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Karl Auerbach: ICANN "Out of Control"
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Corporate Malfeasance?

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Koman: Stuart Lynn says they made this change to streamline the efficiency of the organization.

Auerbach: Since when has efficiency of ICANN been an important goal? ICANN has been the most inefficient organization in the world; it's only created seven top-level domains in its four years of existence. And it only had elected members for half of that period, and only a partially elected membership. ICANN doesn't need efficiency; it needs to examine itself and discover, for example, that its staff is utterly out of control. Stuart Lynn in Shanghai got up and announced to the world that ICANN is going to have three new top-level domains of the sponsored type. Who decided that's what we need or that we need only three of them? Stuart Lynn did. He didn't consult with the community yet he declared the future business landscape of the Internet. He decided who is going to be on the main street of the Internet and who is going to be forced into the back alley. That's not a decision that arose out of elections and non-elections; that arose out of the fact that ICANN has an irresponsible staff that doesn't account to the board, much less to the public, and the board doesn't do anything about it. Insubordination is rife throughout ICANN and the board simply chooses to be powerless and not do anything about it. Elections are a non sequiteur. They have nothing to do with this issue.

In terms of corporate governance, ICANN makes Enron look like a saint. I had to sue them to look at the most basic information a board member should look at, and what's amazing is that out of the lawsuit, we discovered that no other board member had bothered to do it, including ICANN's own audit committee. I can't even believe the auditors signed off on ICANN's annual report because I looked at the raw data and it's unauditable. You can't verify that an expense that was paid was actually tied to an expense requisition--they were just paying random invoices.

Koman: But there's a congressional committee that oversees ICANN, is there not?

Auerbach: No. ICANN plays this shell game--it claims to be a private corporation but it's not really private because it's a public benefit corporation of California. ICANN is in fact, a 501(c)3, which means it's exempt from federal taxes. ICANN is not a governmental organization so Congress's role is not to oversee ICANN but rather to look at it and then determine whether or not Congress needs to pass legislation that controls how the executive branch--the Department of Commerce--acts in situations like this. Yes, Congress can put pressure on the Department of Commerce, but it's indirect pressure. Commerce has chosen to blind itself to the foibles of ICANN. Commerce has not held ICANN to its commitments. It has not audited ICANN to see that ICANN is doing the job it's supposed to do. As far the financial aspects go, Commerce has really no role because ICANN is a private organization. That's what the directors' role is, to oversee the finances, yet ICANN's management has tried to make it so the directors can't do that.

Koman: So in the absence of ICANN directors asking for accountability ...

Auerbach: There is none.

Koman: There is no other layer?

Auerbach: Well, there is one other person who can hold ICANN accountable, but his name is rarely mentioned--Bill Lockyer, the attorney general for the state of California. He can hold ICANN accountable if the board members do not. I imagine the IRS can as well. I've pointed out certain problems in ICANN whereby the board members may be personally liable for millions of dollars for certain acts of ICANN; and even with that sort of sword of Damocles hanging over ICANN and its directors and their pocketbooks, they're not willing to take action. It's an organization that's just unbelievable.

Koman: Karl: In testimony to Congress, you said, if ICANN ceased to exist ...

Auerbach: The Internet would run perfectly. The Internet addressing is now being administered by four groups called the RIRs (Regional Internet Address Registries), and they issued what amounts to a declaration of independence from ICANN--they presented it in Shanghai. That's the critical function. Addresses would continue to be allocated by these groups even if ICANN were to disappear. Verisign takes care of the DNS part--it still prepares the root zone file every day and publishes it--that's where it comes from. ICANN does not have its fingers on the keyboard editing that file--that's still inside Verisign. And that would still happen if ICANN disappeared.

Koman: So the existence of ICANN is in fact a threat to the Net?

Auerbach: Well, as we've seen in the security case, had they not been there we might have reacted more quickly to the threats coming out of September 11. But ICANN has said, "Oh huff and puff, we'll establish these grand glorious committees that will solve the problem. And because so many other things are happening, people have a sense of complacency; they say, "Oh, ICANN's handling that." But ICANN's not. ICANN's far more willing to give .com to Verisign in perpetuity, and deal with reassigning .org, than it is in dealing with what it needs to do to make sure the DNS root level runs responsibly and reliably. For example, my first day on the board I suggested ICANN put in place a monitoring system so that we can learn when DNS servers at the root start to go south. They simply didn't want to consider it. Verisign does that on their own. The security stuff--they don't want to hear about it.

