so many ways. You ask, “who and what has so captured ICANN?” The record is now replete with many examples of the capture of ICANN, as well as ICANN’s incompetence and corruption. I am genuinely surprised you are asking this question! Who has blocking control of the ICANN policy-making GNSO?


: ICANN’s contracted parties, i.e., gTLD registry operators and registrars. What international lobbying organization did ICANN join as a dues paying member in 2015?


: INTA.  See Why Did ICANN Become a Member of Trademark Lobbyist Group INTA? And now trademark lawyers and lobbyists largely control not only the IPC, but also ICANN’s BC and ALAC (say hello to ALAC members Greg Shatan and Jonathan Zuck, both formerly active in IPC). Ever wonder why the ICANN Board listened to only 6 comments and disregarded over 3000 comments in regard to the .ORG Registry Agreement? See The Case for Regulatory Capture at ICANN.
ICANN does


serve the Global Public Interest. ICANN serves Special Interests.

That is an incontrovertible FACT

, and explains why ICANN multistakeholderism is the biggest SCAM ever perpetrated on the global internet community.

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