[Senate Hearing 107-1100]
[From the U.S. Government Publishing Office]
S. Hrg. 107-1100
ICANN GOVERNANCE
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HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 14, 2001
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois RON WYDEN, Oregon
JOHN ENSIGN, Nevada MAX CLELAND, Georgia
GEORGE ALLEN, Virginia BARBARA BOXER, California
JOHN EDWARDS, North Carolina
JEAN CARNAHAN, Missouri
Mark Buse, Republican Staff Director
Ann Choiniere, Republican General Counsel
Kevin D. Kayes, Democratic Staff Director
Moses Boyd, Democratic Chief Counsel
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SUBCOMMITTEE ON COMMUNICATIONS
CONRAD BURNS, Montana, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
TRENT LOTT, Mississippi DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas JOHN F. KERRY, Massachusetts
OLYMPIA J. SNOWE, Maine JOHN B. BREAUX, Louisiana
SAM BROWNBACK, Kansas JOHN D. ROCKEFELLER IV, West
GORDON SMITH, Oregon Virginia
PETER G. FITZGERALD, Illinois BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada RON WYDEN, Oregon
GEORGE ALLEN, Virginia MAX CLELAND, Georgia
BARBARA BOXER, California
JOHN EDWARDS, North Carolina
C O N T E N T S
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Page
Hearing held on February 14, 2001................................ 1
Statement of Senator Boxer....................................... 10
Statement of Senator Burns....................................... 1
Witnesses
Auerbach, Karl, member, ICANN Board of Directors................. 2
Prepared statement........................................... 4
Cartmell, Brian R., Chairman and CEO, eNIC Corporation........... 42
Prepared statement........................................... 44
Cochetti, Roger J., Senior Vice President, Policy, VeriSign
Network Solutions.............................................. 59
Prepared statement........................................... 61
Froomkin, A. Michael, Professor of Law, University of Miami
School of Law.................................................. 48
Prepared statement........................................... 50
Hansen, Kenneth M., Director, Corporate Development, NeuStar,
Inc............................................................ 63
Prepared statement........................................... 65
Roberts, Michael M., CEO, Internet Corporation for Assigned Names
and Numbers.................................................... 11
Prepared statement........................................... 13
Appendix
Broitman, Elana, Director, Policy and Public Affairs,
register.com, prepared statement............................... 77
Letter to Hon. Barbara Boxer, Feb. 16, 2001.................. 80
Crispin, Kent, Computer Scientist, Livermore National Laboratory,
prepared statement............................................. 94
Fassett, Ray, Think Right Company, prepared statement............ 95
Gallegos, Leah, President, AtlanticRoot Network, Inc., prepared
statement...................................................... 81
Gerrin, Paul, Founder/CEO, Name.Space, Inc., prepared statement.. 98
Mackay, Bart P., Vice President and General Counsel, eNIC
Corporation, prepared statement................................ 90
Peters, Karl E., President and CEO, Bridge International
Holdings, Inc., letter dated February 12, 2001, to Senator
Burns.......................................................... 92
Response to written questions submitted by ICANN to Mike Roberts. 92
Stahura, Paul, President, Group One Registry, Inc., prepared
statement...................................................... 95
International Congress of Independent Internet Users, prepared
statement...................................................... 99
The Domain Name Rights Coalition and Computer Professionals for
Social Responsibility, prepared statement...................... 100
ICANN GOVERNANCE
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WEDNESDAY, FEBRUARY 14, 2001
U.S. Senate,
Subcommittee on Communications,
Committee on Commerce, Science, and Transportation,
Washington, DC
The Subcommittee met, pursuant to notice, at 9:30 a.m. in
room SR-253, Russell Senate Office Building, Hon. Conrad Burns,
Chairman of the Subcommittee, presiding.
OPENING STATEMENT OF HON. CONRAD BURNS,
U.S. SENATOR FROM MONTANA
Senator Burns. We will call this hearing to order. We have
some other members coming, but I like to get started pretty
close to on time, and we will hear the testimony of the ones at
the table this morning and then try to start a dialog on this
important situation.
We are familiar by now with the explosive growths in the
use of the Internet in recent years and how it has transformed
our lives. Most of us know very little, however, about how it
began, how it evolved, and how it operates today We have come
to take the existence and operation of the Internet for
granted, except for the occasional intrusion by hackers, and
then that makes big headlines.
The Internet has become important to our Nation's well-
being. We in Congress need to become better informed about its
operation. We may still choose to legislate, but at least have
the choice before us should we deem it important to this
country. This is particularly true in the crucial area such as
the domain named system which is highly technical in nature.
While today's topic is one that might tend to make the eyes
glaze over, we are, in fact, dealing with the very foundation
of the Internet's information superstructure.
While terms such as top-level domains and Internet protocol
addresses might seem to be part of a foreign language,
understanding how the Internet works and who controls it is
critical to the economic, cultural, and educational destiny of
this Nation.
With that in mind, this Subcommittee takes its oversight
capacity very seriously. I believe it is essential that the
Subcommittee thoroughly examine ICANN and how it was created,
the procedure it has created and followed, and the implications
for the consumers and competition.
Today's hearing is necessary only as a first step of
conducting that examination. There are several issues that I
would like the Subcommittee to consider during these hearings.
Many of them involve the delegation of control over the
domain name system from the Department of Commerce to the
Internet Corporation for Assigned Names and Numbers. That is,
ICANN.
The formation of ICANN originated with the so-called Green
and White Papers of the Clinton Administration in 1998 that
proposed the privatization of the domain name system.
The White Paper called for the creation of the new not-for-
profit corporation formed by private sector Internet
stockholders to administer policy for the Internet name and
address system and declared that the U.S. Government should end
its role in the Internet number and name address system.
Soon thereafter, ICANN was created and the Commerce
Department began to delegate certain functions of the Internet
domain name system to it. In the eyes of many, this delegation
has happened far too swiftly. While ICANN is supposed to
function by a consensus of the Internet community, its
operations have often been controversial and shrouded in
mystery.
Serious questions arise about the very legitimacy of ICANN
as an organization. Professor A. Michael Froomkin, who will
testify before us today, makes a powerful argument that the
entire delegation of authority from the Commerce Department to
ICANN is either a violation of the Administration Procedures
Act or a violation of the non-delegation doctrine of the United
States Constitution. I look forward to hearing his testimony.
In short, three serious and troubling questions surround
ICANN.
First, is the delegation of authority over the domain name
system from the Commerce Department to ICANN legal?
Second, is ICANN an appropriate organization to manage the
domain name system? Are they technically competent, and have
they built the required trust for the organization to operate?
Third, how can ICANN perform so far, or how has ICON
performed so far? Have their processes, for example, with the
selection of the new generic top-level domain names been open,
fair, and democratic?
I'm certain that the answers we hear to these questions
will vary, and they will raise new questions as the dialog
continues. The issues are complicated, but the stakes are very
high. My greatest fear is that the administration of the
Internet will be changed in foolish, even disastrous ways while
very few people are watching. We simply cannot afford to let
that happen.
I welcome our witnesses, and I look forward to hearing
their testimony. I would like to specifically mention that a
witness on our second panel, Brian Cartmell, represents the
eNIC Corporation whose president, Jim Trevino, hails from
Calispell, Montana, and we welcome all those folks today.
So we will start with testimony this morning. We welcome
Mr. Auerbach, and we look forward to your testimony.
STATEMENT OF KARL AUERBACH, MEMBER,
ICANN BOARD OF DIRECTORS
Mr. Auerbach. Good morning, Mr. Chairman, distinguished
Senators. Thank you for giving me the opportunity to appear.
I have been involved in the Internet since 1974. I am a
computer engineer. I work in the Advanced Internet
Architectures Group at Cisco Systems. I neither represent nor
speak for Cisco. My opinions are my own.
I am a member of the ICANN Board of Directors. I am the
only person on ICANN's Board of Directors who obtained his seat
through an open election of the Internet community in North
America.
The Internet is seductive. Because the Internet is new and
technical, there is much room to dissemble public policy as
technology. Because the Internet recognizes few borders, it is
easy for subtle controls to have a broad impact, and the
Internet is unclaimed territory upon which an administrative
agency may plant its flag and extend its regulatory powers.
I support the continued existence of ICANN. ICANN is a
valuable institution. Its roles as a technical coordinator are
quite properly needed for the smooth functioning of the
Internet. However, ICANN is ill-designed, has been ill-
operated, has brought upon itself significant ill-will within
the Internet community, and has greatly exceeded its proper
scope. I believe that significant restructuring of ICANN is
needed so that the corporation can fulfill its purposes and
fulfill its obligations toward its stated beneficiaries.
My primary focus within ICANN is on limiting ICANN's scope
of authority, creating well-defined procedures for fair
decisionmaking, and establishing solid business practices.
These are conservative and reasonable goals. ICANN is a
secretive entity. Even as a director, I have difficulty
discovering what ICANN is doing. There are parts of ICANN to
which I am denied access. ICANN has a strong aversion to
democratic principles.
ICANN has been obligated from the outset to create an at-
large membership. ICANN assured Congress that such a membership
would be in place, and then proceeded to back-track, pare, and
equivocate on that assurance. The election we had last fall was
for only a portion of the Board's seats that were promised.
Those few of us who were elected have received seats of
reduced duration, as compared to those of the non-elected
directors, and now the existence of that at-large membership is
at risk. Indeed, ICANN staff has gone so far as to declare that
the at-large membership no longer exists.
There are lessons to be drawn from ICANN. ICANN has shown
us that governmental powers ought not to be delegated to
private bodies unless there is an equal obligation for full
public participation and public accountability. ICANN has shown
us that a public benefit and tax-exempt corporation may be
readily captured by those who think of the public less as
something to be benefited than as a body of consumers from whom
profit may be made. The role of the U.S. Department of Commerce
in ICANN has shown us that the Internet may be used as a
camouflage under which administrative agencies may quietly
expand their powers without statutory authorization from
Congress or the Executive Branch.
Thank you very much for this opportunity to speak. I will
be happy to answer any questions you may have at this time.
[The prepared statement of Mr. Auerbach follows:]
Prepared Statement of Karl Auerbach, Member,
ICANN Board of Directors
Good morning. I have been involved in the Internet since 1974 and
have actively participated in the transition of its administration to
the private sector for the past 5 years.
I am a computer engineer--I do research pertaining to ways of
making the Internet more reliable and efficient in the Advanced
Internet Architectures Group of Cisco Systems in San Jose, California.
I am also working on a joint Cisco-University of California research
project on advanced control and provisioning mechanisms for the net.
With respect to my service on the board of ICANN and for all the
opinions I am expressing here today I neither represent nor speak for
Cisco. My opinions are my own.
I am also an attorney. I graduated cum laude in 1978 from Loyola of
Los Angeles specializing in commercial, international, and
administrative law. Although I maintain my status as the member of the
California Bar and the Intellectual Property Section of the California
Bar, I am not engaged in active practice.
I have been a founder, principal, or first employee in several
Internet related startup companies. These include Epilogue Technology
Corporation (now part of Wind River Systems); Empirical Tools and
Technologies Corporation; Precept Software (now part of Cisco Systems);
and InterWorking Labs, Inc. These have provided me with a broad base of
experience in commerce and technology. I have direct experience with
the needs and obligations of Internet related businesses. I am
sympathetic to the needs of Intellectual Property owners. I own
copyrights, I have owned federally registered trademarks, and I have
filed for patents.
I have been active in the core design and standardization body of
the Internet, the Internet Engineering Task Force (IETF), since the
mid-1980s. And I have been a member of the Internet Society (ISOC)
since its formation.
I have been deeply involved during the last several years with the
evolution and activities of what has become ICANN. I am a founding
member of the Boston Working Group, one of the groups that submitted
organizational proposals to NTIA in 1998 in response to the so-called
``White Paper.'' I am a member of the ICANN Board of Directors. I was
elected to represent North American Internet users. Four others were
elected at the same time to represent other regions of the world.
I was elected to my seat. I was not appointed.
I was elected to represent the Internet users of North America in
an election in which I ran against six other highly qualified
candidates: the Chancellor of the University System of Maryland, the
Chief Scientist of BBN Technologies, the President of the Information
Technology Association of America, the former President of the
Association for Computing Machinery (ACM), a Professor of Business at
the University of Texas, and the former holder of the Berkman Chair at
the Harvard School of Law.
I am the only person on ICANN's Board of Directors who was elected
by the Internet users of North America.
I have only been on ICANN's Board of Directors for a few months--my
term started shortly after the well-publicized and controversial
selection of a mere seven new Top Level Domains (TLDs).
However, despite the short time I have been a Director, I have
already learned much to confirm my fears that ICANN is suffering from a
lack of public process, lack of accountability, mission creep, poor
communication, excessive delegation of policymaking to staff, and poor
business practices. As a Director it is my job to work to correct these
weaknesses. But I despair at the immensity of the task.
My primary focus within ICANN is on limiting ICANN's scope of
authority, creating well defined procedures for fair decisionmaking,
and establishing solid business practices. These are conservative and
reasonable goals.
As both an engineer and an attorney with long experience in other
Internet governance organizations I have a solid grasp of the issues
ICANN has sought to address.
ICANN should be based on viable real-world ideas and processes, not
on some abstract notion that suggests that ICANN can somehow fly above
technical, economic, and political realities.
Those who use the Internet ought to have a voice in the running of
the Internet. I do not subscribe to the notion that people can be
properly represented by pre-defined, one-size-fits-all ``constituency''
structures such as are found in much of ICANN's present structure.
I support the continued existence of ICANN. ICANN is a valuable
institution; its roles as a technical coordinator are quite properly
needed for the smooth functioning of the Internet. However, ICANN is
ill designed, has been ill operated, has brought upon itself
significant ill will within the Internet community, and has greatly
exceeded its proper scope. I believe that significant restructuring of
ICANN is needed so that the corporation can fulfill its purposes \1\
and fulfill its obligations toward its stated beneficiaries.\2\
I would like to discuss the following matters:
1. What kind of entity is ICANN?
2. How can ICANN obtain acceptance and legitimacy?
3. ICANN's obligation to have meaningful public participation in
decisionmaking.
4. Specific things Congress, the U.S. Department of Commerce, and
ICANN ought to do.
what kind of entity is icann?
ICANN is Internet governance.
ICANN is far more than mere technical coordination.
ICANN is about policies for the allocation of Internet resources.
ICANN is responsible to no one other than the Attorney General of
the State of California.
ICANN's policies have an economic impact that is potentially
measured in billions of dollars. The impact of decisions in the Domain
Name System (DNS) space have been well noted elsewhere and were
illustrated last week in hearings before the House Subcommittee on
Telecommunications.
There are those who say that ICANN is merely a technical body. I am
a technologist. Yet I have a difficult time understanding how any of
ICANN's decisions concerned with the Domain Name System have any
technical content at all.
One must wonder where the technical component might be in ICANN's
Uniform Dispute Resolution Policy--a policy that expands the protection
of trademarks to an extent not granted by any national legislature. And
one must also wonder where the technical component might be in ICANN's
preservation, indeed in ICANN's extension, of the hegemony of Network
Solutions over the naming systems of the Internet.
In other words, ICANN is very much a regulatory body. And it is a
regulatory body that has been flung into existence with the support and
aid of the U.S. Department of Commerce. As if to underscore that ICANN
is a fruit that has fallen not far from the administrative agency that
engendered it, ICANN was created with the express purpose of
``lessening the burdens of government.'' \1\
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\1\ ICANN's purposes are stated in its paragraph 3 of its Articles
of Incorporation. Emphasis has been added to highlight those parts
mentioned in the text above: 3. This Corporation is a nonprofit public
benefit corporation and is not organized for the private gain of any
person. It is organized under the California Nonprofit Public Benefit
Corporation Law for charitable and public purposes. The Corporation is
organized, and will be operated, exclusively for charitable,
educational, and scientific purposes within the meaning of Sec. 501
(c)(3) of the Internal Revenue Code of 1986, as amended (the ``Code''),
or the corresponding provision of any future United States tax code.
Any reference in these Articles to the Code shall include the
corresponding provisions of any further United States tax code. In
furtherance of the foregoing purposes, and in recognition of the fact
that the Internet is an international network of networks, owned by no
single nation, individual or organization, the Corporation shall ,
except as limited by Article 5 hereof, pursue the charitable and public
purposes of lessening the burdens of government and promoting the
global public interest in the operational stability of the Internet by
(i) coordinating the assignment of Internet technical parameters as
needed to maintain universal connectivity on the Internet; (ii)
performing and overseeing functions related to the coordination of the
Internet Protocol (``IP'') address space; (iii) performing and
overseeing functions related to the coordination of the Internet domain
name system (``DNS''), including the development of policies for
determining the circumstances under which new top-level domains are
added to the DNS root system; (iv) overseeing operation of the
authoritative Internet DNS root server system; and (v) engaging in any
other related lawful activity in furtherance of items (i) through (iv).
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But unlike regulatory bodies that are part of the government, ICANN
is a private corporation \2\ and is not obligated to undertake any of
those troublesome constitutional Due Process burdens imposed on
governmental administrative bodies. ICANN is not subject to the burden
of judicial review or the Federal Administrative Procedures Act. ICANN
is not required to make it possible for those affected by its decisions
to participate in the making of those decisions. And there is no
mechanism to compel a truly independent review of ICANN's actions.
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\2\ The beneficiaries of ICANN's operations are described in
paragraph 4 of ICANN's Articles of Incorporation. Emphasis has been
added: 4. The Corporation shall operate for the benefit of the Internet
community as a whole, carrying out its activities in conformity with
relevant principles of international law and applicable international
conventions and local law and, to the extent appropriate and consistent
with these Articles and its bylaws, through open and transparent
processes that enable competition and open entry in Internet-related
markets. To this effect, the Corporation shall cooperate as appropriate
with relevant international organizations.
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ICANN's internal mechanisms for review are moribund or exist only
as paper placeholders. I have had one request for independent review
pending for nearly a year because ICANN has been too busy galloping off
doing mission-expanding policy development, leaving it no time to pay
attention to the implementation of fair procedures for review.
And until a viable at-large mechanism is created and full rights of
membership accorded, ICANN has no external entity to which it is
accountable other than the Attorney General of the State of California.
ICANN has gone so far as to assert in amicus briefs that ICANN
believes that it, not the courts, should be the forum for resolution of
disputes.
ICANN is the result of a strange brew of governmental powers and
private lack of accountability.
ICANN, despite its claims to the contrary, is extremely secretive.
We know more about how the College of Cardinals in Rome elects a Pope
than we do about how ICANN makes its decisions. As a member of the
ICANN board I have been surprised at how often I learn of ICANN actions
from outside third parties. And I have perceived a very strong
resistance on the part of ICANN's staff to opening its activities, even
to members of ICANN's Board of Directors.
ICANN has several internal committees and organizations that have
no distinct legal existence apart from ICANN. As a Director I am
responsible for the assets, liabilities, and actions of these bodies.
Yet some of these bodies act as completely autonomous, independent, and
often very secretive entities. At least one of these entities maintains
distinct financial records that seem not to be incorporated into
ICANN's overall financial statements. Another refuses to allow
Directors to inspect its activities or meetings.
I have a hard time reconciling ICANN's opaque processes and
structures with the obligation in its bylaws that ``[t]he Corporation
and its subordinate entities shall operate to the maximum extent
feasible in an open and transparent manner and consistent with
procedures designed to ensure fairness. '' (ICANN bylaws, Article III,
Section 1.)
ICANN has an organizational structure that is truly Byzantine.
ICANN has so many ``committees'', ``organizations'', ``working
groups'', ``councils'', and ``assemblies'' that one's mind goes numb
simply looking at the fully detailed organizational chart. An older
version of the org chart, one that lacks many of ICANN's newer
elements, may be seen at http://www.icannwatch.org/images/orgchart.gif.
Gilbert and Sullivan could easily write a sequel to The Mikado with
ICANN as its subject.
The ever-ramifying complexity of ICANN's organization makes it
exceedingly difficult for any but the most determined, or well
financed, to penetrate past even the outer layers. This has made ICANN
very much the province of professional business advocates and has
deterred the participation of the average citizen.
It is frequently overlooked that ICANN in addition to its role over
DNS, also regulates the allocation of Internet Protocol (IP) addresses.
Address allocation policies will have a very significant impact on the
future growth of the Internet and more particularly on what data
carriers survive and dominate and which will fall by the wayside. It is
likely that over the long term ICANN's IP address allocation policies
will have a much greater economic impact than ICANN's Domain Name
policies.
The very real technical need for IP addresses to be allocated and
then sub-allocated in accord with the present day topology of the
Internet creates a situation that tends to create a preferential lock-
in for those who are currently at the top of the address allocation
hierarchy and a discriminatory lock-out for those who may aspire to
that role in the future. Address allocation is an area of substantial
and subtle interaction between technical, economic, and social
policies. In this area ICANN is for the moment leaving the task to the
three worldwide regional address registries that were already doing the
job before ICANN was formed.
how can icann obtain acceptance and legitimacy?
ICANN aspires to transcend national borders. ICANN conceives of
itself as a supra-national body that may act in ways that no single
nation can, and equally, ICANN harbors a hope that it ought to be above
the reach of the laws of any single nation.
And indeed it is true that ICANN has powers that supersede those of
any single nation. For instance, ICANN's Uniform Dispute Resolution
Policy (UDRP) amounts to a worldwide law, a law that is distinct and
different from that enacted by any national legislature.
ICANN's UDRP is applied via a cascading contractual scheme. But
because of ICANN's position as the sole gatekeeper of the Domain Name
System, those who wish to have domain names have no choice but to
submit to ICANN's will.
Under ICANN's UDRP trademarks are expansively interpreted at the
expense of non-commercial uses of names and even traditionally
acceptable nominative and free speech uses of trademarks. Suffice it to
say, ICANN has created a new law of trademarks that as a practical
matter overrides in many regards the trademark laws enacted by the
Congress of the United States.
ICANN's decisions as to who does and who does not get a Top Level
Domain (TLD) have transformed ICANN into an intrusive worldwide zoning
board issuing licenses that determine who gets the privilege to set up
a lucrative name-service shop on the Internet Boulevard.
Apart from the merits of the UDRP, this supranational scope is
necessary--the Internet is supranational and ICANN's decisions as to
its resources necessarily have supranational impact.
The real question is not whether ICANN ought to have this power but
rather how ICANN's possession of that power obtains acceptance and
legitimacy from the nations of the world and the users of the Internet.
My own answer is very simple: If ICANN makes good decisions using
sound procedures, it will come to be accepted as reasonable and
legitimate.
As a Director I am very concerned that ICANN's rejection of public
participation, its structural bias in favor of certain commercial
interests, and its poorly defined and applied procedures will harm its
long-term prospects for achieving such acceptance and legitimacy.
ICANN was given two distinct tasks by the U.S. National
Telecommunications and Information Administration (NTIA) when ICANN was
formed. The first of these tasks was to deal with domain name issues.
The second was to achieve public acceptance of this new thing under the
sun. ICANN leapt into the first task--deciding DNS policy--while it
slept on the second--achieving the public participatory structures that
would provide a foundation upon which that DNS policy might be erected.
Until ICANN reforms its procedures and until it starts allowing
meaningful public participation in its decisionmaking, ICANN's policy
decisions will be perceived as leaning toward special-interest concerns
and thus undermine ICANN's long term hope of general acceptance and
legitimacy.
icann's obligation to have meaningful public participation in
decisionmaking
As mentioned above, ICANN's hopes for acceptance and legitimacy
depend to a large extent on there being a perception that ICANN is
responsive to all not just to some small set of business interests. To
this end, a viable and believable means by which the public can
participate in ICANN is essential.
ICANN is obligated to have a well-formed mechanism through which
the public may meaningfully participate in ICANN's policymaking.
However, ICANN has a history of impeding the creation of such a public
role. Even today the public has obtained only a partial position--it
elects only about one half of its nominated quota of Directors--and
that partial position is at risk of being eroded or eliminated.
The ``Executive Committee'' of ICANN's Board of Directors appears
to be increasingly active. The Executive Committee acts in lieu of the
full Board, thus effectively eliminating any role for those Directors
not on the Committee. The Executive Committee contains only one
Director elected by the at-large membership. The impact of this is to
dilute the role of the public by diluting the role of its elected
representatives.
ICANN is explicitly required by its Articles of Incorporation to
``operate for the benefit of the Internet community as a whole.'' \3\
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\3\ The beneficiaries of ICANN's operations are described in
paragraph 4 of ICANN's Articles of Incorporation. Emphasis has been
added: 4. The Corporation shall operate for the benefit of the Internet
community as a whole, carrying out its activities in conformity with
relevant principles of international law and applicable international
conventions and local law and, to the extent appropriate and consistent
with these Articles and its bylaws, through open and transparent
processes that enable competition and open entry in Internet-related
markets. To this effect, the Corporation shall cooperate as appropriate
with relevant international organizations.
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ICANN has made several promises to have a body in which the general
public may fully participate in ICANN's policymaking. That promise
remains unfulfilled.
In 1998 during ICANN's formative period, NTIA obligated ICANN to
discuss various matters, including public participation in ICANN, with
groups such as the Boston Working Group.
In 1999 ICANN formed a Membership Advisory Committee. This body
issued its report in spring of 1999. The report was reasonably detailed
and complete--and it favored the creation of a public ``at-large'' body
that would elect Directors.
In July 1999, ICANN's chairman promised a subcommittee of the U.S.
House of Representatives that nine board seats would be filled by
public election by the fall of the year 2000.\4\ That promise was made
to Congress 18 months ago. Although we did in fact have an election, it
was for a mere five of the nine seats. Furthermore ICANN is now taking
the position that the entire at-large body, including its quota of
Directors, may be eliminated altogether.
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\4\ Esther Dyson, Chairman ICANN, made the following statements on
July 22, 1999 before the House Committee on Commerce Subcommittee on
Oversight and Investigations. (Emphasis has been added.)
Elected Board members. ICANN's elected Directors will join the
Board in two waves: the first wave will consist of nine Directors
chosen by ICANN's Supporting Organizations; the second wave will be
elected by an At-Large membership consisting of individual Internet
users. The Board expects the first wave to be completed by November
1999, and the second wave as soon as possible following that. In any
event, the process of creating a fully elected Board must be completed
by September 2000.
As to the first wave of elected Board members, ICANN expects that
the nine Directors to be elected by its three Supporting Organizations
(the Domain Name Supporting Organization, the Address Supporting
Organization, and the Protocol Supporting Organization) will be
selected and seated in time for ICANN's annual meeting in November in
Los Angeles.
As to the second wave, it is ICANN's highest priority to complete
the work necessary to implement a workable At-Large membership
structure and to conduct elections for the nine At-Large Directors that
must be chosen by the membership. ICANN has been working diligently to
accomplish this objective as soon as possible. The Initial Board has
received a comprehensive set of recommendations from ICANN's Membership
Advisory Committee, and expects to begin the implementation process at
its August meeting in Santiago. ICANN's goal is to replace each and
every one of the current Initial Board members as soon as possible,
consistent with creating a process that minimizes the risk of capture
or election fraud, and that will lead to a truly representative Board.
---------------------------------------------------------------------------
Moreover, this election was not held until 2 years after ICANN's
formation and well after many of ICANN's fundamental and important
decisions had been made and put into effect.
The remaining four seats continue to be occupied by unelected
people who were chosen, somehow, back in 1998 for 1 year terms. Those
terms have now been extended to be at least 4 years. This extension is
so long that my own term, and the term of all five of the Board members
who were actually elected, will expire before then.
ICANN has initiated a ``clean sheet'' study to reconsider even the
existence of the ``at-large'' membership and the election of board
members by the public. I personally consider this study to be
unnecessary as it does little more than revisit the ground already
covered by ICANN nearly 2 years ago. I also consider this study to be
overbroad because it explicitly places at risk even the bare existence
of any public participation in the selection of ICANN's Board of
Directors. This risk is not idle conjecture--within the last few weeks,
ICANN executives have declared that the at-large membership no longer
exists under ICANN's bylaws.
Even if ICANN eventually implements a full quota of seats for the
at-large, there will not be an election until fall of 2002--four years
after ICANN's inception. And in those 4 years, ICANN and time will have
poured large amounts of metaphorical concrete around its prior
decisions, making them essentially irreversible and forcing the public
simply to accept that which was done while they were locked outside of
ICANN's primary decisionmaking body.
Changing the subject slightly--that election of the fall of 1999
had some strange characteristics and failures.
Many voters were denied the ability to register to vote, or if
registered, were not given sufficient information and pass codes in
order to cast their vote.
Neither candidates nor voters were allowed access by ICANN to the
voter lists. This made it nearly impossible for the voters to discuss
matters except via the limited channels provided by ICANN. This
limitation made it virtually impossible for the voters to form
coalitions or parties, to otherwise organize their votes, or to promote
their favored candidates. In the long term, this will damage the
ability of ICANN's voters to evolve into a well-structured and
principled institution. Moreover, ICANN's denial of the voter lists was
arguably in contravention to the Corporations Code of the State of
California under which ICANN is incorporated.
I was elected by the at-large voters. But because of ICANN's
restrictive controls over the voter rolls, ICANN has made it impossible
for me to speak to my constituents or to solicit their advice.
This denial of the voter lists is justified by ICANN on the basis
of privacy. Yet, the California legislature has determined that in
corporate elections, the integrity of the election process requires
that voters and candidates have means to communicate with one another
outside of the view and potentially manipulative control of corporate
management. If ICANN has a problem with the enactments of the
California legislature, ICANN ought to take it up with the legislature
rather than unilaterally undermining the viability of public
participation in ICANN.
ICANN's structure, whether taken piecemeal or as a whole, seems
designed to include selected business interests--particularly those of
trademark owners and DNS name registry/registrars--and to exclude
Internet users. Deployment of a fully empowered at-large membership,
with its full quota of Directors would go a long way toward redressing
this imbalance.
specific things congress, the u.s. department of commerce, and icann
ought to do
It is my desire to improve ICANN. To that end let me make some
specific suggestions.
1. Congress should take care that the Internet does not serve as a
means by which Federal administrative agencies slip their leash and
assume unwarranted and undelegated powers.
2. Congress should take care that Federal administrative agencies
do not try to do an end-run around their limited powers by outsourcing
jobs to private bodies such as ICANN.
3. The Department of Commerce should exercise its independent
judgment when dealing with recommendations coming from ICANN even if
this may mean that the Department has to engage in hearings or other
procedures.
4. The Department of Commerce should make it clear to ICANN that it
expects ICANN to remember the obligations imposed on ICANN during its
creation and thus improve its procedures and quickly create a fully
formed vehicle for meaningful public participation in all of ICANN's
decisions.
5. ICANN should be made accountable to someone more than just the
Attorney General of the State of California.
6. ICANN should return to its mission and focus on technical
coordination, leaving the public policy decisions to institutions
better designed to accommodate public policy debate.
7. ICANN should fully adhere to the ideas of open access to all
interested persons, transparent decisionmaking processes, and
accountable decisionmakers. No ICANN process or body should be closed
except when dealing with personnel, contract negotiations, litigation,
or other expressly enumerated matters.
8. ICANN should emphasize implementation and deployment of good,
fair procedures, such as its internal review mechanisms, even at the
risk of delaying substantive policy decisions.
9. ICANN should follow the procedures written into its bylaws and
avoid ad hoc processes. In particular, this means more delegation of
issues to the ICANN's specialized ``supporting organizations.''
10. ICANN should take steps to remedy the apparent capture by
certain industry segments of ICANN's Domain Name Supporting
Organization (DNSO).
11. ICANN should remove policymaking discretion from ``staff'' and
sharply reduce the discretionary powers of executive officers.
12. ICANN should drop the ``clean sheet'' study of the at-large
membership and simply get on with the job of filling all nine of the
Board seats long promised to the public. At the same time ICANN should
fully recognize the rights of at-large members as provided for under
the California Corporations Code.
13. ICANN should rid itself of its excessively complex
organizational structure.
14. ICANN should not have embedded entities that have no distinct
legal status but which block review by members of the Board of
Directors or the public.
15. ICANN should adopt better procedures for internal
decisionmaking. In particular it should mandate semi-formalized
procedures and rules of order for use by its numerous organizational
entities.
Senator Burns. Thank you very much. It is nice to start off
with a critic.
[Laughter.]
Senator Burns. We welcome today and we have been joined
with the distinguished Senator from California. Do you have a
statement? Would you like to make a statement at this time?
STATEMENT OF HON. BARBARA BOXER,
U.S. SENATOR FROM CALIFORNIA
Senator Boxer. I would appreciate it.
Senator Burns. Turn your microphone on there.
Senator Boxer. I would like to keep it to 5 minutes though,
Mr. Chairman. Please do let me know, and then I will submit it
for the record.
Senator Burns. I will start warning at 4, how is that?
Senator Boxer. That sounds good.
Senator Burns. Good.
