To have and to hold – The latest on auDA reform

By LAURIE PATTON | 7 August 2018

One of the many issues discussed last night at auDA‘s Membership Considerations Workshop was the appropriateness of people “hoarding” Internet domain names. For anyone unfamiliar with this practice, there are investors who buy what they believe are noteworthy domain names in the hope they can re-sell them later at a profit. They call themselves “domainers”.

At the heart of a debate over how the allocation of domain names should be managed is the influence the domainers have traditionally exercised, and clearly wish to continue to exercise.

auDA is the company managing our Internet domain names. If you own a website you’ll have dealt with one of the companies selling domain names to the public. They all operate under the authority and supervision of auDA.

Based on a report from his department, the Minister for Communications and the Arts, Senator Mitch Fifield, has given auDA three months to undertake a wide-ranging reform program. For quite some time auDA has been seen as a tightly controlled fiefdom with a board of directors elected from within the industry and fraught with conflicts of interest. The Communications department highlighted the risk of board “capture” among its primary concerns.

As recently appointed independent chair Chris Leptos has observed, “The review highlighted that management and governance practices had not significantly changed over the past 17 years, and had become an impediment to auDA performing its role effectively”.

Last night’s workshop was part of an ongoing process that will see auDA present a new operating model to the government and, subsequently, a vote to approve a new constitution at an AGM later in the year.

An attempted board coup last week by a dissident group, known as the Grumpies, was unsuccessful. Despite the obvious ongoing unhappiness among some of the Grumpies, the consultation process is working well – albeit with only a fraction of the auDA membership sufficiently interested to attend either of the two open consultation workshops held so far.

Last night about a dozen turned up at a venue in Melbourne and around 25 joined online. Only about a dozen people attended the first session in person and about the same number attended online. This is from a total membership well in excess of 1300 – which suggests the Grumpies’ claims of widespread disquiet among auDA members are exaggerated.

Participants last night were asked to vote on a series of questions the answers to which will be fed back to a more formal group – the Consultation Model Working Group – which is preparing a report to go to the auDA board.

The government wants auDA to increase the breadth of membership and to include a wide range of stakeholders. So one question posed was about the level of membership fees, and whether fees should be included in the cost of registering a domain name. While the consensus seemed to be that current fee levels are OK, feelings were mixed on the incorporation of membership with domain registration.

Other issues considered, again with a mix of viewpoints, included:

who are auDA’s stakeholders

 processes for engaging with stakeholders

.  the benefits of auDA membership

.  the appropriateness of having overseas members

.  the purpose and membership of advisory committees

.  the makeup and processes governing a board nominations committee

At the earlier workshop a key question related to the membership structure. Currently auDA has two member classes. One for the demand side and one for the supply side. The clear preference for the future was a “Single Member Class Model…through which any individual, corporate, or institution could join with equal weighting”. Members would thereby collectively elect a certain number of board directors, yet to be determined, with a majority of independent directors appointed from time to time by the board. A majority of independent directors was one of the government’s central requirements.

So, once the consultation process is completed, and assuming Senator Fifield approves the new model, auDA will be well placed to move on. The new board structure should eliminate the prospect of capture by vested interests.

Directors elected at the next AGM will no doubt be conscious of the need to continue the healing now underway. They will also have to deal with a few issues that have so far not been part of the reform debate. Among them, the role of the domainers and auDA’s responsibility to act in the best interests of all who use the Internet.

POSTSCRIPT: Late today auDA announced that demand class director Tim Connell has resigned. Mr Connell says he doesn’t support what auDA describes as the “majority position of admitting new members in line with the auDA Constitution and the requirements of the federal government review”. While Mr Connell is certainly entitled to his viewpoint, at the recent Special General Meeting auDA’s top-tier legal firm, Ashurst, confirmed that the provisions of the Constitution do not allow the board to reject the new members. auDA has three months (“or such longer period as the Board may otherwise resolve”) to appoint a replacement for Mr Connell.

(Laurie Patton is a member of auDA and the former CEO / Executive Director of Internet Australia. He is currently advising Afilias Australia, the company appointed to take over the management of the .au registry for auDA from 1 July 2018. However, the views expressed here are his own and have not been endorsed by Afilias.)