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CONTRACTING THE INTERNET: DOES ICANN

CREATE A BARRIER TO SMALL BUSINESS?

HEARING

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

WASHINGTON, DC, JUNE 7, 2006

Serial No. 109–55

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

COMMITTEE ON SMALL BUSINESS 

DONALD A. MANZULLO, Illinois, Chairman 

ROSCOE BARTLETT, Maryland, Vice 

Chairman 

SUE KELLY, New York 

STEVE CHABOT, Ohio 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

JEB BRADLEY, New Hampshire 

STEVE KING, Iowa 

THADDEUS MCCOTTER, Michigan 

RIC KELLER, Florida 

TED POE, Texas 

MICHAEL SODREL, Indiana 

JEFF FORTENBERRY, Nebraska 

MICHAEL FITZPATRICK, Pennsylvania 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

NYDIA VELA ́ ZQUEZ, New York 

JUANITA MILLENDER-MCDONALD, 

California 

TOM UDALL, New Mexico 

DANIEL LIPINSKI, Illinois 

ENI FALEOMAVAEGA, American Samoa 

DONNA CHRISTENSEN, Virgin Islands 

DANNY DAVIS, Illinois 

ED CASE, Hawaii 

MADELEINE BORDALLO, Guam 

RAU ́ L GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

LINDA SA ́ NCHEZ, California 

JOHN BARROW, Georgia 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

J. MATTHEW SZYMANSKI, Chief of Staff 

PHIL ESKELAND, Deputy Chief of Staff/Policy Director 

MICHAEL DAY, Minority Staff Director

(II) 

C O N T E N T S 

WITNESSES

Page 

Burr, Ms. J. Beckwith, Partner, WilmerHale ........................................................ 3

Jeffrey, Mr. John, General Counsel & Secretary, Internet Corporation for 

Assigned Names and Numbers (ICANN) ........................................................... 5

White, The Honorable Richard, Member, VeriSign’s Internet Advisory Board .. 8

Mitchell, Mr. W.G. Champion, Chairman and Chief Executive Officer, Network Solutions LLC ............................................................................................. 11

DelBianco, Mr. Steven, Executive Director, NetChoice ........................................ 13

Goren, Mr. Craig, Chief Executive Officer, Clarity Consulting ........................... 16

APPENDIX

Opening statements: 

Manzullo, Hon. Donald A. ................................................................................ 29

Prepared statements: 

Burr, Ms. J. Beckwith, Partner, WilmerHale ................................................ 31

Jeffrey, Mr. John, General Counsel & Secretary, Internet Corporation 

for Assigned Names and Numbers (ICANN) .............................................. 37

White, The Honorable Richard, Member, VeriSign’s Internet Advisory 

Board .............................................................................................................. 44

Mitchell, Mr. W.G. Champion, Chairman and Chief Executive Officer, 

Network Solutions LLC ................................................................................ 50

DelBianco, Mr. Steven, Executive Director, NetChoice ................................. 63

Goren, Mr. Craig, Chief Executive Officer, Clarity Consulting .................... 77

(III) 

(1)

CONTRACTING THE INTERNET: DOES ICANN 

CREATE A BARRIER TO SMALL BUSINESS? 

WEDNESDAY, JUNE 7, 2006

HOUSE OF REPRESENTATIVES

COMMITTEE ON SMALL BUSINESS

Washington, DC 

The Committee met, pursuant to call, at 2:00 p.m., in Room 2360 

Rayburn House Office Building, Hon. Roscoe Bartlett [Vice-Chairman of the Committee] presiding. 

Present: Representatives Bartlett, Kelly, Musgrave, Fitzpatrick, 

Velazquez. 

Chairman BARTLETT. The Committee will come to order. Just a 

word of explanation as to why I am sitting here rather than the 

usual occupant, my very good friend and classmate, Chairman 

Manzullo. His wife is having surgery today, unexpected in a sense 

apparently. I did not know until last evening that I needed to be 

here today so I need to apologize for two things. One, that I was 

not better prepared for the hearing. Had I known I would be the 

Chair I would have been better prepared. 

Secondly, for the fact that I may have to briefly recess the hearing if there is not another Republican here on the dias because I 

am also on the Science Committee which will meet in 25 minutes 

to mark up five bills and there will be some contentious votes during some of those bills, but fortunately they are on the same floor 

in the same building, just around the corner so they will let me 

know when I need to go. 

