    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

      SHOULD THE DEPARTMENT OF COMMERCE RELINQUISH DIRECT OVERSIGHT OVER
                                     ICANN?

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                         COURTS, INTELLECTUAL PROPERTY,
                                AND THE INTERNET

                                     OF THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 APRIL 10, 2014

                                   __________

                               Serial No. 113-106

                                   __________

             Printed for the use of the Committee on the Judiciary

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          Available via the World Wide Web: http://judiciary.house.gov
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                           COMMITTEE ON THE JUDICIARY

                       BOB GOODLATTE, Virginia, Chairman
    F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
        Wisconsin                        JERROLD NADLER, New York
    HOWARD COBLE, North Carolina         ROBERT C. ``BOBBY'' SCOTT,
    LAMAR SMITH, Texas                       Virginia
    STEVE CHABOT, Ohio                   ZOE LOFGREN, California
    SPENCER BACHUS, Alabama              SHEILA JACKSON LEE, Texas
    DARRELL E. ISSA, California          STEVE COHEN, Tennessee
    J. RANDY FORBES, Virginia            HENRY C. ``HANK'' JOHNSON, Jr.,
    STEVE KING, Iowa                       Georgia
    TRENT FRANKS, Arizona                PEDRO R. PIERLUISI, Puerto Rico
    LOUIE GOHMERT, Texas                 JUDY CHU, California
    JIM JORDAN, Ohio                     TED DEUTCH, Florida
    TED POE, Texas                       LUIS V. GUTIERREZ, Illinois
    JASON CHAFFETZ, Utah                 KAREN BASS, California
    TOM MARINO, Pennsylvania             CEDRIC RICHMOND, Louisiana
    TREY GOWDY, South Carolina           SUZAN DelBENE, Washington
    RAUL LABRADOR, Idaho                 JOE GARCIA, Florida
    BLAKE FARENTHOLD, Texas              HAKEEM JEFFRIES, New York
    GEORGE HOLDING, North Carolina       DAVID N. CICILLINE, Rhode Island
    DOUG COLLINS, Georgia
    RON DeSANTIS, Florida
    JASON T. SMITH, Missouri
    [Vacant]

               Shelley Husband, Chief of Staff & General Counsel
            Perry Apelbaum, Minority Staff Director & Chief Counsel
                                     ------

        Subcommittee on Courts, Intellectual Property, and the Internet

                     HOWARD COBLE, North Carolina, Chairman

                    TOM MARINO, Pennsylvania, Vice-Chairman

    F. JAMES SENSENBRENNER, Jr.,         JERROLD NADLER, New York
    Wisconsin                            JOHN CONYERS, Jr., Michigan
    LAMAR SMITH, Texas                   JUDY CHU, California
    STEVE CHABOT, Ohio                   TED DEUTCH, Florida
    DARRELL E. ISSA, California          KAREN BASS, California
    TED POE, Texas                       CEDRIC RICHMOND, Louisiana
    JASON CHAFFETZ, Utah                 SUZAN DelBENE, Washington
    BLAKE FARENTHOLD, Texas              HAKEEM JEFFRIES, New York
    GEORGE HOLDING, North Carolina       DAVID N. CICILLINE, Rhode Island
    DOUG COLLINS, Georgia                ZOE LOFGREN, California
    RON DeSANTIS, Florida                SHEILA JACKSON LEE, Texas
    JASON T. SMITH, Missouri             STEVE COHEN, Tennessee
    [Vacant]

                           Joe Keeley, Chief Counsel

                        Heather Sawyer, Minority Counsel

                                C O N T E N T S

                                  ----------

                                 APRIL 10, 2014

                                                                       Page

                               OPENING STATEMENTS

    The Honorable Tom Marino, a Representative in Congress from the
      State of Pennsylvania, Vice-Chairman, Subcommittee on Courts,
      Intellectual Property, and the Internet........................     1
    The Honorable Jerrold Nadler, a Representative in Congress from
      the State of New York, and Ranking Member, Subcommittee on
      Courts, Intellectual Property, and the Internet................     3
    The Honorable Bob Goodlatte, a Representative in Congress from
      the State of Virginia, and Chairman, Committee on the Judiciary     5
    The Honorable John Conyers, Jr., a Representative in Congress
      from the State of Michigan, and Ranking Member, Committee on
      the Judiciary..................................................     6

                                   WITNESSES

    The Honorable Lawrence E. Strickling, Assistant Secretary for
      Communications and Information, National Telecommunications and
      Information Administration, United States Department of
      Commerce
      Oral Testimony.................................................    13
      Prepared Statement.............................................    17
    Paul Rosenzweig, Visiting Fellow, The Heritage Foundation,
      Principal, Red Branch Consulting, PLLC
      Oral Testimony.................................................    45
      Prepared Statement.............................................    48
    Fadi Chehade, President and Chief Executive Officer, Internet
      Corporation for Assigned Names and Numbers (ICANN)
      Oral Testimony.................................................    60
      Prepared Statement.............................................    61
    Steven J. Metalitz, Partner, Mitchell Silberberg & Knupp LLP, on
      behalf of the Coalition for Online Accountability
      Oral Testimony.................................................    65
      Prepared Statement.............................................    67
    Daniel Castro, Senior Analyst, Information Technology and
      Innovation Foundation (ITIF)
      Oral Testimony.................................................    84
      Prepared Statement.............................................    85

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Material submitted by the Honorable John Conyers, Jr., a
      Representative in Congress from the State of Michigan, and
      Ranking Member, Committee on the Judiciary.....................     9
    Material submitted by the Honorable Jerrold Nadler, a
      Representative in Congress from the State of New York, and
      Ranking Member, Subcommittee on Courts, Intellectual Property,
      and the Internet...............................................    29
    Material submitted by the Honorable Tom Marino, a Representative
      in Congress from the State of Pennsylvania, Vice-Chairman,
      Subcommittee on Courts, Intellectual Property, and the Internet    97
    Material submitted by the Honorable Jerrold Nadler, a
      Representative in Congress from the State of New York, and
      Ranking Member, Subcommittee on Courts, Intellectual Property,
      and the Internet...............................................   101

                                    APPENDIX
                   Material Submitted for the Hearing Record

    Letter from human rights and free expression organizations.......   118
    WSJ Governments Grab for the Web.................................   122
    Prepared Statement of Josh Bourne, President, Coalition Against
      Domain Name Abuse (CADNA)......................................   124
    Letter from Michael Beckerman, President and CEO, The Internet
      Association (IA)...............................................   126

                       SHOULD THE DEPARTMENT OF COMMERCE
                          RELINQUISH DIRECT OVERSIGHT
                                  OVER ICANN?

                                  ----------

                            THURSDAY, APRIL 10, 2014

                            House of Representatives

                Subcommittee on Courts, Intellectual Property,
                                and the Internet

                           Committee on the Judiciary

                                Washington, DC.

        The Subcommittee met, pursuant to call, at 9:05 a.m., in
    room 2141, Rayburn House Office Building, the Honorable Tom
    Marino (Vice-Chairman of the Subcommittee) presiding.
        Present: Representatives Marino, Goodlatte, Sensenbrenner,
    Holding, Collins, Nadler, Conyers, Chu, Deutch, Bass, Richmond,
    DelBene, Lofgren, Jackson Lee, Cohen.
        Staff Present: (Majority) David Whitney, Counsel; Olivia
    Lee, Clerk; (Minority) Stephanie Moore, Minority Counsel; Jason
    Everett, Counsel; Heather Sawyer, Counsel.
        Mr. Marino. The Subcommittee on Courts, Intellectual
    Property, and the Internet will come to order.
        Without objection, the Chair is authorized to declare a
    recess of the Subcommittee at any time. And we welcome all the
    witnesses today.
        This is going to be a unique series of strategy today. We
    have three series of votes. We have two panels of distinguished
    experts.
        So we are going to be manipulating this testimony as best
    we can so the witnesses are not sitting around waiting for us.
    We will get to the floor and vote and then we will shoot back.
    Okay? Just a warning.
        Good morning, everyone, and welcome to the House Judiciary
    Committee.
        This morning, the Subcommittee on Courts, Intellectual
    Property, and the Internet will commence aggressive oversight
    over an extraordinarily significant matter, the future of the
    Internet.
        Throughout the world, there are competing visions for what
    the Internet is and what it will become. The path we choose to
    follow will impact not only the course of our own individual
    lives and fortunes, but, also, those of future generations in
    the U.S. and abroad.
        The proper course to follow must be determined after a very
    judicious process in which we rationally discuss the details
    with all the stakeholders in the community, including the
    users.
        Our focus in this initial hearing is a topic that may sound
    like an arcane subject, the relationship between the U.S.
    Department of Commerce and the Internet Corporation for
    Assigned Names and Numbers, otherwise known as ICANN, which,
    among other things, manages certain key functions of the
    Internet under a longstanding contractual relationship with the
    Department.
        However, this relationship is key to ensuring the Internet
    continues to be free and open for years to come. According to a
    published report in The Hill on February 8, ICANN betrayed
    broader ambitions last year when it endorsed a statement
    calling for the globalization of ICANN and other domain name
    technical work that is currently managed by the United States.
        The report continued--and I quote--"The statement, which
    was issued with nine other Internet infrastructure
    organizations, suggested that the domain work of the Internet
    Assigned Numbers Authority, known as IANA, be handed over to
    ICANN.'' The report went on to note, ``Those duties are now
    contracted out by the Commerce Department.''
        Further, the report stated some of the tech industry saw
    the statement as a direct challenge to the U.S. role in
    Internet governance, which is already being called into
    question after the revelation about global snooping at the
    National Security Agency, or the NSA.
        Less than 5 weeks later, late on the afternoon of Friday,
    March 14, a shocking announcement from the Department of
    Commerce's National Telecommunication and Information
    Administration, NTIA, which is charged with oversight over the
    IANA contract, was issued.
        The former CEO of ICANN, Rod Beckstrom, described the
    release by stating--and I quote--"Last Friday the U.S.
    Government effectively surrendered its historic authority over
    the Internet with its surprise announcement of its intention to
    pass this responsibility to the global multi-stakeholder
    community.''
        Beckstrom continued, ``Why did the U.S. Government do this
    now? Because they face the serious risk of losing even more at
    the upcoming Net Mundial conference on Internet governance in
    Brazil, a conference that it is reportedly organized in
    substantial part by ICANN itself.
        Beckstrom opined--and I quote--"With the suddenness of the
    announcement, we are entering a new risky and chaotic process
    without a clear plan, and nothing less than the future of the
    Internet is at stake.''
        Those who are paying attention will no doubt agree with
    Beckstrom's last point. The sudden and surprise nature of the
    NTIA's announcement on March 14 stunned many. The fact it was
    timed for release when Members of Congress were traveling back
    to their districts for a work period is undoubtedly not a
    coincidence.
        The future of the Internet is at stake and this
    Administration and the NTIA are attempting to take matters into
    their own hands without consultation with Congress.
        When asked about the sudden change in policy and asked to
    justify their decisions and processes, they point to unrelated
    resolutions that do not address oversight over the IANA
    functions.
        They ignore congressional resolve that explicitly provides
    that the Secretary of Commerce should continue to exercise
    oversight over ICANN, and they attempt to cite papers from the
    late 1990's to justify the reversal of course today.
        Even our liberal friend, President Bill Clinton, has made
    it clear that he disagrees with the decision of the NTIA and
    those that could pose significant dangers to the free and open
    Internet.
        While he noted he understood the arguments being made for
    the multi-stakeholder process, he stated, ``A lot of these so-
    called multi-stakeholders are really governments that want to
    gag people and restrict access to the Internet.''
        Given that Mr. Clinton was the executive under whose
    authority these department papers were created, I believe we
    should give considerable credence to his opinions on the
    subject.
        There is a lot of ground to cover today, and I have barely
    scratched the surface. Nevertheless, I am pleased that today we
    have with us an outstanding panel of witnesses who can direct
    our attention to the relationship between the Department of
    Commerce and NTIA and, also, help educate us on matters that
    pertain to this decision to surrender control of the IANA
    function to ICANN in as soon as 18 months.
        I welcome our witnesses, our audience today. And, with
    that, I recognize the Subcommittee Ranking Member, the
    distinguished gentleman, Representative Nadler of New York, for
    his opening remarks.
        Mr. Nadler. Thank you, Mr. Chairman.
        Last month the Department of Commerce announced that it
    will begin a process for transitioning key Internet domain name
    functions to the global multi-stakeholder community.
        This announcement continues the privatization process first
    started in 1998, continued through the Bush Administration, and
    that has been supported by various Congresses. Despite this,
    some of my Republican colleagues have now accused the Obama
    Administration of wanting to surrender control of the Internet
    to foreigners.
        This type of alarmist assertion misunderstands a core fact.
    There is not now nor will there ever be one party, whether
    government or private sector, that controls the Internet. The
    Internet is and will remain a decentralized network of networks
    that run smoothly only through the voluntary cooperation and
    coordination of all its participants.
        Ensuring effective private-sector management of these
    networks and transitioning functions served by the United
    States Government has been a goal shared by Republicans and
    Democrats alike for the past 16 years.
        And, frankly, I am surprised that some of my Republican
    colleagues now seem to oppose the next step in the ongoing
    privatization process. It cannot be that Republicans support
    private industry and oppose government control in everything
    except this. So why the outrage now?
        I am hopeful that behind some of the overheated rhetoric
    surrounding NTIA's announcement there is a sincere desire to
    take a clear look at the facts.
        There is, of course, a need to ensure that the transition
    process and the model developed through that process produces a
    management structure that supports a secure, open, and truly
    global Internet.
        NTIA has established criteria to help ensure that this
    occurs, and I am confident that NTIA and ICANN will agree to
    update us periodically as this process progresses.
        We need not pass legislation that further complicates this
    process, and there is no reason to make this a partisan battle
    now.
        Today's Internet has its origins in the network developed
    by the United States Department of Defense and other Federal
    agencies to connect universities and research labs conducting
    projects for the government.
        Since then, the Internet has become a remarkable platform
    for commerce, social discourse, and innovation across the
    globe.
        Since the late 1990's, of course, Democratic and Republican
    administrations and with the full support of various
    Congresses, including a 413 to nothing vote only 2 years ago,
    our government has embraced the principle that core Internet
    domain name systems functions should be managed by the private
    sector, not by this or any other government.
        Private-sector interests formed ICANN in the late 1990's
    for this purpose, and NTIA has been working with ICANN since
    that time to transition technical DNS coordination and
    management functions to the private sector.
        NTIA's recent announcement that it would begin the process
    for transitioning its oversight of the technical functions
    necessary to assign numbers and registered domain names, known
    as the Internet Assigned Number Authority, or IANA, to ICANN in
    the multi-stakeholder model that has been developed into the
    technical coordination represents the final step in a 16-year
    transition process and, far from being a surprise, was an
    expected announcement, the only question being the timing.
        The IANA functions include management of the DNS root zone
    top-level domain names and coordination of the allocation of IP
    addresses.
        For the last 2 decades, the IANA functions have been
    performed under successive contracts between the Department of
    Commerce and ICANN.
        During that time, the U.S. Government has simultaneously
    exercised oversight over ICANN through the IANA contract while
    remaining steadfast in its commitment to turn over DNS
    management to the multi-stakeholder private sector model.
        Congress has long supported this commitment, often doing so
    in response to other governments around the world, urging
    intergovernmental control of the Internet through, for example,
    proposals for control by the United Nations International
    Telecommunications Union, the ITU.
        Just last Congress we responded to this possibility by
    passing a bipartisan, bicameral resolution providing that, ``It
    is the policy of the United States to preserve and advance the
    successful multi-stakeholder model that governs the Internet.''
    H.Con.Resolution 127 passed the House by a unanimous 413 to
    nothing vote.
        This latest announcement by IANA--I am sorry--by NTIA
    follows in that tradition and was warmly welcomed, was warmly
    welcomed, by American corporations such as AT&T, Cisco, Google,
    Microsoft, Neustar, and Verizon, as well as by the Chamber of
    Commerce, the Internet technical community, and our global
    allies.
        By inviting the multi-stakeholder community to present
    proposals for administration of IANA functions that have
    brought support and that preserve the security, stability,
    resiliency, and openness of the Internet, NTIA has reinforced
    our longstanding dedication to transitioning to private-sector
    management in a responsible and successful manner.
        Exactly how we accomplish this is yet to be determined
    through the process initiated by NTIA's announcement, but the
    time to initiate the process for that transition has come.
        Congress, together with the world community, should now
    focus on developing plans that ensure transparency,
    accountability, and robust safeguards to enable the continued
    efficient operation of the Internet.
        I want to thank each of the witnesses for their testimony
    and yield back the balance of my time.
        Mr. Marino. Thank you, Congressman Nadler.
        I would now like to recognize the full Committee Chairman,
    the distinguished gentleman from Virginia, Chairman Bob
    Goodlatte, for his opening statement.
        Mr. Goodlatte. Thank you, Mr. Chairman.
        Mr. Chairman, the title of today's hearing vastly
    understates its importance. All hyperbole aside, this hearing
    is about nothing less than the future of the Internet and,
    significantly, who has the right, the ability, and the
    authority to determine it.
        Should it be decided by a few people in Washington,
    Beijing, Moscow, Sao Paolo, or even Silicon Valley, or should
    it be determined by those who use and stand to benefit from it?
        In determining the United States' role, should we have a
    process where a few officials in the Administration make
    decisions in a bubble without consulting or seeking meaningful
    input from the American people and their elected
    representatives, or should we have an open, transparent, and
    accountable process before decisions are made that impact all
    our futures?
        To be clear, the process and the manner in which the Obama
    Administration and, specifically, the National
    Telecommunications and Information Administration, or NTIA,
    arrived at and announced their decision to transition oversight
    over the critical Internet Assigned Names and Numbers authority
    function in as early as 18 months has not been fully
    transparent.
        For example, NTIA announced its decision late on a Friday
    afternoon as Americans were beginning their weekends and
    Members were returning to their districts. NTIA implied that
    the House and Senate passage of resolutions in 2012 in support
    of a multi-stakeholder model of Internet governance somehow
    provided an advanced endorsement, but, in truth, those
    resolutions nowhere mention the IANA contract.
        Furthermore, to assert that, in the late 1990's, the
    Department of Commerce stated its intent to phase out its
    oversight role and, thus, no one has a right now to question
    why the Obama Administration has decided to do this is
    sophistry. Indeed, it is an attempt to shut down discussion.
        As a result, an enormous number of questions have been
    raised that the American people and this Subcommittee deserve
    to have answered publicly in a responsible, professional,
    honest and forthright manner.
        There are good reasons why the United States has maintained
    oversight over the IANA function contract. Indeed, in 2005, the
    House passed a resolution that explicitly stated that it is the
    sense of Congress that the Secretary of Commerce shall maintain
    oversight of ICANN so that ICANN can continue to manage the
    day-to-day operation of the Internet's domain name and
    addressing system well, remain responsive to all Internet
    stakeholders worldwide, and otherwise fulfill its core
    technical mission.
        The Obama Administration should bear the burden of proof
    for why it wants to make this significant public policy change
    and whether it is in the best interests of U.S. citizens and
    Internet users around the globe.
        One of the reasons given by many for relinquishing this
    contract is to improve the U.S. image internationally. As a
    result of the public revelation of certain U.S. intelligence-
    gathering practices, it is true that U.S.-based companies are
    under enormous pressure to place operations overseas in order
    to do business there and are facing increased competition from
    their foreign competitors.
        This is because the President and his team have failed to
    effectively engage and inspire confidence among those countries
    and citizens who traditionally viewed Americans as allies.
        We must address this concern, but the most direct way to do
    so is by reforming our Nation's surveillance laws to better
    protect civil liberties.
        While I see both sides of the proposal to ultimately
    transfer the IANA function to the private sector, it is clear
    that the U.S. has served as a critical and responsible backstop
    against censorship and as a promoter of openness and free
    speech on the Internet.
        The reality is that, once we surrender our unique position,
    it will be impossible to take it back if something goes awry.
    This is an important point that needs to be seriously discussed
    as we determine our future role.
        All this leads back to today's hearing. With all due
    respect to our Administration witness, many Americans are past
    the point of being satisfied with vague assurances when hard
    answers, evidence, and sober judgment are needed.
        I look forward to a robust discussion today about this
    important issue, and I yield back to the Chairman.
        Mr. Marino. Thank you, Mr. Chairman.
        I would now like to recognize the full Committee Ranking
    Member, the gentleman from Michigan, Congressman Conyers, for
    his opening statement.
        Mr. Conyers. Thank you, Mr. Chairman, and Members of the
    Committee and our distinguished witness.
        What we are doing this morning is examining the National
    Telecommunications and Information Administration's recent
    announcement of their intent to transition key Internet domain
    name functions to the global multi-stakeholder community. So I
    want to try to allay some of the alarm and fears that seem to
    be moving around this issue.
        I would try to administer some medicine that doesn't
    require a prescription or some other tactic other than the
    usual arguments that we will put up, but I want you to
    understand and I think we should agree on that this move will
    not lead to control of the Internet by foreign governments. I
    suppose that is always a concern that a lot of people have.
        But opponents of this transition have raised concerns about
    whether there is sufficient safeguards in place to prevent
    foreign government intrusion during the transition. The
    criticism has also included inaccurate statements about
    concerns about threats from foreign governments who seek
    control or tax or censor the Internet.
        These concerns are misplaced because this transition
    reaffirms the United States' commitment to a multi-stakeholder
    approach, which will work to improve the security and stability
    of the Internet.
        And NTIA has fully confirmed that it will not transition to
    any management model that is government led. So I hope we will
    begin to feel better as this discussion unfolds with our
    distinguished witnesses.
        Now, with this proposed transition, NTIA is putting into
    place the final phase of privatization, which the United States
    has long supported and which I trust our conservative
    colleagues are in support of, and this will be accomplished by
    transitioning key Internet domain name functions to the global
    multi-stakeholder community.
        There have also been a concern or two raised about whether
    the multi-stakeholder model is an appropriate approach.
        Congress itself has expressly stated its support of the
    private multi-stakeholder model of Internet governance by
    passing bipartisan resolutions in both the House and the Senate
    during the last Congress. Last session we passed Concurrent
    Resolution 127, which supported the multi-stakeholder model for
    governance of the Internet by an overwhelming unanimous vote,
    414 to 0.
        Now, the NTIA has developed core principles to guide this
    process. Some argue that there are no core principles that will
    guide this process, but NTIA has put in place core principles
    to assure successful transition and the long-term viability of
    this plan.
        Indeed, any proposal for transition of the domain name
    system must meet certain core principles before it can be
    approved and finalized by NTIA.
        If the proposal does not meet fully these criteria, the
    NTIA may seek additional time to work through the process to
    develop an acceptable transition proposal.
        These principles, which must be met, ensure that the United
    States will succeed in maintaining freedom, openness, security,
    and stability of the network.
        And in addition to specific criteria that must be met, NTIA
    has also confirmed that any transition cannot be controlled by
    a government entity.
        The transition must maintain security and stability of
    Internet DNS, support the multi-stakeholder process, meet
    global needs and demands, and maintain an open interest.
        And I believe that there is sufficient time for
    stakeholders to work through the process to develop an
    acceptable transition proposal.
        Now, this Committee has historically exercised its role to
    address the problems of cyber squatting, competition, and
    copyright infringement with respect to generic top-level domain
    names.
        That oversight has included concerns about the
    effectiveness of the multi-stakeholder model that led to the
    expansion of the top-level domain names.
        And I, along with a number of my colleagues on both sides
    of the aisle of this Committee, along with our counterparts on
    the Senate Judiciary Committee, wrote a letter to ICANN
    describing these safeguards, including whether that multi-
    stakeholder process provided trademark owners, consumers, and
    law enforcement community a meaningful opportunity to voice
    their concerns, and I am going to put that letter in the
    record.
        [The information referred to follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                   __________

