![[Image]](icann01.jpg)
12 June 2002. Thanks to RF, ICANN Watch and RS.
These are three witness statements of the Congressional hearing on ICANN today.
Full witness list: http://commerce.senate.gov/~commerce/press/02/2002611336.html
Hearing on ICANN -- Science, Technology and Space SubcommitteeDate: Wednesday, June 12, 2002
Time: 2:30 PM
Location: Room 253 of the Russell Senate Office Building
Notes: Sen. Wyden will preside.Witness List
Panel I
The Honorable Nancy Victory [below], Assistant Secretary for Communications and Information, U.S. Department of Commerce, Room 4898, 1401 Constitution Avenue, NW, Washington, DC 20230
Mr. Peter Guerrero [below], Director, Physical Infrastructure Group, General Accounting Office, 441 G. St. NW, Washington, DC 20548
Mr. Stuart Lynn [below], President, Internet Corporation for Assigned Name and Numbers, 4676 Admiralty Way, Suite 330, Marina del Rey, CA 90292
Panel II
Mr. Karl Auerbach [Senate site], Member, ICANN Board of Directors, 170 West Taman Drive, San Jose, CA 95117
Mr. Roger Cochetti [Senate site], Senior Vice President, VeriSign, Inc., 1666 K. St. Suite 410, Washington, DC 20006
Mr. Alan Davidson [CDT site], Associate Director, Center for Democracy and Technology, 1634 Eye Street NW, Suite 1100, Washington, DC 200006
Mr. Cameron Powell [below], Vice President and General Counsel, SnapNames, 115 NW First Ave., Suite 300, Portland, OR 97209.
Source:
http://www.ntia.doc.gov/ntiahome/congress/2002/icann6122002.htm
Testimony of Nancy J. Victory
Assistant Secretary for Communications and
Information
National Telecommunications and Information
Administration
United States Department of
Commerce
Before the
Subcommittee on Science, Technology and
Space
Committee on Commerce, Science and
Transportation
United States Senate
On ICANN Governance
June 12, 2002
Thank you, Mr. Chairman. I would like to thank you and the members of the
Subcommittee for inviting me here today to testify on this important issue.
I am Nancy J. Victory, Assistant Secretary for Communications and Information
and Administrator of the National Telecommunications and Information
Administration.
There is no question that the Internet has seen tremendous growth over the last several years. What started as a small-scale system of links among U.S. academic institutions is now a gigantic global network connecting any American with a computer hook-up to individuals, companies and institutions around the world. The Internet has not merely grown in size. Its role in society has also expanded exponentially, particularly here in America. The Internet has become a significant and important means of doing research, communicating with each other, and conducting business. In fact, e-commerce sales by retail establishments reached $9.8 billion during the first quarter of 2002 - a 70 percent increase over first quarter 2000. Given the Internet's importance in all of these facets of daily life and the country's general economic well-being, it is essential that the Internet - and its underlying domain name management system - remain stable and secure. This is the primary concern of the Department of Commerce.
While the Department continues to serve as the steward of critical elements of the domain name system during the transition to private sector management, the Internet Corporation of Assigned Names and Numbers (ICANN) is the private sector organization responsible for its day-to-day management. Recently, there have been calls for ICANN to review its mission, structure and processes for their efficacy and appropriateness in light of the needs of today's Internet. ICANN itself has initiated its own process of reform. The Department believes these discussions are healthy and essential to ensuring the best path for stable and secure Internet management in the future. On behalf of the Department, I am pleased to participate here today to assist in further discourse on this important issue.
In my testimony today, I would like to briefly outline the Department's relationship with ICANN, the Department's activities during this reform effort, and the Department's views on the priority areas for ICANN reform.
The Department's Relationship with ICANN
ICANN was created out of an effort to bring more coordination and sustainability to the domain name management process, as the Internet grew into a large-scale global network. In June 1998, the Department issued the Statement of Policy on the Privatization of the Internet Domain Name System (DNS), known as the DNS White Paper. This document articulated four primary functions for global DNS coordination and management:
The White Paper concluded that these functions were relevant to the state of the DNS and should be primarily performed through private sector management. To this end, the Department stated that it was prepared to enter into agreement with a new not-for-profit corporation formed by private sector Internet stakeholders to administer policy for the Internet name and address system. ICANN was formed by private sector interests for this purpose, and, in the fall of 1998, the Department of Commerce entered into a memorandum of understanding (MOU) with ICANN to carry out these functions.
The MOU did not simply turn over management of the domain name system to ICANN. Rather, the purpose of this agreement was to give ICANN certain responsibilities during a transition period to allow the Department to ensure that ICANN possessed the capabilities to assume technical management of the DNS before it was transferred from the Federal government. Under the MOU, the domain name system management functions to be undertaken by ICANN included:
The relationship between the Department and ICANN is defined by legal agreements, and is not one of regulator and regulated. The Department plays no role in the internal governance or day-to-day operations of the organization. However, under the terms of the MOU, the Department may provide oversight to ensure that ICANN performs the MOU tasks and may offer expertise and advice on certain discrete issues, such as private sector functions related to technical management of the DNS and processes for making the management of the root server system more robust and secure. The Department's real ability to influence ICANN's activities is tied to renewal of the MOU. The MOU is set to expire on September 30, 2002, at which time the Department will have to decide whether to extend the agreement, modify the agreement, or allow it to expire.
Re-Examination of ICANN Is Appropriate
Since its inception less than four years ago, ICANN has had some significant successes and made progress in the development of a more competitive Internet environment. For example:
Yet, there has also been substantial criticism of some of ICANN's decisions
or lack thereof. For example:
Yet, separate and apart from these important stakeholder concerns, the Department believes that the current re-examination of ICANN's structure, process, role and mission is not only appropriate, but also inevitable. After all, ICANN is really the first experiment with having a private sector entity manage a huge, complex resource with multi-national implications. There was no precedent or model for ICANN to follow. It should not be surprising, then, that in hindsight some things should have been done differently. Moreover, the Internet has changed dramatically in scope and usage since ICANN was first conceived. Governance and decision-making processes that might have made sense several years ago may no longer make sense today. Accordingly, the Department views the current reform process as a timely and necessary step.
Reforming ICANN, however, will not be easy. One of the great strengths of the Internet - its diversity of stakeholders - is also one of ICANN's challenges. These stakeholders run the gamut from commercial carriers and businesses to public interest organizations and private citizens, not to mention technocrats, governments and assorted others. These different constituencies have different interests and priorities - and very different visions of DNS management. It will be difficult, if not impossible, for any reform effort to satisfy all of these different parties. Yet, while they may have different perspectives, these stakeholders should all share a common goal in maintaining a safe and stable Internet. The task before ICANN is to ensure that these interests stay focused on their common goal so that they all can benefit together.
DOC/NTIA Role in Exploring ICANN Reform
As I mentioned earlier, the Department believes that an examination of the ICANN experiment is a particularly appropriate undertaking at this time. Given the gravity of the Department's charge to ensure the stable and sound management of the Internet domain name system, we were especially heartened by ICANN's own call for reform and self-examination. Recently, Stuart Lynn, the Chief Executive Officer of ICANN, published a paper outlining his views on the organization's problems, as well as steps for reform. The ICANN board responded to Mr. Lynn's call for reform by establishing a Committee on Evolution and Reform, charged with constructing a plan to address these problems. In accomplishing this task, the Committee invited public participation and considered reform proposals from the ICANN community.
As part of the reform efforts, NTIA and other Departmental agencies engaged other U.S. Government agencies including, the Department of State, the Federal Trade Commission, the Federal Communications Commission, and other Commerce agencies including the Technology Administration, the International Trade Administration, and the U.S. Patent and Trademark Office to develop an interagency consensus on acceptable parameters for the ICANN reform process.
The Department further consulted private sector stakeholders including trade associations, businesses, academia, and public interest groups to gather a wide range of views on ICANN reform issues. Recognizing the global nature of the DNS, the Department also consulted international counterparts through ICANN's Governmental Advisory Committee and on a bilateral basis. And of course we have listened carefully to the views of Congress on this matter and have had the opportunity to consult with Congressional staff on the topic several times both prior to and during the ICANN reform process. We have shared these views with ICANN management and look forward to working with them on the organization's reform effort.
