SUBCOMMITTEE ON BASIC RESEARCH
MARCH 31, 1998
Thank you Mr. Chairman, and members of the Subcommittee, for permitting me to discuss the Department of Commerce discussion draft to Improve the Technical Management of Internet Names and Addresses. As you already know, the Department of Commerce relied on an inter-agency process to develop this document. This process has been coordinated by the electronic commerce working group, which I co-chair. I would note for the record, however, that the discussion draft was issued by NTIA in January as a discussion draft. The "Green Paper," as it is frequently called, is a proposal of the Department of Commerce. It is not a final statement of Commerce or Administration policy.
No single force embodies the electronic transformation we are experiencing today more than the evolving medium known as the Internet. Once a tool reserved for scientific and academic exchange, the Internet has emerged as an appliance of everyday life, accessible from almost every point on the planet. Students across the world are discovering vast treasures of data via the World Wide Web. Doctors are utilizing telemedicine to administer off-site diagnoses to patients in need. The Internet is being used to reinvent government and reshape our lives and communities, and is also changing classic business and economic paradigms.
Last summer, President Clinton issued A Framework for Global Electronic Commerce, which articulated the Administration's vision for the emergence of the Global Information Infrastructure as a vibrant, global marketplace. The Framework suggested a set of principles to guide our government's approach to a number of important policy issues. In keeping with those principles, President Clinton directed Secretary of Commerce William Daley to work to privatize, increase competition in, and promote international participation in the domain name system.
Several functions of the domain name system are, as a legacy, performed under agreements with agencies of the U.S. government. These functions include:
A) Assignment of Numerical Addresses to Internet Users - the assignment of Internet Protocol (IP) numbers (the numeric address for computers on the Internet) to the 3 regional IP numbering authorities. (DARPA/IANA).
B) Management of the System of Registering Names for Internet Users - the registration of Internet domain names in the set of generic top-level domains (gTLDs) including .com, .net, .org. (NSF/NSI).
C) Operation of the Root Server System - the USG plays a direct role in the operation of half the world's 13 root servers, including the 'A' root which is the authoritative server. (NSF/NSI + other USG agencies).
D) Protocol Assignment - the assignment and registration of the technical parameters and protocols used on the Internet (DARPA/IANA).
Increasingly the Internet has become an international medium for commerce, education and communication. We believe that it has outgrown the legacy system of technical management, and faces increasing pressure for change from different quarters.
The purpose of the Commerce Department proposal is to improve the technical management of the DNS only. The Green Paper does not propose a monolithic Internet governance system. Frankly, we doubt that the Internet should be governed by a single body or plan. We hope that after appropriate modifications are made to the plan in response to public input, reasonable consensus can be found on the plan in the coming months.
Based on broad consultation with Internet stakeholders, the Green Paper cites several principles for DNS that are shared by most all Internet stakeholders. These principles are:
1) Stability. The USG should end its stewardship of the DNS in a responsible manner, which above all else, means ensuring the stability of the Internet;
2) Competition. Where possible, market mechanisms that support competition should drive DNS management;
3) Private, Bottom-Up Coordination. Private-sector coordination of DNS management is preferable to government control; and
4) Representation. Technical management of the Internet should reflect a diversity of Internet users both functionally and geographically.
For the Internet to run smoothly, some functions should be performed on a coordinated, centralized basis. These are: 1) the management of IP addresses; 2) the coordination and management of the Internet root servers; 3) the dissemination and management of protocol parameters for Internet addressing.
