[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
IS ICANN'S NEW GENERATION OF INTERNET DOMAIN NAME SELECTION PROCESS
THWARTING COMPETITION?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 8, 2001
__________
Serial No. 107-4
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
_______
U.S. GOVERNMENT PRINTING OFFICE
71-484 WASHINGTON : 2001
____________________________________________________________________________
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Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
------------------------------
COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
STEVE LARGENT, Oklahoma BART GORDON, Tennessee
RICHARD BURR, North Carolina PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
GREG GANSKE, Iowa ANNA G. ESHOO, California
CHARLIE NORWOOD, Georgia BART STUPAK, Michigan
BARBARA CUBIN, Wyoming ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois TOM SAWYER, Ohio
HEATHER WILSON, New Mexico ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona GENE GREEN, Texas
CHARLES ``CHIP'' PICKERING, KAREN McCARTHY, Missouri
Mississippi TED STRICKLAND, Ohio
VITO FOSSELLA, New York DIANA DeGETTE, Colorado
THOMAS M. DAVIS, Virginia THOMAS M. BARRETT, Wisconsin
ROY BLUNT, Missouri BILL LUTHER, Minnesota
ED BRYANT, Tennessee LOIS CAPPS, California
ROBERT L. EHRLICH, Jr., Maryland MICHAEL F. DOYLE, Pennsylvania
STEVE BUYER, Indiana CHRISTOPHER JOHN, Louisiana
GEORGE RADANOVICH, California JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
CHARLES F. BASS, New Hampshire
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Telecommunications and the Internet
FRED UPTON, Michigan, Chairman
MICHAEL BILIRAKIS, Florida EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas BART GORDON, Tennessee
CLIFF STEARNS, Florida BOBBY L. RUSH, Illinois
Vice Chairman ANNA G. ESHOO, California
PAUL E. GILLMOR, Ohio ELIOT L. ENGEL, New York
CHRISTOPHER COX, California GENE GREEN, Texas
NATHAN DEAL, Georgia KAREN McCARTHY, Missouri
STEVE LARGENT, Oklahoma BILL LUTHER, Minnesota
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois DIANA DeGETTE, Colorado
HEATHER WILSON, New Mexico JANE HARMAN, California
JOHN B. SHADEGG, Arizona RICK BOUCHER, Virginia
CHARLES ``CHIP'' PICKERING, SHERROD BROWN, Ohio
Mississippi TOM SAWYER, Ohio
VITO FOSSELLA, New York JOHN D. DINGELL, Michigan,
THOMAS M. DAVIS, Virginia (Ex Officio)
ROY BLUNT, Missouri
ROBERT L. EHRLICH, Jr., Maryland
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Broitman, Elana, Director, Policy and Public Affairs,
register.com............................................... 31
Cerf, Vinton G., Chairman of the Board, Internet Corporation
for Assigned Names and Numbers............................. 13
Davidson, Alan B., Associate Director, Center for Democracy
and Technology............................................. 78
Froomkin, A. Michael, Professor of Law, University of Miami
School of Law.............................................. 68
Gallegos, Leah, President, AtlanticRoot Network, Inc......... 45
Hansen, Kenneth M., Director, Corporate Development, NeuStar,
Inc........................................................ 42
Kerner, Lou, Chief Executive Officer, .tv.................... 26
Short, David E., Legal Director, International Air Transport
Association................................................ 36
Material submitted for the record by:
Gallegos, Leah, President, AtlanticRoot Network, Inc., letter
enclosing material for the record.......................... 107
Name.Space, Inc., prepared statement of...................... 106
(iii)
IS ICANN'S NEW GENERATION OF INTERNET DOMAIN NAME SELECTION PROCESS
THWARTING COMPETITION?
----------
THURSDAY, FEBRUARY 8, 2001
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Telecommunications
and the Internet,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:05 a.m., in
room 2123, Rayburn House Office Building, Hon. Fred Upton
(chairman) presiding.
Members present: Representatives Upton, Stearns, Gillmor,
Cox, Shimkus, Pickering, Davis, Ehrlich, Tauzin (ex officio),
Markey, Gordon, DeGette, Harman, Brown, and Dingell (ex
officio).
Staff present: Will Norwind, majority counsel; Yong Choe,
legislative clerk; Andrew Levin, minority counsel; and Brendan
Kelsay, minority professional staff.
Mr. Upton. The hearing will come to order. Today we are
holding the first hearing in the 107th Congress of the
Subcommittee on Telecommunications, where we will be discussing
the Internet. I want to welcome all the members of the
subcommittee, particularly Ed Markey, the ranking member, and
our vice chair Mr. Stearns, good friends both.
Today's hearing focuses on whether ICANN's new generation
of Internet domain name selection process is thwarting
competition. Our constituents may not know the term ICANN, top-
level domain name, or root server, but they are definitely
familiar with .com, .net, and .org. And every time they e-mail
us, .gov, our constituents use these top-level domain names
every single day, enabling them with a simple click of the
mouse to communicate almost instantaneously all over the world.
If ICANN gets its way, our constituents may also--should
become familiar with seven new top-level domain names, like
.biz, .info, .pro, .name, .museum, .aero, and .coop. These are
seven new names selected last November by ICANN for potentially
launching as early as later this year. However, 37 other
applicants were not selected by ICANN. Moreover, we know that
others could not even afford the $50,000 application fee or
chose not to apply because, on principle, they question ICANN's
authority to, in their minds, play God with respect to
approving new names. Hence there is a great deal of controversy
surrounding ICANN's selection process which has prompted us to
have this timely hearing called by myself and Chairman Tauzin
in a January letter to ICANN.
At this point I would ask unanimous consent to put that
letter into the record.
[The letter follows:]
Congress of the United States
House of Representatives
January 12, 2001
Mr. Michael M. Roberts
President and Chief Executive Officer
Internet Corporation for Assigned Names and Numbers
4674 Admiralty Way, Ste. 330
Marina del Rey, CA 90292
Dear Mr. Roberts: The Committee on Energy and Commerce is
continuing its oversight of the Internet Corporation for Assigned Names
and Numbers (ICANN). As you may recall, the Subcommittee on Oversight
and Investigations of the Committee on Commerce held a hearing on July
22, 1999, to examine the issue of domain name system privatization.
In connection with our continuing review, we have been monitoring
the process by which ICANN arrived at its decision in November to
approve seven suffixes: .aero, .coop, .info, .museum, .name, .pro, and
.biz. There have been a number of reports that ICANN's process to
create a new generation of Internet domain name suffixes may be
thwarting competition in the registration and assignment of Internet
domain names. As the Committee of jurisdiction over this issue, the
Committee wants to ensure that this process is open and fair, and most
important, successfully sparks competition. To that end, we are
gathering facts in preparation for a Subcommittee on Telecommunications
hearing in February to examine the process by which ICANN selects
Internet domain name suffixes. Accordingly, we request that you contact
Chairman Tauzin's telecommunications counsel, Jessica Wallace, to
arrange a time to jointly brief committee staff at your earliest
convenience.
Sincerely,
W.J. ``Billy'' Tauzin
Chairman, Committee on Energy and Commerce
Fred Upton
Member of Congress
Mr. Upton. The House Energy and Commerce Committee has
jurisdiction over ICANN, and this hearing is the latest in a
series of activities in which this subcommittee is engaged on
this topic. Back in July 1999, I chaired an Oversight and
Investigations Subcommittee hearing entitled, Is ICANN Out of
Control? At the heart of that hearing were broad fundamental
questions about the Commerce Department's decision to vest
responsibility for the management of the domain name system in
a private nonprofit corporation as the Federal Government moved
to privatize this critical function.
Much has transpired since July 1999, but important policy
questions still linger about ICANN. Some continue to question
its very legitimacy and the propriety of the Commerce
Department's delegation of responsibility to it. Others support
the Commerce Department's efforts to privatize management of
the DNS, but remain vigilant as this relatively fledgling
concept evolves to ensure that it operates openly and fairly.
While I anticipate more hearings on ICANN later this year
on a variety of other important substantive issues, this
hearing will focus specifically on ICANN's selection process
for new top-level domain names and whether it is, in fact,
thwarting competition. On the one hand some view ICANN's
approval of only a limited number of names as thwarting
competition. On the other hand, others argue ICANN was prudent
in selecting a number of--limited number of new names so that
they can be test-driven to best hedge against harming the
technical integrity of the Internet.
It appears these principles need to be balanced. Today we
will get a feel for how well or poorly ICANN is balancing these
principles by examining its selection process. In my mind,
legitimate questions have been raised by several of our
witnesses about the fairness of the application and selection
process, questions which must, in fact, be answered by ICANN.
As such, today we will hear from ICANN, two businesses
whose applications were selected, two businesses whose
applications were not selected, one small business which did
not apply at all, and two public interest advocates. Today's
witnesses will greatly assist our subcommittee in answering the
question of whether ICANN is thwarting competition.
In addition, I have to say that as a parent of two young
kids, I want to explore ICANN's rationale for not approving two
particular top-level domain names, .kids and .xxx as a means of
protecting our kids from the awful, awful filth which is
sometimes widespread on the Internet. We should strongly
encourage the use of technology to protect our kids, and
special top-level domain names may be just exactly the dose of
medicine that is needed. That is why many parents lie awake at
night thinking about the ways we need to respond.
These issues are too important to not have proper
oversight. If ICANN can't, who can?
[The prepared statement of Hon. Fred Upton follows:]
Prepared Statement of Hon. Fred Upton, Chairman, Subcommittee on
Telecommunications and the Internet
Good morning. Today we are holding the first hearing in the 107th
Congress of the Subcommittee on Telecommunications and the Internet. I
want to welcome all of the members of the Subcommittee and tip my hat
to our ranking member, Ed Markey, and our vice chair Cliff Stearns.
Today's hearing focuses on whether ICANN's new generation of
Internet domain name selection process is thwarting competition?
Our constituents may not know the terms: ICANN, Top Level Domain
name, or root server, but they are definitely familiar with: ``dot
com'', ``dot net'', ``dot org'', and--every time they e-mail us--``dot
gov''. Our constituents use these Top Level Domain names every day,
enabling them--with a simple click of the mouse--to communicate almost
instantaneously all over the world.
If ICANN gets its way, our constituents may become familiar with
seven new Top Level Domain names, like: ``dot biz'', ``dot info'',
``dot pro'', ``dot name'', ``dot museum'', ``dot aero'', and ``dot co-
op''. These are the seven new names selected last November by ICANN for
potential launching as early as later this year. However, thirty-seven
other applicants were not selected by ICANN. Moreover, we know that
others could not even afford the $50,000 application fee or chose not
to apply because, on principle, they question ICANN's authority to, in
their minds, ``play god'' with respect to approving new names. Hence,
there is a great deal of controversy surrounding ICANN's selection
process--which has prompted this timely hearing, called for by myself
and Chairman Tauzin in a January letter to ICANN.
I ask unanimous consent to put the Tauzin/Upton letter in the
record.
The House Energy and Commerce Committee has jurisdiction over
ICANN, and this hearing is the latest in a series of activities in
which this Committee has engaged on this subject. In fact, in July
1999, I chaired an Oversight and Investigations Subcommittee hearing
entitled: Is ICANN out of control? At the heart of that hearing were
broad, fundamental questions about the Commerce Department's decision
to vest responsibility for the management of the domain name system in
a private non-rofit corporation, as the federal government moved to
privatize this critical function.
Much has transpired since July 1999, but important policy questions
linger about ICANN. Some continue to question its very legitimacy and
the propriety of the Commerce Department's delegation of responsibility
to it. Others support the Commerce Department's efforts to privatize
management of the DNS, but remain vigilant as this relatively fledging
concept evolves to ensure that it operates openly and fairly.
While I anticipate more hearings on ICANN this year on a variety of
other important, substantive issues, this hearing will focus
specifically on ICANN's selection process for new Top Level Domain
names and whether it is thwarting competition. On the one hand, some
view ICANN's approval of only a limited number of new names as
thwarting competition. On the other hand, others argue that ICANN was
prudent to select a limited number of new names so that they can be
``test driven'' to best hedge against harming the technical integrity
of the Internet. It appears as if these are principles which need to be
balanced.
Today, we will get a feel for how well, or poorly, ICANN is
balancing these principles by examining its selection process. In my
mind, legitimate questions have been raised by several of our witnesses
about the fairness of the application and selection process--questions
which must be answered by ICANN. As such, today we will hear from:
ICANN, two businesses whose applications were selected, two businesses
whose applications were not selected, one small business which did not
apply at all, and two public interest advocates. Today's witnesses will
greatly assist our Subcommittee in answering the question of whether
ICANN is thwarting competition.
In addition, as a parent of two young children, I want to explore
ICANN's rationale for not approving two particular Top Level Domain
names: ``dot kids'' and ``dot xxx'', as a means to protect kids from
the awful smut which is so widespread on the Internet. We should
strongly encourage the use of technology to protect our kids, and
special Top Level Domain names may be just the ticket. This is what so
many parents lie awake at night thinking about, and we need to respond.
I look forward to hearing from the witnesses, and I thank them for
their participation today.
Mr. Upton. I yield to my ranking member Mr. Markey, the
gentleman from Massachusetts.
Mr. Markey. Thank you, Mr. Chairman, and welcome to the
Subcommittee on Telecommunications, Trade, and Consumer
Protection----
Mr. Upton. Welcome back. Thank you.
Mr. Markey. [continuing] in your new role as the chairman
of this prestigious panel. I think it is going to be a very
exciting 2 years. This is my 25th year on the Subcommittee on
Telecommunications, Trade, and Consumer Protection, and I think
that the issues today are more exciting than we have ever had
in the past as all of these technologies offer new public
policy challenges to the Congress as they do to the private
sector. So this is a very distinguished panel which you have
brought with us here today.
ICANN was specifically created to undertake certain
administrative and technical management aspects of the domain
name system and Internet address space. ICANN exists because
the U.S. Department of Commerce and many corporate and civic
entities believe that these functions should not be done by the
government, but, instead, by a private sector entity.
In its early stages of the Internet's development, things
were much easier. Vin Cerf could contact Jon Postel, who in
turn contacted a select group of Internet pioneers and elder
statesmen, and they were largely able to determine amongst
themselves what was best for the Net's development. Yet given
the rapid commercialization of the Internet and the ardent
desire of various public, private and civic voices to have
their say on how the Internet develops from here forward, it is
obvious that we must proceed with a different process.
As we do so, it is important to keep in mind ICANN is not
simply an international standards-setting body. Recent
decisions creating new top-level domains demonstrates that
ICANN is establishing Internet policy in its selections, not
merely advising the global community of appropriate technical
standards. This development in itself is neither good nor bad.
It is perhaps somewhat inevitable. It only becomes problematic
when ICANN starts to make policy judgments without an adequate
policy process.
There is no question in my mind that the current process is
highly flawed. ICANN has made much of the fact that all
applications and comments were posted on a Web site. That is
very useful, but it is no substitute for a comprehensive policy
process, especially for something as important to Internet
competition and diversity as selecting new top-level domains.
New top-level domains are quasipublic assets. Some of the
people making these decisions were elected; some were not.
There was a significant $50,000 fee assessed against
applicants, although not all that money was actually spent
analyzing the applications themselves. Not all technically
qualified and financially qualified applications were selected.
The winners, therefore, were chosen for other, more subjective
reasons, although it is not apparent what criteria were used
for these subjective judgments.
To hear some of the participants explain it, both winners
and losers, events at the Vatican are shrouded in less mystery
than how ICANN chooses top-level domains.
Let me be clear, however, that this does not mean that any
of the new seven top-level domains selected are bad choices or
should not have been chosen. ICANN would have done well to
prohibit in this first round of applications any applications
from the incumbent, Verisign, but at the end of the day, the
new seven domain names chosen will increase competition and
diversity somewhat.
My concern is with those that were not selected and with
the smaller, less powerful voices who feel they have no access
to this process.
We have a number of important questions to explore today.
For those applicants that were not selected, what is the
appeals process? To whom are the ICANN board members
accountable, to the Internet community, to the Department of
Commerce? Is the Department of Commerce performing adequate
oversight? Is it simply an eyewitness to history? How can we
make the subjective criteria for ICANN's policymaking more
clear? Does ICANN have adequate resources to perform these
policy functions? And how do we address ICANN's long-term
funding needs?
The future of Internet governance and Internet policymaking
raise vitally important issues. I want to commend Chairman
Upton for calling this hearing and, again, thank the witnesses
for their participation this morning. I yield back the balance
of my time.
[The prepared statement of Hon. Edward J. Markey follows:]
Prepared Statement of Hon. Edward J. Markey, a Representative in
Congress from the State of Massachusetts
Good Morning. I want to commend Chairman Upton for calling this
hearing today on the Internet Domain Name System and issues related to
Internet governance. I also want to thank all of our witnesses for
coming to share their views with us on these important topics.
Mr. Chairman, the Internet Corporation for Assigned Names and
Numbers--or ICANN--was established to perform certain limited, but
highly vital functions. It was created specifically to undertake
certain administrative and technical management aspects of the Domain
Name System and the Internet address space. ICANN exists because the
U.S. Department of Commerce, and many corporate and civic entities,
believed that these functions should not be done by the government but
instead by a private sector entity.
In its early stages of the Internet's development, things were much
easier. Vint Cerf could contact Jon Postel, who in turn contacted a
select group of Internet pioneers and elder statesmen and they were
largely able to determine among themselves what was best for the Net's
development. Yet given the rapid commercialization of the Internet and
the ardent desire of various public, private, and civic voices to have
their say on how the Internet develops from here forward, it is obvious
that we must proceed with a different process.
As we do so, it is important to keep in mind that ICANN is not
simply an international standards setting body. Recent decisions
creating new Top Level Domains demonstrate that ICANN is establishing
Internet policy in its selections, not merely advising the global
community of appropriate technical standards. This development in
itself is neither good nor bad. It is perhaps, somewhat inevitable. It
only becomes problematic when ICANN starts to make policy judgements
without an adequate policy process.
There's no question in my mind that the current process is highly
flawed. ICANN has made much of the fact that all applications and
comments were posted on a website. That's very useful, but it is no
substitute for a comprehensive policy process--especially for something
as important to Internet competition and diversity as selecting new Top
Level Domains.
New Top Level Domains are a quasi-public asset. Some of the people
making these decisions were elected, some were not. There was a
significant $50,000 fee assessed applicants although not all of that
money was actually spent analyzing the applications themselves. Not all
technically qualified and financially qualified applications were
selected. The ``winners'' therefore, were chosen for other, more
subjective reasons--although its not apparent what criteria were used
for these subjective judgements.
To hear some of the participants explain it, (both winners and
losers,) events at the Vatican are shrouded in less mystery than how
ICANN chooses new Top Level Domains.
Let me be clear however, that this does not mean that any of the
seven new Top Level Domains selected are bad choices or should not have
been chosen. ICANN would have done well to prohibit in this first round
of applications any application from the incumbent, Verisign, but at
the end of the day the new seven domain names chosen will increase
competition and diversity somewhat.
My concern is with those that were not selected and with the
smaller, less powerful voices who feel they have no access to this
process. We have a number of important questions to explore today. For
those applicants that were not selected, what is the appeals process?
To whom are the ICANN board members accountable--to the Internet
community?--to the Department of Commerce? Is the Department of
Commerce performing adequate oversight or is it simply an eyewitness to
history? How can we make the subjective criteria for ICANN's
policymaking more clear? Does ICANN have adequate resources to perform
these policy functions? How do we address ICANN's long term funding
needs?
This future of Internet governance and Internet policymaking raise
vitally important issues. I want to commend Chairman Upton for calling
this hearing and again, thank the witnesses for their participation
this morning.
Mr. Stearns [presiding]. I would also like to have a short
opening statement to congratulate the new Chairman on his
selection to this prestigious committee and his kindness in
offering me the vice chairmanship, and I look forward to
working with him shoulder to shoulder on the issues.
This, of course, marks the first hearing of this
subcommittee, and it is examining the Internet Corporation for
Assigned Names and Numbers, ICANN, selection process of new
Internet domain names.
The Internet is not the unsettled Wild West it once used to
be. Users have tamed this frontier, and both the Internet and
the World Wide Web have become a stable facet for many
Americans. Furthermore, estimates indicate the number of e-
commerce Web sites to double in the next 2 years, up from
687,000 just 2 years ago.
Of course, to ensure this continual prosperity oversight of
how the Internet infrastructure is managed should be a key
responsibility for us on this subcommittee. So I look forward
to getting a report card from today's witnesses on ICANN,
accountability and transparency throughout the process, and to
learn more about what ICANN is doing to ensure competition and
the integrity and stability of the Internet.
And Mr. Dingell, the ranking member of the full committee,
is recognized.
Mr. Dingell. Mr. Chairman, I thank you. Mr. Chairman, I
want to congratulate you on the accession to the responsibility
of the chairman of this subcommittee, and I look forward to
working with you on these matters.
I also want to commend you for today's hearings. We are
engaged in inquiring into a matter which a lot of people regard
as being arcane, but that does not mean that it is irrelevant.
To the contrary, the integrity of the process used by ICANN
recently when it selected a handful of new top domain names is
arguably one of the most critical issues affecting the Internet
today. Domain names are the key to Internet commerce, and we
must determine whether ICANN has a process which is fair and
proper, and whether the outcome will lead to a more effective
competition in the management of the global domain name system.
We must also inquire as to whether the process has resulted
in achieving a measure of public confidence by its fairness or,
by grotesque unfairness, has achieved not just distrust, but
active distaste.
The questions, important as they are, are only going to
address, however, narrow issues pertaining to domain name
assignments. The larger question we must ask is whether this
administrative process is emblematic of a larger problem with
the overall system of Internet governance. This system set up
by ICANN was initiated by the U.S. Department of Commerce and
continues to be subject to the authority of that agency. As
such, it falls squarely within this committee's oversight
responsibilities.
I hope and expect that we will be holding hearings to
evaluate whether the mission of that agency is being soundly
defined, properly executed, and whether, in fact, it is being
fair. The signs I would observe are that it has not been
behaving fairly, and that its behavior has left a lot of
unanswered questions.
I hope that we will hear from witnesses today who will be
able to describe what is going on there. I gather many of them
believe the system is broken. I have strong evidence to believe
they are correct.
Some suggest that ICANN has morphed from a nongovernmental,
technical standards-setting organization to a full-fledged
policymaking body. If that is true, there is cause for serious
concern. ICANN was not given authority to assume that function,
and it appears to be accountable to no one, except perhaps God
Almighty, for its actions.
Most important, if ICANN is making Internet policy
decisions, then the people must know that they who are affected
will have access to a reliable and transparent system to seek
redress for harm.
There is no question we are treading on uncharted
territory. Bumps in the road are, of course, unavoidable, but
while it may be desirable to keep the Internet unregulated both
from a diplomatic and economic standpoint, we must not allow
U.S. interests to be put at risk by blindly adhering to a
hands-off approach, and we must see to it that the agency which
we are constituting to act on behalf of the U.S. Government in
these matters functions fairly, well, efficiently and in a
fashion which is going to be in the broad overall public
interest.
I particularly commend you, therefore, for initiating this
hearing. I believe that our oversight efforts have to be
extremely diligent, and we have to be prepared to act quickly
should it become necessary to do so. I would observe that we
should follow this set of hearings vigorously and energetically
to require the necessary answers from ICANN and from the
Department of Commerce. I believe there is much to be justified
here, and I believe that the task of justifying these things is
going to be difficult, and I look forward to assisting those
agencies that are responsible here in achieving a correct and a
proper result. It may be painful for them. Thank you, Mr.
Chairman.
[The prepared statement of Hon. John D. Dingell follows:]
Prepared Statement of Hon. John D. Dingell, a Representative in
Congress from the State of Michigan
Mr. Chairman, thank you for recognizing me. First, I want to
congratulate and welcome you to the Subcommittee on Telecommunications
and the Internet. I know you will do a wonderful job in charting the
course of this Subcommittee, and in helping us navigate through the
many complex issues associated with telecommunications. You are to be
commended not only for your enthusiasm in scheduling the very first
hearing of the 107th Congress, but also for your courage in tackling
what may be the most arcane issue we have faced in years. I've
familiarized myself with today's testimony, Mr. Chairman, and even
reciprocal compensation is starting to look like a simple fix.
Arcane, however, does not mean irrelevant. To the contrary, the
integrity of the process used by ICANN recently when it selected a
handful of new top-level domain names is arguably one of the most
critical issues affecting the Internet today. Domain names are the key
to Internet commerce, and we must determine whether the ICANN process
was fair and proper, and whether the outcome will lead to more
effective competition in the management of the global domain name
system.
These questions, however important they may be, still only address
the narrow issue pertaining to domain name assignments. The larger
question we must ask is whether this administrative process--if found
to be deficient--is emblematic of a larger problem with the overall
system of Internet governance. This system of governance set up by
ICANN--was initiated by the U.S. Department of Commerce, and continues
to be subject to the authority of that agency. As such, it falls
squarely within the jurisdiction of this Committee's oversight
responsibilities, and I hope and expect that we will hold ongoing
hearings to evaluate whether ICANN's mission is both soundly defined
and properly executed.
We will hear from some witnesses today who believe the system is
broken. Some suggest that ICANN has morphed from a non-governmental
technical standards-setting organization to a full-fledged policymaking
body. If that is true, I believe it is cause for serious concern. ICANN
was not given authority to assume that function, and it appears to be
accountable to no specific body for its actions. Most important, if
ICANN is making Internet policy decisions, then those people directly
affected must have access to a reliable and transparent system to seek
redress from harm.
There is no question that we are treading on uncharted territory
and bumps in the road are unavoidable. But while it may be desirable to
keep the Internet unregulated, both from a diplomatic and economic
standpoint, we must not allow U.S. interests to be put at risk by
blindly adhering to a hands-off approach. I believe we should be
diligent in our oversight efforts, and quick to act should it become
necessary to do so.
Thank you again, Mr. Chairman, for holding this important hearing,
and I also want to extend my appreciation to each of the distinguished
witnesses for appearing today.
Mr. Upton. Thank you, Mr. Dingell.
I would make a motion at this point that all Members--the
House is not in session with recorded votes today, so a number
of Members I know have gone back to their districts, but I
would make a motion by unanimous consent that all members of
the subcommittee have an opportunity to put their--insert their
full statement into the record.
And with that I recognize Mr. Shimkus from Illinois.
Mr. Shimkus. Mr. Chairman, I don't have an opening
statement.
Mr. Upton. Mr. Brown.
Mr. Brown. Thank you, Mr. Chairman, brief opening
statement.
I am pleased to join the Subcommittee on Telecommunications
and the Internet with you, Mr. Chairman, with Ranking Member
Markey, and look forward to working with both of you on issues
that are so important to the new economy.
The subject of domain names is of interest to all of us.
Recently I met with the vice president of Cuyahoga Community
College in Cleveland, who stressed his frustration with his
school's Internet domain. Cuyahoga Community College in
Cleveland, Ohio, otherwise known as Tri-C, is the first and
largest community college in Ohio. It is the fourth largest
institution of higher education in the State.
Despite the fact Tri-C is a large, well-established higher
education institution, it has been locked out of obtaining the
domain .edu. Only 4-year, degree-granting colleges and
universities generally are allowed the .edu domain. Two-year
colleges are not allowed that address even though they educate
as many, if not more, students than 4-year students. www.tri-
c.cc.oh.us is not an especially memorable address for its
faculty and others.
The Department of Commerce, in partnership with ICANN,
oversees the .edu domain. While they have expressed interest in
finding a solution, action has not been taken in an expedient
manner. It is important for the Department and ICANN to move
expeditiously so community colleges and their students can have
easier access and equal access to important campus resources
and the Internet.
Mr. Chairman, I thank you.
Mr. Upton. Mr. Davis.
Mr. Davis. I ask unanimous consent my statement go in the
record in deference to our witnesses so we can hear from them.
[The prepared statement of Hon. Tom Davis follows:]
Prepared Statement of Hon. Tom Davis, a Representative in Congress from
the State of Virginia
Mr. Chairman, I am pleased to be beginning my membership on the
Subcommittee with a very timely oversight hearing on ICANN's selection
of new generic DNS suffixes. Thank you to all of the witnesses for
taking time from their work to be here today. I am particularly pleased
to see Dr. Cerf whom I have had the pleasure of meeting previously, and
Ms. Leah Gallegos who hails from my home state of Virginia.
As the Internet continues to grow, not only in terms of electronic
commerce but also with respect to global communication in general, the
number of people, businesses, and nations with a stakeholder interest
in the fair and competitive expansion of its perimeters is growing. At
the same time, there is a legitimate expectation that the Internet will
be a predictable environment that reflects the competitive marketplace.
With that growth, it becomes even more important that there is
confidence the ICANN is managing Internet functions in a manner that
promotes competition, uses an open and transparent process that
maintains the Corporation's neutrality, and does no harm to the future
growth of the Internet.
I have heard from a number of persons in Virginia who have
expressed their dismay at both the format and the process by which
ICANN selected the suffixes and the successful registry applicants in
November of last year. I look forward to hearing our witnesses's
testimonies and having the opportunity to determine whether or not
Congress needs to take action that will assist ICANN and the Department
of Commerce in improving the process for promoting competition in the
selection of next generation Internet Domain Names.
Mr. Upton. Thank you, Mr. Davis.
Mr. Gordon.
Mr. Gordon. I am ready to hear the panel.
Mr. Upton. Ms. Harman.
Ms. Harman. As the rookie on this committee who represents
what is now called the digital coast of California, I just want
to say how happy I am to be here and to be on the this
subcommittee and to make one observation, which is that I
believe we have in general a digital economy and an analogue
government, and the challenge is to create a digital government
to match the digital economy. We have to do this right, and we
have to observe fairness, but it would be a shame if we imposed
analogue procedures on this issue. And so I hope that we will
be very creative and very digital in this subcommittee as we
move forward.
I yield back, Mr. Chairman.
Mr. Upton. Thank you.
Ms. DeGette.
Ms. DeGette. Mr. Chairman, I will echo my colleague from
California's pleasure at being on this committee. You may not
be aware, but just in the past few years, the Denver
metropolitan area has become one of the fastest growing
telecommunications hubs in the country, and, as a matter of
fact, is now in the top five. So even though it is onerous, I
know, I would love to invite the chairman and the ranking
member to come out there and see our industry at some point and
to perhaps have some field hearings there. It is exciting what
is going on, and I am excited to be on the telecom committee.
Even though I am new to this committee, I am not new to the
issue. When I was in the State legislature in Colorado, we
passed one of the landmark laws that preceded the 1969 act, so
I am delighted to get back with these issues and to hear from
the witnesses today, and I yield back my time as well.
[The prepared statement of Hon. Diana DeGette follows:]
Prepared Statement of Hon. Diana DeGette, a Representative in Congress
from the State of Colorado
Good morning Mr. Chairman. A warm welcome to our witnesses.
I am thrilled to be here today as a new member of this
subcommittee. I am pleased as well, that my colleague Mr. Stupak has
joined me as a fellow refugee from the now defunct Finance and HazMat
subcommittee.
As some of you may know, the Denver metropolitan area, which I
represent, has one of the fastest growing telecommunications industries
in the country right now.
In fact, overall, I believe we are in the top five telcom hubs in
the nation at this time. The growth of this dynamic industry has
unbelievable growth in the Denver area over the past decade, and as one
who is very interested in these issues, it has been exciting to watch
the progress.
Given this fact, I would like to take the opportunity to invite my
Chairman and Ranking Member to come pay us a visit. I would be happy to
host some field hearings in the near future on some of the pressing
telecom issues that we will be dealing with in the 107th.
While I was not yet in Congress when the Telecommunications Act of
1996 passed, I did work on this issue in the Colorado State House. In
fact Colorado passed a landmark telecom reform act in 1995, which I was
very involved in, and I look forward to continuing that work here at
the federal level.
I am pleased to attend my first subcommittee first hearing on such
an interesting issue, that of new domain names and how the whole
process of selecting them has unfolded.
This issue couldn't be more timely, not only because of the where
ICANN is in the process of selecting new suffixes, but because the
Internet is still growing at an unbelievable rate and pressure
continues to build on its capabilities.
If you look at the rate at which registered domain names have grown
over the past few years, it is clear that there is a huge demand to
expand the number of domain names available for registrations by
individuals, organizations and businesses.
As the Internet has grown, the method of allocating and designating
domain names has been fairly controversial. The issues that have caused
to many headaches include transitioning to a single domain names system
(DNS) registrars to many registrars, trademark disputes, the
appropriate federal role and of course, the issues that brings us here
today, the process of creating new domain names.
Certainly, it is the responsibility of this committee to make sure
that the process is as open and fair as possible. It is also our
responsibility to make sure that ICANN is taking every step necessary
to guarantee that the overall efficacy of the Internet is not
disrupted.
I will forward to hearing the testimony of our witnesses.
Mr. Upton. Thank you very much.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
I would like to thank Chairman Upton for holding this important and
timely hearing on the Internet Corporation for Assigned Names and
Numbers (ICANN). As the Committee of jurisdiction over ICANN, it is
imperative that we continue our oversight responsibilities in this
area. The issues ICANN is grappling with will have a fundamental impact
on the future vibrancy of the Internet. While I recognize that there
are a number of important and interesting issues involving ICANN
governance issues, funding, issues, root server competition issues,
multilingual issues, dispute resolution issues, countrycode TLD issues,
and significant trademark implications--this hearing is intended to
focus on the discrete but critical issue of the process by which ICANN
recently approved seven suffixes: dot areo, dot co-op, dot info, dot
museum, dot name, dot pro, and dot biz.
That said, it is my intention to, with Chairman Upton, actively
monitor those issues I just mentioned. In that regard, I sincerely hope
that ICANN--and its outside representatives--will respect this
Committee's rules in the future and submit its testimony within 48
hours of a hearing. This rule really is for your benefit as much as it
is for ours. Providing Members and their staff with sufficient time to
review your written testimony enables us to better understand your
position, encourages Members to be more engaged and generally makes for
a more fruitful hearing experience.
For being in existence for a little over two years--ICANN has been
charged with a number of important tasks, one of which is to establish
a process for the introduction of new top level domain (TLDs) names in
a way that will not destabilize the Internet. On November 16th ICANN
announced its selection of the seven new suffixes--doubling the number
of global TLDs. There are many arguments both for and against new TLDs.
Those in favor of a limitless number (or at least significantly more
than seven) maintain that new TLDs are technically easy to create, will
help relieve the scarcity in existing name spaces that make it
difficult for companies to find catchy new website addresses, and are
consistent with increasing consumer choice and a diversity of options.
However, there are those who urge restraint and caution in the
introduction of TLDs pointing to greater possibilities for consumer
confusion, the risk of increased trademark infringement, cybersquatting
and cvberpiracy. I am eager to hear from ICANN about how it arrived at
the number seven.
Equally important, many are questioning the very process by which
the suffixes were selected. I am eager to hear ICANN's view of the
process, the views of selected and set aside applicants, and the views
of Professor Froomkin and the Center for Democracy and Technology. I
encourage all panelists to offer, in addition to specific criticism--or
praise depending on their point of view--their insights as to how to
improve the process as we move forward to future rounds of suffix
selections.
On August 3rd ICANN posted an extensive process overview to assist
those considering applying to operate a new TLD. The application
materials were subsequently posted on August 15th. October 2nd was the
deadline for submitting applications and ICANN announced it decision on
November 16th. Some validly argue that the six week application review
process seemed unacceptably short--making it extremely difficult for
each application to enjoy a thorough review. Some are complaining that
the criteria was vague and not followed: they were not provided an
opportunity to correct errors in the staff recommendation on their
applications: they were not provided with any meaningful opportunity
for face-to-face consultations and that in fact, they were only
provided with three minutes to make a ``last ditch'' pitch to the
Board. With each applicant paying a non-refundable $50,000 filing fee,
should the process have provided more?
Notwithstanding these complaints others were happy with the process
and maintain that the time has come to introduce new domain names onto
the Internet, and urge that there not be any further delay.
Our role should be to ensure that the process by which ICANN, a
private, non-profit entity with global responsibilities, selected
domain names was open and fair to all applicants. Were the procedures
clearly articulated and consistently followed? To the extent we find
shortcomings in this new process, and I already have, I hope we can
provide some guidance that will serve as a roadmap in the future given
that this is not expected to be the last round of domain name
selections. With this hearing, our review will not end, we will
continue to review this process.
I look forward to hearing from this distinguished panel of
witnesses. Thank you.
______
Prepared Statement of Hon. Eliot Engel, a Representative in Congress
from the State of New York
Thank you Mr. Chairman.
Let me also welcome you to your new position. Like all of my
Democratic colleagues I look forward to working with you and the other
Republican members on these issues to ensure consumer protection and
free and open competition.
I also want to welcome back Mr. Markey to the Ranking Position--I
have always admired your strong leadership and vocal support for
America's consumers.
Today's hearing will hopefully be illuminating to all of us here.
Many questions have been raised about the process that ICANN employed
to approve the first round of new Top Level Domains (TLDs). This
hearing will give us an opportunity to learn about this process.
I, for one, am interested in ensuring that the process was open,
fair, and clear to all the participants and those who may have wanted
to participate. This is one of my concerns--the $50,000 filing fee does
seem at first glance to be rather high.
This hearing being called is very timely as well because the
Commerce Department has not yet approved the new TLDs.
I do appreciate the difficulty ICANN had in organizing this
process. There is just no precedent for doing this. And so even if
there were fits and starts, so long as the process was open and clear
to all involved, then I am hopeful that we can work with ICANN to
improve and streamline this process for future determinations of TLDs.
Mr. Upton. Our witnesses today are Dr. Vincent Cerf,
Chairman of the Board for the Internet Corporation for Assigned
Names and Numbers, ICANN; Mr. Lou Kerner, CEO of .TV; Ms. Elana
Broitman, director of policy and public affairs, register.com;
Mr. David Short, legal director of the International Air
Transport Association; Mr. Ken Hansen, director of corporate
development of NeuStar, Inc.; Ms. Leah Gallegos, president of
AtlanticRoot Network, Inc.; Professor Michael Froomkin,
professor of law, University of Miami School of Law; and Mr.
Alan Davidson, associate director of the Center for Democracy
and Technology.
Welcome all of you to our first hearing of the year. Your
statements are made part of the record in their entirety. We
would like to limit your presentation to no more than 5
minutes. We have a relatively new timer here which will tell
you exactly how much time you have left, and I am going to be
fairly fast with the gavel.
Following that 5 minutes, members on the dais will be able
to ask questions for 5 minutes, and we will proceed that way.
Dr. Cerf, welcome.
STATEMENTS OF VINTON G. CERF, CHAIRMAN OF THE BOARD, INTERNET
CORPORATION FOR ASSIGNED NAMES AND NUMBERS; LOU KERNER, CHIEF
EXECUTIVE OFFICER, .TV; ELANA BROITMAN, DIRECTOR, POLICY AND
PUBLIC AFFAIRS, REGISTER.COM; DAVID E. SHORT, LEGAL DIRECTOR,
INTERNATIONAL AIR TRANSPORT ASSOCIATION; KENNETH M. HANSEN,
DIRECTOR, CORPORATE DEVELOPMENT, NEUSTAR, INC.; LEAH GALLEGOS,
PRESIDENT, ATLAN-
TICROOT NETWORK, INC.; A. MICHAEL FROOMKIN, PROFESSOR OF LAW,
UNIVERSITY OF MIAMI SCHOOL OF LAW; AND ALAN B. DAVIDSON,
ASSOCIATE DIRECTOR, CENTER FOR DEMOCRACY AND TECHNOLOGY
Mr. Cerf. Thank you very much, Mr. Chairman, Ranking Member
Markey, ladies and gentlemen of the committee. I appreciate the
opportunity to describe what I believe is an important
accomplishment of what is a young and still maturing entity,
the Internet Corporation for Assigned Names and Numbers.
The introduction of new competition for global domain names
at the registry or wholesale level of the domain name system is
happening for the first time in 15 years. This is the third and
the last of the significant initial goals set forth in the U.S.
Government white paper that called for the creation of ICANN.
ICANN has succeeded in opening the registrar or the retail
portion of the domain name market to new competition,
accrediting more than 180 competitive registrars of which about
half are now operating, and seeing average registrar prices
drop by more than a factor of two in the first year of this
competition.
ICANN's uniform dispute resolution procedure has
successfully provided a quick, cheap and globally available way
to resolve many domain name disputes.
