Two recent ICANN announcements caught our eye because of their relevance to domain investors.
The first was ICANN’s placement of a notice that it was seeking to hire its first ever Registrant Services Director-Consumer Advocate. The Job Description states that the position “involves participation in a number of cross-organizational projects in areas such as registrant rights, contract interpretations and compliance, operations, legal policy definitions and implementation with a strong focus on multi-stakeholder collaboration” and that, among other tasks, the selected individual will “become the Registrant Community advocate within ICANN and represent their needs to other teams across the organization.” The Director will report to the President of the Global Domains Division, the separate business unit established within ICANN last year. Consistent with CEO Fadi Chehade’s statement during the London meeting that future staff growth would occur in locations outside ICANN’s Los Angeles headquarters, this position is to be based in Istanbul, Turkey – although applicants must be willing to travel 40% of the time. Curiously, despite the job’s focus on registrant rights, contractual interpretations, and legal policy, the educational experience sought is “BA or BS degree, MS or MBA preferred. Advanced degree in engineering or systems is highly desirable” – and not a law degree.
The creation of this position finally puts some meat on the bones of CEO Chehade’s June 2013 declaration that domain registrants are ICANN’s primary customer. As a trade organization representing the interests of registrants who are professional domain investors and developers we have been critical of ICANN’s failure to “walk the walk” on that verbal commitment in the past. ICA now looks forward to working with this new ICANN staffer on issues of importance to registrants, while recognizing that in certain situations involving registrant grievances against ICANN there will be constraints against biting the hand that pays him, or her.
Separately, ICANN’s GNSO is soliciting volunteers for the just-launched GNSO New gTLDs Subsequent Rounds Discussion Group. This Group will review the first round of new gTLDs and report findings to the GNSO Council “that may lead to changes or adjustments for subsequent new gTLD application procedures”. With Initial Evaluation just having been completed on all applications submitted in the first round of the new gTLD program, ICANN is putting in place the first step in meeting its commitment to review it thoroughly before a second round commences.
From what we have heard, when it does launch down the road the second “round” may not be a round at all, in terms of having a set time window in which applications must be submitted. Rather, once any adjustments in the program are made based upon first round experiences the application window may simply stay open indefinitely, with applicants free to submit a bid for any string at any time.
The new gTLD program of course included the new rights protection mechanisms (RPMs) of Uniform Rapid Suspension (URS) and the Trademark Clearinghouse (TMCH), and we expect both to be the subject of discussion and possible suggestions for modification within the new Discussion Group. That’s one major reason why ICA shall be participating. Perhaps once the Registrant Services Director is hired he or she will participate as well — to help assure that registrant rights receive adequate due process as the new gTLD program evolves.
In an unprecedented development, all stakeholder groups and constituencies comprising ICANN”s Generic Names Supporting Organization (GNSO) unanimously endorsed a joint statement in support of the 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”. The statement was read aloud during a June 26th session on the IANA transition process held on the last day of the ICANN 50 public meeting in London.
The creation of this new accountability structure is meant to accompany the transition of the IANA functions away from US control and is intended to encompass accountability issues beyond those that are IANA-specific. Business, intellectual property, and civil society members of the GNSO will likely be delivering the message to Congress and the NTIA that creation of this new accountability mechanism must be assured before any final action is taken on an IANA transition plan developed within ICANN’s multistakeholder community.
During an earlier session on ICANN accountability, ICA Counsel Philip Corwin delivered remarks emphasizing that there was a preexisting need for improved ICANN accountability and transparency independent of the IANA transition, but that the contemplated termination of US counterparty status in regard to the IANA contract presented the opportunity and increased the need for establishment of an independent review and redress mechanism to address ICANN actions. He noted that ICANN’s fairly unique combination of public policy functions and substantial self-funding capabilities created an enhanced need for measures that could address the substantial potential for self-dealing behavior by the organization.
Here is the full text of the unanimous GNSO statement:
The entire GNSO join together today calling for the Board to support community 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. This deserves the Board’s serious consideration – not only does it reflect an unprecedented level of consensus across the entire ICANN community, it is a necessary and integral element of the IANA transition.
True accountability does not mean ICANN is only accountable to itself, or to some vague definition of “the world,” nor does it mean that governments should have the ultimate say over community policy subject to the rule of law. Rather, the Board’s decisions must be open to challenge and the Board cannot be in a position of reviewing and certifying its own decisions. We need an independent accountability structure that holds the ICANN Board, Staff, and various stakeholder groups accountable under ICANN’s governing documents, serves as an ultimate review of Board/Staff decisions, and through the creation of precedent, creates prospective guidance for the board, the staff, and the entire community.
As part of the IANA transition, the multi-stakeholder community has the opportunity and responsibility to propose meaningful accountability structures that go beyond just the IANA-specific accountability issues. We are committed to coming together and developing recommendations for creation of these mechanisms. We ask the ICANN Board and Staff to fulfill their obligations and support this community driven, multi-stakeholder initiative.
“The temperature in the room is warm and I suspect it will get a whole lot warmer before we are through.” So stated ICANN Board Chairman Steve Crocker at the beginning of the Board’s interaction with the GNSO Council on the afternoon of Sunday, June 22nd. Yet that dialogue never got beyond lukewarm. Both Crocker and CEO Fadi Chehade made clear that the recently published report of the Expert Working Group on gTLD Directory Services, a complex proposal to replace the current WHOIS registrant data service, was just the beginning of a dialogue with the community — and that it was premature to begin a Policy Development Process (PDP) based upon it. The main dust-up regarding the EWG report was the omission of a dissent regarding insufficient privacy protections filed by one of the participating experts.
