News Review: ICANN, IANA Transition, Capitol Hill Reality Check

Domain Mondo's review of the past week and look ahead [pdf here]:

In the IANA stewardship transition:

• May 16, 2016: "... NTIA received the stewardship transition proposal on March 10 and has set a target of 90 days to complete its review ... The ICANN Board is expected to vote on whether these draft Bylaws adequately represent the recommendations of the proposal on or around May 27. In addition, ICANN has stated that in the event of NTIA’s approval of the stewardship transition proposal, ICANN would produce an implementation report by August 15, certifying that it is prepared for contract expiry on September 30, 2016. NTIA maintains the flexibility to extend its contract with ICANN if necessary. NTIA recognizes that Congress has a strong interest in this proposal, and we expect Congress to closely monitor and review the proposal, as well as our evaluation of the plan. NTIA will continue to provide timely updates to Congress in addition to quarterly written reports ..." - Sixth Quarterly Report on the IANA Transition (pdf) from NTIA (emphasis added).

• May 18, 2016: "U.S. Senator John Thune (R-S.D.), Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, has announced a full committee hearing titled “Examining the Multistakeholder Plan for Transitioning the Internet Assigned Number Authority” on Tuesday, May 24, 2016, at 10:00 a.m. ET in the Senate Russell Building 253, Washington, D.C." Read more here.

Section of the U.S. House Appropriations bill barring use of funds for IANA transition (pdf) (highlighting added)

• May 18, 2016:  "A House Appropriations subcommittee on Wednesday advanced a funding bill for Commerce, Justice and Science that included a provision barring the government from using funds to make the [IANA] transition through 2017 [see graphic above] ... On the other side of the Capitol, Sen. Marco Rubio (R-FL) appears to be circulating a letter to colleagues pressing the head of the Commerce Department's National Telecommunications and Information Association (NTIA) to delay the handoff amid concerns." --TheHill.com (emphasis added)

• May 19, 2016: "... we respectfully request that you extend NTIA's IANA functions contract with ICANN." Letter to U.S. Commerce Secretary Penny Pritzker and NTIA's Larry Strickling from U.S. Senators Cruz, Lankford and Lee (read more here) (emphasis added).

• May 19, 2016: Former ICANN staff member, Kieren McCarthy, writing in theregister.co.uk:

"... the concern over whether the reforms to ICANN will prove sufficient are all too real. ICANN has been through no less than eight reviews into its lack of accountability and transparency in the past decade ... in every case, the same corporate culture has managed to re-impose itself and undermine the very changes that were designed to cause a turnaround in its behavior. If Marco Rubio is asking for a delay until this latest set of reforms can be seen to be working, he's not acting irrationally, he's simply noting history."

* * * * * * *

ICANN's Interlocutory Appeal of .AFRICA Preliminary Injunction

•  New gTLD .AFRICA: In the DotConnectAfrica Trust case (see above graphic), ICANN has filed an unopposed motion (pdf) for extension of time through June 29, 2016, to file its appellant's brief in view of the June 6th hearing in U.S. District Court on co-defendant ZACR's "motion to reconsider the preliminary injunction order from which this appeal is taken." More on .AFRICA.

•  More from ICANN FY15 Form 990: In FY15 (ending June 30, 2015) ICANN contributed over $200,000 to the World Economic Forum (WEF).  ICANN's President & CEO at that time, Fadi Chehade, is now senior advisor to the Executive Chairman of WEF (hat tip: @EyeOnICANN).

•  Comments close this coming week at ICANN on only one issue: Proposal for Khmer Script Root Zone‬ Label Generation Rules (LGR) - comments close 28 May 2016 23:59 UTC.

•  ICANN finally "Enhancing Openness and Transparency – Board Deliberations" and it only took 18 years! See also The ICANN Chairman's Blog: An Update From the May 2016 Board Workshop in Amsterdam. It's a start but every ICANN Board meeting should be open to observers via Adobe Connect (except executive sessions to discuss confidential matters such as personnel, litigation, etc.).

•  More of ICANN's 'shady' new gTLDs anyone?--Paul Vixie on the glibc bug, Internet crime and more | techtarget.com: "... [the internet] has, unfortunately, also put the world's wealth more at risk to criminals than it has ever been in the history of humanity." See also SEC warns cybersecurity is biggest threat to financial system | theregister.co.uk and The Internet Is Broken - MIT Technology Review | technologyreview.com.

•  A Culture of Hype and Spin - Silicon Valley is becoming like ICANN: "I get lied to by entrepreneurs every day," says Bob Kocher, a venture capitalist who specializes in health IT ... "If you sell me a dream, you’ll have to be stuck with this upset crazy person who doesn’t trust you for a decade," says Kocher. But far more concerning is when startups begin to believe their own hype and start making short-cuts to ramp up faster than the market typically allows ... We’re likely to see many more examples of companies like Theranos and Zenefits unless the startup world makes a big shift to a whole lot more honesty, transparency ...  Inside Silicon Valley's Culture of Spin | Fast Company.com.

•  This week in tech: 

• The BIG news out of Google I/O 2016: Google Home. Remember when Google used to copy Apple? Well, "Amazon is the new Apple" --My Echo | Lefsetz.com. "Google Home not avail until later this yr. Meanwhile, Echo continues to add features & connect w/products. Is Amazon's head start too big?" asks @KatieBoehret; The BEST news was Google adding Android apps and Play Store to Chrome OS (Chromebooks).
• FinTech Disaster--in spite of all the right "connections" and "funding"-- How Wall Street Led LendingClub.com Into Crisis | Bloomberg.com: "“Many people expected the wheels to come off at some point,” said Robert Wardrop, executive director of the Cambridge Center for Alternative Finance, which studies funding systems that don’t depend on regulated banks and capital markets. “The big surprise, clearly, was that this was an event that happened at a top performer.”"

