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<nettime> fwd 1: telcom digest: What Cerf and Dyson are up to These Days

--- Forwarded

X-From_: ptownson@massis.lcs.mit.edu  Thu Sep  2 05:41:28 1999
Date: Wed, 1 Sep 1999 23:43:29 -0400 (EDT)
From: TELECOM Digest Editor <ptownson@massis.lcs.mit.edu>
To: ptownson@massis.lcs.mit.edu
Subject: What Vint Cerf and Esther Dyson are up to These Days

      This special mailing from TELECOM Digest is in the public
      domain. You are encouraged to share it with other mailing
      lists and newsgroups as appropriate. *Please do not spam*
      in the process of doing so, but it is your net after all,
      and netizens deserve to be kept informed, even if those
      who approach the vice-president of the United States saying
      they 'represent all users' don't want you knowing what
      they are doing or getting in the way.

Gordon Cook of Cook Report has kindly forwarded to me some email of
interest; email between Vint Cerf and others in the clique known as ICANN,
the Internet Corporation for Assigned Names and Numbers.  Internet
Society, another tightly controlled clique, is a separate organization,
but essentially the same people control each, like two peas in a pod, as
the saying goes. Tomorrow, I have a bit more, and the day after that, more
also.  If/when/ever Cerf, Dyson and others want to join us at user level
to discuss the great giveaway of the internet, I'll happily be quiet and
give them the floor. 

Rebuttals and responses of course will be quite welcome. My sincere thanks
to Mr. Cook for sharing his notes. 


  Date: Wed, 1 Sep 1999 17:47:21 -0400
  From: Gordon Cook <cook@cookreport.com>
  Subject: Follow the Money: an Inside View of ICANN Fund Raising

The COOK Report has received the full text of nine email messages
detailing ICANN's efforts in June to stave off bankruptcy.  It has
obtained independent verification that they are messages that were given
by ICANN to the House Commerce Committee Subcommitte on Oversight and
Investigations that held hearings on July 22.  The e-mail below makes very
clear that ICANN's support is focused largely within IBM, MCI, Cisco, and
the Executive Office of the President of the United States. 

 MCI's Vint Cerf and IBM's Vice President of Internet Technology, John
Patrick show themselves as the masterminds of a campaign to collect funds
from internet related companies.  The guise is that without ICANN the
Internet cannot function smoothly and "if ICANN fails
e-business/e-anything is in jeopardy." The messages show the grasping
self-serving mindset of the ICANN clique -- one that is useful to contrast
to their avowed stance of public interest coordination of Internet
technical functions. 

ICANN has constructed an edifice of Byzantine complexity to do a job that
six people are doing now for a cost of about $600,000 a year including
equipment and overhead.  Those who have not bought into its centralized,
control-oriented mindset maintain that it is a job that does not need to
be done and is one that will allow a handful of huge corporations to
dominate the formerly decentralized entrepreneurial workings of the
Internet.  The Internet is functioning quite well without ICANN. 

Congress must ascertain what has motivated ICANN's core supporters, a
group of only four people: Vint Cerf, John Patrick, Esther Dyson, and Mike
Roberts to claim that the Internet is in danger?  Do we really want the
Internet, which is functioning perfectly well, run by an unaccountable
bureaucracy staging a global road show and spending annually some ten
times the current amount that gets the job done? 

Two legacy companies, IBM and MCI, are at the heart of a gambit to build
-- with the aid of other legacy operations like Netscape and AT&T, and the
hangers-on of the failed gTLD-MOU, IAHC, Core group -- an unaccountable
operation that is at heart antithetical to the interests of the globally
expanding entrepreneurial Internet. 

Leaders of most other internet companies, seeing through the Cerf-Patrick
subterfuge, have not contributed to those directing the ICANN gambit. 
Unfortunately, Cerf, Patrick, Dyson and Roberts didn't get the message
that should have been delivered by their last years worth of fund raising
efforts. ICANN should be put out of its misery and the Internet left to
run itself. 

The lessons taught by ICANN will provide strong motivation for domain name
registrars and the regional IP number registries to contribute the six to
seven hundred thousand dollars a year necessary to keep IANA functioning. 
Left to its own devices we will find that the DNS registry/registrar
industry will be able (perhaps with some congress- ional guidance) to form
an association.  We shall see that this association will be able to
operate multiple root servers in a way that will prevent most conflicts
and that by letting the market place actually operate we shall quickly
gain a larger and more stable DNS system. 

