[Senate Hearing 114-546]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-546

                  EXAMINING THE MULTISTAKEHOLDER PLAN
        FOR TRANSITIONING THE INTERNET ASSIGNED NUMBER AUTHORITY

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

                                 HEARING

                               BEFORE THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 24, 2016

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
                             
                             
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                            
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 24, 2016.....................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Schatz......................................     2
Statement of Senator Fischer.....................................    63
Statement of Senator Ayotte......................................    66
Statement of Senator Gardner.....................................    67
Statement of Senator Daines......................................    69
Statement of Senator McCaskill...................................    71
Statement of Senator Johnson.....................................    74
Statement of Senator Rubio.......................................    76
Statement of Senator Sullivan....................................    80
Statement of Senator Blumenthal..................................    82
Statement of Senator Klobuchar...................................    84
    Letter supporting the transition from 17 Internet companies 
      and trade associations, including the Internet Association 
      and U.S. Chamber of Commerce...............................    85
    Statement dated May 23, 2016 from a group of seven civil 
      society and public interest groups supporting the IANA 
      transition.................................................    86
Statement of Senator Markey......................................    89

                               Witnesses

Michael Beckerman, President and CEO, Internet Association.......     4
    Prepared statement...........................................     5
Steve DelBianco, Executive Director, NetChoice...................     8
    Prepared statement...........................................    10
Hon. David A. Gross, former U.S. Coordinator for International 
  Communications and Information Policy, U.S. State Department...    23
    Prepared statement...........................................    24
Richard Manning, President, Americans for Limited Government.....    27
    Prepared statement...........................................    29
Brett D. Schaefer, Jay Kingham Fellow, International Regulatory 
  Affairs, The Heritage Foundation...............................    37
    Prepared statement...........................................    39
Andrew Sullivan, Chair, Internet Architecture Board (IAB)........    52
    Prepared statement...........................................    53

                                Appendix

Hon. Bill Nelson, U.S. Senator from Florida, prepared statement..    93
Chris Calabrese, Vice President, Policy, Center for Democracy & 
  Technology, prepared statement.................................    93
Article dated June 7, 2016 entitled ``Obama's Internet 
  Endangerment'' by Rick Manning.................................    96
Response to written question submitted to Michael Beckerman by:
    Hon. Marco Rubio.............................................    97
Response to written questions submitted to Steve DelBianco by:
    Hon. John Thune..............................................    98
    Hon. Marco Rubio.............................................    99
Response to written questions submitted to Hon. David A. Gross 
  by:
    Hon. John Thune..............................................   103
    Hon. Marco Rubio.............................................   103
Response to written questions submitted to Richard Manning by:
    Hon. John Thune..............................................   104
    Hon. Marco Rubio.............................................   105
Response to written questions submitted to Brett D. Schaefer by:
    Hon. John Thune..............................................   107
    Hon. Marco Rubio.............................................   108

 
                  EXAMINING THE MULTISTAKEHOLDER PLAN
        FOR TRANSITIONING THE INTERNET ASSIGNED NUMBER AUTHORITY

                              ----------                              


                         TUESDAY, MAY 24, 2016

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:02 a.m. in 
room SR-253, Russell Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Wicker, Blunt, Rubio, 
Ayotte, Fischer, Sullivan, Moran, Johnson, Gardner, Daines, 
Cantwell, McCaskill, Klobuchar, Blumenthal, Schatz, and Markey.

             OPENING STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    The Chairman. Good morning. This hearing will commence. 
Thank you all for being here.
    Two years ago, the Commerce Department's National 
Telecommunications Information Administration, or NTIA, 
announced its intention to transition the functions of the 
Internet Assigned Number Authority, or IANA, to the global 
multistakeholder community. Since that time, the 
multistakeholder community, made up of businesses, technical 
experts, academics, and civil societies, spent more than 26,000 
working hours on the IANA transition proposal and held more 
than 600 related meetings and calls.
    At the outset of this hearing, I want to acknowledge the 
hard work undertaken by many stakeholders, some of whom are 
here today as witnesses, in taking on the daunting task of 
developing the transition proposal. Regardless of where one 
stands on the transition, we should recognize the difficult 
work that has been done and the ongoing commitment that will be 
needed if the transition is to be completed in a way that 
addresses the important concerns that have been raised about 
the future governance of the Internet.
    On March 10, the Internet Corporation for Assigned Names 
and Numbers, or ICANN, forwarded to NTIA for review the 
transition proposal developed by the global community of 
Internet stakeholders. NTIA set a target of 90 days to complete 
its review, which is expected to be completed on June 10, 
whereupon NTIA will issue a report stating its determination as 
to whether the proposal meets the criteria that NTIA outlined 
when it first announced the transition, such as the requirement 
that the proposal maintain the openness and global 
interoperability of the Internet.
    If NTIA approves the transition, ICANN expects to produce 
an implementation report by August 15. The existing IANA 
contract is set to expire on September 30, 2016, unless NTIA 
acts to extend it or Congress acts to delay the transition. 
These dates are rapidly approaching, which is why I called this 
hearing today to examine the stakeholders' transition proposal.
    Our committee held an earlier hearing on the proposed IANA 
transition in February 2015. At that hearing, I said I would 
review any IANA transition plan to make sure it both meets the 
requirements laid out by NTIA and that it adopts meaningful 
accountability reforms, such as curtailing government 
involvement in apolitical governance matters; providing 
additional oversight tools to the multistakeholder community; 
and adopting an independent dispute resolution process.
    Last year, I also introduced the DOTCOM Act along with 
Senators Schatz, Wicker, and Rubio, which our committee 
approved on a bipartisan basis. With that bill, which also 
passed the House of Representatives by a vote of 378 to 25, we 
all made clear that any transition plan must not replace the 
role of the NTIA with a government-led or intergovernmental 
organization. Further, the DOTCOM Act would require any 
transition plan to maintain the security, stability, and 
resiliency of the Internet domain name system.
    I hope to hear today from each of our witnesses whether 
they believe the proposed IANA transition plan developed by the 
multistakeholder community meets these requirements as well as 
whether it satisfies NTIA's criteria. In particular, I am 
interested to learn whether the stakeholder community has 
delivered a proposal with accountability reforms strong enough 
to give Congress and the American people confidence that the 
time has come to privatize the IANA functions.
    At last year's IANA hearing, I said that the goal of 
everyone here is the same. We want one global Internet that is 
not fragmented nor hijacked by authoritarian regimes. Whether 
the IANA transition goes forward or not, I know that everyone 
wants to ensure all Internet users can continue to have 
complete faith that the IANA functions will be carried out 
effectively and seamlessly long into the future.
    We have a very distinguished panel here today--and I want 
to thank them for their time and effort in their testimony--
representing a diverse variety of perspectives, professional 
experiences, and personal views. I'm looking forward to hearing 
from each of you.
    With that, I'll turn to our Ranking Member, Senator Schatz, 
for any comments he would like to make.

                STATEMENT OF HON. BRIAN SCHATZ, 
                    U.S. SENATOR FROM HAWAII

    Senator Schatz. Thank you, Mr. Chairman. Good morning.
    The Internet has its roots in America, but its social, 
economic, and human rights benefits depend on the Internet's 
global nature. A successful IANA transition will ensure that 
the global community continues to benefit from an open 
Internet.
    The Internet by its very nature is a network of networks 
that exists solely because millions of stakeholders and users 
continue to agree that a free and open Internet is essential 
and that the multistakeholder approach to global Internet 
governance actually works. Yet there are those who feel that 
the government itself, specifically the Department of Commerce, 
must maintain control over the IANA functions and through that, 
somehow, the Internet totally.
    It is ironic to me that so-called ``small government 
types'' want a Commerce Department bureau to oversee the 
technical underpinnings of the Internet. If the goal is to 
preserve and grow a free and open global Internet, you can't 
have an agency bureau run it forever, even if it's just the 
technical functions.
    The consensus plan for decades through many 
administrations, Democratic and Republican, has always been to 
turn the IANA functions over to the private sector. In fact, 
this Congress and the U.S. Government at large have expressed 
unanimous support for the multistakeholder model of 
international Internet governance. There's no question that the 
transition must move forward.
    Now, the Internet community has submitted a proposal to 
NTIA for the transition, and technical experts, civil society, 
industry, and others from the global Internet community 
developed this proposal over several years. These stakeholders, 
large and small, believe that this plan and the IANA transition 
itself are essential to preserve and advance the global 
Internet.
    This community of experts has also expressed that delay or 
termination of the transition would undermine our nation's 
commitment to the free and open Internet. And they warn that it 
could even result in a fractured Internet that no longer serves 
as a vital engine of commerce and innovation.
    These views should not be dismissed lightly. It's important 
that we stay on track with this transition which can be 
successfully completed this fall. The timing allows for NTIA to 
conduct a full review of the plan to make sure it complies with 
NTIA and congressional requirements for the transition. These 
requirements are clear and will deliver a new governance 
structure that will preserve the multistakeholder model that is 
at the heart of global Internet governance. I look forward to 
NTIA's review that will determine if the plan makes the 
necessary reforms to ensure ICANN's accountability to the 
global multistakeholder community.
    Finally, I appreciate the Chairman holding today's hearing. 
He and I have partnered with several Senators on the DOTCOM Act 
in making sure that the transition goes smoothly. We take the 
Commerce Committee's oversight of this matter very seriously, 
and I look forward to the hearing.
    The Chairman. Thank you, Senator Schatz.
    We do, as I said, have a very distinguished panel of 
witnesses today, and I'm going to ask them to make their 
opening statements. First off, we'll hear from Michael 
Beckerman, who is President and CEO of the Internet 
Association; followed by Steve DelBianco, who is Executive 
Director of NetChoice; the Honorable David Gross, who is the 
former U.S. Coordinator for International Communications and 
Information Policy at the State Department; Rick Manning, who 
is President for Americans for Limited Government; Brett 
Schafer with the Heritage Foundation; and Andrew Sullivan, who 
is Chair of the Internet Architecture Board.
    So I'll ask you all as much as you can--we've got a large 
panel today--if you could confine your opening remarks to as 
close to 5 minutes as possible, and we will certainly, of 
course, submit your entire written statements for the record. 
But we want to maximize the opportunity for members of the 
Committee to ask questions.
    So we'll start on my left, on your right, with Mr. 
Beckerman. Please proceed.

  STATEMENT OF MICHAEL BECKERMAN, PRESIDENT AND CEO, INTERNET 
                          ASSOCIATION

    Mr. Beckerman. Thank you. Chairman Thune, Ranking Member 
Nelson, and distinguished members of the Committee, thank you 
for inviting me to testify before you today at this important 
hearing on the IANA transition. My name is Michael Beckerman, 
and I am the President and CEO of the Internet Association.
    The IA represents almost 40 of the world's leading Internet 
companies. Our mission is to foster innovation, promote 
economic growth, and empower people through the free and open 
Internet. I'd like to summarize my remarks and ask that my full 
written testimony be submitted for the record.
    The Internet Association and its member companies have been 
actively involved in the IANA transition to ensure that the 
final proposal is good for our member companies, good for users 
around the world, and the Internet writ large. This is a plan 
that will transition the IANA functions in a way that will keep 
the Internet safe, secure, reliable, and resilient.
    Our goal throughout this process has been to ensure that a 
post-transition ICANN is fortified with the appropriate 
separation of powers necessary to protect the system from 
capture by any one stakeholder group, thus preserving a free 
and open Internet. We share the concern for members of this 
committee that foreign governments, specifically China or 
Russia or even the U.N.'s ITU, want to bring the Internet under 
their control. But we want to make sure that everybody 
recognizes that a delay or blocking this transition makes this 
outcome more likely, not less.
    The transition we're talking about today is designed 
specifically to keep a government takeover from happening. 
Simply put, the best way to protect the Internet from 
governments and political interests and the parade of horribles 
that we'll talk about today is to empower the multistakeholder 
process by moving forward the transition. The successful 
transition of IANA functions serves U.S. interests, because it 
will ensure that the people with the most at stake in the 
Internet's future growth are entrusted with the responsibility 
to protect the Internet and given the power to do so.
    This is not a foregone conclusion. As you know, there are 
countries that want to impose a top-down, state-centric 
governance model for the Internet. If they have their way, the 
global and open Internet as we know it today will cease to 
exist. This will be bad for Internet companies, bad for users, 
and bad for the global economy, to say nothing of free 
expression around the world.
    To be clear, the Internet Association and our members have 
not been a rubber stamp on this process. We'll be the first to 
argue that a transition alone is not enough. The Internet 
Association agrees that the IANA transition must be done with 
carefully crafted proposals that provide for a successful 
transition.
    The companies, members of civil society, technologists, and 
users that drive the Internet worked together to craft 
proposals that are better than the status quo. I'd like to 
quickly highlight three ways these proposals ensure that a 
post-transition ICANN is truly accountable to the community and 
an improvement over ICANN's current structure.
    One, ICANN's mission will be explicitly limited to the 
operation of the Domain Name System and the policies that are 
reasonably necessary to facilitate its openness, 
interoperability, resilience, and stability. The proposal also 
explicitly states that anything not articulated in the bylaws 
would be outside of ICANN's mission.
    Second, for the first time, this proposal distinguishes 
between ICANN bylaws and fundamental bylaws. Included here are 
mechanisms establishing new accountability checks and balances, 
and this designation of fundamental bylaws cannot be amended by 
Board action alone.
    And, third, ensuring limited government and less government 
control. The Government Advisory Committee, GAC, will be more 
constrained in the future than it is presently. This will 
significantly limit the GAC's ability to overturn 
multistakeholder policy by a number of reforms, including that 
GAC advice must be issued without objection, it must be 
accompanied by a rationale, and the Board must not violate its 
own bylaws when implementing GAC advice.
    Ensuring the proper limitations on ICANN is important to 
the future of the Internet, and the Internet Association and 
the multistakeholder community will continue to be intimately 
engaged with the transition process and the implementation as 
it moves forward.
    Thank you for having me testify today. I look forward to 
the questions the Committee may have.
    [The prepared statement of Mr. Beckerman follows:]

      Prepared Statement of Michael Beckerman, President and CEO, 
                          Internet Association
Introduction
    Chairman Thune, Ranking Member Nelson, and distinguished members of 
the Committee, thank you for inviting me to testify before you at this 
important hearing on the Internet Assigned Numbers Authority (IANA) 
transition.
    My name is Michael Beckerman, and I am the President and CEO of the 
Internet Association. The Internet Association represents almost 40 of 
the world's leading Internet companies.\1\ Our mission is to foster 
innovation, promote economic growth, and empower people through the 
free and open Internet. As the voice of the world's leading Internet 
companies, our job is to ensure that all stakeholders understand the 
benefits the Internet brings to our economy.
---------------------------------------------------------------------------
    \1\ The Internet Association's members include Airbnb, Amazon, 
Coinbase, DoorDash, Dropbox, eBay, Etsy, Expedia, Facebook, FanDuel, 
Google, Groupon, Handy, IAC, Intuit, LinkedIn, Lyft, Monster Worldwide, 
Netflix, Pandora, PayPal, Pinterest, Practice Fusion, Rackspace, 
reddit, Salesforce.com, Snapchat, Spotify, SurveyMonkey, Ten-X, 
TransferWise, TripAdvisor, Turo, Twitter, Uber Technologies, Inc., 
Yahoo!, Yelp, Zenefits, and Zynga.
---------------------------------------------------------------------------
    The companies represented by the Internet Association depend on the 
global, open Internet. Accordingly, the Internet Association and its 
member companies have been actively involved in the IANA transition 
process to ensure that the final proposal is good for our member 
companies, users around the world, and the Internet writ large. This is 
a plan that will transition the IANA functions to the global 
multistakeholder community--and remove unnecessary government 
involvement in the management of the engine of the 21st century digital 
economy--in a way that will keep the Internet safe, security, reliable, 
and resilient. We know this because we were involved in making sure the 
proposal accomplished these goals. Alongside our direct engagement in 
the IANA transition process, the Internet Association is also a member 
of the ICANN Business Constituency.\2\
---------------------------------------------------------------------------
    \2\ The mission of the Business Constituency is to promote the 
development of an Internet that promotes user confidence, that the 
Internet is a safe place to do business, is competitive in the supply 
of registry and registrar services, and is technically stable, secure, 
and reliable. The Business Constituency supported the final proposals 
by the IANA Stewardship Transition Coordination Group (ICG) and Cross 
Community Working Group on Enhancing ICANN Accountability (CCWG-
Accountability).
---------------------------------------------------------------------------
    I will address my testimony today in three parts, which are also 
important questions for the Committee to consider as it moves forward:

   First, are U.S. interests best served by an IANA transition?

   Second, do the IANA transition proposals sent from the 
        Internet Corporation for Assigned Names and Numbers (ICANN) to 
        NTIA this March ensure a successful transition?

   Third, what issues should a post-transition ICANN focus on 
        in the short to long term?

    The IANA transition has been long contemplated, beginning in 1997, 
when the U.S. Government first moved to privatize Internet technical 
functions in an effort to promote innovation and competition online. 
Our goal throughout this process has been to ensure that a post-
transition ICANN is aligned with the stringent criteria set forth in 
2014 by the National Telecommunications and Information Administration 
(NTIA) and is fortified with the appropriate separation of powers 
necessary to protect the system from capture by any one stakeholder 
group, thus preserving a free and open Internet.
U.S. Interests Are Better Served By A Successful IANA Transition
    The successful transition of the IANA functions serves U.S. 
interests because it will ensure that people with the most at stake in 
the Internet's future growth--the small and medium businesses, the 
technologists, the companies and members of civil society, and 
individual users--are entrusted with the responsibility to ensure the 
open Internet, and are given the powers to do so.
    This is not a foregone conclusion. There are countries that want to 
impose a top-down, state-centric governance model for the Internet. 
These countries believe that something as powerful as the Internet 
needs to be tamed by governments, or in some cases fragmented so that 
networks stop at national borders. If they have it their way, the 
global and open Internet as we know it will cease to exist. This will 
be bad for Internet companies, bad for Internet users, and bad for the 
global economy--to say nothing of free expression and human rights 
around the world.
    The Internet Association believes that a robust multistakeholder 
model is the best method to maintain an Internet free from government 
control. Maintaining the U.S. Government's ``special'' role--which has 
always hidden the reality that it was the Internet community itself 
that was primarily responsible for keeping the Internet working around 
the world--could encourage other governments to break off and create 
their own systems, endangering the seamless functionality and openness 
of the global Internet.
    Fragmentation of the Internet would impede the free flow of 
information online and free speech worldwide, and would have political, 
economic, social, and cultural costs to society.\3\ The risks to the 
multistakeholder model should a transition not proceed are significant, 
and as such, the transition should be supported.
---------------------------------------------------------------------------
    \3\ See Julius Genachowski and Gordon Goldstein, `` `Global' 
Internet Governance Invites Censorship,'' (April 3, 2014) available at: 
http://www.wsj.com/articles/SB1000142405270230397
8304579471670854356630
---------------------------------------------------------------------------
    Failure to implement a successful IANA transition will serve to 
undermine the multistakeholder model, potentially stripping power from 
a model that has helped make the Internet the success it is today. It 
could further expose Internet governance to the whims of individual 
governments around the world looking to fill the void of a failed IANA 
transition, in turn creating a risk to the economic, social, and 
cultural engine that we all agree must be protected. Instead, we must 
focus on not only moving forward with a transition, but on all 
stakeholders creating an ecosystem for success in a post-transition 
world.
IANA Stewardship Transition Coordination Group (ICG) Proposals Match 
        Principles For Successful Transition
    A transition alone is not enough: the Internet Association agrees 
that the IANA transition must be done with carefully crafted proposals 
that provide for a successful transition.
    In March 2014, when NTIA announced that it intended to transition 
the ICANN functions to a global multistakeholder community, NTIA told 
ICANN that the transition proposal must have broad community support 
and address the following four principles:

   Support and enhance the multistakeholder model;

   Maintain the security, stability, and resiliency of the 
        Internet DNS;

   Meet the needs and expectations of the global customers and 
        partners of the IANA services; and

   Maintain the openness of the Internet.

    NTIA also stated that it would not accept a proposal that replaces 
the NTIA role with a government-led or an intergovernmental 
organization solution. These criteria for the transition are well-
founded principles for the success of a transition.
    The companies, members of civil society, technologists, and users 
that drive the Internet worked together to craft proposals that meet 
these criteria, and ICANN delivered proposals on both the IANA 
transition and enhanced ICANN accountability to NTIA for review in 
March 2016. To highlight, here are four examples of the way these 
proposals create the checks and balances needed to ensure that post-
transition ICANN is truly accountable to the community, even without a 
special role for NTIA:

   Under the Accountability Proposal submitted to NTIA, ICANN's 
        mission is explicitly ``limited to coordinating the development 
        and implementation of policies that are designed to ensure the 
        stable and secure operation of the Domain Name System and are 
        reasonably necessary to facilitate its openness, 
        interoperability, resilience, and/or stability.'' \4\ 
        Helpfully, the proposal also explicitly states that anything 
        not articulated in the bylaws would be outside ICANN's mission.
---------------------------------------------------------------------------
    \4\ CCWG-Accountability Supplemental Final Proposal on Work Stream 
1 Recommendations, ICANN, (Feb. 23, 2016) at 26 available at https://
www.icann.org/en/system/files/files/ccwg-accountability-supp-proposal-
work-stream-1-recs-23feb16-en.pdf

   The proposal for the first time distinguishes between ICANN 
        bylaws and fundamental bylaws. Included in the fundamental 
        bylaws are mechanisms establishing new accountability checks 
        and balances and changes to ICANN's mission. This designation 
        of fundamental bylaws matters because fundamental bylaws cannot 
---------------------------------------------------------------------------
        be amended by board action alone.

   The proposal creates a further check on ICANN by improving 
        the Independent Review Process (IRP) and Request for 
        Reconsideration (RFR) mechanisms. As we know from the U.S. 
        experience, judicial review of decisions is a very important 
        tool in our democracy. The counterpart to judicial review in 
        the ICANN system is IRP. Under the Accountability Proposal, the 
        current IRP mechanism is independent arbitration that ensures 
        that ICANN does not go beyond its limited mission through its 
        actions and does not violate its bylaws. Under the 
        Accountability Proposal, this arbitration mechanism is 
        strengthened to make it more accessible and less costly. It is 
        also made permanent through the establishment of a standing 
        panel of independent experts with expertise in ICANN-related 
        fields.

   The Governmental Advisory Committee (GAC) will be more 
        constrained in the future than it is presently. This will 
        significantly limit the GAC's ability to overturn 
        multistakeholder policy:

     that GAC advice be issued without objection in order 
            to compel the Board to attempt to seek a mutually agreeable 
            solution if the Board does not accept that advice;

     that GAC advice must be accompanied by a rationale; 
            and

     that the Board must not violate its own bylaws when 
            implementing GAC advice.

    These restraints represent significant reforms to the way the GAC 
issues advice, and more than outweigh raising the threshold for the 
Board to reject GAC advice is raised to 60 percent. Additionally, while 
the GAC may participate in Empowered Community processes, it may not 
participate as a decisional entity in any matter related to the Board's 
implementation of GAC advice.
    The transition proposals satisfy NTIA's stringent criteria. They 
satisfy our condition that any transition happen in a thoughtful way 
that protects the open Internet and removes unnecessary government 
involvement. Put simply, the proposals ensure that the same community 
of innovators, entrepreneurs, and users who made the Internet will be 
entrusted with keeping it safe for future generations.
Priorities For The Post-Transition ICANN
    As the IANA transition proceeds, our companies--and the rest of the 
global Internet community--are going to stay intimately involved and 
will keep close watch on the implementation of the accountability 
proposals.
    Successful implementation of what the proposals for the Internet 
Association includes:

   First, ICANN, under the leadership of its new CEO, should 
        demonstrate a clear commitment to the Accountability Proposals 
        in the first one hundred days post-transition. This will serve 
        as an important signal to all stakeholders that that it intends 
        to honor both the letter and the spirit of the transition.

   Second, ICANN must prioritize not only Workstream 1, but 
        also the Workstream 2 proposals. This latter Workstream is not 
        yet complete and includes several very important issues for the 
        multistakeholder community going forward. As one important 
        stakeholder in ICANN--the GNSO-explained, Workstream 2 issues 
        ``remain vitally important and must be budgeted and supported 
        at a level sufficient to ensure their development and 
        implementation.'' \5\
---------------------------------------------------------------------------
    \5\ Thomas Rickert, Mathieu Weill, Leon Felipe Sanchez Ambia, 
Transmittal of results of GNSO Council consideration of CCWG-
Accountability Supplemental Final Proposal, (Mar. 9, 2016) at 10, 
available at http://gnso.icann.org/en/correspondence/bladel-to-ccwg-
accountability-chairs-09mar16-en.pdf

   Third, the new ICANN CEO should within his first 100 days in 
        office send a clear signal to the multistakeholder community at 
        the next ICANN gathering in Helsinki that ICANN will not engage 
        in mission creep beyond its core mission statement and that it 
        honors this fundamental bylaw and the clarity it brings to the 
        multistakeholder community. Of particular concern to Internet 
        Association members is that a post-transition ICANN would 
        become a new forum for policing and enforcement beyond its core 
        mandate. Specifically, ICANN should leave intellectual property 
        content policing and enforcement to the stakeholders better 
---------------------------------------------------------------------------
        equipped to handle these issues.

    Ensuring the proper limitations on ICANN is important to the future 
of the Internet and the future of other international multistakeholder 
communities that wish to keep the Internet free and open for future 
generations.
    Thank you for having me testify on this important issue. I look 
forward to any questions you may have.

    The Chairman. Thank you, Mr. Beckerman.
    Mr. DelBianco?

  STATEMENT OF STEVE DelBIANCO, EXECUTIVE DIRECTOR, NetChoice

    Mr. DelBianco. Thank you, Chairman Thune and members of the 
Committee. I'm Steve DelBianco, Executive Director of 
NetChoice, a trade association representing the leading online 
and e-commerce companies. And I'm deeply involved at ICANN, 
having been elected six times as the policy chair for the 
business constituency, and I represent commercial stakeholders 
on the working group that developed the accountability 
proposal.
    Let me start by thanking this committee for approving the 
DOTCOM Act last June. When ICANN's gathering was happening in 
Argentina, when I told the 1,500 people in the room that the 
DOTCOM Act required implementation of the community's proposal, 
everyone stood to applaud. So let the record show there was a 
standing ovation for the U.S. Congress in Buenos Aires.
    [Laughter.]
    Mr. DelBianco. Let me also thank the members of this 
committee for your serious questions about the transition. The 
good news is that wherever your concerns actually relate to the 
functions of policies of ICANN and IANA, I will describe how 
your concerns are addressed.
    First, there's some general angst, asking the question: 
does the expiration of IANA give away the U.S. Internet? Well, 
in the 1980s, American engineers developed the recipe for 
Internet protocol, and they promptly gave that recipe to the 
world. That enabled engineers anywhere in the world to create 
their own IP network and connect to the Internet, and the U.S. 
doesn't own the Internet any more, Mr. Chairman, than South 
Dakota owns the recipe for chislic or cubed meat.
    The U.S. Government did create ICANN as a way to 
internationalize and privatize management of the Domain Name 
System. However, it is neither sustainable or necessary for the 
U.S. Government to retain its unique role forever, and, in 
fact, retaining the role increases the risks you are worried 
about.
    Second, let me describe why ICANN will maintain its legal 
presence in the United States. This is something this committee 
probed in your February 2015 hearing, and you got a verbal 
assurance from ICANN's CEO, but we looked for stronger stuff, 
belts and suspenders, and the belts are in the ICANN bylaws, 
which state that the principal office for the business of ICANN 
shall be in Los Angeles. The suspenders are in the Articles of 
Incorporation, where it says ICANN, ``is organized under 
California nonprofit public benefit corporation law.'' And our 
proposal requires 75 percent community approval to change that 
Article of Incorporation.
    Third, the proposal will not see an increase in the power 
of governments. Just after NTIA's announcement of transition, 
NetChoice proposed stress tests to evaluate new accountability 
mechanisms. A prominent stress test was where the GAC could 
change to majority voting from its consensus method. In 
response, we locked in the consensus method, we added one more 
Board vote to reject consensus advice, and we exclude the GAC 
from the community decisions to challenge a Board decision on 
accepting the GAC's advice.
    Some governments oppose these limits on GAC influence. The 
France Minister of IT complained recently, ``This will 
marginalize states in the decisionmaking processes of ICANN, 
especially compared to the role of the private sector.'' Well, 
France is right. The full package of accountability measures 
sufficiently cabins governmental influence and fully meets 
NTIA's criteria.
    Fourth, the proposal would not increase government 
censorship of the Internet. Recent moves by the Chinese 
government to control domestic domain name registration is 
troubling to all of us since it could fragment the Internet and 
isolate China's businesses and citizens. But the Chinese 
government's new policies are not an attempt to influence 
ICANN, because the Chinese government censorship works only on 
the edge of the Internet when traffic crosses China's physical 
borders. So neither China nor other governments can extend 
censorship to the core of the Internet so long as our 
multistakeholder community controls ICANN policymaking and 
holds ICANN's Board accountable.
    And then, finally, a significant delay in this transition 
would create far more risks than benefits. Some of you worry 
that the proposal would create a radically different governance 
structure for ICANN. But the proposal is somewhat complicated. 
I'll acknowledge that. But it is rooted in California law in 
order to extend legal powers to the community that ICANN is 
designed to serve.
    A delay to test community powers--there's no expectation 
when the community would exercise the new powers to challenge a 
Board decision. These are extraordinary measures. Nor does it 
make sense to delay two years just to see how Work Stream 2 
turns out. The new bylaws give the community the power to force 
reforms on ICANN at any time. So the only way to pause and 
evaluate all changes the community would ever make in the 
future would be to delay the transition forever.
    But a long-term delay of transition would rekindle the fire 
at the United Nations, who sees the legacy U.S. Government role 
as something they should be doing. With the transition, we 
eliminate the role where one government has the unique role, 
and the U.N. could not longer point to the U.S. role and say 
they should step into those shoes.
    I'll close by thanking you for your committee's deep 
engagement on this transition and for backing the 
multistakeholder community. Your letters and the hearing has 
made this a better process, and it's now ready for completion. 
I look forward to your questions.
    [The prepared statement of Mr. DelBianco follows:]

  Prepared Statement of Steve DelBianco, Executive Director, NetChoice
    I am Executive Director of NetChoice, an association of leading 
online businesses.\1\ At state, federal, and international fora, 
NetChoice promotes the integrity and availability of the Internet. 
We've attended 32 ICANN meetings and I'm serving a 6th term as policy 
chair for ICANN's Business Constituency. I've attended 9 Internet 
Governance Forum (IGF) meetings and testified in 8 Congressional 
hearings on ICANN and Internet governance, including 3 hearings 
specifically on the IANA transition and ICANN Accountability.
---------------------------------------------------------------------------
    \1\ See http://www.NetChoice.org. This statement reflects the view 
of NetChoice and does not necessarily represent the views of any 
individual member company.
---------------------------------------------------------------------------
    NetChoice members depend upon a secure Internet address system 
that's resilient to cyber attacks and abuse. We need an Internet that 
works around the globe--free from censorship, discriminatory 
regulation, and taxation. We need policies that are predictable and 
enforceable, facilitating innovation and creativity while protecting 
consumers. I will focus on three points today:

  1.  Over 18 years and three administrations, the U.S. Government has 
        use light-touch oversight over ICANN. However, it is neither 
        sustainable nor necessary for the U.S. to retain its unique 
        role forever. In fact, retaining this unique role increases the 
        risk of Internet fragmentation and government overreach. At 
        NTIA's request, the Internet community created proposals to let 
        ICANN loosen ties to the U.S. Government and strengthen its 
        accountability to the global Internet user community and 
        keeping core Internet functions free from governmental control.

  2.  NTIA's requirements for this transition guided the design of new 
        mechanisms to: manage core Internet functions; hold ICANN 
        accountable; and prevent government capture after the 
        transition. Congress' role in this transition began with 
        questions about accountability and stress tests, such as the 
        guidance provided by this committee in your Feb-2015 hearing. 
        Your committee backed the community with the DOTCOM Act, 
        insisting that NTIA require ICANN to adopt the multistakeholder 
        proposals as a condition of the transition.

  3.  The community's proposal meets NTIA requirements and reduces 
        governments' ability to override community consensus with its 
        advice to ICANN's board. While we have nearly completed ICANN 
        Bylaws to implement the proposal, a few implementation tasks 
        need to be finished in the months ahead. This transition will 
        for the first time make ICANN accountable to the technologists, 
        businesses, civil society, and users who depend upon the 
        Internet to drive economic growth and social evolution around 
        the world. This is a significant improvement on the ICANN 
        accountability we have today.
1. Where are we in this transition process for ICANN and IANA?
    This committee has led Senate oversight of NTIA's transition plan, 
which can be visualized with this timeline:
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    When ICANN's board accepted our transition proposals and forwarded 
them to NTIA in March, the timeline leading up to the IANA contract 
expiration date on 30-Sep was tight, but doable:

   20-Apr: Draft new bylaws posted for public comment period of 
        30 days.

   Late May: Evaluate public comments and ICANN board approves 
        new bylaws.

   10-Jun: NTIA evaluates adopted bylaws and reports to 
        Congress in time for review before recess in mid-July. Berkman 
        Center review expected to be part of this report.

   15-Aug: NTIA evaluates implementation of community 
        proposals, since this is the 45-day notice period for NTIA to 
        extend the IANA contract, if needed.

    The new bylaws will give the community powers to ensure these 
measures can be implemented--even if ICANN's board and management were 
to object. Next month, the ICANN community will begin designing Work 
Stream 2 accountability measures, addressing transparency, diversity, 
and human rights.
2. How did we get to this point?
    In the Annex to this statement we have summarized key events in the 
18-year evolution of ICANN. We chronicle the escalating resentment of 
other governments over the unique role retained by the U.S., leading to 
the 2009 termination of U.S. oversight agreements and replacement with 
the Affirmation of Commitments. The diagram below shows today's 
multiple contractual ties and connections between ICANN and its global 
stakeholders.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    The present arrangement reflects growing independence for ICANN, 
despite its two bilateral agreements with NTIA--the IANA Contract and 
Affirmation of Commitments (see above). Then, the 2013 Snowden 
revelations--though not unique to the U.S. and entirely unrelated to 
the stewardship of the IANA functions--stoked international concerns 
that led to the administration's decision to relinquish the legacy link 
between ICANN and the U.S. Government--the IANA functions contract.
3. NTIA's announced transition for IANA functions and ICANN 
        accountability
    In March 2014, the Commerce Department announced that it would 
transition its stewardship of the Internet Assigned Numbers Authority 
(IANA) functions to the global multistakeholder community. Positive 
global response was immediate, signaling that this move, at this time, 
might relieve some pressure from foreign governments that were 
demanding the U.S. end its unique U.S. role and give governments and 
the U.N. a greater role in IANA and ICANN oversight.
    NTIA asked ICANN to develop a transition plan to shift stewardship 
of IANA functions to ``the global multistakeholder community,'' saying 
the transition proposal must have broad community support and satisfy 
four principles in replacing NTIA's role \2\:
---------------------------------------------------------------------------
    \2\ Press Release, ``NTIA Announces Intent to Transition Key 
Internet Domain Name Functions'', March 14, 2014, at http://
www.ntia.doc.gov/press-release/2014/ntia-announces-intent-transition-
key-internet-domain-name-functions

---------------------------------------------------------------------------
   Support and enhance the multistakeholder model

   Maintain the security, stability, and resiliency of the 
        Internet DNS

   Meet the needs and expectation of the global customers and 
        partners of IANA services

   Maintain the openness of the Internet

    NTIA also added a statement that it would not give up IANA control 
if the plan developed by ICANN would place other governments in the 
legacy role of the U.S. With the experience of the last 18 years, it's 
appropriate for the U.S. to impose these principles and to prevent any 
government-led organization from replacing the former U.S. role after 
the transition.
    At the same time, NTIA and most stakeholders recognized that NTIA's 
existing IANA contract provides a broader accountability framework for 
ICANN, and that accountability enhancements should be developed and 
adopted in parallel with the transition. After NTIA's 2014 
announcement, the Internet community and ICANN developed two tracks to 
respond to the challenge (as shown on the timeline on page 2):

        IANA Stewardship track: Placing the global Internet community 
        in the role historically held by NTIA in the IANA contract with 
        ICANN.

        ICANN Accountability track: Giving the global Internet 
        community more power to hold the ICANN corporation accountable 
        because NTIA will lose the leverage associated with the IANA 
        contract once it expires.

    On each track, the community is comprised of representatives of 
ICANN's recognized Advisory Committees and Stakeholder Organizations, 
including business; governments; and civil society.
    The IANA Stewardship Track: ICANN structured the IANA track to have 
community groups with customers of the numbers, protocol parameters, 
and naming functions. They began meeting in Oct-2014 and published a 
final proposal in Oct-2015, with these elements:

   Create a new legal entity to contract with ICANN to operate 
        IANA naming functions

   Establish a customer committee to monitor the performance of 
        IANA functions

   Establish a periodic review of the IANA Functions, embedded 
        in ICANN bylaws

   Empower the community select a new operator for the IANA 
        Functions, if needed

    Notably, the IANA naming proposal relies upon enhanced community 
powers in the ICANN Accountability Track to hold ICANN to its new 
obligations.
    The ICANN Accountability Track: Beginning in Dec-2014, ICANN 
stakeholders named representatives to a cross-community working group 
(CCWG) representing the companies, technical experts, civil society 
activists, and users that are driving the Internet's growth and depend 
on the free and open Internet. (I serve as the representative of 
Commercial Stakeholders on the CCWG). After more than 200 meetings and 
calls, and over 12,000 e-mails over 14 months, the 200 participants in 
CCWG published a final proposal in Feb-2016 giving the community new 
powers to ensure ICANN was answerable to more than just itself.\3\ New 
powers for the community include the ability to:
---------------------------------------------------------------------------
    \3\ Final Accountability Proposal, at https://www.icann.org/en/
system/files/files/ccwg-accountability-supp-proposal-work-stream-1-
recs-23feb16-en.pdf

---------------------------------------------------------------------------
   Inspect ICANN's internal documents and records

   Challenge board actions via Independent Review Panels whose 
        decisions are binding

   Veto bylaw changes proposed by the ICANN board

   Approve any changes to ICANN Fundamental Bylaws (deemed core 
        to ICANN's governance structure) and Articles of Incorporation

   Veto strategic plans and budgets proposed by the ICANN board

   Control the periodic reviews required by the Affirmation of 
        Commitments

   Remove individual ICANN board directors

   Recall the entire ICANN board, as a last-resort measure

    ICANN's lawyers and the community's independent legal counsel 
jointly drafted new ICANN bylaws, which the CCWG reviewed and published 
for comment on 20-Apr-2016. (NetChoice supports the draft bylaws, 
subject to a few minor refinements.) The comment period closed 21-May, 
after which the bylaws may be revised to reflect comments, and then to 
the ICANN board for formal acceptance.
    In the next section we summarize questions and concerns raised by 
members of this committee as well as hearings and legislation handled 
by the committee, regarding the announced transition of IANA and 
enhancing ICANN accountability.
4. Transition and accountability concerns raised by members of this 
        committee
    This committee and its members have engaged early and often in 
transition discussions, with letters and hearings that have shaped the 
process, as summarized below:

   Ten present members of this committee were among 35 Senators 
        who wrote NTIA in Apr-2014 to reiterate the 2012 joint 
        congressional resolution supporting the multistakeholder model, 
        and to ask tough questions about this transition: why, by what 
        authority, when, how, and what about potential risks? \4\
---------------------------------------------------------------------------
    \4\ 2-Apr-2014, ``Thune, Rubio Demand Answers from Administration 
on Internet Transition``, at http://www.thune.senate.gov/public/
index.cfm/2014/4/thune-rubio-demand-answers-from-administration-on-
internet-transition

   In May-2014 Senator Rubio was joined by 7 committee members 
        calling for a hearing on NTIA's transition decision \5\.
---------------------------------------------------------------------------
    \5\ 22-May-2014, ``Rubio, Commerce Republicans Seek Answers On 
Future Of Internet Governance'', at http://www.rubio.senate.gov/public/
index.cfm/press-releases?ID=23503316-cea1-4bce-a4e6-af02ea864470

   In Jul-2014 Senators Thune and Rubio wrote to ICANN chairman 
        Stephen Crocker, recommending several reforms at ICANN:\6\
---------------------------------------------------------------------------
    \6\ 31-Jul-2014, Letter from Senators Thune and Rubio to ICANN 
Chairman Stephen Crocker, at https://www.icann.org/en/system/files/
correspondence/thune-rubio-to-crocker-31jul14-en.pdf

    1.  The transition should not allow governments to increase their 
---------------------------------------------------------------------------
            influence

    2.  Keep policy development separate from technical IANA functions

    3.  Increase threshold for board decisions to 4/5 of voting 
            directors

    4.  Give the community additional transparency and oversight tools

    5.  Improve the independent dispute resolution process (IRP)

    6.  Bylaws should enshrine ICANN's obligations under the 
            Affirmation of Commitments

   This committee held a critical hearing in Feb-2015, where 
        members pressed ICANN's CEO Fadi Chehade and NTIA's Larry 
        Strickling on several points: \7\
---------------------------------------------------------------------------
    \7\ 25-Feb-2015, Senate Commerce Committee hearing on M-S model of 
Internet Governance, video and statements at http://
www.commerce.senate.gov/public/index.cfm/hearings?ID
=683924AE-83D7-4BF4-922A-CDECB9556BA9, hearing transcript at https://
www.gpo.gov/fdsys/pkg/CHRG-114shrg98129/html/CHRG-114shrg98129.htm

    1.  Sen. Thune emphasized that the historical U.S. role must not be 
---------------------------------------------------------------------------
            replaced by a government-led structure.

    2.  Senators Thune and Blunt queried ICANN's commitment to retain 
            its U.S. headquarters.

    3.  Sen. Fischer questioned Chehade on threshold for board 
            rejection of government advice

    4.  Sen. Thune and others suggested that the Affirmation of 
            Commitments be made permanent by incorporating its reviews 
            in the ICANN bylaws.

   On 25-Jun-2015, this committee favorably reported S. 1551, 
        the DOTCOM Act that passed the House two days earlier by an 
        overwhelming margin of 378 to 25.\8\ This legislation would 
        require ICANN to adopt the multistakeholder community proposals 
        before NTIA could complete the IANA transition.
---------------------------------------------------------------------------
    \8\ 23-Jun-2015, Roll call vote on HR 805, at http://
clerk.house.gov/evs/2015/roll377.xml

   In Sep-2015 Senator Cruz led a bicameral request for GAO to 
        determine whether the administration has the power to 
        relinquish IANA functions.\9\
---------------------------------------------------------------------------
    \9\ 28-Sep-2015, Sen. Cruz Leads Bicameral Letter Asking GAO to 
Determine Whether Obama Administration Has Power to Give Away the 
Internet, at http://www.cruz.senate.gov/?p=press_release&id=2453

   In Feb-2016 Senators Cruz, Lankford, and Lee wrote to ICANN, 
        objecting to actions they believe supported Chinese Internet 
        censorship.\10\ ICANN's response \11\ was then followed by 
        another letter from the same Senators on 3-Mar-2016, referring 
        to China's latest regulations for Internet domain 
        registrations.\12\
---------------------------------------------------------------------------
    \10\ 4-Feb-2016, Letter to ICANN CEO, at https://www.icann.org/en/
system/files/correspondence/cruz-et-al-to-chehade-04feb16-en.pdf
    \11\ 19-Feb-2016, ICANN CEO response letter, at https://
www.icann.org/en/system/files/correspondence/chehade-to-cruz-et-al-
19feb16-en.pdf
    \12\ 3-Mar-2016, Follow-up letter from Senators Cruz, Lankford and 
Lee to ICANN CEO, at https://www.icann.org/en/system/files/
correspondence/cruz-et-al-to-crocker-03mar16-en.pdf

   On 4-Apr-2016, Senators Cruz, Lankford, and Lee wrote to 
        ICANN demanding answers to questions they had raised in their 
        previous letter.\13\
---------------------------------------------------------------------------
    \13\ 4-Apr-2016, Letter from Senators Cruz, Lankford, and Lee to 
ICANN, at https://www.icann.org/en/system/files/correspondence/cruz-
lankford-lee-to-crocker-04apr16-en.pdf

   Last week, on 18-May-2016, Senator Rubio reportedly 
        circulated a letter to NTIA suggesting that some period of 
        delay in the IANA transition was necessary in order to ensure 
        satisfactory implementation of the proposal.\14\
---------------------------------------------------------------------------
    \14\ 18-May-2016, Mario Trujillo in The Hill, ``Republicans renew 
attempts to delay Internet domain handoff ``, at http://thehill.com/
policy/technology/280354-republicans-continue-attempts-to-delay-
internet-domain-handoff

   On 19-May-2016, Senators Cruz, Lankford, and Lee wrote to 
        Commerce Secretary Pritzker and NTIA Assistant Secretary 
        Strickling, giving reasons they believe NTIA should extend the 
        IANA contract:\15\
---------------------------------------------------------------------------
    \15\ 19-May-2016, Letter from Senators Cruz, Lankford, and Lee to 
Secretary Pritzker and Assistant Secretary Strickling, at http://
www.cruz.senate.gov/files/documents/Letters/20160519
_ICANNLetter.pdf

    1.  They believe the proposal ``significantly increases the power 
---------------------------------------------------------------------------
            of foreign governments''

    2.  An undefined commitment to respect human rights

    3.  The IANA transition might imply a transfer of government 
            property

    4.  ICANN may move its headquarters outside the U.S.

    5.  The proposal will embolden an unaccountable ICANN board

    Below, I address the major points raised by committee members, 
drawing on my hands-on experience with the ICANN accountability and 
transition planning process, where I have represented commercial 
stakeholders since the transition process began in 2014.
5. The accountability enhancements and transition plan address 
        committee concerns
    At the same time committee members were raising questions about the 
transition, the CCWG was also pursuing a structured way to assess how a 
post-transition ICANN could be held accountable in the face of internal 
and external threats. The month after NTIA announced the transition, I 
testified before the House Commerce Committee about stress tests to 
inform and evaluate accountability proposals.\16\ I led the working 
group that applied these stress tests to the accountability proposal, 
and we ultimately determined that proposed new accountability measures 
were a significant improvement over existing measures, and would give 
the community adequate powers to challenge ICANN's actions.
---------------------------------------------------------------------------
    \16\ See Stress Tests, pages 7-10 at NetChoice Testimony before the 
House Energy & Commerce Committee, Subcommittee on Communications and 
Technology--Ensuring the Security, Stability, Resilience, and Freedom 
of the Global Internet, 2-Apr-2014
---------------------------------------------------------------------------
    Several stress tests led CCWG to address concerns also raised by 
committee members, starting with the risks of having ICANN quit the 
Affirmation of Commitments and eliminate its legal presence in the 
United States, as discussed below.
5.1 ICANN will maintain its legal presence in the United States
    Your Feb-2015 hearing touched on Affirmation of Commitments section 
8b, which commits ICANN to ``remain a not for profit corporation, 
headquartered in the United States of America with offices around the 
world to meet the needs of a global community.'' In your Feb-2015 
hearing, ICANN CEO Chehade repeated this commitment, saying, ''ICANN 
shall remain in the United States of America, and we stand by this.'' 
\17\
---------------------------------------------------------------------------
    \17\ 23-Jun-2015, Roll call vote on HR 805, at http://
clerk.house.gov/evs/2015/roll377.xml
---------------------------------------------------------------------------
    Many in the CCWG were not content to rely upon a verbal promise 
made by a CEO, so we sought further assurance of a continued U.S. 
presence in ICANN's bylaws and articles of incorporation. We noted this 
commitment is already part of ICANN bylaws Article XVIII:

        ``OFFICES. The principal office for the transaction of the 
        business of ICANN shall be in the County of Los Angeles, State 
        of California, United States of America. ICANN may also have an 
        additional office or offices within or outside the United 
        States of America as it may from time to time establish.''