•  Q1 2016 Earnings Season postscript: "... In Q1, according to FactSet.com, the companies in the DJIA that “adjusted” their earnings inflated them on average by 28.9% over their earnings under GAAP ... we doubt that the media and Wall Street analysts will “self-correct.” They’re the main perpetrators in the propagation of these fairy tales. If they’d wanted to, they could have stopped long ago featuring these fairy tales in their headlines and reports, but no way, that might have tripped up stock prices ..." - WolfStreet.com

•  Five most popular posts (# of pageviews Sun-Sat) this week on DomainMondo.com:

1. Domain Names, New gTLDs, DNS Abuse, ICANN as Chief Abuser Why New gTLDs + IANA Transition May Be The Undoing of ICANN
2. News Review [May 15, 2016]: IANA, ICANN, New gTLDs .AFRICA, .AMAZON, .BLOG
3. IANA & ICANN: Cruz, Lankford & Lee Letter to Pritzker & Strickling
4. Will ICANN File An Interlocutory Appeal in DCA Trust gTLD AFRICA Case? | UPDATE: ICANN filed an interlocutory appeal on May 11, 2016
5. Buffett Invests $1B in $AAPL, Apple Invests $1B in China's Didi Chuxing 

• Other Reading Recommendations (some with a tease of content or my commentary):

1. Now Available Globally: Fast.com, a New Tool to Check Your Internet Speed | netflix.com: go to fast.com on any device and check your internet connection speed wherever you are.
2. GoDaddy to buy FreedomVoice for up to $47M | SeekingAlpha.com (Tucows & Ting)
3. Yahoo's Fire Sale - Deal Could Still Derail | SeekingAlpha.com: "The core business is failing, the company's stake in Alibaba can be questioned ... and like everything else under her regime, we don't expect a shareholder friendly deal to get done with [Marissa] Mayer involved."
4. Now you can embed Reddit posts on other websites | TechCrunch.com: "If you’re an online writer or publisher, that means you can start including live Reddit content in your stories. If you’re a reader, that means you might start to see more Reddit posts on other sites, the same way you can see embedded tweets and YouTube videos."
5. Stop Faxing | JDSupra.com: "... In addition to the many reasons faxes are antiquated and annoying, the SEC has just provided us another reason to avoid them: they encourage violations of Reg. S-P ..."
6. Do You Love Music? Silicon Valley Doesn’t | NYTimes.com: "YouTube, which is owned by Google, is now the world’s dominant audio streaming platform, dwarfing Spotify and virtually every other service." Actually, the best music service right now, based solely on my own personal experience, is Amazon.com Prime Music.
7. Russia Frets about Risk of “Recession” in China | WolfStreet.com: "... a slowdown in China from super-hot growth to just-hot growth, which is the official story coming out of China ... risk of an actual contraction, the risk of a recession, which would slam China’s demand for oil and other commodities. And that sort of economic development would not only send shock waves through Russia but the global economy ... There are already repercussions ... Money from Chinese investors “has dried up,” a real-estate broker in San Francisco said ..."
8. Election 2016 UPDATE: Trump Now Leads Clinton by 5 - RasmussenReports.com: "Trump earns 42% support to Clinton’s 37% when 'Likely U.S. Voters' are asked whom they would vote for if the presidential election were held today. But Rasmussen Reports’ latest national telephone survey finds that 13% prefer some other candidate, while seven percent (7%) are undecided." Gender gap? "Clinton appears to have a bigger problem with men than Trump does with women. Trump leads by 22 points among men, compared to Clinton’s 11-point advantage among women." Watch out for Bernie: see How Bernie Sanders WILL Win the Democratic Nomination and Sanders delegates brace for Philadelphia convention fight (Hat tip: @UnderMyPalm | Election2016).

Have a great week!

-- John Poole, Editor, Domain Mondo

Follow @DomainMondo

DISCLAIMER

News Review: IANA, ICANN, New gTLDs .AFRICA, .AMAZON, .BLOG

Domain Mondo's review of the past week and look ahead [pdf here]:

•  POLITICO.com has reported a Senate Commerce Committee hearing on "the U.S. handover of oversight of some Internet operations — the so-called IANA transition" is now tentatively scheduled for Tuesday, May 24th, and NTIA, "the branch of the Commerce Department tasked with making a final decision on approving the handover, has said it’s aiming to give a thumbs up or down by the second week of June." 

•  Comments close this coming week at ICANN on two issues:

1. Draft Report: New gTLD Program Safeguards to Mitigate DNS Abuse: comments close 20 May 2016 at 23:59 UTC (extended from May 13, 2016). Read all comments here. My comment of May 13th, is also posted on Domain Mondo: Domain Names, New gTLDs, DNS Abuse, ICANN as Chief Abuser: "Why New gTLDs + IANA Transition May Be The Undoing of ICANN"

2. Draft of New ICANN Bylaws: comments close 21 May 2016 23:59 UTC. "Adoption of the new Bylaws by the ICANN Board is anticipated for on or around 27 May 2016. Once new ICANN Bylaws have been adopted, ICANN will notify NTIA so they can complete their anticipated 90-day review of the IANA Stewardship Transition Proposal"--ICANN. Review all comments submitted here. Note that three groups involved in the IANA transition--the ICG, the CCWG-Accountability, and IAB (Internet Architecture Board)--have already submitted comments, essentially telling the drafters to remove provisions in the draft inconsistent with the IANA transition plans. Part of the problem is the drafting bylaws process, as explained in the CCWG-Accountability comment: "Given the necessary complexity of the Draft Bylaws and the short timeframes we are working under, the CCWG participants were unable to conduct a thorough review prior to publication for public consultation." (emphasis added)

• In the IANA stewardship transition at ICANN, a lot of implementation work remains yet to be completed--see ICANN's own update here--below is ICANN's graphic of progress thus far:

ICANN: IANA Stewardship Transition Planning Update (Vol.2), 10 May 2016

A good example of all the details involved is IANA CWG Meeting #79 (12 May 2016) and the slide presentation (pdf) from that meeting. 

•  ICANN budget: ICANN held community calls on the Draft ICANN FY17 Operating Plan and Budget. Some interesting comments were submitted by various stakeholders, including:

"Similar to what we communicated in our comments a year ago for the Draft FY16 Operating Plan &Budget, we again are concerned that planned expenses are growing too fast and faster than planned revenue. In particular, revenue is forecasted to grow by $11.6M (9.6%) while expenses are projected to grow by $17.8M (16.3%). We appreciate the fact that planned expenses balance planned revenue but we would suggest that continuing to simply spend all of increased revenue is not the only option; because gTLD registries, registrars and registrants fund well over 95% of ICANN’s revenue, reducing gTLD fees should be considered as well."--gTLD Registries Stakeholder Group (RySG) (emphasis added)

•  .AFRICA UPDATE: ICANN has appealed the U.S. District Court's Order granting a Preliminary Injunction in the DCA (DotConnectAfrica) Trust vs ICANN and ZACR litigation over new gTLD .AFRICA. In the District Court, ICANN has allowed ZACR to take the lead, and ZACR has filed a Motion to Reconsider and Vacate the Preliminary Injunction Order (which DCA Trust won), with a hearing date of June 6, 2016, in the U.S. District Court at Los Angeles. ICANN has joined (pdf) in ZACR's motion. Copies of the pleadings and other documents may be reviewed on the ICANN website here. UPDATE June 16, 2016: New gTLD AFRICA Litigation: Defendant ZACR Dismissed as a Party.