Summary of DOC/NTIA's Views Regarding Reform
As a result of these consultations and the Department's own independent analysis, the Department continues to support the goal of private sector management of the DNS. Indeed, private sector management seems to be the preference of virtually all of the Internet stakeholders with whom we have consulted. The Department strongly believes this approach is a much more effective vehicle than having such functions performed by an intergovernmental body, such as the International Telecommunication Union (ITU). We believe an intergovernmental body would be less responsive in managing an essentially private infrastructure. Further, such intergovernmental management would be inconsistent with U.S. efforts to privatize other global commercially driven communication services, such as Intelsat. Governmental input into ICANN is more appropriately provided through an effective Government Advisory Committee.
While generally supportive of private sector management, some stakeholders have urged abandonment of ICANN in favor of a new private sector entity. At this time, the Department considers this approach premature. ICANN is attempting to reform itself and the preliminary efforts of the Committee on Evolution and Reform show some promise. Starting over with a new entity would likely raise many of the same systemic problems that ICANN is currently in the process of tackling, as well as some issues ICANN may already have successfully addressed. Accordingly, the Department believes allowing time for the ICANN reform process is warranted.
Nevertheless, it is critical for ICANN reform to take place in a timely manner. If it is going to be effective, ICANN must instill confidence and legitimacy in its operations and focus solely on the business of DNS management. The September termination date of the MOU will be a key time for the Department to determine whether ICANN is on track for doing so. What will we be looking for in making this analysis? In general, we need to see that ICANN is on track to be professionally run and managed, in a stable manner, for the long term. In particular, the Department feels that progress needs to be made in several areas:
In sum, the Department continues to be supportive of the ICANN model. However, the Department does believe that ICANN needs to make certain reforms to assure the Department and the Internet community that it is able to carry out its important missions - effectively and in a stable manner - into the future. I have outlined above the types of reforms the Department will be looking for in making a determination in September as to whether to renew, extend or modify the MOU with ICANN. We look forward to working with this Committee, ICANN and the Internet community to see that these reforms are achieved.
Thank you and I would be happy to answer any questions that you may have.
Source: http://commerce.senate.gov/hearings/061202guerrero.pdf
GAO
United States General Accounting Office
Testimony
Before the Subcommittee on Science, Technology, and
Space, Committee on Commerce, Science, and
Transportation, U.S. SenateFor Release on Delivery
Expected at 2:30 p.m. EDT
Wednesday
June 12, 2002INTERNET
MANAGEMENTLimited Progress on
Privatization Project
Makes Outcome UncertainStatement of Peter Guerrero
Director, Physical Infrastructure IssuesGAO-02-805T
Mr. Chairman and Members of the Subcommittee:
We appreciate the opportunity to provide testimony today on the important
issue of privatizing the management of the Internet domain name system. This
system is a vital aspect of the Internet that works like an automated telephone
directory, allowing users to reach Web sites using easy-to-understand domain
names like www.senate.gov, instead of the string of numbers that computers
use when communicating with each other. As you know, the U.S. government
supported the development of the domain name system and, in 1997, the President
charged the Department of Commerce with transitioning it to private management.
The Department subsequently issued a policy statement, called the “White
Paper,” that defined the following four guiding principles for the
privatization effort:
After reviewing several proposals from private sector organizations, the Department chose the Internet Corporation for Assigned Names and Numbers (ICANN), a not-for-profit corporation, to carry out the transition. In November 1998, the Department entered into an agreement with ICANN in the form of a Memorandum of Understanding (MOU) under which the two parties agreed to collaborate on a joint transition project. The Department emphasized that the MOU was an essential means for the Department to ensure the continuity and stability of the domain name management functions that were then being performed by, or on the behalf of, the U.S. government. The MOU states that before making a transition to private sector management, the Department requires assurances that the private sector has the capability and resources to manage the domain name system. To gain these assurances, the Department and ICANN agreed in the MOU to complete a set of transition tasks. The Department’s tasks mainly relate to providing advice, coordination with foreign governments, and general oversight of the transition. ICANN agreed to undertake tasks that call for it to design, develop, and test procedures that could be used to manage the domain name system. Collectively, ICANN’s tasks address all four of the transition’s guiding principles.
Progress on and completion of each task is assessed by the Department on a case-by-case basis, with input from ICANN. Any amendments to the MOU, such as removing tasks, must be approved by both parties. However, the Department retains responsibility for determining when management of the domain name system will be transitioned to ICANN, using the procedures tested during the transition. The original MOU was scheduled to expire on September 2000. Because work on the transition was not completed within the original transition time frame, the MOU was amended several times, and its time frame extended twice. The amended MOU is currently due to expire in September 2002.
My testimony today responds to Senator Burns’ request that we review (1) ICANN’s progress in carrying out the transition, and (2) the Department’s assessment of the transition. To address these issues, we spoke with officials from the Department of Commerce and ICANN, as well as members of ICANN’s Board of Directors and outside experts. We also reviewed relevant documents and attended public meetings of ICANN. We conducted our work from June 2001 through May 2002 in accordance with generally accepted government auditing standards.
In summary, we found that the timing and eventual outcome of the transition remains highly uncertain. ICANN has made significant progress in carrying out MOU tasks related to one of the guiding principles of the transition effort—increasing competition—but progress has been much slower in the areas of increasing the stability and security of the Internet; ensuring representation of the Internet community in domain name policymaking; and using private, bottom-up coordination. For example, despite years of debate, ICANN has not yet decided on a way to represent the globally and functionally diverse group of Internet stakeholders within its decision-making processes. Earlier this year, ICANN’s president concluded that ICANN faced serious problems in accomplishing the transition and would not succeed in accomplishing its assigned mission without fundamental reform. Several of his proposed reforms were directed at increasing participation in ICANN by national governments, business interests, and other Internet stakeholders; revamping the composition of ICANN’s Board and the process for selecting Board members; and establishing broader funding for ICANN’s operations. In response, ICANN’s Board established an internal committee to recommend options for reform. The committee’s May 31, 2002, report built on several of the president’s proposals and made recommendations involving, among other things, changes to ICANN’s organizational structure. The Board plans to discuss the committee’s recommendations at ICANN’s upcoming meeting in Bucharest in late June 2002.
Although the transition is well behind schedule, the Department’s public assessment of the progress being made on the transition has been limited for several reasons. First, the Department carries out its oversight of ICANN’s MOU-related activities mainly through informal discussions with ICANN officials. As a result, little information is made publicly available. Second, although the transition is past its original September 2000 completion date, the Department has not provided a written assessment of ICANN’s progress since mid-1999. The MOU required only a final joint project report. Just prior to the ICANN president’s announcement of ICANN’s serious problems, Department officials told us that substantial progress had been made on the project, though they would not speculate on ICANN’s ability to complete the transition tasks before September 2002, when the current MOU is set to expire. Third, although the Department stated that it welcomed the call for the reform of ICANN, they have not yet taken a public position on reforms being proposed. They noted that the Department is following ICANN’s reform effort closely, and is consulting with U.S. business and public interest groups and foreign governments to gather their views on this effort. Because the Department is responsible for gaining assurance, as the steward of the transition process, that ICANN has the resources and capability to manage the domain name system, we are recommending that the Secretary of Commerce issue a status report assessing the transition’s progress, the work that remains to be done, and the estimated timeframe for completing it. In addition, the report should discuss any changes to the transition tasks or the Department’s relationship with ICANN that result from ICANN’s reform initiative.
We discussed our characterization of ICANN’s progress and the Department’s assessment of the transition with officials from the Department, who stated that they generally agree with GAO’s characterization of the Department’s relationship with ICANN and indicated that it would take our recommendation with respect to an interim report under consideration.
From its origins as a research project sponsored by the U.S. government, the Internet has grown increasingly important to American businesses and consumers, serving as the host for hundreds of billions of dollars of commerce each year.1 It is also a critical resource supporting vital services, such as power distribution, health care, law enforcement, and national defense. Similar growth has taken place in other parts of the world.
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1 For example, a March 2001 report by the Census Bureau estimated that online business accounted for $485 billion in shipments for manufacturers and $134 billion in sales for wholesalers in the United States in 1999. The Census data include transactions conducted over the Internet and private data networks. For more details, see http://www.census.gov/estats/.
The Internet relies upon a set of functions, called the domain name system, to ensure the uniqueness of each e-mail and Web site address. The rules that govern the domain name system determine which top-level domains (the string of text following the right-most period, such as .gov) are recognized by most computers connected to the Internet. The heart of this system is a set of 13 computers called “root servers,” which are responsible for coordinating the translation of domain names into Internet addresses. Appendix I provides more background on how this system works.
