Information Concerning the Formation of ICANN Supporting Organizations

December 21, 1998

1. Purpose

The purpose of this note is to provide assistance to those membersof the Internet community who are interested in forming ICANNSupporting Organizations. The information contained in this documentreflects ICANN's views as of the date shown above, which are subjectto change based on further deliberations of the Board and discussionswith members of the community.

2. Introduction

The Board wishes to encourage the early formation of SupportingOrganizations and the seating of additional Directors nominated byrecognized SO's. The ICANN Bylaws provide for substantial delegationof policy responsibility to Supporting Organizations in the beliefthat putting policy development and recommendations organizationallycloser to working professionals will produce a better result for theentire community. Details of the internal organization of SO's arebest dealt with by the organizations themselves, so long as the basicrequirements for recognition (see paragraph 10 below) are met andmaintained.

Proposers should especially note that there is no requirement forprecise symmetry among Supporting Organizations. The ability of thevarious SO communities to accomplish their work most effectively maywell result in organizational configurations which differ from eachother.

In addition to the substance of Supporting Organization proposals, theICANN Board wishes to see explicit statements of support for the candidate SO included with applications for recognition. This will be extremely important in establishing whether consensus proposals having substantial breadth and depth of support have been received.

The ICANN Board will meet next in open session in Singapore on March 3,1999. Details of this meeting may be found at www.icann.org. In order tobe placed on the agenda of the ICANN Board at the Singapore meeting,applications for recognition of a Supporting Organization must be receivedby ICANN not later than midnight, U.S. West Coast time, Friday, February5, 1999. Applications are to be submitted in ascii text to msvh@icann.organd additionally must be posted on a widely accessible Web site instandard html format. Proposers are encouraged to post complete, or nearlycomplete, applications on a widely accessible Web site as far in advanceof the submission deadline as possible. ICANN will provide links to thesesites from its own Web site in order to ensure the maximum availability ofthis information to the community at large. ICANN will establish specificcomment mechanisms on its Web site for all SO applications forrecognition.

The next opportunity for consideration of applications for SO recognitionnot received in time for the March meeting will be in May, 1999. An agendadeadline for the May meeting will be announced at a later date.Applications received after February 5, 1999, may be noticed for action ata special meeting held before the May meeting, if such a meeting issubsequently scheduled and the application is ripe for action at thattime.

3. Background

The United States Government, in its Statement of Policy issued June 5,1998, generally known as the "White Paper", proposed the formation of aprivate, non-profit corporation to administer policy for the Internet Nameand Address System. Subsequently, in a Memorandum of Understandingexecuted on November 25, 1998, the government recognized ICANN as thecorporation designated to undertake these responsibilities. [Text ofthese documents may be viewed at www.ntia.doc.gov.]

With respect to governance of the new corporation, the White Paper stated,"The new corporation could rely on separate, diverse and robust name andnumber councils responsible for developing, reviewing, and recommendingfor the board's approval policy related to matters within each council'scompetence. Such councils, if developed, should also abide by rules anddecision-making processes that are sound, transparent, protect againstcapture by a self-interested party and provide an open process for thepresentation of petitions for consideration. The elected Board ofDirectors, however, should have final authority to approve or rejectpolicies recommended by the councils."

This guidance, with the further benefit of community discussion and debateduring the summer of 1998, resulted in the support organization structurewhich is contained in Article VI of the ICANN Bylaws, the complete text ofwhich may be found at www.icann.org.

4. ICANN Supporting Organizations

The Bylaws currently provide for three Supporting Organizations, althoughmore are allowed if found to be needed in the future. The general scopeof the three SO's is set forth in section 3 (a) of Article VI as follows:

"(i) The Address Supporting Organization shall be composed ofrepresentatives from regional Internet address registries and others withlegitimate interests in these issues, as determined by the AddressSupporting Organization consistent with Section 2 of this Article andapproved by the Board. The Address Supporting Organization shall createan Address Council to make recommendations to the Board regarding theoperation, assignment and management of Internet addresses and otherrelated subjects;

(ii) The Domain Name Supporting Organization shall be composed ofrepresentatives from name registries and registrars of top-level domains("TLDs"), businesses and any other entities that are users of the Internetand others with legitimate interests in these issues, as determined by theDomain Name Supporting Organization consistent with Section 2 of thisArticle and approved by the Board. The Domain Name SupportingOrganization shall create a Names Council to make recommendationsregarding TLDs, including operation, assignment and management of thedomain name system and other related subjects; and

(iii) The Protocol Supporting Organization shall be composed ofrepresentatives from Internet protocol organizations and others withlegitimate interests in these issues, as determined by the ProtocolSupporting Organization consistent with Section 2 of this Article andapproved by the Board. The Protocol Supporting Organization shall createa Protocol Council to make recommendations regarding the operation,assignment and management of protocol parameters, such as port numbers,enterprise numbers, other technical parameters and related subjects."

