At-Large Representative for Canada and the United States on the
ICANN Board of Directors
Karl Auerbach

Diary - February 12, 2002

It's 5:30am and I've been up writing code all night.  I'm waiting for 6am to come around - that's when the board meeting conference call will start.  And what do I do?  I fall asleep and end up missing the meeting.  So, in the absence of my actually being there, here's what I was thinking about:

Well, it's only been three weeks since our last pre-dawn telephone board meeting.  If one compares the number of these telephone meetings - meetings that are held in private, excluding the public - to the number of "public" meetings, one can see that ICANN's Board of Directors does most of its work in closed sessions.  The DNSO Names Council does a much better job and one wonders why if the Names Council can place its meetings on the record, why can not the ICANN Board of Directors?

The preliminary report may be found at:

Reconsideration Requests

I would have voted to reject the reconsideration committee's report.  I believe that the reconsideration request has considerable merit and that ICANN's creation of ICP-3 was an act that contained within it a clear repudiation of the concept that ICANN's role is to serve the Internet community and a declaration that ICANN is an entity driven by the whims of its management.

We have the request regarding ICANN's ICP-3 - ICANN staff's fiat decree that there shall be one DNS root.  The original request may be found at:  And the "reconsideration" may be found at:

I have not used the ICANN/NTIA root system for nearly four years.  I've used competing roots and have operated my own - and never had any difficulties on the net.  So I personally know that the contents of this ICP are unfounded and incorrect.

The "reconsideration" report makes the mistake of confusing the policy vacuum that existed before competing roots arose for a policy against such competing roots.  And the "reconsideration" report simply whitewashes the lack of procedure by which this "policy" was simply decreed by ICANN's president.

I find that ICANN's policy about competing roots is yet another form of "mission creep" - ICANN's business should be limited to ICANN's own DNS root.  ICANN should not attempt to spread Fear, Uncertainty, and Doubt (FUD) about DNS systems that chose to compete with ICANN's.

Director Term Alignment

I would have voted for this measure.  There would be an extension of some Director's terms (not including my own or that of the other four true at-large Directors).  This extension would be for about six weeks.  I would have preferred that the resolution be modified so that the changes wouldn't extend any current terms, but I didn't perceive much support for that suggestion on the e-mail list used by the board (a list that contains several outsiders).

Annual Financial Statement

The purpose of a financial statement is to disclose to the public the financial state of the Corporation.  This is doubly true when the corporation is is exempt from both Federal and State taxation and is organized as a public-benefit corporation.

Do ICANN's published financials meet this standard?  I do not believe they do.  In fact I suspect that they are quite misleading.  ICANN's 15 month resistance to an inspection of its records by this Director does nothing to alleviate my concerns.

There is of course the matter of counting pledge cards as revenue - a practice that is apparently coming home to roost as ICANN's management more and more frequently directly or indirectly indicates impending corporate poverty.

And then there's the matter of the DNSO funds that pass through ICANN without being part of ICANN's budget or clearly shown on ICANN's public reports.  In my opinion this situation has an overwhelming stench of impropriety and abuse of ICANN's tax exempt status.

And then there is the matter of what may be, in the words of section 4958 the United States Internal Revenue Code (26 USC 4958), payments of an "excess benefit" to a "disqualified person".  ( See 26 USC 4958 and )  My back-of-the-envelope calculation indicates that many of  ICANN's past and present Directors, ICANN's past and present managers, and the recipients of ICANN's improper largess could be subject to $6,000,000 or more in tax penalties.  I brought this situation to the attention of ICANN management in August of 2001 and they have done nothing.  And apparently ICANN's auditors were not apprised of the possibility of such crushing penalties.  But then again, it seems that ICANN's auditors were quite willing to close their eyes and accept whatever ICANN's management put before them.

Indeed, I am very surprised that KPMG, the auditors, signed off on ICANN's public report.  KPMG can not claim innocent unawareness - I wrote them two letters early in 2001 year informing them of my concerns about the DNSO's cash practices.

.JP Redelgation/ccTLD Agreement

I would have abstained as I had not the time to fully review or understand this issue.

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2002 Karl Auerbach, All Rights Reserved.
Updated: Monday, March 04, 2002 03:14:37 PM