The U.S. government supported the implementation of the domain name system for nearly a decade, largely through a Department of Defense contract. Following a 1997 presidential directive, the Department of Commerce began a process for transitioning the technical responsibility for the domain name system to the private sector. After requesting and reviewing public comments on how to implement this goal, in June 1998 the Department issued a general statement of policy, known as the “White Paper.” In this document, the Department stated that because the Internet was rapidly becoming an international medium for commerce, education, and communication, the traditional means of managing its technical functions needed to evolve as well. Moreover, the White Paper stated the U.S. government was committed to a transition that would allow the private sector to take leadership for the management of the domain name system. Accordingly the Department stated that the U.S. government was prepared to enter into an agreement to transition the Internet’s name and number process to a new not-for-profit organization. At the same time, the White Paper said that it would be irresponsible for the U.S. government to withdraw from its existing management role without taking steps to ensure the stability of the Internet during the transition. According to Department officials, the Department sees its role as the responsible steward of the transition process. Subsequently, the Department entered into an MOU with ICANN to guide the transition.
ICANN has made significant progress in carrying out MOU tasks related to one of the guiding principles of the transition effort—increasing competition. However, progress has been much slower on activities designed to address the other guiding principles: increasing the stability and security of the Internet; ensuring representation of the Internet community in domain name policy-making; and using private, bottom-up coordination. Earlier this year, ICANN’s president concluded that ICANN faced serious problems in accomplishing the transition and needed fundamental reform. In response, ICANN’s Board established an internal committee to recommend options for reform.
ICANN Has Increased Domain Name Competition
ICANN made important progress on several of its assigned tasks related to promoting competition. At the time the transition began, only one company, Network Solutions, was authorized to register names under the three publicly available top-level domains (.com, .net, and .org). In response to an MOU task calling for increased competition, ICANN successfully developed and implemented procedures under which other companies, known as registrars, could carry out this function. As a result, by early 2001, more than 180 registrars were certified by ICANN. The cost of securing these names has now dropped from $50 to $10 or less per year.
Another MOU task called on ICANN to expand the pool of available domain names through the selection of new top-level domains. To test the feasibility of this idea, ICANN’s Board selected seven new top-level domains from 44 applications; by March 2002, it had approved agreements with all seven of the organizations chosen to manage the new domains. At a February 2001 hearing before a Subcommittee of the U.S. House of Representatives, witnesses presented differing views on whether the selection process was transparent and based on clear criteria.2 ICANN’s internal evaluation of this test was still ongoing when we finished our audit work in May 2002.
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2 The hearing took place before the House Committee on Energy and Commerce, Subcommittee on Telecommunications and the Internet, on February 8, 2001.
Efforts to Improve Stability and Security Are Behind Schedule
Several efforts to address the White Paper’s guiding principle for improving the security and stability of the Internet are behind schedule. These include developing operational requirements and security policies to enhance the stability and security of the domain name system root servers, and formalizing relationships with other entities involved in running the domain name system.
Recent reports by federally sponsored organizations have highlighted the importance of the domain name system to the stability and security of the entire Internet. A presidential advisory committee reported in 1999 that the domain name system is the only aspect of the Internet where a single vulnerability could be exploited to disrupt the entire Internet.3 More recently, the federal National Infrastructure Protection Center issued several warnings in 2001 stating that multiple vulnerabilities in commonly used domain name software present a serious threat to the Internet infrastructure. In recognition of the critical role that the domain name system plays for the Internet, the White Paper designated the stability and security of the Internet as the top priority of the transition.
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3 President’s National Security Telecommunications Advisory Committee, Network Group Internet Report: An Examination of the NS/EP Implications of Internet Technologies, (Washington, D.C.: June 1999).
The MOU tasked ICANN and the Department with developing operational requirements and security policies to enhance the stability and security of the root servers—the computers at the heart of the domain name system. In June 1999, ICANN and the Department entered into a cooperative research and development agreement to guide the development of these enhancements, with a final report expected by September 2000. This deadline was subsequently extended to December 2001 and the MOU between ICANN and the Department was amended to require the development of a proposed enhanced architecture (or system design) for root server security, as well as a transition plan, procedures, and implementation schedule. An ICANN advisory committee, made up of the operators of the 13 root servers and representatives of the Department, is coordinating research on this topic. Although the chairman of the committee stated at ICANN’s November 2001 meeting that it would finish its report by February or March 2002, it had not completed the report as of May 2002.
To further enhance the stability of the Internet, the White Paper identified the need to formalize the traditionally informal relationships among the parties involved in running the domain name system. The White Paper pointed out that many commercial interests, staking their future on the successful growth of the Internet, were calling for a more formal and robust management structure. In response, the MOU and its amendments included several tasks that called on ICANN to enter into formal agreements with the parties that traditionally supported the domain name system through voluntary efforts. However, as of May 2002, few such agreements had been signed. ICANN’s Board has approved a model agreement to formalize the relationship between the root server operators and ICANN, but no agreements had been reached with any of the operators as of May 2002. Similarly, there are roughly 240 country-code domains (2-letter top-level domains reserved mainly for national governments), such as .us for the United States. As with the root servers, responsibility for these domains was originally given by the Internet’s developers to individuals who served as volunteers. Although the amended MOU tasked ICANN with reaching contractual agreements with these operators, it has reached agreements with only 2 domain operators as of May 2002.4 Finally, the amended MOU tasked ICANN with reaching formal agreements with the Regional Internet Registries, each of which is responsible for allocating Internet protocol numbers to users in one of three regions of the world.5 The registries reported that progress was being made on these agreements, though none had been reached as of May 2002.
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4 ICANN signed agreements with the operators responsible for the .au (Australia) and .jp (Japan) country-code domains and their respective governments.5 The areas of responsibility for the three Regional Internet Address Registries are: the Western Hemisphere and southern Africa, Europe and northern Africa, and Asia.
Slow Progress for Creating Processes to Ensure Representation and Bottom-up Coordination
Progress has also been slow regarding the other two guiding principles outlined in the White Paper, which call for the creation of processes to represent the functional and geographic diversity of the Internet, and for the use of private, bottom-up coordination in preference to government control. In order for the private sector organization to derive legitimacy from the participation of key Internet stakeholders, the White Paper suggested the idea of a board of directors that would balance the interests of various Internet constituencies, such as Internet service providers, domain name managers, technical bodies, and individual Internet users.
The White Paper also suggested the use of councils to develop, recommend, and review policies related to their areas of expertise, but added that the board should have the final authority for making policy decisions. The Department reinforced the importance of a representative board in a 1998 letter responding to ICANN’s initial proposal. The Department’s letter cited public comments suggesting that without an open membership structure, ICANN would be unlikely to fulfill its goals of private, bottom-up coordination and representation. ICANN’s Board responded to the Department by amending its bylaws to make it clear that the Board has an “unconditional mandate” to create a membership structure that would elect at-large directors on the basis of nominations from Internet users and other participants.
To implement these White Paper principles, the MOU between ICANN and the Department includes two tasks: one relating to developing mechanisms that ensure representation of the global and functional diversity of the Internet and its users, and one relating to allowing affected parties to participate in the formation of ICANN’s policies and procedures through a bottom-up coordination process. In response to these two tasks, ICANN adopted the overall structure suggested by the White Paper. First, ICANN created a policy-making Board of Directors. The initial Board consisted of ICANN’s president and 9 at-large members who were appointed at ICANN’s creation. ICANN planned to replace the appointed at-large Board members with 9 members elected by an open membership to reflect the diverse, worldwide Internet community. Second, ICANN organized a set of three supporting organizations to advise its Board on policies related to their areas of expertise. One supporting organization was created to address Internet numbering issues, one was created to address protocol development issues, and one was created to address domain name issues.6 Together these three supporting organizations selected 9 additional members of ICANN’s Board–3 from each organization. Thus, ICANN’s Board was initially designed to reflect the balance of interests described in the White Paper. Figure 1 illustrates the relationships among ICANN’s supporting organizations and its Board of Directors, as well as several advisory committees ICANN also created to provide input without formal representation on its Board.
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6 In the context of ICANN’s responsibilities, protocols are the technical rules that allow communications among networks.
Despite considerable debate, ICANN has not resolved the question of how to
fully implement this structure, especially the at-large Board members.
