[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]









                 ICANN'S TOP-LEVEL DOMAIN NAME PROGRAM

=======================================================================

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 14, 2011

                               __________

                           Serial No. 112-107




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                   COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
  Vice Chairman                      DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California         JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana              Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

                                 _____

             Subcommittee on Communications and Technology

                          GREG WALDEN, Oregon
                                 Chairman
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
  Vice Chairman                        Ranking Member
CLIFF STEARNS, Florida               EDWARD J. MARKEY, Massachusetts
JOHN SHIMKUS, Illinois               MICHAEL F. DOYLE, Pennsylvania
MARY BONO MACK, California           DORIS O. MATSUI, California
MIKE ROGERS, Michigan                JOHN BARROW, Georgia
MARSHA BLACKBURN, Tennessee          DONNA M. CHRISTENSEN, Virgin 
BRIAN P. BILBRAY, California             Islands
CHARLES F. BASS, New Hampshire       EDOLPHUS TOWNS, New York
PHIL GINGREY, Georgia                FRANK PALLONE, Jr., New Jersey
STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
ROBERT E. LATTA, Ohio                DIANA DeGETTE, Colorado
BRETT GUTHRIE, Kentucky              JOHN D. DINGELL, Michigan
ADAM KINZINGER, Illinois             HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)

                                  (ii)
















                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     1
    Prepared statement...........................................     3
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................     6
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................     8
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     8
Hon. Doris O. Matsui, a Representative in Congress from the State 
  of California, opening statement...............................     9
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    10

                               Witnesses

Fiona M. Alexander, Associate Administrator, Office of 
  International Affairs, National Telecommunications and 
  Information Administration, Department of Commerce.............    11
    Prepared statement...........................................    14
    Answers to submitted questions...............................   176
Kurt Pritz, Senior Vice President, Stakeholder Relations, 
  International Corporation for Assigned Names and Numbers 
  (ICANN)........................................................    22
    Prepared statement...........................................    24
    Answers to submitted questions...............................   185
Daniel L. Jaffe, Executive Vice President, Government Relations, 
  Association of National Advertisers, on behalf of Coalition for 
  Responsible Internet Domain Oversight..........................    62
    Prepared statement...........................................    64
    Answers to submitted questions...............................   212
Thomas Embrescia, Chief Executive Officer, Employ Media..........   107
    Prepared statement...........................................   109
Anjali K. Hansen, Intellectual Property Attorney, Council of 
  Better Business Bureaus........................................   119
    Prepared statement...........................................   121
Joshua S. Bourne, President, The Coalition Against Domain Name 
  Abuse..........................................................   128
    Prepared statement...........................................   131
    Answers to submitted questions...............................   222

                           Submitted Material

Statement, dated December 13, 2011, of ASAE, The Center for 
  Association Leadership.........................................   142
Statement, dated December 14, 2011, of Name.Space, Inc...........   144
Letter, dated December 13, 2011, from Rebecca M.J. Gould, Vice 
  President, Global Government Relations and Public Policy, Dell, 
  Inc., to Mr. Walden and Ms. Eshoo..............................   155
Statement, dated December 14, 2011, of the National Restaurant 
  Association....................................................   167
Statement, dated December 3, 2011, of Rod Beckstrom, Chief 
  Executive Officer and President, International Corporation for 
  Assigned Names and Numbers (ICANN), et al......................   171

 
                 ICANN'S TOP-LEVEL DOMAIN NAME PROGRAM

                              ----------                              


                      WEDNESDAY, DECEMBER 14, 2011

                  House of Representatives,
     Subcommittee on Communications and Technology,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:04 a.m., in 
room 2123, Rayburn House Office Building, Hon. Greg Walden 
(chairman of the subcommittee) presiding.
    Members present: Representatives Walden, Terry, Stearns, 
Shimkus, Bono Mack, Blackburn, Bilbray, Bass, Gingrey, Scalise, 
Latta, Guthrie, Kinzinger, Barton, Upton (ex officio), Eshoo, 
Markey, Matsui, Barrow, Christensen, and Waxman (ex officio).
    Staff present: Ray Baum, Senior Policy Advisor/Director of 
Coalitions; Allison Busbee, Legislative Clerk; Neil Fried, 
Chief Counsel, C&T Debbee Keller, Press Secretary; Gib Mullan, 
Chief Counsel, CMT; David Redl, Counsel, C&T Roger Sherman, 
Democratic Chief Counsel, Communications and Technology; Shawn 
Chang, Democratic Counsel; Kara Van Stralen, Democratic Special 
Assistant; Jeff Cohen, Democratic Counsel, FCC Detailee; and 
Phil Barnett, Democratic Staff Director.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Call to order the Subcommittee on 
Communications and Technology for the purpose of a hearing on 
ICANN's top-level domain name program. I welcome our witnesses 
here today, and we look forward to your testimony.
    Although most Americans probably have never heard of the 
Internet Corporation for Assigned Names and Numbers, sorry, 
ICANN, the California not-for-profit manages the top-level 
domains, that part that comes after the dot in, for example, a 
.com, .net and .gov. Today's hearing focuses on how to balance 
ICANN's plans to expand the level of top-level domains with 
safeguards to ensure businesses are not forced to expend 
extraordinary sums to guard against fraud, trademark abuse, or 
dilution of their brands.
    For several years ICANN has considered the expansion of 
top-level domains. Reasonable people can differ on the process 
that ICANN has followed leading to this point, but we now stand 
at the threshold of implementation, and the question before us 
today is what is the best path forward?
    To illustrate concerns of critics, consider the number of 
domains a company may be faced with registering. Apple, for 
example, has Apple.com, iPhone.com, iCloud.com, and iChat.com. 
iPad.com, however, displays nothing more than a splash page 
that says it is a site that is soon coming, likely meaning 
someone bought the domain name in anticipation of selling it to 
Apple. The House of Representatives Information Security Group 
has flagged Facetime.com as a malicious site that may attempt 
to install rogue scripts on your computer if you visit it. 
These are just a few examples of the issues that arise every 
day on the Internet between cybersquatters, criminals, and 
legitimate businesses.
    Now, bear in mind that all these examples are in the .com 
top-level domain. To protect against mischief, Apple also owns 
domain names in other top-level domains like Apple.info, to say 
nothing of the more than 200 country code top-level domains and 
the international domain names that use non-Latin alphabets. 
Under the expansion that ICANN will begin this January, 
trademark holders are concerned that not only will each new 
top-level domain present a new chance for bad actors to 
purchase second-level domains for nefarious or illegitimate 
purposes, but that the top-level domains themselves could 
become fertile ground for cybersquatters. This is particularly 
concerning to trademark holders because each application for a 
top-level domain carries a $185,000 price tag.
    To try to protect business interests in this new world of 
nearly unlimited top-level domains, ICANN has instituted a 7-
month objection period for each new top-level domain 
application. One of the objections available to companies is 
that a new top-level domain infringes on another's legal 
rights. To address second-level domain issues, ICANN has 
required a trademark clearinghouse and sunrise periods during 
which trademark holders can preregister for domain names.
    Nonetheless, the success or failure of even the best 
planned processes comes down to execution. How can ICANN 
implement these processes? What lessons can be learned early in 
the process to prevent failure? Are there additional safeguards 
in the event this process doesn't work as advertised?
    These and other questions are the reason for today's 
hearing, and I look forward to the testimony of ICANN, the 
NTIA, and those who have had good experiences with the limited 
expansion of top-level domain names to date, and those who are 
still concerned that their valuable brands stand to be 
tarnished by this process. So I thank the witnesses for being 
here today to share their insight.
    [The prepared statement of Mr. Walden follows:]


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    Mr. Walden. At this point I have 1 \1/2\ minutes left, and 
I would yield to the chairman of the full committee, who has a 
statement he wants to put in the record.
    Mr. Upton. I am just going to insert it in the record.
    [The prepared statement of Mr. Upton follows:]


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    Mr. Walden. And then I would yield to Mr. Terry for the 
remainder of my time.

   OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Terry. Thank you, Mr. Chairman, for holding today's 
hearing to discuss this very important topic. I appreciate our 
witnesses joining us here today and look forward to listening 
to all of your testimony.
    I am primarily interested in hearing Mr. Pritz explain the 
benefits of expanding the number of top-level domain names. I 
am told that this expansion could promote competition and 
choice in domain address and market, while providing new 
opportunities for organizing information on the Internet or for 
marketing and services. But how will the Internet users 
ultimately be affected is the ultimate question.
    The Justice Department's Antitrust Division has raised 
concerns that new top-level domains could, quote, ``impose 
substantial additional domain registration costs on many 
consumers.'' Others are concerned that an increase in the 
number of top-level domains will exacerbate the potential for 
abuse of the domain name system. In my opinion, these concerns 
should not be taken lightly. The consumer benefits of this 
proposed expansion should far outweigh any potential harms it 
may cause.
    Mr. Chairman, I again thank you and our expert witnesses 
here today for joining us, and I yield back.
    Mr. Walden. The gentleman yields back the balance of his 
time.
    The chair now recognizes the ranking member of the 
subcommittee, Ms. Eshoo from California, for 5 minutes.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman. And good morning to all 
Members and the witnesses.
    I welcome today's hearing to examine ICANN's proposed 
rollout of new generic top-level domains. This is an exciting 
time in the evolution of the Internet. Domain name 
registrations across all TLDs increased by 2.5 percent between 
the first and the second quarters of this year. And all signs 
point to continued growth, as over 40 percent of the world's 
population is expected to come online by 2015. That is quite 
extraordinary, that figure, just in and of itself.
    When this subcommittee last examined the issue in June of 
2009, ICANN's CEO acknowledged the concerns about trademark and 
intellectual property protections, and promised that the new 
rollout of new TLDs would not move forward until these concerns 
had been addressed.
    I am not opposed to the expansion of new gTLDs. I believe, 
in fact, with the right process in place, this program could 
enable new, innovative business models that expand user choice 
and make it easier to find Web sites within a particular 
category such as hotels, restaurants, drug stores, and other 
sites. But the written testimony before us suggests that many 
businesses continue to have significant concerns regarding the 
economic impact, the potential for consumer confusion, and 
increased cybersquatting that could occur without proper checks 
and balances. Our hearing today will enable us to explore these 
issues and determine what steps ICANN has taken since our 
hearing more than 2 years ago.
    The potential rollout of thousands of new gTLDs requires a 
clear understanding of the safeguards being put in place to 
protect trademarks and copyrights, how disputes between common 
brand names will be addressed, and what costs businesses will 
incur in defending their brand. Forcing small businesses, 
nonprofits, and other organizations with limited resources to 
spend $185,000 per domain name just to protect their brands I 
don't think is sustainable.
    And despite the enactment of the Anticybersquatting 
Consumer Protection Act in 1999, cybersquatting remains a 
serious problem. In fact, one form of cybersquatting, in which 
malicious actors register domain names with common misspellings 
of popular Web sites, is particularly pervasive. Collectively, 
these domain name typos receive at least 68.2 million daily 
visitors, leading to consumer confusion and even fraudulent 
activity.
    I hope today's hearing will enable ICANN to find solutions 
that strengthen the gTLD program and address many of the 
legitimate concerns raised by the business community. These 
include the problem of cybersquatting, the potential for 
consumer confusion, and addressing the costs associated with 
the program.
    So I would like to thank all the witnesses for being here 
today, and I will yield the balance of my time to Ms. Matsui 
for her opening statement.

