News Review: IANA Transition & ICANN Corruption, Capture, and Control

"If one wanted to capture ICANN on a single issue, or a group of interrelated issues, the most practical tactic might be bribery"--John C. Coffee Jr., Columbia University Professor of Law, see this week's FEATURE further below.

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Domain Mondo's review and look ahead [pdf], starting first with the macro view, the big picture, after cutting through all the noise: 

•  GOP nominates TrumpPeter Thiel at the 2016 RNC: "... Across the country, wages are flat. Americans get paid less today than 10 years ago ... Our economy is broken ... our government is broken ... We don't need to see Hillary Clinton's deleted emails; her incompetence is in plain sight. She pushed for a war in Libya, and today it's a training ground for ISIS. On this most important issue, Donald Trump is right, it's time to end the era of stupid wars and rebuild our country ... Of course, every American has a unique identity. I am proud to be gay. I am proud to be a Republican. But most of all, I am proud to be an American! I don't pretend to agree with every plank in our party's platform, but fake culture wars only distract us from our economic decline. And nobody in this race is being honest about it except Donald Trump ... Tonight, I urge all of my fellow Americans to stand up and vote for Donald Trump." See also Ivanka Trump's speech (video) that set social media abuzz. More at: LIVE Video: Tech Entrepreneur & VC Peter Thiel Speaks at #RNCinCLE. A Reuters/Ipsos poll of likely U.S. voters shows Clinton and Trump virtually tied (within margin of error).

•   Hillary chooses Senator Tim Kaine (D-Va) as her Vice Presidential nominee but VP pick greeted by blowback from progressive groups | WashingtonPost.com"... several organizations, including some with ties to Sen. Bernie Sanders (I-Vt.), the runner-up in the Democratic primaries, sharply questioned Kaine’s liberal bona fides, pointing to Kaine’s support of trade deals and regulations favorable to big banks. Stephanie Taylor, the co-founder of the Progressive Change Campaign Committee, worried that Kaine’s support of a pending trade deal known as the Trans-Pacific Partnership [TPP] could allow Republican presidential nominee Donald Trump to “outflank” Clinton on trade." See also: New Leak: Top DNC Official Wanted to Use Bernie Sanders’s Religious Beliefs Against Him | TheIntercept.com"Among the nearly 20,000 internal emails from the Democratic National Committee, released Friday by Wikileaks and presumably provided by the hacker “Guccifer 2.0,” is a May 2016 message from DNC CFO Brad Marshall. In it, he suggested that the party should “get someone to ask” Democratic presidential candidate Bernie Sanders about his religious beliefs." The Democratic National Coronation Convention is in Philadelphia this coming week, July 25-28. UPDATE: #DNCleak #DNCleaks LIVE twitter feed

•  Turkey is in turmoil: "Turkey’s president is destroying the democracy that Turks risked their lives to defend."--Erdogan’s revenge | Economist.com.

•  Ireland Hits Brexit Alarm in Biggest Foreign Crisis in 50 Years | Bloomberg.com"The prime minister is under pressure, economists are slashing growth forecasts and companies are warning of Brexit’s dire consequences. London? NoDublin. The intertwining of trade and finance means no other country is feeling the fallout from the U.K.’s vote to leave the European Union more than Ireland." See also: Europe’s hedge-fund industry contracted for a sixth straight quarter "shrinking the industry to fewer than 4,000 funds."  As noted before on Domain Mondo, the EU actually needs the UK more than the UK needs the EU (which is why the UK, instead of EU-dependent Greece, will be the first member state to leave the EU): see UK Property Market Proves Resilient post-Brexit and One month after Brexit: what we know about the UK economy | FT.com: "little Brexit effect on [UK] retail sales growth" and ecommerce transactions "showing similar growth rates to those before the referendum." Markets in Europe since the June 23rd Brexit vote: UK's FTSE100 UP +6.19%; Germany's DAX DOWN -1.07%, France's CAC40 DOWN -1.90%, as of Friday, July 22.

