Statement Regarding Extenstion of Memorandum of Understanding with ICANN (Ammendment 5)

DEPARTMENT OF COMMERCE
STATEMENT REGARDING EXTENSION OF
MEMORANDUM OF UNDERSTANDING WITH ICANN

Part I Introduction and Summary

The Internet has seen tremendous growth over the last several years. What began as a small-scale system of links among U.S. academic institutions is now a global network connecting anyone with a computer hook-up to individuals, companies, and institutions around the world. The Internet has not merely grown in size. Its role in society has also expanded exponentially. The Internet has become a significant and important means of doing research, communicating with each other, and conducting business. Given the Internet's importance in all of these facets of daily life, it is essential that the Internet - and its underlying domain name management system - remain stable and secure. This is of primary concern to the Bush Administration and the global community.

The Department of Commerce (Department) continues to support the goal of private sector management of the Internet domain name system (DNS). Innovation, expanded services, broader participation, and lower prices will arise most easily in a market-driven arena, not in an environment that operates under substantial regulation. To this end, the Department has long maintained that a private sector organization is best able to respond nimbly to DNS issues in the rapidly evolving Internet space. Further, in order to garner international respect and function stably and soundly in the long-term, such an organization must be globally and functionally representative, operate on the basis of open and transparent processes, and possess robust, professional management. While the Department continues to serve as the steward of critical elements of the DNS during the transition to private sector management, for the last several years the Internet Corporation for Assigned Names and Numbers (ICANN) has been the private sector organization responsible for day-to-day DNS management.

ICANN assumed this role in November 1998 when it entered into a memorandum of understanding (MOU) with the Department to develop the mechanisms, methods, and procedures necessary, over time, to transition management responsibility for the domain name system functions to the private sector (transition tasks).(1) The transition period was intended to assure the Department and the Internet community that ICANN possessed the technical capabilities and resources to undertake this important responsibility. The current MOU is set to expire on September 30, 2002.

The Department and ICANN have agreed to extend the term of the MOU for an additional year, until September 30, 2003. This decision comes at the end of a thoughtful and critical examination not only of ICANN's progress towards fulfilling the transition tasks, but also of ICANN's significant efforts toward adopting and implementing organizational reforms. Clearly, ICANN's progress to date has been slower than expected and the organization still has much to accomplish before maturing into the stable and accountable entity necessary to complete transition of DNS management functions. Nevertheless, ICANN's achievements to date and recent reform efforts have convinced the Department that ICANN should be afforded a limited period of additional time to address the transition tasks.

The Department views the one-year term of this extension to be a critical period for ICANN to make substantial progress on the remaining transition tasks. Indeed, the tasks themselves have been revised and augmented to highlight areas where both ICANN and the Department agree that ICANN's attention needs to be focused. During this one-year term of the MOU extension, the Department will be closely monitoring ICANN's efforts, particularly through a quarterly reporting mechanism, and expects to see significant advancement.

Although the MOU tasks have been augmented, this should not be construed as expanding ICANN's coordination role. The Department strongly believes that ICANN should not be "the government of the Internet." Particularly, as the registry and registrar markets become increasingly competitive, the Department believes that market forces should play a greater role and that ICANN's involvement in policy-making in this area should be correspondingly narrow.

While most of the work ahead is ICANN's to do, ICANN's development into a mature, stable and accountable entity cannot be achieved unilaterally. The Department clearly has a role to play, as recognized by its expanded responsibilities under the amended MOU. In fact, other governments also have an important role -- actively participating in ICANN's Governmental Advisory Committee (GAC) so as to ensure that ICANN's structure, processes and scope develop in a manner that benefits their citizens. But those that have the biggest stake in ICANN's success or failure are the members of the global Internet community. They owe it to themselves to be active and constructive participants in ICANN to ensure that the organization's functional framework is representative, accountable, and effective. As all should recognize, ICANN's success will benefit all; ICANN's failure will be to everyone's detriment.

This statement, released by the Department to accompany Amendment 5 to the MOU and in fulfillment of the commitment the Department made to Congressional authorizers with respect to this particular decision, reviews the process and basis for the Department's decision to extend the MOU. In addition, it highlights the areas that ICANN still needs to address and in which the Department expects to see progress.