•  .AMAZON: I recently read ICANN's 25-page Response (pdf) to the IRP filed by Amazon (Amazon EU S.à.r.l.), concerning Amazon's 3 new gTLD applications: .AMAZON and its equivalent in Chinese and Japanese characters. The ICANN response together with the witness statement of Akram Atallah (pdf) and Exhibits R-1 to R-38 (pdf), provide a good history of the new gTLDs program, the particulars of Amazon's applications, and the powers granted to the GAC (Governmental Advisory Committee) in the new gTLDs program Guidebook, which itself went through a long development process at ICANN:

Source: ICANN witness statement of Akram Atallah, page 4. filed in Amazon IRP 

Money quote from ICANN's response (pp. 2-3):

While it is understandable that Amazon, faced with “injur[y to its] business model,” continues to pursue its Applications through the Independent Review Process, Amazon’s arguments should be rejected because:

a. In highlighting the fact that its Applications passed the reviews for geographic names and community objections, Amazon wrongly deprecates the GAC’s separate role in raising governmental concerns about applications. Those concerns led to GAC consensus advice against the Applications, which the ICANN Board evaluated and ultimately accepted. This meant that Amazon’s Applications could not proceed, even though they passed other parts of the evaluation.

b. Despite Amazon’s claims that ICANN bowed to “political pressure” from Brazil and Peru and “abdicated its independent decision-making role,” the record shows that ICANN’s NGPC [New gTLD Program Committee] independently investigated the circumstances, considered extensive arguments made by Amazon, and even commissioned an independent legal expert to advise whether denial of Amazon’s Applications was inconsistent with international law – the primary legal contention Amazon was then making. The NGPC was careful, thorough, neutral, and objective in its decision to accept the GAC consensus advice. (emphasis added) 

Of course, at that same time, ICANN was also deeply involved with Brazil in the NETmundial meeting (conflicts of interest are systemic within ICANN). The NGPC decision and further background information on .AMAZON may be reviewed here. "Governmental concerns" obviously won the day at ICANN on the Amazon new gTLDs. It is conceivable this IRP could lead to more litigation (see .AFRICA above) in the U.S. judicial system, since both Amazon and ICANN have "deep pockets," and ICANN is on shaky ground in blocking Amazon from using its own trademark as a new gTLD:

"[ICANN has] continued to deny Amazon the dot Amazon top level domain, claiming it is somehow a geographical indicator. Now that’s just not true, it’s not a geographic indication, and there is no law that I’m aware of in my 22 years of practice that supports that conclusion." --J Scott Evans, trademark attorney and former INTA President

•  .BLOG: It was reported this week that Automattic (domain: automattic.com), owner of Wordpress and WooCommerce, "is actively asking businesses having the word ‘woo’ in their domain name to change the domain name" according to WPMayor.com.  Wonder if Automattic will now try the same tactic with the word 'blog,' which is also their new gTLD (pdf)? Read more: The creator of WordPress on why .blog was worth $19 million | VentureBeat.com. $19 million? It was originally reported that the sales price was $30 million. But that must have been just more new gTLDs hype. In any event, it will be interesting to see what happens to .BLOG. It has the right operator, is only 4 characters, and is a recognizable term and category. Negatives are that the word 'blog' is in decline, as is 'web'--so sayeth Google--

Google Trends - Web Search interest: com, web, blog, net, app - Worldwide, 2004 - present

•  ICANN FY15 Form 990 Announcement May 13, 2016: "ICANN's FY15 Form 990 [PDF, 5.51 MB], as well as the restatements for FY14 Form 990 [PDF, 5.60 MB] and FY13 Form 990 [PDF, 5.06 MB], are now posted and are available to the community." Note FY15 Lobbying expenditures: "The organization [ICANN] utilized the services of a staff registered lobbyist and three government affairs firms during the year ended June 30, 2015, for a cost of $620,997."

•  Goodbye: ICANN Announces Senior Leader Transitions: "The Internet Corporation for Assigned Names and Numbers (ICANN) today announced its Chief Contract Compliance Officer, Allen R. Grogan, and Nora Abusitta, Senior Vice President of Development and Public Responsibility Programs (DPRD), have notified the organization of their intent to leave ICANN later this year. Grogan will transition to a part-time role beginning 1 August 2016 and continue to oversee Contractual Compliance and Consumer Safeguards until his departure at the end of December 2016. Abusitta will remain in her current capacity until 1 June 2016, followed by a short part-time engagement period ..."  As Chief Contract Compliance Officer, Grogan has been criticized by ICANN stakeholders, with one stating, "The Compliance department of ICANN is an unmitigated disaster when it comes to earning the consumer trust." Grogan was reportedly one of several cronies ex-CEO Fadi Chehade hired during Chehade's short tenure (3½ years) at ICANN. The global internet community can only hope that all of Chehade's cronies at ICANN follow Grogan's lead out the door.

•  This week in tech:
1. Google I/O 2016, May 18-20, in Mountain View, California. Keynote speaker: Sundar Pichai, Google CEO. What to look for: Google IO: Positioning Android To Disrupt The PC Industry | Seeking Alpha.com: "This year's Google IO developer conference ... could be a watershed event for Android. I expect it to provide confirmation of Google's intentions for Android as a converged mobile personal computing platform that will disrupt the traditional PC platforms of Microsoft and Apple ..." See also: What to Expect From Google I/O 2016 | Gizmodo.com.
2. The Best Thing That Could Happen to Yahoo: Reuters and Recode have reported Warren Buffett has offered a consortium led by Quicken Loans founder Dan Gilbert, financing in the form of a preferred instrument, similar to those he did with Goldman Sachs and General Electric, to buy Yahoo assets. Read more: Top ex-Yahoos are advising a Buffett-financed group in a bid for the company | Recode.net.