Another point emphasized by both Crocker and Board member Bruce Tonkin was that ICANN policy was to be made by the GNSO and the other ICANN supporting organizations, with the Board’s role confined to overseeing the implementation of policy. As Tonkin summarized, the Board is a corporate one and “not a parliament”.
The temperature had been a bit substantially warmer earlier in the session as ICANN staff described the status of the IANA functions transition process and the parallel effort to develop an enhanced ICANN accountability structure. Many participants wanted a clear commitment that the transition plan would not go forward until an acceptable accountability framework had been formalized and accepted, but staff was unwilling to go beyond stating that they were “interdependent” and would inform one another. Staff was also pressed to explain why ICANN’s recent revision of the transition process plan, while making concessions on coordinating group composition and community-based selection of its members, had not broadened the scoping document despite numerous comments that it was far too narrow and sought to predetermine an outcome in which ICANN alone would be recipient of the IANA functions. But, while confirming that the scoping document remained unchanged, staff provided no clear rationale for that intransigence.
Following that impasse, CEO Fadi Chehade engaged in dialogue with the Council. Conceding that the workload burden on the community had reached unprecedented levels, he announced that senior staff would hold a weekend long meeting with the heads of ICANN’s supporting organizations and advisory committees to discuss ways in which that might be addressed.
Chehade also raised the “original sin” of continuing mistrust between ICANN and its community, but the ensuing dialogue reached no consensus on how to narrow the trust gap. Chehade’s closing words, in which he asked, “What is driving people who want to slow down the IANA transition? What interests do they represent?” indicated that the mistrust extends to ICANN’s executive staff as well. Our perception is that the overwhelming majority of the community accepts that the IANA transition will occur, but believe that finalizing it prior to the development and acceptance of enhanced accountability measures would surrender the only real leverage for improving ICANN’s adherence to community input in the future.
At Monday morning’s Welcome Ceremony, Chehade conceded that ICANN accountability must be improved. He also referred to the IANA transition as a removal of ICANN’s “training wheels”, and announced that ICANN staff levels would reach 300 by the end of 2014 as its globalization efforts continued – with no new staff additions planned for its Los Angeles headquarters office. Turning to Internet governance (IG), he pronounced the recent NETmundial meeting in Sao Paulo a success in laying the groundwork for the development of a distributed Internet cooperation ecosystem. He also indicated that, while ICANN would not be playing a lead role in future IG developments, it would soon announce a number of new alliances and coalitions related to it in the coming months. We’ll be standing by to see what those entail.
The real work of the ICANN 50 meeting in London is about to commence. We shall be actively participating and will report on important developments
The Senate Appropriations Committee just reported out on June 5th its version of the Commerce-Justice-State Departments Appropriations bill for FY 15. In the course of its deliberations it added a consensus amendment on the IANA transition offered by Sen. Mike Johanns (R-NE). The amendment reads:
1. Amendment proposed by Senator Johanns
On page 24 of the report, in the paragraph beginning with “Internet”, strike the sentence beginning with “While” and replace with:
“While NTIA has stated that it will not accept a proposal that includes government-led or intergovernmental control over ICANN the Committee directs NTIA to conduct a thorough review and analysis of any proposed transition of the IANA contract. This review shall ensure that ICANN has in place a NTIA approved multi-stakeholder oversight plan that is insulated from foreign government and inter-governmental control. Further, the Committee directs NTIA to report quarterly to the Committee on all aspects of the privatization process and further directs NTIA to inform the Committee, as well as the Committee on Commerce, Science, and Transportation, not less than 7 days in advance of any decision with respect to a successor contract.”
In addition to that statutory language, the Committee report on the bill, which creates its “legislative history”, contains this relevant passage:
Internet Corporation for Assigned Names and Numbers [ICANN].-The Committee remains concerned that the Department of Commerce, through NTIA, has not been a strong advocate for American companies and consumers and urges greater participation and advocacy within the Governmental Advisory Committee [GAC] and any other mechanisms within ICANN in which NTIA is a participant. The Committee strongly encourages NTIA to be an active supporter for the interests of the Nation within ICANN and to ensure that the principles of accountability, transparency, security, and stability of the Internet are maintained for consumers, business, and the Government. The Committee awaits the past due report on NTIA’s plans for greater involvement in the GAC and the efforts it is undertaking to protect U.S. consumers, companies, and intellectual property.
Parsing the amendment’s language, the requirement that NTIA conduct a thorough review and analysis of any proposed IANA transition plan amounts to telling it to do its job properly; implicit in this requirement is that the analysis be shared with Congress. The requirement that the review ensures a multi-stakeholder oversight plan links the IANA transition to the enhanced ICANN accountability that many groups have already said must accompany and be implemented simultaneously with any IANA transition plan. The requirement for quarterly NTIA reports to Congress on all aspects of the “privatization process” reinforces that it must assure continued private sector leadership, and that Congress does not want to be kept guessing as to where things stand. As for the requirement that Congress receive at least seven days’ advance notice of any NTIA decision on a successor IANA contract, that seems too brief an interval for meaningful Congressional review – but this amendment will not likely be the final form of any language sent by Congress to the President.