Part II The Department's Analysis Supporting Extending the MOU

A. The Department's Analysis Process

In making its decision concerning the extension of the MOU, the Department examined not only ICANN's performance under the transition tasks, but also its progress in the following reform areas: 1) clarifying its mission and responsibilities, 2) achieving transparency and accountability in its decision-making processes; 3) responding to Internet stakeholders, 4) developing an effective advisory role for governments; and 5) ensuring adequate financial and personnel resources. To this end, the National Telecommunications and Information Administration (NTIA) engaged a variety of U.S. Government agencies, including the Department of State, the Federal Trade Commission, the Federal Communications Commission, as well as other agencies within the Department, such as the Technology Administration, the International Trade Administration, and the U.S. Patent and Trademark Office, to develop an interagency consensus on acceptable parameters for the ICANN reform process. NTIA conferred with private sector stakeholders including trade associations, small businesses, multi-national corporations, domain name registrars and registries, representatives of the trademark and intellectual property community, academic and scientific communities, and public interest groups to gather a wide range of views on ICANN reform issues. Recognizing the global nature of the DNS, NTIA participated actively in the GAC's consideration of ICANN's reform efforts and consulted on a bilateral basis with GAC members. NTIA listened carefully to the views of Congress and consulted with Congressional staff on these issues. In addition, NTIA also considered the views of the Government Accounting Office, as expressed in its June 2002 testimony before Subcommittee on Science, Technology, and Space, Committee on Commerce, Science, and Transportation, United States Senate. NTIA conferred with representatives of ICANN to discuss the reform effort and their view of ICANN's progress towards completing the transition tasks set forth in the MOU. Lastly, NTIA met with representatives of the ICANN assistance projects and advisory committees, who had been charged by the Board with specific responsibilities and tasks in furtherance of the reform effort.

B. ICANN's Successes

Since its inception less than four years ago, ICANN has achieved a number of significant successes and made progress in the development of a more competitive Internet environment:

· ICANN has developed and implemented procedures under which any accredited registrar can register names in .com, .net, and .org on a competitive basis. Presently, there are well over 100 operational accredited registrars, the average price of domain name registrations has dropped from $50 per year to $10 per year, and there are myriad new service offerings available to consumers.

· ICANN has increased competition in the global top level domain registry market, successfully selecting and implementing seven new generic top level domain (gTLD) registries - .pro, .aero, .museum, .biz, .info, .coop, and .name, doubling the number of gTLD registries available to the public.(2)

· ICANN has made significant strides with respect to resolving disputes between the intellectual property community and domain name registrants. One of its most important accomplishments is the adoption of the Uniform Dispute Resolution Policy (UDRP), based on recommendations from the World Intellectual Property Organization, which provides an inexpensive and streamlined procedure for resolving "cybersquatting" disputes.(3) ICANN has also adopted policies to improve and expand important WHOIS services to the global Internet community.(4)

· Most recently, the ICANN Board approved a redemption grace period policy that will allow domain name holders to restore their deleted registrations.(5) This policy will eliminate much of the consumer confusion and concern created by unintended deletions.

C. ICANN's Challenges

Despite these successes, ICANN has been troubled by internal and external difficulties that have slowed its completion of the transition tasks and hampered its ability to garner the full support and confidence of the global Internet community. Indeed, with respect to a number of the transition tasks, ICANN has as yet demonstrated only limited progress:

· Root Server Security. ICANN's ability to establish stable relationships with the root server system operators is a core transition task. To date, little progress has been made in concluding agreements that would stabilize this relationship. Further, little progress has been made on a critical review (to be conducted jointly by ICANN and the root server system operators) of the current root server system and the security measures necessary to protect it. The Department is still waiting for a report detailing the current system as well as a proposal for enhancing the system's architecture and security.

· Mechanisms for Accountability. While ICANN's current bylaws provide for an independent review process for decisions that purport to conflict with the corporation's bylaws, ICANN has not yet implemented such a mechanism. ICANN has put in place a reconsideration process, under which members of the ICANN community affected by actions of the ICANN staff or Board can seek reconsideration of those actions. This process has had limited success in resolving the type of disputes it was intended to address.

· Public Participation. Identifying a mechanism that would enable all of ICANN's constituents to participate in decision-making and ensure the public interest is represented has proven challenging. While there is general agreement concerning the need for such representation, ICANN has not been able to garner consensus regarding the level or best method for achieving it.