This last major initial goal, the introduction of new
global top-level domains, is the most complex of these three
efforts. The seven original global TLDs were created in 1985,
and for at least most of the past decade there has been
considerable debate about whether adding new TLDs is a good
idea. The range of opinion is from zero to millions, literally,
and, as a result, a number of past efforts have not reached a
conclusion for lack of consensus. It has only been with the
creation of ICANN and the use of the consensus development
mechanisms it contains that we have finally been able to come
to a sufficient consensus to allow us to move forward with
enough TLD additions to the domain name system.
On the other hand, all the advice that we have received
from the technical and the policy bodies of ICANN have told us
to move prudently and carefully to minimize any risk of
destabilizing the domain name system. Many of us believe that
we can add new TLDs without creating instability or other
adverse effects, but the fact is it has never been done in the
context of the Internet as its exists today, and thus, while
our objective is to encourage new competition here, just as we
already have in the registrar segment of the market, we want to
do so without endangering the utility of what has become a
critical global medium for communication and commerce.
The consensus development process within ICANN has been
extensive. This issue was first referred to ICANN's Domain Name
Support Organization, an open advisory body, that recommended
the introduction of a limited number of new TLDs as a proof of
concept, with additional TLDs to be added only if it was clear
that it could be done without destabilizing or otherwise
impairing the utility of the Internet. A similar recommendation
was conveyed by ICANN's technical support organization. The
board accepted these recommendations and asked for proposals
for new TLDs to be included in this first limited proof-of-
concept phase.
Because ICANN is a consensus development body, everything
about this process was transparent. All the proposals were
posted on ICANN's Web site for public comment. Both the
proposals and roughly 4,000 public comments were reviewed by
ICANN's staff and independent consultants retained for that
specific purpose. The results of that evaluation, a 326-page
analysis, were also posted for public comment, and another
thousand comments were received. The board then held a public
forum lasting 12 hours, where the applicants and the general
public provided final input and then the next day selected a
diverse group of seven proposals to carry out this initial
proof of concept experiment in a public meeting that lasted
about 6 hours. Since that time, negotiation of appropriate
commercial agreements have been under way, and I hope we will
see those final agreements soon.
Because, as was clear from the beginning of the process,
ICANN was only going to select a limited number of proposals
for this initial proof of concept phase, a significant fraction
of the 44 applications that went through the process were
inevitably going to be disappointed at not being selected in
this first proof of concept round. And they were disappointed.
But the real news here is that finally, with the formation of
ICANN and the development of this consensus, this long debate
is actually producing new TLDs. If all those selected become
operational, we will have immediately doubled the number of
global TLDs available. This will immediately increase
competition and consumer choice.
I have a longer statement, Mr. Chairman.
Mr. Upton. I know, I read it last night.
Mr. Cerf. You are very kind to have done so, sir.
I have a longer statement, with attachments, and I would
ask these be entered into the record. I will be happy to answer
any questions you may have, and I thank you for allowing me and
ICANN to participate in this important proceeding.
[The prepared statement of Vinton G. Cerf follows:]
Prepared Statement of Vinton G. Cerf, Chairman of the Board, Internet
Corporation for Assigned Names and Numbers
My name is Vinton G. Cerf, and outside of my regular employment at
WorldCom,\1\ I am the volunteer Chairman of the Internet Corporation
for Assigned Names and Numbers (ICANN). I appreciate the opportunity to
appear before this Committee to describe the efforts of ICANN to
introduce additional competition into the Internet name space, while at
the same time prudently protecting against possible disruption of this
extremely important global resource for communications and commerce.
---------------------------------------------------------------------------
\1\ My curriculum vitae is attached.
---------------------------------------------------------------------------
The basic message I would like to leave with you today is that
ICANN is functioning well, especially for such a young organization
with such a difficult job. In fact, it has made substantial progress
toward the specific goals it was created to meet, including the
introduction of competition at both the wholesale and retail levels of
the registration of names in the Domain Name System (DNS). The recent
action to introduce seven new Top Level Domains (TLDs) into the DNS
will double the number of global TLDs and at the same time will not, we
believe, create serious risks of destabilizing the Internet--something
I know none of us wants to see. The fact that ICANN, in just over a
year, has been able to generate global consensus on this issue--which
has been fiercely debated for most of the last decade--is a testament
to ICANN's potential to effectively administer the limited but
important aspects of the DNS that are its only responsibility.\2\
---------------------------------------------------------------------------
\2\ I have attached to this testimony a time line that describes
the chronology of the debate over new Top Level Domains.
---------------------------------------------------------------------------
a. what is icann?
It is probably useful to first provide a little background about
ICANN, which is a unique entity that may not be familiar to everyone.
ICANN is a non-profit private-sector organization with a 19-member
international volunteer Board of Directors drawn from a set of
specialized technical and policy advisory groups, and through open,
worldwide online elections. ICANN was formed in 1998 through a
consensus-development process in the global Internet community, in
response to a suggestion by the United States Government that the
private sector create such a body. It was formed to undertake certain
administrative and technical management aspects of the Domain Name
System (DNS) and the Internet address space. Domain names serve as the
visible face of the name and address mechanism of the Internet--in
short, the way computers know where to send or receive information.
ICANN performs functions that, prior to ICANN's creation by the
private sector, were performed by contractors to the US Government
(National Science Foundation and DARPA). ICANN is a young, and still
maturing organization; it turns out that achieving global consensus is
not so easy. But it has made great--and many would say surprising--
progress toward the objective shared by the vast majority of
responsible voices in the international Internet community: the
creation of a stable, efficient and effective administrative management
body for specific technical and related policy aspects of the DNS and
the Internet address space that is consensus-based, internationally
representative, and non-governmental.
b. what are the guiding principles of icann?
There is nothing quite like ICANN anywhere in the world, and of
course it will be some time before we are certain that this unique
approach to consensus development can effectively carry out the limited
but quite important tasks assigned to it. I am cautiously optimistic,
but we are still at an early stage of evolution, and there is much work
to do. The organizational work has been complicated by the fact that we
have also been asked to simultaneously begin to accomplish the specific
operational goals set out by the US Government in the White Paper.\3\
The situation is analogous to building a restaurant and starting to
serve customers while the kitchen is still under construction; it is
possible, but may occasionally produce cold food.
---------------------------------------------------------------------------
\3\ The White Paper was a policy statement published by the
Department of Commerce on June 10, 1998. See Management of Internet
Names and Addresses, 63 Fed. Reg. 31741 (1998)
---------------------------------------------------------------------------
The White Paper set forth four principles that it described as
critical to the success of an entity such as ICANN: stability;
competition; private, bottom-up coordination; and representation.
1. Stability is perhaps the easiest to understand. The US
Government was seeking to extract itself from what it had concluded was
no longer a proper role for the US Government--the funding of private
contractors to manage important technical aspects of the global
Internet name and number address system--but only in a way that did not
threaten the stability of the Internet. As the White Paper said, and as
seems obvious, ``the stability of the Internet should be the first
priority of any DNS management system.'' If the DNS does not work, then
for all practical purposes for most people, the Internet does not work.
That is an unacceptable outcome, and thus everything that ICANN does is
guided by, and tested against, this primary directive.
2. Competition was also an important goal set forth in the White
Paper, which stated that ``[w]here possible, market mechanisms that
support competition and consumer choice should drive the management of
the Internet because they will lower costs, promote innovation,
encourage diversity, and enhance user choice and satisfaction.''
Competition in the DNS structure as it stands today is theoretically
possible at both the registry (or wholesale) level, and the registrar
(or retail) level. Increasing competition at the retail level involves
only adding additional sellers of names to be recorded in existing
registries; as a result, it generates relatively minor stability
concerns. For this reason, adding new competition at the retail level
was the first substantive goal that ICANN quickly accomplished after
its formation. On the other hand, adding new registry (or wholesale)
competition--which is the subject of this hearing--requires the
introduction of additional Top Level Domains into the namespace, and
thus does raise potential stability issues of various kinds. As a
result, and given its prime directive to protect stability, ICANN has
moved forward in this area in a prudent and cautious way, consistent
with recommendations from many constituencies interested in the
Internet, which I will describe in more detail later in this testimony.
3. A third principle was private sector, bottom-up consensus
development, and the entirety of ICANN's processes are controlled by
this principle. ICANN is a private-sector body, and its participants
draw from the full range of private-sector organizations, from business
entities to non-profit organizations to foundations to private
individuals. Its policies are the result of the complex, sometimes
cumbersome interaction of all these actors, in an open, transparent and
sometimes slow progression from individuals and particular entities
through the ICANN working groups and Supporting Organizations to
ICANN's Board, which by its own bylaws has the role of recognizing
consensus already developed below, not imposing it from above. Like
democracy, it is far from a perfect system, but it is an attempt, and
the best way we have yet been able to devise, to generate global
consensus without the coercive power of governments.
4. Finally, the fourth core principle on which ICANN rests is
representation. A body such as ICANN can only plausibly claim to
operate as a consensus development organization for the Internet
community if it is truly representative of that community. The White
Paper called for ICANN to ``reflect the functional and geographic
diversity of the Internet and its users,'' and to ``ensure
international participation in decision making.'' To satisfy these
objectives, all of ICANN's structures are required to be geographically
diverse, and the structures have been designed to, in the aggregate, to
provide opportunities for input from all manner of Internet
stakeholders. This is an extremely complicated task, and we are not yet
finished with the construction phase; indeed, we have just initiated a
Study Committee chaired by the former Prime Minister of Sweden, Carl
Bildt, to oversee a new effort to find a consensus solution for
obtaining input from and providing accountability to the general user
community, which might not otherwise be involved in or even
knowledgeable about ICANN and its activities. Other organizational
tasks necessary to ensure that ICANN is fully representative of the
entirety of the Internet community are also ongoing. This is hard work,
and there is more to do to get it done right.
c. what has icann accomplished so far?
Obviously, ICANN is still a work in progress. Nevertheless, it has,
in my view, already made remarkable progress in its young life. ICANN
was created in November of 1998, and did not really become fully
operational until a year later (November of 1999) with the signing of a
series of agreements with Network Solutions Inc., then the sole
operator of the largest and most significant registries--.com, .net,
and .org. So ICANN really has only about 14 months of operating
history. Still, even in that short span of time, some significant
things have happened.
1. The Introduction of Retail Competition. As one of its very first
actions, ICANN created an accreditation system for competitive
registrars and, pursuant to its NSI agreements, gave those new
competitors access to the NSI-operated registries. When ICANN was
formed, there was only a single registrar (NSI) and everyone had to pay
the single price for the single domain name product that sole registrar
offered: $70 for a two-year registration. There are now over 180
accredited registrars, with more than half of those actively operating,
and you can now register a domain name in the .com, .net, and .org
registries for a wide range of prices and terms--some will charge zero
for the name if you buy other services, while others will sell you a
ten-year registration for significantly less than the $350 it would
have cost pre-ICANN (even if it had been available, which it was not).
While there are no precise statistics, in part because the market is so
diverse, a good estimate of the average retail price today of a one-
year domain name registration in the NSI registries is probably $10-
15--or less than half the retail price just 18 months ago.
At the time of ICANN's creation, NSI had 100% of the registration
market for the .com, .net and .org TLDs. Today, we estimate that NSI is
registering less than 40% of new registrations in those TLDs--a market
share drop of more than half in that same 18-month period. There are
still issues that must be dealt with in this area; some registrars have
not lived up to their contractual commitments, and ICANN needs to
ensure that they do. And indeed, there may be too many registrars; 94%
of all registrations come from the 10 largest registrars, with the
other 80 or 90 active registrars sharing the other 6%. Name
registration is quickly becoming a commodity business, and a commodity
business, with commodity margins, will probably not support 100
vigorous competitors. We are already starting to see some companies
wishing to leave the business, and we need to make as sure as we can
that those departures do not impair the ability of consumers and
businesses to rely on names they have registered, and that departures
or even failures do not generate unreliability or other forms of
instability in the namespace itself. So while there are still issues to
be dealt with, I think it is widely recognized that ICANN has been very
successful in changing the retail name registration market from a
monopoly market to a highly competitive market.
2. Creation of a Cost-Effective, Efficient Dispute Resolution
System. A second significant accomplishment has been the creation of
the Uniform Dispute Resolution Policy, a way to quickly and cheaply
arbitrate certain domain name disputes. While domain names themselves
cannot be trademarked, it is certainly possible for domain names to be
confusingly similar to a trademarked name, or in other ways to be
inappropriately used by someone for illegitimate means. Since trademark
and other intellectual property rules differ from country to country,
enforcing those rights is complex and expensive.
One of the policies that was generated from the ICANN bottom-up
process early on was the need for a simple procedure to resolve the
clearest and most egregious violations on a global basis. The result,
after considerable work in a variety of ICANN forums, is the UDRP,
which one commentator recently noted is ``widely viewed as a model of
dispute resolution for the 21st Century.'' The UDRP is limited to
certain very specific claims, is intended to require only about $1,500
in costs and 45 days to invoke, and is required to be included in all
name registration contracts by all ICANN-accredited registrars, thus
providing the basis for global uniformity in the resolution of this
particular class of domain name disputes. Even though the UDRP is non-
binding (either party may take the dispute to court after an
unfavorable UDRP decision), it appears that has happened in only a few
dozen out of over 2,000 decisions to date.
The UDRP is, I would submit, another very positive accomplishment
of ICANN during its short existence to date. As of this writing,
parties interested in further refinement of the UDRP are already
studying its design for possible revisions.
d. the introduction of new global top level domains.
That brings me to the subject of today's hearings, which is really
the third major accomplishment of ICANN in its short existence: the
creation of additional competition at the registry (or wholesale) level
of the namespace. To understand how much of an accomplishment this was,
and how difficult it has been to get to this point, we need to start
with some history, after which I will walk through the general standard
utilized, the criteria that were applied, the application process, the
evaluation process, and the selection process. I will then bring the
story up to date with a description of what has happened since the
selections were made.
Background. The Internet as we know it today was not created with
all of its present uses clearly in mind. In fact, I can safely say
(having been very much involved in the very earliest days of the
Internet) that no one had any idea how it would develop in the hands of
the general public, nor even that it would ever reach public hands.
Certainly there was little appreciation of the increasingly critical
role it would play in everyday life.
In those days, we were designing a communications system intended
for military application and used for experimental purposes by the
research and academic community, and not a system for commerce.
Internet addresses are numeric values, usually represented by four
numbers separated by ``.'' (dots). This is sometimes called ``dotted
notation'' as in 192.136.34.07. In the earliest days, computers
(``hosts'') were known by simple names such as ``UCLA'' or ``USC-ISI''.
As the system grew, especially after 1985 as the National Science
Foundation began growing its NSFNET, it became clear that a system of
hierarchical naming and addressing conventions would be needed.
At that time, seven so-called ``Top Level Domains'' were created:
.com for commercial, .net for networks, .org for non-commercial
organizations, .gov for government users, .mil for the military, .edu
for educational institutions, and .int for international organizations.
All domain names since that time (with an important exception I will
mention momentarily) have been subdivisions of those original seven
TLDs. Thus, wcom.com, to pick an example, is part of the .com top level
domain, and all messages sent to [email protected] are routed
pursuant to the information contained ultimately in the .com registry's
distributed database. In particular, that database resolves
``wcom.com'' into a 32 bit address, such as 192.136.34.07 [note, this
is not the actual Internet address associated with the wcom.com domain
name].
The exception mentioned earlier is the set of so-called ``country
code'' (or ``cc'') TLDs. The original seven TLDs were once called
``generic'' TLDs and are now known as ``global'' TLDs, meaning that
there are theoretically no geographic boundaries that constrain entries
in those databases.\4\ In the early days of the Internet, one of the
most important values to the scientists seeking to incubate and grow
this new thing was the spreading of connectivity to as many parts of
the world as possible. To help in that, individual countries (and some
other geographic areas) were delegated their own TLDs, such as .au for
Australia, or .jp for Japan, or .fr for France. Operation of the
registries for these ccTLDs was delegated to a wide variety of people
or entities, with the primary consideration being a willingness to
agree to operate them for the benefit of the citizens of that
geography. These original delegates were frequently academics,
sometimes government agencies, and sometimes local entrepreneurs; the
common thread was that they promised to use these TLDs to provide
access to this new thing called the Internet for local constituents. In
this way, the Internet, which started as a research experiment in
American universities, slowly became truly global. It is worth noting
that the Internet research project was international in its scope
almost immediately. It started in 1973, and by early 1975, University
College London and the Norwegian Defense Research Establishment were
involved. Later, sites in Italy and Germany became a part of the
Internet research effort.
---------------------------------------------------------------------------
\4\Of course, in fact entries in .gov, .mil, and for the most part
.edu relate only to the United States, but the other global TLDs are
open to entries from all over the world.
---------------------------------------------------------------------------
The original seven gTLDs were created in the mid- to late-1980s; no
new global TLD has been added to the namespace since then. There are
now some 245 ccTLDs, but as described, these were intended to be for
localized use, not as alternatives for global TLDs. So as the Internet
grew during the 1990s, demand for domain names grew as well, but as a
practical matter the only global (i.e., non-national) TLDs in which
businesses or individuals could freely register a domain name were
.com, .net and .org--all administered by Network Solutions, Inc. under
a contract with the National Science Foundation.
There is a long history about how this came about, which I don't
have time to tell, but suffice it to say that as demand exploded, NSI
could not effectively operate the registry within the financial
framework of its agreement with the National Science Foundation and
sought to remedy this by obtaining permission to charge users for
registration of names in the .com, .net and .org databases. Over time,
there came to be dissatisfaction with the service offered by NSI. In
addition (also for reasons too complicated to relate here), NSI was
constrained by its contract with NSF to charge exactly $70 for a two-
year registration with an annual $35 charge after the second year--no
exceptions, no changes. As the number of name registrations climbed
into the millions, many felt that the charge far exceeded the cost of
accepting the registration and maintaining the database.
This unhappiness of a significant portion of the Internet community
was one of the driving forces behind a grass-roots attempt to
institutionalize the function of the original ICANN, the Information
Sciences Institute at the University of Southern California, a
government contractor that performed a set of functions known as the
Internet Assigned Numbers Authority (IANA). After almost three years of
contentious debate, the grass-roots effort failed to gel and the US
Government (after extensive public consultation) then called on the
private sector to come forward with a new kind of organization. The
private sector responded by creating ICANN, as a way to, among other
things, encourage the addition of competition at both the retail and
wholesale levels of the namespace.
Standards for Introduction of New TLDs. As described above, ICANN
was able to introduce retail competition relatively quickly after its
creation, and this has produced the expected benefits--lower prices,
more consumer choice, and innovation. But the introduction of wholesale
competition, because it involves actually expanding the structure of
the namespace, presented and continues to present more risks. While
most Internet engineers believe that some number of additional TLDs
could be added without serious risks of instability, there is
considerable uncertainty about how many could be added without adverse
side effects, and very few engineers have been willing to absolutely
guarantee that there was zero risk of instability. Given the
increasingly critical role the Internet now plays in everyday
commercial and personal life, the almost uniform consensus in the
community was to be cautious and prudent in this process.
For example, the White Paper asserted that ``expansion of gTLDs
[should] proceed at a deliberate and controlled pace to allow for
evaluation of the impact of the new gTLDs and well-reasoned evaluation
of the domain space.'' In addition to concerns about the technical
stability of the Internet, many were concerned about potential costs
that rapid expansion of the TLD space might impose on business and
consumers. The World Intellectual Property Organization, which
conducted a study of intellectual property issues in connection with
the DNS at the request of the United States Government, concluded that
new gTLDs could be introduced if done ``in a slow and controlled manner
that takes into account the efficacy of the proposed measures in
reducing existing problems.'' The Protocol Supporting Organization of
ICANN (made up of the Internet Engineering Task Force and other
Internet engineering and protocol development bodies) said it saw no
technical problems with the introduction of a ``relatively small''
number of new TLDs.
In fact, every entity or organization without an economic stake in
the answer that has examined this question has recommended the same
thing: a ``small'' or ``limited'' or ``prudent'' number of new TLDs
should be tried first, as a sort of proof of concept or experiment.
Once this ``limited'' number of new TLDs was introduced--and the
suggested numbers roughly ranged from 1 to 10--and assuming there were
no adverse side effects, then additional TLDs could be introduced if
there was consumer demand for them.
The ICANN Structure and Procedures. Because ICANN is a consensus
development body that relies on bottom-up policy development, the
issues of whether and how to introduce new gTLDs were first taken up by
the Domain Name Supporting Organization (DNSO), the ICANN constituent
body responsible for name policy issues. The DNSO organized a Working
Group, which recommended that a small number (6-10) of TLDs be
initially introduced, and that the effects of that introduction be
evaluated before proceeding further. That recommendation was forwarded
to the Names Council, the executive body of the DNSO, which reviewed
the Working Group recommendation and public comments on it, and
recommended to the ICANN Board that it establish a ``policy for the
introduction of new gTLDs in a measured and responsible way.'' The
Names Council suggested that ``a limited number of new top-level
domains be introduced initially and that the future introduction of
additional top-level domains be done only after careful evaluation of
the initial introduction.''
Consistent with the ICANN bylaws, the ICANN Board accepts the
recommendations of Supporting Organizations if the recommendations meet
certain minimal standards designed to ensure that they truly represent
consensus recommendations. Thus, the Names Council recommendation was
published for public comments, and following the receipt of numerous
public comments, the ICANN staff in June 2000 issued a Discussion Draft
seeking public comments on a series of questions intended to lead to
the adoption of principles and procedures to be followed in a
``measured and responsible introduction'' of a limited number of new
TLDs.\5\ Following several thousand additional public comments, and
considerable discussion at a public meeting in Yokohama in July 2000,
the ICANN Board adopted a series of resolutions instructing its staff
to begin the process of accepting applications for a ``proof of
concept'' for the introduction of new TLDs.\6\
---------------------------------------------------------------------------
\5\ See generally ICANN Yokohama Meeting Topic: Introduction of New
Top-Level Domains, at http://www.icann.org/yokohama/new-tld-topic.htm.
\6\ See Resolutions of the ICANN Board on New TLDs, at http://
www.icann.org/tlds/new-tld-resolutions-16jul00.htm
---------------------------------------------------------------------------
In early August, ICANN posted a detailed discussion of the new TLD
process it proposed to follow,\7\ and in mid-August a detailed set of
Criteria for Assessing TLD Proposals.\8\ These nine criteria have been
constant throughout this process, and so they bear repeating here:
---------------------------------------------------------------------------
\7\ See New TLD Application Process Overview, at http://
www.icann.org/tlds/application-process-03aug00.htm
\8\ See Criteria for Assessing TLD Proposals, at http://
www.icann.org/tlds/tld-criteria-15aug00.htm
---------------------------------------------------------------------------
1. The need to maintain the Internet's stability.
This speaks for itself. ICANN's overriding obligation is to protect
the stability of the Internet, and all other objectives are secondary.
Thus, any proposal that could be shown to threaten this stability
(other than any risk inherent in any new TLD introduction) was
obviously unacceptable.
2. The extent to which selection of the proposal would lead to an
effective ``proof of concept'' concerning the introduction of
top-level domains in the future.
This too is largely self-explanatory. The effort here was not to
find the ``best'' application, however that might be measured, but to
ask the community to offer up a set of options from which ICANN could
select a limited number that, taken in the aggregate, would satisfy the
evaluation objectives of this proof of concept. This is exactly the
same approach that ICANN had previously taken in the introduction of
competitive registrars, and which had worked so well there. The
addition of multiple registrars to the NSI registries required the
creation of new interface software, since before this time only one
registrar had been able to direct new entries in those registries.
Thus, there was some experimental effort required to make sure that the
software was ready for use by a larger number of simultaneous
registrars. ICANN first created a ``test-bed,'' asked for expressions
of interest from the community, and accredited only five new registrars
for a period of a few months, while they and NSI worked out the bugs in
the interface software. As soon as the test-bed was completed, ICANN
accredited large numbers of registrars, now exceeding 180.
Here, the concept is similar: from options offered up from the
community, create a limited number of new TLDs to ensure that the DNS
can accept, both technically and practically, these additions without
impairing stability in any way. Once that is proven, additional TLDs
can be created as appropriate.
3. The enhancement of competition for registration services.
Obviously, this is the principal reason for adding new TLDs, so one
criterion for determining which applications to accept initially is how
effective they are likely to be in creating new competition for the NSI
registries. Of course, competition takes many forms; here, one form
would be analogous to .com--a global, unrestricted registry focusing on
business. To compete in this way requires not only desire, but the
capacity to effectively compete with a competitor with high brand
awareness (.com has almost become a generic term), a very significant
marketing budget, and a large installed base of registered names which
will produce some level of renewals more or less automatically. To
compete successfully on a global basis under these circumstances
requires a significant capital investment, very significant technical
expertise (running a database of several million names that gets
hundreds of simultaneous queries every second is a complicated matter),
and a substantial marketing budget to build the kind of brand equity
that will be necessary to compete effectively with, for example, .com.
Another way to introduce competition into the wholesale part of the
market is to offer a different kind of product--not a global
unrestricted domain, but various kinds of limited or restricted
registries that might appeal to specific different sectors of the
market. To use a television analogy, narrowcasting instead of
broadcasting. Here, capital and marketing expenses may be lower, but
other kinds of service characteristics may be more important.
ICANN's purpose with this criteria was to invite a broad range of
competitive options, from which it could select a menu that, taken as a
whole, would offer a number of different competitive alternatives to
consumers of domain name services.
4. The enhancement of the utility of the DNS.
In addition to competition, one must reasonably consider the
practical effects of the introduction of new TLDs. The names registered
in the DNS are intended to be used by people, and sound engineering
requires that human factors be taken into account.
5. The extent to which the proposal would meet previously unmet types
of needs.
If it is assumed that the DNS should meet a diversity of needs, it
would be a positive value if a proposed TLD appeared to meet any
previously unmet needs of the Internet community.
6. The extent to which the proposal would enhance the diversity of the
DNS and of registration services generally.
Here, what was sought was diversity of all kinds, in the hopes of
creating the broadest possible--and thus most instructive--experiment
within the limitations recommended (i.e., a small number of new top
level domains). So, the published criteria encouraged the submission of
proposals for different kinds of TLDs (open or closed, non-commercial
or commercial, personal or business-oriented, etc.) The criteria also
sought diverse business models and proposals from different geographic
regions, for the same reasons.
7. The evaluation of delegation of policy-formulation functions for
special-purpose TLDs to appropriate organizations.
For those proposals that envisioned restricted or special-purpose
TLDs, this criterion recognized that development of policies for the
TLD would best be done by a ``sponsoring organization'' that could
demonstrate that it would include participation of the segments of the
communities that would be most affected by the TLD. Thus, with this
class of application, the representativeness of the sponsoring
organization was a very important criterion in the evaluation process.
8. Appropriate protections of rights of others in connection with the
operation of the TLD.
Any new TLD is likely to have an initial ``land rush'' when it
first starts operations as people seek the most desirable names. In
addition, every new TLD offers the potential opportunity for
cybersquatting and other inappropriate name registration practices.
This criterion sought information about how the applicant proposed to
deal with these issues, and also how it proposed to provide appropriate
mechanisms to resolve domain name disputes.
9. The completeness of the proposals submitted and the extent to which
they demonstrate realistic business, financial, technical, and
operational plans and sound analysis of market needs.
Finally, this criterion simply emphasized that, since the effort
was a ``proof of concept,'' the soundness and completeness of the
application and the business plan would be important elements of the
selection process. This was not intended to be an experiment in how
well the DNS or the Internet could survive the business failure of a
new TLD operator. Nor was it intended to be clairvoyant with regard to
the outcome of any particular proposal. Thus, to the extent possible,
those applications that appeared to have the soundest business plans,
based on the most realistic estimates of likely outcomes.
The Application Process. The application process required the
filing of a detailed proposal speaking to all the criteria outlined
above. It recommended that applicants retain professional assistance
from technical, financial and management advisers, and lawyers. And
perhaps most controversially, it required a non-refundable application
fee of $50,000. A brief explanation of this particular requirement may
be useful.
ICANN is a self-funding organization. It has no capital, and no
shareholders from which to raise capital. It must recover its costs
from the various constituent units that benefit from ICANN's processes
and procedures--today, those costs are borne by address registries,
name registries, and registrars. Its annual expenditures to date have
been in the $4-5 million range, covering employee salaries and expenses
(there are now 14 employees), and a wide range of other expenditures
associated with operating in a global setting.
Thus, there was no ready source of funds to pay for the process of
introducing new TLDs, and the ICANN Board determined that this, like
all other ICANN activities, should be a self-funded effort, with the
costs of the process borne by those seeking the new TLDs. At that
point, ICANN estimated the potential costs of this process, including
the retention of technical and financial advisers, legal advice, the
logistics of the process, and the potential cost of litigation pursued
by those unhappy with the results. While obviously all these elements
were highly uncertain, based on its best judgment of how many
applications were likely to come in and what the likely costs would be,
and incidentally only after receiving public comments, ICANN
established a $50,000 fee. As it turns out, there were more
applications than expected, and thus the absolute costs of processing
and reviewing them were higher than expected; about half the
application revenues have already been used to cover costs of the
process to date, with considerable work left to do and still with the
potential for litigation at the end of the process. To date, it appears
that the fact of more applications and higher costs of review and
evaluation than expected have cancelled each other out, and so it
appears that the fees adopted were about right in creating the funds
necessary to carry out this process.
I know there have been complaints by some that they were foreclosed
from this process because they simply could not afford the $50,000
application fee, and I am sympathetic to these concerns. But there are
three practical responses that, in my view, make it clear that this is
not a fair criticism of the process. First, the process had to be self-
funding; there simply was no other option, since ICANN has no general
source of funds. Based on costs to date and those projected, it
certainly does not seem that the fee was set too high. While there are
still application fee receipts that remain unspent, the process is not
over, and it has already consumed half of the fees collected.
Second, and as importantly, it is highly unlikely that any
individual or entity that could not afford the application fee would
have the resources to be able to operate a successful and scalable TLD
registry. The capital and operating costs of even a small registry are
thought to be considerable, and especially if the goal is to operate a
registry that charged low or no fees for name registrations (many of
the persons and entities advancing this particular complaint are non-
profit or public interest bodies), those fees would not likely cover
the costs of operation, much less the necessary start-up and capital
costs. Of course, it is possible that, if an organization that would
otherwise have difficulty managing the costs of operating a TLD
registry were in fact awarded a new TLD, it might be able to raise the
funds through subsequent contributions or grants or the like, but this
leads us directly to the third point.
This effort was not a contest to find the most qualified, or the
most worthy, or the most attractive for any reason of the various
applicants. ICANN is not and should not be in the business of making
value judgments. What ICANN is about is protecting the stability of the
Internet and, to the extent consistent with that goal, increasing
competition and competitive options for consumers of domain name
services. Thus, what ICANN was doing here was an experiment, a proof of
concept, an attempt to find a limited number of appropriate applicants
to test what happens when new TLDs of various kinds are added to the
namespace today--a namespace that is vastly different in size and in
application than that which existed more than 15 years ago when the
first seven global TLDs and the ccTLDs were created.
Because this was a proof of concept, the emphasis was on diverse
business models, technical capacity, and diversity of geography and
focus--and not on some weighing of the relative merits, however
measured, of the applicants. Indeed, a serious attempt was made to
avoid otherwise normal business risks, such as limits on capital or
other resources, so that forseeably likely business failures did not
interfere with the data collection and evaluation process of this
experiment. Thus, it would have been impossible to accept any
application which relied on the mere hope of obtaining funding if an
application was accepted, and indeed, several of the applicants not
selected in the evaluation process were thought to be deficient just on
that point.
Under these circumstances, it was not appropriate to encourage
applications by those with limited resources, since those limitations
would almost certainly result in their not being selected. Thus,
setting the fee to recover expected costs, without regard to the effect
it had on applications, seemed then (and seems today) the logical
approach. Once this experiment is over, and assuming it demonstrates
that adding new TLDs in a measured way does not threaten the stability
of the DNS or the Internet, I would hope that processes could be
developed to both expedite and significantly reduce the cost of new TLD
applications or, at a minimum, to deal with special cases of TLDs with
very limited scope, scale and cost.
The Evaluation Procedure. Forty-seven applications were submitted
by the deadline established; three of those were withdrawn for various
reasons, and the remaining 44 were then published on ICANN's website,
open to public comments, and subjected to an extensive evaluation,
applying the criteria set forth in the various materials previously
published by ICANN. More than 4,000 public comments were received. The
applications and the public comments were carefully reviewed by
technical, financial and legal experts, and the result of that
evaluation--a 326-page staff report summarizing the public comments and
the staff evaluation--was itself posted on the ICANN website for public
comment and review .by the Board of Directors of ICANN.\9\ Another
1,000 public comments were received on the staff report. The Board was
provided with regular status reports, interim results of the staff
evaluations, and of course had access to the public comments as they
were filed.
---------------------------------------------------------------------------
\9\ See Report on New TLD Applications, at http://www.icann.org/
tlds/report
---------------------------------------------------------------------------
There has been some criticism of the fact that the full staff
evaluation was not available to the public--and thus to the
applicants--until November, only days before the actual Board meeting.
Obviously, it would have been much better to produce this earlier, and
we tried to do so. But in fact the timing of the release of the staff
report was largely the product of the bottom-up process that ICANN
follows to generate consensus. An important ingredient in the staff
evaluations was the substance of the voluminous--over 5000--public
comments produced in the month after the applications were posted.
ICANN's job is to identify consensus, and thus input from the community
is a critical part of any Board decision. Getting that community input,
considering it, and completing the technical and financial evaluations
was a massive job.
It would have been preferable to have issued the staff report
earlier. But on the other hand, in the six days between the posting of
the report and the Board meeting, ICANN received more than 1,000
additional public comments on the staff report, many from the
applicants responding to the evaluation of their particular
application. The ultimate question is whether the Board got sufficient
timely information on which to base its selection decisions, bearing in
mind the objective of the exercise. I believe it did.
At its Annual Meeting in Los Angeles in November 2000, the ICANN
Board devoted most of the standard public forum day immediately
preceding the Board meeting to the new TLD issue, with presentations by
the staff of their findings, public comments, and short presentations
from the applicants. Another point of criticism by some has been the
short time--three minutes--allowed during this public forum for
presentations by each of the applicants, but oral presentations were
never intended to be the sole or primary source of information for the
Board. Voluminous applications (with many hundreds of pages) had been
filed by each applicant; many of them had received and answered
clarifying questions from the staff; and many of them had provided
additional material by filing material on the ICANN public comment page
(every one of the 5,000+ comments was read by ICANN staff). The Board
had access to the applications and to the staff evaluations well ahead
of the public Board meeting at which the applications were reviewed.
The opportunity to make a presentation at the public forum was simply
the final step in an extensive process, available so that any last-
minute questions could be asked or points made.
Since there were 44 applicants, nearly all of whom wished to speak,
and since the time available (given the other parts of the community
who also wished to be heard) was limited to about two hours, three
minutes was simply all the time available. Most used it wisely,
pointing out the particular strengths of their applications.
Some disappointed applicants have also complained that ICANN staff
refused to talk with them, or let them respond to concerns raised by
their applications. This is not accurate; what ICANN staff refused to
do is have private conversations with the applicants, and this derives
from the very nature of ICANN as an entity. ICANN is a consensus
development body, not a regulatory agency; its decisions are intended
to reflect consensus in the Internet community, not simply the policy
preferences of those who happen to sit on its Board at any given
moment. For this process to work, the vast bulk of ICANN's work must be
transparent to the public, and so with very rare exceptions (such as
matters dealing with personnel issues), everything ICANN does it does
in public. (In fact, one of the three applications that were withdrawn
resulted from the applicants' unwillingness to allow significant
material in their application to be posted on ICANN's website.) If the
public was going to have a real opportunity to comment on the
applications, the applications themselves needed to be public, and any
substantive discussion of them had to be public as well.
In an effort to help this process, and still get questions
answered, ICANN staff frequently took email or other private questions,
reformulated them to make them more generically useful, and then posted
them on the website as FAQs. In addition, staff encouraged applicants
to post any information they wished on the public comment pages, where
it would be read by ICANN staff, the ICANN Board and also by any
interested observer. What staff would not do, and what was evidently
very frustrating to many of the applicants that had not previously had
any experience with the open structure and operations of ICANN, was to
have private substantive discussions with the applicants.
It is easy to understand this frustration, especially for those
disappointed applicants who had not previously participated in the
ICANN process and, as a result, did not understand what ICANN is and
how it operates and thus were surprised at the transparency of the
entire process. Still, it is hard to see how any other process could
have been followed consistent with ICANN's consensus development
process. Without access to the entirety of the information about each
applicant and each application that was available to the Board, the
Board would not have had the benefit of public comments on some (often
significant) factors, and it would have been hard to justify its
selections as deriving from a consensus development process.
The Selection Process. To understand the selection process, we must
go back to first principles. The goal here was not to have a contest
and pick winners; it was not to decide who ``deserved'' to have a new
TLD; it was not even to attempt to predict the kind or type of TLDs
that might get public acceptance. The goal, articulated plainly from
the beginning of the process more than a year ago, was to identify from
suggestions by the community a limited number of diverse TLDs that
could be introduced into the namespace in a prudent and controlled
manner so that the world could test whether the addition of new global
TLDs was feasible without destabilizing the DNS or producing other bad
consequences.
This was not a race, with the swiftest automatically the winner. It
was a process that was intended to enable an experiment, a proof of
concept, in which private entities were invited to participate if they
chose to do so--and those who did choose to participate did so
voluntarily, knowing that the odds of being selected were not high,
that the criteria for being included in this experiment were in some
measure subjective, and that the goal was the production of
experimental information that could be evaluated. Of course, when many
more applications were received than anyone had suggested should be
prudently introduced at this stage, some evaluation was necessary to
attempt to identify those suggestions that might best fit the
experimental parameters that had been laid down. But this was never a
process in which the absolute or relative merit of the particular
application was determinative.
Many applications with likely merit were necessarily not going to
be selected, if the goal was a small number (remember, the entire range
of responsible suggestions for introducing new TLDs was from one to 10
new ones). And since one objective was diversity--of business model, of
geography, of type of registry--it was highly likely that some
qualified applications would not be selected--both because prudence
required the addition of only a small number of TLDs, and because our
proof of concept required data from a diverse set of new TLDs. This was
especially true of those applications seeking open, global TLDs; while
two were selected, about half of the 44 applications sought such a
charter. But it was also true of others; .geo received a very positive
evaluation from the staff, but the Board felt that, at this proof of
concept stage, there were in fact potential risks to the operation of
the DNS that could not be fully evaluated without consultation with the
technical support organization(s) associated with ICANN.
Thus, the Board considered every one of the 44 remaining
applications at its meeting on November 16, 2000, measuring them
against their collective judgment about how well they would serve to
carry out the test that was being considered. In a meeting that lasted
more than six hours, the Board methodically reviewed, and either set
aside or retained for further evaluation, application after
application, until it was left with approximately 10 applications that
seemed to have broad consensus support. After further, more focused
discussion, that number was pared to the seven that were ultimately
selected, and which had almost unanimous Board support: .biz, .info,
.pro, .aero, .coop, .museum, and .name.\10\ In the aggregate, the Board
concluded that this group provided enough diversity of business models
and other relevant considerations so as to form an acceptable test bed
or proof of concept.
---------------------------------------------------------------------------
\10\ See http://www.icann.org/minutes/prelim-report-
16nov00.htm#00.89
---------------------------------------------------------------------------
The various TLDs have very different intended purposes, and that is
the strength of the group in the aggregate. Two--.biz and .info--were
advanced as essentially alternatives to .com--global, business-oriented
registries aimed at capturing millions of registered names around the
world. In order to compete with .com--which has a recognized brand, a
large installed base that produces a regular stream of renewals, and a
very substantial marketing budget--these particular applicants assumed
they would need a significant investment in both capital equipment and
marketing. The Board felt that these applicants seemed most capable of
bringing the necessary resources to bear to test whether anyone can
effectively compete with .com after the latter's significant head
start.
Two other TLDs--.pro and .name--were aimed at individuals rather
than businesses, but in very different ways. .pro was aimed at licensed
professionals, while .name was aimed at any individual. The other
three--.aero (aerospace industry), .coop (for cooperatives), and
.museum (for museums)--were all restricted TLDs, aimed at an industry
or a business method or a type of entity, and added to the diversity of
this experimental collection of TLDs.