    While ICANN's board could propose a change to this bylaws 
provision, the empowered community could block the proposed change, 
using one of its new community powers. In addition, ICANN's Articles of 
Incorporation already state that ICANN ``is organized under California 
Nonprofit Public Benefit Corporation Law'' \18\. The CCWG proposal 
amends ICANN's Articles of Incorporation such that any change would 
require a 75 percent majority of the empowered community.
---------------------------------------------------------------------------
    \18\ Section 3 of ICANN Articles of Incorporation, at https://
www.icann.org/resources/pages/governance/articles-en
---------------------------------------------------------------------------
    These two foundational documents are sufficient assurance that 
ICANN will continue to maintain principal offices and a legal presence 
in the U.S.
5.2 The post-transition ICANN will not see an increase in the power of 
        governments
    Governments have influence on ICANN policy development and contract 
compliance via their collective participation in the Governmental 
Advisory Committee (GAC). The GAC was established when the U.S. 
Commerce Department and American private sector interests first created 
ICANN in 1998:\19\
---------------------------------------------------------------------------
    \19\ 6-Nov-1998, Bylaws for ICANN, at https://www.icann.org/
resources/unthemed-pages/bylaws-1998-11-06-en

        The Governmental Advisory Committee should consider and provide 
        advice on the activities of the Corporation as they relate to 
        concerns of governments, particularly matters where there may 
        be an interaction between the Corporation's policies and 
---------------------------------------------------------------------------
        various laws, and international agreements.

    The GAC has gradually grown in its effectiveness to and its advice 
to ICANN has grown in importance, as seen with policies adopted for the 
latest expansion of new top-level domains.
    In our previous Congressional testimony, I described a stress test 
where governments could significantly raise their influence via GAC 
formal advice:\20\
---------------------------------------------------------------------------
    \20\ See Stress Tests 6 & 7, on p. 9 at NetChoice Testimony before 
the House Energy & Commerce Committee--Ensuring the Security, 
Stability, Resilience, and Freedom of the Global Internet, 2-Apr-2014

        Stress Test #18 is related to a scenario where ICANN's GAC 
        would amend its operating procedures to change from consensus 
---------------------------------------------------------------------------
        decisions to majority voting for advice to the ICANN Board.

        Since the ICANN Board must seek a mutually acceptable solution 
        if it rejects GAC advice, concerns were raised that the Board 
        could be forced to arbitrate among sovereign governments if 
        they were divided in their support for the GAC advice. In 
        addition, if the GAC lowered its decision threshold while also 
        participating in the Empowered Community, some stakeholders 
        believe this could inappropriately increase government 
        influence over ICANN.\21\
---------------------------------------------------------------------------
    \21\ pp. 2-3, Annex 11--Recommendation #11: Board Obligations with 
Regard to Governmental Advisory Committee Advice (Stress Test #18), at 
https://www.icann.org/en/system/files/files/ccwg-accountability-supp-
proposal-work-stream-1-recs-23feb16-en.pdf

    Several governments had previously voiced dissatisfaction with the 
present consensus rule for GAC decisions, so it is plausible that the 
GAC could change its method of approving advice at some point, such 
that a majority could prevail over a significant minority of 
governments. Early on, NTIA said that addressing Stress Test 18 was 
required for the transition:\22\
---------------------------------------------------------------------------
    \22\ E-mail from Suzanne Radell, Senior Policy Advisor, NTIA, 19-
Mar-2015, at http://mm.icann.org/pipermail/accountability-cross-
community/2015-March/001711.html

        As a threshold matter, the USG considers the stress test both 
        appropriate and necessary to meet the requirement that the IANA 
        transition should not yield a government-led or an 
        intergovernmental replacement for NTIA's current stewardship 
---------------------------------------------------------------------------
        role.

        Finally, we interpret the proposed stress test as capturing 
        this important distinction in GAC advice, with an appropriate 
        remedy in the form of a Bylaws amendment to reinforce the ICANN 
        community's expectation that anything less than consensus is 
        not advice that triggers the Bylaw provisions.

    In response, the new bylaws would enshrine the GAC's present full-
consensus rule as the only way to trigger the board's obligation to 
``try and find a mutually acceptable solution.'' Several GAC members 
fiercely resisted this change, saying it interfered with government 
decision-making and reduced the role of governments. To overcome some 
of that resistance, we raised the threshold for ICANN's board to reject 
GAC's full-consensus advice, from today's simple majority (9 votes) to 
60 percent (10 votes).
    This brings to mind your Feb-2015 hearing, where Senator Fischer 
asked ICANN CEO Fadi Chehade about a proposal to raise the rejection 
threshold to 2/3 of board votes. Chehade replied, ``The Board has 
looked at that matter and has pushed it back, so it is off the table.'' 
It's true that a standalone proposal to raise the GAC rejection 
threshold was broadly opposed and set aside in late 2014. However, the 
proposed bylaw to increase the rejection threshold to 60 percent (1 
additional vote) is an entirely different arrangement, since it 
reserves the higher threshold only for GAC advice adopted ``by general 
agreement in the absence of any formal objection''. This requirement 
prevents the GAC from generating privileged advice based on anything 
less than consensus, and more than justifies the addition of 1 more 
vote to reject that advice.
    If the board rejects GAC advice, it must still follow existing 
bylaws to ``try, in good faith and in a timely and efficient manner, to 
find a mutually acceptable solution.'' This is an obligation to ``try'' 
and does not oblige ICANN to find a solution that is acceptable to the 
GAC.
    Another imposition on GAC advice is a requirement that advice ``is 
communicated in a clear and unambiguous written statement, including 
the rationale for such advice.'' \23\ And if ICANN's board accepted GAC 
advice that is inconsistent with ICANN Bylaws, the community can invoke 
the independent review process (IRP) to ``ensure that ICANN does not 
exceed the scope of its limited technical Mission and otherwise 
complies with its Articles of Incorporation and Bylaws.'' \24\
---------------------------------------------------------------------------
    \23\ 20-Apr-2016, Section 12.3 of Draft New ICANN Bylaws, at 
https://www.icann.org/en/system/files/files/proposed-new-bylaws-
20apr16-en.pdf
    \24\ Ibid, Section 4.3 a
---------------------------------------------------------------------------
    As one of the 7 Advisory Committees and Supporting Organizations 
that comprise the ICANN community, GAC was also invited to participate 
as a decisional participant of the Empowered Community. A few critics 
say that we should have excluded GAC from the community, but I cannot 
imagine that Congress or the Administration would accept an 
accountability structure where governments--including the U.S.--have no 
seat at the table. National, state, and local governments maintain 
websites and services as domain name registrants, and many government 
employees are Internet users. Moreover, governments have a role among 
all stakeholders in developing public policy and enforcing laws that 
are relevant to the Internet.
    While GAC is rightfully an equal among ICANN stakeholders, the new 
bylaws ensure that governments could not block a community challenge of 
ICANN Board's implementation of GAC advice. In what is known as the 
``GAC Carve-out'', the bylaws exclude the GAC from the community 
decision whether to challenge a board action based on GAC consensus 
advice. Several governments vigorously oppose these bylaws provisions 
to limit GAC influence and lock-in their consensus method of decision-
making. In a statement issued Mar-2016, France's minister for digital 
economy complained about ICANN's new bylaws:\25\
---------------------------------------------------------------------------
    \25\ 24-Mar-2016, ``French scream sacre bleu! as U.S. govt gives up 
the Internet to ICANN'', at http://www.theregister.co.uk/2016/03/24/
france_slams_us_govt_internet_transition/

        ``Despite the continued efforts of civil society and many 
        governments to reach a balanced compromise, elements of this 
        reform project will marginalize states in the decision-making 
        processes of ICANN, especially compared to the role of the 
---------------------------------------------------------------------------
        private sector.''

        Unnamed French foreign ministry officials also told Le Monde 
        they were unhappy with the end result, saying: ``This is an 
        unsatisfactory condition. The consensus requirement only 
        produces warm water. And that does not put the GAC on the same 
        footing as the other committees of ICANN.''

    The French official is right--the GAC is not on the same footing as 
other ICANN stakeholders. That, however, is by design. Notwithstanding 
criticism from certain governments, the full package of transition 
accountability measures sufficiently cabins governmental influence and 
fully meets NTIA's conditions for the transition.
5.3 The Affirmation of Commitments is being added to ICANN bylaws
    The first stress test that we proposed to Congress was where ICANN 
decides to quit the Affirmation of Commitments, a bilateral agreement 
with the U.S. that either party may terminate with 120 days notice.\26\ 
Once the IANA contract is gone, ICANN could quit the Affirmation 
without fear of losing its control over IANA functions. Even if ICANN 
wanted to retain the Affirmation after transition, that agreement would 
be targeted for elimination by governments who resent the U.S. having a 
unique, bilateral relationship with ICANN.
---------------------------------------------------------------------------
    \26\ See Stress Test 1, on page 8 at NetChoice Testimony before the 
House Energy & Commerce Committee, Subcommittee on Communications and 
Technology--Ensuring the Security, Stability, Resilience, and Freedom 
of the Global Internet, 2-Apr-2014
---------------------------------------------------------------------------
    In your Feb-2015 hearing, members of this committee suggested 
making Affirmation obligations permanent. At the same time, the CCWG 
examined Affirmation items to determine which were already in ICANN 
bylaws, and proposed adding key Affirmation commitments to ICANN 
bylaws--including the 4 periodic community reviews:

        ICANN's accountability & transparency

        Preserving security, stability and resiliency

        Promoting competition, consumer trust, and consumer choice

        The extent to which WHOIS services meet legitimate needs of law 
        enforcement

    Now, these reviews will be part of ICANN bylaws, enhanced to give 
the community access to ICANN internal documents and control over 
review team composition. In addition, the IANA stewardship group 
proposed an IANA Functions Review be added to the bylaws.
    When combined with new powers to challenge ICANN board decisions, 
these bylaws changes would enable termination of the Affirmation of 
Commitments. The CCWG concluded that the Affirmation should be 
terminated to avoid having a side agreement different from the new 
bylaws, and to eliminate a bilateral agreement with the U.S. that would 
become a target for critics of a unique U.S. Government role in ICANN 
oversight.\27\
---------------------------------------------------------------------------
    \27\ p. 6, Annex 9--Recommendation #9: Incorporating the 
Affirmation of Commitments in ICANN's Bylaws, at https://www.icann.org/
en/system/files/files/ccwg-accountability-supp-proposal-work-stream-1-
recs-23feb16-en.pdf
---------------------------------------------------------------------------
5.4 The post-transition ICANN would not increase government censorship 
        of online content
    As noted in section 4 above, Senators Cruz, Lankford, and Lee wrote 
to ICANN's chairman this year about his CEO's engagement with the 
Chinese government and China's latest regulatory restrictions on 
domestic Internet domain name registrations. The response from ICANN 
asserted that the CEO's personal engagement with a Chinese conference 
was not related to his role as CEO, and said that ICANN's engagement 
with China ``does not suggest any level of support for the Nation's 
government or its policies.'' \28\
---------------------------------------------------------------------------
    \28\ 6-Apr-2016, Response from ICANN to Senators Cruz, Lee, and 
Lankford, at https://www.icann.org/en/system/files/correspondence/
crocker-to-cruz-lankford-lee-06apr16-en.pdf
---------------------------------------------------------------------------
    However, recent moves by the Chinese government to regulate domain 
name registrations remains troubling to NetChoice members, since it 
could lead to fragmentation of the global Internet and isolation of 
China's citizens and businesses. The Senators are right to be concerned 
about this, and a post this week by NTIA's Larry Strickling and 
Ambassador Danny Sepulveda echoes those same concerns:\29\
---------------------------------------------------------------------------
    \29\ 16-May-2016, Lawrence Strickling and Daniel Sepulveda, 
``China's Internet Domain Name Measures and the Digital Economy'', at: 
https://blogs.state.gov/stories/2016/05/16/china-s-internet-domain-
name-measures-and-digital-economy

        If left unchanged, China's regulations would undermine some of 
        the most fundamental aspects of the Internet--openness, 
        reliability, and interoperability--within China. By creating 
        its own rules for domain name management, China is threatening 
        to fragment the Internet, which would limit the Internet's 
        ability to operate as a global platform for human 
---------------------------------------------------------------------------
        communication, commerce, and creativity.

    However troubling the Chinese government's recent moves may be, 
they are not an attempt to take control of ICANN or the global domain 
name system. The Chinese government's move to control domain 
registrations by Chinese nationals is part of its larger effort to 
control what reaches or originates from its citizens. It may also be 
driven by a desire to reduce online fraud and abuse among several 
hundred million Chinese Internet users, many of whom are going online 
for the first time.
    Fortunately, the Chinese government's censorship regime works only 
at the edge of the Internet, where online traffic enters networks 
within China's physical borders. Neither China nor other governments 
can extend censorship to the core of the global Internet, so long as 
our multistakeholder community controls ICANN policy development and 
holds ICANN accountable for its actions.
    Our transition proposal does not help China--or any other 
government--to extend censorship to the root of the DNS. In fact, we 
have new powers to challenge board implementation of GAC advice that 
exceeds our new--and narrower--mission for ICANN. The new bylaws 
explicitly limit ICANN's ability to impose restrictions on content or 
conduct:\30\
---------------------------------------------------------------------------
    \30\ 20-Apr-2016, ICANN Draft new Bylaws, at https://www.icann.org/
en/system/files/files/proposed-new-bylaws-20apr16-en.pdf

        ICANN shall not regulate (i.e., impose rules and restrictions 
        on) services that use the Internet's unique identifiers or the 
        content that such services carry or provide, outside the 
        express scope of Section 1.1(a). For the avoidance of doubt, 
        ICANN does not hold any governmentally authorized regulatory 
---------------------------------------------------------------------------
        authority.

    Authoritarian regimes don't want the IANA transition to succeed. 
This transition empowers the private sector, civil society, and 
technologists--not governments--to take the reins over the global 
Internet. As one noted China cyber expert put it, this is a development 
that would dramatically undermine the authoritarians' arguments that 
only governments can truly manage something as powerful as the 
Internet.\31\ We know this to be false, because of the incredible role 
that stakeholders from around the world have played for decades in 
keeping the global Internet safe and running smoothly.
---------------------------------------------------------------------------
    \31\ Adam Segal, ``The Hacked World Order'', (PublicAffairs, 2016) 
at 220.
---------------------------------------------------------------------------
    But in the face of these threats to fragment the global Internet, 
it's more important than ever to ensure that the innovators and 
entrepreneurs who have always been responsible for growing and 
protecting the Internet remain at the helm, free from undue government 
influence. The transition plan we are here to discuss will do precisely 
that.
5.5 At this point, a significant delay in this transition could create 
        far more risks than rewards for the interests of U.S. 
        Government, businesses, and citizens
    As noted in section 4, Senators on the committee circulated letters 
last week indicating reasons to delay the transition beyond the IANA 
contract expiration on 30-Sep-2016. We acknowledge that a modest delay 
could give more time to complete remaining implementation tasks and 
verify promised implementation by the ICANN Board. But an extended 
delay would create more risks and no significant benefits from the 
perspective of the U.S. Government, businesses, and citizens.
    First, Sen. Rubio wrote that the proposal ``would create a 
radically different governance structure for ICANN''. While it is true 
that the proposed new governance structure is somewhat complicated, it 
is rooted in California law to give legal powers to the community. This 
is the same kind of accountability typically used by shareholders, 
association members, and voters. Moreover, the newly empowered 
community would invoke these new accountability powers only if ICANN's 
board ignored community consensus in its pursuit of a budget, a bylaws 
change, or a policy action. The mere existence of these new community 
powers will diminish the board's appetite to confront a united 
community of disgruntled Internet stakeholders.
    Second, Senators raise concern ``about the expanded role of 
governments''. That concern could reasonably arise from looking in 
isolation at the GAC's status as multi-equal stakeholder in the 
empowered community. But as noted in section 5.3 above, the net effect 
of transition changes does not increase the influence of governments 
over ICANN activities. This is also evident in the complaints of 
France, Brazil, and other GAC members who believe their influence is 
being reduced in favor of other ICANN stakeholder groups.
    Third, Senators Cruz, Lankford, and Lee worry that the CCWG 
proposal could commit ICANN to potentially troubling enforcement 
obligations for human rights. NetChoice shared this concern with the 
first draft of Bylaws regarding the Work Stream 2 framework on human 
rights, so we support this amended Bylaw text:

        (viii) Subject to the limitations set forth in Section 27.3, 
        within the scope of its Mission and other Core Values, 
        respecting internationally recognized human rights as required 
        by applicable law. This Core Value does not create, and shall 
        not be interpreted to create, any obligation on ICANN outside 
        its Mission, or beyond obligations found in applicable law. 
        This Core Value does not obligate ICANN to enforce its human 
        rights obligations, or the human rights obligations of other 
        parties, against such other parties.

    This proposed bylaws text would make it clear that ICANN will not 
become embroiled in enforcement of claims related to human rights, and 
should address the Senators' concern.
    Fourth, Sen. Rubio and others observe that there are ``details of 
the proposal that have yet to be developed'', referring specifically to 
Work Stream 2 elements such as transparency improvements and a new 
framework for respecting human rights. Actually, there are several 
additional tasks in Work Stream 2, which will take the CCWG well into 
mid-2017 to complete.
    However, the whole point of separating Work Stream 1 and 2 tasks 
was to identify what had to be implemented before the IANA contract 
expired, after which there would be very little leverage to force 
accountability measures that would be resisted by ICANN's board. Work 
Stream 1 includes new powers to block the board's budget, overturn a 
board decision, and to recall board directors. Those powers are deemed 
sufficient to force a future ICANN board to accept Work Stream 2 
changes that are developed though community consensus.
    In other words, ICANN's new bylaws give the Empowered Community new 
powers to implement further reforms at any time. So the only way to 
evaluate all changes the community might pursue in the future is to 
delay the transition indefinitely.
    A long-term delay of transition would re-kindle the fire at the 
United Nations, where many governments have cited the U.S. Government 
role as the sole supervisor of ICANN and the IANA functions as an 
excuse to gain more control over the Internet for themselves. With this 
transition we are eliminating the role where one government holds ICANN 
accountable, by moving to a structure where ICANN is accountable to a 
broad community of Internet stakeholders. After transition, the U.N. 
and ITU can no longer point to the U.S. Government role and say they 
should step into those shoes.
    Finally, an extended delay of transition would signal that the U.S. 
Government does not actually trust the multistakeholder model that we 
are encouraging China and other governments to trust. China's 
government would surely note our hypocrisy for criticizing them for 
failing to embrace domain registration policies developed by ICANN's 
multistakeholder community.
6. Conclusion
    This transition is the best opportunity to pursue difficult but 
necessary reforms to ensure that ICANN is accountable to the community 
it was created to serve.
    It's imperative to empower the Internet community to challenge 
ICANN decisions on situations that will arise in the decades ahead. The 
new Bylaws provide direct court enforcement for community's statutory 
power to remove an individual director or to recall the entire ICANN 
board.\32\ And if the community wins in an independent review process 
(IRP) and the ICANN board does not comply with the IRP decision, the 
community can petition a court to enforce the result of the IRP. For 
all other community powers, the recourse is to recall the entire ICANN 
board, which is also enforceable in court.
---------------------------------------------------------------------------
    \32\ p. 9, Annex 02--Recommendation #2: Empowering the Community 
through Consensus, at https://www.icann.org/en/system/files/files/ccwg-
accountability-supp-proposal-work-stream-1-recs-23feb16-en.pdf
---------------------------------------------------------------------------
    The global Internet community has devoted thousands of hours 
developing this proposal and bylaws, and is facing additional effort on 
Work Stream 2 enhancements. We are therefore grateful that this 
committee approved legislation insisting that NTIA require ICANN to 
adopt the multistakeholder community proposals as a condition of the 
IANA transition. Your strong support helped us persuade ICANN's board 
to commit to adopt bylaws changes required by the community proposal--
regardless of when this proposal works its way through Washington.
    To prepare ICANN for a future independent of U.S. Government 
contracts, the Internet community needs to hold ICANN accountable, with 
powers like shareholders have over corporations; voters over their 
elected officials; and members over their trade associations. This 
transition can realize the White Paper vision for an ICANN that is led 
by, and accountable to its multistakeholder communities, including the 
private sector; civil society; and technology experts--along with a 
limited role for governments. Together, we can bring connectivity, 
content, and commerce to the next billion global Internet users and to 
future generations of Americans.
Annex--United States government stewardship of ICANN and IANA
    American engineers came up with a ``recipe'' for core Internet 
technologies and promptly gave that recipe to the world. Internet hosts 
were appearing internationally by the 1980s. The 1990s saw the 
explosion of commercial uses of the Internet, based on a naming and 
numbering system also created in the United States. In 1998, the 
Clinton administration sought to privatize and internationalize the 
Domain Name System (DNS) with this directive in the White Paper:

        The President directed the Secretary of Commerce to privatize 
        the Domain Name System in a way that increases competition and 
        facilitates international participation in its management.

        The U.S. Government is committed to a transition that will 
        allow the private sector to take leadership for DNS 
        management.\33\
---------------------------------------------------------------------------
    \33\ The ``White Paper'' on Management of Internet Names and 
Addresses, U.S. Department of Commerce, Jun-1998, see http://
www.ntia.doc.gov/ntiahome/domainname/6_5_98dns.htm

    In the 18 years since, it's been a long road from American 
invention to internationalized private-sector leadership by an entity 
the U.S. established for the task: the Internet Corporation for 
Assigned Names and Numbers (ICANN). Three administrations and several 
Congresses have worked to help ICANN mature and protect the vision of 
private-sector leadership from growing pressure for control by 
governments, who saw the growth of the Internet and assumed that its 
governance required an inter-governmental solution.
    The transition to an independent ICANN was expected to take a few 
years, but the National Telecommunications and Information 
Administration (NTIA) made several extensions of its oversight 
arrangements, the latest of which expired in September 2009. At the 
time, NetChoice was among those calling for another extension so that 
ICANN could develop permanent accountability mechanisms.
    Instead, NTIA and ICANN unveiled a new agreement, the Affirmation 
of Commitments. \34\ The Affirmation established periodic reviews 
giving all stakeholders--including governments--a defined oversight 
role in assessing ICANN's performance. The Affirmation gave the global 
Internet community what was promised: independence for ICANN in a 
framework where governments were alongside private sector stakeholders.
---------------------------------------------------------------------------
    \34\ Affirmation of Commitments, 2009, http://icann.org/en/
documents/affirmation-of-commitments-30sep09-en.htm
---------------------------------------------------------------------------
    But concerns about the U.S. role in naming and numbering remained 
after the execution of the Affirmation, because NTIA retained its 
contracting role for the Internet Assigned Numbers Authority (IANA). 
The IANA contract is deemed essential to ICANN and therefore provided 
NTIA leverage to hold ICANN to its Affirmation obligations.
    However, ICANN can quit the Affirmation with just 120 days notice. 
And within a year of signing, ICANN's then-chairman told a group of 
European parliamentarians that he saw the Affirmation as a temporary 
arrangement ICANN would like to eventually terminate.\35\
---------------------------------------------------------------------------
    \35\ Peter Dengate Thrush, in response to a question from Steve 
DelBianco, at event hosted by European Internet Foundation in Brussels, 
June 22, 2010.
---------------------------------------------------------------------------
    All of this to say that ICANN needs a persistent and powerful 
reminder that it serves at the pleasure of global stakeholders; that 
ICANN has no permanent lock on managing the Internet's name and address 
system. We said at the time that ICANN's role in IANA functions should 
disappear if it were to walk away from the Affirmation of Commitments.
    Since the U.N. created the Internet Governance Forum (IGF) in 2005, 
IGF meetings have become increasingly productive, yet some governments 
still want the U.N. to oversee DNS tasks handled by ICANN and IANA. In 
its July-2010 statement to the U.N., China's government asked the U.N. 
and IGF to ``solve the issue of unilateral control of the Critical 
Internet Resources.'' By ``unilateral control'', China means U.S. 
custody of the IANA contract. And ``Critical Internet Resources'' 
include IP addresses, root servers, and the policymaking for domain 
names.
    China was not alone in its desire for the migration of ICANN and 
IANA functions to the U.N.'s International Telecommunication Union 
(ITU). ITU leadership did not like a model where governments share 
power with industry and civil society, and warned ICANN that sooner or 
later governments would take greater control of the organization.
    In 2011, a group of governments proposed their own replacement for 
U.S. oversight and ICANN's model of private sector leadership. India, 
Brazil, and South Africa declared it was time for ``establishing a new 
global body'' located ``within the U.N. system'' to ``oversee the 
bodies responsible for technical and operational functioning of the 
Internet.'' \36\ In contrast, both houses of Congress unanimously 
affirmed a resolution in 2012 stating, ``the consistent and unequivocal 
policy of the United States to promote a global Internet free from 
government control and preserve and advance the successful 
multistakeholder model that governs the Internet today.'' \37\
---------------------------------------------------------------------------
    \36\ Recommendations of IBSA Multistakeholder meeting on Global 
Internet Governance, September 2011, at http://www.culturalivre.org.br/
artigos/IBSA_recommendations_Internet_
Governance.pdf
    \37\ H.Con.Res.127 and S.Con.Res.50--Expressing the sense of 
Congress regarding actions to preserve and advance the multistakeholder 
governance model under which the Internet has thrived, Aug 20, 2012
---------------------------------------------------------------------------
    The diagram below shows the multiple contractual ties and 
connections between ICANN and its global stakeholders.


    Clearly, the last 18 years of ``transition'' have seen significant 
improvements in globalizing ICANN and IANA, although there have 
certainly been some challenges. Along the way, some governments and 
intergovernmental organizations have criticized the U.S. role and 
openly coveted taking over that role. But throughout, the U.S. Congress 
and multiple administrations have stayed with the vision of 
multistakeholder, private-sector leadership for Internet addressing and 
policymaking. And our government has used its contractual tools to 
improve ICANN's performance and to hold the organization to the 
accountability measures in the Affirmation of Commitments.
    Still, the U.S. continued to work towards full privatization of 
ICANN and IANA, at a deliberate pace and with measurable progress. Then 
came 2013 and Edward Snowden's revelations of U.S. Government 
surveillance. While not unique to the U.S. and entirely unrelated to 
ICANN and the IANA functions, Snowden stoked international concerns 
that led to the administration's decision to relinquish the remaining 
tether of ICANN accountability to the U.S.--the IANA functions 
contract.
Ensuring that ICANN accepts and implements the community proposals
    In September 2014, all ICANN advisory committees and stakeholder 
groups wrote a joint letter raising questions about ICANN's proposed 
accountability process.\38\ ICANN responded by asking whether and why 
the community seemed to lack trust in ICANN's board and management. The 
Business Constituency's reply is remarkable for its clarity on why the 
community needs new measures to hold ICANN accountable:\39\
---------------------------------------------------------------------------
    \38\ Joint questions, https://www.icann.org/en/system/files/
correspondence/cooper-et-al-to-che
hade-crocker-03sep14-en.pdf
    \39\ p. 3, Business Constituency comment on Enhancing ICANN 
Accountability Process, 27-Sep-2014, at http://www.bizconst.org/wp-
content/uploads/2014/09/BC-comment-on-Enhancing-ICANN-Accountability-
Process.pdf

        First, this discussion is not about whether the community 
        ``trusts'' the current ICANN board. It's about trusting future 
        boards--after we no longer have the leverage/influence of the 
        U.S. Government to rely upon. This IANA transition is the 
        community's chance to establish mechanisms to rein-in a future 
        board that would put ICANN's corporate interests ahead of the 
        community. We are not suggesting that a future board would do 
        so. Rather, we are acknowledging that the board is obliged to 
        protect the corporation's interests first, as required by ICANN 
---------------------------------------------------------------------------
        bylaws:

                Section 7: Directors shall serve as individuals who 
                have the duty to act in what they reasonably believe 
                are the best interests of ICANN and not as 
                representatives of the entity that selected them.

        Should there be any confusion about whether the bylaws refer to 
        ``ICANN'' as the corporation or the community, see ICANN's 
        Management Operating Principles (2008):

                ``The third and perhaps most critical point of tension 
                is between the accountability to the participating 
                community to perform functions in keeping with the 
                expectations of the community and the corporate and 
                legal responsibilities of the Board to meet its 
                fiduciary obligations. The ultimate legal 
                accountability of the organization lies with the Board, 
                not with the individuals and entities that make up the 
                ICANN community.'' \40\
---------------------------------------------------------------------------
    \40\ ICANN Accountability & Transparency Frameworks and Principles, 
Jan-2008, p.5, at https://www.icann.org/en/system/files/files/acct-
trans-frameworks-principles-10jan08-en.pdf

    The Business Constituency had it right: ICANN's present bylaws do 
not hold the board accountable to the community. Before the U.S. 
Government lets go of the oversight leverage inherent in the IANA 
contract, it must ensure that ICANN accepts and implements the 
proposals needed to keep the ICANN corporation accountable to the 
---------------------------------------------------------------------------
global multistakeholder community that ICANN was created to serve.

    The Chairman. Thank you, Mr. DelBianco.
    Mr. Gross?

            STATEMENT OF HON. DAVID A. GROSS, FORMER

       U.S. COORDINATOR FOR INTERNATIONAL COMMUNICATIONS

         AND INFORMATION POLICY, U.S. STATE DEPARTMENT

    Ambassador Gross. Thank you very much, Mr. Chairman, 
members of the Committee. Good morning, and thank you very much 
for the opportunity to testify before you today.
    My name is David Gross. Formerly, I had the great honor of 
serving the United States in the Department of State as the 
U.S. Coordinator for International Communications and 
Information Policy from 2001 until 2009. During that time, I 
led the United States delegations to the preparatory meetings 
and was the co-head of the U.S. delegations to both phases of 
the World Summit on the Information Society, WSIS, that was 
held by the United Nations in Geneva in 2003 and in Tunis in 
2005.
    WSIS, among other things, focused on the role of 
governments regarding Internet governance and resulted in the 
creation of the Internet Governance Forum, the IGF. Today, I am 
appearing on behalf of the Internet Governance Coalition, an 
industry-led coalition with broad representation from the 
communications, Internet, and related industries.
    The Internet Governance Coalition is pleased to testify on 
the important developments in the process of the transition of 
key Internet domain name functions to the global 
multistakeholder community, commenced by NTIA more than 2 years 
ago. The transition package, including the accountability 
proposals, created by the global Internet community is an 
important milestone for the multistakeholder model of Internet 
governance and for the Internet as a whole.
    The progress that has been made regarding these issues is 
the result of more than 2 years of hard work by many people and 
organizations, demonstrating that even complex and difficult 
Internet related issues can be resolved successfully through 
bottom-up, community-driven processes. Since the United States 
has long been the champion of the multistakeholder process for 
resolving Internet governance related issues, this success is 
very good news for America.
    Our review of the IANA Stewardship Transition Plan is 
rooted in the principles laid out by NTIA at the commencement 
of this process in March 2014. Recognizing that the U.S. 
Government must still make its careful assessment of the 
proposals and their implementation, and recognizing that there 
are constructive suggestions for further improvements that were 
recently made, we believe that the process set forth by NTIA 
and the transition itself will ensure the ongoing stability and 
reliability of the Internet.
    Importantly, we are encouraged that, to date, the 
multistakeholder process has worked well and has enabled 
companies, technologists, members of the civil society, and 
users to be heard loud and clear. Importantly, this success 
should be viewed as illustrating the benefits of the policies 
associated with the elimination of unnecessary governmental 
involvement in the operation of the technical aspects of the 
Internet.
    Of course, the completion of the IANA stewardship 
transition will not be the end of the road. But the question is 
not whether the challenges will emerge. It is whether the 
multistakeholder community is robust and resilient enough to 
deal with those challenges and to help shape Internet policies 
worldwide. Simply put, it is. So the companies represented by 
the Internet Governance Coalition not only will stay engaged 
with the implementation of the IANA transition but also will 
remain vigilant in monitoring and participating in Internet 
governance discussions as they arise in other fora, as they 
most certainly will.
    Thank you very much, and I look forward to answering your 
questions.
    [The prepared statement of Ambassador Gross follows:]

Prepared Statement of Ambassador David A. Gross, former Coordinator for 
International Communications and Information Policy, U.S. Department of 
                                 State
Summary
    The Internet Governance Coalition is pleased to testify on the 
important developments in the process to transition key Internet domain 
name functions to the global multistakeholder community, commenced by 
NTIA more than two years ago. The transition package, including the 
accountability proposals, created by the global Internet community is 
an important milestone for the multistakeholder model of Internet 
governance and for the Internet as a whole. The progress that has been 
made regarding these issues is the result of more than two years of 
hard work by many people and organizations, demonstrating that even 
complex and difficult Internet-related issues can be resolved 
successfully through bottom-up, community-driven processes. Since the 
United States has long been the champion of the multistakeholder 
process for resolving Internet governance-related issues, this success 
is very good news for America.
    Our review of the IANA Stewardship Transition Plan is rooted in the 
principles laid out by NTIA at the commencement of this process in 
March 2014. Recognizing that the U.S. Government still must make its 
careful assessment of the proposals and their implementation, and 
recognizing there are constructive suggestions for further 
improvements, we believe that the process set forth by NTIA, and the 
transition itself, will ensure the ongoing stability and reliability of 
the Internet. Importantly, we are encouraged that to date the 
multistakeholder process has worked well and has enabled the companies, 
technologists, members of civil society, and users to be heard loud and 
clear. This success should be viewed as illustrating the benefits of 
policies associated with the elimination of unnecessary government 
involvement in the operation of the technical aspects of the Internet.
    Of course, the potential completion of the IANA Stewardship 
Transition will not be the end of the road. But the question is not 
whether challenges will emerge; it is whether the multistakeholder 
community is robust and resilient enough to deal with those challenges 
and to help shape Internet policies worldwide. Simply put, it is. So 
the companies represented by the Internet Governance Coalition not only 
will stay engaged with the implementation of the IANA transition, but 
also will remain vigilant in monitoring and participating in Internet 
governance discussions as they arise in other fora.
                                 ______
                                 
    Chairman, Ranking Member, Members of the Committee, good morning 
and thank you for the opportunity to testify before you today.
    My name is David A. Gross. Formerly, I had the great honor of 
serving in the Department of State as the United States Coordinator for 
International Communications and Information Policy from 2001 to 2009. 
During this time, I led the United States delegations to the 
preparatory meetings and I was the co-head of the United States 
delegations to both phases of the United Nations' World Summit on the 
Information Society (WSIS) in Geneva (2003) and Tunis (2005), which, 
among other things, focused on the role of governments regarding 
Internet governance and resulted in the creation of the Internet 
Governance Forum (IGF). Today I am appearing on behalf of the Internet 
Governance Coalition, an industry-led coalition with broad 
representation from the communications, Internet, and related 
industries, including AT&T, Inc., Cisco Systems, Inc., Comcast 
NBCUniversal, Facebook, GoDaddy, Google Inc., Juniper Networks Inc., 
Microsoft Corporation, Telefonica, S.A., The Walt Disney Company, Time 
Warner Cable Inc., Twenty-First Century Fox Inc., and Verizon 
Communications Inc.
    I am pleased to appear before this Committee to testify regarding 
the important developments in the process of transitioning key Internet 
domain name functions to the global multistakeholder community. The 
National Telecommunications and Information Administration's (NTIA) 
decision to initiate a process leading to the possible transition of 
the Internet Assigned Numbers Authority (IANA) functions contract to a 
multistakeholder entity is a critical step toward bringing the economic 
and societal benefits of the Internet to everyone.
    The ICANN Board has taken several important steps to implement the 
transition, including approving a plan for transitioning control of the 
IANA functions to the multistakeholder community, and related 
accountability proposals. That transition package was forwarded to NTIA 
for review. Last month, the Board also issued draft amended bylaws 
designed to implement the recommendations in the transition package. 
The ICANN Board accepted public comments on the draft amended bylaws 
from April 21 to May 21, which prompted some constructive suggestions 
for ensuring the bylaws appropriately adhere to the recommendations of 
the IANA Stewardship Transition Plan. Should the ICANN Board vote to 
adopt revised bylaws, NTIA will have the entire transition package and 
be in a position to conclude its assessment. If the transition package 
is adopted and approved, it will be because of the more than two years 
of hard work performed by diverse people and organizations, 
demonstrating that even complex and difficult Internet-related issues 
can be resolved successfully through a multistakeholder process.
    The Coalition believes that a thriving Internet depends on a 
governance structure that is open, transparent, and representative of 
all stakeholders. The current multistakeholder model for Internet 
governance facilitated the historic Internet-driven economic, social, 
and political development of the past two decades. The decentralized 
structure of the Internet enabled individuals to access information and 
services, to connect and to communicate, and to share ideas and 
knowledge globally. By offering new possibilities for entrepreneurial 
creativity, the Internet became a powerful engine for unparalleled 
technological innovation, economic growth and the preservation and 
promotion of cultural diversity.
    Too much government oversight, however, potentially can place these 
important benefits in jeopardy by hampering innovation and 
technological development and threatening Internet growth. United 
States Government oversight of the IANA functions has been a long-
standing concern of many in the global community. Yet, in carefully 
transitioning the IANA functions to a bottom-up multistakeholder 
entity, the United States is addressing these concerns while 
simultaneously promoting its core values by affirming our Nation's 
commitment to the multistakeholder model. Those core values have, at 
their heart, the strong belief that no other government or 
intergovernmental entity should be able to control ICANN. Indeed, the 
U.S. Government's role vis-a-vis ICANN has always belied the reality 
that companies, technologists, members of civil society, and users--not 
governments in general, nor the U.S. Government in particular--have 
been primarily responsible for ensuring that the Internet's technical 
functions continue to drive economic and social opportunities around 
the world. The IANA Transition ensures that this reality is now 
reflected in the bylaws and procedures governing ICANN. Done properly, 
the IANA Transition should help to unleash the private sector and 
others toward greater innovation and improved Internet connectivity and 
services, all without unnecessary government involvement.
    After the transition, the United States is expected to continue to 
participate actively in the Government Advisory Committee (GAC), one of 
the important stakeholder constituencies in the multistakeholder model. 
Accordingly, after the IANA Transition, U.S. interests will continue to 
be well-represented--an outcome that is good for America and good for 
the global Internet community.
    By ensuring that the principles NTIA identified for the transition 
are met--which are critical conditions for this process to work 
successfully--the United States will succeed in creating an environment 
to maintain the freedom, openness, security, and stability of the 
Internet we have all enjoyed since its inception. Of course, robust 
accountability and transparency mechanisms are necessary to ensure 
future stability in the absence of NTIA's current role, and these 
additional mechanisms, contained in the new accountability proposal 
approved by the ICANN Board, must be in place prior to or simultaneous 
with the transition.
    As this Committee knows from prior testimony, the Coalition 
supported NTIA's assurance that an acceptable transitional proposal 
must:

   Support and enhance the multistakeholder model;

   Maintain the security, stability, and resiliency of the 
        Internet DNS;

   Meet the needs and expectation of the global customers and 
        partners of the IANA services; and,

   Maintain the openness of the Internet.

    These principles, together with NTIA's critically important, 
explicit commitment not to accept any plan that could replace its role 
with a government-led or an inter-governmental organization, are 
consistent with the Coalition's own policy principles, which also have 
been the basis of its advocacy before the United Nations, the 
International Telecommunication Union (ITU), and elsewhere.
    The importance of the Internet to U.S. and global businesses, and 
its social and cultural centrality to people around the world, cannot 
be overstated. Accordingly, we need to preserve the stability and 
reliability of the Internet, in terms of both technical decision making 
and policy making. Changes in the processes of Internet governance--
which have helped shape the historic growth of the Internet economy, 
and the immense benefits that it has brought--are of great interest and 
concern to the Internet Governance Coalition. That is why, although the 
Coalition itself has not been directly involved in the process of 
developing the stewardship transition plan and accountability 
proposals, some Coalition member companies have taken an active role 
and the Coalition has monitored the processes and has been diligent in 
its review of the outcomes.
    In these various fora, the Internet Governance Coalition has 
stressed that we all--governments, the private sector, civil society, 
technologists, users, and others--must join together to ensure a safe, 
secure, open, interoperable, and global Internet as the underlying 
foundation for sustainable economic and social development. This means 
promoting policies that stimulate continued investment in, deployment 
of, and access to Internet networks and the industries and services 
that create demand for those networks. It also means continuing to 
support capacity building and assistance on implementation of network 
security best practices, especially in the developing world.
    Policies must support opening and maintaining international markets 
allowing the seamless flow of legal digital services, applications, 
products and information. Any actions taken should foster innovation 
and investment across Internet networks, services, and other sectors of 
the Internet ecosystem. This includes ensuring both the enhancement of 
human rights and the protection of intellectual property. Governments 
can advance these goals by establishing even-handedness and 
predictability in decision-making, while at the same time encouraging 
reduced direct Internet oversight and control.
    Finally, the Internet Governance Coalition believes in increased 
and appropriate transparency and openness in intergovernmental 
organizations and multistakeholder mechanisms, to ensure that all 
stakeholders can participate meaningfully in key Internet policy 
discussions. The quality of Internet governance decisions increases 
when diverse stakeholders actively and consistently participate. 
Furthermore, this approach is consistent with America's long-standing 
policy of unlocking innovation by freeing sectors from unnecessary 
government oversight.
    Recognizing, of course, that the U.S. Government still must 
complete its careful assessment of the proposals, and recognizing that 
there already are constructive suggestions for further improvements, we 
are optimistic that the results of ICANN's and NTIA's remaining work 
will result in a transition that will meet NTIA's conditions set forth 
two years ago and that should benefit not only global businesses but 
also all those who seek a more global and ubiquitous Internet. In 
addition, although the U.S. Government's review of the transition 
proposal justifiably may take time, the Coalition believes these new 
accountability mechanisms should be put into place promptly regardless 
of the timing of the overall transition. These mechanisms, a product of 
the two-year-long multistakeholder process, should help to ensure the 
ongoing stability and reliability of the Internet as it continues to 
help the world's people economically, socially and culturally.
    Ultimately, the Internet Governance Coalition believes the 
proposals approved by the ICANN Board in Marrakesh will be good for 
America, good for American business, good for the Internet, and good 
for the world. The members of the Internet Governance Coalition believe 
that it is critically important that the free and open Internet is 
protected and that ICANN is accountable to the Internet community. 
Therefore, it is important that any final plan approved by NTIA do 
these things. Looking ahead, all stakeholders should stay engaged, 
especially in the near term as ICANN works to adopt amended bylaws and 
the U.S. Government undertakes its review. Continuing improvements to 
these processes can be made, including with respect to increasing 
transparency into ICANN's functions and interactions. Such work begins 
in earnest next month and ongoing engagement by U.S. businesses and the 
U.S. Government with ICANN as it matures into ``adulthood'' is 
essential.
    I would like to thank the Committee for allowing me, on behalf of 
the Internet Governance Coalition, to present our views on these 
matters of great importance for preserving the fundamental principles 
that have governed the Internet, and have greatly benefited not only 
America, but also the world.

