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July 14, 2006

Ms. Fiona Alexander

Office of International Affairs

National Telecommunications and Information Administration

1401 Constitution Avenue, NW

Room 4701

Washington, DC 20230

Dear Ms. Alexander:

Verizon is a longstanding and active member of ICANN's user community
within the Internet Service Providers and Connectivity Providers
(ISPCP), Business and IP constituencies. The technical coordination and
administration of the Internet is of critical importance to Verizon, our
customers and our further development and deployment of premier
international communications services. Verizon was active among
multinational industry participants who consulted on the creation of
ICANN in 1998. Consequently, we continue to support the model of private
sector leadership embodied in ICANN. The overriding objective must be to
ensure the operational security and stability of the Internet.

In our view, the challenge at hand is for ICANN to build on its
successes and to learn from its mistakes in order to strengthen and
improve the organization. ICANN must work with government
representatives through the Government Advisory Committee (GAC) to
ensure the effective evolution of a global advisory process. The United
States Government (USG) must also continue to provide support and
leadership throughout ICANN's progress, including outreach and ongoing
consultation with leading stakeholders and with other governments to
ensure broader global support for ICANN's structure and mission.

We urge that you continue your commitment, as we have, to a long-term
supportive role with ICANN. The private sector's coordination and
management of the technical functions of the global Internet, combined
with the development of associated polices, offers the best possible
solution for all -- users, suppliers/providers, and governments. To this
end, we are pleased to provide comments as the Department of Commerce
considers both the continuation of its Memorandum of Understanding (MOU)
with ICANN and the issues surrounding an eventual transition from its
memorandum-based relationship with USG.

[Principles relevant to private sector transition]{.underline}.

The Principles articulated in the DNS White Paper are still very
relevant and integral to the transition of the Internet DNS to private
sector management. Stability, competition and representation through
bottom-up, private sector led and coordinated policy development are
imperative to the continued transition of the DNS.

In addition, it would be useful to take into consideration the lessons
learned since 1998 to instill new principles into the transition
process. Transparency and security are two additional principles that
should be considered in setting the proper benchmarks for completion of
the transition process.

Transparency in ICANN's interactions with its stakeholders is
imperative. It is often stated that ICANN is made up of a community of
users, providers, government representatives and other stakeholders.
However, in practical terms, stakeholder input and contributions to
ICANN's proposals are not given the deference they deserve and this is
not conducive to a bottom-up consensus building process.

Certainly, when competition issues and contract negotiations are at
play, there is some need for confidentiality. However, major changes in
policy should not be implemented under the guise of confidential
negotiations in an organization that is built on the principles of
openness and transparency. In the past several months, ICANN
participants and staff have spent a tremendous amount of time debating
matters that would be nonexistent had there been sufficient transparency
in the objectives and outcomes related to various goals. By way of
example, the contract renewal for dotcom continues to cause great
consternation for the ICANN community, and much of that could have been
avoided had there been greater transparency early in the process as to
the settlement terms and the reasons therefore. On the other hand, we
applaud the visibility of ICANN's operational plan where,
notwithstanding substantive concerns, there has been sufficient vetting
of the plan so as to make it a credible document. Progress in openness
and transparency will not only serve to enhance global participation in
ICANN decision-making, but also will alleviate misunderstanding
regarding the private debate of issues that would otherwise be
non-controversial.

Security of the DNS involves more than purely technical activities. The
established principle of stability implies a sense of reliability and
dependability that consistently balances the needs of users and
providers who rely on the DNS as a ubiquitous tool in global
communication. It implies a need for security which should be used as an
additional principle for the measurement of DNS transition. Without
security, there can be no stability. However, the notion of stability −
which is a subjective and sometimes political concept − while
incorporating security often does not sufficiently address it.

The advancement of the Internet as a key means of global communications
should lead ICANN to broaden its mission to include better security and
reliability for the DNS. While ICANN has accomplished a great deal to
ensure the general stability of the system, ICANN should not fail to
address its limited responsibility to reduce fraudulent activity related
to the DNS and domain name registrations. ICANN should recognize that,
in light of the ever increasing number of users around the world, its
mission should conform accordingly to reflect the importance of the DNS
and Internet in today's information society.