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Matsui. Thank you, Ranking Member Eshoo, for yielding 
me time. I am pleased that we are here today, and I would like 
to thank the witnesses for joining us.
    As we all know, next month ICANN plans to begin the process 
of applying for and introducing new gTLDs. I am concerned about 
the impact and potential unintended consequences that this 
proposal might pose on nonprofits, small businesses, American 
innovators, and consumers. There may also be practical impacts 
such as privacy and cybersecurity that will need consideration.
    Right now there are a number of unanswered questions that 
remain. We need answers to fundamental questions like will this 
policy create additional financial burden on brand owners? I am 
mostly concerned about expansion of second-level domain names, 
which has the potential to dramatically increases costs for 
rights holders for the rising costs associated with defensive 
registrations and guarding against cybersquatting.
    Mr. Chairman, I believe ICANN needs to take a step back, 
slow down, and reexamine this proposal. The Internet is just 
too valuable an asset for consumers, for businesses, and for 
the economy as a whole. I believe there is a way to get this 
right, and I encourage all stakeholders to work together to 
properly address the outstanding concerns.
    I thank you, Mr. Chairman, for holding this important 
hearing today, and I yield back the balance of my time.
    Mr. Walden. The gentlelady yields back the balance of her 
time. The gentlelady's time has expired.
    Are there any members on the Republican side seeking 
recognition for opening comments? If not, I would turn then to 
the gentleman from California, Mr. Waxman, for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you, Mr. Chairman. I am pleased that the 
subcommittee is holding this timely hearing on the Internet 
Corporation for Assigned Names and Numbers, or ICANN.
    Two years ago, the Democratic members of this subcommittee 
sent a letter to then-Commerce Secretary Locke supporting the 
creation of a permanent instrument to replace the Joint Project 
Agreement between ICANN and the Department of Commerce. At the 
time, we stated that any such instrument must include a 
mechanism for the implementation of new generic top-level 
domains to ensure, quote, ``an appropriate consultation with 
stakeholders,'' as well as periodic reviews. Today we face the 
first real test of the new instrument known as, quote, 
``Affirmation of Commitments,'' which was signed by ICANN and 
the Department of Commerce in September 2009. And I want to 
make sure that the process for the upcoming expansion of new 
gTLDs fully reflects the goals of transparency and 
accountability called for in the Affirmation of Commitments.
    I have three concerns that I hope today's panel will 
address. First, cost. It has been estimated that the new gTLD 
application program will bring in $92.5 million in revenue for 
ICANN, but only $36 million of that will be spent on the launch 
of the program. An additional $31 million will be set aside for 
a contingency reserve for litigation and other potential costs. 
I would like to hear more about how ICANN plans to utilize the 
substantial revenues coming in from this program.
    Second, accountability. ICANN has created several new 
processes to address trademark protection concerns with the new 
gTLDs, such as a rapid system to take down infringing domain 
names and a one-stop clearinghouse to allow trademark holders 
to register and protect their marks. Nevertheless, ICANN has 
not yet selected the entities that will run these crucial new 
programs. With the new gTLD program scheduled to launch next 
month, I am interested to learn what ICANN plans to do about 
this critical challenge.
    And finally, timing. I understand that the development of 
the new gTLD program has gone through a 7-year process 
involving thousands of stakeholders. It is not clear to me, 
however, why there is the urgency to launch up to 500 new gTLDs 
during the first round. I would like to hear today's witnesses 
discuss whether it makes more sense to consider a phased launch 
to ensure that ICANN has the appropriate resources and 
procedures in place to react to actual demand. A phase-in might 
also give the global community more time to understand and 
absorb the impact of the program.
    I am not opposed to the creation of new gTLDs. Expanding 
the number of gTLDs is consistent with ICANN's mission to 
promote competition and consumer choice. NTIA deserves credit 
for its diligent work with ICANN through the Government 
Advisory Committee, and I know the agency will continue to 
monitor this issue closely.
    Thank you again, Mr. Chairman, for holding today's hearing. 
I look forward to the testimony of our expert panel. Yield back 
the balance of my time.
    Mr. Walden. The gentleman yields back the balance of his 
time. No other Members seeking recognition, we will move on to 
the panel.
    We appreciate all of you being here today, and your 
testimony, which I have read, it is very informative and 
helpful.
    We will lead off with Ms. Fiona Alexander, Associate 
Administrator, Office of International Affairs, National 
Telecommunications and Information Administration. I am 
delighted to have you here this morning.
    One thing just for all the witnesses, you have to push the 
little button to turn the microphone on when it comes your 
time. And you also want to get pretty close to these 
microphones, or we can't hear you as well.
    So, Ms. Alexander, please go ahead.

  STATEMENTS OF FIONA M. ALEXANDER, ASSOCIATE ADMINISTRATOR, 
 OFFICE OF INTERNATIONAL AFFAIRS, NATIONAL TELECOMMUNICATIONS 
 AND INFORMATION ADMINISTRATION, DEPARTMENT OF COMMERCE; KURT 
     PRITZ, SENIOR VICE PRESIDENT, STAKEHOLDER RELATIONS, 
   INTERNATIONAL CORPORATION FOR ASSIGNED NAMES AND NUMBERS 
(ICANN); DANIEL L. JAFFE, EXECUTIVE VICE PRESIDENT, GOVERNMENT 
 RELATIONS, ASSOCIATION OF NATIONAL ADVERTISERS, ON BEHALF OF 
  COALITION FOR RESPONSIBLE INTERNET DOMAIN OVERSIGHT; THOMAS 
  EMBRESCIA, CHIEF EXECUTIVE OFFICER, EMPLOY MEDIA; ANJALI K. 
   HANSEN, INTELLECTUAL PROPERTY ATTORNEY, COUNCIL OF BETTER 
    BUSINESS BUREAUS; AND JOSHUA S. BOURNE, PRESIDENT, THE 
              COALITION AGAINST DOMAIN NAME ABUSE

                STATEMENT OF FIONA M. ALEXANDER

    Ms. Alexander. Thank you very much.
    Good morning, Chairman Walden, Ranking Member Eshoo, and 
members of the committee. I appreciate the opportunity to talk 
to you today on behalf of NTIA regarding ICANN's planned 
expansion of the Internet domain name system through the 
introduction of new generic top-level domain names, or new 
gTLDs.
    Since its inception in 1998, ICANN has been charged with 
promoting competition in the registration of domain names, 
while ensuring the security and stability of the DNS. In 2000 
and 2003, ICANN conducted a limited expansion of gTLDs. In 
2005, it initiated the process we are discussing today. After 6 
years of multistakeholder discussion, including input from 
governments through the GAC, ICANN approved the rules for the 
new gTLD program in the form of an applicant guidebook.
    Expansion of the gTLD space is expected to provide a 
platform for city, geographic, and internationalized domain 
names, among other things. This type of change to the DNS is 
expected to enhance consumer trust and choice, and reinforce 
the global nature of the Internet. It is also expected that a 
portion of applications will be either generic words or brand-
focused as part of business development, investment, and start-
up plans.
    Within ICANN, the GAC provides governments a meaningful 
opportunity to participate in the development of policies 
related to DNS issues. Over the last 6 years, NTIA has actively 
engaged with its counterparts in the GAC in developing advice 
to inform this program. In December 2010, the GAC developed a 
scorecard of the outstanding issues governments had with the 
program. Between February and June of this year, GAC 
representatives from around the world met with the ICANN board 
and extended face-to-face discussions to review the GAC 
scorecard and to identify specific differences between GAC 
advice and the existing version of the applicant guidebook. 
These unprecedented exchanges resulted in the adoption of a 
number of changes to the program.
    NTIA believes that ICANN improved the new gTLD program by 
incorporating a significant number of proposals from the GAC, 
including providing law enforcement and consumer protection 
authorities with more tools than those available in existing 
gTLDs. The fact that not all of the GAC's proposals were 
adopted as originally offered does not represent a failure of 
the process or a setback to governments. Rather, it reflects 
the reality of a multistakeholder model.
    As a member of the GAC, NTIA will continue to actively 
monitor and participate in discussions relating to the 
expansion of new gTLDs. NTIA appreciates that certain trademark 
owners and other stakeholders have expressed concerns regarding 
this program. Safeguarding the rights of trademark owners and 
ensuring appropriate consumer protections as this process moves 
forward remains a priority. As such, NTIA is committed to 
working with U.S. industry and other stakeholders as the new 
gTLD program unfolds to mitigate any unintended consequences.
    In addition, NTIA intends to continue to collaborate with 
U.S. Government agencies to track their experiences and to 
coordinate the collection of data regarding the effect on 
consumers and business users. In particular, NTIA, working with 
other agencies, will focus on ensuring that law enforcement 
concerns are addressed through strength in registry and 
registrar accreditation agreements and enhanced contract 
compliance.
    NTIA will also be encouraging all interested parties to 
collaborate in the development of metrics to facilitate the 
review of the new gTLD program. We feel strongly that the 
review must be informed by fact-based, real-time experiences 
that can be captured by data from a variety of sources.
    NTIA is dedicated to maintaining an open, global Internet 
that remains a valuable tool for economic growth, innovation, 
and the free flow of information, goods, and services online. 
We believe the best way to achieve this goal is to continue to 
actively support and participate in multistakeholder Internet 
governance processes such as ICANN.
    Thank you again, Mr. Chairman, for the opportunity to 
testify this morning. NTIA looks forward to working with 
Congress, U.S. businesses, individuals, and other stakeholders 
to preserve and enhance the multistakeholder model. It has been 
a hallmark feature of the global Internet institutions that 
have been responsible for the success of the Internet.
    I will be happy to answer any questions. Thank you.
    [The prepared statement of Ms. Alexander follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Walden. Ms. Alexander, thank you very much for your 
testimony and your work at NTIA.
    We are now appreciative of Mr. Kurt Pritz, who is going to 
testify. He is the senior vice president of ICANN.
    So, Mr. Pritz, thank you for being here, and we look 
forward to your comments.

                    STATEMENT OF KURT PRITZ

    Mr. Pritz. Thank you, Mr. Chairman, Ranking Member, and 
members of the subcommittee. I am Kurt Pritz, senior vice 
president for stakeholder relations for ICANN, the Internet 
Corporation for Assigned Names and Numbers. I am very pleased 
to be testifying before you today.
    After more than 7 years of policy development and 
implementation planning, on January 12 next year ICANN will 
start receiving applications for new top-level domains, TLDs, 
such as today's .com, .org, and .edu. ICANN carefully and 
cautiously developed the requirements for the new gTLD program. 
And by ICANN, I mean the global multistakeholder community made 
up of governments, intellectual property experts, consumers, 
large and small businesses, not-for-profit organizations, 
Internet security experts, and Internet users.
    The launch of the new gTLD program was part of ICANN's 
founding mandate when it was formed by the U.S. Government over 
12 years ago. The implementation of the new gTLD program under 
discussion today is the result of a cautious, deliberative, 
multiyear process on how ICANN will execute on its promise to 
the NTIA to facilitate competition in the domain name system 
while protecting vital security, consumer and business 
interests.
    Today's program was refined through thousands of comments 
in no less than 47 extended comment periods, 1,400 pages of 
comment summaries and analysis. Every comment was carefully 
considered and analyzed and addressed over seven versions of 
the Applicant Guidebook. The program, including enhancements 
and new protections, was created by over 10 independent expert 
working groups and described through 59 explanatory memoranda 
and independent reports and 5 independent economic reports.
    The new gTLD program will be implemented in a measured, 
limited manner. After the 90-day application window for the 
first round closes, a stringent evaluation process limits new 
gTLD registries to those entities with the ability to meet the 
high technical and operational requirements with a capacity to 
responsibly operate parts of the Internet infrastructure.
    That careful review means that the new TLDs, the first new 
TLDs, will not be operational until early 2013, and delegations 
will be spread over time after that. The new TLDs that will 
come in under this program will have significantly increased 
safeguards compared to TLD registries that exist today. ICANN 
formed teams of world-class experts who worked to ensure that 
new TLDs offer more protection for trademark holders and 
consumers than today's. New trademark protections include a 
universal trademark clearinghouse, a rapid take-down process, 
and new methods of recourse against wrongdoers. The new 
safeguards will sharply reduce the need for defensive 
registrations.
    New TLDs will also bring better consumer and security 
protections. Domain name abuse experts have developed specific 
measures to combat malicious conduct and provide law 
enforcement authorities with more tools to fight malfeasance. 
These include criminal background checks on all applicants, a 
requirement for DNSSEC deployment, maintenance of a thick WHOIS 
database, and centralized access to TLD data.
    In the last decade the number of domain name registrations 
has increased tenfold, enabling more than $3 trillion of 
commerce annually.
    As with the introduction of any innovation, new TLDs will 
generate interest and excitement and require a period of 
learning. Internet users have already shown great adaptability, 
and they will find value when it is created as a result of this 
program.
    What type of innovation is waiting? Dot-brand TLDs are in 
planning, similar to .gov today that can give consumers 
immediate trust of the site they are visiting. Your 
constituents know that when they type a House.gov address, they 
are reaching the domain managed for the U.S. House of 
Representatives. Financial industry participants are 
considering financial services TLDs, where banks and financial 
institutions can offer their customers greater trust, more 
secure transactions, and control of the flow of their data. 
Brand managers see a world of creative opportunity, including 
TLDs providing dedicated registrations tailored to meet their 
customers' needs. American jobs are already being created to 
explore the benefits and opportunities of new TLDs.
    The important areas under discussion before the committee 
today have been the subject of debate and compromise for many 
years. Together, the Internet community, hearing all the 
concerns raised at the table today, designed a program where 
new TLDs will be more secure; offer greater protections for 
trademark holders; reduce the need for defensive registrations; 
more effectively combat malicious conduct; and provide 
competition, innovation, and consumer choice.
    Thank you for inviting me to testify. I am happy to answer 
any questions you have afterward.
    [The prepared statement of Mr. Pritz follows:]


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    Mr. Walden. All right, Mr. Pritz. Thank you very much for 
your testimony.
    Now we are going to hear from Mr. Daniel L. Jaffe, 
executive vice president, National Association of Advertisers, 
on behalf of the Coalition for Responsible Internet Domain 
Oversight.
    Mr. Jaffe, thank you very much for your very detailed 
testimony. We look forward to your comments.
    Mr. Jaffe. Good morning. Thank you.
    Mr. Walden. And be sure to turn on the microphone and pull 
it uncomfortably close to your mouth.

