Cruz Planning Mid-to-Late September Hearing on ICANN, IANA Transition
Sen. Ted Cruz, R-Texas, is planning a hearing mid-to-late September on his concerns about the pending Internet Assigned Numbers Authority (IANA) transition, said four domain name and internet lobbyists in interviews. Cruz is planning to hold the IANA hearing via the Senate Judiciary Oversight Subcommittee, which he chairs, the lobbyists said. Such a hearing would come amid a likely showdown in Congress over whether to delay the transition and require NTIA to extend its existing contract with ICANN to administer the IANA functions past its current Sept. 30 expiration date, the lobbyists and other stakeholders said.
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Details of the hearing haven't been completely finalized, with lobbyists we spoke with noting a range of proposed dates between Sept. 14 and 22. Cruz is spearheading the hearing, but Senate Judiciary Chairman Chuck Grassley, R-Iowa, and Senate Judiciary Antitrust Subcommittee Chairman Mike Lee, R-Utah, are also said to be interested in it, two lobbyists said. The witness list for the hearing hasn't been finalized, though one lobbyist said it wouldn't be a surprise if officials from ICANN and NTIA were asked to testify. Cruz's office, ICANN and NTIA didn't comment.
Cruz has voiced concerns about a wide range of issues on the IANA transition, but the hearing is likely to have a major focus on ICANN's proposed extension of its .com registry agreement with Verisign through 2024, two lobbyists said. Cruz, Lee and House Financial Services Committee Oversight Subcommittee Chairman Sean Duffy, R-Wis., jointly raised concerns about the Verisign agreement extension in mid-August. They urged DOJ Antitrust Division head Renata Hesse to do a competition review of the proposed agreement extension (see 1608150052).
The hearing may also touch on ICANN's controversial auction of the .web generic top-level domain, the two lobbyists said. Verisign-funded Nu Dot Co ultimately won .web for $135 million and agreed to pass control of the gTLD on to Verisign. Donuts is suing ICANN for $22.5 million over the .web auction, claiming ICANN “intentionally failed to abide by its contractual obligations to conduct a full and open investigation” into Donuts' claims that control of Nu Dot Co had changed hands (see 1608010008 and 1608090036). Targeting antitrust aspects of the transition would be part of a more general approach of “throwing everything they can at the wall and see what sticks,” one lobbyist said.
It would make sense for Cruz to focus on antitrust implications of the IANA transition “because he hasn't had a chance to talk about those yet” in a hearing, as opposed to his earlier concerns about foreign governments' influence at ICANN, said Shane Tews, visiting fellow at American Enterprise Institute’s Center for Internet, Communications and Technology Policy. It's “important” for Cruz to focus on his antitrust concerns during a hearing at this point in the transition process “given the fact that ICANN has a government-sanctioned monopoly over administering the IANA functions,” said Americans for Limited Government President Rick Manning in an interview. “Once that government-imposed monopoly goes away [post-transition], they will encounter a bevy of lawsuits from other private entities that want to get a piece of the pie. The right of ICANN to auction of registry agreements will be challenged based on the loss of that monopoly status."
A hearing focused on ICANN antitrust issues shouldn't be a surprise given Cruz's strong signaling on that line of argument in recent weeks, said internet and IP lawyer Greg Shatan of McCarter & English. Cruz's line of argument on the antitrust implications of the IANA transition is “harebrained” and clearly another attempt to “throw stones in the path of the transition,” Shatan said: “I have no doubt that this is going to be show trial” but both ICANN and NTIA have been careful to swiftly counter those claims publicly. DOJ's Office of Legislative Affairs also pushed back against antitrust concerns last week, with Assistant Attorney General Peter Kadzik telling Cruz, Duffy and Lee that the department “has been and will continue to be vigilant in monitoring competition issues implicated by [ICANN's] operation and governance.” ICANN's proposed extension of the Verisign agreement doesn't alter an existing price cap on .com addresses that will be re-evaluated in 2018 even if the IANA transition occurs, Kadzik said in in letters to the three lawmakers. “If NTIA were to approve an extension of the .com Registry Agreement, it would have the right in its sole discretion to extend the term of the Cooperative Agreement with the current price cap in place until 2024 at any time prior to” the cooperative agreement's Nov. 30, 2018, expiration, Kadzik said.