The inner circle of ICANN is amazingly narrow: 

MCI-WorldCom (Vint Cerf & John Sidgemore); 

IBM (John Patrick, Roger Cochetti, Mike Nelson & George Conrades); 

Mike Roberts (who at Educom was beholden to IBM funding); 

Esther Dyson (known as one of the most influential persons in the
             IT industry); 

Joe Sims (anti trust attorney for the powerful law firm of Jones and
          Day); and,

Tom Kalil (the group's White House liason to the highest levels of the
          (Clinton-Gore administration).


               An SOS from IBM and MCI WorldCom Falls Flat


The ICANN Papers begin with a June 7th Mike Roberts message to Mike
Nelson, Roger Cochetti and Vint Cerf: 

    "Esther and Joe and I are not quitters, but reality suggests that
    unless there is an immediate infusion of $500K to $1M there won't
    be a functioning ICANN by the end of August. There are various
    approaches that have been kicked around in the last several months
    - a second round from current supporters, a special appeal to those
    who have not given yet, a loan of some kind.  I don't think those
    of us on the ICANN side have a preference one way or the other."

On the same day Vint Cerf replied in a message showing the unusual length
that he was prepared to go to salvage ICANN as an MCI/IBM control vehicle: 

    Cerf: "I have talked with John Sidgmore.  We will try to get $500K
    at least "backup" in case nothing else in the way of fundraising
    works.  Mike Nelson, I have copied John Patrick and Irving
    Wladawsky-Berger [Editor: an IBM e-commerce executive] on this
    message, as well as John  Sidgmore. If IBM and MCI Worldcom can
    come up with $1M in "bridge" funding, to be paid back at a later
    time under reasonable terms that will not harm ICANN, then perhaps
    we can begin a new fundraising campaign knowing that we have the
    ability to back up the campaign with a rescue effort in the short
    term.  It will be easier for John Sidgmore to make the case to the
    MCI WorldCom management if IBM is willing to go into this with us
    and split the $1M cost.  Is it possible?

    "I would then launch a campaign with GIP, ITAA, Internet Society,
    and other interested groups on the basis that

    [TD Editor's emphasis]

    *ICANN must succeed or Internet will be in jeopardy.  This ought
    to play well with any company whose stock price is dependent on a
    well-functioning Internet." "Thoughts?"*

    [end TD Editor's emphasis]

Having failed to get sufficient money to support ICANN from outside
sources, Vint returns to the IBM/MCI duopoly of the Global Internet
Project which since its 1997 launch has featured Patrick and Cerf as the
prime movers.  An October 1997 news story from Reuters made a candid
announcement of the intentions behind the GIP: 

   "Internet Companies Welcome Idea of Global Charter BRUSSELS
   (Reuters) - A group of U.S., European and Japanese companies
   involved in the Internet informally welcomed a European Union
   proposal to draw up a charter to govern the global computer network.
   The companies, who have united as the Global Internet Project (GIP),
   said they wanted to be involved in the process [of the global
   charter design]."

 From the vantage point of two year's hindsight it is clear that ICANN is
the charter of the GIP for governing the global computer network.  This is
the carefully crafted tool of control that Cerf and Patrick fear the loss
of.  The lengths to which Cerf is ready to go to salvage his creation are
quite extraordinary: 

     "I would then launch a campaign with GIP, ITAA, Internet
     Society, and other interested groups on the basis that ICANN
     must succeed or Internet will be in jeopardy.  This ought to play
     well with any company whose stock price is dependent on a well-
     functioning Internet."

The reader will note the willingness to use fear, uncertainty, and doubt
to manipulate other players to reach for their check books if only to
maintain a public perception that things are under control. 

Note also that ITAA is the Information Technology Association of America,
a Washington DC lobby for American IT companies.  ITAA Vice president Jon
Englund has for the past year been enlisted to use the ITAA as a platform
for ICANN support, although the effort has been reasonably quiet --
reaching its highest profile when ITAA gathered the copyright and
trademark interests in a January, 1999, Washington, DC meeting to
influence the formation of ICANN's Domain Name Support- ing Organization. 
Vint's feel of control over ISOC, ITAA, and GIP and his willingness to put
his reputation on the line is impressive. 