                  STATEMENT OF DANIEL L. JAFFE

    Mr. Jaffe. Good morning. Thank you very much for having me 
here today. We really appreciate the opportunity to discuss 
what we think is one of the most important issues facing the 
whole of the brand community throughout the world.
    My name, as you stated, is Dan Jaffe, and I am executive 
vice president, government relations, for the Association of 
National Advertisers. I am also appearing on behalf of CRIDO, 
the Coalition for Responsible Internet Domain Oversight.
    CRIDO represents 159 major national and international 
companies and trade associations that have joined together to 
oppose the virtually unlimited rollout of ICANN's new top-level 
domain program. There simply is not widespread support or 
consensus in favor of ICANN's proposal. Law enforcement 
agencies, business, consumers, nonprofit groups, 
nongovernmental organizations, and even the founding chair of 
the ICANN Board all have expressed very serious reservations 
about this plan.
    This concern cuts through a diverse and wide swath of major 
participants in the U.S. and the international economy: 
restaurants like Dunkin' Brands, Burger King, and Papa John's--
and all of these are just examples, they don't cover the whole 
list--broadcasters, advertisers in 52 countries around the 
world; financial entities such as American Express and Visa; 
high-tech companies like Dell, HP and 3M; manufacturers such as 
Kraft Foods, the Kellogg Company, and Procter & Gamble and 
Whirlpool; retailers like Walmart, Costco, and many small 
businesses; automobile manufacturers such as Ford, Chrysler 
Group, and Toyota, and the list goes on and on and on and 
continues to grow every day.
    There are numerous other entities who are very concerned, 
including 100 major trade associations representing other wide 
sectors of the economy and 1.5 million nonprofit organizations 
like the YMCA. And a diverse group of 28 public IGOs, ranging 
from the IMF and OECD to NATO, all believe ICANN's program is 
severely flawed. Many of them believe that it would impose 
extraordinary costs on the whole global brand community. It is 
flawed because it threatens severe economic harms.
    ICANN's own studies demonstrate that the program will force 
companies and even individuals, yes, including Members of 
Congress, to engage in widespread defensive registrations to 
protect their names and reduce capital investment. Companies 
will have to divert major multibillions of dollars' worth of 
resources from job creation and product development.
    The plan is flawed because consumers will be significantly 
harmed. Vastly increased domain names will cause consumer 
confusion. The cybersquatting, malware, phishing, and other 
cyber harms that already occur today will only increase 
exponentially.
    It is flawed because law enforcement officials have said 
that this expansion will make it far more difficult to enforce 
cybersecurity laws. The chair of the Federal Trade Commission 
just last week said this plan would be a, quote, ``disaster'' 
for both consumers and businesses. The OECD also has just 
raised serious issues with the rollout.
    ICANN has not achieved consensus among stakeholders, 
something it is required do under its own code of conduct. And 
there are many serious conflict of interest concerns. ANA, and 
many of the members of CRIDO and others objected throughout the 
ICANN process, but ICANN hasn't listened.
    Recently, NTIA Administrator Strickling made several points 
with which we agree. Consumer trust in the Internet is vitally 
important. The Internet should not be controlled by any one 
nation or group. And a valid multistakeholder process could 
result in an environment that encourages creativity and 
innovation. However, unfortunately, that is clearly not what is 
happening today. ICANN's expansion dramatically increases the 
risk for consumer mistrust generated by cyber harms.
    Some try to use scare tactics to claim that we seek to 
abolish ICANN or to have the U.S. Government run the Internet. 
That is totally false. We believe the greatest danger to ICANN 
is to launch headlong into this ill-conceived program without 
first developing the important protections that Chairman 
Leibowitz, the Government Advisory Committee, the OECD, and 
other law enforcement officials are calling for.
    Members of the subcommittee, there is nothing sacred about 
the January 12 ICANN top-level domain rollout. Before ICANN 
proceeds, it should step back, conduct real and careful studies 
and analysis to justify the expansion. It should then, in an 
extremely detailed and analytical manner, explain to the 
Department of Commerce, the Congress, and the entire online 
community how this plan will benefit the public interest, both 
here and abroad, as is required under the Affirmation of 
Commitments between ICANN and the DOC.
    Thank you very much.
    [The prepared statement of Mr. Jaffe follows:]


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    Mr. Walden. Mr. Jaffe, thank you very much for your very 
thorough testimony. We are pleased to have you here.
    Now we are going to turn to Mr. Thomas Embrescia, CEO of 
Employ Media.
    Mr. Embrescia, thank you for your testimony as an Internet 
domain manager and registrar. So we thank you for being here. 
We look forward to your comments.

                 STATEMENT OF THOMAS EMBRESCIA

    Mr. Embrescia. Thank you, Chairman Walden and Ranking 
Member Eshoo and members of the distinguished subcommittee. I 
am happy to be here today with you. I am going to talk about 
myself as a current registry operator, one of the 22 that exist 
running .jobs. I am also going to talk to you about--and I 
don't want to date myself--my history as a licensed broadcast 
holder, radio and television stations over the past 40 years, 
right here.
    I woke up this morning in my hotel, and on the hotel 
television channel they were talking about the things that you 
should see while you are in Washington, D.C. And one of the 
things that caught my attention was a statue of someone sitting 
in front of an old radio listening to Franklin Delano Roosevelt 
talking, these family talks on a weekly basis. So I am not 
quite that old, but I do go back to being raised when AM radio 
was the be-all/end-all on what was happening.
    When I came out of college in Ohio, I got a job on an FM 
radio station when no one even knew what that was. The 
frequency wasn't around. And thanks to the wiseness of 
Congress, they mandated that automobile dealers put FM 
frequencies in the cars, and FM flourished. It took off. It 
gave me an opportunity to start on an FM band, create a 
channel. We narrowcasted where AM stations were all things to 
all people, they provided service for everyone; where FM 
stations went and suddenly became all rock or all country, soft 
AC.
    In the 1980s, I see Congressman Latta just walked out of 
the room, from Ohio, but in his district, in Toledo, Ohio, the 
big television stations were VHF channels 2 through 13. You, in 
your wiseness, had created a UHF band, but no one knew what to 
do with it. But entrepreneurism and job opportunity created 
guys like me who created a television station in Toledo, Ohio, 
in 1985, built it from scratch, put it on the air. And suddenly 
the Fox Network flourished and took off and created jobs and 
opportunities and businesses.
    Then I saw the same thing happen with cable, which at one 
time was strictly designed to fill in holes in rural areas in 
Tennessee and surrounding communities. But suddenly they 
decided content was important, and they started to create 
channels by narrowcasting again. And who thought 24-7 CNN, 
ESPN, MTV, and my favorite, the Food Channel, that I watch all 
the time and what I am doing.
    And suddenly in 2000 this opportunity arose when ICANN came 
back and created a proof of concept round in 2004. And we were 
offered the opportunity to create a trusted valued source on 
the Internet for content. Ours happens to be HR-related. We 
superserve that community and do it well. And that is what we 
do. And we see this expansion, quite frankly, as history 
repeating itself.
    You have been wise in what you have allowed in the spectrum 
allocation, and people being creative and being able to use 
their initiative to create jobs, better consumer opportunities, 
better information on a consistent basis. I firmly believe in 
what we have created here in the U.S. in opportunity and the 
wisdom of people to be smart about how to do this. And sure, 
could there be bad operators? Could there be people that have 
some problems? I am confident that ICANN's multistakeholder 
model can serve that purpose.
    And so I am here today to support that expansion as an 
existing operator, looking back at history and watching my own 
history of how spectrum, broadband width has created 
opportunity, jobs, better opportunities for consumers. So I 
thank you for that, and I welcome any comments you have.
    [The prepared statement of Mr. Embrescia follows:]


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    Mr. Walden. Mr. Embrescia, thank you very much. And some of 
us actually remember AM radio as well.
    Ms. Hansen, we are delighted to have you here as well. Ms. 
Anjali Hansen, intellectual property attorney for the Council 
of Better Business Bureaus. Ms. Hansen, thank you for your 
testimony, and please go ahead.

                 STATEMENT OF ANJALI K. HANSEN

    Ms. Hansen. Good morning. My name is Anjali Hansen. I am 
the intellectual property attorney of the Council of Better 
Business Bureaus, which is the umbrella organization for the 
116 Better Business Bureaus across North America.
    The Better Business Bureaus are a network of nonprofit 
organizations. For the past 100 years, our mission has been to 
build trust between consumers and businesses in the 
marketplace. Thank you, Mr. Chairman, Ranking Member Eshoo, and 
members of the subcommittee. Our organization greatly 
appreciates this opportunity to testify and tell you about the 
challenges that we face every day to keep our brand and logos 
out of the hands of fraudulent and criminal elements that run 
rampant on the Internet. The new top-level domains will 
increase these threats exponentially if ICANN does not put 
additional protective measures in first.
    Today I am going to focus my testimony on three grave 
problems that I face every day protecting our trusted marks on 
the Internet. The first problem is the massive abuse of our 
marks on third-party Web sites. Every day I am bombarded with 
reports and links to Web sites that display our BBB torch logo 
and our accredited business seals without authorization. 
Fraudulently operated businesses copy the logos to defraud 
consumers into thinking that they are dealing with a reliable 
source. Combating these infringements takes a great deal of 
time. It can be difficult to shut down Web sites if the Web 
hosting company or registrar is not cooperative, and it is very 
costly to our organization.
    In addition, our organization is routinely subject to 
sophisticated phishing attacks that defraud consumers into 
believing that BBB is sending them an email, but which instead, 
upon clicking on the Web link within the email, infects their 
computers with viruses. The architects of these phishing scams 
have used the very symbol of trust, our BBB name and logo, to 
victimize unsuspecting businesses and consumers.
    ICANN needs to come up with better controls over fraud at 
this level. Frauds and criminals can currently easily purchase 
domain names and Web sites from registrars and Web hosting 
companies and then use them for illicit purposes with impunity.
    The third and final major problem that I face in protecting 
our trusted marks on the Internet is cybersquatting. 
Cybersquatters register brand owners' trademarks as their own 
domain names. For example, they will register BBB.net, BBB.com, 
BBB.info. So most brand owners have adopted the costly practice 
of purchasing their own domain names and trademarks in all of 
the major top-level domains. This is called defensive 
registration, as you noted earlier. BBB has over 300 domain 
names, most of which are defensive registrations, and there are 
currently only 22 top-level domains. So with the expansion, 
there will be hundreds, and the cost to defensively register 
will quickly become prohibitive.
    Under ICANN's proposed framework of trademark protections, 
it will have a centralized trademark clearinghouse which each 
brand owner can register their trademark in for a fee. But 
registering our trademarks in this clearinghouse only 
guarantees us the first right to buy or block our trademarks in 
domains in each of the new top-level domains. Instead, ICANN 
should ensure that trademarks registered in the trademark 
clearinghouse cannot be sold to anyone other than the trademark 
owner in any of these new registries.
    The practice of having to defensively register our 
trademarks in each top-level domains needs to stop. This 
practice simply provides an unjustified windfall of profits to 
registries and registrars, and takes resources away from brand 
holders. The most recent top-level domain to be brought online, 
the now famous .xxx, just profited enormously from the over 
90,000 domains paid to be blocked by trademark owners who do 
not want their names associated with that registry. In 
conclusion, even more astounding was the fact that the .xxx 
registry refused to accept registration of our most famous 
mark, BBB, because it was allowed by ICANN to reserve BBB.xxx 
as a premium name that it can later auction off to the highest 
bidder.
    Thank you again for taking the time to listen to the issues 
I and many other brand owners face, which include small 
businesses and nonprofits. These practices have the net effect 
of imposing major consumer harm. If ICANN does not address 
these issues, it should not set forth on its plans to increase 
the number of top-level domains. Thank you.
    [The prepared statement of Ms. Hansen follows:]


