CCWG-Accountability Work Stream 1

Work Stream 1 (CCWG-Accountability WS1) was a process for ICANN to facilitate a smooth and swift transition of the IANA functions stewardship. The CCWG-Accountability divided work into two streams. WS1 addressed accountability issues prior to the transition of the IANA stewardship from NTIA to the global multistakeholder community.

Meetings and Members

Work Stream 1 held its first meeting in December 2014. The group had a distinction between members and participants. All members were participants, but not all participants were members. The members of WS1 were appointed from the working group's chartering organizations:

ALAC
Leon Sanchez (Latin America) – Co-Chair
Sebastien Bachollet (Europe)
Tijani Ben Jemaa (Africa)
Alan Greenberg (North America)
Cheryl Langdon-Orr (Asia/Asia Pacific)

ASO
Fiona Asonga
Athina Fragkouli
Izumi Okutani
Jorge Villa

ccNSO
Mathieu Weill (.FR, European Region) – Co-Chair
Jordan Carter (.NZ, AP Region)
Eberhard Lisse (.NA, African Region)
Roelof Meijer (.NL, European Region)
Giovanni Seppia (.EU, European Region)

GAC
Par Brumark (Niue)
Olga Cavalli (Agentina)
Alice Munyua (African Union Commission)
Suzanne Radell (USA)
Julia Wolman (Denmark)

GNSO
Thomas Rickert (GNSO Council, Europe Region) – Co-Chair
James Bladel (RrSG, North America Region)
Becky Burr (RySG, North America Region)
Steve DelBianco (CSG, North America Region)
Robin Gross (NCSG, North America Region)

SSAC
Lyman Chapin
Julie Hammer

Others
Bruce Tonkin - ICANN Board Liaison
Samantha Eisner - ICANN Staff Representative

Role Definitions

Participants were defined as anyone with an interest in the work of the CCWG-Accountability:

Anyone interested can volunteer to join the CCWG as a "participant," regardless of whether they are members of the ICANN community. Participants are expected to actively contribute to mailing list conversations as well as meetings. It is anticipated that participants will provide essential input to the process. They will participate similarly to ICANN chartering organization-appointed members and will be required to provide a Statement of Interest (SOI).

Out of the ICANN Community, 199 individuals submitted SOIs as participants. The distinction between appointed members and participants was a source of contention on a few occasions, including the submission of minority statements to CCWG drafts. Faced with a number of issues to address, the WS1 team divided into several work parties: legal, IRP implementation oversight, community empowerment, review & redress, emerging issues, and stress testing. Each group addressed facets of the identified work areas for the CCWG-Accountability project as a whole. During the course of its work, it became apparent that a work party should also be devoted to human rights issues.

Work Stream 1 drafts, meetings, work party activities, and other information can be found in their workspace archive.

WS 1 Drafts and Public Comments

The first draft of the WS 1 Report was published for public comment in May 2015. The draft emphasized that the proposals were not the result of consensus; rather, they were a snapshot of the working group's thinking to date. The proposal sought community feedback on the direction of Work Stream 1, as well as ideas or suggestions that may not have been covered. The draft proposal contained the following principal recommendations:

• Revise the Mission, Core Values, and Commitments sections of the Bylaws;
• Designate certain Bylaws as "Fundamental" and require a 75% supermajority to change those Bylaws;
• Improvements the Independent Review Panel process;
• Improvements to the reconsideration process;
• Create a mechanism (using an SO/AC "membership" model) to empower the ICANN community, and imbue the community with the power to:
  • reconsider/reject budget or strategy/operating plans;
  • reconsider/reject changes to non-fundamental Bylaws;
  • approve changes to Fundamental Bylaws;
  • recall individual ICANN directors; and
  • recall the entire ICANN Board;
• Incorporate the commitments contained in the Affirmation of Commitments into the ICANN Bylaws; and
• Revise the Bylaws to ameliorate problems discovered via stress testing (specifically, require the Board to respond to Advisory Committee advice, and to consult with the GAC and find mutually acceptable solutions for consensus-based GAC advice). The draft proposal sought responses to specific aspects of the proposal, as well as general comments and feedback regarding the direction of the working group's efforts and work product to date.