On June 8th, John Patrick was correctly worried that with only MCI and IBM
squarely behind the GIP effort, there would be an impression of big
corporate capture of ICANN. Possibly motivated in part by the fact that
George Conrades and Esther Dyson have their own venture capital
operations, Patrick wrote a dunning letter to Silicon Valley area VCs. 
The Patrick letter contains some telling admissions: 

      Patrick: "ICANN is trying to get the policy, technical and
      financial aspects of the Internet moved successfully from U.S.
      government to the international private sector.  Everyone
      thinks this is a good idea.  In fact, I would say that the
      future of the Internet is dependent on the execution of the plan."

Consider carefully his words.

Remember that Esther was recently chiding Dave Farber not to call ICANN
the Internet's "Oversight Board" since ICANN's purpose was nothing more
than dealing with a subset of technical coordination. On June 13 Patrick,
writing in assumed privacy to venture capital fund directors, paints a
different and very broad picture of control:  namely moving

     "the policy, technical and financial aspects of the
        Internet to the international private sector."

Speaking in public ICANN has always denied an interest in policy and
financial control.  In Patrick comes on with great urgency: 

      "Not to sound alarmist, but if ICANN fails e-business/
      e-anything is in jeopardy. This means your future investments
      and your past ones."

Explaining why getting money from small companies will take too long and
that getting money from large ones, "creates problems of "big US companies
trying to dominate/control the Internet". Loan guarantees might be an
angle, but they present complexities for companies to provide them. You
guys and your vc colleagues have created incredibly creative financings
for many $billions of Internet opportunities.  Could a handful of you jump
in and help solve this relative trivial financial hurdle to your future?" 

It seems that John never stopped to realize that his VC audience looked
for return on its investments, and that they might have their own opinions
on the soundness of fronting for ICANN.  Further those who were sure only
had to call the CEO's of companies they funded.  These men and women would
be quite ready to give their own interpretation of the Patrick letter. 
Judging by the events that have unfolded with ICANN getting loans from
Cisco and MCI, ICANN failed the VC risk analysis test.  (As far as we can
tell it also failed the IBM test.  Despite Patrick's pushing IBM seems not
have loaned ICANN anything -- evidence of remarkable shrewdness on the
part of those above Patrick.) 

On June 14th George Conrades of Polaris Ventures, CEO of Akami
Technolgies, and an ex-IBM vice-president asked Patrick where IBM itself
stood on ICANN.  (Tellingly, Conrades, whom we have always considered
IBM's representative to the ICANN board, was the only ICANN Board member
besides Esther Dyson involved in these discussions.)  George was quite

       "Is this a challenge IBM would take on?  I realize potential
       downside to ICANN perception (capture and all that) but what
       about a "United Way" kind of involvement/support."

On June 15th with things apparently not going well the ICANN Keystone Cops
turned to the White House.  While Al Gore did not found the Internet, he
has always been supportive of investment in it on the part of the US
government and the part of IBM.  My first acquaintance with Mike Nelson,
(John Patrick's lieutenant) came at the US Congress Office of Technology
Assessment in the fall of 1990 when I was hired to craft an assessment of
the National Research and Education Network. 

Nelson at this point was Gore's technology staff person and was author of
the High Performance Computing Legislation eventually passed by Congress
in 1992.  After 18 months experience with Nelson (late 1990 to early 1992)
Mike's loyalty to IBM became very clear.  My only surprise has been that
it took quite a number of years before he went to work for them directly
last year. 

Kalil has always been the chief IT staff person on the National Economic
Council in the Executive Office of the President.  Ira Magaziner turned to
his study of the Internet in 1995 under Kalil's tutelage.  Tom has also
had a major responsibility for the Next Generation Internet project. 
Although my evidence is circumstantial, it appears to me that he is the
primary link between Clinton and Gore and Becky Burr in the Commerce

We find Joe Sims, ICANN's high powered anti-trust attorney reporting on
June 15 to chair@jonesday.com: 

     "Esther and I met with him today, and he promised to do
     what he could to promise what he could to encourage private
     donations to make it clear that we are not going to be finan-
     cially starved for the foreseeable future.  He said it would
     be useful to have emailed to him information on the budget, work
     plans, etc. - the kind of stuff that he could give people to show
     them that we have a real live operation here."