Such emphasis will also serve to support a critical security-related
component of ICANN's stability remit. In fact, the role of the Security
and Stability Advisory Committee (SSAC) and the advocacy for a secure
DNS (DNSSEC) can be viewed as recognition by ICANN itself, of the
importance of security in its guiding principles.

[Timing and principles of transition as outlined in the MOU]{.underline}

The actions noted in the DNS white paper and outlined in the MOU with
the US Government indicate that the timing is not yet ripe for complete
transition of DNS coordination and management responsibilities to the
private sector by September 30, 2006. These tasks are still relevant and
should be used as the benchmark for the completion of transition process
when the timing is appropriate to do so. A few important issues
highlight the need for continued oversight of the transition process.

First, ICANN's role in the greater Internet governance arena should be
further established and legitimized. We applaud ICANN's efforts, as
outlined in its strategic plans, on outreach in various global regions
as indicted by its liaison activities, governmental outreach and
regional at-large organizations (RALO). One of the common themes arising
out of the WSIS process is the call for greater international
participation. It would be useful for ICANN to address how it envisions
accomplishing this task without compromising the private sector
leadership that is a key aspect of its charter.

The recent outreach to the GAC by the ICANN Board of Directors (Board)
and correspondence to the GAC from Chairman, Vint Cerf, are positive and
encouraging steps towards a more robust relationship. In addition,
establishing ongoing working groups and liaisons from the GAC to the
Board, GNSO, ccNSO and related policy making task forces will serve to
provide more direct dialogue between the private sector stakeholders and
government representatives.

However, there is often a great void in the input received from the GAC
because of the diversity of views and interests. GAC representatives are
not always available to provide meaningful input on policy decisions in
a timely manner. For the same reason, it has not been feasible to
provide voting status to the GAC within the Board and supporting
organization bodies. Thus, there should be some renewed thinking in the
way the GAC interacts within ICANN, and some improvement is called for
towards greater interaction. Indeed, establishing some mechanisms for
greater and more consistent GAC input into ICANN's established policy
making processes would be a concrete starting point in legitimizing
ICANN's important role in global Internet governance.

Second, as a steward of the DNS transition to ICANN, the Department of
Commerce should pay special attention to the incomplete task of
improving the accuracy and availability of Whois data. Yet, not only is
ICANN not implementing policies that would improve the accuracy of Whois
data, but the GNSO council and ICANN board have recently moved towards
policy positions that would cut off access to Whois data for a large
percentage the DNS user community, and would effectively make accuracy a
moot point. It cannot be overemphasized that preventing public access to
Whois data would lead to greater fraud and instability in the DNS.
Eliminating or reducing public access to Whois data would remove a
significant tool in the investigation and prosecution of illegal
activities and it would have a significant negative impact to Internet
service providers (ISPs) by removing a means for technical and
administrative purposes. Thus, not only should further work continue in
improving the accuracy of Whois data, but the continued commitment to
the availability of the data in a system that discourages monetization
and encourages harmonized availability should be included as an
additional task under the MOU. Continued access to accurate Whois data
is but one of the many policy considerations related to ICANN's
technical coordination activities, but it is one that has particular
impact on a wide range of stakeholders because of its implications to
the stability, reliability and security of domain names and DNS
registrants.

An issue of related concern to DNS reliability involves the growing
problem of ICANN-accredited registrars engaging in infringing and unfair
trade practices known as "domain name parking" and "typo squatting". In
an attempt to monetize the secondary market in domain names, certain
registrars have been registering typo squatted variations of trademarks
(including Verizon's trademarks) in bulk, taking advantage of a 5 day
waiting period before payment is due for such domain names. During the
waiting period, the typo squatter-registrar can evaluate which domain
names generate the most traffic (known as "domain name tasting") and
drop the names that are not valuable with a full refund. The valuable
names are "parked" on websites that push online advertising and
sponsored links to consumers. These same registrars have often obscured
their identities in the WHOIS database as the actual registrant. When
confronted by the rightful trademark owner, registrars have threatened
to auction the names or refused to return them without receiving a
significant payment. These practices impair the reliability of the DNS,
harm consumers and add to the misconception that ICANN lacks legitimacy
because it has not taken steps to expressly prohibit such practices.