    The Chairman. Thank you, Ambassador Gross.
    Mr. Manning?

           STATEMENT OF RICHARD MANNING, PRESIDENT, 
                AMERICANS FOR LIMITED GOVERNMENT

    Mr. Manning. Chairman, Ranking Member, and distinguished 
members of the Committee, thank you for the opportunity to 
offer Americans for Limited Government's view regarding the 
NTIA plan to transition oversight of the Internet's Domain Name 
System.
    Advocates of the transition have long held the concern that 
failure to move forward would in some way fracture the 
Internet, and that has been the rationale given by many for the 
U.S. to proceed with turning over the IANA functions to a new 
governance body led by the current vendor, ICANN, which handles 
these and other functions on behalf of the U.S. Government.
    Last year, then outgoing ICANN CEO and President Fadi 
Chehade stated that failure to transition the IANA functions 
would result in this fracturing, saying, ``ICANN's community 
may fracture or fray slowly, becoming divided. The technical 
operating communities using IANA may go separate ways.''
    But that's not the real danger. Let me be clear. No 
multistakeholder system that can be devised, even with all 
these smart guys sitting at this table--no multistakeholder 
system can be devised that will ever be as effective at 
protecting the free and open Internet as the current U.S. 
Government and the protections of the U.S. Constitution. In 
short, the Internet works, so the burden of proof on whether to 
change control over some of the core functions is on the 
proponents of that change, and the fracturing rationale for 
change is already becoming moot.
    Last week, the State Department's Daniel Sepulveda and 
NTIA's Lawrence Strickling stated in an official blog post that 
the Internet is already being fractured by China, which has 
developed an alternate root zone system as well as a separate 
naming convention. Sepulveda and Strickling write, ``If left 
unchanged, China's regulations would undermine some of the most 
fundamental aspects of the Internet--openness, reliability, and 
interoperability--within China. By creating its own rules for 
domain name management, China is threatening to fragment the 
Internet, which would limit the Internet's ability to operate 
as a global platform for human communication, commerce, and 
creativity.''
    Only the most naive would believe that going forward with 
this transition will assuage the government of China from 
implementing their own Internet censorship regime. One only 
needs to look at the recorded failed attempt to have 12,000 
different words excluded from use in domain names on the dot-
xyz top level domain for proof that the Chinese will pursue 
their own vision for the Internet for the future.
    So how would ICANN hold up over the long haul in protecting 
a free and open Internet? I must contend not well, based upon a 
proposal to change ICANN's bylaws that is pending right now to 
include a commitment to respect, ``international recognized 
human rights.''
    A May 20 letter by Senators Cruz, Lee, and Lankford to 
Commerce Secretary Pritzker explains that this provision would 
``open the door to the regulation of content. Inclusion of such 
a commitment would unquestionably be outside the historical 
mission of an organization whose functions are supposedly very 
limited to the names and numbers and protocol parameters which 
are way down in the plumbing of the Internet.''
    Cruz, Lee, and Lankford continued, ``However, any provision 
such as human rights that is included in ICANN's bylaws 
automatically becomes an integral part of ICANN's core mission 
and, in this case, could provide a gateway to content 
regulation.'' Regulating content is antithetical to the concept 
of a free and open Internet, and ICANN's willingness to even 
consider this proposal shows a stunning admission of their 
inadequacy to be the protector of speech in a post-transition 
world.
    As this committee is well aware from the recent Facebook 
censorship allegations, a private entity has no legal 
responsibility to uphold First Amendment freedoms, and, post-
transition, this would apply to ICANN, and any Constitutional 
protection afforded to holders of domains against censorship 
would be washed away. It is also increasingly clear that any 
attempt to transition the Internet will face significant legal 
hurdles, disrupting any orderly transition.
    The first legal issue is whether President Obama has the 
authority to conduct the transfer without going through the 
congressionally established channels for the disposal of 
property. The administration has argued that they would not be 
transferring property so the law doesn't apply. Yet the 
contracts that govern the relationship between the U.S. 
Government and ICANN repeatedly refer to it as property, 
negating their argument and making their process for the 
transition dubious at best.
    Adding to the legal questions, ICANN is currently exempt 
from any antitrust litigation over their highly lucrative 
monopoly in creating and selling top level domain names. This 
protection is due to the very government vendor contract they 
seek to get out from under. Not that it should, but Congress 
has not acted to provide ICANN any post-transfer antitrust 
exemptions. As a result, it's reasonable to assume that legal 
challenges would be forthcoming with potential competitors 
attempting to break ICANN's single source power to price 
current and future top level domain names, manage existing top 
level domain leases, and create new top level domain names.
    As strange as it may seem, the same Obama administration 
that seeks to transition the people of the United States' 
property to ICANN was so frustrated by this vendor just 4 years 
ago, they put out an RFP on the contract due to ICANN's 
accountability failures. Yet today, they ask you to give some 
new untested iteration of that same unresponsive vendor 
permanent power with little accountability to you, as 
representatives of the people of the United States.
    The U.S. Government stands as the protector of freedom on 
the Internet. Vendors like ICANN help bring specific expertise 
to manage the day to day operations of the Internet, and the 
system functions well when the U.S. Government plays its 
oversight role to prevent abuse. Americans for Limited 
Government urges you to use every legislative power at your 
disposal to stop the planned transition of these critical 
Internet functions to ICANN. The rationale for the transition 
is moot, and allowing the Obama administration to proceed would 
create an open door to future Internet censorship.
    I submit the remainder of my testimony for the record.
    [The prepared statement of Mr. Manning follows:]

           Prepared Statement of Richard Manning, President, 
                    Americans for Limited Government
    Chairman Thune, Ranking Member Nelson, and members of this 
distinguished committee, thank you for the opportunity to offer 
Americans for Limited Government's views regarding the National 
Telecommunications and Information Administration's (NTIA) plan to 
transition oversight of the Internet's domain name system (DNS), 
including the Internet Assigned Numbers Authority (IANA) functions, to 
the Internet Corporation for Assigned Names and Numbers (ICANN).
    The actions of Congress over the months ahead will determine if the 
primary value of maintaining a free and open Internet prevails or not.
    Advocates for the transition have long held the concern that 
failure to move forward would in some way fracture the Internet, and 
that has been the rationale given for the U.S. to proceed with turning 
over the IANA functions to a new governance body led by the current 
vendor, ICANN, which handles these and other functions on behalf of the 
U.S. Government. Last year, then-outgoing ICANN CEO Fadi Chehade stated 
that failure to transition the IANA functions would result in 
fracturing. Chehade stated, ``ICANN's community may fracture or fray 
slowly, becoming divided. . . . The technical operating communities 
using IANA may go separate ways . . .'' \1\
---------------------------------------------------------------------------
    \1\ http://domainincite.com/19390-chehade-outlines-five-ways-icann-
could-die
---------------------------------------------------------------------------
    But that is not the real danger. Let me be clear, no 
multistakeholder system that can be devised will ever be as effective 
at protecting a free and open Internet as the current United States 
government oversight system.
    It is probably safe to assume that everyone in this room agrees 
that protecting a free and open Internet is a primary value. It is also 
probably safe to assume that everyone agrees that the Internet 
structure as currently administered by the United States government has 
provided that platform since its inception. In short, the Internet 
works, so the burden of proof on changing management over some of its 
core functions is on the proponents.
    What is also undeniably true, based upon a State Department hosted 
May 16, 2016, blog post \2\ by Daniel Sepulveda,\3\ the Deputy 
Assistant Secretary of State and U.S. Coordinator for International 
Communications and Information Policy in the State Department's Bureau 
of Economic and Business Affairs (EB) \4\ and Lawrence E. Strickling, 
the Assistant Secretary of Commerce for Communications and Information 
and Administrator, National Telecommunications and Information 
Administration, is that the Internet is already being fractured by 
China which has developed an alternate root zone system as well as a 
separate naming convention.
---------------------------------------------------------------------------
    \2\ https://blogs.state.gov/stories/2016/05/16/china-s-internet-
domain-name-measures-and-digital-economy#sthash.m76i03qf.dpuf
    \3\ http://www.state.gov/r/pa/ei/biog/bureau/209063.htm
    \4\ http://www.state.gov/e/eb/
---------------------------------------------------------------------------
    Sepulveda and Strickling write, ``The digital economy has become 
one of the most powerful engines for global economic growth. If left 
unchanged, China's regulations would undermine some of the most 
fundamental aspects of the Internet--openness, reliability, and 
interoperability 1--within China. By creating its own rules for domain 
name management, China is threatening to fragment the Internet, which 
would limit the Internet's ability to operate as a global platform for 
human communication, commerce, and creativity.''
    Only the most naive would believe that the government of China is 
going to be assuaged to not implement their own Internet censorship 
regime if only the United States turned a large portion of Internet 
governance over to a multi-national stakeholder community.
    And those who believe that the IANA functions transition would 
temporarily stem China's threat to fracture the Internet, need only 
look at China's attempted censorship demands on the .XYZ top level 
domain name where the government of China demanded last year that the 
owner not allow 12,000 different words be accepted as domain names 
including ``liberty'' and ``democracy'' as revealing the terrible 
potential cost of maintaining the Internet's ``interoperability.''
    Stunningly, the issue of possible content censorship in a post-
transition world is left wide open by a proposal to insert into ICANN's 
bylaws a commitment to respect ``internationally recognized human 
rights.'' A May 20, 2016, letter by Senators Cruz, Lee and Lankford to 
Commerce Secretary Pritzker states this provision ``would open the door 
to the regulation of content. Inclusion of such a commitment would 
unquestionably be outside the historical mission of an organization 
whose functions are supposedly `very limited to the names and numbers 
and protocol parameters which are way down in the plumbing of the 
Internet.' '' \5\
---------------------------------------------------------------------------
    \5\ http://www.cruz.senate.gov/?p=press_release&id=2646
---------------------------------------------------------------------------
    Cruz, Lee and Lankford continue writing, ``However any provision, 
such as human rights, that is included in ICANN's bylaws automatically 
becomes an integral part of ICANN's core mission and, in this case, 
could provide a gateway to content regulation.''
    Given the audacity of ICANN's proposal before the transition has 
even occurred, Congress can be assured that if content is not 
regulated, then China or somebody else could aggressively fracture the 
Internet as the free exchange of ideas is antithetical to their 
national interest. And if content is regulated, the Internet will cease 
to exist as a free and open system removing its DNA and unalterably 
changing it. What's more, as this committee is well aware from the 
recent Facebook censorship allegations, a private entity has no legal 
responsibility to uphold First Amendment freedoms, so post-transition, 
there would be no constitutional protection afforded holders of domains 
using terms like liberty, should China or any other entity prevail in a 
censorship gambit.
    What's more it is increasingly clear that any attempt to transition 
the Internet will face significant legal hurdles disrupting any orderly 
transfer.
    The first legal issue surrounds whether President Obama has the 
authority to conduct the transfer without going through the 
Congressionally established legal channels for the disposal of 
property. The Administration has argued that they would not be 
transferring property so the law doesn't apply, yet, the contracts that 
govern the relationship between the U.S. Government and ICANN 
repeatedly refer to property negating that argument.
    Incredibly, the same Obama Administration that seeks to deny that 
ICANN manages U.S. Government property, put out a Request for Proposals 
in 2012 for the contract that ICANN manages due to the vendor's failure 
to respond to various accountability changes that were being demanded. 
Yet, today, they ask you to give some iteration of that same 
unresponsive vendor permanent power with little if any accountability 
to either the U.S. Government or you as representatives of the people 
of the United States.
    What's more, ICANN has been exempt from any antitrust questions of 
their highly lucrative monopoly in creating and selling top level 
domain names due to their being protected by the very contract they 
seek to get out from under. Congress has not acted to provide ICANN any 
antitrust exemptions should the transfer occur. Not that it should, but 
as a result, it is reasonable to assume that legal challenges would be 
forthcoming should the transfer occur attempting to break ICANN's 
single source power to price current and future top level domain names, 
manage existing top level domain leases and create new top level domain 
names.
    The United States government stands as the protector of freedom on 
the Internet. Vendors like ICANN help bring specific expertise to 
manage the day to day operations of the Internet, and the system 
functions well when the United States government plays its oversight 
role to prevent abuse.
    Absent the U.S. Government's light handed oversight, the idea of a 
free and open Internet will certainly become a thing of the past.
    I urge you to use every legislative power at your disposal to stop 
the planned transition of these critical Internet functions to ICANN. 
The rationale for the transition is moot and allowing the Obama 
Administration to proceed would create an open door to future 
censorship. I submit the remainder of my testimony for the record. Yet 
I must remind you to consider if you choose to proceed not only how the 
NTIA transition plan might work, but what could happen to the free and 
open Internet if it does not.
Does the NTIA have legal authority to transfer IANA functions to ICANN?
    On March 25, 2014, Rep. Blake Farenthold and Rep. Darrell Issa 
issued a letter \6\ to Assistant Secretary for Communications of the 
National Telecommunications and Information Administration (NTIA) 
Lawrence Strickling regarding the NTIA's March 14, 2014, announcement 
\7\ of its intention to transition key Internet domain name functions 
to the Internet Corporation for Assigned Names and Numbers (ICANN) and 
the global multistakeholder community. The letter specifically asked 
Strickling, ``Does the Executive Branch have unilateral authority to 
transfer control over the Internet addresses and root zone management 
of domains?''
---------------------------------------------------------------------------
    \6\ http://farenthold.house.gov/uploadedfiles/icann.pdf
    \7\ http://www.ntia.doc.gov/press-release/2014/ntia-announces-
intent-transition-key-internet-domain-name-functions
---------------------------------------------------------------------------
    On Jan. 14, 2015, Issa and Farenthold actually received a reply 
from Strickling on April 28, 2014.\8\ In it, Strickling stated: 
``NTIA's announcement marks the final phase of privatization of the 
Internet domain name system (DNS) first outlined by the U.S. Government 
in 1998 after broad consultation with stakeholders in the development 
of Statement of Policy,'' referring to Federal Register Volume 63, 
Number 111 published on Wednesday, June 10, 1998, Pages 31741-31751.\9\
---------------------------------------------------------------------------
    \8\ http://getliberty.org/wp-content/uploads/2015/01/
NTIA_Letter_to_Rep-_Issa_4-28-14.pdf
    \9\ http://www.gpo.gov/fdsys/pkg/FR-1998-06-10/html/98-15392.htm
---------------------------------------------------------------------------
    Strickling added, ``Our action is fully consistent with the 2012 
resolution, H.Con.Res.127, that called on the United States to continue 
to support a global Internet free from government control and to 
preserve and advance the successful multistakeholder model that governs 
the Internet.''
    On the specific question of legal authority, Strickling wrote: ``In 
2000, NTIA did not contract with ICANN to procure the IANA functions 
services as an assertion of `control' over the Internet DNS. Rather 
NTIA contracted with ICANN as a temporary measure to carry out the 
government's policy to allow the private sector to take leadership for 
management of the Internet DNS. By performing the IANA functions in a 
competent manner for almost a decade and half, ICANN has established 
itself in this role and there is no longer a need to maintain a 
government contract designating it to perform these functions. Just as 
Federal agencies can enter into contracts they need to fulfill their 
missions without specific legislative authority, Federal agencies can 
discontinue obtaining services when they no longer need them. As NTIA 
made clear at the time of its Statement of Policy, it intended only to 
procure the IANA functions services until such time as the transition 
to private sector management of the Internet DNS was complete.''
    Finally, in a footnote Strickling stated referencing a 2000 then-
General Accounting Office (GAO) report on the potential need for 
legislative action in this area: ``GAO's discussion about the need for 
legislative authority to transfer government property does not concern 
the provision of the IANA functions under contract since no government 
property or assets are involved in the contract.'' \10\
---------------------------------------------------------------------------
    \10\ http://www.gao.gov/new.items/og00033r.pdf
---------------------------------------------------------------------------
The IANA functions contract, government property and Article IV, 
        Section 3 of the Constitution
    Although Strickling claimed in the letter that ``no government 
property or assets are involved in the contract,'' here, Strickling 
clearly mischaracterized the contract. To wit, the current October 1, 
2012, NTIA contract with ICANN explicitly states that ``All 
deliverables under this contract become the property of the U.S. 
Government.'' \11\
---------------------------------------------------------------------------
    \11\ http://www.ntia.doc.gov/files/ntia/publications/sf_26_pg_1-2-
final_award_and_
sacs.pdf
---------------------------------------------------------------------------
    Deliverables under the contract include ``technical requirements 
for each corresponding IANA function,'' ``performance standards in 
collaboration with all interested and affected parties . . . for each 
of the IANA functions,'' and ``a fully automated root zone management 
system . . . [that] must, at a minimum, include a secure (encrypted) 
system for customer communications; an automated provisioning protocol 
allowing customers to manage their interactions with the root zone 
management system; an online database of change requests and subsequent 
actions whereby each customer can see a record of their historic 
requests and maintain visibility into the progress of their current 
requests; and a test system, which customers can use to meet the 
technical requirements for a change request; an internal interface for 
secure communications between the IANA Functions Operator; the 
Administrator, and the Root Zone Maintainer,'' among other items.
    Further, ICANN collects annual revenues of more than $100 million a 
year, making it property of real value.
    Article 4, Section 3 of the U.S. Constitution states that only 
``The Congress shall have power to dispose of . . . property belonging 
to the United States.''
    It therefore follows that NTIA cannot perform the transfer of the 
IANA functions to ICANN without a vote in Congress, or some other 
authorizing statute, for example, 40. U.S.C., Chapter 5, Subchapter 
III, ``Disposing of property'' (see below).
    In addition, the IANA itself reverts to the Commerce Department 
upon termination of the contract: ``the Government may terminate the 
contract for default.'' The contract even provides for the possibility 
of IANA being performed by another entity: ``In the event the 
Government selects a successor contractor, the Contractor shall have a 
plan in place for transitioning each of the IANA functions to ensure an 
orderly transition while maintaining continuity and security of 
operations.'' These provisions further indicate that upon conclusion of 
the contract on Sept. 30, 2015, the Commerce Department remains in 
possession of the IANA functions.
Disposal of property provided under 40 U.S. Code, Chapter 5, Subchapter 
        III
    In Strickling's letter to Rep. Issa, he explicitly denied that 
there was any property or assets involved in the transfer of the IANA 
functions to ICANN: ``the need for legislative authority to transfer 
government property does not concern the provision of the IANA 
functions under contract since no government property or assets are 
involved in the contract.'' This despite the fact the contract, 
explicitly states, ``All deliverables under this contract become the 
property of the U.S. Government.''
    One reason to deny this might be because, if it were government 
property, then it would fall under an onerous process for disposing of 
property under the 40 U.S.C., Chapter 5, Subchapter III, ``Disposing of 
property.'' The disadvantage to NTIA and ICANN would be that the IANA 
functions would have to come up for competitive bid as provided in 40 
U.S.C. 545 (a).
    Or if a negotiated sale as provided in 40 U.S.C. 545 (d)(1), it 
would have to done at ``fair market value'': ``the sale must be 
publicized to an extent consistent with the value and nature of the 
property involved and the price established must reflect the estimated 
fair market value of the property.'' Since this is an entity that does 
more than $100 million a year of revenue, the fair market value of the 
IANA functions--we're talking about a global monopoly for allocation of 
an unlimited number of IP addresses, domain names, and top-level domain 
names--it should be worth billions!
    Or, if disposal through a contract broker as provided in 40 U.S.C. 
545 (c), ``wide public notice of the availability of the property for 
disposal'' would be required: ``Disposals and contracts for disposal of 
surplus real and related personal property through contract realty 
brokers employed by the Administrator shall be made in the manner 
followed in similar commercial transactions under regulations the 
Administrator prescribes. The regulations must require that brokers 
give wide public notice of the availability of the property for 
disposal.'' Yet, no such notice has been given.
The Antitrust Implications under 40 U.S.C. 559 (b)(1)
    But perhaps most critically, if Strickling were to acknowledge 
there is property at stake, the disposal of such property to a private 
interest would invoke antitrust.
    40 U.S.C. 559 (b)(1) states: ``An executive agency shall not 
dispose of property to a private interest until the agency has received 
the advice of the Attorney General on whether the disposal to a private 
interest would tend to create or maintain a situation inconsistent with 
antitrust law.'' Since Strickling's position is that there is no 
property involved, NTIA would not have sought the Attorney General's 
advice the disposal of property to a private interest prior to the 
March 2014 announcement.
    That is a huge liability for ICANN, and potentially for anyone 
involved at the agency if the provision of the contract stating ``All 
deliverables under this contract become the property of the U.S. 
Government'' was deliberately ignored. No more so than because 15 
U.S.C. Section 2 prohibits and makes a felony any attempt ``to 
monopolize any part of the trade or commerce among the several states, 
or with foreign nations.'' 15 U.S.C. Sections 13 and 14 forbid any 
business practice where the effect ``may be to substantially lessen 
competition or tend to create a monopoly in any line of commerce.''
    Antitrust law challenges to IANA functions administrator were 
anticipated in the 1998 statement of policy: ``Several commenters 
suggested that the U.S. Government should provide full antitrust 
immunity or indemnification for the new corporation. Others noted that 
potential antitrust liability would provide an important safeguard 
against institutional inflexibility and abuses of power.''
    To which, NTIA responded, saying it would seek no such immunity for 
the corporation and that antitrust would actually help keep the 
corporation in line: ``Applicable antitrust law will provide 
accountability to and protection for the international Internet 
community. Legal challenges and lawsuits can be expected within the 
normal course of business for any enterprise and the new corporation 
should anticipate this reality.'' \12\ Is that not still a danger 
today?
---------------------------------------------------------------------------
    \12\ ``Applicable antitrust law will provide accountability to and 
protection for the international Internet community. Legal challenges 
and lawsuits can be expected within the normal course of business for 
any enterprise and the new corporation should anticipate this reality. 
The Green Paper envisioned the new corporation as operating on 
principles similar to those of a standard-setting body. Under this 
model, due process requirements and other appropriate processes that 
ensure transparency, equity and fair play in the development of 
policies or practices would need to be included in the new 
corporation's originating documents. For example, the new corporation's 
activities would need to be open to all persons who are directly 
affected by the entity, with no undue financial barriers to 
participation or unreasonable restrictions on participation based on 
technical or other such requirements. Entities and individuals would 
need to be able to participate by expressing a position and its basis, 
having that position considered, and appealing if adversely affected. 
Further, the decision making process would need to reflect a balance of 
interests and should not be dominated by any single interest category. 
If the new corporation behaves this way, it should be less vulnerable 
to antitrust challenges.'' Federal Register Volume 63, Number 111 
published on Wednesday, June 10, 1998, Pages 31741-31751, http://
www.gpo.gov/fdsys/pkg/FR-1998-06-10/html/98-15392.htm
---------------------------------------------------------------------------
    Did NTIA even conduct any legal analysis about whether it had the 
authority to proceed with the transfer?
    In an April 2, 2014, letter to Assistant Secretary of Commerce 
Lawrence Strickling, head of the National Telecommunications and 
Information Administration (NTIA), 35 Senate Republicans including Sen. 
John Thune (R-S.D.) and Sen. Marco Rubio (R-Fla.) sought 
``clarification regarding the recent announcement that NTIA intends to 
relinquish responsibility of the Internet Assigned Numbers Authority 
(IANA) functions to the global multistakeholder community.'' \13\
---------------------------------------------------------------------------
    \13\ http://www.thune.senate.gov/public/index.cfm/2014/4/thune-
rubio-demand-answers-from-administration-on-internet-transition
---------------------------------------------------------------------------
    In part, the letter questions the legal basis for the Commerce 
Department to perform the transition of vital Internet names and 
numbers functions, citing a 2000 report by the then-U.S. General 
Accounting Office, which stated, ``it is unclear if the Department has 
the requisite authority'' to transfer control of the IANA functions to 
a private entity. The Senate letter requests ``the Administration's 
legal views and analysis on whether the United States Government can 
transition the IANA functions to another entity without an Act of 
Congress.'' \14\
---------------------------------------------------------------------------
    \14\ http://www.gao.gov/new.items/og00033r.pdf
---------------------------------------------------------------------------
    Yet, to date, the White House has failed to produce the legal basis 
for transferring the IANA functions without Congress, despite numerous 
requests. As revealed on March 23, 2014, by the Wall Street Journal's 
L. Gordon Crovitz: ``a spokesman for the Commerce Department's National 
Telecommunications and Information Administration said the agency 
reviewed this legal issue and concluded the administration can act 
without Congress but refused to share a copy of the legal analysis.'' 
\15\
---------------------------------------------------------------------------
    \15\ http://online.wsj.com/news/articles/
SB10001424052702303802104579453263393882136
---------------------------------------------------------------------------
    The Crovitz report prompted Americans for Limited Government to 
file a Freedom of Information Act (FOIA) request with the NTIA 
requesting the legal basis for its plans to transition control over 
Internet governance to some as of yet unnamed international body. The 
FOIA request includes ``All records relating to legal and policy 
analysis developed by or provided to the National Telecommunications 
and Information Administration that support its decision to `transition 
key Internet domain name functions,' including any analysis showing 
whether the NTIA has the legal authority to perform the transition.'' 
\16\
---------------------------------------------------------------------------
    \16\ http://getliberty.org/wp-content/uploads/2014/03/DOC-NTIA-
FOIA-re-ICANN-03-27-14.pdf
---------------------------------------------------------------------------
    The Department's interim response to the FOIA request,\17\ which 
was referenced in the Wall Street Journal on June 29, 2014, by 
Crovitz,\18\ still failed to produce the legal analysis. And the 
agency's many responses since \19\ \20\ \21\ \22\ have not produced any 
legal analysis supporting the transition, nor has the agency claimed 
any privileged exemptions under the FOIA Act. Meaning, such an analysis 
being conducted prior to the transition being announced might not even 
exist.
---------------------------------------------------------------------------
    \17\ http://getliberty.org/wp-content/uploads/2014/06/DOC-
NTIA_FOIA-Responsive-Docs-Set1.pdf
    \18\ http://online.wsj.com/articles/gordon-crovitz-au-revoir-to-
the-open-internet-1404076280
    \19\ http://getliberty.org/wp-content/uploads/2015/06/DOC-
NTIA_FOIA-Responsive-Docs-Set2.pdf
    \20\ https://getliberty.org/wp-content/uploads/2016/03/
NTIAFOIA3rdSet-3-14-16.pdf
    \21\ https://getliberty.org/wp-content/uploads/2016/03/
NTIAFOIAResponse4thSet3-18-16.pdf
    \22\ https://getliberty.org/wp-content/uploads/2016/01/
NTIAFOIAResponse1-7-2016.pdf
---------------------------------------------------------------------------
Is NTIA already violating the Congressional defund barring the 
        transition of the IANA functions passed the past two years?
    In Singapore on Feb. 15, 2015, Assistant Secretary for 
Communications and Information at the Department of Commerce Lawrence 
Strickling answered a question about why he believed the National 
Telecommunications and Information Administration (NTIA) was still 
allowed to plan transitioning the Internet Assigned Numbers Authority 
(IANA) functions to the Internet Corporation for Assigned Names and 
Numbers (ICANN) in spite of a thrice-enacted prohibition \23\ \24\ \25\ 
by Congress barring the use of funds to engage in said transition, 
including attending such conferences at taxpayer expense.
---------------------------------------------------------------------------
    \23\ PL 114-113, H.R. 2029, Section 539.
    \24\ PL 114-53, H.R. 719, Section 101.
    \25\ PL 113-235, H.R. 83, Section 540.
---------------------------------------------------------------------------
    Strickling replied:

        ``So yes there was a rider attached into our budget in the 
        budget bill last December that said that we can't spend 
        appropriated dollars to complete transition before the end of 
        next September. And so we have taken that seriously and I've 
        reported out that there will not be a transition before next--
        the end of next September. At the same time though there was 
        some commentators, not necessarily anybody with any expertise 
        were saying ah this shuts down NTIA. They have to sit on the 
        sidelines and not do anything. You know, like our hands are 
        tied. And so that concerned us. We didn't read the bill that 
        way or the law that way and we've consulted with--informally 
        with both the House and the Senate, both Democrats and 
        Republicans to get an understanding as to what exactly they 
        intended. So one of the things was even in the rider it said 
        you must provide us regular reports and updates on how the 
        transition is going. So they clearly intended us to do things 
        like come to the ICANN meetings and watch and report back 
        what's going on. We clearly are participating in the GAC and 
        none of that affects that. And the only real issue was to what 
        extent do we provide feedback during the process to the 
        community. And on that, you know, the assurances I got from 
        most of the staff on the Hill was they didn't see any problem 
        with that because . . . we want to protect the interests of the 
        United States in all of this.'' \26\
---------------------------------------------------------------------------
    \26\ http://singapore52.icann.org/en/schedule/tue-ncuc/transcript-
ncuc-10feb15-en.pdf

    Americans for Limited Government Foundation President Nathan 
Mehrens has filed a complaint with the Commerce Department Inspector 
General David Smith on Feb. 1,\27\ stating, ``Despite the explicit 
prohibition, the NTIA is clearly engaged in activities that are 
designed to lead to the relinquishment of its responsibilities 
regarding Internet domain name system functions, including 
responsibility with respect to the authoritative root zone fine and the 
Internet Assigned Numbers Authority functions. The NTIA personnel have 
traveled to numerous conferences on Internet governance and speeches 
from NTIA personnel clearly indicate that they are moving ahead as if 
Congress had not acted to prohibit their very actions.''
---------------------------------------------------------------------------
    \27\ https://getliberty.org/wp-content/uploads/2016/03/NPM-
Complaint-to-DOC-IG-Re-NTIA-Antideficiency-Act_02.01.16.pdf
---------------------------------------------------------------------------
    As for Strickling's citing of reporting requirements that were 
included in the spending bills, these do not authorize working on the 
relinquishment of the IANA functions specifically because they cannot 
supersede the statute.
    In the 2015 omnibus spending bill, Congress required NTIA to submit 
a report due January 30 ``regarding any recourse that would be 
available to the United States if the decision is made to transition to 
a new contract and any subsequent decisions made following such 
transfer of Internet governance are deleterious to the United States.'' 
\28\ That does not authorize any work on relinquishing the Internet, 
except to produce NTIA's backup plan in case anything went wrong with 
such a transition.
---------------------------------------------------------------------------
    \28\ http://www.circleid.com/posts/
20141210_breaking_us_government_funding_bill_del
ays_iana_transition/
---------------------------------------------------------------------------
    Congress also directed ``NTIA to inform appropriate Congressional 
committees not less than 45 days in advance of any such proposed 
successor contract or any other decision related to changing NTIA's 
role with respect to ICANN or IANA activities.'' \29\
---------------------------------------------------------------------------
    \29\ http://www.circleid.com/posts/
20141210_breaking_us_government_funding_bill_del
ays_iana_transition/
---------------------------------------------------------------------------
    This reporting requirement was not fully followed when NTIA most 
recently unilaterally modified its contract with ICANN on August 4 
allowing for a short-term extension.\30\ According to NTIA 
Administrator Strickling, Congress was not notified of the contract 
extension until Friday, August 14, after the modification to the 
contract had already gone into effect.\31\
---------------------------------------------------------------------------
    \30\ https://www.ntia.doc.gov/files/ntia/publications/
mod_0003_for_sa1301-12-cn-0035_
signed.pdf
    \31\ https://www.ntia.doc.gov/blog/2015/update-iana-transition
---------------------------------------------------------------------------
    Again, these reporting requirements were very specific and narrowly 
tailored to ensure Congress would be notified of any changes to the 
NTIA contract with ICANN and of the agency's contingency plan in case 
any IANA functions transition goes awry. None of them authorized 
continued work on the transition.
    As for the claim by Strickling that he informally consulted with 
Congressional staff about the intent of the prohibition, that is no 
legal standard whatsoever. As Mehrens noted in the Inspector General 
complaint, ``it is not Hill staff that decide whether there is a 
problem, but rather the actual language passed by Congress should be 
examined.''
    Americans for Limited Government Foundation has since been informed 
by the Inspector General that they have referred the matter for an 
investigation.
    As Congress works to affirm its commitment to restoring the 
Constitution's Article I separation of powers, including the power of 
the purse, a great place to start would be with prohibitions on the use 
of funds that Congress has already enacted. With NTIA clearly violating 
the prohibition barring the use of funds to engage in the IANA 
functions transition, plus not even meeting with the reporting 
requirements set for by Congress in the 2015 omnibus spending bill, 
there should be legislative redress, and that should be requiring NTIA 
to extend the current contract with ICANN for another two years.
Conclusion
    While many of my esteemed fellow panelists today will be examining 
in great depth the multistakeholder plan for NTIA's transition of the 
IANA functions, and rightly so, the testimony I intend to deliver today 
is much more of a gut check. Mr. Chairman, the real questions you must 
consider today and the days that follow are whether NTIA--and indeed 
the members of this committee and Congress as a whole--have done their 
own due diligence. That is, in ensuring whether this proposed 
transition is even lawful, serves U.S. interests and preserves the free 
and open Internet that we all today take for granted. And finally, 
whether surrendering oversight of the Internet's names and numbers is 
even a good idea.
    Failing in these key pillars, we risk creating an unaccountable 
Internet that is beyond any law or authority, acts openly against U.S. 
interests and is anything but free and open. One that taxes users of 
the Internet at will, tramples upon property rights and threatens the 
religious and civic liberties of peoples around the world. Or, one that 
is no longer authoritative, splinters into multiple root zones and 
cannot maintain control over its framework as it splits into 
irreconcilable chaos, hindering global communications and commerce.
    Today, the Internet works.
    It is free and open. Users of the Internet, high and low, have a 
ready, robust recourse in Federal courts to adjudicate any and all 
First Amendment claims should censorship ever occur in the fulfillment 
of the current U.S. Government contracts and cooperative agreements. 
That it hasn't occurred is a testament to the virtue of the current 
U.S. oversight. But members of this committee should not take false 
comfort or become complacent. Much like the U.S. nuclear deterrent, we 
do not consider the absence of a nuclear exchange as reason to suddenly 
begin disarming our vast arsenal of warheads. U.S. oversight of the 
Internet has enabled the Internet to take on our uniquely American 
character for openness and entrepreneurship. Somebody has to be 
standing on the wall, and it is undoubtedly better to have the current, 
underappreciated constitutional system that says the root zone 
operator, ICANN, a U.S. Government contractor, cannot violate the First 
Amendment rights of anyone who uses the Internet or else they go to 
court--than to leave it to the forces of globalization and profit, or 
foreign powers who might capture the function, to determine what shall 
be free and what shall be open.
    In 1998, groups like the Electronic Frontier Foundation (EFF) 
criticized the transfer of DNS to a private foundation like ICANN. 
``Internet administration has always guaranteed free speech and due 
process, since it has been done by U.S. Government contractors who are 
required to follow the U.S. Constitution. If the New IANA moves 
Internet administration out from under the U.S. Government, as there is 
general agreement to do, the public will lose these guarantees,'' Shari 
Steele, Staff Counsel at EFF warned at the time.\32\ These concerns 
have not been raised since, and certainly not during this process.
---------------------------------------------------------------------------
    \32\ https://w2.eff.org/Infrastructure/DNS_control/ICANN_IANA_IAHC/
19980924_eff_
new_iana_pressrel.html
---------------------------------------------------------------------------
    The Internet as we know it depends on there being a single, 
authoritative source for the names and numbers in order to work. For, 
while the government-overseen contracts and agreements are in place to 
establish the rules of the road, ICANN, Verisign, the regional 
registries, etc. are all shielded from antitrust scrutiny. Such 
pitfalls of collusion, monopoly power and price gouging might have 
arisen otherwise if the Internet had been brought up singularly in the 
private sector. Instead today's single, usable and affordable Internet, 
again, is a virtue of U.S. oversight. It is a monopoly, yes, but a 
regulated one that can be pulled back if needs be, where claims of U.S. 
Government property over the IANA functions act simply as a failsafe--
just in case anything goes wrong. We must consider whether trading the 
current system for a single, unaccountable monopoly beyond law or 
competition, or one that could be subject to antitrust suits the moment 
it engages in anticompetitive activities, splintering the Internet, 
could actually be a far worse outcome. Antitrust law challenges to the 
IANA functions were fully anticipated in the 1998 statement of policy: 
``Applicable antitrust law will provide accountability to and 
protection for the international Internet community. Legal challenges 
and lawsuits can be expected within the normal course of business for 
any enterprise and the new corporation should anticipate this 
reality.'' \33\ But throughout this entire process, nobody has really 
considered the antitrust fallout of the transition.
---------------------------------------------------------------------------
    \33\ ``Applicable antitrust law will provide accountability to and 
protection for the international Internet community. Legal challenges 
and lawsuits can be expected within the normal course of business for 
any enterprise and the new corporation should anticipate this reality. 
The Green Paper envisioned the new corporation as operating on 
principles similar to those of a standard-setting body. Under this 
model, due process requirements and other appropriate processes that 
ensure transparency, equity and fair play in the development of 
policies or practices would need to be included in the new 
corporation's originating documents. For example, the new corporation's 
activities would need to be open to all persons who are directly 
affected by the entity, with no undue financial barriers to 
participation or unreasonable restrictions on participation based on 
technical or other such requirements. Entities and individuals would 
need to be able to participate by expressing a position and its basis, 
having that position considered, and appealing if adversely affected. 
Further, the decision making process would need to reflect a balance of 
interests and should not be dominated by any single interest category. 
If the new corporation behaves this way, it should be less vulnerable 
to antitrust challenges.'' Federal Register Volume 63, Number 111 
published on Wednesday, June 10, 1998, Pages 31741-31751, http://
www.gpo.gov/fdsys/pkg/FR-1998-06-10/html/98-15392.htm
---------------------------------------------------------------------------
    The Internet in its current form is in fact held accountable by the 
U.S. contracts. In 2012, NTIA put up the IANA functions for a request 
for proposals,\34\ to see if anybody else besides ICANN might perform 
the functions but, mostly, to ensure that ICANN realized its 
authorities could be revoked as a fallback if the U.S. deemed it 
necessary.
---------------------------------------------------------------------------
    \34\ https://www.fbo.gov/
index?s=opportunity&mode=form&tab=core&id=337abfa3fa508d26073
8052baf46bdf9&_cview=1
---------------------------------------------------------------------------
    A fallback plan, mind you, that without the current contract, the 
U.S. will lack. In the 2015 omnibus spending bill, Congress required 
NTIA to submit a report due January 30 ``regarding any recourse that 
would be available to the United States if the decision is made to 
transition to a new contract and any subsequent decisions made 
following such transfer of Internet governance are deleterious to the 
United States.'' \35\
---------------------------------------------------------------------------
    \35\ http://www.circleid.com/posts/
20141210_breaking_us_government_funding_bill_de
lays_iana_transition/
---------------------------------------------------------------------------
    In response in its first quarterly report, NTIA told Congress that 
``Our preliminary answer is that the criteria for the plan that NTIA 
established in its March 2014 announcement will ensure an outcome that 
is not `deleterious' to the United States.'' \36\
---------------------------------------------------------------------------
    \36\ http://www.ntia.doc.gov/files/ntia/publications/
iana_report_013015.pdf
---------------------------------------------------------------------------
    Besides this vague assurance, NTIA never produced its contingency 
plan should the IANA functions transition harm U.S. interests in its 
subsequent quarterly reports to Congress.\37\ \38\ \39\ \40\ \41\ That 
is to say, Mr. Chairman, there is no backup plan should the Internet 
become an unaccountable monopoly, subjected to foreign capture or 
broken into hundreds of pieces--even though Congress required there to 
be such a plan. You've got the plan for transition, but no fallback 
position.
---------------------------------------------------------------------------
    \37\ https://www.ntia.doc.gov/files/ntia/publications/
ntia_second_quarterly_iana_report
_05.07.15.pdf
    \38\ https://www.ntia.doc.gov/files/ntia/publications/
ntia_iana_third_quarterly_report.pdf
    \39\ https://www.ntia.doc.gov/files/ntia/publications/
iana_transition_report_to_congress_-_fourth_quarterly_11.02.15.pdf
    \40\ https://www.ntia.doc.gov/files/ntia/publications/
ntia_iana_fifth_quarterly_report_to
_congress.pdf
    \41\ https://www.ntia.doc.gov/files/ntia/publications/iana-
transition-quarterly-report-05162016
.pdf
---------------------------------------------------------------------------
    In short, the dangers of the IANA functions transition and leaving 
U.S. oversight behind include:

  (1)  The plan necessarily lacks First Amendment protections for the 
        Internet naming conventions because the government contract is 
        the only way for anybody to invoke the First Amendment;

  (2)  The plan lacks antitrust protections for ICANN without the 
        government contract, and Congress does not appear to anticipate 
        any need to offer an antitrust exemption to ICANN. Not that it 
        should, as it might lead to other unintended consequences;

  (3)  The plan lacks Congressional authority;

  (4)  The plan could lead to an Internet that is either an 
        unaccountable monopoly or one that is fractured, either way it 
        could end up being less free and open;

  (5)  Neither Congress nor NTIA has any backup plan if anything goes 
        wrong.

    Thank you for allowing me to present Americans for Limited 
Government's rationale for ardently opposing the proposed transition.

    The Chairman. Thank you, Mr. Manning.
    Mr. Schafer?

