Electronic Communications |
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13 February 2001
Excerpts: Congressional Hearing on New Internet DomainsTelecommunications panel reviews domain selection process
A variety of stakeholders in the Internet community raised questions before a Congressional committee February 8 about the process used in the selection of new top level domain (TLD) names to accommodate the anticipated expansion of the World Wide Web. The Internet Corporation for Assigned Names and Numbers (ICANN) announced a decision for new names in November, a decision that must still be finalized with the U.S. Department of Commerce. In addition to the ".gov," ".com" and ".edu" domains now widely in use, ICANN identified seven new domains after reviewing proposals from 47 different applicants and comments from thousands of interested parties. They are ".areo," ".co-op," ".info," ".museum," ".name," ".pro" and ".biz." The chairman of ICANN, Vincent G. Cerf, explained the criteria the board followed to make the selections, and responded to criticisms about the process used to evaluate the applications. Particular complaints have been raised about a $50,000 application fee that TLD name proposers had to pay. Cerf, an inventor of a computer protocol that enabled the creation of the Internet, said ICANN must pay for its own operations with no outside funding, so the fees were designed to make the TLD-expansion project pay for itself. The TLD selection process is a matter of great public interest, according to testimony from the Center for Democracy and Technology (CDT), a communications research group. CDT Associate Director Alan B. Davidson said in prepared testimony, "Today, access to the domain name system is access to the Internet. Domain names are the signposts in cyberspace that help make content available and visible on the Internet." Professor A. Michael Froomkin challenged the approach ICANN took in making its new TLD selections. "Its arbitrary and capricious decisions violate both the Administrative Procedures Act (APA) and the Due Process Clause of the Constitution," he said. The APA governs how government agencies must conduct their business. ICANN is an independent body created by the private sector to take over Internet-management responsibilities that had previously been handled by the U.S. government. David E. Short, representing the International Air Transport Association (IATA), protested ICANN's failure to approve an application for the proposed TLD ".travel." Short said, "A '.travel' TLD would offer competitive advantages unmatched by any of the new TLDs selected by ICANN, which are either too broad or too narrow in scope to offer a real competitive alternative to 'com.'" The complete texts of all the witnesses' testimony is available at http://www.house.gov/commerce/hearings/telecom02082001.htm Following are excerpts of House Telecommunications Subcommittee hearing:
U.S. HOUSE OF REPRESENTATIVES
Tauzin Delivers Statement on ICANN's Domain Name Selection Process
Washington (February 8) - Chairman Billy Tauzin (R-LA) issued the following statement at a Subcommittee on Telecommunications and the Internet hearing entitled: "Is ICANN's New Generation of Internet Domain Name Selection Process Thwarting Competition?": "I would like to thank Chairman Upton for holding this important and timely hearing on the Internet Corporation for Assigned Names and Numbers (ICANN). As the Committee of jurisdiction over ICANN, it is imperative that we continue our oversight responsibilities in this area. The issues ICANN is grappling with will have a fundamental impact on the future vibrancy of the Internet. While I recognize that there are a number of important and interesting issues involving ICANN - governance issues, funding issues, root server competition issues, multilingual issues, dispute resolution issues, countrycode TLD issues, and significant trademark implications -- this hearing is intended to focus on the discrete but critical issue of the process by which ICANN recently approved seven suffixes: dot areo, dot co-op, dot info, dot museum, dot name, dot pro, and dot biz. "That said, it is my intention to, with Chairman Upton, actively monitor those issues I just mentioned. . . . "For being in existence for a little over two years -- ICANN has been charged with a number of important tasks, one of which is to establish a process for the introduction of new top level domain (TLDs) names in a way that will not destabilize the Internet. On November 16th ICANN announced its selection of the seven new suffixes - doubling the number of global TLDs. There are many arguments both for and against new TLDs. Those in favor of a limitless number (or at least significantly more than seven) maintain that new TLDs are technically easy to create, will help relieve the scarcity in existing name spaces that make it difficult for companies to find catchy new website addresses, and are consistent with increasing consumer choice and a diversity of options. However, there are those who urge restraint and caution in the introduction of TLDs pointing to greater possibilities for consumer confusion, the risk of increased trademark infringement, cybersquatting and cyberpiracy. I am eager to hear from ICANN about how it arrived at the number seven. "Equally important, many are questioning the very process by which the suffixes were selected. I am eager to hear ICANN's view of the process, the views of selected and set aside applicants, and the views of Professor Froomkin and the Center for Democracy and Technology. I encourage all panelists to offer, in addition to specific criticism -- or praise depending on their point of view -- their insights as to how to improve the process as we move forward to future rounds of suffix selections. "On August 3rd ICANN posted an extensive process overview to assist those considering applying to operate a new TLD. The application materials were subsequently posted on August 15th. October 2nd was the deadline for submitting applications and ICANN announced it decision on November 16th. Some validly argue that the six week application review process seemed unacceptably short - making it extremely difficult for each application to enjoy a thorough review. Some are complaining that the criteria was vague and not followed; they were not provided an opportunity to correct errors in the staff recommendation on their applications; they were not provided with any meaningful opportunity for face-to-face consultations and that in fact, they were only provided with three minutes to make a "last ditch" pitch to the Board. With each applicant paying a non-refundable $50,000 filing fee, should the process have provided more? "Notwithstanding these complaints others were happy with the process and maintain that the time has come to introduce new domain names onto the Internet, and urge that there not be any further delay. "Our role should be to ensure that the process by which ICANN, a private, non-profit entity with global responsibilities, selected domain names was open and fair to all applicants. Were the procedures clearly articulated and consistently followed? To the extent we find shortcomings in this new process, and I already have, I hope we can provide some guidance that will serve as a roadmap in the future given that this is not expected to be the last round of domain name selections. With this hearing, our review will not end, we will continue to review this process. "I look forward to hearing from this distinguished panel of witnesses. Thank you." end excerpt
begin excerpt
DR. VINTON G. CERF
My name is Vinton G. Cerf, and outside of my regular employment at WorldCom, I am the volunteer Chairman of the Internet Corporation For Assigned Names and Numbers (ICANN). I appreciate the opportunity to appear before this Committee to describe the efforts of ICANN to introduce additional competition into the Internet name space, while at the same time prudently protecting against possible disruption of this extremely important global resource for communications and commerce. The basic message I would like to leave with you today is that ICANN is functioning well, especially for such a young organization with such a difficult job. In fact, it has made substantial progress toward the specific goals it was created to meet, including the introduction of competition at both the wholesale and retail levels of the registration of names in the Domain Name System (DNS). The recent action to introduce seven new Top Level Domains (TLDs) into the DNS will double the number of global TLDs and at the same time will not, we believe, create serious risks of destabilizing the Internet -- something I know none of us wants to see. The fact that ICANN, in just over a year, has been able to generate global consensus on this issue -- which has been fiercely debated for most of the last decade -- is a testament to ICANN's potential to effectively administer the limited but important aspects of the DNS that are its only responsibility. A. What is ICANN?
It is probably useful to first provide a little background about ICANN, which is a unique entity that may not be familiar to everyone. ICANN is a non-profit private-sector organization with a 19-member international volunteer Board of Directors drawn from a set of specialized technical and policy advisory groups, and through open, worldwide online elections. ICANN was formed in 1998 through a consensus-development process in the global Internet community, in response to a suggestion by the United States Government that the private sector create such a body. It was formed to undertake certain administrative and technical management aspects of the Domain Name System (DNS) and the Internet address space. Domain names serve as the visible face of the name and address mechanism of the Internet -- in short, the way computers know where to send or receive information. ICANN performs functions that, prior to ICANN's creation by the private sector, were performed by contractors to the US Government (National Science Foundation and DARPA). ICANN is a young, and still maturing organization; it turns out that achieving global consensus is not so easy. But it has made great -- and many would say surprising -- progress toward the objective shared by the vast majority of responsible voices in the international Internet community: the creation of a stable, efficient and effective administrative management body for specific technical and related policy aspects of the DNS and the Internet address space that is consensus-based, internationally representative, and non-governmental. B. What are the Guiding Principles of ICANN?
