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[RRE]Analysis of Internet By-laws Proposals
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Date: Sat, 26 Sep 1998 12:50:47 -0400
From: "Hans K. Klein" INTERNET BY-LAWS:
AN ANALYSIS AND CRITIQUE OF THREE PROPOSALS by
Hans Klein Computer Professionals for Social Responsibility (CPSR)
Public Policy Track Co-chair, INET-95, INET-96, INET-97, INET-98
School of Public Policy, Georgia Institute of Technology September 26, 1998 As the Internet governance stakeholder process approaches its
September 30 deadline, we have seen three different versions of
by-laws proposed for the new corporation ("Newco.") These three
proposals are "IANA-NSI" (the August 17 joint proposal of those two
players), the "Boston Group" (a group of technical lawyers out of
Boston), and "EFF" (the Electronic Frontier Foundation). (Their web
addresses are at the end of this document.) These by-laws are
difficult to understand, and the implications of their different
features are not obvious. In what follows I analyze and contrast
them to make them understandable, and I critique them on the basis
of the values embodied in CPSR's principles for Internet governance. The three proposals can be understood in terms of how they achieve
basic functions of governance. Governance functions are similar for
both nation states and private firms, so they should be familiar to
most newspaper-reading citizens. The governance functions considered
below concern: 1) representation, 2)transparency, 3) rights, and 4)
finances. I compare how the different by-law proposals perform these
different functions. Representation --- Newco's Board of Directors can be compared to the Congress of the
United States. Both are both the top authority for their respective
"societies." A lot of thought has to go into ensuring that the top
authority effectively represents those who are governed.
Representation in the US government is accorded by certain
categories. These include: 1) geography (seats are reserved for
representatives from different localities,) and 2) size (Congress
has two chambers, one favoring populous states and another in which
little states have equal power.) These categories of representation
ensure that different kinds of states all receive representation.
Different Newco proposals also have different categories for
representation. The IANA-NSI proposes three categories of representation: function,
geography, and membership. Functional representation is accorded to
Board members by reserving Board seats for three Supporting
Organizations, the Address SO, the Domain SO, and the protocol SO.
Much like you will find the "California delegation" in the US
Congress, you would find the "Address delegation" on Newco's Board.
Each SO would control three Board seats, so 9 (3+3+3=9) of 19 seats
are functionally-defined. Geographic representation is facilitated (but not guaranteed) by the
definition of 6 "geographic regions." Really, IANA-NSI only guards
again excessive concentration: no one region can have more than 11
of the 19 Board seats (2+2+2+1+4). That doesn't ensure that
places like Africa or Central America will have any representation,
but it does ensure that a region like North America will not control
two-thirds of the Board. Membership representation is not explicitly defined, but is expected
to be defined by Newco's first, Interim Board. So-called "At Large"
Board members will be elected by some kind of membership (where the
definition of membership remains undefined and is perhaps
problematic.) If we think of the SO's Board members as "insiders"
with a financial interest in Newco (as many stakeholders seem to
think) the At-Large Board members will represent more "outsiders" or
end users. There will be 9 At-Large Directors. (The president/top
officer of Newco will also be on the Board, so we get 3+3+3+9+1
Directors.) So that is how IANA-NSI proposes to handle representation. What
about the others? Interestingly, EFF proposes exactly the same
thing. EFF has not concerned itself too much with issues of
representation. Its concern is with rights (below). In contrast, for the Boston Group representation is the main thing.
They are especially concerned that Newco "insiders" -- the
Supporting Organizations and the President -- will attain too much
influence. To prevent this the Boston Group's proposal eliminates
those 9+1 insider Board members, leaving only the 9 At-Large
Directors elected by the membership. (This small Interim Board could
be increased later.) In the Boston Group's version the Board
represents only users. Thus this proposal does away with functional
representation by the SOs entirely. The SOs have only advisory power. The Boston group also proposes a different mode of geographic
representation. Instead of setting an upper limit on any one
region's representation, they endorse a lower limit, which would
guarantee that the Board include at least one director from each of
the 6 geographic regions. On a 9-member Board, that means that no
region could have more than 4 of nine seats. Were the Board to
expand, however, those 6 seats would become less significant
(asymptotically approaching zero in the hypothetical case of an
infinite Board.) Ultimately, greater geographic concentration might
become possible with this plan than with the IANA-NSI proposal. So, to summarize, when it comes to representation the choices so far
are between an insider/functional model and an outsider/user model.
