State AGs fight to stop Internet surrender at 11th
hour but fail, By Robert Romano
Update: The federal district court has sided with
the Commerce Department and refused to issue the injunction, paving the way for the transfer of U.S. oversight of the
Internet at midnight.
There is one last chance to stop the
end of U.S. oversight of the Internet’s domain name system.
Congress has already lost this
battle after Republican majorities failed to include language blocking the
transfer of the Internet Assigned Numbers Authority (IANA) functions in the
continuing resolution funding the federal government.The transfer had been defunded the
past two fiscal years, but no more.
So now, with just hours left before
the Commerce Department contract with the Internet Corporation for Assigned
Names and Numbers (ICANN) on Oct. 1, four state attorneys general led by
Arizona Attorney General Mark Brnovich are now suing the government over the
transition in the U.S. District Court in the Southern District of Texas,
Galveston division, arguing the transfer is an illegal
transfer of government property without a vote of Congress.
Federal District Judge George Hanks, Jr.
has ordered a hearing at 1:30 p.m. central time after denying a motion by the plaintiffs to do a
hearing via phone.
The case boils down to Article 4,
Section 3 of the U.S. Constitution, which states that only “The Congress shall
have power to dispose of … property belonging to the United States.” The current October 1, 2012 NTIA contract
with ICANN explicitly states that “All
deliverables under this contract become the property of the U.S. Government.”
Deliverables under the contract
include “technical requirements for each corresponding IANA function,”
“performance standards in collaboration with all interested and affected
parties … for each of the IANA functions,” and “a fully automated root zone
management system … [that] must, at a minimum, include a secure (encrypted)
system for customer communications; an automated provisioning protocol allowing
customers to manage their interactions with the root zone management system; an
online database of change requests and subsequent actions whereby each customer
can see a record of their historic requests and maintain visibility into the
progress of their current requests; and a test system, which customers can use
to meet the technical requirements for a change request; an internal interface
for secure communications between the IANA Functions Operator; the
Administrator, and the Root Zone Maintainer,” among other items.
Further, ICANN collects annual
revenues of more than $100 million a year, making it property of real value.
In addition, the IANA itself reverts
to the Commerce Department upon termination of the contract: “the Government
may terminate the contract for default.” The contract even provides for the
possibility of IANA being performed by another entity: “In the event the
Government selects a successor contractor, the Contractor shall have a plan in
place for transitioning each of the IANA functions to ensure an orderly
transition while maintaining continuity and security of operations.” These
provisions further indicate that upon conclusion of the contract on Sept. 30,
2016, the Commerce Department remains in possession of the IANA functions, and
nothing which states ICANN does.
It therefore follows that NTIA
cannot perform the transfer of the IANA functions to ICANN without a vote in
Congress, or some other authorizing statute, for example, 40. U.S.C., Chapter
5, Subchapter III, “Disposing of property.” Under that statute, the
disadvantage to NTIA and ICANN would be that the IANA functions would have to
come up for competitive bid as provided in 40 U.S.C. 545 (a).
Or if a negotiated sale as provided
in 40 U.S.C. 545 (d)(1), it would have to done at “fair market value”: “the
sale must be publicized to an extent consistent with the value and nature of
the property involved and the price established must reflect the estimated fair
market value of the property.”
Since this is an entity that does
more than $100 million a year of revenue, the fair market value of the IANA
functions — we’re talking about a global monopoly for allocation of an
unlimited number of IP addresses, domain names, and top-level domain names — it should be worth billions!
Or, if disposal through a contract
broker as provided in 40 U.S.C. 545 (c), “wide public notice of the
availability of the property for disposal” would be required: “Disposals and
contracts for disposal of surplus real and related personal property through
contract realty brokers employed by the Administrator shall be made in the
manner followed in similar commercial transactions under regulations the
Administrator prescribes. The regulations must require that brokers give wide
public notice of the availability of the property for disposal.” Yet, no such
notice has been given.
The disposal of such property to a
private interest would also invoke antitrust. 40 U.S.C. 559 (b)(1) states: “An
executive agency shall not dispose of property to a private interest until the
agency has received the advice of the Attorney General on whether the disposal
to a private interest would tend to create or maintain a situation inconsistent
with antitrust law.”
We also now know via Freedom of
Information Act requests by Americans for Limited Government that the NTIA has
not sought the Attorney General’s advice the disposal of property to a private
interest prior to the March 2014 announcement. That is a huge liability for
ICANN, and potentially for anyone involved at the agency if the provision of
the contract stating “All deliverables under this contract become the property
of the U.S. Government” was deliberately ignored. Was this a conspiracy to get
around antitrust?
Leaving that aside — antitrust is
not cited in the state attorneys general case, but it is likely to come up
later by private actors looking to compete with ICANN — there certainly are
some outstanding legal questions for the federal courts to feel out.
In addition, the state attorneys
general argue that the original contract with ICANN created designated public
forum under the First Amendment for the entire Internet, and that in ending the
contract and giving that forum to a private entity without strict guidelines
for continuing that level of protection a First Amendment violation has
occurred. It’s a novel argument.
Did the government contract with
ICANN make the Internet into a public forum with First Amendment protections?
Americans for Limited Government has
argued in the past that the government contract has meant no changes to the
root zone file could be approved by the Department of Commerce if they would
result in censorship or otherwise violate the First Amendment. In other words,
there are definite limits to any content restrictions imposed by ICANN whilst
under government contract. It also therefore follows that the Internet itself
becomes a public forum in that range of protection.
Besides that, the attorneys general
argue that the transition violates the Administrative Procedures Act, and would
result in potential irreparable harm to domains operated by the federal and
state governments if ICANN were to suddenly start messing with government top
level domains.
For remedy, the states are
requesting the federal courts to enjoin the transition and instruct the
Commerce Department to renew the current contract.
In the least, a preliminary
injunction and temporary extension of the contract would be warranted,
Americans for Limited Government President Rick Manning noted in a statement:
“The court has to issue a restraining order against the transition, as moving
ahead has been deemed to be irreversible, with no way to undo harms done to the
plaintiffs and the American people. The First Amendment protections afforded by
government the contract must not be cast away so lightly. A private actor like
ICANN does not have to honor the freedom of expression the way the federal
government does. That should be taken into account.”
We’ll know by midnight if the
federal district court in Texas agreed to slow down the Internet surrender
enough to hear these issues out. Fingers crossed.
Robert
Romano is the senior editor of Americans for Limited Government.
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