European Commission gives qualified thumbs-up to IANA rebid

by Kieren McCarthy | 14 Nov 2011 |

The European Commission has given the process of rebidding for the IANA contract a qualified thumbs-up, claiming credit for some key changes but also complaining about the requirement that the winning contractor be based in the United States, and again raising the issue of 'applicable law'.

The contract covers a range of critical Internet functions including maintenance of the Internet's main directory, the root zone file. It has been awarded to ICANN for the past 10 years but its renewal this year will be done through an open-bid process, the final details of which were published late last week.

In a press release in response to the release of the final contract details, EC Commissioner Neelie Kroes noted that "the new IANA tender is a clear step forward for global internet governance." The release then highlights a number of clauses in the new contract that it claims resulted from its own "initiative to improve Internet Governance".

The "suggested changes" that the EC says it made at two meetings between Kroes and US counterpart Larry Strickling, in Brussels in May and Nairobi in September (at the IGF) include "clear and binding provisions on conflict of interest" and a requirement that "the next IANA contractor will have to provide specific documentation demonstrating how the underlying decision-making process was supportive of the public interest".

Conflict of interests

The conflict of interests issue was sparked by the decision in June by former ICANN chairman Peter Dengate Thrush to immediately accept a leading role in a company with a strong financial interest in the new gTLD process that he had pushed hard to finalize in the last moments of his chairmanship.

That has resulted in US Congressional complaints and heavy pressure on ICANN - the current IANA contractor - to put a strong conflict of interests policy in place as soon as possible. Kroes used her speech at the opening ceremony of the Internet Governance Forum (IGF) in Nairobi to specifically raise the issue. "In particular, the next IANA contractor must be protected from conflicts of interest," she noted.

The end result is an entire clause in the IANA contract (Clause 6: Conflict of Interest Requirements). As the EC notes: "The next IANA contractor will have to take measures to avoid any activity or situation that could compromise, or give the appearance of compromising, the impartial and objective performance of the contract."

Dot-xxx clause

EC and US anger with ICANN's decision to approve the dot-xxx Internet extension in March this year sparked a series of letters between Kroes and Strickling, resulting in a May bilateral meeting in Brussels.

The end result of those discussion was the addition of a controversial clause into a draft form of the IANA rebid - the 'Further Notice of Inquiry', or FNOI. The clause was 'Responsibility and Respect for Stakeholders' and the idea was to force any IANA contractor to check that any new additions to the Internet were fully supported.

The wording upset many in the Internet community who saw it as effectively giving governments, particularly the US government, a veto over the multi-stakeholder process used to make decisions about the Internet's evolution.

Clause C.2.2.1.3.2 in the FNOI noted that the IANA contractor would have to "include documentation to demonstrate how the proposed string has received consensus support from relevant stakeholders and is supported by the global public interest."

In the final IANA RFP, clause C.2.2.1.3.2 has become C.2.9.2.d, has been renamed 'Delegation and Redelegation of a Generic Top level Domain (gTLD)', and has been completely reframed.

Now there is explicit mention of "the procedures developed by ICANN" where before there wasn't, and the contractor needs to provide "documentation verifying that lCANN followed its policy framework".

Rather than checking any new Internet extension "has received consensus support from relevant stakeholders and is supported by the global public interest", the new IANA contractor will now have to include "specific documentation demonstrating how the process provided the opportunity for input from relevant stakeholders and was supportive of the global public interest".

This is an intelligent compromise and one that the EC seems happy with.

US requirement

The EC is less excited about the fact that a requirement in the new IANA contract is that the company be based in the United States. The release "noted with regret that non-US companies are not allowed to compete for the forthcoming IANA contract".

This comes in clause C.2.1, which is quite explicit: "The Contractor must be able to demonstrate that all primary operations and systems will remain within the Unites States," part of it reads.

Kroes has long been pushing for the IANA contract to be 'internationalized' using another set-piece speech at ICANN's meeting in Brussels in June 2010 to ask that "the expiry of the IANA contract next year will be turned into an opportunity for more international cooperation serving the global public interests".

In one sense, Kroes got that with not one but two bilateral meetings with the US government on ICANN and IANA, the inclusion of EC concerns into the IANA contract, and a three-stage IANA rebid that saw two opportunities for public comment (although the EC did not take the opportunity to publicly comment (46 others did though)).