As for the accompanying Report language, the fact that the Committee is dissatisfied with NTIA’s advocacy for US interests within the GAC raises the implicit question of whether the IANA transition itself is in the national interest. And the inclusion of a note of displeasure regarding “the past due report on NTIA’s plans” indicates impatience with NTIA’s responsiveness to Congressional directives.
The House-passed counterpart to this CSJ Appropriations bill contains the Duffy Amendment that would deprive NTIA of any funds to carry out the IANA transition. While that flat prohibition has close to zero chance of being accepted by the Senate, the inclusion of this IANA-related language significantly enhances the chances for compromise language being worked out during future negotiations to reconcile the bills. The middle ground could well be a modified version of the Shimkus Amendment (incorporating the full DOTCOM Act) that was attached to the Defense Authorization Act in the House, as it is now clear that both sides of Capitol Hill want some degree of assurance that they will receive updated reports on the progress of IANA transition deliberations as well as some opportunity to review a succession plan prior to its implementation. There also remains a strong possibility that the Senate Commerce Committee will hold an IANA oversight hearing prior to full Senate consideration of this CSJ bill, and if that happens it could provide new fodder for related floor amendments.
In a related development, also on June 5th a group of six House Republicans, including the Chairman and Vice-Chair of the Energy and Commerce Committee, sent a letter to the Governmental Accountability Office “requesting an examination of the Obama administration’s recent proposal to transition Internet oversight to the global multi-stakeholder community”. The letter asks GAO to address such issues as potential national security implications and other possible risks of the IANA transition, how to assure against a future multilateral ICANN takeover, future enforcement and enhancement of the Affirmation of Commitments (AOC), and useful evaluation criteria beyond those set by the NTIA. This request implements the study portion of the Shimkus Amendment but lays aside its one year delay. By taking this action the way may be better cleared for a House-Senate compromise agreement that assures a meaningful Congressional oversight and review role on the transition.
Meanwhile, on June 3rd a group of seven civil society organizations sent a letter to Senate Majority Leader Harry Reid as well as the leaders of key Senate Committees expressing their opposition to the Shimkus Amendment, which would delay adoption of any IANA transition plan forwarded by ICANN for up to one year while the GAO analyzed it.
The organizations base their opposition in a belief that:
[T]he DOTCOM Act will give additional ammunition to foreign governments and stakeholders who oppose Internet freedom, bolstering their argument for an overhaul of the current Internet governance system to facilitate greater control by non-democratic governments or international organizations… Passage of the DOTCOM Act would unnecessarily interfere with the announced transition process, which is still in development through an open consultation convened by ICANN. Further, it would damage the reputation of the United States as a champion of multi-stakeholder Internet governance and contradict previous bipartisan statements of Congressional support for the multi-stakeholder governance model.
The letter’s final operative paragraph reads:
It is critical that the IANA transition proposal development process be fair and transparent, and we welcome Congressional interest and participation as an equal stakeholder in the process. However, efforts to interfere with or delay this transition process, or require the Congressional approval beyond the criteria suggested by NTIA, will neither achieve the goals of the bill nor reflect Congress’s previously stated position on Internet governance. We therefore strongly urge the Senate to oppose the Shimkus Amendment #6 to the FY15 NDAA and other efforts to block this transfer and to show support for an Internet that is free, open, and guided by global, multi-stakeholder governance principles.
While these views are sincere and all the signatory groups do good work on behalf of Internet freedom and privacy, we doubt that Russia, China, Iran and other nations which already restrict their own citizens’ Internet freedom need any new incentives or arguments to push for multilateral control of the DNS.
And there is a bit of a mixed message in welcoming Congress as an “equal stakeholder” in the transition process while essentially asking it to trust in and defer to NTIA’s determinations on a decision that, once made, cannot be redone.
It’s doubtful that the Senate will accept the Shimkus Amendment/DOTCOM Act in the form sent over from the House. But this new Senate Appropriations bill and House GAO study request are the latest indicators of evolving bipartisan and bicameral interest in the IANA transition — and that could well lead to the negotiation of compromise language adopted on a bill funding three of the most important Executive Branch agencies that assures a truly equal role for Congress.
The House of Representatives has passed another measure related to the proposed IANA functions transition, and has again attached it to “must pass” legislation. This move ups the ante and may well be the final straw that compels the Senate Commerce Committee to hold its own oversight hearing on the IANA transition proposal.
On May 30th the House adopted the Duffy Amendment to the Appropriations bill funding the Commerce, Justice, and State Departments in FY 2015. The final vote on the amendment was 229 in favor and 178 opposed – it was fairly partisan outcome, with only ten Democrats voting aye while just one Republican voted nay. The amendment not only prohibits the Commerce Department from surrendering the US counterparty role on the IANA contract but also slashes the NTIA’s budget by nearly $15 million. The underlying bill passed later that evening.
In speaking for his amendment, Rep. Duffy (R-WI) stated:
Thank you, Mr. Chairman. I think most Americans are aware that the President has recently stated that he intends to transfer the core functions of the internet to an international or foreign body.
What my amendment does today will prohibit the President from using any of these funds to relinquish control of those core functions to the internet. I think this is an incredibly important amendment because America in our zest for freedom of speech has made sure that the internet an open forum for dialogue, an open forum for ideas. By relinquishing these rights, our core functions to a foreign body, I don’t think we will retain the current system of the internet and the current rights or freedom of speech that internet currently enjoys. if you look at stakeholders who have a say in how the internet is run, I think when we use the term stakeholders what we are referring to are foreign governments and corporations, I think we have to ask the question, do we think that China, that Russia, that Iran who have a say in the core functions of the internet have the same concern for freedom of speech that we Americans do? I think it’s important that this institution use its control of the purse strings to limit the president’s authority to transfer those core functions to this foreign body. With that I retain the balance of my time.