· Agreements with ccTLD Operators. Establishing stable agreements with country code top level domain (ccTLD) operators is an important component of securing the future stability of the Internet. ICANN has made some progress in this area, having signed agreements with four ccTLD operators. However, an agreement that would appeal to the majority of ccTLD operators has not yet been defined. Understandably, the diverse relationships among ccTLD registry operators and the governments associated with the local communities they are intended to serve make this issue extremely complicated, implicating issues of national sovereignty, international law, and the equities of the global and local Internet communities. Yet, this is an important task on which both ICANN and the ccTLD community need to demonstrate progress.

· Process for Selecting New TLDs. ICANN successfully introduced seven new gTLDs as part of the testbed during 2000-2001. However, ICANN has not yet defined the processes, procedures, and standards for ensuring predictability and transparency in the gTLD selection process long-term (including the timeframe within which new gTLDs would be made available).

· Regional Internet Registries. Establishing stable relationships with the regional Internet registries (RIRs) remains critical to ICANN's ability to perform its address allocation responsibilities, as well as to the overall stability of the Internet. While the RIRs currently participate in ICANN's decision-making processes (through the Address Supporting Organization) and work collaboratively with ICANN, formal legal agreements between these organizations and ICANN have not been completed.

Perhaps in large part because of its limited progress on these issues, ICANN's reputation in the Internet community has suffered. In particular, ICANN has been criticized for over-reaching, arbitrariness, and lack of transparency in its decisionmaking. Concerns have been raised about ICANN's lack of accountability and that it is inserting itself too much into the pricing and nature of services offered by, and business practices of, domain name companies. Some consider ICANN too slow to act on various issues, especially the roll-out of new gTLDs. There has also been growing concern that ICANN's structure, processes, and inability to make progress on other key DNS issues have undermined its effectiveness and legitimacy. Not surprisingly, many in the Internet community have called for ICANN to review its mission, structure, and processes for efficacy and appropriateness in light of the needs of today's Internet.

D. Initiation of ICANN Reform

To ICANN's credit, the corporation earlier this year recognized these concerns and began taking steps to address them. ICANN President Stuart Lynn released a report in February calling for reform of ICANN's structure and processes, launching the ongoing debate concerning the organization's role in DNS management.(6) ICANN charged the Evolution and Reform Committee (ERC) with engaging the Internet community in these discussions and with making reform recommendations to the ICANN Board. In carrying out this charge, the ERC sought community input and received a large number of comments on a wide range of issues.

In June, the ERC published its report, ICANN: A Blueprint for Reform, offering specific recommendations for action and outlining a transition plan for completing the development of and implementing these recommendations.(7) Shortly thereafter, the ICANN Board approved a resolution adopting the Blueprint and instructed the ERC to oversee the necessary imple-mentation and transition work with the continued participation of the ICANN community.(8) The ERC subsequently released three status reports on implementation and engaged four separate assistance groups to help in formulating implementation recommendations.(9) The ERC has since published two implementation reports.(10)

It is the Department's understanding that the ERC's final recommendations will be developed and published by October 1, 2002. The ERC has indicated that, in order to implement the various reform recommendations, new bylaws must be developed. To that end, in its final set of recommendations, the ERC will propose a new set of ICANN bylaws. It is the Department's understanding that these proposed bylaws will be considered by the ICANN Board of Directors at its next meeting in late October.(11)

E. MOU Extension

The Department has frankly been disappointed that ICANN's progress on the MOU tasks has moved so slowly. In fairness, the accomplishment of many of these tasks requires more than ICANN's unilateral effort. Further, it is not surprising that the completion of certain tasks has proven difficult or that initial thoughts on processes and structure require rethinking based upon experience. Nevertheless, the variety of criticisms expressed by the Internet community is of concern to the Department - and should be instructive to ICANN.

While ICANN clearly has much more to accomplish in order to mature into the stable and accountable entity necessary to complete transition of the DNS management functions, the Department is mindful of the organization's significant achievements to date. As noted above, these include the introduction of competitive registrars, the launching of seven new global top level domains, the adoption of the UDRP, and the approval of the redemption grace period policy. The Department is also pleased that ICANN has initiated a comprehensive reform effort. The ERC has made recommendations to address key areas of criticism and additional work is continuing. While much remains to be done to complete the development and implementation of the reforms identified, ICANN appears to be on the path towards becoming a more professionally managed and stable organization capable of performing critical Internet DNS functions. The Department considers the progress on reform to date to be a substantial justification for affording ICANN more time to evolve and to address the transition tasks. The Department also believes ICANN's apparent willingness to engage in self-reflection and substantial reform bodes well for its ability to respond long-term to the ever-evolving DNS.