There is nothing quite like ICANN anywhere in the world, and of course it will be some time before we are certain that this unique approach to consensus development can effectively carry out the limited but quite important tasks assigned to it. I am cautiously optimistic, but we are still at an early stage of evolution, and there is much work to do. The organizational work has been complicated by the fact that we have also been asked to simultaneously begin to accomplish the specific operational goals set out by the US Government in the White Paper. The situation is analogous to building a restaurant and starting to serve customers while the kitchen is still under construction; it is possible, but may occasionally produce cold food. The White Paper set forth four principles that it described as critical to the success of an entity such as ICANN: stability; competition; private, bottom-up coordination; and representation. 1. Stability is perhaps the easiest to understand. The US Government was seeking to extract itself from what it had concluded was no longer a proper role for the US Government -- the funding of private contractors to manage important technical aspects of the global Internet name and number address system -- but only in a way that did not threaten the stability of the Internet. As the White Paper said, and as seems obvious, "the stability of the Internet should be the first priority of any DNS management system." If the DNS does not work, then for all practical purposes for most people, the Internet does not work. That is an unacceptable outcome, and thus everything that ICANN does is guided by, and tested against, this primary directive. 2. Competition was also an important goal set forth in the White Paper, which stated that "[w]here possible, market mechanisms that support competition and consumer choice should drive the management of the Internet because they will lower costs, promote innovation, encourage diversity, and enhance user choice and satisfaction." Competition in the DNS structure as it stands today is theoretically possible at both the registry (or wholesale) level, and the registrar (or retail) level. Increasing competition at the retail level involves only adding additional sellers of names to be recorded in existing registries; as a result, it generates relatively minor stability concerns. For this reason, adding new competition at the retail level was the first substantive goal that ICANN quickly accomplished after its formation. On the other hand, adding new registry (or wholesale) competition -- which is the subject of this hearing -- requires the introduction of additional Top Level Domains into the namespace, and thus does raise potential stability issues of various kinds. As a result, and given its prime directive to protect stability, ICANN has moved forward in this area in a prudent and cautious way, consistent with recommendations from many constituencies interested in the Internet, which I will describe in more detail later in this testimony. 3. A third principle was private sector, bottom-up consensus development, and the entirety of ICANN's processes are controlled by this principle. ICANN is a private-sector body, and its participants draw from the full range of private-sector organizations, from business entities to non-profit organizations to foundations to private individuals. Its policies are the result of the complex, sometimes cumbersome interaction of all these actors, in an open, transparent and sometimes slow progression from individuals and particular entities through the ICANN working groups and Supporting Organizations to ICANN's Board, which by its own bylaws has the role of recognizing consensus already developed below, not imposing it from above. Like democracy, it is far from a perfect system, but it is an attempt, and the best way we have yet been able to devise, to generate global consensus without the coercive power of governments. 4. Finally, the fourth core principle on which ICANN rests is representation. A body such as ICANN can only plausibly claim to operate as a consensus development organization for the Internet community if it is truly representative of that community. The White Paper called for ICANN to "reflect the functional and geographic diversity of the Internet and its users," and to "ensure international participation in decision making." To satisfy these objectives, all of ICANN's structures are required to be geographically diverse, and the structures have been designed to, in the aggregate, to provide opportunities for input from all manner of Internet stakeholders. This is an extremely complicated task, and we are not yet finished with the construction phase; indeed, we have just initiated a Study Committee chaired by the former Prime Minister of Sweden, Carl Bildt, to oversee a new effort to find a consensus solution for obtaining input from and providing accountability to the general user community, which might not otherwise be involved in or even knowledgeable about ICANN and its activities. Other organizational tasks necessary to ensure that ICANN is fully representative of the entirety of the Internet community are also ongoing. This is hard work, and there is more to do to get it done right. C. What Has ICANN Accomplished So Far?
Obviously, ICANN is still a work in progress. Nevertheless, it has, in my view, already made remarkable progress in its young life. ICANN was created in November of 1998, and did not really become fully operational until a year later (November of 1999) with the signing of a series of agreements with Network Solutions Inc. (NSI), then the sole operator of the largest and most significant registries -- .com, .net, and .org. So ICANN really has only about 14 months of operating history. Still, even in that short span of time, some significant things have happened. 1. The Introduction of Retail Competition. As one of its very first actions, ICANN created an accreditation system for competitive registrars and, pursuant to its NSI agreements, gave those new competitors access to the NSI-operated registries. When ICANN was formed, there was only a single registrar (NSI) and everyone had to pay the single price for the single domain name product that sole registrar offered: $70 for a two-year registration. There are now over 180 accredited registrars, with more than half of those actively operating, and you can now register a domain name in the .com, .net, and .org registries for a wide range of prices and terms -- some will charge zero for the name if you buy other services, while others will sell you a ten-year registration for significantly less than the $350 it would have cost pre-ICANN (even if it had been available, which it was not). While there are no precise statistics, in part because the market is so diverse, a good estimate of the average retail price today of a one-year domain name registration in the NSI registries is probably $10-15 -- or less than half the retail price just 18 months ago. . . . So while there are still issues to be dealt with, I think it is widely recognized that ICANN has been very successful in changing the retail name registration market from a monopoly market to a highly competitive market. 2. Creation of a Cost-Effective, Efficient Dispute Resolution System. A second significant accomplishment has been the creation of the Uniform Dispute Resolution Policy (UDRP), a way to quickly and cheaply arbitrate certain domain name disputes. While domain names themselves cannot be trademarked, it is certainly possible for domain names to be confusingly similar to a trademarked name, or in other ways to be inappropriately used by someone for illegitimate means. Since trademark and other intellectual property rules differ from country to country, enforcing those rights is complex and expensive. One of the policies that was generated from the ICANN bottom-up process early on was the need for a simple procedure to resolve the clearest and most egregious violations on a global basis. The result, after considerable work in a variety of ICANN forums, is the UDRP, which one commentator recently noted is "widely viewed as a model of dispute resolution for the 21st Century." The UDRP is limited to certain very specific claims, is intended to require only about $1,500 in costs and 45 days to invoke, and is required to be included in all name registration contracts by all ICANN-accredited registrars, thus providing the basis for global uniformity in the resolution of this particular class of domain name disputes. Even though the UDRP is non-binding (either party may take the dispute to court after an unfavorable UDRP decision), it appears that has happened in only a few dozen out of over 2,000 decisions to date. The UDRP is, I would submit, another very positive accomplishment of ICANN during its short existence to date. As of this writing, parties interested in further refinement of the UDRP are already studying its design for possible revisions. D. The Introduction of New Global Top Level Domains.
