Lawmakers Accuse ICANN of Negligence, Bloat, Want Pact Renewed

President Barack Obama’s new cybersecurity plan and the global economic downturn were named as factors relevant to judging ICANN’s goals of ending the JPA and removing the cap on generic top-level domains, currently at 21. Subcommittee Chairman Rick Boucher, D-Va., said a top concern was ICANN’s ability to mitigate the expected flood of cybersquatting on a large number of newly approved gTLDs.

Lawmwakers gave some credit to ICANN, with Ranking Member Cliff Stearns, R-Fla., complimenting its “very high achievement” as a private sector-led organization for nearly 11 years. But he worried that new gTLDs would lack a “rational fee structure,” and noted that ICANN ran a $7 million surplus last year. “Like any new organization, ICANN has gone through its share of growing pains,” though it has successfully fostered domain competition, and the most popular domain, .com, has never gone down, said Eshoo. “But the alternative [to U.S. oversight] right now, I think, is clearly unacceptable” until ICANN can fend off pressure from other governments, she said.

ICANN is “far from a model” of self-governance, said Commerce Committee Chairman Emeritus John Dingell, D-Mich. With more cyberattacks on the government and businesses, and the “recent observable effects of deregulation” in other sectors, the JPA should be renewed, he said. Ending restrictions on creation of new gTLDs could create an “unhealthy and dangerous situation” as consumers are exposed to more fraudulent Web sites.

ICANN isn’t doing enough to fight “domain slamming,” in which a registrar tricks another registrar’s user into switching their domain registration, said Rep. Mike Doyle, D- Pa. Users need a watchdog, and “I don’t see it from ICANN.” The economic downturn is the worst possible time for ICANN to embark on its own, said Rep. John Shimkus, R-Ill. The Commerce Department appropriately exercises “limited oversight,” said Rep. Doris Matsui, D-Calif., a view shared by several lawmakers.

NTIA agrees, and promises it will remain an “active participant” if ICANN is spun off, said Fiona Alexander, associate administrator in the Office of International Affairs. The agency will keep ties to ICANN through the Internet Assigned Numbers Authority contract regardless of what happens to the JPA, she said, also pointing to NTIA’s just-announced plan to work with ICANN on implementing the DNS Security Extensions in the root zone (WID June 4 p5). NTIA still wants more economic study of introducing gTLDs, though, to ensure it will increase competition, Alexander said. ICANN must remain “insulated” from each country’s domestic concerns, said VeriSign Chief Technology Officer Ken Silva. VeriSign operates .com and .net, which receive 50 billion queries daily, but it can handle up to four trillion, he said. Officials should act on ICANN in the manner that’s “least disruptive” of the upgrade to IPv6 and DNSSEC.

The U.S. relationship “will continue to be critically important to ICANN’s success,” Twomey said. The IANA contract is the “key instrument of oversight” for the U.S. ICANN is practically independent already, though the U.S. seems to be questioning its private-sector setup. “We should not expect other governments to have confidence in the model” if the U.S. position is perceived as “basic principles are open for debate,” he said. Another executive recently said Commerce oversight was becoming a “destabilizer” (WID May 11 p4). The Internet community has demanded new gTLDs such as .eco and .green, though ICANN is working to resolve brand- owner and security concerns with the gTLD expansion, Twomey said: “We will not move forward with any progress and implementation” otherwise.

A renewed JPA should include new rules on openness and transparency, said Christine Jones, general counsel for the Go Daddy Group, owner of the most popular registrar, GoDaddy.com. Jones said her company would support a temporary extension of the JPA, a compromise recently suggested by Sens. Olympia Snowe, R-Me., and Bill Nelson, D- Fla., in a letter to Commerce Secretary Gary Locke. But ICANN still hasn’t explained how it will choose new gTLDs, she said. ICANN stands to bring in $90 million in gTLD application fees alone, plus a $75,000 annual renewal fee, driving up everyone else’s costs in the process, said Sarah Deutsch, Verizon associate general counsel. “Hundreds of diverse parties … have raised concerns” that ICANN hasn’t adequately addressed, she said. The victim of “tens of thousands” of cybersquatting violations, Verizon has “observed little or any enforcement” by ICANN against registrars who illegally sell variations of its brand, she said. It doesn’t want to fight off someone trying to register Verizon.phone, Deutsch said. ICANN’s staff isn’t to blame, but rather its “institutional design,” under which its “funders” -- registries and registrars -- would go out of business if they stopped paying, said Technology Policy Institute President Tom Lenard. His group has proposed the funders have direct control over ICANN.

