Although ICA is not in attendance at the Internet Governance Forum meeting currently taking place in Istanbul, Turkey an ICA-endorsed session on “Accountability in Multistakeholder Governance Regime ICANN” will be taking place on the morning of September 3rd. ICA was one of several host organizations that endorsed the proposal for this session, along with CGI.BR of Brazil, the Public Interest Registry, InternetNZ of New Zealand, and the Internet Governance Project.
The session will address the following questions:
Panelists at the session will include NTIA head Larry Strickling, VeriSign Vice President Pat Kane, and ICANN Ombudsman Chris LaHatte, along with others from the technical community and civil society. Robin Gross of the IPJustice organization will moderate.
Achieving enhanced accountability for ICANN Board and staff actions is an important component of protecting the rights of domain investors, especially as the U.S. contemplates relinquishing its IANA functions oversight role that put real teeth into enforcement of the Affirmation of Commitments (AoC). ICA will continue to work within the Business Constituency and with other members of the broad ICANN community as the Accountability Process moves forward in order to ensure that any transition of the IANA functions is accompanied by meaningful enhancements of available accountability measures — and perhaps by new means of redress as well.
In another unpredicted development the entire community of ICANN stakeholders has sent a joint letter to CEO Fadi Chehade and the ICANN Board that strongly questions the “Enhancing ICANN Accountability and Governance – Process and Next Steps” document published by ICANN staff on August 14th over widespread community objections. Signatories to the August 26th letter (text below) include the GNSO Council and all of the GNSO’s stakeholder groups and constituencies, the Country Code Name Supporting Organization, the At-Large Advisory Committee, the Security and Stability Advisory Committee – and, most surprisingly, the Governmental Advisory Committee.
The letter states that “substantial questions and concerns remain unanswered, including around the process to date and the plan as constructed” and promises to deliver a “list of clarifying questions and comments within seven days” so that the signatories “not only understand the proposed approach, but are able to endorse it”. In other words, the current Accountability Process lacks the endorsement of any stakeholder group within ICANN.
In addition to this letter and the detailed questions to be delivered to ICANN next week, a number of ICANN stakeholder groups are preparing to file a formal Reconsideration Request to ICANN’s Board by the required 14-day (August 28) deadline in which the Board will be asked to review and reverse or modify the staff plan on the grounds that both its substance and the process by which it was created have materially harmed their interests. In an ironic twist those stakeholders are requesting that the Board hold the staff accountable for the alleged violations arising from publication and adoption of this non-endorsed Accountability Process.
Comments filed with ICANN as well as other community input indicated a strong preference for the establishment of a standard Cross-Community Working Group (CCWG) to develop the vital enhanced accountability measures that are supposed to accompany any proposal for facilitating the IANA functions transition away from US control, with experts available to facilitate the work of that CCWG at its request. Instead, ICANN’s staff are trying to unilaterally impose an overly complicated tripartite construct that resembles a Rube Goldberg machine.
The staff proposal would segregate community discussion into an Accountability & Governance Cross Community Group that would have a restricted ability to appoint participants to the Accountability & Governance Coordination Group in which the real decisions would be made, and which would issue a final report and recommendations. Meanwhile, a separate Accountability & Governance Public Experts Group (PEG) would appoint up to seven “experts” to the decision-making group. Many within the ICANN community view the proposed structure as designed to dilute the strength of any final recommendations for new enhanced accountability measures; especially the establishment of an independent appeals mechanism with the power to reverse decisions that violate ICANN Bylaws, and to discipline Board members and staff. It is highly doubtful that anything as robust as the “KEY PRINCIPLES FOR COORDINATION OF INTERNET UNIQUE IDENTIFIERS” that are attracting increasing support among Internet companies, trade associations, and civil society could ever emerge from such a process.
In addition, the staff-imposed Process contains this key language:
Following public comment, the Coordination Group will submit its final report to the ICANN Board. The ICANN Board will immediately and publicly post the final report, consider whether to adopt all or parts of it, and direct the CEO to implement those parts it has accepted once that decision is made. ICANN staff should be involved in assessing feasibility and flagging implementation concerns as early as possible in the recommendation development process to allow for alternatives to be identified. To be clear, ICANN’s goal is to have this work develop recommendations that are capable of implementation, and not solely to go through the exercise of a review. Any decision by the Board to not implement a recommendation (or a portion of a recommendation) will be accompanied by a detailed rationale.