     Mr. Conyers. I look forward to hearing today about how we
    can ensure that ICANN remains responsive to our concerns as
    well as those of other key stakeholders over the next 18 months
    as this process unfolds.
        So, finally, a truly effective transition must and can
    ensure that the criteria for transition remain in place long
    after that transition occurs.
        Some of the critics of the NTIA's announcement have
    expressed concern that, by relinquishing its contract with
    ICANN, the United States will be unable to prevent subsequent
    changes and it might undermine Internet security, stability,
    and openness. This is not exactly accurate because the process
    itself can and should result in enforceable principles that the
    United States can support.
        Again, this is the start of a transition process that there
    will be plenty of opportunity to make sure it is going well.
    And, if not, NTIA has the option to renew the contract with
    ICANN for a total of four additional years through 2019.
        Stakeholders should all work together to be involved in the
    process announced by NTIA on March 14 so that ICANN and the
    Internet community can develop constructive proposals that will
    meet NTIA's criteria.
        To this point, there has been a broad group of stakeholders
    who have expressed support for the NTIA announcement, including
    AT&T, Verizon, Microsoft, Google, Public Knowledge, and the
    Chamber of Commerce. The process should continue to be open,
    transparent, and obtain international stakeholder consensus and
    support.
        We should have more hearings to review this issue to see
    how it develops and evaluate the process as it moves forward.
    These hearings will provide us with the opportunity to examine
    whether sufficient safeguards are being put in place during the
    next steps of the transition of NTIA's role, and the Committee
    should consider sending designated representatives to attend
    and monitor the meetings held in compliance with NTIA's
    announcement. This would facilitate meaningful oversight by
    Congress.
        These are some suggestions that I have. And I thank the
    Chairman. I yield back the balance of my time and look forward
    to hearing from the witnesses.
        Mr. Marino. Thank you, Congressman Conyers.
        Without objection, other Members' opening statements will
    be made part of the record.
        I want to explain who I am. My name is Tom Marino. I am the
    Vice-Chair of the Intellectual Property Subcommittee.
        My colleague, the Chairman and my mentor, Howard Coble, the
    gentleman from North Carolina, has a conflicting schedule this
    morning, but will attempt to get here as soon as possible.
        We have two very distinguished panels today. I will begin
    by swearing in our first witness before introducing him.
        If you would please rise, sir, and raise your right hand.
        [Witness sworn.]
        Mr. Marino. Let the record reflect that the witness has
    answered in the affirmative.
        And, Mr. Secretary, you may be seated.
        The witness's written statement will be entered into the
    record in its entirety.
        I ask that the witness summarize his testimony in 5 minutes
    or less. We are on a very tight schedule today. So when you get
    to 5 minutes, I will politely tap the hammer just to give you
    an indication because those lights are to the sides of you and
    you know how they work.
        And to help stay within the time, these are timing lights
    on your table. They make no sense to me because I am colorblind
    and I can't tell what they are.
        When the light switches from so-called green to yellow--and
    I have no idea what that is--you will have 1 minute to conclude
    your statement. When the light turns red, it signals that the
    witness's 5 minutes has expired. So I will politely nudge you,
    if you don't mind
        Our first witness this morning is the Honorable Lawrence
    Strickling, Assistant Secretary for Communications and
    Information at the United States Department of Commerce, a very
    important position.
        In his position, Mr. Strickling serves as Administrator of
    the National Telecommunications and Information Administration,
    the executive branch agency that is responsible for advising
    the President on communications and information policies.
        Mr. Strickling earned his juris doctorate from Harvard Law
    School and his bachelor of science in economics from the
    University of Maryland.
        Welcome, Mr. Strickling.

     TESTIMONY OF THE HONORABLE LAWRENCE E. STRICKLING, ASSISTANT
        SECRETARY FOR COMMUNICATIONS AND INFORMATION, NATIONAL
       TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION, UNITED
                     STATES DEPARTMENT OF COMMERCE

        Mr. Strickling. Thank you, Chairman Marino.
        And I want to acknowledge Ranking Member Nadler, Chairman
    Goodlatte, and Ranking Member Conyers.
        I am pleased to be here today to testify about NTIA's role
    working with ICANN and the domain name system as well as our
    March 14th release announcing our intent to transition key
    Internet domain name functions to the global multi-stakeholder
    community.
        And, Chairman Goodlatte, I want to assure you I am not here
    to shut down discussion about this issue. My hope is that these
    issues are fully debated not just here, but among all of the
    global Internet stakeholders.
        For 16 years, it has been the clear and unquestioned policy
    of the United States Government that the private sector should
    lead the management of the domain name system.
        In its 1998 policy statement, the Department of Commerce
    stated that the U.S. Government is committed to a transition
    that will allow the private sector to take leadership for DNS
    management.
        Since then, the Department, through NTIA, has entered into
    a series of agreements with ICANN under which it performs what
    are known as the IANA functions. These include assigning
    Internet protocol numbers to regional registries, who then
    assign them to Internet service providers.
        Another function is the maintenance and updating of the
    root zone file of top-level domain names, the so-called address
    book. And I brought a copy if anybody wants to look at it. This
    is necessary for the rooting of Internet communications.
        ICANN performs these tasks at no cost to the U.S.
    Government. Our role in this process is simply to verify
    changes and updates proposed by ICANN to the root zone file
    before passing the changes on to VeriSign, which actually
    maintains and updates the root zone file.
        ICANN develops its policies through a bottom-up multi-
    stakeholder process. These efforts are open to all
    stakeholders, whether they are businesses, civil society
    organizations, technical experts or governments, who work in
    concert to reach consensus agreement on Internet policies.
        I want to emphasize that NTIA does not exercise any control
    or oversight over policymaking at ICANN. Rather, it is the
    global multi-stakeholder community that makes Internet policy
    today, whether it be setting domain name policy at ICANN or
    developing Internet technical standards at the Internet
    Engineering Task Force.
        The U.S. Government has been a vigorous supporter of the
    multi-stakeholder model of Internet governance from the start.
    Both Republican and Democratic administrations have
    consistently emphasized that the multi-stakeholder process is
    the best mechanism for making Internet policy. Congress agrees.
        In 2012, both houses of Congress unanimously passed
    resolutions stating that it was the consistent and unequivocal
    policy of the United States to promote a global Internet free
    from government control and to preserve and advance the
    successful multi-stakeholder model that governs the Internet
    today.
        In furtherance of this clear congressional statement, on
    March 14, NTIA announced the final phase of the privatization
    of the domain name system. We asked ICANN to convene global
    stakeholders to develop a proposal to transition the current
    role played by NTIA in the coordination of the domain name
    system.
        In making this announcement, we stated that the transition
    proposal must have broad community support and must address
    four principles.
        It must support and enhance the multi-stakeholder model. It
    must maintain the security, stability, and resiliency of the
    Internet domain name system. It must meet the needs and
    expectations of the global customers and partners of the IANA
    services. And it must maintain the openness of the Internet.
        And we made crystal clear that we will not accept a
    proposal that replaces the NTIA role with a government-led or
    intergovernmental solution.
        We asked ICANN to convene the multi-stakeholder process
    because it is the current IANA functions contractor and the
    global coordinator for DNS.
        We informed ICANN that we expected it to work
    collaboratively with the other Internet technical
    organizations, including the Internet Society, the IETF, the
    Internet Architecture Board, and the regional Internet
    registries.
        At its recent meeting in Singapore, ICANN convened two
    public sessions in association with these organizations to
    obtain stakeholder input on how to design the process to
    develop the transition plan.
        The Internet community has responded to our announcement
    with strong statements of support, and many of the Members have
    referred to them.
        Among the business community, Microsoft hailed the
    announcement as a significant and welcome development. Cisco
    stated that it has long supported an open and innovative multi-
    stakeholder Internet governance process in this next step in
    this evolution.
        Our announcement in the process that is now underway to
    develop a transition plan benefits American interests. We
    depend on a growing and innovative Internet and, despite the
    symbolic role the U.S. Government has played over the years,
    the fact is that no country controls the Internet.
        Its continued growth and innovation depends on building
    trust among all users worldwide and strengthening the
    engagement of all stakeholders. Taking this action is the best
    measure to prevent authoritarian regimes from expanding their
    restrictive policies beyond their own borders.
        I am confident that the global Internet community will work
    diligently to develop a plan that has the support of the
    community and that meets the four conditions we laid out on
    March 14.
        And I want to assure all Members that, before any
    transition takes place, the businesses, civil society
    organizations, and technical experts of the Internet must
    present a plan that ensures the uninterrupted stable
    functioning of the Internet and preserves its openness. Until
    such time, there will be no change in our current role.
        Similarly, we have not set any deadline for action. The
    current contract expires on September 30th, 2015, but we can
    extend it for up to 4 years if the community needs more time to
    develop its proposal.
        I also want to assure all Members that, even as the United
    States looks to transition out of this clerical role that we
    play, we will remain strong and vigorous advocates for Internet
    freedom, growth, and innovation.
        We will continue to play a major role on ICANN's
    governmental advisory committee where governments develop
    consensus advice to ICANN on public policy matters, and we will
    continue in our role to enhance the accountability and
    transparency of ICANN through our participation in the
    accountability and transparency review teams established by the
    affirmation of commitments we signed in 2009.
        Our commitment to preserving the Internet as a platform for
    economic growth and innovation remains steadfast and, by this
    action, we are simply enlisting others to step up and join us
    in supporting the free and open Internet.
        Thank you. And I look forward to answering your questions
    this morning.
        Mr. Marino. Thank you, Secretary. And once again, your full
    statement will be made part of the record.
        [The prepared statement of Mr. Strickling follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                       __________