And on June 17 Mike Roberts writes to Kalil:

     "Tom, pleased to hear about your offer of help to Esther and
     Joe. There are three current documents that may be of use to
     you. (In addition to Esther's letter to Nader, which lays out
     the current terms of political engagement.) One is a six month
     status report from ICANN to Commerce, which carefully lays out
     what we have been doing and why. The second is our budget pack-
     age for next year, starting at 7/1/99, which details what the
     projected income is and what it is going to be used for.

     "The third document is a private and confidential financial
     statement based on actual results as of 6/15/99 and projected
     to fiscal year end at 6/30/99 the most salient figure on this
     schedule is a negative net worth of $727,954 at June 30. I'd
     be happy to fax the entire schedule to you if you give me a
     number for a machine where the schedule won't get loose. I'm
     discussing it with the CFO of Cisco tomorrow and with MCI as
     well, with respect to second round of financial support. Let
     me know if I can provide additional help."

What Happens Next?

In view of the bold ideas about the need to wake up corporate America
because nothing less than the fate of the internet is at stake, its
amusing to note that only the CFO of Cisco and Vint Cerf's MCI delivered
money ($650,000) at 7% interest. 

           ICANN tried to keep what it was doing quiet.

Suddenly on August 17 much delayed minutes of the July 26 ICANN Board
Meeting appeared on the ICANN web site where at
http://www.icann.org/minutes/minutes-26july99.htm we read

        " WHEREAS, the Board of Directors has determined that it
        is in the best interests of the Corporation to borrow up
        to US$2,000,000 on an unsecured basis at such rates;
        RESOLVED [resolution 99.64], that the Corporation is
        authorized to borrow the aggregate principal amount of
        $2,000,000 from various lenders selected by the Interim
        President and Chief Executive Officer on an unsecured
        basis, at interest rates not to exceed seven percent per
        annum, with repayment terms of not less than one year, and
        on other terms and conditions substantially as set forth
        in Exhibit A hereto."

To cover the movements described in this article the board gave its
retroactive approval: 

        RESOLVED FURTHER [resolution 99.69], that the authority
        given in these resolutions is retroactive and any and all
        acts authorized herein performed before the passage of these
        resolutions are ratified and affirmed.

Brock Meeks story on the ICANN fund raising appeared the following day
August 18 and on August 20th ICANN announced that it had "received loans
in the amount of $500,000 from MCI WorldCom and $150,000 from Cisco
Systems. These funds, which will be put toward an overall target of $2
million, will enable ICANN to temporarily meet its expenses until
permanent funding is secured.." 

Of course what ICANN did with the funds when it received them is
instructive: It paid $800,000 in invoices from its fiscal year ended June
30, 1999.  See
ons-through-8-31-99.html Of the $800,000 in invoices $500,000 was from

     [TD Editor's emphasis]

     Joe Sim's Jones and Day Law Firm.  Services rendered by what
     last summer war announced as ICANN's probono attorney.

     Tony Rutkowski commented to BWG: ICANN appears to have been
     created, manipulated, and propped up substantially by John
     Patrick and Vint Cerf who have never had any public accountability.

     [End TD Editor's emphasis]

     "I'm not aware that either has ever publicly explained what they
     are doing and why, much less participated in any forum -
     electronic or otherwise - where anyone substantively knowledgeable
     could interact with them.  Indeed, it has long made a mockery out
     of all these public discussion and even the government's own
     public processes, when the real deals were all being worked out
     behind the scenes by others to meet their unknown objectives. Has
     anyone been able to ever engage them on these matters or heard an


                Did Al Gore Create or Give Away the Internet?


While Al Gore may not have created the Internet, the above correspondence
makes clear how on his watch, his trusted lieutenant Mike Nelson has been
a participant in a Clinton-Gore administration sanctioned give away in the
words of IBM's John Patrick of "the policy, technical and financial
aspects of the Internet to the international private sector." 

While ICANN has been a closed door black box, the Europeans do have three
members (Capdeboscq, Kraaijenbrink, and Triana) of a ten member board. 
Before they sit back with satisfaction that Christopher Wilkinson (a GAC
member representing the EU) has their interests adequately protected, they
need to read and ponder carefully that ICANN, when the rubber meets the
road, is a strictly American operation. 