•  Q1 2016 Earnings Season for stocks covered on Domain Mondo, has now ended. The "Q1 2016 Earnings Season Scorecard" will be an upcoming post this week.

•  Five most popular posts (# of pageviews Sun-Sat) this week on DomainMondo.com:

1. News Review [May 8, 2016]: ICANN, IANA, AFRICA, WSIS, XYZ, Chinese Speculators
2. Craig Wright, Creator of Bitcoin? Bitcoin Mystery Explained (video)
3. Daily Fantasy Sports, Online Gambling, US Congressional Hearing Video
4. Is HP a Dinosaur? This Is What the Future Looks Like for HP Inc. (videos)
5. Domain Names, New gTLDs, DNS Abuse, ICANN as Chief Abuser

Honorable mention: World Press Freedom Index, Release of Panama Papers Database

• Other Reading Recommendations, some with a tease of content or my commentary:

1. Outside ICANN's Mission & Scope? Berkeley names iCANN as next cannabis dispensary | Berkeleyside.com. 
2. Facebook Likes Censorship: Former Facebook Workers: We Routinely Suppressed Conservative News | gizmodo.com: "In other words, Facebook’s news section operates like a traditional newsroom, reflecting the biases of its workers and the institutional imperatives of the corporation." See also: Senate GOP Launches Inquiry Into Facebook’s News Curation | gizmodo.com and Leaked documents show human editors shape Facebook’s trending news | TheHill.com.
3. Amazon Video Direct Takes On YouTube - Variety.com: With the launch of Amazon Video Direct (videodirect.amazon.com), open to any video creator, the e-commerce giant will compete head-to-head with Google’s YouTube.com for video-ad dollars and views as well as other big Internet video distributors like Facebook.com and Vimeo.com.
4. Trend: iPhone Sales Are Down ... Flipping for 'Dumb' Phones.| NBCnews.com: America bought 24 million "dumb" phones last year, an increase of 1.7 million from 2014, according to a recent study by research firm IDC ... Rihanna, Scarlett Johansson, and Iggy Pop have all been spotted clutching clamshells ... It's much easier to talk on, it holds a charge for days, and costs a fraction of what you'd pay for a smartphone. There's no need to worry about hacking ... "People are tired of having the same smartphone as everyone else," said Maxime Chanson of Lekki.fr a website that sells vintage mobile phones to a high-end clientele. "Some people have had enough of the ultra connectivity of the 21st century and are looking for a phone that gives them some space for their private life, without being constantly interrupted."
5. If you think "professionals" or "experts," or even you, can consistently beat the markets, read this: Defeated managers, in assets globally | The Big Picture / ritholtz.com.
6. Prepare for the worst: The Coming War of Central Banks | WashingtonsBlog.com: "Nations such as China are boxed into a lose-lose choice ... The Fed is boxed in, too: if the Fed can’t raise rates after seven years of “growth,” then its credibility suffers. If it raises rates, that accelerates the capital flow into USD and the U.S., pushing the dollar higher, which then triggers mayhem in China, emerging markets, commodity markets ... "
7. IoT anyone? France’s SigFox will expand its dedicated IoT network to 100 U.S. cities | TechCrunch.com: "The U.S. is a huge growth market for Internet of Things connectivity." See also: Salesforce.com to build IoT cloud on Amazon Web Services | ZDNet.com
8. Snowden's Legacy: Twitter Bars Intelligence Agencies From Using Analytics Service | WSJ.com: "Social media firm cuts access to Dataminr, a service used to identify unfolding terror attacks, political unrest ... the latest example of tension between Silicon Valley and the federal government over terrorism and privacy."
9. Google - FTC Antitrust: Sources: Feds taking second look at Google search | POLITICO.com. See also Android legal troubles hit Google | SeekingAlpha.com.
10. Election 2016 Update: Trump Is A Metal Band | Lefsetz.com May 9, 2016: "... That’s what Donald Trump is, a disruptor. As is Bernie Sanders ... To see the press and the Congress and everybody who paid their dues under the old paradigm freak is incredibly satisfying ... Trump is more real than Hillary Clinton ..." and Bernie Wins Again! (West Virginia)| Lefsetz.com: "... this looks very bad for Hillary Clinton. And if you think attacking the Donald will win you the election, you’ve got no understanding of a populace scorned ..." and DoubleLine Capital CEO (a/k/a the "Bond King") Jeff Gundlach Bashes Hillary Clinton | ZeroHedge.com: "Donald Trump will win ... Trump has been underestimated for months, but he is the better campaigner ..." "People are going to start putting greater focus on Hillary (Clinton). Voters are going to say, 'No. I don't want this,'" he told Reuters. "Hillary is going to evolve into an unacceptable choice. If she is such a great candidate, how come (Bernie Sanders) is beating her?"

Have a great week!

-- John Poole, Editor, Domain Mondo

Follow @DomainMondo

DISCLAIMER

ICANN, IANA, CCWG-Accountability Update post-Marrakech ICANN55

[CCWG-ACCT] CCWG Update post-Marrakech (source: CCWG-Accountability public mail list) (emphasis and some links added):

"To: Accountability Cross Community - Going Forward
Although the CCWG has completed an important part of our work, we are far from done, and there are a number of projects we must still complete. These projects include:

• Drafting of Bylaws to implement our Work Stream 1 (WS1) recommendations
• Completing the work on IRP that goes beyond the Bylaws
• Finalizing the budget process in coordination with the CWG-Stewardship
• Undertaking Work Stream 2 (WS2)

"Later this week, the co-Chairs will be sending a note to the Chartering Organizations (COs) to explain our plan for completing the CCWG’s remaining WS1 projects and that we assume that CO members will remain in place unless we are advised otherwise. This will be a follow-up to the communication sent on 6 March 2016.

"You will also see a call for WS2 volunteers on the ICANN website in the next few days. In accordance with ICANN’s general outreach practices, the announcement will go out to all users subscribed to ICANN news alerts, and shared amongst their regional stakeholder engagement teams, mailing lists and social media platforms.

"We ask that you also share this call for volunteers widely to ensure that all interested parties, including those outside of the ICANN ecosystem, are aware that they are welcome to participate in projects of WS2. It is important for our group to continue to strive for maximized diversity of our participants going forward.

