subcommittee will come to water our discussions this morning focuses on the activities of the internet corporation for assigned names and numbers commonly referred to as i can since hundred ninety eight i can has managed the designation and allocation of internet domain names and addresses under various contractual arrangements with the united states department of commerce the original memorandum of understanding that was signed in the vendor of one nine hundred ninety eight has been renewed on several occasions most recently as a joint project agreement which is now scheduled to expire on september thirtieth of this year one matter upon which we will focus this morning is whether department of commerce oversight should be retained through redo all of that agreement or in the alternative whether the time has come for that oversight to be relinquished and for i can to operate after september thirtieth without supervision with respect to the allocation and designation of internet domain names and addresses and associated functions it should be noted that under a separate contract which is not scheduled to expire the department of commerce has conferred upon i can the management of the master files of the domain name system generally known as the root zone files under that non expiring contract i can also manages and coordinates the allocation of ip addresses in considering whether the expiring contract should be renewed or should expire without renewable key questions are whether i can is decision making is sufficiently transparent or whether improvements are needed and whether under its existing structure and practices i can is sufficiently accountable to internet stakeholders and the global community of internet users i'm sure that today's witnesses and members of this panel will have a number of views to express and the members will have questions about those key matters a second focus of today's hearing is on i can's proposal to introduce a new generic top level domains which could involve descriptions of various types of activities locations brands or trademark names it's suggested that the creation of new top level domains would promote competition among registry operators of the t l g s and would enhance consumer choice among the concerns that have been raised about a proliferation of new t oldies is the cost to companies associated with protecting their brands if they have to purchase additional second level domain registrations under the new top level domains not only do they purchase their exact brand names as a common practice under the various tea oldies but they generally also purchase common misspellings of their brand names in order to protect the brand name itself so a buffer area in effect is acquired around that brand name through the second oldies so as the number of top level to the oldies grows the cost to companies to protect their brand names grows exponentially does the added competition and consumer choice that would arise from the new t oldies offset that cost as a matter of public policy a key question for us to consider other questions relate to i can skip past city to manage all of the new top level domains and assure the overall stability and security of the domain name system and whether i can kind of sure that an adequate amount of competition would in fact arise in the bidding process for new t oldies we will welcome our testimony this morning we thank  witnesses for being with us and sharing their views on these very important subjects with regard to the future of internet management and governance and at this time i am pleased to recognize the ranking republican on our sub committee the gentleman from florida mr stearns good morning and thank you mr chairman for more than a decade icon icann has played a vital role in maintaining a stable and reliable internet and i think that's a that's a very high achievement icon can has the critically important responsibility for managing the domain name system and the hierarchy of ip addresses and associated domain names that enable internet users around the globe to communicate with each other icann has succeeded both because it has been a private sector led effort not controlled for example by the united nations or any other government and thanks to the advice guidance and engagement of the united states through a series arrangements including the joint projects agreement the key question before this committee is will the spiration of the j p a in september put stability and security of the internet at risk i have some concerns and want to hear from the panel on this matter the j p a with the department of commerce has played an important role in ensuring that ican is accountable for its decision and conduct its mission in a manner that provides for stakeholders participation the j p a should be extended and the n t i a is in the process of seeking seeking public comment on this issue one major question for this hearing is whether there is a need to renew the j p a when it expires and what the nature of us in gauging it with icann would be in its absence while you can never please all of stakeholders all the time it needs appropriate governance mechanism that will ensure its openness and accountability apart from icann agreement with the department of commerce what other external mechanisms are in place today to simply safeguard that accountability if there are none or if there are insufficient controls perhaps i can ongoing relationship with the department of commerce should continue ultimately though through the global internet community will need to develop an appropriate governance structure to ensure its accountability one of its functions is to create generic top level domains or g t l d s which is a unit of letters or words beyond the rightmost dot such as dot com or dot org dot net over the time the number of g g l d s has expanded to twenty one last june i can propose to further expand the number of g t l d s under the proposal which was put out for public comment and must be finalized and approved by the board of directors new g t l d's could include the names of organizations companies locations or additional generic words however before i can expand this list it should address concerns about the proposed expansion provide further opportunity for comments by all the stakeholders in a letter to icann last december n t i a raised a number of questions regarding the way in which it was proposed to administer the rollout of these new g t l d s specifically a wondered whether it is prepared to implement measures to promote competition on registry prices terms and conditions and sure the application process for respect with respect to national international laws including intellectual property rights in force contract compliance and design a rational fee structure n t i a recommended that icahn can really resolve a number of these issues be before expanding the these my colleagues trade holders are concerned that without sufficient protection for intellectual property rights they will have to engage in costly defensive registration of domains that are identical or similar to their trademarks across g t others from registering them or pursue costly and time consuming administrative or legal processes against cyber squatters hope our witnesses will address these legitimate concerns also another and find final point that since icahn is considered a not for profit organization does a transparent mechanism exist to address any x excess revenues according to data from the technology policy institute its revenues have increased from five million in two thousand to over sixty million in two thousand and nine while expenses have increased from under three million in two thousand to over fifty four million in two thousand the us it will have a surplus of close to seven million from f y two thousand i can's a largest expenses personnel accounting for close to twenty million of the fifty four million according to its annual report employs one hundred staff members although salary information administrative costs were not available i hope it witnesses today will address these issues on finance thank you mr chairman for holding this hearing thank you very much mr stearns the gentleman from pennsylvania mr doyle is recognized for two minutes thank you m chairman i want to thank you for holding this important hearing i own a few to mainz and i've benefited from the competition among domains and who i can buy them from i believe that because the internet is truly global significant input from around the world is important to its governance which is why it pains me to say that i hope that the department of commerce continues the j p a with icann and not relinquish control at this time i'm afraid i can seems better at furthering its own interests than those of the millions of internet users that it's supposed to look out for my constituents are still receiving misleading solicitations that look like invoices from a registrar despite a court injunction and despite f t c intervention why does i can't allow them to continue to sell donate domain names this is domain slamming and it continues today when i can attempted to curb the abuse of domain tasting the five day window when purchased the mains were able to be returned and refunded their solution was to make their fee non refundable well that her help curb the abuse but the money didn't go for consumer protection or co ordination towards i p v six it went to the general budget executive compensation and questioning i can't four point six million dollar spark market loss last year if they can afford to lose that much money in the market why are they collecting the fees from us in the first place i'm glad to see witness is talking about the g t l d issue today which i have grave reservations i fear that the primary beneficiary is not the consumer who might suffer from increased confusion or the businesses who would need to register new to the manes to defend their trademark across a near infinite number of top level domains on the other hand it might act as a needed market based solution to ensure that rates and fees for dot com are kept low in this economic downturn small domain users like me and companies that