That brings me to the subject of today's hearings, which is really the third major accomplishment of ICANN in its short existence: the creation of additional competition at the registry (or wholesale) level of the namespace. To understand how much of an accomplishment this was, and how difficult it has been to get to this point, we need to start with some history, after which I will walk through the general standard utilized, the criteria that were applied, the application process, the evaluation process, and the selection process. I will then bring the story up to date with a description of what has happened since the selections were made. Background. The Internet as we know it today was not created with all of its present uses clearly in mind. In fact, I can safely say (having been very much involved in the very earliest days of the Internet) that no one had any idea how it would develop in the hands of the general public, nor even that it would ever reach public hands. Certainly there was little appreciation of the increasingly critical role it would play in everyday life. In those days, we were designing a communications system intended for military application and used for experimental purposes by the research and academic community, and not a system for commerce. Internet addresses are numeric values, usually represented by four numbers separated by "." (dots). This is sometimes called "dotted notation" as in 192.136.34.07. In the earliest days, computers ("hosts") were known by simple names such as "UCLA" or "USC-ISI". As the system grew, especially after 1985 as the National Science Foundation began growing its NSFNET, it became clear that a system of hierarchical naming and addressing conventions would be needed. At that time, seven so-called "Top Level Domains" were created: .com for commercial, .net for networks, .org for non-commercial organizations, .gov for government users, .mil for the military, .edu for educational institutions, and .int for international organizations. All domain names since that time (with an important exception I will mention momentarily) have been subdivisions of those original seven TLDs. . . . The exception mentioned earlier is the set of so-called "country code" (or "cc") TLDs. The original seven TLDs were once called "generic" TLDs and are now known as "global" TLDs, meaning that there are theoretically no geographic boundaries that constrain entries in those databases. In the early days of the Internet, one of the most important values to the scientists seeking to incubate and grow this new thing was the spreading of connectivity to as many parts of the world as possible. To help in that, individual countries (and some other geographic areas) were delegated their own TLDs, such as .au for Australia, or .jp for Japan, or .fr for France. Operation of the registries for these ccTLDs was delegated to a wide variety of people or entities, with the primary consideration being a willingness to agree to operate them for the benefit of the citizens of that geography. These original delegates were frequently academics, sometimes government agencies, and sometimes local entrepreneurs; the common thread was that they promised to use these TLDs to provide access to this new thing called the Internet for local constituents. In this way, the Internet, which started as a research experiment in American universities, slowly became truly global. . . . The original seven gTLDs were created in the mid- to late-1980s; no new global TLD has been added to the namespace since then. There are now some 245 ccTLDs, but as described, these were intended to be for localized use, not as alternatives for global TLDs. So as the Internet grew during the 1990s, demand for domain names grew as well, but as a practical matter the only global (i.e., non-national) TLDs in which businesses or individuals could freely register a domain name were .com, .net and .org -- all administered by Network Solutions, Inc. under a contract with the National Science Foundation. There is a long history about how this came about, which I don't have time to tell, but suffice it to say that as demand exploded, NSI could not effectively operate the registry within the financial framework of its agreement with the National Science Foundation and sought to remedy this by obtaining permission to charge users for registration of names in the .com, .net and .org databases. . . . This unhappiness of a significant portion of the Internet community was one of the driving forces behind a grass-roots attempt to institutionalize the function of the original ICANN, the Information Sciences Institute at the University of Southern California, a government contractor that performed a set of functions known as the Internet Assigned Numbers Authority (IANA). After almost three years of contentious debate, the grass-roots effort failed to gel and the US Government (after extensive public consultation) then called on the private sector to come forward with a new kind of organization. The private sector responded by creating ICANN, as a way to, among other things, encourage the addition of competition at both the retail and wholesale levels of the namespace. Standards for Introduction of New TLDs. As described above, ICANN was able to introduce retail competition relatively quickly after its creation, and this has produced the expected benefits -- lower prices, more consumer choice, and innovation. But the introduction of wholesale competition, because it involves actually expanding the structure of the namespace, presented and continues to present more risks. While most Internet engineers believe that some number of additional TLDs could be added without serious risks of instability, there is considerable uncertainty about how many could be added without adverse side effects, and very few engineers have been willing to absolutely guarantee that there was zero risk of instability. Given the increasingly critical role the Internet now plays in everyday commercial and personal life, the almost uniform consensus in the community was to be cautious and prudent in this process. In fact, every entity or organization without an economic stake in the answer that has examined this question has recommended the same thing: a "small" or "limited" or "prudent" number of new TLDs should be tried first, as a sort of proof of concept or experiment. Once this "limited" number of new TLDs was introduced -- and the suggested numbers roughly ranged from 1 to 10 -- and assuming there were no adverse side effects, then additional TLDs could be introduced if there was consumer demand for them. The ICANN Structure and Procedures. Because ICANN is a consensus development body that relies on bottom-up policy development, the issues of whether and how to introduce new gTLDs were first taken up by the Domain Name Supporting Organization (DNSO), the ICANN constituent body responsible for name policy issues. The DNSO organized a Working Group, which recommended that a small number (6-10) of TLDs be initially introduced, and that the effects of that introduction be evaluated before proceeding further. That recommendation was forwarded to the Names Council, the executive body of the DNSO, which reviewed the Working Group recommendation and public comments on it, and recommended to the ICANN Board that it establish a "policy for the introduction of new gTLDs in a measured and responsible way." The Names Council suggested that "a limited number of new top-level domains be introduced initially and that the future introduction of additional top-level domains be done only after careful evaluation of the initial introduction." Consistent with the ICANN bylaws, the ICANN Board accepts the recommendations of Supporting Organizations if the recommendations meet certain minimal standards designed to ensure that they truly represent consensus recommendations. Thus, the Names Council recommendation was published for public comments, and following the receipt of numerous public comments, the ICANN staff in June 2000 issued a Discussion Draft seeking public comments on a series of questions intended to lead to the adoption of principles and procedures to be followed in a "measured and responsible introduction" of a limited number of new TLDs. Following several thousand additional public comments, and considerable discussion at a public meeting in Yokohama in July 2000, the ICANN Board adopted a series of resolutions instructing its staff to begin the process of accepting applications for a "proof of concept" for the introduction of new TLDs. In early August, ICANN posted a detailed discussion of the new TLD process it proposed to follow, and in mid-August a detailed set of Criteria for Assessing TLD Proposals. These nine criteria have been constant throughout this process, and so they bear repeating here: 1. The need to maintain the Internet's stability.
This speaks for itself. ICANN's overriding obligation is to protect the stability of the Internet, all other objectives are secondary. . . . 2. The extent to which selection of the proposal would lead to an effective "proof of concept" concerning the introduction of top-level domains in the future. This too is largely self-explanatory. The effort here was not to find the "best" application, however that might be measured, but to ask the community to offer up a set of options from which ICANN could select a limited number that, taken in the aggregate, would satisfy the evaluation objectives of this proof of concept. . . . Here, the concept is similar: from options offered up from the community, create a limited number of new TLDs to ensure that the DNS can accept, both technically and practically, these additions without impairing stability in any way. Once that is proven, additional TLDs can be created as appropriate. 3. The enhancement of competition for registration services.
Obviously, this is the principal reason for adding new TLDs, so one criterion for determining which applications to accept initially is how effective they are likely to be in creating new competition for the NSI registries. Of course, competition takes many forms; here, one form would be analogous to .com -- a global, unrestricted registry focusing on business. To compete in this way requires not only desire, but the capacity to effectively compete with a competitor with high brand awareness (.com has almost become a generic term), a very significant marketing budget, and a large installed base of registered names which will produce some level of renewals more or less automatically. To compete successfully on a global basis under these circumstances requires a significant capital investment, very significant technical expertise (running a database of several million names that gets hundreds of simultaneous queries every second is a complicated matter), and a substantial marketing budget to build the kind of brand equity that will be necessary to compete effectively with, for example, .com. Another way to introduce competition into the wholesale part of the market is to offer a different kind of product -- not a global unrestricted domain, but various kinds of limited or restricted registries that might appeal to specific different sectors of the market. To use a television analogy, narrowcasting instead of broadcasting. Here, capital and marketing expenses may be lower, but other kinds of service characteristics may be more important. ICANN's purpose with this criteria was to invite a broad range of competitive options, from which it could select a menu that, taken as a whole, would offer a number of different competitive alternatives to consumers of domain name services. 4. The enhancement of the utility of the DNS. . . .