We have one last chance.  The House Commerce Committee is not through with
its investigation.  Mikki Barry submitted 30 pages of answers to their
questions last week. 

Found at  http://minion.netpolicy.com/dnrc/82799cong.html

        the testimony makes quite it clear how badly the Clinton,
        Gore, Kalil lead NTIA has gotten in over its head in letting
        Patrick, Cerf, Dyson and Roberts dispose of technology inter-
        ests that

          *should be serving all Americans and all American
          business rather than this tiny clique of insiders.*

While NSI may be non-responsive, ICANN is the far bigger stench.  Our
current executive branch leaders have badly failed us.  It is time for
Congress to take over.  Including Senator McCain on behalf of the Senate
Commerce committee. 

         The committee should subpeona Cerf and Patrick and find
         out just what they had in mind when they warned of
         Internet instability and the failure of E-commerce if
         ICANN doesn't get its way.  Reading the ICANN Papers we
         can only wonder at the private personna shown here by
         Cerf and Dyson in contrast to their public postures of
         the "Internet is for everyone" and "champion of the
         little guy."

But there are additional contrasting forces at work. The gap between the
innocuous public role claimed for it by ICANN's supporters and the lengths
to which powerful men like Cerf and Patrick are willing to go on its
behalf, carries with it the odor of deception.  If ICANN is so essential
to the survival of the Internet, they should be willing to engage in open
debate in its support.  The fact that they have hidden for a year from any
public debate where they cannot control the terms says that their real
agenda could not survive public scrutiny. 

A strong hint of the likely real agenda came in one of the resolutions
from the Santiago meeting where ICANN announced the Formation of [an] Ad
Hoc Group. 

       "RESOLVED that the Interim President and CEO, working
       with Director Kraaijenbrink, is directed to establish
       an ad hoc group to be charged with developing the
       objectives and proposing structures for future policies
       in the area of numbering, especially as required to meet
       global market needs and taking into account the convergence
       of information technology services and networks."

[Editor: ad hoc group being formed is in response to the August letter to
the ICANN Board sent by ETSI and ETNO.  The letter indicated a vote of no
confidence in the ability of the three regional IP number registries to
hand out IPv6 addresses.]

On August 31, Jim Dixon, Telecom Director for EuroISPA, commented to the
BWG list: 

      "'Numbering' and 'Global'. That's two magic words in a row.
      In telephony and governmental circles, "numbering" policies
      are those that relate to the allocation of telephone numbers.
      I read this as a suggestion that a global policy for the all-
      ocation of numbers can be created, with telephone number
      allocation becoming more or less a detail in the larger problem
      of allocating IP address space.  This actually makes a great
      deal of sense.  Certainly if we have 128 bits of IP[v6]
      address space 13 or so digits of telephone numbers can be
      tucked in there without anyone even noticing it."

"And everyone in either of the businesses can see the "convergence"  of
the Internet and telephony and all of the activities associated with both.
My company (an ISP) got its telco license six months ago.  The dominant
telco (British Telecom) drags out the process, but we expect to have an
active interconnect in a couple of months. I'm not familiar with how this
sort of thing works in the States,

        [TD Editor's emphasis]

        but I expect that most of the larger ISPs in the UK
        will be telcos inside of three years," Dixon concluded.

        [TD Editor end of emphasis]

The ICANN resolution concluded:

       "The group will include representatives of businesses,
       including telecom operators and Internet service providers
       and trade organizations, the ASO Council, the ICANN Board,
       and other legitimately interested parties. The group will
       present an interim report before the ICANN public meeting in
       2000. A final report from the ad hoc group will be presented
       to the ICANN Board prior to the Annual Meeting in 2000."

       Dixon: "To me this is the first sign of any imagination on
       the part of the ICANN board. Up to now it has just been
       fumbling around, trying to take over the domain name system
       in a confused and rather grandiose way.  But this looks like
       the Board is beginning to grasp the possibilities: if enough
       people are careless enough, ICANN just might be able to get
       control of the entire global telecommunications system.
       Worth trillions, I should think."

This message contains a strong hint of what may be troubling Vint Cerf
when he fears for the future of the Internet if ICANN doesn't survive. 
Perhaps his fear is just a code word for his concerns for MCI WorldCom, a
legacy telco if there ever were one. 

