Story from National Journal's Technology Daily 6/15/99 Thursday, June 17, 1999 11:32 AM ICANN't Believe What They're Doing When it was chosen last year by the federal government to take over administration of the Internet and oversee the introduction of competition to the domain name registration business, the Internet Corporation for Assigned Names and Numbers was greeted with a healthy dose of suspicion. More than a half a year later, dissension and mistrust about the body known by its acronym, ICANN, has not abated. Some say it has increased, even though ICANN has helped usher in the first competitor to Network Solutions Inc. (NSI), which has had a monopoly over the business of registering top level domain names since 1993. Those are the most popular names used to navigate the Internet, especially ones ending in the .com suffix. (NSI will maintain monopoly control of the registry, the database where all the domain names that are registered are stored, until next year.) Critics have raised doubts about a number of ICANN's actions, from the fees it has imposed to support itself, to its treatment of a controversial report on how to resolve disputes among parties who all demand the same domain name. Chief among its critics is NSI, which claims that ICANN has strayed far from its purpose. Such critics have found some sympathetic ears on Capitol Hill. Yet despite ongoing concerns by some in the Internet community, Commerce Department Assistant Secretary for Communications and Information Larry Irving, whose agency is overseeing the transition, says he still has confidence that ICANN will succeed while still ensuring the stability of the Internet. "They have a difficult job...It's going to be a long slog," Irving said in an interview. "At the end of the process, we should have a system that works." Many say whether ICANN succeeds or fails will have enormous implications on the future of the Internet. ICANN's failure could undermine the stability of the Internet. Yet others contend a powerful ICANN unchecked by government could lead to corporate control of the Internet. "The people in charge of ICANN, they have at their fingers a kind of power over the Internet that nobody else has," said Temple University Law Professor David Post, who specializes in cyberspace and intellectual property law. Rocky Start Despite being the brainchild of the late Jon Postel, a key figure in the creation of the Internet, ICANN has been controversial since it signed its memorandum of understanding with the Commerce Department in November. ICANN agreed perform an array of duties, including providing advice and expertise on the technical functions of the Internet, collaborating on the design, development and testing of competition in registering names, and fostering the development of a global membership structure. Its interim board was viewed suspiciously when announced because few knew how they were chosen for the job. (Most were reportedly chosen by Postel, who died in October 1998 before ICANN ever met.) The board's decision to hold closed board meetings, despite promises of conducting a bottom-up decision-making process, further antagonized ICANN's critics. ICANN's Board Chief among the criticisms is that ICANN's interim board is making important decisions that should be left for a planned elected board once it is chosen. "I wish they would focus more on getting an elected board in place and less on making policy decisions at this point," said Diane Cabell, an attorney active on Internet issues and a member of a committee that recently provided ICANN with recommendations on creating an at-large membership structure. ICANN interim Chairwoman Esther Dyson said she is hopeful that a process for electing such a membership will be ready by ICANN's next board meeting in August in Santiago, Chile. She said there are several interim board members who would be happy to give up their posts right now. Controversial Decisions ICANN's interim board met most recently at the end of May in Berlin, and made one crucial and controversial decision: it approved six of the seven "constituencies"— ranging from intellectual property interests to Internet service providers— that will make up the Domain Name Supporting Organization, DNSO. The body will advise ICANN on domain name issues, notably contest for control of domain names that also embody trademarks. The one constituency the board did not recognize represents non-commercial domain name holders, precisely those with the most to lose if corporate trademark holders win the contest. Dyson said the board deferred action until those interested in forming this constituency can come together on one proposal. Still, the move fueled suspicions that ICANN is overly influenced by corporate interests. ICANN also recognized principles embodied in a report conducted by the World Intellectual Property Organization recommending ways to resolve disputes over domain names. While endorsing WIPO's call for a uniform domain name dispute resolution process, ICANN deferred action to the DNSO on many of the report's most controversial recommendations for establishing this process and its call for setting aside domain names for the most famous trademarks. Critics say even though ICANN left action on most of the WIPO report's controversial suggestions to the DNSO, the outcome is predetermined because that organization is staked in favor of trademark interests. NSI, meanwhile, claims ICANN is changing