[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

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      Available via the World Wide Web: http://judiciary.house.gov
                                ______

                         U.S. GOVERNMENT PRINTING OFFICE 

87-498 PDF                     WASHINGTON : 2014 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Printing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001  
      
      
      
      
      
      
      
      
      
      
                       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:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                               __________

    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:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
       
                                   __________
    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:]
  
     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                               __________
                               
    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:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                     
                               __________
    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.]
    
    
    
    
    
    
    
    
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record
               
               
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                                 [all]