      STATEMENT OF BRETT D. SCHAEFER, JAY KINGHAM FELLOW, 
   INTERNATIONAL REGULATORY AFFAIRS, THE HERITAGE FOUNDATION

    Mr. Schafer. Mr. Chairman, members of the Committee, thank 
you for inviting me to testify.
    It has been more than two years since NTIA announced that 
it intended to end its current contract with ICANN and called 
for ICANN to coordinate the development of a proposal for 
transitioning key Internet functions to the global 
multistakeholder community. NTIA caught many in the Internet 
community by surprise with this announcement. After all, the 
proposed transition was not driven by problems or failings 
within the current IANA process or the U.S. role within that 
process. The process was working well and was providing a 
platform for the Internet to continue its fantastic success and 
growth. If it was not broken, then why fix it?
    The answer was international politics of an opportunistic 
and cynical variety. Other governments, particularly repressive 
regimes that are interested in constraining free speech and 
political discourse online, have sought for years to 
internationalize Internet governance. This disclosure has added 
a new complication and led the U.S. to announce the transition 
out of concern that it could no longer thwart efforts to have 
the ITU intrude into Internet governance. This decision may 
have provided temporary reprieve, but it is no solution. 
Regardless of whether the transition occurs or U.S. stewardship 
continues, China, Russia, and other likeminded governments will 
not cease their attempts to regulate and censor the Internet 
domestically through the U.N. or by asserting whatever leverage 
they can within and upon ICANN. Approving the transition will 
not satisfy the ambitions of these governments. It will only 
whet their appetite.
    From the very beginning, I and my colleagues at Heritage 
have consistently opposed increased government authority over 
ICANN and the Internet. In fact, less than a month after the 
NTIA announcement, my colleague, Paul Rosenzweig, testified 
that he opposed the notion that government should have a formal 
membership role in ICANN. Paul and I have engaged heavily in 
the ICANN working group discussions on the transition proposal. 
But our overriding concern, voiced in publications and ICANN 
discussions, has been to prevent the expansion of government 
authority beyond its current advisory role.
    I respect the work and time invested to develop the 
transition proposal, which includes a number of sound 
recommendations to improve accountability. However, a number of 
concerns remain.
    First, the near certainty that there are errors and 
omissions in ICANN's revised bylaws which have doubled in size 
as a result of the transition proposal and the accountability 
of reforms. These oversights will likely go undiscovered due to 
a politically compressed timeline which leaves no adequate 
period for testing the new mechanisms.
    Second, fundamental and controversial issues such as human 
rights and legal jurisdiction that will not be resolved prior 
to the transition.
    Third, questions about how our stress tested solutions will 
work under real-world pressures and whether the ICANN community 
can adequately muster the sustained will and cohesion to 
effectively use them.
    Most critically, despite our best efforts, governments 
would have more power and influence in ICANN than is the case 
today, as I discuss in greater length in my written testimony. 
The threshold for the Board to reject government advice has 
been raised, and governments will for the first time have the 
power to vote on bylaw changes, dismissal of the Board, ICANN's 
budget, and other major decisions.
    Worth noting is that the consensus requirement does not 
apply to GAC decisionmaking in the EC, in the Empowered 
Community. It only applies to the Board advice. And it is also 
worth noting that the Board alone decides whether the GAC 
advice has materially affected the decision that results from 
the Board's decision. For this reason alone, I would oppose the 
transition.
    But even if you find the expansion of government authority 
inside of ICANN acceptable, the fact that what we are 
considering is untested should give you pause. Adopting the 
fundamental changes to ICANN outlined in the transition 
proposal, while simultaneously ending the historical U.S. 
contractual relationship with ICANN, is tantamount to a 
strategy of cut the rope and hope. Everything could work out 
just as we envision it will. But then, again, we might 
encounter serious problems. Hope is no substitute for rigorous 
empirical real-world testing.
    After the transition, the ability of the U.S. to provide 
support for the ICANN community's future demands that the ICANN 
Board adopt additional changes would be far less than if the 
current contractual arrangement remains in place. Over the past 
2 years, with the transition online, the ICANN Board has 
repeatedly resisted efforts to maximize accountability. That is 
not a good sign. Without the leverage of U.S. oversight, the 
Board would be even less accommodating. In short, we have once 
chance to get this right.
    Currently, ICANN and Verisign are engaged in a parallel 
testing period for the new IANA process to make sure that if 
the transition occurs, the new process will be reliable. I 
believe we should also parallel test the governance and 
accountability measures we are proposing. This is why I would 
recommend, at the very least, a soft extension of the current 
contract. Importantly, this would not derail the progress that 
has been made. The ICANN Board has confirmed that nearly all of 
the recommended changes, including the new accountability 
improvements, will be adopted and implemented regardless of 
whether the transition proceeds or not.
    A soft extension of the current contract for a reasonable 
period of time, say, for 2 years, would allow the community and 
ICANN to take the new mechanisms for a sustained test drive to 
verify that the new governance model works as we hope that it 
will. It will also continue U.S. oversight as the details of 
Work Stream 2 are fully fleshed out.
    In conclusion, let me make clear that I am not opposed to 
the transition. But the transition need not happen this 
September, nor need it happen exactly under the terms of this 
current proposal. Extending the contract does pose risks, but 
so does ending U.S. oversight before we know that the new ICANN 
will work as envisioned.
    NTIA and ICANN have repeatedly stated that it is better to 
get this done right than to get it done in any specific 
timeline, and I fully agree with that statement. The transition 
to a multistakeholder ICANN is too important to get wrong, and 
it is too important to rush.
    Thank you very much, and I look forward to your questions.
    [The prepared statement of Mr. Schafer follows:]

     Prepared Statement of Brett D. Schaefer, Jay Kingham Fellow, 
       International Regulatory Affairs, The Heritage Foundation
    My name is Brett Schaefer and I am the Jay Kingham Fellow in 
International Regulatory Affairs at The Heritage Foundation. The views 
I express in this statement for the record are my own and should not be 
construed as representing any official position of The Heritage 
Foundation.
    A critical change in Internet governance is imminent. It has been 
two years since the National Telecommunications and Information 
Administration (NTIA), an arm of the U.S. Department of Commerce, 
announced that it intended to end its current contract with the 
Internet Corporation for Assigned Names and Numbers (ICANN) and 
``transition key Internet domain name functions to the global 
multistakeholder community.'' \1\
---------------------------------------------------------------------------
    \1\ News release, ``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 (accessed March 15, 2016).
---------------------------------------------------------------------------
    Now the U.S. Government is on the verge of giving up its historical 
role in overseeing changes in the Domain Name System (DNS), the policy 
apparatus and technological method that assigns names and numbers on 
the Internet. It is the system, for example, that ensures that 
``Heritage.org'' refers to The Heritage Foundation and not some 
hypothetical ancestry and heritage group. If things proceed as 
proposed, the DNS system will be run independently under ICANN with 
oversight performed by a new international multistakeholder entity. As 
the Administration and Congress consider the transition, projected to 
be completed by the end of September 2016, they should proceed with 
caution.
    In its 2014 announcement, before the transition could occur, the 
NTIA required ICANN to develop a formal proposal that would assure the 
U.S. that the termination of its contractual relationship would not 
threaten the security and openness of the Internet, undermine the 
bottom-up multistakeholder process, or replace the current role of the 
NTIA with a government-led or intergovernmental organization solution. 
That proposal was finalized and approved by the relevant groups in 
ICANN, known as supporting organizations and advisory committees (SO/
ACs), and the ICANN board.\2\ Draft bylaws intended to reflect the 
changes recommended in the Cross Community Working Group (CCWG-
Accountability) and the IANA Stewardship Transition Coordination Group 
(ICG) proposals have been drafted and posted for public comment by 
ICANN.
---------------------------------------------------------------------------
    \2\ News release, ``Plan to Transition Stewardship of Key Internet 
Functions Sent to the U.S. Government,'' ICANN, March 10, 2016, https:/
/www.icann.org/news/announcement-2016-03-10-en (accessed March 15, 
2016).
---------------------------------------------------------------------------
    I and my colleague Paul Rosenzweig participated extensively in this 
process through our research and publications, submissions to ICANN's 
public comment process, involvement in and attendance at ICANN 
meetings, participation in the CCWG-Accountability meetings and remote 
discussions, and membership in the Non-Commercial Users Constituency 
and the Non-Commercial Stakeholder Group within ICANN. We have 
commented on and debated various proposed changes in those forums and 
our suggestions have in some cases been incorporated into the final 
CCWG-Accountability proposal and the revised bylaws.
    I have great respect for the work and time that the members and 
participants of these groups have invested. The proposal includes a 
number of positive elements that, if they operate as envisioned, would 
create mechanisms for the ICANN community to hold the board and staff 
accountable and reverse imprudent decisions.
    There are concerns, however. For instance, while not replacing the 
NTIA with a governmental or intergovernmental solution, the proposed 
changes would greatly enhance the power of governments within ICANN 
relative to the status quo. There are important issues that have yet to 
be fleshed out, like human rights and ICANN's jurisdiction of 
incorporation and headquarters, which will be implemented in Work 
Stream 2 and are unlikely to be completed prior to September 2016. 
Although improved accountability measures would be established, it is 
unknown how they will work in practice. The new bylaws are twice as 
long as the current bylaws and establish new, untested mechanisms and 
procedures. Unforeseen errors, flaws, or oversights could lie 
unnoticed.
    Uncertainty with regard to how this new ICANN structure would 
operate should lead the U.S. to retain some oversight until there is 
confidence that it will work smoothly as envisioned. To that end, I 
recommend a ``soft extension'' of the existing contractual 
relationship--one that allows ICANN two years to demonstrate that the 
new procedures it is putting in place actually work to hold the 
corporation accountable. The transition to a multistakeholder global 
system is too important to get wrong and too important to rush.
A Long, Difficult Process
    In March 2014, the NTIA announced that it intended ``to transition 
key Internet domain name functions to the global multistakeholder 
community'' and asked ICANN to convene a group of global stakeholders 
to develop a proposal on a new process to replace the NTIA's 
``procedural role of administering changes to the authoritative root 
zone file--the database containing the lists of names and addresses of 
all top-level domains.'' \3\ In that announcement, however, NTIA 
stated:
---------------------------------------------------------------------------
    \3\ News release, ``NTIA Announces Intent to Transition Key 
Internet Domain Name Functions.''

  NTIA has communicated to ICANN that the transition proposal must have 
---------------------------------------------------------------------------
    broad community support and address the following four principles:

   Support and enhance the multistakeholder model;

   Maintain the security, stability, and resiliency of the 
        Internet DNS;

   Meet the needs and expectation of the global customers and 
        partners of the IANA [Internet Assigned Number Authority] 
        services; and,

   Maintain the openness of the Internet.

  Consistent with the clear policy expressed in bipartisan resolutions 
    of the U.S. Senate and House of Representatives (S.Con.Res.50 and 
    H.Con.Res.127), which affirmed the United States support for the 
    multistakeholder model of Internet governance, NTIA will not accept 
    a proposal that replaces the NTIA role with a government-led or an 
    inter-governmental organization solution.\4\
---------------------------------------------------------------------------
    \4\ Ibid.

    After the NTIA made its announcement, ICANN quickly convened the 
IANA Stewardship Transition Coordination Group (ICG), comprised of 
three sub-groups: the Cross Community Working Group on Stewardship 
(CWG-Stewardship); Numbering Resources (CRISP Team); and Protocol 
Parameters (IANAPLAN Working Group).\5\ This effort focused on the 
technical questions raised by the transition and how the gaps in 
process resulting from the withdrawal of the NTIA would be filled. The 
relatively narrow focus of this effort, combined with the earlier 
start, led to the ICG proposal being largely complete by January 2015.
---------------------------------------------------------------------------
    \5\ For a descriptive chronology and the ICG proposal, see IANA 
Stewardship Transition Coordination Group (ICG), Proposal to Transition 
the Stewardship of the Internet Assigned Numbers Authority (IANA) 
Functions from the U.S. Commerce Department's National 
Telecommunications and Information Administration (NTIA) to the Global 
Multistakeholder Community, March 2016, https://www.icann.org/en/
system/files/files/iana-stewardship-transition-proposal-10mar16-en.pdf 
(accessed March 15, 2016).
---------------------------------------------------------------------------
    To their credit, however, many in the ICANN community made clear 
that they would not be satisfied with a narrow technical proposal that 
only addressed the gaps arising from the end of the U.S. contractual 
relationship with ICANN. They insisted that long-standing concerns 
about insufficient transparency and accountability within ICANN and its 
decision-making process needed to be addressed before the transition 
occurred.
    An initial attempt by the ICANN board to lead this process raised 
strong objections from the ICANN community, which was concerned that 
the board would not develop or support robust accountability measures 
that would allow the community to block objectionable board decisions 
or recall the board. An unprecedented unanimous statement from all of 
the stakeholder groups and constituencies that make up ICANN's Generic 
Names Supporting Organization (gNSO) \6\ rebuked the board for trying 
to control this process and called for ``creation of an independent 
accountability mechanism that provides meaningful review and adequate 
redress for those harmed by ICANN action or inaction in contravention 
of an agreed upon compact with the community.'' \7\
---------------------------------------------------------------------------
    \6\ The gNSO is one of three ``supporting organizations'' in ICANN. 
It is by far the largest and provides ICANN with policy advice relating 
to generic names--most of the domain names on the Internet in the .org, 
.edu, .com, and other top-level domains (TLDs), including all of the 
relatively new gTLDs like .biz and .net. The country code name 
supporting organization (ccNSO) provides advice relating to country 
code domains--for example, the .uk that signifies the United Kingdom. 
The address supporting organization (ASO) provides advice regarding IP 
addresses--the unique numbers given to all computers connected to the 
Internet.
    \7\ Brett Schaefer and Paul Rosenzweig, ``Fireworks Erupt at 
ICANN's London Meeting,'' The Daily Signal, June 29, 2014, http://
dailysignal.com/2014/06/29/fireworks-erupt-icanns-london-meeting/ 
(accessed March 15, 2016).
---------------------------------------------------------------------------
    After several months of negotiation, the board and the community 
agreed to establish the Cross Community Working Group on Enhancing 
ICANN Accountability (CCWG-Accountability), which held its first 
meeting in December 2014. Since then, the CCWG-Accountability's 28 
members and 203 participants--including myself and Paul Rosenzweig--
dedicated enormous effort to developing a robust accountability 
proposal. As of March 2016, the group had held 209 meetings and calls 
consuming a total of 404 hours and had exchanged 12,430 e-mails on the 
proposal.\8\
---------------------------------------------------------------------------
    \8\ ICANN, ``IANA Stewardship Transition and Enhancing ICANN 
Accountability Engagement and Participation Statistics,'' March 2014-
March 2016, https://www.icann.org/resources/pages/iana-accountability-
participation-statistics-2015-11-04-en (accessed March 15, 2016).
---------------------------------------------------------------------------
    The final draft of their proposal was approved by the chartering 
organizations and the ICANN board at a meeting in early March, and the 
board has now transmitted the ICG and CCWG-Accountability proposals to 
the NTIA. Both proposals were analyzed and revisions were made to 
ICANN's bylaws to reflect their recommendations and posted for public 
comment by ICANN. The NTIA has announced that it will review the 
combined proposal to determine whether it meets the criteria set forth 
and will consult with Congress as the transition moves forward.\9\
---------------------------------------------------------------------------
    \9\ Lawrence E. Strickling, Assistant Secretary of Commerce for 
Communications and Information and NTIA Administrator, ``Reviewing the 
IANA Transition Proposal,'' National Telecommunications and Information 
Administration, March 11, 2016, https://www.ntia.doc.gov/blog/2016/
reviewing-iana-transition-proposal (accessed March 15, 2016).
---------------------------------------------------------------------------
    Board Interference and Procedural Irregularities. A number of 
challenges arose in this process beyond the normal differences of 
opinion and approach inherent in negotiating an important document 
between groups with different equities. High among these challenges was 
the tendency of the ICANN board to act as a participant in the process 
rather than as a recipient of the proposal as devised by the 
multistakeholder community.
    When queried, former ICANN Chief Executive Officer Fadi Chehade 
assured Congress that the board would allow the multistakeholder 
community to develop the accountability plan independently and would 
transfer it forward to the NTIA even if it contained provisions that 
the board opposed.\10\ The board, however, did not adhere to this 
promise and instead intervened to shape the proposal in fundamental 
ways and block provisions that it opposed.
---------------------------------------------------------------------------
    \10\ ICANN CEO Fadi Chehade promised the Senate that ``if the 
stakeholders present [ICANN] with [such] a proposal [w]e will give it 
to NTIA, and we committed already that we will not change the 
proposal.'' Hearing, Preserving the Multistakeholder Model of Internet 
Governance, Committee on Commerce, Science and Transportation, U.S. 
Senate, February 25, 2015, http://www.commerce.senate.gov/public/
index.cfm/2015/2/preserving-the-multistakeholder-model-of-internet-
governance (accessed March 15, 2016).
---------------------------------------------------------------------------
    Most notable was the board's opposition to the Cross Community 
Working Group on Enhancing ICANN Accountability Second Draft Report 
(Work Stream 1) because it recommended making ICANN into a member-based 
nonprofit corporation with the SO/ACs jointly comprising a single 
member called the ``Sole Member Model.'' \11\ Under California law, 
which is the relevant law because ICANN is currently incorporated in 
California, this model would have given the community significant 
authority over the board in much the same way that shareholders have 
control of for-profit corporations.
---------------------------------------------------------------------------
    \11\ ICANN, ``Cross Community Working Group on Enhancing ICANN 
Accountability 2nd Draft Report (Work Stream 1),'' Public Comment, 
August 3, 2015, https://www.icann.org/public-comments/ccwg-
accountability-2015-08-03-en (accessed March 15, 2015).
---------------------------------------------------------------------------
    The board objected to membership for several reasons that it 
thought could be potentially destabilizing. Prominent among them was 
the board's concern that the ``Sole Member Model would bring with it 
statutory rights that could impact ICANN and its operations, without 
any fiduciary duty to ICANN.'' \12\ In other words, the board objected 
to membership even though it was a standard California method of 
governance in nonprofit organizations because, in its view, the model 
gave the membership too much power over ICANN's operations.
---------------------------------------------------------------------------
    \12\ Quoted from ICANN board, ``Frequently Asked Questions 
Regarding Approach for Community Enforceability,'' September 11, 2015, 
http://forum.icann.org/lists/comments-ccwg-accountability-03aug15/
msg00045.html (accessed March 15, 2016). For the entire comment, see 
ICANN board, ``ICANN Board Submission of Supplementary and Final 
Comments to the CCWG--Accountability 2nd Draft Proposal Public Comment 
Forum,'' September 11, 2015, http://forum.icann.org/lists/comments-
ccwg-accountability-03aug15/msg00045.html (accessed March 15, 2016).
---------------------------------------------------------------------------
    In the face of the board's opposition, the CCWG-Accountability 
backed down and did not insist that the board transfer the proposal to 
the NTIA as promised to Congress. Instead, the CCWG-Accountability 
dramatically altered the proposal, wasting weeks and perhaps months of 
work. A new proposal titled ``CCWG-Accountability--Draft Proposal on 
Work Stream 1 Recommendations'' was submitted to public comment on 
November 30.\13\ This proposal abandoned the membership model and 
suggested a ``Sole Designator Model'' that would consolidate the SO/ACs 
as a group into a ``designator,'' later called the Empowered Community 
(EC). Under California law, a designator has far more limited powers 
than a member. To address these gaps, the proposal would grant 
specified powers to the EC through new or amended bylaws. 
Notwithstanding the gap-filling effort, this shift in the model of 
governance undoubtedly weakened the legal standing and independence of 
the ICANN community as compared to a member organization. Specifically, 
many powers would be subject to change through bylaw amendment and 
would lack the guarantees of statute in California law--that is, an 
authority external to ICANN.\14\
---------------------------------------------------------------------------
    \13\ ICANN Public Comment, ``CCWG-Accountability--Draft Proposal on 
Work Stream 1 Recommendations,'' November 30, 2015, https://
www.icann.org/public-comments/draft-ccwg-accountability-proposal-2015-
11-30-en (accessed March 15, 2016).
    \14\ This is by no means the only such board intervention. In fact, 
the very start of this process began poorly with the ICANN board 
authorizing the CEO to ``explore ways to accelerate [an] end of U.S. 
stewardship'' without consulting the ICANN community or making the 
decision public. For a detailed chronology, see Jordan Carter, 
``Chronology of Recent ICANN Accountability Milestones,'' October 9, 
2015, https://internetnz.nz/sites/default/files/2015-10-09-ICANN-accty-
chrono.pdf (accessed March 15, 2016).
---------------------------------------------------------------------------
    Other significant board interventions occurred during the process 
and even after the report was supposed to be final. As noted by ICANN's 
Intellectual Property Constituency (IPC) in its comment to the gNSO:

        [A] last minute, Board-initiated change was made less than two 
        weeks before the commencement of ICANN 55 and the deadline for 
        CCWG Chartering Organization decisions whether to approve or 
        reject the Final Proposal. The Board-initiated change did not 
        involve a fringe issue; rather it went to the heart of the 
        proposal, and in particular the balance of government interests 
        and private sector interests.\15\
---------------------------------------------------------------------------
    \15\ ICANN/GNSO, ``Transmittal of results of GNSO Council 
consideration of CCWG-Accountability Supplemental Final Proposal,'' 
March 9, 2016, p. 5, http://mm.icann.org/pipermail/ac
countability-cross-community/attachments/20160309/f1b5ce45/CCWG-
Accountabilitytransmit
talofresults-9March2016-0001.pdf (accessed March 15, 2016).

    The board's comment led to changes in the proposal even though that 
stage of the process had officially closed and only copyedits and 
corrections were being accepted. This procedural irregularity was not 
---------------------------------------------------------------------------
unique. As noted by the IPC:

        While the effort of the CCWG has spanned 14 months, many of the 
        details ultimately provided in the Proposal were not completely 
        articulated until the Third Draft Proposal circulated in late 
        Fall 2015. . . . Review of the final proposal between 
        publication and the Marrakech meeting, as well as the earlier 
        truncated comment period for the Third Draft Proposal, which 
        fell during the Winter holidays, required herculean efforts to 
        review, digest and (when called for) draft responsive comments. 
        Given their importance, it is unfortunate that the proposed 
        changes to ICANN governance and accountability mechanisms were 
        fast tracked.\16\
---------------------------------------------------------------------------
    \16\ Ibid., pp. 5-6.

    Despite the fact that the NTIA and ICANN repeatedly assured 
Congress that it was more important to get this transition right than 
to get it done on time, these procedural compromises were deemed 
necessary because of a perceived need to meet political deadlines. The 
NTIA has the ability to extend the U.S. oversight role through 
September 2019, but there is a keen desire in ICANN, the NTIA, and 
among many in the community to get the transition done before the 2016 
U.S. presidential election out of concern that a new Administration 
might not support the timeline. It is uncertain whether the report 
contains unnoticed problems or oversights that could impair ICANN 
operations or governance, but if they do surface after the transition 
occurs, this politically driven haste would be partially to blame for 
the failure to vet this proposal diligently.
Final CCWG Report: Good and Bad
    The CCWG-Accountability proposal, titled the Supplemental Final 
Proposal on Work Stream 1 Recommendations, was finalized on February 23 
and supported by all seven SO/ACs \17\ and the ICANN board at the ICANN 
55 public meeting in Marrakech on March 4-10. The document is 
incredibly detailed and totals 346 pages, including 15 annexes and 
another 11 appendices.\18\ The impact on the bylaws is similarly 
large--the ICANN bylaws as revised (in draft form, at this point) to 
reflect the ICG and the CCWG-Accountability proposals are more than 
twice the size, both in terms of pages and number of words, as the 
current bylaws. The changes substantially revise ICANN's accountability 
mechanisms, establish two new entities within ICANN, and outline a 
number of important issues that will be developed in the coming months 
or years to be incorporated into the bylaws and ICANN's operations.
---------------------------------------------------------------------------
    \17\ In addition to the supporting organizations, ICANN has four 
advisory committees (ACs) that are intended to advise the ICANN 
community and the ICANN board on specific policy issues or to represent 
the views and opinions of parts of the ICANN community that are not 
integrated into the supporting organizations. The four ACs are the At-
Large Advisory Committee (ALAC); Governmental Advisory Committee (GAC); 
Root Server System Advisory Committee (RSSAC); and Security and 
Stability Advisory Committee (SSAC).
    \18\ CCWG-Accountability, Supplemental Final Proposal on Work 
Stream 1 Recommendations, February 23, 2016, https://www.icann.org/en/
system/files/files/ccwg-accountability-supp-proposal-work-stream-1-
recs-23feb16-en.pdf (accessed March 23, 2016).
---------------------------------------------------------------------------
    The extent of the changes and the need to be familiar with ICANN's 
structure and processes make it very difficult to comprehend the 
proposal for those who have not been intimately involved in the 
transition process. This will prove to be a barrier to efforts in 
Congress to exercise due diligence in scrutinizing the report. In an 
effort to assist congressional scrutiny, I will highlight significant 
positive and negative elements of the proposal.
    Positive Elements. Overall, a number of positive accountability 
measures have been proposed and incorporated into the revised draft 
bylaws.

   Limiting ICANN's mission. One major concern is that ICANN 
        will see its role as broader than the technical management of 
        the DNS system and the Internet Assigned Number Authority 
        function, which has the responsibility for assigning names and 
        numbers to websites. Without the backstop provided by the NTIA 
        contract, some in the ICANN community were concerned that ICANN 
        could fall victim to mission creep that could distract the 
        organization from its primary purpose or drain resources 
        through support of tangential activities.

    Under the CCWG-Accountability proposal, ICANN's mission is to be 
        ``limited to coordinating the development and implementation of 
        policies that are designed to ensure the stable and secure 
        operation of the Domain Name System and are reasonably 
        necessary to facilitate its openness, interoperability, 
        resilience, and/or stability.'' \19\ The proposal also 
        clarifies that anything not specifically articulated in the 
        bylaws would be outside the scope and mission of ICANN. 
        Adoption of and adherence to this mission statement would go a 
        long way toward assuring that ICANN did not seek to become a 
        ``global guardian of the Internet'' or take on responsibilities 
        beyond its narrow remit. The draft revised bylaws reflect the 
        limited mission as recommended by the CCWG.
---------------------------------------------------------------------------
    \19\ Ibid., p. 26.

   Creating fundamental bylaws. Certain bylaws, including those 
        establishing new accountability mechanisms and clarifying 
        ICANN's mission, were deemed too important to be changed by 
        board action alone. Under the proposal and in the revised draft 
        bylaws, they will also require approval by the ICANN community 
        as represented in the Empowered Community. This useful change 
        both prevents the board from acting unilaterally on these 
        fundamental bylaws without broader support and entrenches 
        limits on ICANN in the form of quasi-constitutional 
---------------------------------------------------------------------------
        restrictions.

   Establishing the Empowered Community. A new nonprofit 
        association is to be established within ICANN called the 
        Empowered Community, populated by five of ICANN's SO/ACs: the 
        Address Supporting Organization (ASO); At Large Advisory 
        Committee (ALAC); Country Code Names Supporting Organization 
        (ccNSO); Generic Names Supporting Organization (gNSO); and 
        Government Advisory Committee (GAC).\20\ The EC would have the 
        statutory power to appoint and remove ICANN board directors, 
        either individually or as a group, and authority under the 
        bylaws to reject an operating plan, strategic plan, and budget 
        proposed by the board; approve changes in fundamental bylaws; 
        reject changes in standard bylaws; initiate a binding 
        Independent Review Process; and reject board decisions related 
        to reviews of the IANA functions, including triggering of any 
        Post Transition IANA (PTI) separation.\21\
---------------------------------------------------------------------------
    \20\ The other two advisory committees, the Security and Stability 
Advisory Committee and Root Server System Advisory Committee, informed 
the CCWG-Accountability at the ICANN Public Meeting in October 2015 
(ICANN 54) that they did not want to participate as decisional 
participants in the Empowered Community. The revised bylaws make clear 
that amending the fundamental bylaw listing the decisional participants 
of the Empowered Community would be required to reverse this decision 
and include SSAC and RSSAC among the decisional participants.
    \21\ The PTI is the organizational structure envisioned for 
technical operation of the IANA function after the NTIA contract is 
terminated. It is to be a sub-organization within ICANN, but the draft 
proposal contemplates the possibility of complete separation at some 
point in the future, should the need arise.

    In addition, the revised bylaws would grant the EC the right to 
        inspect ICANN accounting books and records, the right to 
        investigate ICANN by means of a third-party audit, and mandate 
        board engagement and consultation with the EC before approving 
        an annual or five-year strategic plan, an annual or five-year 
        operating plan, the ICANN annual budget, the IANA functions 
        budget, any bylaw changes, and any decisions regarding the PTI 
        separation process. Taken together, these changes provide 
        significant potential power to the EC to involve itself in 
        ICANN decisions, scrutinize ICANN activities, block undesired 
---------------------------------------------------------------------------
        actions, and hold the board to account.

   Improving the Independent Review Process (IRP) and Request 
        for Reconsideration (RFR) mechanisms. The IRP is an independent 
        external arbitration review mechanism to ensure that ICANN does 
        not go beyond its limited scope and mission through its actions 
        or decisions and does not violate its bylaws. Under the CCWG-
        Accountability proposal, the IRP process would be slightly 
        broadened in scope and made accessible to any materially 
        affected person or party (including the EC), less costly, and 
        more systematic through the establishment of a standing panel 
        of independent experts in ICANN-related fields. It would also 
        provide for interim relief if the decision could result in 
        irreparable harm. The RFR, which any individual can use to 
        appeal for a review of any ICANN action or inaction, would be 
        improved by expanding the range of permissible requests, 
        lengthening the time for filing a request, establishing firm 
        deadlines for RFR procedures and responses, adding transparency 
        requirements, narrowing the grounds for dismissal, and 
        requiring the board to handle all requests directly. Both of 
        these changes are helpful. Unfortunately, however, the RFR 
        process does not provide for interim relief during the 
        reconsideration process even though irreparable harm could 
        result.

    Collectively, these accountability changes are a significant 
improvement over the status quo. It is important to note that their 
implementation is not dependent on NTIA and/or congressional approval 
of the transition. When asked, the board confirmed that the 
accountability improvements in the proposal would be adopted and 
implemented whether the transition proceeds or not.\22\
---------------------------------------------------------------------------
    \22\ A member of the Commercial Stakeholder Group asked the board 
to confirm that ``Even in the event that there were some political 
problem with the transition, it is your intention that we will have 
implemented the bylaws changes. That the accountability reforms are 
done and that we will have implemented the other aspects and that 
political impediment to the transition will not prevent the 
implementation of those bylaws reforms.'' ICANN board member Bruce 
Tonkin answered on behalf of the board: ``So the only caveat in that 
case . . . is if the NTIA wished to continue its agreement, we would 
just need to make sure that any changes were not in conflict with that 
agreement, which really doesn't involve much in the way of any of t he 
accountability work that you've been involved in.'' ICANN board member 
Cherine Chalaby added: ``So I'd like to add to what Bruce is saying. 
Basically on the accountability reforms, I think the train has left the 
station and the reasons for that is the community has come to an 
agreement. I mean, if the community did not come to an agreement, it 
would be a different thing. So I think they are good accountability 
measures and we're committed to go forward with it, even if there are 
political positions and such. So subject to some of the caveats that 
Bruce has done, we're all in support of that.'' Video and initial 
transcript available at ICANN Public Meetings, ``Joint Meeting of the 
ICANN Board & the Commercial Stakeholders/Adobe Connect: Full [EN],'' 
March 8, 2016, https://meetings.icann.org/en/marrakech55/schedule/tue-
board-csg/ac-board-csg-08mar16-en (accessed March 15, 2016).
---------------------------------------------------------------------------
    Remaining Issues of Concern. While the changes to ICANN include 
many good provisions, there remain a number of concerns:

   Lack of resolution on .mil and .gov. Today, the United 
        States has exclusive use of the .mil and .gov domains. Allowing 
        other governments or the private sector to use these gTLDs 
        poses security risks. In a July 8, 2015, hearing held by the 
        House Energy and Commerce Committee's Subcommittee on 
        Communications and Technology, when pressed about formalizing 
        the informal agreement about .mil and .gov, Assistant Secretary 
        for Communications and Information and NTIA Administrator 
        Lawrence Strickling stated,

                There is nothing in the transition of our stewardship 
                which actually implicates .mil or .gov, and also .us, 
                which we administer at the Department of Commerce. But 
                we understand this is an issue of concern and so we 
                will do whatever is appropriate, in consultation with 
                the Department of Defense and GSA and the other 
                agencies that have equities in this, to make sure that 
                these names are protected going forward. We understand 
                the importance of it.

                Today, they are not under any particular contract. 
                These are legacy names that go back to the very 
                beginning of the Internet. I think .mil was delegated 
                back in 1984. That shows you how old it is. So there is 
                no contract today, but there is a whole structure of 
                these informal regulations within the Internet model 
                that govern how . . .

                [Question from Rep. Long] So you think informal 
                regulations would hold up through this process?

                [Sec. Strickling] There is no reason why they should 
                change, but we are not going to rest there. We are 
                going to take a look at them and make sure that if 
                there is a way we can strengthen the U.S. Government's 
                rights to those names, we will do so.\23\
---------------------------------------------------------------------------
    \23\ House of Representatives, Subcommittee on Communications and 
Technology, Committee on Energy and Commerce, ``Internet Governance 
After ICANN 53,'' July 8, 2015, pp. 52-53, http://docs.house.gov/
meetings/IF/IF16/20150708/103711/HHRG-114-IF16-20150708-SD006
.pdf (accessed May 20, 2016).

    Even though the transition may occur within a few months, NTIA has 
        not publicly provided any detailed information on what, if 
        anything, it intends to do to address this matter. Congress 
        should not allow the transition to occur without securing sole 
---------------------------------------------------------------------------
        U.S. ownership, control and use of these domains in perpetuity.

   An undefined commitment to human rights. The CCWG-
        Accountability proposal includes a recommendation to 
        incorporate into the ICANN bylaws an undefined commitment to 
        internationally recognized human rights. Implementation of this 
        recommendation is deferred to the future under Work Stream 2.

    ``Internationally recognized human rights'' is a very broad, 
        imprecisely defined term, and there is no clear delineation of 
        where internationally recognized human rights start or end. 
        Indeed, it is a fundamental tenet in the United Nations and 
        among the majority of human rights advocates that human rights 
        are all interrelated, interdependent, and indivisible. More 
        than three dozen rights are recognized in the Universal 
        Declaration of Human Rights (UDHR); International Covenant on 
        Civil and Political Rights (ICCPR); and International Covenant 
        on Economic, Social and Cultural Rights (ICESCR), and the 
        Office of the High Commissioner for Human Rights identifies 
        over 50 human rights issues.\24\ New rights--the so-called 
        third-generation human rights, which some argue should include 
        the right to Internet access, also known as the right to 
        broadband--are being promulgated and seriously considered even 
        if they currently lack the acceptance of more established human 
        rights.\25\
---------------------------------------------------------------------------
    \24\ Office of the High Commissioner for Human Rights, ``List of 
Human Rights Issues,'' http://www.ohchr.org/EN/Issues/Pages/
ListofIssues.aspx (accessed March 15, 2016).
    \25\ The first generation is civil and political rights like 
freedom of expression and the right to due process. The second 
generation is economic, social, and cultural rights like the right to 
education and the right to housing.

    Moreover, how these rights are understood often varies from one 
        country to another. For instance, under the U.S. Constitution, 
        freedom of speech is an extremely broad right, but in many 
        other countries, there are significant constraints on freedom 
        of speech in the interests of preventing, for instance, hate 
        speech. If ICANN adopts the more common and limited 
        interpretation of free speech in its human rights commitment, 
        it could create means for governments or businesses to use 
---------------------------------------------------------------------------
        ICANN to moderate content.

    As noted above, the proposal clarifies that anything not 
        specifically articulated in the bylaws would be outside the 
        scope and mission of ICANN. In addition, the draft revised 
        bylaws stipulate that the ICANN's human right commitment to 
        respect human rights must be ``within the scope of its Mission 
        and other Core Values'' and ``does not create and shall not be 
        interpreted to create any additional obligations for ICANN and 
        shall not obligate ICANN to respond to or consider any 
        complaint, request or demand seeking the enforcement of human 
        rights by ICANN, except as provided herein.'' The final 
        italicized clause provides a worrisome loophole that such an 
        obligation could be created through the Work Stream 2 human 
        rights process. The CCWG public comment on the revised bylaws 
        recommends closing this potential loophole by strengthening the 
        current bylaw text and eliminating the final clause: ``except 
        as provided herein.'' \26\ But it remains uncertain if the 
        ICANN board will incorporate this deletion in the final 
        approved bylaws.
---------------------------------------------------------------------------
    \26\ The CCWG-Accountability public comment recommends the 
following revision: Replace current language with the following: 
``(viii) Subject to the limitations set forth in Section 27.3, within 
the scope of its Mission and other Core Values, respecti ng 
internationally recognized human rights as required by applicable law. 
This Core Value does not create, and shall not be interpreted to 
create, any obligation on ICANN outside its Mission, or beyond 
obligations found in applicable law. This Core Value does not obligate 
ICANN to enforce its human rights obligations, or the human rights 
obligations of other parties, against such other parties.'' CCWG-
Accountability, ``CCWG-Accountability Comments on Draft New ICANN 
Bylaws,'' May 13, 2016, http://forum.icann.org/lists/comments-draft-
new-bylaws-21apr16/msg00004.html (accessed May 20, 2016).

    Even so, an unknown commitment to respect human rights will almost 
        certainly be included in the bylaws. Therefore, there is a 
        legitimate concern that a broad commitment to ``internationally 
        recognized fundamental human rights,'' even if circumscribed by 
        the caveat that the commitment be within the mission and scope 
        of ICANN, would be an invitation for various civil society 
        groups, ICANN constituencies, and governments to petition the 
        organization to push the envelope and involve itself in human 
        rights activities like promoting the right to the Internet or 
        the right to development through access to information and 
        communications technology (ICT) that could be linked to ICANN's 
        core values and mission or observe human rights in a manner 
        that could be in tension with a truly free and open 
        Internet.\27\
---------------------------------------------------------------------------
    \27\ Comment of Brett D. Schaefer and Paul Rosenzweig of The 
Heritage Foundation on the Human Rights Commitment in the Cross 
Community Working Group on Enhancing ICANN Accountability Second Draft 
Report (Work Stream 1), September 11, 2015, http://forum.icann.org/
lists/comments-ccwg-accountability-03aug15/msg00037.html (accessed 
March 15, 2016).

   Enhanced power for governments. Since the March 2014 NTIA 
        announcement, I and my colleague Paul Rosenzweig have 
        repeatedly cautioned against providing enhanced authority for 
        governments in a post-transition ICANN in papers, articles, 
        congressional testimony, and public comments submitted to ICANN 
        on the various CCWG proposals.\28\ In fact, less than a month 
        after the NTIA announcement, Rosenzweig testified,
---------------------------------------------------------------------------
    \28\ See, for instance, Paul Rosenzweig, Brett D. Schaefer, James 
L. Gattuso and David Inserra, ``Protecting Internet Freedom and 
American Interests: Required Reforms and Standards for ICANN 
Transition,'' Heritage Foundations Backgrounder #2922, June 16, 2014, 
http://www.heritage.org/research/reports/2014/06/protecting-internet-
freedom-and-american-interests-required-reforms-and-standards-for-
icann-transition (accessed May 20, 2016); Brett D. Schaefer, 
``Stakeholder Perspectives on the IANA Transition,'' Testimony before 
Subcommittee on Communications and Technology Energy and Commerce 
Committee United States House of Representatives, May 13, 2015, http://
www.heritage.org/research/testimony/2015/stakeholder-perspectives-on-
the-iana-transition (accessed May 20, 2016); Brett D. Schaefer and Paul 
Rosenzweig, ``Comment of the Heritage Foundation on the Cross Community 
Working Group on Enhancing ICANN Accountability 2nd Draft Report (Work 
Stream 1),'' August 20, 2015, http://forum.icann.org/lists/comments-
ccwg-accountability-03aug15/msg00005.html (accessed May 20, 2016); and 
Brett D. Schaefer and Paul Rosenzweig, ``Comment on the CCWG-
Accountability Draft Proposal on Work Stream 1 Recommendations,'' 
December 16, 2015, http://forum.icann.org/lists/comments-draft-ccwg-
accountability-proposal-30nov15/msg00020.html (accessed May 20, 2016).

                According to news reports, during the recent ICANN 
                meeting in Singapore, the Department of Commerce 
                appeared to accept the idea that governmental 
                organizations would have some formal membership role in 
                the new IANA management structure to be created by 
                ICANN. That would be consistent with ICANN's expressed 
                view that ``all'' stakeholders should have a say in the 
                management of the domain. I think that would be a 
                mistake. If the premise of our decision to give up NTIA 
                control of the IANA function is that governmental 
                management is suspect, then that should be equally true 
                of a governmental role (even a broader based one) in 
                the new IANA management structure. My recommendation 
                would be that the governmental role in any new 
                structure be limited to an advisory one--with no 
                formal, or informal right of control over the 
                process.\29\
---------------------------------------------------------------------------
    \29\ Italics added. Paul Rosenzweig, ``The Proposed Transfer of the 
IANA Function to ICANN,'' Testimony before the Subcommittee on Courts, 
Intellectual Property and the Internet, Committee on the Judiciary, 
United States House of Representatives, April 10, 2014, https://
judiciary.house.gov/wp-content/uploads/2016/02/041014-ICANN-
Rosenzweig.pdf (accessed May 20, 2016).

    Under the current proposal, governments would significantly 
        increase their power in ICANN versus the status quo. As it now 
        stands, governments are represented in ICANN through the 
        Government Advisory Committee (GAC), an advisory body that is 
        unable to appoint board directors. The GAC has a power that 
        other advisory bodies do not--an ability to convey advice to 
        the board that the board must implement unless opposed by 
        majority vote--and even if this advice is rejected, the board 
        is obligated to try to find a mutually acceptable solution with 
        the GAC. This special advisory role has frustrated the 
        community because it allows the GAC to intervene at late hours 
        and upend community-led policy development processes.\30\
---------------------------------------------------------------------------
    \30\ A good example of the pernicious potential that arises from 
GAC intervention is the controversy that continues to plague ICANN over 
the question of the delegation of the .africa domain name. Initially, 
the board accepted the GAC's advice to favor one applicant over 
another--a decision that it adopted in apparent violation of its own 
internal procedures. The losing applicant, DotConnectAfrica, was 
compelled to seek redress through the Independent Review Process--an 
adjudication that led in the end to a declaration that the board had 
acted improperly. See International Centre for Dispute Resolution, 
Independent Review Panel, Case #50 2013 001083, DotConnectAfrica Trust 
v. Internet Corporation for Assigned Names and Numbers, Final 
Declaration, version redacted July 31, 2015, https://www.icann.org/en/
system/files/files/final-declaration-2-redacted-09jul15-en.pdf 
(accessed March 15, 2016). More recently, when the board sought to 
restart the .africa delegation (again awarding the domain to another 
applicant), DotConnectAfrica sought and received a temporary 
restraining order from a California court. See DotConnectAfrica Trust 
v. Internet Corporation for Assigned Names and Numbers, No. CV 16-00862 
(C.D.Calif., Mar. 2, 2016), https://www.icann.org/en/system/files/
files/litigation-dca-minute-order-plaintiff-ex-parte-application-
04mar16-en.pdf (accessed March 15, 2016). The case remains pending, and 
a final adjudication on the merits has yet to be made, but it should 
trouble all observers that the board's apparent deference to the GAC 
has embroiled ICANN in such a long-running and contentious piece of 
litigation.

    Under the current proposal, the GAC would retain this special 
        advisory power, but with slightly different details. The 
        threshold for board rejection of GAC advice actually increases 
        from 50 percent to 60 percent. But the proposal also clarifies 
        that only GAC advice that is truly adopted by consensus 
        (without any formal objection) can trigger the board's 
        obligation to find a mutually acceptable solution. While the 
        definition of consensus is welcome, the higher threshold for 
        board rejection of GAC consensus advice is a real increase in 
        GAC authority. In addition, the higher threshold may place 
        ICANN in legal jeopardy because California law requires that 
        the ICANN board be in charge of decision making. This new 
        threshold creates the possibility that a decision could be 
        implemented over the opposition of a majority of the board.\31\
---------------------------------------------------------------------------
    \31\ In January, CCWG-Accountability legal advisor Rosemary Fei 
pointed out, ``The Board under California Corporate Law has to be in 
charge or running the organizations of how it can exercise its 
fiduciary duties. And that's a basic requisite of corporate structure. 
And if the way it works is that if the GAC is able to come up with 
consensus advice, that the Board can only reject with a two-thirds 
vote, that means that you could have more than half the Board believe 
that something is not a good idea and not good for the corporation and 
all of those things, and still have to do it.'' ICANN, ``Transcript 
_CCWG ACCT_CoChairs-Lawyer Meeting_8 Jan.doc'' January 8, 2016, https:/
/community.icann.org/download/attachments/56989655/Transcript%
20_CCWG%20ACCT_CoChairs-
Lawyer%20Meeting_820Jan.doc?version=1&modificationDate
=1453041576000&api=v2 (accessed May 20, 2016). Perforce, this concern 
would also apply to the 60 percent rejection threshold.

    In addition to retaining its privileged advisory power, the GAC 
        also would be a decisional participant in the EC with a direct 
        say in the exercise of all community powers including, for 
        example, board dismissal and bylaw changes.\32\ This is 
        somewhat moderated by the ``GAC carve-out,'' which prohibits 
        the GAC from being a decisional participant when the matter 
        involves a board decision based on consensus GAC advice. This 
        restriction is to prevent the GAC from getting two bites of the 
        apple by being able to provide consensus advice to the board 
        and use its new authority in the EC to impede efforts by the 
        community to block implementation of that advice if the board 
        approves it.
---------------------------------------------------------------------------
    \32\ It is uncertain how often or under what circumstances or 
procedures the GAC will be able to agree to exercise this decisional 
authority. The GAC failed to clarify this matter in its Marrakech 
statement supporting the CCWG-Accountability transition proposal, which 
stated, ``The GAC expresses its support for the multistakeholder, 
bottom-up approach within ICANN and reiterates its interest in 
participating in the post--transition phase with a view to fulfilling 
its roles and responsibilities. The GAC wishes to express its sincere 
appreciation of the diligent and productive work performed by the CCWG-
Accountability, its Co-Chairs, its members and all its contributors. 
The GAC reaffirms its role as an advisory committee to the ICANN Board 
and within the ICANN multistakeholder environment and will continue to 
advise on relevant matters of concern with regard to government and 
public interests. The GAC has considered the CCWG's proposal and 
supports Recommendations 1 to 10 and 12. However, there is no consensus 
on Recommendation 11 and the ``carve-out'' provision contained in 
Recommendations 1 and 2. As regards Recommendations 1 and 2, the GAC 
expresses its willingness to take part in the envisioned empowered 
community mechanism as a decisional participant, under conditions to be 
determined internally. While there are delegations that have expressed 
support for the proposal, there are other delegations that were not in 
a position to endorse the proposal as a whole. In spite of this 
difference of opinions, the GAC has no objection to the transmission of 
the proposal to the ICANN Board.'' Governmental Advisory Committee, 
``GAC Communique09Marrakech, Kingdom of Morocco,'' Marrakech, March 9, 
2016, p. 4-5, https://gacweb.icann.org/display/GACADV/
GAC+Communiques?preview=/28278854/41943976/GAC%20Morocco%2055
%20Communique%20FINAL.pdf (accessed May 20, 2016).

    Indisputably, the CCWG-Accountability proposal would grant the GAC 
        powers that it did not previously have and increase government 
        authority in ICANN versus the status quo. These changes were 
        recommended even though some Members of Congress have 
        explicitly opposed this outcome. Specifically, a 2014 letter 
        from Senators John Thune (R-SD) and Marco Rubio (R-FL) made 
        clear that from their perspective, government influence should 
---------------------------------------------------------------------------
        not be expanded in the transition:

                First, ICANN must prevent governments from exercising 
                undue influence over Internet governance. In April we 
                led 33 Senators in a letter to NTIA regarding the IANA 
                transition. We wrote that ``[r]eplacing NTIA's role 
                with another governmental organization would be 
                disastrous and we would vigorously oppose such a plan. 
                ICANN should reduce the chances of governments 
                inappropriately inserting themselves into apolitical 
                governance matters. Some ideas to accomplish this 
                include: not permitting representatives of governments 
                to sit on ICANN's Board, limiting government 
                participation to advisory roles, such as through the 
                Government Advisory Committee, and amending ICANN's 
                bylaws to only allow receipt of GAC advice if that 
                advice is proffered by consensus. The IANA transition 
                should not provide an opportunity for governments to 
                increase their influence.\33\
---------------------------------------------------------------------------
    \33\ Italics added. Senator John Thune and Senator Marco Rubio, 
letter to Dr. Stephen Crocker, Chairman, ICANN board of Directors, July 
31, 2014, https://www.icann.org/en/system/files/correspondence/thune-
rubio-to-crocker-31jul14-en.pdf (accessed March 15, 2016).