Adoption of the Duffy Amendment follows by one week House passage of the Shimkus Amendment to the Defense authorization bill. That amendment would mandate up to a one-year delay in carrying out the transition while the GAO studied and reported to Congress regarding the implications of any IANA transition plan forwarded by ICANN for NTIA review. Rep. Shimkus (R-IL) said via his press office that he also voted for the Duffy measure “to send a message that Congress is prepared to put a stop to the IANA transition altogether if the Administration continues to disregard the potential risks and dismiss his reasonable call for GAO review.” He reiterated his view that “Congressional oversight [is the] best path forward” and said he is “hopeful the Senate will adopt that approach as well.”
However, Commerce Committee member Rep. Mike Doyle (D-PA) responded to the amendment’s passage by declaring, “I am again disappointed by the irresponsible actions taken by House Republicans to delay NTIA’s transition of the IANA functions…Stakeholders from around the Internet including ISPs, edge providers, industry associations, technology experts, and public interest groups, all support NTIA’s transition plan. I will work with my colleagues in the House and Senate to ensure that these provisions are removed as this bill moves forward.”
Two balls are now in the Senate’s court, and a negotiated version of the Shimkus GAO study Amendment would certainly appear a more palatable course for the Administration than the flat IANA transition prohibition and NTIA budget slashing of the Duffy Amendment. Neither bill will be on the Senate floor in the immediate future, which gives the Senate Commerce Committee more than enough time to hold its own IANA functions transition and ICANN accountability oversight hearing.
A Senate Commerce hearing could give NTIA a platform to demonstrate that it is effectively overseeing the process and will not just rubber stamp any proposal served up by ICANN. It could also inquire into whether the IANA transition and enhanced accountability processes proposed by ICANN adequately comport with NTIA’s request that it convene stakeholders for the purpose of creating acceptable plans — without trying to control that process or its outcome. ICANN received broad resistance to its original transition plan process blueprint and has yet to announce whether it will respond with course corrections.
The Shimkus Amendment to the $601 billion National Defense Authorization Act (HR 4435) passed the House of Representatives yesterday on a mostly partisan vote of 245 – 177. While all 228 Republicans present and voting supported the amendment only 17 Democrats voted “aye”, with 177 in opposition. Final passage on the entire bill was a bipartisan vote of 325-98.
The Senate has not yet passed its version of a FY 2015 Pentagon funding bill, and once it does all the differences between the two versions must be reconciled before it can be sent to President Obama for his signature. There’s no indication yet whether a similar amendment will be offered in the Senate or whether enough Democratic votes can be picked up to pass it on that side of Capitol Hill.
The Shimkus amendment embodied the text of the DOTCOM Act. It would prohibit the NTIA from transitioning oversight of the IANA root zone functions from US oversight to a multistakeholder entity until Congress had received a report from the GAO analyzing the implications of the transition plan. It would provide GAO with a one-year period to complete that study, with the clock starting when ICANN transmitted a transition plan for NTIA review. As no such plan is expected to be forthcoming until sometime in 2015, the Act would essentially make it all but impossible to complete the transition by the September 2015 end date of the current IANA contract, and would thus trigger the need for a two-year extension – an option already provided for in that contract. NTIA head Larry Strickling and ICANN CEO Chehade stressed in recent Congressional testimony that September 2015 was just a goal and not a deadline. But we’d wager that ICANN very much wants to avoid a contract extension, and parties outside the US want IANA globalization by 2015 as expressed in the final document issued at last month’s NETmundial meeting in Brazil.
Meanwhile, in the Senate, Senator Marco Rubio of Florida and eight other Senate Republicans have just sent a letter to Commerce Committee Chairman Jay Rockefeller asking that the Committee hold an oversight hearing on the IANA transition proposal. With the DOTCOM amendment on its way over from the House, and with the House expected to shortly pass a Department of Commerce appropriations bill that slashes NTIA funding to deny it the monetary capability to carry out the transition, it would appear to be a good time for the Senate to start informing itself on the matter. Rockefeller has shown past interest in ICANN, having held oversight hearings on the new gTLD program and most recently sending a letter to NTIA raising concerns about .Sucks and similar new gTLDs. Any Senate Commerce oversight hearing might well include a look at the status of the new gTLD program, as it is the largest and riskiest effort ever undertaken by ICANN and the market and operational status of the new gTLD rollout might be viewed as indicative of its readiness to sever its last formal connection with the US government.
The text of the Rubio letter follows:
May 21, 2014
Dear Chairmen Rockefeller, Pryor and Ranking Members Thune and Wicker:
We are writing to respectfully request that the Senate Committee on Commerce, Science, and Transportation (“the Committee”) hold a hearing to review the National Telecommunications and Information Administration’s (NTIA) announcement to transition oversight of certain Internet domain name functions to the global multistakeholder community. This transition, if it occurs, could have profound consequences on the future of Internet governance and freedom, and therefore deserves a close examination by the Committee.