ICANN's objectives--and by that we mean to say the objectives of
the general Internet community, which ICANN tries to represent--were to
introduce a small number of various kinds of new TLDs into the
namespace in a prudent fashion, see what happened, and then, if
appropriate, based on those results, move forward with additional new
TLDs. It is certainly conceivable that some different subset of the
applications it had before it would have met that objective as well as
those chosen, but the real question is whether the choices were
reasonable, and likely to produce the necessary information on which
future introductions could be based. It is also possible, as some of
those not selected have complained, that those selected will have a
head start (to the extent that matters) over future TLD applicants, but
this would be an inevitable consequence of any selection of less than
all applicants. Those who were not selected, no matter who they are,
were predictably going to be unhappy, and those who were selected were
predictably going to be glad, but neither was an ICANN goal. ICANN's
goal, and its responsibility, was to find a limited collection of
diverse new TLDs that could be prudently added to the namespace while
minimizing any risk of instability. While time will tell, at this point
we believe we faithfully carried out that responsibility.
The Post-Selection Process. Since November, we have been in the
process of drafting and negotiating agreements with the selected
applicants. Since these agreements will hopefully be templates for
future agreements, we are taking great care to make sure that the
structure and terms are replicable in different environments. Since
these agreements will contain the promises and commitments under which
the applicants will have to live for some time, the applicants are
being very careful. The result is slow progress, but progress. We are
hopeful that we will be able to complete the first draft agreements
within a few weeks. The Board will then be asked to assess whether the
agreements reflect the proposals that were selected and, if so, to
approve the agreements. Shortly thereafter, this great experiment will
begin. We are all looking forward to that time.
Of course, it cannot be stressed enough that no one knows for sure
what the effects of this experiment will be. Since there have been no
new global TLDs introduced for more than a decade, the Internet is a
vastly different space than it was the last time this happened. Of
course, there have been a number of country code TLDs introduced over
that period, and since some of those have recently begun to function in
a way quite analogous to a global TLD, it may be that we will be able
to conclude that the DNS can readily absorb more new global TLDs. But
there has never been an introduction of as many as seven new global
TLDs simultaneously, with the possibility of a land rush that is
inherent in that fact. There has never been a highly visible
introduction of multiple new TLDs in the context of an Internet that
has become a principal global medium for commerce and communication. We
do not know whether the introduction of a number of new TLDs--
especially combined with the relatively new phenomenon of the use of
ccTLDs in a fashion never intended (after all, .tv stands for Tuvalu,
not television, no matter what its marketers say)--will create consumer
confusion, or will impair the functioning of various kinds of software
that has been written to assume that .com is the most likely domain for
any address.
In short, it is not absolutely clear what effects these
introductions will have on the stability of the DNS or how to introduce
new TLDs in a way that minimizes harmful side-effects, and that is
precisely why we are conducting this experiment. The results will guide
our future actions.
e. conclusion
One of ICANN's primary missions is to preserve the integrity and
stability of the Internet through prudent oversight and management of
the DNS by bottom-up, global, representative consensus development.
Like location in real estate, the three most important goals of ICANN
are stability, stability and stability. Once there is consensus that
stability is not threatened, ICANN is then charged with seeking to
increase competition and diversity, both very important but secondary
goals. A competitive Internet that does not function is not useful. An
Internet in which anyone can obtain the domain name of their choice,
but where the DNS does not function when someone seeks to find a
particular website, is also not useful.
In its short life, ICANN has some real accomplishments--made more
impressive by the inherent difficulty of developing global consensus on
anything, but especially on issues as complex and contentious as those
facing ICANN. It has achieved these accomplishments by hewing to its
first and guiding principle--to maintain a stable, functional DNS--and
within those limits by seeking to increase competitive options and
efficient dispute resolution. This same principle has guided the
careful, prudent way in which ICANN has approached the introduction of
new global TLDs, really for the first time in the history of the
Internet as we know it today.
ICANN's processes are and have been transparent. The goals and
procedures were derived from public comments, clearly laid out at the
beginning of the process, and all decisions were made in full public
view. Given the importance of care and prudence in the process, and the
potentially devastating results of a misstep, ICANN has and will
continue to err on the side of caution. This may mean slower progress
than some would like, but it will also reduce and hopefully eliminate
the potential for the catastrophic effects on business and personal use
of the Internet that malfunction or other instability of the DNS would
produce.
Mr. Upton. All right. Thank you very much.
Mr. Kerner.
STATEMENT OF LOU KERNER
Mr. Kerner. Good morning, Mr. Chairman and members of the
committee. I am Lou Kerner, CEO of The .TV Corporation. Thank
you for the opportunity to appear today and to share our
concerns about the process by which ICANN proposes a new set of
top-level domain names to the Internet.
.TV is the registry for Web addresses ending in .tv. In
1999, we entered into a partnership with the sovereign nation
of Tuvalu to commercialize its country code top-level domain,
.tv, and in just 9 months we have registered over 250,000
domain names, establishing .tv as the fasting growing TLD in
Internet history. We have invested millions of dollars to build
a globally diverse technical infrastructure that is reliable,
scalable, and secure.
We come here as supporters of ICANN, but with serious
concerns about its TLD selection process and its impact on the
Internet community. The white paper which led to the creation
of ICANN in 1998 envisioned an organization which would operate
under a, ``sound and transparent decisionmaking process and be
fair, open and procompetitive.'' Mr. Chairman, these worthy
ideals were not evident in the TLD selection process
implemented by ICANN, which can be described as unfair, closed,
and anticompetitive.
On August 15, 2000, ICANN solicited applications to
operates new TLDs. Applicants were required to submit in great
detail their technical, financial and business plan for the
proposed TLD and to pay an unrefundable $50,000 fee. After
paying the fee and spending hundreds of manhours preparing our
applications, we were thrust into a selection process that was
highly flawed. Our many concerns with the process are covered
in greater detail in our written submission, but let me briefly
outline three areas of glaring deficiency for the committee.
First, there was very vague selection criteria. ICANN's
criteria for assessing proposals were vague at best and were
not weighted in any manner to give applicants a clear idea of
the relative importance of each of the criteria. For example,
the criteria included the enhancement of competition for
registration services. Our consortium thus proposed a registry
fee of $3.50 a name, substantially lower than the average of
the winning applicant's, which was $9.68, and even the lowest
fee among the winners of $5 is still almost 50 percent above
our proposed registry fee. However, pricing never seemed to be
addressed by ICANN in the selection process.
Our second major area of concern is a lack of due diligence
in the process. ICANN had intended that the evaluation process,
``not involve only reviewing what has been submitted, but also
consulting with technical, financial, business and legal
experts and gathering additional information that may be
pertinent to the application.'' However, ICANN received 47
applications by its October 2 filing deadline, which
overwhelmed its resources. It became apparent that the 6-week
period allocated to the review process was completely
unrealistic.
ICANN fell behind its timetable, forcing it to abbreviate
the review process. Most notably ICANN abandoned plans to
conduct interviews with applicants. Due process was sacrificed
for expediency in order to meet ICANN's self-imposed deadline
of November 16.
In response to criticism from applicants concerning the
lack of opportunity to respond to the staff report, ICANN
announced on November 14 that each applicant would be permitted
to make a 3-minute presentation to the board on the following
day. As decisions by the board appeared to have largely already
been made, this was a disingenuous gesture; thus, we used our
time to express our dissatisfaction with the process, and our
message met with thunderous applause from the ICANN community
members in attendance.
Our final major concern is that the board decisions were
based upon factually inaccurate staff reports. After conducting
little financial, technical or operational due diligence, ICANN
on November 10 released its staff report which, though replete
with errors about our proposal, profoundly influenced the
decision of the ICANN board. The report was posted just 1 day
before the start of the ICANN meetings at which the new TLDs
were selected, effectively eliminating the opportunity for
public comment originally proscribed by ICANN.
The report seriously misstated the technical capabilities
of our consortium, which collectively offered a broad
geographical reach, diverse Internet and technological
expertise and the financial resources necessary. Our written
response to the staff report, posted on ICANN's Web site per
ICANN protocol, was not even read by the board. The erroneous
findings of the staff report essentially limited our
applications and many others from serious consideration by the
board.
Given the current situation, Congress must intervene to
ensure a fair and equitable method for approving new TLDs. Mr.
Chairman, the approval of new top-level domains is an important
manner warranting congressional review, and the Department of
Commerce should not implement ICANN's recommendation until such
a review takes place. We are concerned that Commerce intends to
simply rubber-stamp ICANN's implementation request, which we
believe is inappropriate given the fundamental flaws in the
selection process.
We are not advocating U.S. Government control of the
Internet. However, while Commerce maintains oversight authority
of ICANN, the U.S. Government has a responsibility to ensure
that decisions affecting the Internet are reached fairly and
that proper precedents are established.
This is the first major test of ICANN's decisionmaking
authority, and Congress has an important role to play in
establishing and enforcing the standards by which ICANN will
make future decisions. Through the urging of Congress, the
Department of Commerce should direct ICANN to reconsider all
top-level domain applications in a manner that is fair, open,
and rational.
Mr. Upton. Mr. Kerner, I must beg that we have to stay on
our schedule.
Mr. Kerner. Mr. Chairman, in that case, I will stop there.
Thank you.
[The prepared statement of Lou Kerner follows:]
Prepared Statement of Lou Kerner, Chief Executive Officer, .tv
Corporation International
Good morning, Mr. Chairman and members of the Committee. My name is
Lou Kerner. I am Chief Executive Officer of The .tv Corporation
International (``dotTV''). Thank you for allowing me the opportunity to
appear today and to share our serious concerns with respect to the
process by which the Internet Corporation for Assigned Names and
Numbers (ICANN) proposes to introduce a new set of generic top level
domains (``TLDs'') to the Internet.
I want to emphasize at the outset that ICANN, a body that is
largely unknown to the public, has enormous power over the Internet
today. How it exercises that power has great significance for consumer
choice, competition and the efficiency and viability of the Internet.
Congress has an important role to play in making sure that ICANN
carries out its responsibilities in the public interest.
In July of 1998, the Department of Commerce issued a ``White
Paper'' to create a private, non-profit corporation with broad
responsibility to manage the policy and operation of the Internet. This
entity, which subsequently became ICANN, was to be governed ``on the
basis of a sound and transparent decision-making process'' that was to
be ``fair, open, and pro-competitive.'' Mr. Chairman, this lofty ideal
in no way resembles the events of recent months, which more accurately
could be described as hurried, arbitrary and unfair. As a member of two
bidding consortiums, the dotNOM Consortium and The dotPRO Consortium,
it is our belief that the process prescribed and implemented by ICANN
is fundamentally flawed and that due process and thoughtful decision
making has been sacrificed for the sake of expediency. In reliance on
this flawed process, critical decisions with irreversible and far-
reaching consequences affecting the future of the Internet may soon be
made.
We come here as supporters of ICANN generally, but with serious
concerns about its TLD selection process which we view as fundamentally
flawed and lacking due process. We continue to recognize the enormous
task and power ICANN holds over the Internet today and in the future.
How it exercises that power has great significance for consumer choice,
competition and the efficiency and viability of the Internet. As the
U.S. Department of Commerce still has oversight authority over ICANN,
the U.S. Government has an important role to play in making sure that
ICANN carries out its responsibilities in a responsible manner.
Following some brief background information, I first will describe
the method by which ICANN selected a new set of TLDs and then identify
some of the specific flaws in the TLD selection process. Finally, I
will set forth the congressional action we believe is necessary to
remedy ICANN's actions and to ensure that the deliberate and thoughtful
process contemplated by the ICANN charter is followed in decision-
making.
1. about top level domain names:
The Internet domain name system (``DNS'') is based on a
hierarchical structure of names. At the top of this hierarchy are top
level domain names (``TLDs'') comprising ``generic'' TLDs (``gTLDs'')
such as .com, .org, .net and the two letter country code top level
domains (``ccTLDs'') such as .uk, .jp and .tv. Below the TLDs are the
many millions of second level domain names that have been registered by
individuals and organizations such as amazon.com, earthlink.net and
npr.org. For some years consideration has been given to the
introduction of new gTLDs, however, none have been added to the system
since the mid 1980s.
2. about icann:
Responsibility for the overall coordination of the DNS originally
resided with the Internet Assigned Numbers Authority (``IANA'') under
the oversight of the U.S. Department of Commerce. This responsibility
was subsequently passed to ICANN which was created in 1998, however,
ICANN continues to be subject to oversight by the Department of
Commerce.
ICANN is a not-for-profit corporation that operates under the
direction of a board of 19 directors (the ``Board''); nine appointed by
ICANN's supporting organizations, nine at-large directors and ICANN's
President. As at November 16, (the date on which the Board decided upon
the new gTLD which were to be approved) the nine at-large directorships
continued to be held by interim directors appointed by the Department
of Commerce.
Five directors elected in October 2000 from the at-large Internet
community did not assume their positions on the Board until immediately
following the November 16 meeting and were therefore precluded from the
evaluation and selection of applications for new gTLDs. This is a
matter of significant controversy within the Internet community with
many believing that the Board's haste to conclude the new gTLD review
process was, at least in part, motivated by the desire to thwart the
new directors from participating in the process.
3. about dottv:
dotTV is a leading global provider of Web identity services and the
exclusive worldwide source for Web addresses ending in .tv. In 1999, we
entered into a partnership with the sovereign nation of Tuvalu to
operate the registry for its assigned country code top-level domain
name, .tv. In just over nine months we have registered over 250,000
domain names and have established ourselves as the fastest growing top
level domain in the history of the Internet. To meet these increasing
demands and the possibility of assuming the registry function for new
TLDs, we have invested millions in building a globally diverse and
robust technical infrastructure that is scalable, secure and reliable.
4. about the dotpro and dotnom applications:
dotTV led a consortium of major international corporations
including Lycos Inc., XO Communications, OnlineNIC, SK Telecom and 7DC
which submitted two applications for ``.pro'' (for use by professional
service providers) and ``.nom'' (for non-commercial use by private
individuals). Information regarding the structure, operation and
objectives of these proposed TLDs is contained in the attached
executive summaries of the applications.
The consortium offered many collective strengths including:
broad geographical reach through its international partners
based in the US, China, Korea and Europe;
an impressive and diverse range of Internet and related
technological expertise including registry services, wireless
networking, web navigation, broadband, web-hosting and online
services;
financial resources and business relationships necessary to
quickly establish an international distribution network and
promote the worldwide recognition and adoption of new gTLDs.
With the objective of promoting competition in the domain name
industry and providing consumers with a low priced alternative, the
dotTV-led Consortium proposed that both the .pro and .nom TLDs would be
made available to registrars at an annual rate of $3.50. This price was
significantly lower than that proposed by most other applicants
including the successful rival application for .pro which proposed a
price of $6.00.
5. the application process:
In August of 2000, ICANN began its process by announcing that it
would solicit applications for new TLDs to supplement the Internet's
current TLDs. Application Instructions were first posted on ICANN's
website on August 15, 2000 directing that applications in the
prescribed format be filed by October 2, 2000 with an accompanying non-
refundable fee of $50,000. Applications were required to set forth in
great detail the applicant's technical, financial and business plans
with regard to the new gTLD being proposed. Some applications exceeded
several hundred pages and included lengthy technical appendices.
ICANN received 47 applications by the October 2 filing deadline and
publicly acknowledged that it had not expected such a large number of
submissions. This volume clearly overwhelmed ICANN which fell further
and further behind its stated timetable over the following weeks. In
the face of the increasing backlog in the process, ICANN chose to
significantly abbreviate or abandon certain planned steps in the review
and evaluation process rather than push back its self-imposed November
16 deadline for completion of the process. Attached is a schedule
outlining the review and evaluation timetable showing targeted and
actual dates of each step in the process.
The mere 6-week period allocated by ICANN for the entire review
process was extremely ambitious and, in light of the number of
applications filed, completely unrealistic.
6. the defects in the process:
Mr. Chairman, I am not a lawyer, and I do not claim to be an expert
on the subject of procedural requirements, but the methods employed by
ICANN to select new TLDs fundamentally lacked fairness, and it does not
take a lawyer to reach that conclusion.
Many of the flaws in the process stem from the unrealistic
timetable that ICANN imposed upon itself in evaluating and selecting
successful applications. It is unclear to us why the Board should have
been so motivated to conclude the process by November 16, though we
note that by making its decision on this date the newly elected at-
large directors were prevented from being involved in the selection
process.
Mr. Chairman, we believe that the selection process was
fundamentally flawed in the following three respects:
A. Vague and Unweighted Selection Criteria.
The stated criteria for assessing new top-level domain proposals
were vague at best and were not weighted in any manner to give
applicants a clear idea of the relative importance attributed by ICANN
to each of the criteria.
B. Lack of Due Diligence.
Partly due to the unanticipated number of applicants (47) and the
extensive nature of the application materials, ICANN found itself
unable to review the proposals as planned and as the Internet community
expected.
ICANN's original instructions contemplated that ``ICANN staff may
gather additional information by sending applicants e-mails asking for
the information, by conducting telephone or in-person interviews with
applicants, by attending (possibly with ICANN-retained experts)
presentations by applicants or their experts, or by other means. These
inquiries will be initiated by ICANN staff.'' The original timetable
provided that such consultation would occur between October 18-21;
however, on October 23 ICANN advised that it had abandoned this step
stating that because ``the applications that have been submitted do a
generally good job of explaining the nature of the proposals, [we] have
concluded that real-time interviews are not warranted at this time.''
In reality, it appeared that ICANN's decision to dispense with this
important step of the review procedure was entirely motivated by its
desire to expedite the process, and that applicants were being denied
due process so that ICANN's staff could meet their self-imposed
November 16 deadline for concluding the selection process.
In response to mounting criticism over the lack of opportunity for
applicants to present their proposals in person and to respond to the
staff report, the ICANN staff announced on November 14 that each of the
remaining 44 applicants would be permitted to make a three minute
presentation to the Board on the following day. Applicants who had
invested tens if not hundreds of thousands of dollars and countless
hours to prepare and file immensely detailed proposals incorporating
financial, technical and operational plans, (in many cases comprising
hundreds of pages), and paid a non-refundable fee of $50,000 now found
that success or failure could hinge on a three minute ``pitch''. The
Board heard approximately 40 of these three minute presentations back-
to-back on November 15.
C. Publication of and reliance on factually inaccurate Staff Report.
Prior to the November 16 decision, the ICANN staff prepared a staff
report, which though replete with errors about our proposal as well as
others, profoundly influenced the final decisions by the Board of
Directors. ICANN posted the staff report on its website on Friday,
November 10, only one day before the start of the ICANN meetings at
which the Board was to select the new gTLDs. Neither the TLD applicants
nor the public had a meaningful opportunity to register objections or
comments to the staff report prior to the inception of the ICANN
conference. The preliminary assessments made in the staff report
essentially amounted to the summary rejection of many of the
applications and was formulated behind closed doors without any
consultation with the public or the applicants. The staff report
included serious factual errors and presented damaging misstatements to
the Board and the public.
The report also ignored or downplayed important positive elements
of certain applications that it appeared not to favor. Specifically,
with regard to the dotTV Consortium's applications, the report
inaccurately assessed dotTV's technical capabilities and failed to
discuss our proposed pricing structure that would have enormously
enhanced competition in the domain name business for the ultimate
benefit of the consumer. dotTV issued a letter to ICANN on November 12
identifying and correcting several of the most glaring errors and
misstatements contained in the report and urging the Board not to rely
solely on the findings of the staff report, however, it appears that
this letter was not seriously considered by the Board before their
deliberations.
The ICANN staff strongly urged the Board to rely on the staff
report's findings and to adhere to its recommendations. This position
was reinforced by the in-person presentation made to the Board by ICANN
staff on November 15 which prompted Board member Vinton Cerf to comment
``I must confess to a certain discomfort with the process because it
feels like we're a venture capital firm''. During this presentation,
staff members advised that many applications had failed to meet certain
``threshold'' criteria including ``completeness'', though these
criteria were not elaborated upon by the presenters. The presentation
then went on to discuss only those applications which had satisfied the
staff's undefined criteria and no reference was made to dotTV's written
response which had challenged underlying assumptions contained in the
staff report.
On November 14, by a vote of 78 to 52, the General Assembly of the
Domain Name Supporting Organization, a supporting body of ICANN,
adopted a resolution that the Board ``should not decide upon new gTLDs
until the applicants have had time to respond to the Staff Report.''
The ICANN Board ignored this resolution.
7. questionable selections of new tlds.
The gTLDs selected by the Board on November 16 include: .pro,
.aero, .museum, .name, .biz, .info, and .coop. Given the inherently
flawed nature of the process, it is not surprising that the wisdom of
these selections is being seriously questioned by the Internet public.
It is generally felt that few if any of the selected gTLDs meet the
criteria by which ICANN purported to evaluate the applications and
that, collectively, they offer little to enhance the utility of the
Internet.
It is our view that the proposals presented by the dotTV-led
consortiums would provide a low-priced alternative, promoting
competition and consumer choice within the domain name business. Owing
to erroneous conclusions in the staff report, however, ICANN eliminated
this proposal from consideration early in the selection process.
8. congress must intervene in the icann selection process to ensure
fair and equitable method for approving new tlds.
Mr. Chairman, dotTV strongly believes that the approval of new TLDs
is an important matter for congressional review, and that the
Department of Commerce should not be permitted to implement ICANN's
recommendations until such a review takes place. We are concerned that
the Department intends to treat ICANN's request for implementation of
the new TLDs simply as a matter for technical review which we believe
is inappropriate due to the fundamental flaws in the selection process.
The United States government--and the American public--have a stake in
ensuring that ICANN's procedures be as fair as possible.
Mr. Chairman, we are not advocating that the United States attempt
to dominate the management of the Internet, nor are we advocating that
the U.S. or any government control the Internet. As long as the
Department of Commerce maintains oversight authority of ICANN, however,
the U.S. government has a responsibility to ensure that decisions
affecting the Internet are reached fairly. In addition, it is important
to establish correct precedents for similar decisions by ICANN in the
future. The Department's White Paper contemplated that ICANN would
engage in fair, open, and representative decision-making, and ICANN's
approval of new TLDs is the first major test of its decision-making
authority. Congress has an important role to play in establishing and
enforcing these standards to guide how decisions will be made in the
future.
Through the urging of Congress, the Department of Commerce should
direct ICANN to immediately suspend the current process and to
reconsider all TLD applications--both those approved and those denied--
under a procedure that is fairer and more rational than witnessed in
recent months. Only by doing so will ICANN assure that the first
expansion of TLDs occurs in manner that is both deliberative and pro-
consumer.
Mr. Upton. And I appreciated receiving your statement as
well, which I was also able to read last night. Thank you.
Ms. Broitman.
STATEMENT OF ELANA BROITMAN
Ms. Broitman. Mr. Chairman, Mr. Markey, and members of the
committee, thank you for inviting me to appear before you
today. I commend the committee for holding this hearing, as
your role is important to continuing the stable and innovative
growth of the Internet.
I am here representing register.com, an equity partner in
RegistryPro, which, as you know, is one of the new registries
selected by ICANN. I am here to provide the perspective of a
company that was awarded a new TLD. Building on the restricted
model of .gov, .edu, and .mil, RegistryPro proposed a .pro TLD
to focus on professionals. I can also offer the perspective of
a registrar, as we believe consumers will benefit significantly
from new TLDs.
To fully answer the question, please allow me to briefly
review the growth of this market. As the committee knows, from
1993 to as recently as 2 years ago, a single company was both
the only registry and the sole registrar for .com, .net and
.org. To introduce competition, ICANN has taken two major
steps. Two years ago, ICANN launched a test bed of five
registrars, and although NSI remained the sole registry, there
are over 140 accredited registrars.
With competition, the domain name market has grown
dramatically, from 8 million in 1999 to about 29 million .com,
.net and .org names today. ICANN took its second step with
these new TLDs, and the market is projected to grow to over 140
million in 4 years. The growth is key not only for registrars,
but also other Internet-related businesses.
This committee has endorsed competition in this sector
knowing that it would deliver value to consumers, and it has
been proven right. Competition among registrars has improved
technology, customer support, introduced price competition, and
fostered innovative new products. Competition among registries
will similarly deliver value.
First, there will be improved services; second, consumers
can register for the Web address of their choice; they will
also be able to distinguish their Web site, depending on the
TLD they choose. Conversely, delay only serves to protect the
sole global registry and deny consumer choice.
While registry competition will not exist until these new
TLDs are actually operational, this will take months of
preparation and significant resources. Substantial
technological facilities must be built, engineering protocols
and applications written and tested, and highly skilled
personnel located and retained.
Competition is also critical to future innovation. New
technology is on its way, but if new registries are not
introduced rapidly, there will be only one registry in a
position to shape and operate the new technologies.
As for the process, we believe it achieved the fundamental
of introducing successful new TLDs while protecting the
stability of the Internet. On August 15, ICANN posted eight
specific criteria relating to stability, proof of concept,
competition, utility of the domain name system, meeting unmet
needs, diversity, policy, and protecting the rights of others.
RegistryPro worked hard to meet these requirements. We
prepared a detailed description of state-of-the-art, innovative
technology that would enhance the usefulness and dependability
of the .pro Web sites. We proposed an innovative TLD that would
add diversity and address the needs of consumers and
professionals. We reached out to professional associations and
credentialing bodies to work out a good trust and verification
mechanism, and are establishing an advisory board to continue
doing so.
We also outlined a set of policies to address the needs of
the various domain name system constituencies and guaranteed a
level playing field for all accredited registrars. We have
invested hundreds of thousands in research, analysis, and
preparation of a thorough proposal, and the build out and
operation of a secure registry requires a commitment of
millions more. We believe that our application, like others,
received substantial scrutiny by the independent panels of
experts, by ICANN's staff, by the public during several public
comment periods, and, ultimately, significant independent
deliberation by the ICANN board. There was an opportunity in
this process for applicants to clarify their documents on the
public record.
While no process is perfect, we believe a genuine effort
was made by ICANN to provide notice, transparency and fairness.
ICANN accomplished the ultimate goal of launching new global
TLDs while minimizing risk. The variety of these TLDs paves the
way for future development. As the chairman noted in the last
hearing on this subject, ICANN is responsible for introducing
competition. We hope that the committee's conclusion today is
an endorsement of an expeditious launch of these new TLDs so
that consumers can benefit from the resulting innovation and
the availability of new domain names.
Mr. Chairman, and members of the committee, it has been my
pleasure to testify today. I appreciate the opportunity.
Mr. Upton. And you yield back the balance of your time.
That is terrific.
[The prepared statement of Elana Broitman follows:]
Prepared Statement of Elana Broitman, Director, Policy and Public
Affairs, register.com, inc.
INTRODUCTION
Mr. Chairman, Members of the Committee, thank you for inviting me
to appear before you today. I commend the Committee for holding this
hearing. Your role is important to continuing the stability and
innovative growth of the Internet.
I am here representing register.com, an equity partner in
RegistryPro. RegistryPro, as you know, is one of the new registries
that was selected by the Internet Corporation for Assigned Names and
Numbers (ICANN) to operate a new global Top Level Domain (TLD)
1. RegistryPro is a new company formed by register.com, one
of the leading registrars on the Internet today, and Virtual Internet
Ltd, a top European registrar.
---------------------------------------------------------------------------
\1\ A TLD is the domain name address, such as .com, .net, and .org.
The new TLDs would be .pro, .info, .biz, .name, .aero, .museum, and
.coop.
---------------------------------------------------------------------------
I am here to provide the perspective of a company that was awarded
a new TLD, .pro. Building on the restricted model of .gov, .edu, and
.mil, the .pro TLD focuses on professional registrants--such as
doctors, lawyers, and accountants. I can also offer the perspective of
a registrar. Based on our two years' experience, register.com believes
consumers will benefit significantly from the introduction of new TLDs.
industry overview
To fully answer the question about the new TLDs, please allow me to
briefly review the structure and growth of the domain name market.
Securing a domain name, or Internet address, is the first and
fundamental step for businesses, individuals, and organizations that
are building a presence on the web. Before setting up a website or
launching e-commerce, a consumer contacts a registrar, such as
register.com, to secure a domain name, such as www.house.gov.
Registrars maintain contact with the consumer, invoice the customer,
handle all customer services, and act as the technical interface to the
registry on behalf of the customer.
A registry, such as Verisign Global Registry Services for .com,
.net and .org, maintains the list of available domain names within its
TLD and allocates those names on a first come, first served basis.
Registrars get the domain names for the consumer by purchasing them
from the registry that manages that TLD.
As this Committee knows, the Internet, and the domain name market
in particular, has grown and expanded at a rapid pace. From 1993 to as
recently as two years ago, a single company, Network Solutions
(``NSI''), today owned by Verisign, was both the only registry and the
sole registrar for .com, .net, and .org TLDs. Presently, these TLDs are
the only globally available generic domain addresses.
In determining the best manner to introduce competition and oversee
the domain name system, the Department of Commerce called for the
creation of a not-for-profit corporation. ICANN was recognized to fill
that role.
To introduce competition, ICANN has taken two major steps. First in
April 1999, ICANN launched a test bed of five registrars. Register.com
was the first registrar to go ``live'' and register .com, .net, and
.org names. Although NSI remained the sole registry for the com, .net,
and .org TLDs, today there are over 140 accredited registrars.
Consumers have benefited from the competition in prices and services.
In November 2000, ICANN took the second step toward competition by
approving the introduction of seven new global TLDs to generate
competition in the registry business. RegistryPro was selected to
manage the .pro TLD, which is restricted to the professional business
sector. Other new TLDs include unrestricted, personal, and non-profit
domain name sectors.
The domain name market has grown to about 29 million .com, .net,
and .org domain names, and growth has increased dramatically since the
days of the registrar monopoly, from 8-9 million in 1999, to more than
20 million in 2000, the first full year of competition. This market is
projected to grow to over 140 million registrations over the next four
years. This growth is fundamental not only to the health and
competitiveness of the registrar business community, but the
introduction of new TLDs will also expand the opportunity for other
Internet-related businesses
competition among registries
This Committee has endorsed competition in this sector, knowing
that it would deliver value to consumers. It has been proven right.
Competition among registrars has improved technology and customer
support, introduced price competition, and fostered innovative new
products to better serve the needs of domain name holders and Internet
businesses.
Competition among registries will similarly deliver value. First,
consumers will have a choice among competitive TLDs and registries,
leading to improved services. For example, alternative registries may
accelerate the launch of websites and make them more secure. Second,
consumers can register for the web address of their choice, as the best
addresses, in many cases, are already taken in the .com, .net and .org
TLDs. Third, consumers will be able to distinguish their web address
based on the TLD they chose--we believe, for example, lawyers would
prefer .law.pro and accountants, .cpa.pro.
Conversely, delay in launching new TLDs serves to protect the sole
global TLD registry and deny consumer choice.
do not delay launch of new tlds
While registry competition will not exist until these new TLDs are
operational, this will take months of preparation and significant
resources. Substantial technological facilities must be built,
engineering protocols and software applications written and tested, and
highly skilled personnel located and retained. In fact, substantial
resources have already been spent and committed--both during the
application process and since then.
Not only is competition going to improve the registry sector, it is
fundamental to future innovation. New technology is on its way ``if new
registries are not introduced rapidly, there will be only one company
in a position to operate the new technologies and determine the course
of their evolution. For example, Verisign launched the worldwide test
beds with respect to two recent developments--multilingual domain
names, and eNUM, a convergence of telephony and domain names. There
were no other competitive registries in place to create an alternative
environment.
Moving expeditiously to add these new TLDs to the domain name
system is critical.
registrypro's experience with the process
As for the process, we believe it achieved the fundamental goals of
determining whether an applicant had what it takes to run a successful
TLD, and balancing the interest in new TLDs with the imperative to
preserve the stability of the Internet.
While notice of its plans to authorize competitor registries has
been publicly available for about two years, ICANN posted a set of
criteria for assessing new TLD proposals on August 15, 2000:
1. The need to maintain the Internet's stability. ICANN analyzed:
a. the prospects for the continued and unimpaired operation of the
TLD,
b. provisions to minimize unscheduled outages due to technical
failures or malicious activity of others,
c. provisions to ensure consistent compliance with technical
requirements,
d.the effect of the new TLD on the operation of the DNS and the
root-server system,
e. measures to promote rapid correction of potential technical
difficulties,
f. the protection of domain name holders from the effects of
registry or registration system failure, and
g. provisions for orderly and reliable assignment of domain names
during the initial period of TLD operation.
2. The extent to which selection of the proposal would lead to an
effective ``proof of concept'' concerning the introduction of
top-level domains in the future. Proposals were to be examined
for their ability to promote effective evaluation of
a. the feasibility and utility of different types of new TLDs,
b. the effectiveness of different procedures for launching new
TLDs,
c. different policies under which the TLDs can be administered in
the longer term,
d. different operational models for the registry and registrar
functions,
e. different business and economic models under which TLDs can be
operated;
f. the market demand for different types of TLDs and DNS services;
and
g. different institutional structures for the formulation of
registration and operation policies within the TLD.
3. The enhancement of competition for registration services. ICANN
noted that though the market will be the ultimate arbiter of
competitive merit, the proposals were to be evaluated with
regard to whether they enhanced the general goal of competition
at both the registry and registrar levels.
4. The enhancement of the utility of DNS. Under this factor, TLDs
were to be evaluated as to whether they added to the existing
DNS hierarchy without adding confusion. For example does the
TLD's name suggest its purpose, or in the case of a restricted
TLD, would the restriction assist users in remembering or
locating domain names within the TLD?
5. The extent to which the proposal would meet previously unmet
needs. Close examination was to be given to whether submitted
proposals exhibit a well-conceived plan, backed by sufficient
resources, to meet presently unmet needs of the Internet
community.
6. The extent to which the proposal would enhance the diversity of
the DNS and of registration services generally.
7. The evaluation of delegation of policy-formulation functions for
special-purpose TLDs to appropriate organizations.
8. Appropriate protections of rights of others in connection with the
operation of the TLD. The types of protections that an
application was to address included:
a. a plan for allocation of names during the start-up phase of the
TLD,
b. a reasonably accessible and efficient mechanism for resolving
domain-name disputes,
c. intellectual property or other protections for third-party
interests,
d. adequate provision for Whois service that balances personal
privacy and public access to information regarding domain-
name registrations, and
e. policies to discourage abusive registration practices.
registrypro met icann requirements
We worked hard to meet these requirements. We prepared a detailed
description of innovative state-of-the-art technology, which would
enhance the usefulness and dependability of the .pro websites. The
RegistryPro technology would:
Allow for near real time posting of websites (as opposed to
today's 48-hour waiting period),
Diminish the potential for system crashes,
Protect consumers against potential registrar failures, and
Provide better tools to protect against potential cyber
squatters or professional imposters.
We proposed an innovative TLD that would add diversity to the
current domain name space and address the needs of the marketplace.
Based on our surveys of consumers and professionals, we determined that
consumers were looking for a trusted way to identify professionals on
the Internet, and professionals would be more inclined to register
domain names if they had a designated address.
In devising that trusted addressing system, we have reached out to
professional associations, to work out the mechanisms for verifying
professional credentials.
We also outlined a set of policies to address the needs of various
constituencies. We balanced intellectual property protections, which
earned us one of the highest ratings by the intellectual property
constituency, with personal privacy concerns. We also guaranteed a
level playing field for all accredited registrars.
We invested hundreds of thousands of dollars--including in market
research, legal drafting, and financial analysis--to prepare the
application. The build out and operation of a stable and secure
registry requires a commitment of millions more.
We believe that our application, like others, received substantial
scrutiny--by the independent panels of international experts in
technology, law and finance; by ICANN staff, by the public during
several public comment periods; and ultimately by significant
independent deliberation by the ICANN Board. There was an opportunity
for applicants to clarify their documents, on the public record. While
no process is perfect, we believe a genuine effort was made by ICANN to
provide notice, transparency and due process.
ultimate goal accomplished
ICANN accomplished the ultimate goal of launching new global TLDs
while protecting the security of the Internet. These new TLDs offer a
variety of business models and domain name addresses--from generic to
non-profit. Incremental growth will protect stability and pave the way
for future development.
As the Chairman had noted in the last hearing on this topic, ICANN
is responsible for introducing competition into the registration of
domain names. We hope that the Committee's conclusion today is an
endorsement of an expeditious launch of these new TLDs, so that
consumers can benefit from the resulting innovation and the
availability of new domain names.
Mr. Chairman, Members of the Committee--it has been my pleasure to
testify today. Thank you for the opportunity.
Mr. Upton. Mr. Short, welcome.
STATEMENT OF DAVID E. SHORT
Mr. Short. Thank you. Good morning, Mr. Chairman and
subcommittee members. My name is David Short, and I am the
legal director for the International Air Transport Association,
IATA, based in Geneva, Switzerland. IATA appreciates this
opportunity to appear today to share with the committee its
experience in applying to ICANN to sponsor .travel as a new
Internet TLD. Copies of IATA's written comments have been
previously provided to the committee staff, and, before
proceeding, may I ask that they be incorporated into the record
of this hearing?
Mr. Upton. Absolutely.
Mr. Short. Thank you.
First, let me say a word or two about my organization,
IATA. IATA lies at the very heart of the world's largest
industry, travel and tourism. Our members consist of 275
airlines, which transport over 95 percent of the world's
scheduled international air traffic.
Travel is one of the largest segments of e-commerce today.
There are really only two things holding travel back from
realizing its full potential in the new economy. The first is
the fact that in the .com environment there are no quality
standards applied to domain name registrants. It is the first
party to show up with $35 to claim a name not already taken by
somebody else who gets it, without having to satisfy any
integrity, consumer protection or quality assurance standards.
And so while many consumers may research travel on the Web,
they are understandably reluctant to actually book and pay for
transactions on .com Web sites they have no reason or basis to
trust in. And this makes it all the harder for new Web sites to
compete with the existing dominant sites like Expedia and
Travelocity.
The second constraint is the depletion of commercially
attractive .com names. As the committee is well aware, all the
simple and obvious names, and virtually all of the common
English language words, are already registered as .com domain
names, thus erecting potentially insurmountable barriers to new
entry and new competition.
And so when ICANN announced it would entertain applications
for new TLDs, IATA conceived .travel as a dedicated TLD for the
entire travel industry, where quality criteria would be applied
such that consumers would have a basis to trust in and more
readily do business with .travel Web sites.
The IATA application drew support on the record from
individual commenters and associations representing over 1
million travel industry businesses around the world. Our
application and supplemental filings with ICANN demonstrated
that we fully satisfied all of the nine criteria that ICANN had
announced would apply to the new TLD applications, and ICANN
never disagreed with that.
What happened was the ICANN staff evaluation of our
application decided to apply a new 10th criterion, which they
called representativeness, and they erroneously concluded the
IATA application did not reflect sufficient representativeness
of the travel industry and threw it out based solely on that
factor, without regard to all of its undisputed positive
attributes or the widespread support it had attracted.
Obviously, it was fundamentally unfair to judge our
application according to something we had no notice we even
needed to address. But even more troubling is the fact that
when looked at objectively, our application is, in fact, one of
the most representative of all of the applications, as
evidenced by the broad support it attracted on the record.
The ICANN staff conclusion was based solely on the fact
that a relatively small number of comments had been filed on
the comment form by a group of travel agents who have a record
of opposing virtually everything proposed by the airline
industry, not because it is a bad idea, but simply because they
have an axe to grind against the airlines. No effort was made
by the ICANN staff to assess the veracity of the statements
made in these comments, nor to recognize that they were, in
fact, prompted by ulterior motives rather than any valid
objection to the .travel TLD.
Moreover, IATA seeks only the opportunity to offer .travel
as a new competitive alternative. Any of these dissenting
commenters, or anyone else for that matter, who wants to stay
in the .com world remains free to do so. So there is absolutely
no reason to allow a tiny minority of travel agents to veto an
innovative proposal to introduce a new competitive alternative
so desperately sought and supported by the great majority of
our industry.
In summary, all IATA asks is that our application be given
the fair shake we clearly were denied in November. One way to
do so would be for ICANN to grant our pending request that our
application be reconsidered. Another would be for the Commerce
Department to exercise its responsibility to select the new
TLDs in accordance with APA requirements.
I see my time has expired. Thank you very much.
[The prepared statement of David E. Short follows:]
Prepared Statement of David E. Short, Director, Legal Services, The
International Air Transport Association
Good morning Chairman Upton and subcommittee members:
My name is David E. Short. I am the Legal Director of the
International Air Transport Association (``IATA''), Based in Geneva,
Switzerland. IATA appreciates this opportunity to share with the
subcommittee IATA'S experience as an applicant for one of the new
Internet Top Level Domains, or ``TLDs.''
I am here today because IATA is committed to sponsoring ``.travel''
as a new Top Level Domain. Given that the travel industry represents
one of the largest and most popular segments of e-commerce, ``.travel''
clearly is an obvious choice for one of the first new TLDs to be added
to the Internet.