    A number of CCWG members and participants shared this concern about 
        government increasing its power in ICANN post-transition, as 
        did some representatives from ICANN stakeholder and 
        constituency groups.\34\ Yet this is precisely what will occur 
        if the proposal is enacted as recommended.
---------------------------------------------------------------------------
    \34\ See comments of Non-Commercial Stakeholders Group (NCSG) and 
Intellectual Property Constituency (IPC) councilors in ICANN/GNSO, 
``Transmittal of results of GNSO Council consideration of CCWG-
Accountability Supplemental Final Proposal,'' pp. 5-10.

   An uncertain commitment to U.S. jurisdiction. In the draft 
        revised bylaws, the Post Transition IANA and the Empowered 
        Community, respectively, would be ``a California nonprofit 
        public benefit corporation'' and ``a nonprofit association 
        formed under the laws of the State of California.'' There would 
        also be several references to the California Corporations Code 
        and a clause specifying that mediation for the IRP shall occur 
        in Los Angeles. However, the bylaws never specify that ICANN 
        itself must remain a California non-profit corporation. Article 
        24 states, ``The principal office for the transaction of the 
        business of ICANN shall be in the County of Los Angeles, State 
        of California, United States of America. ICANN may also have an 
        additional office or offices within or outside the United 
        States of America as it may from time to time establish.'' 
        There is an obvious difference between the location of a 
        principal office and the jurisdiction of incorporations. In 
        short, there is no bylaw restriction preventing ICANN from 
        shifting its legal jurisdiction of incorporation to Australia, 
        Belgium, China, Iran, Russia, Singapore, Switzerland, or 
---------------------------------------------------------------------------
        anywhere else.

    Notably, even if the ICANN board thought that it needed to amend 
        Article 24 to shift legal jurisdiction, that bylaw is a normal 
        bylaw--not a fundamental bylaw--and could be changed by a two-
        thirds vote of the board. The EC could reject this amendment, 
        but that would require significant opposition among decisional 
        participants that is not evident from CCWG discussions. In 
        fact, Annex 12 of the CCWG-Accountability report specifically 
        includes among the topics of discussion for Work Stream 2: 
        ``Place and jurisdiction of incorporation and operations, 
        including governance of internal affairs, tax system, human 
        resources, etc.'' and ``Jurisdiction of places of physical 
        presence.'' These Work Stream 2 topics were included at the 
        insistence of a number of members and participants who object 
        to ICANN remaining a U.S. non-profit corporation. Worth noting 
        is the fact that the resolution of the jurisdiction discussion 
        in Work Stream 2 would almost certainly occur after the 
        transition.\35\
---------------------------------------------------------------------------
    \35\ For a more detailed discussion, see Philip S. Corwin, ``The 
Irritating Irresolution of ICANN Jurisdiction,'' May 23, 2015, http://
www.circleid.com/posts/20160523_the_irritating_irre
solution_of_icann_jurisdiction/ (accessed May 23, 2015).

   An immature organization. One of the hallmarks of an 
        institution ready for additional responsibility is the facility 
        with which it handles its existing obligations. Recent events 
        raise questions about ICANN's willingness to deal with 
        controversial matters. An instance of note was the decision to 
        open a new gTLD: the .sucks domain. For obvious reasons, many 
        intellectual property rights holders objected to creation of 
        the domain--nobody at The Heritage Foundation, for example, is 
        overjoyed at the prospect of a ``heritagefoundation.sucks'' 
        domain.\36\ When intellectual property rights holders 
        complained to ICANN, however, rather than address the issue 
        directly, ICANN ducked. It referred the question of whether 
        .sucks was lawful to regulatory authorities in the United 
        States (where ICANN is incorporated) and Canada (where the 
        domain name owner of .sucks is incorporated) and asked them to 
        adjudicate the matter. Both countries quite reasonably declined 
        to offer their opinions on the matter.\37\
---------------------------------------------------------------------------
    \36\ To be clear, though not overjoyed at the prospect, this 
discomfort is a small price to pay to preserve the right of free 
speech.
    \37\ Chris Burt, ``Canada Responds to ICANN on Controversial .SUCKS 
New gTLD,'' The Whir, June 17, 2015, http://www.thewhir.com/web-
hosting-news/canada-responds-to-icann-on-contro
versial-sucks-new-gtld (accessed March 15, 2016).

    It does not engender great confidence in ICANN that, at the same 
        time it is seeking greater independence from governmental 
        authorities, it turns to those same authorities for assistance 
        in resolving controversial matters within its remit. As the 
        transition moves forward, ICANN will need to develop the 
        institutional maturity to deal with controversies of this sort 
---------------------------------------------------------------------------
        independently.

   A community rarely able or willing to unite. The CCWG-
        Accountability proposal and the revised bylaws are at the 
        moment a theoretical product. There is a real prospect that the 
        Empowered Community--which is at the core of fundamental 
        accountability for ICANN--may be hamstrung by unanticipated and 
        unintended consequences of the current structural proposals.

    While there are serious concerns about the proposed accountability 
        revisions themselves, there is an even more fundamental concern 
        about whether the community can be decisive and united enough 
        to utilize the accountability measures provided to the EC. The 
        entire premise of the transition is that the multistakeholder 
        ICANN community has sufficient maturity and cohesiveness to 
        serve as a counterweight to the board and the enhanced 
        influence of the GAC. The CCWG-Accountability development 
        process engenders real doubts about the foundational 
        suitability of the community as bedrock for accountability.

    To exercise most powers requires the support of three or four of 
        the five decisional participants. This will be very difficult 
        to achieve even in the face of substantial cause. Because of 
        their differing perspectives, if the matter at hand does not 
        directly affect them, individual SO/ACs could be indifferent 
        even when the ICANN board and staff are acting in a very 
        objectionable manner. This is compounded by the GAC's status as 
        a decisional participant because the GAC is unlikely to be able 
        to arrive at a common position in a timely manner if at all 
        unless it changes its procedures to allow EC positions to be 
        determined by less than a full consensus--a change that 
        requires only a majority vote under the GAC's operating 
        procedures. Thus, GAC participation in the EC poses two 
        potential challenges. First, if the GAC habitually finds itself 
        unable to arrive at a decision, it would effectively increase 
        the threshold for EC action by reducing the pool of potential 
        decisional participants that could support or reject EC action 
        from five to four. Alternatively, if the GAC changes its 
        procedures to permit GAC decisions in the EC at less than full 
        consensus, the U.S. could find itself frequently outvoted with 
        the GAC supporting or opposing EC actions at odds with U.S. 
        interests.

    If the accountability measures are implemented properly, there will 
        be avenues, such as the IRP and RFR processes, for righting 
        ICANN missteps and forcing compliance with agreed procedures 
        and rules without a decision from the Empowered Community. 
        However, the most powerful accountability measures are 
        exercised only by the Empowered Community and are premised on 
        it's being able to act in a decisive and dependable manner. 
        Regrettably, the practical challenges of exercising its powers 
        raise questions about the community's ability or willingness to 
        fulfill such a role.
Conclusion
    Nearly half of the world's population, including almost everyone in 
the United States, uses the Internet for business or personal purposes 
and pursuits, and it has become a critical vehicle for research, 
discourse, and commerce. ICANN plays an important role in maintaining 
the safety, security, reliability, and openness of the Internet, and it 
is necessary that it remain accountable and transparent.
    It is important to note that the proposed transition was not driven 
by problems or failings in the current IANA process or the U.S. role in 
that process. It was driven by political considerations. In my opinion, 
those political concerns are substantial and eventually will require 
the U.S. to end its historical relationship with ICANN. But that 
transition need not happen this September nor with this particular 
transition proposal. Indeed, NTIA and ICANN have repeatedly stated that 
it is better to get this transition done right than to get it done 
within a specific timeframe.
    The proposed changes to ICANN provide numerous improvements and 
tools for enhanced accountability, but there are also uncertainties. 
The proposal is a blueprint for an accountable institution, but it is 
unclear whether the result will be sound or whether the ICANN community 
can or will act responsibly and in a timely manner to hold ICANN 
accountable.
    In short, the adjustments in ICANN's structure and governance model 
are significant and untested. ICANN and Verisign are engaged in a 90 
day ``parallel testing'' period of the new technical IANA process to 
make sure that, if the transition occurs, the new process will be 
reliable. Reportedly, Senator Rubio has requested that NTIA consider 
extending U.S. oversight role to provide for similar parallel testing 
of the new ICANN governance model.\38\
---------------------------------------------------------------------------
    \38\ Kieren McCarthy, ``Republicans threaten to derail Internet 
transition: IANA contract getting unwelcome attention,'' The Register, 
May 19, 2016, http://www.theregister.co.uk/2016/05/19/
republicans_threaten_to_derail_internet_transition/ (accessed May 20, 
2016).
---------------------------------------------------------------------------
    I agree that the U.S. should take steps to allow ICANN to operate 
under the new structure for a period of time to verify that unforeseen 
complications and problems do not arise while retaining the ability to 
reassert the historical NTIA relationship if unforeseen complications 
do arise. The ICANN board suggested such an approach in its public 
comment on the first CCWG report:

        We believe the Sole Membership Model as proposed has the 
        potential for changes in the balance of powers between 
        stakeholder groups in ICANN's multistakeholder model. At any 
        time, the balance of power and influence among any of the 
        ``groups'' within ICANN can change based upon the willingness 
        or ability to participate in the Sole Member, changing for 
        example the balance between governments and the private sector 
        and civil society. We believe that if the Sole Membership Model 
        is the only proposed path forward, it may be prudent to delay 
        the transition until the Sole Membership Model is in place and 
        ICANN has demonstrated its experience operating the model and 
        ensuring that the model works in a stable manner.\39\
---------------------------------------------------------------------------
    \39\ ICANN board, ``ICANN Board submission of supplementary and 
final comments to the CCWG-Accountability 2nd Draft Proposal Public 
Comment forum: Summary of Board Input,'' September 11, 2015, http://
forum.icann.org/lists/comments-ccwg-accountability-03aug15/pdfj
18SFyc7XR.pdf (accessed May 20, 2016).

    The new ICANN similarly would implement changes in ICANN governance 
and shifts in the balance of power and influence among groups within 
ICANN. A soft extension of the current contract for a reasonable period 
of time would allow the community and ICANN to take the new mechanisms 
for a sustained test drive to verify to the Internet community that 
relies on ICANN that they are working as envisioned. This would not 
derail the progress made by the ICG or the CCWG because the ICANN board 
has confirmed that virtually all of the recommended changes, including 
the new accountability improvements and the EC, would be adopted and 
implemented whether the transition proceeds or not. It would therefore 
be prudent to maintain U.S. oversight, or at least a means for 
reasserting NTIA oversight, for the next two years until the new 
structure proves itself and the details of Work Stream 2 are fully 
---------------------------------------------------------------------------
developed and their implications understood.

--Brett D. Schaefer is Jay Kingham Fellow in International Regulatory 
Affairs in the Margaret Thatcher Center for Freedom, of the Kathryn and 
Shelby Cullom Davis Institute for National Security and Foreign Policy, 
at The Heritage Foundation.
                                 ______
                                 
    The Heritage Foundation is a public policy, research, and 
educational organization recognized as exempt under section 501(c)(3) 
of the Internal Revenue Code. It is privately supported and receives no 
funds from any government at any level, nor does it perform any 
government or other contract work.
    The Heritage Foundation is the most broadly supported think tank in 
the United States. During 2014, it had hundreds of thousands of 
individual, foundation, and corporate supporters representing every 
state in the U.S. Its 2014 income came from the following sources:

        Individuals 75 percent

        Foundations 12 percent

        Corporations 3 percent

        Program revenue and other income 10 percent

    The top five corporate givers provided The Heritage Foundation with 
2 percent of its 2014 income. The Heritage Foundation's books are 
audited annually by the national accounting firm of RSM US, LLP.

    Members of The Heritage Foundation staff testify as individuals 
discussing their own independent research. The views expressed are 
their own and do not reflect an institutional position for The Heritage 
Foundation or its board of trustees.

    The Chairman. Thank you, Mr. Schafer.
    Mr. Sullivan?

             STATEMENT OF ANDREW SULLIVAN, CHAIR, 
               INTERNET ARCHITECTURE BOARD (IAB)

    Mr. Sullivan. Chairman Thune, members of the Committee, 
thank you for this opportunity to testify before you today on 
the topic of the IANA stewardship transition. My name is Andrew 
Sullivan, and I'm Chair of the Internet Architecture Board, or 
IAB.
    The IAB is an organization that provides a long-range 
technical direction for Internet development. We donate our 
time in the interest of making the Internet better, and because 
we donate our time, we usually have an employer. Mine is Dyn. 
It is an Internet performance management company with its 
global headquarters in New Hampshire. But I'm not speaking on 
its behalf today.
    Because of my two roles, my daily work relies on dependable 
IANA functions. Nearly 50 years ago, the United States 
government kicked off the project that led to the Internet. It 
trusted technical people to come up with a new communications 
medium that offered greater efficiencies, cheaper operation, 
and a reliable system made out of unreliable parts. The 
technical community delivered. Today, we have an almost magical 
technology that is a powerful engine of the U.S. economy, a 
technology on which much of the world relies and which is 
designed to minimize central points of failure and control.
    The Internet only functions because all the independent 
networks that make it up cooperate voluntarily without central 
control or authority. This fact is why it is essentially 
impossible to take over the Internet and why it is so 
convenient, not necessary, but convenient to have people keep 
choosing to use the IANA registries. It makes interoperation 
among the various networks easier.
    Today, the Internet community is on the cusp of eliminating 
needless involvement of the U.S. Government in IANA by 
operating this part of the Internet the way everything else on 
the Internet already operates, through private sector led 
cooperation. The proposal is complete, prepared. It has 
achieved consensus in the global Internet community. It is 
overdue, and now it needs to be implemented.
    The NTIA's involvement in IANA causes two kinds of 
problems. First, it means that the normal evolution and 
operation of IANA has to work at government speed, not Internet 
speed. Second, it gives other countries the opportunity to 
blame the U.S. Government for problems it does not cause. There 
is a simple solution to all of this. Let the community of IANA 
experts manage this function themselves. They know how to do 
it.
    Despite what some people claim, the proposal doesn't really 
change that much, because every single change in the proposal, 
even every change to ICANN, ultimately relies on some system or 
organization that exists today, whether it be the Internet 
Engineering Task Force or the regional internet registries or 
the supporting organizations and advisory committees that ICANN 
already uses to make all its policy. We operational communities 
have enormous interest in making sure things will work after 
the transition, because we are the ones who will have to 
respond if we are wrong.
    Some people seem to think the transition is happening in a 
rush. This is the slowest moving rush in history. Plans to get 
the U.S. Government out of this role have been around since 
1998 when the founder of Facebook was 14 years old. There is 
simply no reason to wait or to do things in multiyear phases 
that appear only to be delaying tactics designed to create 
frustration in the community and thereby erode this consensus. 
Any phased approach wouldn't be a real test of the system 
anyway, so it would add delay and risk for no reward.
    For businesses that depend on the Internet, such as my 
employer, Dyn, delay would threaten the functions we rely on to 
make our products and to provide jobs to our employees. Delay 
would signal to those who want to control the Internet that the 
U.S. Government does not believe the Internet really works as 
designed, and it would tell the global Internet community that 
its historic consensus around this proposal is meaningless.
    We have a plan. It is a good one, and it meets the tests 
set out by the NTIA. It aligns responsibility with 
accountability, avoids the use of governmental authority when 
agreements among affected parties will serve the same purpose. 
There remains, of course, careful work to be completed in 
bringing the proposal to fruition, but my colleagues on the IAB 
and I remain completely engaged in the effort to see this 
through.
    This is a tremendous chance for the United States to show 
the world its leadership in understanding that the Internet is 
robust and designed not to be captured, that even if other 
governments wish to control it or bend it to their will, the 
Internet is a system inherently resistant to those wishes. I 
urge you to lead us that way and show the world what tremendous 
ingenuity harnessed to voluntary cooperation can give to all of 
us.
    Thank you for your kind consideration, and I look forward 
to any questions you have.
    [The prepared statement of Mr. Sullivan follows:]

             Prepared Statement of Andrew Sullivan, Chair, 
                   Internet Architecture Board (IAB)
    Chairman Thune, Ranking Member Nelson, and members of the 
Committee:

    I thank you for the opportunity to testify before you on the topic 
of the transition of key Internet functions to the global Internet 
community. This is an important issue for the Internet, and I very much 
appreciate your thoughtful attention to the topic.
1. Introduction
    My name is Andrew Sullivan. I am the Chair of the Internet 
Architecture Board (IAB). The IAB provides long-range technical 
direction for Internet development, ensuring the Internet continues to 
grow and evolve as a platform for global communication and innovation. 
We are chartered as both a committee of the Internet Engineering Task 
Force (IETF), and an advisory body of the Internet Society. There are 
13 members of the IAB, all selected by the IETF community and each 
donating time in his or her individual capacity: we do not represent 
our employers or other groups. Because the IETF depends on our donated 
time, we normally have other employment, too. In my case, I work for 
Dyn, an Internet Performance Management company with its global 
headquarters in New Hampshire. Dyn's products and services depend on 
the global Domain Name System (DNS) and the global routing system: a 
destabilized Internet Assigned Numbers Authority (IANA) would be 
extremely bad for Dyn's business. Today, I offer you my personal views, 
which may not reflect the views of Dyn.
    One of the tasks of the IAB is to act as the interface between the 
IETF and the rest of the world, and in that capacity the IAB oversees 
certain IANA registries. Because of this, I have been closely involved 
in the discussions about IANA's future since before the National 
Telecommunications and Information Administration's (NTIA) announcement 
of the transition in 2014.
    I come to this topic primarily as someone whose daily work relies 
on dependable IANA functions. In my IETF and IAB work I have had 
countless interactions with IANA staff and the registries. In my Dyn 
work, my colleagues and I depend on IANA. I believe the IANA transition 
is about ensuring the health of the Internet.
    In my view, the proposal to move the stewardship of the IANA 
functions to the Internet community is a good proposal, for three 
reasons. First, IANA's quite properly limited function works well for 
the Internet; but IANA is unfortunately less efficient than it could be 
because of the involvement of NTIA. Second, the transition makes 
limited changes that provide continuity with the way the system has 
been working at least since the founding of the Internet Corporation 
for Assigned Names and Numbers (ICANN). Finally, the proposal to make 
the transition is complete, and prepared, and has the support of the 
global Internet community; therefore, it needs to be implemented now.
2. Background on the Transition
    In March of 2014, NTIA announced \1\ its intention to move the 
stewardship of IANA to the Internet community. In accordance with 
NTIA's request, ICANN convened stakeholders with an interest in IANA's 
operation. The result was the formation of the IANA Stewardship 
Transition Coordination Group (ICG) in July of 2014. The ICG in turn 
asked the communities who regularly populate IANA registries--the 
operational communities--each to prepare a proposal about how to effect 
the transition for the relevant IANA registries.
---------------------------------------------------------------------------
    \1\ https://www.ntia.doc.gov/press-release/2014/ntia-announces-
intent-transition-key-internet-domain-name-functions
---------------------------------------------------------------------------
    Each operational community prepared its proposal, and they were 
assembled into a whole (and checked for coherence) by the ICG. Each 
operational community reported its consensus \2\ and degree of support 
to the ICG. The ICG reported its unanimous support of the proposal in 
March of this year, and the ICANN Board transmitted the proposal to 
NTIA shortly thereafter. It is that proposal, along with an associated 
set of proposed accountability changes for ICANN, that NTIA is 
examining.
---------------------------------------------------------------------------
    \2\ In the technical world, ``consensus'' does not have quite the 
meaning that it usually does in legislative contexts, but it is still 
very strong. When we say we have reached consensus, we mean that the 
objections have all been considered and either addressed or found not 
to override other considerations about the system. See for instance RFC 
7282, available from https://www.rfc-editor.org/rfc/rfc7282.txt.
---------------------------------------------------------------------------
    Before turning to the substance of the proposal, it is worth 
pausing and asking why the proposal was developed this way, with so 
many groups involved. The answer lies in the nature of IANA and the 
Internet.
    One of the important ways that the Internet differs from other 
telecommunications technologies is in how much it depends on voluntary 
co-operation. The Internet is a network of networks (of networks, and 
so on), and each network operates more or less independently. The 
networks co-operate with one another, without a lot of central co-
ordination, because it is in their independent interests to do so. In 
this way, the Internet is something like a market economy: people trade 
(goods in the economy, ``packets'' on the Internet) because they each 
get something out of it. In my view, it is the very alignment of each 
operator's interests with the outcomes that has allowed the Internet to 
grow and flourish, such that it is a dominant communications technology 
of our time.
    In a centrally-organized and centrally-operated system, controls 
over how people configure systems would be imposed by the center. 
Centrally-managed systems tend to be expensive or hard to operate (or 
both) when they get very large. But the Internet is distributed, 
because in a network of networks there is no center. In a distributed 
environment, it's often easier if one has clues about how to get 
started interoperating with others. Those clues are the IANA 
registries. They fall into three broad categories, which I describe 
below.
    To begin with, internetworking means that data (in the form of 
packets) are shared among independently-operated networks. To allow 
data packets to get from other networks to yours, it is necessary to be 
able to tell others what networks you are operating. To make that work, 
when you say, ``I'm running this network,'' everyone else needs to know 
what ``this network'' means. The way we do that is to use a common set 
of numbers to represent the networks, and to use a common set of 
numbers it is convenient to maintain a starting-point list--a registry. 
IANA maintains the top-most of these number registries. IANA uses 
policies that work in tandem with the Regional Internet Registries 
(RIRs), who are directly responsible for managing the number resources 
in various geographic regions. Ultimately, when you connect to the 
Internet, you get an Internet Protocol address from your Internet 
Service Provider (ISP), who got their pool of addresses from an RIR, 
who originally got their share of the global pool from IANA. This 
distributed way of working ensures that there is not a single large 
bureaucracy in charge of all Internet addresses.
    Second, to make it easy for the various networks to connect to and 
operate with one another predictably and reliably, they can use common 
mechanisms configured in a particular way. The mechanisms are called 
``protocols''--such as those the IETF creates. Protocols do not contain 
all the instructions for configuration, so, it is necessary to know how 
to configure a protocol for use on the Internet. For instance, when you 
go on the Internet and look at cat videos, your computer knows to show 
you a video as opposed to opening a spreadsheet because the cat video 
comes with a protocol parameter called ``media type''. It is convenient 
to have a single place to look up the configuration settings for these 
different protocols. Depending on who defines the protocol, the 
definition of the agreed-upon settings might come from different 
actors, but everyone writes them down in a shared place. That shared 
place comprises the protocol parameters registries; publishing them is 
another IANA job.
    Third, names that are assigned on one network won't be any use to 
those connected to other networks unless the other network users know 
how to get to those names. It is no use to know that you want to reach 
``mail-server'' without knowing whether it's the Senate's mail server, 
or your ISP's, or Dyn's. To know that, it is convenient to have a place 
to start looking for a name on the Internet. Mathematically, a way to 
do that (and one that is not too hard to implement in computers) is a 
tree structure, which by definition starts from a common root. We do 
this today in the DNS. Maintaining the registry of the common root 
(also known as the ``root zone'') is IANA's third job, which it does 
according to policies established by the multistakeholder processes in 
ICANN.
    Note the emphasis above on how these arrangements are 
``convenient''. We could make the Internet in a different way. People 
have designed and deployed systems that did away with some or all of 
the IANA registries, in favor of other approaches. But IANA is the 
system we have now, and the one that got the Internet this far. Note as 
well that the contents of these registries are specified by someone 
other than IANA. It is those communities of IANA users--the 
``operational communities''--who were involved in preparing the 
different parts of the ICG proposal.
    One other point about IANA is critical to keep in mind: just like 
everything else on the Internet, use of it is voluntary. The Internet 
has no compliance department and there are no protocol police, because 
each constituent network that participates in the Internet is 
independent. On your network, you make your rules. Networks use IANA 
functions because those functions are useful. Of course, this also 
means that if they cease to be useful, or if the cost of relying on 
IANA is greater than the benefit it provides, people will find another 
way to operate their networks. You can only build the Internet with 
carrots: sticks do not work.
3. The Limited IANA Function Works Well
    IANA's tasks are not policy functions; they are important, 
specialized functions, but they are not a locus of control of the 
Internet because the Internet by its nature is designed not to have 
such controls. The decisions about how these registries are to be 
populated belong with others. This division of responsibility works 
well, and the ICG proposal only serves to make that division clearer 
and more explicit.
    Each operational community provides the contents of and policies 
for the registries with which it is concerned. The IETF is responsible 
for the protocol parameters registries it creates, and it is also the 
body that creates the protocols that use those registries. The RIRs are 
closely involved in number resource policy, and they are in turn 
responsible to their communities of members--the very people who depend 
on the numbers distributed by the RIRs. And finally, the root zone 
registry is maintained according to the multistakeholder processes that 
ICANN uses. Naturally, none of these processes (which are designed and 
operated by humans) is perfect. But they each have the conspicuous 
advantage that the technical interest in making the Internet work 
aligns with participation in ensuring that the registries perform their 
technical function. The Internet works well when the managers of 
resources feel the effects of their management decisions.
    When requests come to it, IANA makes sure that the requests are 
well-formed, that requests conform with the policies for the registry, 
and so on. In this sense, IANA functions are narrow and limited in 
scope. This is not to suggest they are unimportant, but rather to state 
that the technical functions that IANA provides are specialized, and 
are not a source of control over the Internet.
    The processes in question, and the communities involved in 
operating these processes with IANA, are mature and robust. We have 
been operating this way for more than 15 years, which is practically an 
eternity on the Internet. During that period, of course, various 
improvements and adjustments have happened; but the basic model has not 
changed very much.
    There is one small current problem, and that is the ongoing 
involvement of the U.S. Department of Commerce through the NTIA. This 
is not to impugn the NTIA's staff, but instead to admit that its 
involvement at this stage is incongruous with how the Internet works. 
The reason it is problematic is that, unlike the operational 
communities involved in overseeing the different registries, NTIA is 
not itself primarily an operator of any Internet infrastructure; 
neither does it have any special expertise about the Internet that 
cannot be found among the operational communities.
    There are two issues that result from the involvement of the NTIA. 
The first is that there is an extra party involved in all the IANA 
accountability arrangements, which means that the accountability is not 
as transparent as it ought to be. Worse, it sets up the U.S. Government 
as an impediment to the natural evolution of these key Internet 
functions, because changes to them invoke all the machinery of 
government bureaucracy before they can take effect. The arrangement 
forces IANA to work at government speed, not at Internet speed.
    The second problem is that the presence of the U.S. Government in 
approving some IANA actions gives other countries the opportunity to 
blame the U.S. Government for problems that it does not cause. NTIA's 
approval function sometimes includes changes that directly affect 
country code top-level domains, and one sometimes hears claims that a 
response to an emergency on the Internet was held up by NTIA. This 
perception--even if it is unwarranted--potentially gives other 
countries an argument that IANA should be controlled by an 
intergovernmental body, as though a delay introduced by one government 
could be made shorter by adding all the other governments in the world 
to the task. The obvious answer, instead, is to let the people who need 
this service--the operational communities--manage it themselves. They 
are ready to do it, and have a proposal that has achieved global 
consensus on how to make that happen; so now is the time to make the 
transition.
4. The Transition Proposal Brings Minimal Change
    One of the open secrets about the Internet is how little the people 
who actually operate networks and services like to change things. The 
first rule of being ``on call'' is to avoid getting called, so 
operators do not like to make changes unnecessarily.
    Yet successful operators also know that maintenance is critical. In 
order not to have a large problem later, you must constantly remove 
unneeded code and functions that are no longer really necessary, but 
are there because they were always there. Systems that do not get good, 
regular maintenance are called ``crufty'', and they're just as ugly as 
that word sounds.
    The proposal to move the stewardship of IANA to the Internet 
community is good, conservative maintenance. It eliminates a feature 
that is no longer really necessary, because the functionality is 
already provided in another, more efficient way. Also, the whole 
transition proposal was developed using the same inclusive, bottom-up 
mechanisms that daily bring us the Internet. The proposal aligns 
responsibility with accountability, and avoids the use of governmental 
authority when agreements among affected parties will serve the same 
purpose. It provides a practicable solution to a practical problem, and 
only makes changes where necessary to achieve the practical goal.
    Consider the parts of the proposal. The IETF came together to 
develop the part of the proposal related to protocol parameters 
registries. It did this using the same mechanisms it uses for 
everything else: it chartered a working group in which anyone could 
participate (IANAPLAN). The working group proceeded as these groups 
always do--they work in public to create a document and determine what 
rough consensus emerges. The IETF achieved rough consensus on the 
IANAPLAN draft, so it became a part of the final proposal. The protocol 
parameters portion of the proposal changes so little in the IANA 
arrangements that the IETF decided to implement the proposal using 
ordinary supplemental agreements that the IETF and ICANN undertake 
approximately every year. This is in spite of the fact that the IETF 
makes far more use of IANA than any of the other operational 
communities, because there are thousands of protocol parameters 
registries and hundreds of changes processed every month. The IETF-IANA 
interaction works well.
    To create the numbers portion of the proposal, the RIRs created the 
Consolidated RIR IANA Stewardship Proposal (``CRISP'') Team to create a 
single proposal approved by all the RIRs. This part of the proposal is 
little more than a contractual formalization of the arrangements that 
the RIRs already have with ICANN for operating of the numbers 
registries. The most significant innovation is the ability of the RIRs 
to change the IANA operator for numbers registries. But that innovation 
is hardly ground-breaking: it is just a standard relationship between a 
service provider and its customer. Accountability that depends on 
market mechanisms instead of governmental regulatory power has been 
effective in other parts of the Internet, so there is no reason to 
suppose it will not be successful in this case too. Indeed, this is the 
very sort of extremely successful relationship that the IETF has with 
IANA.
    At first glance, it might appear that the names portion of the 
proposal changes a lot more than the other portions. It creates a 
number of new bodies, and depends on some fairly significant shifts in 
ICANN's corporate accountability structures. The changes are, however, 
less radical than the first glance would suggest. There are three 
reasons for this.
    First, because ICANN to date has contained both the policy function 
for names and the IANA function, it has not always been clear to people 
which function of ICANN was involved in any given discussion. So, the 
names proposal makes the distinction explicit, by creating a Post-
Transition IANA (PTI) that will be used to contain the IANA functions. 
Making clear a line that was blurry is not radical, but is instead a 
hallmark of good system design. And this clarification is an 
improvement in the stability of IANA, because it protects IANA from 
being drawn into the policy discussions that ought properly to go on 
inside the ICANN multistakeholder community.
    Second, while the accountability changes appear large, they 
actually depend entirely on the already-functioning advisory committees 
and supporting organizations that ICANN uses for all policy 
development. Past accountability relied on NTIA's ability to enforce 
its contract with ICANN to regulate ICANN behavior. Under the new 
arrangements, that enforcement function lives with the community of 
people who are most affected. To perform that function they must have 
the necessary powers, and so the names proposal depends on the newly-
empowered community. We already know what that community is like, 
because it comprises the very same structures that ICANN has relied 
upon for many years.\3\
---------------------------------------------------------------------------
    \3\  The current arrangements have evolved over time, so it would 
not be correct to claim that the structures have been around for the 
lifetime of ICANN. Nevertheless, the basics of the current structure 
were mostly established by the early 2000s, and it is no exaggeration 
to say that the proposal is primarily relying on structures that are at 
least as old as Facebook or Twitter--practically geologic age on the 
Internet.
---------------------------------------------------------------------------
    Third, the names community proposal mimics the successful 
relationship between the IETF and IANA, and thereby ensures the 
operation of all the IANA registries along the same lines.
    The overall effect is to provide continuity with the way that 
things have actually worked for many years, to align IANA stewardship 
with the way things happen on the Internet more generally, and to make 
changes only if they are rooted in already-operating structures and 
bodies.
5. It Is Time to Act
    It might be tempting to think that the transition should not happen 
according to the current timeline, on the grounds that it is happening 
in a rush. If this is a rush, it is a slow-moving one. Since the 
original ``White Paper'' in 1998,\4\ the plan has always been for the 
U.S. Government gradually to step out of this function, partly on the 
grounds that the users of the Internet knew better how to ensure the 
necessary accountability.
---------------------------------------------------------------------------
    \4\ https://www.ntia.doc.gov/files/ntia/publications/dnsdrft.txt
---------------------------------------------------------------------------
    More recently, NTIA's announcement about this stage of IANA's 
evolution was fully two years ago. In the intervening time people from 
all over the world have debated and evaluated the various proposals and 
come to consensus. They have put in countless hours in reading and 
writing proposals, corresponding with one another, and attending 
meetings both virtually and in person. The proposals we have are 
developed and mature, and they are founded on mechanisms and bodies 
that have been tested for years.
    Under the ICG proposal, IANA will mostly continue to work the way 
it always has, and the work will continue to be done by the same 
professionals who have been doing it. The main functional changes are 
the removal of a formal approval step by the U.S. Department of 
Commerce, and the elimination of a zero-cost contract let by the United 
States Government. Because of the process that led to the transition 
proposal, people all over the Internet have come to expect the final 
step in completing the work started in the era of the ``White Paper''--
a time when the World Wide Web was not even ten years old, and before 
Wikipedia had been established. The Internet has waited long enough. 
There is a proposal that has found consensus and that is workable. Now 
is the right time to proceed with this transition.
    In an abundance of caution, some have suggested that the transition 
proceed in phases. It is not clear, however, how that would help 
anything. A phased deployment would not actually be a test of the 
eventual IANA arrangements. Instead, it would test a different set of 
arrangements every time a new phase started, and each phase would 
introduce a change (which necessarily brings some risk). So, a phased 
approach will not be a good indicator of how the eventual IANA 
structure would perform, and would introduce heretofore uncontemplated 
risks. From a technical point of view, it would be safer and better-
advised to proceed with the transition of the IANA all at once. In any 
case, a phased approach is transparently an attempt to create time to 
undermine the remarkable global consensus reached on this proposal. A 
consensus this broad will be frustrated and fragile when faced with 
delay, and such a delay would represent an attack on the global 
multistakeholder community.
    For businesses that depend on the Internet, such as my employer 
Dyn, a delay now would send a terrible message. It would introduce 
uncertainty into the fate of the functions we rely on to make our 
products, to make our company grow and thrive, and to provide jobs for 
more than 400 people worldwide. More generally, a delay in the 
transition outside the process already underway would support the 
efforts of those aiming to cast doubts on the commitment of U.S. 
Government to carry through on the plan--first articulated in 1998--to 
transition out of its involvement in the IANA function, as well as the 
more recent request made by the NTIA to the Internet community to come 
up with a plan. It would signal to governments that want to control the 
Internet that the U.S. Government does not believe the Internet is 
resistant to those controls. Finally, it would undermine the 
multistakeholder processes that have been a foundation of the 
Internet's success, by telling the global Internet community that its 
historic, worldwide consensus around this proposal is meaningless.
6. Conclusion
    The ICG's ``Proposal to Transition the Stewardship of the Internet 
Assigned Numbers Authority (IANA) Functions from the U.S. Commerce 
Department's National Telecommunications and Information Administration 
(NTIA) to the Global Multistakeholder Community'' \5\ meets the tests 
set out by NTIA. The proposal is a practical way to allow the 
government to step out of a function it does not need to perform, and 
ensure that IANA continues with business as usual. A limited IANA works 
for the Internet now, and will continue to do so essentially unchanged 
in the future. While there are some inevitable changes proposed to 
enable the transition, they are all based on foundations that are both 
already working and in line with how the rest of the Internet already 
functions. The Internet has been waiting a long time for this step to 
be taken. Delaying brings no benefit and it might itself bring harm.
---------------------------------------------------------------------------
    \5\ https://www.ianacg.org/icg-files/documents/IANA-transition-
proposal-final.pdf
---------------------------------------------------------------------------
    There remains, of course, careful work to be completed in bringing 
the proposal to fruition. But execution of a plan that requires months 
to complete is not improved by the addition of more time. It is, 
however, improved by the addition of more dedication to see the plan 
through to its faithful and complete end. Working with others across 
the Internet community, I believe that we shall together see that end.
    Nearly 50 years ago, the United States Government kicked off the 
project that led to the Internet. It trusted technical people to come 
up with a new communications medium that offered greater efficiencies, 
cheaper operation, and a reliable system made out of unreliable parts. 
The technical community delivered, and today we have an almost magical 
technology that is a critical engine of the U.S. economy--a technology 
on which much of the world relies, and which is designed to minimize 
central points of control and failure. Today, the Internet community is 
offering to eliminate a needless involvement of the U.S. Government, 
and to operate this part of the Internet the way everything else on the 
Internet operates: by private-sector-led co-operation. This is a 
tremendous chance for the United States to show the world its 
leadership in understanding that the Internet is robust and designed 
not to be captured--that even if other governments wish to control it 
or bend it to their will, the Internet is a system inherently resistant 
to those wishes. I urge you to lead us that way, and show the world 
what tremendous ingenuity, harnessed through voluntary co-operation, 
can give us all.
    My colleagues on the IAB and I remain fully engaged to ensure 
timely completion of this effort. I thank this Committee and its 
Members for your kind consideration.

    The Chairman. Thank you, Mr. Sullivan.
    Mr. DelBianco, your prepared testimony states that the 
power of governments will not be increased under the transition 
proposal, but Mr. Schafer's testimony states exactly the 
opposite, that government power is, and I quote, 
``significantly increased.'' So the question is for both of 
you. While you were both in the same room when this agreement 
was being negotiated, you have fundamentally opposing 
conclusions about the weight of government power in this 
proposal, and I'm interested in how you think senators ought to 
assess that.
    Mr. DelBianco. Thank you, Chairman Thune. I'll go first. 
Brett from Heritage and I were both instrumental in drafting 
it, and there's a different interpretation of what we've done 
by empowering the community. When the U.S. created ICANN, we 
established a Governmental Advisory Committee as one of the 
formal committees of ICANN.
    I mean, if I had to stand before you today and say, ``Of 
all the stakeholders in the world, governments don't count at 
all''--you represent your states and your nation. You want 
governments to have a role at ICANN, and they have a role. But 
it need not be a special role. It's a multi-equal role, just 
alongside civil society, the engineering community, the 
business community that we represent, and as such, that 
community gets one of the votes among the community when it 
comes to deciding whether the community is going to challenge 
ICANN's Board's decisions, or they're going to block a budget, 
or actually spill the entire Board of Directors.
    But when it comes to challenging decisions that arise from 
government advice, we drew the line. We said that government 
advice must only be adopted by governments within the absence 
of an objection. So the U.S. Government role can block 
government advice that violates our values.
    Second, when the Board of ICANN acts on government advice, 
and the community wishes to challenge that advice, we can't 
allow governments to block our ability to challenge it. So we 
carve them out. We exclude the governments from having a vote, 
if what we're challenging is the Board's adoption of government 
advice.
    On net, I think it's unquestionable that we have cabined 
off the government power, not increased it at all. And if you 
listen to the foreign governments, among them Brazil and Spain, 
and I gave you the quote from France, the governments complain 
that they've been disadvantaged vis-a-vis the private sector in 
this transition.
    The Chairman. Thank you, Mr. DelBianco.
    Mr. Schafer?
    Mr. Schafer. Thank you. Well, Steve answered the question. 
The governments will have powers that they currently do not 
have under the new ICANN structure. Currently, the role of 
governments is solely to be a member of the Government Advisory 
Committee that may provide advice to the Board. It has no 
votes. It has no power. It doesn't decide a budget. It doesn't 
decide to spill directors. It doesn't appoint directors.
    Under this proposal, it will do all those things. It will 
have an equal vote with other parts of the community that it 
currently does not possess. And, furthermore, the safeguards 
that we put into the GAC carve-out--which I appreciate and I 
fought hard for in this transition to try and insert some 
protections--leave out carefully--nuances.
    First, the decision over whether the GAC carve-out applies 
is dependent on the Board. The Board alone is empowered to 
decide--and I'll quote the new draft bylaws here--``whether it 
is determined that the GAC consensus advice was a material 
factor in the Board's adoption of the resolution.'' So the 
Board decides whether the GAC consensus advice actually fit 
into the resolution or not.
    There's also no restriction on including the GAC advice in 
something broader in terms of the resolution, that the 
community very well might want more than it resists whatever 
that GAC advice it wants that otherwise might be objectionable. 
That combined sort of resolution is not prohibited under the 
current bylaws.
    While the GAC consensus requirement applies to advice to 
the Board, it does not apply to GAC decisions within the 
Empowered Community. The U.S. might find itself very easily 
outnumbered in a vote in the GAC on a decision that the GAC 
raises inside the Empowered Community. The GAC's decisionmaking 
processes are guided by Operating Principle 47, which currently 
says that they're going to try and operate by consensus. But 
they can change that rule by a majority vote at any time they 
want to.
    So, in short, governments have powers that they don't have 
currently. They have the ability to expand their use and their 
voice inside the Empowered Community, which they might not 
under the current consensus proposal, but they can change that, 
and the GAC and the Board itself can manipulate the process to 
determine whether GAC consensus advice is going to be applied 
in terms of the GAC carve-out. So it can be done and 
manipulated to the Board's pleasure for that purpose as well.
    The Chairman. Mr. DelBianco and Ambassador Gross, both of 
you have extensive personal experience in the Internet 
governance space and both of you see value in the current 
transition proposal moving forward this year. Mr. Schafer has 
called for extending the IANA contract for an additional 2 
years to help prove out the new ICANN structures, which, on its 
face, I have to say doesn't seem to be an unreasonable 
proposal.
    So the question for either or both of you is: What is the 
harm in taking a little more time before finalizing the 
transition?
    Mr. DelBianco. Mr. Chairman, as I indicated in my opening 
remarks, that sends the signal that the U.S. is not serious 
about the entire multistakeholder process that we charged with 
the mission of coming up with a transition proposal. Some of 
Heritage's ideas surfaced during the multistakeholder process 
of 2 years, and they failed to gather support. Some of 
Heritage's interpretations of government power were argued 
strenuously and very few agreed.
    So I think what we would signal by a delay is an indication 
that we want to relitigate this, that certain elements want to 
change the proposal from what the community came up with, and 
that's a direct slap in the face of a community that has worked 
for 2 years on this proposal. Now, the effort of the community 
is of no consequence if the product of our work was not 
appropriate. And you have heard from all members of the 
community that support the notion of what we've come up with, 
that it strikes the right balance.
    Let me also add that any delay could not be positioned as 
if it's a test drive. Think about that for a second. The powers 
the community has are extraordinary powers. We would only 
invoke the power to block a budget, block bylaws, or spill the 
Board if the Board acted in a completely inappropriate way. It 
could be a decade before we even exercise that muscle within 
ICANN. There's no test drive component involved.
    In fact, there's no coverage provided by the United States 
that could be better than the coverage we have in California 
courts. What we've designed gives the community for the first 
time ever the power to go to court in California to force the 
Board to follow the community's consensus, to spill the Board, 
if that's our consensus, and to overturn a budget that the 
community doesn't support. That's the kind of backstop we need, 
and we have it in the California courts.
    Ambassador Gross. Thank you, Mr. Chairman, for that 
question. I think it's understandably confusing as to where the 
truth lies, because, clearly, there are many competing 
interests here. Having said that, based on my long now and 
painful sometimes experience in the international community on 
the issues about the role of governments and the like with 
regard to the Internet, I think the process going forward is 
clear.
    If the U.S. Government steps in, as, clearly, they could, 
and seeks a delay of a year or two, it will be viewed as the 
role of government preempts the multistakeholder process, and 
it will be seen by the international community as proving that 
which many in Russia, China, and others have said to me and to 
many others, that this ought to be the province of governments, 
and the governments ought to decide these issues, not the 
multistakeholder community. I think that would be a tremendous 
failure for all of us, for all of us who have worked so hard to 
make sure that U.S. leadership focused on the importance of the 
multistakeholder environment and that the leadership there is 
used throughout the Internet community.
    I look in terms of what the reaction of the international 
community after Marrakech when ICANN came forward with its 
proposal, and the reactions by governments was very clear. I 
think one of the market-based tests that we can use as to what 
the views of the international community, in particular, the 
governments are is by what they say. They told many of us 
privately that they feel they got rolled, that the 
international governments got rolled on this, that they got 
boxed in and lost.
    I don't think that's an unfair characteristic. I think the 
international multistakeholder community did, in fact, rise up 
and minimize the role the governments sought to play going 
forward in ICANN. And the very next month, Russia, China--the 
foreign ministers of Russia, China, and India issued a 
statement--the foreign ministers--saying that the need to 
internationalize the Internet governance and to enhance in this 
regard--the role of the ITU. So they are already moving past 
ICANN, recognizing it, and going to looking to the ITU for 
their approach for Internet governance.
    The Chairman. Thank you, Mr. Gross.
    Senator Schatz?
    Senator Schatz. Thank you, Mr. Chairman.
    Mr. DelBianco, I want to get some clarification on how the 
process would work in the case that the United States was, in 
Mr. Schafer's words, outnumbered on the GAC making a 
recommendation to ICANN. My understanding is that there's a 
mechanism to prevent that from mattering, essentially. But I 
want you to walk us through the process, because it was sort of 
a quick exchange and I want to make sure we totally understand 
what would happen if GAC--if there were a non-consensus 
recommendation made to ICANN that was determined not to be in 
the United States' best interest.
    Mr. DelBianco. Thank you, Senator Schatz. One of the first 
things we did was to introduce a stress test to make sure that 
if the GAC were to change away from full consensus, there would 
be no obligation for ICANN's Board to try and find a mutually 
acceptable solution. Done. We fixed that.
    So you're going into another case, which is let's suppose 
that the governments together decided they wanted to offer 
certain other kinds of advice that's non-consensus advice in a 
situation where the U.S. and its allies might be outnumbered. 
If that advice arrived in the form of a letter to ICANN's 
Board, the ICANN Board has no obligation, no special obligation 
at all, to consider or implement that advice.
    But if it were to do so, the entire community is able to 
use the power to overturn Board implementation and Board 
actions that violate ICANN's bylaws, and therein lies the 
protection. As Mr. Beckerman explained, there are tight 
provisions limiting the mission of ICANN so that we can go 
after that.
    Senator Schatz. Just to be clear, GAC is advisory in the 
first place. If GAC makes a recommendation--excuse me--if a 
faction within GAC makes a recommendation that is contrary to 
the United States' interests, ICANN doesn't have to do anything 
with it. If they did, and it was contrary to the bylaws, it 
would be overturned as a matter of interpretation of the 
bylaws. Is that correct?
    Mr. DelBianco. Any party that felt aggrieved by the Board 
following that non-consensus advice can file an independent 
review process. That's invoking an independent review based on 
ICANN's bylaws and Articles of Incorporation. Oh, and by the 
way, the full community can also file an independent review.
    Mr. Schafer likes to suggest that that community might be 
thwarted if the governments didn't want to go along, but we 
don't require unanimity. So if the governments alone didn't 
support the idea of challenging the Board's adoption of their 
own advice, they can't block it at all.
    Senator Schatz. What about this assertion that there's the 
possibility for mischief or the manipulation of the process in 
the interpretation of the GAC advice, that the ICANN has to 
come to some sort of determination that the advice was arrived 
at in a certain way? Can you address that?
    Mr. DelBianco. Yes, thank you very much. So if the Board 
received advice from the GAC and was acting on that advice, the 
Board has some leeway to interpret whether their action was 
based mostly on GAC advice or not. But this is neither here nor 
there. No matter what action the Board takes, whether it came 
to them in a dream or GAC advice, if they take action that's 
contrary to the bylaws, any aggrieved party, the business 
community, civil society, the technologists, or the entire 
community can come together and challenge that as against 
ICANN's bylaws and Articles. Therein lies the power we have 
never had before and that we'll be able to exercise in 
California courts. That's the safety belts that we're putting 
onto this engine.
    Senator Schatz. Ambassador Gross, I have a question for 
you. There were a number of people--and I think this is a fair 
statement, that if there were a two-year delay, it would 
indicate a desire to relitigate this. But I want to go a little 
big deeper. What is the practical impact of that on the 
Internet? I mean, we're talking in acronyms, right?
    But for the public who wants to be assured that the 
Internet is growing, not just in the United States, but this 
network of networks continues to grow, and understanding for 
those of us who are watching this that there are some sort of 
incorrigible countries and there are some free countries and 
there are those in between that are making judgments sort of in 
real time about the extent to which they're going to be 
connected to the real Internet or essentially have a country-
based intranet.
    So what would be the practical impact of a two-year delay 
in terms of that decisionmaking and sort of our geopolitical 
negotiations?
    Ambassador Gross. Thank you. I think the clearest impact is 
not necessarily on the operations of ICANN itself, but rather 
on the broader global community. It will signal very, very 
clearly that the United States has changed its position, that 
the United States no longer believes firmly in a 
multistakeholder, private sector led Internet, but rather 
believes that the government and governments, therefore, play 
the primary role of making the final decision. Russia, China, 
and others will welcome such a decision.
    Senator Schatz. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Schatz.
    Senator Fischer?