5. ICANN Directors Selected by Supporting Organizations

Each Supporting Organization will be represented on the ICANN Board bythree Directors. Article V, section 2 of the Bylaws states:

"Immediately upon the recognition of a Supporting Organization by theBoard pursuant to Section 3(b) of Article VI, the Board shall request thatsuch Supporting Organization nominate three persons to be directors. Uponreceipt of such nominations, the Board shall elect such persons as membersof the Initial Board."

With respect to the first election of Support Organization Directors,Article V, section 9(d) states:

"the three original Directors nominated by any Supporting Organizationshall be elected for terms of one (1) year, two (2) years, and three (3)years, respectively, with each term considered to have begun on October 1,1998 regardless of when those original Directors actually take office."

6. Powers and Responsibilities of Supporting Organizations

The Supporting Organizations will be the primary source of substantivepolicy recommendations for matters lying within their individual chartersas described in paragraph 4 above. More specifically, Article VI, section1 states:

"(a) The Supporting Organizations shall serve as advisory bodies tothe Board and shall have such powers and duties as may be prescribed bythe Board and these Bylaws. The Board may add additional SupportingOrganizations by a two-thirds (2/3) majority vote of all members of theBoard and in such event shall, by such two-thirds (2/3) vote, reallocatethe positions on the Board set forth in Section 4 of Article V. ASupporting Organization may not have obligations to any other entityinconsistent with its duties to the Corporation.

(b) Each Supporting Organization shall be responsible for nominatingDirectors for election to those seats on the Board designated to befilled by each Supporting Organization.

(c) The Supporting Organizations shall be delegated the primaryresponsibility for developing and recommending substantive policies andprocedures regarding those matters within their individual scope (asdefined by the Board in its recognition of each such SupportingOrganization). Recommendations of Supporting Organizations shall beadopted as policies and procedures of the Corporation only upon action ofthe Board as provided in this Section 1.

(d) The Board shall refer proposals for policies and procedures notreceived from a Supporting Organization to the Supporting Organization(s)with primary responsibility over the matter to which the proposal relatesfor initial consideration and recommendation to the Board.

(e) Any recommendation forwarded to the Board by a SupportingOrganization shall be simultaneously transmitted to all other SupportingOrganizations so that each Supporting Organization may comment to theBoard regarding the implications of such a recommendation on activitieswithin their individual scope.

(f) Subject to the provisions of Article III, Section 3, the Board shallaccept the recommendations of a Supporting Organization if the Board findsthat the recommended action, policy or procedure (1) furthers the purposesof, and is in the best interest of, the Corporation, (2) complies with theArticles and Bylaws, (3) was arrived at through fair and open processes(including permitting participation by representatives of other SupportingOrganizations if requested), and (4) is not reasonably opposed by any ofthe other Supporting Organizations. No recommendation of a SupportingOrganization shall be adopted unless the votes in favor of adoption wouldbe sufficient for adoption by the Board without taking account of eitherthe Directors nominated for election by that Supporting Organization ortheir votes.

(g) If the Board declines to accept any such recommendation of aSupporting Organization, it shall return the recommendation to theSupporting Organization for further consideration, along with anexplanation of the reasons it declines to accept the recommendation. If,after reasonable efforts, the Board does not receive a recommendation froma Supporting Organization that meets the foregoing standards or, afterattempting to mediate any disputes or disagreements between SupportingOrganizations, receives conflicting recommendations from SupportingOrganizations, and the Board finds that there is a justification forprompt action, the Board may initiate, amend or modify and then approve aspecific action, policy or procedure.

(h) Nothing in this Section 1 is intended to limit the general powers ofthe Board or the Corporation to act on matters not within the scope of aSupporting Organization or that the Board finds are necessary orappropriate to further the purposes of the Corporation."

7. Membership in Supporting Organizations

Participation in Supporting Organizations must be open to any individual or organization that meets reasonable minimum qualifications proposed by the SO and ratified by the ICANN Board. Article VI, section 2 states, in part:

"Participation in a Supporting Organization shall be open to anyindividual or organization that meets the minimum qualifications adoptedby the Supporting Organization and ratified by the Board. Each SupportingOrganization may adopt membership structures, including open or multipleclasses or categories of members, that it deems appropriate for itseffective functioning, consistent with the foregoing."