"Bylaws Drafting
The immediate focus of our efforts is drafting the necessary Bylaws based on our WS1 recommendations. As discussed during our meeting on 10 March at ICANN55 in Marrakech, there is a critical path for the Bylaws drafting. Along with the CWG-Stewardship co-Chairs, we have instructed our legal teams to work with ICANN to draft the Bylaws. The legal teams will meet in Los Angeles on Wednesday, Thursday, and Friday of this week to work through and refine language for the draft Bylaws. Our CCWG Rapporteur, Becky Burr, will attend the meeting as an observer and will send through written updates to the CCWG mailing list. Chris Disspain will also attend as an observer from the ICANN Board, and Bernard Turcotte will observe in his support role to the CCWG-Accountability.

"It is expected that the lawyers will come to an agreement by the end of this meeting and that a final draft of the proposed revisions to the Bylaws would be available for CCWG review by Friday 2 April 2016 at the latest.

"It is important to remember that the overall transition schedule depends on completing this work. In order for the transition to take place by the end of the current contract between NTIA and ICANN on 30 September 2016:

• ICANN must publish the Bylaws for a 30-day public comment period beginning on 20 April.
• This timeline would allow the Board to approve the changes to the Bylaws on 27 May.
• This means that the CCWG will be required to complete its review of the draft Bylaws by Wednesday, 13 April.

"As agreed upon in Marrakech, our objective is to provide the CCWG with as much time as possible to review these draft Bylaws to confirm that the proposals are adequately reflected, with the minimum time being 7 full calendar days.

"To facilitate the CCWG’s review, we will be organizing two meetings on: 5 April from 19:00-21:00 UTC, and 7 April from 12:00-14:00 UTC, where the legal teams can answer any questions we have with respect to the draft Bylaws. Prior to submission to the CCWG, the external counsel to the CCWG will be asked to confirm that the Bylaws are an appropriate reflection of the CCWG’s proposal.

"We do not anticipate any plenary CCWG calls before the Bylaw review calls on 5 and 7 April. The IRP subgroup may have a meeting next week to discuss the IRP section of the Bylaws, but we leave this decision to Becky who is leading the effort on developing further IRP implementation guidance.

"Implementation and WS2
Once the Bylaws work is complete, we will turn our focus to our inventory of WS2 items. However, this does not prevent anyone in the group from launching into discussions on the mailing list and self-organizing around the topics.

"Regarding mailing lists, we have decided to keep the conversation on the main CCWG list until there is enough interest and discussion to launch a separate sub-group list. This way, we can manage the prioritization and sequencing of our work based on the group’s interest. To help us make a determination on when to launch a separate mailing list, it would be useful for the discussion on the main CCWG mailing list to be around scope, initial research, work plan, etc. It should be noted that the Human Rights effort already has a mailing list (former “WP4” group), and anyone interested in joining that mailing list may contact acct-staff.
Thank you,
Mathieu, Leon, Thomas,
Co-Chairs, CCWG-Accountability"

See also: News Review (March 20): ICANN, IANA, NTIA, Congress, the American People | DomainMondo.com

Note: CCWG-Accountability meetings schedule here which are online via Adobe Connect (open to silent "observers") icann.adobeconnect.com/accountability/.


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DISCLAIMER

ICANN55: GAC Letter on ICANN Accountability Final Proposal

The ICANN Governmental Advisory Committee (GAC) has responded to the CCWG's Supplemental Final Proposal (part of the IANA stewardship transition plan) which is scheduled to be approved and transmitted by the ICANN Board of Directors on Thursday, March 10, 2016, to NTIA: 

"... The GAC has considered the CCWG's proposal and supports Recommendations 1 to 10 and 12. However, there is no consensus on Recommendation 11 and the “carve-out” provision contained in Recommendations 1 and 2. As regards Recommendations 1 and 2, the GAC expresses its willingness to take part in the envisioned empowered community mechanism as a decisional participant, under conditions to be determined internally ... the GAC has no objection to the transmission of the proposal to the ICANN Board."  

Complete GAC letter embedded below:

See also on Domain Mondo:

• ICANN Accountability, CCWG F2F Meeting Friday, Agenda, Reading List
• Total ICANN Tab for IANA Stewardship Transition? US$31+ Million!
• News Review: ICANN Accountability ...
• GAC Members Minority Statement on ICANN Accountability WS1 Proposal 
• IANA Stewardship Transition, New ICANN CCWG Accountability Timeline.

Follow @DomainMondo

DISCLAIMER

ICANN a Steward? LOL! This Is How ICANN Wastes Registrants' Money

UPDATE (emphasis added) [CCWG-ACCT] See Photos from Last Night's AFRALO Showcase/Fadi Tribute in #ICANN55:

Dear Eberhard,
Thank you for your question. The Afralo showcase and tribute to Fadi was held on Monday night. The 2 purposes were combined so that they don’t conflict on the schedule and to save logistics and costs. The entire event cost approximately $106,000 to ICANN which was planned for 1200 people. The Afralo showcase (musicians, dancers,…) was paid for by Afralo. In case of interest, ICANN has previously held a community farewell cocktail for exiting CEOs at their last meeting. The cost of this is typically between $50,000 and $60,000. The additional $40,000 we had to pay this time was for the fitted out marquee including AV. This was required on this particular occasion as no other room large enough to accommodate the entire community was available. I hope this is helpful and addresses your question.
Best,
Xavier Calvez
CFO, ICANN

"Thank you very much.
I am shocked at the amount of money ICANN has to waste.
That does put the pressure being applied with regards to funding of WS2
into perspective.
greetings, el"  [Dr Eberhard W Lisse]

[--end of UPDATE--]

From the CCWG-Accountability public email list: [CCWG-ACCT] See Photos from Last Night's AFRALO Showcase/Fadi Tribute in #ICANN55:

"Xavier [Xavier Calvez, ICANN CFO],
I have received the below.
How much did this extravaganza cost ICANN?
greetings, el"
[Dr Eberhard W Lisse - CCWG-Accountability member, representing ccNSO, from the African Region]

"Camels, Drummers And Hundreds of ICANNers: Last Night's AFRALO Showcase And Fadi Tribute Was A Hit!