need and use thousands of domain names to run their businesses and the tens of millions of internet users who place their trust in the internet today need assurance that someone is looking out for them i don't see it from i can thank you mr chairman thank you very much mr doyle the gentleman from illinois mr shimkus is recognized for two minutes recognized for two minutes thank you to the chairman and ranking member for this hearing and for giving me yet another list of new acronyms to add to others that i'm still trying to have been committed to memory but i'm beginning to understand the concept and that's more important we had to review the progress i can is made and whether it's ready for the joint project agreement expire on nine thirty nine and for the management of the d m s to transfer from the m   u with the us government to the global community whether it's fully able to meet its mandates and the goals of the bill of the competition bottom up coordination security and broader presentation as well as transparency there seem to be many concerns that it's not ready and we need to determine if this is just the fear of the risk that any change would bring whether there are legitimate concerns that still need to be addressed some panelists will suggest i'm particularly interested in the bottom up coordination of course security as well as understanding whether the project that plans icann has are not only realistic but responsible and whether or not they jeopardized ability and security i want to applaud our chair and ranking member once again for the excellent oversight and yet another pressing issue and look forward to the testimony that will be presented thank you everyone for being here and sharing your views with us on this issue thank you ms kristiansen the gentle lady from tennessee ms blackburn is recognized for two chairman and prescience you holding this hearing on what i believe could actually be a matter of national security i cancer's a very important role in being responsible for managing the domain name system which as you know is the hierarchy of ip addresses and associated domain names that enable internet users around the globe to communicate with each other this interconnectedness that allows us to communicate with one another is the reason that i should renewed the joint project agreement or sign a similar agreement with the current agreement and when the current agreement expires later this year the goals of the j p a should continue to work towards increasing i can transparency accountability and openness while developing mechanisms and procedures to transition the don't domain name system functions to the private sector in a matter that promote stability the competition bottom up coordination and representation should a rogue nation get the chance to control the d n a is definite possibility that they could use it to harm the u s or to dismantle and interfere with our ability to communicate globally through the internet i would hope that my colleagues would join me in saying that quite simply put the united states government created the internet and it needs to be in charge as we could very well be vital to our nation's security thank you mr assigned names and numbers i appreciate the witnesses willingness to be here today to discuss these important business issues and consumer issues and how we continue to modernize the internet back the rest extended and in a timely fashion and i look forward to being a partner in that i believe it will be certainly bipartisan one is well since we have ms alexander here we have a pretty big day coming up on a little bit more than a week away here and you may expect to have some questions on the transition to digital just to see where we are and i know a lot of americans are concerned about that it don't have quite the publicity we had back in february but we all hope that  thank you mr chairman thank you for calling today's hearing i applaud your leadership in addressing this important issue i'd also like to thank our panel as for being with us here this morning as we all know i can was created in one nine hundred ninety eight to govern the allocation designation of internet domain names and addresses although certain responsibilities for the domain name system were transferred from the department commerce to icann department commerce continues to exercise limited oversight of icann through the joint project agreement under this agreement the department of commerce affirmed us policy goals of preserving the security and stability of the internet domain name system this agreement is now set to expire on september thirtieth of this year while i understand some of the reasons that i can does not want to expand the j p agreement such as how the us role is viewed abroad now may not be the time to say that i can should be on its own just last year n g i a initiated a review of the agreement and found that although i can has made progress in key areas concerning security and stability of the domain system important work still remains we must ensure the internet domain system is transparent accountable and has a strong governance structure moving forward i urge administration to carefully consider its agreement and partnership with icann i thank you mr chairman for for two minutes thank you all reserve thank you mister thank you mr inslee will have two minutes of time added to your questioning period the gentleman from california mr mcnerney is recognized for two minutes thank you mr chairman  this is an interesting and important hearing so i'm looking forward to it it's important to work together to ensure that we have a fair and transparent system maintaining and improving the internet in order to avoid potential difficulties it's essential that we keep the internet acceptable and easily navigated to all and i look forward to the testimony this morning thank you thank you mr mcnerney the gentle lady from california it was created eleven years ago it has been a target for criticism among the global internet community i'll have some questions today about the operation and where  you are right now but i i do think that progress has been made and that on the other hand that many of the concerns i think have been appropriate and i can continue to develop  itself and to do the thorough oversight over the technical and administrative functions under its jurisdiction and that's a that's a plus i think that you have been successful in introducing competition to both the retail and the wholesale demain name business added a whole new host of internet domains and stepped in to ensure that the country code top level domains are properly  designated i think the most important and have heavily trafficked domains dot com and dot net are operated by various sign a company headquartered my district in mountain view california and i know that mr silva is here today and i welcome him there aside has maintained a one hundred percent up time for dot com it has never failed that something in and of itself so to be congratulated for that it's important to remember that i was founded in response to growing concerns about u s domination of the internet and today i think many countries believe the u s continues to exert undo influence over icon and the administrative functions of the internet we can talk about that but i understand the concerns about this whole issue of excessive u s control over internet governance but the alternative right now i think is clearly unacceptable i can't doesn't have the independent authority in the governance structure to prevent other governments from using power over the d m s to interfere with innovation competition and freedom of expression so i look forward to  the discussion and the questions that i will ask as well as my colleagues to welcome all of you here and i thank the chairman for having you here today because i think it's important that you are back thank you very much m gentle lady from tennessee ms blackburn is recognized for two minutes thank you mr chairman i do thank you for the hearing today and for our witnesses welcome we are delighted that you are here with us as we do have multiple hearings going on this morning so we are going to be jumping up and down in the in and out but please excuse us for for that few international organizations quietly wield the power in the global community that i can currently will while most americans have probably never heard of i can it is this california based organization which is a nonprofit and that is responsible for the nan achievement and the assignment of virtually every address and domain name worldwide wow that is the growing side of things it is an enormous responsibility to be overseen by a non governmental organization that reason alone necessitates this committee's time and attention to provide proper oversight not withstanding the fact that our government's only functional tool for overseeing icann activity stems from the j p a and that does expire on september thirtieth which brings us to today and now there is a letter from chairman thr the january twenty fifth letter in which he states that i can does not believe it should answer directly to the u s government and says the memorandum of understanding it signed in november of zero eight is no longer necessary and i'm quoting from that letter now many disagree and believe that additional oversight not less is necessary to provide a check and balance regarding decisions made by an international organization comprised of an elected officials the internet and this is what is so interesting to me and i think it's really exciting when you look at commerce in the growth of especially small business commerce the internet consist of one hundred seventy four million web sites five hundred seventy million computers and more than one and a half billion users coordination of this intricate web necessitates transparent decision making technical expertise and even handed governance only u s sponsored oversight for a body tasked with s government to remain integral integral a link to the organization thereby securing the historic role american role in the development of commercial governance of the internet architecture so we're looking forward to hearing