MCI WorldCom is not a greenfield carrier.  As shown by the 10 day long
collapse of its frame relay network in August, it contains a dizzying
array of acquired legacy networks that will be very costly for the debt
belabored enterprise that Bernie Ebbers has built to upgrade.  An ICANN
that could control IPv6 allocations on behalf of the interests of such
companies could be an invaluable resource to someone in Cerf's position. 

      Whatever happens to MCI, Congress must be made to
      understand that a bankruptcy of ICANN as the failed
      private preserve of Cerf and Patrick is in the public

It must realize that someone like the Markle Foundation could provide
necessary funding for IANA and that the domain name camp needs to start
over to rebuild its house this time in an open and truly democratic way. 
We can still hope that Network Solution might seize the opportunity
present by ICANN's betrayal of trust to reform itself in the interests of
the Internet community as well as its stock holders.  Above all Congress
must do its homework and come to the realization that the biggest danger
for the Internet and for American technology is to fall victim to the myth
that a single group needs to control it. 


         The Triumph of the IP Insurgency or of ICANN?


What I wrote on January 29, 1999 is even more true on September 1.

Even so, knowing that the IP Insurgency is now so close to total triumph
in undermining the old telecom order, we would be naive not to consider
the possibility that more serious intentions lay behind the conservative,
old line computer companies, and ITU-oriented telco interests that control
ICANN. There can be no proof that ICANN will do evil because ICANN is not
yet fully constituted, and has not yet been given NTIAs' final blessing. 

But make no mistake about it, the legal and operational framework that
[has been] built for ICANN has been structured such, that it will be quite
possible for ICANN to implement rules designed to blunt and slow down
further innovation of the IP insurgency under the guise of "management of
public resources on behalf of the alleged common good." 

While the world's legacy telcos and computer companies may be slow to
innovate, they are run by people intelligent enough to realize that if
they can't win on technical merit, ICANN may be their last best hope.
ICANN looks destined to become the first Internet international regulatory
body.  Therefore the legacy computer companies and legacy telcos of the
world have ample reason to want to gain direct or indirect control of
ICANN. Such control may be their only way to see that the IP insurgency
doesn't run them out of town. 

But something even more profoundly important is at stake. The technologies
of the industrial age raised the economic barriers for anyone wanting to
start a business beyond the range of most ordinary Americans. Because our
culture and history has long preached the virtues of self-reliance and
economic independence, this was hard for most of us to swallow. It was the
small cost and enormous power of the personal computer hooked to a modem
that, for the first time in a century, re-opened the door to individual
freedom and economic self- reliance. 

But this re-opened door is a profound threat to both those business
interests that seek monopoly market power and those whose livelihood
depends on social and political control of the masses.  These people fear
the Internet and are determined to find a way to control it. ICANN, as
constituted, represents the last best hope of achieving their misguided

The COOK Report on Internet            Index to seven years of the COOK Report
431 Greenway Ave, Ewing, NJ 08618 USA  http://cookreport.com
(609) 882-2572 (phone & fax)           ICANN: The Internet's Oversight Board -
cook@cookreport.com                    What's Behind ICANN's Desire to Control
the Development of the Internet http://cookreport.com/icannregulate.shtml


[TELECOM Digest Editor's Note: And there you have, in Gordon Cook's more
eloquently phrased style than I could hope to accomplish, what I have been
trying to say here for quite some time. I tried saying it without
mentioning any names or organizations. Then I tried it with a couple of
hints. Then I mentioned Internet Society (of which Vint Cert is an
officer) and now I guess it just comes down to names and blunt statements: 

ICANN, Internet Society, Vint Cerf, Esther Dyson and others as mentioned
above want control of the internet. They represent very large business
interests. You and I are not part of their plans;  in fact, we are
actually in the way. Pay no attention to the mocking statement on the ISOC
web site saying that 'the internet is for everyone' ... not quite ... 

This is the first in a series of messages. Tomorrow we will have more
pontifications from Vint Cerf and a discussion of the 'Esther Dyson tax'
... a plan to tack on a dollar to the registrar's fee. 

Quite (I hope) obviously, anytime Cerf, Dyson or others in their little
clique want to respond, or actually begin a net-wide discussion of their
plans, I'll be privileged to print anything they want to say. 


--- Backwarded

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