Senator Boxer. Mr. Chairman, you and I have worked on
Internet issues and encryption, and I am just delighted now to
be on the Subcommittee and to be able to participate more
fully. This is the first hearing that I have been at before the
Communications Subcommittee, and I am looking forward to
working with you on many more.
I am also very pleased, Mr. Chairman, that you are holding
this hearing. I thank you for examining this very timely issue
and providing us with a chance not only to learn more about how
the ICANN selection process worked, but also to learn more
about how ICANN plans to move forward with the seven new top-
level domain registry operators.
I have heard from a great many businesses in California who
are concerned, and therefore this is a very important matter.
Although some would consider it very technical or arcane, for
our people in California--I know that you know this, Mr.
Chairman--it is a very important one.
American industry has given us the incredible growth of the
Internet. I am certainly proud of my State. It is the home of
some of the most innovative and successful companies
responsible for this explosion. I do see that California is
well-represented on the panels today. I certainly want to thank
you for that and extend a special welcome to the witnesses on
the first panel from ICANN, which is based in California,
Michael Roberts and Karl Auerbach, and also to Roger Cochetti
on the second panel, who works for the California-based
company, VeriSign.
I would like to bring to the panel's attention that I
myself have been a victim of identity theft in the domain name
context. Now, I know that is not the prime focus of today's
hearing, but I want to share with you what happened to me. I
did not speak out about it until now, because--well, you will
see why, but during the last election somebody took the name
BarbaraBoxer.org. When you type in BarbaraBoxer.org, it will
take you to an anti-Dianne Feinstein website, my friend and my
colleague whom I work with proudly.
When I found out about this I was stunned. I had taken
BarbaraBoxer.com so that no one could take that, but had
overlooked BarbaraBoxer.org. It is extremely disturbing to me
that someone in a way can steal my identity and put up
something like this. I mean, it would be bad enough if it was
something I agreed with, if it was a pro-Dianne Feinstein site,
but it is still nothing to do with me.
So, I am hoping that the panelists might address this, if
you can, because to me we have a problem with identity theft.
This is a clear example of identity theft on the Internet,
which is extremely disturbing, to say the least.
I am interested to see where we go from here now that we
have selected these new generic top-level domains. What actions
need to be taken to ensure the reliability, the safety, and the
security of the Internet? What can ICANN do to make sure that
my constituents are able to reach their intended destinations
in cyberspace?
These are very important questions, and I know they are not
easily answered. For that reason, I believe it is vital we move
forward thoughtfully and deliberatively, and make sure that all
actions are aimed at guaranteeing the continued growth and the
stability of the Internet.
Thank you, Mr. Chairman, for holding this hearing.
Senator Burns. Thank you, Senator.
Now we will continue with the testimony now of the CEO from
ICANN, Michael Roberts, and welcome to the hearing this
morning.
STATEMENT OF MICHAEL M. ROBERTS, CEO, INTERNET
CORPORATION FOR ASSIGNED NAMES AND NUMBERS
Mr. Roberts. Thank you, Mr. Chairman, and members of the
Subcommittee. I appreciate this opportunity to appear here
today and offer a status report on the Internet Corporation for
Assigned Names and Numbers, ICANN, which I have served as
president and chief executive officer since its formation in
November 1998.
Before I report to you on ICANN, I would like to take just
a minute to set some context. The reason why there is a need
for an ICANN-like organization today is directly traceable to
the enormous worldwide success of the Internet.
The Internet's success, in turn, is the product of a
sustained commitment by the U.S. Government over many years to
a public-private partnership among Federal research agencies,
our preeminent researching universities, and the energy and
entrepreneurial ingenuity of American high technology
companies.
Beginning with the Federal sponsorship of the original
basic research, those of us involved in this process have had
at every key point in the evolution of Internet technology,
infrastructure, and commercial deployment, the kind of U.S.
Government support that was needed. At the same time, however,
we should also recognize the many contributions of our
international partners which have been essential to the
worldwide development and deployment of the network.
Indeed, if the Internet was not based on a solid foundation
of international partnership, many of the opportunities which
it offers for trade, economic development, enhancement of
national security, and the growth of democratic institutions,
would not be possible.
The important role of Congress should also be acknowledged.
It is notable that the High Performance Computing and
Communications Act which President Bush signed in 1991, and
which for the first time established a Federal mandate and
funding for advanced networking, originated in this
Subcommittee.
ICANN itself is a unique entity, but it follows a great
American tradition of finding and using practical means to
address problems that stand in the way of progress. Several
years ago, the U.S. Government was confronted with the fact
that its agency assignments for coordination of Internet
activities were seriously lagging the rate at which the
Internet was growing, especially in areas related to commercial
use.
To very much shorten an interesting story, the resulting
scrutiny of the issues involved was a judgment that the most
appropriate solution was to entrust the management of a small
set of key technical infrastructure coordination
responsibilities to the private sector.
ICANN was reorganized by the U.S. Government in November
1998 by means of a memorandum of understanding between the
Department of Commerce and ICANN. ICANN and its stakeholders
are required to earn the trust of the citizens and nations of
the world and their governments by demonstrating the private
sector consensus management of these functions works
efficiently and serves the public interest while promoting
opportunities for businesses to engage in the research,
development, and delivery of network services.
Although we have really been operational for only about 14
months, I think it is fair to say that much has already been
accomplished. Indeed, more than some imagined could be done,
either in that time, or by this entity. For example, there has
been a dramatic transformation of the domain name registration
market from a monopoly to an extremely competitive market.
We also now have a well-functioning global dispute
resolution system for certain of the most common domain name
disputes, a system that one recent commentator stated was
widely used as a model of dispute resolution for the 21st
Century, and we are on the verge of introducing real
competition at the domain registry level.
But these achievements, real and important as they are, are
only part of the story. We have certainly not yet accomplished
ICANN's ultimate goal, to become a truly effective consensus
development body for the entire Internet community in the areas
for which ICANN is responsible. All the necessary parts are not
yet in place.
I am frequently asked, why is there so much noise around
ICANN? How can you get any work done over there? My response is
that ICANN is noisy by design. We are intended to be the forum
in which interested parties, some might characterize them as
combatants, have the opportunity to advance multiple futures
for the domain name and address system and have those competing
and frequently contradictory futures merged into one
satisfactory solution.
By definition, it will be noisy. It will be messy, and
sometimes slow, and frequently contentious, but if it works--
and the jury is still out, although I am reasonably
optimistic--it may well be a useful model for other global
issue resolution mechanisms.
Thank you for the opportunity to appear, and I will be glad
to answer any questions.
[The prepared statement of Mr. Roberts follows:]
Prepared Statement of Michael M. Roberts, CEO,
Internet Corporation for Assigned Names and Numbers
i. introduction
Mr. Chairman and members of the subcommittee, I appreciate the
opportunity to appear here today and offer a status report on the
Internet Corporation for Assigned Names and Numbers (ICANN), which I
have served as President and Chief Executive Officer since its
formation in November 1998. I am also happy to report that the ``only a
few months'' assignment, as it was described when I came out of
retirement to take it on a little over 2 years ago, will finally come
to an end next month, when I will retire once more, and Stuart Lynn
will take over this challenging but interesting task.
Before I report to you on ICANN, I would like to take just a minute
to set some context. The reason why there is a need for an ICANN-like
organization today is directly traceable to the enormous, worldwide
success of the Internet. The Internet's success, in turn, is a product
of a sustained commitment by the U.S. Government over many years to a
public-private partnership among Federal research agencies, our pre-
eminent research universities, and the energy and entrepreneurial
ingenuity of American high technology companies.
Beginning with the Defense Department's sponsorship of the original
basic research, and moving through the participation of other agencies
such as Energy, NASA, and particularly the National Science Foundation,
those of us involved in this process have had at every key point in the
evolution of Internet technology, infrastructure, and commercial
deployment the kind of U.S. Government support that was needed.
However, we should also recognize the many contributions of our
international partners, which have been essential to the worldwide
development and deployment of the network. Indeed, if the Internet was
not based on a solid foundation of international partnership, many of
the opportunities which it offers for trade, economic development,
enhancement of national security and the growth of democratic
institutions would not be possible.
The important role of Congress should also be acknowledged. It was
my privilege in my former role as a technology policy advocate for
higher education to work closely with Mr. Boehlert and Mr. Brown and
other members of the House Science Committee in the middle 1980s on
legislative programs for support of broader use of the Internet in
research and education. It is notable that the High Performance
Computing and Communications Act, which President Bush signed in 1991,
originated in this Committee. Hearings such as this, and the recent
hearing in the House, continue the constructive tradition of the
Congress of encouraging the continued development of a stable, secure
and open infrastructure for global commerce and communication.
ICANN itself is a unique entity, but it follows a great tradition
of finding and using practical means to address problems that stand in
the way of progress. Several years ago, the U.S. Government was
confronted with the fact that its agency assignments for coordination
of Internet activities were seriously lagging the rate at which the
Internet was growing, especially in areas related to commercial use. To
very much shorten an interesting story, the result of scrutiny of the
issues involved was a judgment that the most appropriate solution was
to entrust the management of a small set of key technical
infrastructure management and coordination responsibilities to the
private sector. ICANN was the response of the Internet community to the
call for the creation of a private sector, non-profit, global consensus
development entity to take over these functions.
In an important sense, the strenuous effort that resulted in the
creation of ICANN was the last public service by Dr. Jon Postel, who
sadly is no longer with us. His almost thirty-year stewardship of the
Domain Name System has left us with a remarkable legacy of selfless
devotion to the public interest, along with a basic framework for
ICANN's functions that is of important and continuing value.
ICANN was recognized by the U.S. Government in November, 1998, by
means of a Memorandum of Understanding between the Department of
Commerce and ICANN. It was and still is the case that ICANN and its
stakeholders are required to earn the trust of the citizens and nations
of the world and their governments by demonstrating that private sector
consensus management of these functions works efficiently and serves
the public interest while promoting opportunities for businesses to
engage in the research, development and delivery of network services.
Although ICANN was formed in 1998, we have really been operational
for only about 14 months. I think it is fair to say that much has
already been accomplished--indeed, more than some imagined could be
done, either in that time or by this entity. For example, there has
been a dramatic transformation in the domain name registration market,
from a monopoly to an extremely competitive market, with predictably
positive impacts on consumers--including cutting the average price for
registration in half. We now have a well-functioning global dispute
resolution system for certain of the most common domain name disputes--
a system that one recent commentator stated was ``widely viewed as a
model of dispute resolution for the 21st Century.'' And we are on the
verge of introducing real competition at the domain name registry
level, a goal that has been fiercely debated and energetically pursued
for much of the last decade, but for various reasons never able to be
accomplished until the creation of ICANN.
But these achievements, real and important as they are, are only
part of the story. We have certainly not yet accomplished ICANN's
ultimate goal--to become a truly effective consensus development body
for the entire Internet community in the areas for which ICANN is
responsible. We have been forced by events and the speed of Internet
time to undertake some complex operational tasks, even though we are
still working to complete the basic organizational architecture of
ICANN. All the necessary parts are not yet in place. We have certainly
not solved the very difficult problem of how to create a global process
that is, on the one hand, broadly viewed as fair and effective, but on
the other hand, does not erect a procedural, political and legal
thicket that makes it impossible to achieve the kind of consensus
decisionmaking that ICANN was created to accomplish.
As a result, no one is really satisfied with the current State of
affairs, and rightly so. As it turns out--and this will be no surprise
to any member of this Committee--achieving global consensus is a
difficult task, especially on issues as complex and important as those
which prompted the creation of ICANN. There are important parts of the
Internet community--country code registry operators, address registry
operators, root server operators, and the general user community--where
we have not completed the discussions that will formalize their
relationships with or within ICANN. Even those elements of the
construction that appear to have been completed, such as ICANN's three
Supporting Organizations, need refinements of various kinds; any
structure that is, as ICANN was, the product of a series of compromises
is not likely to be perfect at first creation.
And so, while we have attempted to be responsive to the important
operational objectives that formed much of the impetus for the creation
of ICANN, we have also worked very hard--and we continue to work hard--
to assemble a complete working organization for the development of
global consensus on these issues, and to ensure that all the
stakeholders in the Internet community have an appropriate place in,
and the ability to have their voices heard in, the ICANN process.
I am frequently asked, ``Why is there so much noise around ICANN?
How can you get any work done over there?'' My response is that ICANN
is noisy by design. We are intended to be the forum in which interested
parties--some might characterize them as combatants--have the
opportunity to advance multiple futures for the domain name and address
system, and have those competing and frequently contradictory futures
merged into one satisfactory solution. By definition, it will be noisy,
and messy, and sometimes slow, and frequently contentious, but if it
works--and the jury is still out, although I am reasonably optimistic--
it may well be a useful model for other global issue resolution
mechanisms.
ii. background
For much of its formal history, which begins in 1973 with roots
stretching into the 1960s, the functions of ICANN were performed by one
computer scientist, Jon Postel, under a research contract to the U.S.
Defense Advanced Research Projects Agency (DARPA). During the mid
1990s, as the Internet emerged as a potent commercial force in the
telecommunications environment, it became clear that such functions
needed to be institutionalized. Dr. Postel participated in attempts to
achieve that goal beginning as far back as 1995. In the midst of the
effort in the late 1990s that led to the creation of ICANN, Dr. Postel
unexpectedly passed away. ICANN was formed to privatize,
institutionalize and internationalize the functions that Dr. Postel
performed so ably for so long.
A. The Formation of ICANN
ICANN is a non-profit private sector organization with a 19-member
international volunteer Board of Directors \1\ drawn from a set of
specialized technical and policy advisory groups, and from an online
voting process of Internet users worldwide. Through a series of
Supporting Organizations, Advisory Committees and Working Groups,\2\ it
functions as a consensus development body for certain technical and
administrative management issues related to the name and address
functions of the Internet.
---------------------------------------------------------------------------
\1\ Short biographies of the directors can be found at http://
www.icann.org/general/abouticann.htm.
\2\ An organizational chart of ICANN and its constituent units is
attached to this testimony.
---------------------------------------------------------------------------
ICANN is the end result of an extensive policy development process,
both within the U.S. Government and within the global Internet
community. During 1997 and 1998, under the leadership of the U.S.
Department of Commerce, a framework for private sector management of
the Internet's Domain Name System (DNS) and Address System was
developed and put into writing in the form of a policy document known
as the White Paper.\3\
---------------------------------------------------------------------------
\3\ The White Paper can be found at http://www.icann.org/general/
white-paper-05jun98.htm.
---------------------------------------------------------------------------
The White Paper, which was issued in June 1998, proposed that the
private sector undertake management of these functions through the
formation of a private, non-profit corporation, and it outlined the
substantive responsibilities of the new organization and a number of
guiding principles for its work. Following several months of public
meetings and dialog in the summer of 1998, during which the White Paper
framework was turned into a specific charter and set of Bylaws, ICANN
was incorporated in September of that year, and was recognized by the
U.S. Government in November 1998, in the form of a 2-year Memorandum of
Understanding/Joint Project Agreement between the Commerce Department
and ICANN. The MOU has subsequently been amended twice and currently
has a term expiring on September 30, 2001.\4\
---------------------------------------------------------------------------
\4\ The full text of the MOU/JPA can be found at http://
www.icann.org/general/icann-mou-25nov98.htm.
---------------------------------------------------------------------------
B. ICANN Responsibilities
The White Paper identified four principal areas of responsibility
for the new private sector consensus organization: Coordination of the
Internet Domain Name System; Overseeing operation of the authoritative
root server system; Coordination of the Internet Protocol (IP) Address
space; Coordinating the assignment of Internet technical parameters.
As recognized in the White Paper, these four functions were
broadly seen by the global Internet community as requiring coordinated
action to assure the smooth and reliable operation of the Internet.
C. Guiding Principles for ICANN
The White Paper identified 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 U.S.
Government was seeking to extract itself from what it had concluded was
no longer a proper role for the U.S. Government--the funding of private
contractors by research agencies 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 registration of domain names is theoretically
possible at both the registry (or wholesale) level, and at the
registrar (or retail) level. Increasing competition at the retail level
involves only allowing multiple providers of registration services to
add domain name registrations to registry data bases; as a result, that
objective can be accomplished without major stability concerns. For
this reason, adding new competition at the retail level was the first
substantive goal that ICANN quickly accomplished after its formation.
By contrast, the introduction of competition at the new registry (or
wholesale) level 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 with a stake in the Internet.
3. A third White Paper principle was private sector, bottom-up
consensus development, and the entirety of ICANN's processes are
organized around this principle. ICANN is a private-sector body, and
its participants draw from the full range of Internet stakeholder
organizations, from business entities to non-profit organizations to
academic institutions to individual Internet users. Its policies are
the result of the complex, sometimes cumbersome interaction of all
these actors in an open, transparent, sometimes slow and sometimes
contentious progression from individuals and particular entities
through the ICANN working groups and Supporting Organizations to
ICANN's Board, which under its bylaws has the principal role of
recognizing consensus as developed below, rather than imposing it from
above. Like democracy, consensus is far from a perfect system, but it
is an attempt, and the best way we have yet been able to devise, to
achieve globally acceptable policies 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 decisionmaking.'' 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 Carl Bildt, the former Prime Minister of
Sweden, to oversee a new effort to find a consensus approach to
obtaining input from and providing accountability to the general
Internet user community, which might not otherwise be involved in or
even knowledgeable about ICANN and its activities. This is a formidable
challenge, given that there are an estimated 400 million Internet users
around the world in over 200 countries--a number that has been growing
at 100 percent per year since 1988.
We have also undertaken a number of other organizational tasks
necessary to ensure that ICANN is fully representative of the entirety
of the Internet community. This is hard work, and there is more to do
to get it done right.
iii. icann accomplishments to date
The tasks assumed by ICANN in the Memorandum of Understanding were
of two general kinds. The first were related to completion of its
organizational structure, particularly its three specialized Supporting
Organizations (for domain names, technical protocols, and IP
Addresses--the numeric identifiers used in Internet routing), and its
fourth component, known as ``At Large'' (which is intended to provide a
vehicle for input and participation by the full range of Internet users
in ICANN's work). The second set of tasks were related to specific
problems that had arisen as a result of the rapid growth and
commercialization of the Internet in the middle 1990s.
Obviously, ICANN is still a work in progress. Nevertheless, it has
already made remarkable progress in the short span of little more than
2 years.\5\ In the following portions of the testimony, I describe our
work on four specific tasks--the enhancement of the Internet's Root
Server System; introduction of retail competition in domain name
registrations for .com, .net, and .org; adoption of a non-judicial
mechanism for resolving certain disputes over the registration of
domain names; and introduction of new Top Level Domain Name Registries
to provide ``wholesale'' competition. Because staff has indicated that
the Committee has a special interest in the Root Server System, I will
begin with that subject.
---------------------------------------------------------------------------
\5\ For the first two annual summaries of progress provided to the
Department of Commerce, see First Status Report at http://
www.icann.org/general/statusreport-15june99.htm; Second Status Report
at http://www.icann.org/general/statusreport-jun00.htm.
---------------------------------------------------------------------------
A. Enhancement of the Security and Reliability of the Root Server
System
A.1 Functioning of the Domain Name System. In recent years, the
domain-name system (DNS) has become a vital part of the Internet. The
function of the domain name system is to provide a means for converting
easy to remember mnemonic domain names into the numeric addresses that
are required for sending and receiving information on the Internet. The
DNS provides a translation service that permits Internet users to
locate Internet sites by convenient names (e.g., http://www.senate.gov)
rather than being required to use the unique numbers (e.g.,
156.33.195.33) that are assigned to each computer on the Internet.
The Internet engineering community devised the DNS in the early
1980s.\6\ One of the Internet's prominent engineers, Dr. Jon Postel
(the creator of the IANA function that preceded ICANN, and the
principal force behind the creation of ICANN) took on responsibility
for coordinating a decentralized system of computers throughout the
Internet to implement the DNS. These computers are organized in a
hierarchical manner, with ``root nameservers'' at the highest level
that point to nameservers for top-level domains (e.g., .gov), that in
turn point to nameservers for second-level domains (e.g., senate.gov),
and so on. In all there are 253 top level domains, of which the
greatest number are assigned to the national, or ``country code,'' top
level domains.
---------------------------------------------------------------------------
\6\ The DNS replaced an earlier, smaller capacity translation
mechanism known as the ``hosts.txt'' system.
---------------------------------------------------------------------------
Upon the deployment of this new system in 1985, Internet users
worldwide could point their computers to the root nameservers, and use
them to receive the translation services (i.e. from names to numbers)
that the DNS provides. The system is highly redundant and
decentralized, consisting of almost 100,000 nameservers arranged in a
topologically and geographically distributed system. It has repeatedly
demonstrated its technical resilience and robustness, including during
last year's Y2K event during which the system functioned smoothly
without interruption.
As a first step in deploying the DNS nameserver system, Dr. Postel
arranged for voluntary operation of the root nameservers by a group of
expert and trusted individuals and organizations throughout the world,
who each volunteered to operate a root nameserver. This group now
numbers nine organizations, plus the U.S. Government; they operate the
13 root nameservers on a completely voluntary, free-of-charge, and
public interest basis. The following map and chart show the identities
and locations of the organizations operating the DNS root servers:
[GRAPHIC] [TIFF OMITTED] 87255.001
List of the Root Servers
----------------------------------------------------------------------------------------------------------------
Name Org City Type
----------------------------------------------------------------------------------------------------------------
a.................................... NSI.................... Herndon, VA, U.S....... com
b.................................... USC-ISI................ Marina del Rey, CA, edu
U.S..
c.................................... PSInet................. Herndon, VA, U.S....... com
d.................................... U of Maryland College edu....................
Park, MD, U.S..
e.................................... NASA................... Mt View, CA, U.S....... usg
f.................................... Internet Software C.... Palo Alto, CA, U.S..... com
g.................................... DISA................... Vienna, VA, U.S........ usg
h.................................... ARL.................... Aberdeen, MD, U.S...... usg
i.................................... NORDUnet............... Stockholm, SE.......... int
j.................................... NSI (TBD).............. Herndon, VA, U.S....... (com)
k.................................... RIPE................... London, UK............. int
l.................................... ICANN.................. Marina del Rey, CA, org
U.S..
m.................................... WIDE................... Tokyo, JP.............. edu
----------------------------------------------------------------------------------------------------------------
At lower levels in the DNS hierarchy (for example .com), the
operators of the nameservers and the associated registries have
received compensation, first by governmental subsidies in the late
1980s and early 1990s and then, beginning in the mid-1990s, by charging
those who wished to register domain names within the system. The root
nameserver system itself, however, has always been operated on a
voluntary basis and without user fee (or even government subsidy,
though the U.S. Government does contribute by operating some of the 13
root nameservers). As a result, the system has become broadly accepted
by Internet users worldwide as an integral feature of the Internet.
A.2 U.S. Government Policy Concerning the Root Server System. As
the Internet has evolved from a system for research conducted under
U.S. Government sponsorship to an essential medium for global commerce,
the need for a secure, stable, and reliable DNS root nameserver system
coordinated according to the needs of the Internet community has also
grown. The White Paper reflected a broad consensus within the Internet
community when it said, ``coordination of the root server network is
necessary if the whole system is to work smoothly. While day-to-day
operational tasks, such as the actual operation and maintenance of the
Internet root servers, can be dispersed, overall policy guidance and
control of the TLDs and the Internet root server system should be
vested in a single organization that is representative of Internet
users around the globe.''
In the ICANN MOU, the U.S. Government represented that it would
``undertake, in cooperation with IANA, NSI, the IAB, and other relevant
organizations from the public and private sector, a review of the root
server system to recommend means to increase the security and assure
professional management of the system. The recommendations of the study
should be implemented as part of the transition process; and the new
corporation should develop a comprehensive security strategy for DNS
management and operations.''
Subsequently, one of the first Advisory Committees established by
ICANN was the Root Server System Advisory Committee (RSSAC), chaired by
ICANN Board member Jun Murai of Keio University in Japan. Professor
Murai is also responsible for the operation of the root nameserver
located in Tokyo. All root nameserver operators are members of the
RSSAC, which also includes technical experts from the Internet
Engineering Task Force (IETF).
The RSSAC has been working diligently since ICANN's creation to
evaluate and improve where necessary the security and reliability of
the root nameservers. In its last report, at ICANN's public meeting in
Yokohama in July of last year, it described the results of its efforts,
which basically involve the evolution in the near future of the current
root nameserver system structure to one in which a ``dedicated
primary'' server, rather than one of the 13 operational root servers,
is responsible for distributing updated root zone files to the publicly
accessible root nameservers in a secure, reliable and robust system
transparent to users. When implemented, this will be a major
improvement in the security and reliability of the root nameserver
system, and therefore of the DNS and the Internet.
A.3. Formalization of Arrangements for Operation of the Root
Nameservers. In addition, ICANN has been working on formalizing the
legal relationships under which the various organizations have operated
the individual DNS root nameservers. As described above, since the
initial deployment of the DNS the root nameservers have been operated
under the voluntary arrangements originally made by Dr. Jon Postel.
After ICANN was established, some additional formality was introduced
by the participation of the operators in the RSSAC, and in mid-1999,
ICANN and the National Institute of Standards and Technology entered
into a Cooperative Research and Development Agreement under which the
U.S. Government is participating in the RSSAC's work toward enhancing
the stability and security of the root nameserver system. As part of
this effort, ICANN is near the completion of agreements with the
organizations operating the individual root nameservers, with the goal
of mutually recognizing in an appropriate way each other's obligations
and responsibilities to protect the stability of the DNS and the
Internet. We are well along in those discussions and I expect they will
be completed in the near future.
A.4 Administration of Changes to the Root Server System. There has
been, and continues to be, some confusion about the current and
proposed procedures for coordination and administration of changes to
the files contained in the root server computers.
Currently, the root nameserver operators follow the convention that
one of the operators, Network Solutions, Inc. (NSI), is responsible for
implementing edits to the ``root zone'' file that designates the top-
level domains in the DNS. Under agreements among ICANN, the U.S.
Government, and NSI, ICANN (through IANA, now absorbed into ICANN),
sends documentation for needed changes to the root zone file to the
U.S. Department of Commerce, which directs Network Solutions to
implement them by editing the authoritative root zone file. By
convention among the RSSAC's root nameserver operators, that file is
loaded twice daily into all 13 DNS root nameservers.
ICANN, through the RSSAC and through its soon-to-be-completed
agreements with the root server operators, is already playing an
important role in facilitating a more structured understanding among
these most critical participants in the DNS. As a result, the very
informal arrangements that have served us well in the past are in the
process of a transition to a more transparent but still collegial and
consensus-based structure that we believe will continue this
outstanding record of service into the future.
B. The Introduction of Retail Competition
A very important impetus for the formation of ICANN was the
perception that the name registration market was not competitive, and
as noted above, the introduction of competition was an important goal
outlined in the White Paper. Thus, as one of its very first actions,
ICANN created an accreditation system for competitive registrars and,
pursuant to its agreements with NSI, gave those new competitors access
to the NSIoperated registries (specifically, .com, .net and .org).
When ICANN was formed, there was only a single registrar (NSI) for
.com, .net. org, and everyone had to pay the single price for the
single domain name product that sole registrar offered: $70 for a 2-
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 1-year domain name registration
in the NSI registries is probably $10-15--or less than half the retail
price just 18 months ago.
As another illustration of the dramatic changes over the last year,
NSI's share of the registration market for the .com, .net and .org TLDs
has fallen from 100 percent at the time of ICANN's creation to less
than 40 percent of new registrations in those TLDs today--a market
share drop of more than half in just over a year.
There are still issues that must be dealt with in this area; some
registrars appear not to have not lived up to their contractual
commitments, and ICANN needs to ensure that they do. And indeed, there
may be more registrars than the market will support in the long term;
94 percent of all registrations come from the 10 largest registrars,
with the other 80 or 90 active registrars sharing the other 6 percent.
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. While these issues must 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.
C. Creation of a Cost-Effective, Efficient Dispute Resolution System
Another significant accomplishment has been the creation of the
Uniform Dispute Resolution Policy (UDRP), 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 cases 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 TLDs
D.1 Background. This brings us to the current effort to introduce
competition at the registry (or wholesale) level of the domain name
market. ICANN was able to create 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 can 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 U.S. 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 communications 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.
D.2 ICANN Process. 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
a consensus position. 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.\7\ 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.\8\
---------------------------------------------------------------------------
\7\ See generally ICANN Yokohama Meeting Topic: Introduction of New
Top-Level Domains, at http://www.icann.org/yokohama/new-tld-topic.htm.
\8\ See Resolutions of the ICANN Board on New TLDs, at http://
www.icann.org/tlds/new-tldresolutions-16jul00.htm.
---------------------------------------------------------------------------
D.3 Criteria for Evaluating Applications. In early August, ICANN
posted a detailed discussion of the new TLD process it proposed to
follow,\9\ and in mid-August a detailed set of Criteria for Assessing
TLD Proposals.\10\ These nine criteria have been constant throughout
this process, and so they bear repeating here:
---------------------------------------------------------------------------
\9\ See New TLD Application Process Overview, at http://
www.icann.org/tlds/applicationprocess-03aug00.htm.
\10\ See Criteria for Assessing TLD Proposals, at http://
www.icann.org/tlds/tld-criteria-15aug00.htm.
---------------------------------------------------------------------------
a. 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 subordinate to that. Thus,
any proposal that could be shown to threaten this stability (other than
any risk inherent in any new TLD introduction) was obviously
unacceptable.
b. The extent to which selection of the proposal would lead to an
effective ``proof of concept'' concerning the introduction of toplevel
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 larger 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.
c. 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 market participant that already
has high brand awareness, 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 data base
of several million names that gets hundreds of 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 criterion 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.
d. 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, so that confusion, recognition difficulties, and
the like do not impair the DNS's ease of use.
e. 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.
f. 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, noncommercial or commercial, personal or
business-oriented, etc.) The criteria also sought diverse business
models and proposals from different geographic regions, for the same
reasons.
g. 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 representative participation of all 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.
h. 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.
i. 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
how businesses and consumers might suffer from a failure. It was also
not intended to be clairvoyant with regard to the outcome of any
particular proposal. Thus, to the extent possible and consistent with
other goals, the Board favored those applications that appeared to have
the soundest business plans, and were based on the most realistic
estimates of likely outcomes.
D.4 The Application Process and Fee. 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 in an open, transparent,
bottom-up consensus based manner.
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 not satisfied with the process or 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, 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 canceled 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 considerable, and
especially if the goal is to operate a registry that charges low or no
fees for name registrations (many of the persons and entities advancing
this particular complaint are nonprofit or public interest bodies),
those fees would not likely cover the costs of operation, much less the
necessary startup 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 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 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 were
not selected in the evaluation process at least in part on 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.
D.5 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.\11\ Another 1,000 public comments were received on the staff
report. The Board, of course, had access to the applications and the
public comments as they were filed, and was kept generally informed as
to the process of the evaluation.
---------------------------------------------------------------------------
\11\ 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 10, 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 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.
In one sense, it would have been preferable to have issued the
staff report earlier. But on the other hand, doing that would have
required shortening the period that the public had to make comments
that would be summarized in the report. In fact, in the 6 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 nearly all 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 for the applicants (given the other parts
of the community who also wished to be heard) was limited to about 2
hours, 3 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 applicant withdrew its application because of
its unwillingness to allow significant material in the 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 this 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 public 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.
D.6 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,\12\
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.
---------------------------------------------------------------------------
\12\ In the application instructions, each applicant was told:
``The requirements for sponsoring or operating a new TLD are very
stringent. Only a limited number to TLDs will be established in this
round of applications, and it is likely that only applications with
very high qualifications will be accepted.'' http://www.icann.org/tlds/
new-tld-application-instructions-15aug00.htm#12. To make doubly sure
there was no misundeerstanding, every applicant was required to
acknowledge in writing: ``The applicant understands and acknowledges
that ICANN has the right to reject all applications for new top-level
domains that it receives and that there is no assurance that any
additional top-level domain will ever be created in the future.''
http://www.icann.org/tlds/eld-app-unsponsored-transmittal-
15au00.htm#B6.
---------------------------------------------------------------------------
Many applications with likely merit were necessarily not going to
be selected, since 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 organizations 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 experiment. Although some suggest that the decision
process was somehow hidden, in fact all of this consideration was
conducted in a public meeting, in full view of the assembled audience
and of hundreds of users observing the webcast. In a meeting that
lasted more than 6 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.\13\ 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.
---------------------------------------------------------------------------
\13\ 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, we believe, the objectives of the general
Internet community, 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 dissatisfied, 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.
D.7 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. (There
have been a number of country code TLDs introduced over that period,
and some of those have recently begun to function in a way quite
analogous to a global TLD. These have only achieved relatively small
numbers of registrations, so that they do little to test whether the
stability of the DNS by large TLDs competitive with .com.) 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 sideeffects, and that is
precisely why we are conducting this experiment. The results will guide
our future actions.
iv. important outstanding issues
A. Country Code Top Level Domain (ccTLD) Relationships. This is
certainly one of the most complex parts of the ICANN structural process
that remains to be resolved. While there are many moving parts, the key
issues are the proper relationships between governments, current ccTLD
operators, and ICANN.
