FC: J.Zittrain responds -- ICANN letter to House subcommittee

[Declan McCullagh <declan () well com>]

********

Date: Thu, 02 Sep 1999 11:48:49 -0400
To: declan () well com
From: Jonathan Zittrain <zittrain () law harvard edu>
Subject: ICANN
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D-

this might be useful for politech.  ...JZ 




                                                                August 24,
1999



The Honorable Fred Upton 
Chairman 
Subcommittee on Oversight and Investigations 
Committee on Commerce 
U.S. House of Representatives 
Room 2125, Rayburn House Office Building 
Washington, DC 20515-6115 

Dear Chairman Upton: 

Here are my answers to your followup questions for the record in response
to my
testimony before your subcommittee on July 22, 1999, concerning ICANN and the
management of the prevailing Internet domain name and IP numbering system. 

1. In your opinion, what would be the impact of the failure of ICANN on the
domain name system transition process?  What different scenarios do you
foresee
for transition of domain name system management if ICANN were to fail? 

In the short term, the failure of ICANN would extend the status quo through a
halt to the domain name system transition process; no growth in the number of
open generic top level domains; a continued paralysis in the evolution of
certain critical aspects of the namespace; and the continued absence-for
better
or worse-of contractually-enabled substantive policies such as alternative
dispute resolution for domain name challenges. 

Over a longer term, as described in my testimony, plausible alternative
options
are these: 

(a) Creation of a "Son of ICANN" to build a new organization improving on that
which ICANN had not done so well.  This strikes me as unlikely,
particularly if
the failure were seen as structural, since the interested parties would
doubt a
successor organization could do any better.  Further, any parties who feel
disadvantaged as a result of the actions of ICANN-or its very existence-could
perpetually undermine the organization in hopes that the next incarnation (or
the status quo of none) might be more advantageous. 

(b) An international treaty organization. One could imagine an attempt to
assert
management over top-level Internet names and numbers by individual sovereigns
(most likely the United States) or, with sovereigns' acquiescence, a treaty
organization such as the International Telecommunications Union.  The
governments represented through ICANN's "Government Advisory Committee" (GAC)
have already agreed that the Internet naming system is a public resource to be
managed in the public interest.  (See, for example, the GAC statement of
August
24, 1999, at
<<http://cyber.law.harvard.edu/icann/santiago/archive/GAC-Comminuque-mtg3.h
tml>http://cyber.law.harvard.edu/icann/santiago/archive/GAC-Comminuque-mtg3
.<http://cyber.law.harvard.edu/icann/santiago/archive/GAC-Comminuque-mtg3.h
tml>html>.) Such an approach is directly contrary to the current U.S.
government
policy of transition to non-governmental management, but it is this policy
which would be most called into doubt were ICANN to fail. Orchestrating the
cooperation of a critical mass of non-governmental system administrators and
"mirror" root zone server operators (see my answer to 2(c), below, for
details)
would be delicate, and might encourage the coordinated (but unincorporated)
Internet engineering community, along with commercial software developers, to
hasten work on integrating completely different technical architectures for
naming. 

(c) Market left to its own devices. In the absence of alternatives (a) and
(b),
above, a battle would be fought by existing market players for control of the
current root.  Either through technical or legal maneuvering, some private
party would end up running the root, and it would likely not be structured as
self-consciously intending due process, checks and balances, and consensus
building the way ICANN had been in the ideal.  (In other words, the winner
would be truly "private," rather than "private, public trust.")  Network
Solutions would likely continue to operate the ..com, .net, and .org top level
domains. 

The new "owner" of the existing root would then compete against the for-profit
and non-profit entrepreneurs who are experimenting with alternative naming
schemes.  These schemes would also substitute their respective proprietary
decisionmaking for "public trust" authority in allocating names to a
particular
entity or site. 