Last Congress many of us were leaders on S. Con. Res. 50 (SCR 50), which reinforced the U.S. government’s opposition to ceding control of Internet governance to the International Telecommunications Union (ITU) or to any other governmental body. By unanimously passing SCR 50, Congress sent a strong message of support for the existing bottom-up, multistakeholder approach to Internet governance. The current model has enabled individual empowerment and technological advancement around the world, and has ensured the Internet remains free from the control of governments and intergovernmental organizations.
Congress must once again lead the cause for Internet freedom. All of the signatories of this letter also sent several questions to NTIA in March. While we appreciate NTIA’s response, there are a number of unresolved questions concerning NTIA’s decision, as well as uncertainty about how this transition will unfold. NTIA’s announcement must be carefully considered and understood, which is why the Committee must conduct rigorous oversight of this decision and process.
Since the announcement by NTIA, the United States has sent delegations to the Internet Corporation for Assigned Names and Numbers (ICANN) 49 conference in Singapore and to the NETmundial meeting on the future of Internet governance in Brazil. NTIA’s decision and ICANN’s future role were discussed at both conferences, and we understand that countries like China and Russia pushed back against the multi-stakeholder model and toward greater control over the Internet.
It is important that the Committee, Congress, and the American people hear from NTIA, members of the U.S. delegation, and other Internet stakeholders about how these conferences went and what the global community is proposing. Chairman Rockefeller, when the Committee held a hearing in December 2011 on ICANN’s expansion of top level domains, you stated:
As the Senate Committee tasked with examining issues related to the Internet, it is critical that we understand what this will mean for the millions of Americans who use the Internet on a daily basis and the thousands of businesses and organizations that now depend upon the Internet to reach their customers and members.
That statement certainly applies today to NTIA’s proposed transition. As this process unfolds and NTIA engages the global Internet community, it is imperative the Committee exercise its jurisdiction and conduct careful oversight on behalf of the American people to ensure Internet freedom is protected. The House has already held two hearings, and the global Internet community continues to convene. We must do the same. This announcement and the outcome of this proposed transition are too important for the Committee to remain silent. We appreciate your consideration of this request and look forward to working with all of you on this important issue.
In an unanticipated move a third Committee of the US House of Representatives has weighed in with concerns regarding the NTIA’s proposed transition of the US role as counterparty to ICANN’s IANA functions contract to one with the “global multistakeholder community”.
On May 13th the House Armed Services Committee Report for HR 4435, the Defense Authorization bill, was released. It contains language referring to the ICANN transition and, in particular, the .Mil top level domain which is administered by the US Department of Defense Network Information Center (NIC, which also runs the g-root authoritative root server — while the h-root server is operated by the US Army Research Lab). The Report language (reproduced at the end of this post) questions whether .Mil, which has always been available solely for US military operations, will remain protected post-transition – and also states that “any negotiations that occur should include verifiable measures for maintaining a separation between the policymaking and technical operation of root-zone management functions and that such protections should be a red line in interagency discussions and U.S. Government positions.” (Emphasis added) The introduction of US national security concerns brings a new element into discussions of the IANA transition.
This latest action follows on the heels of IANA-related steps recently taken by two other House Committees:
The House will likely take up The Commerce, Justice, Science and Related Agencies Appropriations Act for FY2015, which contains that cut in NTIA funding, next week. Further, we have just learned that Rep. John Shimkus, lead sponsor of the DOTCOM Act, has filed the text of that legislation as an amendment to be offered to the Defense Authorization bill that is currently being considered on the House floor, and we expect both it and the underlying bill to pass the House.
All of these prior actions were taken on party-line votes in the Republican-controlled and highly polarized House, and next week’s House floor vote will likely follow that pattern. While such Senate Democrats as Robert Menendez and Mark Warner have expressed concerns about the IANA transition, we’d wager that if these proposals are passed by the House and sent over to the Senate they will never receive a vote so long as Harry Reid is the Democrat’s Majority Leader. Senate Democrats will also likely resist accepting the House provisions if a conference committee is appointed to seek resolution of the different positions on the appropriations bill.
However, given that the earliest goal for completing the IANA transition is September 2015, when the current contract term expires (although the US has the option of extending it for two more 2-year terms) the situation could change dramatically if Republicans succeed in gaining control of the Senate in the November 2014 elections. Most pollsters and election analysts give them a slightly better than even chance of doing so, given President Obama’s current low approval ratings as well as the historic trends for mid-term Congressional elections in a President’s second term. Yesterday’s primary results, in which Senate Minority Leader Mitch McConnell and other “establishment” GOP candidates defeated “tea party” challengers probably enhance that possibility of Republican Senate control in 2015-16.
ICANN’s initial proposal for both the process and scope of IANA transition discussions has already encountered broad and vocal opposition. Its new proposal for a parallel process to determine enhanced accountability mechanisms may prove equally controversial (we’ll be writing more on that shortly). While it remains to be seen how ICANN will respond to criticism of its proposed pathway, the NTIA has made clear that it expects it to convene an unbiased community discussion that results in a transition plan and accompanying accountability provisions that are credible and have broad consensus support. That deliberative process will take some considerable time, and in the interim the US political context could undergo significant alterations.
Here’s the Armed Services Committee Report language—
The committee is aware of a recent proposal by the Department of Commerce to start the process of transferring the remaining Department of Commerce-managed Internet Assigned Numbers Authority (IANA) functions to the global multi-stakeholder community. The committee is also aware that such a transition is supported by the Administration, many in industry, and the international community.
