In November 1998, the Department of Commerce entered into an agreement with ICANN in the form of a Memorandum of Understanding (MOU) under which the two parties agreed to collaborate on a joint transition project to transfer control over the Domain Name System (DNS) from the U.S. government to ICANN. The Department emphasized that the MOU was an essential means for the Department to ensure the continuity and stability of the domain name management functions that were then being performed by, or on the behalf of, the U.S. government.
The MOU stated that before making a transition to private sector management, the Department required assurances that the private sector has the capability and resources to manage the domain name system. To gain these assurances, the Department and ICANN agreed in the MOU to complete a set of transition tasks. The Department's tasks mainly relate to providing advice, coordination with foreign governments, and general oversight of the transition. ICANN agreed to undertake tasks that call for it to design, develop, and test procedures that could be used to manage the domain name system. Collectively, ICANN's tasks addressed all four of the transition’s guiding principles as set forth in the White Paper.
To implement these White Paper principles, the MOU between ICANN and the Department includes two tasks: one relating to developing mechanisms that ensure representation of the global and functional diversity of the Internet and its users, and one relating to allowing affected parties to participate in the formation of ICANN's policies and procedures through a bottom-up coordination process. In response to these two tasks, ICANN adopted the overall structure suggested by the White Paper.
First, ICANN created a policy-making Board of Directors. The initial Board consisted of ICANN’s president and nine at-large members who were appointed at ICANN’s creation. ICANN planned to replace the appointed at-large Board members with nine members elected by an open membership to reflect the diverse, worldwide Internet community.
Second, ICANN organized a set of three supporting organizations to advise its Board on policies related to their areas of expertise. One supporting organization was created to address Internet numbering issues, one was created to address protocol development issues, and one was created to address domain name issues. Together these three supporting organizations selected nine additional members of ICANN's Board — 3 from each organization. Thus, ICANN's Board was initially designed to reflect the balance of interests described in the White Paper.
Progress on and completion of each task was to be assessed by the Department on a case-by-case basis, with input from ICANN. Any amendments to the MOU, such as removing tasks, had to be approved by both parties. However, the Department retained responsibility for determining when management of the domain name system will be transitioned to ICANN, using the procedures tested during the transition. In the event of a serious disagreement with ICANN, the Department would have recourse under the MOU to terminate the agreement.
The original MOU was scheduled to expire on September 2000. Because work on the transition was not completed within the original transition time frame, the MOU was amended several times, and its time frame extended twice. In September 2006, the amended MOU was replaced with a Joint Project Agreement (JPA).