from you and wish to reiterate my insistence that i can remains far from a model of affective and sustainable self governance and i hope they're listening to that comment legitimate concerns about the lack of transparency and accountability and icons functioning continue to be raised by stakeholders in internet community particularly in a time of particular increased cyber attacks on the us government and domestic businesses i over can may be given the recent observable effects of deregulation and adequate oversight on the economy i believe that here we have an analogy the j p a between n t i a and i choice clearly inadequate moreover i have suspicions that expanding the number of top level domains could in fact give rise to increased instances of fraud perpetrated on conservers and the practice of and on healthy and dangerous situation finally i continue to maintain that icons contract was very sign for the register of the quote dot com close quote domain is characterized by a deplorable lack of transparency if this is not going to be a government undertaking it is not going to be adequately regulated it has to be transparent which it clearly is not in brief i have grave misgivings about the wisdom of extending this contract after two expires in two thousand and twelve and i will expect this hearing to produce some answers as to whether or not that should be extended and whether or not it safeguards to assure that it is properly it extended with proper transparency or in the alternative more regulation thank you for your courtesy mr chairman i look forward to a constructive discussion with our witnesses and answer to the questions which this committee has to ask thank you thank you very much mr dingell the gentleman from arizona mr shafiq is recognized for two minutes thank you mr chairman and thank you for holding this hearing today i want to welcome all of our witnesses but i particularly want to welcome to washington the go daddy group and its representative christine jones whom i've known and worked with for many years to go to any group plays a important role in the economy of arizona they are a key component of our business community and they have i think great insight and perspective in this particular topic about which we are discussing today i welcome mr jones and look forward to her testimony along with that of the other witnesses i can has played a vital role in the development of the internet and has carried a huge burden but has been adequately expressed here and i will be brief in my remarks there are certainly problems and is parent to a great deal of work needs to be done with the looming expiration of the joint project agreement it is clear that a plan must be put in place to ensure the security stability and viability of the internet remains intact and i applaud the work of i can to date but i believe there are areas indeed significant areas for improvement mr chairman i thank you for this hearing i believe it's important that we learn more about how i can fax all of us both the key players in the internet world but all americans all people around the world who use the internet and i'm interested in hearing how how it affects the organizations that are represented here of relinquish my time for opening statement thank you very much mr winter we now turn to our panel of witnesses and we welcome each of them to the subcommittee this morning i'll just say a brief word of introduction with respect to each ms fiona alexander is associate administrator in the office of international affairs at the national telecommunications and information administration and that position she is the primary layers on between the department and i can block dr paul to me is president and chief executive officer of can mr kennett silva is senior vice president and chief technology officer for vera signed the registry for the dot com top level domain miss christine jones is the general counsel and corporate secretary for go daddy ms sarah deutsch is vice president and associate general counsel for  a rise in communications and dr thomas leonard is president and senior fellow of the technology policy institute we welcome each of our witnesses and without objection your prepared written statement will be made a part of the record ranking member stern and members of the committee thank you for this opportunity to testify on behalf of ms alexander if you could pull that microphone slightly closer we can assure your voters better members of the subcommittee thank you for this opportunity to testify on behalf of the national telecommunications and information ministration on issues related to that in its domain name and addressing system internet has become a significant and important medium for conducting research communicating with others and conducting business given the internet's importance and of the fact these facets of the life and the country's general economic wellbeing it is essential that the internet and its underlying infrastructure remain stable and secure consequently the department of commerce takes very seriously its responsibilities with respect to internet d n a s including the joint project remember to the department and i can i can was created out of an effort to bring more coordination same ability to the management of the internet d n a s as an it grew into a large scale policy on the privatization of the internet d n a s and concluded that concluded that the core functions should popularly perform to private sector management i can list for my private sector interest for this purpose and the fall of one thousand nine hundred eighty the department of commerce entered into memorandum of understanding or ammo you with i can tell you did not simply turn over management of the us to icann rather the purpose of this agreement was to design develop and test mechanisms and methods and procedures to ensure the private sector has the capability and resources to assume important responsibilities related to technical coordination and management the d n a s this agreement does not give the department of commerce the ability to exercise oversight in the traditional context of regulation and we play no role in the internal governance or day to day extending the current and the you for three more years until september thirtieth of this year anticipation of the september thirtieth expiration of the j p a and you release the notice of inquiry on april twenty fourth seeking comments regarding the progress of the transition as well as a model of private sector leadership and bottom up policy development which i can represents the comment process for the death of the stock it closes on monday june eighth the department's commitment to preserving the security and stability of internet d m s and the public record developed as a result of this comment process will inform any decision about the j p s future is important to note however that regardless of whether the g p s terminated modified or extended the department through n p a will continue to be an active participant and i can name the united states government and i can's governmental advisory committee and by following following comments as appropriate and i can various public consultation processes in addition the department's relationship with icann will continue as i can currently performs the internet assign numbers authority functions under contract to the department in addition to important institutional confidence issues associated with the j p a the department is actively engaged in discussions with stakeholders related to the introduction of new generic top level domain names or g t l d s the department of knowledge of the introduction of new g t o b s has been a longstanding p a relationship and the subject of ongoing public consultation process that icann the department in coordination with an interagency group has in fact filed public comments in this consultation asking if the threshold question of whether the potential consumer benefits outweigh the potential costs as a result of this exercise and has had been adequately addressed in the chairman and recommending further economic study of the issue is called for by the icann board the department also identified a series of initial items that needed to be resolved prior to moving forward including expanding the marketplace before effective and meaningful tools are in place to protect consumers and brand owners as well as the need to preserve the security and stability of the d m s the department believes is critical to keep in mind the core in simple as articulated in the very first demo you of the zone level this action is an important step toward protecting the integrity of the us data and mitigating attacks such as cash policing and other data modification threats given the importance of the internet as a global medium to support economic growth  and stability of the internet d s will guide and decisions at the department of commerce make with respect to its future relationship with like him and he looks forward to working with you members of the committee and the congress on this important issue as a september thirtieth two thousand and nine j keeps driving us to improve and will never allow us to stop striving for the best that we can be we're not seeking less accountability to this multi stakeholder community we want more the question at hand is how to ensure that between the joint project agreement and i am a contract is something we should explore what we've been working together on for eleven years but advice from that our states government is a model all about private sector bottom up partnership with guidance from government this is the time to have confidence to state this model works any new instrument no matter how temporary implicitly says that we the united states government and i can don't have the confidence in that model that will cause the international community to continue to look for alternatives indeed with the media speculation as to the possibility of renewal they already are if the u s does not have the confidence in a private sector late model we should not expect other governments to have confidence in the model if we continue to question the private sector led community's ability