How much democracy do stakeholders want? These two modes of representation are not above criticism. Both of
them ignore some categories of representation that were proposed
during the last year. In 1997 the Domain Name Rights Coalition
proposed that the Board represent "all major groups on the Internet,
including individuals, small businesses and entrepreneurs, political
and community organizations, and large companies (Press Release, 1
May 1997). Computer Professionals for Social Responsibility (CPSR)
proposed that the Board "should include at least 3 members [of 15]
who represent the 'Internet Community' at large ... [and who] should
be free from direct financial interests..." (CPSR Proposals, 30 June
1998). These suggestions are not incorporated into any of the three
proposals. The Boston Group's emphasis on users/members goes in this
direction, but does not reserve a specific number of Board seats for
any type of user. The by-laws could define categories for Board members, such as "for
profit" and "educational/non-profit." Language could be included to
ensure that a certain number of Board members correspond to each
category. (More on this below.) Transparency --- It is important that people know what their "governors" are doing.
For this reason many states, notably California, have "sunshine
laws" that prevent public business from being conducted in secrecy.
Newco proposals differ in their emphasis on transparency. The original IANA-NSI proposal favored corporate confidentiality
over transparency. Some meetings were to be closed, minutes would be
distributed with some delay, etc. Overall, Newco could operate with
a fairly high degree of discretion. Both the Boston Group and EFF reacted strongly against this,
proposing procedures for a high degree of transparency. EFF included
the most specific language, adapting language from the California
"sunshine laws" for Newco's charter. Thus "every portion of every
meeting of every [Newco body]" shall be open to public attendance,
and "minutes ... shall be made publicly available within one day."
In this way Newco's activities are known to all. Rights --- The Constitution of the U.S. defines a number rights that the
Congress may not abridge, most notably the First Amendment right to
free speech. As a private entity Newco would not be as strictly
constrained by the First Amendment as is the U.S. government (and
its current agents, NSI and IANA). Therefore, in the transition to
Newco some protections of speech could be lost. EFF, in keeping with its civil liberties orientation, makes this a
centerpiece of its proposal. Rather than referring to U.S. law, EFF
incorporates a reference to international law, The U.N. Universal
Declaration of Human Rights. This reads: "Everyone has the right to
freedom of opinion and expression; this right includes freedom to
hold opinions without interference and to seek, receive and impart
information and ideas through any media and regardless of
frontiers." Neither IANA-NSI nor the Boston Group proposed special
measures to preserve freedom of speech. It is my guess that the U.N. declaration provides even stronger
protections than does the U.S. First Amendment. If that is the case
then under the EFF proposal communication rights would be even
stronger than under the current U.S. regime. Finances --- Money plays a big part in governance. To prevent abusive taxation,
the U.S. founding fathers placed the power of taxation in that house
of Congress that was the most representative of the citizens,
maximizing the relationship between taxation and representation.
Today money remains a big issue. A majority of Congress current
supports campaign finance reform that would limit the influence
wealthy groups to "buy" or at least influence elections. The
regulation of campaigns is intended to reinforce the principle of
"one [person] one vote" and weaken the principle of "one dollar one
vote." (Campaign finance reform in the U.S. failed, by the way!) All Newco by-law proposals also address money issues, and as far as
I can see, they are all adopt the language proposed by IANA-NSI.
Concerning fees ("taxation," if you will,) Newco will charge enough
to cover its expenses and keep some money in the bank. Undoubtedly,
the big business players who will pay these fees will keep a close
eye on them. One allowable expense for Newco is to pay the costs that Directors
incur from Board service. This means that personal or organizational
wealth is not an absolute prerequisite for Board service, a set-up
that makes it easier for non-profit organizations to participate on
the Board. All three Board proposals contain the provision that the "resources
of the Corporation will not be expended in support of any nominee's
campaign." However, there are no other restrictions on campaign
financing. This provision could favor wealthier individuals and
members who can expend considerable funds in election campaigns.
That is what happens in public elections. The final by-laws might want to include funding and expense
provisions that level the playing field for rich and poor Board
members. Allowable expenses could include reimbursement of the value
of a Board members' time expended on Newco business. Campaign
spending could also be limited. An upper spending limit might be
defined, or candidates could be limited to campaigning via a common
web location on the Newco web site. Finally, start-up funding for Newco could present tricky issues. The
money needed for start-up could be substantial. Currently some
particularly wealthy stakeholders have offered to donate money to
cover its initial costs. At the very least such funding would create
the strong impression of industrial dominance of Newco through this
financial dependency. If Newco is to get off to a clean start, a
neutral start-up funding source should be identified (e.g. a bank
loan against future revenues.) Odds and Ends
=============
Pre-existing contracts: The IANA-NSI proposal contained a
controversial provision that would bind Newco to pre-existing
contracts. The EFF proposal does away with this. Location: All proposals foresee the corporation being incorporated
in Los Angeles County. This may contribute to continuity of staffing
in the IANA-Newco transition, in efffect "bringing the mountain to
Mohammed." On the other hand, a new location could help make a clean
break with the past. Some have also said that California's laws of
incorporation provide fewer free speech protections than do those of
Deleware. Conclusions and Recommendations --- If these three proposals express the range of stakeholder opinion in
the Internet community (and this is a big "if"!), then consensus may
not be far away. The three proposals have more in common than they
differ. Reconciling them into one set of by-laws that can garner
consensual support may well be possible. The Boston Group and EFF's proposed safeguards on transparency could
be adopted. These seem likely to be preferred by most stakeholders,
who will ultimately be outsiders looking in at Newco's activities.