To properly understand how we got to where we are, we need to look
back to the early days of the DNS, when Jon Postel and others were
seeking primarily to expand connectivity throughout the globe. In order
to have a truly global network, and for all of the world's population
to enjoy the benefits of that network, worldwide connectivity is a
crucial first step. After the creation of the original seven generic
TLDs in the mid-1980s, Dr. Postel (in his IANA role) delegated what he
described as ``country code'' or ``cc'' TLDs to persons (often academic
researchers) willing to operate those registries for the benefit of the
residents of that particular geographic area.
While in general these delegations were made on a national boundary
basis, Dr. Postel also made delegations to persons willing to take on
this commitment in isolated geographies, such as island groups, even
though they might be part of an already existing national cc
delegation. Typically, each ccTLD was operated by a designated
individual. Since the goal was to expand connectivity, and since there
was in fact very little interest in this subject on the part of most
national governments at the time, there was clearly less care and
precision about the specifics of those delegations than might seem
desirable today.
Over time, the standards and criteria for such delegations grew
more rigorous, and were eventually described in a document known as RFC
1591.\14\ It became the practice to only create new delegations for
those nations or geographic areas included on a list maintained by the
Organization for International Standardization (ISO) on behalf of the
United Nations Statistics Office, which maintains two-letter codes for
nations and various external territories. But the legacy of those early
days still remains in some instances, and so there are separate ccTLDs
for locations such as the Cocos (Keeling) Islands (.cc) and Christmas
Island (.cx), both territories of Australia, as well as various French
overseas departments and territories (e.g., Guadeloupe (.gp) and
Mayotte (.yt)) and miscellaneous others (e.g., American Samoa (.as) and
Pitcairn Island (.pn)).
---------------------------------------------------------------------------
\14\ ``Requests for Comments'' (RFCs'') are standards and other
related documents developed and published under the auspices of the
Internet Engineering Task Force.
---------------------------------------------------------------------------
The 244 ccTLDs are quite diverse. Some, like .de (Germany) or .uk
(Great Britain) are large and active registries; some, like .aq
(Antarctica), have almost no registrations at all; and some are
completely inactive. In addition, the way the ccTLDs are operated
varies enormously. Some are highly restricted to residents or citizens
of the particular country, while others are completely unrestricted.
Some are limited to particular kinds of registrations, while others
allow registrations of almost any string of letters. Some are operated
as non-profit cooperatives, while others are highly entrepreneurial
businesses.
A few delegees have decided to essentially license the marketing of
the ccTLD to a commercial enterprise for various forms of compensation,
and that has produced out-of-territory marketing campaigns for such
ccTLDs as .tv (Tuvalu), .md (Moldova), .nu (Niue), and .cc (Cocos
Islands). This practice, of course, is a distortion of the original
intended use of the ccTLDs by Jon Postel: opening up the Internet to
all parts of the globe, allowing it to accommodate diversity in
linguistic, cultural, economic, political, and legal circumstances. Dr.
Postel was seeking stewards for the local community's interest in being
part of this growing global network we now call the Internet. He was
looking for, and generally found, volunteers who were willing to take
what he (and they, in the vast majority of cases) viewed as a public
trust for the Internet community of which the person or entity
receiving the delegation was a part.
But Dr. Postel, while a genius in his field, was no more prescient
than anyone else about what the Internet would become, and in any event
did not insist upon written contracts and legal agreements as a
condition of a delegation. He relied, as did all involved at the time,
on the good faith and interest in serving the public of all involved.
The Internet we see today--a global medium for commerce and
communication that presents enormous opportunities for profit--is
vastly different than the infant network that he was trying to nurture
to adolescence. And it is this evolution that is the principal reason
that Dr. Postel and the great majority of the Internet community
concluded that something like ICANN needed to be created.
Unfortunately, the task that ICANN inherited with respect to the
ccTLDs is complicated greatly by the fact that much water has passed
under the bridge since most of the original delegations. In some
countries, the national government is intimately involved in oversight
of the ccTLD delegated for that country. In other countries, the
national government has shown little or no interest in these issues.
And in some countries or geographic areas, the operation of the ccTLDs
have run strongly counter to governmental preferences and, in several
cases, legislation. As we have seen, in some of those situations, where
a private entrepreneur has obtained an agreement to market a ccTLD from
the original delegee, that entrepreneur has interests that are
completely unrelated to the original goals of the delegation, and may
have a significant economic interest in maintaining the status quo,
without regard to the interests of the global or local Internet
communities.
One of the great changes over the last two decades is the
involvement and interest of many of the world's governments in the
Internet. For many reasons, national governments and even multi-
national bodies now see the Internet as an important vehicle or tool
for economic development, for communication, for cultural preservation
or many other objectives. Since ICANN is a private sector entity,
governments or government officials cannot directly participate in the
governance or operations of ICANN. But since the interests of national
governments are obviously important elements of the global Internet
community, and certainly have to be taken account of in the creation of
any meaningful global consensus, ICANN created its Governmental
Advisory Committee (GAC) to serve as a device for sharing information
and concerns between national governments and recognized geographic
areas, on the one hand, and the private sector participants in ICANN on
the other. The GAC meets (at least) quarterly, in conjunction with the
quarterly ICANN meetings, and has developed the tradition of issuing a
public communique following each such meeting. ICANN's bylaws provide
that it will receive advice from the GAC, and deal with it as it sees
fit, but any such advice is always given the serious consideration that
it deserves, since it comes from those chosen as representatives of
populations that make up much of the Internet community.
The GAC has a particular interest in the relationships between
ccTLD delegees and ICANN, since it and its members believe that nations
have a sovereign interest in the ccTLD that has been created to
represent the interests of the citizens of those nations. On the other
hand, while ICANN has recognized and accepted that sovereign
interest,\15\ ICANN's prime directive--the stability of the Internet--
cannot be sacrificed or ignored because of it. And finally, there are
commercial relationships that have been created over the years, and
investments made in reliance on those relationships, that should not be
ignored either, both as a matter of common equity and because to do so
could adversely affect the very stability that ICANN (and the Internet
community it represents) seeks. Thus, finding the correct articulation
of the appropriate relationships between (1) the government and the
ccTLD administrator; (2) the ccTLD administrator and ICANN; and (3)
ICANN and the government is inherently complex.
---------------------------------------------------------------------------
\15\ The White Paper summarized this interest as follows: ``Of
course, national governments now have, and will continue to have,
authority to manage or establish policy for their own ccTLDs.''
---------------------------------------------------------------------------
We have worked hard, but we don't have this part of the ICANN
construction project done yet. We have just hired the former ccTLD
administrator for Austria, Herbert Vitzthum, to help bring this
particular set of conversations to a conclusion as soon as possible.
B. At-Large (or general user) Participation in ICANN. The original
ICANN proposal to the Department of Commerce to be recognized as the
Internet community private sector consensus entity called for by the
White Paper proposed that nine of the 19 members of the ICANN Board
would be selected with the participation of the general user community,
``if feasible.'' The reason for the qualification was purely practical;
there was a clear consensus that users should have some appropriate way
to participate in the ICANN consensus development process, but there
was no consensus--and indeed no good ideas--about how that could be
accomplished without risking the very ability of ICANN to carry out its
principal mission. There were loud voices calling for global online
elections--one-person (or one-domain name, or one email address), one
vote. But there were other equally loud voices raising concerns about
the possibility that such elections could be easily captured by
determined minorities--business, geographic, ethnic, religious,
philosophical or other--and even if that did not happen, having half
the Board of an organization whose principal mission was technical
stability of the Internet selected by an electorate that almost
certainly would know almost nothing about the subject was unwise. No
one had come up with a scheme for accomplishing the objective while
eliminating the obvious risks, and so the original proposal promised
only to do what was feasible.
The Clinton Administration, in the form of Ira Magaziner, who had
been delegated the lead responsibility in this area, took the position
that it would not recognize ICANN unless it committed to user
participation (comprising at least nomination) in the process of
selecting nine Board members--presumably on the basis that, without
that commitment, it would not accept that ICANN truly represented a
consensus of the Internet community. Whatever the merits of that point
of view, the ICANN organizers acquiesced, and thus began 18 months of
searching for a method to accomplish this goal that could achieve
consensus support. We have not yet found that needle in the haystack,
and this failure has been a constant source of criticism from a portion
of the Internet community and from various academics and interest
groups who feel strongly about the issue. An appropriate solution for
the At Large issue is necessary if ICANN is to truly be an effective
consensus development body for the entire Internet community.
Because all other attempts had failed, the ICANN Board last year
determined that it would, on an interim basis, conduct a global online
selection process for five members of the ICANN Board, which would be
followed with a new study effort to find the consensus that has eluded
the community so far on this issue. Those selections were held last
fall, and selected one Director from each of the five ICANN regions--
North America, Europe, Asia-Pacific, Latin America, and Africa. The
reason for selecting five rather than nine was to obtain support for
this interim compromise from those who oppose direct online selections;
with five directors selected by online voting, those directors in the
aggregate (even in the event of a total capture of the selection
process by some determined minority) would still amount to one director
less than one-third of the Board. The Board would still be able to act,
even where a two-thirds majority was required, even if all five (in
this hypothetical) ``captured'' directors voted as a block. To assure
that nine At Large seats continued to be occupied, four of the original
interim directors agreed to serve beyond their original 2 year
commitment.
In fact, the online selection process was unsatisfactory in a
variety of ways, but it does not appear that there was any ``capture''
of the five selected directors as a group. They have taken their Board
seats and are functioning in every way as ICANN directors today. The At
Large Study Committee is in the process of being established, with Carl
Bildt, the former prime minister of Sweden as its Chair, and Charles
Costello, an elections expert from the Carter Center, and Pindar Wong,
a well-known Internet technologist from Hong Kong, as Vice-Chairs. The
remainder of the Committee will be named soon, and its goal is to find
that consensus solution to this problem that has gone undiscovered to
date.
v. conclusion
I trust that this description of the background and current status
of the most important ICANN initiatives will be helpful to the
Committee, and we stand ready to provide any other information that the
Committee might find useful.
Senator Burns. Thank you, Mr. Roberts, for your statement.
I want to start off with the situation on the dispute
resolution. In that, and I have not studied that end of it, and
you will have to enlighten me, does that also include due
process?
Mr. Roberts. The history of dispute resolution over domain
names goes back several years, involves a good deal of activity
and, as you know, the Senate decided that it needed to enact a
cyber-squatting statute, which it did.
In addition to that, there has long been a demand for a
non-judicial way of resolving these disputes, particularly
because going to court is a significant burden to many small
businesses whose domain names may be involved in an
infringement action of one kind or another.
So with a worldwide process that involved hearings in many
countries, in the U.S. and elsewhere, we worked with the
stakeholders that are particularly interested in this area to
come up with something that's called the Uniform Dispute
Resolution Policy. That policy was adopted by the Board a
little bit over a year ago, and we selected several companies
that are completely independent of ICANN to administer that
policy and those procedures on a worldwide basis, starting last
January.
In the course of the subsequent 12 or 13 months, there have
been some 2,000 disputes that have been resolved. We do not
claim perfection for that. In fact, the Board specifically said
when it adopted the policy that, after a period of experience
with it, it would conduct a review of the policy, and the
pluses and the minuses, and any mid-course corrections that
needed to be made in dealing with the outcomes of those actions
and those reviews.
Senator Burns. You have been critical of this, Mr.
Auerbach. Would you like to respond to that?
Mr. Auerbach. Yes, I would. The UDRP, Uniform Dispute
Resolution Policy, amounts to an international law. It is a law
refining the relationship of trademarks over other uses of a
name and, because it is international, it is actually superior
to a law which you, the Senators, along with Congress, can
pass. It is stronger than that. It supersedes that.
It is also a policy which favors trademark intellectual
property interests over other users of names. It is only
available to those who have trademarks. That is a condition
precedent to bringing an action under the UDRP. If my name, if
Senator Boxer's name is being misused by anyone else, neither
of us could bring a claim on the UDRP because neither of us has
a trademark in our name, which is a precondition to bringing
it.
The UDRP is very, very flawed. There has been some research
on it at the University of Syracuse New York, by Professor
Milton Mueller, and I can bring that to the attention of the
Subcommittee if you would like.
Senator Burns. The process of resolving these disputes, Mr.
Roberts, are they laid out specifically in the MOU? Did the MOU
address that situation at all?
Mr. Roberts. The Administration was very much involved as a
member state of the WIPO compact in attempting to find a way to
allay the concerns of the trademark community, worldwide
trademark community, and there was a specific mandate in the
White Paper that said that non-profit entity that was organized
was to take up this issue and work with the community to see
what could be devised. The Congress has already held hearings
on this, and there is testimony in the record from last fall
with regard to the issues.
Senator Burns. When those negotiations were going on, and
from the Commerce Department in developing the MOU and the
setting up of ICANN, was there any reference made that it might
take congressional action to make it legal?
Mr. Roberts. Are you referring specifically to the UDRP?
Senator Burns. Yes.
Mr. Roberts. The Administration invited the World
Intellectual Property Organization to conduct a process leading
to a report, and that report came out in the spring of 1999 and
was referred to ICANN and to its Board to work with the
stakeholders to see what parts of that report might be
pertinent to a process that ICANN could deal with.
ICANN's powers in this area are extremely limited. I would
just like to point out that the way that this process works, it
is only available to domain name registrants. It is completely
non-judicial, and it does not affect the opportunity of any
party to such a dispute to seek judicial relief under
applicable law.
Senator Burns. Would you care to comment, Mr. Auerbach?
Mr. Auerbach. I am just wondering under what section of the
Constitution the Department of Commerce obtains the authority
to delegate this power to ICANN. I have not seen such a
section, and I would like to be educated.
Senator Burns. I have got a couple of other questions, and
I yield to my good friend from California.
Senator Boxer. Would you prefer to finish your set?
Senator Burns. No.
Senator Boxer. Thank you, Mr. Chairman.
Senator Burns. I think there will be a lot of rounds with
this panel, I have a feeling.
Senator Boxer. It is interesting.
Mr. Auerbach, I get the sense from your statement and your
comments that you do not think there is a need to do anything
in this arena. Am I right?
Mr. Auerbach. I am not sure what you mean.
Senator Boxer. I mean, you seem very critical of where
things are going.
Mr. Auerbach. I am very critical.
Senator Boxer. What would you suggest?
Mr. Auerbach. OK, in terms of concrete, ICANN is needed.
There are certain network resources. There is the domain name
space, and we should not forget the IP address space, which is
actually the 9/10ths of the iceberg under ICANN which everybody
forgets, that need some degree of central coordination.
Senator Boxer. IP meaning?
Mr. Auerbach. Internet protocol addresses.
Senator Boxer. Thank you.
Mr. Auerbach. They are the numbers that actually represent
your machine. They are the things that actually make packets
move around the network.
If you think about it, the domain name service is actually
a layered-on service. If we compare it to your telephone
system, the ability to make a phone call is the primary
service. The ability to call 411 and look in a phone book is a
layered-on service. DNS is a layered-on service.
Anyway, as far as ICANN goes, we need an ICANN. We need
something, and the real question in my mind is, ICANN in the
end game has to be something that is pretty much a fairly
independent, international type body that is really beyond any
particular nation's control. The question is really how do we
go from here, which is, we have a California corporation in the
United States, and how do we get to this new kind of entity
which is sort of free-floating?
To my mind it really requires at least two major
components. One is, it has to have public participation,
because unless we get acceptance of ICANN by those who are in
the Internet who are affected by its decisions, it will not
have legitimacy.
The second point is, to the extent that ICANN has to be
released from United States control, I believe it's going to
take some action on the part of Congress, painful as it may be,
to possibly slightly relinquish a little bit of United States
sovereignty. It is going to be difficult. It is going to be
painful. I do not know details of how we can achieve it. I see
a very fuzzy road in front of us, but I know we need
congressional help to do this.
Senator Boxer. Well, if I might ask Mr. Roberts to comment,
because I look at America as the cutting edge here, and at this
stage if we don't take the ball and run with it, so to speak, I
do not know what would happen. Could you perhaps comment on Mr
Auerbach's statement.
Mr. Roberts. I do not believe it is appropriate at this
time to consider any country relinquishing any national
sovereignty in connection with ICANN. I do not believe that the
private contracts, which are the source of the mutual
obligations which our stakeholders assumed as a result of our
policy deliberations, should go any further at this time.
If the world evolves to the point where we can have a
genuine transnational community of nations, that time will
arrive. ICANN absolutely wishes to stay out of that. Our
authorities have been very clearly set forth by the White Paper
and by agreements with the Commerce Department, and we stick
very closely to them.
Senator Boxer. Let me go back to my first point about this
identity theft issue, Mr. Roberts, and see if you can help me
out here. Last August, California passed a new law to protect
personal names. It goes further, Mr. Chairman, than what we
did, because, as I understand, the cyber-squatting legislation
we passed said that if you are going to be liable for using
someone's name, you have to profit from it.
In other words, if you're going to profit from it, then we
can go after you, but if they just steal your name to do
something other than that, such as what I showed you, which is
cynical and misleading at best, and harmful at worst--I found
it to be extremely harmful and disturbing--you cannot do
anything.
Mr. Roberts, I wonder if you think we ought to take a look
at that California law, because there you are liable if you
take someone's name for a bad faith purpose. I wonder whether
you think we ought to take a look at our legislation and see if
we can strengthen it to protect people from having this happen
to them.
Mr. Roberts. Senator, you have put your finger on a very
difficult situation that I know is of personal concern to
Senator Hatch, because he himself has had exactly the same
difficulty that you have, as well as other members of the
Congress have had.
On the other hand, we are dealing with a rather tricky area
of the law. I am not a lawyer or a legal scholar. Professor
Froomkin has worked with WIPO very extensively, and he may have
comments on the next panel.
The issue of the extent, and how statutory authority to
control what everyone says in a common-sense way, as you have,
that this is wrong, without compromising constitutional rights,
is a difficult one, and it needs your scrutiny, and I should
point out that this is not an area in which ICANN has any
competence or any desire to be involved.
Our procedures under UR--UDRP, pardon me, I stumble on my
own acronyms. The procedures are to deal with a non-judicial
settlement of abusive registration tactics.
Senator Boxer. Well, I think it is abusive to take
somebody's name and put up a false site, so I hope you will
rethink it, because I think it would be a very helpful thing.
Mr. Roberts. Well, of course, there are always remedies
available to you for defamation and libel, but as I think every
member of the Congress is aware, a public figure is severely
disadvantaged.
Senator Boxer. Well, that is not available to us.
Mr. Roberts. Right.
Senator Boxer. That is not available to us as public
figures.
Mr. Auerbach, did you want to comment, or do you have any
comment?
Mr. Auerbach. I was just going to reiterate that yes, the
standard court laws, there are such things, misappropriation of
identity, but ICANN should not be a legislature. You do a much
better job of it than we do.
Senator Boxer. We hope so.
Senator Burns. There are times, however----
[Laughter.]
Senator Boxer. There are times, and there are times.
Mr. Chairman, I have another question, but why don't I wait
till after your next round.
Senator Burns. Mr. Auerbach, you said in your opening
testimony that you as an individual have been denied access to
some areas of ICANN. Can you give me an example of that?
Mr. Auerbach. There is a group called the Government
Advisory Committee. It is formally part of ICANN. There is no
legal distinct existence. It is part of ICANN, yet they lock
the doors and they keep directors out. I am not allowed in the
meetings. I do not know what goes on in the meetings. I do not
know whether they are violating any particular laws. It is a
secret to me.
There is another part. There is a domain name supporting
organization, which again is legally part of ICANN. I am
responsible for its assets. I am responsible for its debts, as
director. I am responsible for its actions. Its assets and
liabilities were not, as far as I can tell, on the annual
statement. I do not know where that money is.
Senator Burns. Do you believe that every part of ICANN
should be open for scrutiny and public scrutiny?
Mr. Auerbach. To gain acceptance and legitimacy so it can
make the transition to being more than a mere California
corporation I believe is going to require that, but also, what
has it got to hide?
Other than personnel matters, contract negotiations, and
litigation, part of the premise of its existence would be that
it would be open and transparent. Part of its bylaws are that
it shall operate in an open and transparent manner to the
maximum extent possible, yet I have been an outsider for
several years, and I can tell you it is not open and
transparent, and even as an insider it is not open and
transparent.
I learn more about what goes on inside ICANN from people
who are part of my community outside of ICANN who watch it very
closely, reading tea leaves, than I do from internally.
Senator Burns. Mr. Roberts, do you want to comment on that?
Mr. Roberts. I would just make two brief comments. One is
that our fiduciary responsibilities that are incumbent upon
directors and management of a non-profit corporation are set
forth in the California statute. Our books are audited. We
comply religiously with all the legal requirements in the
corporation. We publish our financial statements, and if Mr.
Auerbach has any unresolved questions I would be delighted to
have him sit down with our auditors.
With regard to the issue of openness of the actions of some
of our committees, the Board of Directors is obliged by the
portion of the bylaws dealing with open and transparent
procedures to conduct all of its policy activities in the open
and publicly, and it does so.
On the other hand, the stakeholder activities that were
designed in the White Paper to provide a compartmented voice
for the specialized technical areas of the Internet that
represent the expertise that feeds to our Board, when the Board
undertakes a policy thing, the chairs of those bodies and those
committees are given considerable latitude to conduct their
affairs, which frequently are on a worldwide basis, by
electronic mail and telephone calls, and quarterly public
meetings, in the manner that they think facilitates carrying
out their part of the charter of ICANN.
It is, in fact, the delegated responsibility of the chair
of the Government Advisory Committee, who is a Government
official, to ensure that his committee, whose recommendations
to the ICANN Board are purely advisory, gets its work done in
the most efficient manner that its members believe it should
operate under.
It is, I think, of note that my reports to the Government
Advisory Committee and reports of certain other non-GAC members
are made in public session.
We have been feeling our way along with this. I think you
are aware that on a worldwide basis, practice about how to get
these kind of stakeholder activities done varies considerably,
and we take our openness and transparency responsibilities very
literally, and on the other hand, we have to adapt to the
manner in which people around the world are used to getting
things done. We have an international board of directors. A
substantial number of the members of our supporting
organization councils and their subordinate organizations are
non-U.S.
Senator Burns. I am very much interested to note that the
election of the five at-large, in quotes, Board members of
ICANN took place over the Internet. However, I have also heard
reports that there are many technical difficulties in this
process, along with other problems.
Mr. Roberts, can you comment on how the procedure for this
election was created, and Mr. Auerbach, what are your views of
that process, as you were a candidate?
Mr. Roberts. The story of the at-large, which I have a
substantial amount of narrative in my prepared testimony, goes
back to the beginning of ICANN. The first thing that the Board
did back at the beginning of 1999 was to appoint a committee
from around the world of knowledgeable individuals to attempt
to fashion a set of rules for how to do the first worldwide
electronic election of individuals who would be able to
participate in and assist the Board in carrying out its
technical management responsibilities.
Throughout 1999, this topic was the subject of committee
hearings, of reports to the ICANN Board, and the adoption of
resolutions, beginning to converge to a solutions base. To
shorten my remarks, at the quarterly meeting in Cairo in the
first quarter of 2000, the Board was confronted with a
cacophony of voices disputing the decisions it had made the
previous November at its annual meeting in California.
The result of what is now known, and there is considerable
backup to this, as the Cairo compromise, is the Board could not
find consensus about how to proceed on at-large. It had
attempted to do so. It had had several meetings on it, lots of
discussion, hours and hours of public testimony on the matter,
and the end result of that was violent disagreement about what
to do.
As a result of that, what the Board decided to do was to
hold an election using a system that was under development for
somewhat another purpose, of five directors, of five at-large
directors in 2000 and then, having seated those directors, to
completely reexamine how a worldwide at-large component of
ICANN might usefully contribute to the work of the corporation
and its responsibilities.
We held that election. We elected those five individuals.
We have publicly stated here and in my testimony and elsewhere
that it was a traumatic learning experience for many people,
including the candidates, and that when we have the work of the
study committee, which Mr. Karl Bilt, former Prime Minister of
Sweden, is just putting into operation as I speak, that we will
look real hard at how to do this better the next time.
Senator Burns. Mr. Auerbach, would you like to make a
comment?
Mr. Auerbach. Oh, certainly. There was no compromise. There
was a choice in Cairo between having no viable election
whatsoever and a minimal election. It was the kind of
compromise one makes with a starving person who will pay any
price for food. That is why we have an election that is only
electing a portion of the half of the ICANN Board that should
be elected by the public.
As far as the election process itself goes, first of all,
the ballot itself was stuffed by ICANN hand-picked candidates.
There are only a subportion of those candidates who were
actually nominated by the public. The second part was, ICANN
controlled every communication channel between the electors,
between the voters.
Imagine campaigning if you were in your own State and you
could not get the names of the people on your voter rolls. How
would you reach them? How would you communicate with them? How
would you discuss issues? How would they talk to one another to
form parties? How would they give you funds? How would they
support you? We had none of that opportunity with ICANN. ICANN
controlled every communication channel. It withheld the address
list, in my mind in violation of California law, which says
those lists shall be made public to the voters.
Then the election itself, the technology was somewhat
flawed. Yes, there were more people signing up than were
anticipated. Many people could not sign up. Many people did not
get the pass codes for the election. That was explained because
158,000 people signed up.
Now, if you compute that over the period of the sign-up
period, that worked out to between three and four transactions
per minute, and I do not know of any computer that slow these
days, so we are talking about a system that overloaded under
extremely low transaction rates.
This election was a success in the fact that it actually
occurred. It was a failure in the fact that there were an
extraordinary number of obstacles put in the way of candidates.
Senator Burns. Can you comment, Mr. Roberts, on the ICANN
funds, how you gain your funds and how you do your activities?
Also, specifically refer to the $50,000 application fee charged
to applicants for new top-level domains, how this number was
arrived at, and is it fair.
Mr. Roberts. Thank you. The White Paper suggested, I think
it is the right term, that the appropriate source of funds for
the new private sector corporation and, of course, since this
was not a government corporation or a government-controlled
corporation, it was totally required that the stakeholders
provide all of the funding for it, including all of the startup
funding.
This was a substantial challenge to me when I took over as
the startup CEO in October 1998. We took the guidance of the
White Paper and sat down with what are known as the registry
companies, the operators of the domain name and address
registries, and over the past couple of years we have begun to
fashion the written agreements and the commitments to provide
financial support to ICANN.
It was intended that the community do this in a self-
supporting manner. We have, I would say, at the current state
of affairs, that we're about half-way through there. We have an
extremely diverse array of worldwide registries and registrars,
in the several hundreds, and at the present time about 60
percent of our funding base is confirmed by written agreement,
and the balance remains to be so confirmed.
With respect to the $50,000, this was a process, of course,
that had to be entirely self-supporting. It had never been done
before. In fact, it was taking place after 5 years of violent
argument about even whether it should be done, much less how it
should be done, and so we believe that the $50,000 represented
a reasonable sum under the circumstances as we knew them going
into this.
As the Board's policy process and its' structure for
soliciting applications was developed, as it has turned out at
the end of January, we have expended about $1,022,000 out of a
total of $2.2 million that has been received, and we still have
a substantial negotiations of the seven contracts that take
place, and we also, of course, have implementation of valuation
and some hazard from those non-selected of pursuing their case
in the courts, which, of course, is a hazard that we were aware
of from the very beginning of the process.
Senator Burns. I guess the most visible that we read about
was the .travel, and if you would comment on that, why were
applications for seemingly reasonable new TLDs, such as
.travel, for instance, they were rejected, while more obscure
new TLDs such as .museum was accepted? The $50,000 was kept
after the application was paid for.
Mr. Roberts. Well, let me make very brief comments about
that. First of all, the process was to lead to a proof-of-
concept selection of a diverse group of registry operators who
could demonstrate to the community whether the assumptions on
which we were going forward were, in fact, valid.
The bottom line of what is going to happen here is a
determination by the marketplace that expansion of the name
space in this manner is appropriate, it's safe for the
Internet, it's stable with regard to the economics of what
these companies are going to do, and that they won't fail.
There is a lock-in hazard here that someone who registers in
these new companies, if it goes bankrupt, there will be
disruption. There will be people whose business plans will be
broken, and so we have had all along, for that reason and other
reasons, considerable caution about doing this.
So I think the travel situation reflected an analysis of
the record and of the evaluation and of a substantial number of
public comments calling into question, since this was a
sponsored proposal, this was a proposal on behalf of a specific
community, that the community support for the proposal was not
all there.
Senator Burns. Now, my eyes glazed over, but if you wanted
to establish a .travel, I guess, why would you be concerned the
companies that join and do business in that particular area?
Mr. Roberts. Well, the Board's structure for the proof of
concept introduction of new TLDs have two main categories.
One was unsponsored, and one was sponsored. Sponsored
basically were people who thought that they were equipped to go
into competition with .com on a worldwide basis, and they were
evaluated on the basis of their technical business and
financial ability to, in fact, do that.
Those applicants who were seeking a sponsored top-level
domain were required to demonstrate, to be very particular
about what community they were representing, and how they were
confident they were going to represent that community in the
registration of domain names to the members of that community.
For instance, the .museum, which I think you're aware is
very widely internationally supported and supported in
California by the Getty Museum and the Getty Foundation, is
four museums, and it is intended to enable the worldwide museum
community to extend their educational and other kinds of
outreach via the Internet, and so in these sponsored proposals
it is necessary that you take a good look at the people who
have developed the proposal.
In fact, do they have the confidence of the community that
they are purported to support? For instance, you would not want
organizations that were not museums getting a domain name in
.museum and undertaking some sort of consumer--creating a
consumer problem and a consumer confidence problem.
Senator Burns. Senator Boxer.
Senator Boxer. Thank you.
Mr. Roberts, this is new territory for all of us, so if we
ask very basic questions, please understand.
Now, I understand before these new top-level domain names
become operational, ICANN must negotiate with these new seven,
or with these players, as to how they plan to protect trademark
holders. It is important that before this flood of new
addresses hit the market, that trademark holders have the
chance to protect their existing trademarks, and I understand
that there is a sunrise scheme that would do that.
As I understand it, even these new seven top-level domains
are required to establish a protocol on intellectual property
protection before ICANN will sign a contract with them. I
understand that .info, and I think also .pro, that they are
working on a so-called sunrise period that requires pre-
registration, a holding period, and preferences for trademark
holders on a first-come, first-served basis.
It seems to me this sunrise scheme, which I look at as sort
of a waiting period where you can make sure everyone is
protected, would go a long way toward protecting trademark
holders. Now, do I understand what this sunrise period is? Have
I described it correctly?
Mr. Roberts. Yes, you have.
Senator Boxer. And is this going to be applied to all of
the new names, or just those two domains?
Mr. Roberts. Let's talk about the principle we're trying to
deal with here. The principle is that a legitimate holder of a
trademark does not have that trademark infringed by the
registration of domain name transactions, and we have lots of
evidence from the difficulties with Network Solutions that this
not only happened, but it was extremely difficult to remedy,
and so one of the things that the community and the
stakeholders have told us, emphatically told us, is, don't
introduce these new top-level domains in a way that takes us
down that path again.
So as you might imagine, what will happen here if there is
an infringement action, it will not be an action against ICANN.
It will be an action against the registry operator. The
registry operator, after all, now has a business plan that they
have staked several millions of dollars, because the problem
you are pointing out is mostly in the worldwide commercial area
and not in, for instance, .museum, where there really is not
this kind of problem.
They have to gain the confidence of the market that they
are a viable entity and that they will conduct their affairs in
a reasonable way, and so we are not trying to put anybody in a
straitjacket about this. What we want is to see evidence that,
in fact, the companies are knowledgeable about the problem,
that they are talking to people that are involved here, the
trademark holders and others, and that they intend to see that
the right thing is done, and that is our bottom line.
Senator Boxer. Before I ask you, Mr. Auerbach, because I
see you want to put your word in, I just want to make sure that
I understand. This sunrise scheme, which sounds to me is the
right way to go, is only going to apply to two of the seven
top-level domains, or more than that?
Mr. Roberts. Well, in theory it applies to any top-level
domain registry, but as a practical matter, where you have a
highly restricted registry, there is very little room for that
particular type of abuse.
Senator Boxer. What minimum standards will you require from
these new applicants before you sign the contract? Can you lay
that out?
Mr. Roberts. Well, our registry accreditation agreements,
which were developed a year-and-a-half ago in connection with
our duties under what was known at the time as Amendment 11 of
the Cooperative Agreement between the Government and Network
Solutions--we were the instrumentality by which competition was
introduced into the .com, .org, and .net registry--have
provisions in this area. The basic provision that was in those
agreements was, if ICANN, through its policy process adopts a
dispute resolution process, then you as a registrar are
obligated to include that process in your agreements with the
people who register domain names, which they have now done, and
something similar to that will occur with regard to the new
registries.
