REFORMATED: .NU DOMAIN'S PROPOSED ICANN BYLAW CHANGES

["J. William Semich (NIC JWS7)" <bsemich@mail.nu>]

 Hello;
 
 At the request of the White House, we have today submitted to Ira
 Magaziner and the NTIA Domain Name comments page the following proposed
 modifications to Jon Postel's/IANA's version 5 of the new ICANN  
Corporation's  bylaws (attached below), as follow-up to our
 previously-stated concerns at
 http://www.iana.org/comments-mail/msg00090.html) 
 about maintaining fiscal responsibility at the new IANA.
 
 Regards,
 
 Bill Semich
 bsemich@mail.nu
 
 

 
 How To Assure Fiscal Accountability of the New IANA
 
 By J. William Semich
 President and CFO
 .NU Domain Ltd
 bsemich@mail.nu
 http://whats.nu
 
 With Harold J. Carroll, JD
 Corporation Counsel to .NU Domain Ltd
 And Partner, Gadsby & Hannah, LLP
 Hcarroll@ghlaw.com
 http://www.ghlaw.com/bios/carrollh.html#frame1
 
 
 The basic problem with the latest of the new IANA Corporation's bylaws
 is the apparently-intentional lack of board accountability to the
 public. The result will be an organizational structure similar to an
 independent public authority. To assure accountability to the public,
 it is necessary to include language in the bylaws that will give
 budget approval powers to the groups that are providing the source of
 funds to the new corporation - the Supporting Organizations.
 
 Below I have proposed such additions to the IANA bylaws. If these
 additions are finally included in the New IANA's bylaws, it would:
 
 - Require that the Corporation submit an annual budget request and
   service plan to the Supporting Organizations for review and approval
   or reduction;
 
 - Require that all long-term bonding or bond refunding requests
   receive a 2/3 majority vote of by the Supporting Organizations;
 
 - Require that the Corporation manage annual spending levels to stay
   within its approved annual budget;
 
 - Require a guaranteed, maintenance of effort, level of funding to the
   Corporation regardless of any budget reductions voted by the
   Supporting Organizations, in order to assure the IANA's existing
   level of services are maintained. The base "maintenance of effort"
   level of funding is taken to be the current annual spending by IANA
   under its contracts with the US Government;
 
 - Require that the Corporation make all its spending and other
   information available to the Supporting Organizations as part of the
   budget monitoring and approval process.
 
 If these provisions are included in the bylaws to the new Corporation,
 it would go a long way to assuring public accountability.
 
 Below is a list of problems inherent in the language of the current
 draft of the New IANA bylaws, and an explanation of each. These are
 followed by the proposed additions to the bylaws.
 
 Problem 1:
 
 	The Board is controlled by the At Large Directors and the
 	President, which together outnumber the three directors
 	nominated by the each of three Supporting Organizations (total
 	of nine for supporting organizations) (Bylaws, Art. V,
 	Secs. 1, 4 , hereinafter "BL.V(1,4)", etc.). The predefined
 	membership of one Supporting Organization (the Address
 	Supporting Organization, BL. VI(3)(a)(I)) is a creature of the
 	current IANA, and therefore adds to the potential majority of
 	At Large directors and the President.
 
 Problem 2: 
 
 	The identity BL.VI(3)(b), powers, structure and number
 	BL.VI(1)(a) of Supporting Organizations is determined by the
 	Board, giving further control to the majority At Large
 	members. Moreover, this control is self-perpetuating in that
 	At Large members will select their own replacements until some
 	unknown membership system is devised at some indefinite future
 	time.  BL.V(9)(c).
 
 Problem 3: 
 
 	The Board has complete control of the Corporation.  BL.(1)(a).
 
 Problem 4: 
 
 	The Supporting Organizations are advisory only, unless the
 	Board delegates powers.  BL.VI(1)(a).  
 
 Problem 5: 
 
 	The Supporting Organizations will provide the primary if not
 	exclusive financial support of the Corporation through fees
 	and charges solely to be set by the Board, BL.IV(2). The
 	Supporting Organizations will have to assess their own
 	membership for fees as yet undetermined to support a budget
 	controlled entirely by board members not directly answerable
 	to those who pay the fees.
 
 Proposed solution::
 
 	Give Supporting Organizations the Power of the Purse
 
 The powers of the Supporting Organizations under Article VI(1) should
 be expanded to include the power to approve (or reduce) the
 Authority's annual budget, along with the requirement that the
 Authority control spending to stay within that approved budget. This
 should prove sufficient to protect the Supporting Organizations and
 their constituents from the tendencies of a non-accountable,
 self-perpetuating Authority with powers of assessment, to serve ends
 not always in the public interest.  Such a process would also
 significantly increase the appearance of public participation in the
 governing process. Such power to approve the budget should include the
 right to review all spending, investment and borrowing activities, the
 right to perform an annual independent audit of the Authority, the
 right to examine books and accounts without notice, and to use any and
 all the other mechanisms available to assure the Authority's accounts
 are open to public view.
 
 Proposed Revised Language for Version 5 of the new IANA Bylaws:
 
 	Make the following changes/additions to BL V (25):
 
 	Delete "The Board shall prepare an annual budget, which shall
 be published on the Web Site."
  
 ADD:
 
 BL V (25) (a.) 
 