to lead itself through the i can model we should expect ongoing challenges and alternatives from others a hypothetical temporary agreement which is just th basic principles of open to debate across the global technical registry and governments community the question i get posed regularly is does the united states government agree with and have confidence in the private sector led model if the answer is yes remained based the united states remain a not for profit remain an independent organization as has been foremost a living yes remain private sector multi stakeholder did with international support remain committed to into continuous improvement reinforcing that they are i can ask currently deciding how to leave that out official limit there are crucial concerns about trademark a little property protections once the expansion of g t o d's begins it's as decided we've heard those concerns and we are acting to fix them so i can is invited those who voiced concern to give us solutions before we open up the application process we have already really already received their recommendations we're focusing on other concerns as well to do with malicious behavior security and demand and i can assure members of the committee that we will not move forward with any progress and implementation and who we have addressed these issues we will get it right we will not rush the answer we've often asked why are we expanding the top level domain space and i can it's made all the stronger for that thank you for inviting me and i look happy to take any questions thank you very much dr to me mr silver good morning jared boucher ranking member stearns and other distinguished members of the subcommittee my name is ken cell that i should serve as the chief technology officer for verizon thank you for the opportunity to testify today veri sign operates a digital infrastructure that enables and protects billions of interactions every day across the world's voice and data networks companies headquartered in mountain view california we have additional offices in virginia delaware massachusetts because our responsibility is global we're also in thirty different countries at a time of economic challenges and i'm certainly would be easy to focus on the m pressing near term issues that affect our nation but it is critical that we also focus on the internet because the infrastructure is not only integral to the economic recovery of our country but our national security as well as the operator of the dot com a dot net domain registries as well as a steward for two of the thirteen root servers of service a nerve center of the internet era sign understands what's at stake over the last ten years veri sign is operated its infrastructure with one hundred percent uptime and other words the systems that ensure the internet dysfunctional have never gone down but the internet is not a static system it's a dynamic network of networks that continues to change it's growing dramatically overseas raising questions about its future governance and the role of the nations who share who do not share our values about freedom of expression content and commerce is increasingly relied upon by citizens businesses organizations and governments raising questions about whether content can can continue to scale to meet the needs of over two billion users in the future it is a target of attacks that expand exponentially in volume scope and sophistication raising questions about whether enough is being done to protect those critical networks that serve as a lifeline for commerce and communications recent incidents in china india pakistan and a stony underscore that import that importance i would like to address three challenges in my testimony internet governance scaling of the internet securing the internet with respect to internet governance when it became clear that the internet would have a profound impact on every facet of society the clinton administration took the lead in establishing icann to serve as a technical coordinating body that apartment of commerce was given the task of helping guide icann and provide a governmental backstop we must consider how to ensure that the internet and the community that guides it are insulated as much as possible from domestic political pressures or the goals of those in the world who want to restrict what has made the internet so dynamic namely its innovative forcing capacity to create businesses and jobs with that we look forward to the outcome of the discussions between icann that part of the commerce over the j p particularly as it relates to its impact on the security and stability of the internet and it's responsible stewardship from our point of view while i can has continued to make progress in certain areas the basic circumstances giving rise to widespread community concerns over an expiration of the j p a remain largely an answer to the overall goal in this process must be the strengthening of the security and stability of the internet with respect to scaling the internet because dot com and dot net never go down users and even some companies who rely on it for their business model take it for granted but very sign other private sector players and government cannot we must continually invest in work to improve its capacity to keep up with the demand versailles and systems that manage dot com and dot net traffic can now handle more than ten thousand times the query volume that they could handle in two thousand and to put that in perspective that increase is about six hundred times greater than moore's law the theory that computing power doubles every eighteen months veri sign's systems handle more than fifty billion queries a day and that's a sixty seven percent increase in just two years our investments including creasing capacity to support up to four trillion queries per day we all know that the internet that we use today is far different than it was ten years ago and we know that ten years from now it'll be dramatically different than it is today that's why there are scientists continually investing and looking into strengthening that infrastructure that we all rely upon with respect to securing the internet we are pleased that president obama cybersecurity czar will sit at the national economic council and the national security council is that underscores the threat that cyber security attacks pose to our nation as c t o i've had to identify and manage attacks every day cyber criminals cleverly manipulate the internet's advances and the increased ban with a computing power available to them literally gives hackers more ammunition to utilize against the infrastructure there are many issues that we must address as an internet community we must continue to invest in deploying infrastructure upgrades such as d s and ip version six in a way that is least disruptive to internet users developers businesses and governments we must continue to work together to invest in developing the infrastructure so that it can continue its role as a platform for commerce and communications i know that veri sign i can in the rest of the internet community work diligently to ensure that the infrastructure remains reliable and secure i thank you very much for your time  sullivan jones ranking member stearns and members of the committee i'm christine jones from go daddy at the outset like to thank you chairman boucher for all of your work in the committee's work and for holding this hearing we're happy to be here with i can is there a sign i can's largest registrar benefactor in versailles and largest customers are always happy to participate with them as the world's largest registrar go daddy work to daily with icann in its role as the coordinating body for the internet we believe it is essential for world commerce as well as the security and the stability of the internet that the relationship between the n t i a and i can be continued along with appropriate improvements in accountability transparency and democracy and governing principles continuing to j p between icann and the n t i a will not only provide the framework for ensuring a continued focus on internet security and stability issues but will prove prevent icann from vulnerability to capture by another government international organization or business that does not have an open secure and stable internet as its top priority on the renewal of the j p the d s white paper first published back in  articulated that principles of accountability competition private bottom up coordination and representation are necessary for guiding the transition to a private sector management of internet d n a s we believe those principles even eleven years later remain relevant i can has made great progress toward achieving some but not all of these goals specifically icann has not yet achieved competition nor the private bond of bottom up coordination and of internet d m s management to the private sector through icann and of course we would be happy to be involved in the process of determining appropriate revisions to the j p a if if such assistance would be helpful i want to talk about the extension of the g p a that you mention mr chairman for a minute i want to reiterate we are in favor of renewal of the j p a between i can and then for a multitude of reasons not the least of which are a failure to accomplish its mission and abide by its stated core values we believe i can will will benefit from continued relationship but we're aware that both very science ex parte letter and the recent letter from senators nelson and snowe mentioned considering a one year extension of the current j p a if that arrangement would provide time to consider nude or additional terms of a renewed then we would support such an extension as well s we're not opposed go daddy is not opposed to the concept of introducing new g t l d s in fact as mr to me said the community has been calling for that for quite some time but we have taken exception to the methodology by which they've been introduced loud voices from both the intellectual property community and the registrant community have been virtually ignored in this process and i can't can't seem to establish a guideline by which the new detail these will be will be purchases and