As described, ICANN staff will have free rein to assess “feasibility” and to flag “implementation concerns” throughout the process, and the Board will be able to cherry-pick the final recommendations and reject anything it cares to, with no standard for rejection and subject only to the requirement that it provide some rationale for its decision. It is almost impossible to envision anything that imposes enhanced accountability and binding disciple on the Board and staff resulting from such a Process.
On August 19th, five days after imposing this Process as a fait accompli without any opportunity for public comment, ICANN announced the members of the PEG. They are:
It is particularly disquieting to see Secretary Strickling on this list as it may be viewed by some parties as implying US government endorsement and support for an ICANN staff-originated Process that was imposed over the objections and concerns of ICANN community leaders and that has subsequently elicited widespread pushback from the entire community. This is not how the much vaunted multistakeholder model is supposed to operate.
Just two months ago all of the GNSO constituencies issued a joint statement at ICANN’s London meeting in which they called 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” and asked “the ICANN Board and Staff to fulfill their obligations and support this community driven, multi-stakeholder initiative”.
Instead of supporting the community’s desire for an Accountability CCWG, the staff has indicated its apparent mistrust of the community through this attempt to impose its own Accountability Process that many believe will dilute any final recommendations — and even then allow the Board to reject any of them for any reason whatsoever. That staff attempt has resulted in this new and broader message to ICANN that extends well beyond the boundaries of the GNSO, including the GAC. It appears that ICANN’s staff is driving unprecedented unity within the ICANN community – unfortunately, that unity is based on unanimous and extremely serious concerns about staff actions on a matter of overarching importance.
The road ahead on Accountability will either follow the flawed path developed by staff – with active community participation in substantial doubt – or, even if significant modifications are achieved through united community resistance, the forthcoming Process may well be marred by lingering mistrust as a result of this high-handed staff action. All of this is very unfortunate and was totally avoidable if ICANN had simply allowed for bottom-up development and made adequate solicitation of public comment before adopting a final Accountability Process.
The text of the letter follows:
August 26, 2014
Fadi Chehadé, CEO, ICANN
Dr. Stephen Crocker, Chair, ICANN Board of Directors
Dear Fadi, Steve and ICANN Directors,
Regarding ICANN’s announcement on August 14, 2014, Enhancing Accountability: Process and Next Steps, the Supporting Organisation, Advisory Committee, Stakeholder Group and Constituency chairs formally request additional time and opportunity to review and discuss the proposal contained in the announcement and in the subsequent FAQ’s published on August 22, so that next steps can be confirmed with increased support from the ICANN community.
Recognizing that the ICANN plan is a brand new construct that was announced without a corresponding public comment period, substantial questions and concerns remain unanswered, including around the process to date and the plan as constructed.
The undersigned Supporting Organisation, Advisory Committee, Stakeholder Group and Constituency leaders are currently engaging our respective groups’ bottom-up, consensus processes at this time to develop and finalize a list of questions that will require clarification or correction. As a result, additional opportunity is needed to ensure understanding of the proposal and the ways in which it is responsive to the interests and working methods of the ICANN stakeholder groups. We commit to submitting to ICANN staff our list of clarifying questions and comments within seven days of this letter.
Since the Enhancing Accountability process will affect ICANN’s future, as well as the range of stakeholders impacted by its decisions, we trust that this request will be received positively and lead to further engagement on this important matter to ensure that the SOs, ACs and SGs and Cs not only understand the proposed approach, but are able to endorse it.