                STATEMENT OF HON. DEB FISCHER, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Fischer. Thank you, Mr. Chairman.
    Mr. DelBianco, if I understood you correctly in your 
previous comments and then earlier in your testimony, when you 
mentioned safety belts and when you talk about the community, 
was my interpretation of this correct in that the community 
can, in effect, dismiss or, in your terminology, spill the 
Board? Just a short answer.
    Mr. DelBianco. Short answer is yes, Senator. Just like any 
corporation, the shareholders can spill the directors for doing 
the same thing.
    Senator Fischer. OK. So it seems like the community has 
quite a bit of power here. How does government fit in? Does 
government fit in your plan at all, or does the community have 
veto power over government?
    Mr. DelBianco. Governments are one of the multistakeholders 
that the U.S. created when we designed ICANN, and they are one 
of them.
    Senator Fischer. But it doesn't have to be a unanimous 
decision? Did I hear that correctly?
    Mr. DelBianco. It does not. We deliberately avoided 
unanimity so that no single entity could block a community 
decision.
    Senator Fischer. Including government?
    Mr. DelBianco. Including governments. They cannot block any 
decisions that are supported by the rest of the community 
members.
    Senator Fischer. Mr. Schafer, what do you think of that? 
I've seen you kind of smile and nod through this conversation. 
So what do you think of that?
    Mr. Schafer. Well, it's--in essence, the discussion that 
was just occurring before was apples and oranges. We were 
talking about expansion of government authority in the ICANN, 
and that is indisputably the case. Governments will have more 
power in the ICANN that is post-transition than is currently 
the case. They will have votes that they didn't have before. 
They will be able to make decisions that they weren't able to 
before. They will be non-purely advisory, which they are purely 
advisory now. So that was the discussion happening over there.
    There was also a discussion about how the GAC carve-out 
would work, these protections against the GAC having two bites 
at the apple, being able to pose something to the Board and 
then going to the community and having a vote there on their 
own advice. And that also has a loophole, because it is up to 
the Board's discretion to determine whether the GAC advice 
materially affected or whether they came up with that on their 
own or whether they just would prefer to have the GAC be in a 
vote in the Empowered Community as well as being responsible 
for the resolution in the first place.
    So those discussions are not necessarily the same as the 
safeguards and how the Empowered Community works. In the 
Empowered Community, the GAC has one vote among five. The way 
that the process works, you generally require at least three 
votes, sometimes four, to either block or to approve a decision 
that is being made within the parameters of the Empowered 
Community. So that's true. The GAC will have one vote among 
those.
    But whether that's going to be readily available or 
effectively used by the community is hard to say. The community 
is a very fractious body. It very rarely comes to consensus on 
very many things. The different parts of the organization, 
different parts of the community, have very specific focuses on 
the mandate and the topics that are going to be discussed in 
ICANN. Sometimes they may not have any equities whatsoever and 
may choose not to involve itself whatsoever, even though one 
party may be horribly abused by the Board decision. So that's 
part of that process.
    So my whole proposal here is we need--yes, we're not going 
to be able to have everything tested out----
    Senator Fischer. But you'd make a little more time to see 
how this all tested out.
    Mr. Schafer.--but in 2 years, we'd be able to have the 
community sort of stretch out, examine how the process is going 
to work, familiarize itself with it. And we should have more 
confidence in how it's going to work after that.
    Senator Fischer. I had a couple of other directions I 
wanted to go here, Ambassador Gross. As Mr. Schafer notes in 
his written testimony, today the United States does have the 
exclusive use of dot-mil and dot-gov, the domains, and I'm 
concerned about security risks that could result if this 
exclusive use cannot continue after the transition takes place.
    So what, if anything, does NTIA or ICANN plan to do to 
address this issue? And if it's not addressed in the transition 
plan, how can we assume that these domains are going to be 
accounted for in the future?
    Ambassador Gross. I'm afraid, Senator, I would give you a 
very unsatisfactory answer, which is----
    Senator Fischer. Then make it short.
    Ambassador Gross.--I'm not sure. I'm afraid it has to be 
ICANN and NTIA that will have to answer those questions.
    Senator Fischer. Mr. DelBianco?
    Mr. DelBianco. Thank you, Senator. On the question of dot-
mil and dot-gov, I agree completely. Those entities, the 
Department of Defense and General Services Administration, need 
to have a permanent assurance that those top level domains are 
permanently under the control of the U.S. Government. That 
requires an agreement, a piece of paper, a contract, and if it 
doesn't exist today--and I'm told that it doesn't--then our DOD 
and our GSA should draw it up and ICANN will sign it. Those are 
the property of the U.S. Government, and they should never be 
at risk.
    Senator Fischer. Do we need to have this contract take 
place, signed and sealed, before we move ahead on this?
    Mr. DelBianco. I would suggest to you if the Department of 
Defense feels they need more paper than they have, and if the 
General Services Administration thinks they need more paper 
than they have on gov, then I would completely support their 
desire to force ICANN to sign that up, and I am confident ICANN 
will do so.
    Senator Fischer. Well, it sounds like you and I agree that 
they need more paper, too. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Fischer.
    Senator Ayotte?

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Thank you. Just to follow up on what 
Senator Fischer asked, Mr. DelBianco, is there something that's 
holding that back at the DOD end or any of the government 
agency ends in terms of thinking about the transition time 
coming up here relatively quickly?
    Mr. DelBianco. Senator, I first brought this up over two 
years ago in two hearings on the same day over on the House 
side, and it's shown up in reports from this committee and 
letters that many of you have written. I am told that the 
General Services Administration and the Department of Defense 
are satisfied with the status quo, and yet if they believe they 
need more documentation, I know that ICANN would support it. 
But that's within our government. So I would ask you to direct 
those inquiries to the DOD and GSA, and we'll support whatever 
it is they think they need.
    Senator Ayotte. Well, this sounds to me like an important 
congressional oversight function, given the security functions 
of that site and what we need to do. We'll follow up on that, 
and it seems to me that we don't want to have problems there 
with their exclusive use in terms of the transition.
    Mr. Sullivan, we really appreciate Dyn and how important 
the business is to New Hampshire. I wanted to ask you as you 
think about this transition, are there areas where you think 
that the deadline isn't going to be met, or do you think that 
everything is in line, that these deadlines can be met?
    Mr. Sullivan. I think we can meet them. I fully admit that 
this is rough. I mean, it is--this is a tight time. But at the 
same time, I believe we can do it, because we're not changing 
that much, and we've already worked on this for all this time. 
So we know what we're doing. I believe we can complete it.
    I'll just say one other thing just to follow up on the 
previous item. It's important to remember that those top level 
domains, mil and gov, are actually below the thing that is 
being transferred. So it's the root zone that is moving, not 
the domains underneath, and the DNS is designed, actually, to 
break those things up. So you can actually do those two pieces 
in different tracks, and it's not a problem.
    Senator Ayotte. I think it seems very doable. It's just 
that we need a plan, right, and we need to have it executed and 
we need that clear understanding going into it. Does that make 
sense?
    Mr. Sullivan. Yes. But we have a plan. I mean, we're 
executing it right now. We're having regular meetings. Those of 
us who have to implement these things are busy doing it. In 
fact, from my point of view, the biggest distraction is that 
people keep saying, ``Oh, well, they can go longer.'' No, no. 
You know, when you want to make a change on the Internet, you 
don't sort of hold it on forever. If you do an upgrade to your 
system, you don't let that take 2 years. You do it today, 
because a halfway upgraded system is actually broken.
    Senator Ayotte. My only point on the plan was just--we've 
seen this slow moving train coming, and some of the basic 
things in terms of the dot-gov and dot-mil--it seems like we 
should have that already shored up and resolved and make sure 
there's a clear contract. That's something I hope we'll just 
make sure we get done, and we'll follow up with GSA and DOD on 
that.
    But I did want to ask you: Are the ongoing stress tests 
sufficient to determine the reliability of the proposal's 
policies before we have the all-out transition?
    Mr. Sullivan. You can't do a partial test of this. The key 
piece, of course, is taking out the U.S. Government oversight. 
So if you don't take that out, you haven't tested anything, and 
that's the reason that you can't do a sort of gradual test of 
this thing.
    Senator Ayotte. Or phased in.
    Mr. Sullivan. You can't do it. If you do that, what you 
will do instead is just introduce delays that don't tell you 
what you need to know.
    Senator Ayotte. If you were in our position, and if you 
think about some of the issues that have been raised on the 
other side of this issue, what do you believe that members of 
Congress should be most focused on in reviewing this proposal 
to make sure that we end up where we want to be? I think we all 
share the same goals.
    Mr. Sullivan. I think that a key thing to keep in mind is 
that this is a voluntary system. People do this because they 
chose it, and if you give them a choice and then take away the 
meaning of that choice by saying, ``No, no, we're not going to 
do it the way you said,'' then they might make a different 
choice.
    So the danger here is, in fact, that we could create a 
situation in which people don't want IANA anymore, and they 
want to do it some other way. That's possible. The Internet is 
designed that way. And that is at least as big a threat to the 
Internet as anything else that people could do. So from my 
point of view, it's critical to recognize and to support that 
the community has come together on this, we have consensus, and 
we know how to do this. So let's get it finished.
    Senator Ayotte. Thank you all for being here.
    The Chairman. Thank you, Senator Ayotte.
    Senator Gardner?

                STATEMENT OF HON. CORY GARDNER, 
                   U.S. SENATOR FROM COLORADO

    Senator Gardner. Thank you, Mr. Chairman, and thank you to 
the panel for your testimony today.
    Mr. Beckerman, it's always good to see alumni of the Energy 
and Commerce Committee make it over to the Senate, so it's good 
to see an Energy and Commerce staff do good. So thank you for 
being here today.
    You say in your testimony the NTIA's oversight of IANA 
functions has always hidden the reality that it was the 
Internet community itself that was primarily responsible for 
keeping the Internet working around the world. And on the other 
hand, however, your statement also says that the failure to 
implement a successful IANA transition will serve to undermine 
the multistakeholder model, in turn, creating a risk to the 
economic, social, and cultural engine that we all agree must be 
protected.
    So while we're having this debate, the question I have is: 
How is it that NTIA's current role is minimal or not primarily 
responsible, as your testimony stated, for day to day operation 
of the Internet, yet also could be potentially destructive to 
the existence of the Internet as we know it? So maybe clarify 
the balance between those two. And do you believe the 
transition is largely a response to international perception 
and pressure, or is it something that we just need to do 
naturally?
    Mr. Beckerman. Thank you, Senator. It's good to be here. 
I'd argue that the Internet has been one of the greatest 
engines for economic growth and freedom around the world, and 
that's what our members care about and our users care about and 
what we want to maintain. I think probably all the Senators on 
the Committee agree on that.
    We think the best way to go forward with that and maintain 
that is to move forward with this transition, and we've talked 
a lot about some of the checks and balances that are in place. 
But we feel that if we keep the status quo under NTIA or the 
U.S. Government in some way, it will light the fire again under 
the ITU or other nations to try to change that model, and as a 
result, that would have a dire economic impact, we think, on 
the Internet. So that's why we want to see this go forward.
    Senator Gardner. Some nations' governments have instituted 
countrywide Internet access blackouts, including nations like 
Iraq, the Democratic Republic of the Congo, and perhaps most 
known to everybody here, North Korea as well. In your 
testimony, you talk about some countries that, quote, ``believe 
that something as powerful as the Internet needs to be tamed by 
government or in some cases fragmented so that networks stop at 
national borders.'' You further note that if they have it their 
way, the global and open Internet as we know it will cease to 
exist.
    So do you think that the most recent IANA transition will 
send this--the proposal that we've been talking about today 
sends a strong enough message to bad actors around the globe 
like Russia that the United States will not tolerate 
governments limiting, terminating, or otherwise restricting 
public access to the Internet? If so, why do you think--to the 
people who may believe that you haven't done such a good job, 
how would you argue to them?
    Mr. Beckerman. Thank you, Senator. That's a great question. 
You know, part of the system that we have, as has been noted, 
is that it only operates now under consensus, meaning that 
everybody agrees that this is how it operates. We obviously 
have limited powers, generally, on how countries want to 
operate within their borders. But the best thing that we can do 
is be the example for the world and let the multistakeholder 
community, who has the greatest stake in the future of an open 
Internet, take the reins here and show that out in the global 
community.
    Senator Gardner. Mr. DelBianco, in your testimony, you 
argue that retaining NTIA's unique role increases the risk of 
Internet fragmentation and government overreach. Do you think 
the risk has developed or increased over time? And if you 
believe it has increased over time, what specific events or 
decisions do you think were most responsible for that, and how 
has the role that NTIA has played changed over that time?
    Mr. DelBianco. In the years, Senator, since we transitioned 
ICANN toward privatization and independence, the U.S. Commerce 
Department has taken a very light-touch role. So over time, it 
was diminishing, this notion that the U.S. had a special and 
unique power. And then it came more to a head, in the wake of 
the Snowden revelations, that the U.S. control might have some 
implications there.
    Now, all of us in this room know that the domain name 
system has nothing at all to do with government surveillance. 
But it doesn't matter. Politics are what they are. That led to 
the pressure on moving ahead with the planned privatization, 
the last remaining legacy arrangement that we had, which was 
the oversight of the IANA contract. So now the pressure shows 
up on that.
    We are in a position now to replace the U.S. light-touch 
oversight with heavy oversight by the community. It's an 
excellent bargain for the community of Internet stakeholders. 
And yet if we were to delay this transition--any kind of a 
significant delay, as Ambassador Gross has said many times--
that refocuses the world that, hey, there really must be 
something special about the role that NTIA holds with IANA. In 
fact, it must be so special that it ought to be run by the 
United Nations. We end up creating that entire spectacle again 
and increasing the pressure that we have been in the middle of 
diminishing.
    Senator Gardner. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Gardner.
    Senator Daines?

                STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. Thank you, Mr. Chairman. We've heard today 
that a successful transition means maintaining an Internet free 
from government control, and that an Internet tamed by 
government is bad for Internet users and for the overall global 
economy. This government-involved model that we are trying to 
avoid sounds a bit like the FCC's Net Neutrality Rules.
    Mr. Schafer, are the FCC's Net Neutrality Rules consistent 
with the light-touch oversight regime that everyone seems to 
agree is essential to maintaining freedom on the Internet?
    Mr. Schafer. Thank you, Senator. I'm afraid I'm going to 
have to beg off on that question, because I don't do Net 
Neutrality for the Heritage Foundation. So I don't feel like 
I'm the person to answer that question for us.
    Senator Daines. Do we have somebody who would like to swing 
the bat at that ball?
    Mr. DelBianco. Senator, I'm also not an expert on FCC. But 
when you think about neutrality being the control of traffic, 
we've really got to acknowledge that, as Mr. Beckerman said, 
governments control the conduct and content of what happens 
within their borders, whether it's over the air or on the 
Internet. And when they do that, we have to lead by example and 
claim that it's wrong, that it disadvantages their citizens to 
get lousy information, that their businesses can't reach 
customers out here, and we can't sell things to them.
    But I don't think that the parallel would work here, 
because ICANN can do nothing to influence the content 
censorship that happens within a country's borders. ICANN has 
nothing to do with that, on purpose.
    Senator Daines. Let me pivot over on this issue of small 
business representation. The business community and 
constituency that help advise the ICANN Board is made up of 
companies like Amazon, AT&T, Facebook, Google, Microsoft--great 
companies.
    But, Mr. Gross, what about small businesses? The 
constituency claims to do outreach to small enterprises. But 
are the interests of small businesses truly represented in this 
model?
    Ambassador Gross. I think it actually clearly is, and I can 
give you some examples. Not only are all of us involved in this 
process very sensitive to that, because we all recognize that 
the growth and innovation of the Internet by and large is 
driven by small entrepreneurial organizations and that the 
economic impact on an economy is driven by SMEs, but Mr. 
Sullivan is a good example of what we're talking about.
    Many of the technical people that are very, very deeply 
involved in this process work for small companies, small 
technology companies, and are acutely aware of the impact that 
this has on them.
    Senator Daines. Well, I appreciate that, because I was part 
of a small technology company for a number of years that became 
a large technology company.
    We've also heard about the possibility of Internet 
fragmentation, the governments breaking off, perhaps creating 
their own systems, if this transition were not to go through. 
When I was at Right Now Technologies, we had customers in 
Canada, Australia, Germany, Japan. Our product was available in 
33 different languages. We had 17 offices around the world. So 
I saw that firsthand.
    Mr. Beckerman, could you talk about the implications of a 
fragmented Internet on your member companies that have global 
businesses?
    Mr. Beckerman. Thank you, Senator, and your point is a good 
one. A fragmentation is terrible, probably even worse for the 
small and medium sized business, but for larger companies as 
well. The Internet has grown and has created this great 
innovation and growth of the economy because it is not 
fragmented, because data can flow throughout borders, and it is 
one system.
    So anything that blocks that will be bad for, I think, the 
global economy, generally, particularly as the Internet is 
taking a larger role in creating economic growth. But it would 
be devastating, I believe, for the smaller companies.
    Senator Daines. The issue of the dot-mil and dot-gov 
domains was brought up earlier. We've got exclusive use--and I 
say, we, being the United States' exclusive use of dot-mil and 
dot-gov. It's unclear whether the U.S. will keep exclusive use 
after the transition. Despite years of work on the transition 
proposal, today, we still don't have any clear information on 
how this matter would be addressed.
    Mr. Schafer, could you talk about the security risks 
involved in allowing other governments or the private sector to 
use dot-mil or dot-gov domains?
    Mr. Schafer. Well, absolutely. We've preserved our 
exclusive use of those because we don't want third actors to 
come in there where our military has sensitive information and 
our government has sensitive information. We want to be able to 
preserve our unique and sole use of those domains going forward 
and we want to make sure that doesn't happen.
    The only way to do that is to enter into a sole contract 
with ICANN assuring that the U.S. will have exclusive use of 
that in perpetuity. We have informal arrangements right now. I 
think we should formalize them, and that's the only way to 
resolve that.
    I have some other thoughts on other questions you've asked, 
but I'll reserve----
    Senator Daines. Thank you. That's a good answer to the 
question. I think it's helpful.
    Last, for Mr. Sullivan, we've heard today about how the 
NTIA's current oversight role is bureaucratic and moves at the 
speed of government, not at the speed of the Internet. But the 
transition proposal before us is 210 pages long. ICANN's bylaws 
are 216 pages long, and the ICANN Board is advised by half a 
dozen advisory committees, each with sub-constituencies. With 
all of these accountability layers in place, are we really 
achieving a less bureaucratic process?
    Mr. Sullivan. Yes, we are. Thank you. The reason that there 
is an issue is because there is a wheel in the system right now 
that does no work. The approval of NTIA happens after all of 
the other checks have already taken place. So I have been 
directly involved, not that long ago, in a change to the root 
zone that was a response to a denial of service attack on the 
Internet. This happened to be an attack on the top level domain 
of the country, Turkey.
    That attack--we were able to mitigate it by adding some 
additional name servers to the network. But the problem was we 
had to go through the approval of NTIA. Now, some people 
involved in that thought that NTIA made it slow, and other 
people think that it didn't make it slow. And from my point of 
view, it doesn't matter, because all of the technical work had 
already been done. There was no reason to do this.
    That's the kind of problem that I see with the continued 
involvement of the NTIA. It's just not doing any work. You 
should get rid of features that you don't need in your code. 
They're just bugs waiting to happen.
    Senator Daines. Thank you, and thanks for that thoughtful 
reply today, too, as well. I appreciate it.
    The Chairman. Thank you, Senator Daines.
    Senator McCaskill?

              STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. Mr. Schafer, this is to you or Mr. 
Manning. In 2012, Marco Rubio and I sponsored a resolution that 
said, and I quote, ``The consistent unequivocal policy of the 
United States is to promote a global Internet free from 
government control and preserve and advance the successful 
multistakeholder model that governs the Internet today.'' That 
passed unanimously in both the House and the Senate, which is, 
frankly, astounding that anything would pass unanimously in 
both the House and the Senate.
    So what has changed in the last three and a half years to 
justify forcing the Commerce Department to continue in the 
current role?
    Mr. Manning. First of all, I appreciate the question. 
Sitting here with the various esteemed experts who have been 
talking reminds me a little bit of when I went to Belfast and I 
spent some time in a shipyard there and watched the shipyard 
where the Titanic was launched, and all the experts said it 
would work, and it did until it got halfway through the North 
Atlantic. And we all know what happened.
    But in terms of your direct question, in 2012, the Obama 
Administration also put an RFP out on whether ICANN should 
hold, should continue to be the contractor, the vendor, to 
oversee these functions. So in that exact timeframe that you're 
talking about, the Obama Administration was so frustrated with 
the actions of ICANN and the lack of accountability that they 
actually went to the step of putting out an RFP to try to get 
their attention so they would be accountable. That's one of the 
things that's happened.
    It's proven that when the Federal Government has the 
capacity to say ``Wait a second. You're not doing what you're 
supposed to be doing'' to ICANN, ICANN reacts. When ICANN is 
acting as an independent operator, then they will have no 
accountability to you or to Mr. Rubio or to anyone else who 
sits in this committee room, only to the Executive Branch.
    Senator McCaskill. I get your point. But let me ask the 
panelists who are working on this transition: Wouldn't a two-
year extension just kind of make China and Russia point to our 
delay as a rationale to exert more control and build support 
for moving the governance to the U.N.? I mean, aren't we going 
to create exactly the atmosphere by continuing to delay that is 
going to end up causing much more damage than the frustration 
we have with the accountability of an organization that's not 
directly under government control?
    Mr. DelBianco. Senator, I would agree completely. That is 
the risk that we've identified here today, because we have 
spent a generation explaining that the U.S. has a light-touch 
oversight with an intention to transition and privatize. And 
now at the final hour after the community unanimously supports 
the proposal, we're going to say, ``Never mind.'' Others want 
another bite at the apple. Somebody wants to revise it. That 
will send a signal that, really, I guess the U.S. Government's 
unique role is quite important, that the U.S. has no intention 
of giving it up, and that's a signal that the U.N. should 
resume its efforts to step into the shoes that we stand in 
today.
    Senator McCaskill. So let me ask you this. Let's assume 
that we move forward with the transition. I'm a little worried 
about the accountability of ICANN. I agree with the witnesses 
that have talked about that. Is there a mechanism in the plan 
for third-party audits? Who's going to be a third-party arbiter 
over their finances and other--you know, who's going to make 
sure that there's transparency? Who besides the Board?
    Mr. Schafer. There is not one automatically in place. The 
community can request one. It has been given the power to 
request one.
    Senator McCaskill. Shouldn't there be a requirement that 
there be a third-party audit?
    Mr. DelBianco. There is a financial audit every year by a 
third party.
    Mr. Schafer. I'm talking about a third-party audit of ICANN 
that can be decided by the Empowered Community, and it has been 
empowered to do that. But I agree with you that the 
transparency is important.
    In terms of the multistakeholder model, you asked earlier, 
you know, do we want to just toss it aside. No, I don't think 
so. I've said it before, and I said it in my opening statement, 
and I said it in my written testimony that I'm in favor of the 
transition.
    But I think we need to proceed cautiously because the 
Internet is important. And we have proceeded--Andrew said it's 
the slowest car crash in history, but it has actually been a 
very, very difficult and jam-packed two years to put this 
proposal together. We have worked extreme hours and in 
extremely tight timelines, and we've done extreme edits to the 
bylaws. They are twice the size that they used to be.
    And proceeding now, I think we should make sure that we 
have appropriate time to assess how the process is going to 
work in real time, not these stress tests, which, while I think 
are valuable, are not real world exercises. See how it works in 
the real world, and then we can move on to the transition. I 
think that we should do that. But I think we need to verify and 
vet to make sure that we're not making irreversible decisions 
before moving forward.
    In terms of the government control of the Internet, I agree 
with the resolution that passed unanimously. I think that we 
should move to a multistakeholder model, but I think we also 
need to make sure that we understand exactly what we're 
proposing. And the equities and principles that are established 
by NTIA are not necessarily those that are established by 
Congress.
    The letter by Senator Thune and Senator Rubio in 2014 
contains the phrase that they thought that the IANA transition 
should not provide an opportunity for governments to increase 
their influence. So exactly where is that line about where 
governments should be in ICANN and what should be acceptable in 
this transition to NTIA but also to Congress, and those may not 
be the same thing. Thank you.
    Senator McCaskill. I'm out time. If the Chairman allows you 
to go, Mr. DelBianco--I know you wanted to say something.
    The Chairman. Yes, please go ahead.
    Mr. DelBianco. Thank you. You asked about annual audits of 
accountability. So here's the good news. In June--I'm sorry--in 
February of last year, this committee really quizzed Secretary 
Strickling and ICANN's CEO over whether ICANN would live by the 
Affirmation of Commitments once the IANA contract was over. We 
took good note of that, and stress test 14 specifically looked 
at what happens if ICANN walks away from the Affirmation of 
Commitments, because in that affirmation is the only place 
where we can require ICANN to do annual reports of transparency 
and accountability and every 5 years, a community-led review of 
accountability and transparency, where we have the ability to 
inspect documents that are inside of ICANN.
    So the good news is that we have baked all of those 
commitments on accountability into the bylaws. ICANN cannot 
walk away from them anymore, and that's in specific response to 
a concern that this committee raised last February.
    Senator McCaskill. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator McCaskill.
    Senator Johnson?

                STATEMENT OF HON. RON JOHNSON, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Johnson. Thank you, Mr. Chairman, first of all, for 
holding this hearing. This is really an interesting discussion. 
I appreciate really all the testimony, and this all sounds so 
reasonable. We have all these acronyms for all these different 
organizations. You know, I come from a manufacturing 
background, so I've solved an awful lot of problems. There are 
two well-known sayings that, certainly, are my guiding 
principles. The first one is ``If it ain't broke, don't fix 
it,'' and, secondly, ``All change is not progress, all movement 
is not forward.''
    So I want to first go to Mr. Schafer. You said you're not 
opposed to this transition. Define what's broken. What's 
broken? Why do we need to transition?
    Mr. Schafer. As I mentioned in my opening remarks, the main 
impetus for this transition is political. The system is not 
broken. The process is working smoothly. The actual IANA 
function process is working well. It has facilitated the growth 
of the Internet over the past three decades, and since ICANN 
was established in 1998, that process has worked smoothly and 
well.
    So it's a political dynamic whether it's going to move 
forward or not. I disagree strongly with Mr. DelBianco and Mr. 
Gross that this will send a signal that we don't have faith in 
the multistakeholder community.
    I think that we are just showing prudent caution to make 
sure that what the multistakeholder community is approving 
works well and works the way that they think it's going to work 
before we let go and loosen the U.S. ability to actually back 
up that community and demand that the Board implement changes. 
The Board has resisted things over and over and over again.
    And in terms of the other countries, our decision over this 
transition is not going to affect one iota China, Russia, or 
other countries' decisions on their own domestic policies or 
whether they're going to pursue their own censorship or 
constraints on the Internet in the United Nations, or to try 
and pressure ICANN itself through the GAC or bilaterally or 
other means, whatever they have available. This agenda is 
important to them. They're going to pursue it regardless of our 
decision.
    Senator Johnson. Mr. DelBianco, in answer to one of the 
questions, you basically agreed that this was about politics. 
Pressure has been building because of Edward Snowden. Is this 
really just about politics and pressure? Where has America not 
been a good steward of the Internet? I mean, look at the 
phenomenal progress that's been made under our stewardship. Why 
do we want to give that up? Why would the world community want 
us to give that up?
    Mr. DelBianco. Excellent question, Senator. I would suggest 
that part of what happened with Snowden affected only the 
timing. That created the impetus in 2014 to take a hard look. 
But you said if it ain't broke, don't fix it. But if there's 
something broken in the road ahead, you would definitely pay 
attention.
    And think about it. The IANA contract would end at the end 
of 2018. The U.S. Government at that point would have to 
confront the specter of telling the rest of the world, ``We're 
going to renew the contract. We're going to continue to hold 
the reins.'' So sooner or later, Senator, we would have 
absolutely faced the specter of telling all the other 
governments in the U.N. we're never going to give up control.
    Senator Johnson. I like preventative measures, no doubt 
about it. But, again, let me go back to--can you point to 
something that's actually broken right now, other than the 
political perception that something is amiss?
    Mr. DelBianco. Senator, I will. If we allowed this contract 
to just go on until it expires in 2018, the U.S. would face a 
broken system, because the U.S. would have to stand in front of 
the world and say, ``We really never intended to transition 
ICANN to privatization.'' What we have done here is accelerated 
that timeframe, because the contract itself had a short 
expiration in 2015. We extended it.
    Senator Johnson. And so we're assuming something in the 
future might be broken, but you can't point to anything in the 
past that's broken.
    Mr. Manning, do you want to try to answer this?
    Mr. Manning. Well, you know, anybody who has ever put in an 
operating system into their computer knows you really don't 
want to be a first mover. You want to allow the beta testers to 
figure it out. And it seems to me that what we're doing with 
this accelerated time-frame is we're really putting ourselves 
in a position of beta testing this whole multistakeholder 
system that's been developed. I recognize that with the 
backstop of having government oversight over ICANN--it isn't a 
full and complete test.
    However, I think it's foolish to move forward with a system 
that's being crammed together in short order by a lot of really 
smart people with best intentions and not--with the real 
stewardship responsibilities we have, not make certain that at 
least the blocking and tackling is done right before we turn 
full control over of this system to----
    Senator Johnson. By the way, we have extended this contract 
four times, correct? Did a disaster occur? And, by the way, I 
have seen multiple times something far less complex, things 
like material resource planning systems in companies, just be 
an unmitigated disaster. So that's, again, why I kind of adhere 
to ``All change is not progress, all movement is not forward.''
    Mr. Sullivan, you wanted to chime in on this one?
    Mr. Sullivan. I have been involved in cases where there 
was, in fact, a failure, because this is an additional step. 
There's this additional approval step, and it's unnecessary, 
and what it does is slow down responses, emergency responses on 
the Internet to real operational problems. I do DNS for a 
living, and we see those things slow stuff down. So that's an 
example of something that is broken today because of the need 
of the U.S. Government to be involved.
    The additional thing is that these are voluntary systems. 
They are systems that people choose to use. The community of 
people on the Internet could go away and do something else with 
this. There are systems, for instance, that have been designed 
to avoid the IANA registries, and we could encourage that sort 
of thing even further if we delay on this. So there are 
immediate threats and there are actual practical cases.
    Senator Johnson. OK. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Johnson.
    Senator Rubio?

                STATEMENT OF HON. MARCO RUBIO, 
                   U.S. SENATOR FROM FLORIDA

    Senator Rubio. Thank you. I think we can all begin by an 
agreement that up to this point, this process has worked well 
for the world. The U.S. innovated the Internet, and our 
management of it has led to its enormous explosion. I want to 
say that one of the reasons why the world should be grateful 
that America innovated it is because we have a concept in this 
country of free speech that doesn't exist in many other 
democracies, vibrant democracies in this world where the 
concept of free speech does not exist.
    So that has governed the way in which the Internet has 
developed here and around the world, and for better or for 
worse, there's a lot of free speech on the Internet, as we're 
all aware. So up to this point, it has worked well.
    I understand the argument. I really do. The world has grown 
up, and now they're saying, ``OK, we've now grown up. We've now 
reached capacity, and so we want to have a greater stake 
through non-governmental entities in the future of the 
Internet. America should no longer singularly control it. We 
thank you for innovating it and bringing it forth. We thank you 
for your years of management, but we want a greater stake in 
what is now a global common.''
    I don't dispute that or dismiss it offhand. What I do 
dismiss, however, is this notion that if we somehow don't do it 
on this accelerated timeframe, then the world is going to rebel 
and say, ``Oh, we knew you were lying to us the whole time. You 
never intend to give this up,'' and that somehow this is going 
to give an excuse, for example, to China or Russia to argue to 
the world, ``That's why we need our own Internet regulatory 
framework apart from the United States because this stuff 
doesn't work anymore.''
    And the reason why is because I think irrespective of what 
we do, China is going to move forward. I have here, for 
example, from NTIA, dated May 16, 2016, and it writes, ``In 
March 2016, China's minister of industry and information 
technology issued draft measures that would require all 
Internet domain names in China to be registered through 
government licensed service providers that have established a 
domestic presence in the country and would impose additional 
stringent regulations on the provision of domain services.''
    It goes on to say, ``These regulations would contravene 
policies that have been established already at the global level 
by all Internet stakeholders, including the Chinese.'' So my 
view and my prediction is that I don't care how fast this moves 
or what we do, China is going to try to take over, at least as 
much as they can, the Internet, because it's a threat to their 
government control of their society.
    There's an article somewhere today--I only read the 
headline. I didn't get a chance to read the body of the 
article. But it said that one of the unfortunate things that's 
happened in China is it proves that Internet control works. 
It's one of the first things these regimes try to do, and, of 
course, China will try to use its growing economy as a leverage 
point on the world: If you want to sell to the Chinese people, 
then you're going to have to register domains under our system 
that we've created. So I think that's going to happen anyway.
    I think the point and what I intend to communicate here in 
a letter here that I hope my colleagues will join me on is that 
before any plan can be implemented, we ensure that changes in 
the transition proposal are applied, that they operate as 
envisioned, and that they don't contain unforeseen problems 
that could undermine the multistakeholder model or that 
threaten the openness, security, stability, the resiliency of 
the Internet.
    So I plan to communicate this formally to the 
administration in a letter later today, and I welcome any of my 
colleagues on this committee to join me in making sure that 
we're not the ones who get this wrong, that we're not the ones 
on the wrong side of history, who, because of international 
pressure, because of these arbitrary deadlines, we proceed 
hastily to give up one of the greatest promoters of democracy 
and free commerce in the history of the world, the free and 
open Internet.
    I honestly don't believe that proceeding cautiously on this 
is to our detriment, and I think that's fully understandable, 
given the scope of what we're talking about here. And I would 
say also that while we still control the process and the 
timeline, once we move past a certain point, there is no 
leverage to pull back. If this thing goes off the rails, if, in 
fact, it's used in a nefarious way, what leverage do we have to 
pull back on it?
    Mr. Schafer, I'll ask you: What would be the consequences 
if we didn't do a soft transition? What would be the 
consequences of not doing a soft transition by allowing, for 
example, the NTIA contract to expire in three months?
    Mr. Schafer. We would be pursuing what you just outlined, 
which is a risky course of action. We think we know what this 
proposal is going to do. We think we know how the Empowered 
Community is going to work. We think we know how ICANN is going 
to respond to governments and to the Empowered Community. But 
we do not know that.
    If we go forward with this transition--which the Board has 
promised to implement all of the accountability measures, the 
vast majority of the recommendations in the bylaw changes 
already--regardless of whether the transition proceeds on time 
or not, if we do that, it allows us to vet and actually explore 
this proposal and make sure that it's operating the way we 
think it's going to. I think that is a prudent course of 
action, to proceed cautiously and to go forward on a sort of 
test drive of this new process and make sure that it is 
operating effectively and as we think it's going to.
    Senator Rubio. On the open questions, Mr. DelBianco, I 
would ask--I think you spoke about this earlier. The revised 
bylaws for the ICANN Board that they're currently reviewing 
seem to send a mixed message in terms of future jurisdiction. 
Particularly, the revised bylaws do not include a fundamental 
bylaw that would solidify ICANN's locus as in L.A. County or 
the U.S., generally, which the U.S. Chamber of Commerce and 
others have sought since the transition's announcement in 2014.
    Furthermore, the 2009 Affirmation of Commitments includes a 
provision that ICANN remain headquartered in the U.S., but that 
commitment is not enshrined in the revised bylaws. On the other 
hand, the revised bylaws are rooted in California non-profit 
law and include a provision that the principal office of ICANN 
remain in L.A. County.
    So what assurances do we have that can be provided that 
ICANN will remain headquartered, not just maintain a principal 
office, in the U.S., considering these deficiencies as it 
currently stands?
    Mr. DelBianco. Thank you, Senator. I'm not a lawyer. I'm a 
tech entrepreneur and a businessman. But lawyers tell me that 
the principal office for the transaction of business is the 
term they use for headquarters, and that is in the bylaws. It's 
in Article 18, that the principal office for the transaction of 
business of ICANN shall--not is or may be--but shall be in Los 
Angeles. That's in the bylaws. If ICANN attempted to change 
that bylaw, the community itself could block that change.
    But that's not enough. I said belts and suspenders in my 
opening remarks. The suspenders part is in the Articles of 
Incorporation, where Section 3 says ICANN is organized under 
California non-profit public benefit corporation law. And for 
ICANN to try to change the Articles of Incorporation would 
require a 75 percent support from the Empowered Community.
    So ICANN will have a U.S. presence, a legal presence and a 
headquarters presence, unless the vast majority of the whole 
Internet community decides at some point that they don't want 
it to have that. Now, none of that would interfere with your 
ability to protect American citizens and businesses from 
whatever ICANN would ever do, because jurisdiction flows any 
time that an entity like ICANN is affecting the interests of 
Americans. It really doesn't matter at that point on the U.S. 
jurisdiction.
    Senator, you talk about this notion of an accelerated 
timeline, so I took the liberty of displaying a board, which I 
created about a year and a half ago for hearings in the House, 
to show the timeline on this transition. So it's 2 years long, 
and it has multiple tracks, the accountability part, Andrew 
Sullivan's technology part, and a tremendous role for the U.S. 
Congress and administration as well as civil society. So we've 
had plenty of opportunities to work our way in to this multi-
hundred-page document, but you can't test the document.
    Almost everything we're doing in our new bylaws affects how 
the community reacts when things go wrong, when there's a 
disagreement with ICANN's Board, you see, because every day, 
ICANN will get up and put their pants on and do business the 
same way they always have. We can't test extreme emergency 
measures such as we've built over any period of a few months or 
even a few years.
    So the notion of a delay--I'll close quickly. I'm using 
your time and I'm very sorry about that. But the notion of a 
delay simply sends the signal that the U.S. believes that the 
role we hold is so valuable we're not giving it up, and we've 
reiterated to China, Russia, and the United Nations that they 
want to step into those shoes, and that's the biggest danger of 
a delay.
    Senator Rubio. Yes, and I would just say, look, I can't 
speak for anybody else. Maybe others never want to give it up, 
OK? I'm telling you from my perspective and my engagement on 
this issue, it's not about not giving it up at some point. It 
is about whether we do it the right way, because it's an 
irreversible decision in many, many ways, and it comes in light 
of increased authoritarian measures around the world in places 
like Russia, in places like China, over the Internet.
    I just read to you this statement put out by NTIA that 
shows that we are having this debate in the context of an 
increasingly authoritarian environment when it comes to 
oversight of the Internet, where China has done a successful 
job of building a great firewall, where today, you know, people 
in China do not have, for example, access to images from 
Tiananmen Square. It is filtered out.
    So there are real concerns about the environment that we 
operate in when some of the largest global players are 
authoritarian regimes who have shown the propensity and the 
willingness to exercise control over the Internet and also, by 
the way, in the context of what's happening geopolitically in 
the South China Sea, as an example, where China is a signatory 
to the Law of the Sea Treaty, and yet they are taking over 
illegitimate territorial claims that they're exercising, 
building artificial islands, claiming territory that doesn't 
belong to them, and basically ignoring the mechanisms by which 
all of that is supposed to be regulated. If they do that for 
islands, why would they not do it for the Internet, one of the 
most powerful tools in human history?
    So it's not that I don't want it to happen. I just think it 
has to happen in the right way in the right timing, or we can't 
get it back. We can't reverse those mistakes.
    Mr. DelBianco. Senator, let me add that you're exactly 
right. The actions that these regimes take to block their 
citizens' access is fragmenting the Internet, and it is a bad 
thing. It is exhibit number one for why we don't want to allow 
them to elevate that to a United Nations level control over the 
Internet itself. China is going to censor content of its own 
citizens and businesses, and there's not a thing that ICANN can 
do about that at all. Nothing ICANN can do will ever affect 
that.
    Instead, we need to make sure that ICANN is insulated and 
doesn't present a target for China, Russia, and other nations 
to elevate that censorship through the U.N. into where they now 
can impose that at the top level of the Internet. See, it's one 
thing for them to block the content of a YouTube video in 
Turkey if it offends the sensibilities of a president. But what 
if they could use that to block the entire YouTube.com domain 
from the entire Web.
    Do you see what I'm saying? We can't allow that censorship 
to creep to the core. The best we can do is recognize the 
nations will censor at the edge of the Internet.
    The Chairman. Thank you, Senator Rubio.
    Senator Sullivan and then Senator Klobuchar.