in the interest of time i'm going to be further to the expert on this panel to talk about these but i'd love to get back to this if anybody has questions on it i want to focus on security and stability because like all of us at this table and in this room go daddy believes that security has to be already of the internet is vital indeed we devote a considerable amount of time and resources to working with law enforcement on preserving the integrity and safety of the internet by quickly closing down websites and domain names engaged in illegal activities we work with law enforcement agencies at all levels and routinely insist on a wide variety of criminal and civil investigations and like our friends at various sign we respond to and fight cyber attacks on our hosting email and domain name systems every single day i personally and this company in general have made it a high priority to use our position as the world's largest registrar to make the internet a better and safer place and we could not agree more with president obama's decision to make cybersecurity an internet privacy issue is a top priority in his administration as he said as the president said on friday america's economic prosperity in the twenty first century will be will depend on cyber security this is also a matter of public safety and national security it's now clear the cyber threat is one of the most serious economic and national security challenges we face as a nation we wholeheartedly agree so thank you again mr chairman for holding this hearing we are in support again of the extension of the j p a i would be happy to answer any questions for you or other members of the panel thank you thank you very much ms jones ms daum will be happy to hear from you members of the subcommittee thanks for the opportunity to participate in this important hearing addressing issues related to i can arise and support can we wish to see it succeed as an independent and accountable model of private sector leadership can must be given the time and support it needs to make that move transition my focus today is on i can's plans to expand the existing domain name space camp plans to accept as many as five hundred initial applications for new generic top  i will refer to g t o these simply as names in the future there may be unlimited number of new names future names could include anything one could imagine from god thanks to dod health to dot congress i can financially benefit from this expansion it will bring in more than ninety million dollars from the initial round up locations alone it will also collect ongoing fees of seventy five thousand dollars per applicant for manual renewals of each new name and it collects a twenty five cent transaction fee from every demain name registered as a result however businesses and consumers will face higher costs this isn't very helpful in the current economic climate hundreds of diverse parties including consumer groups business organizations trademark owners and internet security experts have raised concerns icann has acknowledged the many concerns but has not adequately addressed them nevertheless it plans to begin accepting applications for the new t o the starting in early two thousand and ten bryson believes there are four fundamental concerns that icann needs to address fully before commencing any introduction of new t l d's first icann must complete an impartial and comprehensive economic study of the domain a marketplace that study must explore whether there isn't even a need for so many new names in the first place i can board supported that study in two thousand and seven yet it was never undertaken second i can must ensure th consumers are adequately protected from online confusion and fraud if as predicted there are more than one thousand new names in the next three years consumers will be the victims of more online confusion more fraud and more malicious activity consumers already have difficulty today finding the legitimate web sites they want to reach so consumers must be confident when they go to verizon and dot phone for example that they've reached an authorized horizon web site versus one set up by a cybersquatter or an international  scam third i can see rapid expansion may be at odds with this responsibility to increase the long term safety and stability of the domain name system icann may not have the ability to manage such a rapid expansion fo trademark and brand protection remain a critical concern trademark protection of course is directly tied can to consumer protection trademarks help consumers reach the websites and brands they know and trust when users go online however they can easily be confused or diverted and unfortunately brands like for eyes and household brands have been targets for cyber squatters cyber squatters have registered tens of thousands of variations of our trademarks over the past few years and here's a little you need to know that many of these cyber squatters are icann accredited registrars they've set up large scale operations earning millions of dollars a year from their illegal activities to protect our customers we've brought many high profile lawsuits against ican registrars in recent years i can't registrars contractually agree to comply with all laws yet we have observed little if any enforcement by icann against registrars who are found to violate anti cybersquatting laws we are very pleased that i can acknowledge the concerns raised by trademark owners by convening a small group of experts to offer possible solutions to address cybersquatting and in expanding g t o these space we urge icann to adopt all these proposals as a package and continue to work with trademark owners on improving them verizon has specific ideas for such improvements as discussed in our written statement in some any new t l d rollout must be delayed until all threshold concerns are fully addressed i can should proceed slowly and cautiously in expanding the domain name space to protect the internet and its users finally one note on the j p a numerous thoughtful suggestions have been made to improve i ca process while still preserving the model of private sector leadership it is important to allow sufficient time to consider and implement these suggestions as well we commend the subcommittee for addressing this important subject thanks again for the opportunity to testify members of the subcommittee my name is thomas levet i'm president and senior fellow at the technology policy institute is a nonpartisan nonprofit think tank that focuses on the economics of innovation technical change and related regulation and mission of icann in the subcommittees examination of these issues is very important one of those issues is i can's lack of accountability which is a recurring issue which is an issue that we recently accountability is not really is not an indictment of icann staff or leadership it's simply a function of i can's institutional design it's non corporate corp status combined with the way it's funded in government and funders the registries and the registrars can stop funding out i can without going out of business selves to study ways in which i can could become more accountable we examined the structures of a number of organizations that perform similar coordination in standard setting functions we learned a couple of things first none of the organizations we considered operates with the independence that i can enjoy even under the current nominal oversight by the department of commerce in addition virtually all of these other organizations are governed by their direct users thereby building accountability into their structures we believe this would be a good model for i can as well the registries and the registrar users we recognize that this proposal may be viewed as radical but it is already served to stimulate a discussion like him governance issues that otherwise might not have taken place our study also addressed i can's mission i can scope should be clearly delineated it should you closely the technical functions in administering the domain name system i can also we believe should have a clear mission of encouraging competition and a minimal as a regulator this means allowing relatively free entry into the market for june for g t elders in order to bring the benefits of competition to consumers and as we've heard icann is moving in that direction  currently but as part of this in order for the for and really for the free entry of g l detail these to work well protections for incumbent domain name holders must be strengthened so that they are not subject to nuisance or ransom demands from new registrants there needs to be a thorough examination of how this should be done and who should do it as was alluded to i can and is doing that now but i can is not particularly well equipped to be a regulator and probably not  particularly well equipped to be an adjudicator of intellectual property disputes issues as important and complex as these nervous thorough evaluation which probably cannot be completed by september therefore we believe that the agreement with the department of commerce should be extended in some form beyond its current expiration date while reforms are being considered and hopefully becoming established reforming icann in a way that makes it truly accountable and clearly defines its scope of operations will ultimately make it feasible to end the j p s and more importantly ensure vibrant innovative and competitive internet for the future thank you very much thank you very much dr leonard thanks to all of the witnesses for your informative comments this morning dr to me we're pleased to have you with us today and thank you for taking the time to travel to washington for purposes of this hearing i know that many of the members and their questions are going to focus on the expiration of the joint project agreement which occurs this september so i'm going to take my question time this morning to focus on some other matters and the first thing i would like to ask you to do is comment on the concerns that were raised by ms deutsch when she talked about the tremendous cybersquatting that is occurring and mentioned that some of the companies in gauged in cybersquatting are actually accredited