Elisa Cooper, Commercial Business Users, Commercial Stakeholder Group
Olivier Crépin-LeBlond, At-Large Advisory Committee
Rafik Dammak, Non-Commercial Stakeholder Group
William Drake, Non-Commercial Users
Keith Drazek, Registry Stakeholder Group
Heather Dryden, Governmental Advisory Committee
Patrik Fältström, Security and Stability Advisory Committee
Byron Holland, Country Code Names Supporting Organization
Tony Holmes, Internet Service Providers, Commercial Stakeholder Group
Michele Neylon, Registrar Stakeholder Group
Jonathan Robinson, Generic Names Supporting Organization Council
Kristina Rosette, Intellectual Property, Commercial Stakeholder Group
An initial review of ICANN’s response to litigation seeking it to turn over control of the ccTLDs of Iran, Syria and North Korea led to the conclusion that it had opened a “legal can of worms”. A few more just wriggled out, and they threaten the basic assumption that underlies the U.S. statute governing cybersquatting and the practices engaged in by Federal officials seizing domain names engaged in intellectual property infringement.
In a blog post, “Are Internet domain names “property”?”, placed at the influential Volokh Conspiracy legal discussion website, Temple University Law Professor David Post further explores the implications of ICANN’s response. His comments carry considerable weight, as he is also a Fellow at the Center for Democracy and Technology, an Adjunct Scholar at the Cato Institute, and a member of the Board of Trustees of the Nexa Center for Internet and Society.
Professor Post starts out by declaring his distaste for “resolving through private litigation matters that are more properly viewed as substantial international disputes between nation-states”. That aversion is heightened when it “embroils ICANN in either (a) complicated questions of international politics or (b) the resolution of private disputes”. And he gets to the heart of the potential international political dangers of this litigation with his observation that, “the notion that the decisions of US courts can interfere in ICANN’s management of the domain name system in a way that courts elsewhere cannot… will not go over very well in an international community that already thinks the US government exercises too much control over ICANN, and over Internet infrastructure in general.
While agreeing with ICANN’s argument that a ccTLD is not property, he goes on to observe that this contention is actually at sharp odds with existing U.S. law and enforcement practices involving the protection of trademarks and copyrights:
It’s a very sensible argument, and I’ve made it myself many times. The problem, though, is that US law already – very unfortunately, in my view, but there you are – treats domain names as if they were “property”. The Anti-Cybersquatting Protection Act permits aggrieved trademark owners to institute in rem actions against domain names whose owners are located abroad (and not subject to the jurisdiction of the US courts) – to seize the domain names and then to adjudicate the rights associated with them, on the fiction that the names are indeed property located in the judicial district where the particular domain name registry is located. On very much the same theory – that domain names are seizeable “property” – the Dept. of Homeland Security has issued several thousand seizure orders over the past few years against domain names allegedly involved in large-scale copyright infringement.
Professor Post, after noting that, “I would expect the plaintiffs here to press this argument in opposition to ICANN’s motions to quash”, concludes his post with the hope that “ICANN’s other arguments are strong enough that the judge can (and hopefully will) grant its motion without having to delve into this rather tricky nomenclatural minefield about what is, and what isn’t, property”.
But what if the case doesn’t play out that way? What if the plaintiffs raise the “are domains property?” issue with sufficient force to get the DC Court of Appeals to rule on it? What if the politically fraught nature of this case propels it on to the Supreme Court, which may have to resolve conflicting Appeals Court decisions that have split on whether second level domains are property or just a form of licensure?
Any holding that domains are not property could well be the basis for a challenge to the in rem provision of the ACPA, and to ICE’s domain seizure practices.
There is of course an argument to be made that ccTLDs assigned to nation-states and whose relationship with ICANN is strictly voluntary are fundamentally different in legal character than gTLDs that are based upon a registry agreement contract between the operator and ICANN. But that argument is most unlikely to be raised in this case as it only involves ccTLDs.
Lots of parties not involved in this litigation have a considerable stake in it. New gTLD applicants that have expended large investments in their registries would like certainty over the U.S. legal status of them, since all registry contracts are governed by US law. While there is no consensus within the domain investment community as to whether it would be desirable to have interests in second level domains classified as a property right, it seems axiomatic that if a gTLD is found to not constitute property than a second level subunit of it will likewise lack that status. And trademark and copyright owners may not be pleased with any judicial decision that undermines the basis of their current online protections.
This is but the latest potential fallout of this most unusual case. More consequences may be in the offing. Stay tuned.