        Mr. Marino. We will now proceed under the 5-minute rule
    with questions, and I will begin by recognizing the Chairman of
    the full Committee, Chairman Goodlatte.
        Mr. Goodlatte. Thank you, Mr. Chairman.
        Secretary Strickling, welcome, and I very much appreciate
    your remarks, and they are helpful in this process.
        My first question is: Do you agree that the authority that
    NTIA has over ICANN under the IANA contract has never been
    abused?
        Mr. Strickling. That we have not abused our authority?
        Mr. Goodlatte. Correct.
        Mr. Strickling. Yes.
        Mr. Goodlatte. Do you agree that this authority and the
    functions performed under this agreement have absolutely
    nothing to do with the surveillance techniques that were
    allegedly revealed by Edward Snowden?
        Mr. Strickling. Yes.
        Mr. Goodlatte. Nevertheless, it is hard to imagine that
    this is a subject that never came up in interdepartmental
    discussions.
        Did this issue ever come up in the discussion surrounding
    this decision?
        Mr. Strickling. Yes. But it was never a primary reason for
    our action. Our action that we are taking today was fueled much
    more by the fact that we felt Internet had matured as an
    organization to the point where it was time for--to do this
    final transition.
        And it was also, I think, fueled by the increasing
    international acceptance of the multi-stakeholder model of
    governance that we are seeing in the developing world as
    reflected in the Brazil undertaking of the global multi-
    stakeholder meeting they are hosting in Brazil later this
    month.
        Mr. Goodlatte. Mr. Castro states that, without U.S.
    oversight, ICANN has the potential to become the world's
    largest unregulated monopoly.
        Do you agree or disagree with his statement, and why?
        Mr. Strickling. Well, if we are referring to IANA
    functions, I strongly disagree. I think that totally
    misapprehends exactly what our role is under IANA functions.
        Mr. Goodlatte. I would have to say that you have a point to
    the extent that, while a number of concerns were raised in this
    Committee and elsewhere in the Congress and elsewhere in
    interested groups, that had no effect on the decision by ICANN
    to undertake the dramatic expansion of the top-level domain
    name program that has quite a bit of concern on many parts,
    quite a bit of cost to some entities, and contains the, I would
    say, evidence that this is an organization that can, maybe even
    now under the existing contract--but certainly would be able
    to, without such a contractual relationship with the United
    States, expand itself and expand its powers with regard to the
    Internet.
        Would you agree with that statement?
        Mr. Strickling. No.
        Mr. Goodlatte. Explain yourself.
        Mr. Strickling. Well, let's take the example of the
    expansion of top-level domains. ICANN didn't do that in terms
    of ICANN, the employees and the board members. That was a
    decision taken after 6 years of multi-stakeholder discussion.
        Many people were involved in debating the pros and cons of
    doing that. It actually goes back to the origination of ICANN.
        I mean, one of the purposes of putting this to the private
    sector was to increase competition among domain names. So this
    has long been contemplated, going back to 1998, when ICANN was
    created.
        And I think people tend to conflate ICANN with the output
    of the multi-stakeholder process that is conducted within the
    ICANN sphere.
        And so I think the idea that ICANN as an organization is
    going to turn into some unregulated monopoly totally disregards
    the presence of hundreds of stakeholders--thousands of
    stakeholders who actually set the policies for ICANN.
        And if you are saying that AT&T, Verizon, Cisco, Microsoft,
    Freedom House, Public Knowledge, Center for Democracy and
    Technology are all going to allow that to happen, then, you are
    basically saying you don't believe in the multi-stakeholder
    model, because I don't think they will let that happen.
        Mr. Goodlatte. No. I am not saying that I believe that at
    all.
        But I will say that I am concerned that the actions taken
    by the entity are the genesis of the problems that we have with
    countries that do not respect the freedom that exists on the
    Internet, do not respect individual liberty, and will always--
    unless they change their own perspective of the world and their
    own perspective of civil liberties, will always be looking for
    excuses to take control of the Internet. I am talking about
    countries like Brazil undertaking the initiative that they have
    right now.
        So I understand the concern about this remaining link to
    the United States, which, in my opinion, notwithstanding the
    challenges that we and any other representative democracy face,
    still is a beacon in the world for freedom.
        And I think that we can rightly take credit for the freedom
    that exists on the Internet today in the manner in which we
    have worked to unfold it.
        The question and concern that I have and many others have
    is: When we let go of that final link, will that institution
    that I support in terms of how it is expected to operate--will
    that institution be safer from those efforts to regulate the
    Internet or will it be more exposed because it no longer has
    the protection of the United States?
        Mr. Strickling. Well, Chairman, I am a little flummoxed by
    your question because it is not the last link. As I said in my
    statement, we continue to have a tremendous amount of
    engagement with ICANN. We are an active and vigorous
    participant in the Government Advisory Committee, and that is
    public policy.
        Mr. Goodlatte. No question. No question. But is the last
    contractual relationship.
        Mr. Strickling. Well, but we also have the affirmation of
    commitments with ICANN under which they have committed things
    that are basically in their bylaws in terms of increasing their
    accountability and transparency not just to us, but the entire
    worldwide community.
        And it has set up a series of review teams, one of which,
    the accountability and review team, I sit as a member on. So I
    have devoted a tremendous amount of my own time both in 2010
    and again last year, 2013, for the first two iterations of that
    team that does a very in-depth examination of the
    accountability mechanisms at ICANN and makes recommendations to
    the board in terms of how to improve that.
        We are joined in that effort by governments of Denmark,
    Australia, Costa Rica in the last iteration, as well as from
    experts from around the globe, technical experts and then
    members of the representatives of the various supporting
    organizations. So there are a number of ways that we provide
    input and guidance and oversight into how ICANN operates.
        The IANA function really is primarily a symbolic role that
    we have played. We got involved in this in 1998 because, when
    the government wanted to get out of this role, when it was
    performing these functions itself, we had to find a mechanism
    by which to get a private entity to do it.
        That was the purpose of the IANA functions contract. It was
    basically a one-time opportunity for the United States to move
    from doing it itself to finding someone else to do it.
        And, since then, they have been performing these roles.
    Policies have been set by stakeholders and, literally, our role
    has been to do that final verification of accuracy of changes
    before they are made.
        And I think people are blowing totally out of proportion
    this function that we perform with respect to IANA functions
    and they are ignoring the many other ways in which--that we
    participate through the multi-stakeholder process to ensure
    that American interests are furthered through ICANN and through
    any of the other Internet technical organizations.
        Mr. Goodlatte. I get that. And I thank you. Your comments
    are helpful.
        Thank you, Mr. Chairman. My time is expired.
        Mr. Marino. Thank you, Chairman.
        The Chair now recognizes the Ranking Member, Congressman
    Nadler.
        Mr. Nadler. Thank you, Mr. Chairman.
        Before beginning my questions, I ask unanimous consent to
    enter an article from 2011 titled, ``Beckstrom Calls for
    ICANN's Independence,'' in which Mr. Beckstrom expressed the
    belief--the ``clear belief that the U.S. Government should live
    up to its 1998 white paper commitment to transfer management of
    the IANA functions to the private sector-led organization
    enlisted to manage DNS, which is ICANN.''
        Given representations of Mr. Beckstrom's opposition to this
    transition now, I think it is important that the hearing record
    reflects a more complete record of his position.
        Mr. Marino. Without objection.
        [The information referred to follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                   __________
        Mr. Nadler. Thank you.
        Mr. Strickling, before I begin my other questions, let me
    ask you as a follow-on: Do you believe that the step that you
    have announced of--with respect to ICANN will have any effect,
    pro or con, in increasing or decreasing the power of a foreign
    government that wants to limit the Internet in some way to do
    so outside its own borders or inside its borders, for that
    matter?
        Mr. Strickling. I don't think it affects their power. No.
        Mr. Nadler. Because?
        Mr. Strickling. Well, to the extent a government wants to
    shut off content coming into its country, there is nothing any
    of us can do to prevent that other than continuing to help
    inspire stakeholders in those countries to rise up and oppose
    and object to such practices when they take place.
        The ability of any government to somehow come in and take
    over ICANN is basically zero by itself. There is just no
    mechanism by which it can happen.
        Now, governments can bring these matters to the UN and to
    the International Telecommunication Union, and we are concerned
    about certainly the outcome at the World Conference on
    International Telecommunications 2 years ago where 88 countries
    basically felt that some of these matters of Internet policy
    ought to be brought to the ITU.
        That is very troubling, and we are working very hard in a--
    --
        Mr. Nadler. The step you are taking now that we are
    discussing today has no effect on that one way or the other?
        Mr. Strickling. Well, we hope that--there is no question
    but what--the U.S. role in this has served as a talking point
    for countries like Russia and other authoritarian regimes.
        When they are trying to convince countries in the
    developing world to join in them in some of their policies,
    they use this as an argument.
        So, yes, we are taking that argument away. So we would hope
    that developing countries would approach these issues with a
    different mindset as a result of this.
        Mr. Nadler. Thank you.
        Now, the House Energy and Commerce Committee's
    Communication Technology Subcommittee is marking up and voting
    today on H.R. 4342, the DOTCOM Act of 2014. That bill would
    delay any transition of the IANA functions until after the
    Government Accountability Office reviews and reports on any
    transition proposals.
        Do you support this bill? Could this act harm the
    transition process? And how might it impact the ongoing efforts
    of some nations to transition Internet governance to the ITU of
    the United Nations?
        Mr. Strickling. So the Administration opposes the DOTCOM
    bill, and we do think that enactment of the bill would send the
    wrong signal to the global Internet community about the United
    States' continued support of the global multi-stakeholder
    governance model.
        We think that the bill undermines longstanding U.S. support
    for the model's multi-stakeholder model of Internet governance.
        And while we have certainly seen international support
    growing for the multi-stakeholder model, authoritarian regimes
    are attempting to provide an alternative Internet governance
    model that would enhance the role of governments in controlling
    the Internet, and the timing of this bill would be particularly
    damaging for supporters of the multi-stakeholder model.
        Mr. Nadler. Okay. Now, some of my colleagues--and you dealt
    with this somewhat in your statement, but I would like you to
    briefly elaborate on it.
        Some of my colleagues have claimed that relinquishing the
    contractual relationship with ICANN could mean turning Internet
    over to greater influence by foreign governments such as Russia
    or China. You stated this isn't true, obviously.
        Even if the initial model to which we transition doesn't
    allow for this, how do we ensure that it isn't later changed to
    allow governments to exert undue control?
        Mr. Strickling. Well, again, we are putting our faith, as
    we have for the last 15 years, in the multi-stakeholder model.
        What we are depending on, again, are large multi-national
    corporations, important civil society organizations both here
    and the United States and worldwide.
        We are relying on technical experts who created this
    Internet, people like Steve Crocker, the chairman of the board
    of ICANN who is sitting in the room today.
        And you would have us believe that somehow those people are
    going to somehow end up with a result that, in effect, would
    turn this over to governments who have a totally different
    model in mind in terms of how the Internet ought to operate? I
    just don't see that happening. It just won't happen.
        Mr. Nadler. Now, some have argued that relinquishing the
    contractual relationship robs us of any oversight or leverage
    to ensure that ICANN adheres to its operating principles.
        Do we have any such control by virtue of our contract with
    ICANN now? And, if so, how do we ensure similar accountability
    from ICANN if we relinquish the contract?
        Mr. Strickling. Well, these are important questions, and I
    think that is exactly what we have teed up for the community to
    be talking about as they develop a transition plan.
        The question we put to the community is: What do you want
    to create, if anything, to replace the role we have played,
    however it has been interpreted by the community?
        We recognize that there is a symbolic nature of the IANA
    functions contract that has given, we think, comfort to people
    who feel that somehow we can use that to discipline ICANN.
        And the question of the community now is: Well, if you
    believe that, then design a mechanism that provides that same
    assurance to the entire community going forward. That is the
    task that the community will be taking up here over the next
    many months.
        Mr. Nadler. And we will be able review the results of that?
        Mr. Strickling. Yes. And as I indicated in my statement, we
    have provided four conditions that any proposal must meet.
        They include maintaining security and stability of the
    Internet. They include respecting the multi-stakeholder model.
    And we expect and will demand and ensure that any proposal that
    is brought back to us measures up to those standards.
        Mr. Nadler. Thank you.
        And, finally, it is my understanding that some of ICANN's
    most important functions are performed under its affirmation of
    commitments, or AOC.
        What incentives or pressures exist to keep ICANN from
    unilaterally withdrawing from the AOC? And is this something
    that can or might be strengthened through proposals to
    transition the IANA functions?
        Mr. Strickling. I don't think it is affected by our
    announcement regarding IANA. Keep in mind that the commitments
    ICANN makes under the affirmation largely are already reflected
    in its own bylaws.
        So, again, this is a situation where the multi-stakeholder
    community insists on these commitments, and I don't think they
    would allow them to be relaxed in any respect, nor would we in
    terms of the fact that these commitments have served an
    important purpose in the last 3 or 4 years.
        We have seen the accountability and transparency of ICANN
    improve as a result of the work of the accountability and
    transparency teams.
        ICANN staff, ICANN board have been supporters and have
    taken very seriously these recommendations and have taken the
    measures necessary to improve in those areas.
        So I don't see those commitments going away, as a practical
    matter, even if the instrument itself might change over time.
        Mr. Nadler. And the step you are proposing now would not
    change our ability to enforce any such commitments?
        Mr. Strickling. That is right.
        Mr. Nadler. Thank you.
        Mr. Marino. Thank you, Congressman Nadler.
        I am going to break tradition here a little bit. And now
    the Ranking Member of the full Committee, Congressman Conyers,
    will ask questions.
        Mr. Conyers. Thank you, Mr. Chairman.
        And we welcome you here, Assistant Secretary Strickling.
    This is--your testimony has been very helpful in starting us
    off on this role.
        Let me ask you how you feel about the argument that NTIA's
    contractual relationship is working and should not be changed,
    it follows the ``if it ain't broke, don't fix it'' phrase?
        Mr. Strickling. Well, we don't think we are changing
    anything. We feel we are carrying out the policy originally set
    forth in 1998 that has continued to be the policy of the United
    States, which is to complete the privatization of the domain
    name system.
        Mr. Conyers. All right. Some have characterized NTIA's role
    as providing critical oversight through its supervisory
    contractual control over ICANN and have raised concerns that,
    without the U.S. Government ensuring that ICANN's operating
    principles are followed, there is no way to stop foreign
    governments from interfering with ICANN's operation going
    forward.
        How do you react to those kinds of assertions?
        Mr. Strickling. Well, again, referring to my previous
    testimony, I just don't see a mechanism for that happening as a
    result of us completing the privatization of the domain name
    system. That action will not lead to that outcome, period.
        Mr. Conyers. And even if the initial model to which the
    IANA functions are transitioned--safeguards against this, how
    do we ensure that changes aren't made that allow undue
    governmental influence going forward?
        Mr. Strickling. Well, again, we have made it very clear
    that any proposal presented to us cannot be a proposal that
    turns this over to governments or would lead to governments
    taking this over.
        So we are expecting that in terms of coming from the
    community--that we would get from the community a proposal that
    will ensure that.
        Mr. Conyers. All right. In the past, a number of us,
    including myself, former Judiciary Chair Lamar Smith, have
    raised concerns about ICANN's management of Internet domain
    functions, including whether it was affording adequate
    protections for consumers and rights holders in working to
    combat online fraud and piracy.
        Now, if NTIA relinquishes all contractual relations with
    ICANN, how do we ensure that ICANN remains responsive to our
    concerns as well as those of other key stakeholders down the
    road?
        Mr. Strickling. So, again, the role we have with IANA
    functions really doesn't bear on the policymaking with respect
    to the expansion of top-level domains.
        We shared many of those same concerns in terms of the
    expansion of top-level domains, and we expressed those views as
    vigorous advocates at the Government Advisory Committee.
        And to ICANN's credit, they adopted many, many of the
    recommendations that the governmental advisory committee,
    through our leadership, adopted.
        And so we will continue to play that role going forward,
    and I do know that will not change as a result of the
    announcement we made 3, 4 weeks ago.
        Mr. Conyers. Well, Secretary Strickling, your responses
    have all been quite satisfactory to me. I thank you.
        Mr. Strickling. Thank you.
        Mr. Conyers. And I yield back the balance of my time, Mr.
    Chairman.
        Mr. Marino. Okay. We are going to--thank you, Congressman
    Conyers.
        We are going to break for votes. We are being held more and
    more to the time limit on the votes. So we will get over there.
    We will vote. Looks like we are going to have two votes, and we
    will be back here. I apologize for the inconvenience. Recess.
        [Recess.]
        Mr. Marino. The hearing will now come to order.
        The Chair recognizes the gentleman from Texas, Congressman
    Farenthold, who has to be in three places at one time today.
        Mr. Farenthold. Thank you very much, Mr. Strickling. I want
    to talk to you a second. Mr. Conyers asked you, if it ain't
    broke, why are we trying to fix it, and your response was to
    the effect of, we are not fixing it, we are just moving along
    with the process. You know, I want to take exception to that,
    because I think if you are changing the process and the people
    in charge, you really do run the risk of breaking something
    that isn't broken.
        I mean, we are not having any problems today getting the
    root servers updated. I mean, the technical process is going
    fine, right? There are no problems there?
        Mr. Strickling. That is correct.
        Mr. Farenthold. And they are being done in a timely
    fashion, right? It is getting done
        Mr. Strickling. Well----
        Mr. Farenthold [continuing]. Basically overnight, at the
    max?
        Mr. Strickling. You should probably ask the customers of
    the IANA functions the rate on that.
        Mr. Farenthold. Yeah. And there have been no complaints
    that we are not administering in a fair fashion?
        Mr. Strickling. I am sorry?
        Mr. Farenthold. It is not being administered in an unfair
    way, right?
        Mr. Strickling. Well, when you say administer, what are you
    referring to?
        Mr. Farenthold. Well, you don't have people saying, well,
    you are not registering my domain name because I am from X, Y,
    Z country?
        Mr. Strickling. That is not us.
        Mr. Farenthold. Right. Nobody is saying we are not being
    fair?
        Mr. Strickling. Well, again, I think you are maybe
    conflating ICANN and the policymaking process with the role we
    play. Again, as I said earlier in my testimony, all we do after
    a change to the root zone is sent to us from ICANN, verify its
    accuracy, basically proofread it and pass it onto Verisign, and
    nobody has complained about that role that we have played.
        Mr. Farenthold. And it is not costing us a lot of money?
        Mr. Strickling. No, it is less than a full-time staff
    person who performs these functions for us.
        Mr. Farenthold. All right. And I think you answered
    Chairman Goodlatte that there is no complaints we are taking
    advantage of this through, you know, the Snowden in the NSA, or
    we are not getting any intelligence advantage or any other
    advantage out of doing this, right?
        Mr. Strickling. None.
        Mr. Farenthold. We are not blocking our political enemies
    or trying to stifle free speech by saying, oh, we are not going
    to register that domain name, we are going to, you know, block
    this. We are not doing that, right?
        Mr. Strickling. That is correct.
        Mr. Farenthold. And in fact, this country has been pretty
    aggressive about protecting that. I know we had quite a debate
    here in Congress when SOPA and PIPA came out, we were talking
    about, you know, blocking things, a little above your level at
    the DNS level, but we didn't do that. So I guess I come back
    to, it isn't broke, it is not expensive, why are we messing
    with it?
        Mr. Strickling. Well, again, I repeat what I said before,
    we are carrying out the policy that was established in 1998 to
    complete the privatization of this function. And we are----
        Mr. Farenthold. All right. And I understand where you are
    going with that, and I----
        Mr. Strickling. Yes. Could I add, sir?
        Mr. Farenthold. Sure.
        Mr. Strickling. But what we have put in place now is a
    process for the community to decide how best to replace our
    role. They may decide nothing is needed, because as I said
    before, it is largely a clerical role. That is for the
    community to decide.
        Mr. Farenthold. Right. And I think you also testified in
    response to a question from Chairman Goodlatte, with respect to
    the affirmation deal, isn't it correct that that could be
    abrogated with just a couple months' notice?
        Mr. Strickling. The document can be abrogated on 120 days'
    notice. But as I also testified, the commitments that ICANN
    makes in that largely come directly from its bylaws, so they
    are not going to go away.
        Mr. Farenthold. And, you know, again, I am going to beg to
    differ with you there, that I like the fact that America
    continues to be in a leadership role in the Internet.
        Mr. Strickling. We will continue in that leadership role,
    sir.
        Mr. Farenthold. We basically invented it, you know. Our tax
    dollars funded DARPA which became the Internet. I would argue,
    it may be the only successful computing project this government
    has actually ever undertaken. So, you know, I am concerned
    about giving up our leadership role.
        Finally, I----
        Mr. Strickling. Sir, please, I must push back on you. We
    are not giving up our leadership role. We are stepping out of a
    clerical function that we currently perform, but as I have
    testified I think to many of the Members this morning, we are
    not giving up our leadership role in this space.
        Mr. Farenthold. All right. And you and I visited a couple
    seconds before the meeting. My office had sent you a letter
    with some specific questions and rather than take up this
    Committee's time dealing with this, I just want you to just
    state for the record you are in the process of answering that
    and will have those answers in short order, some things dealing
    with some constitutional analysis and background and the
    process coming to this decision. You are committed to getting
    us an answer to those questions?
        Mr. Strickling. Yes, sir, we are preparing answers to your
    questions, and we will get that to you as quickly as we can.
        Mr. Farenthold. And I don't want to put you on the spot. I
    want full and accurate answers----
        Mr. Strickling. Sir, feel free.
        Mr. Farenthold [continuing]. So I will be waiting for the
    response to that letter. Hopefully it will not close before the
    opportunity to file extraneous materials in the record for this
    hearing.
        But my red light is on, so I am out of time. Thank you.
        Mr. Marino. Thank you.
        The Chair now recognizes the gentlewoman from California,
    Dr. Chu.
        Ms. Chu. Thank you, Mr. Chair.
        A number of U.S. companies including, for example, Google,
    Verizon, AT&T, and the Chamber of Commerce have expressed their
    support for NTIA's announcement and the transition to this
    multi-stakeholder process. Why do these companies support this,
    and how might this transition affect their businesses here and
    overseas?
        Mr. Strickling. So, first off, you referred to a transition