 	The Chief Financial Officer shall prepare an annual operating
 	budget, on a line-item basis, and submit it to the Supporting
 	Organizations four months prior to the beginning of the
 	Corporation's fiscal year, for their review and action. The
 	Board shall establish, by a vote of not less than 60% of all
 	the members, the appropriate definition of such line items for
 	budgeting and accounting purposes. The Chief Technical Officer
 	shall prepare and submit, at the same time, an annual service
 	plan which shall be reflected in and complimentary to the
 	funding requests in the annual budget. The Corporation shall
 	make its best effort to tie the line items in the budget
 	request to the detailed services to be provided during the
 	upcoming fiscal year.
 
 	  (b.) 
 
 	No budget shall be deemed to be approved for the purposes of
 	enabling any increase in expenditures or funding any increased
 	appropriation to the Corporation for the following fiscal
 	year, excepting previous year's obligations such as payments
 	on debts already incurred or multi-yearcontractual obligations
 	or labor agreements, until the Committee of the Whole of the
 	Supporting Organizations has approved an annual budget and
 	service plan for the Corporation for that fiscal year;
 	excepting that, if the Supporting Organizations have taken no
 	action on the annual budget request, and the following fiscal
 	year shall commence, the Corporation shall be required to
 	operate on a 1/12 previous-year's operating expense,
 	maintenance-of-effort basis, until such time as the Supporting
 	Organizations approve an annual budget for the Corporation.
 
 	 (c.) 
 
 	The sum total of all fees and charges assessed by the
 	Corporation on or to the Supporting Organizations and/or its
 	members during the fiscal year shall not exceed the amount
 	required to support the approved annual budget for that fiscal
 	year, or, if such budget is not approved, shall not exceed the
 	amount assessed during the previous fiscal year, on a 1/12
 	monthly basis, until such time as the annual budget is
 	approved by the Supporting Organizations.
 
 	 (c.) 
 
 	Once an annual budget and service plan are approved by the
 	Supporting Organizations' Committee of the Whole, the
 	Corporation shall manage its affairs and operations in such a
 	manner as to keep its expenditures and obligations within the
 	constraints of the approved budget.
 
 ADD
 
 BL VI (d.)
 
 	All of the Supporting Organizations which have fee-payment
 	responsibilities to the Corporation shall meet, no later than
 	six weeks prior to the end of the current fiscal year, as a
 	Committee of the Whole to vote, yea or nay, as submitted or as
 	amended, on the annual budget and services plan for the
 	Corporation's following fiscal year. A majority vote is
 	required to approve the annual budget and the service plan,
 	and a 2/3 majority vote is required to approve any long-term
 	borrowing requests or long-term bond refunding requests by the
 	Corporation. The Supporting Organizations may choose to assign
 	weights to votes, based on the proportion of fees paid by each
 	voting member, or on some other fair and reasonable method
 
       (e.)
 
 	The Supporting Organizations may decide what structure or
 	committees or staffing to establish in order best to enable an
 	appropriate review process, perform any required analysis and
 	take action on the budget, including developing an equitable
 	voting mechanism for such action. The Committee of the Whole
 	shall, prior to the beginning of the following fiscal year,
 	either approve the budget and service plan as submitted, make
 	reasonable reductions in the budget and service plan
 	accompanied by a reasonable explanation of any reductions, or
 	return the budget without action to the Chief Financial
 	Officer, which he may subsequently re-submit to the Committee
 	of the Whole after making any modifications which may be
 	suggested by the Supporting Organizations.  The Supporting
 	Organizations' Committee of the Whole may not make any such
 	reductions in the budget request that will result in the loss
 	or substantial disruption of any ongoing Internet service
 	currently provided by the Corporation at its inception,
 	excepting in those cases where both the Supporting
 	Organizations and the Board have agreed to terminate such
 	services.  The Supporting Organizations' Committee of the
 	Whole may not reduce any annual budget request by the
 	Corporation to an overall amount that is lower than the amount
 	expended during the previous fiscal year. For the purposes of
 	establishing a starting point for the previous year's
 	maintenance of effort spending level, the amount spent in
 	support of the US Government's contract(s) with the University
 	of Southern California's Information Sciences Institute for
 	the final year of services by IANA under that contract(s)
 	shall constitute the expenditure level for the first "previous
 	fiscal year."
 
       (f.) 
 
 	The Supporting Organizations shall have all the same rights
 	and obligations of inspection of the Corporation's books,
 	records, and documents of every kind, as is granted to the
 	Board of Directors in Article V, Section 21 of the bylaws. 

----------------------------END------------------------------------- 
 
 About J. William Semich:

 Currently:

 President and Chief Financial Officer 
 .NU Domain Ltd
 http://whats.nu 
 "One of the top 20 Top Level Domain Name Registries in the World"
 (Source: Http://www.domainstats.com/iso.cfm) 


 Formerly:

 - Director of Financial Analysis for the City of Boston
 - Chairman, Finance Committee, Massachusetts Bay Transit Authority
 Advisory Board (The MBTA's Budget Review and Approval body)
 - Financial Adviser to the Mayor of Boston for Tax Policy and Planning
 - Assistant to Collector-Treasurer, City of Boston
 - Deputy Director and Executive Secretary to the Board, 
 Boston Economic Development and Industrial Commission

 Achievements:
 - Co-author, "Inside the Shadow Government," Boston Magazine, November,
 1989, selected as one of  the "Top 10 Magazine Investigations of 1989,"
 by Investigative Reporters and Editors, Inc. (IRE);
 - Lead investigator and financial consultant, WBZ-TV Boston's "I-Team,"
 in-depth 1995 investigative report on the Mass. Turnpike Authority's
 actions over a ten year period to extend it's life using fiscal
 manipulations;
 - Co-author, "The Money Pit," Boston Magazine, September, 1986,
 investigative article on abuses by the Mass. Convention Center  
Authority in its redevelopment of the Hynes Convention Center.