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.
It was an omen of things to come. Just over an hour out from Hong Kong the pilot of my 777 en route from San Francisco came on the intercom. Hong Kong was temporarily closed due to torrential rain and we would need to land in Taipei to refuel before proceeding.
When we finally arrived in HKG my journey from Washington, DC was already close to 24 hours’ duration. I cleared immigration, collected my bags, and met the driver of my hotel-dispatched Mercedes. En route the downpour began again, in sweeping waves that the locals call “black rain”. I have no idea how my driver saw the road as the wipers engaged in a futile battle with the deluge. I never spoke to him during the ride except to say “thank you” when we finally arrived at the Sheraton in Kowloon, afraid that distracting him for even a moment could have fatal consequences.
That black rain would become a metaphor for the coming deluge of Internet-related trademark law and policy proposals that could arrive as a vast storm front in the next two years. The trademark community is readying an ark to ride out the flood, and the domain investment industry must do so as well.
The Sheraton was situated directly across Hong Kong harbor from the massive Convention Center housing the annual meeting of the International Trademark Association (INTA) from May 11-14. I was attending it in my new capacity as a member of INTA’s Internet Committee, which wrestles with the intersection of trademark protection and cyberspace, as well as its Subcommittee on Internet Governance. On the first morning of the meeting I made the mistake of walking the two blocks from hotel to the Star Ferry terminal to catch the 5-minute, two-and-a half Hong Kong dollar (33 cents U.S.) ride across to the Convention Center. During rainy season Hong Kong is akin to a giant steam bath, a mass of humanity in a cloud of humidity. I sweated through my shirt and suit on that stroll and for the rest of the stay took a taxi those two blocks to avoid a repeat of that.
Inside the cavernous convention hall, where walking from one end to the other took ten minutes at a brisk pace, it became clear how huge the world of branding is in the 21st century. Thousands were in attendance from every corner of the globe, and more than one hundred exhibitors filled a space of several acres.
While those exhibitors included booths from a variety of incumbent and new gTLD registries, registrars, and a large number of online brand protection providers, it’s no secret that the trademark world has been less than enthusiastic about ICANN’s new gTLD program — concerned about the potential for vastly expanded cybersquatting and unnecessarily draining costs for legal actions and defensive registrations. So now that the program was off the launch pad I wanted to see how the trademark sector was viewing and reacting to it.
The first feedback came at a small “Table Talk” luncheon discussion of domain name litigation and arbitration attorneys and consultants involved in the new world of 1,000-plus gTLDs. These was an informal, unofficial conversation that allow INTA members to discuss subjects among themselves. It became clear that many of the trademark experts in attendance were just beginning to focus on the new gTLD program, despite clear notice of its impending arrival and the availability of new rights protection mechanisms (RPMs) consisting of the Trademark Clearinghouse (TMCH) and Uniform Rapid Suspension (URS). Those more conversant with it were concerned by a variety of registry and registrar practices that they thought were undermining their ability to make defensive registrations at reasonable cost.
Anecdotal reports also indicated that much of the intentional cybersquatting was being done by amateurs with no understanding of trademark law — one domain industry attorney related, laughingly, how he had been asked to help broker the sale of a newly registered infringing domain to its major brand rights holder for a contingency fee, and how he had advised the registrant to just transfer the name now before he was hit with a cease-and-desist letter or worse. A major concern of discussants was whether a rights holder had to take action against every infringing domain, no matter how slight the impact, to demonstrate active policing of its rights, to protect their mark through active policing; the moderator suggested that a memo to file explaining why action had been declined might suffice, but noted that there is no way to tell how courts would treat such decisions in the context of new gTLDs.
More information came at a large general session on trademarks and new gTLDs. As of that date (May 12):
Session speakers conveyed anecdotal reports of substantial levels of cybersquatting. Many rights holders appeared to be passing on TMCH registrations because they had little interest in making large numbers of defensive “sunrise” registrations at new gTLDs. Complaints were heard that the URS was unattractive because it involved perpetual monitoring of suspended domains that could later be re-registered, and that the UDRP was too slow and expensive to scale to the new world. Session attendees were reminded that ICANN would be conducting an initial review of the efficacy of the new RPMs in 2015, and that review of the UDRP would also commence next year – and were urged to document how they used the new RPMs and what their total defensive costs stemming from new gTLDs added up to.
