IP: Letter from the Office of Ira ,Magaziner re ICANN

[Dave Farber <farber () cis upenn edu>]

        October 20, 1998

Dr. Herb Schorr, Executive Director
USC Information Sciences Institute
4676 Admiralty Way
Suite 1001
Marina del Rey, California 90292-6601


Re:     Internet Corporation for Assigned Names and Numbers (ICANN)


Dear Dr. Schorr:

On October 2, 1998, the Internet Assigned Numbers Authority (IANA) made a
submission on behalf of the Internet Corporation for Assigned Names and Numbers
(ICANN) 
in response to the National Telecommunications and Information Administration
(NTIA) Statement of Policy entitled “Management of Internet Names and
Addresses,” 63 Fed. Reg. 31741 (June 5, 1998) (hereinafter the “Statement of
Policy” or “White Paper”).  The White Paper invited the private sector to come
together and form a new, not-for-profit corporation to administer policy for
the Internet name and address system (the “domain name system” or “DNS”).

Based on a review of ICANN’s submission, other public submissions, and on
public comments on those submissions, the Department of Commerce regards the
ICANN submission as a significant step towards privatizing management of the
domain name system.  Overall, the submissions we received supported moving
forward with the ICANN structure.  We note, however, that the public comments
received on the ICANN submission reflect significant concerns about substantive
and operational aspects of ICANN.  We strongly recommend that you review and
consider the many thoughtful and constructive comments posted at
www.ntia.doc.gov.  The submissions of the Boston Working Group and the Open Root
Server Confederation, among others, articulate specific concerns, many of which
we share.  As you refine your proposal, we urge you to consult with these
groups and others who commented critically on your proposal to try to broaden
the consensus.
The White Paper contemplates that the United States would enter into an
agreement based on the principles of stability, competition, private bottom-up
coordination and representation.  The public submissions and comments indicate
that there are remaining concerns in the area of accountability
(representational and financial), transparent decision-making processes,
conflict of interest, and ICANN’s proposed role with respect to country-code
top level domains (ccTLDs).  These concerns are described below in greater
detail.

Under your submission, the Interim board is encouraged but not required to
establish an open membership structure.  Many commenters expressed the view
that the principles of private, bottom-up coordination and representation set
out in the White Paper are unlikely to be achieved in the absence of some type
of membership-based structure.  We believe ICANN should resolve this issue in a
way that ensures greater accountability of the board of directors to the
Internet community.  

Commenters also pointed out that the ICANN submission does not describe a
mechanism to ensure financial accountability to the members of the Internet
community who will be funding the organization.  The absence of transparency
and controls in the budget process could impose unnecessary burdens on Internet
users and endanger the long term viability of ICANN and thus the stability of
the Internet.  We are interested in knowing how you plan to address these
concerns.

The White Paper envisions that the United States would enter into an agreement
with a corporation that is governed on the basis of a sound and transparent
decision-making process, which protects against capture by a self-interested
faction.  Commenters applauded your decision to provide notice of and seek
public comment on any policies that substantially affect the operation of the
Internet or third parties.  But many submissions urged that the Board also
regularly explain decisions that do not reach the level of “substantially
affecting the interests of the Internet or third parties,” suggesting, for
example, that such explanations could be included in promptly published minutes
of the board and other decision-making meetings.  

In general, commenters emphasized the importance of establishing and
guaranteeing open and transparent processes and avoiding the appearance of
conflicts of interests with respect to the supporting organizations described
in the ICANN proposal.  For example, some commenters suggested that a system
that permits officers and employees of the supporting organizations to serve on
the ICANN board of directors threatens the independence of the board and
should, accordingly, be prohibited.

The White Paper indicates that the United States is prepared to enter into an
agreement with an organization that reflects the geographic and functional
diversity of the Internet community. A number of commenters expressed concern
about the proposed interim board of directors and called for the establishment
of mechanisms to ensure equitable representation of the Internet community,
including developing regions, based on a transparent and democratic election
process.  We are interested in hearing how ICANN intends to address these
concerns as additional interim board members are selected and as the process
for electing the permanent board is adopted.      

One final issue raised relates to our assumption that national governments
would continue to have authority to manage and/or establish policy for their
own ccTLDs (except, of course,  insofar as such policies adversely affect
universal connectivity on the Internet).  The ICANN submission, however, is
silent with respect to ccTLD management, and we would appreciate an elaboration
as to ICANN’s intentions in this area.  

We hope that ICANN is prepared to address the concerns listed above in a manner
that is consistent with the principles of stability, competition, bottom-up
coordination and representation. The United States intends to move carefully
but expeditiously to privatize DNS management.  We therefore look forward to
hearing ICANN’s response to the concerns expressed during the recently
completed comment period, and to meeting with you to discuss these issues. 
Assuming that the concerns described can be resolved satisfactorily, we would
then like to begin work on a transition agreement between the United States and
ICANN.  In keeping with our commitment to the principles of openness and
transparency, we plan to continue to facilitate public participation in the
transition process.

Sincerely,



J. Beckwith Burr
Associate Administrator (Acting)