Senator Boxer. Well, could you put in writing the minimum
standards ICANN will require for these new applicants before
you sign the contracts?
Mr. Roberts. I would be delighted to send you a letter
about that.
Senator Boxer. That would be very important. Thank you.
How do you plan to ensure, or can you ensure, that when
these new TLDs are open for business we are not faced with a
flood of new cyber-squatters?
Mr. Roberts. Well, first of all, since we have had this
very painful experience over the past 5 years, everyone is
extremely--all of our stakeholders and all of the parties to
this are very aware of the problem.
It was much discussed. It was part of the proceedings of
the working group and the domain name support organization that
forwarded its recommendations about the manner in which new
TLDs should be introduced to the Board, so I am trying to
distinguish here between the principle that guides how the
things are to be done versus the specific implementation.
It is not up to us to get down into the trenches on the
implementation, so long as the result of that is fairness and
adherence to the policies.
Senator Boxer. So your point is that one of the minimum
requirements will be that they are held liable if, in fact,
they are cyber-squatting, so that they are actually going to
sign something to that effect. Then you step out of the picture
and let other people go at it. Is that what you are saying?
Mr. Roberts. The only qualification to that is to go back
and remind you again that our authority and our responsibility
is with private contracts, with registry operators and
registrars that are limited to the scope under which a private
contract is enforceable. We do not have any statutory
authority, and there are some classes, some potential classes
of a problem that you describe that would require judicial
remedy of some kind, for instance. Some of those are already
dealt with in the U.S. cyber-squatting statute.
Senator Boxer. So basically what you are trying to do, as I
see it, is to have some document signed which would hold people
accountable if they do the wrong thing, but the actual
enforcement would be outside your jurisdiction.
Mr. Roberts. That is correct.
Senator Boxer. Mr. Auerbach, you have been shaking your
head vigorously. Why don't you give us your side of this?
Mr. Auerbach. First of all, until now I did not realize I
was on the Board of Directors of an insurance company that is
insuring that these new TLD operators will stay in business. To
my mind, a TLD can perfectly well go out of business. If I am a
customer of that TLD, I have the ability to pay them more
money. Standard, Adam Smith kind of control. I can pay them
more money to put in better infrastructures, rather than having
a new regulatory body with governmental dedicated powers to do
this. I think the standard economic methods will work here.
Senator Boxer. So you do not support the idea of these
agreements, signed by people saying that they are not going to
infringe?
Mr. Auerbach. That is a different subject. I said that
ICANN should not be looking at the business plans, the business
finances, the personnel, the management, whatever, of these TLD
operators. ICANN should let these operators go out of business
if they are bad business people.
Senator Boxer. Before you continue, I did not hear you say
that that is exactly what you are doing. Could you comment on
that, Mr. Roberts?
Mr. Roberts. I think that the judgment of the community,
and it has been repeated several times, and, in fact, it is
even contained in a White Paper language, is that the
introduction of new TLDs ought to be done in a cautious manner
which allows the community to learn to crawl before it walks
about this.
As I have already stated earlier in my testimony,
ultimately the market will provide the verdict on the success
of these companies. I think on the other hand, ICANN, on behalf
of its stakeholders, it has been told it has a responsibility
to exercise caution with regard to the integrity and the
ordinary prudence of the business plans and operational plans
that have been submitted to us by the applicants.
Senator Boxer. Mr. Auerbach.
Mr. Auerbach. Stakeholders, that is a code word that means
insiders. We're talking about intellectual property interest
and other registrars. Of course, they do not want more TLDs for
the trademark people. That means more space for them to search
for the registrars. That means more competitors. They have a
built-in interest against new competitors. The notion of
stakeholders in ICANN has been used to select who is in ICANN,
who can make decisions.
There is no participation by the community. I was not
permitted to participate in this TLD selection process, because
there were shortened periods for comment. The decision was
accelerated so that I could not participate. The community, the
elected representatives did not participate in this, so when
Mr. Roberts says community, he's really talking about the
intellectual property community and the registrars, both of
whom do not want new TLDs.
Mr. Roberts. I think the fact that we received 5,000 public
comments in the 6 weeks we are talking about is a substantial
verdict on the side of openness.
Senator Boxer. Did you use the web to let people know what
you were doing?
Mr. Roberts. We did, at every step of this process over a
period of 18 months, and thousands of pages of the applications
were posted for community scrutiny, and as I just said, we
received over 5,000 comments in response to those postings.
Senator Boxer. What is your website?
Mr. Roberts. It is ICANN.org.
Senator Boxer. Well, Mr. Chairman, I think those are my
questions for this panel. I will hold for the next panel.
Senator Burns. Well, thank you very much, Senator.
I think I hear you saying two different things, Mr.
Roberts, and correct me if I am wrong. In other words, I do not
understand, on the domain--let us go back to the .travel and
the .museum again, OK?
You are saying that if a commercial operator was assigned
into the domain of .museums, or had requested that, and that
was kind of against the rules that you have set up for .museum,
because that was set up for education, and without commercial
exploitation I would imagine, and you say if you made that
assignment and it was a mistake, then you have no liability in
that mistake? You are absolved from any liability of a
misassignment?
Mr. Roberts. Well, Senator, the applications were evaluated
on nine different criteria. My submitted testimony goes into
that.
Senator Burns. I will have to read that, and I will
probably glaze over again.
[Laughter.]
Mr. Roberts. I think the bottom line of the question you
are asking me is, does the record show that the staff
evaluation and the result of the public comments and the
Board's public deliberations and the Board's board meeting
deliberations, which extended over some 14 or 15 hours, does
the record show that these applicants were evaluated on those
criteria, and that appropriate judgments were made to engage in
a proof of concept limited introduction, and I believe the
record supports that.
Senator Burns. OK. Now, let us go over on the travel side
of it now. I run a travel business, and I kind of like the idea
of a .travel, maybe it is an industry-type thing, or maybe it
is people that would go to that site seeking information on
travel that was denied because you did not think there was
substantial support.
Now, what is your expense of setting up that domain if
there are maybe one or maybe two of us that are the only two
people that are active in that domain?
Mr. Roberts. First of all, let me point out that the
application was----
Senator Burns. And I am learning here.
Mr. Roberts. The application was not denied. The
application was not selected for a proof of concept ground, and
I understand that it may sound like a thin distinction, but it
was a very important distinction to the Board. The Board does
not know how many more new TLDs there ought to be, but there is
obviously, from the record of this hearing and of last week's
hearing, considerable sentiment that it should, provided that
the evaluation of what happens with the seven supports that.
But going more to your point, we had a category of
applications where the applicants could, on behalf of a defined
group of sponsoring groups, say, we wish to apply for the
delegation of a top-level domain that reflects the business
sector we are in, and that we will be the domain nameholders
in, and we will serve the public through those domains in the
following ways.
The assumption was, and in fact, one of the stated
requirements was, of the applications, that the applicant or
the applying organization had to demonstrate it had very
substantial support of all of the people in the sponsoring
group.
Now, the worldwide travel agency business is a very, very
complicated and very highly distributed business.
Senator Burns. It is competitive.
Mr. Roberts. The applying organization had difficulty
demonstrating it had substantial support and, in fact, our
public record is full of a large number of complaints that they
did not.
Senator Burns. I have no further questions for this panel.
I know there are going to be some questions arise on your
comments here by other Senators and, if you would, if you are
asked to make comment on their questions, if you would submit
that to the individual Senator and to the Subcommittee we will
leave this record open for the time being.
I want to thank you very much for coming this morning and
offering your testimony. Now we go the second panel, and thank
you. This panel is excused.
We have Brian Cartmell, Chairman and CEO of eNIC
Corporation out of Seattle, Washington; A. Michael Froomkin,
Professor of Law at University of Miami School of Law in Coral
Gables, Florida; Roger Cochetti, Senior Vice President, Policy,
at VeriSign Network Solutions; and Kenneth Hansen, Director of
Corporate Development at NeuStar here in Washington, DC.
Gentlemen, we welcome you to the hearing this morning. We
look forward to your testimony.
Mr. Cartmell, we will start with you.
STATEMENT OF BRIAN R. CARTMELL, CHAIRMAN AND CEO,
eNIC CORPORATION
Mr. Cartmell. Good morning, Mr. Chairman, members of the
Subcommittee.
Senator Burns. You might want to pull the microphone up
there. You are a little soft.
Mr. Cartmell. Good morning, Mr. Chairman, members of the
Subcommittee. My name is Brian Cartmell, and I am Chairman and
CEO of eNIC Corporation, a privately-held company based in
Seattle, Washington. I thank the Subcommittee for its
invitation to participate in the hearing this morning. I
welcome this opportunity to provide the Subcommittee with
eNIC's views on the Internet Corporation for Assigned Names and
Numbers, generally referred to as ICANN.
My perspective of ICANN and the issues being addressed by
this Subcommittee is a result of extensive experience in and
knowledge of the domain name system. My involvement began even
before the creation of ICANN, when I submitted an application
to the Internet Assigned Numbers Authority, IANA, to manage and
operate the .cc top-level domain, which is associated with the
Cocos-Killian Islands. That application was approved on October
12, 1997, and we commenced our name domain registrations a
couple of weeks thereafter.
Since that time, we have grown to be the second largest
domain registry in the United States, second only to VeriSign,
with approximately 400,000 domain names registered, including
nearly 300,000 in the United States alone. We have invested
literally millions of dollars to develop a globally diverse and
robust infrastructure that we believe rivals any in the
industry. .cc registers a cross-section of Internet users, and
among them small and medium-sized businesses, educational
organizations, and public interest groups.
You received a lot of information today, so I will just
make five points.
One, despite a lot of suggestions to the contrary, there is
no shortage of domain name space for customers looking for
domain names. They can choose from the existing generic top-
level domains, or from more than 240 top-level domains such as
.cc or .TV. Since very few top-level domains have more than
15,000 registrations, there is still room for literally
billions of domain names.
Two, while ICANN has definitely made some mistakes, we
should recognize the importance and difficulty of what they are
trying to do, all without any statutory or regulatory guidance,
or regularized source of funding. No one has ever tried what
they are attempting, to guide, if not manage, the world's
largest marketplace. Since its actions involve the very
architecture of the Internet, ICANN affects millions of
consumers and businesses.
Three, we are concerned about proposals that have been made
to confer national sovereignty over country code top-level
domains. That idea, I believe, would lead to a fractured
Internet where national regulatory schemes and privacy rules
apply to different pieces, creating uncertainty for businesses
and confusion for customers.
Four, as you know, ICANN does not control the domain name
system. Rather, the ultimate authority rests with the U.S.
Government, namely the Department of Commerce, which is under
the jurisdiction of this Committee. As stated recently by
ICANN's general counsel, ICANN has no legal authority to
authorize the issuance of new top-level domains or change the
delegation of existing top-level domains. The legal authority
to make these decisions rests with the Department of Commerce.
Five, ICANN should not take further actions involving the
policy or the architecture of the domain system until Congress
or a congressionally-mandated commission first conducts a
comprehensive study of critical policies and legal questions.
As more fully described in my written testimony, these include:
What should ICANN's mission be, if any?
What is the appropriate scope of its authority?
What role should foreign national governments play?
What tools and resources are needed for the governing body?
What is the effect of this initiative on U.S. national
consumer and business interest?
The answer to these and many other questions need to be
fully and publicly explored.
Mr. Chairman, I would like to thank you and the
Subcommittee for your time, and interest in these important
issues. I welcome any Subcommittee questions you might have.
[The prepared statement of Mr. Cartmell follows:]
Prepared Statement of Brian R. Cartmell, Chairman and CEO,
eNIC Corporation
I thank the Committee for its invitation to participate in the
hearing this morning and welcome this opportunity to provide the
Committee with eNIC's views on the Internet Corporation for Assigned
Names and Numbers, generally referred to as ICANN.
I commend the Committee for recognizing the importance of the
matters being discussed here today. Indeed, under review is the
governance and control of the underlying architecture of the Internet,
the super-highway that is quickly emerging as the world's largest
marketplace and a primary forum for exchanging information and ideas.
Much like the human body which is dependent on the heart for life, the
Internet is dependent on a properly functioning, stable, and secure
Domain Name System. Without it, the important Internet-related issues
being debated in these halls, issues such as Internet privacy, consumer
protection and security, literally would become moot. If the Domain
Name System fails, an exchange or transmission of information across
the Internet would not be possible. Consumers would not be able to
access websites to look up information. Businesses would not be able
transact business with their customers.
overview of enic corporation
My perspective of ICANN and the issues being addressed by this
Committee is the result of my extensive experience in and knowledge of
the Domain Name System. My involvement began even before the creation
of ICANN when, in conjunction with an associate, I submitted an
application, on September 25, 1997, to the Internet Assigned Numbers
Authority (``IANA''), an agency contracted by the U.S. Department of
Commerce, to operate and manage the Dot-CC top level domain. The
application was approved on October 13, 1997, and we commenced domain
name registration operations a couple of weeks thereafter. The Dot-CC
domain is associated with the Cocos Islands, a group of islands in the
Indian Ocean that, at the time we submitted our application, were
privately owned, but today are a territory of Australia.
Since that time, we have grown to be the second largest domain name
registry in the United States, second only to VeriSign Global Registry,
with approximately 400,000 domain names registered. We employ 40 people
and have invested literally millions of dollars to develop a globally
diverse and robust infrastructure that we believe rivals any in the
industry. Our Dot-CC registrants are located in all parts of the world,
including nearly 300,000 in the United States alone, a scenario which
is quite different from the widespread perception that correlates
``country code top level domain'' registrants to a particular
geographical area. Dot-CC registrants are a varied cross-section of
Internet users, among them individuals, small- and medium-sized
businesses, educational organizations, and public interest groups. Our
internal monitoring systems indicate that Dot-CC sites are accessed
millions of times daily around the world, indicating a widespread use
and adoption of the Dot-CC top level domain by both registrants and
consumers. Incidentally, my engineers tell me we have 43,893 customers
in Florida but, given recent events, I have asked for a recount.
I speak today as an active participant in the process, both prior
to and after ICANN's founding in November 1998. In that regard, I have
attended and participated in almost every quarterly ICANN meeting and
have had countless discussions with ICANN executives. I also speak as a
representative of a U.S.-based organization that has made tremendous
commitments and expended significant resources to promote the long-term
viability of the Internet as a whole, while also advancing the
interests of eNIC Corporation, its employees, customers and those we
serve.
a recipe for error from its inception
In his testimony on February 8, 2001 before the House Energy &
Commerce Committee's Telecommunications Subcommittee, Mr. Vinton Cerf,
Chairman of ICANN, likened the process of establishing ICANN 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.'' Mr. Cerf further characterized ICANN
as a ``young, and still maturing organization,'' while acknowledging
that it has made mistakes and is still a ``work in progress.'' As a
representative of an organization that is vitally interested in the
workings of the Domain Name System and which has invested millions of
dollars to establish a world-class technological infrastructure and
maintains obligations to several hundred thousand consumers in the Dot-
CC domain sphere, I consider such admissions both disconcerting and
alarming.
Looking back at the genesis of ICANN, it appears that the situation
described by Mr. Cerf was inevitable. ICANN launched into uncharted
waters without a prior, meaningful, thorough analysis of crucial issues
involved, or of the far-reaching ramifications of the ICANN initiative,
including how to protect the interests of the U.S. in this critical
asset and those of U.S. businesses who would be directly affected by
ICANN's decisions.
Upon reflection, I am amazed. In my relatively short life, I am
aware of millions of dollars being spent on governmental commissions
studying the construction of single highways connecting two points. I
find it ironic that in the case of perhaps the most important ``super-
highway'' of my generation, the ``information super-highway'' we know
as the Internet, the U.S. Government has not commissioned even one such
study. Rather, much like the development of the Internet itself, the
principles for its governance have simply been viewed as a developing,
``adapt as we go'' experience. Absent is any enabling legislation or
other road map other than the general principles stated in the ``White
Paper.'' Please allow me to enumerate some to the critical issues to
which I refer and which have yet to be analyzed in any meaningful way.
1. To What Extent Does the Department of Commerce have authority
over the root server system or to delegate powers to ICANN? One need
only review the findings of the General Accounting Office, set forth in
a report dated July 7, 2000 delivered to this Committee and a
corresponding committee in the House, as an example of the Department
of Commerce's failure to conduct even the most basic inquiries before
it took the ICANN ``plunge.'' On page 27 of its report, the GAO noted
that the Department of Commerce did not even know whether it had the
legal authority to delegate the control of the authoritative root
server to ICANN as contemplated by the seminal ``White Paper.'' Indeed,
the General Counsel of the Department of Commerce acknowledged to the
GAO that in the ``absence of such plans [to transfer the ``A'' root
server], we have not devoted the possibly substantial resources that
would be necessary to develop a legal opinion as to whether legislation
would be necessary to do so.'' Obviously, this issue is a cornerstone
of any analysis and must be answered before any decisions should be
made on the proper course of action.
2. Is a private, non-profit organization the proper structure to
govern such crucial functions of the Internet? One of the most frequent
arguments of ICANN's defenders is effectively stated by simply asking
the question, ``can you identify a better alternative? On the surface,
such an argument is compelling and makes a great deal of sense, as
``privatizing'' the Internet functions seems to be preferable to
government control thereof. In reality, however, it is premature to ask
such a question as no meaningful study has been conducted to discover
viable alternatives or, considering critical U.S. interests, even the
desirability of such a non-profit entity handling governance
responsibilities. For example, even now ICANN is faced with the dilemma
of deciding what safeguards it can implement to shield its assets and
operations from potential liabilities that will inevitably materialize
and which, in the worst case, could threaten ICANN's very existence.
While administrative agencies of government benefit from certain
immunities for their rulemaking functions, ICANN cannot claim such
immunities without appropriate governmental action.
3. What effect does the transfer to ICANN of the governance of the
Domain Name System have on current and future U.S. interests, including
those of its consumers and businesses? Much like the GPS network, the
Internet was primarily a U.S.-based initiative, with significant
taxpayer funds expended in its development. With the explosion of
commercial growth on the Internet, the interests of U.S. based
businesses and the global economy are increasingly dependent on the
Internet, its stability and robustness. What effect, if any, will such
a transfer have on matters of national security or governmental
operations in the ``.mil'' and ``.gov'' top level domains? Can security
be assured on a go-forward basis under the ICANN structure?
In sum, an important question is whether the transfer of those
crucial functions to a private, non-profit corporation which is exposed
to liability claims, in reality, advances and protects U.S. interests
or, to the contrary, exposes them to unnecessary or unwarranted
threats. Incidentally, it is my position that it is the role and
responsibility of the U.S. Congress, not ICANN or even the Department
of Commerce, to decide what U.S. assets should be ``gifted'' to the
world or exposed in some way, and that such a decision should be based
on complete information garnered from appropriate inquiry and
investigation. Unfortunately, to date, Congress has not been included
in, nor been involved with, this important decision.
4. Is ICANN being established exclusively as a technical standards
body or should it be delegated policy and rulemaking powers as well?
Mr. Cerf and other officers of ICANN continually stress that, rather
than being a policymaking entity, ICANN's main role is as a
``consensus''-building organization charged with making decisions in
accordance with the will of the ``international Internet community.''
Oddly, no one has yet defined what the term ``international Internet
community'' really means. I would submit that without clear definition,
the term has no meaning at all because, as we have seen through
history, even illegitimate governments claim to be governed by the
``consensus'' of the ``people.'' Without clear standards for
measurement, unfettered democratic processes, and uncompromising
transparency, a ``consensus'' can either be manipulated, or a mirage
created by, those in power.
In reality, ICANN's assertions are somewhat simplistic and ignore
the tremendous governance function that ICANN has assumed, either
rightfully or in excess of its charter. One only needs to review (a)
the recent decisions relating to the approval of new ``generic'' top
level domains, or (b) ICANN's requirements imposing the uniform dispute
resolution process (``UDRP''), as evidence that ICANN is exerting
tremendous and wide-ranging policy powers over the Domain Name System.
Indeed, the power to give and take away rights equates to the power to
govern, and extends well beyond the ``consensus'' building function
championed by ICANN.
5. To whom, if anyone, should ICANN be accountable? A key element
of any governing body is the idea of effective accountability,
including the question of due process that has been raised by several
observers. Yet in the present situation, the question of the
accountability of ICANN has not been addressed in any meaningful way.
To whom will ICANN be accountable on an on-going basis once the
privatization of the Domain Name System is complete? ICANN proponents
suggest that it will be accountable to the ``international Internet
community.'' As discussed previously, such a standard has never been
defined or evaluated. Consequently, for purposes of governance, it is
virtually meaningless and equates to no accountability whatsoever in
the real sense of the word. Perhaps a more important question is what
mechanism or standard for accountability is in the best interests of
the U.S? Such a question is for Congress to address, not ICANN or other
interest groups.
6. What interests should foreign governments or sovereigns have
over the Domain Name System and Internet governance? This issue is of
particular importance to eNIC Corporation, and its worldwide customer
base because Dot-CC is officially a ``country code top level domain.''
Our administration of, and interest in. the Dot-CC top level domain
arises from a delegation from IANA in October 1997, more than a year
before ICANN was established. Since that time we have expended
literally millions of dollars establishing a state-of-the-art system of
servers worldwide, marketing the Dot-CC top level domain around the
world, and serving our customers and others. We have spent nearly $2
million on projects that benefit the people of the Cocos (Keeling)
Islands, something that we have voluntarily undertaken to fulfill our
charge to act for the ``benefit'' of the local Internet community on
the Cocos (Keeling) Islands under RFC 1591.
From the beginning, the country code TLDs have not been based on
country names and abbreviations but rather on a list known as ISO 3166-
1. This listing is a compilation of names and codes developed by the
International Organization for Standardization for various statistical
purposes and includes country names as well as names of territories,
such as Puerto Rico, the Netherlands Antilles and the Cocos Islands. In
the paper establishing the Domain Name System, RFC 1591, March 1994,
Jonathan Postel, head of IANA (the predecessor to ICANN), stated: ``The
IANA is not in the business of deciding what is and what is not a
country. The selection of the ISO 3166 list as a basis for coutnry code
top-level domain names was made with the knowledge that ISO has a
procedure for determining which entities should be and should not be on
that list.''
Neither IANA nor ICANN has ever deviated from this position. In an
affidavit in November 2000, Mr. Louis Touton, ICANN's general counsel,
stated that foreign governments have no ownership interest in or rights
to control any country code TLD. Rather, he specified ``[c]ountry code
TLDs are administered by appointed ccTLD managers, who act as trustees
performing a service on behalf of the Internet community, both globally
and in the country or territory designated by the country code.'' In
his February 8, 2001 testimony, ICANN's chairman, Dr. Vinton Cerf,
again confirmed this. ``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.'' As discussed, eNIC has
operated the Dot-CC top level domain both for the benefit of the local
Internet Community on the Cocos Islands and for the broader Internet
community by registering top level domains on a worldwide basis.
Unfortunately, recent statements by some have implied that
governments of foreign countries may be given more control over
important policy issues, including the operation of country code TLDs.
Any such attempted delegation of authority would have significant
ramifications, both for the Internet as a whole and for U.S. national
interests, those of its consumers and U.S. businesses such as eNIC
Corporation. In my view, Congress, rather than ICANN, is the
appropriate body to make policy regarding such critical issues.
7. Are additional top level domains necessary? The issue of the
approval of new ``generic'' top level domains, and ICANN's process for
approving them, has generated heated and rather divisive debate since
September of last year. I would suggest that there is no real
``shortage'' of domain name space using existing top level domains that
are already root recognized. In fact, with over 240 existing top level
domains, many of which are ``open'' to worldwide registrations and most
of which are dramatically underutilized (less than 15,000 domain
registrations in them), there is plenty of room for literally billions
of domain names without the creation of new top level domains. In other
words, there is no ``shortage'' as has been so widely publicized.
8. What is the proper way to fund the governance of the Internet?
Until last fall when it received U.S. $50,000 from each of the
applicants for new top level domains, ICANN was under-funded and
``boot-strapping'' its operations. The non-refundable application fee
has subjected ICANN to widespread criticism and controversy as many
have suggested that the fee was nothing more that a funding mechanism.
Clearly, any governing body of the Internet needs proper, reliable
funding sources in order to fulfill its mission. Unfortunately, this
rather critical issue had not been addressed at the time ICANN was
launched.
call for a comprehensive congressionally-mandated study
Looking back, it is abundantly clear that the turmoil surrounding
ICANN, the questions regarding its international legitimacy, the
growing doubts about its decisionmaking processes and structure, and
the lingering skepticism relating to its longevity can be traced
directly to the lack of any meaningful analysis or study of material
issues prior to its establishment. Such a study would have identified
(1) the legality of such an endeavor, and its effect on important U.S.
national interests or those of consumers and U.S. businesses, (2)
alternatives for Internet governance that might prove to be superior to
the establishment of a California non-profit corporation to assume the
tasks, (3) the tools and liability protections that such an
organization would need to succeed, (4) the specific interests of the
nations in the international community, (5) a clear definition of
ICANN's mission, the boundaries of its authority, well-delineated
guidelines for the exercise of its powers, and a road map for Congress
to enact such legislation as would be necessary to carry out that
mission. Instead, ICANN was given only broad statements regarding the
objectives of such a governing body.
The good news is that there is still time for Congress to exercise
its rightful oversight and legislative roles. If the U.S. is going to
give the Internet to the world through privatization, at a minimum it
should be the result of a fully informed decision. The bad news is that
the a failure to act will likely lead only to an escalation of the
turmoil, a fracturing and destabilization of the Domain Name System, an
increased regulation of the Internet by foreign sovereigns, and the
further denigration of U.S. national interests and those of its
consumers and U.S. businesses such as eNIC Corporation.
While my instincts tell me that the Internet should move forward
with minimal governmental intervention, the questions that have been
raised are so important, with ramifications so far-reaching, I am
convinced that a comprehensive study should be conducted immediately to
avoid long-lasting mistakes. eNIC Corporation respectfully submits that
the Senate take the following actions:
(1) In conjunction with the House of Representatives, commission a
panel of experts to perform an in-depth study of the issues relating to
ICANN, the governance of the Internet and, in particular, the Domain
Name System; and
(2) Pending the delivery of the conclusions of the appointed
Congressional commission, direct the Department of Commerce to refrain
from taking further actions to expand the role of ICANN, including the
(a) turn-over of the authoritative root servers, (b) recognition of new
generic top level domains, or (c) recognition of rights of foreign
sovereigns over top level domains (except to the extent the foreign
sovereigns have been delegated a country code top level domain by IANA
or the designated country code top level domain manager has already
entered into an agreement with the applicable foreign sovereign
relative to the operation of a particular country code top level
domain).
conclusion
While ICANN has made mistakes, it should be recognized that it has
been undertaking an immensely important and difficult job without any
statutory or regulatory guidance, or regularized source of funding. It
is time to fully analyze the situation and, if merited, give ICANN the
tools and guidance that it needs to succeed. Like a developing child,
it cannot be expected to run before it has been instructed on how to
walk. At the same time, if it is ultimately decided that the ICANN form
of governance is unsuitable for the task at hand, then steps should be
taken as soon as possible to implement a proper governmental form,
before it is too late.
In conclusion, I once again express my appreciation for your
inviting me to participate in these hearings. I will gladly lend any
assistance that this Committee may require to fully and fairly address
the important issues presented today. I welcome any questions that you
may have.
Senator Burns. I appreciate your testimony this morning.
A. Michael Froomkin, Professor of Law, Miami University.
Thank you for coming this morning, and welcome.
STATEMENT OF A. MICHAEL FROOMKIN, PROFESSOR OF LAW, UNIVERSITY
OF MIAMI SCHOOL OF LAW
Mr. Froomkin. Thank you, Mr. Chairman and members of the
Subcommittee. My name is Michael Froomkin. I would like to
thank you very much for holding this hearing and for inviting
me here. As you know, I am a Law Professor at the University of
Miami. I have published a lot of articles in this area,
including one you were kind enough to mention, a 168-page study
of the legality of ICANN's relationship with the Department of
Commerce.
Now, both legally and politically, ICANN is not a unique
creation. It was dreamed up, as you know, by Ira Magaziner in
the so-called DNS White Paper. Eventually the Department of
Commerce delegated to ICANN powers of worldwide significance,
yet it did so without congressional authorization. In fact, it
did it without even a rulemaking.
All that the Department of Commerce and Magaziner issued
was a so-called policy statement, which is legally binding.
Since then, Commerce has entered into an MOU with ICANN, a
zero-dollar procurement contract--that is an unusual one--and a
contract for ICANN to do a study on the DNS, but it is a study
in which ICANN studies by actually regulating the DNS, not one
in which it produces reports or standards.
What is worse is that the system that the Magaziner White
Paper set into motion is almost as Byzantine as his health care
proposals. I include a simplified--and, believe me, this is a
simplified chart--organizational chart of my prepared
testimony. It has got lines and dashes all over it, and it does
not even fit on the page. There is more on the back, and that
is not the whole story.
The consequence of this Rube Goldberg system has been lack
of accountability and lack of due process. ICANN says it is a
technical standards body, but so far, at least on the whole, it
is not acting as one, nor is it a technical coordination body.
Rules about arbitration, domain name disputes, rules about what
jurisdiction you can sue if you lose an arbitration are not the
sort of technical standards for which we ordinarily consult
network engineers, and I have got to say that, at least in my
opinion in the forthcoming article, I am going to argue that
this arbitration system is anything but a good model.
It lacks due process. Plaintiffs get to choose the forum.
They pay the arbitrators. There are all kinds of issues,
unequal access to judicial review, a whole bunch of problems
that make it anything but a model.
Now, more recently ICANN justified its very tentative
approach to new gTLDs by saying it is engaged in a proof of
concept. You just heard a lot of that this morning.
Unfortunately, it has not really told us what is this concept
it is trying to prove. It has not told us when the tests will
be evaluated, or what constitutes success.
The concept cannot be gTLD creation itself. We know how to
do that, and we have been doing it over and over again over the
past few years. You just type in a few lines of code into one
computer in Northern Virginia and through the magic of the
Internet it propagates within a week. We created a new domain
for .Palestine.PS a few weeks ago, and the Internet did not
come grinding to a halt.
In fact, the shortage of new domain names today, the
perceived shortage, is entirely artificial and easily curable.
Experts agree there is no technical obstacle to at least
thousands, maybe tens of thousands or millions of new top-level
domain. Nobody is quite sure where the line is, but it is
nowhere near where we are. There are financial and political
questions involved, but the only real technical issue is
sequencing, keeping them from all happening at once and messing
things up.
Now, we just had this big gTLD creation process, but one
story captures just how arbitrary it was. ICANN rejected a
proposed TLD called .III, and the reason they did was that
somebody on the Board thought that was hard to pronounce. It
seems to have passed all the other tests, but at the last
minute they invented a new one that had never been mentioned
before and it flunked.
Another example of arbitrary behavior goes back to 1999. In
fact, to the creation of ICANN, when they promised that half
the Board seats would be elected at-large. In July 1999, then-
Board Chairman Esther Dyson came into House committee and
reiterated that promise and said it was their highest priority.
But they did not do it. They reneged and said they decided, as
you heard, they would have just five, and now they are going to
have another study, maybe take the five away, zero-base it,
think it over--who knows.
Meanwhile, they amended their timetables to rush the
selection of new gTLDs so that decisions would be made before
even the five elected members got to be at the table. It's not
surprising, therefore, that when ICANN says it has got a
consensus, it is really talking about the views of the people
who get to be at ICANN's table, and that leaves out a lot of
groups. I guess I am not a stakeholder.
Now, why is ICANN acting in this arbitrary fashion? Why did
they put a limit on new gTLDs? Why did it rush? I think it is
really just not acting as a proper standards body. It is not
coordinating anything. It is not casting its net widely enough
for consensus.
In my Duke Law Review article I explained in some detail
why the Department of Commerce must act in conformity with the
Administrative Procedures Act and the Constitution, otherwise
if you say ICANN is private, there is a violation of the non-
delegation doctrine. If you say it is public, the APA ought to
apply directly.
In my opinion, ICANN is a state actor and is fundamentally
acting as a regulator of the registries and maybe the
registrars. Now, there is no question that if a Federal agency
acted like ICANN it would have a lot of trouble with judicial
review and, given that, I think if nothing else it would be
unreasonable for Commerce to rubber-stamp its decisions.
Let me make a couple of positive suggestions about what
ICANN ought to do. It seems to me that with gTLDs, the right
thing for ICANN to do to maximize competition and be fair is to
accept all gTLD applicants who meet a preannounced, open,
neutral and objective standard of competence. You can define
that in lots of interesting ways. Maybe it includes financial,
but it ought to be open and above-board and a priori, not on
the fly.