ICANN has been asked whether open membership in organizations participating in a Supporting Organization would meet these requirements. ICANN is prepared to accept any structure that, considering the subject matter of the SO, ensures that all individuals and organizations with legitimate interests in the activities of the SO have a reasonable opportunity to participate in the SO. An application for recognition must clearly set forth the criteria and standards for participation, and should justify the particular structure proposed in the context of the responsibilities of the SO and the broader ICANN structure and procedures.

8. Supporting Organization Finances

Supporting Organizations are expected to establish equitable membershipdues or assessments which cover all costs of organizing and sustaining thework of the SO, including any amounts which may be required to supportICANN itself. See 3.b.vi in paragraph 10 below.

ICANN will open a proceeding early in 1999 dealing with its budget andrevenue sources. In that proceeding, alternatives for supporting ICANN'sbudget will be fully explored. Pending the conclusion of that proceeding,applications for recognition of SO's should not assume that a substantialfunding burden for ICANN expenses will be borne by SO dues or assessments.ICANN does not presently intend to look to the SO's themselves for asignificant portion of its funding requirements.

9. Supporting Organization Liability and Indemnity

It is intended that Supporting Organizations and their councils will havea separate organizational identity from that of ICANN, and that ICANN'srelationship with the SO's, to the extent necessary apart from the bylaws,will be by contract. Thus, ICANN's liability insurance and other corporateresources will not be available to Supporting Organizations.

ICANN has been asked whether SO's are permitted to function asunincorporated associations, and whether they are permitted to have a non-U.S. corporate or unincorporated place of business. ICANN believes theseare decisions best made by organizers of Supporting Organizations,following advice of counsel. ICANN does not intend to bias a recognitiondecision based on corporate form or location, provided that otherrequirements for recognition are met and that such a decision does notunnecessarily inflict administrative, financial or legal complexity on theSO or ICANN. Regardless of the specific organizational form chosen, theprocedural rules of the proposed organization must meet commonly appliedstandards of organizational performance, integrity, and financialstewardship.

10. Recognition of Supporting Organizations

The ICANN Bylaws contain specific procedures and criteria for review andapproval of SO recognition proposals. Article VI, section 3 (b) states:

"(b) The Board shall review an application for recognition as one of theSupporting Organizations referred to in Section 3(a) of this Article VI,and, after requesting and considering comments from parties interested inmatters within the scope of the proposed Supporting Organization, shallapprove such application if the Board finds that it has been organized inaccordance with these Bylaws, that it will fairly and adequately reflectthe full range of views of all interested parties, and that itsrecognition would be in the best interest, and serve the purposes, of theCorporation. The application shall include, but not be limited to, adescription of the following in form and substance acceptable to the Board(and a commitment to implement the matters described in the application):

(i) membership or participation criteria,

(ii) methods for developing substantive Internet policies to berecommended to the Board and selecting Board nominees,

(iii) open, transparent, fair and non-discriminatory processes (includingprocedures for public attendance at appropriate meetings of the SupportingOrganization and for the participation of interested persons who may notbe members of the Supporting Organization in advisory committees of theSupporting Organization),

(iv) policies to ensure international and diverse participation,

(v) policies for disclosure to the Corporation by members of orparticipants in a Supporting Organization council of conflicts of interestor other financial interests in matters within the scope of the SupportingOrganization (such conflicts or interests, however, not necessarilyrequiring abstention from action), and

(vi) methods for funding the Supporting Organization and providing fundingfor the Corporation (consistent with Article XI, Section 4 of theseBylaws). If more than one application to be a particular SupportingOrganization is received by the Board, it shall encourage, to the extentpossible and reasonable, such competing applicants to resolve anydifferences, and shall not approve any application that does not meet thecriteria set forth in this Section 3."

With respect to the requirement in VI.3.b above that the application shall include "a description of the following in form and substance acceptable to the Board," proposers should be guided in general by the form of the ICANN bylaw provisions dealing with comparable requirements. E.g., with respect to open processes, see ICANN Bylaws, article III.3.b.

With respect to conflict of interest requirements, proposers should beguided by ICANN Bylaws Article V, section 7, and should prospectively agree to abide by the terms of the ICANN Conflict of Interest policy when it is adopted.

11. ICANN Contracts with Recognized Supporting Organizations

Following recognition of a Supporting Organization, ICANN will execute acontract with the organization which formalizes the recognition, createsbinding responsibilities on the parties, contains provisions fortermination for cause, and establishes mutually agreeable financialconditions.