Empowered Community: Mechanisms

The question of exactly how to empower the community to support and enforce ICANN's mission and core values was a subject of discussion during the creation of the first draft. In the lead-up to ICANN 52 in Singapore, Work Party 1 had generated a number of model mechanisms for consideration:

• A "community veto" utilizing the existing SO/AC structures, as proposed by Robin Gross in a post on CircleID. The proposal suggested that an "empowered community" could be established by leveraging each of the existing SO and AC decision-making procedures, allowing those organizations to collect a vote of its membership and cast an organizational vote accordingly, with the majority of SOs and ACs required to overturn a board decision, recall a member, and other enumerated powers.
• A permanent cross-community working group, with elected or appointed members from each SO and AC, "that stands ready to vote on challenges or initiatives filed by any AC/SO/SG."
• Appointed delegates: under the laws of California governing nonprofit organizations, a corporation may provide in its bylaws for delegates having some or all of the authority of members (as defined by statute) without actually having named members (or being a "membership" non-profit organization as defined). The delegates would act as a council similar to the permanent CCWG.
• Amendment of the ICANN Bylaws to name each SO, AC, and SG as a "member" of the corporation (as defined by California statute), which would, among other things, permit stakeholders to file member derivative lawsuits against ICANN for decisions made in contravention of its core mission or values. Grant members, through consensus or some specific majority, powers to veto certain board decisions or actions, recall board members, or contest policy.
• Create a two-tiered board structure where the ICANN community's representatives sit as a Supervisory Board and have specific powers of review or recall, and the ICANN Board as currently composed maintains its role of strategic and fiscal governance.

In addition, outside legal counsel for the working group provided another option based on the California corporations code. Section 5220 of the code provides for designated board seats, to be selected by one or more "designators." Directors can be seated on the board by a designator without a vote of the members. Outside counsel noted, however, that the designator model would not be able to fulfill all the goals of the empowered community outlined by Work party 1. The first draft proposal focused on a "Reference Mechanism" based on the membership model when presenting its plan for the ICANN empowered community. It acknowledged and briefly discussed each of the other models, as well as a proposal from outside legal counsel regarding the creation of designated board seats, with SOs and ACs appointed as "designators" for those seats. After its discussion of the options, the report provided the following conclusion:

None of the mechanism possibilities should be considered “off the table”. The work of the CCWG-Accountability has proceeded quickly, and our counsel are rapidly becoming familiar with the complexities of ICANN’s history and current approach to dealing with many of these matters.

That said, the CCWG-Accountability is clearly of the view that the SO/AC Membership Model is the currently preferred approach, and relies on this in much of what follows.

How the Reference Mechanism operates (e.g., whether the votes are “cast” by the SOs and ACs as organized through a Membership model, whether there is some community group where there are representatives, how the community’s decisions are implemented through those SOs and ACs that are Members, and/or model rules for the unincorporated associations) is an important implementation detail that will be developed by the CCWG-Accountability and open for thorough community consultation in our second Public Comment report.

Public Comment on the First Draft

Public Comment on the draft was substantial. The time period for comment was extended to accommodate for delays in delivering translations of the draft proposal. The comments were largely supportive of the direction the CCWG was taking, although there were concerns raised regarding certain aspects of the draft, as well as new ideas and input that the working group had not yet considered in the course of its work to date. Some commenters did disagree with specific portions of the proposal, although it was notable that those dissenting voices were in the minority in each issue area. The ICANN board's comment applauded the broad themes of the document, but had many questions and concerns about implementation:

One of the analyses that we do not see within the report is something akin to a regulatory impact analysis, where the costs, benefits and alternatives to proposals are weighed to assure that the design of the solution for each issue is the most efficient, least burdensome on the community, and most cost-­effective solution. This seems a separate exercise from the stress test work that is reflected in the report. That stress test, or contingency planning, work builds from the identification of stressors or situations that ICANN may face, and then considers how the proposed solutions assist ICANN in being more accountable when those situations arise, however unlikely. This is valuable work in considering that the CCWG-­Accountability is working towards the crucial issues. What seems to be the necessary next step, however, is considering whether the mechanisms that are proposed as solutions are capable of withstanding contingencies and stressors. In this regard, the Board presumes there will be an impact analysis. It is currently working on a series of questions to assist in performing that impact analysis.