Specifically, in March 2000, ICANN’s Board noted that extensive discussions
had not produced a consensus regarding the appropriate method to select at-large
representatives. The Board therefore approved a compromise under which
5 at-large members would be elected through regional, online elections. In
October 2000, roughly 34,000 Internet users around the world voted in the
at-large election. The 5 successful candidates joined ICANN’s Board
in November 2000, replacing interim Board members. Four of the appointed
interim Board members first nominated in ICANN’s initial proposal continue
to serve on the Board.
Parallel with the elections, the Board also initiated an internal study to evaluate options for selecting at-large Board members. In its November 2001 report, the committee formed to conduct this study recommended the creation of a new at-large supporting organization, which would select 6 Board members through regional elections. Overall, the number of atlarge seats would be reduced from 9 to 6, and the seats designated forother supporting organizations would increase from 9 to 12.7 A competing, outside study by a committee made up of academic and nonprofit interests recommended continuing the initial policy of directly electing at-large Board members equal to the number selected by the supporting organizations. This committee also recommended strengthening the atlarge participation mechanisms through staff support and a membership council similar to those used by the existing supporting organizations.8 Because of ongoing disagreement among Internet stakeholders about how individuals should participate in ICANN’s efforts, ICANN’s Board referred the question to a new Committee on ICANN Evolution and Reform. Under the current bylaws, the 9 current at-large Board seats will cease to exist after ICANN’s 2002 annual meeting, to be held later this year.
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7 See http://www.atlargestudy.org/final_report.shtml
Although the MOU calls on ICANN to design, develop, and test its procedures, the two tasks involving the adoption of the at-large membership process were removed from the MOU when it was amended in August 2000. However, as we have noted, this process was not fully implemented at the time of the amendment because the election did not take place until October 2000, and the evaluation committee did not release its final report until November 2001. When we discussed this amendment with Department officials, they said that they agreed to the removal of the tasks in August 2000 because ICANN had a process in place to complete them. Nearly 2 years later, however, the issue of how to structure ICANN’s Board to achieve broad representation continues to be unresolved and has been a highly contentious issue at ICANN’s recent public meetings.
In addition, the amended MOU tasked ICANN with developing and testing an independent review process to address claims by members of the Internet community who were adversely affected by ICANN Board decisions that conflicted with ICANN’s bylaws. However, ICANN was unable to find qualified individuals to serve on a committee charged with implementing this policy. In March 2002, ICANN’s Board referred this unresolved matter to the Committee on ICANN Evolution and Reform for further consideration.
ICANN’s President Calls for Major Reform of the Corporation
In the summer of 2001, ICANN’s current president was generally optimistic about the corporation’s prospects for successfully completing the remaining transition tasks. However, in the face of continued slow progress on key aspects of the transition, such as reaching formal agreements with the root server and country-code domain operators, his assessment changed. In February 2002, he reported to ICANN’s Board that the corporation could not accomplish its assigned mission on its present course and needed a new and reformed structure. The president’s proposal for reform, which was presented to ICANN’s Board in February, focused on problems he perceived in three areas: (1) too little participation in ICANN by critical entities, such as national governments, business interests, and entities that share responsibility for the operation of the domain name system (such as root server operators and countrycode domain operators); (2) too much focus on process and representation and not enough focus on achieving ICANN’s core mission; and (3) too little funding for ICANN to hire adequate staff and cover other expenditures. He added that in his opinion, there was little time left to make necessary reforms before the ICANN experiment came to “a grinding halt.”
Several of his proposed reforms challenged some of the basic approaches for carrying out the transition. For example, the president concluded that a totally private sector management model had proved to be unworkable. He proposed instead a “well-balanced public-private partnership” that involved an increased role for national governments in ICANN, including having several voting members of ICANN’s Board selected by national governments. The president also proposed changes that would eliminate global elections of at-large Board members by the Internet community, reduce the number of Board members selected by ICANN’s supporting organizations, and have about a third of the board members selected through a nominating committee composed of Board members and others selected by the Board. He also proposed that ICANN’s funding sources be broadened to include national governments, as well as entities that had agreements with ICANN or received services from ICANN.
In response, ICANN’s Board instructed an internal Committee on ICANN Evolution and Reform (made up of four ICANN Board members) to consider the president’s proposals, along with reactions and suggestions from the Internet community, and develop recommendations for the Board’s consideration on how ICANN could be reformed. The Committee reported back on May 31, 2002, with recommendations reflecting their views on how the reform should be implemented. For example, the committee built on the ICANN president’s earlier proposal to change the composition of the Board and have some members be selected through a nominating committee process, and to create an ombudsman to review complaints and criticisms about ICANN and report the results of these reviews to the Board. In other cases, the committee agreed with conclusions reached by the president (such as the need for increasing the involvement of national governments in ICANN and improving its funding), but did not offer specific recommendations for addressing these areas. The committee’s report, which is posted on ICANN’s public Web site, invited further comment on the issues and recommendations raised in preparation for ICANN’s June 2002 meeting in Bucharest, Romania. The committee recommended that the Board act in Bucharest to adopt a reform plan that would establish the broad outline of a reformed ICANN, so that the focus could be shifted to the details of implementation. The committee believed that this outline should be then be filled in as much as possible between the Bucharest meeting and ICANN’s meeting in Shanghai in late October 2002.
As mentioned previously, the Department is responsible for general oversight of work done under the MOU, as well as the responsibility for determining when ICANN, the private sector entity chosen by the Department to carry out the transition, has demonstrated that it has the resources and capability to manage the domain name system. However, the Department’s public assessment of the status of the transition process has been limited in that its oversight of ICANN has been informal, it has not issued status reports, and it has not publicly commented on specific reform proposals being considered by ICANN.
According to Department officials, the Department’s relationship with ICANN is limited to its agreements with the corporation, and its oversight is limited to determining whether the terms of these agreements are being met.9 They added that the Department does not involve itself in the internal governance of ICANN, is not involved in ICANN’s day-to-day operations, and would not intervene in ICANN’s activities unless the corporation’s actions were inconsistent with the terms of its agreements with the Department. Department officials emphasized that because the MOU defines a joint project, decisions regarding changes to the MOU are reached by mutual agreement between the Department and ICANN. In the event of a serious disagreement with ICANN, the Department would have recourse under the MOU to terminate the agreement.10 Department officials characterized its limited involvement in ICANN’s activities as being appropriate and consistent with the purpose of the project: to test ICANN’s ability to develop the resources and capability to manage the domain name system with minimal involvement of the U.S. government.
Department officials said that they carry out their oversight of ICANN’s MOU-related activities mainly through ongoing informal discussions with ICANN officials. They told us that there is no formal record of these discussions. The Department has also retained authority to approve certain activities under its agreements with ICANN, such as reviewing and approving certain documents related to root server operations. This would include, for example, agreements between ICANN and the root server operators. In addition, the Department retains policy control over the root zone file, the “master file” of top-level domains shared among the 13 root servers. Changes to this file, such as implementing a new top-level domain, must first be authorized by the Department.
____________________
9 In a July 2000 report prepared in response to a congressional mandate, we reviewed questions and issues related to the legal basis and authority for the Department’s relationship with ICANN. U.S. General Accounting Office, Department of Commerce: Relationship with the Internet Corporation for Assigned Names and Numbers, GAO/OCG-00-33R (Washington, D.C.: July 7, 2000). This report discusses the development of the MOU, as well as other agreements related to the ongoing technical operation of the domain name system. We list the various agreements between ICANN and the Department in appendix II, which also lists significant events in the history of the domain name system.10 If the Department withdraws its recognition of ICANN by terminating the MOU, ICANN has agreed to assign to the Department any rights that ICANN has in all existing contracts with registrars and registries.
In addition, the Department sends officials to attend ICANN’s public forums and open Board of Directors meetings, as do other countries and Internet interest groups. According to the Department, it does not participate in ICANN decision-making at these meetings but merely acts as an observer. The Department also represents the United States on ICANN’s Governmental Advisory Committee, which is made up of representatives of about 70 national governments and intergovernmental bodies, such as treaty organizations. The Committee’s purpose is to provide ICANN with nonbinding advice on ICANN activities that may relate to concerns of governments, particularly where there may be an interaction between ICANN’s policies and national laws or international agreements.
The Department made a considerable effort at the beginning of the transition to create an open process that solicited and incorporated input from the public in formulating the guiding principles of the 1998 White Paper. However, since the original MOU, the Department’s public comments on the progress of the transition have been general in nature and infrequent, even though the transition is taking much longer than anticipated. The only report specifically called for under the MOU is a final joint project report to document the outcome of ICANN’s test of the policies and procedures designed and developed under the MOU. This approach was established at a time when it was expected that the project would be completed by September 2000.