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    Mr. Walden. Ms. Hansen, thank you for the good work of the 
Better Business Bureau and for being here today and sharing 
your concerns.
    We will go now to Mr. Joshua S. Bourne, president of the 
Coalition against Domain Name Abuse.
    Mr. Bourne, we are delighted to have you here today. Pull 
that microphone close, and we look forward to your testimony.

                 STATEMENT OF JOSHUA S. BOURNE

    Mr. Bourne. It is uncomfortably close, as you said.
    Well, thank you very much. Good morning, Chairman Walden. 
Good morning, Ranking Member Eshoo and distinguished members of 
the committee. Thank you for convening this hearing on the 
intention of ICANN to expand the number of new gTLDs that will 
be made available to the public. As you know, ICANN's Board 
approved this policy on June 20 of this year, and ICANN plans 
to open the first and only announced application period on 
January 12.
    Given the significant impact that this policy will have on 
the Internet and the recent dialogue about it, CADNA truly 
appreciates the chairman's decision to hold this hearing today. 
As you said, my name is Josh Bourne, and I am the president of 
CADNA. Over 4 years ago, with the help of leading brand owners, 
we founded CADNA, which is a 501(c)(6) nonprofit association, 
to combat a variety of abuses on the Internet. CADNA represents 
businesses vital to the American and global economies from a 
wide range of commercial industries, and our members include 
companies such as Dell, DirecTV, Eli Lilly, Hewlett-Packard, 
HSBC, LEGO, Marriott, New York Life, and Wells Fargo.
    Our mission is more relevant today than it has ever been as 
we look for solutions to reduce or eliminate cybersquatting and 
to work constructively with ICANN, the U.S. Congress, the 
Department of Commerce, and all other stakeholders to improve 
the gTLD policy, ultimately supporting all who agree that this 
policy has flaws and should not move forward without further 
refinement.
    Our current recommendations are a result of a long process 
that started after the ICANN Board approved the gTLD policy 
back in June. Through countless calls and meetings with brand 
owners, public and private Internet governance experts, trade 
associations, and the U.S. Government, we identified several 
aspects of the policy that were driving the majority of anxiety 
in the business community that would lead to unacceptable costs 
for businesses and open the door to new opportunities for 
cybercriminals.
    Fortunately, according to Module 6, Term and Condition 
Number 14 in ICANN's Applicant Guidebook, quote, ``ICANN 
reserves the right to make reasonable updates and changes to 
this Applicant Guidebook and to the application process at any 
time.'' ICANN's recent change to include a provision for 
applicants to file for financial support is an example of how 
the organization can still introduce productive improvements 
into the new gTLD program. If ICANN needs more time to get 
these items done, then it should strongly consider delaying the 
application period or commit to acting upon these 
recommendations.
    Our research efforts and conversations with hundreds of 
potential participants in the application process have resulted 
in several recommendations. I will be the first to admit that 
they need further refinement and development, and there may be 
more adjustments necessary; however, CADNA believes that they 
can serve as the basis for further dialogue with the Internet 
community and ICANN.
    If the new gTLD policy moves forward, here are some 
concrete steps that can be taken to improve the conditions 
surrounding it. First, a declaration by ICANN of when the next 
applicant round will take place would relieve much of the 
anxiety surrounding the first application period. CADNA has 
found that businesses feel forced into applying for new gTLDs 
in this first round lest they be put at a disadvantage relative 
to their competitors, who may gain an edge by acquiring their 
own gTLDs.
    Second, businesses are worrying about dealing with 
cybersquatting that will occur to the left of the dot in the 
new space. In other words, they are worried about the abuse and 
defensive registrations that they will need to pay for in open-
registry-model new gTLDs in order to reduce the impact 
cybersquatting will have on their businesses and customers. To 
alleviate this issue, ICANN should require open registries to 
give brand owners the option to buy low-cost blocks on their 
trademarks before any registration period opens. This could be 
offered at a lower cost than sunrise registrations have been 
priced at in the past. And this precedent has been set with the 
blocks offered by ICM registry in .xxx, where the blocks are 
made in perpetuity for a single nonrecurring fee.
    Third, if ICANN is awarded a new IANA contract, NTIA should 
consider awarding it for a short period of time, perhaps only 1 
or 2 years, and during that time there should be an evaluation 
of whether ICANN followed through on its commitments with 
regard to the gTLD process, and an extension of the contract 
should be contingent on conducting internal reforms to improve 
governance and transparency.
    I see that I am running out of time. May I have a little 
bit of additional time? I have only got one more page.
    Mr. Walden. Finish your testimony, yes, sir, please.
    Mr. Bourne. Thank you.
    Fourth, the U.S. Congress should immediately update the 
Anticybersquatting Consumer Protection Act, or ACPA, in such a 
way that not only curbs and deters cybersquatting in the 
existing TLDs, what we have today, but anything that might come 
in the future.
    To ease the cost on private enterprises and nonprofits 
alike, to ease the anxiety on the business community, and to 
ensure that consumers are shielded from chaos and fraud as much 
as possible, we need to identify and prioritize achievable 
solutions. Commitments from ICANN, Congress, and the 
administration that they will implement these proposals would 
go a long way, but, in the end, more time and a formal process 
to review the policy may be necessary.
    Mr. Chairman, you have been an outspoken leader on Internet 
issues and on Internet governance. CADNA would like to seize 
this opportunity with you and your committee to constructively 
improve the current policy to the benefit of all Internet 
users. We should harness the renewed attention that CADNA's 
colleagues in the association, corporate and nonprofit worlds, 
as well as Members of the U.S. Congress and the administration 
have given the new gTLD program lately by pursuing necessary 
and achievable fixes such as those we have laid out. Thank you 
for this time and this opportunity to speak before you and your 
distinguished committee this morning.
    [The prepared statement of Mr. Bourne follows:]


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    Mr. Walden. Mr. Bourne, thank you very much for coming 
today.
    And to all our witnesses, thank you very much for your 
enlightening testimony.
    Mr. Pritz, I want to start with you. At the Senate Commerce 
hearing last week on the issue, you announced that ICANN would 
reduce the fee for a new gTLD to $47,000 for applicants in the 
need of financial assistance. So I have a couple of questions 
here. How can ICANN determine what constitutes an applicant in 
need of financial assistance? Will lowering the fee ironically 
make it more affordable for individuals with bad intent to 
engage in cybersquatting? And does ICANN have the ability to 
delay?
    Mr. Pritz. The criteria for awarding financial assistance, 
as all things, was developed by the ICANN community. And so 
seeing this issue, a cross-constituency group was formed to 
consider this issue and develop the criteria by which 
applications for financial aid would be considered. And they 
are, one----
    Mr. Walden. Can you make that available to us then, 
whatever those criteria are that would meet this?
    Mr. Pritz. I certainly can, both the working group report 
and then the staff embodiment of that that was passed by the 
ICANN Board, which are operation in the public interest, a TLD 
operating in the public interest; an applicant that is truly 
needy that can demonstrate it in some way. But to address your 
second question really, an applicant that demonstrates some 
financial and operational wherewithal, either managing big 
projects in the past or some financial backing from other 
sources. And so under each of those criteria there are 
subcriteria to measure each of the applicants.
    Mr. Walden. Mr. Pritz, you have heard the testimony. I 
mean, you are involved in this very, very deeply. It seems like 
there is concern pretty strongly expressed, representing a 
pretty broad-based set of organizations, that this may not be 
quite ready for prime time. Do you have the ability to delay? 
And what would that entail?
    Mr. Pritz. So we are really responsive to the broad 
Internet community, and so here is why we think the solutions 
that we have in place for protections are good, and here is why 
we think the process is done. We think they are good--one of 
the hallmarks of the ICANN model is that when we are faced with 
creating a set of trademark protections, we can get a bunch of 
world-class IP experts in a room from all over the world and 
have an extended meeting over a period of months and have real 
experts in those fields develop protections. You know, how 
would you go about it? You would get experts in trademark 
protection. We got experts in malicious conduct mitigation, 
such as the head of the Anti-Phishing Working Group and other 
first responders. They are the ones we rely on to develop these 
solutions.
    Mr. Walden. So I guess one of the suggestions involved some 
sort of trademark clearinghouse, where if you registered your 
trademark there, then you wouldn't have go pay the registrars 
to protect it defensively everywhere else. Is that something 
that is reasonable? Is that something that could be done? Was 
it recommended in the process?
    Mr. Pritz. Yes. So the trademark clearinghouse exists. And 
the purpose of the clearinghouse is that so that trademark 
holders don't have to register with each new TLD for 
protections. They only have to register once, and all TLDs are 
obligated to utilize that clearinghouse in providing services. 
And the details behind how that operates was developed by this 
set of 18 intellectual property experts that over a period of 
months developed the details behind it.
    Mr. Walden. Let me go to maybe Mr. Bourne or Mr. Jaffe to 
comment on does that process work? Is it as recommended? Mr. 
Jaffe?
    Mr. Jaffe. We don't believe so. And I think this is a 
classic example of how what is called consensus really is not.
    What ICANN did is they created a group, which is called the 
Implementation Recommendation Team, which was a group of 18 
experts in trademark protection on the Internet. In the 
statement presented to ICANN and the public at large, the IRT 
noted that a sizable--I emphasize a sizable--number of our team 
would have preferred status quo, with no new gTLDs until better 
rights protection mechanisms are in place for the existing 
gTLDs.
    In addition, the IRT emphasized that others in the IRT 
group favored only the measured introduction of community-based 
gTLDs. While it was true that a few of the members thought that 
it should go forward, that is far from consensus. The broader 
group said don't do anything, or if you are going to do 
something, do it in a very small rollout, just as Congressman 
Waxman was talking about.
    So you can't just claim that there is consensus; you have 
got to actually look and see how it works within their 
organization. And there wasn't consensus there or in many other 
areas.
    Mr. Walden. With the indulgence of the committee, Mr. 
Bourne, could you comment on this?
    Mr. Bourne. Yes. Thank you.
    Two things that I want to say about that. One is 2 weeks 
ago I was on-site with a pharmaceutical company. They are in 
consumer health, they are in many areas. They have amassed tens 
of thousands of domain names that they registered. And I 
thought to ask them, I said, how many .xxx blocks did you buy? 
They immediately answered, over 100. And they said it was 
probably the best investment that they have made in a long 
time, though, because they never have to pay for them again.
    So this is a really smart and innovative idea of ICM 
registry, whereas other registries and registrars typically 
charge a rent or a tax annually on all those BBB domains and 
everything else. And it is a painful, forever, ongoing process 
to secure and maintain a portfolio of those clearly descriptive 
domain names. So that is something that ICANN, I think, should 
make mandatory if this thing moves forward, to require all 
registries to make it more cost-effective for businesses.
    And the second thing that occurs to me is that today we 
have got 200 million domains, give or take. We have 22 gTLDs, 
this is true, but we also have hundreds of country code domains 
around the world. About half of them are in .com, about 100 
million. And there are probably tens of millions of 
cybersquatted domain names.
    We have a serious problem in the traditional space with 
respect to cybersquatting. I think that if Congress has one in 
a most outstanding role in all of this, it is to pursue 
updating a 1999 law that has not led to any deterrence 
whatsoever, the ACPA. And it is something that the Judiciary 
Committees are looking at now.
    Mr. Walden. All right. I am going to have to cut you off. 
The committee has been very indulgent. I went about a minute 
and a half over.
    Before I recognize my friend, the ranking member, I would 
like to insert in the record letters from the Center for 
Association Leadership and from Name.Space, Inc., who have 
written the committee with comments as well. Without objection, 
they will be entered into the record.
    [The information follows:]


