November 24, 2004

Mr. Jim Tozzi

Center for Regulatory Effectiveness

Suite 700

11 Dupont Circle, N.W.

Washington, DC 20036-1231

> RE: Appeal of NTIA Decision on CRE Request for Correction of
> Information
>
> Under the Data Quality Act

Dear Mr. Tozzi:

I received your appeal of the initial determination by the National
Telecommunications and Information Administration (NTIA) that the
financial statements of the Internet Corporation for Assigned Names and
Numbers (ICANN) to which you seek changes are not subject to NTIA's
guidelines implementing the Data Quality Act.[^1] Having reviewed your
initial request and your appeal, I agree with the decision expressed in
the letter you received from Charles Franz, NTIA's Acting Chief
Information Officer, dated August 30, 2004 (CIO Letter). Thus, I deny
your request for relief.

As Assistant Secretary for Communications and Information and NTIA
Administrator, it would not be appropriate for me to opine on the
applicability of the Data Quality Act on any entity other than the
agency that I manage. I disagree with your characterization that the CIO
Letter stated that the ICANN financial statements in question are "not
subject to the Data Quality Act." In fact, the CIO Letter made it clear
that NTIA does not believe this information is subject to the *NTIA
guidelines* implementing the Data Quality Act because ICANN's financial
statements are not information disseminated by NTIA as defined by those
guidelines.[^2]

NTIA did not distribute or release to the public the financial
statements in question. Moreover, NTIA does not have the authority to
direct ICANN to distribute or release the corporation's financial
statements to the public or the authority to review and approve this
information before its release. NTIA's relationship with ICANN is based
on its legal agreements with the organization. The Memorandum of
Understanding (MOU) between NTIA and ICANN does not provide NTIA with
the right to direct the release of or to review or approve ICANN's
financial statements before release. The contract between NTIA and ICANN
is limited to the provision of technical functions related to the
Internet Assigned Numbers Authority (IANA). Contrary to your assertions,
the contract provision to which you refer in your appeal only permits
NTIA to review certain cost data related to the imposition of fees for
services to third parties under the contract. This data would include
only such data as would be necessary for NTIA and the Department to
ensure that the requested fee levels are fair and equitable and do not
in the aggregate exceed the costs of providing services under the
contract. Moreover, the Department and NTIA are not entitled to this
information unless ICANN seeks to recover its costs for the provision of
these services through the imposition of fees.[^3] The financial
statements in question would not fall into this category.

Even though NTIA's guidelines implementing the Data Quality Act do not
apply in this instance, the Department of Commerce and NTIA have a
strong commitment to ensuring the transparency and accountability of
ICANN processes. As Secretary Evans said shortly before enactment of the
Sarbanes-Oxley Act, "Trust matters. Character matters. Values
matter."[^4] These values are the cornerstone of the Department's MOU
with ICANN. If an appropriate regulatory or judicial authority were to
find that ICANN had failed to meet its legal obligations with respect to
applicable accounting standards, the Department would certainly consider
that information in evaluating its ongoing relationship with the
organization.

As the agency recommended to you earlier, I suggest that your concerns
should be directed to the appropriate officials at the organization. I
have every confidence that ICANN will take appropriate steps to address
this issue.

Sincerely,

xxSignedxx

Michael D. Gallagher

[^1]: The Data Quality Act appears as Section 515 of the Treasury and
    Government Appropriations Act for Fiscal Year 2001, Pub. L. No.
    106-554, 114 Stat. 2763, 2763A-153 (2000).

[^2]: "Dissemination means agency initiated or sponsored distribution of
    information to the public." NTIA Information Quality Guidelines at §
    1.2 (available at
    http://www.ntia.doc.gov/ntiahome/occ/ntiaguidelines_09252002.htm).

[^3]: *See* IANA Functions Contract, DG1335-03-SE-0336, section C.2.1.
    To date, ICANN has not requested approval for any such fees under
    this contract. Even if ICANN did request approval to impose a fee
    for these contract services, such cost data would be treated by the
    NTIA and the Department of Commerce as business confidential and
    proprietary and would not be released to the public consistent with
    federal acquisition regulation.

[^4]: "A Matter of Trust," Remarks by Secretary of Commerce Donald L.
    Evans, City Club of Cleveland, Cleveland, Ohio (July 12, 2002)
    (available at
    http://www.doc.gov/opa/speeches/Evans/2002/July_12_Cleveland.htm).