the rules of the game as it goes along. The company is particularly irked by the board's push to have NSI give up two of the three seats it was supposed to have on the DNSO's Name Council, which will forward recommendations made by the broader DNSO constituencies to ICANN. NSI instead offered to give the seats to non-commercial domain holders. They note that other companies ended up with more than one representative on the Names Council as well. "No one is going to be able to tell what the process is going to be," said NSI spokesman Brian O'Shaughnessy. ICANN officials, however, said they were concerned the representatives proposed by NSI would still be acting under the direction of NSI, a charge the company denies. As result, ICANN is expected to amend its bylaws to state that only one representative from any organization can sit on the Names Council. Annual Budget Other controversial moves include ICANN's approval of a $5.9 million annual budget that will be financed by a $1 fee added to the cost of domain names starting July 1, and fees paid for by companies accredited to register domain names. Among those who have expressed concern with ICANN is consumer advocate Ralph Nader, who along with Consumer Project on Technology Director James Love sent a letter June 11 to Dyson with a list of questions about ICANN's intentions. "This is an emerging private government," Nader said. "We want to have some answers to some questions." Dyson released a detailed response Tuesday to the letter in which she defended ICANN's actions as emerging from as much consensus as possible. "Every policy developed in ICANN has been the product of a comprehensive notice and comment process, and every effort has been made to reflect in ICANN policies the consensus position to the extent we can determine it. Of course, consensus is not unanimity, and there are people of good faith who disagree with certain specific ICANN policies," Dyson wrote. "In the end, we realize we can achieve legitimacy only if a substantial number of those affected agree that we are making the right compromises most of the time." Capitol Hill Seeks Answers Among those also looking for answers is Rep. W.J. "Billy" Tauzin R-LA, chairman of the House Commerce Committee's telecommunications panel. He says he would like to hold a hearing on ICANN and the transition to competition in the domain name registration business. He has cited ICANN's authority to impose fees on domain names among his list of concerns. Dyson expected to meet with Tauzin Wednesday, she said. "When does a private corporation...have the power to tax? I have more questions than answers" about the issue, Tauzin said. Meanwhile, there are those who now say the system would have been better off left in the hands of the U.S. government, at least during the transition to competition. They say the federal government, unlike ICANN, is subject to a built-in system of checks and balances. "The federal government should have defined a legal framework for competition and introduced it," said Milton Mueller, a telecommunications professor at Syracuse University. Standoff with NSI? Still, despite ongoing criticism of ICANN, competition to NSI, albeit limited, has gotten off the ground under its watch. Register.com, one of five initial organizations chosen to participate in a competition test before the process is opened to all accredited companies, began registering domain names last week. The others are expected to follow soon. ICANN Interim President Mike Roberts said most of the criticism of his group relates to "process" and not specific decisions ICANN has made. Both he and Dyson say ICANN would welcome an effort to defend its record before a congressional hearing. "This is what I believe in," Dyson said. "I want to make it work." At the same time, Dyson, Roberts and others accuse NSI of generating much of the dissent in an effort to undermine ICANN and hold off threats to its monopoly for as long as possible. "The closer we get to the government pulling the plug" the more NSI is stalling, Roberts said. He points in particular to NSI's refusal to sign on to the same contract that other companies have signed who want to be accredited to register domain names. NSI says it does not believe its agreement with the federal government requires it to be accredited by ICANN, a point government officials dispute. The company also maintains that the contract poses too many liabilities to its business, such as a provision that allows ICANN to cancel a registrar's right to register domain names every year. "We understand a great deal more about the marketplace than" the new registrars who signed the agreement, O'Shaughnessy said. "We understand what's at risk here." Despite this, NSI's motives are viewed suspiciously, particularly by some of those companies vying to compete with NSI. "I think some people, like NSI, don't like what ICANN is doing and are trying to undermine ICANN," said Mike Palage, interim secretariat for the DNSO constituency representing companies that have been accredited to be competing registrars. Despite their concerns with some of ICANN's moves, Palage and others say ICANN should be given more time to make the process work. "I am willing to give ICANN the benefit of the doubt," Cabell said. "I’m not willing to say they are trying to screw everyone over. They may be making decisions that balance the whole picture as they see it" from the worldwide Internet community.