Internet users and their respective Internet service providers can specify
where they want to get their domain name information and they can choose any
alternative root authority that the market might offer; or they can choose to
adopt entirely separate directory and naming architectures that work entirely
independently of the domain name system.  The problem is that there is such
enormous benefit in having a single repository that it is difficult to switch
out of a system that nearly everyone-and everyone's software-has inherited. 
Because of this, what would likely happen is either a continued dominance of
the legacy system (and the private party controlling it), or "tipping
behavior"
through which a new naming scheme would predominate, and a different private
party would end up with control of a new root. Either way, Internet naming
would thus be run by a private actor presumably answerable only to itself or
its shareholders, insensitive to market forces to the extent that its
dominance
is locked in through everyone's use of the system.  Enforcement of individual
countries' antitrust laws or other ad hoc mechanisms would be the primary
instruments of preventing abuse of this new de facto "essential facility." 

2. Regarding the possible addition of new generic Top Level Domains
("gTLDs"): 

a. What concerns do you think those trademark holders have regarding the
addition of new gTLDs? 

It might be useful to consider the interests of famous mark holders separately
from other trademark holders. 

Famous mark holders tend to aggressively seek out all uses of their marks or
strings of characters that might be confused with those marks. To many of
them,
then, new generic top level domains represent yet new areas that will have to
be secured for their names.  Coca-Cola, for example, might seek to reserve
coke.biz, coke.nom, etc.-and might dislike the prospect of having to fight for
such names against those who register them first, whether "cybersquatters"
warehousing the names for profit and/or others who simply claim equal right to
have them. 

Holders of nonfamous marks may actually look forward to the introduction of
new
generic top level domains, since they would allow easier coexistence of
easy-to-recognize domain names for overlapping brands.  For example, Erol's
Internet could have erols.net, while Erol's supermarket could have
erols.shop. 
Non-commercial users and ordinary citizens could also benefit from this
expanded name space. 

Many in the engineering community have pointed out that the use of domain
names
as first-order marquee identifiers on the Internet-things one types into a
browser window after seeing them in magazine advertisements or on the sides of
buses-was never fully contemplated by those who designed them.  They would
like
to see directory services or other naming schemes take the place of domain
names for marquee purposes, returning domain names to the more limited role of
appearing within online browser links or email addresses.  Were this to
happen,
trademark issues wouldn't go away entirely; rather, they'd shift away from
domain names to whatever scheme served as the new marquee-perhaps
privately-held naming systems such as RealNames or Netscape and Microsoft's
"browser keywords."  (Try typing in words like "government" or "Congress" to a
modern browser window, and the names are mapped to a web site or selection of
links by the browser company, rather than by the domain name system.) 

Until domain names are eclipsed by other schemes-creating new battlegrounds as
the old ones are abandoned-trademark holders represent a powerful interest in
the domain name debates, and one of the principal reasons that the
evolution of
the domain name system generally and the introduction of new top level domains
specifically can't, from a practical standpoint, be thought of as merely
technical or ministerial tasks. 


b. How would the addition of new gTLDs increase competition in the
registration
and use of domain names? 

Competition "within" open gTLDs 

Top level domain registries may be best suited to respective administration by
single entities.  A traditional means of lowering prices is to simply regulate
such entities, which are in monopoly positions with respect to the registries
they maintain.  Thus has Network Solutions's maintenance of .com, .net, and
.org been structured through an ongoing cooperative agreement with the United
States government, which originally proscribed any charging of consumers for
names, later capped consumer name charges at $35/year, and most recently
allows
only $9/year to be collected by the registry from a limited group of
registrars-with market rates determining "add-on" fees charged by those
registrars who in turn charge a fee to consumers wishing to register names. 

Network Solutions is both a registry and registrar under this model,
collecting
the $9 registry fee per name per year registered or renewed by any
registrar in
.com, .net, and .org (registrars in turn register names for consumers), and
currently collecting $35 per year when used as a registrar by consumers.  To
the extent that such agreements shift the cost of domain name registration
into
a competitive environment-customer service and other components are handled by
registrars who vie for consumer business instead of a single registry-while
reducing registry fees to mere cost recovery, competition is increased. 

