Text of Joe Sims 'willing to advocate' e-mail
Date: Thursday May 17 2001, @11:59AM
Topic: Verisign/NSI

Recall that two Democratic Congressman who wrote to the Department of Commerce earlier this week to protest the VeriSign deal said in their letter that

you may wish to look further at the process by which the ICANN-VeriSign agreement was reached. Based on staff research and the enclosed e-mail, it does not appear to have been an arm's-length negotiation, but one in which ICANN's outside counsel agreed to become an "advocate" for VeriSign before the ICANN board if certain conditions were met.
Now someone has kindly faxed us the text of that "enclosed e-mail," and of what seems to be a covering note. Once again, we see that critical policy decisions originate in the ICANN staff or its outside lawyer, Joe Sims; key ideas only get communicated to the Board, and to the rest of us, late in the day, when there's only time for a rushed discussion. (Remember, and repeat after me, "ICANN is a consensus based, bottom-up, organization.")

Re-typed text inside. [Corrected to include dates]

[Full text of covering e-mail as faxed to us. Redactions were in fax.]

From: Joe Sims [mail to] Sims@JonesDay.com
Sent: Tuesday, April 24, 2001 4:06 pm
To: [Blanked out on fax copy]

Subject: per our conversation

At your request, I am forwarding you a copy of an email I sent to VeriSign which set forth my personal--and I emphasize personal--ideas about what a possible new agreement might deal with. At this point, I was operating on my own, without seeking specific guidance from my client, since at this point there was as yet no indication that there was any willingness to do anything that might pass muster. Once VeriSign indicated an interest in at least talking about these points, I immediately began to coordinate very closely with staff, and Vint was brought up to speed (and from that point included in the coordination) soon thereafter.

As you can see, this was in essence my "wish list" - - a list of things that I believed could possibly have value, and which I thought there was at least some possibility that VeriSign might be willing to discuss. I did not include things that I believed were a waste of time, like reductions in the registry price, since it was obvious that we had very little time to come to some resolution if it was to be at all possible to get anything done. In essence, we were able to accomplish most of what is set forth in the first 4 items, and not the last three (although all of these latter points were, admittedly, relatively low value points that I included mostly to fill out my list). The first 4 points were the important one to us, and the final agreements track these points very closely.

You can find the new TLD agreements on the ICANN home page, under Status Report on New TLD Agreements. There is a chart in that link that lists the currently available pieces of each agreement. The italicized links indicate that these are revised versions to those originally posted. I am told there will be significant updates in the next day or so, so please check back regularly. Please let me know if I can provide any further information.

Joe Sims
Jones Day Reavis & Pogue
51 Louisiana Avenue NW
Washington, D.C. 20001

---------------------

[Full text of original email, as faxed to us.]

Roger, unless I misunderstand the points you raised, I do not see anything there that would have any potential at all for generating the political support necessary to change the status quo, and I would not be interested in investing any of my political capital in even raising the possibility. Thus, it may be that this particular approach is not worth pursuing. Still, since I have dismissed these ideas, I thought it incumbent to indicate the kind of ideas that could have potential, assuming that VRSN had any interest in pursuing them. In my judgement, to have any chance of success, Plan B would have to include some combination of the following ideas:

  1. VRSN would relinquish the right to operate .net and .org. and perhaps provide some form of capital funding for a non-commercial entity to operate .org: .net would be auctioned off by ICANN to an operator who would operate it as a open, commercial TLD.
  2. Revision of the registry agreement to make it clearer that ICANN has the right and power to set technical standards (an current example would be multi-lingual), and to remove financial caps on VRSN's commitment to follow ICANN consensus policies (and possibly other points that either of us may find useful).
  3. Revision of the registrar agreement to eliminate financial caps on NSI Registrar's obligation to follow ICANN consensus policies (and perhaps other points)
  4. A commitment to support and advocate a new financial structure of the kind previously discussed.
  5. A public recognition that, subject to technical capacity, the management of the primary root should be transferred from VRSN to ICANN as soon as ICANN requests that transfer.
  6. Cooperation in the transfer of the .edu and .us domains to appropriate registry operators, and perhaps capital or transition funding for the new operators, depending on their identity and the conditions of the transfer.
  7. Some agreement on providing information (perhaps created by ICANN) to NSI registrar domain holders about competitive options available to them for renewals simultaneously with any communications by NSI on that subject.

I am not certain that agreements on some combination of these points would do the job, but in my mind there would at least be a possibility, and with the right collection of agreements I would be willing to advocate them. We can discuss tomorrow whether VRSN has any interest in continuing discussions along these lines. If not, we should concentrate on Plan A.

Joe Sims
Jones Day Reavis & Pogue
51 Louisiana Avenue NW
Washington, D.C. 20001

----Forwarded by Joe Sims/JonesDay on 04/24/01 03:21 PM -------

Joe Sims
To: "Cochetti, Roger"
cc: "Korzeniewski, Bob"
Subject: Re: CONFIDENTIAL PLAN B
01/22/01 11:07 PM

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by lextext on Friday May 18 2001, @05:50AM (#608)
User #6 Info | http://www.lextext.com
OK, I'm missing something. Where, exactly, is the nefarious content in this message?

It's not "nefarious," but it does underscore a frequent criticism of ICANN generally and one made about these agreements in particular -- namely, that significant new initiatives are not developed "bottom up," as required in the White Paper, but by Staff, usually not even in consultation with the elected Board. Here, if we believe the cover e-mail, Mr. Sims was working on his own, without the guidance or even knowledge of Staff, much less the Board.

I honestly don't know many lawyers who would have sent the kind of e-mail written by Mr. Sims. It's the first salvo in a negotiation, and you've now set the parameters of the negotiations before you even know what your client wants. You can see how this played out by seeing how close the final deal was to what Sims placed in a "personal" "wish list." Of course, clients are all different in the way they supervise outside counsel, and Mr. Sims obviously knew his well. But the path for the negotiations was set by outside counsel working without policy guidance from the Board or Staff.

Verisign's at fault too. Verisign knows well the way that new initiatives are created within the ICANN process. It worked constructively in the creation of the DNSO and, at least in the beginning, was the most outspoken advocate for bottom-up consultations that start in working groups and move up slowly to the Board level. Verisign also remembers well the firestorm that surrounded the initial presentation of these agreements in 1999. The community was frustrated and angry that it had little time to evaluate the agreements. Watch the Berkman archives of the November 1999 meeting.

With the history of the 1999 agreements fresh in its mind, wouldn't it have been wise for Verisign to avoid the same problems when it wanted to renegotiate? Instead, it approached ICANN's outside counsel. And agreements were negotiated and presented to the community as completed deals, without ever asking the community what it would want, if anything, in a revised relationship with Verisign.

There's nothing nefarious, illegal or unethical here. At most, it's a violation of the ICANN Bylaws that require bottom up consultative processes. But it does underscore a continuing problem with the way ICANN makes important decisions and vets those decisions with the relevant community.

-- Bret
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