The board went on to highlight the report's Reference Mechanism for the empowered community, expressing doubts that such a radical change would have only the intended consequences, and advocating for a comprehensive review of the risks associated with such a change.

ICANN 53

The public comment period on the first draft proposal closed a week before ICANN 53 in Buenos Aires. Much of the programming at the meeting was directed at the IANA transition. At its first work session at ICANN 53, the CCWG discussed the promised impact analysis questions that were received from the board the night before. During the lead-up to the conference, the CCWG-Accountability listserv had grown increasingly contentious around issues of accountability and the ICANN Board's self-interests in responding to the first draft. Steve Crocker stepped into one such conversation and made some remarks regarding what he perceived as misplaced animosity toward the board. At the beginning of June, Jonathan Zuck pleaded for a level-headed, task-oriented approach to continuing the work of the working group. The temperature was not exactly lowered during the first work session at the conference. There were exasperated exchanges around the impact analysis questions posed by the board. One outcome of the first working session was the abandonment of the "membership" reference model. The working group drafted language for its report to the community in the aftermath of the meeting to that effect.

Also during the lead-up to the main meeting content, the CCWG met with the ICANN Board to discuss their draft proposal. The conversation addressed the board's public comments on the draft report, the questions that were subsequently submitted by the board as part of their proposed impact analysis, and the CCWG's internal conversations regarding the comments. Thomas Rickert also reported that, after the team's working session on the previous Friday, the Reference Mechanism membership model had been scrapped:

So what we did last Friday was sit together and there were multiple opportunities and options on the table on how we could move forward. All those individuals in our group that wanted to present their vision of how we could operationalize accountability [got] their time slot to briefly be as persuasive as they could in terms of what they would like us to do.
So everybody was heard, no interruptions, no criticism. They would talk one after the other and could do their sales pitch, basically; or elevator pitch or whatever you might call it. After that we said, okay, there’s a lot of common ground in this. Let’s revisit our list of requirements for an accountability architecture and see whether this still stands after the public comment period has been conducted. We found out that there were some points that we could clearly rule out, some options that we could clearly rule out. So this reference model is off the table. We’re not doing it. We’ve listened to you. We’ve read the comments that we got. It’s off the table. Forget about it. So we’ve now entered our discussions into a new phase where we had other models and we’re now in the process of merging the other options and taking the best of our words if you wish.

Also at ICANN 53, the CWG-Stewardship and CCWG-Accountability held a joint town hall on June 22, 2015 to provide updates to and receive input from the community. Questions about the membership model were raised, as well as other aspects of the draft proposal.

Paris Meeting of the CCWG

The CCWG met in Paris in July 2015 to resolve and refine issues identified at ICANN 53 and the public comment period. Over two days, many topics were discussed regarding the response to the first draft proposal.

Second Draft Proposal

Work Stream 1's second draft proposal was published in August 2015. The second draft acknowledged community support for the building blocks of the WS 1 proposals - principles (commitments and core values), empowered community, structure and accountability of the ICANN Board of Directors, and independent appeals and review mechanisms. The proposed improvements and changes were structured along these building blocks.

Proposal	Associated Building Blocks	Changes from First Draft Proposal
Amendments to ICANN Bylaws	Principles; ICANN Board	Minimal - still focused on incorporating Affirmation of Commitments into bylaws and other amendments to accommodate other proposals and reforms. "Fundamental" Bylaws proposal still intact.
Empowered Community: Powers	Empowered Community	Community can reject operating plan and budget (strategic plan no longer included); refinement on recall of individual directors (appointing body may recall their director)
Empowered Community: Mechanism	Empowered Community	New model, still focused on a "membership" nonprofit organization but with a single member, the ICANN community, rather than SO/AC/SGs as members;
Reforms to IRP and Reconsideration Process	Independent Appeals/Review	Minimal
Work Steam 2 Elements	All	Added some topics for consideration for WS 2 post-IANA transition

The second draft described 37 scenarios that were utilized for stress testing the proposals in the draft, both as they related to accountability mechanisms, and to the NTIA criteria for the ICG's transition proposal.