Under this model, Network Solutions is also proscribed from subsidizing or
unduly benefiting its registrar arm through its registry services; in
practice,
ambiguities in the cooperative agreement seem to have caused disagreement
about
what does and doesn't count as a subsidy. It's also unclear whether Network
Solutions claims as its exclusive registrar customers the millions of entities
who registered (and must regularly renew) names in .com, .net, and .org before
the introduction of the shared registry system and the implementation of the
registry/registrar distinction. 

The cooperative agreement between Network Solutions and the U.S. Government
contemplates that ICANN will take on the U.S. Government's role in the
agreement if it meets certain benchmarks; however, there also appears to be a
thought that competition through new open gTLDs will lessen or completely
eliminate the need for price caps or other oversight of individual
registries. 

Competition through new open gTLDs 

The longer-term plan for competition appears to be through the introduction of
new generic top level domains.  The theory is that once there are plenty of
top
level domains to choose among, run by different registries, market competition
will minimize registry prices, or at least converge to market-desired
combinations of price and service, however service might be defined. 

This theory is true to some extent, and new gTLDs seem desirable for a number
of reasons, but there are limits to the competitive benefits to be expected. 
The most important limit is that of domain name portability.  Someone choosing
a new domain name from scratch can shop among all open TLDs; once the domain
name is selected, however, and goodwill is built up around it, it can be
difficult to switch.  The online merchant Amazon.com, for example, presumably
could not lightly abandon its domain name even if Amazon.biz were readily
available. Perhaps initial selection of a domain name could take into account
what promises a registry is willing to make about the future ("We promise
never
to charge you more than $30/year for a name"), but there is already
substantial
lock-in for existing names, with contracts that to my knowledge make no such
promises. 

Registries might be asked to at least allow for a time period of domain name
forwarding should a consumer registrant wish to switch from one TLD to
another;
such a policy would promote portability of names and therefore make
competition
among TLDs more keen.  Presumably ICANN would be in a position to seek to make
such a policy-and enforce it through contracts with respective registries-but
the scope of ICANN's substantive policymaking power is still untested, and
will
be determined by an odd hybrid of its own bylaws, any superseding national
laws, and the terms of its contracts with registries. 

Finally, a drastic increase in the number of gTLDs could render enough so
there
is one or more gTLD per entity rather than multiple entities sharing space
under a single gTLD-AT&T, for example, might have www.att instead of
www.att.com. In such a case AT&T (and everyone else) need not be a registrant
"under" a TLD, but could be a holder of a TLD that could manage the TLD on its
own.  My sense of the technical community's view of this is that a flattening
of the domain name hierarchy is difficult from an engineering standpoint, and
that at least in the short term new TLDs should number at most in the hundreds
rather than the thousands or millions.  However, the introduction of at least
some new TLDs under the traditional registry model would presumably help
reduce
technical load on the file that points to registrants within the .com domain,
which is by far the busiest. 


c. Does ICANN presently have the authority to add new gTLDs? 

Questions of legal authority are difficult here, since the system has evolved
without a comprehensive treaty-based, statutory, or contractual framework.
But
the short, literal answer to the question appears to be "no, not without the
concurrence of the United States government." 

gTLDs "exist" under the prevailing system because they are reflected in a
"root
zone file" distributed across thirteen "root zone servers" around the world. 
As consumers seek to use domain names to get around the Internet, their
respective internet service providers typically choose how to "resolve" the
name to a unique Internet IP address. Virtually every internet service
provider
ultimately consults one of those thirteen root zone servers about whether a
particular gTLD exists, and if so who manages it. 