                STATEMENT OF HON. DAN SULLIVAN, 
                    U.S. SENATOR FROM ALASKA

    Senator Sullivan. Thank you, Mr. Chairman.
    Gentlemen, thank you for your testimony. I think, you see 
the bipartisan concern that we have here on this issue. There's 
a backdrop to some of the concern, and that's watching an 
administration for 8 years who has undertaken negotiations with 
some of the adversaries that we're talking about--Iran, the 
Iran nuclear deal, even what's going on in Syria with Russia--
where despite being told that these negotiations are in the 
best interest of the United States, a lot of us think that what 
we've gotten has not been in the best interest of the United 
States and other realms.
    But that is a backdrop here, because there's a sense of 
``here we go again''--an administration that sometimes thinks 
our actions in the international realm have harmed the world's 
interest or doing something we might regret. So let me ask a 
question. What was the reason, again, for the idea for NTIA's 
transfer? And how does this advance America's interests? Two 
very simple questions.
    I'll start with you, Ambassador Gross, just on that 
question. How does this advance the interests of the United 
States?
    Ambassador Gross. Thank you very much, Senator. As you well 
know, because you helped lead the U.S. interests just a few 
years ago during the World Summit, the issue of ensuring the 
independence of ICANN from governmental control is of paramount 
importance, and we have been, for the entire time, successful 
in keeping that from happening.
    Senator Sullivan. So let me just--Mr. DelBianco, you 
insinuated that if we allow the transfer to go forward, the 
actions at the United Nations, the actions at the ITU, will 
somehow lessen by Russia, by China, by--but Mr. Schafer, you 
said that this is only going to whet their appetite. Isn't the 
action ultimately going to be at the ITU and the U.N. with 
regard to what China and Russia are doing to try and continue 
control over the Internet?
    Does anyone on this panel believe that they're not going to 
continue regardless of the transfer to try to get more control 
over the content and governance of the Internet? Does anyone 
believe that that's not going to continue to happen?
    Mr. DelBianco. It will continue, Senator, but we will take 
away their target. The target of nations that want to assert 
control is to step into the shoes that the U.S. has uniquely 
filled since we created ICANN. Because we are the unique, sole 
nation controlling the IANA contract, that becomes the target 
that they want to take.
    Senator Sullivan. But you're not saying that we allow this 
transition to go forward and they're going to be good to go on 
Internet control and control over the content.
    Mr. DelBianco. Within their own borders, we know that 
nothing about this transition is going to affect what China 
does to suppress what its citizens see and what its businesses 
can do.
    Senator Sullivan. But I'm also talking internationally. 
Isn't it a concern to you--that all of you share--that they're 
going to continue--and when I say, they're, I'm talking about 
authoritarian governments who want more control over the 
Internet. Aren't they going to continue with their campaign at 
the United Nations, at the ITU?
    Ambassador Gross, you've done a great job of thwarting that 
in your career at the State Department. But isn't that going to 
continue? Isn't that where the action is, to be honest, if 
we're worried about Internet control in terms of authoritarian 
regimes?
    Ambassador Gross. Indeed. In fact, I would say that that is 
going to be it, and the question here is what impact the 
decisions here on the IANA transition will have there. In 
answer partly to your question about the timing, part of the 
timing has been that in 2012, there was a thing called the 
WCIT, which was a treaty conference at the ITU that many of the 
countries that are authoritarian and otherwise wanted to 
explicitly extend the jurisdiction of the ITU to include 
Internet-related issues. There was a split, and we were--we 
never signed that treaty, thank God. But we were also on the 
minority there.
    Senator Sullivan. And is that one--does every nation who is 
a member of the ITU get an equal vote?
    Ambassador Gross. Correct.
    Senator Sullivan. So we are----
    Ambassador Gross. We are one of 183, I think is that 
number.
    Senator Sullivan. Well, that's a challenge.
    Ambassador Gross. Indeed. So here, the key is do we want to 
give ammunition to those who seek to extend the ITU's role in 
this space by saying that governments ought to decide after all 
the work that's been done by the multistakeholder community 
with regard to the IANA transition? Do we want to give them a 
talking point for which we will have a hard time rebutting----
    Senator Sullivan. Well, let me just interrupt you.
    Mr. Schafer, you seem to think the opposite. You thought 
that this would whet the appetite for more action in these 
international fora like the U.N. and ITU. And if that's the 
case, or if all of you believe that these authoritarian regimes 
are going to continue their activities in those international 
fora for more control over the Internet, what should we be 
doing in the Congress once this issue is either behind us or 
delayed? And I think it's a healthy debate to have, but what 
should we be doing as a Congress to give our negotiators, our 
administration, our allies more authority to thwart the 
attempts at Internet control in these international fora, 
which, to me, seems like where the real action is.
    Mr. Schafer?
    Mr. Schafer. Senator, I agree. I think that what's going on 
with the ICANN transition, whether the U.S. allows the 
transition to proceed or whether it doesn't proceed, is not 
going to change the motives. It's not going to change the 
efforts of countries that want to go to the ITU and use it to 
sort of intrude over Internet governance internationally. 
They're going to try to do that anyway, regardless of what 
happens with this transition. Therefore, I kind of regard it as 
a separate matter. I'm more interested in making sure that this 
ICANN transition process, if we're going to proceed down this 
path, is actually well done and is exactly what we're 
envisioning.
    And then we need to battle on this other front, because 
whatever they're trying to do or will intend to do in the ITU 
is not going to be affected by the U.S. continuation of its 
oversight role or the transition being implemented. That is a 
battle that is going to have to be fought there. The decision 
to proceed on the transition and announce it was a short-term 
political effort by this administration to blunt that effort. 
It's not a solution to that problem. We're going to have to 
continue to do that.
    And, therefore, I think that those who think that we're 
going to announce the ICANN transition, and this is somehow 
going to magically appease the governments that want to have a 
greater say over the Internet governance--it's just 
wrongheaded. It's not going to resolve that problem. I think 
you put your finger on a very big issue, and we need to see 
them separately, but we should not delude ourselves and fool 
ourselves into thinking that this transition is somehow going 
to resolve that other problem.
    Senator Sullivan. Well, Mr. Chairman, just a final comment. 
If any of the panelists have suggestions for the record that 
they would like to submit to give us more ammo--and I say, us, 
our negotiators at the U.N. and the ITU--to prevent that kind 
of takeover and how the Senate can help in that regard--because 
that is going to be a continuing battle. We would welcome those 
suggestions as part of this hearing. Thank you.
    The Chairman. Thank you, Senator Sullivan.
    Senator Blumenthal has returned. He's up next, and then 
Senator Klobuchar.

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thanks, Mr. Chairman, and thank you all 
for being here on a very important, complex, and sometimes 
confusing topic.
    Last year, as you know, the FCC established the Open 
Internet Order to protect and promote the open Internet in the 
United States. The global Internet should similarly be free and 
open, and to that end, the United States has a responsibility 
to lead by example. That's the most effective leadership there 
is. That is to remove any perception, real or imaginary, that 
the U.S. Government is somehow controlling the Internet.
    Now that the multistakeholder community has approved an 
IANA transition plan for approval, I think it's important that 
the U.S. Government avoid any actions that may send the wrong 
message to the international community regarding its support of 
an open Internet. There may be certain risks associated with 
any delay of the IANA transition or calling for a vote in 
Congress on that transition.
    So my question to you, Mr. Sullivan, is: what role does the 
Internet have in promoting free speech and human rights? And 
how do we best secure and open an free Internet, not only at 
home, but around the world?
    Mr. Sullivan. Thank you, Senator. First, I should say I am 
not a politician or a human rights lawyer or anything like 
that. I make bits flow on the wires. From that point of view, 
my view is that the Internet encourages the expansion of those 
rights by its nature because it is voluntary, because it is 
designed to work only if you and I want to exchange things, we 
exchange them between us.
    So the whole design of the system encourages that kind of 
operation because it's not possible to go and talk to, you 
know, the person who is in charge of this. Instead, you have to 
encourage people to interact of themselves. So from my point of 
view, that is actually what encourages the rights development, 
both domestically and internationally.
    Senator Blumenthal. If Congress were to call for a vote on 
the IANA transition, what message would it send to foreign 
governments, do you think?
    Mr. Sullivan. Well, I think it would send to foreign 
governments the suggestion that the United States doesn't 
really believe that the community is ready to do this. But I 
don't think it's just foreign governments that I'm worried 
about. I'm worried about this message being sent to the 
operators of all of the networks all over the world.
    The United States said it was going to get out of this, and 
it told people to come up with a plan, and we did come up with 
a plan. We've worked on it for all this time. We've worked on 
it for many years. We've been ready to do this for a long time, 
and it's working.
    So if what happens now is somebody comes along and says, 
``Well, we didn't really mean it,'' then everybody is going to 
look at that and say, ``Well, why should I participate in this 
voluntary association when the people who are involved don't 
hold up their end of the bargain?'' I'm really worried about 
that. I think that would be destabilizing. It would be bad for 
the Internet. It would be bad for all the businesses that 
depend on it. But it's a real risk because that's the way the 
Internet is designed.
    Senator Blumenthal. And bad for human rights?
    Mr. Sullivan. For sure. I mean, if you undermine the 
Internet, and you undermine the functioning of it, and you 
undermine the way that it works, and you undermine the trust 
between people, then the Internet will function less well. It 
will take time for people to come up with these alternatives, 
and they'll be competing alternatives, and we will see various 
kinds of fragmentation.
    I think it'll come back together because the interests are 
always in--you know, on the end of the network for me to 
exchange with other people. That's what I want to do. So it's 
natural that it will gradually converge. But we have a system 
that's working now. We don't need to undertake all of that 
work.
    Senator Blumenthal. Does anyone on the panel disagree with 
that point?
    [No verbal response.]
    Senator Blumenthal. Let me ask you, Mr. Beckerman, if I 
may, if we fail to move forward with transitioning stewardship 
and transitioning over key Internet domain functions within a 
reasonable timeframe, what's the risk that we lose our chance 
to preserve the multistakeholder model, of Internet governance, 
that the ITU and other intergovernmental organizations may 
wrest control, take control?
    Mr. Beckerman. Thank you, Senator, and I appreciate the 
comments you make about the role that the United States has to 
play in a leadership role with the Internet and the role the 
Internet has played for democracy and free speech and human 
rights around the world. It's incredibly important, and that's 
why there is a lot at stake in this transition.
    I think if the United States sends the wrong signal going 
through this process, there will be ramifications for 
multistakeholder processes well beyond this. And, certainly, as 
we've talked about this morning, it does light a fire under the 
ITU and others to take the reins, and the only thing that's 
really holding this particular system together at the moment is 
the consensus. And if there's not faith that the United States 
is negotiating in good faith and that we're putting our trust 
in the multistakeholder community in this process, I think the 
results could be unfortunate.
    Senator Blumenthal. Thank you.
    Thanks, Mr. Chairman.
    The Chairman. Thank you, Senator Blumenthal.
    Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Mr. Chairman. 
Senator Schatz was going to put these on the record, and he 
asked me to do it. First is an open letter supporting the 
transition from 17 Internet companies and trade associations, 
including the Internet Association and U.S. Chamber of 
Commerce. And the second is a letter from a group of seven 
civil society and public interest groups supporting the 
transition.
    The Chairman. Without objection.
    Senator Klobuchar. Thank you.
    [The information referred to follows:]

    
    
                                 ______
                                 
                                                       May 23, 2016
         Civil Society Statement of Support for IANA Transition
Introduction
    We the undersigned U.S. and international civil society and public 
interest groups support and encourage the timely transition of the 
Internet Assigned Numbers Authority (IANA) functions to the 
multistakeholder community, as outlined in the Internet community's 
proposal submitted to National Telecommunications and Information 
Administration (NTIA) on March 10, 2016.
    Civil society has been involved in and following the IANA 
transition since NTIA's announcement in March 2014 in which the agency 
communicated the intention to ``transition key Internet domain name 
functions to the global multistakeholder community.'' Members of our 
community have been involved in both the Working Group (WG) on 
stewardship transition and the WG on enhancing ICANN accountability. 
Representatives from civil society have participated throughout, 
contributing substantively on a range of issues from the structuring of 
the posttransition IANA; to working to ensuring the continued 
stability, continuity, and resiliency of the DNS; to bringing about a 
commitment that ICANN will recognize and meet its human rights 
obligations going forward.
    When the Internet community came together in Marrakech in March 
2016 to endorse and forward the IANA transition package to NTIA, there 
was consensus that the product of two years of challenging hard work 
was robust and credible and met the key NTIA criteria. The undersigned 
civil society and public interest groups believe that the IANA 
transition is a positive development for the Domain Name System and for 
the Internet at large, and that the process to develop the transition 
proposal has been a successful expression of multistakeholder 
approaches to Internet decisionmaking.
The transition is important
    The Internet has been instrumental in promoting civil liberties and 
universal human rights, a goal shared by the United States government. 
As a global platform for the free flow of information, the Internet has 
facilitated unprecedented expansion of free expression and freedom of 
assembly & association. Simply put, the Internet has become an 
indispensable vehicle for the exercise of human rights around the 
world. The continued functionality of the open, interoperable, global 
Internet is a top priority shared by our organizations because it is 
essential to protection of human rights in the 21st century. Our 
organizations depend upon the stable and secure operation of the 
Internet to do our work every day, as do the human rights defenders, 
journalists, and other civil society groups we work with around the 
world.
    Many of the undersigned organizations have worked with ICANN's 
staff and community on the structure of the transition and are 
committed to continue holding ICANN accountable to its human rights 
obligations after the transition. We believe that the multistakeholder 
model and governance structure of ICANN is the best way to empower 
global civil society along with the technical and business communities 
who have an interest in the free and open global Internet. We believe 
that supporting the participation in ICANN of a diverse international 
multistakeholder community that shares a common interest in openness 
and innovation is the most robust long term strategy for preventing any 
governments or other multilateral entities they may commandeer from 
steering the DNS in a direction that would be much less supportive of a 
free and open global Internet. Further, we see this proposal as an 
effective path to continue stable and resilient DNS administration that 
supports the interests of public and private stakeholders across 
societies and industries.
    For those reasons, we strongly support the plan to transition 
oversight of the IANA functions to the global multistakeholder 
community. The IANA functions, which include management of Internet 
number resources and the DNS, help keep the Internet global, scalable 
and interoperable. We believe that executing upon the IANA transition 
is the best way to ensure the continued functionality of the global 
Internet and to protect the free flow of information so essential to 
human rights protection.
Delaying or blocking the transition is not in the interest of 
        stakeholders
    The transition of these functions away from the U.S. Government 
removes an excuse for authoritarian countries to demand greater 
oversight and regulation of Internet issues. Any delay in the transfer 
of these management functions to the global multistakeholder community 
could have the effect of undermining the openness and interoperability 
that has characterized the Internet to date. This is because the open, 
interoperable, global Internet did not arise out of agreements between 
governments, but rather through communityled innovative approaches by a 
diversity of stakeholders. In many ways, this transition is returning 
the Internet and DNS to the open multistakeholder governance model that 
characterized and fostered its first few decades of growth.
    Failure to move ahead with the IANA transition will empower those 
who advocate for governments alone to manage or regulate the Internet, 
without equal involvement of the private sector or civil society. Delay 
will encourage those who favor a governmental, intergovernmental, or 
solely multilateral model of Internet governance, whether implemented 
through the United Nations' International Telecommunication Union (ITU) 
or some other government-dominated, non-multistakeholder body.
    Yet, the importance of the transition to realizing human rights and 
the empowerment of Internet users around the globe does not seem to be 
shared by all. We read with concern the mischaracterizations of the 
IANA transition plan's proposed human rights commitment for ICANN in 
the May 19 letter from Senators Cruz, Lankford, and Lee to U.S. 
Department of Commerce Secretary Pritzker and Assistant Secretary for 
Communications and Information Strickling. While we share the Senators' 
stated desire to protect Internet freedom, we note that their proposed 
solution of delaying the IANA transition will unintentionally have 
exactly the effect they hope to avoid: Delay would incur risk of 
increasing the role for foreign governments over the Internet and 
undermine free speech. The suggestion in the letter that the commitment 
that is sought of ICANN to respect its human rights obligations ``would 
open the door to the regulation of content'' is frankly puzzling and 
clearly incompatible with the further defined and limited ICANN mission 
in the transition plan.
    The consequence of failure to move ahead with this transition will 
be to reinforce the power and influence of those who would prefer a 
less open, less innovative, less global Internet platform. We believe 
this could have significant implications for human rights worldwide, as 
well as undermine U.S. interests and values. We strongly believe that 
the best way forward is to support a strong and accountable 
multistakeholder system that enables civil society groups, business, 
and technical community members from all over the world to participate 
in ICANN independently of their governments.
Conclusion
    It is the view of the undersigned civil society organizations that 
the IANA transition will confirm the legitimacy of multistakeholder 
approaches to Internet policy and governance, will result in a stronger 
and more empowered community within ICANN and ensure that the Internet 
community and not ICANN or one government is responsible and 
accountable for the stability, security and resiliency of the Internet 
going forward. This multistakeholder transition both protects the 
Internet and best serves stakeholder interests. Blocking or delaying 
the transition would strengthen the hand of those who do not believe in 
or support an open Internet and would encourage further government 
intervention and control.
            Signed,
                                                             Access Now
                                                              Article19
                                      Centre for Democracy & Technology
                                                     Human Rights Watch
                                              Open Technology Institute
                                                       Public Knowledge
                             Ranking Digital Rights (Rebecca MacKinnon)

    Senator Klobuchar. Ambassador Gross, at our last hearing on 
this topic, I asked you about the accountability working group, 
and you testified that accountability is incredibly important. 
What aspects of the accountability proposal give you and the 
companies you represent confidence that ICANN will remain 
accountable after the transition?
    Ambassador Gross. Thank you very much, and I appreciate 
your remembering our discussion about this a year or so ago.
    There was tremendous focus on that very issue over the past 
year or so, and thanks to the hard work by many people, some of 
whom are at this table, not including myself, the processes 
that have been often referred to as being very complex and 
lengthy are designed to ensure exactly what you're talking 
about, to make sure that all the voices are heard and that the 
organization is truly accountable in a proactive fashion.
    I would note that there's new leadership at ICANN. In fact, 
I think yesterday there was a new CEO who just began, someone 
who I know and respect and I think will bring tremendous fresh 
insights into the way in which ICANN will be operating. So I 
feel very confident that the processes will, in fact, ensure 
that ICANN is accountable, not just to individual parts of the 
Internet community, but to the entire Internet community.
    Senator Klobuchar. Very good.
    Mr. DelBianco, at our last hearing on the IANA transition, 
I asked Fadi Chehade, who is the former CEO of ICANN, about the 
process for stress testing in advance of the transition. He 
testified that many of the tests were developed based on the 
criteria already set out for transition, and I understand you 
led the working group that applied the stress tests to the 
accountability proposal. Do you want to comment on that and 
whether the proposal satisfies the criteria?
    Mr. DelBianco. Thank you, Senator Klobuchar. A few of the 
stress tests were suggested by the hearing that you held last 
February, such as the accountability agreements that were in 
place or whether ICANN would change its principal place of 
business to avoid a U.S. jurisdiction. Those are just two of 
the 37 stress tests that we eventually analyzed.
    The community working group examined today's ICANN versus 
the proposed ICANN and concluded that without a doubt the new 
accountability mechanisms gave us the ability to hold that 
organization accountable far better than the current system we 
have today.
    Senator Klobuchar. Thank you.
    Mr. Sullivan, Senator Ayotte and I worked closely with 
ICANN to address concerns about the expansion of top level 
domain names in the system that goes back years. At our last 
hearing on the IANA transition, we heard about how ICANN was 
able to address potential risks to consumers, businesses, and 
law enforcement during the expansion. In your testimony, you 
emphasized that the new accountability procedures are built on 
ICANN's existing structures.
    Do you think the experience of implementing the top level 
domain expansion will help ICANN address new policy challenges 
that emerge after the transition? Just comment generally about 
this top level domain name issue.
    Mr. Sullivan. Thank you. First of all, I think that it has 
been helpful. But there's a second piece of this transition 
that I want to emphasize in this context, and that is, 
historically, there has been a little bit of confusion about 
ICANN's role here, because it did two things. It did the IANA 
registry, which is the simple operation of just writing the 
things down and publishing them on the Internet, and it did the 
policy functions about the domain names at the top level.
    What this transition does is it makes really crystal clear 
that these are different functions and they're in separate 
places and it puts them separately. So it ceases the confusion 
that I sometimes notice. It's as though people have confused, 
you know, the Department of Motor Vehicles, where you register 
your car, and this committee.
    You know, there are the policy questions, and they're 
important. And then there is the simple writing things down, 
and this transition actually makes that much clearer. So it 
protects this technical function from all of those policy 
discussions, which are important and they need to go on, and 
they will need to go on in the future. But you keep these 
things separate, and that makes for a much safer system 
overall.
    Senator Klobuchar. OK. Does anyone else want to comment on 
that, the domain names?
    [No verbal response.]
    Senator Klobuchar. All right. Thank you very much.
    The Chairman. Thank you, Senator Klobuchar.
    Senator Markey?

               STATEMENT OF HON. EDWARD MARKEY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Markey. Thank you, Mr. Chairman, very much.
    Good to see you again, Mr. Beckerman. I remember you well 
from being the Republican counsel on the Energy and Commerce 
Committee for all of these issues.
    You know, it's, to me, the most important innovative 
technology of our lifetimes. And when a kid from Holliston, 
Massachusetts, can come up with an idea like Instagram and then 
sell it to a dropout from Harvard for a billion dollars, you 
know there's a good thing going here on the Internet, and we 
don't want to jeopardize it. We want to protect it.
    There are so many telecommunications giants, combined with 
the Chamber of Commerce, combined with human rights 
organizations that have supported the domain name transition. 
From your perspective, Mr. Beckerman, how will the transition 
benefit American businesses?
    Mr. Beckerman. Thank you, Senator. It's good to see you as 
well. I think part of the reason why this transition is 
important and is an improvement over the status quo is that, 
directly to your point, it's giving the interests that have the 
most at stake, businesses large and small, medium sized 
businesses, technologists, civil society, and even Internet 
users, the stake that they need to make sure that the system 
continues and that we can have future Instagrams and future 
Facebooks and everything else around the world and not have 
other interests take over and block the innovation that you've 
seen so closely there in Massachusetts.
    Senator Markey. Thank you.
    Mr. DelBianco, how does it help the business community?
    Mr. DelBianco. Two ways. The business community under the 
new bylaws can participate in challenging Board decisions 
against a tightly constrained set of bylaws. We've never had 
the ability to do a community-based challenge that we could 
enforce in the courts.
    Second is that it's not so much about sending a message or 
appeasement or sending a signal as much as it is about removing 
the target. By the U.S. obliterating the role of one government 
holding the IANA contract, that ceases to become the thing that 
the U.N. covets to take over.
    Senator Markey. Ambassador Gross, we know that an 
alternative to the multistakeholder model are plans proposed by 
a number of countries, including China and Russia, who are 
suggesting measures that strike at the core of what makes the 
Internet great. Can you provide us with some specific examples 
of what Russia and China are proposing as an alternative to the 
structure that we're discussing today?
    Ambassador Gross. Yes. Thank you very much, Senator. Those 
countries--and I would say with Russia in the lead here on this 
particular issue--would seek to enhance the role of the U.N. 
and, in particular, the ITU to be the primary place for the 
discussion and resolution of Internet-related issues and to 
regulate aspects of the Internet.
    I would note that right after--as I mentioned earlier, 
right after the Marrakech meeting of ICANN, when all of this 
came together, not more than a month later, the foreign 
ministers of Russia, China, and India met in Moscow and issued 
a communique, and they said explicitly that the need to 
internationalize Internet governance and to enhance in this 
regard the role of the International Telecommunications Union. 
Based on my experience, I believe foreign ministers when they 
tell me that they're going to do something I don't like.
    Senator Markey. And why would that not be as good, putting 
it at the ITU as opposed to under the framework which we're 
discussing today?
    Ambassador Gross. There are many reasons, but at the core, 
it is that the ITU, which is an incredibly important 
organization for the United States and for the world, is a 
multilateral organization, not a multistakeholder organization. 
It does not give the same rights to the technical community, to 
civil society, to private sector, and to others. So it would be 
a one-size-fits-all type of organization that would not allow 
for diverse voices and the innovation that has been the 
hallmark of the Internet.
    Senator Markey. So since Tim Berners-Lee invented the World 
Wide Web in Bern, Switzerland, and now operates the World Wide 
Web Consortium out of MIT to have this international governance 
openness architecture model, there has been kind of a multi-
constituency way in which the Internet has been governed, 
operated. So that's a very important set of principles that I 
think we want to understand.
    And if it moves over to the International 
Telecommunications Union, it moves over to a different model 
altogether that ultimately could be much more dangerous and put 
much more control in the hands of foreign ministers and defense 
ministers in terms of the decisionmaking rather than this 
broad-based Internet constituency that has developed over the 
last 25 years across the planet.
    So we thank you, Ambassador Gross, and we thank all of you 
for being here today.
    The Chairman. Thank you, Senator Markey.
    I just want to raise one last point. And, by the way, this 
has been a great discussion. Thank you all very much for all 
the different perspectives that you've shared, and you've 
answered a lot of questions for members of this committee and 
our staffs that hopefully will shed further light on the 
discussion of this very important subject moving forward.
    But I want to direct a question to Mr. Sullivan, because it 
has been raised a number of times here today, and that's the 
concern about the Internet being captured by foreign 
governments or other bad actors if U.S. oversight of IANA is 
relinquished. So speaking from your perspective as an Internet 
engineer, could you please describe to the Committee how 
authoritarian countries like Iran or Russia or China could use 
a captured ICANN to disrupt the Web outside of their own 
borders, including inside the United States?
    Mr. Sullivan. Thank you, Mr. Chairman. The answer is they 
can't. The whole system is designed to prevent that kind of 
thing. Countries can do things inside their own borders, but 
they cannot subvert the Internet's design in order to cause 
other people to do things. That's the way a voluntary 
Internetwork of multiple other networks works. On my networks, 
I make my rules. If somebody else wants to make rules for my 
network, they can't because I run it.
    That's the key strength here, and that's the reason that we 
need to get the governments out of this business, because it 
sends this message that it could be controlled. It can't be. 
It's designed not to be. They can't take it over.
    The Chairman. What's the technical DNS mechanism at ICANN 
that these countries would use to censor the Internet in other 
countries?
    Mr. Sullivan. So the only thing that ICANN controls is the 
root zone, the very top of the DNS. So each name in the DNS has 
these dots in it. You're familiar with the dots. And each dot 
is actually a point where somebody else can take over the 
operation of the name. So, for instance, in the case of a 
domain name that I happen to run, anvilwalrusden.com, the root 
delegates dot-com to a company called Verisign. They operate on 
the dot-com registry, and then I operate the anvilwalrusden.com 
domain.
    So the only thing that you can get control over in this 
case is the root zone, if you could get control over it, and 
that would--I mean, in the wildest fantasy, somebody could take 
this over and they could de-delegate, say, dot-com from the 
root, and that would prevent everything underneath dot-com from 
working. But they cannot prevent a single domain name from 
working by controlling the root, because they can only control 
the delegation to the next level down.
    This is a key strength of the way the DNS is designed. It's 
a fundamental thing about it, that it's a distributed 
operation, and that means that you don't have any control in 
any one place. This basic fact of the way all of the pieces on 
the Internet are designed is this distributed operation, and 
distributed operation makes it more resilient and resistant to 
control.
    The Chairman. So what you're saying is that there isn't any 
way in which China could use ICANN to censor the Internet in 
the United States?
    Mr. Sullivan. Exactly correct.
    The Chairman. Well, I think that's an important point, 
because, obviously, it has come up a lot.
    Well, look, again, I want to thank you all for your 
participation and for all your good work in this area. This is 
an issue that we'll be giving a good amount of attention to 
over the course of the next several months for obvious reasons.
    So I would just say that we'll keep the hearing record open 
for 2 weeks, during which time Senators are asked to submit any 
questions for the record. Upon receipt, we would ask the 
witnesses to submit their written answers to the Committee as 
soon as possible.
    Thank you all very much. This hearing is adjourned.
    [Whereupon, at 12:10 p.m., the hearing was adjourned.]

                            A P P E N D I X

   Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida
    Nearly two decades ago, the U.S. Federal Government began to take 
the steps necessary to transfer control of the technical and 
operational aspects of the Internet to the broader international 
Internet community. The government recognized that although the 
foundations of the Internet may have been laid in the United States, 
the Internet itself was a global institution.
    Today, the Committee will hear from stakeholders about the plan 
developed by the global Internet community to complete the work of 
privatizing the technical elements of the Internet begun in 1998. I 
want to commend the work done by hundreds of representatives from 
business, government, and civil society to develop a transition plan 
for the IANA functions.
    This proposal is a concrete demonstration that the multistakeholder 
model of international Internet governance works. And it reminds all of 
us in Congress about how important it is that we remain committed to 
this model and its ability to help maintain a free and open Internet.
    The plan that has been presented to the U.S. Government is the 
product of months of hard work, and represents a good faith attempt to 
develop a proposal that meets the requirements for the transition set 
forth by NTIA. I am pleased that we are here today conducting our own 
oversight of this transition and of the plan.
    The broad Internet stakeholder community strongly supports the 
transition plan and believes that it meets NTIA's requirements, 
including ensuring that the functions, and ICANN itself, cannot be 
captured by another government or intergovernmental body. I trust that 
NTIA will conduct a thorough review of the proposal to affirm that it 
meets all of its requirements. And I know NTIA will monitor the work of 
ICANN in the coming months to make necessary changes to its bylaws and 
implement other reforms essential to a successful IANA transition.
    The transition is widely supported by the U.S. business and tech 
community, who believe that completing the transition is an essential 
diplomatic tool to bolster U.S. international technology and 
communications policies. Congress itself has spoken in the past with a 
single voice about the need to prevent fracturing of the Internet and 
the importance of bolstering the multistakeholder model of 
international Internet governance. In fact, NTIA and the State 
Department just filed formal comments in China the other day affirming 
our national commitment to the decentralized model of international 
Internet governance and opposing China's proposed attempt to thwart 
that model.
    I know that some continue to believe that the IANA transition 
should not happen, or prefer to put new hurdles in the way of the 
transition as a way to maintain the status quo. The time for delaying 
this transition is over.
                                 ______
                                 
    Prepared Statement of Chris Calabrese, Vice President, Policy, 
                   Center for Democracy & Technology
    Chairman Thune, Ranking Member Nelson, and members of the 
Committee:

    Thank you for the opportunity to submit these comments on behalf of 
the Center for Democracy & Technology (CDT). CDT is a nonpartisan, 
nonprofit technology policy advocacy organization dedicated to 
protecting civil liberties and human rights on the Internet and around 
the world. We have been fully involved in the Internet Assigned Numbers 
Authority (IANA) functions transition since it was announced by the 
National Telecommunications and Information Administration (NTIA) in 
March 2014. We have participated in both the Working Group on IANA 
stewardship as well as the Working Group on enhancing the Internet 
Corporation for Assigned Names and Numbers' (ICANN) accountability. Now 
that the IANA transition plan has been forwarded to NTIA for inter-
agency review, CDT and others are reviewing the draft ICANN bylaws and 
participating in the implementation planning for the post-transition 
IANA. We are committed to ensuring that the transition fully reflects 
the intent of the multistakeholder community's transition and 
accountability proposals.
    Replacing the oversight role of the NTIA is not a simple matter, 
nor is changing the governance structure of an organization, let alone 
one as unique as ICANN. Yet the global multistakeholder community rose 
to the challenge and over two years crafted a robust and credible 
transition plan. The work was considerable: the IANA transition was 
organized, planned, discussed and debated in more than 1,100 events 
around the world, with stakeholders spending more than 800 hours in 
meetings and exchanging more than 33,000 messages on mailing lists. 
This community effort shared common goals: the continued stability, 
security, and resiliency of the Domain Name System (DNS), an IANA 
function that continues to operate in a neutral and transparent manner, 
and an ICANN that is fully accountable to its global, multistakeholder 
community.
    Throughout the work on the transition we have been acutely aware of 
the need to satisfy NTIA's requirements that the proposal: (1) support 
and enhance the multistakeholder model; (2) maintain the security, 
stability, and resiliency of the Internet DNS; (3) meet the needs and 
expectation of the global customers and partners of the IANA services; 
and (4) maintain the openness of the internet. NTIA further stated that 
it would not accept a proposal that replaces the NTIA role with a 
government-led or an inter-governmental organization solution. CDT 
believes that the IANA transition plan that was forwarded by the 
multistakeholder community to NTIA at the March 2016 ICANN meeting in 
Marrakech accounts for and satisfies these requirements.
    The IANA transition plan places the responsibility for the Domain 
Name System firmly with ICANN's multistakeholder community. This 
community has been successfully developing policies for the DNS through 
multistakeholder processes since 1998. It comprises professionals from 
across the main stakeholder groupings of ICANN--businesses, registries 
and registrars, the technical community, entrepreneurs, academia, civil 
society, and users--all of whom are committed to the stability, 
security, and resiliency of the internet. Transitioning the U.S. 
Government's administrative role and stewardship to this community is 
not a step into the unknown; it is a transition to a highly competent 
and experienced community that has managed the DNS to date and will 
safeguard it into the future.
    Nor is this transition imperilling the Internet or making it more 
susceptible to government capture; safeguarding against this potential 
was another key criteria for NTIA and for the community that developed 
these proposals. To date, the United States Government's role has been 
effectively hands-off, entrusting the management of the Internet to 
this community since the creation of ICANN. As NTIA noted in its press 
release announcing its intent to transition oversight of the IANA 
functions in March 2014, the U.S. Government has ``envisioned that the 
U.S. role in the IANA functions would be temporary. The Commerce 
Department's June 10, 1998, Statement of Policy stated that the U.S. 
Government ``is committed to a transition that will allow the private 
sector to take leadership for DNS management.''
    The U.S. Government's current role is two-fold: the first is a 
clerical function to ensure that any changes to the root zone file have 
followed the appropriate procedures; the second is a stewardship role 
that is largely related to the award of the contract to ICANN for the 
provision of the IANA services in other words, if ICANN had not 
fulfilled its contractual obligations at some point, NTIA could have 
awarded the IANA functions contract to another entity). While the U.S. 
Government will be stepping back, its role will not be assumed by other 
governments but by the community that has managed the DNS all along. 
This community has delivered a transition plan that empowers the whole 
of the multistakeholder community, which was the goal of the U.S. 
Government when setting up ICANN and a key NTIA criterion for the 
transition proposal to be successful. The transition does not empower 
governments alone--and certainly not individual governments.
    When the community and the ICANN Board endorsed the IANA transition 
plan in Marrakech, it was clear that this significant achievement could 
not have happened without the input of the broad cross-section of the 
global multistakeholder community and the range of business, technical, 
legal, and policy know-how and expertise that this input brings. The 
IANA transition plan has been a proving ground for multistakeholder 
approaches to Internet governance. This two-year process has delivered 
two proposals that are possibly the most successful expression of 
multistakeholder approaches to Internet governance yet. And the two 
Working Groups have demonstrated the efficacy of processes that are 
open, transparent, and inclusive--characteristics that are essential to 
ensuring that the openness of the Internet is maintained.
    The transition plan both supports and enhances the multistakeholder 
model; it also meets the needs and expectations of the global customers 
and partners of the IANA services. The accountability measures that 
have been put in place reinforce the role of the multistakeholder 
community in ICANN and place important checks on the organization's 
mission. The new, limited powers provided to the community ensure that 
the community as a whole--and no one stakeholder group--remains firmly 
in control when it comes to ICANN's governance.
    These new community powers include, among others, the powers to: 
(1) reject ICANN Budgets, IANA Budgets, or Strategic/Operating Plans; 
(2) reject changes to ICANN's Standard Bylaws; (3) approve changes to 
new Fundamental Bylaws and Articles of Incorporation; (4) remove an 
individual ICANN Board Director; (5) recall the entire ICANN Board; (6) 
initiate a binding Independent Review Process (where a panel decision 
is enforceable in any court recognizing international arbitration 
results); and (7) reject ICANN Board decisions relating to reviews of 
the IANA functions. From rejecting strategic plans and budgets to, in 
the worst case of board-overreach, removing and replacing the entire 
ICANN Board, these accountability powers are an effective way of 
ensuring that the stability and continuity of the Internet remain front 
and center at ICANN post-transition.
    Of course, these powers may not be exercised on a whim; the 
community must go through a rigorous process of engagement and 
escalation that should exhaust all possibilities of resolution before 
pursuing the use a particular power. Should there be no resolution, 
there must be agreement to use a power among a minimum number of 
constituencies within the ICANN community. This ensures that no one 
party can unilaterally take actions that could impact ICANN, the IANA 
functions or the DNS. Post-transition accountability will reside with 
the empowered ICANN multistakeholder community as a whole; its 
significant expertise and know-how will very capably guide ICANN, the 
IANA functions, and the DNS in the future.
    The imperative that the transition must not imperil the security, 
stability, and resiliency of the Internet has been foremost in the 
community's mind. The IANA transition plan emphasizes continuity of 
operations by having ICANN be the IANA functions operator post-
transition. At the same time, the plan provides mechanisms for the 
community, and particularly the global customers and partners of the 
IANA functions, to ensure that ICANN meets agreed performance targets. 
Were ICANN to fail to meet these targets, the community could change 
the IANA functions operator--in other words, seek an alternative to 
ICANN to undertake essential DNS-related administrative tasks.
    It is important to note that within the ICANN multistakeholder 
community, the U.S. Government will continue to play its role in the 
Government Advisory Committee, just as representatives of U.S. 
businesses, registries and registrars, technical bodies, and civil 
society organizations will continue to play their roles in their 
respective constituencies. The transition plan does not diminish the 
role of any stakeholder--quite the opposite: all stakeholders are 
appropriately empowered to hold ICANN to account and to ensure that the 
stability, security, and resiliency of the DNS post-transition.
    Of course the community's work is not over. Work on the new ICANN 
bylaws has been going smoothly and we hope they will be adopted by the 
ICANN Board on May 27. Additional accountability-related work--known as 
Work Stream 2--will continue beyond the transition in areas such as 
human rights, community accountability, and ICANN transparency.
    There is no doubt that the community and particularly the WGs must 
remain vigilant in the implementation planning for the post-transition 
IANA. But by producing a transition plan that is robust, credible, and 
implementable--and, importantly, that satisfies NTIA's criteria--the 
community's work on IANA stewardship and ICANN accountability paves the 
way for the multistakeholder community to take on the mantle of 
stewardship that the U.S. Government currently assumes. CDT is 
convinced that the community and the U.S. Government can transition on 
the anticipated date.
    There are those who suggest that an extension of the contract 
between NTIA and ICANN is needed because the IANA transition plan is 
untried and untested. We do not support such an extension. It would 
indicate a clear lack of confidence in the multistakeholder transition 
plan and would undermine not only the legitimacy of ICANN's community 
but also the legitimacy of multistakeholder approaches to Internet 
policy more generally.
    Nor, for similar reasons, does CDT support a call for a vote in 
Congress on the IANA transition. A vote would represent an attempt by 
one government to unilaterally decide the future of key technical 
functions of the internet--precisely the outcome the IANA functions 
transition is designed to avoid. Such an act would only provide fuel to 
those governments who seek greater government control over the Internet 
and who decry multistakeholder approaches around the world.
    We must all understand that if there is an unwarranted delay or if 
the transition does not occur, the multistakeholder model of Internet 
governance could be irretrievably undermined and there would be 
unprecedented ammunition for those nations that want to see increased 
intergovernmentalism and state control of the internet. A failure to 
transition would be seen as a license by some governments to assert 
greater control over the Internet and place greater restrictions on its 
openness. This, in turn, would jeopardize the future of the internet, 
its role in promoting free speech and human rights, and the significant 
benefits it can bring to societies and economies across the globe.
                                 ______
                                 

                     Obama's Internet Endangerment

                      By Rick Manning--7 Jun 2016

Should oversight over the Internet naming conventions and top-level 
        domains be relinquished to a group that just four years ago was 
        in 
        danger of being fired as a vendor due to its lack of 
        accountability?

    Some, like Michael Chertoff, say yes. He worries in Politico that, 
``If Washington fails to follow through on its longstanding commitment 
to privatize the DNS, it will fuel efforts by authoritarian regimes to 
move Internet governance to the United Nations--and potentially put the 
Internet, as we know it, at risk.''
    Apparently Chertoff has not been keeping up to date on the latest 
happenings in the world of Internet governance, because if he had, he 
would have acknowledged the State Department's concern that China has 
already developed its own Internet root zone and DNS system. For all 
intents and purposes, the Chinese government has chosen to put the 
tools in place to break the Internet any time its leaders choose. And 
I'm confident that Secretary Chertoff would agree that in today's 
environment, the Chinese government is going to proceed according to 
its interests.
    What's more, he would know that China attempted to cut a deal with 
the holders of the top-level domain .XYZ which is the sixth largest in 
the world to exclude the use of 12,000 words in domain names in 
exchange for gaining access to their markets. This initial attempt by 
the Chinese to flex their market muscle to control content can only get 
worse and it provides little comfort to those of us with offensive 
words like www.getliberty.org for a domain name to lose the soft power 
of the United States as an offset to the Chinese.
    However, what is most shocking about Chertoff's piece is his 
failure to even mention that the architect of the transition of 
multistakeholder model for Internet governance under current U.S. 
vendor ICANN, Fadi Chehade, no longer is leading the California-based 
tax exempt non-profit, but on the eve of the transition has accepted a 
role as a senior, unpaid adviser to a Chinese government-led effort to 
counter ICANN.
    This is the true elephant in the room.
    In political terms it is as if the primary campaign manager for 
Hillary Clinton were to leave her campaign and sign up with Donald 
Trump's general election effort bringing all the knowledge of the 
systemic weaknesses of the campaign organization to an opponent eager 
to exploit them.
    No one in their right mind would be comfortable with that 
arrangement, yet that is exactly the situation facing an untested, 
vulnerable ICANN under a multistakeholder model suddenly freed from the 
protection of the U.S. Government. A model that all the ``experts'' who 
worked on it assure is impenetrable, an assurance eerily similar to the 
one offered by those who built the Titanic before its maiden voyage 
proved otherwise.
    Chertoff states in his almost puerile missive of vague warnings 
against a future United Nations control of the Internet that, ``While 
authoritarian governments may be happy to see the U.S. relinquish its 
oversight role, privatizing the DNS is a much better way to guarantee 
broad support for the system among allies and the developing world for 
the multistakeholder approach to Internet governance.''
    In a nutshell, the argument is that an unaccountable ICANN 
operating in an environment where the U.S. has the same say as Algeria, 
with the real power divested to companies like Google and others is 
more secure than the current situation where the United States can 
stare down anyone who seeks to impose speech restrictions on the web as 
China attempted recently.
    Beyond the patent absurdity of the claim, it is equally absurd to 
assume that the United Nations won't attempt to grab at a now ripe for 
the plucking Internet governance role. Why do they want it so badly? It 
would provide an independent funding source that the U.N. has always 
craved.
    While politicians in D.C. often put out press releases opposing 
``taxing the Internet'', ICANN already taxes the Internet through its 
fee structure for effectively leasing top level domain names. Anyone 
who uses a .net address is already paying $1 to ICANN in a hidden pass-
through fee for that privilege as an example.
    Verisign reports that at the end of 2015, there were approximately 
314 million domain name registrations and growing each quarter. It 
doesn't take a math major to see the allure of controlling the money 
machine that creates these top-level domains and charges a fee for 
every one that is purchased.
    ICANN revenue in 2015 was $219 million from these and other fees, 
and they have used some of this tax-free largesse to hire some of the 
most prestigious firms in the U.S. to lobby for full control of this 
system, free from having to worry about keeping their vendor contract 
with the U.S. And for the same reason that ICANN wants to control this 
money tree without real oversight, the nations who are a small part of 
ICANN's multistakeholder structure will not be sated by the U.S. ceding 
control. Instead, it is guaranteed that they will seek to grab the pot 
of gold through a U.N. structure that would more directly benefit them, 
and increase their power. Congress has wisely chosen to defund the 
Obama Administration's effort to transfer oversight over Internet 
governance to its vendor over the past two years. Now they need to get 
behind the Cruz-Duffy Protecting Internet Freedom Act to extend the 
contract for another two years, providing more time to stress test the 
system, and measure the impact of Chehade's seemingly switching sides 
in the debate. Notably, Senator Marco Rubio also recently circulated a 
letter also urging an extension garnering the signatures of many of his 
colleagues on the Senate Committee overseeing the issue.
    One thing that the House Energy and Commerce Committee got right 
when discussing this issue is that there will be no going back from the 
transition. Given that, Congress needs to get it right, and for now, 
that means extend the contract and let the next Administration re-
evaluate what Freedom of Information Act records show was President 
Obama's hastily made decision.

The author is president of Americans for Limited Government
                                 ______
                                 
     Response to Written Question Submitted by Hon. Marco Rubio to 
                           Michael Beckerman
    Question. The revised bylaws include provisions that ensure that 
ICANN maintains the ability to enter into and enforce contracts with 
registries and registrars, as well as include provisions that protect 
from ultra vires challenge Public Interest Commitments (PICs) agreed to 
by certain registries and registrars operating in the new gTLD 
marketplace. Such PICs are meant to mitigate DNS abuse in the new gTLD 
market, which is especially important as we see illegal behavior now 
taking place, including the prevalence of child abuse imagery cropping 
up for the first time in new gTLDs in 2015.

   To what extent is the ICANN community, including the Board, 
        committed to ICANN's role in mitigating DNS abuse through 
        contract enforcement?