The addition of ``.travel'' to the Internet would greatly enhance
competition in the Domain Name space by offering suppliers and
consumers of travel-related goods and services critical advantages that
are not provided by the ``.com'' TLD. ``.com'' currently is the
dominant TLD for all commercial industries, including travel. Unlike
``.travel,'' which would be a restricted TLD, ``.com'' is an
unrestricted TLD. A ``.travel'' TLD would have two competitive
advantages over the unrestricted TLDs.
The first advantage is that, as a restricted TLD, ``.travel'' would
create a subdivision of the Internet which, by excluding non-travel web
sites, would make it much more efficient and easier for consumers and
businesses to locate the travel-related entity or information they are
seeking.
The second advantage is that, with a ``.travel'' TLD, consumers
will know that when they access a Domain name ending in ``.travel,''
they will be in touch with a company that has shown itself to be a
legitimate participant in the travel industry by satisfying certain
objective and transparent quality standards. By contrast, unrestricted
TLDs can offer no such indication.
Whatever their respective merits, none of the seven new TLDs
selected by ICANN provides these types of advantages. The seven new
TLDs divide into two groups. Either they are just as generic in scope
as the ``.com'' TLD, or they are substantially more limited in scope
than ``.travel.'' What is missing is the critical middle area,
exemplified by ``.travel,''--which adds value by being restricted to a
particular industry, but is not so limited in scope that it provides
effectively no competitive challenge in the Domain Name space. As long
as ICANN excludes TLDs such as ``.travel,'' the true potential of e-
commerce will remain untapped.
Unfortunately, because of the arbitrary and capricious manner in
which it treated IATA's proposal, ICANN precluded itself from
appreciating how ``.travel'' would significantly enhance competition in
the Internet. The addition of new TLDs involves a critical asset
financed and controlled by the U.S. Government--namely, the
authoritative, or ``a'' root server. Consequently, the process for
selecting new TLDs must comply with the U.S. Administrative Procedure
Act.
ICANN's treatment of IATA's application fell far short of the
mandates of that law. Among other things, ICANN completely ignored the
fact that our ``.travel'' proposal satisfied each and every one of the
nine criteria which ICANN said it would consider in evaluating the
proposals. Instead, ICANN summarily refused to select ``.travel'' based
solely on a new and previously undisclosed tenth criterion--
``representativeness''--which ICANN applied to IATA's application in a
discriminatory and otherwise unfair manner.
Before going into more details regarding how our proposal was
treated, I Would like to tell you a little more about IATA. IATA is a
not-for-profit association that has played a leading role in the global
travel industry since 1919. It has 275 member airlines (246 active and
29 associate) in 143 countries. IATA has offices in 75 countries around
the world.
Among other things, IATA has developed standardized airline ticket
formats that are recognized around the world and make it possible to
buy a ticket from a travel agency in Tokyo, that will be recognized and
accepted by a domestic airline in South Africa, for a flight from
Johannesburg to Cape Town. Similarly, the IATA ``interline'' system
makes it possible to purchase a single ticket, with a single payment,
covering travel on a succession of different airlines. IATA has been
entrusted by the industry, and by governments around the world, to
design and equitably administer the coding systems essential for the
smooth and efficient functioning of the travel industry. IATA also has
developed standards for accreditation and endorsement of travel
agencies, and it has a long-standing relationship with travel agents
and travel organizations in an effort to improve both the business
processes and the marketing and sale of transportation products.
In addition to its airline membership, IATA counts among its
customers approximately 90,000 IATA accredited or endorsed travel
agents located in 209 countries; the operators of other modes of
transportation such as railways and ferry companies; and numerous other
suppliers of travel-related goods and services including hotels, travel
insurance providers, etc.
IATA is uniquely and ideally positioned to sponsor the ``.travel''
TLD because its core activities have always included the setting of
industry standards to facilitate cooperation among suppliers of travel
related services and goods, for the benefit of their customers. it is
entirely logical that IATA exercise its traditional leadership role to
enable the travel industry and its customers to fully exploit the
potential of the Internet.
It is important to highlight that IATA's vision for ``.travel'' was
never limited to only a portion of the global travel community. Rather,
businesses, other organizations and individual stakeholders from the
entire travel industry, including the following, would be able to
obtain Domain Name registrations ending in ``.travel'': Scheduled
Airlines; Charter Airlines; Airports; Ferries; Train Operators; Bus and
Coach Operators; Ground Handlers; Catering Companies; Car Rental
Companies; Hotels and Resorts; Bed and Breakfast Houses; Camp Facility
Operators; Tourist Boards/Associations; Tourist Facility Operators;
Travel Guide Publishers; Travel Agents; Tour Operators; Consolidators;
Internet Service Providers for Travel; Computer Reservation Systems/
Global; and Distribution Systems
Critical decisions affecting ``.travel'', including setting
objective and transparent standards for determining who qualifies to
obtain a Domain Name, would be made not by IATA but, rather, by the
``.travel'' Advisory Board, to be comprised of world-wide
representatives of the travel industry. No individual sectors within
the travel industry, including the airlines, would have ``veto'' rights
over decisions approved by a majority of this board concerning the
standards applicable for ``.travel'' Domain Names.
``.travel'' also would alleviate the problems that arise from the
fact that many trade names in the travel industry have counterparts in
non-travel related businesses. Consider the example of an entity called
Southwest Insurance Company. In the current system dominated by the
``.com'' TLD, Southwest Airlines would have no priority over Southwest
Insurance for the Domain Name ``www.southwest.com.'' This situation
limits the ability of travel-related businesses to utilize the internet
to the maximum extent possible, and often causes confusion and
frustration among consumers, who are unable to access a particular
travel-related web site simply by typing in the trade name plus
``.com.'' with respect to travel-related trade names, this problem
would largely evaporate with the creation of the ``.travel'' TLD.
While IATA believes that ``.travel'' is an ideal selection for the
new generation of competitive TLDs, and that IATA is perfectly suited
to sponsor this TLD, we are not here to ask Congress to deliver this
result. But we do request that the committee exercise its oversight
authority to ensure that the U.S Department of Commerce fulfills its
obligations with respect to the selection of new top level Domain
Names.
Unfortunately, so far Commerce has given no assurance that it
intends to fulfill these obligations. It has taken no measures to
correct the fundamental shortcomings of the TLD selection process
administered last fall by ICANN.
The Commerce Department is inescapably tied to the TLD selection
process, a process which boils down to the issue of which TLDs the
Commerce Department will approve to be added to the authoritative ``a''
root server. The ``a'' root server is a critical asset financed by the
U.S. Government and controlled by the Commerce Department. As a
practical matter, a TLD must be added to the ``a'' root server in order
to be accessible by the vast majority of Internet users. Both ICANN and
the U.S. General Accounting Office recently have confirmed that it is
Commerce, not ICANN, which ultimately decides which TLDs will be added
to the root server.
Because of the undeniable U.S. Government interest in and control
over the root server, the selection of new TLDs to add to the root must
comply with the mandates of the Administrative Procedure Act. However,
neither ICANN nor Commerce has recognized that the APA applies, much
less taken any action to redress the violations of U.S. Administrative
Law which plagued the ICANN TLD selection process last fall.
IATA's proposal for ``.travel'' was widely embraced by the travel
industry, with more than 75 entities submitting comments to ICANN in
support of the new TLD. Supporters included the American Society of
Travel Agents (``ASTA'')--the world's largest association of travel
professionals representing over 26,000 travel agent members (primarily
in the United States); THE Universal Federation of Travel Agents'
Associations (``UFTAA'')--the largest federation of travel agent
associations worldwide, representing over 48,000 travel agent members
in 97 countries; individual travel agents and other travel agent
associations; airlines, airline associations, airline equipment
manufacturers, airports and airport authorities; e-commerce firms,
hotels, railways (including Amtrak and others), travel and tourism
organizations, and individuals. In all, over one million travel
industry businesses around the world, either directly or through their
recognized associations, went on the record with ICANN in support of
IATA's ``.travel'' proposal.
The broader business community also gave its support to
``.travel.'' in comments to ICANN, Citibank touted IATA's experience
and reputation, and characterized IATA's application as perhaps ``the
single best example of how the Internet community can benefit from
independent management of a top level domain.'' In addition, IATA's
proposal received a nearly perfect score of 26 out of 27 possible
points, which tied it for first place, in a study of the TLD
applications by the Berkman Center for Internet & Society at Harvard
Law School. That study also recommended that ``.travel'' be one of six
new TLDs selected by ICANN.
Virtually the only opposition to the ``.travel'' TLD came from a
small number of travel agents who have an agenda of opposing virtually
everything the airline industry endorses--not because it is a bad idea,
but just because it is something endorsed by the airlines.
Unfortunately, the significant effort and expense that IATA
dedicated to its application did not receive treatment by ICANN meeting
even the most basic standards of equity. At a minimum, IATA was
entitled to fair and comprehensive consideration of its proposal. It
received neither.
The Administrative Procedure Act prohibits decisions which are
arbitrary and capricious. This requires (1) that decisions be based on
a consideration of all the relevant factors, (2) that parties are not
discriminated against, and (3) that decisions are not based on ex parte
influences. In addition, APA-like requirements are found in ICANN's By-
Laws, which require ICANN to act consistently, fairly and in a
transparent manner; and the ``Memorandum of Understanding'' between
ICANN and the Commerce Department, which requires ICANN to act in a
manner that is reasonable, justifiable and not arbitrary.
ICANN's treatment of IATA's ``.travel'' proposal failed to consider
all of the relevant factors in that ICANN gave no credit for the fact
IATA's proposal met each and every one of the nine evaluation criteria
that ICANN had stated it would apply in judging top level domain
applications. Instead, weeks after the applications had been submitted,
ICANN decided to invent a tenth and previously undisclosed criterion
called ``representativeness.'' ICANN cursorily applied this new
requirement to IATA's proposal and, without any real consideration of
the issue, decided that it could not find that IATA was sufficiently
``representative'' of the travel industry to sponsor ``.travel''.
In making this decision, ICANN made no effort to place into proper
context the relatively de minimis opposition to ``.travel.'' ICANN
never weighed the negative comments against the overwhelming support
for IATA's proposal. ICANN also did not consider the fact that
rivalries among different travel agent associations meant that some
agents were likely to make negative statements regarding IATA's
proposal solely because the major travel agent associations were in
favor of the new TLD. ICANN also appears to have been influenced by ex
parte communications to which IATA was not given an opportunity to
respond.
In addition, because ``representativeness'' was not one of the nine
announced evaluation criteria, IATA had no prior warning that it need
even address this factor in its application. IATA was denied adequate
notice that if opposition materialized this would be assumed to
constitute conclusive proof of a lack of ``representativeness,''
regardless of whether there was any merit to the allegations made in
such opposition, and regardless of the presence of the counter-
balancing and overwhelming support for the application from throughout
the global travel industry. In addition, IATA's treatment was
discriminatory because most of the other 43 TLD applicants, including
all seven of the proposals selected by ICANN, were not even subjected
to this ``representativeness'' criterion.
In concluding that IATA was not sufficiently representative of the
travel industry, ICANN, by its own admission, acted too hastily to be
able to make a reasoned and rational decision. The ICANN staff conceded
that it ``clearly struggled'' with ``how to evaluate'' ``.travel'', it
lacked ``the tools to figure out'' how much opposition there was to
``.travel'', and was unable to ``give [the ICANN] board much
information about [the] representativeness'' of ``.travel''. In
addition, one ICANN board member acknowledged in the deliberations that
ICANN might have reached a different conclusion had it bothered to
investigate the matter further. Nevertheless, ICANN passed over the
``.travel'' application essentially solely on the basis of the
conclusion that IATA was not sufficiently ``representative.''
ICANN was clearly overwhelmed by the number of applications it
received for top level domains. But this is not a legitimate excuse for
treating IATA's proposal in such a capricious manner. Given that the
Internet community had already waited ten years since the last generic
top level domains were added, the Internet could have waited a few
additional weeks if this was what was required in order for ICANN to
conduct a comprehensive analysis and reach a thorough, well-informed
and principled decision regarding the IATA proposal as well as the
other applications, consistent with its obligations under the
Administrative Procedure Act. Instead, ICANN rushed to judgment,
placing its pre-ordained schedule for issuing its decision above its
overriding need to make decisions which were well-considered, correct
and in compliance with the APA.
This improvident hastiness is exemplified by the fact that ICANN
refused to allow applicants more than three minutes to make oral
presentations in support of their proposals, and crammed every one of
these three-minute sessions into a single afternoon meeting of the
ICANN board. At a minimum, ICANN needed to have provided the applicants
with sufficient time to allow the proposers to receive and respond to
ICANN's concerns in a meaningful fashion.
IATA is deeply concerned about the absence of fairness and due
process in the selection of new TLDs. Either Commerce itself should
undertake to evaluate the TLD applications in a way that complies with
the Administrative Procedure Act, or Commerce should direct ICANN to do
so. If Commerce accepts ICANN's decisions without scrutiny, then ICANN
is acting like a Federal agency and must comply with the APA. If ICANN
does not comply, then Commerce has unlawfully delegated to ICANN full,
unchecked control to make critical policy decisions relating to the
development of the domain name space on the Internet.
To date, neither ICANN nor Commerce has provided any indication of
a willingness to correct these fundamental shortcomings in the TLD
selection process. On December 15, 2000, IATA sent a letter to ICANN
requesting that it reconsider its decision regarding ``.travel''. To
our knowledge, ICANN has taken no steps towards acting on this request.
On December 26, 2000, IATA sent letter to Commerce requesting that it
take the necessary measures to ensure that the APA is complied with in
the addition of the new TLDs. Commerce has not responded to this
letter.
ICANN's failure to consider our proposal in a fair manner affects
more than just our organization. ICANN's conduct towards ``.travel''
and other applicants can only serve to stymie the growth of competition
in the Internet. The commercial side of the Internet is still extremely
dependent on the generic ``.com'' top level domain. To increase
competition in a significant way, consumers and businesses must be
provided a compelling reason to move away from this behemoth. ICANN's
current approach provides no such reason.
Four of the seven new top level domains selected by ICANN last
November--``.museum,'' ``.coop,'' ``.aero'' and ``.pro''--are limited
TLDs that serve small groups. They may be useful to the insular fields
they are intended to serve, but are much too restrictive in scope to
offer any real alternative to ``.com'' for the vast majority of
businesses seeking domain names. The same is true for ``.name.'' While
this TLD has a broad scope in that all individuals may qualify to
register a domain name in the TLD, such domain names are personal in
nature, and this TLD is not intended as a competitive alternative for
businesses to ``.com''
The other two awardees of TLDs--``.info'' and ``.biz''--also do not
provide much of a competitive choice vis-a-vis ``.com'' the TLD
``.info'' seeks to be as widely available as ``.com'' and the TLD
``.biz'' connotes business. But it is difficult to see how either
offers much more than a duplication of the existing domain name space.
There is little value-added by these TLDs relative to ``.com,'' and
this naturally limits their competitiveness to ``.com.''
The gaping hole in ICANN's selections is the lack of any value-
added top level domains that target large sections of the ``.com''
constituency. The new TLDs are either too broad or too narrow in scope.
To have real competition you must have effective competition, which
means alternatives that add value to the currently available choices.
``.travel'' is a prime example of a TLD that would add such value. A
``.travel'' TLD would provide businesses and consumers their own
specialized subdivision of the Internet, but it would not be restricted
to a relatively tiny section of e-commerce, such as museums or
cooperatives. Rather, it would encompass the entire travel industry,
which represents the largest segment of e-commerce today, and that
would only grow larger with its own, dedicated Internet subdivision.
However, as long as ICANN is only willing to add generic would-be
clones of ``.com'' and limited TLDs designed to serve miniscule sectors
of e-commerce, an incredibly important competitive opportunity in the
Internet domain name space will continue to be lost.
IATA thanks the members of this subcommittee for providing it with
this opportunity to share its perspective, and hopes that the
subcommittee will encourage the Department of Commerce and ICANN to
make decisions regarding new top level domain names in a manner that is
fair, transparent and designed to maximize competition on the internet.
Mr. Upton. Thank you.
Mr. Hansen.
STATEMENT OF KENNETH M. HANSEN
Mr. Hansen. Good morning. Thank you, Mr. Chairman. My name
is Ken Hansen, and I am the director of corporate development
for NeuStar. NeuStar is a neutral third-party provider of
clearinghouse and data base administration services. NeuStar
serves as the number plan administrator and the local number
portability administrator for North America. Our joint venture
with Melbourne IT, a Melbourne, Australia-based provider of
domain name services, was recently selected by the Internet
Corporation for Assigned Names and Numbers to operate the
registry for the top-level domain name .biz. During the
application process, the joint venture was referred to as
JVTeam and is now known as NeuLevel.
I appreciate the opportunity to appear before the
subcommittee to discuss the ICANN selection process. NeuStar
has been following the potential introduction of new TLDs and
attending ICANN meetings for over 2 years prior to the issuance
of the August 2000 RFP. NeuLevel was selected to operate the
.biz registry. As such, NeuLevel was one of seven selected to
operate registries for the new top-level domains.
The criteria and objectives utilized in the selection
process represented the culmination of many years of well
publicized industry debate and consensus concerning the
introduction of new top-level domains, and not solely as a
result of the most recent ICANN application process. Having
been directly involved in over 100 requests for proposal
processes during my 15 years in the communications industry, I
can say with confidence that the manner in which ICANN
conducted the application process far exceeds measures taken by
private companies in conducting procurement activities for
services of similar complexity. The process utilized by ICANN
was conducted in an open and transparent manner.
I would like to direct your attention to the attached
exhibit which contrasts these differences. The open process
described in the exhibit represents a process in which all
competitors had equal access to information, had an equal
opportunity to prepare their responses and compete with the
other applicants. We believe that the TLDs selected are a
direct reflection of the evaluation criteria identified by
ICANN and communicated to all applicants and the public in
advance on the ICANN Web site.
The criteria is as follows: Maintain the stability of the
Internet, the No. 1 priority; demonstrate an effective proof of
concept concerning the introduction of new top-level domains;
enhance competition for registry services; enhance utility of
the DNS; meet currently unmet needs; enhance diversity of the
Internet; evaluate the delegation of policy formulation
functions for special purpose TLDs; ensure the appropriate
protections of the rights of others; and require completeness
of proposals.
ICANN stated clearly that its intent was to select a
limited number of TLDs initially and to proceed carefully in
order to ensure that stability of the Internet was maintained.
In the new TLD application process overview, which was posted
to the ICANN Web site, ICANN stated that ``it is anticipated
that only a few of the applications that are received will be
selected for further negotiations toward suitable contracts
with ICANN.'' this statement was consistent with the resolution
of the ICANN board on new TLDs in which the board, ``adopted
the Names Council's recommendation that policy be established
for the introduction of new TLDs in a measured and responsible
manner.''
The selected TLDs are also consistent with ICANN's desire
to create diversity. Specifically, ICANN stated that ``the
diversity the proposal would bring to the program would be
considered in selecting new TLDs.'' in addition, the criteria
for assessing new TLDs included the following criteria: the
feasibility and utility of the different types of TLDs, the
effectiveness of different procedures for launching TLDs, and a
number of others. Although the qualified TLDs were not
selected, ICANN made it clear that additional TLDs were likely
to be introduced in the future.
The ICANN process described above will create effective
competition where none exists. Competition will create new
choices for individuals, for organizations and businesses in
terms of name availability, pricing and functionality.
The ICANN evaluation criteria and objectives in introducing
new TLDs were the result of an open public debate and
widespread Internet community consensus. The market
participants created the ICANN process, and the ICANN process
resulted in TLD and registry operator selections that are
consistent with those criteria and the objectives stated in the
introduction of the selected TLDs to proceed. It is in the
interest of the Internet community as a whole for the
introduction of the selected TLDs to proceed while other
applications pursue appeals through the ICANN request for
consideration process.
I thank the subcommittee for giving me this opportunity to
testify. I will answer any questions you have at this time.
[The prepared statement of Kenneth M. Hansen follows:]
Prepared Statement of Kenneth M. Hansen, Director, Corporate
Development, NeuStar, Inc.
Good morning: My name is Ken Hansen, and I am the Director of
Corporate Development for NeuStar, Inc., a neutral third party provider
of clearinghouse and database administration services. NeuStar serves
as the Number Plan administrator and the Local Number Portability
administrator for North America. Our joint venture with Melbourne IT ,
Ltd (MIT), a Melbourne, Australia based provider of domain name
services was recently selected by the Internet Corporation for Assigned
Names and Numbers to operate the Registry for the Top-Level Domain Name
``.biz''. During the application process the joint venture was referred
to as ``JVTeam'' and is now known as ``NeuLevel''.
I appreciate the opportunity to appear before the subcommittee to
discuss the ICANN selection process. NeuStar has been following the
potential introduction of new TLDs and attending ICANN meetings for
over two years prior to issuance of the RFP.
NeuLevel was selected to operate the Dot-Biz Registry. As such,
NeuLevel was one of seven selected to operate Registries for the new
Top-Level Domains (TLDs). The criteria and objectives utilized in the
selection process represented the culmination of many years of well-
publicized industry debate and consensus building concerning the
introduction of new Top Level Domain Names (TLDs), and not solely the
result of the most recent ICANN application process.
The process utilized by ICANN was conducted in an open and
transparent manner. Having been directly involved in over one hundred
Request for Proposal processes during my fifteen years in the
communications industry, I can say with confidence that the manner in
which ICANN conducted the application process far exceeds measures
taken by private companies in conducting procurement activities for
services of similar complexity. I would like to direct your attention
to the attached exhibit which contrasts these differences.
The open process described in the Exhibit represents a process in
which all competitors had equal access to information, and an equal
opportunity to prepare their responses and compete with other
Applicants. We believe that the TLDs selected are a direct reflection
of the evaluation criteria identified by ICANN and communicated to all
Applicants and the public in advance on the ICANN website. The criteria
is as follows:
The number one priority was the need to maintain the stability
of the Internet
Demonstrate an effective proof of concept concerning the
introduction of new top level domains
The enhancement of competition for registry services
The enhancement of the utility of the DNS
Meet currently unmet needs
Enhance diversity of the Internet
Evaluate the delegation of policy formulation functions for
special purpose TLDs
To ensure the appropriate protections of the rights of others,
and
Completeness of proposals
ICANN stated clearly that its intent was to select a limited number
of new TLDs and to proceed carefully in order to ensure that the
stability of the Internet was maintained. In the New TLD Application
Process Overview (which was posted to the ICANN website) ICANN stated
that, ``It is anticipated that only a few of the applications that are
received will be selected for further negotiations toward suitable
contracts with ICANN''. This statement was consistent with the
Resolution of the ICANN Board on New TLDs, in which the Board ``adopted
the Names Council's recommendation that a policy be established for the
introduction of new TLDs in a measured and responsible manner''.
The selected TLDs are also consistent with ICANN's desire of
creating diversity. Specifically, ICANN stated that, ``the diversity
the proposal would bring to the program'' would be considered in
selecting the new TLDs. In addition, the Criteria for Assessing TLD
Proposals included the following criteria;
The feasibility and utility of different types of new TLDs
The effectiveness of different procedures for launching new
TLDs,
Different policies under which the TLDs can be administered in
the longer term,
Different operational models for the registry and registrar
functions,
Different business and economic models under which TLDs can be
operated;
The market demand for different types of TLDs and DNS
services; and
Different institutional structures for the formulation of
registration and operation policies within the TLD.
Although some qualified TLDs were not selected, ICANN made it clear
that additional TLDs were likely to be introduced in the future.
The ICANN process described above will create effective competition
where none exists today. Competition will create new choices for
individuals, organizations and businesses in terms of name
availability, pricing and functionality.
The ICANN evaluation criteria and objectives in introducing new
TLDs were the result of an open public debate and widespread Internet
community consensus. The ICANN process resulted in TLD and Registry
Operator selections that are consistent with those criteria and
objectives. It is in the interest of the Internet community as a whole
for the introduction of selected new TLDs to proceed, while other
Applicants pursue appeals though the ICANN Request for Reconsideration
process.
I thank the subcommittee for giving me the opportunity to testify.
I will now answer any questions that you may have.
EXHIBIT
TYPICAL PRIVATE COMPANY RFP PROCESS vs. ICANN PROCESS
------------------------------------------------------------------------
TYPICAL PRIVATE
COMPANY RFP
DESCRIPTION PROCESS (for ICANN PROCESS
complex service or
system)
------------------------------------------------------------------------
Announcement of RFP............. Potential bidders Notice posted to
selected and the Internet for
notified directly. public viewing
No public notice.. Expressions of
interest
requested, but
not required
Who can submit a bid?........... Limited number of Any company
selected permitted to
companies. submit an
Those bidders the application
company feels are Forty-seven
qualified and can complete
meet needs. applications
Number of bidders received
limited.
Typically 3-5
proposals
accepted.
Publication of the RFP.......... Sent directly to Posted to the
limited number of Internet for
qualified bidders. public viewing
Public posting of proposals..... None.............. Posted to the
Internet for
public viewing
Confidential information........ Proposal Posted to the
considered Internet for
confidential public viewing
document. Confidential
Not to be information not
disclosed. to be considered
by evaluators
Public comment.................. None.............. Comment forum on
the ICANN site
Public able to
submit a comments
Applicants able to
comment on
competitors
proposals
All comments
published on the
web for viewing.
Questions concerning responses.. Private ICANN questions
correspondence and Applicant
with bidders. answers posted to
Private meetings the ICANN site
with bidders.
Evaluation results.............. Not shared with Written evaluation
the bidders or posted to the web
any outside party. for viewing by
No opportunity to bidders and the
respond or public
comment.
Decision making process......... Private decision Board deliberation
making process. with access to
No involvement or the public
access by bidders. Live broadcast on
the Internet.
Transcripts
published on
ICANN site
Decision announcement........... Bidders privately Announced during
notified by phone. public meeting
Broadcast on the
Internet
Published on the
ICANN site
------------------------------------------------------------------------
Mr. Upton. Thank you.
Ms. Gallegos.
STATEMENT OF LEAH GALLEGOS
Ms. Gallegos. It is still morning, so good morning, Mr.
Chairman. I would like to thank the committee for the
opportunity to be here and present our reasons for believing
that ICANN's process for selecting new TLDs to enter into the
USG root is detrimental to our survival and to the continued
survival of the TLDs outside the auspices of ICANN.
I am the president of ARNI, AtlanticRoot Network, Inc., and
I am the manager of the .biz TLD. This top-level domain resides
in several of the inclusive name space roots which many people
refer to as alternative or alternate roots. The inclusive name
space roots are root server systems that operate in the same
manner, but independently of the Department of Commerce root
system.
The title of this hearing indicates your desire to ensure
fair competition. My question is how can this be accomplished
with ICANN's usurping of the .biz TLD from ARNI, thus stealing
its product? Under ICANN's policy, a competitor can pay a
$50,000 fee to have ICANN usurp our business or any other at
their whim.
Talk about protecting the rights of others. That rather
negates that.
ARNI is a small company. Our entire business at this time
is based upon domain name registrations in our TLD. With the
announcement by ICANN that .biz was to be handed over to
JVTeam, now New Level, e-mail began pouring in asking if we
were going to be closed by ICANN or if ICANN was going to take
our TLD.
Why didn't we apply? For a small company, $50,000 is a high
price to pay as a nonrefundable fee that could be much better
spent on development and infrastructure, as opposed to a
lottery, which we considered this to be.
Why should we have to apply to keep a business that is
already ours? It was well-known that the board considers our
registrants to be illegitimate and registrations to be pre-
registrations even though they are live, many with published
commercial websites.
And we are real, we are a business. There was no need to go
through the ICANN process to prove what has already been
proven, that our registries are open to public, they work, that
the roots which do recognize them have also proven themselves
for well over 5 years.
Stability of the Internet. There is no reason on earth to
consider that it would hurt stability when they have added so
many TLDs over the past 10 years and the roots themselves that
I am talking about have been stable for many, many years and
they are very robust. So stability is really not a technical
issue at all.
The .biz TLD was created in 1995 and first resolved in eDNS
and later the ORSC and now the Pacific roots. We are recognized
in all the major roots, except, of course, the USG root. We
were delegated management of.biz in 2000 and reopened the
registry to the public for registration in the spring. We were
able to provide registrations manually until the launch of our
automated web-based system which had been in Beta. By the way,
there has been over a quarter of a million dollars spent in the
ramp-up for our .biz. We have a good chance of losing all of
that.
The moment the applications to ICANN were lodged, we e-
mailed every applicant for our string and notified them, using
the contact listed on the ICANN website, that.biz already
existed and asked why they would choose an existing TLD. We
also posted numerous comments on the ICANN board, as that was
the only type of communication they would receive; and we
received no responses. We were ignored by all recipients.
We are now faced with a substantial loss due to ICANN's
refusal to recognize that we are real, that we exist. It is
baffling because they obviously recognize that Image Online
Designs .web exists and decided not to the award that string to
Afilias as a result. Vint Cerf, who is here, stated his
discomfort and reaffirmed later, and I have a quote in the
written submission testimony, saying that he was uncomfortable
with giving the .web string to another entity since IOD already
had a functioning registry and they had existed with that
registry for 5 years.
Later, Mr. Kraaijanbrink's outburst seemed to be the
typical attitude of the board, saying that, knowing all of
that, they still supported giving that string to another
entity.
It is important to note that while ICANN insists that it
has its name space and we all have ours, that the DNS is truly
only one name space and that we all must work within that name
space. If ICANN is successful in duplicating a TLD string in
its root, there will be duplicate domain names, thousands of
them. No one will know which domain they will see when keying
an address into a browser because more and more ISPs are
choosing to point to the so-called alternative roots, and
hundreds of thousands of users will be affected.
Consider what would happen if AT&T summarily took New
York's 212 number space away from Verizon. That would be
considered an anti-competitive act, putting Verizon out of
business. Certainly no one would consider suggesting that AT&T
and Verizon issue mirror 212 numbers to different customers.
The phone system wouldn't work.
It would be just as foolish to suggest that ICANN and
AtlanticRoot issue mirror .biz names to different customers.
There is no reason why there cannot be new TLDs added to
the roots, all of them, but there is ample reason not to
duplicate existing ones. It is not a function of the government
to deliberately destroy existing businesses nor is it a
function of ICANN to facilitate that destruction. It is also
not a function of ICANN to determine what business models
should be allowed to exist or to compete, any more than any
other root decides policies of TLD managers or, indeed, other
roots. The market will decide which will succeed and which will
fail.
Mr. Upton. That is a good point to conclude.
Ms. Gallegos. Thank you very much.
[The prepared statement of Leah Gallegos follows:]
Prepared Statement of Leah Gallegos, President, AtlanticRoot Network,
Inc.
My name is Leah Gallegos, President of AtlanticRoot Network, Inc.
(ARNI) The BIZ TLD Registry is an entity of AtlanticRoot Network, Inc.
I am the manager of the dot BIZ TLD. This Top Level Domain resolves in
several of the ``inclusive name space'' roots, which many people refer
to as alternative or alternate roots.
As a citizen of this country, I am fortunate to be able to defend
my right to have a small business and to not have my product taken from
me arbitrarily by a covetous entity under agreement with the
government. I thank this committee for providing the avenue to present
our reasons for believing that ICANN's process for selecting new TLDs
to enter into the USG root is detrimental to our survival and to the
continued survival of all the TLDs outside the auspices of ICANN.
ICANN has selected seven TLD strings to enter into the USG root
that is controlled by the Department of Commerce. The process used for
this selection was ill advised, badly handled and ignored the very
premise for which ICANN was established--to preserve the stability of
the Internet and do no harm to existing entities.
The title of this hearing indicates your desire to ensure fair
competition. My question is how can this be accomplished with ICANN's
usurping of dot BIZ from ARNI, thus stealing its product? Under ICANN's
policy, a competitor can pay a $50,000 fee to have ICANN usurp our
business, or any other, at their whim.
As I said earlier, ARNI is a small company. Our entire business at
this time is based upon domain name registrations. With the
announcement by ICANN that dot BIZ was to be handed over to JVTeam, e-
mail began pouring in asking if we were going to be closed by ICANN or
if ICANN was going to take our TLD. Others asked if there were going to
be duplicates of each name and who would be the legitimate registrants.
Even more asked if their names would even resolve if ICANN ``took'' the
TLD. The public has indicated that they are afraid now to register
names with us and we are losing business merely on the mistaken
assumption that ICANN has the right to take it from us.
Why didn't we opt for the $50,000 application to be included in the
ICANN process?
We have been asked that question many times. There are several
reasons.
1. For a small company, $50,000 is a high price to pay for
consideration as a non-refundable fee.
2. There was little, if any, chance that we would be selected. The
application questions were stated in such a way that it was clear we
would have to adopt a sunrise provision and the UDRP. Those who did
not, were not in the running and we knew that.
3. $50,000 could be much better spent on development and
infrastructure as opposed to a lottery--worse than a lottery. There was
bias with this one.
4. It is obvious that the large dollar monopolies were favored. In
fact, they are the ones who were selected. CORE, NEUSTAR, MELBOURNE IT
. . . We did not have a chance.
5. It was well known that the board considers our registrants to be
illegitimate and registrations to be pre-registrations even though they
are live registrations, many with published commercial websites. The
comments made by Esther Dyson and others at past meetings and
interviews made that very clear. At the MDR meetings, our
interpretations were emphatically crystalized by Mr. Kraaijanbrink and
Mr. Fitzimmons, especially, and by other members in general.
6. We feel that ICANN should honor the IANA commitment to include
these TLDs in the USG root as was promised. There was no need to go
through this process to prove what has already been proven, that the
registries are open to the public, they work and the roots which do
recognize them have also proven themselves for over five years.
As it turned out, several board members recused themselves, leaving
less than the required number to successfully vote on this issue. They
voted anyway. It is also interesting to note that the board members
(except one) waited for this recusal until after the deliberations had
been made regarding qualifications, business models, etc. They had
definite conflicts of interest, yet they stayed in a position to render
opinions on which applicants would ``make the cut.'' The bias was so
thick, even with the remaining board members, that it was easily
visible.
Just as visible was the obvious lack of understanding of the basis
for adding new TLDs and the content of the applications themselves.
Choices were made with flawed and foolish reasoning.
And lastly, the new at-large directors had no input in the
selection of these TLDs. This is important since those directors are
inclined to be more objective and are more concerned with domain name
holders and small businesses.
It is crucial to understand, at this point, just what the status of
ICANN is versus the rest of the Internet with regard to TLDs. ICANN
manages three TLDs at present--dot com, dot net and dot org. They are
under an agreement with the government to make recommendations to the
root manager, the Department of Commerce, regarding the entrance of new
TLDs to the root.
By comparison, ARNI is the manager of some TLDs which are homed in
an inclusive name space (or alternative) root managed by another
entity. The inclusive name space roots were developed with authority
from IANA. If ARNI wishes to enter more TLDs into that root, then it
must petition that root manager, etc. If there are no conflicts (pre-
exiting TLDs) and technical standards have been met, the root manager
will then most likely enter the requested new ones. Both the root
manager(s) and the TLD operators cooperate in determining the existence
of any conflicting TLD strings. If the requested TLD string is found to
exist in another root, then the prospective TLD manager could negotiate
with the existing one or withdraw the request. Often, the root
manager(s) will assist in facilitating potential negotiations. There is
no charge to the potential TLD operator to make this determination.
With the WHEREIS TLD Finder tool, it is not difficult to ascertain
whether there are conflicts with a new TLD request. This tool can be
found at http://www.pccf.net/cgi-bin/root-servers/whereis-tld. Requests
for the entry of new TLDs are accepted on a first come, first served
basis.
In addition to the TLDs which ICANN manages, there are in excess of
240 ccTLDs which are included in the root, but managed by other
entities and under different policies. In other roots, there are TLDs
included which are not homed in those roots, but included in order to
allow users to see all known non-colliding TLDs. Therefore, ICANN
could, and should, do the same thing and include all existing non-
colliding TLDs for the benefit of users world wide and still add new
ones under their own overall management. Technically, it is a simple
task that has been proven with the addition of the ccTLDs. There is
absolutely no need to duplicate what is already in place.
The dot BIZ TLD was created in 1995 and resolved in the eDNS and
later in ORSC the (Open Root Server Confederation). We are recognized
in all the major roots, except, of course, the USG root. We were
delegated management of dot BIZ in 2000 and re-opened for registration
in the spring. We had an automated registration system in beta at that
time, but were able to provide registrations manually until the launch
of the automated web-based system. That system was publicly launched in
October. The re-delegation was made and the registry was open well
prior to any announcement of applications for the characater string
(BIZ) with ICANN. Again, dot BIZ has been in existence at least as long
as dot WEB.
The moment the applications to ICANN were lodged, we e-mailed every
applicant for our string and notified them, using the contact listed on
the ICANN webiste, that .BIZ already existed and asked why they would
choose an existing TLD. We also posted numerous comments on the ICANN
board, since they would accept no communication in another form
regarding TLDs. We also posted to many public mail lists questioning
why ICANN would consider duplicating existing TLDs, especially dot BIZ.
We received no responses from anyone. We were ignored by all
recipients.
ARNI was doing just fine with dot BIZ registrations prior to the
selection process for new TLDs by ICANN. There were no conflicts. We
are now faced with a substantial loss due to ICANN's refusal to
recognize that we exist. It is baffling because they obviously
recognize that IOD's dot WEB exists and decided not to award that
string to Afilias as a result. Current Chairman Vint Cerf stated his
discomfort and reaffirmed later saying, ``I continue to harbor some
concern and discomfort with assigning dot web to Afilias,
notwithstanding the market analysis that they did, which I internally
understand and appreciate. I would be personally a lot more comfortable
if we were to select a different string for them and to reserve dot
web.'' (See Appendix A, 2:17). Without his intervention, the board
would have handed dot WEB over to IOD's competitor, Afilias, another
900 pound gorilla, and IOD would be making the same arguments I am
making today. The board did ``the right'' thing with dot WEB, but has
ignored dot BIZ.
The video clip maintained at the Berkman Center (http://
cyber.law.harvard.edu/scripts/
rammaker.asp?s=cyber&dir=icann&file=icann-111600&start=6-16-00) clearly
illustrates the reluctance of Vint Cerf to award the TLD to any entity
other than its current operator. It also illustrates the unreasonable
attitude typical of most of the board to deliberately ignore any entity
that is not within the ICANN framework. The video would be entertaining
if it were not so important an issue at stake. In that sense, it is
rather sad, and very frustrating to hear the ping pong ball going back
and forth with people's futures at stake.
Why, then, has ICANN decided that it would not usurp IOD's dot WEB,
but would do so with our dot BIZ?
Mr. Kraaijanbrink's outburst (Exhibit A 3:3): ``Well, I would not.
I believe that we have discussed them considerably. The Afilias on
.web. And, from their proposal, and from the discussions, I believe
that we should award dot web KNOWNING that IOD has been in operation as
an alternative root with dot web for some time. But I am reminded, and
I fully support what Frank Fitzsimmons said a few minutes ago that
taking account of alternatives should open an unwanted root to pre-
registration of domain names and domains. So I am fully aware of what I
am doing in voting in support for Afilias dot web.''
Note that this board member refuses to recognize not only the
legitimacy of IOD's TLD registry, but even considers their registrants
to be illegitimate, calling them pre-registrations. There are no pre-
registrations in any of our TLDs or in IOD's dot WEB. They are live and
resolve. It is this very attitude that has prevailed throughout ICANN's
deliberations and decisions regarding the selection and adoption of new
TLDs. It is also due to this posture that ICANN will irreparably harm
our business and that of any other TLD operator whose product it
chooses to usurp.
At these meetings in Marina del Ray, while attending via webcast, I
posted questions to the ICANN Board of Directors, raising the issue of
duplication and was ignored, even though one of the questions was read
aloud to them. At the board meeting, the issue was never addressed at
all. I did receive an acknowledgment from Board member, Vint Cerf,
saying he would pass the message along. Others had been faxing him
regarding this issue steadily during those meetings. If they did not
``know'' that dot BIZ existed, even after the postings and email,
something is wrong. They are supposed to ``coordionnate technical
parameters'' and they haven't even found the technical parameters yet.
It is important to note that while ICANN insists that it has its
name space and we all have ours, that there is truly only ONE name
space and that we all must work within it. If ICANN is successful in
duplicating a TLD string in its root, there will be duplicate domain
names--many thousands of them. No one will know which they will see
when keying an address into a browser because more and more ISPs are
choosing to point to inclusive name space roots. Hundreds of thousands
of users will be effected. One TLD operator has indicated an increase
of 30% per month in the use of one of his servers, which happens to be
one of the ORSC root servers.