Once a name is allocated, instead of ICANN spending months
and maybe piles of money secretly negotiating the contracts
like they're doing right now, they ought to be doing that in
the open, or maybe have standard forms to sign in advance, and
say you pick column A, column B, column C, whichever.
In my last minute, let me suggest one other sort of
idealistic alternative, one that would really enhance
competition and be truly international and borrow from major
league sports. Maybe what ICANN ought to do is take a leaf from
the Internet, which was designed to avoid single points of
failure. When it comes to policy right now, ICANN is a single
point of failure.
If you could take the policy function out and distribute
that to other people, so that ICANN just kept a master list and
avoided collisions so it was doing true technical coordination,
ICANN could have an annual TLD draft. They could pick a bunch
of policy partners from around the world, both governmental,
non-governmental civil society, public-private, and give them
all draft choices. Some of them might get more than one.
You would then run the draft either randomly or by some
other process, and when your number came up you would pick a
name and that other body would set the policy. The U.S.
Government might do some, you might do some, civil liberties
groups might do some, and so on, and then ICANN would just make
sure that no two people got the same name.
Now, whatever model we end up with, however, I am concerned
that we are not going to get the right one, and necessary
changes will not come to ICANN without outside pressure, so I
think this hearing is a wonderfully useful step, and I commend
you all enormously for doing this and for making it one of your
top seven tech issues for the coming year.
Thank you very much.
[The prepared statement of Mr. 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 ICANN governance. I commend the
Subcommittee for its wisdom and foresight in recognizing the importance
of this issue.
I believe it is useful to separate this complex issue into three
parts: (1) ICANN's mission or, if you will, ICANN's ``jurisdiction'';
(2) ICANN's internal organization; (3) The extent to which ICANN is
subject to oversight by the Commerce Department, the U.S. Congress, or
any other outside forces.
These three issues are intertwined. The nature and extent of
ICANN's powers over the Internet and over Internet users that
determines the type of internal governance structures which are
appropriate for it. Similarly, the nature and quality of both ICANN's
powers and its internal representativeness, not to mention checks and
balances, determines the extent to which it needs to be subjected to
searching external oversight. In particular, it is appropriate for this
committee to enquire into the nature of the workings of the
relationship between the Department of Commerce and ICANN.
summary of testimony
ICANN's go-very-slow policy on new gTLDs had no technical basis.
Why then would ICANN adopt such a policy? The reason is that ICANN's
policies are a product of an internal deliberative process that under-
weighs the interests of the public at-large and in so doing tends
toward anti-competitive, or competitively weak, outcomes skewed by
special interests ICANN routinely claims to be either a technical
standards body or a technical coordination body. If this were correct,
then it might be proper for the Department of Commerce to defer to
ICANN's presumed technical expertise and rely on ICANN's standards or
allocation decisions without undertaking independent Administrative
Procedure Act (APA)-compliant processes of its own. When, however,
ICANN acts as policymaking rather than a standard-making body, then due
to ICANN's unrepresentative nature its decisions do not carry any
presumption of regularity or correctness and the U.S. Government cannot
rubber-stamp its decisions without additional independent fact-finding
and deliberation.
We would all be better off if ICANN could confine itself to true
standards issues, or to true technical coordination. If ICANN cannot,
then ICANN needs to be subjected to constant scrutiny.
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).
i. icann's mission
ICANN's processes little resemble either standard-making or
technical coordination. To date, ICANN's ``standard making'' has
produced no standards. ICANN's ``technical coordination'' has been
neither technical nor has it coordinated anything. Rather, in its
initial foray into the creation of new gTLDs, ICANN has acted like a
very badly organized administrative agency. Instead of engaging in
standards work, ICANN is instead engaged in recapitulating the
procedural early errors of Federal administrative agencies such as the
Federal Communications Commission (FCC).
What real standard-making would look like. A standard-based (or, at
least, standardized) approach to gTLD creation would required ICANN to
craft 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. All applicants
meeting that standard would be accepted, unless there were so many that
the number threatened to destabilize the Internet (as noted below, if
there is such a number, it is very large). ICANN might also put in
reasonable limits on the number of TLDs per applicant, and on
sequencing, in order to keep all of them going online the same day,
week, or month.
Under a standards-based approach ICANN would have tried to answer
these questions in the abstract, before trying to hold comparative
hearings in which it attempted to decide to which of specific
applicants it should allocate a new gTLD registry:
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.
Once armed with a set of standards and definitions, ICANN or any
other allocation body, would be on strong ground to reject technically
incompetent or otherwise abusive applications for new gTLDs, such as
those seeking an unreasonably large number of TLDs. 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.
What technical coordination would look like. 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 we have
seen no sign that ICANN is about to divest itself of any policy
authority unless forced to do so.
What ICANN actually did: select an arbitrarily small number of
gTLDs based on arbitrary appraisals of aesthetic merit, market appeal,
capitalization, and experience. Rather than adopt either a standards or
a technical coordination approach, ICANN instead adopted an arbitrary
approach. First it set an arbitrarily low ceiling on the number of
TLDs, then it allocated most but not all of that quota based on its
arbitrary appraisals of the applicants aesthetic merit, market appeal,
capitalization, and experience.
ICANN's decision to impose an arbitrary limit on the number of new
gTLDs. The closest thing to technical standards work that ICANN has
done to date was to adopt an artificially low limit on the number of
gTLDs it would recommend the Commerce Department create under the guise
of a so-called ``proof of concept.'' The grounds on which ICANN based
this arbitrarily low limit on the number of new gTLDs demonstrate as
clearly as anything else that ICANN is not making technical decisions
but instead making policy choices on the basis a wholly inadequate an
unrepresentative structure.
ICANN has never claimed that the technical stability of the DNS
would in any way be threatened by the introduction of a very large
number of new gTLDs. Indeed, it could not easily make this claim, since
all the technical evidence is to the contrary. Rather, the dangers that
ICANN seems concerned about are social--potential consumer confusion,
and a potential ``land rush'' mentality due to the enormous pent-up
demand. (In my opinion, however, ICANN has selected a policy that
maximizes the risk of a ``land rush.'' Panic buying happens when
consumers fear a shortage. Here, ICANN is proposing the creation of a
very small number of gTLDs, with no assurances as to when if ever the
next batch will be created. This gets it exactly backwards: the way to
avoid a land rush would be to have a very predictable path for new
gTLDs so that everyone understands that there's no need to panic since
plenty of names will always be available.)
I am not an expert on Internet engineering. However, my
understanding is that while 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.\1\ Persons with long experience in DNS matters,
including BIND author Paul Vixie, apparently agree.\2\ 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 16 million registrations in .com, if this argument
is right, then the maximum number of TLDs may be very high.\3\ Some
experts worry, however, that a very large number of new TLDs, such as a
million, might affect DNS response time.\4\ 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.
---------------------------------------------------------------------------
\1\ Posting of Karl Auerbach, [email protected], http://
www.dnso.org/wgroups/wg-c/Arc01/msg00195.html.
\2\ 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.
\3\ See Quickstats at http://www.dotcom.com/facts/quickstats.html
(reporting 20 million registrations, of which 80 percent are in .com).
\4\ 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.
---------------------------------------------------------------------------
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.
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.\5\
---------------------------------------------------------------------------
\5\ See IANA Report on Request for Delegation of the .ps Top-Level
Domain at http://www.icann.org/general/ps-report-mar00.htm (Mar. 22,
2000).
---------------------------------------------------------------------------
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--which currently has the power to create new
gTLDs--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 political fear, more than any mythical technical consideration
requiring a ``test'' or ``proof of concept'', 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 persists in falsely claiming consensus for its
artificially low number of TLDs, nor why went about selecting its seven
finalists in the manner it did. Indeed, as described below, ICANN's
gTLD selection procedures were characterized by substantial failures.
Nevertheless, it might seem that despite any procedural
irregularities, ICANN's recommendation that the Department of Commerce
create a small number 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. I am concerned that the faction which controls
ICANN will use this very predictable speculative frenzy as ``evidence''
that new gTLDs are a bad idea, or that the number must be kept down in
the future.
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.
Selection of gTLDs. In ICANN's recent gTLD process, 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.
Although all applicants were charged the same non-refundable
$50,000 fee, a sum that immediately skewed the process toward
commercial uses and away from non-profit or experimental uses, it
appears not all applicants 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.
ICANN then attempted to hold a 1-day comparative hearing between
more than 40 applicants, each of whom had complex applications that
referenced multiple possible gTLDs. During this process, each applicant
was given 3 minutes to speak.
Both before and during the 1-day Board meeting, 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 as to 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
decisionmaking 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.
If ICANN were to limit itself to either standard making or
technical coordination it would have approached its mission very
differently from the arbitrary and amateurish procedures it used. It is
critical to note that the relevant standards of comparison for ICANN's
decisionmaking are not the private sector. As a non-profit standards
body contracting with the U.S. Government, ICANN should either be held
to standards of openness, professionalism, and neutrality appropriate
for standard-making or, if making political and social choices, be
treated as a state actor and expected to act in conformity with
fundamental norms of due process. Suggestions heard from some
victorious gTLD applicants that ICANN's processes compare favorably
with those used for procurement in the private sector are both
erroneous and irrelevant. ICANN is not engaged in procurement. It is
not ``buying'' anything. And ICANN paid almost no attention to the
prices proposed by would-be registries.
ii. internal organization
ICANN's go-very-slow policy on new gTLDs had no technical basis.
Why then would ICANN adopt such a policy? The reason is that it is a
product of an internal deliberative process that under-weighs the
interests of the public at-large and in so doing tends toward anti-
competitive, or competitively weak, outcomes skewed by special
interests.
The source of this predisposition is the distribution of
decisionmaking authority on the ICANN Board, and in ICANN's subsidiary
institutions, which have been manipulated to neuter the public voice,
and the role of individuals, non-profits, and civil society groups.
Originally, half of ICANN's governing Board would have been elected by
at-large members of ICANN. Instead, ICANN has worked at every turn to
prevent this.
In July, 1999, ICANN Chair Esther Dyson told the House Commerce
Committee's Subcommittee on Oversight and Investigation that ICANN's
``highest priority'' was to elect nine at-large Board members,\6\
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. Thus, today:
---------------------------------------------------------------------------
\6\ 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.
---------------------------------------------------------------------------
Instead of half (nine) of the Board members being elected
at-large, as promised to NTIA and to Congress, ICANN amended its bylaws
to allow only five members to be elected at-large;
Instead of all the self-appointed nine original directors
leaving office as they promised Congress and the public they would do,
four remain in office;
Instead of allowing the five elected at-large members to
participate in the selection of the new gTLDs, ICANN amended its bylaws
to seat them at the close of a meeting, instead of at the start (the
process used for all previous new directors). Then ICANN rushed its
processes so that it could make the final decisions minutes before the
new directors took office.
In a move that risks further neutering the five elected
at-large members, ICANN announced that their jobs would all be
abolished at the end of their 2-year terms, unless a majority of the
full Board voted (after a ``clean sheet study'') to re-establish
elected at-large Board seats. [Note that under the current bylaws, the
un-elected directors apparently get to keep their jobs indefinitely.]
The internal institutions that ICANN created to take the
lead in domain name policy--the seven constituencies in the ``Domain
Name Supporting Organization'' (DNSO)--were designed from the start to
exclude individuals from membership. The very engineers who built the
Internet are not represented in their personal capacities--only if
their employers choose to send them.
All non-commercial groups, including all universities, all
consumer groups, all political groups throughout the world are
shoehorned a single DNSO constituency. They are, in the main,
ineligible for full voting membership of any of the other six
constituencies. Meanwhile, many businesses such as Internet first-
movers and others who have an interest in reducing on-line competition
for established firms are eligible to be in two, three, or even four of
the seven constituencies, thus allowing them multiple votes--and a
certain majority.
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 liberty-enhancing and
competitive potential of the Internet.
ICANN is a highly complex organization (see attached charts,
prepared by Tony Rutkowski). It is simply impossible for anyone to keep
track of what is happening in all the different pieces, except an
organization capable of deploying a fleet of lawyers. Similarly,
because ICANN sees its mission as global, it meets four times a year on
four different continents. Next month's meeting, for example, is in
Australia. The result of this laudable attempt at internationalization
is that only interests wealthy enough to attend all these meetings--
with several representatives--can achieve the continuity of
participation required to influence ICANN's decisions in any sort of a
consistent manner. The result tends to be a ``consensus'' of those with
the necessary expense accounts.
[GRAPHIC] [TIFF OMITTED] 87255.002
[GRAPHIC] [TIFF OMITTED] 87255.003
iii. external checks on icann
I do not deny that one can identify potentially serious social
issues that might be caused as side effects of the creation of new
gTLDs. I do submit that ICANN has no competence to deal with them, and
that its actions have to date in creating special domain name
registration rights for trademark holders, well in excess of the rights
granted to them by Congress, have been anti-competitive, unfair, and
counterproductive.
ICANN's mandate and its competence is, at most, for technical
matters. Social policy issues such as the intellectual property
consequences of new gTLDs, the number of days a person should have to
respond to an arbitration over a domain name, or issues of content
management, should not be decided by engineers or by the people who
happen to have seized control of ICANN. Rather, they should be decided
via the means we traditionally use for making social policy choices--
markets and representative democracy.
Since ICANN's decisions as to its gTLD recommendations were not
based on purely technical criteria, as a formal matter ICANN is making
social policy choices, not just acting as a standards body. It is
therefore right that ICANN's decisions are subject to external checks.
Indeed, as I argue in my article 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,
as a matter of law ICANN as currently constituted amounts to a state
actor, and thus is subject to the same Due Process constraints as apply
to any Federal agency. Accordingly, its arbitrary and capricious
decisions violate both the APA and the Due Process Clause of the
Constitution.
ICANN and the U.S. Department of Commerce dispute this
characterization. They prefer to rely on form over reality, and insist
that ICANN is legally private despite the fact that ICANN derives all
of its authority and revenue from Commerce's loan to ICANN of authority
over the root. It follows, however, that if this characterization of
ICANN as a purely private body is correct, then there are strict limits
on the extent to which the Department of Commerce can implement ICANN's
recommendations without violating the Administrative Procedures Act, or
the Constitution's Due Process clause.
Once ICANN makes its formal recommendations, the Department of
Commerce will have to decide how to proceed. Rubber-stamping of ICANN's
decisions by the Department of Commerce would amount to adopting
ICANN's arbitrary and capricious choices, since the U.S. Government
would essentially endorse both ICANN's practices and its conclusions.
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. 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 decisionmaking 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.
ICANN faces a choice: On one path it becomes a true standards body,
or a true technical coordination body, and leaves the social policy
choices to those--like Congress--who have the legitimacy to make them.
On the other path, the one it currently seems to be following, it is a
state actor. In that case, its actions to date have been far too
arbitrary to survive judicial review.
Senator Burns. Thank you very much.
Roger Cochetti, Senior Vice President, Policy, VeriSign
Network Solutions, here in Washington.
STATEMENT OF ROGER J. COCHETTI, SENIOR VICE
PRESIDENT, POLICY, VeriSign NETWORK SOLUTIONS
Mr. Cochetti. Thank you, Mr. Chairman, and thank you,
members of the Subcommittee. I am, as you indicated, Senior
Vice President for Policy at VeriSign Corporation, which merged
last year with Network Solutions. Before joining VeriSign in
1999, I had been with IBM Corporation, where I coordinated many
of their electronic commerce policies, including this area,
which has given me some perspective in the subject of today's
hearings.
I have a prepared statement, as you know, Mr. Chairman, and
ask that it be entered into the record in its entirety.
Let me begin if I may, Mr. Chairman, by commending you for
your leadership in highlighting the tech seven issues that are
starting, the first of which is being highlighted in today's
hearing, and for your work in the previous Congress in
highlighting the digital dozen issues.
Like many companies that are fully involved in electronic
commerce, we look forward to working with you and the
Subcommittee as you work your way through these issues in the
coming months.
I have three points I would like to make in my testimony,
Mr. Chairman. The first is that, as a major provider of
services that make up the logical infrastructure of the
Internet, VeriSign is both deeply interested in and uniquely
qualified to comment on the topic of today's hearing.
Second, ICANN is an experiment in its early stages, with
many of its most important challenges still ahead.
Consequently, we believe it is too early to reach many
meaningful conclusions about ICANN.
Third, we are hopeful about ICANN's future, and committed
to helping it become successful.
Mr. Chairman, VeriSign is an American company with major
operations in California and Virginia and in other States that
is a leading e-commerce enabler, providing such essential e-
commerce services as authentication, often called digital
signature, domain name registrations, web merchant payments,
security, and others. These e-commerce utility functions are
often described as the logical infrastructure of the Internet.
More to the point of today's hearing, VeriSign has operated
the authoritative registry for .com, .net, and .org since 1991.
The registry is the central database that permits resolution
for .com, .net, and .org domain names.
There are around 28 million registrations in .com, .net,
and .org today, and that number grew last year by around 50,000
new registrations each day, distributed to servers around the
world for access by every Internet network operator and end
user. On a typical day, our databases experience over 2 billion
queries. That number has been doubling every 6 months,
incidentally.
VeriSign is active in providing end user registration
services as well, one part of which is our registrar business.
We operate one of about 80 competing registrars for .com, .net,
and .org registrations. Prior to 1999, our registrar, called
the NSI registrar, under a mandate from the National Science
Foundation, was the only provider of direct registration in
.com, .net, and .org.
Following the introduction of registrar competition in
1999, the NSI registrars' market share of new registrations has
declined to below 50 percent by the end of 2000. A whole new
industry of competing registrars has emerged.
Under the direction of the U.S. Commerce Department,
VeriSign maintains the Internet's primary route server, or what
is called the ``A'' server, sometimes called the heart of the
Internet. This server originates the authoritative directory of
all of the Internet's top-level domains, everything from .com
to .gov to .uk.
Also at the request of the Department, we operate as a
public service and at no charge, the registries for .us and
.edu, and we provide the registrar services for colleges that
use .edu at no charge to the colleges.
Mr. Chairman, to my second point, ICANN is intended to be
the principal provider of technical coordination services for
the Internet, particularly in the area of domain names and
numerical Internet addresses, and we believe we are the
principal provider of corresponding operational services for
the Internet, particularly in the area of domain name
registrations.
ICANN grew out of two fundamental goals, first to create a
non-governmental structure that coordinates by way of consensus
among those that are affected certain international functions,
domain name and IP addressing, and second to do so in a way
that is globally acceptable. I believe, Mr. Chairman, that
ICANN is a bold experiment still in an early stage. It is
premised not on regulation by governments, but on consensus and
voluntary contracts.
Private sector technical coordination is not new, but
rarely has it been attempted on a global scale. International
technical coordination is not new, either, but it has never
been attempted by a completely new organization for a medium
that affects a diverse global community of hundreds of millions
of users.
Finally, Mr. Chairman, if ICANN is a bold experiment, we
should not make the mistake of thinking that the experiment is
concluded, or that this has either failed or succeeded. Many of
ICANN's most important challenges lie ahead. These include the
establishment of stable relationships with all of the
operational groups that provide domain name and Internet
numbering services.
While ICANN has stable relationships with both .com, .net,
and .org registrants, and registrars, most notably us, it has
not yet established stable relationships with the operators of
the country code top level domain registries and registrars.
These registries, such as those who operate .uk or .fr, are
responsible for about a third of all domain name registrations
in the world today, and no ICANN system would be complete
without their stable participation in it.
Similarly, ICANN needs to establish stable relationships
with the operators of the Internet address numbering registries
which provide the essential Internet numbering that makes the
Internet work, as Carl described earlier, identifies and
connects the machines on the Internet.
Finally, ICANN needs to establish stable relationships with
the operators of the route servers, the 12 other operators of
the route servers other than VeriSign that distribute the route
that we originate of the Internet.
Internally, we believe that the organization is still in a
formative period in its budget processes and the procedures by
which its councils and Board are selected, and even the voting
members are selected, as well as in the procedures that it uses
to make fundamental decisions. VeriSign is committed to making
ICANN a success.
We are by far the largest contributor of funds to ICANN. We
have probably voluntarily donated more money, beyond our dues,
to ICANN than has anyone else. Last year, for example, we
announced a $100,000 matching donation to ICANN's domain name
supporting organization to support hiring its own staff.
Mr. Chairman, we look forward to the opportunity to work
with both the Subcommittee and with ICANN in helping move this
organization forward to what we believe and hope will be a
successful future. Thank you again for inviting us to
participate.
[The prepared statement of Mr. Cochetti follows:]
Prepared Statement of Roger J. Cochetti, Senior Vice President,
Policy, VeriSign Network Solutions
introduction
Mr. Chairman, Members of the Subcommittee, thank you for the
opportunity to testify before today's hearing on the Internet
Corporation for Assigned Names and Numbers or ICANN. This is the first
in an important series of Internet-related hearings being conducted by
the Subcommittee and we commend you and your colleagues for taking this
initiative. My name is Roger Cochetti and I am Senior Vice-President
for Policy of VeriSign Corporation, which merged with Network
Solutions, Inc. (NSI) last year. Before joining VeriSign, I was with
IBM Corporation for several years, where I coordinated many of IBM's
Internet policies, including their approach to ICANN. This has given me
some perspective on this important experiment in international
cooperation.
VeriSign today is the largest and, we believe, the most important
company anywhere to provide trusted services that make the Internet
work.
VeriSign has been a global pioneer, and a primary force, in
developing the technology and the market for Internet domain names and
public key infrastructure (PKI)-based digital certificates--commonly
called digital signatures. We're also a leader in providing Web
merchants with automated payments tools and services, as well as with a
growing array of utility services that enable electronic commerce.
These include Website hosting, e-mail, Website design, domain name
search and re-sale, and other services.
Mr. Chairman, VeriSign is not a phone company, a retail Internet
startup, an Internet Service Provider or an Online Service Provider. We
don't make computers, routers or other hardware. But we do make e-
commerce possible by enabling merchants and enterprises to take
advantage of the full potential of the Internet by providing services
that are essential to electronic commerce, such as security, identity,
payments, and authentication. Together, these services are key
components of what is increasingly called the ``logical infrastructure
of the Internet.'' As such, we believe that we are a great example of
an American company that is entirely Internet focused, and is bringing
the benefits of e-commerce to people everywhere in the world.
More to the point of these hearings, Mr. Chairman, VeriSign today
operates, and has operated since 1991, the global registries--that is
the central databases that permit what is called ``resolution''--for
.com, .net, and .org. ``Resolution'' is what happens when one inputs a
URL in text form, such as ``verisign.com,'' and is connected over the
Internet to the machine that hosts the proper Website; in this example,
our own. We're proud to say that these databases sustain enormous
volumes of daily use, deflect frequent cyber-attacks, and operate with
very nearly no service interruptions. In fact, our .com, .net, and .org
servers, which are located in 12 sites around the world, respond to
upwards of 12 billion queries a day; a number that has historically
doubled every 6 months. Due to our efforts, anyone from essentially any
country anywhere in the world can sign up, on-line, for a ``.com''
registration in a matter of minutes. We've got over 28 million .com,
.net, and .org registrations in our databases today and the number grew
by an average of about 50,000 registrations a day last year.
In addition, in the highly competitive market for .com, .net, and
.org end-user registration services, we operate one of the largest and
most advanced registrars. Since the introduction of competition in the
.com, .net, and .org registrar marketplace in 1999, the market share of
the VeriSign registrar--called the NSI Registrar--has dropped from
around 100 percent to less than half of all new registrations today,
while a whole new industry of almost 80 competing registrars has grown
up.
Just as important, at the request of the U.S. Commerce Department,
we have operated for quite some time what is called the ``A'' Root
Server. This remarkable facility is frequently called ``the heart of
the Internet'' because it is the single point of integration of all the
Internet's domain name services. In this server, we maintain the
authoritative list of the Internet's top-level domains--everything from
``.com'' to ``.gov'' to ``.uk''--and who is responsible for operating
each of them. This list is called ``The Root''; and from our server, it
is distributed to a global network of secondary servers, which host
identical copies of the files that we generate, and who themselves
distribute the data to every network connected to the Internet around
the world.
Finally, also at the request of the U.S. Commerce Department, we
operate at no charge, the domain name registries for ``.us'' and
``.edu'', as well as provide the registrar services for the thousands
of colleges that use ``.edu''. We're pleased and proud to provide these
as a public service, with the same high quality as our commercial
services, until such time as they are spun out to permanent registries
and registrars by the Commerce Department.
Because of our decade of commitment to these and related domain
name services, the subject of today's hearing is very important to us.
But it is also important to everyone who is using the Internet or
thinking about using it in the future. Along with the competent
operation of the registry and registrar services that make the Internet
actually function, the technical coordination of these services (which
is what ICANN addresses) is central to the smooth and stable operation
of the medium. As it is structured today, the Internet requires both a
central mechanism for technical coordination and the competent
performance of the operational functions. ICANN is the leading provider
of Internet technical coordination, particularly as it relates to
domain names and Internet Protocol addresses; and we believe that we
are the leading provider of Internet operational services, particularly
in the area of domain name registration services.
Thus, we think it is appropriate for the Subcommittee to examine
the role of ICANN in the Internet and we are pleased to share our
thoughts on the subject with you. Mr. Chairman, as you and the
Subcommittee members no doubt know, ICANN grew out of two fundamental
goals: First, to create a non-governmental structure to coordinate
Internet domain name and IP addressing functions; and second, to do so
in a way that is globally viable. We are committed to both of these
goals.
To achieve these twin goals, a non-profit organization was
envisioned in 1998 that would operate on the principle of consensus of
those affected, and bring together the diverse community of interests
called ``the Internet community.'' By using procedures that are
designed to ensure something akin to due process and the protection of
the rights of service providers and users alike, ICANN is organized to
bring many diverse communities into a single conversation about where
domain name and IP address services are headed, and with them the
Internet itself.
Mr. Chairman, I believe that ICANN is a bold experiment. Although
it is sometimes done by governments, technical coordination by the
private sector is not new, but rarely has it been attempted on a global
scale. International technical coordination of this sort is not new
either, but it has never been attempted by a completely new
organization for a medium that effects the daily lives of hundreds of
millions of users. Finally, rarely in the history of private sector-
based international technical coordination has the community of
interested parties been either as diverse or as large as we have seen
with ICANN and the domain name system.
But if ICANN is a bold experiment, we should not make the mistake
of thinking that this experiment has concluded; or that it has been
either successful or failed. We are early in the process of this
experiment and we need more results before we can reach many useful
conclusions. For example, of the five groups of service providers with
whom ICANN must establish stable relationships for its coordination to
work as planned, it has successfully done so with two: the operator of
the generic Top-Level Domain registries (The VeriSign Registry); and
the operators of the generic Top-Level Domain registrars (The NSI
Registrar and its competitors.)
ICANN still has before it the establishment of stable relationships
with the operators of the country code Top-Level Domain registries and
registrars (such as ``.uk'' or ``.fr'') who today issue around a third
of all domain names globally. It also has before it the establishment
of stable relationships with the operators of the IP address
registries, which issue the number blocks that are used to assign
Internet numbers to networks and machines on the Internet. And finally,
ICANN has yet to establish stable relationships with the operators of
the system of secondary root servers, described above, that distribute
the root of the Internet around the world.
In addition, we think it is fair to say that ICANN is still in a
formative period in the development of both its budget process, the
procedures by which its Councils and Board are selected, and the
procedures that it uses to make fundamental decisions. Until we see a
lot more about how these processes and procedures come together, it
would, in or view, be premature to reach many conclusions.
For our part, we are committed to ICANN's success. VeriSign is by
far the largest contributor of funds to ICANN and I believe that we
have voluntarily donated more money, above our dues, to ICANN than has
anyone else. Recently, for example, we announced a new, $100,000
matching donation to the ICANN Domain Names Supporting Organization
that will help that ICANN body hire its own professional staff. We
intend to do more and we do not intend to sit on the sidelines just
watching to see if ICANN can become a success.
Mr. Chairman, we thank you for your involvement in this important
area and appreciate the Subcommittee's continued interest in ICANN. We
look forward to the opportunity to work with both you and ICANN in
helping move this organization forward to what we believe, and hope,
will be a successful future.
Thank you.
Senator Burns. Thank you, Mr. Cochetti. We appreciate your
testimony.
Kenneth Hansen, Director, Corporate Development, NeuStar,
Inc.
STATEMENT OF KENNETH M. HANSEN, DIRECTOR,
CORPORATE DEVELOPMENT, NeuStar, INC.
Mr. Hansen. Good morning, Mr. Chairman. My name is Ken
Hansen. I am the Director of Corporate Development for NeuStar.
I am a neutral third-party provider of clearinghouse and
database administration services. NeuStar serves as a number
plan administrator and 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 ICANN 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
NewLevel.
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.
NewLevel was one of the seven selected to operate
registries for 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-building concerning the introduction of new top-
level domains, and were not solely the result of the recent
ICANN 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 in terms of openness and
transparency 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. Although the
process was not perfect, the procurement was more open and
transparent than most government procurements as well.
It is important to note that it is the open and transparent
nature of the ICANN process that invites public scrutiny and
debate. Had the process not been quite so open, we might not
even be here today. That is not to say that the bar should be
lowered in that regard.
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 situation criteria
identified by ICANN and communicated to all applicants and the
public in advance on the ICANN website.
The criteria is as follows:
Maintain the stability of the Internet, the number one
priority.
Demonstrate an effective proof of concept concerning the
introduction of new top-level domains.
Enhance competition for registry services.
Enhance the utility of the Internet.
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 its intent was to select a limited
number of TLDs initially and to proceed carefully in order to
ensure the stability of the Internet was maintained.
In the new TLD application process overview, which was
posted through the ICANN website, ICANN stated that, and I
quote: 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, quote, adopted the
Names Council recommendation that a policy be established for
the introduction of top-level domains in a measured and
responsible manner.
The selected TLDs were 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 when selecting new TLDs.
The criteria for assessing the TLD proposals document
described in detail the elements of diversity that would be
considered. Although some qualified TLDs were not selected for
this very reason, ICANN made it clear that additional TLDs were
likely to be introduced in the future.
The ICANN process described above will create 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 objective in introducing new TLDs was the result
of an open, public debate and widespread Internet community
consensus. In other words, the market participants played a
significant role in the creation of the ICANN process.
Although it can be argued for subjective reasons that other
selections would or would not have been optimal, the ICANN
process resulted in TLD and registry operator selections that
are consistent with the communicated criteria and objectives.
It is therefore in the interests of the Internet community as a
whole for the introduction of the selected new TLDs to proceed
while other applicants who have chosen to do so make use of the
ICANN request for consideration mechanism which appropriately
supports such appeals.
Thank you very much.
[The prepared statement of Mr. 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 2 years prior to issuance of the August 2000 RFP.
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 TLDs, and were not solely the result of the most
recent ICANN application process.
Having been directly involved in over one hundred Request for
Proposal processes during my 15 years in the communications industry, I
can say with confidence, in terms of openness and transparency 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. Although the process was not perfect, the procurement was
more open and transparent than most government procurements as well. It
is important to note that it is the open and transparent nature of the
ICANN process that invites public scrutiny and debate. Had the process
not been quite so open, we might not be here today. That is not to say
that the bar should be lowered in that regard.
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:
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 new TLDs initially 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. The Criteria for Assessing TLD Proposals
document described in detail the elements of diversity that would be
considered. Although some qualified TLDs were not selected for this
reason, 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. In other words, the market participants played a
significant role in the creation of the ICANN process. Although it can
be argued for subjective reasons that other selections would or would
not have been optimal, the ICANN process resulted in TLD and Registry
Operator selections that are consistent with the communicated criteria
and objectives.
It is, therefore, in the interest of the Internet community as a
whole for the introduction of selected new TLDs to proceed while other
applicants who have chosen to do so, make use of the ICANN Request for
Reconsideration mechanism, which appropriately supports such appeals.
I thank the subcommittee for giving me the opportunity to testify.
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 public viewing.
directly.
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
application.
Those bidders the Forty-seven
company feels are complete
qualified and applications
can meet needs. received.
Number of bidders
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.
Not to be Confidential
disclosed. information not
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
the ICANN site.
Private meetings
with bidders.
Evaluation results.............. Not shared with Written evaluation
the bidders or posted to the web
any outside party. for viewing by
bidders and the
public.
No opportunity to
respond or
comment.
Decisionmaking process.......... Private Board deliberation
decisionmaking with access to
process. the public.
No involvement or Live broadcast on
access by bidders. 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.
------------------------------------------------------------------------
Senator Burns. Thank you, Mr. Hansen.
I want to go to Mr. Froomkin, since you were a little bit
critical on the structure of ICANN. I keep going back to these
domains, as you well know, and I still do not understand the
process there. I just now got a copy of the memorandum.
What would you propose that the action of Congress now--in
light of this MOU, and in light of some complaints, and some
being founded and some being theoretical, what would you
propose?