registrars who have been accredited by you and i would like to get your response to the concerns that she has raised and an indication of what you're doing to police that practice and particularly how you could propose to engage in effective oversight and policing not only with regard to the existing top level domains but with the expanded responsibilities that would come for oversight and policing if you poll it for ra the number of c l deeds because that inevitably is going to mean that companies have to acquire more second level domains and that and courage cost on their part of the opportunity for cybersquatting simply increases and so according to ms deutsch today cybersquatting is not effectively being policed had and that leads to an even height the level of concern about how you would oversee and police of the number of fields these increases so with that general question we'd welcome your answer organization and other entities offer that arbitration and i think so far there's been some thirty six thousand decisions made under that regime we have we have incorporated to help address those this is a person at the second level there's a similar issue applies then at t level domains and we have put proposed that there'd be a similar arbitration making is that people could object to an on going to first application was made so that you could say no i've got a kind on that name or that's related to me and so there's an property contention we actually have that if you like with the deceit of independent arbitrators for them to give us that advice would you like to respond to those comments and i mean you've heard about doctor to me what address the issue of cyber g and he's defined current practice to what extent is current registrar registrars who have been found by federal courts or by this same world intellectual property organization sometimes on hundreds of occasions have been found to at in bad faith so they have taken no action against them well let me stop you at that  have you ever proceeded against any of the sort of registrars because of their activities prices we have publicly moved on another breach if i give you just this morning example and an easy example you'd understand often we find registrars who might be at the edge of such behavior for instance don't pay the fees and sometimes it's eas as well if you would supplied to a letter that describes exactly what you're doing in this area and perhaps without naming particular registrars that you may have proceeded against give us at least a quantitative sense of the extent to which you have addressed this concern actual numbers of proceedings perhaps numbers of registrars that have been decertified where cybersquatting in fact has been alleged that would be helpful my time has expired we may depending on how long this first round takes of a second round of questions i do have some additional ones but at this time i want to recognize the gentleman dollars you're a not for profit organization why don't you take less profit and these fees bring these fees down for the registrars and for consumers and operators and not for profit you're operating as a for profit corporation and your profits are going to balloon based upon these t l days so why aren't you folding i mean you're not building automobiles here you're trying to make it cheaper for people why aren't d c s coming down  dollar process is a contribution to a reserve fund and what do you know the reserve fund if you're not for profit we have taken advice from if you look at most non profits that they have all have some reserve fund how big is your reserve fund going to wear out how bigoted today it's about thirty four million dollars to get thirty four million dollars and you're adding another seven to bring it up to forty one and i am is to bring it to one year's operating expenses and then stop the price is a building that is a fund misted to me when i look at your annual report it looks like your salary is they don't you don't even take a salary out of this you arrange for argo pacific to be a consultant so that i can as our go pacific your salary then you collect for then why do you do that why don't you collect money like the c f o and everyone else in icon i can get directly from i can but you seem to get it from a consultant was that contract with a company that was a recommendation then that's right and do you live in marina del rey as i live in i live my home is in sydney australia so do you ever show up and i can cannes we have offices and i mean do you work there forty hours a week i would more than forty hours a week in various like in australia i mean my would be in this trade you list and one week out of every four when you do the exchange rate what is the total saori including the health retirement saving welfare benefits that you get when you do the exchange with australia what is in australian dollars write it all as it's about eight hundred thousand dollars eight hundred thousand is what you get well my concern is is and i don't have a lot of time here but it seems to me that if you're operating a not for profit and you're paying a c e o like you and a subcontract out of a corporation that your job is to bring the cost down for the consumers in the registrar's and ideas in light of the fact that mr boucher talked about the four things that the storage talked about i don't see you attacking these you should take that seven million and make sure the cyber squatters are gone and she gives a list there looks like about ten thousand cyber squa to take some of this surplus that you're getting and do the job i think your job should be not just developing a surplus but actually implementing making it cheaper for consumers and actually doing your mission which is some of these four things that  arises talked about any dr leonard anything you would suggest more i mean this this idea that he's developing this huge surplus in this not for profit organization i mean that just doesn't seem appropriate considering weiss talked about seventy five thousand dollars for for a fee and i think it's related to the general issue of accountability and the fact that i can is largely accountable to itself so i could make a surplus four times  one yes thank you mr chairman thank you very much mr stearns the gentleman from michigan mr dingell is recognized for five minutes as chairman thank you this question of the panel yes or no answer  areas included long term stability accountability responsible responsiveness continued private sector leadership stakeholder participation increase contract for buyouts and enhance competition  know i think it has little impact as permitted under contract with very shy and raises prices of the charge for the dot com registry in two thousand and seven and two thousand and eight for what in fortifying that infrastructure globally not just adding dots on a map if you will but also increasing the capacity to each of those locations when you look at some recent events such as what happened to estonia what's happened recently china specifically those were part of those were d n a s attacks which were designed specifically to take the entire country's economic system down we want to make sure that that doesn't happen to dot com  no contract some public record so i don't agree with i don't agree with that statement we agree that the manner in which the contract was negotiated la inquiries in the record remain open so that both that letter and their response can be included in the record without objection and other members i'm sure are going to want to propound questions to you as well so as you receive those inquiries making a prompt reply would be it would be very helpful to send without objection the record shall remain open until replies are received the gentleman from arizona mr shadegg is recognized for five minutes thank you mr chairman ms jones i'd like to begin with you i believe you testified that go daddy would like i can't operate in a more transparent and accountable manner how how would you like to see that happen and do you believe the a can be strengthened to achieve that goal i'll answer your second question first yes there are a multitude of ways in which we think accountability can be improved i'll give you an example i can hold three open board meetings a year the rest of their meetings of the board are done in private we've repeatedly asked for those meetings to produce transcripts it's a very simple black and white request we can't get it a couple of days after they happen we can get an agenda and a couple of days after that we can get minutes but we'd actually like to know what's going on in those meetings that would be an example the way they negotiate contracts with registries we'd love to know what's going on in those meetings let's make them accountable for the decisions they make particularly as they relate to the questions that mr stern's asked about prices what they're doing with their money line items in their budget i mean we make requests for information we basically get stonewalled i could go on and on but there are some basic fundamental things that we'd like to see all of that can be and will be if we have any input written into the j p a and its new version because i can set the standards by which you operate when you issue a name generally we're accredited by i can and then we operate with a contract with for example there are sign on a dot com and i can i think it's mission is to be a coordinating body we don't expect them to issue rules for example about what we would do with internet content or domain name dispute because we don't decide the outcome of those disputes but we operate at their luxury so in as much as there you take in sense that mid term review well there's no they're not many of these we had in place but we've had the most space and transparency we've  steps again i'm actually quite comprehensive subbie happy to respond to those more in detail with even writing sharon my time's expired but i would like to hear i would like to allow the other panelist to comment on the steps that icann has taken since the mid term review so again we commend the progress that they've made we don't disagree that he's sitting on top of the numerous