The other factor supporting an MOU extension is the uncertainty that would be generated by a drastic change in direction on DNS management. As the Department has stressed repeatedly, the security and stability of the Internet is its primary concern. Abruptly changing oversight of critical DNS functions could deeply challenge that goal. Further, no obvious alternative exists for long-term DNS management. Of course, if ICANN does not make significant progress on the transition tasks, alternatives will be identified and considered. However, at this point, any such consideration is premature.

For these reasons, the Department and ICANN have agreed to extend the MOU for one year to permit ICANN to complete its organizational reforms and to make significant progress on the remaining transition tasks. The Department and ICANN have also modified the MOU to highlight areas where the Department and ICANN agree ICANN's attention needs to be focused. In addition, the MOU extension sets up a new reporting mechanism to enhance the Department's oversight not only to provide an added incentive for ICANN's progress, but also to afford ICANN and the Department the ability to consult on possible alternative courses of action on tasks where progress might be lagging. The changes to the MOU and the expectations of the Department are described in more detail in the next section.

Part III Modifications to the MOU and Expectations of the Department

A. Quarterly Reporting of Progress on Transition Tasks and Status of Implementation of Reform Efforts

The Department views the next twelve months as a particularly critical period not only for ICANN, but also for the DNS privatization effort. ICANN needs to show progress on the transition tasks during this period in order to retain the confidence of the Internet community and to warrant its continued key role in DNS management. Further, ICANN needs to substantially complete its reform effort and actually implement changes that will enable the organization to operate professionally, stably, and effectively for the long term.

Given the critical nature of the upcoming year and the importance of ICANN's moving ahead rapidly in completing these tasks, the new Amendment 5 to the MOU requires ICANN to provide the Department with quarterly written updates on its progress towards implementation of its reform efforts and fulfillment of the transition tasks (ICANN Task 11). The reports will enable the Department to monitor ICANN's progress very closely over the course of the next year to ascertain whether the appropriate reforms are implemented in a timely manner and that ICANN is progressing productively on the transition tasks. It is also expected that the quarterly nature of the reports will provide an incentive for ICANN to move ahead promptly rather than waiting for the end of the extension period. The reports, which will be made available to the public on NTIA's website, will assist the Department in monitoring progress and determining how best to assist ICANN in achieving the tasks set forth in the MOU.

B. MOU Transition Tasks Have Been Revised and Augmented to Highlight Areas for Greater Focus

The Department believes that to be an effective organization, ICANN must instill confidence and legitimacy in its management and operations. Based upon its recent review, the Department has identified several general areas where ICANN's reform and transition task efforts should promptly be focused. Not surprisingly, this list is quite similar to the areas in which the Internet community has called for ICANN reform and toward which ICANN has directed its recent efforts. These areas are: the scope of ICANN's mission, the transparency and accountability of its decision-making, ICANN's responsiveness to Internet stakeholders, defining an effective advisory role for governments, and the security of Internet functions. The Department, in particular, believes that prices should be set by a competitive marketplace, and that the tasks under the MOU are designed to achieve this result.

Given the importance in achieving rapid progress on these key issues, Amendment 5 revises and augments the MOU tasks to highlight areas where both ICANN and the Department agree that ICANN's attention needs to be focused. In addition, the MOU specifically directs the Department to engage in certain activities to assist ICANN in addressing these tasks. During the extension period, the Department anticipates progress in these highlighted areas. The Department's expectations in each of these areas are set out below.

Mission. The Department believes that one of the most important issues for ICANN's long-term stability and effectiveness is defining the scope of its mission. Understanding its core functions, and formulating its structure and processes accordingly, is the key to any organization's success. The Department strongly believes that ICANN should not be "the government of the Internet." Not only would such a role be unwise from a policy perspective, but it would also be entirely inappropriate for ICANN as a private corporation. While ICANN is primarily a technical coordination body, it will of necessity need to make limited policy decisions to ensure that these technical functions are performed smoothly and stably. For example, ICANN will need to develop criteria upon which to base its selection of gTLD operators and enter into agreements that define the rights and responsibilities of various Internet stakeholders. As the registry and registrar markets become increasingly competitive, the Department believes that market forces should play a greater role in the policy-making in this area, and ICANN's involvement should be correspondingly narrow.