Public Action

Koman: What can people do? No amount of public agitation will bring about change?

Auerbach: No, agitation will work. The Department of Commerce might realize, hey, their little baby is out of control. More congresspeople might realize something's rotten in Denmark and start accumulating the pressure on Commerce. And, of course, there are people outside the U.S. who might realize that ICANN is, for example, advocating wholesale violations of privacy by publishing the whois databases to anybody and anyone, with preference to trademark people, and that includes your personal ID; you've entered into a contract to buy a domain name; you didn't enter into a contract to publish your name, address, phone number, company affiliation, and email address to everybody in the world, including spammers. But ICANN says it has to be that way.

Privacy is a balance between somebody's need to know and your need for privacy. There are a lot of principles that have come up over the years about how this balance is to be struck, and ICANN has disregarded all of those, because the trademark people--in their race to accuse people of being trademark violators and obtain their names, addresses, and phone numbers--have insisted that ICANN make all this stuff widely available. I know a woman who's been stalked because her name was listed in the whois database; it's not that uncommon. And all of us have received spam and phone calls.

Koman: What can outraged citizens do about this?

Auerbach: Well, be outraged, first of all. Participate in ICANN. I displayed a photo showing that the meetings were empty, and they said, "here we are in the most populous nation in the world and the fact that nobody shows up means that we're doing a good job!" Wait a minute, maybe it's that people have become totally disenchanted with you and have figured out that showing up doesn't make any difference. But we can't give them that excuse; people still have to participate in ICANN and ensure that we have a firm record of ICANN constantly and repeatedly going against the demonstrated consensus of opinion; also what the public needs to do is keep up constant pressure on their representatives, and also on Don Evans in the Department of Commerce. I'd make noises; if you're in California, write to the attorney general, and ask how come we have this public benefit corporation in California that receives all these benefits yet seems to operate in complete defiance of the principal of benefitting the public.

Koman: When ICANN demands that DNS be centralized when it could very well be decentralized; when P2P technologies themselves, rather than "pirate users" are attacked by the record companies and Hollywood ... doesn't it seem that there is a battle for control of the infrastructure of the Net, and that the battle is drawn on lines of how centralized or decentralized the Internet shall be?

Auerbach: There's definitely a battle for control. A lot of people are fearful of chaos. ICANN's attitude is that we are technologists; we know better about how the world should run than you do. And these are people who can't even run a small business and keep it afloat. Yes, they're smart people and they are very condescending to other people who have other backgrounds and other points of view. But you know, technology isn't everything; dispute resolution is important; knowing how to keep finances is important.

Koman: Were some directors filled in and others left in the dark?

Auerbach: There was definitely an inner circle. Very definitely. I hear from the budget committee, "Oh, we're watching that." Yet I have never been able to find out whether there's information to be watched. There's some information flowing that I've not yet found. When Stuart Lynn announced his grand plan for change--I don't want to call it "reform" because it's not reform--several board members had already heard it, had seen it; I was just appalled that members had sent people around the world to talk to outsiders, without validating that the board wanted this. And Stuart Lynn gets up there and announces we're going to have three new top-level domains. He never asked the board for that. He just did it.

He has given me and the whole board information that he knew was false. I believe that his intent was to mislead. I have instances where he's knowingly made false statements to the board. I think he should be fired for insubordination, as well as incompetence. And the same for their law firm. Joe Sims--he's the secret director--he's unelected but he's party to everything. He's made more money through ICANN than anyone else.

Koman: Through his law firm?

Auerbach: Yes, and he's a partner.

Auerbach: He's the one who brokered the gift of .com to Verisign in perpetuity, privately. And he went to ICANN and said, "here's what I've done--adopt it." And ICANN said OK. Even over the advice of its own advisory group.

Koman: Amazing.

Auerbach: The public interest is not being served.

Richard Koman is a freelancer writer and editor based in Sonoma County, California. He works on SiliconValleyWatcher, ZDNet blogs, and is a regular contributor to the O'Reilly Network.


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