"Monday's night Tribute to Fadi was a lively affair. Hundreds of ICANN55 participants filled the Orion Tent at the Palmeraie Golf Palace and Resort to enjoy the food, hear traditional Moroccan music and honor Fadi Chehadé's legacy.  Many took to the stage during the evening's festivities including: El Mountassir Billah Azdine, Director General of the National Agency for Regulation of Telecommunications; Xiaodong Lee, CEO & CTO, China Internet Network Information Center; Demi Getschko, Member of the Board, Brazilian Internet Steering Committee; Rinalia Abdul Rahim, ICANN Board Member  and Board Chair Steve Crocker. If you didn't get a chance to take your own camel selfie, you can download last night's photos from ICANN's Flickr account here."--source: ICANN55 newsletter (links added)

The "Fadi" referred to is Fadi Chehade, ICANN's outgoing President & CEO, who gave notice last year that he was quitting ICANN with 2 years left on his contract, and after having served only 2 1/2 years (with a salary+benefits package in the range of $1,000,000+ annually).

Domain Mondo is sure that all domain name registrants worldwide (who fund the bulk of ICANN's wasteful spending), and U.S. Senator Ted Cruz et al, will all be interested to see how ICANN is such a "good steward" of money. Wait until ICANN is no longer subject to U.S. government oversight when the IANA stewardship transition is finished!

Here is an ICANN tweet from last night's "Tribute to Fadi"--

Packed tent at #ICANN55 Fadi Tribute! Happening now at Orion. pic.twitter.com/C7VjWjPEkt

— ICANN (@ICANN) March 7, 2016

Does anyone wonder what would happen if a government official in the U.S. spent taxpayer funds like ICANN officers and directors spend registrants' taxes fees? How about officers and directors of a publicly listed Fortune 500 corporation who engaged in this kind of corporate waste?

It is important to know what YOU ARE NOT ALLOWED to Discuss @ #ICANN55
Never compare #ICANN to BELL CALIFORNIA https://t.co/V7o8JF2khz #OOS

— Techno.CAT.® (@Techno_CAT_R) March 8, 2016

See also on Domain Mondo:

• US Senators Cruz, Lankford, Lee's New Letter to ICANN Chairman re: China
• After Wuzhen, Should ICANN President & CEO Fadi Chehade Be Fired?
• US Congressman Tells ICANN CEO To 'Abandon' IANA Transition
• What Caused ICANN President and CEO Fadi Chehadé To Quit?
• GNSO Calls for Independent Accountability Body to Oversee ICANN
• ICANN Exists for Itself and Insiders, to Exploit Domain Name Registrants
• ICANN Intends to Become Accountable, Too Little Too Late?
• The REAL Domain Hogs: ICANN Officers, Staff, Lavish Pay, Benefits, Accountability Risks Institutionalized

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DISCLAIMER

Total ICANN Tab for IANA Stewardship Transition? US$31+ Million!

Total ICANN Tab for IANA Stewardship Transition (including CCWG-Accountability) per Board Director Cherine Chalaby (see further below): "US$25 million in FY15 and FY16 and a further potential expenditure of US$6-9 million in FY17."

Better hope ICANN is a better steward of the IANA functions than it is of the fees paid by domain name registrants (generally US$.25 per gTLD domain name per year) which provide most of the funding for ICANN, including ICANN's IANA Stewardship Transition--and there isn't even a Registrants Stakeholder Lobby Group in ICANN! (did someone say taxation without representation?)--

From the CCWG-Accountability public mail list (March 1, 2016, emphasis added):

Dear Colleagues,
Please find below an update from the Board Finance Committee on a proposed way forward regarding the management of the [IANA] Transition Project costs. This is a particularly timely contribution to our F2F meeting [Friday, March 4th] in Marrakech. We have specifically invited the Finance Committee members to attend the part of our meeting where we plan to discuss this topic.
Best and safe travels to all,
Mathieu Weill (CCWG Co-Chair)

From Cherine Chalaby [ICANN Board Member] Transition and Accountability Cost Next Step:

Dear CCWG and CWG co-chairs,
Further to our call on 9 February 2016 to discuss the cost of the Transition and Accountability work, I have had follow-up calls with the leaders of the SO/AC Chartering Organisations, and I am pleased to report to you that we have reached an agreement on a way forward.

Historical Perspective
Historically, it has not been not part of the multi-stakeholder model to have any one person or even a small group given the authority to make decisions, including on costs. Furthermore, the SOs/ACs have not been able to obtain information about detailed costs for their work, meetings, staff time, etc. Nevertheless, given the large sums of money involved:

USD 25 millions in FY15 and FY16 and a further potential expenditure of USD 6-9 million in FY17, it would be good practice to produce reliable estimates and to manage costs going forward. This would represent a change of culture for the ICANN community. Therefore, it would be best to adopt a two-step approach in order to get the gradual buy-in of the community. Step 1 entails developing reliable estimates, and Step 2 entails deciding how best to manage cost.

Agreement on Step1 - Developing Reliable Estimates (4-6 weeks)
The leaders of the SO/AC Chartering Organizations agreed that it is imperative to get a good handle and clarity on past and future expenditures. First we must undertake an in-depth analysis of past expenditures in FY15 and FY16 (up to Marrakech) and understand where and how money was spent. From what we will learn, we should be in a position to estimate future expenditures for the remainder of FY16 (from Marrakech to end of Financial Year in June), and for all of FY17. We must also identify potential problem areas and develop ways to address them, one-by-one. With such plans, we can then present to the CCWG and CWG co-chairs what is likely possible and what is likely to be problematic in terms of cost control mechanisms.

We agreed that Step1 should be undertaken, on a pilot basis, by a small dedicated Project Cost Support Team (PCST) and should not last more than 4-6 weeks. The PCST will consist of four members: a project manager, a legal manager, a financial planner and a project administrator. The ICANN CEO will be responsible for selecting these individuals. The desired selection criteria are: competent, respected and trusted by the community, familiarity with ICANN transition and Accountability work and available on a full-time basis for 4-6 weeks. ICANN will pay for the PCST. The leaders of the SO/AC Chartering Organisations as well as the CCWG and CWG co-chairs will be informed of the cost of the PCST.

The PCST is neither a decision making nor a management team. The PCST is a support function to the CCWG and CWG co-chairs. It must therefore coordinate closely with the co-chairs while undertaking Step1.

Given that the Draft FY17 Budget will be posted on 5 March 2016, a placeholder of USD 6-9 millions has been included in the draft budget for Transition and Accountability work in FY17. This figure will be adjusted once the PCST completes Step 1. It is therefore desirable to start Step1 as soon as possible.

Next Call
It was agreed that we should set up a call once Step1 is completed (around mid to end April) to review the findings of the PCST and to agree collectively on how best to manage cost going forward (Step 2).