5. The extent to which the proposal would meet previously unmet types of needs. . . . 6. The extent to which the proposal would enhance the diversity of the DNS and of registration services generally. . . . 7. The evaluation of delegation of policy-formulation functions for special-purpose TLDs to appropriate organizations. For those proposals that envisioned restricted or special-purpose TLDs, this criterion recognized that development of policies for the TLD would best be done by a "sponsoring organization" that could demonstrate that it would include participation of the segments of the communities that would be most affected by the TLD. Thus, with this class of application, the representativeness of the sponsoring organization was a very important criterion in the evaluation process. 8. Appropriate protections of rights of others in connection with the operation of the TLD. Any new TLD is likely to have an initial "land rush" when it first starts operations as people seek the most desirable names. In addition, every new TLD offers the potential opportunity for cybersquatting and other inappropriate name registration practices. This criterion sought information about how the applicant proposed to deal with these issues, and also how it proposed to provide appropriate mechanisms to resolve domain name disputes. 9. The completeness of the proposals submitted and the extent to which they demonstrate realistic business, financial, technical, and operational plans and sound analysis of market needs. . . . The Application Process. The application process required the filing of a detailed proposal speaking to all the criteria outlined above. It recommended that applicants retain professional assistance from technical, financial and management advisers, and lawyers. And perhaps most controversially, it required a non-refundable application fee of $50,000. A brief explanation of this particular requirement may be useful. ICANN is a self-funding organization. It has no capital, and no shareholders from which to raise capital. It must recover its costs from the various constituent units that benefit from ICANN's processes and procedures -- today, those costs are borne by address registries, name registries, and registrars. Its annual expenditures to date have been in the $4-5 million range, covering employee salaries and expenses (there are now 14 employees), and a wide range of other expenditures associated with operating in a global setting. Thus, there was no ready source of funds to pay for the process of introducing new TLDs, and the ICANN Board determined that this, like all other ICANN activities, should be a self-funded effort, with the costs of the process borne by those seeking the new TLDs. At that point, ICANN estimated the potential costs of this process, including the retention of technical and financial advisers, legal advice, the logistics of the process, and the potential cost of litigation pursued by those unhappy with the results. While obviously all these elements were highly uncertain, based on its best judgment of how many applications were likely to come in and what the likely costs would be, and incidentally only after receiving public comments, ICANN established a $50,000 fee. As it turns out, there were more applications than expected, and thus the absolute costs of processing and reviewing them were higher than expected; about half the application revenues have already been used to cover costs of the process to date, with considerable work left to do and still with the potential for litigation at the end of the process. To date, it appears that the fact of more applications and higher costs of review and evaluation than expected have cancelled each other out, and so it appears that the fees adopted were about right in creating the funds necessary to carry out this process. I know there have been complaints by some that they were foreclosed from this process because they simply could not afford the $50,000 application fee, and I am sympathetic to these concerns. But there are three practical responses that, in my view, make it clear that this is not a fair criticism of the process. First, the process had to be self-funding; there simply was no other option, since ICANN has no general source of funds. . . . Second, and as importantly, it is highly unlikely that any individual or entity that could not afford the application fee would have the resources to be able to operate a successful and scalable TLD registry. . . .Of course, it is possible that, if an organization that would otherwise have difficulty managing the costs of operating a TLD registry were in fact awarded a new TLD, it might be able to raise the funds through subsequent contributions or grants or the like, but this leads us directly to the third point. This effort was not a contest to find the most qualified, or the most worthy, or the most attractive for any reason of the various applicants. ICANN is not and should not be in the business of making value judgments. What ICANN is about is protecting the stability of the Internet and, to the extent consistent with that goal, increasing competition and competitive options for consumers of domain name services. Thus, what ICANN was doing here was an experiment, a proof of concept, an attempt to find a limited number of appropriate applicants to test what happens when new TLDs of various kinds are added to the namespace today -- a namespace that is vastly different in size and in application than that which existed more than 15 years ago when the first seven global TLDs and the ccTLDs were created. . . . Thus, it would have been impossible to accept any application which relied on the mere hope of obtaining funding if an application was accepted, and indeed, several of the applicants not selected in the evaluation process were thought to be deficient just on that point. Under these circumstances, it was not appropriate to encourage applications by those with limited resources, since those limitations would almost certainly result in their not being selected. Thus, setting the fee to recover expected costs, without regard to the effect it had on applications, seemed then (and seems today) the logical approach. Once this experiment is over, and assuming it demonstrates that adding new TLDs in a measured way does not threaten the stability of the DNS or the Internet, I would hope that processes could be developed to both expedite and significantly reduce the cost of new TLD applications or, at a minimum, to deal with special cases of TLDs with very limited scope, scale and cost. The Evaluation Procedure. Forty-seven applications were submitted by the deadline established; three of those were withdrawn for various reasons, and the remaining 44 were then published on ICANN's website, open to public comments, and subjected to an extensive evaluation, applying the criteria set forth in the various materials previously published by ICANN. More than 4,000 public comments were received. The applications and the public comments were carefully reviewed by technical, financial and legal experts, and the result of that evaluation -- a 326-page staff report summarizing the public comments and the staff evaluation -- was itself posted on the ICANN website for public comment and review by the Board of Directors of ICANN. Another 1,000 public comments were received on the staff report. The Board was provided with regular status reports, interim results of the staff evaluations, and of course had access to the public comments as they were filed. There has been some criticism of the fact that the full staff evaluation was not available to the public -- and thus to the applicants -- until November, only days before the actual Board meeting. Obviously, it would have been much better to produce this earlier, and we tried to do so. But in fact the timing of the release of the staff report was largely the product of the bottom-up process that ICANN follows to generate consensus. An important ingredient in the staff evaluations was the substance of the voluminous -- over 5000 -- public comments produced in the month after the applications were posted. ICANN's job is to identify consensus, and thus input from the community is a critical part of any Board decision. Getting that community input, considering it, and completing the technical and financial evaluations was a massive job. . . . The Selection Process. To understand the selection process, we must go back to first principles. The goal here was not to have a contest and pick winners; it was not to decide who "deserved" to have a new TLD; it was not even to attempt to predict the kind or type of TLDs that might get public acceptance. The goal, articulated plainly from the beginning of the process more than a year ago, was to identify from suggestions by the community a limited number of diverse TLDs that could be introduced into the namespace in a prudent and controlled manner so that the world could test whether the addition of new global TLDs was feasible without destabilizing the DNS or producing other bad consequences. This was not a race, with the swiftest automatically the winner. It was a process that was intended to enable an experiment, a proof of concept, in which private entities were invited to participate if they