These provisions are also consistent with the June 1998 White
Paper's original principles. EFF's proposal on rights also seems likely to attract wide support.
It is consistent with the libertarian philosophy of many
stakeholders participating in the White Paper process. Even those
stakeholders concerned exclusively about management issues might
approve of this provision: a non-negotiable commitment to
non-interference in communications might help keep Newco out of
disputes over content control. On the other hand, free speech
protection may be anathema to trademark holders, who own many of the
words we use. (Don't have a cow!) The fundamental difference between the three versions is the
definition of representation and the associated problem of
membership. IANA-NSI and EFF's proposals for functional
representation give considerable power to "insiders" in the SOs. If
this is something to be avoided, something like the Boston Group's
proposal is needed. As described above, the Boston Group makes Newco completely
accountable to users/outsiders, granting the SOs only advisory
status. But this proposal suffers from problems of representation. The first problem of representation concerns geographic equity. The
Boston Group's proposal only guarantees one seat per region -- even
though the Board size may vary. As the Board size increases, the
significance of a single seat declines. Instead of guaranteeing
one seat to each region, the by-laws could set minimum and maximum
percentages of Board seats. For example, the by-laws could mandate
that no region have less than 10% of Board seats (1 out of 9
seats, 3 out of 30) or more than 45% (4 out of nine seats, 13 out
of 30). Alternatively, were the Board size to be fixed,
distribution could be guaranteed with specific numbers (as in the
numbers just mentioned.) Currently, a guarantee of one fixed seat
is unsatisfactory. The second problem of representation concerns diversity. The
Boston Group's Board size of 9 is too small to allow diversity
(although the final Board size is not specified.) quantitative
changes in Board size have qualitative impacts: a bigger Board has
more seats with which to allocate, so it can accommodate more
diverse constellations of user types. On a small Board, a single
Director may have to represent all telecommunication firms
combined or all non-profits combined or all of Europe combined. On
a larger Board Directors might represent more distinct user types.
For a body that hopes to represent all the world's Internet users
a larger Board might well be appropriate. What number? The
Internet Society's governing body has 20 members. For Newco a
bigger number, say 30, could be appropriate. The final problem of representation concerns sectoral equity. If
no differentiation is made between user types, then one type may
come to dominate the Board. This type would probably be for-profit
firms who have an immediate financial interest in Newco's
activities. To prevent this the by-laws could define user-type
categories. For example, the by-laws of the Internet Society include
three categories: industry, education/non-profit, and government.
Since Newco is to be a private firm, its Board categories could be
just industry and education/non-profit. Each Board category could have a percentage of seats reserved for
it. This has a long tradition in Board design. For example, back in
the 1960s when the COMSAT Corporation was created, 20% of its Board
seats were reserved for representatives accountable to the American
people (these Board members were appointed by the President.) Other
Board members were accountable to their respective company
stockholders. What percentages could be reserved on Newco? Like
COMSAT, should it be 20%? Or is the Internet more of a "people's
technology" than a satellite? Maybe one-third of the Board could be
reserved for non-profit and educational institutions. Even if the IANA-NSI and EFF "insider" model were preferred over the
Boston group's "outsider" model, these Board categories could apply.
Percentages of At-Large members and SO-based members could be
reserved for industry and for educational/non-profits. In summary, the three by-law proposals currently in circulating
could be combined into a single consensual set of by-laws. The
combined set of by-laws could adopt the highest standards for
transparency. They could guarantee individual rights. And they could
include categories to ensure that both industry and non-profits
receive representation in sufficient number to ensure diversity. Boston Working Group http://www.cavebear.com/bwg/
IANA and NSI http://www.iana.org/intro-coop.html
EFF http://www.eff.org/
CPSR http://www.cpsr.org/onenet/ --- Hans K. Klein
Assistant Professor Phone: 404-894-2258
School of Public Policy, MC:0345 Fax: 404-894-0535
D.M. Smith Building, 313 Email:
hans.klein@pubpolicy.gatech.edu
Georgia Tech Atlanta, GA 30332-0345 ============================================== --- Paul Duguid
Social & Cultural Studies
University of California, Berkeley
duguid@socrates.berkeley.edu
Tel: 510 848 1843
Fax: 510 540 0347
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