There is a clear, global desire for the US government to take its hands off the Internet's tiller and the IANA contract is the most visible symbol of that.

But as the NTIA noted in response to a request from ICANN that the IANA contract be changed to a 'cooperative agreement', such a change would, it felt, require the approval of the US Congress.

With the current geo-political environment as it is, in particular the push from some nations to give the United Nations control of the Internet, there is absolutely no chance of Congress approving a change to the make-up of the IANA contract now or in the foreseeable future.

Applicable law

The one thing that the EC remains unhappy about is what it terms the issue of "applicable law".

The release reads: "The Commission believes greater respect should be given by the IANA contractor to respecting applicable law (such as EU personal data protection laws)."

This has been a persistent request from Kroes. At an OECD high level meeting in June in Paris, she specifically noted concerns about balancing the imposition of new laws on the Internet with maintaining its unique nature. "I know there are pressures – regulatory, political, and economic – to 'fragment' the Internet, often along national borders. Sometimes this results from legitimate concerns, like personal data protection; sometimes it is just plain censorship."

She revisited the issue in Nairobi, noting that the Internet "must inspire confidence... it must be a place of security, of privacy, and safety for everyone, not just for those with deep technical expertise or deep pockets," continuing, "the European Union is working on several fronts to achieve that goal. People must be confident about their online privacy, so we are revising the rules on EU personal data protection to make them clearer and better suited for the globalized online century."

That global privacy effort is being met in the middle by the US government, with Larry Strickling and the NTIA developing a new method for deciding online issues.

Strickling told .Nxt in an exclusive interview in June: "With the global Internet, we need to have privacy policies that work around the world and that are interoperable with one another. They don’t have to be the same, but a corporation doing business in 50 different countries should be able to develop a privacy policy that will satisfy the various demands of the different countries in which it operates. I think our model will help get us there."

He specifically noted discussions with the EU: "We have also been talking to other countries – particularly the EU - to share our thinking and hear what they are doing so that we end up with regimes that, while not identical, can live with each other."

So what aspect of 'applicable law' does Kroes remain unhappy about in the IANA contract?

Paper, scissors, stone

The answer comes in a series of policy papers produced by the European Commission and published by .Nxt in August.

One of the six papers was 'Respect for Applicable Law' and noted a problem in "the limited possibilities that ICANN stakeholders, including governments and public authorities, have to contest ICANN Board decisions if they feel they are inconsistent with either ICANN's own bylaws or applicable law."

It continued: "Such stakeholders may perceive that litigation before a US court offers a less appropriate 'review mechanism' in relation to potential conflicts with international law and national law of third countries than in relation to US law. Extra-judicial alternatives for a redress may also be desirable to enhance the accountability of the IANA contractor in a manner that more flexible, more timely and more economical than litigation."

It suggested imposing this requirement on ICANN through the IANA contract - something that concerned a huge number of people, not least the US government, as it would have ended up politicizing a technical contract.

The issue is very much alive in Kroes' and the EC's minds however. Despite the fact that ICANN has formally agreed to "act in accordance with relevant national laws", the EC briefing paper noted that "ICANN has so far not satisfactorily addressed concerns regarding its compliance with its own rules, including its Bylaws and Articles of Incorporation. It has created rules and procedures that can be in breach of or negatively impact on the implementation of relevant international or national laws, in particular those in the economic sphere (such as competition and trademark law)."

Unsurprisingly, the US government did not impose an extra-judicial process on ICANN through the reformed IANA contract. And in fact the six policy papers unstuck what was becoming a very cosy relationship between the EC and US in Kroes and Strickling.

Nevertheless, when .Nxt interviewed Kroes at the IGF in Nairobi, the issue of applicable law was very much front-of-mind. “I'm not against ICANN. I am against non-applicable law," she told us.

ICANN is currently undergoing a significant number of changes following an accountability and transparency review last year (ATRT). However only the most optimistic observers believe that the organization will ever willingly allow itself to be overseen by another entity, or be obliged to act on another group's decision, so the bigger issue is simply on hold.

Kroes knows that only too well. So when the ATRT reforms, and the IANA contract are all done, signed and sealed, the drumbeat for accountability at the very top of the Internet will start up again.

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