page document that describes their accountability functions that they published minutes detailed minutes from their board meetings i think i said that in my answer before but we still think and we so from the current version of the j p a that there are goals articulated in that document that they have yet to fulfill has progress been made in the last eighteen months yes is there more room for progress to be made in the next eighteen months absolutely and that's why we feel like an extension today and a renewed version in the future will help define accountability you can be very transparent totally on accountable and at one point the way we are viewed in the work we've done is basically accountability to some external party which you can be and i can is allowed to collect fees but is limited to recovering only the actual cost then to believe that the fees being charged by i can are consistent with the department's policy to allow project partners the cover on the actual project cost and are you concerned that the potential revenue to be generated by the proposal which may exceed one hundred million dollars do you believe that those be should be limited to the actual cost of managing the new g t ank you very much congressman for the question there are a variety of different fees that i can i think it's very difficult to in the panel discussion the recycling about different fees but to the extent the question you're raising yes the department still believes that i can as a nonprofit should be charging fees that are consistent with what the costs are and their letter that we filed last year in the detail the public consultation process we actually raised this issue with the actual better explanation of the fee structure in disposition of excess revenues is there  review mechanism to review i can board action has it ever been used thank you congressman and you're quite right we actually have a series of existing mechanisms for  multiple series of accountabilities on the particular one about about appeals we have a need woodsmen we have a broader view process we have an independent review panel which is an independent arbitration making mission that is currently being utilized by one particular state federal laws concerning contract or i think every organization that's organized in any state is accountable to its state's attorney general and i don't think that's the point we're making here and by the way if i could respond to your earlier point about the independent board sure we could throw in another acronym but i'll try to try to forego the ok for here for for says if the i can board appoints the members of the review board it is by definition not independent and therefore not accountable all of the review all of the review not mechanisms we have in place right now the ombudsman really review they're all i can reviewing i can what we're saying is we want them to be accountable to the community if we're going to have a community based review board that's an actual international organization that can say i can board made a decision and we're going to take a look at it and determine if it was appropriate or not that's accountability right we shouldn't have to have somebody go to the attorney general and make a complaint they shouldn't have to go to the court and file a lawsuit why do we have to go there why do we have to have a rise in spending millions upon millions of dollars in litigation every year it's not necessary that board should be independent it should be appointed by ahead i just wonder if you can give us an example of when it's been used and i know i'm not allowed to ask questions you know well i think it at the end of one of my questions asked of the the in the pendant review board that already exists has ever been states critical infrastructure it seems to me that many of our cyber security efforts tend to be more reactive and not proactive enough the president's announcement this week of a newly created national cyber security advisor was certainly b new focus and coordination issue is there anything the government can be doing as well as consumers to stay ahead of the latest techniques used by today's organized and sophisticated cyber criminals thank you i believe that in coordinate in concert with the announcement that the president made was also a report that was published which was the result of a sixty day review by dr hathaway and her team i believe that that outlined some very positive steps that the government can take and there were some good recommendations which which i certainly support in that document as as for consumers i believe that consumers first need to be educated on the issue and unfortunately cyber crime is something that always seems to happen to someone else until it happens to them and it is unfortunate because they probably already been a victim of it and don't even know it in in the confiscated machines of the attackers who have conducted phishing attacks or or attacks where they have attempted to steal credit cards the contents of those machines don't have tens of thousands of numbers they have millions of numbers ok so as far as consumers go and what they can do better i think that will be the result the outcome of that will be the result of a broader educational campaign either through public awareness or through our education so ms jones and your testimony you state that one of the major concerns is that i can is not adequately prepared to defend itself against cyber attack what are your specific concerns about this type of attack that we're talking about is the entire organization being taken over by another entity and that could come in the form of international but as they should and another government some kind of other business and that's not to say that they can't ever build a protection against being taken over but we're just concerned that today  and i think even dr to me said this in his testimony they need to establish a permanent long lasting set of principles upon which that we can prevent them from being taken over now i can tell you if you take a look at the record from the this round of talks conversations about the u n or the itu you taking over i can there are plenty of our of the countries that aren't necessarily friendly to the open exchange of ideas shall we say to put it delicately that would be very happy to take over this this function than on any follow up here doctor to me what assurances could you provide us that the united states always play a critical role with the of the link with the united states come with i can't because of the actual operational than a functions at the core of what i can do so that's the first and foremost secondly as i said before we are based in the united states  can government committee and fourthly because unlike any leading government we need to be closely engaged we have been able to engage for instance on subsequent issues but also on other issues around competition choice and whatever so this this multiple layers of that engagement i have to say that's one of the reasons well i actually might make the point about the joint project agreement which i think is a very different type of instrument that if the joint project agreement expires nothing changes i think that's the key point will find the need to engage in a second round of questions propounded by the members who are here and so pending all of that we're going to recess while these recorded votes are completed we will last for your patients please remain in the subcommittee will reconvene and at this time i'm pleased to recognize the gentle lady from california ms issue for her questions and she is recognized for five minutes chairman for continuing this important hearing and i do support having more on this because i think there is work for the committee to do i want to thank the witnesses for your testimony today and and i want to start out with a few observations and then ask a couple of questions i'll go as quickly as possible because we only have five minutes in my opening statement i thought it was important to acknowledge that  i can as an organization has had several noteworthy accomplishments and i mentioned some of those so i want to be fair and acknowledging that that's one side of the ledger and it's an important side and i salute you for the accomplishments that you've achieved on the other side of the page i think that there's some work to be done i think  to allow the spinning off of icon at the end of this timeframe is not the right way to go and i just don't i hope that the committee comes to the same conclusion  what's troubling to me are are are the following things first of all it's a it's with much curiosity to me that as the united states of america is the is the mother the father many fights to define what's open how to keep it open because it is democratizing it is all of these things and so much more and yet it seems to me from some of the testimony today that the way i c operates does not match that and i don't think that's healthy and i don't think it really promotes what the internet is a is about  if i can were spun off how do we guarantee an open future relative to the internet who would who would they be accountable to how do we have any kind of say so in this i know that iran cuba china are interested they'd love to take it over and god bless them they've got good taste they know something good when they see it but i am troubled by the lack of accountability i believe that we need to be thinking about a new set of rules that would be part of the of the agreement and that in the j p a it's my understanding mr to me that in two thousand and three that there were public members and they were voted off the board is that correct or is it incorrect yeah involved in that well i think i've got my answer it's not very good let me ask you this dr tell me what are the specific problems that you're trying to address by seeking complete independence from the commerce department and other words what what breakdowns have occurred why do you want to break what are you going to go off and do it seems to me that the commerce department part and then t i a have a very loose affiliation with you i mean this is not a heavy hand and i'm not suggesting it