The thirteen servers return identical answers because twelve of them mirror a
single "authoritative" root-currently operated by Network Solutions wholly
apart from its duties as registry (and registrar) of names under .com, .net,
and .org.  To my knowledge Network Solutions has not claimed "ownership" of
this authoritative root zone file, nor the right to make changes to it.  In
practice, changes had been made at the request of Jon Postel/IANA, at times
through the somewhat formal but unincorporated "RFC" processes of the Internet
Engineering Task Force, described in my prior testimony.  More recently, only
ministerial changes to gTLDs have been made to the file, and the October 7,
1998, Amendment 11 to the cooperative agreement between NSI and the Department
of Commerce explicitly provides both that (1) NSI will continue to operate the
primary root server until instructed by the government to transfer it to ICANN
("NewCo") or elsewhere; and that (2) NSI will currently only make changes to
the root with the written authorization of an "authorized USG official" and
that, at some future time, the U.S. government may instruct NSI to accept
ICANN's changes to the root.  (See
<<http://www.networksolutions.com/nsf/agreement/>http://www.networksolution
s.com/nsf/agreement/>.) 

This is consistent with the Department of Commerce's policy "white paper" of
June 5, 1998, "Management of Internet Names and Addresses,"
<<http://www.ntia.doc.gov/ntiahome/domainname/6_5_98dns.htm>http://www.ntia
.doc.gov/ntiahome/domainname/6_5_98dns.htm>: 

The new corporation ultimately should have the authority to manage and perform
a specific set of functions related to coordination of the domain name system,
including the authority necessary to [^Ê] oversee policy for determining the
circumstances under which new TLDs are added to the root system[.] 

The November 25, 1998, memorandum of understanding between the U.S. Department
of Commerce and ICANN (see
<<http://www.ntia.doc.gov/ntiahome/domainname/icann-memorandum.htm>http://w
ww.ntia.doc.gov/ntiahome/domainname/icann-memorandum.htm>) contemplates
that the
two parties will jointly develop processes for "[o]versight of the policy for
determining the circumstances under which new top level domains would be added
to the root system[,]" and that ultimately this function will be performed
solely by ICANN. 

In practice, then, the major parties in this area seem to agree that the
addition of new gTLDs is something that the U.S. government has the authority
to assign; that it currently is sharing these responsibilities with ICANN; and
that ultimately-but not presently-ICANN is slated to have the authority to
manage the addition of new gTLDs and the custody of the authoritative root
zone
file. 

It is noteworthy that some of the twelve mirror root servers might
hypothetically choose to cease mirroring the authoritative root zone file and
provide an alternative file, or that internet service providers or even their
downstream individual customers could seek domain name resolution from
"alternative" roots not within the IANA/USG/NSI/ICANN chain.  This is unlikely
thanks to the lack of interoperability such decisions would entail, but I know
of no legal authority preventing it. 



3. Regarding registration of one of the so-called "seven dirty words" as part
of a domain name: 

a. Should registrars have the right to refuse to register domain names
containing any of these words? 

Registrars' actual legal rights to refuse registration would be defined by the
contracts, if any, by which they enter the registration business-contracts
with
the registries in which they seek to register names, and accreditation
contracts from ICANN, as currently implemented in .com, .net, and .org.  Their
rights may also be limited by law as developed and enforced by sovereigns who
can assert jurisdiction over them.  I do not know of any existing restrictions
in either category. 

To some, the ideal of freedom of speech means that registrars ought not to
refuse a request to register a particular name.  To others, free speech
protection means that private entities (including registrars) can choose to
say-or not say-what they like.  In practice, allowing registrars the
"right" to
refuse registration (or renewal) of particular names isn't controversial so
long as there are a variety of them-registrars could individualize their
registration policies to allow for differences of opinion on such issues, and
chances would be high that sibling registrars will be available to register
words that others reject. 


b. Should registries have the right to refuse to accept a registration
containing any of these words? 

Registries' legal rights to refuse registration would be defined by the
contracts, if any, by which they were commissioned to undertake their work by
whoever manages the root (see 2(c), above).  Their rights may also be limited
by law as developed and enforced by sovereigns who can assert jurisdiction
over
them.  I do not know of any existing restrictions in either category. 

In my view-and this doesn't represent a legal judgment-registries should not
make any judgments of name suitability anymore than a registry of deeds should
refuse to register property based on a perceived offensiveness of the title
owner's name.  There are many words in many languages that offend natives;
enforcement of such concerns should, if it happens at all, be a matter of
local
law. 