So far, there has been only one instance when the Department provided ICANN with a formal written assessment of the corporation’s progress on specific transition tasks. This occurred in June 1999, after ICANN took the initiative to provide the Department and the general public with a status report characterizing its progress on MOU activities. In a letter to ICANN, the Department stated that while ICANN had made progress, there was still important work to be done. For, example, the Department stated that ICANN’s “top priority” must be to complete the work necessary to put in place an elected Board of Directors on a timely basis, adding that the process of electing at-large directors should be complete by June 2000. ICANN made the Department’s letter, as well as its positive response, available to the Internet community on its public Web site.
Although ICANN issued additional status reports in the summers of 2000 and 2001, the Department stated that it did not provide written views and recommendations regarding them, as it did in July 1999, because it agreed with ICANN’s belief that additional time was needed to complete the MOU tasks. Department officials added that they have been reluctant to comment on ICANN’s progress due to sensitivity to international concerns that the United States might be seen as directing ICANN’s actions. The officials stated that they did not plan to issue a status report at this time even though the transition is well behind schedule, but will revisit this decision as the September 2002 termination date for the MOU approaches.
When we met with Department officials in February 2002, they told us that substantial progress had been made on the project, but they would not speculate on ICANN’s ability to complete its tasks by September 2002. The following week, ICANN’s president released his report stating that ICANN could not succeed without fundamental reform. In response, Department officials said that they welcomed the call for the reform of ICANN and would follow ICANN’s reform activities and process closely. When we asked for their views on the reform effort, Department officials stated that they did not wish to comment on specifics that could change as the reform process proceeds. To develop the Department’s position on the effort, they said that they are gathering the views of U.S. business and public interest groups, as well as other executive branch agencies, such as the Department of State; the Office of Management and Budget; the Federal Communications Commission; and components of the Department of Commerce, such as the Patent and Trademark Office. They also said that they have consulted other members of ICANN’s Governmental Advisory Committee to discuss with other governments how best to support the reform process. They noted that the Department is free to adjust its relationship with ICANN in view of any new mission statement or restructuring that might result from the reform effort. Department officials said that they would assess the necessity for such adjustments, or for any legislative or executive action, depending on the results of the reform process.
In conclusion, Mr. Chairman, the effort to privatize the domain name system has reached a critical juncture, as evidenced by slow progress on key tasks and ICANN’s current initiative to reevaluate its mission and consider options for reforming its structure and operations. Until these issues are resolved, the timing and eventual outcome of the transition effort remain highly uncertain, and ICANN’s legitimacy and effectiveness as the private sector manager of the domain name system remain in question. In September 2002, the current MOU between the Department and ICANN will expire. The Department will be faced with deciding whether the MOU should be extended for a third time, and if so, what amendments to the MOU are needed, or whether some new arrangement with ICANN or some other organization is necessary. The Department sees itself as the responsible steward of the transition, and is responsible for gaining assurance that ICANN has the resources and capability to assume technical management of the Internet domain name system. Given the limited progress made so far and the unsettled state of ICANN, Internet stakeholders have a need to understand the Department’s position on the transition and the prospects for a successful outcome.
In view of the critical importance of a stable and secure Internet domain name system to governments, business, and other interests, we recommend that the Secretary of Commerce issue a status report detailing the Department’s assessment of the progress that has been made on transition tasks, the work that remains to be done on the joint project, and the estimated timeframe for completing the transition. In addition, the status report should discuss any changes to the transition tasks or the Department’s relationship with ICANN that result from ICANN’s reform initiative. Subsequent status reports should be issued periodically by the Department until the transition is completed and the final project report is issued.
This concludes my statement, Mr. Chairman. I will be pleased to answer any questions that you and other Members of the Subcommittee may have.
Contact and Acknowledgments
For questions regarding this testimony, please contact Peter Guerrero at
(202) 512-8022. Individuals making key contributions to this testimony included
John P. Finedore; James R. Sweetman, Jr.; Mindi Weisenbloom; Keith Rhodes;
Alan Belkin; and John Shumann.
Although the U.S. government supported the development of the Internet, no single entity controls the entire Internet. In fact, the Internet is not a single network at all. Rather, it is a collection of networks located around the world that communicate via standardized rules called protocols. These rules can be considered voluntary because there is no formal institutional or governmental mechanism for enforcing them. However, if any computer deviates from accepted standards, it risks losing the ability to communicate with other computers that follow the standards. Thus, the rules are essentially self-enforcing. One critical set of rules, collectively known as the domain name system, links names like www.senate.gov with the underlying numerical addresses that computers use to communicate with each other. Among other things, the rules describe what can appear at the end of a domain name. The letters that appear at the far right of a domain name are called top-level domains (TLDs) and include a small number of generic names such as .com and .gov, as well as country-codes such as .us and .jp (for Japan).
The next string of text to the left (“senate” in the www.senate.gov example) is called a second-level domain and is a subset of the top-level domain. Each top-level domain has a designated administrator, called a registry, which is the entity responsible for managing and setting policy for that domain. Figure 2 illustrates the hierarchical organization of domain names with examples, including a number of the original top-level domains and the country-code domain for the United States.
![[Image]](icann02.jpg)
The domain name system translates names into addresses and back again in a process transparent to the end user. This process relies on a system of servers, called domain name servers, which store data linking names with numbers. Each domain name server stores a limited set of names and numbers. They are linked by a series of 13 root servers, which coordinate the data and allow users to find the server that identifies the site they want to reach. They are referred to as root servers because they operate at the root level (also called the root zone), as depicted in figure 2. Domain name servers are organized into a hierarchy that parallels the organization of the domain names. For example, when someone wants to reach the Web site at www.senate.gov, his or her computer will ask one of the root servers for help.11 The root server will direct the query to a server that knows the location of names ending in the .gov top-level domain. If the address includes a sub-domain, the second server refers the query to a third server—in this case, one that knows the address for all names ending in senate.gov. This server will then respond to the request with an numerical address, which the original requester uses to establish a direct connection with the www.senate.gov site. Figure 3 illustrates this example.
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11 This example assumes that the required domain name information is not available on the user’s local network.
![[Image]](icann03.jpg)
Within the root zone, one of the servers is designated the authoritative
root (or the “A root” server). The authoritative root server maintains
the master copy of the file that identifies all top-level domains, called
the “root zone file,” and redistributes it to the other 12 servers.
Currently, the authoritative root server is located in Herndon, Virginia.
In total, 10 of the 13 root servers are located in the United States, including
3 operated by agencies of the U.S. government. ICANN does not fund the operation
of the root servers. Instead, they are supported by the efforts of individual
administrators and their sponsoring organizations. Table 1 lists the operator
and location of each root server.
![[Image]](icann04.jpg)
Because much of the early research on internetworking was funded by the Department of Defense (DOD), many of the rules for connecting networks were developed and implemented under DOD sponsorship. For example, DOD funding supported the efforts of the late Dr. Jon Postel, an Internet pioneer working at the University of Southern California, to develop and coordinate the domain name system. Dr. Postel originally tracked the names and numbers assigned to each computer. He also oversaw the operation of the root servers, and edited and published the documents that tracked changes in Internet protocols. Collectively, these functions became known as the Internet Assigned Numbers Authority, commonly referred to as IANA. Federal support for the development of the Internet was also provided through the National Science Foundation, which funded a network designed for academic institutions.
Two developments helped the Internet evolve from a small, text-based research network into the interactive medium we know today. First, in 1990, the development of the World Wide Web and associated programs called browsers made it easier to view text and graphics together, sparking interest of users outside of academia. Then, in 1992, the Congress enacted legislation for the National Science Foundation to allow commercial traffic on its network. Following these developments, the number of computers connected to the Internet grew dramatically. In response to the growth of commercial sites on the Internet, the National Science Foundation entered into a 5-year cooperative agreement in January 1993 with Network Solutions, Inc., to take over the jobs of registering new, nonmilitary domain names, including those ending in .com, .net, and .org, and running the authoritative root server.12 At first, the Foundation provided the funding to support these functions. As demand for domain names grew, the Foundation allowed Network Solutions to charge an annual fee of $50 for each name registered. Controversy surrounding this fee was one of the reasons the United States government began its efforts to privatize the management of the domain name system.