Mr. Froomkin. Well, I think, Senator, the most important
issue is not setting a precedent by which a department, like
the Department of Commerce, can really end run the
Administrative Procedures Act.
That is an issue that is frankly bigger than the Internet,
and so the global concern here is not just in this process, and
that if you accept that this is a way in which agencies can
bypass ordinary procedures to create a privately organized
regulator in all but name, that uses control over a federally-
dominated resource to make people sign contracts with it, pay
it money, and do what it says, and then not be subject to due
process, not be subject to ordinary court challenge, not be
subject to ordinary oversight, that is really cutting Congress,
and cutting the American people out of the regulatory process.
So while in this case you might have got an outcome which
was better than no decision at all--I have nothing against any
of the winners here. I have no reason to believe any of them
are bad, or imperfect, and for all I know we would be all
better off if they were all put on the route, and lots of
others, too--it seems to me there is a sort of good Government
issue, to use the term, that is pretty serious here, and
someone needs to hold Commerce's feet to the fire on that one.
Senator Burns. Senator Boxer.
Senator Boxer. Mr. Cartmell, I wanted to ask you about the
way you conduct your business in one particular area, which is
the ``WHOIS'' database, and I wanted to get your answer to it.
The ``WHOIS'' database allows Internet users to type in a given
domain name and receive contact information for the person or
company that holds that domain name registration.
A public web-based availability of ``WHOIS'' information, I
believe, is critically important for intellectual property
holders in investigating possible infringement of their
trademark rights and copyrights as well as for law enforcement
authorities that use ``WHOIS'' to investigate possible crimes.
In addition, in my example that I held up before, we are
able to find out the individual who did this, perpetrated this
fraud on my colleague and on me, and so it is a help. Whether I
can stop it is another question that we have to deal with, but
I can find out.
Now, further, ICANN's Uniform Dispute Resolution Policy is
a convenient, low-cost procedure that resolves disputes arising
from the bad faith registration of domain names, or cyber-
squatting. Now, I am concerned and troubled by the fact that
.cc, a domain that markets itself as an alternative to .com,
does not even have an adequate public ``WHOIS'' database. I am
concerned that by failing to provide ``WHOIS'' information, .cc
will become a haven for those who might wish to defraud my
constituents, or a Senator's constituents here.
I understand, in fact, that your company charges users up
to $50 to obtain contact information for domain name registered
in .cc. Further, I understand that .cc does not offer a
convenient mechanism, such as UDRP, to settle cyber-squatting
disputes. I hope I did not misstate this. This is the
information that I have gotten, and I wonder if I am correct on
this, if these facts are true. Could you explain why this is,
and if you plan to implement what I would consider to be more
responsible policies such as that of Mr. Cochetti's
organization?
Mr. Cartmell. Certainly, Senator. .cc ``WHOIS'' information
is provided at a cost of around $15. The way we provide that
information is via postal information to the requester, and at
the same time we alert the registrant of the domain name that
someone has requested that information and provide the
registrant with the information of the requester. We do that so
that we not only protect our customer database, but protect the
identity of the user. It is available. Some people wish that
information to be public, some do not, so the information is
available.
As far as the UDRP, we have not been required to sign on to
that as we have no agreement with ICANN or any other
organization that has come forward. We would be willing to
enter into some sort of dispute resolution policy. My
organization does not necessarily endorse the UDRP. It favors
trademark holders over other holders, and supersedes our U.S.
trademark laws.
Under U.S. trademark, there are multiple holders of the
same word mark under different categories, so there is not
necessarily the same translation to the domain name system, so
I think once ICANN stated that they would go back and
investigate the UDRP and maybe further define it, we might be
willing to accept it in the future.
Senator Boxer. Well, I do not think it is right to have to
spend $15 and wait to find out who is perhaps committing a
crime.
Mr. Cartmell. If law enforcement officers contact our
organization, we provide that information to them at no charge.
Senator Boxer. I do not mean just law enforcement and
criminal activity, I mean a crime of someone stealing your
identity or intellectual property.
I come from a State where intellectual property is the same
as any other property, so if you steal someone's car, that is a
theft, and you would waive the $15. If you steal someone's idea
you do not look at it the same way.
Mr. Cochetti, could you comment on the policy of your
company in terms of being able to find out very quickly,
without a charge, who may be stealing your property?
Mr. Cochetti. Yes, Senator Boxer. First, if I may comment
on the issue you raised earlier, when your staff first notified
us of a problem that had occurred, we investigated it and
discovered that unfortunately it was not our--or fortunately--
it was not our registrar that was involved, but we have, as you
may know, used our good offices to try to help resolve it.
I think the answer you need to hear in problems like that,
however, is not that somebody is using their good offices to
help resolve it, because not everybody is a United States
Senator, and not everybody gets that kind of assistance.
The answer you need to hear is that this is the procedure
you use and these are the rights that you have. You may win or
lose, but you ought not hear someone say, gee, I never thought
about that, and who cares, so we are working and would be happy
to work with your staff to see if there is a long-term, fair
and equitable way to deal with this question of individual
names.
On the question of intellectual property, and the misuse of
intellectual property in domain name registrations, we, of
course, are full participants in and are pleased to say that we
helped design the UDRP and have been fully supportive of it.
The VeriSign registry today supports about 30 million
``WHOIS'' inquiries each day. In other words, each registrar
where somebody is doing a ``WHOIS'' inquiry routes it to the
VeriSign registry, and we support them.
The NSI registrar fully supports and complies with the
procedures of the UDRP, which is to say, if a claim is made and
referred to arbitration, the arbitrator makes a decision in a
relatively short time, renders that decision back to the
registrar, and if we are the registrar it is implemented by the
registrar swiftly.
We think this is a reasonable and fair way to deal with the
question, because the criteria that the arbitration uses is,
does the registrant have any rights to the name, or is it a
situation where they simply do not have rights to it, and so we
are supporters of and help design the UDRP and are interested
and willing to sort of work in ways to improve both it and
other rights of protection on the domain name system.
Senator Boxer. Well, Mr. Cartmell, do you make a lot of
money from charging the $15?
Mr. Cartmell. No, we do not.
Senator Boxer. Then do not charge it.
[Laughter.]
Senator Boxer. If this is not a big money-maker deal for
you, then you could do a lot better with your public relations,
at least from my standpoint, if the service was offered at no
charge. I do not speak for anyone else, but it just seems to me
to be wrong if somebody--and especially when you get into a
State where you think someone is stealing your property, you
want to know who the heck is that person, and now you have to
send money and a credit card. How long does it take you before
you get the $15? How do you do that?
Mr. Cartmell. It is online, so we accept credit card
payment, and then immediately that same day the information is
sent out via U.S. postal. The reason we have implemented this
is because we are a relatively new registry, and the ``WHOIS''
information was never publicized or published on our site. We
have consumers that are concerned about their own privacy and
being released. In addition to that, we feel that we have some
intellectual property rights of our customer database itself,
and do not generally have to provide our customer database to
the public.
Senator Boxer. So your people are concerned about privacy,
but you sell their privacy for $15? Either you protect their
privacy, or you do not protect their privacy.
Mr. Cartmell. At the time of the request of the ``WHOIS''
information they also receive the information of the person who
requested their information, so they knew who has received
their private information.
Senator Boxer. So you do not respect anybody's privacy in
the end. I just do not get it, and also you are now going to
send this information via snail mail, so you are not sending it
that fast. It just seems to me that when I look at Mr.
Cochetti's policy there, it just seems like the right thing.
If somebody is going up on the Internet, they have got to
know they are going up on the Internet. People are going to
want to know who they are. If you do not want to have people
know who you are, do not go up on the Internet. It is pretty
simple.
Believe me, I want to protect what people do once they are
up on the Internet, but the bottom line is, if they are taking
a site and somebody thinks they are stealing their intellectual
property, I think that person ought to be able to know who it
is.
Mr. Froomkin, you wanted to comment.
Mr. Froomkin. Yes. Thank you, Senator. You made a lot of
valid points. I just wanted to point out some of the reasons
that the other version of the policy makes some sense, the
version which does not automatically release information online
about registrants.
Senator Boxer. In other words, Mr. Cartmell's?
Mr. Froomkin. Or something like it. I am not going to go
into the $15 issue, and I know of at least two cases of people
who were stalked who had home offices and who gave their home
address in the ``WHOIS'' and were stalked as a result of that
information being public, so I think people do have some
legitimate reasons to not want it to be automatically available
to everybody and to want to delay to know who is asking so they
can take the appropriate safety measures if necessary.
The second is, when you say people ought to know if you are
online it is publicly available, I do not think people say that
about unlisted phone numbers, and I always think of the
Internet as being a lot like telephone, so I wonder if people
really ought to know just as a condition to having a domain
name you need to make your address and phone number available
for every marketer and spammer and phone salesperson out there
in the world. I am not sure I am entirely comfortable with
that.
Senator Boxer. You are saying if someone goes up on the
Internet and they steal your property, you should not ever be
able to find out who they are?
Mr. Froomkin. There should be a way. I said it does not
necessarily have to be instant and automatically available.
Maybe you ought to write a letter that says who you are and
why you are asking. Maybe that is not asking too much. What I
am concerned about is the spillover effects of making it
automatic and easy is there are other people who you do not
necessarily want to have that information also get it. I think
your points are absolutely valid, of course.
Senator Boxer. Mr. Cochetti, how do you respond to that?
Have you had problems of stalking and so forth?
Mr. Cochetti. Senator, I honestly do not know the answer to
whether we have had experienced problems with stalking. It is
obvious to us, though, that there is an important need not just
for trademark holders, by the way, but for law enforcement and
network operators to have access to registration information.
What we do today is provide that instantaneously and, by
the way, one of the issues that I think the colloquy that just
took place sort of highlights that has not been paid attention
to is that doing this is not easy and not inexpensive. 30
million inquiries a day is a substantial expense and a
substantial operational burden for anyone to carry, but we do
it because we think there is an important need among trademark
holders, among law enforcement and among network operators to
get this information.
Senator Boxer. But you do not necessarily have to put your
home phone number there, do you?
Mr. Cochetti. The registration information requests
telephone numbers as well as address.
Senator Boxer. For your home phone?
Mr. Cochetti. It is not home telephone. It is the
registrant's information.
Senator Boxer. That is a legitimate concern that Mr.
Froomkin raises, but I do not think you necessarily should have
to put a home phone and a home address. You could put your
business, which you would do in any event.
In any case, those are my questions. Thank you.
Senator Burns. I have a feeling we are just touching the
tip of the iceberg in this discussion here today, and this is
going to go much further.
I have got just a crazy question, Mr. Cartmell. What do you
think has taken so long for this thing to finally bubble up in
Washington, DC.?
Mr. Cartmell. That is an interesting question. I think the
public's perception that ICANN was a de facto organization that
was given the powers and everyone just accepted it.
Recently even Microsoft, when their DNS went out a few
weeks ago, blamed ICANN for the situation, even though ICANN is
not running the route server system today.
Senator Burns. And Mr. Froomkin, with your question from
Senator Boxer and the way you answered it, it boils down to who
should ultimately control the route server. In your opinion,
who should control that?
Mr. Froomkin. Right now, Senator, that is a terribly hard
question, of course. You asked the perfect question.
Right now, the U.S. Government has de facto control. I have
to confess, and it is not politically correct to say this and
my European friends do not like to hear it. At the moment, I am
more comfortable with the U.S. Government, with its
constitutional guarantees of due process, First Amendment
rights, and fair play, than I am with some sort of
international organization.
My experience with international organizations has been
they are not representative. They are not democratic.
Representatives of democracies have to negotiate with
representatives of despots, so that although there is a great
imperfection, and to some extent, understandably in the eyes of
the Europeans, unfairness at having ultimate control being in
the U.S., it seems to me that ultimately, in the short term at
least, gives us the kind of democratic and fair play guarantees
we need.
So until ICANN demonstrates that it can narrow its
jurisdiction to truly technical matters, I guess I kind of like
the status quo.
Senator Burns. You described somewhat of an alternative
approach involving a draft system, involving numerous interest
groups to create new top-level domain names. Would you
recommend legislation and, if so, I guess should we be
clarifying some of these ares like due process and this type of
thing, and Mr. Hansen, would you like to comment on that? You
have got a very positive statement on that, and maybe both of
you, and anybody could comment on that.
Mr. Hansen. Well, the positive nature of my comments has to
do with the open and transparent manner in which the selection
process was carried out. I think that we are here today, and
the question was asked why did this take so long to bubble up
and become the topic of discussion here.
Well, the selection process itself, and the open and
transparent manner in which it was conducted leads to public
scrutiny, which I assume landed us here today, and rightly so
for those with concerns and questions, to hear those concerns
discussed.
Senator Burns. Do you want to address the initial question
of legislation?
Mr. Froomkin. Senator, I think that ICANN could choose to
do it itself, in which case that would short-circuit the
question, but if it did not, then I think it would be
appropriate to consider legislation authorizing the appropriate
rulemaking by Commerce, or whoever, to create such a system in
which it would be truly international, open-ended, and let
policy be made.
I mean, the critical point to satisfy international
concerns is not all the choices be made in one country. You
distribute the policymaking choices around the world. We make
some here, they make some there, and you just keep the master
list at ICANN to prevent the collisions that the technical
people are worried about.
Senator Burns. Mr. Cartmell, why are you so opposed to the
transfer of the authority of the route server to ICANN?
Mr. Cartmell. I am not necessarily opposed.
Senator Burns. And what is your worst-case scenario? Give
me something that us fourth graders can understand here.
Mr. Cartmell. I am not necessarily opposed to the transfer
of the route service system to ICANN. I think it is premature,
the transfer to ICANN, at this time. The worst-case possible
scenario is simply the Internet domain name system does not
function any longer. You go to your computer and type in www
some address, and it does not go anywhere. That would be the
worst-case possible scenario.
Senator Burns. I have that problem now.
[Laughter.]
Senator Burns. But I do not spell too good, either.
[Laughter.]
Senator Burns. We can leave it there.
Senator Boxer, do you have any more questions?
Senator Boxer. I have so many, and I am like you, I am just
sort of feeling my way.
Mr. Froomkin, on the issue of the Government taking over
some more responsibilities, you have mentioned the
international community. It is my understanding, and correct me
if I am wrong, that the international community has stated that
it would prefer an independent non-profit group to do that, and
so you have sort of answered that in your first comment by
saying, well, if we--the American Government--just did XY&Z,
and another government did AB&C, and another did DE&F, but it
is my sense that there is an expectation that we would have
this non-profit, independent agency.
Am I wrong on that? Would that not cause an outcry if we,
let us say, introduced legislation to take the responsibility
of ICANN and take it back into the Government?
Mr. Froomkin. Senator, I was told you must never tell a
Senator they are wrong.
Senator Boxer. No, I appreciate your candor, because I
would be the first to tell you if I thought you were wrong.
Mr. Froomkin. This is not about the Government taking over
something, because the Government has it now. It has it now, so
it has got it.
Senator Boxer. But the managing of it.
Mr. Froomkin. Effectively it has the power over that, too,
because it keeps ICANN on such a short leash and tells it what
to do.
Now, you are absolutely correct to say that a lot of our
allies have bought into the ICANN idea as a way of distancing
the U.S. Government, so you have got two different tracks. One
is the domestic U.S. law consequences of the jerry-rigged
system they built to try to do that, and the other is, how you
sort of honor----
Senator Boxer. Jerry-rigged meaning?
Mr. Froomkin. The system where Commerce enters into all
these peculiar agreements with ICANN, supervises, nudges and
winks, gets a letter asking--you know, it is going to get a
letter in a few months saying, here are the names you would
like entered in the route. It has to decide what kind of
process it does, or if it just rubber-stamps. These are not
under the Administrative Processes Act.
Senator Boxer. Do you think we ought to look at that? Do
you think Senator Burns ought to call a hearing and look at
that relationship and how it works?
Mr. Froomkin. I do.
Senator Boxer. So to make it more transparent, to make it
more transparent?
Mr. Froomkin. That was really the point of my statement.
Senator Burns. Mr. Hansen, do you want to comment on that?
Mr. Hansen. Yes. Let me just make a statement concerning
whether legislation is required. I believe legislation at this
point would be a mistake.
Senator Boxer. I did not say a legislation. I said a
hearing to look at the relationship, but go ahead.
Mr. Hansen. Well, I am certainly in favor of hearings, and
today's hearing has already, I am sure, enlightened a number of
people concerning the issues, but the ICANN itself, as Mike
Roberts pointed out earlier, is somewhat of an experiment. It
is a 14-month-old experiment.
There have been significant accomplishments, I think more
good done than harm done by ICANN in the 14 months it has been
operational, things like the UDRP for dispute resolution, the
introduction of competition for registrars. It is new, so it
has not been perfect. It needs to be given an opportunity to
work, and hearings like this one and other oversight hearings
are the appropriate mechanism to support the continued
internationalization of the Internet and the continued support
for grassroots consensus policymaking and operation of the DNS.
Senator Burns. I think I agree with that statement in some
areas, because when we start dealing with legislation on this
thing it has been the result of the past. We have not helped
the situation for it to grow and to let it become an even
larger part of our life than it already is. I have got a couple
of other questions.
I think we are going to have another hearing on this,
because there are questions out there yet, and once we have
gone through your information and the testimony that we have
heard here today--I am concerned about redress and due process.
I am concerned, and I want to go through this MOU so that I am
a little more enlightened on the situation between Commerce,
and was that transfer made? Was it made legal?
Maybe we might do it that way, not necessarily getting into
the operation of ICANN, but let us make sure that the parties
understand that it is laid out a little bit better where there
is due process and some of those things I think are important
in the business world. Before the technology can reach its full
potential, I think the users have to be confident that they are
being protected.
Mr. Cochetti, you had a comment?
Mr. Cochetti. Thank you, Mr. Chairman. I did want to lend
one comment to the discussion that took place a moment ago,
which is to say that as I indicated in my testimony we view
ICANN as an experiment that is in its early stages. We have
taken no issue with the procedures used by the Commerce
Department. They were investigated by the GAO. We found nothing
constitutionally wrong with them.
On the other hand, a great deal depends on how the
organization develops, and we are at such an early stage in
sort of evaluating that that we find it very difficult to say
conclusively it has been a success or it has been a failure. A
lot depends on how this organization evolves over time.
Thank you.
Senator Burns. Any other comments?
Senator Boxer. Yes. I just want to make a couple of closing
comments. I again want to thank you. This is a learning
experience for some of us, and I have learned a lot.
Mr. Chairman, I would like to tell you just a couple of
things that I hope you can continue to lead us on. One is the
relationship between Commerce and ICANN. I think it would be
good. I do not know much about how it actually works.
I think it would be helpful--I am a believer, and I know
you are, in transparency and openness, and I have some concerns
about that, and there may be some reasons why we may not be
seeing this openness, or maybe those claims that it is closed
are exaggerated. I think I need to know more. I cannot make a
conclusion.
I continue to be concerned about the ability to protect
identities and to protect intellectual property rights. I do
not want to do a thing that is going to in any way dampen this
whole arena, because sometimes we put our hands on it and
stifle it, and that is certainly not what I want, nor is it
what my people in California want. I think I need to know more,
so I want to just close by thanking you for this. You can see
by the attendance it is not an area that people say, this is
the most exciting thing we have ever dealt with, but in
essence, it is the future.
I also wanted to say thank you for your choice of
witnesses, because I think every one of them has really added
on both sides. I look forward to future hearings and getting to
be a little more knowledgeable so I can be more helpful than I
can be at this point.
Senator Burns. Well, I think you are exactly right, it is a
continuing education, and I wish I had had the opportunity to
visit with John Postale, who was really the man with the
vision, I think, of what he wanted to happen, and I wish I had
had that opportunity. We do not, however, as he has gone to a
bigger Internet, so to speak.
I want to thank you for the expertise you have brought to
the table. We are going to continue to interact with you as we
have questions. I know we will have some more, and we are going
to leave the record open for a couple more weeks if you have
comments that you have heard here that you want to comment on
to enlighten us, because we are looking for information, and we
know that there are some serious doubts out there and, like I
say, oversight is to bring problems to the table and solve
those problems before they become so large and impossible that
we cannot solve them.
So I appreciate that very much. This afternoon at 5 p.m.
you are all invited to the Internet Caucus under Senator Leahy,
and we will welcome the new Chairman of the FCC this afternoon.
He will speak around 5:30. That is up in Hart 902, upstairs,
those of you who would want to, and that is a very active
caucus, by the way, and I am glad we have enjoyed the
leadership of Senator Leahy and several other folks here in the
Senate, and that was put together for continuing education on
the things that are happening on the Internet, and items just
such as this that I think are terribly important to the
American people.
So thank you again, and this hearing is closed.
[Whereupon, at 11:25 a.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Elana Broitman, Director,
Policy and Public Affairs, register.com
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 2 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 2 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 NETWORK SOLUTIONS 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 that Network Solutions was the sole registrar, 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 4 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 2 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, different operational
models for the registry and registrar functions; (d) different business
and economic models under which TLDs can be operated; (e) the market
demand for different types of TLDs and DNS services; and (f) 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
startup 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.
______
RegistryPro,
Feb. 16, 2001.
Hon. Barbara Boxer,
Hart Senate Office Building, Washington, DC
Dear Senator Boxer, Please allow us to congratulate you on your
joining the Senate Communications Subcommittee and to commend you on
the Subcommittee's informative hearing on ICANN Governance on February
14, 2001.
Among your remarks and questions at the hearing, you made some very
astute observations regarding protection of intellectual property
rights (IPR) by the new registries. We appreciate your citing .pro, the
top level domain awarded to RegistryPro, as a positive example of IPR
protection and wanted to supplement your remarks on this issue.
RegistryPro's mission is to create a reliable, sustainable registry
for professionals, such as doctors, accountants, and lawyers. With the
proliferation of Internet usage, consumers are experiencing increasing
levels of uncertainty on the Internet, particularly in searching for
legitimate professional sites. By coupling concrete registration
qualifications with authentication, and working with professional
associations, RegistryPro would establish a verifiable global directory
on professional websites. In addition, RegistryPro will focus on
providing reliable and robust technology, which will not only improve
the service available via .pro, but also raise the standards of
reliability, responsiveness and world-class intellectual property
protections for all registries.
For further detail regarding intellectual property policies in the
.pro domain, we respectfully request that you would insert in the
record a description of RegistryPro's IPR protection policies.
Please let us know if we can provide you or your staff with any
additional information or clarification about RegistryPro and the pro
top level domain.
Best regards,
Elana Broitman.
______
registrypro's intellectual property protections
RegistryPro is committed to protecting intellectual property
rights.
Restricted Class. By its very nature, .pro will provide fewer
opportunities for cyber-squatting.
First, it would be restricted, and thus impose an additional screen
against potential cyber-squatters.
Second, a significant percentage of .pro websites would be used by
professional individuals, who do not trademark their names.
Third, the target business sector is a trusted professional class,
members of which are subject to professional ethics standards and are
far less likely to engage in cyber-squatting, particularly as they
would not want to compromise their professional relationships and
reputations.
UDRP. The Uniform Dispute Resolution Policy (UDRP) will fully apply
to this registry and registrars will have to comply with the UDRP and
all applicable laws of their respective jurisdictions.
Sunrise Protection. RegistryPro adopted the IP Constituency's
proposal for a sunrise period. Holders of trademarks and service marks
having been registered prior to the creation of .pro will be able to
pre-register their marks as a domain name in the .pro suffix.
Moreover, the requirement that the sunrise registrants also qualify
as professionals would further screen out cyber-squatters.
The registry would set up an enforcement mechanism to ensure that
the pre-registration period is used only for trademark protection:
Registrants would be required to provide the registration number, date,
and jurisdiction for their trade or service mark. In order to limit
cyber-squatters and any abuse of this sunrise period, there will be an
opportunity to challenge the registrations through the UDRP.
Centralized WHOIS. Additionally, the complete domain name records
of all .pro registrants will be housed at the registry level, rather
than scattered among various registrants, as is the case today in .com.
IPR owners could turn to a single place to police and protect their
rights.
Enhanced Searchability. To support intellectual property holders'
ability to defend their rights, RegistryPro would build the capability
to make certain information accessible via searches by appropriate
parties. At the same time, the registry must respect the different
jurisdictions' laws and regulations, such as those protecting data
privacy. Therefore, the search capability would be focused to
accommodate legitimate interests, such of intellectual property holders
and law enforcement, while protecting consumers from misuse of their
data.
Best Practices for Registrars. RegistryPro would require all
registrars to agree to the registry policies and to comply with ICANN
policies in order to participate in the .pro TLD. Compliance with the
terms and conditions of the registry-registrar agreement will be
enforced via a trusted independent arbitration mechanism, including the
providers approved to provide UDRP services.
__________
Prepared Statement of Leah Gallegos, President,
AtlanticRoot Network, Inc.
summary of testimony
The public has demanded, and the government has recognized, the
need for more Top Level Domains (TLDs) to be entered into the USG root
that is controlled by the Department of Commerce (DoC). ICANN has been
tasked with determining which TLDs should be chosen. Unfortunately,
their process for making the determination has been discriminatory and
damaging to our small business that is dependent upon domain name
registrations in our TLD. ICANN's apparent choice is to refuse
acknowledgment of our legitimate business and usurp our product, the
dot BIZ TLD, thus duplicating it and creating chaos. ICANN refuses to
acknowledge any entity outside its own framework, creating a platform
from which to rule the Internet and crush a free market industry in its
infancy. If ICANN succeeds now, it portends the destruction of more
such businesses in the future.
In addition, ICANN has ventured well beyond its scope of a
technical administration body for the DNS and has attempted to become a
world governing body for the Internet.
main points of testimony
1. ICANN fails to acknowledge legitimate businesses of TLDs and
root systems existing outside its framework.
a. They claim separate name space when DNS is ONE name space, and
use it as an excuse to usurp our product.
2. ICANN has chosen to co-opt our product and award it to a
competitor.
3. ICANN ignored dot BIZ while recognizing the pre-existence of dot
WEB.
4. ICANN's application process discriminates against small business
and non-profits.
5. ICANN's duplication of pre-existing TLDs now will open the door
to do even more harm to business.
6. ICANN has violated its agreement with the government that
mandates they will not do harm to existing entities.
7. ICANN's Board of Directors still consists mainly of the original
interim Board which was to have been replaced by an elected Board
within months of its creation.
8. ICANN is supposed to be a bottom-up, open and transparent
organization. It is not. The evaluation of applications for new TLDs is
a prime example.
testimony
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. The inclusive name space roots
are root server systems that operate in the same manner, but
independently of the DoC root system (the ``USG'' root hereinafter).
They each have a master root server and a group of slave servers which
obtain Information from their master. Each root also includes all the
TLDs found in the USG root for the benefit of users and also additional
TLDs. Users have the choice of ``pointing'' their computers to any of
the roots, and Internet Service Providers (ISPs) have the same choice.
There has been dramatic growth in the number of ISPs and users pointing
to the inclusive name space roots in order to see the rest of the
Internet. (See Exhibit C, Page 8 of this document)
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 away
from me arbitrarily by a covetous entity under agreement with the
government. I thank this Subcommittee for providing a forum 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.
How can fair competition be accomplished with ICANN's co-opting of
dot BIZ from ARNI, thus ``taking away'' its product? Under ICANN's
policy, a competitor can pay a $50,000 fee to have ICANN ``take away''
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. $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. It is obvious that the
large dollar monopolies were favored. In fact, they are the ones who
were selected. CORE, NEUSTAR, MELBOURNE IT, AFILIAS. We would not have
had a chance.
As it turned out, several Board members recused themselves, leaving
less than the required number to legitimately vote on this issue. The
remaining members 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.'' Dr. Cerf stated in
testimony given at the recent House Telecommunications Subcommittee
hearing that the recusals were based on ``thin'' criteria. This is not
the case. Some Board members had been involved in the preparation of
applications for TLDs, or were involved with the companies making
application. That is a direct conflict of interest. Those Board members
should have recused themselves from the selection process before it
began, that is, before selection criteria were decided and before
selection made. As it stands now, new gTLDs have been awarded to
companies in which ICANN Board and DNSO members are involved. These
persons are giving business to themselves, while taking away mine.
2. 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 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 Yokohama and MDR meetings, our
projections were proven correct and emphasized by Mr. Kraaijanbrink and
Mr. Fitzsimmons, especially, and by other members in general (see
quotes from MDR transcript later in this document). Dr. Cerf also made
it clear in his testimony that ICANN does not feel responsible for
duplication of TLD strings in the name space and that they are
concerned only with the USG root. ICANN is, therefore, setting a
precedent for harming any business using any TLD strings outside that
one root. The result of this attitude will be chaos in the DNS. It is
obvious that the intent is to control the world's Internet
communications medium.
Additionally, ICANN's processes, policymaking and lack of
cooperation with the rest of the world has resulted in its alienating
many countries to the point where further fragmenting of the Internet
is plausible and even likely. China is furious because ICANN's
contracted registry--Network Solutions, Inc.--has claimed authority
over the Chinese-language name space, and as a result mainland China
has formed a partnership with Taiwan (a first!) to oppose ICANN & NSI,
and is threatening to form its own root. (See http://
www.Cookreport.com). On November 17 in an article headlined ``Beijing
Moves to Control Domain Names,'' (http://www.techweb.com/wire/story/
reuters/REU20001117S0001) CMP Tech Web reported: ``The Chinese
government has mandated that only a handful of domestic companies may
assign Chinese-language Internet addresses, striking a blow to the
registration service launched last week by VeriSign.''
Likewise, some ccTLDs that have been treated unfairly, like .cx
(ICANN refuses to change the .cx name servers to the new ones run by
the current registry) (http://australianit.news.com.au/common/
storyPage/0,3811,1589302 percent5e1285,00.html), are being forced to
think of operating outside the ICANN ``monopoly root.''
An independent, legitimate, and existing registry such as ARNI's
and others saw no reason to apply to ICANN for ``permission'' to
participate in the process of a coordinating body that does not have
the authority to determine the legitimacy of a registry by virtue of
acknowledging it. We (ARNI) already existed as a legitimate commercial
registry under our own legitimate terms and conditions and were
supported by a commercial root system that supported our TLDs globally,
making these TLDs universally available to anyone on the Internet. We
are a private, commercial entity and are only asking that we be
respected as such. We are provided resolution by a commercial network
offering root-level services to the global community universally. ICANN
hasn't the right to either award permission to, or deny the right of
one of the owners of the Internet to engage in its commercial
operations--operations that predate the existence of ICANN by more than
a decade.
3. There was no need to go through the ICANN process to prove what
has already been proven, that the registries are open to the public,
they work, and the roots that do recognize them have also proven
themselves for well over 5 years.
4. Just as visible was the obvious lack of understanding of the
basis for adding new TLDs and the content of the applications
themselves. ICANN continues to claim that they have the consensus of
the Internet community. This claim was repeated by Dr. Cerf in his
testimony at the House Telecommunications Subcommittee. If that
community consists mainly of the special interests--mega corporations
and monopolies in the domain name business, and excludes the users,
then they are correct. If that community is supposed to include ALL the
stakeholders, then they do not have consensus at all.
And last, 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. If they were included, we might have seen something
closer to consensus. ICANN pressed the timetable for introducing the
new TLDs so that the elected Board members would have no voice in those
deliberations. Karl Auerbach stated quite adamantly that had he been
involved those deliberations, and there were a conflict between two TLD
claimants, that ``first demonstrated use on the Internet would
prevail.'' (See video segment from the plenary meeting at MDR, November
15, 2000, first 3 minutes (http://cyber.law.harvard.edu/scripts/
rammaker.asp?s=cyber&dir=icann&file=icann-111500&start=10-31-30).
This Board member also uses the inclusive name space roots and has
advocated multiple roots.
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, at
the direction of DoC, is tasked with monitoring 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 entry of new TLDs to the root.
By comparison, ARNI is the manager of some TLDs (including dot BIZ)
that are homed in an inclusive name space (or alternative) root managed
by another entity. The inclusive name space roots were first
facilitated by IANA. If ARNI wishes to enter more TLDs into that root,
then it must petition that root manager. If there are no conflicts
(pre-existing 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. A prime factor in the DNS is
avoidance of collisions. 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 DoC TLDs that ICANN monitors, there are in
excess of 240 ccTLDs that 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 worldwide and still add new ones that could be included under
their specific management. Technically, it is a simple task that has
been proven with the addition of the ccTLDs in the USG root and over
150 TLDs in the inclusive name space roots. There is absolutely no need
to duplicate, and in fact, compelling reason not 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) and PacificRoot. We
are recognized in all the major roots, except, of course, the USG root.
We were delegated the management of dot BIZ in 2000 and re-opened for
public 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. Registrations increased from a
few hundred to over 3,000. Total registrations in the TLDs serviced by
the registration system have topped 10,500 since that launch. The re-
delegation was made and the registry was open well prior to any
announcement of applications for the character 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 contacts listed
on the ICANN website, that dot 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 take away 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 KNOWING 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 ``take away.''