If there is not another member here to turn the gavel over to, 

I will very briefly have to recess the meeting and then come back. 

The Chairman has a statement which we will submit for the 

record. Let me turn now to the Ranking Member Ms. Velazquez. 

[Chairman Manzullo’s opening statement may be found in the 

appendix.] 

Ms. VELAZQUEZ. Thank you, Mr. Chairman. I welcome the witnesses. It cannot be underestimated how important technology is to 

small businesses. Today we look at issues regarding the Internet 

and its availability to small businesses. 

Increasingly small businesses are turning to the Internet and 

starting their own websites to market their businesses. From beauty salons to motor vehicle dealers posting their services, hours, and 

location in addition to answers to frequently asked questions is valuable and will only expand and help grow their businesses. 

We need to make sure that this continues to be a readily available and affordable option for this nation’s 23 million entrepreneurs. Seventy-seven percent of small business owners who 

2

have a website agree that it is a must for small business and 60 

percent say they wish they had built one for their business sooner. 

The website allowed these entrepreneurs to enhance their advertising efforts by placing pre-detailed information, reports, and other 

beneficial content in a place where anyone can access it. 

For the most part, basic websites are becoming a core part of the 

market and plan for many small businesses and so far the cost of 

standard Internet use such as simple websites and e-mail have fit 

well within the marketing budget of small businesses. A large percentage of small businesses are waiting to spend money and resources to use the Internet as part of their relationships with customers. In fact, 61 percent of entrepreneurs feel that the website 

has added to the bottom line. 

Many small business owners, 51 percent, currently view the 

Internet as more cost effective than other marketing methods. In 

2002 39 percent of small business owners planned to market their 

business on the Internet as opposed to 27 percent by direct mail, 

26 percent in newspapers or magazines, and 24 percent in the Yellow Pages. 

The hearing today will examine the Internet and its access for 

small businesses. It is important that the Internet and websites remain affordable options for entrepreneurs, not just for today but for 

the future as well. I look forward to hearing the witnesses’ testimony so that the Committee has a better understanding of this 

proposed settlement and its impact on small businesses. 

The Internet is becoming a vital component of small businesses 

marketing an outreach plans. Today we need to make sure that 

small firms will consistently be able to afford and have access to 

website ownership. Thank you, Mr. Chairman. 

Chairman BARTLETT. It is not usual that Government becomes 

involved in a situation like this. Our apologies for the appearance 

that we are trying to intrude to Government where Government 

has no business being. 

A primary function of this hearing today is to get the facts on 

the table because apparently there is a lot of disagreement as to 

exactly what this settlement portends for the Internet community, 

and especially for small businesses so we thank you very much for 

coming, especially those of you who traveled considerable distances 

to get here. We will begin now with our witnesses. 

Our first witness is Ms. J. Beckwith Burr. Ms. Burr is currently 

a partner at Wilmer, Cutler, Picker, Hale and Dorr here in D.C., 

but more relevant to our proceedings today she was the Director 

of the Office of International Affairs at NTIA during the Clinton 

Administration and was the lead Commerce staffer on the transition to private sector management of the DNS at the time ICANN 

was formed.

Ms. Burr, and then we will introduce the other witnesses when 

their turn comes. The floor is yours. 

Ms. BURR. Thank you, Mr. Chairman. 

Chairman BARTLETT. Let me first say that all of your written 

statements without objection will become part of the permanent 

record so you are free to summarize any way you wish. Thank you. 

3

STATEMENT OF J. BECKWITH BURR, WILMERHALE 

Ms. BURR. Thank you, Mr. Chairman. Prior to returning to private practice I was, indeed, the primary USG interface with 

ICANN so that very polite introduction may have been staff code 

for ‘‘it is all her fault’’ which, I suppose, is why I have been asked 

to provide some background on the original and purpose of the Department of Commerce approval rights in the registry agreement 

between ICANN and VeriSign. 

In the spring of ’92 the nonmilitary Internet was still largely a 

creature of the academy. There was no World Wide Web or userfriendly browser. Network Solutions operated registries for the 

nonmilitary Internet top-level domains and provided end user registration services under a cooperative agreement with the National 

Science Foundation. 