I sincerely hope that you are supportive of the pilot work we agreed to undertake. Please do not hesitate to ask me any questions.
Best regards,
Cherine

More information (source: ICANN): IANA Stewardship Transition Project Costs


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DISCLAIMER

IANA Transition: Constitutionality, Letter to GAO, CCWG Meeting Sept 29

Screenshot of relevant portion of Verisign web page referenced by Sen. Cruz et al in letter to GAO
(Verisign Inc. is the Internet Root Zone Maintainer pursuant to a contract with US government)

 “Under Article IV, Section 3 of the Constitution, Congress has the exclusive power ‘to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States.’ If the contract governing U.S. oversight of the Internet is indeed government property, the Administration’s intention to cede control to the ‘global stakeholder community’ -- including nations like Iran, Russia and China that do not value free speech and in fact seek to stifle it -- is in violation of the Constitution and should be stopped.” --U.S. Senator Ted Cruz

As announced today via a press release from the office of  U.S. Sen. Ted Cruz (R-Texas), Sen. Cruz, along with Senate Judiciary Committee Chairman Charles Grassley (R-Iowa), House Judiciary Committee Chairman Bob Goodlatte (R-Va.), and Rep. Darrell Issa (R-Calif.), Chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, have sent a letter to the U.S. Government Accountability Office (GAO) requesting an affirmative determination of whether the Obama Administration’s plan to transfer U.S. oversight of the Internet violates the Constitution. The Wall Street Journal columnist, L. Gordon Crovitz, reported on the letter in his Information Age column, “Not Obama’s to Give Away.”

 Sen. Cruz recently filed the DOTCOM Act as an amendment to the highway reauthorization bill the Senate considered in July. Cruz's amendment is identical to the original version of the DOTCOM Act being considered by the Senate with one exception: it would require Congress to have an affirmative up or down vote on the Obama Administration's plan to give away the Internet.

Full text of the Cruz-Grassley-Goodlatte-Issa letter (pdf):

September 22, 2015

Mr. Gene Dodaro
Comptroller General
U.S. Government Accountability Office
441 G Street, N.W.
Washington, DC 20548
Dear Mr. Dodaro:

On March 14, 2014, the National Telecommunications and Information Administration (“NTIA”) announced its intent to relinquish oversight of Internet domain name functions to the “global stakeholder community.” This proposed transition raises questions about NTIA’s authority to transfer possession and control of critical components of the Internet’s infrastructure to a third party.

The Internet as we know it has evolved from a network infrastructure first created by Department of Defense researchers. One key component of that infrastructure is the root zone file, which the federal government currently designates as a “national IT asset.”[1] Creation of the root zone file was funded by the American taxpayer and coordinated by the Department of Defense, and the file has remained under United States control ever since.

Under Article IV, Section 3 of the Constitution, Congress has the exclusive power “to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States.” One question arising from NTIA’s decision to transfer its Internet oversight functions to a third party is whether NTIA may relinquish possession and control of the root zone file—or any other similar component of the Internet that was financed and developed by the United States—without authorization from Congress. This concern was raised in 2000 by the Government Accountability Office (“GAO”), which questioned whether NTIA could relinquish authority over the root zone file and concluded that it was “unclear whether such a transition would involve a transfer of government property to a private entity.”[2] The 2000 GAO report further detailed that the Department of Commerce advised the GAO at the time that “we have not devoted the possibly substantial staff resources that would be necessary to develop a legal opinion as to whether legislation would be necessary” to authorize transfer of the root zone file. Congress should be made aware of the legal status of the root zone file—or any other potential government property—before it makes any final decisions about whether to transfer the government’s Internet oversight functions to a third party.

Some observers and parties involved in the proposed transfer have asserted that the termination of NTIA’s contract with ICANN would not result in the transfer of United States Government property.[3] Others believe that termination of this contract would result in government property being transferred to ICANN and point to a number of factors that would indicate that the root zone file and other contractual deliverables are property of the United States. Supporters of this position point to the fact that the United States acquired title to the root zone file because it was invented pursuant to Department of Defense contracts.[4] In addition, the United States has long claimed ownership or control over the root zone file. For example, President Clinton’s Internet “czar” Ira Magaziner asserted United States ownership of the entire Domain Name System because “[t]he United States paid for the Internet, the Net was created under its auspices, and most importantly everything [researchers] did was pursuant to government contracts.”[5] Additionally the Commerce Department’s contract with ICANN explicitly declares that “[a]ll deliverables provided under this contract,” including the “automated root zone,” are “the property of the U.S. government.”[6] And Verisign and ICANN contracts make clear that changes to the root zone file cannot be made without approval of the Department of Commerce.[7] Congress has also been actively engaged in managing the root zone file. Recently, it enacted the Consolidated and Further Continuing Appropriations Act of 2015, which explicitly prohibited the Commerce Department from using federal funds to relinquish stewardship of the domain name system, “including responsibility with respect to the authoritative root zone file.”[8]

Given this history, we are concerned that NTIA might potentially relinquish ownership of some form of United States property. To inform the Congress so that it may take any necessary and appropriate steps regarding NTIA’s planned transition of the IANA functions, we would like the GAO to conduct a review to address a number of specific questions.

1. Would the termination of the NTIA’s contract with ICANN cause Government property, of any kind, to be transferred to ICANN?

2. Is the authoritative root zone file, or other related or similar materials or information, United States government property?

3. If so, does the NTIA have the authority to transfer the root zone file or, other related materials or information to a non-federal entity?

Please include in this report a description and analysis of the relevant legal authorities and case law dealing with the transfer of United States Government property. We understand that to perform this work, GAO will need to conduct both significant audit work and complex legal analysis.

Please contact Jonathan Nabavi (Chairman Grassley), Sean McLean (Senator Cruz), Vishal Amin (Chairman Goodlatte), and Veronica Wong (Congressman Issa) of our staffs if there are questions regarding this request.