chose to do so -- and those who did choose to participate did so voluntarily, knowing that the odds of being selected were not high, that the criteria for being included in this experiment were in some measure subjective, and that the goal was the production of experimental information that could be evaluated. Of course, when many more applications were received than anyone had suggested should be prudently introduced at this stage, some evaluation was necessary to attempt to identify those suggestions that might best fit the experimental parameters that had been laid down. But this was never a process in which the absolute or relative merit of the particular application was determinative. Many applications with likely merit were necessarily not going to be selected, if the goal was a small number (remember, the entire range of responsible suggestions for introducing new TLDs was from one to 10 new ones). . . . Thus, the Board considered every one of the 44 remaining applications at its meeting on November 16, 2000, measuring them against their collective judgment about how well they would serve to carry out the test that was being considered. In a meeting that lasted more than six hours, the Board methodically reviewed, and either set aside or retained for further evaluation, application after application, until it was left with approximately 10 applications that seemed to have broad consensus support. After further, more focused discussion, that number was pared to the seven that were ultimately selected, and which had almost unanimous Board support: .biz, .info, .pro, .aero, .coop, .museum, and .name.In the aggregate, the Board concluded that this group provided enough diversity of business models and other relevant considerations so as to form an acceptable test bed or proof of concept. The various TLDs have very different intended purposes, and that is the strength of the group in the aggregate. Two -- .biz and .info -- were advanced as essentially alternatives to .com -- global, business-oriented registries aimed at capturing millions of registered names around the world. In order to compete with .com -- which has a recognized brand, a large installed base that produces a regular stream of renewals, and a very substantial marketing budget -- these particular applicants assumed they would need a significant investment in both capital equipment and marketing. The Board felt that these applicants seemed most capable of bringing the necessary resources to bear to test whether anyone can effectively compete with .com after the latter's significant head start. Two other TLDs -- .pro and .name -- were aimed at individuals rather than businesses, but in very different ways. .pro was aimed at licensed professionals, while .name was aimed at any individual. The other three -- .aero (aerospace industry), .coop (for cooperatives), and .museum (for museums) -- were all restricted TLDs, aimed at an industry or a business method or a type of entity, and added to the diversity of this experimental collection of TLDs. . . . Those who were not selected, no matter who they are, were predictably going to be unhappy, and those who were selected were predictably going to be glad, but neither was an ICANN goal. ICANN's goal, and its responsibility, was to find a limited collection of diverse new TLDs that could be prudently added to the namespace while minimizing any risk of instability. While time will tell, at this point we believe we faithfully carried out that responsibility. The Post-Selection Process. Since November, we have been in the process of drafting and negotiating agreements with the selected applicants. Since these agreements will hopefully be templates for future agreements, we are taking great care to make sure that the structure and terms are replicable in different environments. Since these agreements will contain the promises and commitments under which the applicants will have to live for some time, the applicants are being very careful. The result is slow progress, but progress. We are hopeful that we will be able to complete the first draft agreements within a few weeks. The Board will then be asked to assess whether the agreements reflect the proposals that were selected and, if so, to approve the agreements. Shortly thereafter, this great experiment will begin. We are all looking forward to that time. Of course, it cannot be stressed enough that no one knows for sure what the effects of this experiment will be. Since there have been no new global TLDs introduced for more than a decade, the Internet is a vastly different space than it was the last time this happened. In short, it is not absolutely clear what effects these introductions will have on the stability of the DNS or how to introduce new TLDs in a way that minimizes harmful side-effects, and that is precisely why we are conducting this experiment. The results will guide our future actions. E. Conclusion
One of ICANN's primary missions is to preserve the integrity and stability of the Internet through prudent oversight and management of the DNS by bottom-up, global, representative consensus development. Like location in real estate, the three most important goals of ICANN are stability, stability and stability. Once there is consensus that stability is not threatened, ICANN is then charged with seeking to increase competition and diversity, both very important but secondary goals. A competitive Internet that does not function is not useful. An Internet in which anyone can obtain the domain name of their choice, but where the DNS does not function when someone seeks to find a particular website, is also not useful. . . . Given the importance of care and prudence in the process, and the potentially devastating results of a misstep, ICANN has and will continue to err on the side of caution. This may mean slower progress than some would like, but it will also reduce and hopefully eliminate the potential for the catastrophic effects on business and personal use of the Internet that malfunction or other instability of the DNS would produce. end excerpt
begin excerpt
Prepared Statement of
"Is ICANN's New Generation of Internet Domain Name Selection Process Thwarting Competition?"
February 8, 2001
Mr. Chairman and members of the Subcommittee, my name is Michael Froomkin. I would like to thank the Subcommittee for inviting me to appear today at this hearing on "Is ICANN's New Generation of Internet Domain Name Selection Process Thwarting Competition?" I am a law professor at the University of Miami, specializing in the law of the Internet. I have published more than 20 academic papers on Internet governance, ICANN, e-commerce, cryptography, and privacy. I maintain a web site at http://www.law.tm where my articles on these and related topics can be found. I am co-director of ICANNWatch.org, an independent watchdog group that comments on ICANN policies. Two years ago the World Intellectual Property Association (WIPO) appointed me to serve as the sole public interest representative on its "Panel of Experts" that advised WIPO on its report on The Management of Internet Names and Addresses: Intellectual Property Issues. I am also a director of disputes.org which, in partnership with eresolution.ca, has been involved in dispute services provision under ICANN's UDRP. My role in ICANN's selection of new global Top Level Domains (gTLDs), however, is strictly that of an academic observer and commentator, and sometime participant in public comment fora. I have no past or present financial relationship with any gTLD applicant. My goal is to advance what I understand to be the public interest by advocating policies that increase access to the Internet by enhancing free speech and promoting competition. Vigorous competition makes for a healthy marketplace of ideas, and also for a healthy market, as it lowers prices and improves the quality of service -- thus enhancing access to the Internet and to Internet-based information. Summary of Testimony