Revised Model for the Empowered Community

In its deliberations around the EC model, Work Party 1 devised another membership-based structural change to ICANN's organization and bylaws. In the new reference model, the empowered community would be represented by a single entity (the "Community Mechanism") that was a member of ICANN org. ICANN's bylaws would be amended to allow for members, and to describe and define the Community Mechanism's powers and processes. As the draft proposal explains:

As required by law, the Sole Member in the Community Mechanism as Sole Member Model would be a legal person created through the ICANN Bylaws as an unincorporated association. The Community Mechanism as Sole Member Model would rely on direct participation by SOs and ACs in this sole member for exercise of community powers but would not require any of them to have legal personhood. The Sole Member would have no officers or directors and no assets.
ICANN’s SOs and ACs would participate in this Sole Member. Participating in the Sole Member would allow the participating SOs and ACs, as a group, to provide instructions to the Sole Member to use its member powers to exercise the community powers only as directed by the SOs and ACs (for example, to approve change to the Fundamental Bylaws). Participating SOs and ACs would not meet as the Member, and no representatives would cast votes. The directions for voting would come from the SOs and ACs themselves. No SO or AC, or any individual, has to 'join' ICANN or the Sole Member in order to exercise their rights, and no new legal obligations arise for any stakeholder.

This model was adopted after deliberation and discussion of three different options: an "empowered SO/AC" membership model, which modified the first draft's membership model to allow direct participation of SOs and ACs in the exercise of community powers, but which would not require SOs and ACs to incorporate or use some other means of obtaining legal status as entities; the "designator" model proposed by outside counsel (described above); and the Community Mechanism as Sole Member model. The Community Mechanism was selected as the new reference mechanism because it ensured that the community's powers would have a statutory basis for enforcement, while avoiding some of the complications intrinsic to the initial draft's membership model.

The proposed Community Mechanism would have a voting structure that granted five votes to each of the ALAC, ASO, ccNSO, GAC, and GNSO, and two votes apiece to the RSSAC and SSAC. The proposal acknowledged that some of the ACs had already indicated that they would not participate in such a mechanism, but suggested including the full participant list in the bylaws. Under the mechanism, none of community powers could be exercised until there was an opportunity for the full community to engage in a discussion regarding the issue. The draft proposal stated that this was in part to ensure that all members of the community could make an informed decision.

Minority Statements & Dissents

The second draft report included minority statements from both members and participants. Three minority statements were received. Sebastian Bachollet's objections were almost entirely focused on the proposed community powers. In his opinion, all of the enumerated powers introduced more and more substantial risks to ICANN's governance than they provided certainty and accountability. Edward Morris had objections to the Community Mechanism's proposed voting and decision-making model. Eberhard Lisse had a variety of objections to both the direction and the processes employed by the working group, and urged his fellow ccTLD managers and the NTIA to reject the proposal as drafted.

The proposal also noted "dissenting opinions" within each section of the draft, allowing individuals to state differences of opinion on particular issues or details of the proposal.

Public Comment

Many public comments were received regarding the second draft proposal. The ICANN Board submitted two comments: an initial comment providing initial reactions and describing the board's intended process of review; and then "final and supplemental comments" that included a summary chart of board responses to the CCWG-Accountability proposals, an memo describing an alternative empowered community mechanism called the "Multistakeholder Enforcement Mechanism," a FAQ regarding the MEM, and a written summary of the board's input. Most of the board's comments agreed with the CCWG-Accountability proposals or agreed in principle with proposed modifications. However, the board did not agree with the proposed Community Mechanism in the second draft proposal. The board also submitted a memo from law firm Jones Day that provided an impact analysis on the proposals contained in the second draft report. The Jones Day analysis raised several issues that had the potential to destabilize the governance of ICANN, including the apparent lack of interest in participating in the Community Mechanism decision process. In its impact analysis, Jones Day suggested that the regulatory and legal consequences of the model had not been fully explored:

It does not appear that the CCWG has conducted a comprehensive regulatory impact analysis, as suggested by the Board, which would be helpful in identifying and mitigating potential unintended consequences and risks of capture. The move to a membership model is a significant governance shift that should be approached carefully and pursued only when the details of the model are fully defined, completed and tested.
California law provides the Sole Member with significant statutory rights. These rights include, among other things, (1) the right to amend the Bylaws without Board approval, (2) the ability to initiate litigation against ICANN and the Board, and (3) the ability to remove directors without cause. In many cases, it is unclear whether ICANN could enforce provisions of the Bylaws that attempt to waive or modify many of the Sole Member’s statutory rights. A review of the revised Bylaws implementing the Proposal will be needed to fully assess this item.