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    Mr. Walden. And I now recognize the gentlelady from 
California, Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman. And thank you to all of 
the witnesses today. I think this is an excellent panel.
    Let me start out with my impression. I don't think this is 
ready for prime time. You have been at this for 6 years. And I 
am not suggesting that people haven't put in, obviously, a good 
amount of time, but it seems to me that during this time, that 
the opportunity with that time was to work out the differences 
and I think the legitimate concerns that we are hearing today. 
So it is ICANN, but then I think it is turning into ``I 
can't.''
    So I think that the suggestion that this be delayed, and 
that consensus is developed by the various stakeholders, is a 
very reasonable one and a very important one, because I fear 
that if we go ahead, if you go ahead with this, this is 
extraordinarily costly, number one. I mean, I always look at 
the nonprofit world first, and it is my understanding that the 
application fee, Mr. Pritz, to obtain a top-level domain name 
is approximately $185,000--that is a lot of money for a small 
business, for nonprofits--with an annual cost following that of 
$25,000. And you stated that it is a cost-based fee.
    How did you come up with this? Can you deconstruct it for 
me just rather quickly, because I have a whole series of 
questions on what the fee covers, what the money goes toward in 
the gTLD process. Just very quickly.
    Mr. Pritz. Yes. Certainly. So the fee covers the cost of 
the evaluation. The evaluation is extensive.
    Ms. Eshoo. How did you come up with that? How did you 
evaluate the evaluation? Who is doing what that they need to be 
paid this kind of money, and where does it go? Is it salaries? 
What is it?
    Mr. Pritz. Yes. There is six different evaluations provided 
by independent evaluators, and we have hired multiple firms to 
do that. They will evaluate each application that they have, 
the technical and operational----
    Ms. Eshoo. Did you shop it or----
    Mr. Pritz. We certainly shopped it. We did a public request 
for proposals, we interviewed applicants, and we negotiated 
fees.
    So the other part of this is we want to be very careful how 
we delegate these TLDs. We want to delegate them only to those 
entities that have the financial and operational wherewithal to 
operate a register----
    Ms. Eshoo. I understand that there is a subsidy of some--a 
pot of, what, $2 million? Is it 2 million?
    Mr. Pritz. The ICANN Board made--that is sort of a 
different issue. The ICANN Board made a $2 million set-aside as 
a seed fund----
    Ms. Eshoo. For the whole wide world to----
    Mr. Pritz. For helping needy applicants.
    Ms. Eshoo. I mean, that is a pittance. I mean, once that is 
used by a handful of organizations, then what happens?
    Mr. Pritz. Then there will be second rounds, and there will 
be----
    Ms. Eshoo. Second rounds of how much and by when?
    Mr. Pritz. The second round? The second round of new TLDs 
will occur after ICANN has met its obligations to the NTIA, the 
U.S. Government, other governments and trademark holders to 
test the efficacy of its protections and to ensure that roots 
own operation remains stable.
    Ms. Eshoo. What kind of mechanisms are in place to ensure 
that there won't be a proliferation of phishing? This has been 
mentioned by more than one person today and other scams in this 
new space.
    Mr. Pritz. We are sure at the end of the day we are 
creating a safer environment for----
    Ms. Eshoo. How are you sure? How?
    Mr. Pritz [continuing]. And trademark owners.
    Two ways. One is that the new TLDs will have trademark 
protections and malicious conduct mitigations, very specific 
tools that existing TLDs don't have.
    Ms. Eshoo. You know what I am struck by? I am struck by the 
following, and that is that major issues are left to after you 
begin rather than developing the consensus before we move 
forward, and I think that that is really what has risen up in 
the testimony today. And that is what I think is really 
troubling.
    Let me read this to you. It is from a constituent. Dear 
Congresswoman Anna Eshoo, you are a member of the Committee on 
Energy and Commerce and will be holding a hearing on ICANN's 
new gTLD program Wednesday, December 14th. For those of us in 
the IT business who are swimming in spam, please ask ICANN why 
the law enforcement amendments to the registrar contract have 
not been adopted, and why that process is not occurring with 
full disclosure. My personal sense is that ICANN is more 
interested in protecting spammers than they are in protecting 
the public. Regards, Lyle.
    So how would you respond to Lyle?
    Mr. Pritz. Of course ICANN is not interested in protecting 
spammers.
    Ms. Eshoo. But what are you doing----
    Mr. Pritz. ICANN is in active face-to-face negotiations 
with registrars to implement those 12 law enforcement 
recommendations into the registrar accreditation agreement. The 
fastest way to implement them is in this face-to-face 
negotiation. We publish the results of each meeting on our Web 
site so that the community can be kept up to date with the 
status of the negotiations and the implementations that are----
    Ms. Eshoo. Who is negotiating, though? Who is negotiating 
with whom?
    Mr. Pritz. This is a bilateral agreement that ICANN has 
with each of the registrars that sell domain names like Go 
Daddy and NSI. So it is a bilateral agreement. So it is a 
bilateral----
    Ms. Eshoo. And how many of them have been struck?
    Mr. Pritz. How many----
    Ms. Eshoo. How many have been struck, bilateral agreements 
that you are talking about? Or is this after the fact?
    Mr. Pritz. Because there are 900 registrars, we are 
negotiating with a representative group of registrars so that 
we can reach agreement that these law enforcement protections 
will be implemented in all of the agreements simultaneously.
    Ms. Eshoo. I have gone way over my time, and I thank the 
chairman for his patience. If I could just ask this, and you 
can answer it. If this subcommittee were to ask you to delay, 
what would your response be?
    Mr. Pritz. I would say that this process has not been 
rushed. It is 7 years in the making. It is well thought out. 
How do we know we are done? Every issue has been discussed. No 
new issues have been raised. The trademark protections that are 
in place were developed by experts. At the end we were debating 
nuances of those. The people at this table participated in that 
debate and helped craft those RPMs as they were made.
    Ms. Eshoo. Thank you, Mr. Chairman.
    Mr. Walden. I thank the gentlelady from California.
    I now recognize the vice chairman of the Subcommittee on 
Communications and Technology, Mr. Terry.
    Mr. Terry. Thank you, Mr. Chairman.
    And, Ms. Alexander, you look bored. Nobody is asking you 
questions, so I am going to step up to the plate. Last 
December, the Department of Commerce sent a letter to ICANN's 
former president Rod Beckstrom expressing concern about ICANN's 
apparent failure to carry out its obligations as specified in 
the Affirmation of Commitments. In particular the Department of 
Commerce was troubled that ICANN was moving forward with the 
gTLD expansion without having proven that the benefits of 
expansion outweighed the costs. It seems to be the fundamental 
question here today in our discussion. So what has changed 
since last year?
    Ms. Alexander. Thank you very much for the question. We 
did, in fact, send a letter last December, and as a result of 
that letter, we then worked with colleagues from around the 
world and the Governmental Advisory Committee and developed a 
scorecard of 81 different pieces of advice the government and 
even ICANN in this program. The Board then sat in very 
extensive face-to-face negotiations and deliberations with the 
group of governments to resolve all of these issues, and from 
our perspective, many, if not all, of those issues have been 
addressed.
    I think what we are seeing here today is the fact that a 
multistakeholder, consensus-based process doesn't mean every 
stakeholder agrees or unanimity in the process. Until we 
actually--the program unrolls and we see effective 
implementation of the safeguards that have been described, 
there will be predictions of those that want this and those 
that don't.
    So we are very--at this point I think we are looking for 
facts, and facts based on what actually happens going forward. 
And again, it is really key that there be effective 
implementation of the safeguards that the GAC was able to get 
through this process.
    Mr. Terry. You said in your answer that they adopted most 
of the recommendations. In the grouping of ``not accepted,'' 
are there any of those that are of concern to you?
    Ms. Alexander. Not to the United States. There was a set of 
recommendations that the Board didn't agree to. The Board 
action is consistent with U.S. law. It was European colleagues 
that were concerned that this sets up a different set of 
trademarks. But what was adopted and agreed to in the Board is 
consistent with U.S. law, so we were happy with the response.
    Mr. Jaffe. Congressman, can I just say one thing in regard 
to that?
    Mr. Terry. Yes, sir.
    Mr. Jaffe. There is this Government Advisory Committee that 
works with ICANN. There were 12 issues that they had put 
forward to--and this was already mentioned by Mr. Pritz--as 
very fundamental to the protection of the registrars and 
registries from being infiltrated by criminal activities. Of 
those 12, only 3 have even been examined by ICANN, and none of 
them, none of them, have been actually acted upon.
    I would think that those would be somewhat important things 
still standing out there when the Chairman of the FTC says that 
this proposal would be a disaster both to business and 
consumers, not the kind of language that he uses usually. That 
would be very serious. I could show you a chart that shows that 
there are serious holes in the protections that ICANN claims to 
put forward, if that would be all right with the committee.
    Mr. Terry. I would ask you to do that.
    Mr. Jaffe. Can I put up the posterboard with the--I would 
call it the so-called Mickey Mouse posterboard.
    Mr. Terry. OK. I won't ask why.
    Mr. Pritz. Congressman, can I make a correction while the 
board gets put up?
    Mr. Terry. Sure. I will give you 15 seconds.
    Mr. Pritz. The Government Advisory Committee and ICANN 
examined 12 issues and 80 subissues regarding trademark 
protections and malicious conduct measures, and got to 
agreement on 90 percent of them. What Mr. Jaffe is talking 
about are the 12 coincidentally law enforcement recommendations 
that we are seeking to----
    Mr. Terry. OK. I appreciate that clarification.
    Mr. Jaffe. And by the way, though, those discussions have 
been going on for a number of years now.
    What you see over here is the key--one of the key aspects 
of protecting the Internet is actually being able to know who 
stands behind an IP address. This is very important for 
companies and consumers if they are being somehow harmed on the 
Internet.
    What you see here is that when you actually go to existing 
registrars and to what is called the thicker WHOIS, which is 
one of the things that ICANN has particularly stressed as a 
protection, you find that you have people who are registered as 
Mickey Mouse--and this is literal--Donald Duck. If you look--I 
don't know if you can see it here----
    Mr. Terry. I wish I could.
    Mr. Jaffe. But the addresses are clearly fraudulent. 
Anybody would see that immediately, and yet they have not acted 
on this. And this is not just--we have some examples, but they 
could be multiplied many times.
    If you can't tell who is causing the harms on the 
Internet--and there is, by the way, no requirement that there 
be a thicker WHOIS. ICANN recommends it, but doesn't demand it. 
But even if they demand it, and it is not actually carried out, 
this creates a massive hole in their protection system. And to 
roll out a new supertanker with a clear hole in the hull is not 
something that we would want to put much of the business and 
brand community, and most of the consumer community, and much 
of the not-for-profit community on board until it has been 
tested out.
    This seems to me these problems should be solved first, and 
then we should go forward with a major rollout. And we are 
talking about 1,000 potential names. Mr. Pritz in the last 
hearing specifically went from 300 to 500, which we said was a 
1,200 to 2,300 percent increase, and saying that they might 
even go to 1,000 names in the first----
    Mr. Terry. My time is gone. And hopefully, Mr. Pritz, 
someone will ask you to reply to that so we can get the point, 
counterpoint.
    Mr. Walden. I now recognize the gentlelady from California, 
Ms. Matsui.
    Ms. Matsui. Thank you, Mr. Chairman.
    And I only have 5 minutes, so if you can be as crisp as 
possible.
    Mr. Jaffe, in your testimony you noted the proliferation of 
domain names that would raise costs for domain name owners for 
things like defensive registrations and monitoring. Can you 
summarize these costs briefly?
    Mr. Jaffe. Yes, I can. And I will try to be brief. But it 
is important to understand that for our members, they often 
have hundreds, even thousands, of brands. So these numbers 
have--you first get the numbers, and then you have to figure 
out how it might multiply through the process. There is a 
$185,000 registration fee. That doesn't mean that you get the 
registration. That is just to get into the game. Then if you 
get the registration, it is $25,000 per year, and you have to 