By 1998 when the cooperative agreement was scheduled to expire, the commercial Internet had exploded. Given its research orientation, NSF determined to end its role in management of the 

DNS by letting the cooperative agreement expire and permitting 

VeriSign to carry on. Had everything proceeded as expected, the cooperative agreement might have expired without anyone noting. Instead, as we know, lots of people noticed and that is why we are 

here. 

As the cooperative agreement’s final expiration date approached, 

it became clear that the structure in place to manage the DNS was 

not going to scale. Policy authority resided with a single, although 

well-respected, human being. Dr. John Postel’s consensus-building 

skills were legendary in the technical community but they were 

less suited to a litigious commercial setting. 

Meanwhile VeriSign, and I will refer to the registry services as 

VeriSign, appeared to control the most valuable commercial assets 

associated with the public Internet, the .com, .net, and .org toplevel domains. There were lots of objections to dispute resolution 

procedures, the amount of money VeriSign was making, and the 

general dominance of the U.S. based generic top-level domains. It 

was clear, on the one hand, that the U.S. Government could not 

simply walk away from the DNS management problem at that 

point. On the other hand, the ITU was looking for a new job and 

any U.S. mandated solution would clear be unacceptable internationally. 

Accordingly, the U.S. Government set out to develop global consensus for private sector management of the DNS. After extensive 

consultation, the Commerce Department articulated the emerging 

consensus in a document known affectionately in some places as 

the White Paper, and embarked on what was intended to be an orderly transition to private sector management of the DNS. 

Of course, the transition has been anything but orderly. VeriSign 

predictably was not enthusiastic about relinquishing its control of 

the generic TLDs. The allocation of rights and responsibilities 

under the cooperative agreement was murky as were the sources 

and limits on Dr. Postel’s authority for the collection of activities 

that came to be known as the Internet Assigned Number Authority, or the IANA. When the Commerce Department extended the 

cooperative agreement it fixed some of the problems but not all. In 

October of 1998 VeriSign agreed to get on board the privatization 

4

train and to see effective control over the authoritative route to the 

Commerce Department. In the months that followed the Commerce 

Department recognized ICANN and began a transition to really 

back to private sector management. 

The registry agreement between ICANN and VeriSign was a critical piece of this transition and the Commerce Department was at 

the table of those negotiations for several reasons. Most of 

VeriSign’s obligations under the cooperative agreement would have 

to be superseded by a registry agreement with ICANN. The U.S. 

Government wanted to ensure that any such agreement preserved 

the contractual concessions attained in Amendment 11. U.S. Government also wanted to be sure that something was in place if the 

agreement between VeriSign and ICANN fell apart. 

Finally, given the degree of mistrust that had developed in the 

intervening months between ICANN and VeriSign the Commerce 

Department was needed as an honest broker. I believe both parties 

would have said that. 

In short, the Commerce Department’s approval right in the registry agreement was intended to do two things. To protect the 

newly achieved legal clarity about the A root and to facilitate the 

VeriSign ICANN relationship during the transition period. 

In both of these roles as in most everything it did here, the role 

of the Commerce Department was to serve as a trustee for the interest of the global Internet community in a successful transition 

to private sector management of the DNS based on the White 

Paper principles of stability, competition, bottom-up policy development by a representative organization. 

It may help to contrast or to think of this in the context of the 

Department’s residual control over the A root. There in its capacity 

as trustee the DOC has to use its authority in a manner that is 

consistent with the White Paper principles. Given that the transition to private sector management was, as it so clearly remains 

today, dependent on the support of the global Internet community, 

use of the retained authority had to be acceptable to stakeholders 

including our Government partners around the world in this transition. 

Finally, any use of that authority had to be faithful to the ‘‘what 

goes around comes around’’ principle of Internet regulation championed by the U.S. and other countries in the mid ’90s. Individual 

governments should generally refrain from regulatory activity in 

favor of market forces, industry self regulation, and bottom-up consensus policy development. 

The contract approval clause has a slightly different pedigree. As 

I said, the Commerce Department was there to serve as an honest 

broker. In the event that one party thought the other was abusing 

its power or contravening the White Paper principles, it could appeal to the Commerce Department which could, in turn, attempt to 

facilitate a sensible outcome consistent with the White Paper blueprint. 

Community has not discussed how this approval authority might 

be appropriately exercised in the intervening years but if we take 

as a given, as I do, that the role of the Department of Commerce 

is in all cases to facilitate private sector management of the DNS 

5

in accordance with the principles articulated in the White Paper, 

two questions arise. 

