ICANN has lost another Independent Review Process decision, with the panel stating some potentially alarming opinions about how much power ICANN staff has over its board and “independent” third-party contractors.
This time, the successful IRP complainant was Dot Registry LLC, the Kansas company that applied for the gTLDs .llc, .llp, and .inc as a “Community” applicant.
The company lost its Community Priority Evaluations back in 2014, scoring a miserable 5 of the possible 16 points, missing the 14-point winning line by miles.
The IRP panel has now found — by a two-to-one panelist majority — that these CPE decisions had extensive input by ICANN staff, despite the fact that they’re supposedly prepared by an independent third-party, the Economist Intelligence Unit.
It also found that the ICANN Board Governance Committee rejected Dot Registry’s subsequent Request for Reconsideration appeals without doing its due diligence.
The IRP panel said in essence that the BGC merely rubber-stamped RfR decisions prepared by legal staff:
apart from pro forma corporate minutes of the BGC meeting, no evidence at all exists to support a conclusion that the BGC did more than just accept without critical review the recommendations and draft decisions of ICANN staff.
ICANN had of course denied this interpretation of events, but refused to provide the IRP panel with any of the information the BGC had supposedly used in its decision-making, citing legal privilege.
The panel also had questions related to the relationship between the EIU and ICANN staff, pointing to extensive margin notes left on the draft CPE decisions by ICANN staff.
Remarkably, the EIU appears to have incorporated ICANN suggested text into its decisions, even when the facts may not have supported the text.
For example, the final CPE decision on .inc contained the sentence:
Research showed that firms are typically organized around specific industries, locales, and other criteria not related to the entities structure as an LLC
The panel concluded that this text had originated in ICANN’s margin notes:
Possibly something like… “based on our research we could not find any widespread evidence of LLCs from different sectors acting as a community”.
According to the IRP decision, there was no mention of any pertinent “research” in the record prior to ICANN’s note. It’s possible no such research existed.
It seems the ICANN legal team helps redraft supposedly independent CPE decisions to make them less likely to be thrown out on appeal, then drafts the very decisions that the compliant BGC later uses to throw out those eventual appeals.
The IRP panel by majority therefore found a lack of due diligence and transparency at the BGC, which means the ICANN board failed to act in accordance with its bylaws and articles of incorporation.
One of the three panelists dissented from the the majority view, appending a lengthy opinion to the majority declaration.
The IRP panel went beyond its mandate by improperly extending ICANN’s bylaws commitments beyond its board of directors, he wrote, calling the declaration “a thinly veiled rebuke of actions taken by the EIU and ICANN staff”
Just because ICANN submitted no evidence that the BGC acted independently rather than merely rubber-stamping staff decisions, that does not mean the BGC did not act independently, he wrote.
The dissenting view may carry some weight, given that the majority declaration does not give ICANN any guidance whatsoever on how it should proceed.
Dot Registry has specifically not asked for a rerun of the CPEs, and the panel didn’t give it one. Instead, it had asked the panel to simply declare that its applications should have passed CPE the first time around.
That bold demand was, naturally, declined.
But the panel offers no redress in its place either. ICANN has simply been told that the BGC’s decisions on Dot Registry’s RfRs broke the bylaws. What ICANN does with that information seems to be up to ICANN.
These gTLDs are almost certainly still heading to auction.
The documents for this IRP case can be found here.