The committee urges caution in such discussions to understand the full ramifications of any transition of responsibility, since the United States has played an important role in overseeing the stability of the Internet. As noted in recent testimony before the Committee on the Judiciary of the House of Representatives, “Any pledge, commitment, or oath made by the current ICANN [Internet Corporation for Assigned Names and Numbers] leadership is not binding unless there is some accountability mechanism in place to back up that promise. Until now, the United States has served that role. If the U.S. Government is no longer providing that stability, an alternative mechanism is needed to ensure that ICANN is held accountable to the public interest.” Additionally, as this testimony points out, “U.S. oversight has served as a deterrent to stakeholders, including certain foreign countries, who might otherwise choose to interfere with ICANN’s operations or manipulate the Domain Name Servers for political purposes. For example, a country may want to censor a top-level domain name or have ICANN impose certain restrictions on domain name registries or registrars.”
Because of the Department of Defense’s equities in a secure and transparent Internet governance system, the committee believes it is important to ensure that any new Internet governance construct includes protections for the legacy .mil domains and maintains the associated Internet protocol numbers. Furthermore, the committee believes that any negotiations that occur should include verifiable measures for maintaining a separation between the policymaking and technical operation of root-zone management functions and that such protections should be a red line in interagency discussions and U.S. Government positions.
Note: This is an updated version of a story that first appeared at http://www.circleid.com/posts/20140515_house_committees_taking_aim_at_iana_transition_proposal/ .
We have finally had a chance to review the transcript of the Public Forum with the ICANN Board held on March 27th in Singapore. ICA generally takes advantage of those opportunities for interaction to acquaint the Board with matters of concern to the domain investment community.
Two issues were addressed in our Singapore statement. The first was the attempt by UN-affiliated International Governmental Organizations (IGOs), as well as some International Non-Governmental Organizations (INGOs), to block their acronyms from being available at any new gTLD – a position that could eventually threaten some valuable domains at incumbent gTLDs. Our remarks reiterated support for the unanimously adopted GNSO Council resolution on this matter. Subsequent to the Singapore meeting we filed a comment letter that told ICANN it was time to respond to these unreasonable demands with a firm and responding “No”.
The second matter was cybersquatting at new gTLDs. From its inception ICA’s Code of Conduct has taken a strong stand against intentional trademark infringement. Several domain industry bloggers have noted clearly infringing activity going on at new gTLDs. And one law firm reported in February in regard to the just-launched .Bike gTLD:
[O]f the 20 brands selected for the study, as of February 10, 2014, all 20 were registered as domain names in .BIKE. However, only four of the 20 brands have clearly been registered by the actual brand owner. According to WHOIS data, another three are being held by the registry Donuts, and it is unclear for what purpose—whether as a premium name, as part of a blocking program, or otherwise. The other 13 are all being held by third parties who seemingly have no relation to the brand owner, quite possibly cybersquatters. While the sample size of this study is small and not necessarily statistically significant, it supports the supposition that most bicycle brands either were not aware of the .BIKE launch or did not take protective steps to prevent potential cybersquatting once the launch occurred.
Just after that study was issued I received an unsolicited e-mail from an individual in India offering many new gTLD domains for sale – including formula.bike, a name associated with an Italian manufacturer of specialty racing bike parts.
We don’t yet know the extent of intentional cybersquatting at new gTLDs and whether it is significant, and not every generic word registered at a particular new gTLD is going to meet the dual UDRP/URS standard of bad faith registration and use. We also don’t know if any of these cybersquatted domains is receiving any substantial traffic and thereby generating any type of significant income to the registrant (doubtful); or whether any are being for bad purposes beyond infringement.
What we do know is that such activities are not just stupid because they invite legal action, but that they are wrong. And we know that when UDRP reform is initiated in 2015 certain trademark interests may point to these activities as evidence that allegedly supports changes that would reduce the due process rights of legitimate domain registrants. Ditto for proposed changes to national laws such as the U.S. Anticybersquatting Consumer Protection Act (ACPA).
That’s why it’s important for ICA to get on the record reiterating our condemnation of such infringement and asking what ICANN is doing to monitor and analyze the situation. When we engage in that UDRP review discussion we want no questions raised about the commitment of ICA and its members to respecting trademark law — so that we can better press the point that domain rights and trademark rights should be equitably balanced.
The transcript follows–
BILL GRAHAM: Thank you. Next. Mr. Corwin
PHILIP CORWIN: Good afternoon. Philip Corwin speaking in my capacity as counsel to the domain name investors and developers of the Internet Commerce Association and briefly addressing two issues related to the new TLD program. The first is the ongoing discussion of the protections for acronyms of IGOs and INGOs at new TLDs. ICA is strongly in support of the resolution adopted unanimously by the GNSO council on this issue. We think it’s important at a time when we’re ‐‐ a multistakeholder model is being watched by the world — for that resolution to be put into effect and also to address concerns about the role of governments in a post‐NTIA environment. I would note that many short acronyms are extremely valuable domain names. They can be used in a totally noninfringing fashion and that it’s extremely critical to my members that there being a meaningful appeals process which is both perceived and actually provides a fair treatment of both parties.
Turning to the second issue, it’s too early to make a judgment but we have noticed from various analyses and reports that there is unfortunately some intentional cybersquatting going on at new TLDs. ICAs Code of Conduct since its inception has strongly condemned that. We’re monitoring this situation. We’re also monitoring the use of the URS and so far it does seem to be being used as a narrow supplement to the UDRP, and we certainly hope that ICANN staff is giving full attention to this issue because it’s important to the perception of the program and setting up the environment for the discussion of UDRP reform which will start next year. Thank you very much.