To the extent that a multiplicity of registries come to exist, one can imagine
amongst registries the kind of competition that diminishes controversy over
registrar refusals to register names in a given domain described in 3(a),
above.  Indeed, one could imagine a ".kids" domain for which certain
second-level domains are left unregistered, while anything goes in ".xxx." 
Problems with this approach include (1) the apparent distaste for it by the
Internet administrators and engineers whose support might be needed to
implement it and (2) the fact that Internet content found objectionable by
some
is truly found much more within Internet sites than in the single-string
identifiers used to label and find them. 

4. Does the Department of Commerce have the authority to recompete the .com,
.net, and .org registries?  How would such recompetition affect the Internet's
stability and competition for domain name registration and related services? 

I believe so.  As my answer to 2(c) explains, all major parties appear to
agree
that the U.S. government has authority over the "root" file that determines
whether there will be .com, .net, and .org, and if so, who will manage them. 
(A separate matter is whether the Department of Commerce has the authority to
act for the U.S. government in these matters after rather explicit direction
from the President's June 1, 1997 directive on electronic commerce, but absent
specific authorizing legislation.) 

Redirecting the root file to point to a .com, .net, and .org run by a new
entity is not enough.  To effectively recompete these registries, the
Department of Commerce will have to ensure that most of the existing registry
data-for example, what existing names in these domains are already assigned
and
to whom-are available for seamless transition to a new registry operator.
This
does not appear to represent a difficult technical problem if Network
Solutions
were to cooperate in the transition.   Absent such cooperation the Department
of Commerce might resort to filing a lawsuit to attempt to compel it, or to
less certain technical means to "route around" an attempt to withhold the
data.  If the latter were to occur, Network Solutions might itself file
suit to
attempt to establish its rights against such circumvention. 

I have reviewed Network Solutions's letter of August 11, 1999 to Chairman
Bliley, which describes NSI's legal claims to registry data which, if
upheld in
their entirety, would preclude an effective recompetition of the registries
NSI
operates.  I am skeptical of NSI's position because (1) the data in question
appears to fall outside the scope of copyright (see Feist Publications Inc. v.
Rural Telephone Service, Inc., 111 S.Ct. 1282 (1991)) and (2) the data in
question-at least that data necessary to maintain the technical functioning of
the registries-is publicly available and appears to fall outside the scope of
trade secret.  To be sure, the relevant contracts do not speak directly to the
issue, except for the recent Amendment 11 to the original NSI/NSF cooperative
agreement-which, as NSI points out, simply affirms an undetermined status
quo. 

A hastily called-for recompetition-and the brinksmanship between the
Department
of Commerce and NSI that it might entail-would be a danger to Internet
stability.  The current agreement between the two parties is now extended
through October, 2000; were a recompetition to take place now-with NSI fully
entitled to submit a bid for retention-there would likely be sufficient
time as
a technical matter to ensure that whoever was awarded the new registry
contract
could effect a transition.  Such a move might prompt a lawsuit as described
above, which could then require resolution before the recompetition could
fully
proceed. 

The best way to arrive at fair deal promoting long-term stability-with
attention to the public interest at stake, and with terms going forward that
can incorporate all that has been learned about domain name management since
the original cooperative agreement was signed-may be through a competitive bid
process rather than through a one-on-one negotiation where the government has
not developed a viable alternative to an agreement with its negotiating
partner.  Neither the government nor NSI should have to settle for any less
than what their actual rights are, and continued uncertainty or lack of
resolution about these claims could impair the settled expectations and
competitive parity desired by additional prospective registries and downstream
registrars within .com, .net, and .org.  Even a "leisurely" recompetition
would, of course, entail administrative, technical, and legal effort among all
the parties that is bypassed by longer-term agreement between the
Department of
Commerce (and perhaps later, ICANN) and NSI. 


5. Regarding domain name disputes among legitimate trademark holders, is this
an appropriate area of policy for ICANN to consider?  Are such policies needed
by the entire Internet community, and not merely by the trademark or business
community? 