The implications of the shift, Jones Day opined, were magnified by the inexperience of the ICANN board, org, and community in managing a membership non-profit model. Without such experience, substantial and comprehensive testing was recommended to ensure that the Community Mechanism would work as intended. The analysis also recommended that the rules of procedure for the Community Mechanism should be fully defined, and that such work should be a Work Stream 1 task to ensure that the community had an opportunity to review and comment on the proposed rules of procedure. Again, because it did not appear that all SOs and ACs would exercise voting rights in the Community Mechanism as proposed, the establishment of explicit rules prior to adoption presented an opportunity to risk-proof the Community Mechanism from capture and avoid the disenfranchisement of non-participating SOs and ACs.

The board's response, and subsequent discussions, caused some concern among the members of the IANA Functions Stewardship Transition Coordination Group, who feared that substantial differences of opinion on a fundamental element of the accountability proposals could delay or even halt progress on the development of a transition proposal.

ICANN 54

At ICANN 54 in Dublin, the CCWG-Accountability group met with a variety of stakeholder groups, as well as held a public engagement session and open work sessions. The first meeting, held in the lead-up to the main programming of the conference, focused on the feedback received from the public comment period on the group's second draft proposal. The model for the empowered community was once again a key conversation point, both in terms of decision-making (voting rights vs. consensus building) and legal and operational powers (inclusion in bylaws, legal definition of EC, and governance considerations). In the lead up to the meeting in Dublin, Work Party 1 had shifted its attention toward a "single designator" model, marking a third such shift in as many draft cycles. The designator model was examined in detail during the October 16 meeting, and compared with the single-member model of the second draft. As the initial discussion proceeded, Wolfgang Kleinwaechter offered some historical perspective:

I want to continue what Cherine has raised [whether or not the single designator model meant that the removal of individual board members would be removed by community consensus]. But I think that's a key question, you know, whether the five designators, you know, act in -- on a consensus basis or just, you know, in an agreement basis. So this is really a key point for me. Because if you go back to the reform in 2002 when the new mechanism was introduced, the basic argument behind this was we have to have a redistribution of power. No single group can capture the Board. That's why we have five different designators and a stakeholder process in the NomCom. So that means, you know, every year, the Board is reshuffled and you have a new group. I know that some board members, you know, are already there for a long time, but, you know, they had -- go through a process of checking, and then they were reelected.

So that means the decentralization of power is a key factor for ICANN. And whatever we do, we cannot remove this or reduce this. And so far, you know, to answer these questions, whether this can be -- needs consensus of all groups or whether this is just, you know, one group raises the issue and gets rubber-stamped by the others is an important point.
And let me add another experience when I have the microphone. For me, it's deja vu in Tunis 2005 when we discussed in the WSIS four models for ICANN oversight. It was ICANN oversight with the new corporation model in the final negotiations. And, you know, there was, you know -- it was midnight and after midnight that then people realized, okay, we will not agree on a model. What we can agree is on a process. And it should not be a new one; that we should base the process on what we have, on the existing mechanism. We have to enhance this. We have to make it better. And the outcome was rather creative language.

And this is what I hope we will achieve here in Dublin, that we create, really, something new.

There were concerns expressed about making another change in the model for the new proposal, but the co-chairs and others argued that the continued evolution of a model that ensured enforceability of "big stick" community powers (board removal and the removal of individual directors) while also finding ways to escalate and enforce other issues within the bundle of community powers was the goal.

The working group's public engagement session was held on October 19, 2015. Working group chair Leon Sanchez updated the audience on the status of the working group's progress after the comments on the second draft:

We then published our second draft document, we held a second public comment period, and as I speak, we have concluded the comments analysis phase and we are ready to adjust or tweak our proposal so that it is in line with requests and concerns raised by different members of the community.

At the group's first working session, also on October 19, the group initially gathered information and feedback collected outside of official meetings. Bruce Tonkin gave his impression of the ICANN Board's current attitude toward the sole designator model and other structural aspects of the proposal:

With respect to the bylaws' status, the board supports the consideration of the designator model as the closest to our current governance model. So basically from our perspective, the board will continue to actively participate in refining how best to implement the community powers and following up on the work that was done on Saturday morning. And the board is willing to participate in investigating how a sole designator model could be implemented.