keep the registration for 10 years. This basically wipes out 
all medium-sized and small groups.
    That is not all the costs. There is diversion of Internet-
using consumers to other sites, lost sales, damaged reputation, 
goodwill, and the cost to monitor the Internet for such abusive 
conduct, the cost of UDRP actions, anywhere from $5,000 to 
$15,000. And the list goes on and on. It is an extraordinarily 
expensive program for the business community.
    Ms. Matsui. Ms. Hansen, would you agree with that?
    Ms. Hansen. Definitely.
    Ms. Matsui. OK. I have a series of other questions, but I 
must say that I want to get to the point here of the hearing, I 
believe.
    I really don't believe this is ready for prime time. I 
agree with my colleague Ms. Eshoo on this. My concern is, yes, 
you have got 6, 7 years they have been working on this, but 
there are many issues that we have been working on for 6 or 7 
years that we just don't know where to go because you can be 
talking--every issue can be out there, every fact can be out 
there. But quite frankly, it is who emphasizes these issues 
that are really very important.
    This is not at all related to what is happening here today, 
but we have a huge water issue in California. We have been 
working on that for decades, and we know about every single 
fact and issue there is, but we still can't get to a situation 
where we have the right transparency, accountability and 
governance. And I think this is what this is all about. You 
seem to believe that this has to be done, the implementation 
has to go forward, and you have already talked about it for 
years or discussed it. So therefore, 6, 7 years should be 
enough. We will just call it, we will go ahead with it.
    I believe at the very beginning ICANN had a certain 
mission, and I think we have gone off track here. So what I am 
saying, if ICANN is--as you are saying, can't delay its 
implementation, would you consider a pilot project? I mean, we 
are looking at this right now of let us say no more than 50 
total domain names to see how it works, and then see its 
benefits before rolling out the full program, because once it 
takes off, I don't know how we will deal with this.
    Mr. Pritz.
    Mr. Pritz. ICANN does have a mission to increase 
competition and choice, It is baked into our DNA, to create 
competition in the Internet. It has done that since the very 
beginning. This committee chided ICANN in 2001 for moving too 
slowly on new TLDs when it made a very limited round, an 
introduction. The title of the hearing included ``Is ICANN 
Thwarting Competition?'' Our mission is to create competition 
but in a safe and stable way. And what we want to do, what I am 
as passionate about, or more passionate about, than people here 
are launching new TLDs to improve the environment for consumers 
and trademark holders.
    Ms. Matsui. Let me say this, Mr. Pritz. We know a lot more 
now about cybersquatting and all the nefarious things that can 
happen on the Internet. We are dealing with it every single 
day. I mean, let us face it, we are dealing with the Internet 
much more frequently than we did before.
    And this is like--we are trying to do something on a 
worldwide basis now. I don't know where the governance of this 
comes in. It is a private non-profit, and it seems to have 
morphed into a lucrative business. And we may not have 
nefarious motives, but we don't know what would happen once it 
takes off, especially if it is international. There are 
countries around the world who don't have the same standards we 
have, and even though you might be dealing with people who are 
very intelligent, the governance, the accountability, the 
transparency is not apparent to me. And I truly believe that 
there is a way to delay this that would be most helpful so we 
can have a discussion about some of these governance things 
that I think are very important.
    Do you have a comment on that at all, Mr. Pritz?
    Mr. Pritz. Certainly ICANN is one of the most transparent, 
accountable organizations there is, as has been measured by 
others. And I just want to talk specifically about 
cybersquatting.
    Cybersquatting will be reduced in new TLDs, one, because 
there is new protections; and two is cybersquatting occurs in 
the great big TLDs like COM and the others. That is where it 
pays off. That is where malicious conduct pays off. By 
distributing names in more TLDs, it will serve to reduce the 
amount of cybersquatting. There is no incentive----
    Ms. Matsui. I see where my time is--I am sure it is gone. 
But I must say this right now, that our constituents are 
telling us they use the Internet, and they are very concerned. 
And, you know, I look at things at the granular level, at the 
ground level, and quite frankly, it has caught their attention, 
it has caught our attention. I think we need to look at ways to 
delay this.
    I thank you for your patience, Mr. Chairman.
    Mr. Walden. Thank you for your participation and good 
questions.
    We have a letter here from Rebecca M.J. Gould, vice 
president of global government relations and public policy from 
Dell, Inc., which we would like to submit in the record. 
Without objection.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Walden. Now I turn to the gentleman from Georgia, Mr. 
Gingrey, for 5 minutes for questions. We welcome your comments.
    Mr. Gingrey. Mr. Chairman, thank you. And I really thank 
the witnesses. I think we have excellent witnesses on both 
sides of this issue.
    And speaking of issue, I would like to go back to the line 
of questioning that my friend, the gentlelady from California, 
had in regard to the cost. And I want to continue along that 
line, Mr. Pritz. This ICANN or ``I can't,'' but ICANN is a 
nonprofit--or not-for-profit organization. And you set a fee of 
$185,000. And, of course, I think you did describe in your 
dialogue with Congresswoman Eshoo, the ranking member, where 
some of those funds went or how you arrived at the number, the 
top number. But it seems to me that in a nonprofit situation 
you could have picked any number.
    If you can afford to allow people who are in need, whatever 
that definition is, to get this domain for $47,000, then it 
seems to me that the markup--it almost sounds like a Joseph A. 
Banks twofer sale--that maybe the price of 185- is a little bit 
overpricing it.
    And what is the salaries of those people like yourself and 
others who are top-level management of ICANN? You know, 
nonprofits are really bad about that; not necessarily ICANN, 
but a lot of nonprofits. So naturally we would be a little bit 
concerned about that. And maybe you could elaborate a little 
bit more on that.
    Mr. Pritz. Sure. I wish ICANN was bad about overpaying its 
staff. The 185,000--so as an operational manager, I will tell 
you that it is spent. And ICANN has published memos outlining 
where the costs will go. Most of it goes to the evaluation 
itself. There are six different evaluations that----
    Mr. Gingrey. Let me interrupt you right there because that 
raises a red flag for me. Why do you have to have six different 
evaluations? Why not two or three?
    Mr. Pritz. Because we have been talking about protecting 
consumers and trademark owners, and we want to----
    Mr. Gingrey. Why not 12?
    Mr. Pritz. So again, what is great about ICANN is it gets 
to rely on experts in Internet security and trademark 
protection. And we ask them what evaluations should be done on 
these applicants in order to ensure improved safety and 
security in the Internet and these--these evaluations to ensure 
they have the economic and operational wherewithal to run a 
registry? We do criminal background checks. We do background 
checks to ensure they are not involved in domain name 
misappropriations in the past. We want to make sure that 
domain--the top-level domain won't result in consumer 
confusion. And so these are most of the checks we are doing to 
ensure that only those that will operate the registry in a 
responsible way will be awarded these things, because we want 
to improve the environment for consumers.
    Mr. Gingrey. I think you have done a pretty good job in 
responding to me on justification of the cost. Some of my 
colleagues on the other side of the dais have expressed their 
feeling that they don't think this is ready for prime time. I 
will have to admit to you I am not sure whether or not it is 
ready for prime time, and I guess that remains to be seen.
    In the remaining minute and a half, let me move to Mr. 
Jaffe and ask him this question. Mr. Jaffe, within the 
nonprofit world, how might this expansion increase incidents of 
online predator crimes where, for example, the Girl Scouts or 
the Boy Scouts have to keep their name off either this new .xxx 
or something worse that we haven't seen yet? How big a problem?
    Mr. Jaffe. It is an enormous problem. The Red Cross was--
and the Olympics got an exemption out of this program, as did, 
by the way, ICANN. When the Red Cross asked for this exemption, 
they said it was absolutely essential that they have it, 
because every time there is a natural disaster, that they have 
people stealing, pretending to be one of their affiliates; and 
that if they did not have this exemption, that that would be a 
very serious problem.
    That is the same problem that the Council of Better 
Business Bureaus has just discussed with you today. There was a 
witness in the Senate hearings last week from the YMCA 
representing a consortium of 38 other not-for-profits. All of 
them said this would be an extraordinarily serious danger for 
them, and that they did not feel protected, and that to have to 
be able to spend the kind of money that we are talking about to 
reserve their names was going to severely undermine their own 
programs.
    Mr. Gingrey. Well, I have got 11 seconds left. Let me go 
back to Ms. Alexander and then ask again about this .xxx. What 
was the purpose of that, that domain name, creating it?
    Ms. Alexander. Thank you very much for the question. The 
Department was not the applicant for the domain. It is probably 
a better question to put to Mr. Pritz.
    Mr. Gingrey. OK. Mr. Pritz.
    Mr. Pritz. The application was put in as part of the 2003 
round of new TLDs where seven were implemented that were 
restricted to certain types of communities. Dot-xxx submitted 
an application and filled out the technical and operational and 
community information. The ICANN Board decided not to award XXX 
a TLD. ICANN has independent review processes, and ICANN went 
through that independent review process, and in arbitration it 
was determined that the ICANN Board didn't follow its processes 
properly, and the decision was made to delegate XXX. And I 
would say based on some of the other comments here, there is 
significant safeguards in XXX for users and trademark holders 
that some of the panelists have deemed to be effective.
    Mr. Gingrey. OK. Mr. Chairman, thank you. I yield back.
    Mr. Walden. The gentleman yields back his time.
    The chair recognizes the gentlelady from the Virgin 
Islands, Dr. Christensen, for 5 minutes.
    Mrs. Christensen. Thank you, Mr. Chairman.
    Mr. Pritz, three out of four of your fellow panelists are 
not supportive of the January rollout. Could you tell us the 
names of some groups that are supportive of the January--just a 
few.
    Mr. Pritz. Right. So this consensus is built out of ICANN's 
communities. So for the group that makes the policy to initiate 
this program, there is counsel with representatives from 
intellectual property, a business constituency, Internet 
service providers, noncommercial groups, registries and 
registrars. They all represent their constituency groups and 
come to the policy discussions with their viewpoints, and they 
work over a period of time to develop a consensus. Several 
multinational--not several, many multinational corporations 
participated in that debate. Also there is governments that Ms. 
Alexander described that play a very key role in developing 
ICANN's policy.
    Mrs. Christensen. OK. It still seems to me that details 
about the top-level domain expansion are still being worked 
out, including protections to trademark holders, as well as 
enforcement of various new mechanisms. You are still 
negotiating, for example, on the law enforcement 
recommendations. So I, too, have some concerns about moving 
forward with that January rollout while significant portions of 
the plans are still being worked out.
    Also, there are already examples of ICANN's inability to 
implement internal policy. For example, ICANN is currently in 
arbitration with Mr. Embrescia's organization, Employ Media. 
The arbitration in the job space has been stalled because of 
ICANN's inability to meet arbitration deadlines. So how will 
ICANN ensure that these mistakes and delays won't happen in the 
gTLD expansion?
    Mr. Pritz. So there is a very detailed project plan to 
which ICANN is managing to ensure that the program is 
implemented in a timely, transparent and predictable manner. 
Evaluation panelists have already been retained. They are being 
trained. The trademark protection mechanisms, the details of 
those are very well settled as determined by expert groups that 
are determining them. And the implementation of those measures, 
such as the trademark clearinghouse and a rapid take-down 
process, are well underway, according to a timetable. Remember, 
we are not going to see any new TLDs until 2013 at the 
earliest.
    Mrs. Christensen. Do you have a plan in place to ensure 
that ICANN is adequately staffed to review applications and 
implement all parts of the gTLD program? And do you have 
adequate staff to execute the appeals process and avoid 
internal process breakdown?
    Mr. Pritz. Yes. We have--it is published on ICANN's Web 