    to the multi-stakeholder model. The multi-stakeholder model
    exists today. It is the way ICANN does business. I think what
    you are seeing in the various positive responses we are getting
    from these large companies here in the United States, and the
    other support that we are getting from civil society and from
    technical experts reflects the fact that the multi-stakeholder
    model has worked. It is what has led to the economic growth and
    innovation we enjoy today on the Internet, and they want to see
    that continue.
        And I think that is why they are so strongly in support of
    this very, again, renewed affirmation of support from the
    United States for this model, setting an example for the rest
    of the world. Because one of the challenges we face is getting
    other parts of the world to accept this model, to join in this
    effort.
        We need to be able to convince these countries that
    engaging in the multi-stakeholder model can bring the benefits
    of the Internet economy into their Nations, the job creation,
    the wealth creation, and I think these countries stand to gain
    a lot from the growth of users of the Internet and the more
    intensive use of the Internet by existing users, and that is
    why they support this.
        Ms. Chu. And the way it would affect their businesses here
    and overseas?
        Mr. Strickling. I think, as the multi-stakeholder model
    continues to grow and expand overseas, it will help their
    businesses.
        Ms. Chu. What would be the impact if Congress were to halt
    this transition?
        Mr. Strickling. Well, I think we would suffer seriously in
    the face of the rest of the world in terms of a policy that has
    been a clear and unequivocal policy for 15 years, to all of a
    sudden step in and reject that policy. It would show a lack of
    faith in the multi-stakeholder model, and I think there would
    be repercussions for us worldwide.
        Ms. Chu. Some have suggested that NTIA's announcements is a
    knee-jerk reaction to international anger over Edward Snowden's
    leaks about U.S. surveillance. So I would like to ask you, how,
    if at all, has that issue played into this announcement?
        Mr. Strickling. So as I explained in response to an earlier
    question, our decision to do this and to do it now was based on
    two factors: One was the continuing improvement in maturation
    of ICANN in terms of its accountability and transparency and
    technical competence. I mentioned that I had served on these
    two accountability and transparency review teams in 2010 and
    2013, the result of which have been a series of recommendations
    that have been adopted by the ICANN board, implemented by the
    ICANN staff and have led to measurable and significant
    improvement in that regard.
        The other factor that bore on this was the increasing
    international acceptance of the multi-stakeholder model. Again,
    it is trending positively. It is not where it needs to be in
    terms of where we would like to see the international community
    be in terms of support for that, but the trend line was going
    well.
        And we felt that, again, making this announcement at this
    time would provide something of a booster shot to those efforts
    to continue to build international support for the multi-
    stakeholder model of governance, which as I mentioned, in
    response to your earlier question, very important to American
    businesses, very important to continuing the concept of a free
    and open and growing and innovative Internet.
        Ms. Chu. What are your thoughts about subjecting this
    transition and accountability mechanism to stress test?
        Mr. Strickling. We think that is a good idea, in the sense
    that there are serious questions that are being raised here in
    this hearing. We heard them last week at the Energy and
    Commerce hearing. We are hearing them in the community. What we
    have done is simply ask ICANN to convene a process that is
    going to last for many months.
        We do think that all of these issues that people have,
    these concerns that people have raised about what could happen
    here, what might happen there, we ought to develop, and when I
    say ``we,'' I am really referring to the global community that
    works on this. I think it is incumbent upon them to develop
    these use cases and really think through and, as you say,
    stress test them to make sure that the proposal that comes back
    to us is going to meet the conditions and is going to be
    sustainable for the long term.
        Ms. Chu. Could you explain what is the stress test and how
    it might give more assurance to----
        Mr. Strickling. Well, I think the idea is that rather than
    just sitting down and designing a process in isolation, the
    idea of the use cases and stress tests are that you really sit
    down and figure out, what are all the scenarios that might
    emerge, what are all the things that might go differently than
    you assume, and plan at the front end as to how you will
    respond to that if that emerges or to take action in making
    your proposal; that will ensure that the proposal is designed
    strong enough that those situations won't arise and jeopardize
    what it is you are trying to accomplish.
        So it seems to us, this is a very appropriate and
    commonsense way to proceed. My understanding is, and you will
    hear from Fadi Chehade in the next panel, he endorses this. I
    think the community heard this discussion in Singapore several
    weeks ago. I think the community is coming around in support of
    it.
        So I think it is a good idea, and I expect the community
    will actually apply that as they develop their proposal. It is
    a smart thing to do.
        Ms. Chu. Thank you.
        I yield back.
        Mr. Marino. Thank you, Doctor.
        I yield myself 5 minutes now to ask questions. Secretary,
    we are going to do a little lightning round, okay?
        Mr. Strickling. Okay. I will try.
        Mr. Marino. Mr. Secretary, I appreciate your commitment to
    keeping this Committee informed. You and I had a very lengthy
    discussion yesterday and a very good exchange. And throughout
    this proposed transition process, will you also commit to
    working with the Members of this Committee to ensure we can
    develop a consensus before decisions are made or announced.
        Mr. Strickling. Yes, sir, we will keep you informed. We
    will keep my other Committee, Energy and Commerce well
    informed, as well. I have got to put that in. No favoritism
    here. We will endeavor to keep Congress informed of progress
    throughout the process, yes, sir.
        Mr. Marino. And informed in time enough for us to further
    get involved in the decisionmaking as far as our opinions are
    concerned?
        Mr. Strickling. Yes. Chairman, we want this to be a
    consensus proposal.
        Mr. Marino. Good.
        Mr. Strickling. Congress are stakeholders, too, and we
    would hope that you will participate in the process however you
    wish to ensure that we reach a good outcome here.
        Mr. Marino. We appreciate that.
        If we give up oversight, over to the IANA contract, the
    only role we have in ICANN is the Government Affairs Committee;
    is that correct?
        Mr. Strickling. You say the only other role?
        Mr. Marino. Yes, the only.
        Mr. Strickling. Oh, that is not true today.
        Mr. Marino. Please elaborate.
        Mr. Strickling. I am sorry?
        Mr. Marino. Could you please elaborate on that.
        Mr. Strickling. Yes. So we have the Government Advisory
    Committee; in addition, we are the signatory to the affirmation
    of commitments that we have talked about. And I think I
    mentioned several times, I personally have a seat on the
    accountability and transparency review team that meets every 3
    years.
        Mr. Marino. Okay. I am going to pose a quick hypothetical
    to you: As far as putting the American people on solid footing,
    if I may use that suggestion, will our concerns be weighed
    equally with as much input from ICANN concerning North Korea?
    Let me rephrase that.
        Mr. Strickling. Yeah.
        Mr. Marino. Okay. Will the American people's concerns be
    equally weighed with those of North Korea?
        Mr. Strickling. I am not even sure North Korea will
    participate in this process, but I will assure you, American
    interests will be well taken care of as part of this process.
    We will ensure that that happens.
        Mr. Marino. What if communist countries do participate in
    this? Are they going to be given equal weight as democratic
    countries?
        Mr. Strickling. Well, again, I think you are kind of
    migrating over to a multilateral or governmental type of
    discussion. The multi-stakeholder process does not operate by
    governments or by states; it operates by stakeholders. So when
    Cisco appears and operates in this, they may be sending staff
    members from any number of countries who are knowledgeable on
    the issues, but they are there to represent Cisco's interests.
        So what I can assure you is that a well-run, open,
    transparent multi-stakeholder process takes into account
    everyone's issues and everyone's concerns.
        Mr. Marino. Okay. Can you give me your opinion as to why
    former President Clinton made the statement he made, given the
    fact that this was put together under his watch?
        Mr. Strickling. Well, as I read his statement, I did not
    see any lack of support for the multi-stakeholder model. I
    didn't see any statement from him saying that we shouldn't have
    done what we did. What I saw in his statement was that he
    raised concerns, many of which you have raised, have been
    raised here and many that have been raised in other parts of
    the community, and those are important concerns and we want to
    make sure they are addressed as part of this process.
        Mr. Marino. What do we tell our constituents back home,
    what do we tell the American people when the issue comes up of
    what influence, if any, and what authority, if any, is the
    United Nations going to play in this issue?
        Mr. Strickling. So what you want to tell your constituents
    is that the United States is opposed to having the United
    Nations run the Internet; that this process that we have put in
    place, we think, will reduce the risk of that happening; and
    that the proposal that has to be brought back to us cannot
    result in the United Nations taking this over, and we will do
    everything within our power to prevent that from happening.
        I would add to that, that I see no real basis on which to
    assume that the multi-stakeholder community would ever bring
    such a proposal like that back to us. So I think it is an
    extremely small likelihood of occurring. We stated it
    explicitly because we wanted to assure people that wouldn't be
    an outcome of this process.
        Mr. Marino. Given the fact that the U.N. has endorsed this,
    do you have any opinion about that concerning their role in
    this?
        Mr. Strickling. Well, when you say the U.N. has endorsed
    it, I am not sure what you mean. I am aware of a statement from
    the secretary general, but I view that as actually showing
    progress in the sense that the secretary general is endorsing
    the multi-stakeholder model.
        The issue at the U.N. isn't the Secretary General. The
    issue at the U.N. are authoritarian regimes such as Russia and
    countries in the Middle East that attempt to use the U.N. as a
    way to meet their policy goals. The problem is not with the
    Secretary General.
        Mr. Marino. Okay. My time has expired.
        And the Chair now recognizes the Congressman from New York,
    Congressman Jeffries.
        Mr. Jeffries. Thank you very much for yielding.
        And Mr. Strickling, thank you for your presence here today.
        Now, privatization of the domain-name system has been
    contemplated since 1998; is that correct?
        Mr. Strickling. As a practical matter, it has happened. The
    only thing that is remaining is this last little vestige of
    involvement that we have, but ICANN has been managing the
    domain-name system and has been conducting the multi-
    stakeholder processes to set policy in this space for over--
    well, 15 years.
        Mr. Jeffries. Now, in terms of the formal transition, was
    that something that originally was expected by NTIA to occur in
    2000?
        Mr. Strickling. The statement of policy released in 1998
    did lay out 2000 as the date they hoped of which to complete
    the transition. Obviously, we are a little late.
        Mr. Jeffries. So I assume that the privatization that was
    originally contemplated to have been completed by 2000 did not
    occur because NTIA came to the conclusion that ICANN hadn't
    reached the sufficient level of maturity at that time?
        Mr. Strickling. I wasn't there, so I hesitate to give the
    reasons for why it didn't happen. I have heard people say that,
    you know, 9/11, after it occurred, I think, changed some
    behavior as to why, or changed some views on this, but I don't
    know the particulars.
        Mr. Jeffries. But nevertheless, you have now concluded that
    ICANN has reached the sufficient level of maturity, correct?
        Mr. Strickling. That is a factor, yes, in leading us to
    make the announcement we made 4 weeks ago, yes.
        Mr. Jeffries. And what are the indications of that level of
    maturity that you have come to the conclusion that now is an
    appropriate time to move forward with the final stage of
    privatization?
        Mr. Strickling. So as I mentioned earlier in my testimony,
    in large part, the work to improve its accountability and
    transparency. When the affirmation of commitments was signed in
    2009, it created a series of review teams so that the global
    community now had an opportunity to review ICANN's performance
    in a number of areas, the most important of which was their
    overall accountability and transparency to the global
    community. As part of that process, teams are put together and
    they run every 3 years to evaluate ICANN's performance in these
    different areas.
        For accountability and transparency, we set up the
    affirmation so that I, or the Assistant Secretary of Commerce,
    sits on that team. So I personally have participated in very
    lengthy, in-depth reviews of ICANN's accountability and
    transparency, first in 2010 and again last year in 2013.
        Mr. Jeffries. Now, you also stated that you expected that
    the U.S. would continue its leadership role with respect to the
    Internet moving forward, correct?
        Mr. Strickling. Absolutely. We are not going anywhere.
        Mr. Jeffries. Right. Now, can you elaborate on how exactly
    you expect the United States under this completion of
    privatization to maintain its leadership role?
        Mr. Strickling. So again, with respect to ICANN, we will
    continue to play a leadership role in the Governmental Advisory
    Committee just as we have up until now. We will continue to
    participate in the accountability and transparency reviews. I
    think worldwide, though, the United States has always been a
    leader on these issues of Internet policy and Internet
    governance, even beyond just the narrow area, technical area in
    which ICANN performs. We are not yielding that one bit.
        Mr. Jeffries. Now, it is fair to say that the First
    Amendment protections embedded in our Constitution have been
    important to the United States throughout the history of the
    Republic and have helped inform how the Internet has developed
    through United States leadership; is that correct?
        Mr. Strickling. I would tell you that the idea of a free
    and open Internet and the freedom of expression on the Internet
    supersedes, or no, it doesn't supersede but it even transcends
    our First Amendment here in the United States. I mean, that is
    a global value that we increasingly see other countries who
    perhaps don't have the domestic tradition of a First Amendment
    protection in their own constitutions, yet they recognize the
    importance of free expression as a way to grow the Internet. So
    I would say it is more worldwide than just a U.S. issue or U.S.
    value.
        Mr. Jeffries. But isn't it reasonable to be concerned about
    authoritarian governments such as Russia or China or other
    entities that have been moving toward authoritarianism? We saw
    a recent example with the Turkish prime minister as it relates
    to Twitter.
        Are these reasonable concerns as it relates to maintaining
    the openness of the Internet, which I think you yourself have
    testified openness is one of the four criteria that NTIA will
    evaluate; and what are the metrics by which you will measure
    whether sufficient anticensorship measures have been put into
    place?
        Mr. Strickling. Well, again, for the issue that we have
    before us, I am not sure that we are going to get into content
    issues or censorship issues. When you talk about the
    performance of the IANA functions, those aren't content-based
    issues. But in general, I think the United States has to remain
    a beacon for the rest of the world in the area of supporting
    free flow of information on the Internet.
        It is critical to our business interests; it is critical
    for our social interests in ensuring that not just American
    citizens but global citizens, have the ability to express
    themselves on the Internet and I expect that we and the State
    Department and everybody who touches these issues will continue
    to be strong and vigorous advocates for that.
        Mr. Jeffries. My time has expired, but I would simply state
    for the record, too, that how one accesses information through
    the address system that is available is a key link to content,
    and I think that is a consideration that must be taken into
    account.
        I yield back.
        Mr. Strickling. Thank you, sir.
        Mr. Marino. Thank you, Congressman.
        The Chair now goes to the Congresswoman from California,
    Congresswoman Lofgren.
        Ms. Lofgren. Thank you very much, Mr. Chairman.
        You know, it has been interesting to listen to some of the
    discussion today and it reminds me that generally when the
    Congress gets involved in the engineering questions of the
    Internet, we sometimes show that we don't understand the
    Internet and we often almost make mistakes, I think, about the
    call that some on the Committee made to, quote, bring in the
    nerds during the SOPA discussion because it was pretty obvious
    that most of the Members didn't even know what DNS was.
        I do think, therefore, that this hearing is very, very
    helpful, because it informs us and the American people about
    what really is the question before us.
        I remember, I was on the Committee in 1998, 1997 when we
    had these discussions initially, and obviously, America
    invented the Internet, but it became obvious to all of us in
    the mid-1990's that we were not going to have an international
    Internet run by the Department of Commerce, that was just not
    going to work.
        And we had some choices to make, and the choice we made and
    I think has proven to work very well, is to have private-
    sector, multi-stakeholder governance of these core functions,
    and it is driven by, you know, engineers and technical people,
    and I think, you know, and it is not just the generic top-level
    domain system, I mean, IPv4 and IPv6, we have a nongovernmental
    function, that those at that level are being managed by the
    ARIN and RIPE in Europe and elsewhere, so this is not new.
        And I do think it is important that we stand up for what
    has worked, because the alternative, which was the same
    alternative we really had in the 1990's, was to try and have
    government control of this system. Now, we have had
    discussions, ITU had the conference in Dubai where
    authoritarian regimes openly discussed trying to take over all
    functions with an intent to subvert the free and open nature of
    the Internet.
        I think we can't have it both ways. Either we are for
    nongovernmental, multi-stakeholder governance or we are for
    governmental governance and if it is the latter, I think we are
    walking into a very serious bad problem which is the agenda of
    authoritarian regimes to take over this.
        Now, I am against government control of the Internet. I am
    against government regulation of the Internet. And I think, and
    I come from Silicon Valley, all of the Internet companies that
    I am aware of are in favor of an open Internet. So I guess my
    question to you, Mr. Strickling, is, do you know of any of the
    Internet companies that oppose what you are doing?
        Mr. Strickling. No, and, in fact, we have gotten the
    support of the Internet Association, which is a trade
    association of many of those companies. Google and Facebook and
    Cisco have all issued strong statements of support for this,
    and I am sure others that I just don't recall sitting here now.
        Ms. Lofgren. I know that Vint Cerf was at one time on the
    governing board of ICANN, along with other famous Internet
    evangelists. What does Vint Cerf say about this proposal?
        Mr. Strickling. Oh, Vint is a very strong supporter of this
    and has been quoted in the press multiple times over the last 3
    or 4 weeks indicating his support for this.
        Ms. Lofgren. Well, I would just urge, and I won't use all
    my time because we have another panel, but I think that it is
    important that this Committee stand up against the inaccuracies
    that have been promulgated out in the press by people, I assume
    they are working in good faith, but who misunderstand what is
    even being discussed here; and that we stand up for freedom on
    the Internet, which means standing up for multi-stakeholder
    governance and against government control and regulation of the
    Internet.
        That is what this is about. It is what the decision was
    about in 1998 and I still remember the conversation I had with
    Howard Berman at the time saying, you know, we are just not
    going to--it is not a good idea for the government to run this.
    And I think that the Committee was of one mind at that time,
    and hopefully we are of the same mind at this point to preserve
    a free and open Internet.
        And I thank you for your service, sir.
        Mr. Strickling. Well, thank you, congresswoman.
        Mr. Marino. Thank you.
        I see there are no other congresswomen or men here at this
    time, so I want to thank Secretary Strickling for his
    testimony. It was very enlightening, and thank you for being
    here.
        Mr. Strickling. Thank you.
        Mr. Marino. We are going to turn to our second panel, but I
    want my colleagues to know that the record will remain open for
    5 days where they can submit questions to you and hopefully you
    can get some responses back, if you don't mind.
        Again, thank you very much and I am now going to turn to
    the second panel.
        And if you would remain standing, we will get the swearing
    in out of the way. Good morning, gentlemen. Would you please
    raise your right hand.
        [Witnesses sworn.]
        Mr. Marino. You may be seated. And let the record reflect
    that the witnesses answered in the affirmative.
        And let me just give you an update on what is going to
    happen. In the next 10 to 15 minutes we are going to be called
    for votes. We were supposed to have three series today, they
    condensed the last two into one series of votes. However, it is
    broken up where we vote, 10 minutes later vote again, 10
    minutes later vote again.
        We want to continue with this hearing. If it is all right
    with you, I am asking if you would indulge us, and you are
    probably going to be waiting for us for 45 minutes. Jerry says
    it may not be that long. So, I am not as optimistic as he is,
    but if that is the case, so be it. Does anyone have any
    objections? I know your schedules.
        All right, thank you. Thanks so much.
        Our first witness is Mr. Paul Rosenzweig. Am I pronouncing
    that correctly?
        Mr. Rosenzweig. Yes, Mr. Marino.
        Mr. Marino. Thank you. Founder of Red Branch Law and
    Consulting and Visiting Fellow at the Heritage Foundation. He
    is here today to testify in his personal capacity. Mr.
    Rosenzweig formally served as Deputy Assistant Secretary for
    Policy in the Department of Homeland Security; in addition to
    clerking for the Honorable R. Lanier Anderson, III, of the
    United States Court of Appeals for the 11th Circuit.
        Mr. Rosenzweig received his juris doctorate from the
    University of Chicago School of Law. He holds a Master's in
    Science and Chemical Oceanography from the Scripps Institute of
    Oceanography University of California in San Diego and his
    Bachelor of Arts is from Haverford College. Welcome.
        Mr. Rosenzweig. Thank you.
        Mr. Marino. Our next witness is Mister, and help me out on
    the pronunciation, Fadi Chehade. Thank you. President and Chief
    Executive Officer of the Internet Corporation for Assigned
    Names and Numbers, also known as ICANN. Mr. Chehade leads and
    builds progressive Internet enterprises and leverages
    relationships with senior executives and government officials
    across Asia, Europe and the Middle East and the United States.
        Before joining ICANN in 2012, he served as Chief Executive
    Officer of Vocado, a U.S. firm that provides cloud-based
    software for the administration of educational institutions.
    Mr. Chehade received his Master's Degree in Engineering
    Management from Stanford University and his Bachelor's Degrees
    in Computer Science from Polytechnic University in New York.
    Welcome, sir.
        Our third witness is Mr. Steven Metalitz, partner at
    Mitchell Silberberg & Knupp and counsel to the Coalition for
    Online Accountability. For nearly 20 years, Mr. Metalitz had
    advised the trade association and companies in the film, music,
    software, video game and publishing industries on domestic and
    international, antipiracy and e-commerce issues.
        As counsel to the Coalition on Online Accountability, Mr.
    Metalitz represents the interest of copyright industry
    companies, associations and organizations on matters that come
    before ICANN. Mr. Metalitz received his juris doctorate from
    Georgetown University Law Center and his Bachelor of Arts from
    the University of Chicago. It is good to see you here, sir.
        Our fourth and final witness is Mr. Daniel Castro, Senior
    Analyst With Information Technology & Innovation Foundation,
    also known as ITIF. He is also Director of the Center for Data
    Innovation. Mr. Castro writes and speaks on a variety of issues
    related to information technologies and Internet policy,
    including privacy, security, intellectual property and Internet
    governance.
        Before joining ITIF, he worked as an IT analyst at the
    Government Accountability Office where he audited IT security
    and management controls at various government agencies. Mr.
    Castro holds a Master's of Science and Information Security
    Technology in Management from Carnegie Mellon University and
    his Bachelor's of Science in Foreign Service from Georgetown
    University.
        Welcome to you all, and once again, we are going to start
    with Mr. Rosenzweig. And let me, please, again, emphasize,
    would you kindly watch the lights, keep your remarks to 5
    minutes. I will politely tap; you don't have to stop there, but
    just bring it to a conclusion. And bear in mind that all of
    your statements will be entered into the record as full. Thank
    you.
        Sir, please.