At the meeting of the Internet Governance Subcommittee I was asked to head up a new task force to analyze ICANN’s proposal for the process to develop enhanced accountability measures to accompany the transition of the IANA functions from the US government to the multistakeholder community. This followed up on performing the same lead role regarding the IANA transition process, which resulted in submission of an INTA comment letter.
Both domain investors and rights holders appear to share similar concerns about the prospect of a termination of the remaining U.S. role absent the establishment of enhanced and enforceable accountability measures.
At the full Internet Committee I reported on the state of play of that transition and accountability process, including the key elements of ICANN’s initial proposal as well as recent Congressional oversight hearings. At that meeting I also learned more about the use of RPMs against new gTLDs. Many domain registrations that had infringement potential could not yet be the target of a URS or UDRP action because the suspect domains were still “dark” with no content, and hence bad faith use could not be alleged or proven. Overall, only 5 UDRPs had been filed against new gTLDs, so for now the URS appears to be the favored arbitration response.
I also learned at the Internet Committee meeting that the trademark community was readying itself for the major trademark law and policy debates that are likely to arise in the 2015-16 timeframe.
The likely policy issues include:
The Committee was also getting ready to react if other parties should propose legislation related to Internet fraud, or an international treaty on cybersquatting.
I left Hong Kong with a suitcase full of business wear in need of dry cleaning – and with a much better understanding of what trademark owners are thinking about new gTLDs. While .brand gTLDs and certain new gTLD vertical categories may enhance their web presence and marketing/sales strategies, monitoring and enforcement costs are a growing concern. Even if a global brand can keep its total URS costs down to $1,000 an action for filing fees and counsel, that can readily add up to a $1 million cost per mark across the new gTLD landscape.
Hopefully, my engagement on the Internet Committee, as well as that of other domain sector attorneys, can help to bridge the understanding gap between rights holders and domainers and deliver the message that the professional domain portfolio investors represented by ICA are not cybersquatters. (That point was driven home two weeks later when I attended the TRAFFIC domain conference in Las Vegas, where major investors related their own tales of being approached by cybersquatters attempting to sell newly registered and clearly infringing gTLDs — and of telling them to get lost).
It’s prudent for the trademark sector to be gearing up for the coming Internet trademark policy debates, and it would be imprudent for the domain industry to fail to do the same. The domain community respects the measured enforcement of trademark law, and asks in return that the trademark sector recognize that domains are also valuable intangible assets — and that a reasonable balance must be established to reconcile the separate bundles of rights within trademarks and domains. ICA will be delivering that message and readying its own strategy as the debates approach.
And there are many areas where a candid dialogue may produce win-win results. Trademark owners are justifiably chagrined that a URS action only suspends a clearly infringing domain for its remaining registration period, leaving it available for re-registration and the need for a follow-up URS filing — while domain investors don’t want a domain transfer option out of equally justifiable concern that the URS could become a low-cost means of reverse domain name hijacking (RDNH). One possible reconciliation would be to amend the URS so that a lost domain is permanently barred from being reregistered. That would alleviate domainers of their hijacking concern – and take a clearly infringing domain out of circulation with no continuing defensive registration costs for the rights holder.
When it comes to UDRP reform, ICA members have discussed a variety of changes they would like to see come about, and those can be the basis for future negotiations. As for amending the ACPA, we’ll have to see what is proposed – creating secondary liability would concern the entire domain industry far beyond professional investors, including registrars and secondary markets, while a “loser pays” rule would also be of significant concern. (While there is no current indication that those items will be on any INTA wish list, they have already been floated by the DC-based Coalition Against Domain Name Abuse (CADNA)).
How these debates will play out is far from certain. But that they will soon be engaged in is absolutely certain. So everyone with a stake in the future of Internet trademark law and domain investment needs to gear up and be ready to make their case – or else be swept away by coming torrents of policy black rain.
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/ .
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.