Name disputes will, in many cases, be less a moral issue than one of simple
baseline "ownership": under some prevailing law, is the challenger entitled to
use of the name even if the name holder was first to register it?  A uniform
dispute resolution policy may make sense generally in a space where disputants
can be far from each other both physically and jurisdictionally, and where the
commerce affected is global since the domain name at issue is available
globally.  But the devil will be in the details: what "law" shall the dispute
resolvers apply?  Wherever arguably applicable substantive law can enhance a
party's rights, the advantaged party will seek to bypass dispute resolution
procedures.  A mandatory dispute resolution policy (coupled with a waiver of
traditional right and remedies) written into domain name contracts could
unilaterally limit the rights of the initial domain name holder-who, since the
policy is uniform, would have little choice about entering into the contract
short of abandoning the name registration to begin with.  

What scant data there are suggests that relatively few domain name disputes-in
proportion to the millions of names registered-actually proceed to
litigation. 
This may be a fix in search of a problem, or one derived from a legacy
problem:
initial registrations in gTLDs before the commercial potential of the Net was
fully appreciated by those holding trademarks.  The real challenge will be to
avoid an "Oklahoma land rush" as new gTLDs are introduced; IBM, for example,
might seek privileged registration as "ibm.biz" without having to hope its
request for registration is the first one received were the .biz TLD
introduced. 

In addition to the trademark and business communities, one might think that
uniform dispute resolution-were it more accessible and less expensive than
litigation-would assist individual domain name owners in arguing their own
causes for retention of challenged names they hold. This, again, would depend
on the substantive "law" used within the ADR procedure to settle the dispute. 

Finally, the registrar and registry communities appear eager to implement
uniform dispute resolution policies so as not to be entangled in domain name
disputes.  However, one could imagine fairly uniform substantive law by which
such entities adopt a basic policy-first-come, first-served-and then agree to
reassign names on the basis of judicial decrees-a kind of "quasi in rem"
proceeding.  To be sure, certainly at the registrar level, if there is to be a
dispute resolution policy at all it only makes sense as a uniform one;
otherwise, domain name registrants will tend to "race to the bottom" to
register names with the registrar offering the most generous terms (or no
policy at all). 


6. There has been much discussion about the role of the Governmental Advisory
Committee ("GAC") to ICANN.  Regarding the GAC: 

a. Has the GAC taken any actions to date that are inconsistent with its
official role? 

None of which I am aware.  The ICANN bylaws charter the GAC to "^Ê consider and
provide advice on the activities of the Corporation as they relate to concerns
of governments, particularly matters where there may be an interaction between
the Corporation's policies and various laws, and international agreements." 
(See
<<http://www.icann.org/general/bylaws.htm>http://www.icann.org/general/byla
ws.<http://www.icann.org/general/bylaws.htm>htm>.)  Its chief actions
appear to
have been holding both closed and open discussions, certifying who is and is
not a member of the GAC, and generating communiqués about its collective views
on particular domain name issues. 

b. Is the GAC subject to its own rules or to the rules of ICANN? 

ICANN's bylaws, once establishing that there is to be a GAC and providing for
its membership criteria and advisory relationship to ICANN, suggest that the
GAC makes its own rules to govern its internal actions, including the
selection
of its successive chairs.  Since the GAC exists under the ICANN bylaws, it
technically could be eliminated or altered in character by an amendment to
those bylaws; therefore it might literally be subject to rules ICANN could
seek
to impose.  It has no explicit power over ICANN other than as a recognized
resource for information and advice, but as a matter of realpolitik it is not
difficult to imagine that the governments of the world expressing their views
collectively through the GAC would be difficult for ICANN-new, and at the end
of the day, weak-to ignore. 

c. What reforms to the GAC, if any, should be made to ensure that it will act
only as an advisory body to ICANN and not as a policy-making body? 