      TESTIMONY OF PAUL ROSENZWEIG, VISITING FELLOW, THE HERITAGE
           FOUNDATION, PRINCIPAL, RED BRANCH CONSULTING, PLLC

        Mr. Rosenzweig. Thank you, Chairman Marino, Ranking Member
    Nadler, thank you very much for the invitation to be here.
        I confess to find myself a bit confused after the
    conclusion of the prior panel, because if I were to have
    listened to Mr. Strickling, I would have heard that this was an
    exceedingly minor ministerial change which, if that is the
    case, should neither be opposed nor approved but with any great
    degree of fervor. I think the truth is to the contrary, that
    this is a rather consequential change of great significance.
        And I also find myself unconvinced at this point whether it
    is going to be a success or not. I am quite certain that there
    are many ways in which the transition of the IANA function to
    ICANN can work very well. I am also quite certain that there
    are instances in which the proposals that would come forward
    from the community might not be sufficiently protective of some
    of the interests that we think are important in terms of the
    management of the network.
        Indeed, I thought Congressman Jeffries' point was quite
    well taken, which is that there is in the world a significant
    anti-openness, anti-freedom component to the argument, and it
    is at least feasible to imagine certain structures that would
    be developed that would, rather than foster that openness in
    freedom, degrade it.
        So I think the challenge for ICANN going forward, one that
    I am open to their succeeding on, is to develop an architecture
    for the IANA management function that ensures its technical
    capability, that is that the DNS will continue to function as
    well as it functions now; ensures that it maintains a political
    independence from control of authoritarian regimes.
        It is absolutely the case that in the last expansion of
    global top-level domains, some people thought of the top-level
    domains as content based and therefore opposed new top-level
    domains like dot Islam or dot gay on the grounds that they were
    expressive and shouldn't be continued. We can develop
    structures that prohibit, that avoid diminution of the
    openness, but those structures need to be defined, as well.
        Likewise, it is absolutely the case that there are certain
    financial components to the expansion of global top-level
    domains that need to be controlled for and managed in a way to
    ensure that ICANN or the IANA management function doesn't take
    on aspects of an unregulated monopoly, something that Daniel's
    testimony talks about at greater length. I think that there is
    a possibility for that structure to be developed, but it is
    going to have to be brought forward and shown to the NTIA as a
    successful one.
        I can outline some of the components of what I think that
    would necessarily include: Things like outside audit boards for
    the IANA function; maybe an inspector general type
    functionality; a commitment for the new IANA function to a
    FOIA-like responsiveness to the public, such that all of the
    information that is necessary for people to actually have some
    confidence in the transparency and accountability of the
    institution are in place.
        Those are not necessarily impossible things to achieve. And
    then the fourth thing that I would suggest is essential, is
    some way of gaining an assurance that once we have the
    structure in place, it doesn't change. I agree with Mr.
    Strickling that the affirmation of commitments is part of the
    bylaws, for example, of ICANN, but corporations can change
    their bylaws at some point. It takes an act of the board of
    directors and there is a barrier to do that, but if we think it
    is important, we want to try and figure out aspects of the
    mechanism that make that less likely to happen.
        Again, I don't think that those are impossible objectives
    to achieve, but what I do think is that it is going to take a
    great deal of conversation within ICANN, a great deal of
    conversation within the community and that we here in the
    United States, we at the NTIA ought to be cautious in
    proceeding and ought to insist that the details of the
    transition process be made clear before approving the
    transition.
        The principles that Mr. Strickling articulated are
    eminently reasonable and ones that everybody ought to support
    as a necessary component of the transition. But we ought to
    also be clear that if the proposal doesn't meet those
    principles in actual practice, that the NTIA should maintain
    its current role. These are not impossible objectives, but they
    are going to be ones that are going to require a lot of process
    from ICANN in order to achieve.
        I thank you.
        [The prepared statement of Paul Rosenzweig follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                   __________
        Mr. Marino. Thank you, sir.
        Mr. Chehade, please.

       TESTIMONY OF FADI CHEHADE, PRESIDENT AND CHIEF EXECUTIVE
     OFFICER, INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS
                                (ICANN)

        Mr. Chehade. Mr. Chairman, Ranking Member, Members of the
    Subcommittee, thank you for welcoming me here today. I am Fadi
    Chehade, the President and CEO of ICANN, and I am here today to
    provide you testimony that hopefully will help with this
    discussion.
        I was 18 when my father insisted I leave our war-torn
    country that was governed by an oppressive regime. And I asked
    him, why don't I just go to a place where I speak the language,
    because I did not speak English. And my late father said, go to
    America. That is the place that has our values: Openness,
    inclusivity, acceptance, freedom. And I came alone at 18. And
    it has been a remarkable journey, a journey of all these values
    have proved to be true; in fact, they are truest today as I
    stand in front of you.
        These same values underpin the Internet. It was our
    invention, open, inclusive, promoting freedom, again. And it is
    this Internet that I stand before you today to support, because
    many of us think of the Internet as a place that is open and
    free and inclusive. We forget that the American genius that
    created the Internet, which I don't take credit for, I give
    credit to my boss, the chairman of ICANN who is behind me, and
    many others, Dr. Crocker, who invented this when they were in
    high school together, these people equally invented the system
    of governing the Internet which we call the multi-stakeholder
    system. It is a remarkable invention almost as good as the
    Internet where no one can capture this governance model.
        Today at ICANN, yes, we have 133 governments. They cannot
    even offer me advice or offer the board advice unless all 133
    can reach consensus. What kind of capture can happen in a
    system like that? And that is just the governments. Then we
    have all the stakeholders, the users, the civil liberty folks.
    Everyone is at the table with an equal voice. Consensus is
    hard, very hard to achieve, but it is by design like the
    Internet impossible to capture, and it is what made ICANN
    successful today.
        We are promoting the Internet and the multi-stakeholder
    model to the world, and therefore the decision of NTIA to show
    the American people's trust in the multi-stakeholder model is a
    momentous decision; it is a decision telling the world, not
    only have we given you the Internet, but we are giving you a
    model we trust. And the model works. It works very well. It is
    through that model that we have a $4 trillion digital economy
    that fuels the economies of the world today. It is all borne
    out of engineers, academics, Americans, foreigners, everyone
    working together to create this great resource called the
    Internet.
        Today, I stand before you to say the following: I did not
    hear all morning any disagreement that we all want less
    government in the affairs of the Internet. I don't think anyone
    disagrees with that. However, what I did hear is valid concerns
    that we make sure that as this last bit of involvement in the
    IANA functions goes away, that it does not get replaced with
    the wrong mechanism.
        I am with you on that. And as the President of ICANN, I
    want to give you the assurance that we will build the mechanism
    that not only meets the requirements that NTIA put out to
    ensure no government or intergovernmental organization controls
    that mechanism, but I will make sure that these same conditions
    set by NTIA survive the transition. It is important that we
    believe in these parameters, these principles, and we keep them
    at the heart of how ICANN works.
        And I am not alone: Cisco, Microsoft, AT&T, Verizon,
    Facebook, the U.S. Chamber of Commerce, even the Motion Picture
    Association, everyone is engaged with us. I give you this
    assurance. Today, I invite you to join us, as well, in the
    ICANN processes. Please do come visit and watch how this great
    American invention called the multi-stakeholder model works. It
    works very well.
        I am here to take your questions, and I thank you again for
    welcoming us.
        [The prepared statement of Mr. Chehade follows:]
       Prepared Statement of Fadi Chehade, President and Chief Executive
      Officer, Internet Corporation for Assigned Names and Numbers (ICANN)
        Mr. Chairman, Ranking Member, and members of the Subcommittee, I am
    Fadi Chehade, the President and CEO of ICANN, the Internet Corporation
    for Assigned Names and Numbers. I am very pleased to be testifying
    before you today.
        Forty-five years ago, America demonstrated its technological
    brilliance by inventing the Internet. We showed our diplomatic genius
    29 years later, by establishing a multistakeholder community model to
    govern a part of the Internet's basic functioning, free from the
    political pressures inherent in government-run institutions. This was a
    bold and unprecedented experiment. Governance by those who make the
    Internet work for the benefit of all. Over the past 16 years the
    multistakeholder community has demonstrated an extraordinary capacity
    to govern itself, and according to the framework laid out across three
    U.S. Presidential administrations, ICANN has matured into a
    responsible, representative, respected governing body. America's great
    experiment has succeeded.
        In recent years some have questioned the principle of the
    multistakeholder community. Some critics demand a greater role for
    governments, perhaps by transferring functions performed by ICANN to an
    inter-governmental organization, such as the ITU. They point out that
    the Internet is not truly free from government control if one
    government retains unique control for itself--referring to the United
    States, via issuance of the contract with ICANN to perform the Internet
    Assigned Numbers Authority (IANA) functions. The U.S., its allies, and
    the vast majority of stakeholders acknowledge this one exception to the
    ``no government control'' rule, but make clear that overseeing the IANA
    contract is ministerial, minor and has had no real impact on day-to-day
    operations of ICANN or the Internet. And they remind us that for nearly
    16 years the U.S. has consistently voiced its support for the
    multistakeholder model rather than a government-run model.
    Additionally, the U.S. has consistently reduced its unilateral
    involvement in ICANN matters and oversight of ICANN operations.
        On March 14th, the NTIA announced its intent to transition this
    final element--stewardship of Internet domain name functions via the
    IANA contract--to the global multistakeholder community. The U.S.
    called upon ICANN to convene a process to develop a proposal for that
    transition that will guarantee no future government control. ICANN, the
    Internet technical organizations and many American organizations--such
    as AT&T, Cisco, Google, Microsoft, Neustar, the U.S. Chamber and
    Verizon--almost immediately voiced their support for NTIA's
    announcement.
        As outlined in the NTIA's announcement, the NTIA's stewardship role
    will not be replaced with a government-led or an intergovernmental
    solution. This is consistent with the unequivocal policy expressed in
    the 2012 bipartisan resolutions of the U.S. Senate and House of
    Representatives (S.Con.Res.50 and H.Con.Res.127) affirming U.S. support
    for the multistakeholder model of Internet governance.
        In brief, the proposal generated through broad multistakeholder
    dialogue will meet the following four fundamental criteria:

              Supports and enhances the multistakeholder model

              Maintains the security, stability and resiliency of
            the DNS

              Meets the expectations of affected parties

              Maintains the openness of the Internet

        ICANN is committed to developing a robust bottom-up process to
    develop the proposal for transition. At ICANN's forty ninth public
    meeting, which took place March 21-27 in Singapore, ICANN launched
    discussions with the multistakeholder community, in-person and
    remotely, for public dialogue on how the mechanisms for the transition
    should occur. Inputs were compiled, and, on April 8, ICANN intends to
    seek public comment and community feedback on the principles,
    mechanisms, and process for arriving at a proposal that meets NTIA's
    criteria. The feedback from the community will inform the process going
    forward. ICANN is facilitating the process, and in this regard will
    work with its partners to engage the global multistakeholder community
    in relevant forums and meetings around the world, in addition to
    ICANN's public meetings.
        In its role as administrator of the IANA functions since 1998,
    ICANN has been responsible for coordinating unique Internet
    identifiers--names, IP numbers, and protocol parameters--and has done
    so while maintaining the continued security, stability, and resiliency
    of the Internet. It is important to note that ICANN doesn't control
    content on the Internet; instead it coordinates the Internet's unique
    identifier functions. These functions are not apparent to most Internet
    users, but they play a critical role in maintaining a single, global,
    unified and interoperable Internet. ICANN has performed the IANA
    functions for nearly 16 years, in a no-fee agreement with the U.S.
    government.
        Since its inception in 1998, ICANN has evolved its accountability
    and transparency mechanisms for the benefit of the global community.
    ICANN's Bylaws, and the Affirmation of Commitments, establish clear
    mechanisms for ICANN's evolution, review of its processes, and
    improvements, through community input and multistakeholder review
    committees. With the eventual transition, ICANN recognizes the urgency
    of enhancing and extending its accountability mechanisms. At the
    meeting in Singapore, the ICANN multistakeholder community began a
    dialogue on this subject, taking the Affirmation of Commitments as a
    baseline.
        In relation to the IANA functions, ICANN's Performance Standards
    for timeliness and accuracy of processing stakeholder's requests are
    published on a monthly basis. In addition, ICANN is subject to an
    annual audit of the security of the IANA functions systems. Over the
    years, ICANN has performed the IANA functions with increasing autonomy,
    demonstrating in the process both operational excellence and maturity
    in organization--as illustrated by the findings of the IANA Functions
    Satisfaction Survey of December 2013. In addition, after an independent
    assessment, the IANA Functions Department received recognition from an
    international organization for its business excellence.
        Now, let me be clear: NTIA's announcement will not affect the
    status quo. The continued strength and stability of the IANA functions
    are critical to the operation of the Internet. The IANA functions will
    continue to be administered by ICANN in coordination and cooperation
    with the affected parties (country code and generic top-level domain
    operators, root server system operators, regional Internet registries,
    the Internet Architecture Board and the Internet Engineering Task
    Force). These bodies continue to hold policy authority for names, IP
    numbers and protocol parameters. They also maintain oversight
    responsibility to ensure that ICANN administers these functions
    according to those policies. Finally, this announcement does not affect
    Internet users and their use of the Internet. While stakeholders work
    through the ICANN-convened process to develop a transition proposal,
    NTIA's current role will remain unchanged.
        Since ICANN's beginning, the U.S. government has envisaged
    transitioning its modest stewardship role to the private-sector led,
    multistakeholder community. Today, ICANN is uniquely positioned, as
    both the current IANA functions contractor and the global coordinator
    for the DNS, to convene the multistakeholder process to develop the
    transition plan. NTIA's announcement in fact represents the final
    triumph of the American ideal for self-governance by the Internet
    community, free from government control, even our own. Few nations in
    history have had such vision, magnanimity and consistency. ICANN
    understands and accepts the responsibility of the task at hand, and I
    am confident in ICANN's ability to lead the community in this effort.
        Both ICANN and the U.S. government have championed the
    multistakeholder model, in which standards and policies are developed
    by large and small businesses, the technical community, not-for-profit
    organizations, civil society, intellectual property experts,
    governments, academia, and Internet users from around the globe.
    American corporations--such as AT&T, Cisco, Google, Microsoft, Neustar
    and Verizon--and the Internet technical community (the IAB, IETF, the
    Internet Society, the RIRs and the World Wide Web Consortium) are also
    supporters of the multistakeholder model. These entities have welcomed
    the U.S. government's announcement as the way to bring more countries
    to support the multistakeholder approach to Internet governance, moving
    them away from a model in which only governments hold sway. NTIA's
    announcement preserves and prolongs the free and open Internet that has
    brought so much economic growth and social and cultural development.
        Thank you for inviting me to testify. I would be happy to answer
    any questions you may have.
                                   __________

        Mr. Marino. Thank you. The Committee is now in recess and
    hopefully we will return not longer than 30 minutes.
        [Recess.]
        Mr. Marino. The hearing will once again begin, and we have
    opening statements, two opening statements yet.
        Chairman, you want to quickly put in your questions and
    then--all right. The Chair recognizes the Chairman just to put
    two questions into the record.
        Mr. Bachus. Yeah, I just had a unanimous request to submit
    two questions for the record, to the representative of ICANN.
        Mr. Marino. No objection.
        Mr. Bachus. IANA. All right. Thank you.
        [The information referred to follows:]

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                                   __________

        Mr. Marino. Mr. Metalitz, please.

    TESTIMONY OF STEVEN J. METALITZ, PARTNER, MITCHELL SILBERBERG &
    KNUPP LLP, ON BEHALF OF THE COALITION FOR ONLINE ACCOUNTABILITY

        Mr. Metalitz. Thank you very much, Vice Chairman Marino,
    Mr. Nadler, Members of the Subcommittee.
        That was a well timed break since I don't immediately have
    to follow Fadi Chehade,who is a very hard act to follow, but I
    appreciate the chance to be here. This Committee has played a
    critical role in oversight of NTIA and ICANN and their
    relationship for 15 years, and we are pleased to have been able
    to contribute to that. This is the seventh time you have asked
    us to testify on these topics, so we appreciate it very much.
    And of course, I am here representing the Coalition for Online
    Accountability, which is the copyright and trademark interests
    that are very much affected by what ICANN does.
        I want to--you have my written statement, so let me just
    hit 3 points quickly. The first is the IANA function, the
    second is everything else that ICANN does, which is extremely
    important, and then our thoughts on the challenge ahead both
    for ICANN and NTIA and for this Committee. The IANA function,
    as you already heard, is a limited function, a technical
    function but extremely important, and particularly in the part
    we focused on, which is the root zone file for domain names.
    Normally, this function is extremely mundane and routine, but
    it is also quite easy to imagine scenarios in which it would
    not be, and that is why we have been very glad to have NTIA
    oversight of proper execution of this step.
        So, if there is going to be a change in that, it is crucial
    that the alternative structure be very carefully crafted, very
    thoroughly vetted, and very well overseen, including by this
    Committee.
        Now, the NTIA has stated its criteria. It has set up a line
    about governmental control, and we are basically in agreement
    with those. In our testimony we do suggest a couple of other
    factors that ought to be taken into account, but if we look at
    everything else that ICANN does, apart from the IANA functions,
    these are the issues that have really--this Committee has been
    engaged with for 15 years.
        Issues like the accuracy of the ``whois database,'' so we
    know who is actually involved with the registration of domain
    names. The new gTLD program, which we have already heard a lot
    about. These are all areas where the U.S. Government
    relinquished its contractual control, is not planning to, it
    did it 5 years ago in 2009 when the Affirmation of Commitments
    came in replacing the previous contractual relationships.
        So, these are areas where active involvement by the U.S.
    government is really important and very important for copyright
    and trademark owners. We have heard a lot about free expression
    and all the other benefits of the open internet which are very
    important and should be at the center of oversight here, but
    let's also remember, we are talking about some very important
    economic interests of the United States.
        The industries that depend on copyright protection are a
    trillion dollar industry, five-and-a-half million jobs, and
    they are good U.S. jobs, and a lot of the decisions ICANN makes
    have a big impact, especially as more and more of the copyright
    industries are moving to the internet as their main means of
    delivering to the public.
        So, there are at least two vehicles that are important for
    continued NTIA engagement. One is the Governmental Advisory
    Committee. As our testimony lays out, we have seen an increased
    U.S. Government role and it has played a very positive role, I
    think, over the last few years, so we hope history will be
    continuing along that line.
        And the second is the Affirmation of Commitments. One thing
    that is--provision in the Affirmation of Commitments that is
    very important is that ICANN remains in the United States
    subject to U.S. law. This is a failsafe. This is an extremely
    important failsafe to maintain in place, and as we have heard,
    the AOC can be abrogated by either party unilaterally on 120
    days' notice. That is probably an area that really requires
    some greater certainty before we move ahead with the
    transition.
        And finally, in terms of the challenges ahead, I will just
    talk about two. One of course is this IANA function transition,
    both the process for shaping it and the outcome need to be
    credible. We now have NTIA looking over ICANN's shoulder as it
    performs these functions, who is going to be doing that in the
    future? But the other point, of course, is with everything else
    that ICANN is doing, there is a dire need for execution on the
    part of ICANN, and we need the U.S. Government oversight to
    make sure that happens.
        Particularly with regard to contracts. You know, we have
    heard a lot about the multi-stakeholder model here. One key
    feature of the multi-stakeholder model is that instead of
    government regulation, we have contractual frameworks, and
    those frameworks will only work, the multi-stakeholder model
    will only work, if those contracts are strong and if they are
    strongly enforced. So, there is a big compliance and execution
    challenge. We have already seen problems even at the beginning
    of the new gTLD rollout, so this is an area where continued
    strong oversight by this Committee is going to be essential.
        Thank you. I am glad to answer any questions.
        [The prepared statement of Mr. Metalitz follows:]

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                                       __________
        Mr. Marino. Thank you, sir.
        The Chair recognizes Mr. Castro.

        TESTIMONY OF DANIEL CASTRO, SENIOR ANALYST, INFORMATION
              TECHNOLOGY AND INNOVATION FOUNDATION (ITIF)