There are widely divergent views within the Internet community as to ICANN's appropriate mission. After considering these views, the ERC recently recommended, and the Board adopted, the following mission statement:

The mission of ICANN is to coordinate the stable operation of the Internet's unique identifier systems. In particular, ICANN:
a. Coordinates the allocation and assignment of three sets of unique identifiers for the Internet: Domain names (forming a system referred to as the "DNS"); Internet protocol (IP) addresses and autonomous system (AS) numbers; and Protocol port and parameter numbers.
b. Coordinates the operation and evolution of the DNS's root name server system.
c. Coordinates policy-development as necessary to perform these functions.(12)

The Board also adopted the ERC's recommended core values and principles to which ICANN should adhere in meeting this mission.(13)

The Department considers the revised mission statement and core values to be a significant refinement of the parameters of ICANN's activities, as well as reflective of the organization's need to be able to address yet unforeseen developments in this evolving global resource. The Department believes that these revised foundational elements are consistent with the objectives of the Department's Statement of Policy entitled Management of Internet Names and Addresses to recognize an organization whose efforts would be narrowly focused around the coordination of the core technical functions necessary to the stable and secure operation of the Internet DNS and directly related policy development.(14) ICANN, therefore, agreed to perform the tasks as set forth in Amendment 5 of the MOU consistent with "the ICANN Board-approved mission and core values" (ICANN Task Preamble).

The key, however, will be how ICANN implements this revised mission with respect to its future decision-making, policy development, structure, and resource needs. Not only is it essential for ICANN to have adequate financial and personnel resources to perform effectively, but also these resources must be appropriately matched to address ICANN's mission and core functions. The Department looks forward to ICANN's quarterly status reports detailing how ICANN implements its revised mission and addresses this task.

Ensuring transparency and accountability. It is the Department's view that ICANN must improve its processes for transparency and accountability in its decision-making. For example, a number of service providers have expressed concerns about the length of time the ICANN policy development process takes and the delays it causes in bringing new products and services to market. Improvements to ICANN's processes should include clear policy development procedures, with reasonable time frames for the development of recommendations, the posting and public consideration of those recommendations, written explanation of decisions that address views received, and the allotted time for revision of proposed policies. Given the complex issues and diverse interests of DNS stakeholders, transparent processes are essential to ensuring effective, fair, and timely decisionmaking.

To address transparency, Amendment 5 to the MOU sets out a new task that calls on ICANN to continue to develop, test, and implement processes to improve transparency in the consideration and adoption of policies related to technical management of the DNS (ICANN Task 3). This new task acknowledges initial recommendations developed by the ERC in the Blueprint and the First Interim Implementation Report, and which are consistent with the Department's general views in this area.(15) If adopted, the Department believes that these specific recommendations would represent significant improvements in ICANN's decision-making processes. In addition, ICANN should give special consideration to improvements in its decisionmaking processes that would expedite the introduction of new products and services for the benefit of the global Internet community, taking into account the limited, technically-oriented mission of ICANN as set forth in its mission statement. The Department looks forward to ICANN's quarterly status reports detailing how ICANN addresses this task.

The Department and ICANN have also agreed that ICANN needs to proceed with adopting a standardized mechanism for implementing new gTLDs that includes a public articulation of the process, selection criteria, and the rationale for selection decisions (ICANN Task 8). In developing this mechanism and implementing new TLDs, ICANN has agreed to consider recommendations from expert advisory panels, bodies, agencies, or organizations regarding relevant economic, competition, trademark, and intellectual property issues. The Department encourages ICANN to avail itself of the expertise existing in the international community not only with respect to this issue, but also those arising in other facets of its DNS management responsibility. The Department looks forward to ICANN's quarterly status reports detailing how ICANN addresses this task.

To address accountability issues, Amendment 5 to the MOU sets out a new task whereby ICANN will continue to develop, test, and implement accountability and responsiveness mechanisms to address claims by members of the Internet community that they have been adversely affected by decisions in conflict with ICANN's by-laws, contractual obligations, or otherwise treated unfairly in the context of ICANN processes (ICANN Task 4). This new task acknowledges initial recommendations of the ERC with respect to the creation of an ombudsman, improvements to the reconsideration process, and clarification of the independent review process for any allegation that the Board has acted contrary to ICANN's bylaws.(16) The Department believes that these initial recommendations or similar mechanisms will provide aggrieved parties with an ability to seek independent oversight and resolve disputes, while recognizing the necessity for timely and final resolution of policy decisions.(17) Again, the Department looks forward to ICANN's quarterly status reports detailing how ICANN addresses this task.

