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</head><body bgcolor="#ffffff" text="#000000"><p dir="ltr">Kaili is quite right in pointing out the fundamental importance of ICANN being truthfully described.</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr"><!-- tmjah_g_1299s -->Jean-Jacques.<!-- tmjah_g_1299e --><br><br><br></p>
<div class="gmail_quote" >Le 1 mai 2017, à 03:29, Kan Kaili <<a href="mailto:kankaili@gmail.com" target="_blank">kankaili@gmail.com</a>> a écrit:<blockquote class="gmail_quote" style="margin: 0pt 0pt 0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204); padding-left: 1ex;">
<div><font size="2" face="宋体">Hi,</font></div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体">As ICANN CEO visited China last week, I raised a
question during the meeting: Exactly what is ICANN?</font></div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体">According to what ICANN does, it is a de facto
REGULATOR serving the public interest by regulating the DNS industry.
</font></div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体">However, he flatly denied that, saying ICANN is a
"stock exchange".</font></div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体">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 ..." </font></div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体">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.</font></div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体">Thus, I hope this question at least could be clarified
within the At-Large community, before we can make it clear in
ICANN.</font></div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体">Thank you.</font></div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体">Kaili</font></div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体"></font> </div>
<div><font size="2" face="宋体"></font> </div>
<blockquote style="BORDER-LEFT: #000000 2px solid; PADDING-LEFT: 5px; PADDING-RIGHT: 0px; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px">
<div style="FONT: 9pt 宋体">----- Original Message ----- </div>
<div style="FONT: 9pt 宋体; BACKGROUND: #e4e4e4; font-color: black"><b>From:</b>
<a title="ocl@gih.com" href="mailto:ocl@gih.com">Olivier MJ Crepin-Leblond</a>
</div>
<div style="FONT: 9pt 宋体"><b>To:</b> <a title="alac@atlarge-lists.icann.org" href="mailto:alac@atlarge-lists.icann.org">ALAC Working List</a> </div>
<div style="FONT: 9pt 宋体"><b>Sent:</b> Tuesday, April 25, 2017 2:10 PM</div>
<div style="FONT: 9pt 宋体"><b>Subject:</b> [ALAC] ICANN as a 501(c)(3)
Organisation</div>
<div><br></div>Dear Alan,<br><br>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:<br>(Ref: <a class="moz-txt-link-freetext" href="https://www.icann.org/resources/pages/governance/articles-en">https://www.icann.org/resources/pages/governance/articles-en</a>
)<br><br><i><font color="#3366ff">Article 2.I.II:<br>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 “<strong>Code</strong>”), 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 <u>Article IV</u> hereof, pursue the charitable and public purposes of
<b>lessening the burdens of government and promoting the global public
interest </b>in the operational stability of the Internet by carrying out the
mission set forth in the bylaws of the Corporation
(“<strong>Bylaws</strong>”). 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.<br><br>Article 2.IV:<br>Notwithstanding
any other provision of these Articles: <br>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.<br>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.</font></i>
<p>So what does the § 501(c)(3) tax code say? <a class="moz-txt-link-freetext" href="http://bit.ly/1Va1vVt">http://bit.ly/1Va1vVt</a></p>
<p>To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an
organization must be <a href="https://www.irs.gov/charities-non-profits/charitable-organizations/organizational-test-internal-revenue-code-section-501c3">organized</a>
and <a href="https://www.irs.gov/charities-non-profits/charitable-organizations/operational-test-internal-revenue-code-section-501c3">operated</a>
exclusively for <a href="https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3">exempt
purposes</a> set forth in section 501(c)(3), and none of its earnings may <a href="https://www.irs.gov/charities-non-profits/charitable-organizations/inurement-private-benefit-charitable-organizations">inure</a>
to any private shareholder or individual.</p>
<p><br></p>
<p>Exempt purposes:</p>
<p><a class="moz-txt-link-freetext" href="https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3">https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3</a></p>
<p><i><font color="#3366ff">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
<em>charitable</em> 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; <b>lessening the burdens of government</b>;
lessening neighborhood tensions; eliminating prejudice and discrimination;
defending human and civil rights secured by law; and combating community
deterioration and juvenile delinquency.</font></i></p>
<p><font color="#3366ff"><font color="#000000">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.)</font></font></p>
<p><font color="#3366ff"><font color="#000000">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" <a class="moz-txt-link-freetext" href="https://www.irs.gov/charities-non-profits/charitable-organizations/intermediate-sanctions-excess-benefit-transactions">https://www.irs.gov/charities-non-profits/charitable-organizations/intermediate-sanctions-excess-benefit-transactions</a>
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.<br></font></font></p>
<p><font color="#3366ff"><font color="#000000">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.
<br></font></font></p>
<p><font color="#3366ff"><font color="#000000">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.<br></font></font></p>
<p><font color="#3366ff"><font color="#000000">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.</font></font></p>
<p><font color="#3366ff"><font color="#000000"><br></font></font></p>
<p><font color="#3366ff"><font color="#000000">Kindest regards,</font></font></p>
<p><font color="#3366ff"><font color="#000000"><br></font></font></p>
<p><font color="#3366ff"><font color="#000000">Olivier<br></font></font></p>
<p><font color="#3366ff"><font color="#000000"></font><br></font></p>
<p>
</p><hr>
<p></p>_______________________________________________<br>ALAC mailing
list<br>ALAC@atlarge-lists.icann.org<br>https://atlarge-lists.icann.org/mailman/listinfo/alac<br><br>At-Large
Online: http://www.atlarge.icann.org<br>ALAC Working Wiki:
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