Finally, the MOU set forth a series of tasks related to the further
internationalization of ICANN in an effort to bring the Internet to all
users around the world. In this regard, ICANN must commit greater
efforts to internationalized domain names (IDNs). Since 2002, ICANN has
expended tremendous effort in successfully rolling out many new generic
top level domains (gTLDs). While these new gTLDs have been important to
the principle of competition, they have not proven to be viable in the
market place. Thus, we should learn from this market dynamic and forgo
rollout of new gTLDs in favor of sponsored top level domains (sTLDs)
where true value can be created for under represented parts of the
domain name market.

Moreover, priority must be given to IDNs, beyond what it has now, in an
effort to satisfy ICANN's mission. Without immediate and immense
resources focusing on addressing the technical and related policy
requirements for IDN rollout, ICANN will risk its credibility and
leadership role. The very stability of the DNS is at stake if ICANN does
not work more swiftly towards this goal. ICANN's response to this call
has been improved in recent years by creating the President's Advisory
Committee on IDNs, by hosting workshops on IDNs and by working towards
educating the global community on the technical and policy needs of
IDNs. However, there is much work remaining to be accomplished. ICANN
should move beyond the test and research phase and demonstrate its
ability to implement IDNs as a condition of full transition.

These are just a few examples of the milestones that are in need of
greater work prior to the full transition of DNS management over to
ICANN. Verizon supports ICANN's work towards meeting these milestones
and will continue to be actively engaged in assisting ICANN's advances
in this effort.

[Participation of stakeholder groups]{.underline}

The goal of increasing and improving the participation of more
stakeholders also remains to be completed. ICANN has many mechanisms for
participation, and there is no monetary fee to attend ICANN's in person
meetings. The ICANN supporting organizations are arranged to seek input
from many different interests in the public and private sectors.

However, an immense barrier to meaningful stakeholder participation is
the current weighted voting structure within the GNSO. This flawed
structure gives double votes to the registry and registrar
representatives on all policy matters. Thus, ICANN has a unique
structure that essentially gives incumbent providers veto power on
areas, including those impacting competition and market practices that
ICANN has a duty to oversee. The registries and registrars often say
that, because they are funding the lion's share of the budget, they
should have greater input into the decision making process. However,
this is an inaccurate assertion. A significant portion of ICANN's budget
comes from domain name registrants through the money paid to registrars
and passed through to ICANN. The registrants have not been given their
fair share of influence, and are not treated as those to whom there is a
duty and responsibility for the proper management of the DNS.

This voting structure further marginalizes the user community because no
matter how important the policy issues at stake and the amount of work
and input put forth by the user community, its views become meaningless
when weighed against the double votes granted to the registry and
registrar communities. The recent vote on the purpose of WHOIS is only
one such example of a weighted voting result that harms the reputation
of ICANN and causes confusion and backlash in the Internet community.
Although there were an equal number of constituencies in favor of the
alternative view on Whois purpose, the weighted voting structure gave a
foregone conclusion as to the outcome, and did not allow for continued
discussion or a consensus view to take shape. The flawed model of
weighted voting discourages open and vigorous debate and limits the
ability of meaningful participation in ICANN by the user constituencies.
These constituencies together represent thousands of organizations and
countless individual users of the Internet whose input is not valued and
not considered because unless there is a "seal of approval" from the
registry and registrar groups, their views cannot be heard and certainly
cannot prevail.

At the same time, the nominating committee (NomCom) which was
established to appoint board members, is now putting its own members on
the GNSO giving them full policy making power, and each of the NomCom
members seems to represent no interests other than his or her own. Thus,
while some users have very little say in policy development, other users
can voice their own single voices and have no responsibility to any
stakeholders other than themselves. In this way, members of the NomCom
have become a "constituency of one".

At the end of the day, such inequality and imbalance in representation
equates to less buy-in and less active input from a very broad and
diverse number of stakeholders. Within such a structure, it is naïve to
expect that ICANN will gain adequate acceptance and credibility in the
global arena to be able to take on complete management of the DNS
without continued oversight. Involvement in the ICANN policy making
process should not be limited to "contracted parties," but should
embrace the equal participation of non-contracting and "affected
parties," or we risk inviting greater, not less, governmental oversight
to ensure a representative and legitimate process. Accordingly, ICANN's
goal of broad representative participation cannot be adequately
satisfied until and unless the user community has an equal voice with
the provider community on issues of equal impact to all who use, access
and manage the DNS.