I have four basic points that I would like to draw to your attention: 1. ICANN's decision to artificially restrict new gTLDs to a small number of arbitrary selections, further hemmed in by ICANN's insistence on anti-competitive terms of service, has negative consequences for competition in three markets: the market for registry services, the market for registrar services, and the market for second-level domains (including the aftermarket), with spill-over effects on e-commerce generally. Each of these markets would be more competitive if ICANN and the Department of Commerce were to lift their limit on new gTLDs and accept all competent applicants according to open, neutral, and objective criteria. It should be noted, however, that the negative consequences for competition I describe below would be even worse if there were no new gTLDs at all. This is, in summary, a situation where the ordinary rules of supply and demand operate. It is axiomatic that competition increases if one removes barriers to entry. 2. The shortage of gTLDs today is entirely artificial, and easily curable. There is a great pent-up demand for short and attractive second-level registrations in new gTLDs but experts agree there is NO technical obstacle to the creation of at least thousands and possibly tens or hundreds of thousands of new gTLDs, or even more. The current shortage exists only because the body with the power to create new gTLDs -- the U.S. Department of Commerce -- has not yet chosen to do so. The Department of Commerce -- in what I have argued is a violation of the Constitution and/or the Administrative Procedures Act -- has chosen to delegate the power to make an initial recommendation regarding new gTLDs and the registry operators to the Internet Corporation for Assigned Names and Numbers (ICANN). Commerce has also delegated to ICANN the power to negotiate restrictive contractual terms with these registry operators -- negotiations that were due to conclude by Jan. 1, 2001, but are currently continuing in secret. 3. ICANN purports to be a technical standards or technical coordination body, but it did not act like one in this process, as it made arbitrary allocation decisions. When it came to the creation of new gTLDs, rather than act as a technical standards body and promulgate a standard under which all technically and financially qualified new registry operators could qualify, ICANN instead decided to act like an allocation authority for its artificially limited resource. ICANN arbitrarily limited the number of new gTLDs it would approve to under ten. ICANN then solicited $50,000 applications from prospective registries. Instead of considering the applications solely on technical merit, or indeed on any other set of neutral and objective criteria, ICANN selected seven winners on the basis of a series of often subjective and indeed often arbitrary criteria, in some cases applied so arbitrarily as to be almost random. I have no reason to believe that the seven TLDs selected are bad choices; but given ICANN's arbitrary procedures I also have no doubt that many other applicants would have been at least as good. The striking arbitrariness of the ICANN decision-making process is illustrated by the rejection of the ".union" proposal based on unfounded last-minute speculation by an ICANN board member that the international labor organizations proposing the gTLD were somehow undemocratic. The procedures ICANN designed gave the applicants no opportunity to reply to unfounded accusations. ICANN then rejected ".iii" because someone on the Board was concerned that the name was difficult to pronounce, even though the ability to pronounce a proposed gTLD had never before been mentioned as a decision criterion. 4. The correct strategy for maximizing competition would have been to accept all applicants who met a pre-announced, open, neutral, and objective standard of competence, rather than to pick and choose among the applicants on the basis of the ICANN Board's vague and inconsistent ideas of aesthetic merit, market appeal, capitalization, or experience. As a result of its relationship with the Department of Commerce, ICANN is a state actor. Accordingly, its arbitrary and capricious decisions violate both the Administrative Procedures Act (APA) and the Due Process Clause of the Constitution. Rubber-stamping of its decisions by the Department of Commerce will only make these violations explicit, since the U.S. government would essentially endorse both ICANN's practices and its conclusions. Alternately, ICANN might be converted into a true technical coordination body, whose main functions were to set quotas for new gTLD creation, to prevent TLD name collisions by maintaining a master list, and to coordinate the management of parallel TLD creation processes by public and private policy partners around the globe. end excerpt
begin excerpt
BEFORE THE UNITED STATES HOUSE OF REPRESENTATIVES COMMITTEE ON ENERGY AND COMMERCE SUBCOMMITTEE ON TELECOMMUNICATIONS HEARING ON "IS ICANN'S NEW GENERATION OF INTERNET DOMAIN NAME SELECTION PROCESS THWARTING COMPETITION?" February 8, 2001
TESTIMONY OF THE INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA)
SUMMARY OF TESTIMONY
IATA is appearing before the Committee today to describe the treatment its proposal to sponsor ".travel" as a dedicated TLD for the travel industry - the largest segment of e-commerce - received from ICANN. IATA is here to respectfully request the Committee, through its oversight function, to direct the U.S. Department of Commerce and ICANN to make decisions regarding new TLDs in a manner that is fair, transparent and designed to maximize competition on the Internet. ICANN failed to give adequate consideration to IATA's ".travel" proposal, contrary to its obligations under the Administrative Procedure Act. This failure was not only prejudicial to IATA, but also contrary to the objective of enhancing competition on the Internet, because a ".travel" TLD would offer competitive advantages unmatched by any of the new TLDs selected by ICANN, which are either too broad or too narrow in scope to offer a real competitive alternative to ".com." To compete effectively against a dominant market leader like ".com," a new TLD needs to offer something not already available in the existing domain name space. ".travel" would do this by creating a subdivision of the Internet that would make it more convenient for consumers and businesses to locate and purchase travel-related goods and services on-line, with the confidence that they are dealing with entities which have proven themselves to be legitimate participants in the travel industry by having satisfied objective and transparent quality standards. In its summary dismissal of IATA's proposal, ICANN not only ignored the attributes of ".travel" in promoting Internet competition, but also disregarded the fact that IATA satisfied all nine of the criteria which ICANN said it would apply in choosing new TLDs. Instead, weeks after the applications for TLDs were submitted, ICANN invented a new criterion -- "representativeness" -- which it used to justify its decision not to choose ".travel." Yet, in deciding that there was not a sufficient showing that IATA was "representative" of the travel industry, ICANN conceded it was ill-equipped to make such a decision, and ignored the overwhelming support for ".travel" expressed in comments to ICANN from all sectors of the global travel community, including associations representing over one million travel industry businesses around the world. Such cavalier treatment of IATA's proposal failed to comply with the mandates of the U.S. Administrative Procedure Act, which applies to the addition of new TLDs to the "authoritative root server," a critical asset financed and controlled by the U.S. Government. Testimony of the International Air Transport Association
. . . . Given that the travel industry represents one of the largest and most popular segments of e-commerce, ".travel" clearly is an obvious choice for one of the first new TLDS to be added to the Internet. The addition of ".travel" to the Internet would greatly enhance competition in the domain name space by offering suppliers and consumers of travel-related goods and services critical advantages that are not provided by the ".com" TLD. ".Com" currently is the dominant TLD for all commercial industries, including travel. Unlike ".travel," which would be a restricted TLD, ".com" is an unrestricted TLD. A ".travel" TLD would have two competitive advantages over the unrestricted TLDS. The first advantage is that, as a restricted TLD, ".travel" would create a subdivision of the Internet which, by excluding non-travel web sites, would make it much more efficient and easier for consumers and businesses to locate the travel-related entity or information they are seeking. The second advantage is that, with a ".travel" TLD, consumers will know that when they access a domain name ending in ".travel," they will be in touch with a company that has shown itself to be a legitimate participant in the travel industry by satisfying certain objective and transparent quality standards. By contrast, unrestricted TLDS can offer no such indication. Whatever their respective merits, none of the seven new TLDS selected by ICANN provides these types of advantages. The seven new TLDS divide into two groups. Either they are just as generic in scope as the ".com" TLD, or they are substantially more limited in scope than ".travel." What is missing is the critical middle area, exemplified By ".travel," - which adds value by being restricted to a particular industry, but is not so limited in scope that it provides effectively no competitive challenge in the domain name space. As long as ICANN excludes TLDS such as ".travel," the true potential of E-commerce will remain untapped. Unfortunately, because of the arbitrary and capricious manner in which it treated IATA's proposal, ICANN precluded itself from appreciating how ".travel" would significantly enhance competition in the Internet. The addition of new TLDS involves a critical asset financed and controlled by the U.S. government - namely, the Authoritative, or "a" root server. Consequently, the process for selecting new TLDS must comply with the U.S. Administrative Procedure Act. ICANN's treatment of IATA's application fell far short of the mandates of that Law. Among other things, ICANN completely ignored the fact that our ".travel" proposal satisfied each and every one of the nine criteria which ICANN said it would Consider in evaluating the proposals. Instead, ICANN summarily refused to select ".travel" based solely on a new and previously undisclosed tenth criterion -- "representativeness" -- which ICANN applied to IATA's application in a discriminatory and otherwise unfair manner. I would like to tell you a little more about IATA. Iata is a not-for-profit association that has played a leading role in the global travel industry since 1919. It has 275 member Airlines (246 active and 29 associate) in 143 countries. IATA has offices in 75 countries around the world. Among other things, IATA has developed standardized airline ticket formats that are recognized around the world and make it possible to buy a ticket from a Travel agency in Tokyo, that will be recognized and accepted by a domestic airline in South Africa, for a flight from Johannesburg to Cape Town. Similarly, the IATA "interline" system makes it possible to purchase a single ticket, with a single payment, covering travel on a succession of different airlines. IATA has been entrusted by the Industry, and by governments around the world, to design and equitably administer The coding systems essential for the smooth and efficient functioning of the travel Industry. . . . IATA is uniquely and ideally positioned to sponsor the ".travel" TLD because its core activities have always included the setting of industry standards to facilitate cooperation among suppliers of travel related services and goods, for the benefit of their customers. It is entirely logical that IATA exercise its traditional leadership role to enable the travel industry and its customers to fully exploit the potential of the Internet. It is important to highlight that IATA's vision for ".travel" was never limited to only a portion of the global travel community. Rather, businesses, other organizations and individual stakeholders from the entire travel industry, including the following, would be able to obtain domain name registrations ending in ".travel": scheduled airlines, charter airlines,airports, ferries, train operators, bus and coach operators, ground handlers, catering companies, car rental companies, hotels and resorts, bed and breakfast houses, camp facility operators, tourist boards/associations, tourist facility operators, travel guide publishers, travel agents, tour operators, consolidators, Internet service providers for travel computer reservation systems/global distribution systems. . . . While IATA believes that ".travel" is an ideal selection for the new generation of competitive TLDS, and that IATA is perfectly suited to sponsor this TLD, we are not here to ask Congress to deliver this result. But we do request that the committee exercise its oversight authority to ensure that the U.S. Department of Commerce fulfills its obligations with respect to the selection of new top level domain names. Unfortunately, so far Commerce has given no assurance that it intends to fulfill these obligations. It has taken no measures to correct the fundamental shortcomings of the TLD selection process administered last fall by ICANN. The Commerce Department is inescapably tied to the TLD selection process, a process which boils down to the issue of which TLDS the Commerce Department will approve to be added to the authoritative "a" root server. The "a" root server is a critical asset financed by the U.S. government and controlled by the Commerce Department. As a practical matter, a TLD must be added to the "a" root server in order to be accessible by the vast majority of Internet users. Both ICANN and the U.S General Accounting Office recently have confirmed that it is Commerce, not ICANN, which ultimately decides which TLDS will be added to the root server. Because of the undeniable U.S. government interest in and control over the root server, the selection of new TLDS to add to the root must comply with the mandates of the Administrative Procedure Act. However, neither ICANN nor Commerce has Recognized that the APA applies, much less taken any action to redress the violations of U.S. administrative law which plagued the ICANN TLD selection process last fall. IATA's proposal for ".travel" was widely embraced by the travel industry, with more than 75 entities submitting comments to ICANN in support of the new TLD. . . .In all, over one million travel industry businesses around the world, either directly or through their recognized associations, went on the record with ICANN in support of IATA's ".travel" proposal. . . . The Administrative Procedure Act prohibits decisions which are arbitrary and capricious. This requires (1) that decisions be based on a consideration of all the relevant factors, (2) that parties are not discriminated against, and (3) that decisions are not based on ex parte influences. In addition, APA-like requirements are found in ICANN's by-laws, which require ICANN to act consistently, fairly and in a transparent manner; and the "memorandum of understanding" between ICANN and the Commerce Department, which requires ICANN to act in a manner that is reasonable, justifiable And not arbitrary. . . . Nevertheless, ICANN Passed over the ".travel" application essentially solely on the basis of the conclusion that IATA was not sufficiently "representative." ICANN was clearly overwhelmed by the number of applications it received for top level domains. But this is not a legitimate excuse for treating IATA's proposal in such a capricious manner. Given that the Internet community had already waited ten years since the last generic top level domains were added, the Internet could have waited a few additional weeks if this was what was required in order for ICANN to conduct a comprehensive analysis and reach a thorough, well-informed and principled decision regarding the IATA proposal as well as the other applications, consistent with its obligations under the APA. Instead, ICANN rushed to judgment, placing its pre-ordained schedule for issuing its decision above its overriding need to make decisions which were well-considered, correct and in compliance with the APA. . . . Either Commerce itself should undertake to evaluate the TLD applications in a way that complies with the APA, or Commerce should direct ICANN to do so. If Commerce accepts ICANN's decisions without scrutiny, then ICANN is acting like a federal agency and must comply with the APA. If ICANN does not comply, then Commerce has unlawfully delegated to ICANN full, unchecked control to make critical policy decisions relating to the development of the domain name space on the Internet. . . . end excerpt
begin excerpt
ICANN : Towards Domain Name Administration in the public interest
Testimony of
February 8, 2000
"ICANN's New gTLD Decisions:
February 8, 2000
Summary
The Internet's great promise to promote speech, commerce, and civic discourse relies largely on its open, decentralized nature. Within this architecture, the centralized administration of the Internet Corporation for Assigned Names and Numbers (ICANN) is a double-edged sword that presents both the possibility of bottom-up Internet self-governance and the threat of unchecked policy-making by a powerful new central authority. ICANN's recent move to create new global Top Level Domains (gTLDs) is a welcome step towards openness and competition. But the process ICANN used to select those gTLDs was flawed and demonstrates the need for ICANN to take steps to ensure greater transparency, representation, and legitimacy. The Center for Democracy and Technology (CDT) welcomes this opportunity to testify before the Subcommittee on this issue of importance to both competition and free expression online. CDT is a non-profit, public interest organization dedicated to promoting civil liberties and democratic values on the Internet. We have participated in ICANN as advocates for open and representative governance mechanisms that protect basic human rights, the interests of Internet users, and the public voice. We wish to make four main points in our testimony:
--ICANN's decisions, and particularly its selection of new gTLDs, raise issues of broad public concern While ICANN purports to be a purely technical coordination body, it has the potential to exert a great deal of control over the Internet, and many of its "technical" decisions have broader policy implications. The selection of new gTLDs -- particularly in the manner exercised by ICANN -- impacts free expression and the competitive landscape of the Internet. ICANN is not equipped to make policy decisions, and does not even apparently want to. But the gTLD selection process suggests that ICANN could be engaged in broader policy-based decisions than its mission or mandate should allow. --The ICANN Board and governance structure that made the gTLD selection is not appropriately representative of the public voice A starting point for evaluating the gTLD decision is asking: Is the group that made this decision appropriately structured and representative? The Directors that made the gTLD selection did not include any of the elected members of ICANN's Board, and there is an ongoing controversy within ICANN about the appropriate structure and selection of the Board. Despite efforts to make ICANN inclusive, non-commercial interests continue to be underrepresented in its deliberations -- casting doubt on the legitimacy of the gTLD decision. --ICANN's process for selecting new gTLDs was flawed.