To manage these functions, we propose the creation of a new private, not-for-profit corporation (the "new corporation") that would act for the benefit of the Internet as a whole. The new corporation would have the following authority:
1. To set policy for and direct the allocation of IP number blocks;
2. To oversee the operation of the Internet root server system;
3. To oversee policy for determining the circumstances under which new top- level domains would be added to the root system;
4. To register Internet technical parameters related to IP numbers and DNS.
Under the plan proposed in the Green Paper, the U.S. Government (USG) would gradually transfer authority over these functions to the new corporation, beginning as soon as possible, with operational responsibility transferred by the end of the ramp-down period (September 1998). Until the new corporation were to be established and stable, the USG would participate in policy oversight, phasing out as soon as possible but in no event later than September 2000. We also suggest, that since the expertise for performing the functions currently resides in the United States (it is contemplated that IANA staff that currently administer the functions would likely move to the new corporation), the new corporation would be headquartered in the U.S. The new corporation would be incorporated under U.S. law, however, the proposal does nothing to change current international law with respect to jurisdiction and choice of law. Although it would be headquartered in the U.S. and subject to U.S. law, as a global organization, the new corporation would be subject to the laws of the countries in which it does business.
The new corporation board of directors should be balanced and represent the functional and geographic diversity of the Internet. We suggest that a representative board could be drawn from the existing internationally representative IP number registries (ARIN, RIPE and APNIC) , the Internet Architecture Board (IAB) (an international board representing the Internet technical community), an international membership association representing domain name registries and registrars (to be created), an international membership association representing the Internet user community (to be created). We also suggest that the new corporation would hire a CEO with a background in business administration to bring more rigorous management to the coordination of Internet functions.
The Competitive Functions
We believe that the system for registering second level domain names (SLDs - e.g. the "amazon" in amazon.com) and the management of generic top-level domains (TLDs - e.g. the ".com" in amazon.com) should be moved into a competitive environment. Currently, these functions are performed in tandem by NSI under the NSF/NSI cooperative agreement. However, this could be split into two market driven businesses:
"Registry" - an entity responsible for the maintenance of a TLD "zone file" that contains the name of each SLD in that TLD and each SLD's corresponding IP number.
"Registrar" - an entity that takes registration information from a domain name registrant and submits that customer data and SLD request to the registry. The registrar would act as the interface between the customer and the TLD registry.
A number of different companies could operate registries on a competitive basis. Just as NSI currently operates .com, another company could operate a different TLD such as .vend or .store, for example. On the registrar level, any entity meeting specified objective criteria should be allowed to offer SLD registration services in any or all gTLDs. We note that, while there appears to be broad consensus that the registrar function should be competitive, we recognize that there is disagreement within the Internet community on whether the registry function should be market-driven. The Green Paper presents arguments on both sides of the issue, and proposes a competitive registry system, based on our belief that such a system presents the greatest opportunity for consumers to benefit.
There is much disagreement between Internet stakeholders on the number of new gTLDs that should be introduced into the root server. The Green Paper takes the position that, to preserve the stability of the Internet, gTLDs expansion should take place at a controlled pace. However, if new gTLDs are added to the root, we believe that enough new gTLDs should be introduced so that effective competition is created among registries. Accordingly, we propose that the introduction of five (5) new gTLDs would be consistent with this goal. After the transition, however, the new corporation would determine when or whether new gTLDs should be introduced.
Trademark protection in cyberspace is important for the development of electronic commerce. However, a balance must be struck between the needs of the Internet community as a whole and the needs of trademark holders. The Green Paper suggests certain steps that would likely make trademark holder's task of monitoring and registering their trademarks easier. Suggested steps include:
1. Requiring domain name registrants to supply basic name and sufficient contact information to be able to locate the applicant or its representative.
2. A registry could require applicants to certify that they know of no other entity with superior rights to the name they wish to register, to deter domain name pirating.
3. The creation of a more flexible, robust and "user friendly" tool for searching domain name databases.
We do not support proposals, such as mandatory waiting periods, that could significantly limit the flexibility of the Internet.
Determining jurisdiction for filing trademark/domain name-related law suits is a difficult and contentious issue, as domain name registrants are located in all regions of the world. To address this issue, we suggest that at the time of registration, registrants could agree that jurisdiction for trademark disputes involving the name registered would lie where the registry is domiciled, where the registry database, or where the "A" root server is maintained. We believe that this will provide trademark holders more choice in selecting a convenient jurisdiction in which to defend their marks.