The implementation of the right structure and selection process for its decision-making body can also serve to increase ICANN's accountability. A sound mechanism for the nomination, election, and replacement of Board members is essential to the long-term viability and efficacy of the corporation. The Department notes that the Blueprint provides for a fundamental restructuring of the Board election process, including the Board's composition, its selection process, and terms and qualifications of Board members.(18) While the Board adopted the Blueprint at its June 2002 meeting, the ERC has been tasked with developing and recommending the details for implementing the Board's restructuring and nominating process.(19) The current ICANN Board is set to consider these recommendations at its October 2002 meeting. The Department hopes ICANN will include in its quarterly status reports details on how the organization implements an accountable decision-making body and selection process.

Responding to Internet stakeholders. It is the Department's view that ICANN's processes should be designed to ensure that all Internet stakeholders have the opportunity to get a fair hearing. Given the great diversity among Internet stakeholders, it is critical that ICANN develop mechanisms that allow for the opinions of all stakeholders to be heard and meaningfully considered.

To address this concern, Amendment 5 to the MOU sets out a new task (ICANN Task 9) whereby ICANN will continue to develop, test, and implement mechanisms to increase informed participation by the global Internet community in decision-making. This new task acknowledges the ERC's proposal to create a manager of public participation who would be responsible for developing mechanisms to encourage full public participation in ICANN and to facilitate the receipt and analysis of all public comments received on a given proposed action by the ICANN Board. It also recognizes the Board's charge to the ERC to explore the development of an At-Large Advisory Committee as a vehicle for soliciting informed participation by the broader user community.(20) The Department looks forward to ICANN's quarterly status reports detailing how ICANN addresses this task.

In addition, the Department is very much aware of the concerns expressed by individual Internet stakeholders that ICANN is not always responsive to inquiries regarding DNS management issues. Although not specifically referenced in the MOU, the Department hopes that ICANN will develop processes and set aside appropriate resources to ensure it promptly responds to constituent inquiries. The Department hopes ICANN will include in its quarterly status reports details on how the organization implements processes and mechanisms to ensure responsiveness to such inquiries.

Developing an effective advisory role for governments. Given the global nature of the DNS, the Department believes that ICANN's structure and processes should continue to provide an effective advisory role for all national governments through the GAC.(21) The GAC has indicated its continuing endorsement of the principles behind ICANN's creation and has provided valuable advice on the ICANN reform proposal, particularly with respect to improving the GAC's role and working methods.(22) The Department believes that an effective GAC is crucial to ICANN's long-term effectiveness on behalf of the global Internet community.

The Department is committed to working within the GAC to ensure that it serves as an effective voice for governmental input into ICANN. Amendment 5 to the MOU formalizes this commitment by requiring the Department to consult with foreign governments to promote increased and more effective governmental participation in the GAC, as well as to work with the GAC on steps governments should take to advance ICANN's efforts to achieve stable relationships with ccTLD operators (Department Task 11). In addition, Amendment 5 requires the Department to work within the GAC to encourage the creation of stable agreements between ICANN and the Regional Internet Registries (Department Task 7).

Amendment 5 to the MOU also encourages ICANN to draw upon the GAC to assist it in accomplishing the various MOU tasks. For example, in an effort to achieve stable agreements with ccTLD operators, ICANN is directed to encourage greater liaising between ccTLD operators and the GAC (ICANN Task 7).(23) The Department looks forward to ICANN's quarterly status reports detailing how ICANN addresses this task.

Stability and Security of Internet Functions. The DNS root server system is a key component of the overall security and stability of the Internet. ICANN's ability to establish stable relationships with the root server operators and to have a complete understanding of the current operation of the system and the security measures taken to protect it are critical to the transition and any determination of whether the private sector has the capability and resources to assume the important responsibilities related to the technical management of the DNS.