        Mr. Castro. Thank you. Mr. Chairman and Members of the
    Subcommittee, I appreciate the opportunity to discuss the
    future of internet governance here today.
        NTIA's proposal to relinquish its oversight of the IANA
    function presents unique risk. U.S. oversight serves an
    important and valuable role in maintaining the security,
    stability, and openness of the internet and in deterring
    countries who might try to manipulate the DNS for political
    purposes.
        The U.S. Government does not directly exert its authority
    on ICANN's policymaking process, but it has intervened when
    ICANN has fallen short of global expectations. For example, in
    2002, NTIA used its oversight to ensure that ICANN adopt an
    organization-wide conflict of interest policy and public
    reporting requirements to increase its transparency. Moreover,
    ICANN's future performance in the absence of U.S. oversight
    cannot be predicted based on its past performance while under
    it. Removing oversight means removing accountability.
        Any pledged commitment or oath made by the current ICANN
    leadership is not binding unless there is some accountability
    mechanism in place to back up those promises. Until now, the
    United States has served that role. If the U.S. Government is
    no longer providing that stability, an alternative mechanism is
    needed to ensure that ICANN is held accountable to the public
    interest.
        Without U.S. Oversight, ICANN has the potential to grow
    into the world's largest unregulated monopoly. ICANN finances
    its operations by levying fees on the internet resources it
    maintains. These fees can be adjusted and expanded at the
    discretion of ICANN. This is a conflict of interest since
    ICANN's own financial interests are at odds with keeping costs
    down for internet users and businesses.
        It is natural for organizations to want larger budgets, but
    ICANN is in an unusual position in that it has a substantial
    amount of authority to independently raise additional revenue.
    Already ICANN has shown its appetite for more funding. In the
    decade from 2003 to 2012, ICANN's annual revenue grew tenfold,
    from 6 million to over 70 million, and in between 2012 and
    2013, ICANN's revenue tripled to over 230 million as the
    organization expanded the number of top-level domains.
        A lot could happen with so much money at stake. For
    example, some countries could look to ICANN as a new tool to
    redistribute global wealth. We should be very mindful of
    creating a global organization with little accountability that
    can effectively tax the internet.
        While the proposal to transition governance of the DNS to a
    multi-stakeholder organization like ICANN is vastly superior to
    alternatives such as ceding control to the ITU. Giving up U.S.
    oversight creates a highly uncertain future for ICANN. The
    primary problem is that its existing bylaws and structures are
    not permanent and can easily be changed in the future. Without
    the U.S. Government serving as a backstop, it may very well
    devolve into something resembling the ITU. Congress should be
    aware that a U.N. style takeover of the internet could happen
    even within ICANN if the advisory role the governments have
    today later becomes one of outright control.
        Given the significant impact that this transition could
    have on the future of the internet, it is critical for Congress
    to be actively engaged on this issue. The final decision to
    relinquish its oversight should only occur if there is
    consensus for transition in both Congress and the
    Administration. If NTIA pursues this transition, it has only
    one opportunity to get it right. There are no second chances.
        Therefore, Congress, through the Government Accountability
    Office should work closely with NTIA and other stakeholders to
    identify potential risks involved in the transition, including
    worse case scenarios, as well as opportunities to mitigate
    those risks. NTIA should then be required to explain to
    Congress how any proposal it finds acceptable would
    successfully avoid the threats identified by stakeholders and
    importantly, NTIA should be required to explain not just how
    the plan mitigates first order risk in the proposed plan but
    also second order risk of how ICANN could change after the U.S.
    Government relinquishes its oversight. Developing new scenarios
    will also help NTIA move from broad principles to detailed
    criteria for how it will evaluate any future proposal.
        The future of internet governance is at a crossroads. The
    transition away from U.S. oversight will create risks and
    challenges for internet governance, many of which we may not be
    able to fully anticipate today. Without the current oversight
    by the United States, ICANN will not be accountable to anyone.
    Such a change may not bode well for the principles supported by
    the United States and its allies. While the initial principles
    for the transition outlined by NTIA are a good first step,
    Congress should exercise its own oversight authority to demand
    a more detailed set of criteria that must be met before any
    transition plan is accepted.
        Thank you for the opportunity to share with you my thoughts
    on the proposed transition. I look forward to any questions.
        [The prepared statement of Mr. Castro follows:]
             Prepared Statement of Daniel Castro, Senior Analyst,
            Information Technology and Innovation Foundation (ITIF)
        Chairman Coble and members of the subcommittee, I appreciate the
    opportunity to appear before you to discuss the recent decision by the
    Department of Commerce to give up U.S. oversight of important Internet
    functions. I am a senior analyst at the Information Technology and
    Innovation Foundation (ITIF). ITIF is a nonpartisan think tank whose
    mission is to formulate and promote public policies to advance
    technological innovation and productivity. In my testimony today, I
    will discuss the unique and valuable role that U.S. oversight has
    served in Internet governance, the risks inherent in a transition away
    from this model, and how to best mitigate those risks.
                                   background
        The U.S. government has had an unparalleled impact on the
    development of the Internet from the Defense Advanced Research Projects
    Agency (DARPA) building the first packet switching network to the
    National Science Foundation (NSF) funding research that would
    eventually lead to the creation of Google. Over time, the Internet has
    evolved from its original roots as a domestic research network into a
    global platform for commerce, communication, and innovation; however,
    throughout this transformation, the U.S. government has been at the
    forefront of efforts to ensure the security, stability, and resiliency
    of the Internet, while also protecting the interests of individual
    users, businesses, and other stakeholders.
        A core component of these efforts has been the oversight of the
    Internet Assigned Numbers Authority (IANA) functions by the National
    Telecommunications and Information Administration (NTIA) in the U.S.
    Department of Commerce. The IANA functions include managing the root
    zone of the Domain Name System (DNS), allocating Internet Protocol (IP)
    addresses, and various other technical functions integral to the
    stability and security of the Internet. The DNS is the system that
    translates URLs, such as www.congress.gov, into IP addresses, such as
    140.147.249.9. These functions were originally managed directly by
    contracts held by the U.S. government, but after commercial use of the
    Internet expanded in the 1990s, the U.S. government decided to transfer
    the management of the DNS and related functions to the private sector.
        In July 1997, the Clinton Administration reassigned responsibility
    for the IANA functions from the NSF to the NTIA and authorized the
    Department of Commerce ``to support efforts to make the governance of
    the domain name system private and competitive and to create a
    contractually based self-regulatory regime that deals with potential
    conflicts between domain name usage and trademark laws on a global
    basis.'' \1\ The NTIA, in turn, issued two policy statements, in
    January and June 1998 respectively (commonly referred to as ``the Green
    Paper'' and ``the White Paper'') outlining a plan to privatize the
    management of Internet names and addresses.\2\ The NTIA made clear that
    ``during the transition and thereafter, the stability of the Internet
    should be the first priority of any DNS management system.'' \3\
    Following the publication of these policy documents, the NTIA signed a
    no-cost contract with the Internet Corporation for Assigned Names and
    Numbers (ICANN), a newly-formed not-for-profit organization
    headquartered in Marina del Rey, California, tasking it with managing
    the DNS and related technical functions. Since then, the IANA contract
    has been renewed and modified multiple times, and the existing IANA
    contract with ICANN will expire on September 30, 2015. On March 14,
    2014, the NTIA announced that it intends to relinquish its oversight of
    the IANA functions.\4\
    ---------------------------------------------------------------------------
        \1\ ``A Framework for Global Electronic Commerce,'' The White
    House, July 1, 1997. https://www.fas.org/irp/offdocs/pdd-nec-ec.htm.
        \2\ ``Statement of Policy on the Management of Internet Names and
    Addresses,'' National Telecommunications and Information
    Administration, June 5, 1998, http://www.ntia.doc.gov/federal-register-
    notice/1998/statement-policy-management-internet-names-and-addresses.
        \3\ Ibid.
        \4\ ``NTIA Announces Intent to Transition Key Internet Domain Name
    Functions,'' National Telecommunications and Information
    Administration, March 14, 2014, http://www.ntia.doc.gov/press-release/
    2014/ntia-announces-intent-transition-key-internet-domain-name-
    functions.
    ---------------------------------------------------------------------------
        u.s. oversight has contributed to the stability of the dns and
                            accountability for icann
        The U.S. government has had, and continues to have, an important
    role in maintaining the security, stability, and openness of the
    Internet. U.S. oversight provides a backstop to ensure that ICANN
    satisfies its responsibilities in effectively managing the Internet's
    domain name and addressing system. This oversight provides the
    necessary assurance to the millions of companies not just in the United
    States, but around the world, who invest in and use the Internet for
    business that the Internet's basic technical architecture will continue
    to be governed in a fair, open, and transparent manner. And under this
    oversight, the world has witnessed the Internet deliver an incredible
    amount of innovation and social benefits.
        Moreover, U.S. oversight has served as a deterrent to stakeholders,
    including certain foreign countries, who might otherwise choose to
    interfere with ICANN's operations or manipulate the DNS for political
    purposes. For example, a country may want to censor a top-level domain
    name or have ICANN impose certain restrictions on domain name
    registries or registrars. However, both ICANN and the U.S. government
    have publicly committed to ensuring that decisions about the DNS are
    made in the public interest and that ICANN operates openly and
    transparently.\5\ Although the U.S. government has made a strong
    commitment to upholding these principles, it does not directly exert
    its authority in ICANN's policymaking process. Instead, if ICANN were
    to fall short of these commitments, the U.S. government could
    intervene. For example, as recently as 2012, the NTIA used its
    oversight of the IANA function to ensure that ICANN adopt an
    organization-wide conflict of interest policy and public reporting
    requirements to increase its transparency.\6\ This governance structure
    provides tremendous benefit as it has created an open, participatory,
    bottom-up structure of Internet policymaking that includes constituents
    from the private sector, civil society, and governments, while ensuring
    that there is a fail-safe mechanism in place so that the principles and
    spirit with which ICANN was created can flourish.
    ---------------------------------------------------------------------------
        \5\ ``Affirmation of Commitments by the United States Department of
    Commerce and the Internet Corporation for Assigned Names and Numbers,''
    September 30, 2014, http://www.ntia.doc.gov/files/ntia/publications/
    affirmation_of_commitments_2009.pdf.
        \6\ ``Commerce Department Awards Contract for Management of Key
    Internet Functions to ICANN,'' National Telecommunications and
    Information Administration, July 2, 2012, http://www.ntia.doc.gov/
    press-release/2012/commerce-department-awards-contract-management-key-
    internet-functions-icann.
    ---------------------------------------------------------------------------
         the proposed transition presents risks to internet governance
        The proposal to relinquish U.S. oversight of the IANA function
    presents unique risks to the future stability, security, and openness
    of the Internet. Removing oversight means removing accountability. Any
    pledge, commitment, or oath made by the current ICANN leadership is not
    binding unless there is some accountability mechanism in place to back
    up that promise. Until now, the United States has served that role. If
    the U.S. government is no longer providing that stability, an
    alternative mechanism is needed to ensure that ICANN is held
    accountable to the public interest.
        ICANN's future performance in the absence of U.S. oversight cannot
    be predicted based on its past performance under U.S. oversight. U.S.
    oversight of ICANN resembles self-regulatory systems in the private
    sector. In these systems, an industry-led self-regulatory organization
    sets and enforces rules and standards related to the conduct of
    companies in the industry. However, there is typically an outside
    entity, such as the Federal Trade Commission (FTC), which can intervene
    if a company defies the self-regulatory organization or if the self-
    regulatory organization produces rules that are insufficient to protect
    the public interest. Just as it would be incomprehensible to suggest
    that an industry that has a successful track record with self-
    regulation no longer be subject to the FTC or other government
    oversight, it is a similarly dubious proposition to suggest removing
    this backstop for Internet governance without a suitable alternative
    mechanism in place.
        Without U.S. oversight ICANN has the potential to grow into the
    world's largest unregulated monopoly. ICANN finances its operations by
    levying fees on the Internet resources it maintains. For every domain
    name that is registered, renewed, or transferred, ICANN receives
    between $0.18 and $0.25 per transaction.\7\ These fees can be adjusted
    and expanded at the discretion of ICANN. For example, ICANN could
    decide to increase the fees it charges, expand the fee to an annual or
    monthly license fee instead of a per-transaction fee, or create new
    fees for other resources it manages such as IP addresses. ICANN has a
    conflict of interest in pursuing the global public interest since its
    own financial interests are at odds with keeping costs down for
    Internet users and businesses. It is natural for organizations to want
    larger budgets, but ICANN is in an unusual position in that it could
    raise a substantial amount of additional revenue with little
    accountability. Already, ICANN has shown its appetite for more funding.
    In the decade from 2003 to 2012, ICANN's annual revenue grew ten-fold
    from under $6 million to over $70 million. And then between 2012 and
    2013, ICANN's revenue tripled to over $230 million as the organization
    expanded the number of top-level domains. Moreover, some countries
    could look to ICANN's ability to extract money from the Internet
    ecosystem to fund other projects such as broadband connectivity,
    digital literacy, or access to computers. These types of projects may
    have broad appeal, but it would not be useful to create a global
    organization with the ability to effectively tax the Internet with no
    safeguards in place to limit its authority.
    ---------------------------------------------------------------------------
        \7\ ICANN receives either $0.18 or $0.20 from registrars providing
    services for current TLDs. See ``FY14 Budget Approval,'' ICANN, August
    22, 2013, http://www.icann.org/en/about/financials/adopted-opplan-
    budget-fy14-22aug13-en.pdf. Registrars providing services for the new
    gTLDs are assessed a $0.25 fee. See: ``Frequently Asked Questions,''
    ICANN, 2014, http://newgtlds.icann.org/en/applicants/customer-service/
    faqs/faqs-en.
    ---------------------------------------------------------------------------
        Finally, while the proposal to transition governance of the DNS to
    a multi-stakeholder organization like ICANN is vastly superior to some
    alternatives, such as ceding control of these functions to a multi-
    lateral governmental organization like the International
    Telecommunication Union (ITU), as some nations have proposed, giving up
    U.S. oversight creates an uncertain future for the Internet. The
    primary problem is that the existing governance structure of ICANN, as
    with any organization, is not permanent and can easily be restructured
    in the future. Without the U.S. government serving as a backstop, it
    may very well devolve into something resembling the United Nations.
    Congress should be aware that a UN-style takeover of the Internet could
    happen even within ICANN if the advisory role that governments have
    today later becomes one of outright control.
        the u.s. government should work to identify and mitigate risks
                                 moving forward
        Given the significant impact that this transition could have on the
    future of the Internet, it is critical for Congress to be actively
    engaged on this issue. The final decision to relinquish this oversight
    should only occur if there is consensus for a transition in both
    Congress and the Administration. If the NTIA pursues this transition,
    it has only one opportunity to get it right--there are no second
    chances. Therefore, Congress, through the Government Accountability
    Office, should work closely with the NTIA and other stakeholders to
    identify potential risks involved in this transition, including ``worst
    case'' scenarios, as well as opportunities to mitigate those risks. The
    NTIA should then be required to explain to Congress how any proposal it
    finds acceptable would successfully avoid the threats identified by
    stakeholders. And importantly, the NTIA should be required to explain
    not just how their plan mitigates first-order risks in the proposed
    plan, but also second-order risks of how ICANN could change after the
    U.S. government relinquishes its oversight. Developing these scenarios
    will also help the NTIA move from broad principles to detailed criteria
    for how it will evaluate any proposal.
                                   conclusion
        The future of Internet governance is at a crossroads. The
    transition away from U.S. oversight will create unique risks and
    challenges for Internet governance, many of which we may not be able to
    anticipate today. Without the current oversight by the United States,
    ICANN would not be accountable to anyone and would be motivated only by
    the interests of those individuals who control the organization. Such a
    change may not bode well for the principles supported by the United
    States and its allies. While the initial principles for the transition
    outlined by the NTIA are a good first step, Congress should exercise
    its own authority to demand a more detailed set of criteria that must
    be met before any transition plan is accepted. Thank you for the
    opportunity to share with you my thoughts on the proposed transition. I
    look forward to answering any questions you have.
                                   __________

