[ALAC] ICANN as a 501(c)(3) Organisation

Mon May 1 05:19:05 UTC 2017

Kaili is quite right in pointing out the fundamental importance of ICANN being truthfully described.

A decade ago, and less, this came up in Board discussions every now and then, the majority swatting down anything suggestive of "regulation". The closest we got to accurately naming ICANN's function was "quasi regulation", but this expression was then redacted from reports. Among the arguments put forward by opponents to such a designation, the fear of aggravating Washington was uppermost. Who were we to dare question a tenet of Reagonomics and Thatcherism, i.e. "Only self-regulation can lead to prosperity"? And never mind if the 2008 financial meltdown proved that self-regulation had failed, common wisdom would not accept the evidence.

This debate is not neutral, especially at a time when we see a perilous convergence between some democracies and the régimes they used to (rightly) criticize. When democracies resort to doctoring facts and smothering free debate, the public interest is in peril.

This may be the right time to put forward, once again, the term "quasi regulatory" to describe ICANN's main function. As in the time of Copernic, calling out reality may not be without risk, but remains essential for human development.

Jean-Jacques.

Le 1 mai 2017 03:29, à 03:29, Kan Kaili <kankaili at gmail.com> a écrit:
>Hi,
>
>As ICANN CEO visited China last week, I raised a question during the
>meeting:  Exactly what is ICANN?
>
>According to what ICANN does, it is a de facto REGULATOR serving the
>public interest by regulating the DNS industry.  
>
>However, he flatly denied that, saying ICANN is a "stock exchange".
>
>As I see it, this is a fundamental undefined question of ICANN.  Even
>during the openning speech in Copenhagen, Steve Croker said "whatever
>ICANN is ..."  
>
>However, this question leads to the position and weight of ALAC, and
>the consumers'/end-users' interests, within ICANN, including the number
>of seats on the Board, budget allocation, etc.
>
>Thus, I hope this question at least could be clarified within the
>At-Large community, before we can make it clear in ICANN.
>
>Thank you.
>
>Kaili
>
>
>
>  ----- Original Message ----- 
>  From: Olivier MJ Crepin-Leblond 
>  To: ALAC Working List 
>  Sent: Tuesday, April 25, 2017 2:10 PM
>  Subject: [ALAC] ICANN as a 501(c)(3) Organisation
>
>
>  Dear Alan,
>
>as a follow-up to my explanation on the ALAC mailing list about ICANN
>being a 501(c)(3) organisation, the relevant Article of Incorporation
>paragraph is:
>  (Ref: https://www.icann.org/resources/pages/governance/articles-en )
>
>  Article 2.I.II:
>This Corporation is a nonprofit public benefit corporation and is not
>organized for the private gain of any person. It is organized under the
>Nonprofit Public Benefit Corporation Law for charitable and public
>purposes. The Corporation is organized, and will be operated,
>exclusively for charitable, educational, and scientific purposes within
>the meaning of § 501(c)(3) of the Internal Revenue Code of 1986, as
>amended (the “Code”), or the corresponding provision of any future
>United States tax code. Any reference in these Articles to the Code
>shall include the corresponding provisions of any future United States
>tax code. In furtherance of the foregoing purposes, and in recognition
>of the fact that the Internet is an international network of networks,
>owned by no single nation, individual or organization, the Corporation
>shall, except as limited by Article IV hereof, pursue the charitable
>and public purposes of lessening the burdens of government and
>promoting the global public interest in the operational stability of
>the Internet by carrying out the mission set forth in the bylaws of the
>Corporation (“Bylaws”). Such global public interest may be determined
>from time to time.  Any determination of such global public interest
>shall be made by the multistakeholder community through an inclusive
>bottom-up multistakeholder community process.
>
>  Article 2.IV:
>  Notwithstanding any other provision of these Articles: 
>a. The Corporation shall not carry on any other activities not
>permitted to be carried on (i) by a corporation exempt from United
>States income tax under § 501(c)(3) of the Code or (ii) by a
>corporation, contributions to which are deductible under § 170(c)(2) of
>the Code.
>b. No substantial part of the activities of the Corporation shall be
>the carrying on of propaganda, or otherwise attempting to influence
>legislation, and the Corporation shall be empowered to make the
>election under § 501 (h) of the Code. 
>  So what does the § 501(c)(3) tax code say? http://bit.ly/1Va1vVt
>
>To be tax-exempt under section 501(c)(3) of the Internal Revenue Code,
>an organization must be organized and operated exclusively for exempt
>purposes set forth in section 501(c)(3), and none of its earnings may
>inure to any private shareholder or individual.
>
>
>
>
>  Exempt purposes:
>
>https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3
>
>The exempt purposes set forth in section 501(c)(3) are charitable,
>religious, educational, scientific, literary, testing for public
>safety, fostering national or international amateur sports competition,
>and preventing cruelty to children or animals.  The term charitable is
>used in its generally accepted legal sense and includes relief of the
>poor, the distressed, or the underprivileged; advancement of religion;
>advancement of education or science; erecting or maintaining public
>buildings, monuments, or works; lessening the burdens of government;
>lessening neighborhood tensions; eliminating prejudice and
>discrimination; defending human and civil rights secured by law; and
>combating community deterioration and juvenile delinquency.
>
>So "lessening the burdens of government" is clearly the key reason for
>ICANN to operate as 501(c)(3), but as you can see there are other
>possible purposes. (As a side track, it is particularly important to
>note the "global public interest" part of the mission which is still
>undefined and unresolved.)
>
>With the new gTLD program generating a large income, ICANN needs to be
>very careful and show sustained support for "lessening the burdens of
>government" - thus support all sorts of Internet-related activities
>outside of ICANN. Not doing so, it could be accused of "excess benefit
>transactions"
>https://www.irs.gov/charities-non-profits/charitable-organizations/intermediate-sanctions-excess-benefit-transactions
>and be sanctioned. ICANN needs to walk a very fine line on this. I am
>not a US tax attorney and have very little knowledge of the matter, but
>it is my understanding that if ICANN was to stop supporting initiatives
>in the wider Internet ecosystem space, activities related to ICANN but
>not *strictly* relating to Names and Numbers, it would risk losing its
>501(c)(3) status.
>
>
>This loss of 501(c)(3) status is completely independent of the point of
>view that some are holding that ICANN is spending too much money
>outside ICANN core activities. 
>
>
>It is also worth noting that adhering to the conditions for retaining
>501(c)(3) status will be a key issue for the allocation of Auction
>funds.
>
>
>I really think that we should fully play this card when it comes down
>to use of funds in ICANN. The At-Large Community is part of this
>"promoting the global public interest" and we need to remind everyone
>about this regularly.
>
>
>
>
>  Kindest regards,
>
>
>
>
>  Olivier
>
>
>
>
>
>
>
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