Given the importance of this issue to Internet security and stability, Amendment 5 to the MOU refines and underscores the existing MOU task for ICANN to review the current status of the root server system and to propose and implement enhanced architecture for root server security (ICANN Task 5). The Department considers the completion of this task absolutely crucial, particularly in today's post-September 11th world. Amendment 5 sets forth a due date of November 30, 2002 for the report detailing the root server system's status, and a due date of December 31, 2002 for the enhanced architecture proposal. Additionally, the Department also strongly urges ICANN and the root server system operators to take such steps as are necessary to complete negotiation on any pending draft agreement and execute such agreement no later than December 31, 2002.

In recognition of the importance of these tasks, the Department commits in the MOU collaborate on the requested root server reports (Department Task 5). In addition, the Department commits to consult with managers of the root name servers operated by the U.S. Government with respect to operational and security matters and recommendations for improvements (Department Task 6). The Department stands ready to assist ICANN in gathering the information it needs to complete these reports. That said, the Department expects ICANN to fulfill these key security obligations. ICANN's failure to do so will be a significant consideration by the Department in determining ICANN's future in DNS management.

Part IV Conclusion

The Department views the next twelve months as a particularly critical period not only for ICANN, but also for the global Internet community. The Department stands ready to continue its stewardship obligations of critical elements of the DNS during the transition period and to assist the global Internet community in maintaining a stable and secure Internet. The Department is looking forward to learning how ICANN addresses the many challenges facing it during this next year as it implements reform and proceeds with the transition tasks. Over the course of the one-year extension, the Department will review ICANN's progress in these areas as it determines the path forward on DNS privatization into the future.

 



ENDNOTES:

1. The text of the MOU is available at http://www.ntia.doc.gov/ntiahome/domainname/icann.htm.The MOU has been amended by mutual agreement four times since its execution. Amendment 1 (dated November 10, 1999) was part of a series of five agreements between the Department, Network Solutions, Inc., and ICANN that were necessary to introduce competition for registrations in the .com, .net, and .org top level domains and to continue the ramp-down of a related Departmental cooperative agreement with Network Solutions. Amendment 2 (August 30, 2000) extended the term of the MOU for one year and refined the tasks to be undertaken by ICANN in recognition of the work that the corporation had completed as of that date. Amendment 3 (May 25, 2001) provided approval to change the original registry agreements between Network Solutions and ICANN to create separate agreements for the .com, .net, and .org registries. Amendment 4 (September 24, 2001) extended the term of the MOU until September 30, 2002. The MOU Amendments are available at http://www.ntia.doc.gov/ntiahome/domainname/icann.htm.

2. ICANN also negotiated new agreements with VeriSign, Inc. for .com, .net, and .org, so that all existing registries (legacy and new market entrants) operate under similar terms and conditions. In addition, ICANN and VeriSignagreed that the .org registry agreement would expire on December 31, 2002, and that the domain would subsequently be operated by a non-profit organization for the benefit of the global noncommercial Internet community. ICANN's competitive selection process for the new .org management is underway. See Sixth Update on .org Reassignment Process (Sept. 13, 2002) (available at http://www/icann.org/announcments/update-13sept02.htm).

3. ICANN has arrangements with four UDRP service providers around the world. These entities have concluded over 5700 proceedings involving over 9500 domain names since ICANN's adoption of the policy at the end of 1999. This policy has also become a model for similar policies used to resolve disputes in over 28 country code top level domains (ccTLDs), including the .us domain.

4. WHOIS databases contain domain name holders' contact information in an online directory. This information is used by the copyright, trademark, and law enforcement communities as well as by consumers seeking information on web site operators before conducting business online. ICANN requires that registrars in the .com, .net and .org domains and registry operators in .info, .name, and .biz domains provide this information free of charge.

5.  ICANN Board Resolution 02.45-02.83 (June 28, 2002).

6.  M. Stuart Lynn, President's Report: ICANN - The Case for Reform (Blueprint) (Feb. 24, 2002) (available at http://www.icann.org/general/lynn-reform-proposal-24feb02.htm).

7.  ERC, ICANN: A Blueprint for Reform ("Blueprint") (June 20, 2002) (available at http://www.icann.org/committees/evol-reform/blueprint-20jun02.htm).