should be but what do you want to accomplish by spending not what's in your way no i want what's in the way what congresswoman very clear when we're not looking for independents i mean what are you looking for then we're looking permanent statement at the end of the day what i think this is and i hope i'm wrong but this is the impression that i'm getting is that there is disdain for any u s authority in this and while we have to have very strong partners throughout the world i role you know can't be and should not be in my view leapfrogged over is that the that's that's not the intention it's not the intention of it all is there any sensibility around that or is it totally me that you want out of it but it seems to me mr to me that you've been saying to us that stakeholders want to be independent and we have stakeholders that are testifying that are saying absolutely not so there's there's there's a division of approach here and that's why i think we have some more work to do on it and i i hope that what we can count on when we get to a rewrite or an extension of the j p a is that we get some very good ideas from stakeholders suggestions about some of the rules of the road i don't pretend to know what all of them might be but it be putting on my hat and i know i'm going over time but i think i'm the only other one here as a member of the house intelligence committee how important the internet  is to our country in our national security and the role that it plays and so i think just allowing icon to go off to spin off to become i don't know what  s deeply concerning to me when i put that hat on so i want to thank all of you and i look forward to working some more on this mr chairman and i appreciate the extra time and your patience thank you very much i'm going to ask unanimous consent at this point to insert three statements in the record that have been submitted to the subcommittee commenting on the general subject matter before us today these have been reviewed by the minority without objection these will be inserted in the record mr stearns and i both have some additional questions we would like to propound and so we're going to open a second round of questioning for such members of the subcommittee as desired to propound additional questions and  mr to me let me continue the questioning of you and return to the subject of the proposal that you have to issue additional top level domains what assurance do you have and can we take that if additional top level domains are authorized that that real competition will emerge in the bidding for these domains have you taken any kind of survey of  as a related question will you have any kind of bar on existing registrars being able to bid for these domains another word registrars who currently that minister or other top level domains and what other  assurances can you put in place there will be real competition in the event that new top levels are authorized well thank you chairman from all the feedback we have received and in the that there's a ryan g p pl who are very interested in applying some of it and in pretty general terms they looking for general terms in english shops and shops and not waves that sort of thing quite a lot of people interested in geographic terms as i mentioned before some of those cities build in new york city paris interest from indigenous communities there's some talk about potentially adult maori or don't sign me so people looking represent from the marketing departments in the product development department that they read each and having a top level domain so we're hearing that difference and they think well you've talked about areas where you might have one bit or if it's an indigent tribe for example  potentially you'd have that try bidding to operate or someone associated with it i don't know but do you think you'd have real competition in the bidding for such a top level domain would you would you have a variety of that or seek it would be it would if other if other business was to to bead well i understand the process would be open but to what extent do you have confidence that there would be real competition in the bidding through that open process fundamental question that's almost an empirical question have you actually done a survey and identified within these various oldies that you might issue now more than one better or any betters for some of them we are expecting for some of them there will be multiple b domain which you know well and my question is would you conduct some sort of imperial survey in advance just to be sure that there actually would be a sufficient level of competition in the bidding for administering that one of things we're putting forward is to have an extensive if we used to have an extensive promotion of the process before we dive and so the people where the price is available to come to the specific question you're asking that went we're not putting forward that we choose the string and then say who wants to bid for this we're actually saying it's not a lot of profit for us to decide what string people should be full but the prices should be and then it's up to people who think there's an opportunity to put forward a string well the reason i'm pursuing this  at some length is because the public policy justification for putting companies to the additional costs associated with protecting their brand that will come from them having to acquire buffers around that brand not under just the existing two oldies but potentially multiple new t l d's as well is the new competition that comes and the choice that comes from that and if you really don't get a level of competition  the bidding for those two year old d s then that public policy justification seems to me to be diminished substantially so i think it is a legitimate area let me ask if anyone else on this on the panel wants to comment on that question i guess three points first of all i don't think you got a clear answer but to our knowledge there's never been that empirical study on the need for a second we already think you know there are twenty one g tail these today we think there's sufficient competition in the market today maybe there could be a few more slowly released or the international demand names might be something to think about but eighty eight percent of all internet traffic goes to dot com that's still the premier piece of real estate so there's no nothing to say that the addition of all these new ones still won't leave dot com in that dominance space and third we think you know there is not that bidding process it's more like speculating people can bid but you're not going to know who else is bidding for what name if you happen to bid for the same name maybe they'll be some competition ok staff that two thirds are not the board members are required to come from one of five regions in the world ok north america is one of those regions and each region has to be represented on the board if you go ahead with these t l days and could generate another ninety million so does that mean if you are one hundred fifty million dollars in revenue that you would try to get this cash reserve up to one hundred fifty million dollars that your statement no that's not the statement and if i can be quite clear on the budget the reason the budget has increased is because the very things that some of the members of the committee have raised of this concerns we have about twenty percent of our budget is dedicated to security and stability issues we've increased quite significantly recovery only for that but the be not cross subsidy for anybody who's applying for a new g t o de we expected those fees you're throwing to a one off application fees to be dealt with and that and the actual revenues would come down but you still indicated you earlier that you want to have a reserve fund equal to your revenues i'm on public record of saying that that should be equal to about one of the present operational budget so if you're doing sixty one million today you want to do sixty what's around my public record as saying i think that number should be around fifty million dollars so it's not what you said earlier that it will be equivalent to one years where that was that was the advice we had received and i think it should be tempted about the one that i have to reinforce why that's important it's important for security but to the extent that i can remain piano functions contractor they need to be located in the united states there's a legal legal contract they need to be in the united states ok now this to me let's say you know you want to be free from the contract with the commerce department and you want to be separate independent and that's what you and the people would do would you be willing to have competition have have another to it i think the analysis at the technical level remains that is the case so we're very carefully structured to try to deal with many antitrust issues and have trust issues inside i can have been tested and tried several times in u my last question this is cheney a subject totally have gone back to the t v transition about seven hundred twenty five thousand more households have to prepare themselves for the d t d transition using the stimulus money based upon the nielsen rating data and information from the self at that pace about nine hundred thousand will have used the money to prepare by june twelfth that means we'll have spent more than seven hundred dollars per household for a fifty dollar device been here for a long time and i think a very interesting and informative discussion and we appreciate your contributions to it i'm sure that members of the subcommittee are going to have additional questions and some members who were not able to attend the hearing today because of conflicts will also have questions and those will be propounded to you over a period of the coming weeks and when you receive those inquiries to the extent that you can make rapid replies that will be helpful to us and we're going to keep the record open from those hearing to receive those replies for a period of about one month so please be prompt and getting those responses back we appreciate very much your attendance this morning and your informative presentations and this