BILL GRAHAM: Thank you. We’ll have a brief presentation on the NGO/INGO names at the beginning of the next session.
On April 24th the NETmundial “Global Multistakeholder Meeting on the Future of Internet Governance” concluded with the issuance of an eight-page statement. This non-binding document is hardly the “Magna Carta for the Internet” called for in an opening statement delivered by Tim Berners Lee, but it does set the stage for the other two major 2014 events that will affect the course of Internet Governance (IG) – the IGF meeting in Istanbul, Turkey and the ITU meeting in Busan, Korea.
Before turning to the final outcome document a separate and very important development took place on the meeting’s final day. That was ICANN CEO Fadi Chehade’s statement at the IANA transition session that the transition plan and the broader issue of improved ICANN accountability are “very interrelated” and that ICANN will publish a proposal for a consultation on improved accountability this week — adding that the two processes will develop “hopefully together on the same time line”.
While a welcome clarification, this statement is inevitable recognition that the need for periodic renewal of the IANA functions contract operated as a powerful tool to make ICANN adhere to the Affirmation of Commitments (AOC) signed with the US but providing global benefits in regard to ICANN accountability and transparency. Many parties both within and outside the ICANN community will never sign off on an IANA transition proposal unless it is accompanied by a robust and reliable ICANN accountability mechanism. Further, it is likely the IANA transition process proposed by ICANN earlier this month will encounter some stiff pushback from many members of its community because it proposes structural details (e.g., Steering Committee guidance and composition) that should be left to the community to determine — and its proposed definition of what is and is not within scope for the discussion is far too narrow and tries to predetermine an outcome in which ICANN receives permanent possession of those IANA functions, with no other options permitted for discussion.
Turing to the final NETmundial document:
In regard to the more important Roadmap for Future Evolution for IG, which will have bearing on the IGF and ITU events as well as other developments down the road:
How do we ensure that resources are mobilized and maintained for a viable Internet Governance mechanism? The question is not just at the global level, but also at regional and national levels. Whose resources are we going to commit? My leaning is that the Internet should be able to provide resources for its own governance. Maybe, part of the domain name fees could be reinvested here. (Emphasis added)
While ICANN may have to expend some resources to participate in relevant meetings and thereby contribute to the Internet governance ecosystem, the fees it collects from domain registrants via registrar and registry Internet intermediaries should be used solely to fund its own role as technical manager of the DNS and for related policy matters. Having ICANN go beyond that narrow remit and redistribute registrant fees to global, regional, or national IG activities would convert it into a multinational tax-and-spend organization. That is not only inappropriate but would be accompanied by a large potential for corrupting digital cronyism. This is a dangerous idea that bears continued close scrutiny.
The official U.S. statement issued upon NETmundial’s conclusion declared that “hundreds of stakeholders from around the world convened to discuss and agree upon a shared vision for the multistakeholder model of Internet governance that seeks to further develop an increasingly open, transparent, inclusive, and responsive system” and that its Multistakeholder Statement “endorsed the transition of the U.S. Government’s stewardship role of IANA functions to the global multistakeholder community, consistent with our stated principles”. The U.S. surely breathed a sigh of relief that the meeting did not blow up in acrimony — and that the final document makes no direct reference to the NSA data collection program, stating more generally that, “Mass and arbitrary surveillance undermines trust in the Internet and trust in the Internet governance ecosystem. Collection and processing of personal data by state and non-state actors should be conducted in accordance with international human rights law.”
The U.S. statement also recognizes that NETmundial was just the opening event in this year’s IG passion play, stating, “NETmundial marks one of many critical global discussions planned for the multistakeholder community this year. The U.S. Government supports these discussions and looks forward to working collaboratively with the global community to strengthen the Internet governance structure, enabling broad participation from governments, businesses, civil society, technology experts and academia.” The fact that the U.S. delegation was led by White House Cybersecurity Coordinator Michael Daniel just underlines that IG is now seen as a top tier, high-stakes issue by the Obama Administration.
While NETmundial made incremental progress, it failed in one central aim. ICANN claimed that Brazil President Dilma Rousseff had been converted to a multistakeholder model advocate, and that holding this meeting in Brazil could bring the other BRIC nations along. But President Rousseff adopted a half-pregnant position in Sao Paulo, making the politically expedient declaration that there is “no opposition” between the multilateral and the multistakeholder approaches. And Russia, India, and China, along with other developing world nations, all strongly reiterated their support for a UN-led, government centric approach to Internet governance. Those nations collectively comprise about half the planet’s population and the great majority of the next billion Internet users. And a more decisional IGF, along with the UN-affiliated ITU, may provide far more compatible venues for their goals than a one-off NETmundial meeting.
So, while a bullet has been dodged, the real drama lies ahead.
The NETmundial meeting in Sao Paulo kicked off on the morning of April 23rd and one of the speakers at its Opening Ceremony proclaimed that the Internet was a curious type of “Public Commons” in which private domain registrants should be obligated to pay a fee to fund access, capacity-building, and general bridging of the Internet gap between the developing and developed world. That proposal for turning ICANN into a species of Internet tax collector and transnational development project fund disburser came from Nnenna Nwakanma, identified on the event agenda as a member of Civil Society from Africa. Her remarks received resounding applause from attendees.