Third Draft Proposal

After the Dublin Meeting, the Workstream 1 team continued work on the draft proposal. A third draft proposal was published on November 30, 2015.

Adopting a "Sole Designator" model for the Empowered Community

As foreshadowed at ICANN 54, the team made significant changes to the proposed reference model for the Empowered Community. The team proposed a combination of inherent statutory and legal rights of the Empowered Community on the one hand, and a process of engagement, escalation, and enforcement on the other:

To implement the Sole Designator model, ICANN’s Supporting Organizations and Advisory Committees would create a unified entity to enforce their Community Powers. This unified entity will be referred to as the “Empowered Community.”

Under California law, the Sole Designator has the statutory right to appoint and remove ICANN Board Directors, whether individually or the entire Board.
If the ICANN Board refused to comply with a decision by the Empowered Community to use the statutory right, the refusal could be petitioned in a court that has jurisdiction to force the ICANN Board to comply with that decision.
The CCWG-Accountability accepts that only having the above statutory power is sufficient given:

1. All of the recommended Work Stream 1 accountability mechanisms are constituted as Fundamental Bylaws and protected from any changes without Empowered Community approval...
2. The Empowered Community has legal standing as a California-based, unincorporated association...
3. The Empowered Community and the rules by which it is governed will be constituted as a Fundamental Bylaw along with provisions to protect it from any changes without its own approval...
4. The Articles will be amended to clarify that the interests of the corporation will be determined through a bottom-up multistakeholder process.

The proposal addresses the process of engagement, escalation, and enforcement in its second recommendation:

The CCWG-Accountability expects that disagreements between the ICANN community and the ICANN Board might arise from time to time. In an effort to prevent such disagreements from happening, the CCWG-Accountability recommends that ICANN be required to engage with the community on any key decisions it is considering, such as budgets or changing Bylaws. Should disagreements arise, the CCWG-Accountability proposes a series of procedures that ensure all sides have the chance to completely and thoroughly discuss any disagreements and have multiple opportunities to resolve any such issues before having to resort to the powers of the Empowered Community.
This process is referred to as Engagement, Escalation, and Enforcement.

The changes were made in response to the public comments criticizing the membership model from the second draft proposal. As noted in the proposal:

In the Public Comment Period on the “Second Draft Proposal on Work Stream 1 Recommendations,” concerns were raised about the Sole Member model. Under California law, such “members” have certain statutory powers that cannot be waived. Commenters expressed concern that these rights, such as the ability to dissolve the corporation, could not be adequately constrained and might have unintended and unanticipated consequences.

To address the concerns described above, the CCWG-Accountability now recommends implementing a Sole Designator model. Under California law, the Sole Designator only has the statutory power to appoint and remove individual ICANN Board Directors or the entire Board, which is a requirement of the CCWG-Accountability and the CWG-Stewardship. This removes the concerns related to unintended and unanticipated consequences of the additional statutory powers associated with a member.
Given that the right to inspect, as outlined in California Corporations Code 6333, is not a statutory right of a Designator, and that the community felt this was a critical requirement, the CCWG-Accountability recommends this right be granted to the Sole Designator in the Fundamental Bylaws.

The CCWG-Accountability external legal counsel informed the group that adopting a Sole Designator model could effectively be implemented while meeting the community’s requirements and having minimal impact on the corporate structure of ICANN.

The "sole designator" model was originally suggested by outside counsel during the team's research in spring 2015. The reference model as proposed would grant statutory powers for the "nuclear options" - removal of board members, and removal of the entire board, as well as adding the right to inspect the records of the corporation. Then, the other community empowerment goals envisioned by the would be operationalized by the engagement, escalation, and enforcement processes described in recommendation 2:

• Approving ICANN’s Five-Year Strategic Plan
• Approving ICANN’s Five-Year Operating Plan
• Approving ICANN’s Annual Operating Plan & Budget
• Approving The Internet Assigned Numbers Authority (IANA) Functions Budget
• Approving any modifications to Standard or Fundamental Bylaws
• ICANN Board decisions relating to reviews of IANA Functions, including the triggering of Post-Transition IANA (PTI) separation