Since the creation of the DNS White Paper, there has been a great deal
of formal and informal interaction with a variety of experts within the
ICANN framework. Security, language, standards and policy experts have
all led to the further edification of ICANN staff and community alike.
ICANN has made tremendous strides in working with experts involved in
DNS security by establishing the Security and Stability Advisory
Committee (SSAC) and collaborative efforts towards IPv6 implementation.
Verizon urges continued collaboration and a more established working
partnership with other organizations that contribute to the management
of the DNS such as the Internet Engineering Task Force (IETF) and the
World Wide Web Consortium (W3C). As we move towards an ever more
converged Internet world, an ongoing partnership with standards and
protocol making bodies will be all the more central to successful
coordination of DNS management.

[Greater responsiveness to governments and ccTLD managers.]{.underline}

Timing has proven to be one of the ongoing challenges in the efficiency
and responsiveness to governments. ICANN's policy development process
has not shown itself to be flexible enough to engage the GAC in an
effective manner because GAC views often take much longer to establish,
reach consensus and be communicated into the process than has been
feasible for valuable input. This is an ongoing problem that was
underscored in the GAC communiqué against the .XXX operator after it had
gained approval for a new sTLD aimed at adult content. This was again
made apparent in the most recent ICANN meetings when the GAC voiced its
concerns over the Whois issue after the GNSO had voted to limit the
purpose of Whois data, thereby causing the GNSO to rethink the meaning
and result of its previous vote.

Any efforts at improving the timing of ICANN's PDP and the GAC's input
into the process would be vital to greater efficiencies for both.
Perhaps one way of accomplishing this would be to align the GAC
according to various governmental interests the way the private sector
constituencies are separated along functional lines. For example, rather
than a single GAC view on an issue which may be difficult to establish,
governmental representatives can provide GAC law enforcement guidance,
GAC consumer protection guidance, GAC communications guidance and
additional input from other expert international bodies, such as the
World Intellectual Property Organization and so forth.

The most recent Board resolution on timing of PDP issues released just
this week will provide further recognition of the timing obstacle and
should be used as a call to action for additional ideas on how to
overcome the obstacle. The ideal goal will be to obtain greater GAC
input through ongoing dialogue, consistent consultation and more
detailed presentation of practical needs as seen in the Marrakesh and
Montreal GAC Whois requirements.

Likewise, ccTLD managers can work more collaboratively within the ICANN
structure if there is full engagement and participation in the policies
set forth by ICANN. However, there should be some measure of sovereignty
and ability to adopt protocols balanced with ICANN policy adoption that
would recognize the unique structure of ccTLD needs. In recognition of
the importance of preserving the security and stability of the DNS,
there should be a solid move, supported by the country code supporting
organization (ccSO) against country code managers and private
organizations that offer alternate roots. A great start to an improved
process to work with ccTLDs is to establish formal agreements with many
more ccTLD managers.

[ICANN, WSIS and Internet Governance]{.underline}

The Internet Governance Forum (IGF) was created at the World Summit on
the Information Society (WSIS) in November 2005 as a vehicle for
continuing discussion of Internet technical and policy issues. The IGF
is expected to occur annually with the first meeting slated for October
2006 in Athens, Greece. Early planning for IGF meetings has highlighted
the different positions in the ongoing debate.

While it is fairly settled that ICANN's role in DNS management is but
one among many topics related to the technical and policy functions that
constitute Internet governance generally, this limited role must be
continually stressed in a post WSIS world. ICANN has made many positive
efforts towards outreach and education on its role and responsibilities
such as training of ccTLD managers and establishing relationships with
international, regional and intergovernmental organizations such as the
UN Economic, Social and Cultural Organization (UNESCO), Organization for
Economic Co-operation and Development (OECD) and the International
Telecommunications Union (ITU).

While some may continue to call for the demise of ICANN in favor of a
governmental oversight body, it is far more useful to focus on the IGF
as the means to address the greater percentage of governance issues that
are indeed outside the scope of ICANN. It is only through such an
approach that the continued global participation and diversity within
ICANN decision-making so critical to its success can be assured. Verizon
sees these engagements as a positive outcome of the WSIS effort and will
be actively engaged in ongoing IGF discussions in order to support
ICANN's narrow mission of coordination of DNS management while leaving
the issues outside its purview to groups outside its organization.