8.  ICANN Board Resolutions 02.76 - 02-79 (June 28, 2002).

9. ERC, Status Report on Implementation of Evolution and Reform (July 15, 2002) (available at http://www.icann.org/committees/evol-reform/status-report-15jul02.htm); ERC, Second Status Report on Implementation of Evolution and Reform (July 24, 2002) (available at http://www.icann.org/committees/evol-reform/status-report-24jul02.htm); ERC, Third Status Report on Implementation of Evolution and Reform (September 17, 2002) (available at http://www.icann.org/committees/evol-reform/status-report-17sep02.htm).

10.  ERC, First Interim Implementation Report (Aug. 1, 2002) (available at http://www.icann.org/committees/evol-reform/first-implementation-report-01aug02.htm); ERC, Second Interim Implementation Report (September 2, 2002) (available at http://www.icann.org/committees/evol-reform/second-implementation-report-02sep02.htm).

11.  Second Interim Implementation Report, at 27.

12.  Subsequent to the Board's adoption of this mission statement, the GAC recommended further refining the mission statement with respect to policy development to read "reasonably and appropriately related to its technical functions." First Interim Implementation Report, at 2. The ERC sought comment on the GAC proposal, and based on the comments received, has indicated that it will recommend the following revision for the Board's consideration at the October 2002 meeting: "Coordinates policy-development reasonably and appropriately related to these technical functions." Second Interim Implementation Report, at 3. It is the Department's understanding that the ERC has called for additional public comment on the proposed GAC revised mission statement before presentation to the ICANN Board for consideration at its October 2002 meeting.

13.  Blueprint, at § 2. The ERC has indicated that it will recommend for the Board's consideration at its October 2002 meeting some refinement to the Core Values to reflect the public comments it received. See Second Interim Implementation Report, at 3 and Appendix 1.

14.  63 Fed. Reg. 31741 (1998). Such policies, for example, would include the UDRP and WHOIS policies.

15. See Blueprint, at § 4; First Interim Implementation Report, at 6-10. It is the Department's understanding that the ERC has called for additional public comment on these recommendations, before presentation to the ICANN Board for consideration at its October 2002 meeting. The ERC has obtained advice and assistance from the Names Policy Development Process Assistance Group. This group filed its Recommendation on August 21, 2002 (available at http://www.icann.org/committees/evol-reform/npdpag-report-21aug02.htm).

16.  First Interim Implementation Report, at 4.

17.  It is the Department's understanding that the ERC has called for additional public comment on these recommendations, before presentation to the ICANN Board for consideration at its October 2002 meeting. The ERC has obtained advice and assistance from the Accountability Framework Assistance Project (Becky Burr). This group filed its Recommendation Regarding Accountability on August 23, 2002 (available at http://www.icann.org/committees/evol-reform/afap-report-23aug02.htm).

18.  Blueprint, at § 4.

19. See ICANN Board Resolution 02.78 (June 28, 2002).

20. See ICANN Board Resolution 02.78 (June 28, 2002). The ERC has developed a initial structure for an at-large advisory committee with the input of Assistance Group. It is the Department's understanding that the ERC has called for additional public comments on this structure to inform its recommendations to the Board on this issue. The Assistance Group on Proposed Implementation of an At-Large Advisory Committee ("Assistance Group") provided its Report to the ERC on August 19, 2002 (available at http://www.icann.org/committees/evol-reform/alacag-report-19aug02.htm) Additional recommendations from the Assistance Group were set forth in the Second Interim Implementation Report, at 20-24.

21.  In recognition that the Internet DNS is largely a private sector infrastructure, the Department, however, continues to support limiting governmental participation in ICANN to an advisory role consistent with the White Paper. White Paper, 63 Fed. Reg. at 31,750.

22.  Communique of the Government Advisory Committee (June 26, 2002) (available at http://www.icann.org/committees/gac/communique-26jun02.htm).

23.  While the ERC does not make substantive recommendations about the role of the GAC, it does encourage greater liaising between the GAC and ICANN's supporting organizations and proposes that a GAC representative serve in an ex officio capacity on the Board of Directors. In addition to the "non-voting liaison to the Board," the ERC proffered that the GAC appoint one delegate to the nominating committee, and non-voting liaisons (not necessarily members of the GAC) to each of the Supporting Organization Councils, and to the Root Server System Advisory Committee, the Technical Advisory Committee, and the Security Advisory Committee. See Blueprint, at § 3; First Interim Implementation Report at 10; Second Interim Implementation Report, at 18. It is the Department's understanding that the ERC has called for additional public comment on these suggestions, before presentation to the ICANN Board for consideration at its October 2002 meeting.