The Commonwealth Minister for Communications and the Arts, Senator the Hon Mitch Fifield announced a review of the management of Australia’s .au internet domain in October 2017 (DOCA Review). The team undertaking the review at the Department of Communications and the Arts released a Discussion Paper for the review on 16 November, with responses due by 18 December 2017.

Background and recent history

Currently, responsibility for policy development and enforcement and the general management of the .au domain resides with .au Domain Administration Ltd (auDA).

auDA is a company limited by guarantee with a board elected by members of the supply side (4 directors) and demand side (4 directors) of the domain name industry and 3 independent directors appointed by the elected directors. The CEO of auDA attends board meetings as a non-voting member of the board.

Anyone can become a member of auDA and, three months after joining, is able to vote in elections for directors and other matters at the company’s general meetings.

From the introduction of the competitive market structure for the Australian domain name industry in 2002 until 2016, auDA managed the regulation of the industry through a period of rapid growth in a solid, dependable and largely ‘no-surprises’ way, despite the inevitable controversies and issues which arise in any rapidly growing industry.

However, since the replacement of the long time chair the Hon Tony Staley AO (a former Minister for Communications and experienced public company director and chair) by the board in late 2015, there has been a large turnover of auDA’s directors, including the other long serving independent directors:

  • Graham McDonald, an experienced lawyer who was a former Presidential Member of the Commonwealth AAT, Chair of the Superannuation Complaints Tribunal and inaugural Australian Banking Ombudsman.

In that time there has also been an almost complete turnover of staff including the long term CEO and Chief Policy Officer, with two key senior executives also leaving the company within about a year of their commencement.

In July 2017 the Chair who had replaced Tony Staley unexpectedly resigned himself after it became clear that a Special General Meeting convened at the request of members under the Corporations Act 2001 would pass a resolution to remove him as a director. A new independent Chair was announced in November 2017.

At the same time as these events have been occuring auDA is conducting a process to transform the arrangements under which the registry of .au domain names is managed and a comprehensive review of all of the binding published policies which apply to .au domain names.

DOCA Review

The DoCA Review’s terms of reference are to examine and make recommendations on:

  • the most appropriate framework for the management of the .au top level domain;
  • how to ensure that Government and community expectations inform auDA’s operation and decision-making; and
  • mitigation strategies to address future risks to the security and stability of .au.

Current Governance Model

auDA is not directly under the control of the Australian Government. Rather, it holds a delegation of power to manage .au from the Internet Corporation for Assigned Names and Numbers (ICANN) under a Sponsorship Agreement after auDA was endorsed by the then Commonwealth Minister for Communications (Senator the Hon Richard Alston) as the appropriate entity to hold the delegation for .au.

However, under it’s Constitution, auDA has always recognised that the Internet Domain Name System is a public asset and that the .au country code top level domain (.au ccTLD) is under the sovereign control of the Commonwealth of Australia.

The Principal Purposes of auDA are: to be the administrator of and Australian self regulatory policy body for the .au ccTLD and to maintain and promote its operational stability and utility and to enhance the benefits of the internet to the wider community. auDA is to do so through cost effective administration of .au; by developing and administering rules relevant to .au and its sub-domains; liaising with national and international bodies on issues relating to the development and administration of domain name systems; and establishing appropriate complaints handling and dispute resolution processes.

Accordingly, auDA must administer the .au ccTLD for the benefit of the Australian community, rather than to benefit the members or directors of the company themselves.

Further, Under Part 22, Division 3 of the Telecommunications Act 1997, the Australian Communications and Media Authority (ACMA) may declare a specified person or association to be a declared manager of electronic addressing if the ACMA considers that the person or organisation is not managing the electronic addressing to the ACMA’s satisfaction or if the Australian Competition and Consumer Commission (ACCC) directs it to. Once a person or organisation has been declared, the ACMA may then give binding directions after consulting with the ACCC.

These processes require the independent statutory office holders of the ACMA and the ACCC to be satisfied that a situation has arisen which makes it necessary to step in and assume a degree of control over auDA and then give directions as to how auDA manages electronic addressing. In effect, this gives statutory ‘reserve powers’ to the ACMA and the ACCC on behalf of the Australian Government and community but, in practice, they have never needed to be used.

This model of industry self-regulation, expressly in the public interest rather than the interest of members of the industry or the government of the day, has been largely successful in enabling and perhaps even driving the rapid growth of the internet in Australia and establishing .au domains as a relatively trusted brand amongst Australian consumers. As noted in the Discussion Paper, Australia has a policy of and commitment to the multi-stakeholder approach to internet governance which is implemented in this model.

Occasionally in the hurly burley of industry politics, such as in the lead up to a contested election for board positions at auDA, some may lose sight of the fact that auDA exists to manage the .au Domain Name System for the benefit of the entire Australian Community, rather than to benefit the industry it regulates or the sectional interests of directors or the members who elect a majority of them.

Possible areas for reform

In examining and responding to the DOCA Review’s 20 questions set out in the Discussion Paper, respondents could focus on the desirability of preserving the multi-stakeholder, bottom up, consensus driven model of internet governance for auDA and suggest mechanisms for improving the governance of the company itself to avoid future periods of instability such as those experienced in the last 2 years.

Some useful governance reforms might include:

  • introduction of term limits for elected and independent directors of, say, 3 terms;
  • decreasing the number of elected directors to 6, each of whom are elected for a term of 3 years;
  • staggering the terms of elected and independent directors to achieve a balance of continuity and renewal on the board;
  • removing the distinction between the supply and demand sides of the industry in auDA’s membership structure, which has had the unintended consequence that each supplier member’s vote carries significantly more weight than each demand member’s vote;
  • a requirement that the chair and deputy chair of auDA be independent directors;
  • the definition of ‘independent director’ excluding persons who have been elected directors within the last 3 years; and
  • the introduction of a formalised nominating committee process to ensure that individuals selected as independent directors have appropriate, high level internet and/or “for-purpose” governance experience and expertise.

Maddocks acted for auDA between 2001 and 2017.