As an analogy, consider what would happen if AT&T summarily took
New York's 212 number space away from Verizon. That would be considered
an anti-competitive move, putting Verizon out of business. Certainly no
one would consider suggesting that AT&T and Verizon issue mirror 212
phone numbers to different customers. The phone system wouldn't work!
It would be just as foolish to suggest that ICANN and AtlanticRoot
issue mirror dot BIZ names to different customers.
How can this not harm us? Our TLD has been in existence for over 5
years. Our registrants have e-commerce businesses operating using dot
BIZ domains. We have approximately 3,000 registrants and growing daily.
Those businesses will be destroyed because of the fracture ICANN will
cause with this duplication. In addition, if ICANN is allowed to do
this now, what will happen to all the other TLDs when ICANN decides to
add more in the future? We will then be talking about hundreds of
thousands of domain name holders and thousands of businesses and
organizations being disenfranchized--ruined.
Why do the inclusive name space roots not duplicate dot com, net or
org? They could. They do not for a couple of reasons. One is that it is
understood that duplication in the name space is not in the best
interests of the Internet or its users. As a matter of fact doing so is
detrimental. It is a cooperative effort to keep the name space uniform
and consistent. The second is that they all recognize the prior
existence of the USG and ccTLDs and include them in their roots. So why
is ICANN doing the opposite?
If there were over one hundred TLDs available to the public and
included in the USG root, we would see not only a competitive free
market, but the disappearance of many of the disputes and speculation
present today. The so-called scarcity of domain names has been created
by the delay in entering more TLDs into the USG root. The simplest
solution is to recognize the existing TLDs before entering new ones.
There is no reason why there cannot be new TLDs added to the root, but
there is ample reason not to duplicate existing ones. It is not a
function of the government to deliberately destroy existing businesses,
nor is it a function of ICANN to facilitate that destruction. It is
also not a function of ICANN to determine what business models should
be allowed to exist or to compete, any more than any other root
dictates policies of TLD managers. The market will decide which will
succeed and which will fail.
The MOU between ICANN and the government clearly states in its
prohibitions, Section V:D:2. ``Neither Party, either in the DNS Project
or in any act related to the DNS Project, shall act unjustifiably or
arbitrarily to injure particular persons or entities or particular
categories of persons or entities.''
ICANN has acted both arbitrarily and unjustifiably in deliberately
ignoring our existence as a viable registry offering legitimate,
resolving domain names to the public.
Whether ICANN/DoC chooses to include the pre-existing TLDs in the
USG root or not is one thing. Whether they choose to ignore their
existence and threaten them with destruction via abuse of power is
another.
By moving ahead with their process they have created dissension,
confusion and harm to our business and our registrants. They are
eliminating true competition by assuming authority over the world's
name space rather than remaining focused on their own narrow
responsibility. They have shown no respect for our existence or that of
all the other TLD operators who have the right to operate their
businesses or organizations and they threaten, by their actions today,
to crush them as they appear to intend to crush us. We must also
consider the effect this situation is having on countries around the
world. More and more of them are considering alternatives to the USG
root and some have already moved to create them or use the existing
roots; all because ICANN will not recognize the fact that they manage
just one set of TLDs in one root.
Because ICANN currently enjoys the largest market share in terms of
those ``pointing'' to the USG root, it has a commensurate
responsibility to ensure fairness in a free market. It was the
government that determined the Internet should be privatized, yet it
has allowed ICANN to assume a governmental attitude toward the
Internet. It was formed at the order of the government, and remains
under the oversight of the government, yet it competes against small
business in what should be a free market with the power to usurp the
businesses it is competing against, without due process or
compensation. It has invited applicants to do so.
With regard to their so-called ``new'' TLDs, ICANN threatens not
only small businesses, but, as a result of their arrogant, ill
conceived actions, actually threatens the world's economy and the
stability of the Internet--in direct conflict with the agreement they
signed with the United States government.
We feel that ICANN, under the oversight of DoC, has acted
completely irresponsibly and probably illegally. DoC will do the same
and has stated it will most likely rubber stamp any decisions made by
ICANN. We feel they have breached their agreement by harming our
business and will potentially do so with any other duplications placed
in the USG root. In addition, we believe that DoC will, and ICANN has,
abused their power and that this issue falls under the Administrative
Procedures Act (APA). We have filed a Petition for a Rulemaking with
the NTIA, which is attached as Exhibit B.
It is our hope that this committee will intervene to ensure that
there is fair play and consideration for existing businesses; that the
entry of duplicate TLDs in the USG root will not be permitted and that
the promises made by IANA will be kept.
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Mr. Upton. Professor Froomkin.
STATEMENT OF A. MICHAEL FROOMKIN
Mr. Froomkin. Mr. Chairman and members of the subcommittee,
my name is Michael Froomkin. I would like to thank the
subcommittee very much for inviting me to appear here today.
I am a law professor at the University of Miami,
specializing in the law of the Internet. I have published more
than 20 papers on the subject of Internet-related topics.
Five points. No. 1, the shortage of gTLDs today is entirely
artificial and easily curable. Experts including Dr. Cerf, as
far as I know, agree there is no technical obstacle to the
creation of at least thousands and possibly tens of thousands,
hundreds of thousands, maybe millions of new TLDs. The only
issue is rolling them out in some sequence where you don't do
them all the same day.
Removing the shortage would have competitive benefits in
each of the three markets identified in my prepared statement,
the registry, registrar and market for domain names. The
spillover effects would benefit e-commerce and, thus, the
entire economy.
Now why do we have this shortage now? We have it because
the people with the power to fix it, the Department of
Commerce, has simply chosen not to do so, instead have
delegated the question to ICANN which they see as a private
body and they say is a standards body. I am going to explain
that it is not.
ICANN says it is a standards body, but in this case it is
not acting as one nor as a technical coordination body. It
justifies its very tentative approach by saying it is a proof
of concept. But it hasn't told us what the concept is it is
trying to prove. It hasn't told us when the test is going to be
evaluated or how we tell if it is a success.
The concept can't gTLD creation itself because we know
there is no rocket science to the mechanics of that. You just
type a few lines to a computer across the river here in
Virginia and it just takes a few minutes and then it propagates
naturally through the design of the Internet.
Just how arbitrary ICANN was in this past process can be
illustrated by two simple stories. One is it rejected the
.union proposal based on unfounded last-minute speculation that
maybe the international labor organizations that were part of
the union movement somehow aren't democratic enough. It also
rejected something called .iii because somebody on the board
thought it was hard to pronounce. But that had never been a
criterion and ever, ever mentioned before that very last
minute.
Now why is ICANN acting in this arbitrary fashion? Why did
it put in this limit on there? Why did it rush? I think the
reason is--and despite its very nice rhetoric and the very
welcome presence of genuine Internet visionaries such as Dr.
Cerf--that ICANN isn't a standards body. It isn't coordinating
anything. It doesn't act by consensus of all the affected
parties, just for the parties who get to have a seat at ICANN's
table. It doesn't listen much to the public or end users. It
welcomes their comments and then ignores them. In fact, what
happened is ICANN skipped one of the goals in the white paper.
In July 1999, then ICANN Chair Esther Dyson came before
this committee's Subcommittee on Oversight and Investigation
and assured that ICANN's highest priority was to elect nine at-
large board members, exactly as ICANN had committed to do to
the Department of Commerce when it was set up. They didn't do
it. They reneged. Instead, they decided to only have five
elected. Then they decided to have another study and take those
five away and maybe zero-base it, think it all over again. And
who knows? Meanwhile, they amended their timetable to rush the
selection of new gTLDs so all the decisions would be made
before even those five elected people got to be at the table.
The subsidiary organizations like the Names Council and
domain name supporting organizations have charters right now
that exclude the participation of individuals. As an
individual, you can't be a member of any of those things. It is
not surprising, therefore, that when ICANN defines its
consensus it gets the view of only a narrow part of the
Internet.
In my prepared statement I have explained in some detail
why it is that Commerce is going to have to act in conformity
with the APA and the Constitution. You can say ICANN is
private. Then there is a nondelegation problem. You can say it
is public, and then the APA ought to apply. I am not going to
repeat that here. I know your long-suffering staff has actually
read that in detail, and I am real impressed with them.
Let me talk about what ICANN ought to do and maybe you
might do to help them. It seems to me the right thing for ICANN
to do to maximize competition and to be fair is to accept all
applicants who meet a preannounced, open, neutral and objective
standard of competence. You can define competence in lots of
interesting ways. Financial might be part of that. But it
shouldn't be making case-by-case allocations decisions and
amateurish comparative hearings. It is just not right, and it
doesn't work, and they have shown us that.
Let me also in my last minute suggest to you an alternate
approach to gTLD creation, one that would certainly enhance
competition and would take its inspiration from the fundamental
design of the Internet and from major league sports. The
Internet was designed to continue to function even if large
parts of the network sustained damage. The Internet network
design avoids, whenever possible, the creation of single points
of failure. But when it comes to policy, ICANN right now is
that single point of failure.
The solution to the problem, therefore, would be to share
out the policy function and leave in ICANN only the
coordinating functions. What it would do then would be to keep
a master list of TLDs to prevent collisions, make sure no
registries ever try to run the same string, fix an annual quota
of new gTLDs, run an annual gTLD draft, just like the pros do
with the college athletes, and coordinate the new process so
the gTLDs come on stream in an orderly way and not all at once.
Each of ICANN's policy partners, and they could be groups
from all around the world--government, civil society groups,
corporations--you can have a real healthy mix, would get some
draft choices, some would get one, some might get more, and
then ICANN would randomly or otherwise assign them the picks
and work the system.
Thank you very much.
[The prepared statement of A. Michael Froomkin follows:]
Prepared Statement of A. Michael Froomkin, Professor of Law, University
of Miami School of Law
Mr. Chairman and members of the Subcommittee, my name is Michael
Froomkin. I would like to thank the Subcommittee for inviting me to
appear today at this hearing on ``Is ICANN's New Generation of Internet
Domain Name Selection Process Thwarting Competition?''
I am a law professor at the University of Miami, specializing in
the law of the Internet. I have published more than 20 academic papers
on Internet governance, ICANN, e-commerce, cryptography, and privacy. I
maintain a web site at http://www.law.tm where my articles on these and
related topics can be found. I am co-director of ICANNWatch.org, an
independent watchdog group that comments on ICANN policies. Two years
ago the World Intellectual Property Association (WIPO) appointed me to
serve as the sole public interest representative on its ``Panel of
Experts'' that advised WIPO on its report on The Management of Internet
Names and Addresses: Intellectual Property Issues. I am also a director
of disputes.org which, in partnership with eresolution.ca, has been
involved in dispute services provision under ICANN's UDRP.
My role in ICANN's selection of new global Top Level Domains
(gTLDs), however, is strictly that of an academic observer and
commentator, and sometime participant in public comment fora. I have no
past or present financial relationship with any gTLD applicant. My goal
is to advance what I understand to be the public interest by advocating
policies that increase access to the Internet by enhancing free speech
and promoting competition. Vigorous competition makes for a healthy
marketplace of ideas, and also for a healthy market, as it lowers
prices and improves the quality of service - thus enhancing access to
the Internet and to Internet-based information.
summary of testimony
I have four basic points that I would like to draw to your
attention:
1. ICANN's decision to artificially restrict new gTLDs to a small
number of arbitrary selections, further hemmed in by ICANN's insistence
on anti-competitive terms of service, has negative consequences for
competition in three markets: the market for registry services, the
market for registrar services, and the market for second-level domains
(including the aftermarket), with spill-over effects on e-commerce
generally. Each of these markets would be more competitive if ICANN and
the Department of Commerce were to lift their limit on new gTLDs and
accept all competent applicants according to open, neutral, and
objective criteria. It should be noted, however, that the negative
consequences for competition I describe below would be even worse if
there were no new gTLDs at all. This is, in summary, a situation where
the ordinary rules of supply and demand operate. It is axiomatic that
competition increases if one removes barriers to entry.
2. The shortage of gTLDs today is entirely artificial, and easily
curable. There is a great pent-up demand for short and attractive
second-level registrations in new gTLDs but experts agree there is NO
technical obstacle to the creation of at least thousands and possibly
tens or hundreds of thousands of new gTLDs, or even more. The current
shortage exists only because the body with the power to create new
gTLDs--the U.S. Department of Commerce--has not yet chosen to do so.
The Department of Commerce--in what I have argued is a violation of the
Constitution and/or the Administrative Procedures Act \1\--has chosen
to delegate the power to make an initial recommendation regarding new
gTLDs and the registry operators to the Internet Corporation for
Assigned Names and Numbers (ICANN). Commerce has also delegated to
ICANN the power to negotiate restrictive contractual terms with these
registry operators--negotiations that were due to conclude by Jan. 1,
2001, but are currently continuing in secret.
---------------------------------------------------------------------------
\1\ A. Michael Froomkin, Wrong Turn in Cyberspace: Using ICANN to
Route Around the APA and the Constitution, 50 Duke L.J. 17 (2000),
available online http://www.law.miami.edu/froomkin/articles/icann.pdf .
---------------------------------------------------------------------------
3. ICANN purports to be a technical standards or technical
coordination body, but it did not act like one in this process, as it
made arbitrary allocation decisions. When it came to the creation of
new gTLDs, rather than act as a technical standards body and promulgate
a standard under which all technically and financially qualified new
registry operators could qualify, ICANN instead decided to act like an
allocation authority for its artificially limited resource. ICANN
arbitrarily limited the number of new gTLDs it would approve to under
ten. ICANN then solicited $50,000 applications from prospective
registries. Instead of considering the applications solely on technical
merit, or indeed on any other set of neutral and objective criteria,
ICANN selected seven winners on the basis of a series of often
subjective and indeed often arbitrary criteria, in some cases applied
so arbitrarily as to be almost random.
I have no reason to believe that the seven TLDs selected are bad
choices; but given ICANN's arbitrary procedures I also have no doubt
that many other applicants would have been at least as good. The
striking arbitrariness of the ICANN decision-making process is
illustrated by the rejection of the ``.union'' proposal based on
unfounded last-minute speculation by an ICANN board member that the
international labor organizations proposing the gTLD were somehow
undemocratic. The procedures ICANN designed gave the applicants no
opportunity to reply to unfounded accusations. ICANN then rejected
``.iii'' because someone on the Board was concerned that the name was
difficult to pronounce, even though the ability to pronounce a proposed
gTLD had never before been mentioned as a decision criterion.
4. The correct strategy for maximizing competition would have been
to accept all applicants who met a pre-announced, open, neutral, and
objective standard of competence, rather than to pick and choose among
the applicants on the basis of the ICANN Board's vague and inconsistent
ideas of aesthetic merit, market appeal, capitalization, or experience.
As a result of its relationship with the Department of Commerce, ICANN
is a state actor. Accordingly, its arbitrary and capricious decisions
violate both the APA and the Due Process Clause of the Constitution.
Rubber-stamping of its decisions by the Department of Commerce will
only make these violations explicit, since the U.S. government would
essentially endorse both ICANN's practices and its conclusions.
Alternately, ICANN might be converted into a true technical
coordination body, whose main functions were to set quotas for new gTLD
creation, to prevent TLD name collisions by maintaining a master list,
and to coordinate the management of parallel TLD creation processes by
public and private policy partners around the globe.
i. basic principles of supply and demand apply in the relevant markets
Two principles should shape any analysis of the competitive effects
of ICANN's gTLD selection process: (1) Careful definition of the
relevant markets; (2) An understanding that each of these markets obeys
the normal laws of supply and demand, and that despite attempts by some
to obfuscate the issues, in each of these markets there are at most
only very minor and easily surmounted technical obstacles to allowing
normal market forces to operate.
Terminological note: A ``registrar'' is a firm that contracts with
clients (``registrants'') to collect their information and payment in
order to make a definitive and unique entry into a database containing
all domain names registered in a top-level domain (TLD). This database
is maintained by a ``registry.'' Top-level domains are sometimes
grouped into ``generic TLDs'' (gTLDs), which are currently three- or
four-letter transnational domains, and ``country code TLDs'' (ccTLDs)
which are currently two-letter TLDs. The ``root'' is the master file
containing the authoritative list of which TLDs exist, and where to
find the authoritative registries that have the data for those TLDs.
Registrants typically register second-level domains (e.g. myname.com),
but sometimes are limited to third-level domains (e.g. myname.
genericword.com).
The Three Relevant Markets
There are at least three markets affected by ICANN's decisions
relating to the creation of new gTLDs: the market for registry
services, the market for registrar services, and the market for domain
names (including the secondary market). This last market has spillover
effects on e-commerce generally. In order to examine the overall
competitive effects of ICANN's recent actions relating to gTLDs, it is
important to understand what those three markets are and how the supply
of new gTLDs affects them.
(1) The market for registry services. For technical reasons, each
gTLD has a single registry. A single registry can serve more than one
gTLD, but under the current architecture having multiple registries
serve a single gTLD creates potential problems that most internet
engineers would prefer to avoid. A registry maintains the authoritative
database containing registration information for a given TLD. This
database includes the name of the second level domain (SLD) [e.g. the
``miami'' in ``miami.edu''], the registrant's contact information, and
the information about which nameservers carry the authoritative data
that allows users to resolve the domain name to an IP number.
Currently, pursuant to an agreement between NSI and the US
Department of Commerce,\2\ NSI (Verisign) is the single monopoly
registry for the lucrative .com, .org, and .net domains. That agreement
also set a fixed $6/year price per registration that the registry may
charge to registrars,\3\ which they then pass on to registrants. There
is currently no competition in this market, although when Verisign's
exclusive rights lapse there may be some sort of bidding process
instituted to decide who will run the registry in the future. Verisign
also runs a registrar, which has competitors. Under Verisign's
agreement with the Department of Commerce, Verisign soon must divest
itself of either its registry or its registrar business in order to
benefit from a contractual opportunity to extend its registry monopoly
by four years.
---------------------------------------------------------------------------
\2\ DoC-NSI Cooperative Agreement, Amendment 19, Sec. I.B.10 (Nov.
4, 1999), http://www.icann.
org/nsi/coopagmt-amend19-04nov99.htm .
\3\ Paragraph 5.2(b) of the Registry-Registrar Agreement, required
by ICANN of every registrar, states that ``Registrar agrees to pay NSI
the non-refundable amounts of $6 United States dollars for each annual
increment of an initial domain name registration and $6 United States
dollars for each annual increment of a domain name re-registration
(collectively, the ``Registration Fees'') registered by Registrar
through the System.'' http://www.icann.org/nsi/nsi-rla-04nov
99.htm .
---------------------------------------------------------------------------
Verisign has just announced a planned divestiture of its registrar.
As a result of this divestiture, competition for registry services in
.com, .org. and .net--and the legal wrangles over intellectual property
rights it will engender--remains far in the future. Meanwhile,
Verisign's monopoly registry will continue to require its $6 per year
payment from every registration in .com, .org, and .net--a number that
is probably well over the market-clearing price, and indeed is greater
than the prices projected by many registry applicants to ICANN.
Since the price charged to registrars by Verisign is fixed for the
time being by an agreement that ICANN lacks the power to vary, ICANN's
ability in the short and medium term to enhance competition in the
market for registry services turns on its willingness to recommend that
the Department of Commerce create attractive competitors to the exiting
gTLDs. If enough gTLDs with attractive names are created, and if the
registries are free to set prices and policies as the market demands,
this should create pressure on the price charged to registrants. Given
that there is already substantial competition among registrars and that
the market price of domains in gTLDs is already as low as $9.99 per
year, the $6 being charged annually by Verisign becomes a very
significant part of the total cost of a registration in the TLDs for
which it is a registry. It is almost certain that having multiple
attractively named gTLDs would promote price and service competition
that would work to the advantage of the end-user.
As new gTLDs are created, each will have its own registry. Indeed,
what ICANN really did at its LA meeting was to select registries from
among the applications, in which the registry's proposed gTLD was only
one of several factors that ICANN considered. ICANN, as the Department
of Commerce's delegate, is currently negotiating contract terms with
these registries. Despite ICANN's obligation under paragraph 4 of its
Articles of Incorporation to use transparent procedures in conducting
its affairs ``to the maximum extent feasible'' those negotiations have
been completely secret, and we know only what was in the proposals
submitted by the would-be registries. The absence of this information
makes a precise discussion of the effect of the new gTLDs difficult.
One can, however, make informed speculation based on the content of the
proposals selected by ICANN.
In order to produce maximum price and service competition in the
registry market, ICANN and the Department of Commerce would have to
approve a large number of attractively named gTLDs. The registries
would have had to have the freedom to adopt pricing and registration
policies of their own, based on market conditions, rather than having
their business plans selected and enforced by ICANN. The proposals that
ICANN has stated it intends to send to the Department of Commerce do
not appear to be likely to create the optimal amount of competition
with Verisign. The creation of the seven new gTLDs proposed by ICANN
will introduce competition to the market for registry services, but
this will be less than the optimal amount, probably substantially less,
for three reasons: (1) the small number of relatively open new gTLDs,
(2) the actual names selected, and (3) the restrictive conditions that
the registries and associated registrars may be contractually obligated
to impose on the public.
Small Number. For technical reasons, each registry will have a
monopoly over the gTLD(s) it controls. The seven gTLDs selected by
ICANN are .aero, .biz, .coop, .info, .museum, .name and .pro. Of these
seven proposed gTLDs, three--. aero, .coop, and .museum--will limit
themselves to a very select group of potential registrants; their
effect on the overall competitive market will therefore be quite
trivial. The other four--.biz, .info, .name, and .pro--will have much
broader charters, and their competitive impact should therefore be
greater also.
Names Selected. In the view of many observers, the gTLDs ICANN
selected are not the ones most calculated to meet registrants' desires.
Ted Byfield's comprehensive article, ``Ushering in Banality'' \4\
quotes BBC Online as saying ``The net's new domain names may do little
to open up the internet and the range of names that people can pick.''
My personal guess, and it is only a guess, is that the pent-up demand
for attractive names is sufficiently strong that there will be
significant take-up in the new open gTLDs. That is not to say, however,
that the take-up would not be greater, and registrant satisfaction
higher, if there were a greater variety of choices available.
---------------------------------------------------------------------------
\4\ Ted Byfield, Ushering In Banality, Telopolis, http://
www.heise.de/tp/english/inhalt/te/4347/1.html .
---------------------------------------------------------------------------
Restrictive Conditions. Of the four relatively open gTLDs ICANN
selected, both .pro and .name will restrict registrants to third-level
domains, potentially lessening their attractiveness. As we do not know
what conditions are currently being negotiated between the registries
and ICANN, we can only speculate as to what conditions ICANN will
impose on them. It seems likely that in general the registries will not
be fully free to compete on terms of service, as they will be required
to adhere to ICANN's controversial dispute resolution policy, by which
ICANN requires every registrant to agree to an adhesive third-party
beneficiary agreement promising to arbitrate disputes initiated by any
trade or service mark owner in the world-before a tribunal chosen and
paid for by the mark holder. It appears that both .biz and .info will
be hampered by restrictive pre-registration policies that will give
substantial preferences to trademark holders over start-ups and other
potential registrants. Why the Australian makers of ``computer'' brand
socks should have priority right to register computer.biz, or how this
enhances competition for computers (or socks) is not evident.
Additional competitive issues raised by ICANN's hostility to
``alternate'' or ``non-legacy'' roots and registries. One other factor
shaping the market for registry services is ICANN's apparently deep-
seated hostility to ``alternate'' or ``non-legacy'' registries. ICANN's
discrimination against these very minor competitors (measured by market
share) appears anti-competitive. It was striking that in the beginning
of the first paragraph of its list of criteria for evaluating
applications for the new gTLDs, ICANN warned applicants that any
application which ICANN found could ``create alternate root systems''
would be rejected.\5\ Note also that in one of a series of agreements
between Verisign (then NSI), the Department of Commerce, and ICANN,
NSI--probably the only company then capable of deploying an alternate
root with instant worldwide acceptance--promised the Department of
Commerce that it would not deploy alternative DNS root server
systems.\6\
---------------------------------------------------------------------------
\5\ ICANN, Criteria for Assessing TLD Proposals para. 1 (Aug. 15,
2000), http://www.icann.org/tlds/tld-criteria-15aug00.htm .
\6\ DoC-NSI Cooperative Agreement, Amendment 19, Sec. I.B.4.E.
(Nov. 4, 1999), http://www.icann.
org/nsi/coopagmt-amend19-04nov99.htm
---------------------------------------------------------------------------
There are technical reasons why it is highly desirable, at least
for most people most of the time, to have a single common root.
``Splitting the root'' is indeed anathema to Internet traditionalists.
On the other hand, the alternate roots currently deployed and in use by
a small fraction of Internet users appear to harm no one. As a
technical coordination body, ICANN's hostility to these small
independent registries may therefore seem surprising. It is the case,
however, that ICANN derives a major part of its current and planned
revenue from registrars or registries that contract with it in order to
be listed in the Department of Commerce's so-called ``legacy'' root,
and that the creation of new ICANN-affiliated gTLD registries could
increase this revenue stream. In the relatively unlikely event that the
alternate registries were to acquire a substantial market share
independent of the legacy root, they would not only compete with the
registries that have contracted with ICANN, but would strike at the
financial and political foundations of ICANN's continued existence.
This financial interest may not be irrelevant to the legal consequences
of ICANN's insistence that registries who deal with it abjure
alternatives and competitors.
(2) The market for registrar services. Where once there was a
monopoly, there is now cut-throat competition in the market for
registrar services. Prices have dropped very substantially as a result.
A recent report stated that NSI's market share for last year had fallen
to less than 60% of the total for the open gTLDs, with its next
competitors, Register.com at 11.5% BulkRegister.com at 6.5%;
Tucows.com, Inc. at 5.9%; and CORE Internet Council of Registrars at
3.5%. More than 50 competitors shared the remaining 14% of the
registrations business last year. (I have not considered whether there
is cross-ownership of registrars by registries or others, and it is
possible that this may cut against what appears on the surface to be
healthy competition.)
The introduction of new gTLDs, several of which will be available
to be marketed by multiple registrars, should increase competition in
this market further, although again competition might be enhanced even
more by a larger supply. Registrars need product to sell, and the
introduction of new gTLDs provides that. Furthermore, NSI's advantages
in both branding and automatic renewal deriving from its former
monopoly position, will be absent in the new TLDs.
(3) The market for domain names (including aftermarket). It is an
article of faith among Internet entrepreneurs that possession of a good
domain name is a necessity for an Internet startup. Many traditional
firms also consider the acquisition of a memorable or short domain name
to be of strategic importance. Recently, for Internet startups,
possession of a ``good'' name was seen as a major asset--reputedly
enough in some cases to secure venture financing.
For some time now, however, it has also been an article of faith in
the Internet community that ``all the good names are taken'' Recently
it has seemed as if simply all the names that were a single word were
taken. This apparent shortage, especially in .com, has driven firms
seeking catchy names into the aftermarket. There does appear to be a
reasonably large stock of names in the existing gTLDs being held by
domain name brokers for resale in the aftermarket. Prices are very
variable. Although few firms paid millions of dollars like the
purchasers of business.com, and loans.com, it appears that at least
until the .com bubble burst, the shortage of attractive names in .com ,
and the resulting need to purchase them at high markups in the
aftermarket created what amounted to a substantial ``startup tax'' on
new businesses.
In this respect, it might seem that the creation of new gTLDs can
only be good for competition as it will increase supply and thus drive
down prices. And indeed, supply will increase. Unfortunately, of the
new gTLDs, only .biz and maybe .info are likely to be of attractive to
the majority of startups and other Internet newcomers. Because there
are only two such domains, and because there is no easily foreseeable
date at which additional gTLDs might become available, there is a
substantial risk of a speculative frenzy in which domain name brokers,
cybersquatters, and amateur arbitragers all seek to register the catchy
names that have not already been snapped up by trademark holders who
took advantage of their pre-registration period.
The surest way to drive down and keep down the price of domain
names, thus eliminating the ``startup tax'' and enhancing the ability
of new firms to enter new markets and incidentally greatly reducing,
perhaps even almost eliminating, cybersquatting, is to create healthy
expectations. As soon as participants in the market understand that a
steady supply of new domain names in attractive gTLDs will continue to
become available on a predictable schedule, the bottom will fall out of
the after-market, and the incentive (albeit not the opportunities) for
cybersquatting will be greatly reduced, thus helping e-commerce by
making attractive names available on reasonable terms to a much greater
number, and wider variety, of persons and firms.
ii. the shortage of gtlds today is entirely artificial, and easily
curable.
I am not an expert on Internet engineering. However, my
understanding is that although experts do not agree on precisely how
many gTLDs could be created without adverse consequences to DNS
response time, there appears to be a technical consensus that we are
nowhere near even the lowest possible limit. ICANN At-Large Director
Karl Auerbach, himself a technical expert, has suggested that the
smallest technically-mandated upper level for the number of gTLDs might
be as high as a million.\7\ Persons with long experience in DNS
matters, including BIND author Paul Vixie, apparently agree.\8\ Others
have performed tests loading the entire .com file as if it were a root
file, and found that it works. In principle, this is not surprising, as
there is no technical difference between the root file containing the
information about TLDs and a second-level domain file. Given that there
are currently about sixteen million registrations in .com, if this
argument is right, then the maximum number of TLDs may be very high.\9\
Some experts worry, however, that a very large number of new TLDs, such
as a million, might affect DNS response time.\10\ If so, that still
means that with fewer than 300 TLDs in operation today (gTLDs +
ccTLDs), we can afford to create tens of thousands, and probably
hundreds of thousands, more.
---------------------------------------------------------------------------
\7\ Posting of Karl Auerbach, karl71484CaveBear.com, http://
www.dnso.org/wgroups/wg-c/Arc01/msg00195.html .
\8\ E-mail from Paul Vixie, BIND 8 Primary Author, to Eric Brunner
(Dec. 15, 1999) (``A million names under `.' isn't fundamentally harder
to write code or operate computers for than are a million names under
`COM.' ''), http://www.dnso.org/wgroups/wg-c/Arc01/msg00203.html .
\9\ See Quickstats, at http://www.dotcom.com/facts/quickstats.html
(reporting twenty million registrations, of which 80% are in .com).
\10\ See, e.g., E-mail from Paul V. Mockapetris, BIND Author, to
Paul Vixie, BIND 8 Primary Author, & Eric Brunner (Dec. 15, 1999)
(querying whether one million new TLDs would impose performance costs
on DNS), http://www.dnso.org/wgroups/wg-c/Arc01/msg00202.html .
---------------------------------------------------------------------------
Thus, the pre-ICANN moratorium on the creation of new gTLDs had no
technical basis, and neither does the current go-very-slow policy
adopted by ICANN. It is a purely political choice, a product of an
internal deliberative process devised by ICANN that under-weighs the
interests of the public at large and in so doing tends towards anti-
competitive, or competitively weak, outcomes skewed by special
interests.
The source of this tendency is the distribution of decision-making
authority on the ICANN Board, and in ICANN's subsidiary institutions.
In July, 1999, ICANN Chair Esther Dyson told this Committee's
Subcommittee on Oversight and Investigation that ICANN's ``highest
priority'' was to elect nine at-large Board members,\11\ exactly as
ICANN had committed to do as an original condition of being approved by
the Department of Commerce. Instead, ICANN reneged on its commitment to
the United States government, and to the public, that half its Board
would be elected by an at-large membership. Indeed, the Board amended
its bylaws and rushed its timetable so that its selection of the new
gTLDs would be complete before even the five elected at-large directors
could participate. Similarly, the institutions that ICANN created to
take the lead in domain name policy--the seven constituencies in the
``Domain Name Supporting Organization''--were designed from the start
to exclude individuals from membership.
---------------------------------------------------------------------------
\11\ Testimony of Esther Dyson, Chair, ICANN, before the House
Commerce Committee, Subcommittee on Oversight and Investigations, July
22, 1999, http://www.icann.org/dyson-testimony-22july99.htm .
---------------------------------------------------------------------------
The interest groups that acquired a voting majority in those
institutions have shown relatively little interest in the rights and
needs of small businesses, non-commercial entities, or individuals.
They have shown considerably more interest in securing special
protections for trademarks, above and beyond what is provided by
statute, than they have in maximizing the competitive potential of the
Internet.
ICANN justifies its very tentative initial foray into gTLD creation
as a ``proof of concept'' but it has not disclosed the concept that is
believes it is trying to prove, nor described how one tells if the test
is successful, nor even when one might expect ICANN to do the
evaluation. The ``concept'' cannot be gTLD creation itself: There is no
rocket science to the mechanics of creating a new gTLD. From a
technical perspective, creating a new gTLD is exactly like creating a
new ccTLD, and creating new ccTLDs is quite routine. Indeed, .ps, a TLD
for Palestine, was created less than a year ago with no noticeable
effect on the Internet at all.\12\
---------------------------------------------------------------------------
\12\ See IANA Report on Request for Delegation of the .ps Top-Level
Domain, at http://www.icann.org/general/ps-report-22mar00.htm (Mar. 22,
2000).
---------------------------------------------------------------------------
iii. icann purports to be a technical standards or technical
coordination body, but it did not act like one in this process, as it
made arbitrary allocation decisions.
ICANN usually justifies its processes by claiming to be either a
technical standards body or a technical coordination body. In the case
of the recent gTLD process, however, ICANN acted not as a standards or
coordination body, but as if it were allocating scarce broadcast
spectrum is some kind of comparative hearing process. ICANN created no
standard. It `coordinated' no projects with running code being deployed
by outside parties. Rather, ICANN acted like a foundation grant
committee, trying to pick `winners.' In practice, ICANN's exercise of
its gatekeeper committee role contributes to the artificial shortage of
gTLDs. Worse, the selection processes ICANN employed were amateurish
and arbitrary.
In fairness, ICANN is not originally responsible for the gridlock
in gTLD creation policy, which in fact long predates it. Indeed the
Department of Commerce called ICANN into being because it wanted to
find a politically feasible way to create new TLDs in the face of
difficult political obstacles, not least a belief in the intellectual
property rights holders community that new TLDs might add to the risk
of customer confusion and trademark dilution.
This fear, more than any technical consideration, explains why
ICANN imposed a needlessly low limit on the number of new gTLDs it
would recommend the Department of Commerce create in this first round,
and why ICANN has as yet not been able to consider when if ever it will
contemplate future rounds of gTLD recommendations. It does not explain,
however, why ICANN went about selecting its seven finalists in the
manner it did. Indeed, ICANN's gTLD selection procedures were
characterized by substantial failures.
First, although all applicants were charged the same non-refundable
$50,000 fee, it appears not all received equal treatment. During the
Los Angeles ICANN Board Meeting, it transpired that the staff had not
subjected all the proposals to the same level of analysis. Thus, when
Board members sought more detailed information about proposals that
interested them, but which the staff had relegated to the second tier,
that information sometimes did not exist, although it existed for the
staff's preferred picks.
Second, both the staff and the Board seemed excessively concerned
with avoiding risk. Although true competition in a fully competitive
market requires that participants be allowed to fail if they deserve to
do so, there are reasonable arguments why it makes sense to have a body
like ICANN require potential registry operators to meet some minimum
standard of technical competence. One can even make a case for
requiring a showing of some financial resources, and for requiring the
advance preparation of basic registry policy documents spelling out who
will be allowed to register names and under what terms. Perhaps there
are other neutral criteria that should also be required and assessed.
This is a far cry from ICANN's apparent tendency to tend to prefer
established institutions and big corporations, and to downplay the
value of experience in running code. If in 1985 the Internet itself had
been a proposal placed before a committee that behaved as ICANN did in
2000, the Internet would have been rejected as too risky. Risk aversion
of this type is antithetical to entrepreneurship and competition.
Worst of all, ICANN applied its criteria arbitrarily, even making
them up as it went along. The striking arbitrariness of the ICANN
decision-making process is illustrated by the rejection of the
``.union'' proposal based on unfounded last-minute speculation by an
ICANN board member that the international labor organizations proposing
the gTLD were somehow undemocratic. (That this same Board member was at
the time recused from the process only adds to the strangeness.) The
procedures ICANN designed gave the applicants no opportunity to reply
to unfounded accusations. ICANN then rejected ``.iii'' because someone
on the Board was concerned that the name was difficult to pronounce,
even though the ability to pronounce a proposed gTLD had never before
been mentioned as a decision criterion. I am not in a position to vouch
for the accuracy of each of the claims of error made by the firms that
filed reconsideration requests after the Los Angeles meeting (available
at http://www.icann.org/committees/reconsideration/index.html) but as a
group these make for very sobering reading.
iv. the correct strategy would have been to accept all applicants who
met a pre-announced, open, neutral, and objective standard of
competence, rather than to pick and choose among the applicants on the
basis of the icann board's vague and inconsistent ideas of aesthetic
merit, market appeal, capitalization, or experience.
The procedural mess described above makes it impossible for me, at
least, to form an opinion as to which were the ``best'' applicants.
That sort of decision is in any case one more properly made by markets
rather than by ICANN or by academics. I have no reason to believe that
any of the seven TLDs selected are bad choices; but given ICANN's
arbitrary procedures I also have no real doubt that many other
applicants would have been at least as good. But in any case these are
really the wrong questions. Other than rejecting technically
incompetent or otherwise abusive applications, e.g. a single registry
improperly claiming a large number of gTLDs, ICANN should not be acting
as a barrier to entry. The right questions, which ICANN apparently
never asked, are
What is the minimum standard of competence (technical,
financial, whatever) to be found qualified to run a registry
for a given type of TLD?
What open, neutral, and objective means should be used to
decide among competing applicants when two or more would-be
registries seek the same TLD string?
What are the technical limits on the number of new TLDs that
can reasonably be created in an orderly fashion per year?
What open, neutral, and objective means should be used to
decide among competing applicants, or to sequence applicants,
if the number of applicants meeting the qualification threshold
exceeds the number of gTLDs being created in a given year?
Today, reasonable people could no doubt disagree on the fine
details of some of these questions, and perhaps on almost every aspect
of others. Resolving these issues in the abstract would not necessarily
be easy. It would, however, be valuable and appropriate work for an
Internet standards body, and would greatly enhance competition in all
the affected markets. A thoughtful answer would inevitably resolve a
number of difficult questions, not least the terms on which a marriage
might be made between the Department of Commerce's ``legacy'' root and
the so-called ``alternate'' roots.
Using a standards-based approach, rather than an ad-hoc comparative
hearing or committee allocation approach, could only enhance
competition in each of the affected markets.
Once ICANN makes its formal recommendations, the Department of
Commerce will have to decide how to proceed. As I have argued
elsewhere, as a result of its relationship with the Department of
Commerce, ICANN is a state actor. Accordingly, its arbitrary and
capricious decisions violate both the APA and the Due Process Clause of
the Constitution. Rubber-stamping of its decisions by the Department of
Commerce will only make these violations explicit, since the U.S.
government would essentially endorse both ICANN's practices and its
conclusions. If, on the other hand, ICANN is private, then rubber-
stamping ICANN's decisions will amount to endorsing a deeply flawed
procedure.
The Department of Commerce has maintained that its relations with
ICANN are not subject to the APA, or indeed to any legal constraint
other than those relating to relations with a government contractor
and/or a participant in a cooperative research agreement. This
characterization twists forms to obliterate substance. But whatever the
legal arguments, when contemplating decisions which will shape the very
nature of the Internet naming system, Commerce should proceed with
deliberation, and act only on the basis of reliable information. The
need for reliable information, proper public participation, and
transparent and accountable decision-making is even stronger when
Commerce contemplates making the sort of social policy choices--as
opposed to mere technical standard-setting--embodied in creating new
gTLDs and imposing conditions on their use. Basic requirements of
fairness, due process, and the need to make reasonable decisions
counsel in favor of notice, public access, the making of an official
record, and deliberation.
There is no question but that if a federal agency had acted as the
ICANN Board did, its decisions would not satisfy even cursory judicial
review. In the circumstances, therefore, it would be unreasonable and a
denial of due process for Commerce to rely on the outcome of such a
flawed process without conducting its own review.
An Alternate Approach
An alternate approach to gTLD creation, one that would most
certainly enhance competition, would take its inspiration from the
fundamental design of the Internet itself--and from major league
sports. The Internet was designed to continue to function even if large
parts of the network sustained damage. Internet network design avoids,
whenever possible, the creation of single points of failure. When it
comes to policy, however, ICANN is currently a single point of failure
for the network. A solution to this problem would be to share out part
of ICANN's current functions to a variety of institutions.
In this scenario, ICANN would become a true technical coordination
body, coordinating the activities of a large number of gTLD policy
partners. ICANN's functions would be: (1) to keep a master list of
TLDs, (2) to ensure that there were no `name collisions'--two
registries attempting to mange the same TLD string; (3) to fix an
annual quota of new gTLDs; (4) to run an annual gTLD draft; (5) to
coordinate the gTLD creation process so that new gTLDs came on stream
in an orderly fashion instead of all at once.