site, but we have agreements with very well-known firms, both 
in the United States and internationally, to perform the 
evaluations and also perform any necessary arbitrations. We 
have developed processes for independent arbitration. So if 
there is a dispute, it goes outside ICANN, it gets settled and 
comes back. So the process itself is well thought out and 
managed.
    Mrs. Christensen. And staffed?
    Mr. Pritz. Oh, yes. And certainly staff. There is staffing 
plans for the next year not only in evaluating these 
applications, but also in increases to our compliance program, 
our financial staff, our staff that administers the contracts 
are all well planned.
    Mrs. Christensen. This question is both to you and to Ms. 
Alexander. To you, Mr. Pritz, what mechanisms are in place to 
ensure that ICANN's own procedures and rules are followed? And 
who will enforce those rules when the process breaks down?
    And, Ms. Alexander, what role, if any, will NTIA or the 
Department of Commerce play in ensuring ICANN adequately 
implements guidelines in the procedures it has set?
    Ms. Alexander. Thank you very much.
    So NTIA will continue to play a very active role as it does 
within the Governmental Advisory Committee in working with 
colleagues around the world to make sure that these key 
safeguards are actually put into place. The other safeguard 
that we have is the Affirmation of Commitments that was 
referred to earlier, I think, by Ms. Eshoo. It actually calls 
for a multistakeholder review of this program a year after the 
first TLD is in the root, similar to what we have done with the 
Accountability and Transparency Review Team. We will be very 
actively participating in that process.
    Mrs. Christensen. What recourse will NTIA or other 
stakeholders have if the gTLD program is not rolled out in a 
satisfactory fashion?
    Ms. Alexander. So we believe our current safeguards in the 
process and through the GAC--we can actually ask for additional 
changes if they are needed. This will require us to work very 
actively and closely with stakeholders, including those at the 
table. We take very seriously the concerns people are raising 
and want to work actively with them to make sure those are 
taken into account and addressed going forward.
    Mrs. Christensen. Thank you, Mr. Chairman.
    Mr. Walden. The gentlelady's time has expired.
    The chair now recognizes the gentleman from Florida, Mr. 
Stearns, chairman of the Oversight and Investigations 
subcommittee.
    Mr. Stearns. Thank you, Mr. Chairman. And thank you for 
having this hearing.
    We have had hearings like this before, and I think one of 
the concerns a lot of us have, which I could hear when I was 
watching in my office, is the amount of money as a not-for-
profit that you folks are going to make. Do you think you will 
sell 500, Mr. Pritz, 1,000 new addresses? How many do you think 
you will sell?
    Mr. Pritz. Sir, we are not selling them, but we are 
providing them and have the zero-cost fee. So the latest 
testaments are that we hear from the outside----
    Mr. Stearns. Of the 185,000 cost-recovery fee, how many of 
these do you think you will get?
    Mr. Pritz. We think--so this is hearsay. The latest 
estimates are over 500.
    Mr. Stearns. So you could have 1,000?
    Mr. Pritz. Yes.
    Mr. Stearns. So you think 2,000 is a fair estimate?
    Mr. Pritz. I don't think so. I think it is much less than 
that.
    Mr. Stearns. If you do 500, it is roughly $92-million-500.
    Mr. Pritz. Yes, I know exactly----
    Mr. Stearns. So if it is 1,000, then you will have $185 
million. If you do 2,000, you will have $360 million. Is all of 
this money going into a surplus, or where is it going?
    Mr. Pritz. Sir, if there is--ICANN is a not-for-profit, and 
if there is a surplus at the end----
    Mr. Stearns. There should be a surplus at----
    Mr. Pritz [continuing]. It will be identified and 
segregated and put into a fund to help applicants in future 
rounds.
    Mr. Stearns. Do you have a surplus now?
    Mr. Pritz. We have an operating reserve fund of about 9 
months' worth of operations.
    Mr. Stearns. So you have no large surplus at this point?
    Mr. Pritz. No. We have a reserve fund of 9 to 12 months of 
operating----
    Mr. Stearns. And how much is that?
    Mr. Pritz. It is $50 million.
    Mr. Stearns. Fifty million?
    Mr. Pritz. It is about that. I would have to consult with 
our CEO what it is exactly.
    Mr. Stearns. So it appears you have $50 million in surplus 
right now, and you are adding anywhere from $100 million to 
$200 million. It seems you will be overly supplied in your 
surplus. Wouldn't you think that? In other words, if $50 
million takes you to 9 months, then if you add another $200 
million, that is going to take you to 3 \1/2\-plus years--you 
will be over 4 years surplus. Do you think you need that much?
    Mr. Pritz. No. And I don't think that--there is not 
intended to be an increase in the reserve fund based on the new 
gTLD, the program where the costs and fees received are 
segregated and handled separately.
    Mr. Stearns. Well, I think what you judge here--we just 
think you are charging too much money. Is it possible when you 
do these cost-recovery fees that you could stipulate in the 
contract--and you are trying to prevent Internet squatters. 
Couldn't you say that if the person doesn't do something with 
it in a certain amount of time, they will forfeit, and that way 
you wouldn't have to charge so much money? If the reason you 
are charging so much money is to discourage people that are 
just going to sit on the domain, why couldn't you stipulate in 
a contract, like they do in a franchise for Burger King and 
McDonald's, you have got to do X, Y, Z to your property; if you 
don't do it, you lose your franchise? Couldn't you do something 
like that and then drop the fee?
    Mr. Pritz. So----
    Mr. Stearns. Just yes or no.
    Mr. Pritz. Yes. We are intending to encourage applicants to 
bring new businesses and innovation. This is all about bringing 
innovation----
    Mr. Stearns. I mean, to bring the cost down, couldn't you 
stipulate in language that they have to do something in a 
certain amount of time, and that way you prevent squatters?
    Mr. Pritz. We do that. We have new protections that are 
built into the program, that are built into the new agreement 
that new registries have to comply with to combat squatters. So 
it is really a separate issue than the fee, which is really 
targeted at evaluating the applications. And think about----
    Mr. Stearns. Mr. Pritz, how much do you make a year? What 
is your salary?
    Mr. Pritz. Well, I was making $248,000 a year, and I got 
two 15 percent raises in the last several years.
    Mr. Stearns. How much total salary today?
    Mr. Pritz. Including bonuses, about $395,000.
    Mr. Stearns. You are making $400,000 a year. And what is 
the CEO making?
    Mr. Pritz. I am not sure.
    Mr. Stearns. Well, I think it is public knowledge. So you 
must know. What is it?
    Mr. Pritz. I think it is over $800,000.
    Mr. Stearns. Because when we testified--I was chairing a 
committee, and we had this testimony--anyway, it was up about 
that 2 or 3 years ago. Does that include all the fringe 
benefits, this $850,000 he makes?
    Mr. Pritz. I am not sure. I am sure that it is competitive 
with other similarly situated CEOs, because ICANN strives to 
have----
    Mr. Stearns. Well, I think in light of the fact that the 
salaries are pretty generous, it seems, and you are going to 
potentially have $200 million added to your surplus with your 
$50 million, you will have reserves for 3-1/2, 4 years of 
operating, I think you folks should take to advice here and not 
charge so much here.
    Mr. Pritz. And I wish we could. And we will look at the 
actual costs after the first round. But we have made a very 
good-faith attempt to identify the costs with great 
specificity, and our prediction is that is what it is going to 
cost. And we think we are right in the middle. It could be--the 
actual costs could be greater, or it could be less. If it is 
less, that money is going to go back to the Internet community 
in some form. It is not going to go into salaries, and it is 
not going to go into the ICANN reserve fund.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. Walden. I thank the gentleman from Florida, and I 
recognize the gentleman from Massachusetts, Mr. Markey, for 5.
    Mr. Markey. Thank you, Mr. Chairman.
    I believe that ICANN's proposed changes need to be closely 
scrutinized. And I thank the gentleman from Oregon for holding 
this important hearing this morning.
    My concerns with ICANN's proposal to expand the amount of 
generic top-level domains or the words to the right of the dot 
in a Web site address are twofold. One, I am concerned that 
ICANN has not sufficiently proven that any problem exists. Is 
there a shortage of Web site addresses? Why does this change 
have to occur right now?
    Two, I am also concerned that ICANN's proposal could burden 
both consumers and businesses. For example, the proliferation 
of gTLDs could hurt consumers by increasing the risk of fraud. 
A consumer may have problems distinguishing a legitimate Web 
site from a fake one. As a result, a consumer may disclose her 
personal or her financial information to an imposter posing as 
a legitimate business.
    Before making a sweeping change to the Internet, we must 
ask who really stands to benefit from the change. Any proposal 
that would fundamentally alter the Internet must first ensure 
that consumers and businesses alike are protected.
    Mr. Jaffe, if this proposal were implemented, and analysis 
then demonstrates that the costs of the new gTLD program exceed 
the benefits, isn't it true that the damage from the new gTLDs 
would already have taken place, and that there is no provision 
to undo these decisions once the damage has been done?
    Mr. Jaffe. That is absolutely correct. And this is why we 
think it is particularly premature to do this kind of a 
rollout. Just last week there was a letter written to the 
Department of Commerce by Robert Hall, who is the Robert and 
Carole McNeil joint professor of economics at Stanford 
University, the senior fellow at Stanford's Hoover Institution. 
He served as president of the American Economic Association for 
the year 2010. Speaking about the cost-benefit issues, he said, 
our analysis today shows that an unlimited expansion of gTLDs 
would not add anything material to the product variety facing 
Internet users. It would merely create a costly nuisance for 
those users. ICANN is sponsoring a perversion of the economic 
analysis that a commission--by even suggesting that this 
nuisance has net benefits for the Internet community. We 
therefore urge you to take action to block the unlimited 
expansion of gTLDs unless it is satisfactorily and 
transparently demonstrated that any such expansion or a limited 
expansion on a case-by-case basis would be in the public----
    Mr. Markey. What would the impact be on ICANN's credibility 
with the public and with governments?
    Mr. Jaffe. Well, we think there is going to be an 
enormous--despite what has been said at this hearing, an 
enormous further proliferation of cybersquatting, phishing 
because they have not been able to control the 22 top-level 
domains. And so why do you think that they can control 300, 
500, 1,000 more domains?
    And understand something that is very important to 
understand in this process. The top-level domains, which will 
be going up enormously, proliferate everything to the left side 
of the dot, the secondary domains. Right now with 22 top-level 
domains, there is more than 100 million secondary domains. Just 
think what will happen here. In the XXX area, almost every 
college and university in this country felt it was necessary, 
to protect their good name, to buy a name on the XXX area.
    Mr. Markey. Let me ask Mr. Bourne a quick question if I 
may.
    In your testimony, you emphasize that ICANN should change 
its proposal to make it less harmful to consumers. As you know, 
the Federal Trade Commission Chairman Jon Leibowitz has called 
ICANN's proposal, quote, ``a disaster for consumers.'' In your 
view, what risks does the current ICANN proposal pose to 
consumers?
    Mr. Bourne. Thank you for your question, Congressman. My 
estimate today is that maybe there will be 800 applications, 
right, for new gTLDs. Probably two-thirds to three-quarters are 
coming from brands. So that number is artificially high because 
brand owners are unsure when this could be available to them 
again. So ICANN in a way has created a condition of scarcity 
there. So by illuminating when the next round could be, maybe 
fewer applicants will apply. Right? So lowering the stack, 
reducing it.
    Furthermore, this point about cybersquatting, consumer 
harm, it is bad out there today, right? The existing space is a 
mess. Will the new space be worse? Maybe. It will be bigger, 
that is for sure. There are things that we can do, that ICANN 
can do, that all the different stakeholders in this can do to 
affect cybercrime, and the most important thing to do is to 
establish a deterrent. These people are undeterred. The 1999 
ACPA has basically done nothing. Cybersquatting has increased 
dramatically since it was introduced. So that is something that 
we can do to fix this space. And God forbid this space gets 
much bigger, it will affect that space positively as well.
    Mr. Markey. Mr. Chairman, thank you very much. And I think 
this is a very important hearing. Thank you.
    Mr. Walden. We do as well. Thank you for your participation 
and your questions.
    We will now go to Mr. Shimkus from Illinois for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. I appreciate the 