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12 Network Solutions later merged with VeriSign. The new company currently uses the VeriSign name. Under its original agreement with the National Science Foundation, Network Solutions was also responsible for registering second-level domain names in the restricted .gov and .edu top-level domains.
_______________________________________________
Nov. 1983
Working under funding provided by the Department of Defense, a group led by Drs. Paul Mockapetris and Jon Postel creates the domain name system for locating networked computers by name instead of by number.
Oct. 1984
Dr. Postel publishes specifications for the first six generic top-level domains (.com, .org, .edu, .mil, .gov, and .arpa). By July 1985, the .net domain was added.
Nov. 1992
President Bush signs into law an act requiring the National Science Foundation to allow commercial activity on the network that became the Internet.
Jan. 1993
Network Solutions, Inc., signs a 5-year cooperative agreement with the National Science Foundation to manage public registration of new, nonmilitary domain names, including those ending in .com, .net, or .org.
July 1997
President Clinton issues a presidential directive on electronic commerce, making the Department of Commerce the agency responsible for managing the U.S. government’s role in the domain name system.
Jan. 1998
The Department of Commerce issues the “Green Paper,” which is a proposal to improve technical management of Internet names and addresses through privatization. Specifically, the Green Paper proposes a variety of issues for discussion, including the creation of a new nonprofit corporation to manage the domain name system.
June 1998
In response to comments on the Green Paper, the Department of Commerce issues a policy statement known as the “White Paper,” which states that the U.S. government is prepared to transition domain name system management to a private, nonprofit corporation. The paper includes the four guiding principles of privatization: stability; competition; representation; and private, bottom-up coordination.
Nov. 1998
The Internet Corporation for Assigned Names and Numbers (ICANN) incorporates in California. ICANN’s by-laws call for a 19-member Board with 9 members elected “at-large.”
Nov. 1998
The Department of Commerce and ICANN enter into an MOU that states the parties will jointly design, develop, and test the methods and procedures necessary to transfer domain name system management to ICANN. The MOU is set to expire in September 2000.
June 1999
ICANN issues its first status report, which lists ICANN’s progress to date and states that there are important issues that still must be addressed.
June 1999
ICANN and the Department of Commerce enter into a cooperative research and development agreement to study root server stability and security. The study is intended to result in a final report by September 2000.
Nov. 1999
ICANN and the Department of Commerce approve MOU amendment 1 to reflect the roles of ICANN and Network Solutions, Inc.
Feb. 2000
The Department of Commerce contracts with ICANN to perform certain technical management functions related to the domain name system, such as address allocation and root zone coordination.
Mar. 2000
At a meeting in Cairo, Egypt, ICANN adopts a process for external review of its decisions that utilizes outside experts, who will be selected at an unspecified later date. ICANN also approves a compromise whereby 5 atlarge Board members will be chosen in regional online elections.
June 2000
ICANN issues its second Status Report, which states that several of the tasks have been completed, but work on other tasks was still under way.
July 2000
At a meeting in Yokahama, Japan, ICANN’s Board approves a policy for the introduction of new top-level domains.
Aug. 2000
The Department of Commerce and ICANN approve MOU amendment 2, which deleted tasks related to membership mechanisms, public information, and registry competition and extended the MOU until September 2001. They also agree to extend the cooperative research and development agreement on root server stability and security through September 2001.
Oct. 2000
ICANN holds worldwide elections to replace 5 of the 9 interim Board members appointed at ICANN’s creation.
Nov. 2000
At a meeting in California, ICANN selects 7 new top-level domain names: .biz (for use by businesses), .info (for general use), .pro (for use by professionals), .name (for use by individuals), .aero (for use by the air transport industry), .coop (for use by cooperatives), and .museum (for use by museums).
March 2001
The Department of Commerce enters into a second contract with ICANN regarding technical functions of the domain name system.
May 2002
ICANN and the Department of Commerce approve MOU amendment 3, which conforms the MOU with the Department’s new agreement with VeriSign (formerly Network Solutions.)
July 2001
ICANN issues its third Status Report, which states that most of the tasks in the MOU are either complete or well on their way to completion.
Aug. 2001
ICANN’s At-Large Membership Study Committee issues a preliminary report that recommends creating a new at-large supporting organization. The new organization would be open to anyone with a domain name and would elect 6 members of ICANN’s Board of Directors.
Sep. 2001
The Department of Commerce and ICANN agree to extend the MOU through September 2002 and the cooperative research and development agreement through June 2002 (amendment 4).
Nov. 2001
Following the September 11 terrorist attacks, ICANN devotes the bulk of its annual meeting to security issues. The At-large Membership Study Committee releases its final report, which retains the Board reorganization first proposed in August 2001.
Feb. 2002
ICANN president Dr. M. Stuart Lynn releases a proposal for the reform of ICANN.
Mar. 2002
At a Board meeting in Ghana, ICANN’s Board refers Dr. Lynn’s proposal and questions about at-large representation and outside review to an internal Committee on ICANN Evolution and Reform.
Apr. 2002
The Department of Commerce exercises an option in its contract with ICANN regarding the technical functions of the domain name system, extending it through September 2002.
May 2002
ICANN’s Committee on Evolution and Reform reports its recommendations to ICANN’s Board.
June 2002
ICANN’s Board is scheduled to meet in Bucharest, Romania.
Oct. 2002
ICANN’s Board is scheduled to meet in Shanghai, China
(545001)
Source:
http://commerce.senate.gov/hearings/061202lynn.pdf
Testimony of M. Stuart Lynn
Before the
Senate Committee on Commerce, Science and Transportation
Subcommittee on Science, Technology, and Space
June 12, 2002
Mr. Chairman and members of the subcommittee, I appreciate the opportunity to appear here today to discuss the ongoing process of reform and restructuring of the Internet Corporation for Assigned Names and Numbers (ICANN), which I have served as President and Chief Executive Officer since March of last year.
The timing of this hearing is opportune, because reform and restructuring are front and center of ICANN's agenda at its next round of meetings in late June, and thus I welcome input from you and other interested legislators. If ICANN is to succeed as a private-sector coordinating body, its structure and operation must deserve the strong support not only of the Administration, but of the U.S. Congress as well. I welcome today's hearing as a significant step in that dialogue.
The Debate Over ICANN
ICANN embodies a complex idea: an open and participatory non-governmental entity that seeks to balance widely diverse interests. Thus, ICANN is intended to be a lightning rod for loud and noisy debates, and considerable contention. In fact, in a very real sense that is a principal reason ICANN was created -- to establish a single forum in which all these varied interests, from around the globe, could come together and, where possible, arrive at consensus solutions to complex technical and policy issues essential to the continued stable operation of the Internet.
An observer in the Wall Street Journal recently noted that, to the uninitiated outsider, the intensity and obscurity of ICANN debates evoke the image of die-hard Star Trek fans arguing whether Captain Kirk could defeat Captain Picard. There is more than a grain of truth to that. But this fact -- that ICANN is intended to be a forum for discussion and debate, sometimes quite vigorous -- does not mean that ICANN should not or cannot operate effectively. ICANN’s core values are fundamental to its character and legitimacy -- core values such as open participation (ensuring that all interested parties have their say) and consensus (seeking wherever possible to arrive at commonly-agreed solutions). Taken to extremes, however, these can result – and, in my view, have too often resulted – in near-paralysis on important issues.
A central theme for my testimony today is the need for fundamental reform of ICANN's processes and procedures. A bottom-up policy development process like ICANN’s must be fair, open, and transparent, but the procedures themselves cannot be allowed to prevent reaching decisions when consensus proves elusive or impossible. It is an unfortunate fact of life that consensus-based procedures can be abused to prevent effective and timely action by ICANN. To carry out its mission, ICANN must not become prisoner to the lowest common denominator of special interests but must seek out the technical or policy solution that best serves the global Internet community.
Finding the correct balance between these sometimes conflicting objectives is what the current reform and evolution process is all about. The debate was begun by the publication of my report to the ICANN Board in February of this year. That report, entitled “ICANN -- The Case For Reform,” is attached to this testimony, and was the result of my evaluation of ICANN, its operations and processes during the first year of my tenure. It concluded that, despite considerable accomplishments to date, ICANN must continue to evolve in both structure and operation if it is to meet the more complex tasks facing it in the foreseeable future. I believe that deep, meaningful reforms are needed if ICANN is to continue to be as successful in the future as it has been to date.