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 ``coordinate 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. This has always been the
prime directive for stability of the Internet. Dr. Cerf has made
mention of this aspect of the DNS. In fact, he made a point of it in
his testimony on February 8, 2001. Unfortunately, he reversed it to
sound as though it is we who will cause this collision, rather than
ICANN/DoC. Dot BIZ has been in existence for many years. It is ICANN
who will cause the duplication and threaten stability. 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 affected. One TLD operator has indicated
an increase of 30 percent per month in the use of one of his servers,
which happens to be one of the ORSC root servers.
exhibit c--atlanticroot network, inc.
The DoC root is just one root system. Others are in service and
have been for many years. Any user, including ISPs can, and do, point
to whichever root they desire. All roots include the TLDs found in the
DoC root plus additional non-colliding TLDs. Now, however, we are faced
with a collision in THE name space--ICANN's duplicate dot BIZ.
[GRAPHIC] [TIFF OMITTED] 87255.004
[GRAPHIC] [TIFF OMITTED] 87255.005
The choice to point elsewhere could be compared to a choice
of television cable and satellite companies. Each company
offers essentially the same basic channels, but some offer many
more. Users have a choice of a variety of cable companies and
satellite dishes. It is their best interests to offer as much
as possible.
The major difference is that with the Internet there are no
spectrum limitations. Users and ISPs have the choice to point
anywhere in the world where there is connectivity.
If DoC enters a duplicate dot BIZ into their root, users
will not know which version they will see, since ISPs may be
pointing to any of them. Only the DoC root will be different.
Users are confused, businesses harmed.
With a distributed system of several roots, there is no
single point of failure. An entire system could be destroyed
and the Internet would still be live.
ICANN's refusal to respect our presence in a free market is
harming our business and depriving users of their choice of
vendors in addition to causing mass confusion. The ``taking
away'' of our business product offends the MOU signed by ICANN
and the DoC. This precedent threatens to harm all other TLD
operators in the inclusive name space and associated businesses
owned by domain name holders within those TLDs. At present
there are over 150 TLDs and thousands of domain names
registered. Hundreds of thousands of dollars have been invested
in networks and registry systems. As the accredited registrar
for dot BIZ, PacificRoot has invested over $200,000 and
continues to invest in upgrades and scaling.
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 over 3,000 registrants
and growing daily, albeit at a much slower pace due to the
confusion generated by ICANN. Those businesses will be
destroyed because of the fracture ICANN will cause with this
duplication. In addition, if ICANN is allowed to ``take away''
our business product 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
disenfranchised--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? It is quite
deliberate, as is noted in Mr. Kraaijenbrink's outburst at MDR.
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 roots, 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,
or indeed, other roots. The market will decide which will
succeed and which will fail.
ICANN has overstepped its mandate in determining
subjectively which business models and character strings are
worthy of inclusion in their root. They are supposed to be a
technical body, not a policymaker for the world's Internet.
The Internet is almost entirely a private commercial
operation, owned by private companies such as The PacificRoot,
SPRINT, Verizon, WorldCom, Qwest, Verio, etc., traffic is
permitted to traverse from one network to the next by
contractual agreements, and traffic is prevented from passing
through our networks if those entities don't like it--for a
myriad of reasons. The Internet is not publicly owned or
controlled. What little and relatively insignificant portions
(percentage wise) of the Internet are government controlled are
primarily dedicated to public services such as libraries,
public schools, or archives, and of course MILnet functions
that are really better defined as Intranets with gateways to
the Internet. There are other government owned sections too,
but almost without exception, those government controlled
sections are using privately owned infrastructure belonging to
private sector entities like The PacificRoot, Verizon, UUnet,
etc., and almost without exception, these government-controlled
portions must pay for, and have permission (implied, explicit,
or otherwise) to pass over the copper, and fiber, and routers
and other parts of the Internet owned by us--the private
sector.
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 to date, 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 ``take away'' the
businesses it is competing against, without due process. It has
invited applicants to do so. It answers to no one and is not
bound by the APA even though its oversight is the
responsibility of the government and the government has final
authority over additions or changes to the root. ICANN should
be either a government contractor and bound by the APA or it
should be private and liable for its actions. This is a dilemma
because the root is controlled by the government and cannot
simply be handed over to a private entity without due process
and compensation to us, the taxpayers. There seems to be a
circular problem here.
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. 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
of existing TLDs 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.
In terms of Internet Governance, there is a violation of
ICANN's mandate in the use of that term. ICANN was formed to
administer the DNS in the USG root. It was never intended to
govern the world's Internet. The Internet is in its infancy and
should be allowed to grow and evolve in freedom and in a free
market. To allow this body that was formed to coordinate the
technical aspects of the DNS the power to ``govern'' for the
world is a grave error. ICANN has already overstepped its
mandate in several ways.
First, the initial Board was to have been replaced by an
elected Board within months of its formation. Two-and-a-half
years later, that Board is still not elected, except for five
at-large directors.
Second, there were to be nine at-large directors elected by
the at-large membership. The unelected Board decided to not
only limit that election to five and re-appoint four existing
Board members to those seats, but to effectively disenfranchise
at-large membership by manipulating the by-laws.
Third, the Board has instituted a ``clean sheet study'' of
the at-large to determine if there should even be such a
membership.
Fourth, it has changed the bylaws to define the at-large
members as not being statutory members under California law.
In other words, it has effectively cutoff membership at the
individual level.
Fifth, individuals and small businesses are not represented
on the Board and have no voice.
Sixth, many decisions and deliberations are conducted by
staff behind closed doors. There is still no open and
transparent organization. The handling of TLD applications is a
prime example.
Fourth, ICANN should have nothing whatever to do with legal
or policy issues. It should stay within technical issues only.
Fifth, ICANN must function within the single name space and
act as the coordinator of the one root's TLDs as well as
cooperate with the rest of the world's root systems in avoiding
collisions. Multiple distributed roots, as described on Exhibit
C (page six) of this document is desirable and prevents having
a single point of failure.
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 ICANN be directed to elect its
Board immediately and adhere to the technical coordination of
the USG root cooperating with the rest of the world rather than
perform as an uncontrolled quasi-governmental body answerable
to no one.
attachments--exhibit b
Re: ICANN Recommended Internet Top Level Domain Names/Petition for
Hearing:
On behalf of Atlantic Root Network, Inc., a private registry for
the ``.biz'' Top Level Domain Name (``TLD''), we hereby petition the
National Telecommunications and Information Agency (``NTIA'') and the
Department of Commerce (``DoC'') to hold a public hearing pursuant to
the Administrative Procedures Act (``APA'') (5 U.S.C.A. Sec. 551, et.
seq.) prior to consideration and approval of the ICANN recommended
TLDs. The approval of the ICANN recommended ``.biz'' TLD would impair
the rights of Atlantic Root Network, Inc., and would violate the U.S.
Constitution, Federal statute, and the common law. The approval of the
``.biz'' TLD would also violate the Memorandum of Understanding between
ICANN and the DoC.
background
Interest of Atlantic Root Network, Inc.
Atlantic Root Network, Inc. (``ARNI'') is a Georgia corporation
that has been delegated maintenance and operation of the ``.biz'' TLD
in the Open Root Server Confederation (``ORSC''), the PacificRoot, and
the North American Root Server Confederation (``NARSC'') Internet root
server systems. MCSNet established the ``.biz'' TLD in 1996, and began
accepting registrations in 1996. ARNI acquired authority to operate the
``.biz'' TLD in May of 2000, and has been accepting domain name
registrations through PacificRoot.com pursuant to a contractual
arrangement. ARNI currently manages over 1,000 Internet domain names
actively using the ``.biz'' TLD. ARNI and the PacificRoot have expended
considerable capital and effort in maintaining the ``.biz'' TLD.
The ORSC is a public, viable ``inclusive name space'' root server
system that operates in parallel with, and complements, the ICANN/DoC
root server system. Established as an alternative root server system to
the NSF/NSI operated system in 1995, the public can readily obtain
access to ORSC (or other inclusive name space root servers such as the
PacificRoot and Superroot). This is done by merely ``pointing'' their
computer to them, or requesting their Internet Service Provider to
designate the alternative root server. In turn, the inclusive name
space root managers accommodate communication with the ICANN/DoC
managed root server, including the ``A'' root server, by incorporating
the DOC root TLDs in their root system as ``baseline'' TLDs.
Specifically, to ensure universal Internet name space compatibility,
the inclusive name space root server managers imprint on their system
and carry all of the recognized ICANN/DoC TLDs
(.com/.net/.org/.edu/.us), as well as, the country code (cc) TLDs as a
complementary set. The TLDs that are approved and then activated on
their systems thus complement and augment the ``baseline'' ICANN/DoC
TLDs. In this way the interests of the Internet public in choice and
convenience are advanced, while governmental interests in competition
and efficiency are preserved.
Obviously, the functioning of the entire Internet name space
system--ICANN/DoC's 13 root servers, and the alternative root servers--
would be compromised were ICANN/DoC to commission new TLDs, which
collided with existing TLDs in the greater Internet name space system.
It is just this collision, however, that is threatened by the recent
announcement of ICANN that it will recommend for approval the proposed
``.biz'' TLD for inclusion in the ICANN/DoC root server system.
ICANN TLD Proceedings
In conformance with the general mandate conveyed in the ``White
Paper'' (63 FR 31741-01 (June 10, 1998), and in its Memorandum of
Understanding with DoC, ICANN commenced a process in approximately
August 2000 to solicit, evaluate, and approve new TLDs. This process is
well documented in the ICANN website (icann.org). The process
culminated in an ICANN announcement that ``on 16 November 2000, the
ICANN Board selected seven new top-level domains (TLDs) for negotiation
of agreements.'' (See, ICANN web page, Announcements). Furthermore,
ICANN is now apparently engaging in deliberations with the chosen TLD
applicants to negotiate operating agreements. ICANN states that it
anticipates that final agreements will be secured in the near future.
Thus, if these TLDs are approved by DoC and implemented, including the
``.biz'' TLD, the rights of ARNI in the ``.biz'' TLD will be
immediately compromised.
petition for hearing
ARNI asserts that ICANN has no inherent authority to approve new
TLDs (Indeed, even ICANN's authority to operate is questionable as
matter of law. See Wrong Turn in Cyberspace: Using ICANN to Route
Around the APA and the Constitution (Duke Law Journal 50:17 (Prof. M.
Froomkin, October 2000)). The Government Accounting Office (``GAO'')
has affirmed that ICANN can make no authoritative decision concerning
Domain Name administration without express approval from the DoC. In
its definitive July 7, 2000 letter/report to Congress (``Department of
Commerce: Relationship with the Internet Corporation for Assigned Names
and Numbers'') the GAO was emphatic that final authority over the root
server and its administration rests with DoC. GAO interpreted the
November 25, 1998 Memorandum of Understanding between ICANN and DoC as
a ``joint project agreement'' for the domain name system management,
including ``the policy for determining the circumstances under which
new top-level domains would be added to the system.'' Report at page
16. The GAO made it clear that the transfer of decisionmaking to ICANN
would constitute a transfer of property, which would be unlawful under
the doctrine of subdelegation. See National Parks and Conservation
Association v. Stanton, 54 F. Supp. 2d. 7, 18-19 (D.D.C. 1999).
Finally, the GAO noted that such a violation of law is not implicated
in light of the language included in Amendment 11 to the Cooperative
Agreement with Network Solutions, Inc. Pursuant to Amendment 11, the
GAO states, ``Network Solutions, Inc. must receive written
authorization from a Department official before making or rejecting any
modifications, additions, or deletions to the root zone file.''
Further, citing to the November 1999 agreements among ICANN, Network
Solutions, and the DoC, the GAO found that collectively, these
agreements ``make clear that the Department retains final policy
authorization over the ``A'' root server.'' Report page 30. This
includes, of course, final decisionmaking on the entry of new TLDs to
the ``A'' root server.
ICANN itself clearly agrees with the GAO legal analysis. In recent
litigation, Economic Solutions, Inc. v. Internet Corporation for
Assigned Names and Numbers (U.S. District Court, Eastern District of
Missouri (No. 4:00CV1785-DJS)) ICANN submitted the Declaration of its
officer and general counsel, Louis Touton, in opposition to the Motion
for a Preliminary Injunction filed by Economic Solutions, Inc. Mr.
Touton explicitly states in this Declaration that only the DoC can make
a decision regarding new TLDs, and that ICANN has no inherent power to
do so. The Federal district court, in reliance on this Declaration,
denied the motion holding: ``ICANN represents that it has no authority
to implement TLDs, and that instead, it merely makes recommendations to
the Commerce Department, which has the ultimate authority to make such
a decision.'' Based on these authorities, and the elemental application
of constitutional and statutory law, it is clear that the DoC will
shortly be tasked with the responsibility for considering ruling on the
ICANN recommended TLDs. Based on this legal premise, ARNI hereby
petitions NTIA to implement a Rulemaking pursuant to the provisions of
Sections 556, 557, and 558 of the APA. Given the abundance of case law
authority, it can not be denied that the approval of TLDs constitutes
either a ``rule'' or ``license'' within the meaning of the APA. Once
this is established it is mandatory under the APA for the NTIA to
conduct a Rulemaking. This in turn, requires a statement of the
proposed rule, a request for public comment, and a studied
consideration of these comments. In particular, NTIA will be required
to consider not only the rationale and criteria developed by ICANN, but
more broadly, the competitive impact of the recommended TLDs on
Internet name space, the interests of efficiency, the legal
ramification of approval, and the availability of alternate TLDs.
ARNI petitions for this Rulemaking fully convinced that when NTIA
carefully evaluates all of the factors it must consider as an executive
agency of the U.S. Government it must reject the ICANN recommended
``.biz'' TLD. In particular, ARNI believes that the ``.biz'' TDL
violates ARNI's constitutional safeguards, conflicts with a number of
statutory requirements, undermines ARNI's property rights, and offends
the Memorandum of Understanding between ICANN and DoC. Indeed, the
essence of these safeguards is captured in the Memorandum of
Understanding which states under paragraph D(2) ``Prohibitions'' that
``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.'' The adoption of the ``.biz'' TLD would violate this
provision with respect to ARNI and threatens the viability of inclusive
name space providers.
conclusion
Only the NTIA/DoC may authorize and commission new, ``A'' root
TLDs; ICANN can not. The new TLDs recommended by ICANN must be subject
to formal Rulemaking under the Administrative Procedures Act. Such a
rulemaking will reveal the legal infirmity of the contemplated ``.biz''
TLD.
__________
Prepared Statement of Bart P. Mackay, Vice President and
General Counsel, eNIC Corporation
My name is Bart P. Mackay, and I am the Senior Vice President and
General Counsel for eNIC Corporation. I am providing a supplemental
statement to Mr. Cartmell's testimony in order to respond to certain
issues raised in the hearing before the Subcommittee on February 14.
Specifically, those issues were eNIC's reluctance to adopt the Uniform
Dispute Resolution Procedures (UDRP), and our charging a nominal fee
for WHOIS information.
Briefly as to my background, I have been practicing law for nearly
16 years, with a primary focus on corporate finance, commercial
transactions, and intellectual property issues. My experience in
intellectual property issues includes working directly with many
companies and trade associations, including such notables as Mr. Eric
Smith of the International Intellectual Property Alliance, the Business
Software Alliance, the Motion Picture Association, the Recording
Industry Association, and the International Trademark Association, in
developing and pushing legislative and regulatory reforms for
copyright, trademark and other intellectual property protections in the
former Soviet Union.
As an initial matter, eNIC Corporation wishes to offer one point of
correction to the written testimony of Brian R. Cartmell submitted in
conjunction with the Subcommittee's hearing held on February 14, 2001,
addressing the governance of the Internet Domain Name System by the
Internet Corporation for Assigned Names and Numbers. The last sentence
of the first paragraph of the subsection entitled ``Overview of eNIC
Corporation,'' erroneously states that ``[T]he Dot-CC domain is
associated with the Cocos Islands, a group of islands in the Indian
Ocean that, at the time we submitted our application, were privately
owned, but today are an external territory of Australia.'' In fact, the
Cocos (Keeling) Islands are a group of islands in the Indian Ocean that
at the time it appeared on the ISO-3166-1 list (referred to in section
6 of Mr. Cartmell's written testimony) were privately owned, but today
are a territory of Australia.
The primary purpose of this supplemental written testimony is to
respond more fully to Senator Barbara Boxer's questions posed during
the Subcommittee's hearing. This opportunity is particularly important
to us as Senator Boxer's inquiry and comments raised questions about
our reluctance to adopt the Uniform Dispute Resolution Policy and our
WHOIS procedures. I want to assure the Subcommittee that we have
adopted these business practices only after long and careful
consideration of the alternatives, and we hope that this full
explanation of those practices will prove the merit of our position.
1. uniform dispute resolution policy
eNIC's position on the UDRP is straightforward. While we definitely
favor an accelerated dispute resolution procedure much like the UDRP,
we have been unwilling to adopt the UDRP system in its present form. As
discussed by Professor Froomkin and Mr. Auerbach at the Committee's
hearing, and acknowledged by ICANN's President, Mr. Mike Roberts, the
existing UDRP needs to undergo a complete re-evaluation to address
certain aspects that have proven deficient. To date, few of the nearly
250 existing top-level domains have adopted the UDRP or any other
alternative dispute resolution mechanism. Thus, eNIC is not alone in
its doubts about the UDRP. eNIC has consistently said that we will
adopt such a dispute resolution mechanism when we find or develop one
that meets traditional and acceptable notions of fairness, due process,
and equitable application.
It should be noted that eNIC is not simply waiting for ICANN to
make badly needed changes to the UDRP before it acts. Instead, eNIC has
undertaken the development of a new dispute resolution policy and
mechanism that we believe: (a) addresses the material deficiencies of
the UDRP; (b) provides fairness, due process and an even playing field
to all participants; (c) contains detailed standards and substantive
guidelines for dispute resolution proceedings that more closely follow
existing trademark laws; and (d) eliminates the ``forum'' shopping
abuses prevalent under the UDRP. This initiative, which commenced
approximately 4 months ago, is being undertaken by outside legal
counsel and at significant expense to eNIC. We expect that a
preliminary draft will be completed before the March 2001 ICANN meeting
in Melbourne. It will be circulated to a broad range of interest groups
for comment and then revised accordingly. We hope to implement the
dispute resolution procedure during 2001. In the meantime, eNIC will
continue to readily abide by the decisions of the courts relative to
cyber-squatting and other domain name matters. We also intend to offer
the new dispute resolution mechanism as a model for dispute resolution
that can be adopted by other top-level domain managers as well.
A final point on this issue: Over the past year, I personally have
had numerous conversations regarding UDRP issues with individual
trademark attorneys as well as representatives of several intellectual
property organizations including the International Intellectual
Property Alliance, the Motion Picture Association, the International
Trademark Association and the Business Software Alliance. Inevitably,
each begins the conversation claiming that eNIC is a ``safe haven'' for
cyber-squatters and infringers, and each insists that eNIC adopt the
UDRP to remedy the situation. Notably, none has offered any specific
evidence or data to substantiate or document their claims against eNIC
or which would correlate the adoption of the UDRP to any meaningful
reduction in cyber-squatting or infringement. Let me be clear: eNIC is
not a haven for infringers or cybersquatters. We take very seriously
our obligation to our customers and the Internet community. Our
concerns about the UDRP should not be confused with indifference to
property rights.
2. enic's whois procedure
eNIC Corporation's existing WHOIS disclosure policy is the result
of a careful balancing of competing factors and interests in the
disclosure of Dot-CC registrant information. These factors and
interests can be grouped into three general categories which include
(a) the fiscal and intellectual property interests of eNIC Corporation,
(b) the disclosure interests of trademark owners and others in the
identity of Dot-CC registrants, and (c) the privacy interests of Dot-CC
registrants. Permit me to briefly discuss these three categories.
(a) Initially, it should be noted that eNIC Corporation is one of
the few top-level domain managers that even offers a WHOIS function.
Any registry offering the WHOIS function can do so only by significant,
on-going monetary expense and dedicating substantial technical
resources to its development and maintenance, a fact confirmed by Mr.
Roger Cochetti of VeriSign in response to questioning from Senator
Boxer. As Mr. Cartmell pointed out during oral testimony, eNIC does not
generate substantial revenues from assessing the $15.00 fee. In fact,
the fee does not recoup eNIC's costs of maintaining the WHOIS function.
If eNIC desired to ``profit'' from its WHOIS function, or protect
cyber-squatters and infringers, certainly the price for the WHOIS
report would have been set at a higher price than $15.00.
As explained below, the nominal $15.00 fee acts to limit frivolous
inquiries and adds a measure of privacy protection for Dot-CC
registrants, while at the same time making the registrant information
affordable and available to trademark owners and others who have a
legitimate interest in discovering registrant information. It also
serves to compensate eNIC, albeit only in part, for operating the WHOIS
system. Few businesses are expected to disclose the identity, address
and other such information of their clients at all. (Few other Internet
registries do at all.) After all, such information is considered
proprietary and extremely valuable.
(b) eNIC recognizes that trademark owners and others have a clear
interest in discovering the identities, contact information and other
information of Dot-CC registrants. That is one of the primary reasons
eNIC incurs the significant expense of maintaining a WHOIS function,
unlike most top-level domain registries. eNIC has also consistently
responded to inquiries of law enforcement agencies in a prompt and
efficient manner, without charge. Consequently, those important
interests are not at issue. However, eNIC has witnessed the abuses of
the dot-com WHOIS function that the VeriSign Global Registry is
compelled to maintain (rather than voluntarily maintain) under its
agreement with ICANN and the Department of Commerce. The two primary
reasons for the existence of our fee are (i) the unauthorized ``data
mining'' that readily occurs as a result of the ``open'' structure of
the dot-com WHOIS function, and (ii) the privacy interests of the Dot-
CC registrants as discussed in subsection (c) below.
eNIC has and maintains a strict policy against ``spam'' (e.g.
unsolicited bulk electronic mail) and consistently takes action against
those Dot-CC registrants that we determine are involved in such
activities. We can state unequivocally that eNIC Corporation has never
undertaken any ``spam'' activities, nor have we sold our database to
marketers. In our view, the ``open'' WHOIS requirement in the dot-com,
dot-net, and dot-org domains is a primary contributor to the unsavory
``spam'' activities conducted on the Internet.
Indeed, the ``open'' nature of the WHOIS function in those top
level domains leaves few access barriers to the ``data mining''
activities of numerous automated programs that collect registrant
identities, e-mail addresses, and other registrant information. The
``mined'' information is then used for many purposes, including illicit
``spamming'' activities. By limiting the WHOIS function, including
charging a nominal fee for WHOIS data access, eNIC is able to limit the
access of automated programs to Dot-CC registrant data by making such
access uneconomical, thus substantially reducing spamming activities on
Dot-CC registrants. The result is that, instead of being a ``haven''
for spammers, eNIC is an active participant in the fight against
illicit ``spam.'' In sum, the ``open'' WHOIS encourages ``spam,'' while
limiting access to WHOIS data actually deters illicit ``spam.''
(c) A primary consideration of eNIC Corporation is the privacy
interests of its Dot-CC registrants, although those interests must be
balanced with the interests of trademark owners and others. As
indicated by Professor Froomkin, an ``open'' WHOIS function provides
tremendous opportunities for misuse of registrant information. While
registries such as VeriSign Global Registry and eNIC cannot monitor
websites or control the use of registrant data derived from their
databases, news accounts abound with examples of stalking, spamming,
and other illicit uses of registrant information in the dot-com domain
space. Unfortunately, we do not live in ``Mr. Rogers' neighborhood''
and people with access to addresses, telephone numbers, e-mail
addresses and other registrant information do not always use such
information for honorable purposes. Consequently, the privacy concerns
of domain registrants are critical and are best served by a
``restricted'' WHOIS function.
As with virtually all compromises, eNIC's position on the WHOIS
database is likely imperfect and does not fully satisfy the demands or
wishes of any one party. However, after careful and thorough
consideration of the issues, taking into account and balancing the
varied competing interests involved, eNIC believes that its decision
strikes an appropriate balance and ultimately promotes the best
interests of the Internet community as a whole.
Response to Written Questions Submitted by ICANN to Mike Roberts
Question 1. One of the applicants for a new top level domain names
was Image On-line Design. Despite having over 23,000 dot.web
registrations and thousands of letters of support for application,
ICANN chose not to accept Image On-line Design. Can you explain why
ICANN chose not to grant the application especially in light that ICANN
is a consensus driven organization?
Answer: That Image On-line Design application had deficiencies that
were cited by technical and financial teams that did the analysis.
Followup: Image On-line Design submitted corrections to numerous
inaccuracies presented by the review and those corrections were not
properly noted. Additionally Image On-line Design and eight others
applicants filed requests for re-consideration. What is the status?
Will the deficiencies by the people seeking reconsideration still be
taken into account? Is that fair when so many of the inaccuracies cited
by so many of the applicants in the application process.
__________
Bridge International Holdings, Inc.,
St. Simons Island, GA, Feb. 12, 2001.
Hon. Burns, Communications Committee.
Dear Senator Burns, I have just learned that your committee will be
holding hearings on the choices and choice making methods of ICANN with
regard to the ``new'' TLDs (Top Level Domain) in the DOC Root of the
Internet.
As you must know, the Internet has come a long way since its early
days of exclusively DoD and research responsibilities. Among the myriad
evolutions since those days has been the birth of numerous robust root
systems to compliment the original. Most of these were established and
running smoothly BEFORE the creation of ICANN just a few years ago.
Operating on these root systems are many and varied TLDs not
represented on the DoC root. The earliest of these was .nomad, started
by Bradley Thornton, now of the Pacific Root Network, but way back in
the 1980s, long before anyone ever even conceived of conflict over
domain names and perceived shortages of them. It was started, not to
compete with ICANN, for ICANN did not exist, it was created as a
private initiative in keeping with the free market economy and
initiative this country likes to pride itself for. Since that pioneer,
others have followed, and with few exceptions, have worked very civilly
and professionally with each other so that no conflicting TLDs would be
developed and the integrity of the Internet naming and numbering system
would be preserved. About 5 years ago, one such entry to the field was
a .biz TLD. It is now under different control than the original, but
has been in continuous operation since creation. The Atlantic Root
Network, Inc., in close cooperation with online registration and DNS
services of the Pacific Root Network are now not only taking live
registrations for .biz domain names but have active and functioning
commercial sites ongoing.
Atlantic Root Network, Inc. is a small and relatively new company.
We do not want to get into prolonged court battles for our obvious
right to pursue our business as we had before ICANN chose to knowingly
usurp our entire business line of domain registration by claiming this
.biz string as their own and assigning it to one of their
``applicants'' (contributors). Given the over-riding rule ICANN is to
respect and create respect for, that the stability of the Internet be
maintained at all costs, it is simply appalling that they would
consciously create a ``colliding'' (duplicate) TLD in the general
namespace that is the Internet. That they have, should be recognized as
a swipe against small business in general, and more specifically a
serious blow to the future integrity of the naming and numbering system
of the Internet. There is a small but growing number of Internet
Service Providers (ISPs) that have learned to respect the first
established TLDs of any particular string and will show the Atlantic
Root Network, Inc. ``.biz'' rather than the ICANN designated one. This
will cause an addressing problem such as we have never seen before.
(I.e. What if two separate companies were to assign telephone numbers
and service for the 212 area code in New York. What assurance of
getting the desired party could there ever be. It would not be a
momentary problem that would work itself out, either.) As long as there
are two independent and non-cooperating systems in one number space,
chaos would reign. It is much the same in Internet addressing. By
ICANN's decision to institute a second operator for .biz in the same
overall scheme of things, they not only contradict their responsibility
to foster independent business involvement in the Internet as dictated
by the DoC upon their creation, but they will also be creating utter
chaos within the Internet.
Even before final approval of the new .biz, several companies have
sprung up to ``pre-register'' these domain names. This is most
confusing to our current customers who see .biz already functioning
just fine in the inclusive namespace, but even more confusing to
potential new customers. Thus it is already serving as a disruptor of
our business, all because ICANN failed to respect one of the Internet's
golden rules.
ICANN is a poor steward of a very important resource and must be
harshly reprimanded and mistakes corrected, or be simply replaced by
some group that understands the meaning of representative government,
living within one's means and using authority wisely and judiciously.
It can not be allowed to continue to run roughshod over anyone they
deem not big enough to sue them. Remember, ICANN, while private, is
doing its business as the DoC's right hand and whatever they are
allowed to get away with reflects badly on the DoC, those who oversee
them and on our Nation as a whole.
Please do your part to fix this blotch on the American business
landscape.
Sincerely yours,
Karl E. Peters,
President & CEO.
P.S. Bridge International Holdings, Inc, is 50 percent owner of the
Atlantic Root Network, Inc.
__________
Prepared Statement of Kent Crispin, Computer Scientist,
Livermore National Laboratory
Honored Committee Chairpersons and Members, during the hearing you
will doubtless hear a great deal from well-meaning, passionate
witnesses who are deeply concerned about freedom of speech and other
civil liberties issues.
These issues are, of course, extremely important, and as
responsible, patriotic Americans we cannot help but take them very
seriously. However, I would like to suggest that in this case these
concerns are largely misplaced, and are based on fundamental
misconceptions about the Internet, the nature of ICANN, and the domain
name registration business.
While the U.S. Government funded much of the basic research that
started the Internet, for perhaps the last 10 years the Internet has
been in the realm of private business. Private investment at this point
completely dwarfs the contribution by the U.S. Government. The U.S.
Government should be justifiably proud of the Internet as a child of
research it funded, but that child has long ago grown up.
The Internet is largely decentralized; there are only a very few
core services that require central coordination. ICANN is intended to
fill that role. ICANN is a private organization coordinating the
activities of private businesses. Such an organization does require
oversight, but in the normal case oversight from Anti-Trust authorities
is deemed sufficient: unlike some other governments, the U.S.
Government does not lightly interfere with the economic engine of
private enterprise.
When viewed from the perspective of private enterprise, the
concerns of freedom of speech and civil liberties take a much different
appearance. Domain name registries are independent businesses offering
services to customers, just as publishing houses offer their services
to customers. The freedom of the registry and the freedom of the
customers is the freedom of the private transaction: The U.S.
Government does not tell the customer what names they can register;
neither does it tell the registries which names they must offer. If a
registry wishes to disallow domain names that are dirty words, that is
the right of that registry.
The U.S. Government does not tell newspaper publishers what stories
they must accept from private citizens; we have confidence in the fact
that there is a tremendous market for free speech to guarantee that
there will be newspaper publishers of every conceivable perspective.
Likewise, the U.S. Government does not need to worry about freedom of
speech in domain name registrations--in only needs to be sure that
there is adequate competition in the domain name registry business.
There is an important caveat: domain names are not a publishing
medium in any conventional sense of the word. They are intended as a
means of addressing particular machines on a network, and they are
active objects, interpreted by computer software for a technical
purpose. This technical purpose is fundamental to domain names; and
consequently the opinion of the technical community must be given
priority in ICANN's processes. ICANN has no choice but to listen to the
best technical opinions; when the Internet Architecture Board, for
example, makes a formal statement that ``alternate roots'' are
technically unsound, ICANN has no real choice but to accept that
judgment. When the weight of opinion from experienced operators of
networks says that ICANN should go slow in the introduction of new
names, ICANN has no choice but to listen.
These technical constraints on ICANN mean that oversight of ICANN
is a very complex affair, and will require careful monitoring by anti-
trust authorities. The Departments of Commerce and Justice are closely
monitoring the progress of ICANN, and I believe that oversight is
adequate.
The activities of private enterprise are not perfect, by any means.
We can expect ICANN to make numerous mistakes as it takes its own road.
This is normal, and should be expected. Free enterprise necessarily
involves the freedom to make mistakes, and the freedom to correct those
mistakes without the paternalistic direction of Uncle Sam.
Thank you very much for your consideration.
__________
Prepard Statement of Ray Fassett, Think Right Company
I wish to take the opportunity to thank your Subcommittee for
reviewing ICANN governance. I desire to have this written testimony
focus only upon such governance as it relates to the expansion of the
Top Level Domain space, or new TLDs.
As your Subcommittee is probably aware, there is widespread opinion
that the recent selection process was quite arbitrary in its selections
and, perhaps, even unfair, involving various conflicts of interest. I
wish to only focus upon the former issue, rather than the latter at
this point in time.
It is important, in moving forward, that the subjective nature in
which TLD applications are accepted be removed and that the ICANN be
clearly accountable for such removal.
This can be very easily accomplished (vs. the round of
applications) by: (1) Mandating to the ICANN to define the technical
criteria necessary for the applicant to achieve acceptance to the A-
root zone; and (2) Mandating the ICANN to accept applications that meet
such pre-defined criteria.
A by-product of these mandates would be that the ICANN would be
further removed from a body that is governing policy (subject to
Congressional review) to one that is applying its technical expertise.