A $50,000 non-refundable application fee and stringent criteria created a high barrier for non-commercial applicants and skewed the applicant pool towards large organizations. The "testbed" concept for creating a small number of initial domains, while not without its merits, also led to the uneven application of vague criteria in order to reduce the number of applicants from those who passed more objective criteria. ICANN has produced little support for its final decisions -- decisions that appeared arbitrary. The appeals process is unsatisfying and post-selection transparency of the important final contract negotiations is minimal. --Nevertheless, on balance a rollback of the gTLD decision is not in the consumer interest. ICANN should reform its selection process and governance model, and Congress and the Commerce Department should exercise oversight in this reform. While the selection process was flawed, new gTLDs are needed. CDT believes that on balance the consumer interest in rapid deployment of new gTLDs, and the violence done to the global interest in ICANN by U.S. intervention, are not outweighed by the benefit of the Commerce Department's reconsidering the entire gTLD decision. Rather, Commerce and the U.S. Congress should insist on a more objective process for gTLD selection moving forward, and on reform of ICANN's structure and mission moving forward to make it appropriately representative. ICANN's founding documents held out the vision of a new form of international, non-governmental, bottom-up, consensus-driven, self-organizing structure for key Internet functions. The promise of that vision was to promote openness, good governance, and competition on a global network. Today, that promise is threatened. As the gTLD selection process demonstrates, serious reform is needed to limit the injection of policy-making into ICANN's technical coordination functions, reassert the bottom-up consensus nature of ICANN's deliberations, and ensure that the public voice is appropriately represented in ICANN's decisions. . . . The Consumer and Free Expression Interest in New gTLDs
Today, access to the domain name system is access to the Internet. Domain names are the signposts in cyberspace that help make content available and visible on the Internet. (For further explanation, see CDT's overview Your Place in Cyberspace: A Guide to the Domain Name System.) The domain name system may ultimately be replaced by other methods of locating content online. But for the time being, a useful and compelling domain name is seen by many as an essential prerequisite to having content widely published and viewed online. There is an increasing consumer interest in creating new gTLDs. The current gTLD name spaces, and the .com space in particular, are highly congested. The most desirable names are auctioned off in secondary markets for large sums of money. It is increasingly difficult to find descriptive and meaningful new names. Moreover, the lack of differentiation in gTLDs creates trademark and intellectual property problems: there is no easy way for United AirLines and United Van Lines to both own united.com. ICANN's decisions about new gTLDs can have other implications for free expression. If, in choosing among otherwise equal proposals, ICANN were to create a new gTLD .democrats but refuse to create .gop, or added .catholic but refused to add .islam, it would be making content-based choices that could have a broad impact on what speech is favored online. In addition, CDT has some concern that the creation of "restricted" domains that require registrants to meet certain criteria -- such as .edu or the new .museum -- risks creating a class of gatekeepers who control access to the name space. Today, access to open gTLDs like .com and .org does not require any proof of a business model or professional license. This easy access to the Internet supports innovation and expression. Who should decide who is a legitimate business, union, or human rights group? CDT has called for a diversity of both open and restricted gTLDs, and will monitor the impact of restricted domains on speech. There is increasing evidence of an artificial scarcity in gTLDs. It is now widely acknowledged that it is technically feasible to add many new gTLDs to the root -- perhaps thousands or even hundred of thousands. Limiting the number of gTLDs without objective technical criteria creates unnecessary congestion; potentially discriminates against the speech of non-commercial publishers or small businesses who cannot compete for the most desirable spaces; and places ICANN in the role of gatekeeper over speech online by deciding which gTLDs to create and under what circumstances. There are many legitimate concerns that call for a slower deployment of new gTLDs. Some have expressed concern about stability of the Internet given a lack of experience in adding many new gTLDs. Trademark holders have also raised concerns about their ability to police their marks in a multitude of new spaces. CDT believes that these concerns support the notion of a phased "proof of concept" rollout of new gTLDs. However, we believe that the consumer interest will be best served by a rapid introduction of the first set of new TLDs -- followed quickly by a larger number of domains. The phased "proof of concept" adopted by ICANN, however, creates a major problem: Because ICANN could add many new gTLDs, but has chosen to add just a few, it has forced itself to make policy-based and possibly arbitrary decisions among legitimate candidates. In this environment, it is most important that gTLDs be allocated through a process that is widely perceived as fair, that is based on objective criteria, fair application of those criteria, and open and transparent decision-making. There are many reasons to believe ICANN's first selection process for new gTLDs has been highly flawed. . . . ICANN organization underrepresents many interests.
Members of the Internet user community and advocates for user interests have often been under-represented in ICANN. ICANN's physical meetings, where many major decisions are made, occur all over the world, pursuing an admirable goal of global inclusiveness. However, the expenses associated with physical attendance at such meetings place it out of reach for many NGOs and public interest advocates. CDT's own experience has been that the ICANN community is receptive to thoughtful input and advocacy, but that it requires a concerted and ongoing effort to be effective. In our case, that effort has only been possible through the support of the Markle Foundation, which early on committed to support efforts to improve the public voice in ICANN. We have received further support from the Ford Foundation as well. These grants provided CDT with the ability to attend and follow ICANN activities, which many other potentially interested organizations in the educational, civil liberties, or library communities cannot do. ICANN's bottom-up structures offer imperfect avenues for public participation. While ICANN explicitly provides representation to a number of commercial interests, it fails to properly represent the millions of individuals that own Internet domain names or have an interest in ICANN's decisions. The main outlet for individual participation-the General Assembly of the Domain Names Supporting Organization-appears increasingly ineffective. Non-commercial organizations have a constituency, the Non-Commercial Constituency, but it is only one of seven groups making up one of the three supporting organizations. ICANN's Board of Directors fails to adequately represent the public voice. In the absence of other structures for representation, the main outlet for public input is the nine At-Large Directors of the Board. These nine directors are to be elected from within a broad At-Large membership, but there has been a great deal of debate about the election mechanism and even the existence of the At-Large Directors. To date only five of the nine At-Large directors have been elected (the seats were otherwise filled with appointed directors), and even those five were not seated in time for the gTLD decision in November. . . . Suggestions for Reforming ICANN and the gTLD Process
The flaws in ICANN's process for allocating new gTLDs, as outlined above, are highly troubling. They point to a need for reform in both the ways the ICANN makes decisions about gTLDs, and ICANN's entire structure. CDT still believes that Internet users have an interest in the vision spelled out in the White Paper -- in the creation of a non-governmental, international coordination body, based on bottom-up self-governance, to administer central naming and numbering functions online. Were the Commerce Department to substantially revisit and change ICANN's decisions on the new gTLDs, the global community would likely question the existence and utility of ICANN. We also believe that there is a dominant consumer interest in rapid rollout of new domains, which would be dramatically slowed by an APA-based rule-making on gTLDs by Commerce. Therefore, on balance, we do not support a major effort to roll back ICANN's decision on the initial domains, but rather would favor rapid creation of the new domains followed coupled with an investigation into the processes ICANN used to create gTLDs. Among our specific suggestions:
--ICANN must reform the method and process it uses for selecting the next round of new gTLDs. A logical step would be to publish an objective and specific set of criteria, and apply it in a more open and transparent way with greater opportunities for public comment. ICANN should stay away from policy-oriented criteria, and attempt to promote criteria based on technical merit and stability. Applicants that meet the criteria should be given the opportunity to participate in new gTLDs. --Barriers to diversity should be mitigated. In particular, the $50,000 fee should be reduced or waived for non-commercial or non-profit entrants. --A study of the method of selecting domains should be set in motion. In addition, careful consideration should be given to the potential openness, competitiveness, and free speech implications of creating a large number of "chartered" or restricted domains that establish gatekeepers on access to domain names. ICANN's governance itself is implicated in the gTLD process. Among the major structural reforms ICANN should pursue include: --Limited mission -- Steps must be taken to structurally limit the mission of ICANN to technical management and coordination. Clear by-laws and charter limitations should be created to delineate "powers reserved to the users" -- much as the Bill of Rights and other constitutional limitations limit the power of the government under the U.S. system. --Empower the public voice in ICANN -- The internal study underway of ICANN's At-Large membership and elections should be a vehicle for ensuring that the public voice finds appropriate ways to be heard in ICANN's decision-making processes. --Expanded review process and bottom-up governance -- ICANN should build internal review processes that produce faith in the ability to appeal decisions of the Board, and continue to pursue the consensus-based governance model. While we do not believe the Commerce Department and Congress should intervene in the initial selection decision, they have a role in this reform. Just like any national government, the U.S. has an interest in making sure that the needs of its Internet users and businesses are protected in ICANN. While the U.S. must be sensitive to the global character of ICANN, it cannot ignore that at least for the time being it retains a backstop role of final oversight over the current root system. It should exercise that oversight judiciously, but to the end of improving ICANN for all Internet users. It is only by restoring the public voice in ICANN, limiting its mission, and returning to first principles of bottom-up governance that ICANN will be able fulfill its vision of a new international self-regulatory body that promotes openness and expression online. end excerpts
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