        Mr. Marino. Thank you, sir.
        The Chair now is going to recognize the Ranking Member Mr.
    Nadler from New York to do the first series of questioning.
        Mr. Nadler. Thank you. Let me thank all the witnesses.
        Let me ask, first of all, that--I gathered from all the
    witnesses, the possible exception of Mr. Castro, that all the
    concerns you have expressed are contingent concerns that we
    ought to bear in mind, that we got to watch the process of--as
    proposals are put out. A year-and-a-half from now, the--or
    request for proposals in effect that is put out. A year-and-a-
    half from now, proposals come back, and at that time we have to
    be very careful that these concerns that have been expressed
    have been adequately addressed by any proposal before it is
    adopted then but that the real concern that we ought to have
    and look at in the proposals that come back then, and just be
    wary of this now.
        Does anyone disagree with that? In other words, does anyone
    disagree? Does anyone think we are taking a step that is
    irrevocable or really bad now, or does everybody, or good, for
    that matter, or does everybody really think that we are setting
    the stage, there is going to be a preparation, and we really
    have to watch carefully what comes back and make decisions a
    year-and-a-half or 2 years from now?
        Why don't we go left to right. Mr. Rosenzweig.
        Mr. Rosenzweig. I agree with the characterization. I would
    add only the small ``p'' political concern that there might be
    a degree of pre-commitment to the result on the part of both
    the Administration and/or and NTIA and/or ICANN, but----
        Mr. Nadler. But you haven't seen that.
        Mr. Rosenzweig. But I haven't seen that, yeah, but I would
    correct--I think you are correct in structuring this as we need
    to measure the result.
        Mr. Nadler. And a little premature to get all upset or
    happy or whatever. Mr. Chehade.
        Mr. Chehade. You are correct, Congressman Nadler. We have
    time, and as I said also before, we are not--we shouldn't be
    rushed. I know that we have a contract that has a natural
    ending in September 2015, but there is no rush. We should get
    this right, and we have the time to do them.
        Mr. Nadler. Mr. Metalitz.
        Mr. Metalitz. Yes, sir. I would agree with that, Mr.
    Nadler. The one footnote I would drop is that in fact this
    decision might be irrevocable, and that is why we need to be so
    careful.
        Mr. Nadler. Yeah, but the decision, a year-and-a-half from
    now, not now?
        Mr. Metalitz. Yes, that is right. Both in the process and
    in the outcome, we need to make sure we get it right.
        Mr. Nadler. Right. Mr. Castro.
        Mr. Castro. I would just add that I think the announcement
    puts us on a irrevocable trajectory right now.
        Mr. Nadler. So you disagree.
        Mr. Castro. I just think that, I don't think we can go back
    from this. I think it would be very difficult to, at least.
        Mr. Nadler. So, are you saying that the decision to seek
    these proposals now binds us to accept a proposal even if the
    criteria are not met, Mr. Castro?
        Mr. Castro. It doesn't bind us, but it certainly puts
    tremendous pressure to accept it.
        Mr. Nadler. Okay. I assume none of you, the rest of you
    agree with that. Okay.
        Now, Mr. Chehade, Politico reported yesterday that you
    conceptually support H.R. 4342, the DOTCOM Act of 2014. Do you
    support that bill?
        Mr. Chehade. As I said yesterday to you and to the public,
    Congressman Nadler, we support conceptually mechanisms for
    accountability and for transparency. We do not support any
    particular bill.
        Mr. Nadler. Okay. So you don't support that bill or any
    other bill. Do you think that that bill, the DOTCOM Act, could
    harm the transition process? And let me just comment, and how
    might it impact the ongoing efforts of some nations to
    transition internet governance to the ITU or to the United
    Nations?
        Mr. Chehade. I believe that if the perception globally that
    our government does not trust the multi-stakeholder model,
    which we approved unanimously----
        Mr. Nadler. Which you think would be generated by adoption
    of that bill?
        Mr. Chehade. Could.
        Mr. Nadler. Okay.
        Mr. Chehade. Could add to the perception that we do not
    trust our own model, and I think that that will send the wrong
    messages.
        Mr. Nadler. So do you think the DOTCOM Act would harm the
    transition process for that or any other reason?
        Mr. Chehade. I don't think it affects directly that
    transition process, but it will send continued messages that we
    are not trusting our own multi-stakeholder model that we
    believe in and we believe is the right model.
        Mr. Nadler. Okay. Do you see any reason we need legislation
    now to ensure our oversight of this process?
        Mr. Chehade. The only reason we would is if we hadn't heard
    Secretary Strickling multiple times say that he is going to be
    available, he is going to build consensus here, he will inform
    the Congress, and I make the same assurances on behalf of
    ICANN.
        Mr. Nadler. Okay. Now, there is concern that without NTIA
    oversight, ICANN will not have any external accountability and
    might be governed by the interests of those controlling the
    organization, what would you reply to that?
        Mr. Chehade. It would be impossible to imagine that.
        Mr. Nadler. Because?
        Mr. Chehade. Because ICANN was structured, as I said
    before, with a set of mechanisms and hundreds of checks and
    balances that make it impossible for any one party to capture
    the processes at ICANN.
        Mr. Nadler. Okay. Now, in the past, some of my colleagues
    have raised concerns that ICANN's management of internet domain
    functions, including whether it was affording adequate
    protections to consumers and rights holders and working to
    combat online fraud and piracy, if NTIA relinquishes
    contractual relations with ICANN, how do we ensure that ICANN
    is responsive to our concerns as well as to other key
    stakeholders down the road?
        Mr. Chehade. So, first let me clarify that the announcement
    by NTIA has nothing to do with the way we make policies and we
    enforce our contracts. These are completely two separate
    things. So the fact that they are going to relinquish that
    particular oversight is being conflated with the other work we
    do, as Mr. Metalitz explained very well. In that other realm of
    policies and enforcement, I want to tell you that we have been
    strengthening our ability to ensure compliance. I think in
    since 2011 we nearly tripled the----
        Mr. Nadler. But some people think that the NTIA--that we
    have leverage over ICANN because of this, no?
        Mr. Chehade. Not any more than you will continue to have.
    NTIA participates, the U.S. Government participates in all of
    our processes, and they will continue to do so. The
    announcement 3 weeks ago has to do with the IANA function, and
    that is a very small and specific area of work, important, but
    has nothing to do with the policies and the enforcement of the
    Congress.
        Mr. Nadler. Okay. My last--is what Mr. Metalitz noted that
    ICANN must remain a not-for-profit subject to U.S. law by
    virtue of the Affirmation of Commitments, and I want to ask why
    is this important and what would cause ICANN to withdraw from
    the AOC, and if it did so, how can anyone be sure that
    obligations contained in the AOC would continue to be followed?
        Mr. Chehade. This Mr. Metalitz is superbly right here. We
    must maintain the AOC. It is a very important document. I am
    committed to that. In fact, in the next few days we will launch
    a public consultation process to strengthen the AOC, strengthen
    our accountability, and engage the whole community to ensure
    that the concepts and the agreements that we made to the world
    and the AOC remain very much in the fabric of ICANN.
        Mr. Nadler. Okay. Mr. Metalitz, you have any comment on
    that?
        Mr. Metalitz. Yes. I think that is--that is a welcome
    statement, but Mr. Chehade is not going to be the president of
    ICANN forever, the board isn't going to be the same forever,
    and I think we need to probably be looking at mechanisms to
    make sure that ICANN's relationship under the Affirmation of
    Commitments is kept permanent as much as possible.
        Mr. Nadler. I assume in the next hearing, you have to go
    make recommendations as to some mechanisms of doing so.
        Mr. Metalitz. Yes.
        Mr. Nadler. Thank you very much. My time is expired.
        Mr. Holding [presiding.] Thank you.
        Mr. Chehade, can you respond to Mr. Castro's concern that
    ICANN has the potential to become the world's largest
    unregulated monopoly and may be able to use this authority to
    tax the internet?
        Mr. Chehade. It is impossible for ICANN to move in that
    direction because of the multi-stakeholder model. It is
    important to appreciate that even the policies we use to
    perform the IANA functions come from huge large communities
    even outside of ICANN. Take, for example, the thousands of
    engineers of the Internet Engineering Task Force, the IETF.
    They get together around the world every few months.
        They make policies. They check on me performing these
    policies regularly, and it is not a fun meeting when we have it
    with them. They have accountability on us. So for all these
    thousands of people in different communities even outside of
    ICANN who make policies for how the internet works, to be
    somehow captured under a single model is impossible. It is by
    design. It is almost like saying one entity can control the
    entire internet. Just like the Internet, ICANN is impossible to
    capture.
        Mr. Holding. Mr. Castro, he says you don't know what you
    are talking about, so take a minute to refute Mr. Chehade
    there.
        Mr. Castro. Sure. I think any political system is subject
    to various types of designs, and those designs put constraints
    on what people can do, but they are not infallible. Certainly
    we can look at any government, any institution in the world
    where we have seen dramatic change. We have seen in our own
    U.S. history a change in the amount of revenue that the Federal
    Government takes in along various principles.
        You know, at one point an income tax was inconceivable, and
    we have that today. I am not, by any means, anti-tax, but the
    point is, organizations change. The dynamics change. The
    political will to do things changes. It is very conceivable to
    think of a time when ICANN would be suffering as an
    organization, and to move forward, it would have to raise
    revenue even just to remain operational, and so changes would
    be made. And as well, the technology changes. The technology
    for which ICANN is responsible might change as well.
        We are moving from IPv4 to IPv6. What that means is we are
    going to have a significantly larger pool of numbers that ICANN
    is responsible for.
        Right now ICANN doesn't charge anything for that, but it
    could. That would be an astronomical increase in the amount of
    revenue it could obtain. These aren't things that definitively
    will happen, but these are risks that we should be aware of.
        Mr. Holding. Mr. Rosenzweig, do you think there is a
    potential of this monopoly danger?
        Mr. Rosenzweig. I think the right way to structure the
    question is this, all of the restrictions that Mr. Chehade has
    referenced are internal to ICANN, and they are good. They are
    probably quite effective, but you work in a body that has a lot
    of internal restrictions as well, and you know as well as I do
    that times come where people waive those restrictions or change
    them or they mutate over time for good reasons or for
    benevolent reasons.
        The only way--the right answer to that problem is one not
    available to this institution of some other form of external
    checking function that is able to restrict and restrain that
    mutation if it goes off in adverse ways. That is why I
    suggested, as part of my testimony, the need for, you know, an
    outside check-in function in forms of audits, oversights,
    inspectors generals, an external judiciary of which they
    already have a forum.
        Those are the types of external structures that will then
    ensure that the internal structures continue to function as
    they are and aren't overtaken by internal events. So, again, I
    don't think it is an insurmountable problem, but I think it is
    critical that as part of the IANA transition, one of the things
    that ICANN brings back to the NTIA and for us to review is what
    those external structures would be that would maintain that Mr.
    Metalitz's suggestion that ICANN has to remain subject to U.S.
    law suggests that is one of those functions might be U.S.
    courts.
        I don't know if that would be a good answer or not and I am
    not sure whether the rest of the world would like that answer,
    but that is at least inside the model of what I think is
    essential.
        Mr. Holding. Do you think it is possible that ICANN has a
    significant financial motive in wanting to move to an
    international status?
        Mr. Rosenzweig. I can't examine the motives of ICANN. I
    don't know. I do know that there are at least failure modes I
    could imagine in which the financial incentives would drive
    behaviors that I would consider bad. I haven't seen any
    evidence of that now, but I can't guarantee that they won't
    happen in the future, so to that degree, I sort of concur with
    Daniel's suggestion that it is a possibility, but it is one
    that I think can be guarded against or should be guarded
    against.
        Mr. Holding. Mr. Chehade, what was ICANN's annual revenue
    in 2001?
        Mr. Chehade. I was not, I am not aware of that number. I
    can get back to you, Mr. Chairman.
        Mr. Holding. A few million dollars, would it fair to say?
        Mr. Chehade. Yes, under 10 million.
        Mr. Holding. How about in 2013?
        Mr. Chehade. Our revenues for the core operations of ICANN
    was a little shy of $80 million or so.
        Mr. Holding. Eighty million?
        Mr. Chehade. Yes. Now if you add the new gTLD program----
        Mr. Holding. 8-0.
        Mr. Nadler. He said 8-0 or 1-8?
        Mr. Chehade. Yes. And then for the new gTLD program, we
    have a separate accounting mechanism to deal with that, but
    that is a revenue neutral program. It is not a profit program.
    The fees we take are used to process the program, and the fees
    we have taken are pretty much spent on getting that program up
    and running.
        Mr. Holding. All right. Thank you.
        I believe Ms. Lofgren.
        Ms. Lofgren. Yes. Thank you, Mr. Chairman.
        I think this has been a very helpful discussion, and as I
    listen to Mr. Chehade's testimony, I am struck by how closely
    this development in ICANN has tracked what our hopes were back
    in the 1990's, in the mid 1990's. Now, it is true, I mean,
    there is no guarantee for anything ever in life, but so far so
    good, and I had to laugh when I heard you say, you know,
    meeting with thousands of internet engineers is not always fun.
    I cannot imagine, I mean, the internet engineers I know
    agreeing to do any of the parade of horribles that, you know,
    people are concerned about, so that is one part of the
    guarantee.
        I think it is important that we have a diversity of
    opinion, and Mr. Castro is odd man out again. I remember when
    you were here during the SOPA hearings. I think you were the
    only voice in favor of DNS redirection and in favor of SOPA
    when all of the rest of the internet engineers I had ever met
    were arguing against it, and I think it is important that your
    voice, although isolated, be heard again.
        I do think that, as I have listened to my colleagues, I am
    hearing an interest. Obviously, the United States is going to
    continue to be involved in ICANN, but primarily that
    involvement has been through the private sector, individual
    engineers, and kind of the nerdiest branch of the Federal
    Government in the Department of Commerce. Is there a role for
    the legislative branch to look and to observe in ICANN or have
    any other governments have legislators also attend meetings and
    observe? Would that be a problem?
        Mr. Chehade. First of all, everyone is welcome at ICANN.
    ICANN is open, has no membership fees, all of our meetings are
    transcribed, completely transparent in all languages of the
    U.N. plus Portuguese, so everyone is welcome. We have not seen
    a large participation by judicial bodies from around the world.
    Law enforcement, however, has been more involved at ICANN with
    the Interpol and the FBI and others engaged, and in fact, they
    have been very helpful in shaping some of the elements of the
    new agreements we signed with a thousand registrars in the
    world.
        Ms. Lofgren. Right.
        Mr. Chehade. So, but I think the participation is welcome,
    Congress is welcome, we need everyone to be involved, but at
    this stage, ICANN has shown its very close attention to the
    review mechanisms and the accountability mechanisms and they
    are in place and they are working. My colleague Paul mentioned
    earlier FOIA.
        We have a process at ICANN similar to FOIA that we have
    implemented since 2009, so we have many of these mechanisms and
    processes, including independent review mechanisms that go
    outside of ICANN to ensure that we are performing with
    accountability.
        Ms. Lofgren. Well, I think that, you know, unfortunately,
    and I don't think it is people in this body, but there have
    been some alarmist voices out in the media world that I wish
    that--I hope that they have listened to this hearing and gotten
    a greater understanding really what this is about, and the fact
    that you, Mr. Chehade, and ICANN itself is not resisting, in
    fact, is embracing the idea of continued involvement to make
    sure that our goals for a free and open internet continue to be
    met.
        And I certainly, the Committee and other, Energy and
    Commerce Committee, as well, is interested in that, and you
    know, I don't know that every Member of Congress would want to
    go and sit through these meetings, but it might be a good
    experience for us and the next time you meet in the United
    States, maybe, you know, we should do a little group and go see
    firsthand what it is like to participate, and I will be the
    first to volunteer to do that. I want to thank each one of you
    for your excellent testimony here today. It is a service to the
    country, and you know, people don't realize that you are
    volunteers here. I mean, and we appreciate that. It is really
    very, very helpful.
        And I thank you, Mr. Chairman. I know we have one other
    speaker and lots of airplanes waiting for us to leave for our 2
    weeks off.
        Thank you very much.
        Mr. Marino [presiding]. Thank you.
        I guess I am the last one. So, as we say in my rural
    district of Pennsylvania, let's go to the barn and talk turkey
    here because I didn't hear the questioning from my colleagues,
    but I was in a meeting with someone that I didn't want to send
    them home without meeting with me, so I apologize for that.
        But I think it--Mr. Metalitz and Mr. Chehade, I emphasized
    on more than one occasion, I believe, that ICANN is going to
    stay in the United States. Is that true? Did I hear that
    correctly?
        Mr. Chehade. Yes, it is part of the Affirmations of
    Commitment document today that we have to remain incorporated
    and headquartered in the United States.
        Mr. Marino. Is there a possibility, and I am asking for a
    prediction, when we pass legislation well intended, we do not
    see some ramifications coming down the road, but with a
    reasonable degree of certainty, can you tell me could ICANN
    leave the United States at some point, and why, and how?
        Mr. Chehade. So long as the Affirmation of Commitments are
    in place, and I mentioned earlier that I am starting a process
    to strengthen them and affirm them, we will stay here. We also
    have thousands of contracts signed here as a California
    corporation. It is the logical thing for us to continue and
    there is no plan or prospect right now for doing so.
        Mr. Marino. I am going to ask you to play devil's advocate
    with me a little bit here. Give me a scenario, if you could,
    again, with a reasonable degree of thought here, how ICANN
    would move from the United States? Is there a circumstance that
    you can think of that would occur, because even though there is
    a commitment, you have contracts here, anything can be
    litigated if it got to that, but there is--I know of nothing
    that would prevent a company from leaving the United States
    should it decide to do that.
        Mr. Chehade. The best way to look at this scenario is to
    think, as you asked, Mr. Chairman, how would we get there.
    Well, it is not the decision I can make. It is not the decision
    even our board can finalize without full multi-stakeholder
    consultation that will take--if it took us 7 years to come up
    with a gTLD program, it will take us a little longer than that
    to agree on something this fundamental and this changing of how
    we work. So, the good news is that ICANN will involve the
    private sector, you will have Microsoft, you will have Google,
    you will have Cisco, you will have all of our members, the
    civil society groups, everyone will have to be involved in,
    frankly, answering your questions, which are why would we do
    this?
        It has worked so well for us here, why would we change
    that. So this is a process, and it takes a long time, and all
    is transparent, so none of this can happen without this House
    and this Congress knowing immediately that there is even a
    discussion about that, because everything we do is public,
    transparent, and transcribed.
        Mr. Marino. Does anyone else want to respond to that? To my
    scenario?
        Mr. Metalitz. If I may.
        Mr. Marino. Please, go ahead, sir.
        Mr. Metalitz. If I may. I would agree that it would be--it
    wouldn't be an overnight decision if that were to occur, but I
    want to--I just feel like I have to respond to one thing that
    Mr. Chehade said earlier which was that it is impossible for
    any one group to capture the multi-stakeholder process.
        That may be true if you think of the multi-stakeholder
    process in the abstract, but as I sit here, having been
    involved in ICANN longer than everyone else at this table put
    together, I can tell you that ICANN, while it tries to embody
    the multi-stakeholder model, ICANN can be captured and it has
    been captured in the past by interest groups. So, I think we
    constantly have to be on guard against that.
        Maybe in the abstract the multi-stakeholder model cannot be
    captured, but I think we really do have to be on guard against
    that in this human institution called ICANN that is attempting
    to embody the multi-stakeholder model.
        And I think this is really an area where oversight by this
    Committee and by the Congress is extremely important as well as
    engagement by the U.S. Government on an ongoing level because I
    think that risk will remain.
        Mr. Marino. How many entities are involved in changing
    bylaws? I am not quite clear on that at this point. Anyone?
        Mr. Chehade. So, ICANN has a board of directors made of 16
    board members that are elected through both the community, so
    it takes a long time again for let's say the user groups can
    elect a person that sits on the board, business sector, et
    cetera, so each stakeholder groups elects these board members.
        And then we have an independent nominating committee that
    picks some of the board members, and again they search openly
    for a non-stakeholder based board members. That board has the
    ability to change the bylaws, but it is a pretty broad board
    and it is a community board and has used its, I think, if you
    look at how they have worked today, especially as it relates to
    bylaws, it has been very judicious in touching these. And it is
    very hard to get consensus, frankly, along 16 board members
    that have been elected through communities, not through
    monolithic processes.
        Mr. Marino. What intention would there be, if any, to bring
    those proposed bylaw changes to this Committee?
        Mr. Chehade. What intention we----
        Mr. Marino. Would you have any problem with bringing those
    proposed bylaw changes to Congress, to this Committee?
        Mr. Chehade. I think it would have to be explained to our
    stakeholders. We have thousands of stakeholders and many not
    U.S. based stakeholders. It would be very complicated for us to
    explain to them that we need to bring bylaw changes for a
    California corporation to Congress.
        Frankly, I don't even know how this could be done with all
    of our stakeholders. We have to, frankly, I appreciate, Mr.
    Chairman, that you are concerned that bylaws could be changed
    without proper vetting, but I can tell you, we will, in these
    mechanisms that we plan to build in this transition, put strong
    components that ensure that the core principles you believe in
    and we believe in are maintained, that they are not easy to
    change. They have to be in there.
        For example, the principles that NTIA put out that no
    government or intergovernmental body can control ICANN or
    control our decision making, I committed in my opening
    statement that we need to put these mechanisms and make sure
    that they survive not just the transition but past the
    transition. So, we are on the same page in that regard, and
    again, I invite you, Mr. Chairman, and Members of the Committee
    not just to attend our meetings, as Congressman Lofgren
    suggested, but indeed to keep an eye, and we will come back and
    keep you briefed so you can keep an eye on these changes.
        Mr. Marino. Thank you.
        Anyone else want to respond to any of my scenarios?
        Okay. Then I see no other individuals here before I move on
    further.
        I would like to submit for the record a letter from ACT
    dated April 9, 2014, to the United States House of
    Representatives Committee on Judiciary that is headed, ``In
    Defense of Process: Identifying the Problem Before Seeking
    Solutions.''
        I hear no opposition, so this will be entered into the
    record.
        [The information referred to follows:]

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                                   __________

        Mr. Chehade. Chairman, may I?
        Mr. Marino. Please, go ahead, sir.
        Mr. Chehade. I just was reminded to share with you that
    every change to our bylaws, every proposed change to our bylaws
    is publicly posted and everyone is welcome to comment on it,
    and I hope including Congress. We do not make these changes
    before they are publicly posted and shared with everyone and we
    receive input from all stakeholders. I want to assure you of
    that.
        Mr. Marino. I am going to throw one more question out
    there, two questions actually, and anyone of you please respond
    it to if you want to. What is the single most important upside
    to this, and what is the single most detrimental down side to
    this?
        Mr. Rosenzweig. I will swing first just because I am on the
    end. The most significant down side would be actually the
    technical one, which is that if somehow in the transition the
    current root zone management system were modified in a way that
    it did not function as effectively as it did now.
        We are all extremely dependent upon that as a successful
    activity across the globe, and if it broke, that would be
    horrible. The upside is that the IANA function, the naming
    function is just one of a host of internet related issues that
    require some form of international coordination, spam,
    cybersecurity, yesterday we discovered the lack of
    international coordination on encryption stamps, et cetera, et
    cetera, et cetera. None of those have effective international--
    or none of those have standardized or completely effective
    international structures of governance.
        Mr. Marino. Sure.
        Mr. Rosenzweig. If this works, if 5 years from now, 10
    years from now we are all really confident in this multi-
    stakeholder model as a way of managing this little piece of the
    internet, then we may be building a structure that goes
    further, that is reproducible.
        Mr. Marino. Thank you. Anyone else?
        Mr. Chehade. I have two boys that I taught to ride a
    bicycle, and at some point in their lives I have to take the
    training wheels off. The worse thing I could have done is that
    after I have watched them and taught them, as soon as they try
    to take their first ride, I put these training wheels back on.
        I think we have been watching ICANN for 15 years, and the
    training wheels have been largely up, and we are fine. It
    doesn't mean we should walk away, just like I didn't from my
    boys when they took their first big ride. I watched them and I
    was near them, and if they got out of the way or did something
    dangerous, I stopped them, but this is the time to let go and
    show the world our trust.
        So the answer to your question, if I could be direct,
    Chairman Marino, is this is the moment the world wants to watch
    us trust our own model. Let's not show them we don't trust it.
    Let's show them we are careful, we will put the safeguards, we
    will check on ICANN, please do, we need you to do that, but at
    the same time let's show our trust in the model we voted for
    unanimously. Please.
        Mr. Marino. All right. Thank you.
        Gentleman, thank you.
        Mr. Nadler.
        Mr. Nadler. Before we adjourn, I would ask unanimous
    consent to insert two statements from the Wall Street Journal
    article and testimony of the executive director of Net Choice
    into the record.
        Mr. Marino. No objection. They are entered into the record.
        [The information referred to follows:]

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                                   __________
        Mr. Marino. Gentleman, thank you so very much. I thank you
    on behalf of the entire Committee, Mr. Nadler, and myself. It
    has been an extraordinary exchange. This is quite a task ahead
    of us. It could be a game changer for the positive.
        So, with that, this concludes today's hearing. Thanks to
    all of you, our witnesses for attending. I want to thank the
    Members out at the gallery for being here and listening to
    this. Many people ask me what I do on intellectual property,
    and as soon as I start talking about copyrights and trademarks
    and hardware and software, they just--they glaze over, but we
    are sitting here because we find it extraordinarily
    interesting.
        So, without objection, all Members will have 5 legislative
    days to submit additional written questions for the witnesses
    or additional materials for the record that you may want to
    submit.
        This hearing is adjourned, and thank you, and everybody
    have a good break.
        [Whereupon, at 1 p.m., the Subcommittee was adjourned.]

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