Each of ICANN's policy partners would be assigned one or more draft
choices, and then ICANN would randomly (or, perhaps, otherwise) assign
each one their draft picks. As each policy partner's turn came up, it
would be entitled to select a registry--imposing whatever conditions it
wished--to manage any gTLD that had not yet been claimed on ICANN's
master list. In keeping with the transnational and public/private
nature of the Internet, ICANN's policy partners could be a highly
diverse mix of international, national, and private ``civil society''
bodies.
While I think this alternate solution would best achieve the ends
of internationalization, competition, and diversity, it might well
require legislation since it is unclear if the Department of Commerce
has the will (or the authority) to implement such a plan, and it is
quite clear that ICANN is not about to divest itself of any policy
authority unless forced to do so.
Mr. Upton. Very good.
Mr. Davidson.
STATEMENT OF ALAN B. DAVIDSON
Mr. Davidson. Good morning, Mr. Chairman, members of the
subcommittee. I am Alan Davidson, Associate Director of the
Center for Democracy and Technology, CDT. I want to thank you
for the opportunity to testify today.
CDT is a nonprofit, public interest organization dedicated
to promoting civil liberties and democratic values on the
Internet. We have been active in the domain name issues as
advocates for open and representative governance mechanisms
that protect basic human rights, the interests of Internet
users, and the public voice, the appropriate public voice in
these kinds of decisions.
I have entered a statement for the record, but I would like
to try to emphasize a few elements of it.
We believe in the promise of ICANN, the possibility laid
out in the white paper of a nongovernmental, bottom-up, self-
governance organization in the best traditions of the Internet.
And, you know, we believe that that kind of mechanism is what
is most appropriate for a global network that needs flexibility
and rapid change in its organizational institutions and that
the possibility of ICANN as the nongovernmental flexible
organization is one that would maximize openness and
competition and individual liberty online. So our comments are
offered as a critique of the gTLD process and of ICANN and as a
road map for fixing what we view as in many ways a flawed
process, as you have heard today.
Our bottom line, however, is that the Commerce Department
and this Congress should not undo this decision that ICANN has
made because, on balance, our belief is that the interests of
consumers in the expansion of the gTLD space and the danger of
the U.S. Government intervening in a heavy-handed way outweigh
the benefits of redoing what is admittedly a flawed process.
I would like to quickly make four points. The first is that
ICANN's decisions and particularly its collection of new gTLDs
do raise issues of public concern. In an ideal world, this
would be a boring hearing, and this would be a boring issue. I
guess some people in the audience might say we have succeeded
in part of that. But I think there are many reasons to believe
that ICANN is, in fact, an important institution that we should
be paying attention to.
There are at least two reasons. One is that there is a
potential for ICANN to be much more of a central authority and
a policymaking body for the Internet. In an otherwise
decentralized world, ICANN sits on centralized functions of
coordination for the Internet from which it can exert a much
broader set of authorities. It has, to its credit, not done so
to date, but a future more powerful ICANN might choose to do
something differently.
Even the technical decisions that ICANN makes can--quote,
unquote, technical decisions--can have broader policy impact.
The gTLD example is a very good one. There is a free clear
speech interest in the creation of new name spaces. It affects
the way that people navigate and find information on the
Internet. And ICANN's decision, albeit, a good one based on the
needs for stability and the interests of trademark owners and
others to create a narrow test bed when in fact there are
probably technical reasons to think that ICANN could have
created many more TLDs, led it down a road of having to make
what many believe were arbitrary decisions or at least policy-
based decisions to go from this objective set of people who
could have created TLDs to the seven that ultimately ICANN
chose.
Second, the ICANN board, as you know--as a threshold matter
we might ask, is this structure that made this decision
appropriately representative? And I think there are many
reasons to believe that the current ICANN structure is not
broadly representative of the Internet community.
I will just speak quickly from the experience of a
nonprofit group who has tried to participate in ICANN. It is a
community that is receptive to input but at the same time is
very difficult to participate in with meetings all over the
world. It is difficult for many organizations that are not
represented there, and we have had a difficulty in creating a
civil society, a meaningful active civil society community at
ICANN to represent the public interest.
Third, ICANN's process for selecting the gTLD's in fact was
flawed. As we have heard today and is spelled out in our
testimony, there are many reasons to believe the process could
have done better. I think the $50,000 barrier to entry
especially had a big impact on noncommercial players. That is
not to say that no entry fee should have been required, but
there could have a been a way to waive it, especially for
nonprofit groups.
Finally, as I have said, I think, on balance, our belief is
that a rollback is not what is required here but that, moving
forward, ICANN needs to reform its process to stay out of the
policymaking game to create a prime directive of sorts that
keeps it out of the policymaking business and that restores
ICANN to its promise of being a bottom-up, technical, objective
policymaking--nonpolicymaking body that is representative of
the public interest and the domain name space.
Thank you very much.
[The prepared statement of Alan B. Davidson and Jerry
Berman follows:]
Prepared Statement of Jerry Berman, Executive Director, and Alan B.
Davidson, Associate Director, Center for Democracy and Technology
1. icann's decisions, and particularly its selection of new gtlds,
raise issues of broad public concern.
Should the public and policymakers care about ICANN and its new
gTLD decisions? The answer today is yes.
There are two competing visions of ICANN. In one, ICANN is a new
world government for the Net--using its control over central domain
name and IP address functions as a way to make policy for the Internet
globally. In the second, ICANN is a purely technical body, making
boring decisions on straightforward technical issues of minimal day-to-
day interest to the public--like a corporate board or a technical
standards group.
In reality, ICANN is somewhere in between and is likely to require
public attention for at least some time to come. There are at least two
important reasons why ICANN is of public concern:
ICANN's has the potential for broad policy-making--On the
decentralized global Internet there are few gatekeepers and a
great deal of openness--features that have contributed to
expression, competition, and innovation online. In this
decentralized world ICANN oversees a crucial centralized
function--the coordination of unique names and addresses. In
this role, ICANN has the potential to exercise a great deal of
control over Internet activities. For example, ICANN has
already required that all domain registrars impose a uniform
policy for resolving trademark disputes. Without a check on its
authority, ICANN could seek to impose other requirements or
even content regulations. While the current ICANN Board has
shown an admirable lack of interest in such policy-making, a
more powerful future ICANN might not be so restrained,
particularly without any checks on its authority.
Even ICANN's narrow technical decisions have broader policy
impacts--``Technical'' decisions often have broader impact.
Expanding the gTLD space, choosing which registry is recognized
for a country code, or even selecting a method for recognizing
when new country-code domains get assigned (as .ps was recently
assigned to Palestine), for example, all have broader political
and social implications.
The Consumer and Free Expression Interest in New gTLDs
Today, access to the domain name system is access to the Internet.
Domain names are the signposts in cyberspace that help make content
available and visible on the Internet. (For further explanation, see
CDT's overview Your Place in Cyberspace: A Guide to the Domain Name
System.) The domain name system may ultimately be replaced by other
methods of locating content online. But for the time being, a useful
and compelling domain name is seen by many as an essential prerequisite
to having content widely published and viewed online.
There is an increasing consumer interest in creating new gTLDs. The
current gTLD name spaces, and the .com space in particular, are highly
congested. The most desirable names are auctioned off in secondary
markets for large sums of money. It is increasingly difficult to find
descriptive and meaningful new names. Moreover, the lack of
differentiation in gTLDs creates trademark and intellectual property
problems: there is no easy way for United AirLines and United Van Lines
to both own united.com.
ICANN's decisions about new gTLDs can have other implications for
free expression. If, in choosing among otherwise equal proposals, ICANN
were to create a new gTLD .democrats but refuse to create .gop, or
added .catholic but refused to add .islam, it would be making content-
based choices that could have a broad impact on what speech is favored
online.
In addition, CDT has some concern that the creation of
``restricted'' domains that require registrants to meet certain
criteria--such as .edu or the new .museum--risks creating a class of
gatekeepers who control access to the name space. Today, access to open
gTLDs like .com and .org does not require any proof of a business model
or professional license. This easy access to the Internet supports
innovation and expression. Who should decide who is a legitimate
business, union, or human rights group? CDT has called for a diversity
of both open and restricted gTLDs, and will monitor the impact of
restricted domains on speech.
There is increasing evidence of an artificial scarcity in gTLDs. It
is now widely acknowledged that it is technically feasible to add many
new gTLDs to the root--perhaps thousands or even hundred of thousands.
Limiting the number of gTLDs without objective technical criteria
creates unnecessary congestion; potentially discriminates against the
speech of non-commercial publishers or small businesses who cannot
compete for the most desirable spaces; and places ICANN in the role of
gatekeeper over speech online by deciding which gTLDs to create and
under what circumstances.
There are many legitimate concerns that call for a slower
deployment of new gTLDs. Some have expressed concern about stability of
the Internet given a lack of experience in adding many new gTLDs.
Trademark holders have also raised concerns about their ability to
police their marks in a multitude of new spaces.
CDT believes that these concerns support the notion of a phased
``proof of concept'' rollout of new gTLDs. However, we believe that the
consumer interest will be best served by a rapid introduction of the
first set of new TLDs--followed quickly by a larger number of domains.
The phased ``proof of concept'' adopted by ICANN, however, creates
a major problem: Because ICANN could add many new gTLDs, but has chosen
to add just a few, it has forced itself to make policy-based and
possibly arbitrary decisions among legitimate candidates.
In this environment, it is most important that gTLDs be allocated
through a process that is widely perceived as fair, that is based on
objective criteria, fair application of those criteria, and open and
transparent decision-making. There are many reasons to believe ICANN's
first selection process for new gTLDs has been highly flawed.
2. the icann board and governance structure that made the gtld
selection is not appropriately representative of the public interest.
A starting point for evaluating the gTLD decision is asking: Is the
group that made this decision appropriately structured and
representative? The governance of ICANN itself is an issue of ongoing
debate. Despite efforts to make ICANN inclusive, there are many
indications that ICANN has failed to be appropriately representative of
all the interests affected by its decisions--casting doubt on the
legitimacy of the gTLD decision.
ICANN organization underrepresents many interests.
Members of the Internet user community and advocates for user
interests have often been under-represented in ICANN. ICANN's physical
meetings, where many major decisions are made, occur all over the
world, pursuing an admirable goal of global inclusiveness. However, the
expenses associated with physical attendance at such meetings place it
out of reach for many NGOs and public interest advocates.
CDT's own experience has been that the ICANN community is receptive
to thoughtful input and advocacy, but that it requires a concerted and
ongoing effort to be effective. In our case, that effort has only been
possible through the support of the Markle Foundation, which early on
committed to support efforts to improve the public voice in ICANN. We
have received further support from the Ford Foundation as well. These
grants provided CDT with the ability to attend and follow ICANN
activities, which many other potentially interested organizations in
the educational, civil liberties, or library communities cannot do.
ICANN's bottom-up structures offer imperfect avenues for public
participation. While ICANN explicitly provides representation to a
number of commercial interests, it fails to properly represent the
millions of individuals that own Internet domain names or have an
interest in ICANN's decisions. The main outlet for individual
participation-the General Assembly of the Domain Names Supporting
Organization-appears increasingly ineffective. Non-commercial
organizations have a constituency, the Non-Commercial Constituency, but
it is only one of seven groups making up one of the three supporting
organizations.
ICANN's Board of Directors fails to adequately represent the public
voice.
In the absence of other structures for representation, the main
outlet for public input is the nine At-Large Directors of the Board.
These nine directors are to be elected from within a broad At-Large
membership, but there has been a great deal of debate about the
election mechanism and even the existence of the At-Large Directors. To
date only five of the nine At-Large directors have been elected (the
seats were otherwise filled with appointed directors), and even those
five were not seated in time for the gTLD decision in November.
CDT, along with Common Cause and the Carter Center, has strongly
advocated for broadly representative and fair mechanisms to fill all
nine At-Large seats as quickly as possible. Last March CDT and Common
Cause prepared a study of ICANN's election system, concluding that the
proposed ``indirect election'' would not adequately represent the
public's voice. ICANN agreed to hold more democratic direct elections
(held last October), but only for five of the nine At-Large Directors,
to be followed by a study of the election process. CDT is currently
engaged in an international research effort, the NGO and Academic ICANN
Study (NAIS), examining last year's election, and in June will offer
its suggestions to ICANN regarding future selection of Directors.
In the meantime, serious questions remain about adequate public
representation on the current board, and the future of the public voice
in selecting the Directors who will make decisions about additional
gTLDs.
ICANN has shifted away from bottom-up coordination.
ICANN's founding conceptual documents, the Green and White Papers,
called for ``private bottom-up coordination'' as the governance model
for ICANN. Despite early attempts at consensus-based decision-making,
authority in ICANN increasingly rests at the top, with the
Corporation's nineteen-member Board of Directors. The Supporting
Organizations have proven to have limited roles in policy generation
and consensus-building. Increasingly, final ICANN policies are
generated by ICANN staff and Board members. As a result the Board has
moved away from the consensus-based, bottom-up practices which were
originally a critical element of its conception.
3. icann's process for selecting new gtlds was flawed.
CDT has not taken a position on the merits of any particular gTLD
or registry operator chosen by ICANN. Our focus has been on the process
ICANN has used to select these domains and the potential rules it may
impose on the use of domains. A different, better process might have
yielded very similar results.
We note also that ICANN and its staff undertook this final
selection in a very compressed period at the end of a years-long debate
about the addition of new gTLDs. They did so in the face of tensions
between at least three competing goals: an open, inclusive, and fair
process; rapid completion of that process, with less than two months
between the submission of proposals and the selection by the Board; and
a ``proof of concept'' goal of a small number of finalists. These often
irreconcilable goals led to many of the problems with the process.
ICANN staff made substantial efforts to conduct an open and
accountable process in the face of these constraints, including the
publication of hundreds of pages of applications and the creation of
forums to discuss the proposals. Still, it is important to recognize
features of the selection process that were flawed, that had anti-
consumer and anti-competitive impacts, and that should not be repeated.
Initial Criteria--ICANN took the helpful step of publishing a set
of criteria it would use in judging applications. In general, the
substantive areas of the criteria reflected objective goals that had
support within much of the ICANN user community. However, the criteria
themselves were vaguely worded and their ultimate application was
poorly understood. Most importantly, they were not purely technical in
nature--reflecting policy goals as much as technical needs--and were
not precise enough to be purely objective in their application.
High Application Fee--ICANN required a $50,000 non-refundable
application fee for all gTLD applicants. This high fee was a clear
barrier to entry for many potential non-commercial applicants and
biased the applicant pool in favor of large organizations that could
risk the fee. This issue was raised by CDT at the Yokohama ICANN Board
meeting, and the Board specifically refused to offer any form of lower
application fees for non-profit or non-commercial proposals.
Additionally, it appeared that the selection process would weed out
applications without sophisticated business plans, legal counsel and
technical expertise. These important qualifications for a strong
application required access to large resources. Given the very short
timeframe of the application period, non-commercial applicants were
therefore put at an even greater disadvantage.
Legitimacy of the Board--As noted above, policy-making at ICANN is
still hampered by institutional challenges regarding its legitimacy and
decision-making mechanisms. ICANN took the unorthodox step of seating
newly elected At-Large Directors after the gTLD decision was made (even
though in previous years new Board members had been seated at the
beginning of meetings.) The argument that new Directors would not be
sufficiently up to speed on the new gTLD decision is specious. The
entire ICANN community was highly focused on the gTLD debate, the new
Board members showed in public appearances that they were highly versed
in the issue, and each of them had gone through an intense campaign in
the Fall answering numerous questions that likely made them more expert
on the nuances of the gTLD issue than many sitting Board members.
Evaluation of Applicants--The ICANN staff attempted, with the help
of outside consultants, to apply its criteria to the 47 applications
received. The published Staff Report provided a useful guide to this
evaluation, but was published just days before the Marina Del Rey
meeting with little opportunity for public comment or debate. There was
little time for public presentation by each of the applicants, or for
each applicant to answer questions or misconceptions about their
submissions. But beyond that, the staff report indicated that about
half (23) of the applicants had met their objective criteria for
technical competence and economic viability. Having met the objective
threshold, the Board was left with only the somewhat arbitrary
application of other criteria to narrow the number of applications to
the desired low number.
Final Selection Arbitrary--With a high number of objectively
qualified applicants, and a commitment to a low number of final gTLDs,
the final decision by the Board at Marina Del Rey was dominated by the
arbitrary application of its remaining criteria as well as other new
criteria--many of which had little to do with technical standards.
Instead, Directors referenced conceptions about the ``sound'' of names,
the democratic nature of the applicants, or the promotion of free
expression--criteria to which CDT is sympathetic, but some of which
were highly subjective and unforeseen review criteria.
Reporting and Post-selection Accountability--There is currently a
lack of any serious objective mechanism for evaluating or appealing the
Board's decision. While CDT is not in a position to judge the merits of
their arguments, the eight petitions for reconsideration filed by
applicants after the Board meeting (see http://www.icann.org/
reconsideration ) raise concerns. Moreover, the final contractual
negotiations between ICANN and the selected applicants are likely to
include rules of great interest to the user community--yet are
occurring with little transparency.
Taken as a whole, the process for selecting new gTLDs contained
serious flaws that at the very least need to be corrected before
another round of selections. Importantly, the process shows how the
line between a ``purely technical coordination body'' and a ``policy-
making body'' is easily crossed by ICANN. The selection made by ICANN
was not a standards-making process or a technical decision. Even
ICANN's ``objective'' criteria were based on social values like
economic viability and diversity (values which CDT supports, but which
represent policy choices nonetheless.) Once it applied these
``objective'' criteria, the ICANN Board did not hesitate to engage in
other policy-making approaches as well.
4. moving forward: suggestions for reforming icann and the gtld process
The flaws in ICANN's process for allocating new gTLDs, as outlined
above, are highly troubling. They point to a need for reform in both
the ways the ICANN makes decisions about gTLDs, and ICANN's entire
structure.
CDT still believes that Internet users have an interest in the
vision spelled out in the White Paper--in the creation of a non-
governmental, international coordination body, based on bottom-up self-
governance, to administer central naming and numbering functions
online. Were the Commerce Department to substantially revisit and
change ICANN's decisions on the new gTLDs, the global community would
likely question the existence and utility of ICANN. We also believe
that there is a dominant consumer interest in rapid rollout of new
domains, which would be dramatically slowed by an APA-based rule-making
on gTLDs by Commerce. Therefore, on balance, we do not support a major
effort to roll back ICANN's decision on the initial domains, but rather
would favor rapid creation of the new domains followed coupled with an
investigation into the processes ICANN used to create gTLDs.
Among our specific suggestions:
ICANN must reform the method and process it uses for selecting
the next round of new gTLDs. A logical step would be to publish
an objective and specific set of criteria, and apply it in a
more open and transparent way with greater opportunities for
public comment. ICANN should stay away from policy-oriented
criteria, and attempt to promote criteria based on technical
merit and stability. Applicants that meet the criteria should
be given the opportunity to participate in new gTLDs.
Barriers to diversity should be mitigated. In particular, the
$50,000 fee should be reduced or waived for non-commercial or
non-profit entrants.
A study of the method of selecting domains should be set in
motion. In addition, careful consideration should be given to
the potential openness, competitiveness, and free speech
implications of creating a large number of ``chartered'' or
restricted domains that establish gatekeepers on access to
domain names.
ICANN's governance itself is implicated in the gTLD process. Among
the major structural reforms ICANN should pursue include:
Limited mission--Steps must be taken to structurally limit the
mission of ICANN to technical management and coordination.
Clear by-laws and charter limitations should be created to
delineate ``powers reserved to the users''--much as the Bill of
Rights and other constitutional limitations limit the power of
the government under the U.S. system.
Empower the public voice in ICANN--The internal study underway
of ICANN's At-Large membership and elections should be a
vehicle for ensuring that the public voice finds appropriate
ways to be heard in ICANN's decision-making processes.
Expanded review process and bottom-up governance--ICANN should
build internal review processes that produce faith in the
ability to appeal decisions of the Board, and continue to
pursue the consensus-based governance model.
While we do not believe the Commerce Department and Congress should
intervene in the initial selection decision, they have a role in this
reform. Just like any national government, the U.S. has an interest in
making sure that the needs of its Internet users and businesses are
protected in ICANN. While the U.S. must be sensitive to the global
character of ICANN, it cannot ignore that at least for the time being
it retains a backstop role of final oversight over the current root
system. It should exercise that oversight judiciously, but to the end
of improving ICANN for all Internet users. It is only by restoring the
public voice in ICANN, limiting its mission, and returning to first
principles of bottom-up governance that ICANN will be able fulfill its
vision of a new international self-regulatory body that promotes
openness and expression online.
Mr. Upton. Thank you.
Thank you all.
I am going to be just as quick on the gavel on the members
up here, I want you to know. So we will try to speak fast as
well.
Mr. Davidson, I appreciated your comments at the end of the
panel here as well. I know I viewed this hearing as a
constructive one from the get-go and tried to make things
better, particularly when we hear a number of complaints not
only from you all but others across the country and even the
world.
And I know, Mr. Cerf, as you embarked on this adventure you
had to have known that you were going to be subject to
criticism at the end. In fact, that was buried in your remarks
as well in terms of the fee and what may come out in terms of
the legal challenges later on.
As I understand it, you have always reported that--at least
ICANN has always reported that it has, in fact, a purely
technical coordination policy. Maybe, to use Mr. Davidson's
words, pretty boring, if it is just that. But it is not. We
know that it is not. In fact, you play a very significant role
in the policy side of things in the implications for the
Internet as well.
As you look back, I know you were aware of some of these
criticisms before this hearing, how was it that you only chose
seven? You indicated you felt that the process was overwhelming
in terms of the comments and the numbers, the names that came
in. But why was it that you only chose seven instead of 10, 12,
15, 20?
The complaint, of course, is on 3 minutes at the end, a lot
of decisions were made before that. Even in this hearing
process, with a full house, you get 5 minutes, not 3. Why is it
that you took--in essence, I think it has been about 8 to 10
years since we came up with our first domain names. Why
couldn't it have lasted a couple more weeks so that in fact a
variety of different players would be able to find out exactly
what the criticisms were and you be able to respond to them and
perhaps make some adjustments so that you weren't locked at
seven?
You know, as I began my preparation for the hearing--I
helped chair the hearing back in 1999 as well. Personally, I
think .travel would have made a lot of sense. I travel, too.
Whether it is a rental car or place to stay, .travel makes more
personal sense than maybe just .aero in terms of the entire
need of the traveling public, whether they be on business
travel or individual.
So there are a lot of questions out there. And I guess if
you had the chance 2 years ago to have heard a number of the
complaints here, criticisms, some positive, some negative,
where would you have changed things, particularly as you have
looked to the future in terms of opening up that door again?
Mr. Cerf. Mr. Chairman, I really like the boring idea a
lot. If we could get to that state----
Mr. Upton. The line outside the door still goes around.
Mr. Cerf. First of all, I think it would be helpful to keep
in mind what our objective was in this first go around. We have
had, as you know, a great deal of discussion over a period of
years about how many top-level domains should be increased, how
many should be added to the system. We didn't come to any
consensus. All the advice that we got was to start slow and
start carefully. But there was no absolute numbers. So we
weren't fixed at seven, particularly. That is where we ended
up.
Our objective, though, was to get a test case with a fairly
broad range of different kinds of TLDs into operation and see
what would happen. The current circumstances of the Internet,
as you know, are heavily commercially oriented now, whereas 10
years ago they weren't. So the conditions under which the first
gTLDs were created was very different than 2001.
So our objective was to simply start with a small number,
selected from a set that were offered to us by the applicants.
We never expected as a board to approve every single
application which might be qualified to operate as a TLD. We
anticipated, however, once we got the results of the first new
TLDs in operation that we would use that to guide our next
selections.
Indeed, I think and hope that once we do get results from
this first set we will be able to simplify the process and I
hope make it a lot easier for the applicants.
I might also mention that, about the $50,000 fee, we made
estimates about how much time and energy would be required to
evaluate the proposals, bearing in mind that we would
scrutinize these pretty carefully given this is the first time
we have done anything of this type. It turns out that in the
long run one hopes that one could reduce that cost, assuming
the process becomes very boring.
The one thing I would point out is that had the fee been
significantly lower, we might have gotten more than 47
proposals in which case we would have had even more difficulty
processing them. So in a funny sense there is a balance that
was fortunately met. We have consumed about half of the funds
that were made available, and we are not done with all the
negotiations with the new applicants.
Mr. Upton. So much for my 2 minutes. I think we will have a
second round of questions, though.
Mr. Markey.
Mr. Markey. I thank you very much. We probably should have
done this for 3 minutes just to get a sense of what it is like
to try to get to the important issues. Just to get out one
question is, you know, difficult in 5 minutes.
Mr. Cerf, you and the others who developed DARPANET are
clearly amongst the geniuses of our time, and we very much
appreciate everything that you did to develop DARPANET which
turned into Internet. It is true back in the old days you and
the other founding fathers and mothers of the DARPANET were
able to just get together and work out whatever standards were
necessary and it worked very well, but we have now transitioned
over the last 8 or 10 years into a commercial model and most of
the people who were once with DARPANET are now in private
sector jobs, not this university setting that was originally
the basis for the development of it.
So my first question to you would be, were the seven
selected the only applicants that met the technical and
financial standards?
Mr. Cerf. No.
Mr. Markey. How did you weigh the criteria, then, to
whittle it down to seven? In other words, at MIT if 3,000 kids
have 800's on their boards and there is only 1,000 seats, then
of course all these kids with 800's who worked hard--but that
is private sector. That is kind of the university setting. Here
we are in kind of a quasi-public situation where the Department
of Commerce has subcontracted this to you. So if more than
seven actually had qualified applications, what did you then
use to disqualify everyone but the seven?
Mr. Cerf. Well, keep in mind, of course, that our intent
was to establish a modest number for purposes of doing the
experiment. So our objective was indeed to not have all 47 or
whatever number qualified. There was discussion toward the end
of the period of debate on which one should be accepted. And as
each one of those was considered, the issues were raised that
caused the board ultimately to form consensus around only those
seven.
Mr. Markey. Of the 47, how many actually met the technical
and financial standards?
Mr. Cerf. I am not sure that I remember exactly the number,
but probably it was more than seven.
Mr. Markey. But was it more like 10 or more like 20 that
met the technical and financial standards?
Mr. Cerf. It is very hard to say because there were a
number of different criteria. Some of these proposals met some
of the criteria.
Mr. Markey. What I am saying is, did you reach a semi-final
stage in your process whereby you whittled out of the 47 down
to 20 or how did you get to the final seven?
Mr. Cerf. The last discussions, as I remember them, were
somewhere around 10.
Mr. Markey. Ten. Ten.
Now, let me ask you, Mr. Kerner, if you want to appeal this
decision, what is the appeal process that you would use if you
are unhappy with what Dr. Cerf and the others have decided in
terms of whittling down from 10 to 7? Let's assume you are one
of the three that was excluded. How would you appeal now?
Mr. Kerner. Well, ICANN has a process for reconsideration;
and we have applied to be reconsidered. According to ICANN's
policy, they are supposed to respond to that in 30 days.
Mr. Markey. What is the criteria which they have given you
in order to file your appeal?
Mr. Kerner. It is a very general reconsideration policy. It
is not particular to the TLD selection process we just went
through.
Mr. Markey. Let me ask, Dr. Cerf, what criteria would you
look at on appeal in order to expand the number----
Mr. Cerf. The reconsideration process, as Mr. Kerner points
out, is a very general one. It is for any actions taken by the
board, and principally it looks to see whether the process was
followed. It is not intended to reconsider decisions made by
the board on, you know, on the merits. In fact, one of the
things that allowed us to I think achieve consensus was the
belief that any of the qualifying TLD applications would, in
fact, be considered later once we had----
Mr. Markey. Let me move to Professor Froomkin then.
Let me ask you, Professor Froomkin, due process, it seems
to me, isn't an analog or a digital concept. It is just an
American concept of fair play. So as you look at the process,
do you believe that--Dr. Cerf was saying he is not going to
look at the merits, only whether or not the process was fair.
Do you believe that the process was fair in the selection of
the seven and the exclusion of the other 40?
Mr. Froomkin. If we look by the standards that we apply to
a Federal administrative agency, there is no question in my
mind that a court would find they were not. In particular, I
would like to point out----
Mr. Markey. Let me ask you this: Was the criteria
subjective or technical?
Mr. Froomkin. There were clearly some technical criteria
used to get rid of a few, and then they went to subjective
ones. I watched the whole thing happen. I did not see a moment
where they said, okay, here's the batch who meet minimum
criteria. Now what do we do? They went after them one at a
time. The criteria that were applied were--appeared to be
applied erratically to different applications. So it was not
this tiered process of here is the semifinalists and now let's
have a beauty contest.
Mr. Markey. Do you agree with that, Mr. Short, the process
for appeal?
Mr. Short. Absolutely. I would like to concur with what the
professor said about the criteria being applied erratically.
To give an example, in the category that ICANN placed the
IATA application which was called a restricted commercial
content, one of the other applicants was .pro, which was
successful. They were not asked to and did not make any showing
on the record of representativeness. We, on the other hand,
were disqualified solely because ICANN found that we were not
representative and, despite as I said earlier, the fact that 1
million travel industry businesses around the world went on the
record saying they agreed with our proposal.
Mr. Markey. So you felt you were rejected on a subjective
rather that a technical basis.
Mr. Short. Absolutely. And I believe, sir, that the record
bears that out.
Mr. Markey. Thirty seconds for Mr. Davidson.
Mr. Davidson. I think you are really on to something here,
which is to say that--anyway, that----
Mr. Markey. Even a blind squirrel finds an acorn once in a
while.
Mr. Davidson. ICANN published a detailed set of criteria.
That was a very welcome move. Some of those criteria were
technical and economic and objectively applied. Some of them,
as much as we agreed on ideas like diversity and competition,
they are not easily objectively applied. I think the boards, in
retrospect, did not do so.
Mr. Markey. Thank you, Mr. Chairman.
Mr. Upton. I recognize the chairman of the full committee,
Mr. Tauzin.
Chairman Tauzin. Thank you, Mr. Chairman.
First, Mr. Chairman, let me thank you for the hearing. This
is an excellent first start for the subcommittee. And like Mr.
Markey, Mr. Cerf, I also want to welcome you and thank you and
our good friend Al for the pioneering work you did on the
Internet.
Second, let me say this discussion you just had is settled
in Mr. Cerf's testimony, if you look on page 26. He indicates
criteria he included in this experiment were in some measures
suggestive. It is an admission that this was a subjective
process. Which raises a question, Mr. Cerf. You also say that
the effort was not a contest to find the most qualified or the
most worthy or most attractive. Why not?
Mr. Cerf. I think because we didn't believe that it was
necessary to do that in order to conduct a credible experiment
and in order to get the data that we needed to determine
whether or not we could open this process up.
Chairman Tauzin. You understand the concern of applicants
who met all your criteria and then learned that your selection
process was suggestive and it was not designed to find the most
qualified, most worthy and most attractive applicant.
Mr. Cerf. It was----
Chairman Tauzin. In ordinary business practices, that would
be considered rather unfair.
Mr. Cerf. In this case, it was considered--what we needed
was a sufficient set of candidates who we thought would likely
successfully function so that we could then open this up to our
test case.
Chairman Tauzin. Well, I only make the point I am not sure
that the relief some of these applicants are asking for is
merited under the circumstances. But you will be doing this in
the future, and one of the concerns I think of this committee
is whether or not in the future as you go forward with
approving new TLDs whether or not the criteria is going to be a
bit more objective and a bit more designed to find the most
qualified, most worthy and, for the consuming public, the most
attractive TLDs.
Mr. Cerf. In fact, what I hope is that the criteria can be
so objective that we don't have to make any value judgments
about the likelihood of business success of the applicants.
Chairman Tauzin. I hope so, too.
Let me quickly put on record something I put in my opening
statement, Mr. Chairman. I believe it has already been made
part of the record. That is, Mr. Cerf, I hope in the future you
and your representatives will pay attention to our committee
rule on testimony being submitted 48 hours in advance. The
committee members read this testimony, need to prepare for
these hearings; and I was a little disappointed that our staff
was unable to get your testimony within the time of our rules.
I hope all of you will follow those rules in the future.
Let me conclude with an area that really intrigues me, and
that is questions posed by Ms. Gallegos to this process. In
selecting a TLD that is already currently being used, .biz,
that raises several concerns. There is more than one root
server. You obviously govern the USG domain name system root
server, but there are others, the Open Root Server Council, the
Pacific Root Server System, all of which have alternative and,
you know, approved TLDs in their systems.
In choosing a TLD that is already being used as in the case
of Ms. Gallegos, recognizing that all the personal computers we
buy today have a default system that points to the USG domain
name system, did you not realize that you would be affecting
her business and perhaps negatively financially if every one of
her customers has to literally reroute their computer so that
it doesn't automatically point to your own root system, root
service system?
Mr. Cerf. There is a serious problem with the notion of
alternate roots. The original design of the system had a single
root for a very good reason. It is to make sure there was no
ambiguity as to what a particular domain name would translate
into. The alternate roots were not introduced with the
concurrence and agreement of the existing initial government
root-based system, and if we were to allow any arbitrary entity
to create alternate domain names in alternate roots we will
have exactly the situation that we can see emerging right now.
If you have anyone who can create an alternate root and then
create a domain name which happens to be the name as some other
domain name in an alternate root----
Chairman Tauzin. What happens when they collide?
Mr. Cerf. What happens is that you get one or the other of
the translations, but you don't get both; and, worse, you have
uncertainty as to who is the other end of the line.
Ms. Gallegos made a very good point about the dangers of
having ambiguity, but that is the consequence of even having an
alternate root system. That is why ICANN continues to believe
there should be only one root.
Chairman Tauzin. You believe that. Have you received legal
opinions regarding the selection of .biz as it relates to the
use of .biz by alternate DNS root servers?
Mr. Cerf. Yes, I did.
Chairman Tauzin. Can you address Ms. Gallegos' complaints
here today?
Mr. Cerf. My understanding is that the creation of
alternate routes, since it was outside of ICANN's purview, does
not bind ICANN to any decisions made by the alternate root
activity. We are responsible for a single root system, and that
is the bounds of our responsibility.
Chairman Tauzin. Do you have the authority, I guess is what
I am asking, to overrun an alternate root server? Because,
essentially, that is what you are doing. When you approve a
.biz under U.S. Government domain system root server and all of
our computers basically point to your system automatically in
default, unless we adjust--are you not overrunning the
alternate root and do have you that authority in law?
Mr. Cerf. Let me turn this around for just a moment and
point out for any alternate root to work you have to go and
modify the customer's personal computer to point to the
alternate root but not to the U.S. Government root. So already
there has been some damage in some sense done to the
architecture because now that particular customer has to be
modified specially instead of what comes naturally from the
manufacturers. Our responsibility, ICANN, as I understand it,
is to manage the creation of top-level domains within that
single root; and that is my understanding of the scope of our
responsibility.
Chairman Tauzin. Just to finalize, Mr. Chairman, that has
the affect of overrunning, does it not, the alternative root
still?
Mr. Cerf. Yes. Although I would also turn this around and
say the creation of the alternate root system has the effect of
potentially overrunning the single root that ICANN runs. We
have no control over someone who creates domain names which
conflict with those that have been assigned within the ICANN
purview.
Chairman Tauzin. Thank you, Mr. Chairman.
Mr. Upton. Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman. This is, obviously, a
great hearing.
Dr. Cerf, pleased to have you back here. How many members
are on the board?
Mr. Cerf. Nineteen.
Mr. Shimkus. It is established through a contract from the
Department of Commerce. How are we assured that--are there any
financial disclosure requirements on board members that are
accessible to the public?
Mr. Cerf. There are no financial disclosure requirements
that I am aware of. However, we do ask the board members to
advise us of any conflicts of interest that they might have in
the conduct of their service.
Mr. Shimkus. So if we have a subjective system,
decisionmaking process with the public not having or the
applicants not knowing through an open disclosure system
possible conflicts of interest, that raises concerns, wouldn't
you agree?
Mr. Cerf. Yes. They certainly could.
May I point out that during the course of the review of the
TLD applications four of our board members voluntarily recused
themselves on what proved to be fairly thin concerns over
conflict.
Mr. Shimkus. But--I applaud that, but I would say if there
is a contractual arrangement with the Federal Government that
is making business decisions that are affecting applicants who
have a financial interest who may not know a possible conflict
of interest of the board members, that is something that you
ought to rectify.
Mr. Cerf. Indeed.
Mr. Shimkus. When you appear before us you are supposed to
identify what government contacts that you all have, and we
have to do it as Members of Congress. So I think that is an
issue that you ought to look at.
Mr. Cerf. Thank you. That is a good point.
Mr. Shimkus. I am a West Point graduate and served as a
recruiter for the academies. We have very qualified young men
and women who apply to the service academies every year. It is
not different from everyone meeting--47 people meeting the
criteria established for the domain names.
They have--what they do is develop a whole candidate. They
do a scoring based upon some subjective issues. But there is
still a score. And then the academies, based upon this score
and the openings, choose those who get acceptance letters.
Subjectivity without scoring raises some level of disputes
which, if there is no quantitative possibility of analysis or
even defense, that is why we are here. And, again, just another
recommendation.
Question. Politically, you would have had a stronger,
favorable reception from this committee had you used your
position to address pornographic material on the Internet. I
understand that--and many of us feel that you have failed in a
great opportunity. Especially us politicians, when we are
addressing this, you invite us now to legislatively get
involved in forcing this issue. Because of the cries of the
public and those of us who understand first amendment
principles, how do we protect the individual's right to free
speech while ensuring that our children are protected?
So I would like to ask--our understanding is it was
rejected due to the controversy surrounding the idea. Again, it
may be a subjective type of analysis. I am not sure. How is a
.xxx avenue any different than current zoning laws or issues in
which the public has kind of addressed this in other mediums?
Mr. Cerf. There was discussion of xxx, and one of the
problems that we encountered is not knowing how we would
prevent any pornographic sites from registering in other than
xxx. The principal question was enforcement. It wasn't clear
how to do that and whether it could be effectively done. The
sites which already exist presumably have established their
brands, if you will--I guess that is the right word--and we
don't know or were not clear at the time we were making these
TLD decisions what mechanism would be available to move them
away from where they are.
Mr. Shimkus. Since my time has expired, let me go to the
flip question. Since you didn't want to address that, why
didn't you address the green light domain, an area of
protection of kids? If you weren't going to do it on the
punitive aspect, why not do something positive?
Mr. Cerf. There was a lot of sympathy for the .kids domain,
which I assume you are talking about.
Mr. Shimkus. Correct.
Mr. Cerf. And there was quite a bit of discussion about
this. One of the things that kept returning to the theme of the
discussion is that all of these are global domains, and there
came a moment when many realized that it wasn't clear what
.kids actually meant. In other words, what is a child? At what
age--what is the age range for which this material would be
considered appropriate?
Given that .kids is global, it wasn't clear what criteria
would be applicable globally for content that would be
acceptable. In some countries, some things might be acceptable
and other things they might not for the same age ranges. It got
less and less clear as the discussion ensued how it would be
possible to specify satisfactorily what those limitations were
and how would they be enforced.
Perhaps in the worst case, suppose that a parent sees
something on .kids that he or she felt was inappropriate. Would
that now come back to ICANN? Would we be sued for having
permitted inappropriate content? We didn't see how we could
enforce it.
Mr. Shimkus. I know my time has expired. I would just say
you are inviting us to have many more of these hearings to
address some of these issues. I wish you would have solved
them.
I yield back my time.
Mr. Upton. Mr. Pickering.
Mr. Pickering. Thank you, Mr. Chairman. I appreciate this
hearing and the importance of what we are discussing today.
From the very beginning of this debate, I was fortunate
enough to be a part, first on the Science Committee as the
acting chairman of the basic research subcommittee as we went
from the transition from a government-run, monopoly based
policy in domain names to a nongovernmental, private
competitive model; and my concern all the way through has been
somewhat different but I think highlighted by this hearing
today.
Many I believe did not realize that, in essence, by setting
up ICANN and what we are doing was fundamentally the
Constitution of the Internet, just as our Founders set up the
decisionmaking process of a representative democracy, the
House, the Senate, the executive, the judicial, making sure
that you had the openness and transparency, hopefully the
credibility and the confidence in the integrity of the
decisions being made and then the checks and balances of that
process.