Sincerely,

Charles E. Grassley
Chairman
Senate Committee on the Judiciary

Ted Cruz
United States Senator

Bob Goodlatte
Chairman
House Committee on the Judiciary

Darrell Issa
Member of Congress

[1]See, Verisign Company Information: http://www.verisign.com/en_US/company-information/index.xhtml
[2]U.S. Government Accountability Office., GAO-B-284206, Department of Commerce: Relationship with the Internet Corporation for Assigned Names and Numbers (2000)
[3]Letter from Lawrence Strickling, Assistant Sec’y for Commc’ns and Info., U.S. Dep’t of Commerce, to Representative Sean Duffy & Representative James Sensenbrenner, U.S. House of Representatives (June 11, 2015)
[4]U.S. Congressional Research Service. Internet Governance and the Domain Name System: Issues for Congress (R42351; August 18, 2015), by Lennard G. Kruger
[5]Jack Goldsmith & Tim Wu, Who Controls the Internet?: Illusions of a Borderless World 41 (2006)
[6]Internet Assigned Numbers Authority Functions Contract between U.S. Department of Commerce and Internet Corporation for Assigned Names and Numbers. Contract Number SA1301-12-CN-0035. October 1, 2012.
[7]See, Amendment 11 of the Cooperative Agreement NCR-9218742 between the U.S. Department of Commerce and Verisign, Inc. Also see, Internet Assigned Numbers Authority Functions Contract between U.S. Department of Commerce and Internet Corporation for Assigned Names and Numbers. Contract Number SA1301-12-CN-0035. October 1, 2012.
[8]Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. No 113-235, § 540, 128 Stat. 2130, 2217 (Dec. 16, 2014)
(emphasis added)

********

In a related note, the ICANN's CCWG-Accountability (Cross Community Working Group on Enhancing ICANN's Accountability, WS-1 required by the NTIA as part of the IANA Transition) is holding an online meeting Tuesday, September 29, 2015, with ICANN CEO Fadi Chehade attending:

Tuesday, 29 September from 19:00-21:00 UTC (time converter) 3pm ET (US), proposed agenda:
1. Welcome, Roll Call, SoI
2. Assessment of agreement areas, by Fadi Chehadé
3. Work plan to Dublin
4. Engagement plan with Chartering organisations and Board
5. AOB

Anyone may attend and observe the meeting online--"Adobe Connect Room is open to any and all silent observers"--icann.adobeconnect.com/accountability/

See also on Domain Mondo:

• ICANN CEO Fadi Chehade "Steamrolled" by CCWG-Accountability Co-Chair Sept 27, 2015
• ICANN Board Does NOT Support CCWG Proposed Membership Model Sept 27, 2015
• CCWG-Accountability F2F LA Meeting, Sep 25-26, ICANN Board Sept 25, 2015
• China (CAICT) Objects to ICANN CCWG Accountability 2nd Draft Proposal Sept 24, 2015
• Only 19 of 90 Comments Support ICANN Accountability Proposal Overall Sept 22, 2015 
• ICANN CCWG-Accountability Co-Chair Comments on the Public Comments Sept 15, 2015

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DISCLAIMER

NTIA Concurs With GAO Recommendation on IANA Transition Proposal

Background: In March, 2014, the US government's NTIA (National Telecommunications and Information Administration) announced its intention to transition its "stewardship" over the internet's IANA functions to the global multistakeholder community and asked ICANN, the California non-profit corporation which is the IANA functions operator under contract with US Department Commerce (NTIA), to convene a "stakeholder" process by which a transition plan would be developed and submitted to NTIA for approval. Subsequently, an "enhancing ICANN accountability" process was also initiated and added as a requirement to any transition plan to be implemented, if and when, NTIA approves. The US Congress had asked the US government's GAO (government accounting office) to review aspects of the US government's stewardship of the IANA functions and the transition. Today, September 18, 2015, the GAO made public its Report, GAO-15-642: Published: Aug 19, 2015. In short, 

"GAO recommends that NTIA review relevant frameworks for evaluation and use applicable portions to help evaluate the transition proposal. The Department of Commerce concurred with the recommendation." (emphasis added)

"NTIA plans to evaluate the [IANA Transition] proposal against core goals, such as maintaining the security and stability of the Internet domain name system and the openness of the Internet. However, NTIA has not yet determined how it will evaluate the proposal against the goals. The changes the working groups are considering could create a new organizational environment for the operation of the technical functions, such as new structures, contractual obligations, and governance models for ICANN. Given the extent of these potential changes, GAO identified frameworks for evaluation that could provide tools to guide NTIA's evaluation.

"These frameworks incorporate leading practices to help organizations obtain reasonable assurance that their goals and objectives will be met or that they will meet certain requirements. For example, key components of one framework include the organizational environment, risk assessment, and monitoring.

"In prior work, GAO has considered such frameworks in relationship to accountability challenges at a variety of organizations. These types of frameworks could help NTIA evaluate whether the transition proposal meets its core goals, and could also be helpful in considering accountability mechanisms that are included in the proposal. For example, one framework's risk assessment component could help NTIA consider the multistakeholder community's efforts to identify and manage risks.

"These frameworks are intentionally flexible, so that NTIA could select elements that are applicable to the scope of the proposed transition. Without a framework as a tool to systematically review the proposal and its various new structures and processes, NTIA may not be assured that its goals for the transition have been fully addressed and embedded over the long term.

"Recommendation: To ensure that NTIA's evaluation of the Internet multistakeholder community's transition proposal fully considers whether the proposal provides reasonable assurance that NTIA's core goals for the transition will be met, the NTIA Administrator should review relevant frameworks for evaluation, such as the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework and the International Organization for Standardization (ISO) quality management principles [pdf], and use the relevant portions of the frameworks to help evaluate and document whether and how the transition proposal meets NTIA's core goals." (emphasis and links added)

More information:
U.S. GAO - Internet Management: Structured Evaluation Could Help Assess Proposed Transition of Key Domain Name and Other Technical Functions:
Recommendation for Executive Action: http://www.gao.gov/products/GAO-15-642
Additional Materials:
Highlights Page: (PDF, 1 page)
Full Report: (PDF, 65 pages)
Accessible Version: (PDF, 72 pages)

Committee of Sponsoring Organizations of the Treadway Commission (COSO) http://coso.org/
Committee of Sponsoring Organizations of the Treadway Commission - (Wikipedia): "COSO admits in their report that while enterprise risk management provides important benefits, limitations exist. Enterprise risk management is dependent on human judgment and therefore susceptible to decision making. Human failures such as simple errors or mistakes can lead to inadequate responses to risk. In addition, controls can be circumvented by collusion of two or more people, and management has the ability to override enterprise risk management decisions. These limitations preclude a board and management from having absolute assurance as to achievement of the entity's objectives."


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DISCLAIMER