   Does the accountability proposal put forward sufficiently 
        ensure that ICANN will enforce its contracts with registries 
        and registrars in this regard?
    Answer. The Internet Association firmly supports the ability of 
ICANN to enforce its contracts with registries and registrars. As a 
group of companies entirely reliant on a stable and trustworthy 
internet, it is in our interest to prevent abusive behavior in the 
Domain Name System (DNS). Critical to that safe environment is a system 
in which all stakeholders do their part to ensure illicit activity is 
minimized. We believe that the community, through the provisions you 
reference in your question, has preserved ICANN's ability to enforce 
existing contracts. Notably, because the ICANN community is now 
empowered to challenge action or inaction by the Board and is 
developing additional accountability mechanisms as part of our ``IANA 
Transition Work Stream 2'' efforts, it will be possible to ensure that 
the Board is exercising oversight that results in ICANN's proper 
execution of its enforcement role according to ICANN's bylaws.
    At the same time, it is important to note that ICANN has a narrow 
technical remit and, as ICANN CEO Goran Marby recently pledged, does 
not have the authority or capability to ``interpret or enforce laws 
regulating websites or website content.'' The Internet industry is 
committed to working closely with ICANN to keep the Internet free and 
open, while working within ICANN's remit to address illicit online 
activity. This includes helping to ensure that Registry Agreements and 
the Registrar Accreditation Agreement (RAA) are properly implemented. 
Contrary to some misinterpretations, the RAA only requires domain name 
registrars to ``take reasonable and prompt steps to investigate and 
respond appropriately to any reports of abuse.'' This agreement does 
not mandate that a registrar remove or delete domains; but rather that 
it receive and investigate the abuse before determining the appropriate 
next steps. Registrars are not equipped with the appropriate 
enforcement tools to control, monitor, or remove specific content or 
specific users who post unauthorized works to a domain.
    In addition to working closely with ICANN, the Internet industry 
also supports various industry-led efforts to develop guidelines and 
best practices to prevent a range of illicit activity online.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                            Steve DelBianco
    Question. Mr. DelBianco, I understand the argument that increasing 
the threshold for the ICANN Board to reject advice from the GAC from 50 
percent to 60 percent is offset by the fact that any GAC advice to the 
ICANN Board must first achieve complete consensus among the 162 
countries, meaning that the U.S., or any country for that matter, may 
object to any advice the GAC might offer. But what about a scenario 
where our government is asleep at the switch and fails to object, or 
actually agrees with some terrible advice from the GAC? What safeguard 
is in place against that type of scenario?
    Answer. Your question assumes a scenario where no government--not 
even the U.S.--would formally object to proposed GAC advice that would 
be adverse to interests of American businesses and citizens. Under such 
a scenario, there are additional safeguards in place to prevent 
implementation of adverse GAC advice.
    First, a new restriction on GAC advice is a requirement that advice 
``is communicated in a clear and unambiguous written statement, 
including the rationale for such advice.'' \1\ If the GAC advice lacked 
clarity or rationale, the ICANN board would not be required to consider 
that advice.
---------------------------------------------------------------------------
    \1\ May-2016, Section 12.3, ICANN Bylaws, at https://www.icann.org/
en/system/files/files/adopted-bylaws-27may16-en.pdf
---------------------------------------------------------------------------
    Second, the ICANN board can reject GAC advice with a vote of 60 
percent of the directors. The board would take into account public 
comments from non-governmental stakeholders, and may reject GAC advice 
for any reason.
    If the board rejects GAC advice, it must ``try, in good faith and 
in a timely and efficient manner, to find a mutually acceptable 
solution'' in consultation with the GAC. This is an obligation only to 
``try,'' and does not oblige ICANN to find a solution that is 
acceptable to the GAC. In these consultations, the board could propose 
modifications to the GAC advice that would mitigate the adverse 
element. But if GAC refused to adequately adjust its advice, the 
board's decision to reject would still hold, and the GAC advice would 
be set aside.
    Third, if the ICANN board accepted such GAC advice, ICANN could be 
stopped from implementing that advice by a challenge brought under the 
enhanced Independent Review Process (IRP). An aggrieved party or the 
Empowered Community can bring an IRP challenge based on actions of 
ICANN to ``ensure that ICANN does not exceed the scope of its limited 
technical Mission and otherwise complies with its Articles of 
Incorporation and Bylaws.'' \2\ While an aggrieved party must pay its 
own legal costs for the IRP, an Empowered Community IRP would mean that 
ICANN must pay all legal costs.
---------------------------------------------------------------------------
    \2\ Ibid, Section 4.3 a
---------------------------------------------------------------------------
    To bring an Empowered Community IRP requires support of 4 of the 5 
stakeholder groups in the Empowered Community, which includes the GAC. 
However, the new bylaws ensure that governments could not block a 
community challenge of ICANN Board's implementation of GAC advice. In 
what is known as the ``GAC Carve-out'', the bylaws exclude the GAC from 
the Empowered Community decision about whether to challenge a board 
action based on GAC consensus advice, so the approval of just 3 
stakeholder groups is required to challenge ICANN's acceptance of GAC 
advice.
    Several governments vigorously opposed these new bylaws provisions 
to limit GAC influence and lock-in their consensus method of decision-
making. In a statement issued Mar-2016, France's minister for digital 
economy complained about ICANN's new bylaws:\3\
---------------------------------------------------------------------------
    \3\ 24-Mar-2016, ``French scream sacre bleu! as U.S. govt gives up 
the Internet to ICANN'', at http://www.theregister.co.uk/2016/03/24/
france_slams_us_govt_internet_transition/

        ``Despite the continued efforts of civil society and many 
        governments to reach a balanced compromise, elements of this 
        reform project will marginalize states in the decision-making 
        processes of ICANN, especially compared to the role of the 
---------------------------------------------------------------------------
        private sector.''

    Unnamed French foreign ministry officials also told Le Monde they 
were unhappy with the end result, saying: ``This is an unsatisfactory 
condition. The consensus requirement only produces warm water. And that 
does not put the GAC on the same footing as the other committees of 
ICANN.''
    The French official is right--the GAC is not on the same footing as 
other ICANN stakeholders. That, however, is by design. Notwithstanding 
criticism from certain governments, the full package of transition 
accountability measures sufficiently cabins governmental influence and 
provides sufficient safeguards to block implementation of GAC consensus 
advice that is adverse to the non-governmental Internet stakeholder 
community.
    Thank you for your question. I am at your service to elaborate on 
these responses and address other questions and concerns you might 
have.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Marco Rubio to 
                            Steve DelBianco
    The revised bylaws include provisions that ensure that ICANN 
maintains the ability to enter into and enforce contracts with 
registries and registrars, as well as include provisions that protect 
from ultra vires challenge Public Interest Commitments (PICs) agreed to 
by certain registries and registrars operating in the new gTLD 
marketplace. Such PICs are meant to mitigate DNS abuse in the new gTLD 
market, which is especially important as we see illegal behavior now 
taking place, including the prevalence of child abuse imagery cropping 
up for the first time in new gTLDs in 2015.

    Question 1. To what extent is the ICANN community, including the 
Board, committed to ICANN's role in mitigating DNS abuse through 
contract enforcement?
    Answer. ICANN community members who developed the new 
accountability proposal were committed to maintaining an Internet that 
is not subject to government restrictions on free expression. At the 
same time, we were committed to ensure that abuse safeguards in the new 
gTLD registry contracts would continue to be enforceable, and not 
subject to challenge under the more explicitly limited mission 
statement for ICANN. All 7 ICANN stakeholder groups approved the new 
proposal earlier this year, and both the ICANN board and NTIA accepted 
the recommendations. Here is how this commitment was articulated in the 
new bylaws:\4\
---------------------------------------------------------------------------
    \4\ May-2016, Section 1.1 of ICANN Bylaws, at https://
www.icann.org/en/system/files/files/adopted-bylaws-27may16-en.pdf

        ICANN's performance of its obligations or duties thereunder, 
        may not be challenged by any party in any proceeding against, 
        or process involving, ICANN (including a request for 
        reconsideration or an independent review process pursuant to 
        Article 4) on the basis that such terms and conditions conflict 
        with, or are in violation of, ICANN's Mission or otherwise 
        exceed the scope of ICANN's authority or powers pursuant to 
---------------------------------------------------------------------------
        these Bylaws (``Bylaws'') or ICANN's Articles of Incorporation.

    This protection from challenge is applied to ``all registry 
agreements and registrar accreditation agreements between ICANN and 
registry operators or registrars in force on 1 October 2016,'' which 
includes agreements and renewals that contain the abuse ``Safeguards'' 
requested by the GAC.
    Such safeguards could still become part of registry and registrar 
agreements negotiated in the future, as long as they avoid giving ICANN 
new powers to ``regulate (i.e., impose rules and restrictions on) 
services that use the Internet's unique identifiers or the content that 
such services carry or provide, outside the express scope of Section 
1.1(a).'' And the new bylaws expressly authorize ICANN to enter and 
enforce contracts: ``ICANN shall have the ability to negotiate, enter 
into and enforce agreements, including public interest commitments, 
with any party in service of its Mission.''
    Moreover, all registry and registrar contracts require 
implementation and enforcement of any Consensus Policies that are 
developed by the ICANN stakeholder organization for generic TLDs 
(GNSO). These Consensus Policies are the mechanism by which the ICANN 
community addresses DNS abuse that was not already or adequately 
addressed in current contracts. For example, the GNSO developed policy 
regarding display of information about domain name registrants (``Thick 
Whois''). This policy will become binding and enforceable on all 
registries and registrars once implementation is complete.

    Question 2. Does the accountability proposal put forward 
sufficiently ensure that ICANN will enforce its contracts with 
registries and registrars in this regard?
    Answer. The accountability proposal did not alter ICANN's existing 
obligations to enforce its contracts and to enforce consensus policies 
against registries and registrars. As always, anyone can bring contract 
enforcement matters to the attention of ICANN's compliance department. 
However, ICANN moves deliberately to investigate and respond to 
enforcement complaints, not always to the satisfaction of those making 
the complaint. Concerns about enforcement have historically centered on 
ICANN's speed of follow-up and on differing interpretations of contract 
terms and policies.
    There are two primary ways that ICANN can be made to enforce its 
contracts against registries and registrars.
    First, affected parties can invoke the enhanced Independent Review 
Process (IRP) if ICANN was failing to enforce its contractual 
obligations and its inaction was in violation of ICANN's Commitments 
and Core Values. The IRP is a binding process and decisions of the 
independent reviewer can be enforced in California courts, or in any 
court that recognizes international arbitration proceedings.
    Second, affected parties may work within the ICANN stakeholder 
organization for generic TLDs (GNSO) to amend and clarify any Consensus 
Policy where ICANN's compliance department is taking a too narrow or 
too broad interpretation of the policy.
    The sufficiency of these measures will almost certainly be tested 
in the years ahead. If the ICANN community finds these measures 
insufficient, the next step is to propose changes that increase 
contract enforcement powers over registries and registrars. Such 
changes could be proposed as recommendations from formal reviews of 
accountability and transparency, or of the review of the new gTLD 
program. Under the new bylaws, registries and registrars alone would 
not be able to block a community challenge if ICANN refused to 
implement such bottom-up recommendations for stronger contract 
enforcement.
    NetChoice appreciates the hard work accomplished in this regard so 
far and believes that ICANN and the multistakeholder community should 
continue to work collaboratively to mitigate DNS abuse within the 
confines of ICANN's mission.

    Question 3. Section 27.2 of the new ICANN bylaws lays out the 
process for developing and adopting Work Stream 2 issues, which include 
important matters like human rights, jurisdiction, and improvements to 
ICANN's transparency. The stated process involves CCWG development of 
the proposal followed by dialogue and exchanges with the Board. 
Subsection (v) concludes, ``If, after the CCWG-Accountability modifies 
a Work Stream 2 Recommendation, the Board still believes it is not in 
the global public interest to implement the Work Stream 2 
Recommendation, the Board may, by a vote of a two-thirds majority of 
the Board, send the matter back to the CCWG-Accountability for further 
consideration. The Board shall provide detailed rationale to accompany 
its action. If the Board determines not to accept a modified version of 
a Work Stream 2 Recommendation, unless required by its fiduciary 
obligations, the Board shall not establish an alternative solution on 
the issue addressed by the Work Stream 2 Recommendation until such time 
as CCWG-Accountability and the Board reach agreement.'' What is the 
global public interest?
    Answer. For several years, NetChoice argued that for purposes of 
ICANN, the global public interest should be defined and limited to 
ICANN's scope--the Domain Name System (DNS) and Internet Protocol 
address numbers. During the recent transition planning, we proposed our 
definition for global public interest: ``the availability and integrity 
of registrations and resolutions''.
    This definition would encompass global access to registering and 
resolving (using) domain names anywhere in the world, in any script or 
language, with the expectation that users of domain names could trust 
that the name was not being used for fraudulent or abusive purposes.
    Unfortunately, we were unable to garner consensus for that 
definition. In fact, no single definition achieved consensus support, 
so ICANN will continue to define public interest in the context of its 
decisions and actions, as described in our next answer.
    A definition of the public interest depends on the definition of 
``public.'' The ``public'' is composed of multiple and diverse elements 
that frequently have very different interests, thereby making it very 
difficult to reach consensus on a single definition.

    Question 4. How will the global public interest be determined?
    Answer. Global public interest is defined by the multistakeholder 
community, in exercising its role in developing policies and holding 
the ICANN corporation and board accountable for its actions and 
inactions. This does not result in community agreement on a formal 
definition of ``global public interest''. Rather, the new Commitments 
and Core Values in ICANN bylaws defer to the multistakeholder community 
to ascertain public interest in the context of each situation:\5\
---------------------------------------------------------------------------
    \5\ May-2016, Section 1.2 of ICANN Bylaws, at https://
www.icann.org/en/system/files/files/adopted-bylaws-27may16-en.pdf

        Seeking and supporting broad, informed participation reflecting 
        the functional, geographic, and cultural diversity of the 
        Internet at all levels of policy development and decision-
        making to ensure that the bottom-up, multistakeholder policy 
        development process is used to ascertain the global public 
        interest and that those processes are accountable and 
---------------------------------------------------------------------------
        transparent;

    While this approach does not give us a single, simple definition of 
global public interest, it does have the advantage of letting Internet 
stakeholders define the concept, instead of leaving that definition to 
ICANN's management and board.

    Question 5. Under the outlined process, could the Board 
indefinitely delay implementation of Work Stream 2 with the 
justification that the proposed Work Stream 2 proposals are not in the 
global public interest?
    Answer. No, the board cannot ``indefinitely'' delay implementation 
of a Work Stream 2 recommendation for which the ICANN community has 
consensus support to force implementation of its recommendations.
    The rationale for separating Work Stream 1 and 2 tasks was to 
identify what had to be implemented before the IANA contract expired, 
after which there would be less leverage to force accountability 
measures that would be resisted by ICANN's board. That's why Work 
Stream 1 includes new powers to block the board's budget, overturn a 
board decision through an IRP challenge, and to recall the board of 
directors. The community deemed those powers sufficient to force a 
future ICANN board to accept Work Stream 2 changes that are developed 
and supported by community consensus.
    First, the community can challenge the board with an Independent 
Review Process (IRP) for failing to follow its bylaws commitment to 
honor the bottom-up multistakeholder process. This challenge would 
directly address the board's argument that proposed recommendations 
were not in the ``global public interest''. As noted above, ICANN's new 
bylaws defer to the community--not the board--to define the global 
public interest:

        . . . ensure that the bottom-up, multistakeholder policy 
        development process is used to ascertain the global public 
        interest.

    An IRP decision is a binding process taking approximately 6 months, 
and decisions of the independent reviewer can be enforced in California 
courts, or in any court that recognizes international arbitration 
proceedings. So IRP decisions could terminate any delay that was being 
caused by the ICANN board.
    Second, the community can recall the ICANN board of directors, and 
designate new directors who would understand that Work Stream 2 
recommendations should be accepted. If these new directors failed to 
accept the recommendations, they too could be recalled.
    Taken together, these two measures ensure that ICANN board members 
cannot indefinitely delay implementation of recommendations that have 
the consensus support of the ICANN community.

    Question 6. Since such a delay would be consistent with the bylaws 
and would be within the scope and mission of ICANN, aside from spilling 
the Board, what would be the tools available to the ICANN community to 
overcome Board resistance and what are the steps for exercising those 
tools?
    Answer. The whole point of separating Work Stream 1 and 2 tasks was 
to identify what had to be implemented before the IANA contract 
expired, after which there would be less leverage to force 
accountability measures that would be resisted by ICANN's board. That's 
why Work Stream 1 includes new powers to block the board's budget, 
overturn a board decision through an IRP challenge, and to recall board 
directors. The community deemed those powers sufficient to force a 
future ICANN board to accept Work Stream 2 changes that are developed 
and supported by community consensus.
    First, the community can challenge the board with an Independent 
Review Process (IRP) for failing to follow its bylaws commitment to 
honor the bottom-up multistakeholder process. This challenge would 
directly address the board's argument that proposed recommendations 
were not in the ``global public interest''. As noted above, ICANN's new 
bylaws defer to the community--not the board--to define the global 
public interest:

        . . . ensure that the bottom-up, multistakeholder policy 
        development process is used to ascertain the global public 
        interest.

    An IRP decision is a binding process taking approximately 6 months, 
and decisions of the independent reviewer can be enforced in California 
courts, or in any court that recognizes international arbitration 
proceedings.
    Second, as you note, the community can recall the ICANN board of 
directors, and designate new directors who would understand that Work 
Stream 2 recommendations should be accepted. If these new directors 
failed to accept the recommendations, they too could be recalled.
    If these new directors failed to accept the recommendations, they 
too could be recalled.

    Question 7. In your opinion, what would be the result of having a 
modest delay in the transition for the stakeholders and international 
community to make sure the accountability measures work properly?
    Answer. During the committee's hearing back in May-2016, I 
acknowledged that a modest delay of a few months might be useful in 
order to verify the creation of new organizational elements and the 
adoption of new ICANN Bylaws and Articles of Incorporation. At this 
point, these implementation steps are substantially complete. The 
required bylaws, articles, and entities have been put into place to 
implement the community's transition proposal.
    Your question suggests that a modest delay would allow the 
community to make sure that accountability measures work properly. But 
there is no way to predict when the ICANN community would exercise its 
new powers to challenge a board decision or recall directors. These are 
extraordinary measures that are not expected to be exercised often.
    Moreover, one reason for having these accountability measures 
available is that they will deter the ICANN board from defying 
consensus recommendations of the ICANN community. So, the board is 
likely to accede rather that force the Empowered Community to invoke 
its new powers.
    So, a modest delay of several months would bring no reasonable 
expectation of seeing how well new accountability measures are working.
    Some critics of the transition might therefore call for a longer 
delay, but that would re-kindle the fire at the United Nations, who 
sees the legacy U.S. Government role as something they should be doing 
instead. With this transition we are eliminating the role where one 
government (the U.S.) holds ICANN accountable, and we are instead 
making ICANN accountable to the community of Internet stakeholders. 
This means the U.N. can no longer point to the U.S. Government role and 
say the U.N. should step into those shoes.
    An indefinite delay of transition would signal that the U.S. 
Government does not actually trust the multistakeholder model that we 
are encouraging other governments to trust. The governments of China 
and Russia would likely exploit any delay to persuade moderate 
governments that the U.N. needs to replace the legacy U.S. role--a 
result that none of us would find acceptable.
    At this point, an indefinite deferral of this transition could 
create far more downside than upside for the interests of U.S. 
Government, businesses, and citizens.

    Question 8. Do you see potential benefits to a modest delay?
    Answer. During the committee's hearing back in May-2016, I 
acknowledged that a modest delay of a few months might be useful in 
order to verify the creation of new organizational elements and the 
adoption of new ICANN Bylaws and Articles of Incorporation. At this 
point, these implementation steps are substantially complete, so there 
is no longer any benefit there to defer the transition.
    As explained in our response to your previous question, we believe 
the risks of indefinitely deferring this transition outweigh the 
minimal potential benefits of delay.
    Thank you for these questions. I am at your service to elaborate on 
these responses and address other questions and concerns you might 
have.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                          Hon. David A. Gross
    Question. Ambassador Gross, how should Senators assess the fact 
that Russia, China, France, and Brazil all believe that this transition 
proposal reduces the power of governments?
    Answer. Some governments have expressed concerns that the 
transition proposal limits governments' ability to participate in the 
ICANN community on equal terms with other stakeholders. This is 
because, post-transition, government participation in ICANN policy 
development will be limited to a purely advisory role within the 
Governmental Advisory Committee (``GAC''). The new ICANN bylaws confine 
the GAC in two important ways. First, GAC ``advice'' to the ICANN Board 
requires ``consensus,'' defined as general agreement in the absence of 
any formal objection by any government, including the United States. 
Second, GAC advice can be rejected by a 60 percent vote of the Board, 
and government representatives cannot serve on the Board. Thus, in 
order for governments to dictate Board action, they would first need to 
obtain consensus (unanimous agreement) within the GAC, an organization 
in which the United States and other like-minded countries take an 
active role. Thereafter, any advisory decision still could be rejected 
by a 60 percent vote of the Board.
    The consequence of these developments is that governments that 
failed to capture ICANN during the transition process now are 
refocusing their efforts on other venues, including the United Nation's 
International Telecommunication Union (``ITU''). In June, the 
presidents of China and Russia issued a joint statement supporting a 
multilateral global Internet governance system and ``maintain[ing] 
[the] UN's important role in setting up global Internet governance 
mechanisms.'' Russia, China, Saudi Arabia, and others also are focusing 
on the ITU's upcoming World Telecommunication Standardization Assembly 
(``WTSA''), which will address several important Internet public policy 
issues. The ITU will be an important setting for post-ICANN debates 
about the appropriate role for governments in Internet policy.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Marco Rubio to 
                          Hon. David A. Gross
    Question 1. The revised bylaws include provisions that ensure that 
ICANN maintains the ability to enter into and enforce contracts with 
registries and registrars, as well as include provisions that protect 
from ultra vires challenge Public Interest Commitments (PICs) agreed to 
by certain registries and registrars operating in the new gTLD 
marketplace. Such PICs are meant to mitigate DNS abuse in the new gTLD 
market, which is especially important as we see illegal behavior now 
taking place, including the prevalence of child abuse imagery cropping 
up for the first time in new gTLDs in 2015.

   To what extent is the ICANN community, including the Board, 
        committed to ICANN's role in mitigating DNS abuse through 
        contract enforcement?

   Does the accountability proposal put forward sufficiently 
        ensure that ICANN will enforce its contracts with registries 
        and registrars in this regard?
    Answer. I appreciate receiving the question about the important 
issue of mitigating DNS abuse. The final report of the Cross Community 
Working Group on Enhancing ICANN Accountability (``CCWG-
Accountability'') and the revised bylaws make it clear that the Public 
Interest Commitments (``PICs'') and the registry contracts that contain 
them are deemed within ICANN's mission. The multistakeholder community 
as a whole is engaged in activity to mitigate DNS abuse and, in a June 
letter from ICANN CEO Goran Marby to the Coalition for Online 
Accountability, ICANN again commits to enforce the PICs contained in 
the Registry Agreements. The Internet Governance Coalition appreciates 
these statements from the ICANN CEO and believes that ICANN and the 
multistakeholder community should continue to work collaboratively to 
mitigate DNS abuse within the confines of ICANN's mission.

    Question 2. The expansion of government authority in the ICANN 
transition proposal is concerning, but it clearly falls short of what 
governments like China, Russia, Iran, and France would like to achieve. 
A joint statement by several foreign ministries was quoted at the 
hearing saying that they were dissatisfied with the proposal and would 
like to see more power for governments. This raises doubts about 
assertions made by you and Mr. DelBianco that this proposal will blunt 
efforts of these governments to pursue their goals in the ITU. Why 
would these governments discontinue their efforts to expand government 
authority over the Internet in the ITU or anywhere else?
    Answer. Thank you for your question. There appears to be a 
misunderstanding regarding my testimony at the hearing. As noted in my 
response to Senator Thune's question above, post-transition, government 
participation in ICANN policy development will be limited to a purely 
advisory role within the Governmental Advisory Committee (``GAC''), and 
the GAC itself is further confined by the new bylaws. However, 
deliberations about the appropriate role for governments regarding 
Internet governance are ongoing and shifting to other venues.
    Governments that failed to gain influence over ICANN are turning 
their attention back to the ITU. In June, the presidents of China and 
Russia issued a joint statement supporting a multilateral global 
Internet governance system and ``maintain[ing] [the] UN's important 
role in setting up global Internet governance mechanisms.'' In October, 
the ITU's World Telecommunication Standardization Assembly (``WTSA'') 
will convene, with an agenda likely to include a wide range of 
Internet-related issues. Governments like Russia, Saudi Arabia, China, 
and others are trying to expand the ITU's activities at WTSA further 
into Internet public policy-related issues. As a result, I do not 
believe that governments will discontinue their efforts to expand 
government authority over the Internet--rather, those efforts are 
shifting to the ITU and other venues.
    Promoting and protecting a thriving Internet will require continued 
engagement in the global debate and ensuring that Internet governance 
mechanisms remain open, transparent, and representative of all relevant 
stakeholders. The transition will ensure that non-governmental 
stakeholders, including U.S. industry, will have front row seats in 
discussions about the Internet's future--making it easier, though no 
less challenging, to keep it free and open for future generations.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                            Richard Manning
    Question 1. Mr. Manning, if the U.S. Government were to extend the 
IANA contract for two more years, what would you need to see during 
that time to become comfortable enough to support the transition plan?
    Answer. The transition proposal should be postponed indefinitely.
    One of the challenges with the proposed transition is that in 
ending ICANN's status as a vendor of the U.S. Government, it also ends 
First Amendment \1\ protections against capricious actions by ICANN or 
its successor in Internet governance.
---------------------------------------------------------------------------
    \1\ https://w2.eff.org/Infrastructure/DNS_control/ICANN_IANA_IAHC/
19980924_eff_new
_iana_pressrel.html
---------------------------------------------------------------------------
    The pending proposal in front of ICANN's Board in Stream 2 that 
would put protecting ``internationally recognized human rights'' \2\ in 
the group's bylaws should be viewed with deep alarm. This change would 
create an undefined, shifting standard that would put content control 
as a core value of ICANN. While some dismiss the concerns about 
delinking the First Amendment from ICANN activities through the 
transition, there can be no reasonable argument that ICANN's 
consideration of content control bylaws legislation so close to the 
proposed transfer, demonstrates that the organization has a dangerous 
blind spot toward the underlying freedoms upon which the free and open 
Internet has thrived.
---------------------------------------------------------------------------
    \2\ http://www.cruz.senate.gov/?p=press_release&id=2646
---------------------------------------------------------------------------
    Another challenge is that proponents of the transition argue that 
the multistakeholder community can better protect the Internet from a 
United Nations' takeover than the U.S. Government. This is absurd on 
its face. The private sector stakeholders are each subject to market 
based coercion, and have a fiduciary responsibility to their 
shareholders, not to the American public. The consequences of the 
private, publicly held stakeholders' fiduciary responsibilities are 
likely to be interpreted to mean that if making concessions on Internet 
governance opens up potentially profitable markets it becomes these 
companies' legal responsibility to trade concerns about Internet 
governance for increased fiscal opportunities and profitability.
    There are many other unanswered areas, such as, the ending of 
pricing oversight for new and existing domain names at the ICANN and 
registrar levels effectively allowing ICANN to impose increased 
Internet fees/taxes with no oversight or control, and the overall 
ramifications of ICANN losing its anti-trust exemption \3\ which the 
NTIA has completely ignored according to recent Freedom of Information 
Act releases,\4\ which make moving forward with the transition in the 
near term both unwise and extremely risky.
---------------------------------------------------------------------------
    \3\ http://www.wsj.com/articles/an-internet-giveaway-to-the-u-n-
1472421165
    \4\ https://getliberty.org/wp-content/uploads/2016/08/NTIA-No-
Records-Response-Antitrust-Analysis-08.16.16.pdf

    Question 2. Is there any scenario where you would support the U.S. 
relinquishing its role with respect to the IANA functions?
    Answer. It is difficult to foresee any such scenario.
    The names and numbers that constitute the Internet domain name 
system are no different than spectrum. We allot spectrum via the FCC, 
and whatever that system's flaws, it prevents any one power from 
consolidating control over the airwaves.
    This government function, protecting the airwaves, protects the 
First Amendment, and creates a zone where democracy can thrive. 
Government oversight of the Internet domain name system is no 
different.
    Any alternative to the First Amendment protections afforded by 
Federal Government oversight will inevitably fail leaving the Internet 
less open and free than it is today.
    The Internet is a technology that the whole world utilizes. Via 
government oversight of the naming conventions, we have created spaces 
for speech to occur that did not exist previously.
    NTIA has done a good job with the IANA functions contract, 
reflecting the Federal Government's duty as a light-handed steward of 
Internet governance while resisting calls for content based 
restrictions.
    That remains true today. Americans for Limited Government urges you 
to not forget your vital role as protectors of constitutional 
safeguards, and creating an environment where freedom can thrive. 
Speech without protection will be assaulted and lost.
    Surrendering Internet governance to foreign powers or even a 
corporate governance structure that is subject to foreign government 
coercion is akin to surrendering a vital piece of the spectrum to 
international regulators. It need not be housed in the United Nations 
to be a dangerous power to be wielded against U.S. interests. By 
allowing the transition to go through, Congress will be endorsing the 
creation of an unregulated global monopoly over the domain name system 
which is doomed to fail. This would be dangerous and foolish.
    As stated earlier, ceding the IANA functions and the domain name 
system to the international community sacrifices the First Amendment's 
primacy over the government contracts. Nothing unconstitutional is 
allowed to happen under a government contract, but you will lose that 
guarantee when you lose the IANA functions. In fact, your Committee 
will no longer be relevant on this matter should the transition occur 
and will be impotent when inevitable questions and complaints arise.
    No guarantee you receive from ICANN or anyone else will ever be as 
good as the First Amendment and its regime of Federal court 
intervention to ensure the NTIA contract with ICANN complies with the 
safeguards afforded by the First Amendment.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Marco Rubio to 
                            Richard Manning
    During the course of the CCWG's consideration of its accountability 
reform proposal, the U.S. Chamber and other business interests 
requested that ICANN's bylaws be amended to allow for greater insight 
into how and to what extent ICANN interacts with governments and 
government officials (outside the formal interaction with the GAC). 
This request seems especially important in the wake of the revelations 
concerning ICANN's most recent CEO, Fadi Chehade, and his interactions 
with the Chinese government before his departure in March. The CCWG 
delayed consideration of this important work during Work Stream 2.

    Question 1. Do you agree that this type of transparency is 
important?
    Answer. Transparency is important, however the notion that the U.S. 
Government should let the transition take place in order to get bylaws 
changes that bring more transparency to the domain name system is 
exactly backward. The U.S. Government contracting process is the only 
means to bring the transparency you seek. Once you let the contract go, 
you lose leverage to keep it away from other governments, and to 
enforce any transparency laws that have been put in place.
    If Congress wants ICANN bylaws changes to bring more transparency, 
the most efficient means is for NTIA to never let the contract go and 
threaten the contract every time something needs to be reined in. ICANN 
is the contractor, and can be replaced. The domain name system and the 
free and open Internet as we currently know it, cannot be replaced. To 
maintain transparency and accountability, the U.S. Government should 
continue the current contract.
    Besides, the idea the domain name system as currently constituted 
is non-governmental is a fiction. The U.S. Government has controlled 
these functions since their inception, and the rest of the world opted 
in. It's been under government contract the whole time, and as recent 
as 2012, the Obama Administration was so frustrated with the vendor 
that they threatened to open up competitive bidding for the 
contract.\5\ If we want more transparency, then NTIA needs to get in 
there and do its job, not collaborate with foreign interests who wish 
to capture the IANA functions. You don't create transparency by ceding 
power, you lose it.
---------------------------------------------------------------------------
    \5\ https://www.fbo.gov/
index?s=opportunity&mode=form&tab=core&id=337abfa3fa508d260738
052baf46bdf9&_cview=1
---------------------------------------------------------------------------
    If ICANN personnel working for the Chinese government is an 
unacceptable state of affairs, then ICANN should be fired and a new 
contractor found which is committed to maintaining a free and open 
Internet and not appeasing those who wish to destroy this fundamental 
principle.

    Question 2. Should this important work have been punted to Work 
Stream 2?
    Answer. The answer is no, as it denies Congress and the next 
Administration the ability to judge any transition based upon a full 
set of facts. But to be clear, Americans for Limited Government remains 
opposed to the transition regardless of promises, due to the permanent 
loss of First Amendment protections that are only afforded if the 
current relationship is maintained. The only thing that should be 
punted is the transition proposal itself. The work in Stream 2 is 
irrelevant to maintaining U.S. Government control of the IANA 
functions, which is the true task at hand. The only transparency that 
matters to the domain name system is U.S. Government oversight. You 
either keep it, or we'll lose it forever.

    Question 3. What assurances are there that greater transparency 
such as this will be effectuated if the transition was to occur before 
the work is done?
    Answer. There are no assurances you should accept. Delaying is a 
perfectly viable alternative to transitioning. You are contemplating 
sacrificing oversight of the IANA functions to an unaccountable global 
monopoly over the domain name industry. That is a bad idea. Instead, 
you should be maintaining oversight, not giving it up.
    Right now the Internet domain name system has transparency via the 
NTIA contracting process, and our elected officials and Federal courts 
enforcing constitutional protections.
    Right now, you have at least a regulated monopoly that can be 
reined in if need be. Once you let that go, you'll never get it back--
and Congress will have no power to address the inevitable concerns that 
will occur in the future, and will rue the day the free and open 
Internet was unwittingly handed to foreign powers. The transition is 
not in the U.S. interests, nor is it in the interests of maintaining a 
free and open Internet. Given that, Congress should do everything in 
its power to stop the transition, if even for an additional two-year 
period so the next Administration can undertake a thorough review of 
this critical decision and if it decides to proceed, request an up-or-
down vote in Congress to complete the transition.

    Question 4. What other issue have been punted to Work Stream 2 that 
you see potential problem with?
    Answer. The concern about whether ICANN will be locked in as a U.S. 
based non-profit corporation is one. The Committee is well aware of 
this concern so I won't address it further in this document.
    Another obvious concern is the decision on whether to change 
ICANN's by-laws to include, ``internationally recognized human 
rights.'' The fact that the value-neutral ICANN would even consider 
imposing some kind of human rights component to its by-laws 
demonstrates a willingness to create a future censorship regime based 
upon international standards. The Senator is reminded that the U.N. 
Human Rights Council is composed of abusers like Cuba, Venezuela and 
China and have recently condemned Israel \6\ as the leading human 
rights abuser in the world, and in a recent report urged the 
federalization of all of U.S. law enforcement agencies \7\ and the 
sublimation of U.S. law to international law.
---------------------------------------------------------------------------
    \6\ http://www.foxnews.com/opinion/2016/03/29/can-t-make-it-up-un-
names-democratic-israel-as-world-s-top-human-rights-violator.html
    \7\ http://freeassembly.net/news/usa-statement/
---------------------------------------------------------------------------
    The very fact that ICANN would consider making something as 
constantly changing and politically motivated as ``internationally 
recognized human rights'' part of their underlying mission even as 
Congress faces the decision on whether they can be trusted with full 
stewardship over the Internet's IANA is stunning. This consideration 
demonstrates that ICANN could in the near future, impose Internet 
content controls under the guise of `human rights' rejecting the First 
Amendment protections that currently exist through their existing 
contract with the U.S. Government. This Stream Two consideration raises 
significant enough doubts about ICANN's judgment, ability and 
willingness to perform its functions as a vendor to the U.S. 
Government, that serious consideration should be given as to whether 
they should continue to manage the contract on behalf of the U.S. 
Government after a two-year interim extension is put into place by 
Congress.
    Congress can be assured that given the lucrative \8\ functions 
ICANN currently performs there would be no shortage of competitors to 
replace them as the vendor should the next Administration find it 
advisable in 2018.
---------------------------------------------------------------------------
    \8\ https://www.icann.org/en/system/files/files/annual-report-2015-
en.pdf
---------------------------------------------------------------------------
    But let's be clear, as it pertains specifically to Stream 2 
outcomes, even if Congress were to be satisfied, any decision made 
related to Work Stream 2 can be rescinded or revised at a later date by 
the current or a future ICANN Board. This impermanence in the governing 
structure and the instability it represents to future governance 
issues, makes any transition a risky gamble, because once the proposed 
transition has occurred, Congress will have no power to stop changes 
antithetical to a free and open Internet. And as is intended through 
the transition, the U.S. Government's oversight role will have been 
reduced to one of 160+ governments, effectively rendering the U.S. 
powerless to project a free and open Internet from an onslaught from a 
vast majority of the world's governments which fear that very concept.
    Americans for Limited Government strongly urges that Congress act 
to compel the Obama Administration to renew the existing vendor 
contract with ICANN, allowing the next Administration to recommend to 
Congress whether the IANA functions should be turned over to ICANN's 
control, or whether a different course of action is needed to protect a 
free and open Internet into the future.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                           Brett D. Schaefer
    Question. Regarding a proposed two-year delay to the transition of 
the IANA functions, skeptics may always have a reason to call for just 
a little bit more time, turning a short delay into a de facto blocking 
of the transition indefinitely. Can you offer some objective, concrete 
benchmarks or criteria that would demonstrate that the new structure 
has been sufficiently proven effective?
    Answer. There is no specific benchmark that would signal that ICANN 
is ready for the transition. The value of an extension is that it would 
allow implementation of the new ICANN bylaws and provide the ICANN 
community time to explore the new governance structure in practice, 
rather than in theoretical stress tests. It will also provide time for 
all of the Work Stream 2 reforms, which are not expected to be fully 
resolved and implemented until the summer of 2017, to be completed and 
implemented. Important issues yet to be settled include the nature and 
extent of ICANN's commitment to human rights, making ICANN more 
transparent to the community, adopting measures to make the staff more 
accountable, and the issue of ICANN's jurisdiction of incorporation, 
which remains an issue of dispute.
    NTIA opposes a test period because they see the community powers as 
``a safeguard and tools of last resort. As such, there is no 
expectation that the community will ever need to exercise these powers 
in the next several years; indeed, the hope is that they are never 
exercised. The notion of `testing' these would require significant 
failure on behalf of ICANN that is unlikely to happen in the near 
future, if at all.''
    I disagree. While there is no guarantee of a significant failure--
and I hope one does not occur--there will be opportunities for the 
multistakeholder community to test out the new accountability 
mechanisms through already scheduled actions. These include approving 
or opposing bylaw changes related to further ICANN reforms envisioned 
under Work Stream 2 and working out the kinks of more mundane processes 
like consulting with the supporting organizations and advisory 
committees during the budget development process and providing 
notifications to the Empowered Community. The extension would maintain 
the option of reasserting U.S. oversight if the new community powers 
prove inadequate or ICANN resists promised accountability reforms 
sought by the ICANN community.
    At the latest, I see U.S. oversight ending in 2019. The current 
contract cannot be extended beyond 2019 and continued U.S. oversight 
would require a new contract, which ICANN must enter into willingly. If 
ICANN fulfills its promises to the community on accountability and 
performs its responsibilities well, believe the multistakeholder 
community and most of the world's countries, including the U.S., will 
support ICANN continuing its role absent U.S. oversight.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Marco Rubio to 
                           Brett D. Schaefer
    During the course of the CCWG's consideration of its accountability 
reform proposal, the U.S. Chamber and other business interests 
requested that ICANN's bylaws be amended to allow for greater insight 
into how and to what extent ICANN interacts with governments and 
government officials (outside the formal interaction with the GAC). 
This request seems especially important in the wake of the revelations 
concerning ICANN's most recent CEO, Fadi Chehade, and his interactions 
with the Chinese government before his departure in March. The CCWG 
delayed consideration of this important work during Work Stream 2.

    Question 1. Do you agree that this type of transparency is 
important?
    Answer. Yes, it is critically important that an organization with 
the authority and resources that ICANN possesses be transparent about 
its interactions with all governments. ICANN discloses the information 
required by U.S. law, but this disclosure is not comprehensive. For 
instance, ICANN refuses to provide details to the ICANN community about 
its contracts with vendors like Albright Stonebridge Group LLC, Wiley 
Rein LLP, Rice Hadley Gates LLC and other entities hired to provide 
``education/engagement'' services because of confidentiality 
obligations in the contracts. U.S. law would also not cover 
interactions between ICANN and other governments. If the ICANN 
community is to be in a position to hold ICANN accountable post-
transition, it needs to be fully informed of its activities and 
interests.

    Question 2. Should this important work have been punted to Work 
Stream 2?
    Answer. Early on, the ICANN community identified a number of 
serious reforms that it deemed critical to make ICANN accountable. 
However, it was clear that not all of the reforms could be fully 
developed or implemented under the original projected deadline for the 
transition of September 2015. Therefore, the ICANN cross community 
working group on accountability divided the reforms into ``Work Stream 
1'' reforms that had to be in place prior to the transition and ``Work 
Stream 2'' reforms that could be implemented after the transition. The 
difference between the two was not their importance, but whether or not 
they directly involved replacing the U.S. role in the IANA process. It 
is very unfortunate that an artificial, political deadline drove this 
division in ICANN reforms. In my opinion, the U.S. should have required 
all reforms to be implemented prior to the transition.

    Question 3. What assurances are there that greater transparency 
such as this will be effectuated if the transition was to occur before 
the work is done?
    Answer. There is a commitment to implementing Work Stream 2 reforms 
written into the bylaws, but it is a broad commitment that could result 
in significant reforms or cosmetic reforms. A major reason why the 
ICANN Board has been willing to accept Work Stream 1 accountability 
measures in the current proposal is that the U.S. Government has said 
that the transition is dependent on their adoption. Even then, the 
Board has been recalcitrant at times and forced the community to 
retreat from reforms that it sought. After the transition, the ICANN 
Board will likely be less accommodating to community demands for 
greater accountability and transparency. We could see a similar dynamic 
post-transition with the community backing down in the face of Board 
opposition and settling for minimal reforms. Adding to this concern is 
the fact that ICANN has significantly curtailed the budget for 
independent legal advice for Work Stream 2 versus Work Stream 1. In 
short, there is reason to doubt that the Work Stream 2 reforms will be 
implemented to the level desired by the much of the ICANN community as 
expressed during the past two years. An extension of the contract would 
place the ICANN community in a much stronger position to demand full 
implementation of Work Stream 2 reforms.

    Question 4. What other issue have been punted to Work Stream 2 that 
you see potential problem with?
    Answer. Important issues yet to be settled include the nature and 
extent of ICANN's commitment to human rights and making ICANN more 
transparent to the community, which I discussed in my testimony.
    More recent events have illustrated the importance of stronger 
accountability for the ICANN Board and staff. In a July 29 declaration, 
an Independent Review Panel (an arbitral panel for dispute resolution) 
condemned ICANN for its actions involving applications for domains by a 
company called Dot Registry. The panel found that ICANN legal staff 
inappropriately intervened in the report of an independent evaluator. 
Then it found that the Board Governance Committee, or BGC (the body 
responsible for responding to requests for reconsideration of board 
decisions and administering ICANN's conflict of interest policy), 
repeatedly failed to do its job. Its decisions were described as 
``cavalier'' and ``simply not credible.''
    According to the panel, ``ICANN failed to apply the proper 
standards in the reconsiderations at issues, and that the actions and 
inactions of the board were inconsistent with ICANN's Articles of 
Incorporation and Bylaws.'' Specifically, the Board ``failed to 
exercise due diligence and care,'' ``failed to fulfill its transparency 
obligations,'' and the evidence did ``not support a determination that 
the board (acting through the BGC) exercised independent judgement in 
reaching the reconsideration decisions.'' These are serious governance 
flaws that need to be addressed, but have been largely deferred to Work 
Stream 2.
    Another issue in Work Stream 2 that could have serious implications 
is the issue of ICANN's jurisdiction of incorporation, which remains an 
issue of dispute. ICANN's bylaws state that ``the principal office for 
the transaction of the business of ICANN shall be in the County of Los 
Angeles, State of California, United States of America.'' However, 
ICANN's principal office and place of incorporation can be changed and 
some participants in the Work Stream 2 discussions have been very vocal 
in their desire to move ICANN out of the U.S., which could have far-
reaching implications.
    Foreign governments have already pushed for regulatory control of 
the Internet by the United Nations or a governmental regime.

    Question 5. How much will the transition be able to reverse the 
thinking of governments that are already in favor of this governance?
    Answer. Not at all. Governments like Russia, China, and Iran will 
always prefer more government control over the Internet. That is 
easiest to achieve through U.N. or International Telecommunication 
Union (ITU) governance of the Internet and they will continue to press 
for that outcome. That was never going to change regardless of the 
transition. How many governments are in this group? At the 2012 WCIT 
conference, 89 countries voted in favor of granting the ITU a role in 
Internet governance versus 55 countries that voted against the 
proposal.
    The NTIA has argued that the transition announcement has eroded 
this support. In July, Assistant Secretary Strickling stated that 
``almost 30 of [the 89 countries supporting U.N. governance of the 
Internet in 2012] have now demonstrated their support for 
multistakeholder governance of the domain name system by joining in the 
Governmental Advisory Committee's [GAC's] consensus position to move 
the transition proposal forward.'' This means that roughly 60 countries 
continue to oppose the multistakeholder model.
    But more fundamentally, support for the transition proposal in the 
GAC does not ipso facto mean that those governments would not prefer 
U.N. governance of the Internet. It could mean that they support ending 
the U.S. contractual relationship with ICANN and see it as an avenue 
toward asserting ITU governance of the Internet. In other words, the 
long-term impact of the transition on government positions vis-a-vis 
U.N. governance of the Internet is unknown.

    Question 6. Will a delay in the transition, to ensure 
accountability, push these foreign governments to abandon the mutli-
stakeholder model altogether or will it do more to prevent these 
governments from abusing it?
    Answer. In my opinion, it is unlikely that countries supportive of 
the multistakeholder model would abandon it. For years, the U.S. had 
worked with like-minded countries to resist efforts to have the 
International Telecommunication Union (ITU) assume a role in Internet 
governance. In the 2012 WCIT conference, 89 countries voted in support 
of a proposal to have the ITU assume some authority over the Internet. 
NTIA believes that the transition announcement convinced some 30 
countries to reconsider their position. However, 54 countries voted 
with the U.S. at the WCIT to oppose the proposal to have the ITU assume 
some authority over the Internet. As far as I know, there has been no 
significant shift in the position of countries that support of the 
multistakeholder model since the WCIT. If the U.S. said that it 
remained committed to the transition, but wanted more time to fully vet 
the proposal, I believe that these countries would remain supportive of 
the multistakeholder model.

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