What we have today is, as Mr. Davidson talked about, the
great promise and the great potential of what we had hoped for
at the very beginning; and that is a grass-root, bottom-up,
inclusive, open international body that would be making the
decisions as we govern the Internet and the use of the
Internet. But as Mr. Davidson highlighted his concerns, and I
would like to associate myself with his concerns, I think he
captures where we are today and where we need to be.
We do need immediate reform, and I hope it is done
voluntarily. We still have the promise of a nongovernmental,
private, open competitive model; and that is the objective in
the policy that I want to see. But the way that this has
occurred to date, I am concerned, as Mr. Davidson is, that the
process was arbitrary, subjective. Decisions are being
questioned. The confidence, the credibility, the integrity is
in question. And that if we do not take our steps toward reform
quickly that the promise and the potential of ICANN and what we
are trying to do could be at risk.
Mr. Davidson--let me ask the rest of the panel, how many of
you have read Mr. Davidson's testimony or would agree with the
reforms that he has laid out in his testimony? Mr. Cerf?
Mr. Cerf. I am not sure that I am prepared to agree to all
of them, but I absolutely accept the idea that we need to
reexamine the procedures that we used. I certainly would like
something simpler and less complicated than we had to go
through in November. So I welcome Mr. Davidson's organization's
inputs and others who have constructively commented today.
Mr. Pickering. Mr. Short, Ms. Gallegos, you all were very
critical of the process. Have you all had a chance to read Mr.
Davidson's testimony?
Ms. Gallegos. I have not had a chance to read his
testimony.
Mr. Pickering. Or his reforms?
Ms. Gallegos. No, I have not had a chance to read them.
Mr. Pickering. If I could ask you to respond to the
committee in writing as we conclude the hearing today as to
your comments with your views concerning his proposed reforms,
that would be helpful to the committee.
Mr. Davidson.
Mr. Davidson. Well, Mr. Pickering, I very much appreciate
those remarks. I do think that there is a sense here that we
don't want to throw the baby out here, that there is a
potential here. And I have tried to lay out some steps. I think
there are things that many in the ICANN community agree with,
especially the notion of really trying to focus on ICANN's
mission of being as much as possible a technical and objective
body. I think, unfortunately, the process that we have right
now shows how easy it is to morph out of that world. I am
hopeful that we can all work together and try and make it
better and I think get the appropriate level of public input
where it is needed to the extent it does engage in policy-
oriented activities.
Thank you.
Mr. Pickering. Mr. Short.
Mr. Short. Thank you, Mr. Pickering.
I have to say I have not had an opportunity to read Mr.
Davidson's testimony yet. It was just provided to me this
morning. But I would say that we feel all we are asking for
really is a fair shake. We are not asking this committee or
Congress to direct that we get .travel, but we feel the record
makes it abundantly clear what has happened is not in
conformity with the requirements of the Administrative
Procedure Act or basic notions of due process, a point I think
Professor Froomkin has confirmed; and any reforms that would
take the process in that direction, which I think is essential
for any asset funded by the U.S. Government, we would certainly
support.
Thank you.
Mr. Pickering. Yes, Ms. Gallegos.
Ms. Gallegos. In terms of the APA, we, of course, had a
petition for rulemaking, you know, that was presented to the
DOC. We haven't heard anything on that yet. We would really
like to see that take place.
I think that one of the problems that we have perceived is
that there really is no public process. There is no due
process. There is no appeals process. There is no transparency.
And most of what is done by ICANN is done in secret. The
deliberations and considerations over all of these gTLDs was
done in secret. We knew nothing--we, the public, knew nothing
until we saw the reviews that were published on the website,
which were woefully inadequate.
I think that the premise behind having an ICANN is a good
one. I think that to throw it out is like cutting the head off
of the monster, it grows back two. I think what we need to do
is look at ICANN as something that needs to be reformatted
perhaps, but it is a good idea.
From our perspective, also we need to look at, as opposed
to what Mr. Cerf had said, the alternative roots were formed
for a reason. IANA did facilitate the first alternative root
because they were supposed to be new TLDs entered into the
root. They were promised and they were not given. The root was
formed because of that. And it needed to be a test bed so IANA
approved the formation of that root. Then it was scrapped. So
all of that time, effort and money had gone into that, proved
that the root was workable, proved that it could coexist, and
then it was scrapped.
So they said, well, we have it. Let's use it. And that is
what they have been doing. This has been going on for many,
many, many years. We do coexist. There is no reason for our
government to take the posture that we can just wipe out a
business because we can; and, basically, this is what has
happened.
I think there is a lot of merit in looking at the
coexistence, and not only that but a very simple solution to
having new TLDs, use the ones that are already there, are
working and have been proving to work and are successful, and
you might have a good avenue.
Thank you.
Mr. Pickering. I have some additional questions, but I will
wait until the second round. Thank you very much.
Mr. Upton. Very good. Thank you.
Professor Froomkin, you indicated in your testimony you
questioned or you raised the question how many are needed. How
many do you think we need?
Mr. Froomkin. I think that is a decision only the market
can tell us. I think that if people are willing to take the
trouble to build them and go through a modest application
process and run them, do whatever other things we require them,
maybe even a small bond, whatever it takes to meet a threshold,
as long as we are willing to do that let's let the market
decide. I couldn't begin to know how any human being would know
the answer to that question.
Mr. Upton. Dr. Cerf, your question--your answer to Mr.
Markey that you thought about 10 or so were actually
sufficient, passed all of the barriers to be approved, did you
ever consider as a body whether you ought to move the number
from 7 to 10 or 11 to 9? At what point did you lock in 7?
Mr. Cerf. We locked in seven at the--in fact, we went down
from a collection that looked like they might be adequate down
to seven of them that we had full consensus on. The board did
not uniformly agree on all 10. That is my opinion, that maybe
that many were acceptable. But we were looking for full
consensus on the board. We achieved full consensus on seven of
them. Since that lay within the range that all the
recommendations were to start with, we felt, I felt satisfied
that the board had come to a reasonable conclusion, especially
given the belief that we would add more of them once we could
demonstrate that this first set in fact worked adequately and
didn't cause any trouble.
Mr. Upton. Is this process that you embarked on, is it
pretty much over now? I mean, that is that and at what point
are you looking for a second round?
Mr. Cerf. Two things have to happen before I think we would
be well-advised to proceed to a second round. First, we need to
complete the negotiations with the applicants. Those
negotiations are ongoing but not complete.
The second, we need to get some experience with what
happens as those new TLDs are introduced. I am sure you are
familiar with terms like land rush or gold rush and so on. We
don't know, quite honestly, what kinds of behavior we will see
from the market as these new TLDs are introduced. Some of them
are of the restricted type, like .museum. But others are quite
open, like .info; and so we don't know what behavior will be.
Until we can see that, I would say it was probably inadvisable
to begin reconsideration of additional TLDs. I hope that we
could do that with about 6 months of experience with the new
ones.
Mr. Upton. All ICANN-accredited registers currently adhere
to this agreement which, among other things, requires registers
to provide real time public access to registrant contact
information, WHOIS data. Consumers, law enforcement,
intellectual property owners, among others, rely on this public
availability of WHOIS data.
What is your sense as to whether you intend--this is a
question for Mr. Kerner through Ms. Gallegos--what is your
sense about embracing the policy as set forth in this register
agreement in any new TLDs that you might operate? Mr. Kerner.
Mr. Kerner. As the current operators of the .tv top-level
domain, we in fact have a very robust, easily accessible WHOIS
that we find is used quite frequently by trademark holders. And
we are actually find that ICANN's GDRP resolution procedure is
actually quite effective in enabling trademark holders to get
back their trademarks.
Mr. Upton. Ms. Broitman.
Ms. Broitman. In the registry preapplication we designed a
system that is slightly different from today's system. That was
on the advice of a lot of consensus thinking, and that is what
is known as a thick WHOIS data base where all of the
information resides in a single place. So that a trademark
owner, for example, could go to a single place to go searching
for cybersquatters.
Mr. Upton. Mr. Short.
Mr. Short. Mr. Chairman, we are--our back-in provider
actually is New Star New Level. Mr. Hansen can provide more of
the technical information. But I would just say we are fully
committed to protection of intellectual property rights. It is
my understanding we were proposing to offer the highest level
of WHOIS service as part of our proposal.
Thank you.
Mr. Hansen. The new technology that we have proposed
creates the ability to create a centralized data base. This
centralized data base, because of a new protocol that would be
used to collect data from the registrars, allows for the
collection of data that is of a much higher quality than you
would find in today's very distributed model. The registrars
today inconsistently collect data. Some collect data better
than others. It is updated in some cases very rigorously; in
other cases, it is not.
The requirement the centralized data base can impose upon
the registrars in terms of submitting a consistent set of data
that will be contained in the data base will actually be an
enhancement that the trademark and intellectual property
community should embrace, partly because today they do have to
go around to all of these various data bases to collect the
data. The reliability of the data, consistency of the data is
questionable.
Mr. Upton. Mr. Davidson.
Mr. Davidson. I would like to make a quick comment to say
we should note that there are some privacy aspects to this
whole question of the availability of WHOIS data and what
exactly is included in there. These privacy concerns are being
raised especially as many more individuals and small businesses
get involved in registering domain names and finding certain
kinds of information that might be personal being put into data
base. I think it is a question for ongoing debate about how we
balance those interests and find ways to give--you know,
protect legitimate interests in getting in data while still
protecting the privacy, especially of consumers and
noncommercial interests.
Mr. Upton. Ms. Gallegos.
Ms. Gallegos. I think I would like to, if it is okay with
you, relate just one story. When I started in my business it
was a soho, small office home office. When I got my first
domain name I had no choice but to put all the relevant
information into the thick WHOIS; and, as a result of that, I
was stalked. I had to change my phone number. I had to have
security dogs. I finally got a post office box and started
using that.
There are some very serious privacy issues. With more and
more businesses operating out of their homes now, that means
that a person has to give up his personal information, put his
family at risk. So I think that, you know, we need to consider
that.
I know that with the.biz, we have a thick WHOIS, and it
does have all of the relevant information, but we are going to
be instituting a situation where people can use a dummy contact
that will show up in the WHOIS. And if there is a need for that
information to be given to a person that has legitimate need
for that information, it will be given but only with an order.
As far as intellectual property is concerned, that act was
designed for the consumer and not for the trademark holder. I
think that we need to really protect the consumer and let the
trademark holder police his marks.
Mr. Upton. Thank you.
Mr. Markey.
Mr. Markey. Thank you, Mr. Chairman.
Here's what I would like. I would like each one of you to
give us your top-level recommendation, your one recommendation
for improving the ICANN process. So we will go right down. One
recommendation to improve ICANN process. Mr. Davidson.
Mr. Davidson. Thank you.
I just want to say, by the way, it has been our observation
over the years that, in fact, sir, you are no blind squirrel,
so I thank you for your earlier question.
I guess my No. 1 recommendation would be the institution of
a prime directive in the mind-set of ICANN that is to always
stay out of policy-oriented decisionmaking as much as possible
and stick as much as possible to the technical and objectively
measured approach. It may not always be possible. But I think,
for example, even in the gTLD context, if it turned out that
you had, you know, 20 otherwise absolutely equal people and you
felt compelled to only choose seven, do a lottery, do
something, stay out of the business of--even as attractive as
it may be to many of us, stay out of the business of trying to
make policy.
Mr. Markey. Thank you.
Professor.
Mr. Froomkin. I would put that slightly different but
close. I think ICANN needs to be told it has got to take one of
two roads and not try to mix the two. Either it becomes the
true standards body and does the kind of things that Alan
Davidson was just talking about, or it is going to have to
recognize if it is doing policy, given its relationship with
the Department of Commerce as a State actor, a governmental
body, be subjected to the APA and the Constitution.
This is heresy to say among Internet people, but this is an
issue that is bigger than the Internet. This issue--what the
Department of Commerce has tried to do with these strange zero
cost procurement contracts, these research contracts where the
research turns out to be running things and so on, is a
blueprint for an end run around accountable government and the
APA. And if ICANN can be put back in the standards body box
where it probably could live very happily in a more modest
vision I think a lot of people would be really happy, and that
would be great. If it takes the other road, it has go to
understand the consequences against, and those need to be
applied to.
Mr. Markey. By APA you mean the Administrative Procedures
Act, which is kind of the constitution of all decisions that
are made in all administrative agencies in terms of protecting
due process and using a reasonable standard.
Mr. Froomkin. When I get back to Miami I am going to tell
my students that Congress gets it.
Mr. Markey. Okay. Thank you.
Excuse me, what was your final----
Mr. Froomkin. When I go back to Miami I am going to tell my
students that Congress gets it.
Mr. Markey. Congress gets it. Some people define that
Congress gets it by saying, well, you know Congress knows that
it can never understand these issues, so they don't ask
questions. But I would prefer to use your definition is that we
get it when we do understand and we are asking relevant
questions.
Ms. Gallegos. Representative Markey, thank you.
I think I would have to echo what the professor has said.
We need to keep it technical. It is either going to be a
standards body or a governmental body. Let's decide what it is
going to be. While I disagree that it should be a governmental
body, I think it should go to the private sector. It should be
a standards body only.
But I think the one thing that we really have to recognize
from the get-go is that the board seated itself. It has never
been elected. We have an interim board that has been an interim
board since the beginning except for the five elected members.
I think that the whole board needs to be elected appropriately,
and maybe that is a start if we have the proper representation.
Right now, we have a special interest representation except for
the five elected members.
Mr. Markey. By the way, I would recommend that we have a
hearing with just the five members here and we just be allowed
to ask them questions.
Mr. Hansen.
Mr. Hansen. Yes. The recommendation I would make, focusing
on the process itself, is I think it would have been helpful
had minimum qualifications for applications--the companies who
were submitting applications, for instance, be established up
front at the beginning of the process. That may have resulted
in fewer applications but probably would have helped on the--
once the selections were made, people would understand that,
you know--they wouldn't submit an application at the beginning
if their company wasn't qualified based on the minimum criteria
established by ICANN. So you would have fewer applications.
That would enhance the assessment process, allow more time to
focus on the fewer number of applications and would improve the
quality of the applications as well.
Mr. Markey. Mr. Short.
Mr. Short. Thank you, Mr. Markey. Our principal
recommendation would be that the Administrative Procedures Act
principles should apply to decisionmaking in this area. What we
would be looking for is fairness and an actual decision on the
record.
I would just add that before going off to join IATA, I
spent many years hear in Washington as a regulatory lawyer and
have some familiarity with proceedings under the APA. And while
there are always going to be winners and losers, at least in my
assessment the APA principles generally deliver results that
are in the public interest, and that is all we are really
asking for here.
Mr. Markey. Ms. Broitman.
Ms. Broitman. Thank you, Congressman.
I think that one of the opportunities to reform the process
in the future is to provide a bit more time during the entire
process, and particularly between an intermediate
recommendation and the final board decision.
What was very helpful actually in the ICANN process is that
there were questions and answers on the record as well as
public comment periods on the record during the entire 6-week
period. And in the future, having some more of that sort of
opportunity beyond the staff report I think would be helpful to
all.
Mr. Markey. Mr. Kerner.
Mr. Kerner. Mr. Chairman, I think, speaking as an
applicant, what we would have most appreciated is an iterative
open selection process where we could have had a dialog, ICANN
could have had a dialog with all the applicants to address
concerns that they had, and those decisions wouldn't have been
reached by the board, but was based on factually inaccurate
information provided by the staff report.
Dr. Cerf indicated that seven final selections were made
from what he estimated at 10 qualified applicants. I don't
think he considered either one of our applications from .com or
.pro to be qualified applicants because the staff had indicated
that our consortium did not have the technical capabilities to
run a top-level domain. And that was said even though, again,
we had a proven robust technical infrastructure that was
capable of resolving domain names at about 10 times the rate as
currently experienced with .com.
Mr. Markey. Dr. Cerf.
Mr. Cerf. I think the most salient thing for us, apart from
some very good suggestions that we have just heard, is, in
fact, to find more objective ways of making these decisions
wherever we can and, as I said before, to make them as boring
as possible.
Mr. Markey. And what would be the one recommendation you
would make in order to make the process more clear?
Mr. Cerf. I would like to see that the objective criteria
are principally that the applicants simply be able to
demonstrate technical capability to perform the function. The
big concern in this first go-round was that if the applicants
also didn't have the financial and other ability to execute,
that we might not have a very good proof of concept because
some of them wouldn't work at all. But in the long run, it
would be nice to let the market decide that.
Mr. Markey. Thank you, Doctor.
Thank you, Mr. Chairman.
Mr. Upton. Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman.
Mr. Hansen, in your opinion, did the criteria posted and
used by ICANN change along the way, or did ICANN act
consistently throughout the process?
Mr. Hansen. I believe ICANN did act consistently as it
applies to the criteria that were laid out. We understood at
the very beginning that stability of the Internet was the No. 1
priority, and we focused on that in our application. We focused
on the technical aspects of our proposal for that very reason
and other ways in which we could support stability of the
Internet in introducing a new top-level domain name.
Mr. Shimkus. Thank you.
Mr. Kerner, I always find it interesting on the disclosure,
you have indicated that ICANN made poor choices in selecting
these top-level domains, although you also submitted two that
were accepted; is that correct?
Mr. Kerner. That is correct. We were part of two
consortiums, .nom and .pro.
Mr. Shimkus. Why do you think you were successful in the
two and not successful in the other?
Mr. Kerner. I don't think that it is possible for me to
address those individually. I just think by definition if you
have a flawed process, by definition the results of that
process are going to be flawed as well.
Mr. Shimkus. But was it flawed in the selection of the two
that got accepted?
Mr. Kerner. Again, I think we believe that the entire
process was flawed.
Mr. Shimkus. So should we undo the two that were selected?
Mr. Kerner. I think what we are proposing is that we
basically start again at the beginning and we institute a fair
and open process.
Mr. Shimkus. I agree with that. This is always fun. It may
not be fun for people on the panels, and I have been on the
other side, too, but there is discrepancy in the testimony when
you are attacking a system that you have also benefited by
successfully.
So in one part it has failed, but in the other part it was
successful in two applications which you supported; is that
correct?
Mr. Kerner. I am sorry, let me just clarify to make sure we
are both talking on the same page here.
We made applications for, again, the .nom and .pro. Our
applications were not accepted. Other applicants for the same
top-level domains were accepted. Now, obviously, we think that
those would be good choices for this first round.
Mr. Shimkus. So your track record in this recent round is
zero?
Mr. Kerner. Correct; 0 for 2.
Mr. Shimkus. Well, then, I can see why you are upset.
Dr. Cerf, the last question is the $50,000 nonrefundable;
you are a not-for-profit corporation. Obviously the basic
financial records should be available, and this is an
experimental round. I know you probably haven't done an after-
action review of cost-benefit analysis and the time effort. Are
you expecting the cost to go up in the next round or the cost
to go down?
Again, I think there is an agreement there should be more
transparency, and there probably should be transparency in the
fee structure based upon Ms. Gallegos's testimony.
Mr. Cerf. The fee structure is based almost entirely on
what the costs turn out to be for evaluating proposals. That is
the principal basis.
Mr. Shimkus. But you have to set the fee structure before
you accept the proposal.
Mr. Cerf. Exactly. That is why this cycle is so important,
because I hope in the end we get a simplified procedure which
will be less strenuous and less expensive. But, again, all
these costs do have to be borne somehow.
Mr. Pickering. If the gentleman would yield just a second
to clarify.
ICANN has had difficulty in raising funds to support
itself. They looked at a fee at one time that created a
firestorm of controversy. They pulled back from the fee. In
previous answers you said you still have half of the receipts
that came in from the applications, which would indicate that,
in fact, it was not a cost-based fee, but that you actually
have double what it costs you to assess them, and that it could
be a way for you to finance ICANN. Could you clarify that for
me?
Mr. Cerf. I understand your line of reasoning, Congressman
Pickering; however, it turns out we have additional expenses
associated with processing the applications. We now have to go
through the negotiating process to actually come to agreements
with each one of the seven applicants. That costs money as
well. And so we expect there will be continued expenses
associated with finally executing on all of the seven proposals
that are under way.
Mr. Shimkus. And I am going to end my period of time. I
appreciate all your attention. I think we have learned a lot.
Mr. Chairman, I yield back.
Mr. Upton. Mr. Pickering.
Mr. Pickering. Let me try to cover as much ground as
quickly as possible. On your recommendations to Mr. Markey, you
talked about ICANN performing just a standard or a technical
role. But similar to the way budget in this place drives policy
and policy drives budget, does not technical drive policy and
policy drive technical in the Internet world? And how do you
solve that dilemma?
Mr. Davidson. It is difficult to draw that line,
admittedly, and I think we are seeing the struggle that ICANN
itself is having in drawing that line. And we may not be able
to perfectly do it. There may be technical decisions that have
policy implications. That is why actually I think the real set
of recommendations here is that we really have to be thinking
about a three-legged stool here.
One is limitation to the technical objective of things as
much as possible. The second is having appropriate governance,
structure and policy to the extent there are other kinds of
issues that get dealt with, and that means having a good
representative board and having good structures internally. And
the other is doing it in this bottom-up consensus way. As my
statement says, the promise of ICANN is to go back to this
bottom-up nature of self-organizing that the Internet has done
best.
Those are the three things I think ICANN needs to work on.
Mr. Pickering. Is there a way to limit the mission of ICANN
to strictly technical and standards setting better and more
effectively than we currently have?
Mr. Davidson. I believe there is. We have talked about it
in our testimony, and I think it is an ongoing thing for ICANN.
There are no real strong structural limitations like, to use a
U.S. example, the Bill of Rights, which reserves powers for the
people here in our constitutional system. Finding structural
ways to do similar kinds of things for ICANN, I think, would be
a major step forward.
Mr. Pickering. How do you--or who, maybe more
appropriately, would limit their mission and set up the
structural safeguards and do the Internet bill of rights for
Internet users? Who has the authority to do that, and who
should do that? Should Congress? Should ICANN?
Mr. Davidson. It is a tricky question. I think that on some
level much of this is best if it comes from within ICANN, and
if ICANN could itself find ways to do that.
There is a role here for the U.S. Government just as, A,
there is a role for other governments that are involved in
ICANN and in watching what ICANN does. But we should note there
is a special backstop kind of responsibility that the U.S.
Commerce Department has in this area.
Mr. Pickering. Dr. Cerf, would you be willing, as the Chair
of the board of ICANN, to limit your mission to technical and
standard? Would you submit a bill of rights, so to speak, for
Internet users and provide the structural safeguards? Would you
do that voluntarily?
Mr. Cerf. I am a strong proponent, Congressman, of limiting
the role of ICANN. In fact, I speak regularly about its
unnecessary expansion; to use a phrase that is a buzzword,
Internet governance, which I think is a very broad term that
ICANN has no business trying to achieve.
With respect to a bill of rights, it sounds good on the
surface. I need to understand more about the substance of it
before I would know what I was signing up for. But in principle
the notion that we protect the users of the Internet from abuse
and from technical failures and the like is really important, I
think.
Mr. Pickering. Mr. Chairman, one quick follow-up question.
If we limit the role, if we establish safeguards, then the
question is who does policy? If ICANN doesn't do policy, who
should do policy?
Mr. Cerf. I wonder if Mr. Froomkin----
Mr. Froomkin. Well, I guess the question is what sort of
policy do you mean? In a sense we all do policy when we turn on
our computers and decide what we want to use the Internet for.
The Internet is a set of communication standards. We don't do
policies about the alphabet; we don't do policies much about
pencils. And in a sense it is that kind of a tool. So those
policy questions are probably left best to homes and families
and individuals.
Mr. Pickering. This is the dilemma for us and has been for
the very beginning. The reason we have ICANN is to avoid APA,
the Administrative Procedures Act, as much as any reason. We
didn't want the APA to apply to ICANN.
Now, the problem with due process and other rights is that
you have a private body that is not subject to APA, that is
making decisions that many feel like should have some due
process or APA or some safeguard. So how do we ensure that it
continues to be private, nongovernmental, but have the
safeguards? What is the appropriate balance?
In, for example, policy, when ICANN wanted to set a fee,
the question was do they have in essence a taxing authority, an
authority to tax people? Clearly they do not. But now they are
running into a problem with questions of the $50,000 fee; is
that the way to finance themselves. How will ICANN sustain
itself financially? Those are all policy questions. Who will
make those decisions? That is the dilemma we all have.
Mr. Davidson. I think you have really hit the nail on the
head here, and this is difficult. It is in some ways an
experiment. One answer, in some ways also, is to see if there
are ways to make ICANN a healthier organization; that to the
extent that it is appropriate, to the extent that ICANN is
getting into these other areas, that the affected user
community feels like this is a legitimate organization. That is
something that happens over time and we all need to keep
working on. I don't think it has happened yet.
There is a great deal of internal debate within ICANN, for
example, about how its board is selected, especially a section
of the board that is selected at large. And I think the outcome
of those kinds of debates is going to have a lot to do with
whether we can have faith in an ICANN-like body to make these
decisions to the extent that they are not simply objective,
technical standard decisions. So it is tough.
And, again, this bottom-up consensus-oriented idea is very
important in thinking about whether the user community that is
affected by this can trust the organization.
Mr. Pickering. Mr. Chairman, I know that my time is up, but
I think that we are beginning to focus on the issues, and maybe
this is just the beginning with this hearing to see if we can
come up with the reforms and the steps that we need to take to
make sure that the promise of the potential of the Internet,
ICANN, and domain names does have the credibility and the
confidence of the American people, and what we can do as a
committee to be a catalyst to answer these questions.
I look forward to working with all of you, Dr. Cerf and all
of the others, to try to get the right reforms as quickly as
possible, and hopefully done in a voluntary, private,
nongovernmental way.
Mr. Upton. Thank you.
Mr. Cox.
Mr. Cox. Thank you, Mr. Chairman, and I would like to
welcome all of our panelists and thank you especially for your
excellent testimony. We have covered a lot of ground in the
last 14 months, and I think you have improved our knowledge
base a great deal here this morning.
The debate that has gone on this morning has included
questions of the role that ICANN can or should play in the
development of policy. One of the policy issues that I would
like to use is the basis for furthering that discussion in just
a few minutes, that we have discussed here in this committee
and also throughout the House and the Senate, and that is what
to do about pornography on the Internet.
One of several ideas that has been discussed is the
creation of a top-level domain that would essentially zone the
Internet voluntarily. We rejected early on the idea of a
government mandate for this to occur, but we have been very
interested in whether the private sector might migrate in that
direction, because if it did, it might then be possible for
Congress to offer incentives, not penalties, which would run
afoul of first amendment guarantees, but incentives for people
to list on that adults only top-level domain.
Obviously, the most primitive screening software, indeed no
screening software at all virtually, would be needed, to the
extent that this were successful in the marketplace, for people
then to discriminate among content that they were seeking, and
indeed, if you are an aficionado of pornography, probably
simplify your life. But for everyone else who wished to avoid
it, it would also simplify theirs.
So I would begin by putting that question to you, Dr. Cerf,
and I perhaps ought to know the answer to this question, but I
haven't found it in what has gone by thus far, whether any of
the 44 applications you reviewed was for such a top-level
domain?
Mr. Cerf. Indeed one of the applications did propose a
.xxx. The discussions that ensued among the board on this point
turned in large measure on our uncertainty of how to enforce
movement or registration of those pornographic sites to that
top-level domain.
As we all know, you can reach literally every domain on the
Internet by using the domain name system. So everywhere in the
world, not just in the United States, one would need to create
the incentives that you mentioned in order to persuade these
purveyors to move over into this single global top-level
domain.
Mr. Cox. Let's pause just there for a moment, because there
is an assumption there that I think is not empirically in
evidence, and that is that there would not be an advantage to
being registered in a place where people might expect to find
you, and .com is crowded with all sorts of things that you have
to sort through. One might expect rather rapidly to find what
one was looking for on a domain that were--like the other top-
level domains--you expected were descriptive of its purpose.
Mr. Cerf. I don't think that the board was able to conclude
that we could guarantee that everyone would move over, even
though, as you say, there might be some incentive. So in the
absence of knowing for sure it could be guaranteed, we also ran
into the question whether someone would then complain or, in
fact, take legal action if, in fact, not everyone did move
over. So enforcement was of principal concern there.
Mr. Cox. I take it your process for evaluation of this was
discussion at the board level?
Mr. Cerf. It was discussed in public during the course of
the GTLD evaluations, so it is documented on the Web site, in
fact.
Mr. Cox. And the participants in that discussion were?
Mr. Cerf. The members of the board.
Mr. Cox. Well, that tees up--and I know you are dying to
get in here, too, but that tees up a question that I would then
put to Mr. Davidson and Professor Froomkin about whether you
think using this as an example of the kinds of policy decisions
that ICANN is being called upon to make, whether you think this
process is working and is workable for resolving such
questions.
Mr. Davidson. I would like to say two things. One is the
Congressman has been one of the thoughtful commentators on this
question of how we deal with the very compelling issue of
protecting kids on the Internet. I would just say on the
specific question of the .xxx and .kids as presented to ICANN
right now, I really have to rise to ICANN's defense on some
level and say I think they did exactly the right thing by not
going there, as it were.
There are a lot of reasons to believe these are difficult
and troubling concepts. The Congressional Commission on Child
On-Line Protection, in fact, which recently reported to
Congress and came out of the COPA statute, raised a lot of
questions about particularly .xxx, because, for example, it
could be viewed as an attractive nuisance where people could go
to find a collection of materials that were troubling. Or there
is definitely an issue with the fact that these are binary
labels; you are either in or you are out. They don't have any
of the granularity that many of the other much more
sophisticated tools out there for parents do. They do not scale
well globally. What we think ought to be in .kids here in the
United States might not be what they think ought to be in .kids
in Europe or in Asia or in Germany or elsewhere. So it is not
clear these are actually as useful solutions as many of us
might have hoped.
The second thing is that, given that they are highly
controversial because of their impact on speech, in that
respect ICANN did the right thing here by saying this is an
area where there are major policy impacts. We should stay out
of it. If ICANN were to create .dems but not .gop, we would
say, gosh, there is a problem there, right? I think ICANN
should stay out of making decisions in areas where there are
very, very clear policy concerns that have been raised.
Mr. Cox. Let me add that, as you know, but perhaps the
other panelists or other Members don't know, the center has
been very active on this, and I have been much reliant on your
research and advice and guidance, and it is one of the reasons
I have not introduced legislation on this topic.
My question, however, is slightly different. Maybe I should
give Professor Froomkin a chance to answer it. It is not so
much whether at the moment you come down yea or nay on the
question of whether you would have approved a particular
application, but rather whether this, as emblematic of the
kinds of tough policy questions that are getting put to ICANN,
is something which is tractable within the current structure
and whether there are structural changes that need to be made
to address this; whether ICANN is the right body to address
such questions and so on. I think you did answer that
partially, but that is the nub of my question.
Professor Froomkin.
Mr. Froomkin. I will do my best to meet it head on,
Congressman. I think for ICANN to get involved in any issue
that smacks of content control will bring the whole thing
justifiably crashing down, and they were very wise to run away
from it.
Now, that doesn't answer the implicit question, which is if
not ICANN, then what? Let me just take a tiny crack at that, if
I may, and everyone will hate me for this.
There is the .U.S. domain. If we are trying to make rules
that meet the needs of people in this country, we could create
something with granularity for different age groups and so on.
People wouldn't be required to use it, but it would be a
resource that would be available.
That would be one way to do something that didn't run into
the transnational problem, and giving ICANN, which is supposed
a technical standards body and not a speech regulation body,
problems. That might be an avenue to approach. Again, if
linking it to the U.S. brings it right to the fore of the
problem of first amendment values, then that is where it
belongs.
Mr. Cox. I don't know if I have a moment. It seems the
chairman is forbearing, and I will take advantage.
I will just put it back to Dr. Cerf to wrap up for us. The
two commentators have just opined that you made the right
choice, and that one of the reasons that you made the right
choice is that ICANN ought to--normatively ought to stay away
from issues that carry this kind of policy controversy. Can you
tell us your views on that general topic?
Mr. Cerf. Well, I certainly hope that ICANN doesn't have to
ever get into things like content control. We edge in that
direction a little bit when we have the specialized domains
that have restricted membership. But in the cases that we
approved, it appeared to us that the restrictions were pretty
objective; are you a museum or not a museum, are you a co-op or
not a co-op, and so on. In the case of .pro, do you have a
professional affiliation or degree or not? The notion of
content control is such a slippery slope.
We have seen some international debates on this subject.
Perhaps you are aware of the court case in France against
Yahoo. All of these matters are extremely complicated. And as
was pointed out a little bit earlier, the top-level domain
system is a very crude mechanism for describing content. It is
an extraordinarily unsatisfying way of trying to imply what
will be found in a particular top-level domain, and as a result
it feels like that is not the place where ICANN should be
trying to make decisions.
We do have a problem if multiple parties propose the same
top-level domains. We do have a policy question. How do we
choose among them, even within the root that we are responsible
for? That is hard. And it is the sort of thing that I am not
satisfied that we understand how to deal with that, especially
if qualified parties come with conflicting proposals. That is a
very difficult thing.
Mr. Cox. Well, I thank you, and I think what we have
touched on here is something that is not only difficult for
ICANN to handle, but also something that may be beyond the
capacity of any top-level domain system to handle.
It has been suggested, I might add, just for local color,
that a better way to do this, in a purely voluntary fashion,
would be for people to organize around the principle of
including somewhere an Internet address, for example .adu, as
an abbreviation for adult or age-appropriate material, and that
way people could have any address they wanted, any domain they
wanted, and still there would be some unifying theme that
robots could notice. But that is a carol for another Christmas.
Mr. Cerf. That is an interesting idea, in fact.
Mr. Cox. Well, I thank the panel again, and my time surely
has expired.
Thank you, Mr. Chairman.
Mr. Upton. Thank you, Mr. Cox.
This finishes up and concludes the hearing. I would note
for the record, particularly for those Members that were not
able to come, and I know there are some other hearings taking
place at the same time, that we may see some written questions
come your way. You can respond to them on e-mail, if you would
like. We look forward, if that happens, to a timely response.
I would just offer this one conclusion to the hearing.
Based on the questions of all Members here and the statements--
opening statements as well, we don't want a boring or exciting
process. Our goal here is to make sure that it is fair and open
in every way, particularly for those that are qualified parties
with a qualified application, so that they may, in fact,
succeed, and so that all of us users and businesses succeed as
well.
I have viewed this hearing as a constructive one. I hope
all of you have taken that to heart. I think there is room for
improvement as this process continues, and we will continue to
oversee this process in the days ahead not only through my
chairmanship of this subcommittee, but I know Mr. Greenwood
would like to do the same as part of the oversight subcommittee
as well. We look forward to that, and we thank you for your
time and look forward to seeing you again.
Thank you very much.
[Whereupon, at 12:34 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:]
Prepared Statement of Name.Space, inc.
Over the past several years a widespread myth was that adding new
Toplevel Domains to the internet would cause the net to break. The
reality is and has been for five years now that the net is already
broken by NOT adding the new TLDs that have existed since 1996. In a
word, censorship by ``default''. There are places that exist on the
internet that most of the world can't see because they are artificially
and arbitrarily excluded from publication in the global ROOT--the top
of the ``domain tree'' that identifies all the available top level
domains to the rest of the internet.
Many new toplevel domains have been added to the ROOT just as
smoothly as any new ``dot-com'' domain is added to the ``COM'' domain.
On a daily basis sometimes 10,000 or more new entries are added to
``COM'' with no ill effects. At its most basic level, adding one or
more entries into the ROOT domain database (or ANY level of the domain
tree) is nothing more than a mundane administrative task, essentially
copying or typing some lines into a file and saving it. With a simple
``copy and paste'' the internet can be richly enhanced with these new
domain extensions. A very simple and incredibly inexpensive operation
that results in the enabling of vast economic opportunities, making the
best use of the existing ubiquitous and essential DNS technology while
at the same time extending the benefits of expanding the spectrum of
expressive and uniquely descriptive names to support a growing,
commercially and culturally diverse global network.
What should be an everyday mundane administrative task has turned
into the most expensive text edit in history, and one that is delayed
more than five years!
Name.Space has been working toward introducing new TLDs since the
company was formed in 1996 predating ICANN by more than two years.
Since that time Name.Space has been listening to its customers and
users of the internet at large and responding to their desire for new
domain names besides ``.com'' and over the years out of all the
customer requests selected over 540 new extensions and published them
on a distributed DNS infrastructure, (see attatched) available to all
for free. We listened to our clients demands and have worked hard to
bring them the services and quality of service that they were not
getting elsewhere, building useful new tools as we needed them along
the way to improve the security and capabilities of the Name.Space root
domain registry. We would like to share our work with the rest of the
world and of course profit by it so we can create jobs and spinoff
opportunities. The barrier in front of us is a very expensive text edit
that my company paid dearly for and which has yet to happen.
To answer the question raised by this Committee, Is ICANN thwarting
competition? The answer is unmistakedly yes.
Name.Space has been ready to serve the internet with new domains
since 1996 and has been repeatedly denied access to the market by an
artifical and arbitrary exclusion from the ROOT. ICANNs decision to
exclude Name.Space and other qualified applicants unjustly delays the
introduction of true diversity of business model, competition and
consumer choice to the domain industry. It directly harms our business
at Name.Space by the loss of revenues that we have suffered over the
years that most of the world could not resolve our domains, and it
harms individual internet users and non commercial organizations by
depriving them of free speech and consumer choice.
I respectfully request that this Committee reject the ICANN board
selection of 7 TLDs and their operators and ask that the NTIA
reconsider all applicants who were excluded by ICANN and resolve the
terms of inclusion of existing new TLDs into the global ROOT so this
``most expensive text edit in history'' can finally bring about the
logical evolution of the domain name system that is more than five
years in the making--in ``internet time'' five years is an eternity.
______
AtlanticRoot Network, Inc.
Dear Representative Pickering: Thank you for inviting me to respond
to the Center for Democracy and Technology testimony of February 8,
2001.
In order to respond in an organized manner, I have decided to
follow the actual written testimony on a section by section basis. My
comments will be enclosed in brackets [ ] and italicized. For the most
part, Mr. Davidson and I agree. There are, however, some areas in which
I would like to elaborate and some where we disagree.
Summary
The Internet's great promise to promote speech, commerce, and civic
discourse relies largely on its open, decentralized nature. Within this
architecture, the centralized administration of the Internet
Corporation for Assigned Names and Numbers (ICANN) is a double-edged
sword that presents both the possibility of bottom-up Internet self-
governance and the threat of unchecked policy-making by a powerful new
central authority. ICANN's recent move to create new global Top Level
Domains (gTLDs) is a welcome step towards openness and competition. But
the process ICANN used to select those gTLDs was flawed and
demonstrates the need for ICANN to take steps to ensure greater
transparency, representation, and legitimacy.
The Center for Democracy and Technology (CDT) welcomes this
opportunity to testify before the Subcommittee on this issue of
importance to both competition and free expression online. CDT is a
non-profit, public interest organization dedicated to promoting civil
liberties and democratic values on the Internet. We have participated
in ICANN as advocates for open and representative governance mechanisms
that protect basic human rights, the interests of Internet users, and
the public voice.
We wish to make four main points in our testimony:
ICANN's decisions, and particularly its selection of new
gTLDs, raise issues of broad public concern--While ICANN
purports to be a purely technical coordination body, it has the
potential to exert a great deal of control over the Internet,
and many of its ``technical'' decisions have broader policy
implications. The selection of new gTLDs--particularly in the
manner exercised by ICANN--impacts free expression and the
competitive landscape of the Internet. ICANN is not equipped to
make policy decisions, and does not even apparently want to.
But the gTLD selection process suggests that ICANN could be
engaged in broader policy-based decisions than its mission or
mandate should allow.
The ICANN Board and governance structure that made the gTLD
selection is not appropriately representative of the public
voice--A starting point for evaluating the gTLD decision is
asking: Is the group that made this decision appropriately
structured and representative? The Directors that made the gTLD
selection did not include any of the elected members of ICANN's
Board, and there is an ongoing controversy within ICANN about
the appropriate structure and selection of the Board. Despite
efforts to make ICANN inclusive, non-commercial interests
continue to be underrepresented in its deliberations--casting
doubt on the legitimacy of the gTLD decision.
ICANN's process for selecting new gTLDs was flawed.--A $50,000
non-refundable application fee and stringent criteria created a
high barrier for non-commercial applicants and skewed the
applicant pool towards large organizations. The ``testbed''
concept for creating a small number of initial domains, while
not without its merits, also led to the uneven application of
vague criteria in order to reduce the number of applicants from
those who passed more objective criteria. ICANN has produced
little support for its final decisions--decisions that appeared
arbitrary. The appeals process is unsatisfying and post-
selection transparency of the important final contract
negotiations is minimal.