‘You're Operating as a For-Profit Corporation’

ICANN isn’t an intellectual property arbitrator, but the Uniform Domain-Name Dispute-Resolution Policy, a “fairly cheap” online mechanism, has worked very well for 36,000 such disputes, Twomey told Boucher. The same system could work for disputes over who has the right to new gTLDs, he said. Twomey and Deutsch disputed exactly what ICANN does to rogue registrars. “My recollection” is that ICANN has gone after those who sell registrations of another’s trademark or close variation, but perhaps under the pretext of another violation, Twomey said: “Sometimes it’s easier to move on the [nonpayment] of a fee” quickly. Boucher asked Twomey to give the subcommittee a “quantitative sense” of how it’s enforcing terms on registrars without identifying them, and how many registrars it has “decertified” for cybersquatting.

Ranking Member Stearns lobbed a bevy of personal questions at Twomey, noting the executive isn’t paid directly by ICANN. Twomey said the ICANN board decided he should be paid through another company because of his Australian residency. He earns $800,000 Australian. The $75,000 renewal fee for new gTLD applicants “sounds pretty steep to me,” given ICANN’s $7 million surplus last year, Stearns said. Practically speaking, “you're operating as a for- profit corporation … You're not building automobiles here.” That goes toward ICANN’s reserve fund, which stands at $34 million and is intended to cover a year’s operating expenses, though ICANN has actually cut fees 25 percent in the past three years, Twomey said. Stearns wasn’t convinced, given claims that ICANN is lax on cybersquatting. “Why don’t you take some of this surplus you're getting and do the job?” ICANN’s early history was plagued with lawsuits, so it can’t take chances with funds, Twomey said.

Stearns continued to pound on ICANN’s non-U.S. contingent. The body has “seven or eight” board members from the U.S. out of 21, though most employees are Americans, Twomey told Stearns. Alexander said ICANN couldn’t actually leave the U.S., as Stearns worried, because it’s contractually obligated to stay under the IANA contract.

VeriSign’s Silva got a hard time from Dingell, who asked about VeriSign fee increases. The money is going toward Project Titan, the company’s $100 million effort to increase capacity around the world, so that cyberattacks like those directed at Estonia and China don’t take down .com, Silva said. He didn’t know if VeriSign would raise prices again this year.

Boucher pressed Twomey for an “empirical answer” on whether ICANN has ensured that any new gTLDs will have more than one bidder. Twomey said ICANN knows some gTLDs will have multiple bidders, but it can’t impose such limits at least on new gTLDs for brand owners. ICANN will undertake “extensive promotion of the process” to gin up interest in bidding once applications roll in to create new gTLDs, as ICANN itself doesn’t suggest the “strings,” he said. Deutsch said Verizon didn’t know of any studies on demand for new gTLDs, calling the process “speculative.”

ICANN’s transparency in board meetings was also sharply disputed. GoDaddy’s Jones said the company has repeatedly asked for transcripts, so it can get an idea of how contracts are negotiated, but is only given minutes. “It’s a very simple black-and-white request … We basically get stonewalled.” Jones is “just wrong,” Twomey said. Not only board decisions but “full transcripts” are released. Republican Rep. John Shadegg, who represents Arizona-based GoDaddy, challenged his wording, and Twomey clarified ICANN releases a “comprehensive set of minutes.” Board discussions are “transcribed” into five languages and ICANN averaged one consultation a week last year, he said. It welcomes full online participation in meetings and is expanding its independent review panel. There’s still a “big difference between transparency and accountability,” Lenard said.

The independent review panel is showing its value in a current dispute, Twomey told Rep. Donna Christensen, D-V.I. ICANN has a series of other review mechanisms as well, including an ombudsman, and it’s been in U.S. court several times, showing it respects U.S. jurisdiction, he said. But since the board appoints the members of the review panel, “it’s ICANN reviewing ICANN,” Jones said. Wrong again, Twomey said. Members are drawn from the International Center for Dispute Resolution and the panel follows “traditional arbitration mechanisms.”

Eshoo showed the most irritation at ICANN’s bid to end the JPA. The U.S. is the “mother, the father of the Internet,” whose “imprimatur” is its openness -- which seems to stand in contrast to ICANN’s culture. “Why do you want to break?” Eshoo said. “Why is it so menacing to you?” Twomey said ICANN simply wanted “a continuation of the model,” a private sector-led body. “Our role … should not be leapfrogged over,” Eshoo said.