I believe that the current bylaws adequately limit the GAC to offering advice
and recommendations, which the Board may adopt at its own discretion. ICANN
bylaws [Article VII Section 3(a)] state that the Governmental Advisory
Committee should consider and provide advice on the activities of the
Corporation as they relate to concerns of governments, particularly matters
where there may be an interaction between the Corporation's policies and
various laws, and international agreements. The Board will notify the chairman
of the Governmental Advisory Committee of any proposal for which it seeks
comments under Article III, Section 3(b) (policy changes that would
substantially affect the operation of the Internet) and will consider any
response to that notification prior to taking action.  

Governments not only have responsibility for protecting their citizens who use
the Internet, but they are Internet users themselves.  However, ICANN's bylaws
(Article V Section 5) prohibit any government official from sitting on ICANN's
Board of Directors.  An advisory committee, which serves as a conduit for the
expression of governmental interests, seems a reasonable compromise.  To
eliminate the GAC would simply be to shift governmental pressures on ICANN sub
rosa.  Interestingly, the only way to truly limit the GAC's de facto
influence-since its de jure power is technically limited to producing advice
that ICANN is free to ignore-would be to cement ICANN's own authority and
independence, something many are chary about doing until ICANN has more of a
track record.  Limiting government influence to that which takes place through
the structure of the ICANN bylaws is thus, in practicality, a matter of
voluntary abstention by those legislatures and other government authorities in
a position to compel or at least affect ICANN's behavior on the basis of
something as simple as a phone call. 

The U.S. government has a distinct role in relationship to ICANN both because
ICANN is headquartered in the United States and because the authority
underlying the entire "privatization" of domain name and IP number management
has been exercised by the United States.  Alone among sovereigns and apart
from
a simple attempt to exercise raw jurisdiction over ICANN's activities, the
United States has an additional formal route by which to express views and
apply pressure to ICANN-whatever legitimacy ICANN has at this time flows from
the formal recognition and subsequent memorandum of understanding entered into
with the U.S. Department of Commerce.  The circumstances under which this
route
might be used are, presumably, to ensure that ICANN's structures remain free
from capture, rather than to push for or against specific substantive
policies.


7. If ICANN ultimately does not charge its now-suspended $1 per domain name
fee, how should ICANN fund its operation? 

ICANN (and IANA, such as it is; it is not clear if IANA, never formally
incorporated, has been wholly subsumed into ICANN) provides coordination
services to different network constituencies and these are also potential
sources for revenue.  ICANN allocates Internet Protocol addresses to the three
current regional Internet registries (RIRs), who charge fees when they assign
IP addresses to Internet access providers. A portion of these fees could be
paid to cover ICANN's expenses. ICANN's supporting organizations (SOs) and the
at-large membership could charge membership fees to cover the expenses of
coordinating protocol parameters and providing membership services. 

Concern over undue taxation might be alleviated by (1) an explicit cap on the
total amount ICANN will, in fact, collect in a given year, limited to cost
recovery; should a surplus be collected, ICANN's subsequent fees would be
adjusted downward; (2) flat fees rather than per-name taxes.  ICANN could
simply charge registrars a yearly fee based on some metric calibrated to
ability to pay.  Individual country-code TLDs, were they to enter into
memoranda of understanding with ICANN, might also provide for some
contribution
to the organization. 

Any structure that eliminates the necessity for a per-name per-year fee may be
helpful in broadening the possibilties for experimentation with different
kinds
of registry and registrar fees.  As I expressed in my spoken testimony, there
is no particular economic reason why Internet users who register a name and
then "leave it alone" should have to pay recurring yearly fees to anyone. 


*  *  * 

        Please don't hesitate to contact me if you have additional questions. 



                                                                Sincerely, 


                                                                Jonathan
Zittrain 






Jon Zittrain
Harvard Law School
Executive Director, Berkman Center for Internet & Society
http://cyber.law.harvard.edu
Lecturer on Law
http://cyber.law.harvard.edu/is98
http://cyber.law.harvard.edu/msdoj
+ 1 617 495 4643
+ 1 617 495 7641 (fax)



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