My suggestion for what is being called the IANA transition (the U.S. government abdicating its oversight role):
1. Separate IANA from ICANN.
2. Three trustees (see below) should oversee and govern IANA on behalf of the entire global internet community.
3. IANA should be funded by assessments paid by each ICANN-approved registry operator directly to IANA. Failure to pay would result in that registry's domain(s) being removed from the root (upon due notice to the registry operator and ICANN, and in the event of registry operator default, ICANN having the option to revoke the authority of the registry operator, and transfer the domain(s) to another registry operator which would then pay the delinquent assessments.)
Most have it wrong on internet governance reform. Everyone is focused on the US government announcement. Wrong focus. Neither the U.S. government, nor any government(s), should be directly governing or overseeing IANA and its functions. Neither should ICANN. IANA has technical functions that should be kept separate from ICANN and ICANN's administrative and policy-making functions. IANA's functions have been handled competently by the technical community and Verisign (which performs a technical function, at no cost, for the benefit of the global internet community under its contract authority). Both the U.S. government and ICANN should step aside from IANA. Oversight of IANA can be accomplished by having three trustees exercise the stewardship oversight presently provided by the US Department of Commerce and ICANN. I would suggest that those three trustees be selected, 1 each, by 3 separate entities--each trustee having to take an oath affirming a declaration of principles for operation of IANA and the global internet, including continuous stability, security, and internet freedom. The trustees would be selected, 1 trustee each, by 3 non-governmental sources--I suggest these: The Internet Society, The World Wide Web Consortium (W3C) (both of which are existing competent global multistakeholder organizations that have demonstrated integrity in protecting the public interest when it comes to the internet and its users), and the third trustee to be selected by the ICANN-approved registry operators collectively. Bylaws to be adopted by IANA would provide for selection of successor organization(s), if necessary, should either the Internet Society or the World Wide Web Consortium be unable to fulfill their respective roles of selecting an IANA trustee.
Going forward, it is important to not only remove the U.S. government, but also ICANN--in fact, it is just as important that ICANN and IANA be separated, and their respective roles be distinct.
It is truly ICANN that is the elephant in the living room, not the U.S. government. The U.S. government has indicated it is willing to give up its stewardship of the internet to responsible, non-governmental successor(s). ICANN is a much bigger problem, and not just concerning IANA. ICANN needs to either be reformed, or replaced. ICANN has made a lot of mistakes and is not operating in the public interest --
U.S. to relinquish remaining control over the Internet - The Washington Post: “...This is a purely political bone that the U.S. is throwing,” said Garth Bruen, a security fellow at the Digital Citizens Alliance, a Washington-based advocacy group that combats online crime. “ICANN has made a lot of mistakes, and ICANN has not really been a good steward.” Business groups and some others have long complained that ICANN’s decision-making was dominated by the interests of the industry that sells domain names and whose fees provide the vast majority of ICANN’s revenue. The U.S. government contract was a modest check against such abuses, critics said. “It’s inconceivable that ICANN can be accountable to the whole world. That’s the equivalent of being accountable to no one,” said Steve DelBianco, executive director of NetChoice, a trade group representing major Internet commerce businesses...."
So what to do with ICANN? That's the bigger problem, and one that needs to be solved sooner rather than later, before ICANN irreparably damages the internet domain name ecosystem by its own inept, incompetent, conflicted, and poor stewardship. But first, let's keep the global internet technically operating in a sound manner -- that is IANA's function, which it has been performing well. Once we have separated IANA and its functions from ICANN and the U.S. government, will be the time to discuss how ICANN's administrative and policy-making functions can best be performed, and whether to just replace ICANN with a new international, multi-stakeholder organization that is competent, ethical, responsible, and responsive, to the entire global internet community and the public interest, not just a few insiders and special interests.