panel being here today.
    I would like to first turn to Mr. Bourne. And you suggested 
that a second round of general top-level domain applications 
would alleviate some of the concerns with the problems. And I 
would like to put it in this perspective, if I understand the 
testimony. We deal a lot with spectrum here, and if you know 
spectrum, it is really a finite entity. We know what has been 
sold. We know what has been auctioned. We know what is 
available. It does provide some certainty to people who are 
then going to eventually get into the market and bid for a 
slice of it because they know what is out there.
    The concern with what ICANN is doing is we may not know 
what the top and the level is of what is out there, and I think 
your testimony tried to address that. Am I right?
    Mr. Bourne. It did. It did. I talk to hundreds of 
businesses and have talked to hundreds of global enterprises 
since this policy was initiated back in June. We even hosted an 
event in New York City called ``What is At Stake: The Reality 
of the New GTLD Program for Brands.'' Eighty-five participants 
were there discussing the way they felt about this policy. And 
there was a great deal of anxiety. In fact, I would say that 
80, 90 percent of the companies I know who are applying for a 
gTLD are doing so mainly to gain rights to an option of 
hypothetical future value mainly because they don't know if 
they will have another shot at it.
    So coming out of this event on November 1st where the 
founding chairman of ICANN, Ms. Esther Dyson, was our keynote 
speaker, we sent a letter to ICANN asking them just to shine 
some light. And the answer could be in 3 years, it could be in 
4 years, it could be in 5 years. Whatever it is right now, we 
don't know if there will ever be another program.
    So I mentioned this to Congressman Markey. I will say it 
again. Intentionally or unintentionally, ICANN has created a 
condition of scarcity around these gTLDs, and that should be 
alleviated before this moves forward so that companies can make 
a realistic decision if this thing proceeds: Can I afford to 
wait this out? Do I want to sideline, or do I want to be a 
pioneer?
    Mr. Shimkus. Ms. Hansen, I saw you kind of agree. Do you 
want to weigh in on this?
    Ms. Hansen. Yes, definitely. I think your points are very 
good. And we also considered whether or not we should get a 
.bbb. I think everyone has been undergoing that analysis.
    Mr. Shimkus. And that would be just to protect your brand 
name, not knowing what future offers, if ever, will be on the 
table?
    Ms. Hansen. Exactly. We don't want somebody else to get 
that, because our brand is so well-known, and it has been used 
and abused relentlessly already on the Internet. We would 
rather have it and not let it get in the hands of someone else.
    Mr. Shimkus. Mr. Pritz, how do you respond to these two 
concerns?
    Mr. Pritz. Well, that we take the concerns very seriously. 
There is over 50 trademarks that are registered for BBB. And so 
what is required to be put in place is a set of rules that 
protect each of those trademark holders to allow them to object 
if anybody were to attempt to register BBB that would infringe 
their interests.
    Mr. Shimkus. Let us segue right into that. This whole 
debate on string confusion, I mean, I am kind of now moving, 
but I do have you. How do you keep proprietary trademark data 
when someone could, in the purchasing of a gTLD, marry together 
a name that could break copyright identification? Why does 
ICANN permit this as an objection to the TLD, yet still allow a 
registry to reserve domain names for auction that are 
confusingly similar or identical to trademarks; in other words, 
take a Google and then place in an additional G? Why do you let 
them reserve that?
    Mr. Pritz. Each registry develops its own rules. So if 
somebody applies for a trademark name, that trademark holder 
can object to that application for a new gTLD. At the second 
level, there is a set of protections that have been put in 
place by trademark experts to allow trademark owners to have 
first dibs at buying a name; to put a registrant on notice that 
they are registering a trademark name; or, if they are abusing 
a trademark after the fact, take it down in a rapid, 
inexpensive way. So the protections for trademark holders are 
based on existing protections. We don't make stuff up. And 
then----
    Mr. Shimkus. My time has expired. I think we are raising 
some great questions of concern. And since my time has expired, 
I am just going to throw this out. No one needs to answer. Law 
enforcement has concerns on the WHOIS type of information. 
Obviously we don't want criminal elements that now have 
activity--I am not sure what legislative action we can do in 
the oversight hearing. This hearing is very, very important. 
Mr. Chairman, I would request that we continue our discussions 
on this and what we may or may not be able to do. And I yield 
back my time.
    Mr. Walden. I appreciate that. And we will continue the 
discussions.
    Let us go now to the gentleman from Texas, Mr. Barton, for 
5 minutes.
    Mr. Barton. No thanks.
    Mr. Walden. He does not have questions.
    Mr. Scalise from Louisiana, you are on for 5.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
holding this hearing.
    There are a lot of questions as we look at this, and I 
guess I will start with Mr. Pritz. You all are rolling this out 
starting in January. So you have a 3-month period where you 
would take applications for various top-level domain names. And 
then at that point do you have a process, a timeline, for when 
you will start authorizing it at some point? You have got 50 
applicants or whatever the number is going to be. When do you 
actually start issuing those TLDs?
    Mr. Pritz. The evaluation process and then the ensuing 
negotiations are expected to take place over about 9 months. So 
the first TLDs, the first new registries would be operational 
in early 2013.
    Mr. Scalise. OK. Was there any consideration of doing some 
kind of pilot program first? Since this is a kind of new area, 
a lot of questions, whether it is companies that are concerned 
about copyright issues or just the complications that already 
exist with existing TLDs just get carried over and then maybe 
exponentially expanded. Was there the thought of doing that 
before, just kind of opening it wide up?
    Mr. Pritz. Yes. We conducted two pilot programs in the 
past, one in 2000 and one in 2004.
    Mr. Scalise. With what?
    Mr. Pritz. In the 2000 round, new TLDs such as .business 
and .info and .museum were introduced. In 2004, we had--that 
round, we had the introduction of .jobs, Mr. Embrescia's TLD, 
.UPU, for the university----
    Mr. Scalise. Were there any things learned from previous 
problems? Because, I mean, some of the same problems we heard 
today we heard back in 2000. Were any of those problems worked 
out if this was a so-called pilot program?
    Mr. Pritz. Right. Plenty of problems were identified and 
addressed in this program. One had to do with how to limit the 
round. And so this isn't ICANN, me talking, this is--the 
greater Internet community discussed this issue in great depth 
and decided not to limit the round by type of TLD or numbers of 
TLD where ICANN would determine winners and losers in the 
program and put itself in the same position where this 
committee was fairly critical of it in 2001, but rather to 
limit the program first by an open and closed application 
window, and then by setting a high bar to determine only those 
who implement protections and have the wherewithal to operate a 
registry in a responsible way and can be monitored.
    Mr. Scalise. I am going to jump in. Mr. Jaffe, I saw you 
kind of shaking your head. I don't know if you wanted to 
comment on----
    Mr. Jaffe. I would, because what certainly has not 
happened--and we have heard in this hearing several times that 
they have put in a whole series of new types of protections 
because they felt that the existing protections were 
inadequate. They have certainly not tested that out. And I 
would like to show you how--if you would be willing to allow me 
to put a couple more posters up just to see----
    Mr. Scalise. If we can do it in about 40 seconds or so.
    Mr. Jaffe. Put up the poster for the subcommittee members 
who have sites. I will try and do this very quickly. And we 
could obviously have--and this was certainly true for Senators. 
It is also true for the President of the United States. If you 
could then put up the posterboard for the chick.xxx. This is 
just one site. You hear about some of these numbers I have been 
talking about. Here they are talking about selling this for $5 
million. The numbers that we were talking about are actually 
low.
    If you could put up the security warnings for the 
FederalTradeCommission.org.
    What happens here is that if you come to thinking that you 
are going to the Federal Trade Commission, you will be spammed, 
and that this--it looks like it is a safe site, but it, in 
fact, would allow you to have your keystrokes taken.
    So there is a tremendous danger already. Why would we think 
that with these dangers that are already out there, why would 
we do 1,000 more?
    Mr. Scalise. I have time limitations because these are some 
of the problems that I was referring to that have been around 
well before 2000. I know when we dealt with this when I was in 
the State legislature, the issue of cybersquatting on, for 
example, high school athletes or even a college athlete, by the 
time you are maybe a senior in high school, if you are a blue-
chip recruit, somebody bought your name, they took it, it is 
gone. So if you are fortunate enough to make it into the NFL or 
the NBA or Major League Baseball, somebody else owned your 
name. I don't even think that problem has been resolved.
    So the final two questions as my time is expiring are, 
number one, Mr. Pritz, how are you all already dealing with 
that serious problem? And then what happens, then, if you 
somehow create an authorized .athlete, for example, and then 
somebody goes out and now all of those athletes are--somebody 
is going to buy their name and squat on their name? Do you have 
any mechanism--if a name is--a new top-level domain name is 
issued, and then you find problems with it, is there a method 
you have in place to pull that back in your plan that you have 
already drawn up? So if you could answer those two questions.
    Mr. Pritz. One reason for that problem today is scarcity, 
that all of the .com names are gone, every English word is 
registered there. How do we address the needs of--there is 2 
billion Internet users. How do we address the needs of the next 
billion----
    Mr. Scalise. No, no. If there is a John Smith, and if 
another John Smith gets it, first come, first serve. But if Bob 
Dole goes and gets John Smith's name because he wants to take 
advantage of that person, that still exists today. I haven't 
seen you all come up with any mechanism to resolve those 
blatant disputes, and there are too many examples of them.
    Mr. Pritz. That is right. And the new TLDs have to comply 
with a set of protections that will exist for them that don't 
exist now. So if your rights are being infringed, you can 
register a complaint, you can register an objection to have 
that name taken down in a rapid style. But think about the 
architecture of the domain name system and the ability to make 
those registrations more diverse so it is not so important to 
have a registration in that TLD.
    Mr. Scalise. Is there a mechanism to pull one back if you 
do find there are real problems as you issue a new TLD?
    Mr. Pritz. Yep. There is mechanisms against TLD owners 
called the post-delegation dispute resolution process where 
claims can be made to take TLDs down. And there is dispute 
resolution procedures on second-level names, too, where if a 
name is registered that is infringing your rights, you can take 
it down in a rapid, cheap style.
    Mr. Scalise. Thank you, Mr. Chairman. I yield back.
    Mr. Walden. I thank the gentleman for his questions and the 
panel for their answers. We have a letter from the National 
Restaurant Association that we will enter into the record. 
Without objection.
    [The information follows:]


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    Mr. Walden. The ranking member and I wondered, Mr. Jaffe, 
if only esteemed Members, if there--this just being we covered 
ourselves better than our colleagues.
    Mr. Jaffe. It is open to all comers.
    Mr. Walden. Hopefully we are protected.
    Ms. Eshoo. Esteemed and----
    Mr. Walden. Then I am going to recognize the gentlelady 
from California for another letter and comment.
    Ms. Eshoo. Yes, thank you, Mr. Chairman. I would like to 
place into the record a letter that was received yesterday to 
ICANN, the United Nations, the International Monetary Fund and 
26 other international organizations, which raise concerns 
about cybersquatting under ICANN's planned expansion of top-
level domain names.
    Mr. Walden. Without objection, it will be entered into the 
record.
    [The information follows:]


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    Mr. Walden. I want to thank all of our participants today 
for your testimony, your work, and your comments and your 
counsel. We will continue to pursue this issue in the weeks and 
months ahead and review the cybersquatting legislation, I 
think, as well and other issues attendant to this. So thank you 
for your participation.
    This subcommittee stands adjourned.
    [Whereupon, at 10:54 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]


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