I am very pleased that the call for a public debate on these issues has been embraced by virtually all ICANN participants, including the United States and other governments. Over the past few months we have seen a very productive dialogue develop in the ICANN community on exactly how best to address the problems that I identified (and which almost all the community agreed were indeed the key problems of ICANN). That dialogue is still ongoing, but it is beginning to coalesce around some essential concepts that I will discuss later in this testimony.
As is to be expected in a community of very different and opposing perspectives and interests, when presented with the opportunity for reform, some segments of the community retreat to the periphery to defend or advance their unique interests, offering appealing (but generally misguided) sound-bite arguments to water their own turf. You have heard or undoubtedly will hear many of these arguments, and will judge them appropriately.
But ICANN’s job is to seek a common higher ground that melds these private interests with the greater interests of the global (including the United States) Internet community as a whole. I am proud that so many of our constituent bodies recognize this need. With your and their support, I am quite sure ICANN will evolve to where it can act effectively to further the stability and security of the Internet’s naming and address allocation systems, while reflecting the patchwork quilt of so many participants in the process.
ICANN’s Mission – Technical and Policy
Much of the debate has centered around ICANN’s mission. What exactly is ICANN supposed to achieve? Simply put, it is ICANN’s role to ensure that certain essential technical tasks are effectively performed for the benefit of the global Internet. But these technical functions cannot be performed in a policy vacuum. As was discussed in a recent working paper on “ICANN Mission and Core Values” (posted on the ICANN website and attached to this testimony), it is impossible to enter a new top level domain (TLD) into the root without answering serious policy questions: what name, who gets to operate it, for how long, under what conditions, and so forth. And how to reflect public interest concerns such as fair competition, privacy, intellectual property, and diversity? The answers to these questions have serious consequences. Simple "first come, first served" formulas are not solutions. Instead, what is needed is thoughtful, reasoned human judgment, bounded by clear, predictable and transparent rules, and informed by broad public consultation and input.
In short, ICANN must, as it was always intended to do and has done from its creation, address a limited set of policy issues directly related to its core mission – because they are inextricably intertwined with the technical tasks required by that mission. Indeed, everyone interested in this debate should ask themselves, “If not ICANN – rooted in community consensus as that term can best be defined – then who would perform these policy functions?” The policy issues will not go away; they will not disappear simply because they are not “technical” by someone’s definition. And policy issues that affect a global resource are not easily managed by any one national government.
Global interoperability requires global cooperation; this is not a luxury but a necessity. The fact that the Internet is a global resource is what drove the creation of ICANN in the first place. Tellingly, those who object to ICANN's policy role have offered little in the way of credible alternatives to deal with these inevitable policy issues, other than (1) the bureaucratic international treaty organization alternative rejected in favor of the private sector model that became ICANN, or (2) alternatives that essentially lead to chaotic free-for-alls and the eventual destruction of globally unique naming.
To be blunt about it, some want ICANN to perform only those policy functions that hamstring their competitors but free them to do as they wish. It's understandable, but misguided. In a similar vein, you may hear words like “thick” and “thin” bandied around without real definition to describe various versions of ICANN. I do not find those terms particularly useful – you will generally find that a given interest wants ICANN to be “thin” where it wishes to avoid any oversight of its actions, and “thick” where it wants ICANN to enforce rules against someone else. In my view, ICANN should be as thin as possible, but thick enough to do its job.
ICANN: Private in the Public Interest
ICANN is, by deliberate choice of the United States and other world governments, and of the vast majority of private entities who expressed views on this subject, a private sector organization. The United States government, reflecting the very strong views of virtually everyone who participated in the debate that generated ICANN in 1998, concluded that the Internet’s naming and addressing functions must be managed on a global basis, but quite consciously decided that handing this task over to an existing or new multinational governmental bureaucracy was not the right solution. And so it called for the creation of what became ICANN. In the view of most stakeholders, this decision was clearly correct; ICANN’s growing pains pale beside the likely difficulties generated by giving some global multi-governmental organization the responsibility for management of such a dynamic resource.
ICANN is an organization rooted in the private sector and, in the view of most stakeholders, must remain that way. But the Internet has become too critical to the economies and social progress of the community of nations to ignore the important role that governments must play in ensuring that ICANN acts in the public interest as it addresses unavoidable but often divisive policy issues. That, indeed, is why you are holding these hearings today. You are rightly concerned about the public interests of the United States and its citizens, and the relationship of those public interests to those of the rest of the world community. Some may wish to ignore governments’ role in furthering the public interest, bury it under six feet of bureaucratic jargon, or replace the vital role of governments with some kind of unworkable global “democracy” elected by and captive to a tiny minority of Internet users. I prefer that the key role of governments is fully seen in the light of day, and that we collectively and openly determine what kind of public/private partnership can ensure that a private ICANN executes its core mission while respecting governmental concerns for the public interest.
During my tenure and before, ICANN has had a particularly constructive working relationship with the U.S. Department of Commerce. That agency has been sensitive to its unique role in this area, and we continue to work closely with the DOC and other representatives of national governments as we move forward toward an improved public/private partnership. This notion of an improved public/private partnership was a critical part of my original “Case for Reform” document, and I proposed one possible way to accomplish this goal. But, as is often the case with ICANN, much better ways are being suggested as the dialogue progresses and the broader outlines of a restructured ICANN are taking shape.
ICANN’s Reform on Track
Under these circumstances, this hearing is particularly timely. I came out of retirement to take on this responsibility, and agreed to do so for a two-year term that expires in March of 2003. I view the completion of the development of ICANN as my primary remaining task before I retire for the second time. I am committed to seeing this evolution essentially completed by the time my term ends, so that my successor can focus on the basic mission of ICANN. I believe this is well within our grasp. Reaching global consensus on this, like most other issues, requires patience and serious discussion, but we are well on our way to a satisfactory result.
I will not spell out in great detail the ongoing reform debate and the various proposals that are arising from it, since it is a work in process – much of which, like making sausage, is not always pretty. I am attaching three working papers that detail ideas published for community comment by the ICANN Committee on Evolution and Reform, appointed by the ICANN Board of Directors to coordinate the reform process, along with a useful introduction to ICANN's actual day-to-day responsibilities, called "What ICANN Does.". The important point is that the work is moving forward on a fast track, in full public view and with detailed input from the broad Internet community, including governments, non-governmental organizations, those directly and actively involved in ICANN, and the general public. We expect that the Board will adopt a blueprint for reform at its meeting at the end of June that will chart the main outlines of ICANN restructuring.
What will that blueprint look like? The Evolution and Reform Committee’s most recent documents, “ICANN Mission and Core Values “ and “Recommendations for the Evolution and Reform of ICANN,” capture much of the best thinking from the community. In broad terms, it would retain the bottom-up consensus development model that has been a core value of ICANN from the beginning. It would retain the fair, open and transparent character of ICANN processes. It would retain the geographic, functional and cultural diversity that has been a hallmark of ICANN since its creation. And it would retain the private sector model that sets ICANN apart from any other entity responsible for oversight of a critical global resource.
But to enhance the effectiveness of ICANN, it would:
While ICANN’s structure and procedures are obviously important, two other major issues must also be addressed. ICANN must have a proper framework of agreements with all the key participants in the DNS infrastructure – those who operate the name root servers, those who allocate IP addresses, and the operators of the more than 250 TLD registries, including those who are responsible for the socalled “country code” or “ccTLD” registries. And ICANN must, of course, have a funding structure that is adequate to support its mission. As we come closer to consensus on ICANN structure and process, we must not lose sight of these critical building blocks to a successful ICANN.
ICANN Has Been Successful
I have devoted full time over the last year to learning what ICANN did well and where it needed to improve, talking and listening to understand the wide range of perspectives on these issues. And we should be clear: before my tenure (I emphasize this to be clear about my objectivity), ICANN has had some truly important accomplishments.
It successfully introduced competition into the name registration market; the result is more choice, better service, and lower prices – much lower prices – for consumers. Of course, opening a market to competition also opens it to sharp marketing practices, potential fraud, and all the other warts of a free marketplace. With adequate resources, ICANN can certainly do a better job of policing its agreements with accredited registrars, but for consumers who can now get for $10 or less in all sorts of varied packages something that used to have a single price ( $70) for a single product (a two year registration), registrar competition -- warts and all -- looks pretty good.