Surprisingly, similar remarks came during the same session from World Wide Web developer Tim Berners Lee, who declared that the Internet had become “an essential public utility” and that ICANN should act in the best interest of the global Internet community – a duty that he linked to spending funds devoted to “closing the digital divide”. And that divide has been growing, even in those developing nations identified with technological and economic growth – according to a new Global Information Technology Report from the World Economic Forum “many large emerging nations such as China, Brazil and India saw their rankings drop”.
For the past few weeks those who expressed concerns that US withdrawal from its IANA counterparty role might result in greater Internet censorship, or even a global Internet tax, have been met with ridicule from some quarters. Perhaps their concerns are not so ridiculous. It’s easy to imagine the rationale for a “modest” $1 annual digital development fee levied on each registered domain, and ICANN might welcome the opportunity to build ties to Governmental Advisory Committee (GAC) member nations by doling out development dollars.
How much could such a $1 fee raise? According to VeriSign’s April 2014 Domain Name Industry Brief there are now 271 million registered domains, of which 123.5 million are ccTLDs operated by individual nations and likely to be excluded from such a fee as ICANN has no direct authority over them. That leaves 147.5 million domains at gTLDs and would yield $147.5 million per year. Once the precedent is set it’s a simple step to up the levy in future years – crank it up to $5, add in the natural growth in gTLD registrations accelerated by the rollout of more than a thousand new gTLDs, and you can get close to a billion dollars annually without breaking a sweat. That’s a very tempting target, and one that might well be advocated by ICANN’s own GAC at some point – especially if it switches to a majority vote decisional system as an outcome of the Internet governance evolution initiated at NETmundial.
Even more worrisome – the precedent has already been set! Few realize it, but the 2005 .Net registry operator contract between ICANN and VeriSign contained this language levying a 75 cents per .net domain fee for several purposes, one of which was a restricted fund for helping developing nation stakeholders better participate in ICANN :
Registry-Level Transaction Fee. Commencing on 1 July 2005, Registry Operator shall pay ICANN a Registry-Level Transaction Fee in an amount equal to US$0.75 for each annual increment of an initial or renewal domain name registration and for transferring a domain name registration from one ICANN-accredited registrar to another during the calendar quarter to which the Registry-Level Transaction Fee pertains. ICANN intends to apply this fee to purposes including: (a) a special restricted fund for developing country Internet communities to enable further participation in the ICANN mission by developing country stakeholders, (b) a special restricted fund to enhance and facilitate the security and stability of the DNS, and (c) general operating funds to support ICANN’s mission to ensure the stable and secure operation of the DNS.
ICANN mixed that Transaction Fee into its general revenues and never really provided an accounting of how those funds were allocated. Yet the follow-up 2011 .Net agreement contained almost identical language, with an added proviso that ICANN was not required to segregate the funds or establish separate accounts for the designated purposes:
Registry-Level Transaction Fee. Registry Operator shall pay ICANN a Registry-Level Transaction Fee in an amount equal to US$0.75 for each annual increment of an initial or renewal domain name registration and for transferring a domain name registration from one ICANN accredited registrar to another during the calendar quarter to which the Registry-Level Transaction Fee pertains. ICANN intends to apply this fee to purposes including: (a) a special restricted fund for developing country Internet communities to enable further participation in the ICANN mission by developing country stakeholders, (b) a special restricted fund to enhance and facilitate the security and stability of the DNS, and (c) general operating funds to support ICANN’s mission to ensure the stable and secure operation of the DNS; provided, that ICANN will not be required to segregate funds for any such purpose or establish separate accounts for such funds.
Notwithstanding that provision, the ICANN Board committed to an annual accounting when it approved the 2011 .Net contract:
“Whereas, the .NET agreement provides for a US$0.75 registry-level transaction fee, and ICANN has used the funds to support developing country Internet communities to participate in ICANN, enhancing security and stability of the DNS, and for general operating funds. ICANN commits to provide annual reporting on the use of these funds from .NET transaction fees.” http://www.icann.org/en/groups/board/documents/resolutions-24jun11-en.htm#4.rationale
Yet, so far as we can find, ICANN has never provided such annual reports even though the Board committed to them, and the fee is still siphoned into its general funds. That lack of reporting goes to the ongoing problems of ICANN accountability and transparency.
But, getting back to our original point, two speakers at NETmundial opening session suggested that ICANN needs to allocate more funds to closing the digital divide – and ICANN, as we know, gets the vast majority of its funding through the fees paid by domain registrants to registrars and then up-streamed to registries and ICANN. The great majority of gTLD domain registrants reside in the developed world, and the proposal put forward would have them pay a fee to fund projects in the developing world. So the issue of an ICANN-administered “tax” on registrants isn’t that far-fetched after all and does not require a UN takeover to occur. This important issue bears continued close watch by ICA and others.
Other observations drawn from observing the NETmundial meeting remotely for more than ten hours on its opening day:
Finally, the first day’s Fence Straddler Award goes to President Rousseff for her declaration that there was “no opposition” between the government-dominated multilateral model and the private-sector led multistakeholder model. And the MIA Award goes to ICANN CEO Fadi Chehade, who was the only participant in the Opening Ceremony who did not say a word.
As the afternoon session went on, the discussion finally opened up to attendees, who provided their own multiple suggestions for how the conference output document should be amended. That process will continue into NETmundial’s second and final day. Stay tuned.