•  FEATURE: IANA Transition & ICANN Corruption, Capture, and Control
"Any waiver of registry operator fees in the arbitrary and sole discretion of ICANN management and staff is an open invitation to graft, corruption, and kick-back schemes reminiscent of the FIFA scandals. ICANN lacks a comprehensive and effective conflicts of interest and code of conduct applicable to every ICANN employee, and ICANN may have already engaged in questionable, if not illegal, behavior."--John Poole, Editor, Domain Mondo, Comments to ICANN Proposed Amendments to Base New gTLD RA (emphasis added).
John C. Coffee Jr., Adolf A. Berle Professor of Law at Columbia University Law School and Director of its Center on Corporate Governance, has written an interesting article, Adventures in Corporate Governance: Guarding the Internet | NewYorkLawJournal.com, July 20, 2016, about his serving as an advisor for the last two years to the U.S. Department of Commerce (NTIA) in connection with the "Obama Administration's efforts to 'privatize' the Internet Corporation for Assigned Names and Numbers (ICANN)" or what is commonly called the IANA transition. Among his observations:
  • "[W]ho is this "global multistakeholder community"? Ultimately, it is a strange collection of supporting organizations and advisory committees, populated by dreamers, cultists, ideologues, geeks and the Internet's largest commercial users (e.g., Microsoft, Amazon, Apple, etc.)."
  • "The CCWG [Accountability] proposals largely dispensed with the business judgment rule and made everything appealable to a broad community of stakeholders. The key CCWG "reform" was the creation of a new body, literally called the "Empowered Community" ... Nothing in this structure strikes this author as optimal, and the efficiency loss for ICANN could be considerable."
  • "Capture Through Corruption. If one wanted to capture ICANN on a single issue, or a group of interrelated issues, the most practical tactic might be bribery." [See also #4 Other Reading Recommendations (further below)--"spreading the cash" a/k/a "soft lobbying."]
  • "Ironically, the one prospect that does seem unlikely under this new structure is ICANN's capture by a single government or a narrow interest group ... ICANN has been given so many checks and balances that it is difficult to imagine a hostile takeover. Nonetheless, symptomatic of the dysfunction in our political process, it is this least likely scenario that Congress may choose to debate."
  • "If the question were whether ICANN's proposed multistakeholder governance structure is the best way to run a railroad, I would have grave doubts ... but it will be a fascinating test of "bottoms up" corporate governance. More importantly, [U.S. Department of] Commerce was probably correct in its key judgment: The proposed structure seems superior to U.N. control—and real hardball politics." (emphasis added)

•  Unwanted & Unneeded New gTLDsWorldTrademarkReview.com on ICANN's Phase 2 Global Consumer Research Survey conducted by Nielsen"... the real measure of how relevant new gTLDs are is surely the level to which people actually use them, rather than simply the level to which they are aware of their existence. And on this point, the findings look less positive for ICANN ... In total, reported visits to new gTLDs have decreased year-on-year ... people are visiting new gTLDs less than they were one year ago ...  By contrast, visits to legacy TLDs  [e.g., .COM, .NET, .ORG] were up across the board ..." 

•  Reconsideration Request to delay .WEB auction DENIED (pdf): Requesters, Ruby Glen, LLC and Radix FZC, submitted a reconsideration request seeking urgent reconsideration of ICANN’s decision not to delay the .WEB/.WEBS auction (scheduled for 27 July 2016) following ICANN’s investigation into alleged material changes in Nu Dot Co LLC’s (Nu Dot’s) application for .WEB. More information: Auction for 1 Contention Set [.WEB/.WEBS] Slated for 27 July 2016 | ICANN.org. UPDATE: see New gTLD WEB, Ruby Glen, LLC v. ICANN, Complaint & TRO Request | DomainMondo.com and New gTLD dot WEB 'Last Resort' ICANN Auction: and the Winner Is? | DomainMondo.com.

•  Dot AFRICA: ICANN and ZACR Appeals Consolidated "the parties’ joint motion (Docket Entry No. 5) to consolidate Nos.16-55693 and 16-55894 and to amend the briefing schedule is granted. The opening brief in No. 16-55693 has been filed. The opening brief in No. 16-55694 is due July 22, 2016. The answering brief is due August 19, 2016. The optional reply brief is due September 9, 2016."