ICANN successfully introduced the first global dispute resolution system for domain names (the Uniform Dispute Resolution Policy), which has demonstrated the value of innovative global solutions for this global medium. Imagine, if you will, the difficulty of pursuing and prosecuting cybersquatters in every nation on the planet, and compare that to a UDRP proceeding that costs very little, takes little time, and can provide a globally effective resolution. Of course, like any such system, an individual UDRP panelist will occasionally produce a decision that seems to make little sense, and this lack of perfection has caused some to criticize the entire system. But no system manned by imperfect human beings will ever be flawless. Indeed, no more than a handful of UDRP decisions have provoked sustained criticism, which is remarkable given that over 4,000 decisions have been rendered. The UDRP can surely be improved, but it stands as a truly major accomplishment for which ICANN deserves great credit.
Another major accomplishment for ICANN has been the introduction of the first new global Top Level Domains since the creation of the DNS. Seven new TLDs have now become operational over this past year: .biz, .info, .name, .pro, .museum, .coop, and .aero. This was a major undertaking. When ICANN was created, there was, for all intents and purposes, a monopoly provider of domain names to the public. In most of the world, including the United States, the .com top level domain or TLD (and, for some, .net and .org, operated by the same registry) was the only perceived domain name option. And there was something less than consensus about how, and how fast, and even whether to change this situation.
ICANN served as the forum for debating these issues, pulling together those who wanted to allow anyone to operate as many TLDs as they desired (paying little attention to the many technical or other potential difficulties) and those who saw the addition of any new TLDs as unnecessary and undesirable, not serving any true public purpose and simply creating more burdens on business and risks of various kinds. The ICANN process eventually introduced these seven new and highly varied TLDs as a “proof of concept,” with the notion that after evaluating the results the community would turn to the issue of whether and how and how many other new TLDs should be introduced. That process took longer than hoped, and the subsequent evaluation has been slowed by ICANN's ever-present resource limitations, but it is already obvious that any consideration of the introduction of more new TLDs will need to carefully address an number of issues, ranging from the proper role of ICANN to the realistic business prospects of new TLD registries. Still, these questions should not obscure the very real accomplishment of ICANN in producing for the public the first real global alternatives to the .com monopoly.
ICANN has had other accomplishments as well. There is no doubt that not all has been perfect, but it should hardly be a surprise that a new idea like this, staffed largely by volunteers – supported by a very small full-time staff – from around the globe with different perspectives, cultures and operating styles, would have some growing pains. ICANN is still an infant, not yet an adolescent, and certainly not an adult, and it still has some growing to do. The ongoing reform effort will speed ICANN's maturation.
Conclusion
This blend of accomplishment and unfinished development is what makes my job so interesting, and is why so many people of good will are still committed to making ICANN succeed. I came to this job with no baggage; I was not present at ICANN's creation, or even involved at all. I had no prior conceptions, and no need to defend the status quo. I will leave this job next March, so I have no ambition to build an empire. In other words, I am a free agent, able to offer ideas and thoughts based on their merit and the practical realities of what is needed to run an entity like ICANN. But this freedom brings with it a real responsibility. I do not plan to end my short tenure at ICANN having failed to position ICANN so that it can move forward with confidence and stability into the future. I am committed to seeing this evolution through to a successful conclusion. I thank the members of the Subcommittee for your time and interest in ICANN. Your input and support will help us achieve an effective private sector ICANN that truly serves the interests of the global Internet community.
Attachments:
Appendix A - President's Report: ICANN – The Case for ReformAppendix B - What ICANN Does
Appendix C - Working Paper: ICANN Mission and Core Values
Appendix D - Recommendations for the Evolution and Reform of
APPENDIX A:
President's Report: ICANN – The Case for Reformhttp://www.icann.org/general/lynn-reform-proposal-24feb02.htm[Text omitted here.]
APPENDIX B:
What ICANN Doeshttp://www.icann.org/general/toward-mission-statement-07mar02.htm>[Text omitted here.]
APPENDIX C:
Working Paper on ICANN Mission and Core Valueshttp://www.icann.org/committees/evol-reform/working-paper-mission-06may02.htm[Text omitted here.]
APPENDIX D:
Recommendations for the Evolution and Reform of ICANNhttp://www.icann.org/committees/evol-reform/recommendations-31may02.htm[Text omitted here.]
Source: http://commerce.senate.gov/hearings/061202powell.pdf
ON ICANN GOVERNANCE
HEARING BEFORE THE SUBCOMMITTEE ON SCIENCE, TECHNOLOGY, AND SPACE
OF THE
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
Oral Statement
Of Cameron Powell
Vice President and General Counsel
SnapNames
Wednesday, June 12, 2002
I want to thank the Chairman, Senator Allen, and members of the Subcommittee for inviting SnapNames to testify today.
Our company was founded by successful entrepreneurs who saw a critical need to help real individuals and businesses fairly compete to register domain names against domain name professionals. Today, 97.6% of all valuable domain names are registered through means not practically available to the general public.
We expended massive time and resources to come up with a technology to fix part of this broken system. We filed a patent on it. We secured a licensing agreement with VeriSign Registry to distribute our superior service to the public.
In reliance on the principle that the best consumer product, like the best free speech, will triumph in a free market, we hired dozens of new employees in the worst unemployment environment in the country. In any other industry, we would have already launched our technology long ago. In this industry, our superior technological innovation has been hijacked by the equivalent of a prior restraint on free speech, a technological gag order. ICANN’s misguided consensus process has enabled both the uninformed and our competitors to replace the market’s and courts’ judgment with their own, to censor our superior technology, and to force the lay-off of 20% of our employees.
So there are three issues I want to discuss:
I. Current Structure and Process: ICANN and its Supporting Organizations Collectively are Neither a Meritocracy, a Democracy, or a Marketplace, Nor a Real Deliberative Body
ICANN was a unique experiment in global resource management, but the consensus process of one of its three so-called “supporting organizations” has now paralyzed it. The Domain Name Supporting Organization or DNSO is composed of seven constituencies that are supposed to be, but are not, representative of their respective interest groups (registrars and registries, businesses and IP owners, non-commercial interests and ISPs). In reality most constituencies are neither representative of nor accountable to their intended constituents, some constituencies are actually run by only one or two individuals, and in twists fit for Kafka procedures change unannounced and even retroactively.
II. What are the Unintended Consequences of the DNSO’s Consensus “Process”?
First, because the consensus process is not market-driven, it is captive to misinformation and politics unrelated to the public interest, much less the market. All you need in this industry to block an innovation or reform is an opinion. There is no requirement that the opinion have any merit.
There is no requirement that any opinion be tested by the most objective normative tests we have in our society, the law or the market, the courts or consumers. Those who wish to block reform or innovation in the public interest may do so merely by refusing to give their consent. Where every vote is a veto, the result is paralysis. Consensus also dampens market innovation. It is sometimes appropriate for small groups like town meetings. It is an inappropriate substitute for decisions by the market because it is slow, inefficient, unresponsive, bureaucratic, and of course not driven by customer demand.
III. Case Study: How an Innovative Attempt to Answer Market Demand from Mainstream Consumers is Being Thwarted Not By Superior Competition or Technology but by Special Interests, Petty Politics, and Antitrust Enshrined as Process
To return to our personal experience, since September 9, 2001, our innovative technology has been subjected to endless, only nominally public discussions lacking either basis in law or any procedure or evidence. It has been . . . literally . . . talked . . . to . . . death.
Consensus and its Cousin, Antitrust
Here is my question for those concerned with ICANN reform: Why is a consensus process substituting its judgment for the market’s? Why is ICANN even using our competitors’ antitrust arguments as a basis for decision on our technology, when doing so is neither ICANN’s mandate nor expertise and there are laws and courts in place that should be deferred to? Worse, why have our competitors been handed the power to veto our superior technology?
Some in the industry actually think it’s legal to block innovation so long as one of the entities you’re opposing is, in their simplistic lay opinion, a monopoly (they mean our licensee, VeriSign).
Consensus processes are therefore custom-built for collusion; they are an open invitation to antitrust. Businesses injured by this consensus process should not have to resort to antitrust suits simply because their competitors were inexplicably given the illusion of safe harbor from laws superior to the mere contracts that underpin the industry.
IV. Toward a Model and Some Criteria for the Industry’s Oversight Body
Like most complex industries, the domain industry does need oversight of its free market, as well as industry-specific regulations. This is especially true because the domain industry’s technology is based on a single root server. Such a singular system is uniquely capable of disabling the market mechanisms that we typically rely on for much consumer-spirited regulation.
In conclusion, any oversight body or law:
Further elaboration on these ideas is contained in my written testimony. I thank the Subcommittee for its time and attention today.