Nevertheless, on balance a rollback of the gTLD decision is
not in the consumer interest. ICANN should reform its selection
process and governance model, and Congress and the Commerce
Department should exercise oversight in this reform.--While the
selection process was flawed, new gTLDs are needed. CDT
believes that on balance the consumer interest in rapid
deployment of new gTLDs, and the violence done to the global
interest in ICANN by U.S. intervention, are not outweighed by
the benefit of the Commerce Department's reconsidering the
entire gTLD decision. Rather, Commerce and the U.S. Congress
should insist on a more objective process for gTLD selection
moving forward, and on reform of ICANN's structure and mission
moving forward to make it appropriately representative.
ICANN's founding documents held out the vision of a new form of
international, non-governmental, bottom-up, consensus-driven, self-
organizing structure for key Internet functions. The promise of that
vision was to promote openness, good governance, and competition on a
global network. Today, that promise is threatened. As the gTLD
selection process demonstrates, serious reform is needed to limit the
injection of policy-making into ICANN's technical coordination
functions, reassert the bottom-up consensus nature of ICANN's
deliberations, and ensure that the public voice is appropriately
represented in ICANN's decisions.
The Center for Democracy and Technology is a 501(c)(3) non-profit,
public interest organization dedicated to promoting civil liberties and
democratic values on the Internet. Our core goals include ensuring that
principles of fundamental human rights and the U.S. Constitution's
protections extend to the Internet and other new media. CDT co-authored
ICANN's Global Elections: On the Internet, For the Internet, a March
2000 study of ICANN's elections. CDT also serves in the secretariat for
the ``NGO and Academic ICANN Study'' (NAIS), a collaboration of
international researchers and advocates studying ICANN's governance and
At-Large Membership structure.
1. ICANN's decisions, and particularly its selection of new gTLDs,
raise issues of broad public concern.
Should the public and policymakers care about ICANN and its new
gTLD decisions? The answer today is yes.
There are two competing visions of ICANN. In one, ICANN is a new
world government for the Net--using its control over central domain
name and IP address functions as a way to make policy for the Internet
globally. In the second, ICANN is a purely technical body, making
boring decisions on straightforward technical issues of minimal day-to-
day interest to the public--like a corporate board or a technical
standards group.
In reality, ICANN is somewhere in between and is likely to require
public attention for at least some time to come. There are at least two
important reasons why ICANN is of public concern:
ICANN's has the potential for broad policy-making--On the
decentralized global Internet there are few gatekeepers and a great
deal of openness--features that have contributed to expression,
competition, and innovation online. In this decentralized world ICANN
oversees a crucial centralized function--the coordination of unique
names and addresses. In this role, ICANN has the potential to exercise
a great deal of control over Internet activities. For example, ICANN
has already required that all domain registrars impose a uniform policy
for resolving trademark disputes. Without a check on its authority,
ICANN could seek to impose other requirements or even content
regulations. While the current ICANN Board has shown an admirable lack
of interest in such policy-making, a more powerful future ICANN might
not be so restrained, particularly without any checks on its authority.
[The UDRP is horribly flawed .
1. There is no avenue for non-trademark holders to file a
complaint. It is designed strictly for the Trademark Lobby and large
multi-national corporations to obtain domain names they did not have
the foresight to register when they had the opportunity to do so.
Further, it allows these interests to restrain fair use of domain
names.
2. Free speech has been curtailed as a result of the UDRP and the
courts have now begun to use these flawed decisions to deny it. While
it has been determined that names like do not
constitute free speech in some cases, others have ruled that it does.
There is inconsistency and bias throughout. Does a name infer free
speech or does it not?
3. What is a bad faith registration? If Irving B. Matthews, CPA
registers ibm.com or ibm.biz, does that mean a bad faith registration?
It seems so in many decisions involving acronyms and other names. Who
has the rights to Ford, Acme, Amex, clue, Barcelona and a host of
others? Does a trademark holder ``own'' words? Does anyone own
language? Is it proper to allow a claim to words such as ``easy'' in
any form and to deny their use to others? This is currently one such
claim. Another is a claim to ``my''--any use of the word!
4. There is no appeals process, yet the complainant may supplement
comments for a fee with one arbitration forum. The respondent may not.
Either side may go to court, of course, but in most cases, the
respondent does not have the resources to do so, and the complainant
knows this. Many respondents simply give up, especially individuals.
There is nothing to prevent a loop. A respondent went to court and won.
The complainant then filed a UDRP claim. The UDRP does not have to
honor a court judgment and ICANN accepted the claim. In case of a UDRP
loss, the complainant could go back to court, and so on. There is
nothing to stop the cycle, so a trademark holder with deep pockets
could easily bully a respondent into giving up a legitimately held
domain.
5. Forum shopping is standard. WIPO has most applications because
of its obvious bias. In my opinion, WIPO should not be a provider at
all, given its mission as advocate for the IP industry.
6. Respondents have no choice in which arbitration provider is
used. In order to have any voice at all, he must choose a three member
panel and pay for it. For most respondents, this is prohibitive. We
must consider that most complaints are filed by established businesses
against individuals or very small businesses. Many complaints are
simply intimidation and theft by fiat, since they know the respondents
many times simply cannot afford representation or the three member
panel choice.
There are many other areas of the UDRP that cry for reform. I am
one of a great many who feel it needs total reform and that WIPO should
be only an advisor for one interest group. There must be advisors from
all stakeholders.
It seems that the large commercial interests have little or no
understanding of the DNS, or do not wish to recognize its hierarchal
structure. Since there can be only one unique character string (name)
at each level, trademarks do not fit the model at all. A domain name is
just a locator for a numerical address.
One solution may be to absolve trademark holders from the
responsibility of policing their marks within the domain name system.
Without that requirement, there would be no need for such a dispute
resolution process. In addition, the ACPA language is so over broad,
that it invites abuse--abuse that is already apparent.
The term ``cybersquatter'' was meant to refer to those who would
deliberately register a known trademark and then attempt to extort the
trademark holder for large sums of money or sell it to a known
competitor to direct customers away from it. Instead, it has been used
to refer to domain name holders who have not used a name at all for the
web or who wish to enter the secondary market--a perfectly legal
activity. While it has been determined that free speech does not apply
to a domain name in itself, the ACPA and UDRP allow a determination
that one is a cybersquatter for registering a domain name. There is a
great disparity here. Remember, a domain name is a locator, even though
it uses what appears to be common language.
I feel that the ACPA language requires change to a narrowly defined
criteria and definition of ``cybersquatter.''
The Lanham Act was written to protect consumers and has now been
perverted to protect trademark holders against both small business and
consumers. It is resulting in restrained trade and free speech.]
Even ICANN's narrow technical decisions have broader
policy impacts--``Technical'' decisions often have broader impact.
Expanding the gTLD space, choosing which registry is recognized for a
country code, or even selecting a method for recognizing when new
country-code domains get assigned (as .ps was recently assigned to
Palestine), for example, all have broader political and social
implications.
[The ccTLDs are not at all happy with proposed actions by ICANN.
Tri-lateral contracts, involving governments in contracts where
delegations belong to individuals or corporations within a country,
forcing gTLD status on a ccTLD . . . These are areas where ICANN
imposes broad policy and it should not.
ccTLDs are and should be autonomous. In my opinion, I do not see
why any of them should be forced into contracts at all. ICANN provides
little or no services to them and there is little or no cost involved
to maintain an entry in the rootzone. ICANN could, if necessary charge
a nominal fee for making contact or nameserver changes, but this fee
should be no more than a nominal administrative charge of five or ten
dollars. If it is automated, there should be no fee at all. It is in
the public interest to have a ``whois'' database for TLDs, but even
this is a minimal cost.
ICANN should not be engaged in policy making for any TLDs beyond
those held by the DoC. Aside from basic technical requirements that
ensure viability of a TLD (nameservers), ICANN should stand aside.
Business models, dispute policies, payment policies, restrictions,
charters should not be within their purview These are business
decisions or decisions within the realm of national sovereignty.]
The Consumer and Free Expression Interest in New gTLDs
Today, access to the domain name system is access to the Internet.
Domain names are the signposts in cyberspace that help make content
available and visible on the Internet. (For further explanation, see
CDT's overview Your Place in Cyberspace: A Guide to the Domain Name
System.) The domain name system may ultimately be replaced by other
methods of locating content online. But for the time being, a useful
and compelling domain name is seen by many as an essential prerequisite
to having content widely published and viewed online.
There is an increasing consumer interest in creating new gTLDs. The
current gTLD name spaces, and the .com space in particular, are highly
congested. The most desirable names are auctioned off in secondary
markets for large sums of money. It is increasingly difficult to find
descriptive and meaningful new names. Moreover, the lack of
differentiation in gTLDs creates trademark and intellectual property
problems: there is no easy way for United AirLines and United Van Lines
to both own united.com.
[Congestion has occurred due to the delay of introduction of TLDs
to the USG root. It has created a perceived shortage of names and
fostered speculation. If existing TLDs had been entered into the root
years ago, the situation would have been very different today. While
further delay will exacerbate the problem, imprudent decision now will
have serious negative impact later.]
ICANN's decisions about new gTLDs can have other implications for
free expression. If, in choosing among otherwise equal proposals, ICANN
were to create a new gTLD .democrats but refuse to create .gop, or
added .catholic but refused to add .islam, it would be making content-
based choices that could have a broad impact on what speech is favored
online.
[There is no reason to refuse to enter a TLD into the root . . .
All candidates with demonstrable technical capabilities should have
been included, and should be included in the future.]
In addition, CDT has some concern that the creation of
``restricted'' domains that require registrants to meet certain
criteria--such as .edu or the new .museum--risks creating a class of
gatekeepers who control access to the name space. Today, access to open
gTLDs like .com and .org does not require any proof of a business model
or professional license. This easy access to the Internet supports
innovation and expression. Who should decide who is a legitimate
business, union, or human rights group? CDT has called for a diversity
of both open and restricted gTLDs, and will monitor the impact of
restricted domains on speech.
[I disagree that there is a problem with creation of ``chartered''
TLDs. To the contrary, chartered or ``restricted'' TLDS should be
desirable. It allows for consumers to search within categories and can
provide an indication that they will find a bone fide organization,
business, profession or individual within a specified TLD. However, for
this to work well in practice there must be a multitude of TLDs
available. And this is the point, is it not? ICANN/DoC have been
reluctant to provide them and impose such measures that it is nearly
impossible to do so for the vast majority of the world].
There is increasing evidence of an artificial scarcity in gTLDs. It
is now widely acknowledged that it is technically feasible to add many
new gTLDs to the root--perhaps thousands or even hundred of thousands.
Limiting the number of gTLDs without objective technical criteria
creates unnecessary congestion; potentially discriminates against the
speech of non-commercial publishers or small businesses who cannot
compete for the most desirable spaces; and places ICANN in the role of
gatekeeper over speech online by deciding which gTLDs to create and
under what circumstances.
There are many legitimate concerns that call for a slower
deployment of new gTLDs. Some have expressed concern about stability of
the Internet given a lack of experience in adding many new gTLDs.
Trademark holders have also raised concerns about their ability to
police their marks in a multitude of new spaces.
[The fallacy of lack of experience is acutely apparent. There are
TLDs such as .WEB and many others that prove it. There are also
companies, such as Diebold Inc., that have been deploying ``new''
services successfully for many years.
Other roots have been adding TLDS frequently with no problems and
DoC has added ccTLDs in droves over the last decade, and during the
most explosive growth period for the Internet. If failure or success is
a criteria, it should be dropped, since the market will determine that
issue.
As for Trademark concerns, let us consider having 500 TLDs (they
exist today) and then determine whether Trademarks have a place in the
DNS. If, as I mentioned earlier, Trademark holders were absolved of
having to police their marks in the DNS, the purpose of alleviating the
scarcity of names would be accomplished. The trademark issue has become
so over blown and powerful that it threatens to overshadow any
advantage in introducing new gTLDs. What is the point if trademark
holders get first choice before any other entity has a chance in every
TLD? It makes no sense at all. With hundreds of TLDs, it is almost
humorous. One possible solution would be to relegate Trademark holders
to a .TMK or .REG for protection of their marks. However, to say they
have first choice in all new gTLDs is ludicrous.]
CDT believes that these concerns support the notion of a phased
``proof of concept'' rollout of new gTLDs. However, we believe that the
consumer interest will be best served by a rapid introduction of the
first set of new TLDs--followed quickly by a larger number of domains.
[I disagree strongly that there is need for ``proof of concept''
since it has already been accomplished by several TLDs, including .BIZ,
.WEB, .ONLINE, ccTLDs and many others. It makes much more sense to
introduce as many as possible (really simple) immediately, with one
caveat. There should be no duplication in THE NAME SPACE.
I have always advocated that DoC should simply include all known
viable TLDs in their root, just as the other major roots include the
DoC TLDs and ccTLDs in theirs. This is a common reciprocal arrangement.
It provides a singular name space and enhances the stability of the
Internet by providing a multiple system of networks for load balancing
and avoidance of a single point of failure.
What is generally not understood is that while THE name space is
absolutely singular, root systems are not. There can and will be many
roots. There is no way to prevent this occurrence. It is in the best
interests of the global community for ICANN/DoC to recognize the
phenomenon and cooperate with it. The alternative is apparent. ICANN
refuses to acknowledge the existence of pre-existing roots and TLDs and
then simply duplicates them. The potential result is chaotic with much
of the innovation in new systems occurring outside of the US where our
national law would have no effect in any case. Cooperation, on the
other hand, would tend to bring these disparate groups to the table.
This attitude and practice blatantly breaks the agreement with DoC
(the ICANN-DOC MOU) and also the APA that ICANN was designed to avoid.
Since the situation is not going to disappear, and will rear its head
frequently, it is my considered opinion that ICANN/DoC move to
cooperate with all existing entities rather than ignore them. One can
choose to ignore warnings of an impending hurricane, but it will still
make landfall. Once you feel the wind, it's too late to plan. In fact,
once DoC introduces a collider and the registry for that collider is
open to the public, the damage may be irreversible.
We still have a chance to deal with impending chaos, but time is
very short. No amount of US legislation will prevent the global
problem. No one country can ``rule'' the Internet and certainly no
single corporation can do so. ICANN could go a long way to mitigate the
situation, but it must be reformed and focused in task in order to
accomplish the task.]
The phased ``proof of concept'' adopted by ICANN, however, creates
a major problem:Because ICANN could add many new gTLDs, but has chosen
to add just a few, it has forced itself to make policy-based and
possibly arbitrary decisions among legitimate candidates.
[ICANN made decisions based on business models, financials, ethics,
mnemonics, and other arbitrary criteria that should not be within its
purview. In addition, it relied on the sometimes grossly erroneous
reports by staff to render decisions without a thorough personal
understanding by board members of each proposal. Staff ran the show.]
In this environment, it is most important that gTLDs be allocated
through a process that is widely perceived as fair, that is based on
objective criteria, fair application of those criteria, and open and
transparent decision-making. There are many reasons to believe ICANN's
first selection process for new gTLDs has been highly flawed.
3. The ICANN Board and governance structure that made the gTLD
selection is not appropriately representative of the public interest.
A starting point for evaluating the gTLD decision is asking: Is the
group that made this decision appropriately structured and
representative? The governance of ICANN itself is an issue of ongoing
debate. Despite efforts to make ICANN inclusive, there are many
indications that ICANN has failed to be appropriately representative of
all the interests affected by its decisions--casting doubt on the
legitimacy of the gTLD decision.
ICANN organization underrepresents many interests.
Members of the Internet user community and advocates for user
interests have often been under-represented in ICANN. ICANN's physical
meetings, where many major decisions are made, occur all over the
world, pursuing an admirable goal of global inclusiveness. However, the
expenses associated with physical attendance at such meetings place it
out of reach for many NGOs and public interest advocates.
CDT's own experience has been that the ICANN community is receptive
to thoughtful input and advocacy, but that it requires a concerted and
ongoing effort to be effective. In our case, that effort has only been
possible through the support of the Markle Foundation, which early on
committed to support efforts to improve the public voice in ICANN. We
have received further support from the Ford Foundation as well. These
grants provided CDT with the ability to attend and follow ICANN
activities, which many other potentially interested organizations in
the educational, civil liberties, or library communities cannot do.
ICANN's bottom-up structures offer imperfect avenues for public
participation. While ICANN explicitly provides representation to a
number of commercial interests, it fails to properly represent the
millions of individuals that own Internet domain names or have an
interest in ICANN's decisions. The main outlet for individual
participation-the General Assembly of the Domain Names Supporting
Organization-appears increasingly ineffective. Non-commercial
organizations have a constituency, the Non-Commercial Constituency, but
it is only one of seven groups making up one of the three supporting
organizations.
[The General Assembly has literally no voice in ICANN policy making
decisions. Recommendations made at the Melbourne meetings were ignored.
In addition, the board meeting was called to order a half hour early
with no visible notification to the public (I attended via webcast) and
important issues were discussed prior to the public's attendance at
that meeting. Furthermore, the agenda did not include discussed items
and public statements had been made that no decisions would be made
regarding the gTLDs. The board then proceeded to resolve that final
decisions would be made without further review and contracts would be
negotiated and signed as well. At 9:00 am, the Chairman announced that
he was leaving early to catch a flight to the US and he left at 10:00
am. In addition, when there was an announcement by a local barrister
that legal action had been instituted against ICANN, board members
laughed openly and encouraged the audience then in attendance to laugh
as well. Professional, open and transparent? No.
As a typical example of ICANN's closed door procedures and
exclusion of the majority of stakeholders, the ICANN/Verisign agreement
was amended and approved within a twenty-four hour time frame with no
allowance for input from the DNSO. As should be expected, this action
has not been well-received by stakeholders. The GA, rightfully, feels
disenfranchised and ,in fact, is disenfranchised. There was an
inadequate time frame allowed for the entire process. Instead,
negotiations were handled without public input for months and Verisign
was permitted to dictate revisions to the original agreement and
completely avoid the APA. The perception globally is negative. ICANN/
DoC could have avoided the negativity with openness and consideration
for the Internet's users. It did not.
With regard to new TLDs, if ICANN were to listen to stakeholders
more, the resulting TLDs would be more likely to serve the public than
those selected.
It should be noted that one of the major objections to IOD's
application was that it would run both registry and registrar for a
period of time. Hans Kraaijenbrink was adamant in his objection to this
stating , ``IOD goes against everything we ve worked on the last two
years they join registrar and registry, and they have a high price.''
An excerpt from a General Assembly post states:
--I still think that to be able to run (and now without time
--constraints and/or other future limitations) the Registry and the
--Registrar for the major generic TLD *is* giving to VeriSign
--unfair competitive edge. As I said, the matter may now be moot,
--but IMHO we have just witnessed the formalization of a change in
--policy by ICANN.
I do not see a problem with a registry/registrar model, especially
for a start-up registry. Our initial model is one such. It is in the
best interests of the registry to bring on registrars, but there should
be a ``breaking in'' period prior to adding such models. IOD's plan was
practical and prudent. It allows development cost recovery in the
initial months and a phase in of participating registrars. Jumping into
an shared registration system (SRS) with no beta testing is detrimental
to users. The objection to IOD's price is disingenuous since it is the
exact price charged by Verisign.
There was little consistency on the part of the ICANN BoD in the
selection of new TLDs. There was obvious bias, Directors participated
with definite conflicts of interest and did not recuse themselves until
after that participation. In addition, there was not a legal quorum for
the final votes. And this is in addition to the entire flawed process
leading to the final selections. ]
ICANN's Board of Directors fails to adequately represent the public
voice.
In the absence of other structures for representation, the main
outlet for public input is the nine At-Large Directors of the Board.
These nine directors are to be elected from within a broad At-Large
membership, but there has been a great deal of debate about the
election mechanism and even the existence of the At-Large Directors. To
date only five of the nine At-Large directors have been elected (the
seats were otherwise filled with appointed directors), and even those
five were not seated in time for the gTLD decision in November.
CDT, along with Common Cause and the Carter Center, has strongly
advocated for broadly representative and fair mechanisms to fill all
nine At-Large seats as quickly as possible. Last March CDT and Common
Cause prepared a study of ICANN's election system, concluding that the
proposed ``indirect election'' would not adequately represent the
public's voice. ICANN agreed to hold more democratic direct elections
(held last October), but only for five of the nine At-Large Directors,
to be followed by a study of the election process. CDT is currently
engaged in an international research effort, the NGO and Academic ICANN
Study (NAIS), examining last year's election, and in June will offer
its suggestions to ICANN regarding future selection of Directors.
[ICANN has posted a notice on its website: ``At large Membership''
with a closed sign. There have been numerous statements and signs that
there is no intention of having an ``at-large'' membership. One board
member stated to Karl Auerbach (Melbourne BoD meeting) that board
members who where there before him (Mr. Auerbach) saw no need for an
at-large membership and were opposed to it. The white paper and MOU are
being systematically ignored.]
In the meantime, serious questions remain about adequate public
representation on the current board, and the future of the public voice
in selecting the Directors who will make decisions about additional
gTLDs.
[In my testimony on February 8, I stated that one major change
should be the election of the board. Most have been ``squatting'' for
over two years when they should have had an election within two
months.]
ICANN has shifted away from bottom-up coordination.
ICANN's founding conceptual documents, the Green and White Papers,
called for ``private bottom-up coordination'' as the governance model
for ICANN. Despite early attempts at consensus-based decision-making,
authority in ICANN increasingly rests at the top, with the
Corporation's nineteen-member Board of Directors. The Supporting
Organizations have proven to have limited roles in policy generation
and consensus-building. Increasingly, final ICANN policies are
generated by ICANN staff and Board members. As a result the Board has
moved away from the consensus-based, bottom-up practices which were
originally a critical element of its conception.
[The board is captured by special interests and even the elections
for the at-large were tainted by ICANN's selection of candidates rather
than completely open nominations by the at-large. community. It is
anything but bottom up, open and transparent.]
4. ICANN's process for selecting new gTLDs was flawed.
CDT has not taken a position on the merits of any particular gTLD
or registry operator chosen by ICANN. Our focus has been on the process
ICANN has used to select these domains and the potential rules it may
impose on the use of domains. A different, better process might have
yielded very similar results.
[Perhaps it would not have. ICANN should not have accepted
applications for existing TLDs. While CDT does not single out any
applicant, it also does not take into consideration that many
applications were for pre-existing TLDs. This should never have
occurred. In addition, there is no reason why existing TLDs should have
to be under contract to ICANN in order to be included in the root.
Furthermore, the $50,000 fee is outrageous and unnecessary. It was
arbitrarily chosen at the last moment and is designed to include
litigation that ICANN knew would come as a result of its flawed plans.
Why should losers fund ICANN's defense against them and also fund
implementation of the winners of this lottery?
In addition, the application questions themselves precluded
applications by any entity that did not agree with sunrise or UDRP.
ICANN states it was not a criteria, but the intimidation was there and
all applicants for gTLDs who were selected had agreed to these terms.
Another requirement was no involvement with other roots or having
registrations. That also precluded application by all pre-existing
TLDs. At first there was concern that .WEB registrants would be
cancelled.
We have been criticized for not applying to ICANN. Our response is
that application for us would have been a waste of money that could be
better spent for customer service, development and infrastructure, for
one thing. For another, we feel that our existence as a viable business
and registry should be sufficient as proof of concept. As many of the
ccTLDs have no contract with ICANN and do not adhere to ICANN policies
and rules, we have a viable business and should not be compelled to
suddenly contract with ICANN for our existence or inclusion in the USG
root. Had ICANN not selected .BIZ for award to a competitor, we would
not have been placed in this position. Having done so, ICANN has
indicated to the world that co-opting another's business product is
okay as is duplication in the name space. One obvious result is
New.net's introduction of 17 colliders out of the 20 TLDs they
launched. They insist that since no one ``owns'' a TLD, they have every
right to make those business decisions. They are correct, of course.
There is nothing to stop them and the precedent has been set by ICANN.
Neither New.net nor ICANN is considering the chaos this arbitrary
decision is causing in the DNS. As time progresses, it will become more
obvious. We are witnessing the tip of the iceberg.
No amount of legislation will prevent the fracture and will
certainly not cure it. Only reversing the precedent by preventing DoC
from allowing it to occur in the USG root can assist in the global
effort to maintain a stable, collision-free name space. It must be the
responsibility of the caretaker of the largest market share to set the
pace for the rest of the world. That caretaker is the U S government
that assigned the task to the Department of Commerce. A wise president
once said ``The buck stops here.'' So it does. ICANN's burying it's
head in the sand is not the answer. It must take responsibility for the
result of its actions and take the initiative to mitigate its stubborn
refusal to cooperate. However, in the end, it is the U S Government
that has the final authority to mitigate this problem since ICANN has
shown it is not inclined to do so.]
We note also that ICANN and its staff undertook this final
selection in a very compressed period at the end of a years-long debate
about the addition of new gTLDs. They did so in the face of tensions
between at least three competing goals: an open, inclusive, and fair
process; rapid completion of that process, with less than two months
between the submission of proposals and the selection by the Board; and
a ``proof of concept'' goal of a small number of finalists. These often
irreconcilable goals led to many of the problems with the process.
[Because both DoC and ICANN have been reluctant for many years to
move forward with new gTLDs and because of lack of cooperation with
existing entities, scarcity and pubic pressure were factors in ICANN's
actions. However, there was no reason to accelerate this process to the
detriment of all concerned or to avoid an open and transparent process.
Had there been an elected board, a full at-large contingent and
cooperation, very little of the controversy would have reared its head.
In view of the white paper and MOU, it is more important to have a fair
and open process than to meet an unreasonable time constraint.]
ICANN staff made substantial efforts to conduct an open and
accountable process in the face of these constraints, including the
publication of hundreds of pages of applications and the creation of
forums to discuss the proposals. Still, it is important to recognize
features of the selection process that were flawed, that had anti-
consumer and anti-competitive impacts, and that should not be repeated.
[There was inadequate notification to the public in all areas. Only
those who were familiar with the ICANN website could find them. The
majority of the public does not even know what ICANN is. It is the duty
of ICANN to publicize their processes in order to invite the widest
possible discussion. At the very least, all domain name holders should
be notified via e-mail. The website should be re-designed to allow the
public to find all documents and correspondence easily. Instead, much
is buried and requires a sophisticated search to find anything.]
Initial Criteria--ICANN took the helpful step of publishing a set
of criteria it would use in judging applications. In general, the
substantive areas of the criteria reflected objective goals that had
support within much of the ICANN user community. However, the criteria
themselves were vaguely worded and their ultimate application was
poorly understood. Most importantly, they were not purely technical in
nature--reflecting policy goals as much as technical needs--and were
not precise enough to be purely objective in their application.
[Again, the application criteria was intimidating at the very least
and strayed quite far from technical issues. As for the user community,
there was a great deal of concern regarding that criteria and some of
it was expressed on the ICANN message boards. It was not objective and
some have said it went as far as to restrain trade. ]
High Application Fee--ICANN required a $50,000 non-refundable
application fee for all gTLD applicants. This high fee was a clear
barrier to entry for many potential non-commercial applicants and
biased the applicant pool in favor of large organizations that could
risk the fee. This issue was raised by CDT at the Yokohama ICANN Board
meeting, and the Board specifically refused to offer any form of lower
application fees for non-profit or non-commercial proposals.
Additionally, it appeared that the selection process would weed out
applications without sophisticated business plans, legal counsel and
technical expertise. These important qualifications for a strong
application required access to large resources. Given the very short
timeframe of the application period, non-commercial applicants were
therefore put at an even greater disadvantage.
[I covered this earlier. The fee excluded not only non-commercial
applicants, but small businesses as well. It was also meant to fund
ICANN's litigation expenses against the very applicants who paid it,
and to fund other ICANN activities. No small business could afford the
requirements of the ICANN process. So once again, we are faced with big
business ruling the Internet to the detriment and exclusion of the
average user and small business.
There is truly no reason to exclude the smallest organization or
business from entering the TLD market. The public will determine the
success or failure of any registry. While there should be contingencies
for failure in place, there is simply no good reason to exclude any
entity that can make a TLD ``live'' and accept registrations. Many
ccTLDs do not have sophisticated systems in place, and they are not
necessary. Registries will evolve over time.]
Legitimacy of the Board--As noted above, policy-making at ICANN is
still hampered by institutional challenges regarding its legitimacy and
decision-making mechanisms. ICANN took the unorthodox step of seating
newly elected At-Large Directors after the gTLD decision was made (even
though in previous years new Board members had been seated at the
beginning of meetings.) The argument that new Directors would not be
sufficiently up to speed on the new gTLD decision is specious. The
entire ICANN community was highly focused on the gTLD debate, the new
Board members showed in public appearances that they were highly versed
in the issue, and each of them had gone through an intense campaign in
the Fall answering numerous questions that likely made them more expert
on the nuances of the gTLD issue than many sitting Board members.
[It is true that the public and especially the at-large community
was irate at the decision of the board to exclude the elected directors
from decision making for the new TLDs. The attitude of the remaining
directors toward the newly elected directors at the Melbourne meeting
was indicative of the disdain toward the at-large community. The
Chairman cut them off almost every time they spoke. I felt it was an
embarrassing display. There were many comments made on the ICANN
forums, the domain-policy mail list maintained by NSI and many other
mail list forums. The at-large community was generally incensed that
their elected Directors had no input in these decisions. ICANN should
have either delayed the selections for the next quarterly meeting or
seated the elected Directors prior to the MDR meeting.]
Evaluation of Applicants--The ICANN staff attempted, with the help
of outside consultants, to apply its criteria to the 47 applications
received. The published Staff Report provided a useful guide to this
evaluation, but was published just days before the Marina Del Rey
meeting with little opportunity for public comment or debate. There was
little time for public presentation by each of the applicants, or for
each applicant to answer questions or misconceptions about their
submissions. But beyond that, the staff report indicated that about
half (23) of the applicants had met their objective criteria for
technical competence and economic viability. Having met the objective
threshold, the Board was left with only the somewhat arbitrary
application of other criteria to narrow the number of applications to
the desired low number.
[There was almost no time to deliberate the staff report, which
was, itself erroneous and sorely lacking. Each applicant had only three
minutes to respond and no face to face meetings to discuss errors or
omissions. For $50,000, there should have been a great deal more
consideration afforded them. The desired low number was also reached
arbitrarily with no legitimate reason for so doing. If 23 applicants
met criteria, there should have been no reason to exclude them, other
than duplication, of course. However, other choices for TLD strings
could have been made.]
Final Selection Arbitrary--With a high number of objectively
qualified applicants, and a commitment to a low number of final gTLDs,
the final decision by the Board at Marina Del Rey was dominated by the
arbitrary application of its remaining criteria as well as other new
criteria--many of which had little to do with technical standards.
Instead, Directors referenced conceptions about the ``sound'' of names,
the democratic nature of the applicants, or the promotion of free
expression--criteria to which CDT is sympathetic, but some of which
were highly subjective and unforeseen review criteria.
[After attending the meeting via webcast, I replayed the meeting
several times attempting to find some reasonable explanation for the
process used to select TLDs. I concluded there was none. It was
subjective and unreasonable for the most part. Indeed, the only
reasonable decision was concerning not awarding .WEB to Afilias because
Vint Cerf felt ``discomfort'' with awarding it to anyone other than the
existing registry (Image Online Design). Of course a new category was
pulled out of a hat in order to hold .WEB ``in reserve.'' Director
Kraaijenbrink actually raised his voice rather loudly in his opposition
to this proposal, making it clear that the board was well aware of the
duplication and the existence of registrations. He was insistent that
this did not matter, indicating that ICANN was above it all and should
award .WEB to Afilias. Of course, the ARNI .BIZ duplication and the
existence of its functional registry was ignored. The iii TLD was
dismissed because of its ``sound.'' Diebold Inc, a profitable $2
billion public corporation, had their application dismissed in the last
round because of ``a lack of financial commitment.'' Bias abounded and
arrogance toward the rest of the community was obvious.]
Reporting and Post-selection Accountability--There is currently a
lack of any serious objective mechanism for evaluating or appealing the
Board's decision. While CDT is not in a position to judge the merits of
their arguments, the eight petitions for reconsideration filed by
applicants after the Board meeting (see http://www.icann.org/
reconsideration ) raise concerns. Moreover, the final contractual
negotiations between ICANN and the selected applicants are likely to
include rules of great interest to the user community--yet are
occurring with little transparency.
[With the decision of the board in Melbourne, there is no
transparency or further review by the public. At that time, there were
still important documents not posted, yet the board empowered itself to
complete negotiations and execute the contracts. Again, it had been
announced that no decisions regarding the TLDs would be made in
Melbourne because there was still a great deal of negotiating to do. It
was suddenly reversed in that early unscheduled half hour discussion.
The media was taken by surprise, as were the attendees. In addition,
recommendations by the Names Council were ignored.]
Taken as a whole, the process for selecting new gTLDs contained
serious flaws that at the very least need to be corrected before
another round of selections. Importantly, the process shows how the
line between a ``purely technical coordination body'' and a ``policy-
making body'' is easily crossed by ICANN. The selection made by ICANN
was not a standards-making process or a technical decision. Even
ICANN's ``objective'' criteria were based on social values like
economic viability and diversity (values which CDT supports, but which
represent policy choices nonetheless.) Once it applied these
``objective'' criteria, the ICANN Board did not hesitate to engage in
other policy-making approaches as well.
5. Moving Forward: Suggestions for Reforming ICANN and the gTLD Process
The flaws in ICANN's process for allocating new gTLDs, as outlined
above, are highly troubling. They point to a need for reform in both
the ways the ICANN makes decisions about gTLDs, and ICANN's entire
structure.
CDT still believes that Internet users have an interest in the
vision spelled out in the White Paper--in the creation of a non-
governmental, international coordination body, based on bottom-up self-
governance, to administer central naming and numbering functions
online. Were the Commerce Department to substantially revisit and
change ICANN's decisions on the new gTLDs, the global community would
likely question the existence and utility of ICANN. We also believe
that there is a dominant consumer interest in rapid rollout of new
domains, which would be dramatically slowed by an APA-based rule-making
on gTLDs by Commerce. Therefore, on balance, we do not support a major
effort to roll back ICANN's decision on the initial domains, but rather
would favor rapid creation of the new domains followed coupled with an
investigation into the processes ICANN used to create gTLDs.
[I disagree that having a rulemaking on questionable practices is
not in the best interests of the public. It is the avoidance of the APA
that has led to many of the problems we see to date. However, I see no
reason for it to be prolonged, nor do I see any substantial reason for
retarding the completion of contracts for those TLDs that are not being
challenged. I am naturally opposed to DoC entering a duplicate .BIZ
into the root and would like to think that the legality and
inadvisability of such a move would be considered. Our Petition for
Rulemaking stands, of course, and we hope it will be honored by the
DoC. I would truly hate to think that our government practice includes
taking a business product from a small business and handing it to a
competitor for a fee, thus damaging the business. The lack of
protection under trademark law does not preclude IP rights in that
product. ICANN was wrong in accepting applications for existing TLDs
and DoC will be wrong in entering duplicates into the root for any TLD.
]
Among our specific suggestions:
ICANN must reform the method and process it uses for selecting
the next round of new gTLDs. A logical step would be to publish
an objective and specific set of criteria, and apply it in a
more open and transparent way with greater opportunities for
public comment. ICANN should stay away from policy-oriented
criteria, and attempt to promote criteria based on technical
merit and stability. Applicants that meet the criteria should
be given the opportunity to participate in new gTLDs.
Barriers to diversity should be mitigated. In particular, the
$50,000 fee should be reduced or waived for non-commercial or
non-profit entrants.
A study of the method of selecting domains should be set in
motion. In addition, careful consideration should be given to
the potential openness, competitiveness, and free speech
implications of creating a large number of ``chartered'' or
restricted domains that establish gatekeepers on access to
domain names.
[There is no reason for a $50,000 fee except to fill ICANN's
treasury. If applications are limited to basic technical criteria,
$1,000 is sufficient. The fees to be paid to ICANN are excessive as
well, and should be seriously reviewed. In addition, if ICANN were
reasonably structured and salaries reduced to appropriate levels, all
fees could be reasonable.
I also see no reason to exclude ``chartered'' TLDs. There are many
areas where ``gatekeepers'' are advisable, such as .KIDS, .XXX,
.MUSEUMS, .CLUB, .UNION, .REALESTATE . . . Others such as .INFO, .WEB,
ETC need no gatekeepers. There is room for both. If there is a
multitude of TLDs, there will be no barrier to free speech, commercial
activity or a pressing need for intrusive IP interference for average
users. It is not the nature of the TLDs that is causing the problem. It
is the restriction in introduction of TLDs and duplication in the name
space that is the problem. It is not difficult to solve these problems,
but it will necessitate ICANN reform.]
ICANN's governance itself is implicated in the gTLD process. Among
the major structural reforms ICANN should pursue include:
Limited mission--Steps must be taken to structurally limit the
mission of ICANN to technical management and coordination.
Clear by-laws and charter limitations should be created to
delineate ``powers reserved to the users''--much as the Bill of
Rights and other constitutional limitations limit the power of
the government under the U.S. system.
Empower the public voice in ICANN--The internal study underway
of ICANN's At-Large membership and elections should be a
vehicle for ensuring that the public voice finds appropriate
ways to be heard in ICANN's decision-making processes.
[It is my hope that the sentiments voiced at the Melbourne meeting
will not hold true and that the at-large membership will be restored
quickly. Without this input from the Internet community, ICANN will set
itself up as a world Internet governing body that is not in the
interests of anyone but a very small, select group of special
interests. ICANN has done a great deal of harm and must now turn things
around to benefit the community. I believe it can be accomplished, but
will require continual oversight. In addition, ICANN must be held to a
narrow mandate as stated by the CDT.]
Expanded review process and bottom-up governance--ICANN should
build internal review processes that produce faith in the
ability to appeal decisions of the Board, and continue to
pursue the consensus-based governance model.
While we do not believe the Commerce Department and Congress should
intervene in the initial selection decision, they have a role in this
reform. Just like any national government, the U.S. has an interest in
making sure that the needs of its Internet users and businesses are
protected in ICANN. While the U.S. must be sensitive to the global
character of ICANN, it cannot ignore that at least for the time being
it retains a backstop role of final oversight over the current root
system. It should exercise that oversight judiciously, but to the end
of improving ICANN for all Internet users. It is only by restoring the
public voice in ICANN, limiting its mission, and returning to first
principles of bottom-up governance that ICANN will be able fulfill its
vision of a new international self-regulatory body that promotes
openness and expression online.
[I believe that the Department of Commerce should definitely
intervene in the initial selection decision. Not just regarding .BIZ,
but others as well. The Sarnoff application for iii and the Diebold
application, should not have been discarded and there were other
arbitrary decisions as well. If these decisions stand, the precedent
for further arbitrary decisions is set. It is important to prevent
arbitrary actions by ICANN. I also believe that Congress, in its
oversight capacity, should intervene with the Department of Commerce to
ensure that the APA is observed and the best interests of the entire
Internet community are met. It is especially important, in my opinion
to ensure that the terms of the green and white papers and the MOU are
adhered to. Thus far, they are being greatly offended. Entities are
being harmed and the stability of the Internet is about to be injured.
Cooperation among all stakeholders is the most desirable method, of
course, and can be accomplished. However, ICANN/DoC must show a
willingness to do so.
I think that one critical factor has been overlooked completely. It
is the TLDs that are critical to the Domain Name System. Roots are
simply the method of bringing those TLDs to the public in a
comprehensive manner. TLDs can be accessed by anyone at any time, but
would have to constantly change computer settings to do so and would
have to know where to ``point.'' This is where the rootzones come into
play. Exclusion of TLDs by the DoC simply makes it more difficult for
users to access them. It does not mean they will disappear or that they
are invalid. It does, however, mean that there should be a concentrated
effort to not only include all known operational TLDs, but assist in
the effort to cooperate and strive to attempt provide a collision- free
name space.
I would invite the participation of ICANN/DoC to participate in the
efforts of TLD holders world-wide to cooperate in this effort. To that
end the Top Level Domain Association (TLDA) was recently incorporated
as a trade association. It is now in its formation stage and an initial
board has been seated. Membership will be comprised of TLD holders and
will strive toward cooperation on a global scale. ALL TLD holders will
be able to join, including the Department of Commerce (which can
appoint ICANN as its representative if it so chooses). The association
will not be affiliated with any root, and will remain autonomous.]
Thank you again, Representative Pickering for the opportunity to
express my views of the current situation regarding ICANN and the
introduction of new TLDs to the USG root.
Sincerely,
Leah Gallegos
AtlanticRoot Network, Inc.