Mechanisms that allow for on-line dispute resolution could provide a swift and inexpensive alternative to litigation for resolving domain name/trademark disputes. However, trademark holders have been divided on what type of resolution procedures or system would work best. In the absence of consensus on this issue, the Green Paper proposes that each name registry would at least need to establish some set of minimum dispute resolution procedures. Nothing in the document would preclude registries from adopting a more comprehensive set of dispute resolution procedures or would deter the adoption of the same procedure across all registries.
Further, we suggest that shortly after the new gTLDs are introduced into the root, a study of domain name/trademark issue be conducted with input from trademark holders, domain name holders, and registries. The findings of the study would be submitted to the board of the new corporation upon completion.
Under agreement with NSF, thirty percent of the $50 registration fee that NSI collects for the registration of domain names is deposited into a fund set aside for the enhancement the Internet ("Intellectual Infrastructure Fund"). As the USG is seeking to end its role in the domain name system, this portion of the fee will be terminated on April, 1 1998.
To implement the proposal, several steps must be taken.
The NSI Agreement
The USG will ramp-down the NSF/NSI agreement by September 1998. In order to obtain a level playing field, we will seek agreement that NSI will perform the following during the ramp-down period:
1. Separate its operations into clear and distinct registry and registrar businesses. NSI will operate .com, .net and .org on a fully shared registry basis. (The .edu TLD will be shifted to a separate not-for-profit);
2. Develop (or license) and implement software that allows for the sharing of .com, .net, and .org so that any registrar may register in these gTLDS;
3. Turn over a copy of all data, software, and licenses, for use by the new corporation to manage the Internet DNS;
4. Turn over control of the "A" root server;
5. Agree to meet the recommended registry and registrar requirements outlined in the Green Paper.
Competitive Registries, Registrars, and the Addition of New gTLDs
Ideally, the USG would not offer any plan to add new gTLDs to the root system, but leave the issue to be resolved by the new corporation. However many in the Internet community believe that competition should be introduced more quickly. We therefore set out a proposal to introduce competition in the system during the transition to a stable and fully operational new corporation. This plan is meant for transition period only and after that period the new corporation would assume full authority over the terms and conditions for adding new gTLDs.
Registries and New gTLDs - We propose that, during the transition, the first five (5) entities that meet a minimal set of technical requirements for registries (described in Appendix 1), would be allowed to establish a domain name registry. Each of the five registries that qualify would be allowed to administer one new gTLD.
Registrars - Any entity meeting a minimal set of technical requirements for registrars (described in Appendix 1) would be permitted to register domain names for customers in any of the new or existing gTLDs.
The Root Server System
IANA, the USG and other relevant organizations will undertake a study of the root server system to recommend means to increase the security and professional management of the system. The findings of the study would be implemented with the new corporation.
The .us Domain
The USG recognizes that expanding the use, particularly the commercial use, of the .us domain could relieve pressure for unique domain names in the .com gTLD. We will further explore these issues in a separate Request for Comment.
The USG role in the Internet domain name system should end as soon as practical. However, this role must be ended in a responsible manner that preserves the stability of the Internet. Our goal is to seek as strong a consensus as possible so that a new system can emerge that is legitimate in the eyes of all Internet stakeholders.
The Green Paper was posted on the Internet for comment on January 30 and appeared in the Federal Register on February 20, 1998. To date we have received over six hundred fifty (650) comments. Although the comment period officially closed on March 23, NTIA continues to receive comments. All of the comments are available for review on the NTIA web site, and comments received after the 23rd will be posted in a separate section for "late filers." We are currently reviewing the comments, which contain plenty of food for thought.
In general, the comments we received were extremely thoughtful and constructive. Although we can not yet provide a detailed analysis of the comments received, we intend to review and respond to those comments. Because we are in a rulemaking proceeding subject to the Administrative Procedure Act, I will refrain from speculating about the results of our review.
Thank you for the opportunity to discuss the discussion draft and I will be happy to answer your questions at this time.