I am a small business operator that has a desire to file with the
ICANN in the second round of applications. I can raise the necessary
funding to scale my existing Internet infrastructure to meet the
technical requirements for admittance to the A-root zone if the ICANN
would define what these criteria are.
As long as arbitrary and subjective decisionmaking on the part of
the ICANN remain part of the application process, small businesses--
such as mine--will be competitively disadvantaged in relation to larger
corporations with the resources to withstand a ``turned down''
application only to file again in the next round (or the round after
that).
My business cannot move forward, for example, in scaling up its
infrastructure for the second round of applications not knowing that,
even if all technical criteria are met, my application could be
subjectively turned down. Without mandating against this, small
business will be largely removed from the application playing field. No
bank would support my business expansion based upon ``hope'' of
acceptance. Some feel the application process is this way by design,
though I am not ready to fully draw this conclusion as yet.
I respectfully request your Subcommittee to stand behind small
business by mandating the ICANN to clearly define technical criteria
for admittance and to adhere to these criteria in their selection
process.
Thank you for accepting my stated views on the subject matter and I
sincerely appreciate your attention to my concerns.
__________
Prepared Statement of Paul Stahura, President,
Group One Registry, Inc.
Mr. Chairman and Members of the Subcommittee, my name is Paul
Stahura. I am the President of Group One Registry, Inc. I want to take
this opportunity to share with you a vision for the future of the
Internet and to express my views about the process used by the Internet
Corporation for Assigned Names and Numbers (ICANN) to select new top
level domains.
the creation of group one registry
I have been involved in the business of registering domain names
for several years. As President of eNom, an accredited domain name
registrar, I conceived of the Group One concept in response to a
fundamental realization. The practical reality is that with the
explosive growth of the Internet into consumer products there will have
to be a domain name for every new consumer device connected to the
World Wide Web (the Web).
To implement my idea, I worked with WebVision, the Internet
consulting and hosting company that is the parent of eNom, and Internet
Computer Bureau, an experienced operator of country code top level
domains. We formed Group One to apply for and operate the new top level
domain .ONE.
Our goal was that .ONE would serve as the domain for Internet-
connected devices like game players, PDAs, security cameras,
refrigerators, and wireless phones. The domain names would consist of
digits, making them easier to access from a limited keyboard, using the
name space more efficiently, and eliminating most of the intellectual
property concerns raised by character-based domain names. A substantial
additional benefit to the .ONE concept is that our system would
eliminate many of the growing Internet privacy concerns that have
developed since the last TLD selection process. Ours is a unique
proposal in response to a practical reality.
new tlds and icann's role
As new applications for Internet services continue to develop, we
will bring the Internet to consumers in new and exciting ways. This
growth in the practical utilization of the Internet requires that we
add new top level domains (TLDs). More TLDs will reduce the crowding in
.com addresses and the thoughtful addition of new TLDs will increase
competition in operating the Internet's technical services.
In the time since the last new TLDs were introduced, the Internet
has grown beyond most expectations and also has become a critical
medium of international commerce. Businesses and individuals now
regularly rely on the Web for their daily activities. Changes in the
Web's operation can create--or destroy--businesses, consumer services,
and jobs.
The process by which we select the most appropriate TLDs requires
consideration of a number of factors. Adding new TLDs can introduce the
risk of technical failure and requires thorough consideration and
oversight. Some TLD requests or applications are simply inappropriate
for our contemporary commercial or social values. The allocation of new
top level domains is more than a technical function. Social, economic,
and political judgments on an international scale are required. ICANN
has been carefully structured to receive input from a broad range of
constituencies around the world. I support ICANN as the institution
necessary to make decisions about new TLDs. However, the process used
by ICANN must recognize the significance and complexity of the
decisions and its processes for decisionmaking should reflect the
critical nature of its function.
icann's new tld process
Despite the critical nature of TLD decision, the process followed
by ICANN in the most recent selection of TLDs was, in many respects,
deeply flawed. Rather than acknowledge that selecting new TLDs
inherently involves value judgments and building a process to make
those judgments as fair as possible, ICANN pretended those judgments
didn't exist. ICANN has a history of creating ``test beds'' whose
participants attain large profits and secure entrenched positions. The
new TLD selection cannot be written off as a mere experiment; it, too,
is an economically important act and should be made on the merits of
the applications.
There were three main problems with ICANN's process: the time
allowed was too short, ICANN selectively held discussions with some
applicants but not others, and the process produced no clear record of
the basis for the decision.
ICANN did not allow itself enough time to consider the
applications. The initial schedule apparently was created based on the
expectation that only 15 to 20 applications would be submitted. When
far more arrived, ICANN should have extended the timeframe to allow for
more careful consideration. Precisely because this was the first
selection of new TLDs, the structure of the process was of paramount
concern. ICANN seemed to value finishing the process on schedule above
doing it right.
As events transpired, there were only 6 weeks from the application
due date to the date of Board action on 44 applications totaling
thousands of pages. The ICANN staff analysis (300-plus pages in length)
was published only 6 days before the Board voted on the applications.
This did not give adequate time for the Board members to review the
analysis, or for applicants to respond to it. The 3 minutes allocated
to each applicant for presentations to the Board were not a meaningful
opportunity for response and comment, and it was unreasonable to
believe that the Board members would review the vast amount of material
on the public comment site. The only reasonable conclusion to be drawn
was that Board members relied on something other than the written
materials to make their decision.
During the application review process, ICANN instructed applicants
not to contact the Board or staff. However, ICANN contacted several
applicants to request additional information or seek answers to
questions. This provided opportunities for only a select group of
applicants to clarify, explain, or augment their applications. The
applicants who were not contacted were clearly put at a competitive
disadvantage in the process. While applicants were free to post
additional material on the public comment site, only those who received
questions from ICANN knew what additional material would be helpful or
informative. It appeared that ICANN asked questions of applicants it
had already decided to select. This method of decisionmaking, suggests
Board pre-selection, and undermines the credibility of the process.
The ICANN procedures need to be standardized and all potential
applicants need to be advised of the procedures in advance of
submitting their applications. In addition, all applicants should play
and be judged by the same set of rules. Although the application
process produced voluminous public documents and comment, there was no
statement of the basis for the Board's decisions. Absent such a
statement, it is unclear how the stated criteria were applied and how
the Board distinguished among the applications. The only extant record
evidencing Board intent is the brief discussion at the public Board
meeting. For example, ICANN stated that elements such as the staff
evaluation and public comments were only part of the process and not
the full basis for the final decision. However, it is unclear whether
these factors were considered at all and if so, what weight was
attributed to them. This lack of clarity regarding the process itself
as well as the absence of a clear record of review leaves applicants
unsure whether they were treated fairly. Furthermore, it gives future
applicants little guidance about the criteria upon which they will be
judged.
To its credit, ICANN has in place a process to reconsider Board
decisions. However, that process clearly was not designed for decisions
as significant and complex as TLD allocations. The reconsideration
process suffers from many of the same flaws as the initial
consideration process, and once again does not provide applicants with
a meaningful assurance of fair and equal treatment.
Finally, ICANN has insulated itself from accountability for its
decisions by forcing applicants to sign a broad waiver as a condition
to submitting an application. If these waivers are upheld, they permit
ICANN to make arbitrary decisions without explanation--and leave
aggrieved parties with no appeal or recourse. The assumption of such
final and absolute power is contrary to ICANN's ideals as an open,
fair, and accountable body.
group one as a case study
Group One's experience illustrates many of the problems described
above. The .ONE application is technically sound and is backed by
substantial financial resources. Our solution is innovative, and
promises to increase competition in Internet registries while providing
new services to consumers. On its merits, the .ONE application is very
strong.
The first hint that ICANN was not inclined to approve the Group One
application, despite its clear merit, was that we were not among the
applicants contacted by ICANN during the review process. A second
indication came when the staff analysis was released on the Friday
before the Board meeting. The publication of the staff analysis was the
first indication Group One received that ICANN considered its
application ``telephony related.'' Three days after the analysis was
released, Group One sent a letter to ICANN and raised several of the
concerns about the ICANN process that I bring to your attention today.
We also asked ICANN to remove .ONE from the ``telephony-related''
category and to keep the application open for 3 months to provide time
to consider the complicated issues presented by ENUM and the
International Telecommunication Union (ITU). ICANN summarily refused
this request.
When the Board considered Group One's application Board members
consistently spoke favorably of it. Nonetheless, the concerns raised
about the ``telephony'' aspects caused the Board to decide there was
``enough uncertainty'' not to proceed. The source of ICANN's confusion
appears to be a belief that .ONE would conflict with the ongoing ENUM
project by the ITU and others to integrate the telephone numbering
system with the domain name system. Given the opportunity, we could
have explained that .ONE is not targeted at telephones and telephony
applications. In fact, many of the devices that might be served by .ONE
would never be served by a telephony numbering system. In addition, we
could have pointed out that ENUM's proposal raises substantial privacy
concerns which .ONE avoids. Indeed, .ONE could be used in conjunction
with ENUM to eliminate the problem that a phone number as a domain name
means that one's phone number is published to the world. Unfortunately,
we were not given any meaningful opportunity to present these points to
the Board, and Group One's very strong application was rejected.
conclusion
It is not settled whether ICANN is or should be subject to the
Administrative Procedures Act that governs decisionmaking by government
bodies. However, to secure its credibility and exercise its authority
responsibly, ICANN should carefully consider the spirit of the APA when
it makes decisions on broad policy issues like the allocation of new
TLDs. It is not enough for ICANN to say that it seeks consensus, for in
contested processes like the granting of TLDs there always will be
disputes. ICANN should instead follow a process that allows its
decisions to be scrutinized and, if unfair or improper, corrected.
__________
Prepared Statement of Paul Gerrin, Founder/CEO, Name.Space, Inc.
examining governance and icann
With respect to governance, the government that governs least
governs best. The government that listens to the will of the people can
best serve the needs of the people.
ICANN does neither. ICANN has morphed from its intended role as the
coordinator of Internet names and numbers into a private, corporate
world government over the Internet that deliberates in secret and
ignores the will of the people, while ``hiding'' behind a facade of
slogans like ``openness and transparency.'' Their words and deeds prove
to be anything but open or transparent.
As ICANN Director Dr. Vint Cerf admitted before the House Commerce
Subcommittee on Telecommunications on February 8, 2001, the selections
of 7 new companies to act as Top Level Domain (TLD) registries by ICANN
was ``subjective.'' The ICANN board's selection of dominant industry
players at the exclusion of entrepreneurs and small businesses also
ignored the voices of the only publicly-elected members of its board
who were denied a vote in the TLD selection process.
Privatization of government services may act as a way to streamline
government efficiency and provide opportunities to the private sector,
but it should not act as a replacement of government. Certain aspects
of government that are essential to the functioning of civil society
are those that protect the rights of its citizens by rule of law. When
those elements are privatized there must be adequate measures taken to
assure no Constitutional protections are lost.
The ROOT domain of the Internet, the ``invisible'' dot AFTER the
``dot-com'' is the heart of the Internet, the ``master list'' that
identifies which TLDs such as ``.com'' or ``.uk'' or even ``.art'' or
``.politics'' appear to all the users of the Internet ``by default.''
One could say that the ROOT domain is the ``gateway'' by which all
content is made visible to the entire Internet. Only TLDs included in
that ``master list'' can be accessed by the entire Internet, and
anything excluded cannot.
Presently, the U.S. Government holds the authority over the ROOT
domain through its agency the National Telecommunications and
Infrastructure Agency (NTIA) under the Department of Commerce. The NTIA
has entered into an agreement with ICANN to oversee the assignment of
TLDs to operators who will provide services for those TLDs and to
recommend their inclusion into the ROOT domain so they will be visible
to the entire Internet. ICANN at its own admission had acted
arbitrarily and capriciously in selecting 7 TLDs and their operators.
The beneficiaries of the TLD selections include the dominant industry
players, and companies whose principals resided on the ICANN board.
Although some of the board members recused themselves from the actual
vote on the TLD selections, they inevitably made their impression on
the other board members who voted unanimously in their favor. The
exclusion other qualified applicants, and more than 130 new and
expressive TLDs by the ICANN board not only reeks of favoritism, but is
an ominous sign of things to come should ICANN gain control of the ROOT
domain. Some have argued that the restricted number of TLDs selected by
ICANN is meant to ``preserve stability of the Internet.'' In reality,
since the addition of hundreds, thousands, even millions of TLDs would
have no adverse technical impact on the Internet, the artificial
limitation of TLDs is in fact a form of censorship imposed through
pressure by the trademark and intellectual property special interests
who place the value of ``brand'' above free speech and who wish to
profit by creating monopolies and artificially limiting supply in order
to control the market, and in this case, access and free speech.
Should the NTIA move forward to fully privatize the ROOT domain to
ICANN, U.S. Citizens would stand to lose their First Amendment Rights
with respect to the Domain Name System that enables them to access,
publish and express over the Internet. It would be a great tragedy to
our society to see the First Amendment replaced by the Lanham Act!
Should First Amendment rights with respect to the Domain Name System
become lost, the Internet would become a world in which trademark
rights supercede and even chill free expression and speech.
I respectfully urge this Committee to intervene if necessary to
assure that the ROOT domain remain under the authority of the U.S.
Government, and that any ``outsourcing'' of services to manage it
technically or administratively be limited so as to protect the rights
of U.S. citizens under the U.S. Constitution.
Thank you for your time and for the opportunity to present my views
to this Committee. I would be pleased to answer any of your questions
to the best of my ability.
__________
Prepared Statement of International Congress of
Independent Internet Users (ICIIU)
The International Congress of Independent Internet Users ICIIU)
thanks this Subcommittee for an opportunity to present its views on
ICANN and the so-called Internet privatization process in charge of the
U.S. Department of Commerce.
In addition to the comments presented here, the ICIIU has made a
formal complaint to the U.S. Government regarding what we believe to be
the illicit creation of ICANN by special interests and its ongoing
catering to those interests. The complaint can be read at the ICIIU
website (http://www.iciiu.org/Protest.htm), and a news article on the
complaint at http://www.internetnews.com/ec-news/article/0,4-
315131,00.html.
Senators, we users of Internet domain names presently number in the
millions. We are not a small group of special interests like some of
the other stakeholders involved in the Internet. We belong to all
sectors of society, in every country on earth.
We users of Internet domain name registration services should be
free to choose with whom and on what terms we contract for those
services. But we are being restricted to registration of our domain
names with so-called ICANN-accredited registrars, which are companies
that have signed an agreement with ICANN in which they have promised to
impose many unfair conditions on user-registrants, including the
condition that we agree that our domain name can be revoked, suspended,
or canceled by the registrar, the registry (NSI), or ICANN upon the
decision of any one of these to do so, without any show of cause, and
with no provision for review.
This is the essence of anti-competitive and anti-consumer behavior.
ICANN, NSI, and the ``accredited'' registrars comprise a combine, a
trust, that has conspired to deprive companies offering a better
service and fairer terms from doing so, and to deprive registrants of
due and democratic process, with a perpetual threat of discontinuance
of service of our domain name, on which our website and our business
depend.
In its contractual relationship with the accredited registrars and
with NSI-the-registry (this last giving ICANN power to enforce domain
name registrations to its accredited registrars), ICANN has made the
businesses of domain name holders, which depend on continuous domain
name service, subject to the whim of ICANN, registry, and registrar.
This makes it extremely precarious to invest time and money in a
website, which can disappear overnight if the domain name which makes
the website visible to the world is removed from the root domain name
database, controlled by NSI under the aegis of ICANN.
According to the provisions of the registrar/registrant agreement
(the contract of adhesion between registrant and registrar) and the
UDRP, ICANN, registry, and registrar may revoke a domain name for any
reason, or without a reason. There is no due process, there is no
administrative process controlled by law, there is no judicial review,
because ICANN is an administrative agency masquerading as a private
non-profit corporation which believes it cannot be made to answer
either for violations of the Admin. Proc. Act, on the one hand, or the
antitrust violations of a private for-profit corporation, on the other.
Yet ICANN, NSI, and the registrars are, in fact, a cartel illicitly
(that is, without the requisite legislation and in restraint of free
trade) regulating interstate and international commerce.
ICANN itself has been formed, not by the meeting and consensus of
all stakeholders--of which we users are a very considerable part--
called for by the White Paper issued by the Department of Commerce
(http://www.ntia.doc.gov/ntiahome/domainname/6-5-98dns.htm), but by a
secret process that has never been revealed (see ``The Domain Name
System: Hearings Before the Joint Subcommittees of the House of
Representatives Committee on Science and Technology--1998,''
Congressional Record, U.S. Gov't Printing Office).
The initial Board of ICANN, which still runs it after over 2 years
of existence without a membership, and which is determining all of its
policies on domain name usage, was chosen by a small group of persons
representing an alliance of big businesses that includes IBM, MCI, and
AT&T (see http://www.cookreport.com/08.10.shtml [lower part], and
http://www.cookreport.com/icannregulate.shtml).
No end-user of the Internet, no individual, no small business, nor
non-commercial user, has been permitted by ICANN to participate in its
policymaking. When individual and independent domain name holders or
their spokesmen like the ICIIU, IDNO, CPT, etc., have demanded
participation in policymaking committee meetings, we have been thrown
out, disconnected, and refused admission. (The ICIIU has first-hand
evidence, in the form of a tape recording of a teleconference of the
Names Council, the central committee of the Domain Name Supporting
Organization of ICANN from which all domain name-related policy is
supposed to originate, of persons and organizations being disconnected
and excluded, even though these people had a perfect right to
participate as domain name registrants and Internet stakeholders.)
ICANN knows that, if our participation were permitted, the anti-
competitive and anti-consumer contracts and agreements it has
engineered with its registrars and with the monopolist registry NSI
could not have been effected.
The Constituencies and Names Council of the DNSO of ICANN have all
been captured, through the use of undemocratic tactics, by members of
CORE, a trade association of registrars illegaly incorporated in
Switzerland (a complaint in this regard has been filed with the Swiss
Department of Justice), or by members of ISOC, the so-called Internet
Society, whose officers are predominantly employees of IBM, MCI, AT&T,
or other large infrastructure corporations, and which is funded by
those corporations (see http://www.isoc.org/orgs/orgsbylevel.shtml and
http://www.cookreport.com/isoccontrol.shtml).
In September, 1999, ICANN signed contracts with NSI and the ICANN-
accredited registrars, establishing the commercial and regulatory
relationship between them (http://www.icann.org/nsi/nsi-
agreements.htm). These Agreements constitute a per se violation of the
antitrust laws, since they are, in effect, an arrangement between a
producer (NSI), the wholesaler (ICANN), and the retailers (the
registrars) to restrain trade.
No consumer representative nor spokesperson of domain name users
was permitted to be present at the negotiations of the above
Agreements. They were authorized by Beckwith Burr in the name of the
Department of Commerce; Ms. Burr was given the job of representing the
DOC through lobbying pressure from IBM, MCI, AT&T, and others; sheis
IBM's operative in the DOC. And IBM, together with its combine
partners, is funding ICANN: http://www.icann.org/correspondence/ibm-
letter-24sept99.htm ($100,000 contribution from IBM--letter from John
Patrick, IBM VP for Internet).
The ICIIU asks this Committee to investigate ICANN, its creation
and operations, and, if it finds, as we have no doubt it will, that
ICANN has not been created in accordance with law and democratic
procedure, and is not conducting its policy decisionmaking for the
benefit of all alike, to dissolve ICANN and in its place create a new
and proper Internet regulator, responsive to the needs of the millions
of Internet domain name users, who petition this Committee to intervene
and redress our grievances.
__________
Prepared Statement of The Domain Name Rights Coalition and
Computer Professionals for Social Responsibility
introduction
Thanks to the Committee for providing the opportunity to provide
feedback to the Senate regarding the role of ICANN and the Commerce
Department in the ongoing battle for Internet governance. Although you
have received letters from others who attempt to downplay ICANN's role,
make no mistake; it goes far beyond that of technical management and
enters the realm of a regulatory body. ICANN's policy will affect
commerce, freedom of expression, and likely stifle the very medium it
seeks to regulate. ICANN has not provided an accurate picture of the
Internet world to the Committee. We felt it was necessary to correct
and explain much of what they reported to you in response to your
questions.
about dnrc and cpsr
The Domain Name Rights Coalition has participated in the ongoing
debates concerning Internet management as a member of the Boston
Working Group, a member of the Open Root Server Confederation, former
steering committee member of the IFWP (International Forum on the White
Paper.) DNRC submitted comments on the Green Paper, use of the .US
domain, testified before Congress, submitted comments to the World
Intellectual Property Organization, and has dissented in the formation
of ICANN's Uniform Dispute Resolution Policy.
CPSR is a public-interest alliance of computer scientists and
others concerned about the impact of computer technology on society. We
work to influence decisions regarding the development and use of
computers because those decisions have far-reaching consequences and
reflect our basic values and priorities.
As technical experts, CPSR members provide the public and
policymakers with realistic assessments of the power, promise, and
limitations of computer technology. As concerned citizens, we direct
public attention to critical choices concerning the applications of
computing and how those choices affect society.
summary
ICANN continues to execute fundamental Internet policies beyond its
mandate as ``technical coordinator,'' and without creating the
participatory structures that would allow its decisions to be accepted
and trusted by a broad spectrum of stakeholders. The sad fact is that
ICANN has been ``captured'' from the beginning. Special interest groups
have dictated the direction of ICANN, and have morphed it into an
Internet Governance body with none of the protections afforded by
governments.
Governmental safeguards to American ideals such as Free Speech and
other civil liberties, must be codified in ICANN, as well as other
quasi-governmental corporations in the private sector.
There is no technical reason to refuse any applicant for a top
level domain. Instead, policy reasons were substituted for technical
reasons, resulting in limiting competition, not enhancing it.
By maintaining a false artificial scarcity, ICANN is risking an
increasingly fragmented and incoherent Internet system. By their own
statements ICANN claims to be concerned with stability above all.
However, ICANN has now actively sought to cause domain names already
registered by existing businesses (.web, .biz, .museum, .pro, .info and
others) to be registered to potentially different parties at another.
Rather than taking the opportunity to strengthen the domain name
system, ICANN is risking the single predictable factor of the Internet.
They are, in effect, ensuring that current domain names maintain their
scarcity, and thus, value. The Department of Commerce hopefully did not
contemplate that ICANN would become the Federal Reserve Board of domain
names.
Domain name registrars who have proven technical competence beyond
a doubt by registering domain names for years as well as providing
their own alternative roots were refused permission, not on technical
grounds, but purely on policy grounds. TLD registries should be allowed
to set policy independently of ICANN and that no registry be excluded
from TLD operator status if its policy differs from that of ICANN.
The burden of proof should be placed on ICANN to refuse to admit
competition. Potential competitors should not prevented from entering
the market, and force to prove to ICANN that they are worthy of an
artificiality small number of slots.
ICANN further claims to honor intellectual property law. Yet the
fundamental basis of a natural right of property is that one earns
property by the sweat of the brow. The ICANN uniform dispute resolution
protocol (called a protocol to falsely deny that it is clearly a policy
document, with negligible technical content) does not acknowledge any
sweat of the brow argument. In multiple cases (for example, etoys and
workingwomen) entrepreneurs entered the risky world on on-line commerce
and sweat over their domain names to create value. The UDRP policy does
not acknowledge that risk-taking or investment even over such generic
words and phrases as ``toys'' and ``working women.'' The UDRP appears
to have nothing to do with law. For example the published procedural
rules used by one registered UDRP provider are in clear violation of
any standard of procedural due process.
As currently constituted ICANN has failed on all charges. It has
moved slowly; been unrepresentative; acted to limit competition; and
failed to offer useful, fair, coherent policies, or even policies which
encourage investment in virtual property. ICANN is a policy experiment
that has failed.
history
The Domain Name Rights Coalition was formed in 1995 directly
because of the NSI domain name dispute policy which we thought stifled
the rights of individuals and small businesses to choose domain names.
The development and growth of the World Wide Web brought with it a
significant interest by the business community. It soon became clear
that IANA, a US government contractor run by Dr. Jon Postel, would be
unable to continue its management of domain names and numbers without
significant help. The first attempt to transfer control occurred in
1994 when Dr. Postel attempted to place IANA under the Internet Society
(ISOC.) This failed, but something else grew from that union. The IAHC
(International Ad Hoc Committee) was created, and tried to take over
Internet governance via a document called the gTLD-MOU. Comments were
solicited by the IAHC from the Internet community, but the responses
were largely ignored. It is not coincidental that many of the members
of CORE, POC (the Policy Oversight Committee), ISOC (an original IAHC
advocate), WIPO, and the ITU are now heavily involved with the ICANN
process, and have in a sense ``captured'' that process.
The gTLD-MOU was stopped by the Internet community when it became
clear that the process was closed, unaccountable, and non-transparent.
Various people appealed to the Department of Commerce and the State
Department for help. Through significant work and effort, the IAHC
plans were thwarted, and the Commerce Department produced the ``Green
Paper'' as a roadmap for technical management of names and numbers. The
Green Paper was truly a pro-competitive solution, one that was hotly
contested by many European governments, and the previous supporters of
the MoU. In fact, it was right around this time, that Jon Postel
redirected over half of the worldwide root servers to his server in
California. While we may never know, this combination of events
apparently derailed the Green Paper, and started the process that
resulted in the White Paper.
Thousands of comments were submitted by a large cross section of
the Internet community, although many questioned (and still question)
under what authority the Department of Commerce was taking control of
Internet functions. Many of these comments were incorporated in the
``White Paper'' which provided a framework for considering these
issues. Using the White Paper as a foundation, the IFWP (International
Forum on the White Paper) was created in 1998 to discuss these issues
and attempt to reach the consensus that was required to move forward
with the plans envisioned in the White Paper for an open, transparent
and accountable organization, Newco, to manage domain names and
numbers. Please note that even with the White Paper, significant
numbers of people still ask under what authority Commerce is operating
in choosing one company over another, mandating that company's bylaws,
mandating that company to be non-profit, and assisting in choosing the
unelected board members of that company.
The IFWP steering committee consisted of members of the Internet
community who were involved with not-for-profit enterprises. These
included CORE, the Commercial Internet Exchange (CIX), Educause, the
Domain Name Rights Coalition (DNRC), and various other groups. It was
chaired by Tamar Frankel, a respected law professor and expert on
corporate structure and process from Boston University. The IFWP held
meetings around the world, and worked to come to consensus on various
issues. In the midst of this process, Joe Sims, attorney for Dr.
Postel, prommulgated a set of bylaws for Newco. He did this in closed
meetings with no public input. These bylaws were presented to the IFWP,
but did not gain consensus, largely because the points on which the
IFWP had already garnered agreement were not included. Various further
drafts followed, but still none of them achieved consensus.
In late August 1998 after the final IFWP meetings, the steering
committee met telephonically to plan the final or ``wrap-up'' meeting
in which the consensus points would be memorialized, and further
concessions would be provided by all sides. Although there had been
multiple votes already taken that clearly supported a wrap-up meeting,
yet another vote was called at that time. Mike Roberts vehemently
opposed a wrap-up meeting, and was supported in this by Barbara Dooley
of the CIX. There is speculation that Mr. Roberts had already been
contacted at that time regarding serving with the ICANN board in some
capacity. Further, around the time of the wrap-up meeting, Esther Dyson
says that she was approached by Roger Cochetti of IBM and Ira Magaziner
in Aspen, Colorado and asked if she would be interested in joining the
ICANN Board. The IFWP wrap-up was finally completely derailed by
ICANN's refusal to participate in the meeting.
Some of the members of IFWP continued their work to create an open,
transparent and accountable Newco. Two major groups, the Open Root
Server Confederation (ORSC) and the Boston Working Group (BWG)
promulgated bylaws for Newco through open process. Three sets of bylaws
were provided in a timely manner to the Department of Commerce.
Although the Commerce Department had long stated that they would not
choose one set of bylaws over any other, they chose the ICANN's bylaws
as a starting point.
The Commerce Department directed ICANN to consult with the BWG and
the ORSC regarding areas of concern to Commerce but there was little
reason for them to do so since their bylaws and structure had already
been chosen. ICANN did meet telephonically with BWG and ORSC, but
failed to make substantive changes in its bylaws to accommodate the
diversity of opinions toward fundamental issues such as openness of
board meetings, voting on the record, voices for individuals and non-
commercial entities, limitations on ICANN's powers to strictly
technical issues, etc. Both BWG and ORSC warned that the concept of
constituencies would lead to capture by corporate interests at the
expense of expression. BWG wanted to do away with constituencies
altogether. ORSC wanted constituencies structured so that everyone
would have a voice. The ICANN constituency structure has, as predicted,
become the catalyst for capture by the old gTLD-MOU crowd, and a large
and powerful group of trademark interests. These trademark interests
are currently pressing non-legislative expansion of rights for
trademark holders, at the expense of free speech and expression.
competition
It is ironic in that in the midst of all the controversy over
competition, ICANN has hesitated to take the single step that would
introduce the most competition: creating objective technical guidelines
for choosing new TLD registries. Although ICANN has indeed chosen 7 new
gTLDs, no guidelines have been established that would allow for future
expansion. There are no roadmaps by which prospective registries can
turn to structure their technical business plans.
the process of consensus development and implementation
ICANN is correct in that its formation was an unprecedented
experiment in private sector consensus decisionmaking. Unfortunately,
that experiment is in the process of failure. ICANN's claim of
``openness and transparency, based on Internet community consensus,
bottom-up in its orientation and globally representative'' is far from
the reality of the situation. ICANN is the classic top-down
organizational structure without accountability. When its bylaws are
inconvenient, they are changed without discussion.
board of directors
Currently, the 9 seats that were to be elected from the Internet
stakeholders, the so called ``at-large'' directors, were whittled down
to 5. The other 4 seats have been held by ``Board Squatters,'' those
who were appointed and not elected. Despite calls for elections to
replace the squatters, and calls for their resignations, no movement
has occurred.
Instead, the Board has responded with a ``clean sheet'' study that
could, conceivably, dismantle the entire at-large process altogether.
Leaving ICANN controlled solely by special interest groups.
icann staff
ICANN's staff seems, by all outside examination, to be driving all
policy decisions. The non-elected staff, submits reports to the Board
which are normally accepted verbatim, with no indication to the
Internet community of what criteria was used to reach the conclusions
contained therein. These policy decisions, often clearly outside the
reach of a ``technical management'' organization, are then presented as
a ``fait accompli'' with no accountability or transparency, and no
input from the Internet community that they affect.
conclusion
The Internet is the single most significant communications medium
ever created. Its power goes well beyond that of shopping malls and e-
commerce, and empowers individuals in a way never before imagined. It
is thus a national as well as an international resource. The ability to
control important aspects of this technology cannot be underestimated.
It is up to all of us to remain vigilant when organizations are given
special privilege by a branch of the U.S. Government to control this
vast means of expression. Safeguards must be put into place whereby
individuals, non-profit entities, churches, tribal governments, and
other disenfranchised groups may provide unencumbered input and opinion
to an open, transparent and accountable entity. This entity is,
unfortunately, not ICANN in its current form.
ICANN must be restructured. We suggest the following changes: (1)
ICANN must limit itself to technical coordination only. This limitation
must be irrevocably codified in ICANN's bylaws, and must be enforced by
the Commerce Department and/or Congress.
(2) All policy decisions, including the new selection of gTLDs must
be clearly documented as to what objective criteria was used to select
them. Any decisions without such objective, clearly stated criteria
should be rescinded and revisited after such objective criteria are put
in place.
(3) ICANN's current constituency structure must be restructured to
allow for more inclusion by Internet stakeholders, including
individuals, educational entities, religious entities, consumer
protection groups, civil libertarians, and others. The current practice
of lumping all of these groups into one constituency, while leaving 6
others who all represent overlapping business interests, must change.
(4) ICANN must not be used as the arm of government to circumvent
constitutional rights and liberties. An example is the ``takings''
clause. Several gTLDs are being operated currently that will
essentially be ``taken'' if ICANN puts the identical strings in their
root system. Another example is ICANN's non-accountability under the
Federal Administrative Procedures Act.
(5) ICANN must not be allowed to pick and choose provisions of its
mandate that it will accept and others that it will ignore. The most
glaring example is its lack of codifying the at-large group into an
irrevocable part of the bylaws. Second to this is ICANN's failure to
recognize a place for individuals to participate on an equal footing
with business interests. Third, is ICANN's continued failure to
constitute a membership in accordance with the White Paper, as well as
California public policy under which it is organized.
(6) Fundamental rights of American citizens, such as free speech
must trump intellectual property rights of businesses. ICANN's Uniform
Dispute Resolution Policy gives trademark and intellectual
propertyholders a means to limit and silence legitimate speech without
recourse. If ICANN is allowed to continue to use this policy, a balance
must be struck whereby speech rights are protected and abuses by
intellectual propertyholders are curtailed.