•  Comments close this coming week at ICANN on:

•  ICANN Call for Expressions of Interest to Host ICANN Meetings in 2019 and 2020 | ICANN.org"ICANN is actively seeking hosts for its public meetings to be held in 2019 and 2020 in Europe, Africa, Asia/Australia/Pacific, North America and Latin America/Caribbean. Those in the geographic regions are invited to submit expressions of interest for specific locations to hold the events." More information at the link above.

•  Q2 2016 Earnings Releases & Webcasts with coverage on Domain Mondo this coming week:
  • Apple AAPL July 26
  • Twitter TWTR July 26
  • Facebook FB July 27
  • Alphabet GOOG July 28
  • Amazon AMZN July 28
  • Neustar NSR July 28
  • Verisign VRSN July 28

•  Five most popular posts (# of pageviews Sun-Sat) this week on DomainMondo.com:
  1. News Review [17Jul]: ICANN Secretly Colludes With New gTLD Registry Operators
  2. YAHOO $YHOO Q2 2016 Earnings, Webcast Monday July 18, 5:30pm ET
  3. Burberry: British Luxury Fashion Retail, $BRBY UP 16% Since Brexit (video)
  4. FTSE100 Hits New High on SoftBank & UK’s ARM Holdings $32 Billion Deal
  5. LIVE Video: Tech Entrepreneur & VC Peter Thiel Speaks at #RNCinCLE
Most Domain Mondo readers this past week (top 3 countries): U.S., Russia, Germany

 Other Reading Recommendations:
  1. EFF Files Lawsuit Challenging DMCA's Restrictions Security Researchers | Threatpost.com:“... Section 2101 doesn’t make us safer. It impinges on researchers’ First Amendment rights to share vital research that could save lives and keep us safe in a world increasingly reliant on computer code ... If future generations are going to be able to understand and control their own machines, and to participate fully in making rather than simply consuming culture, Section 1201 has to go.”
  2. Attackers launch multi-vector DDoS attacks that use DNSSEC amplification | CIO.com: "The domain owners themselves are not at fault and don't feel the effects of these attacks ... Attackers abuse open resolvers by sending a barrage of spoofed DNS queries where the IP source is set to be the MIT target IP. Most of these servers will cache the initial response so multiple queries are not made to the authoritative name servers."
  3. Roger Ailes Resigns as Chairman and CEO of Fox News Channel and Fox Business Network, and Chairman Fox Television Stations | 21cf.com: "... It is always difficult to create a channel or a publication from the ground up and against seemingly entrenched monopolies.  To lead a flourishing news channel, and to build Fox Business, Roger has defied the odds. His grasp of policy and his ability to make profoundly important issues accessible to a broader audience stand in stark contrast to the self-serving elitism that characterizes far too much of the media. I am personally committed to ensuring that Fox News remains a distinctive, powerful voice ..."--Rupert Murdoch
  4. Google, Trying to Endear Itself to Europe, Spreads Cash Around | NYTimes.com: "... Google has been staging a full-court press in Europe to finance everything from start-up offices to YouTube-sponsored music concerts, trying to remake its image in the region as it battles a mounting list of [EU antitrust claims] regulatory woes. Those efforts represent a campaign of “soft lobbying” where instead of, or alongside, paying registered lobbyists to advocate its case in the corridors of power, a company looks to change the minds of the public at large ... the company has ramped up its campaign in recent years, earmarking about $450 million from 2015 to 2017 ..."
  5. Verizon is close to buying Yahoo for $5 billion as a ‘safe bet’ | Recode.net: "The plan is to combine it with AOL" but investors should read SeekingAlpha.com"The telecom sector remains a defensive industry with muted growth prospects. The largest players in the industry, T [AT&T]and VZ [Verizon], return a significant portion of their free cash flow to investors via a quarterly dividend. The industry requires a consistent outlay of Capex to upgrade and maintain their networks often requiring copious amounts of debt."
Keep up with the Democratic Convention in Philadelphia this coming week, on Domain Mondo's election page.

-- John Poole, Editor, Domain Mondo

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