First, is the proposed contract inconsistent with the White Paper 

principles or does it reflect some imbalance in bargaining positions 

that undermines private sector management of the DNS? If the answer to that question is yes, you must go on to consider whether 

intervention will further and not undermine the success of the 

ICANN experiment. 

This question must be addressed on both a substantive and procedural level. No matter where one comes out on the merits or deficiencies of the .com agreement, I don’t know anyone who thinks 

that this was a particularly good process. In my testimony I have 

provided some suggestions, for what they are worth, and I will stop 

here and happy to take questions. 

Chairman BARTLETT. Thank you. 

[Ms. Burr’s testimony may be found in the appendix.] 

Chairman BARTLETT. Our next witness is Mr. John Jeffrey. Mr. 

Jeffrey is the General Counsel and Secretary of the Internet Corporation for Assigned Names and Numbers, otherwise known as 

ICANN, based in Marina Del Ray, CA. ICANN is an internationally organized nonprofit corporation responsible for managing and 

coordinating the domain name system to ensure that every address 

is unique, that all users of the Internet can find all valid addressees. 

When I think about the illegal immigrant problem, I think about 

how wonderfully the private sector has solved many problems and 

how maybe we ought to be enlisting their help. I go to make a purchase and in a few seconds they know whether or not my Discovery 

credit card is okay. I am sure that there are more credit cards than 

there are illegal immigrants so I would suggest that we don’t need 

14 days to determine whether an immigrant is legal or not. 

Mr. Jeffrey, the floor is yours. 

STATEMENT OF JOHN JEFFREY, INTERNET CORPORATION 

FOR ASSIGNED NAMES AND NUMBERS (ICANN) 

Mr. JEFFREY. Thank you, Mr. Chairman, for the opportunity to 

speak before the Small Business Committee. ICANN is recognized 

by the world community as the global authoritative body on the 

technical coordination and organizational means to ensure the stability and interoperability of the Internet’s domain name and numbering systems. I am pleased to speak before your Committee as 

we are very proud of ICANN’s role in the domain system and 

ICANN’s role in helping to facilitate a global interoperable Internet 

used by America’s small businesses and small businesses throughout the world. 

Since 1998 ICANN’s self-governance model has succeeded in addressing stakeholder issues as they have appeared and in bringing 

lower cost and better services to DNS registrants and everyday 

users of the Internet. Among ICANN’s main achievements are the 

following: 

Streamlining of domain name transfers. ICANN developed a domain name transfer policy that allows domain name holders to 

transfer management of their domain names from one registrar to 

another bringing further choice to domain name holders. 

6

Market competition. Market competition for generic top-level domain registrations established by ICANN has lowered domain 

name cost in some instances as much as 80 percent with savings 

for both consumers and businesses. 

Choice of top-level domains. ICANN continues to introduce new 

top-level domains to give registrants right of choice. These include 

the introduction of seven new gTLDs in 2000 and four additional 

ones so far from the 2004 sponsored top-level domain names round. 

The uniform dispute resolution policy, also called the UDRP. This 

policy has resolved more than 6,000 disputes over the rights to domain names and has proven to be efficient and cost effective. 

Internationalized domain names, or IDNs, working in coordination with the appropriate technical communities and stakeholders 

ICANN’s adopted guidelines have opened the way for domain name 

registration in hundreds of the world’s languages. Since ICANN 

was founded in 1998 ICANN has entered into many private arm’s 

length agreements with registries that run the generic top-level domains and with registrars who are accredited by ICANN to sell 

those domains directly to consumers and businesses. 

A 2004 report by the OECD stated that, ‘‘ICANN’s reform of the 

market structure for the registration of generic top-level domain 

names has been very successful. The division between registry and 

registrar functions has created a competitive market that has lowered prices and encouraged innovation. The initial experience with 

competition at the registry level in association with a successful 

process to introduce new gTLDs has also shown positive results.’’ 

Now I will address the difference between the competition picture in 1998 and in 2006. In 1998 there were only three main generic top-level domain registries, .com, .net, and .org from which 

domain names could be purchased by businesses and consumers. 

Only one company was running all three registries, Network Solutions. Most registrations by small businesses were only in one registry, .com. The price of a single domain name in .com in 1998, 

based upon the information I could gather, was greater than $50 

per domain name per year. The competition in 2006 is much different. 

The .com registry now controlled by VeriSign maintains a significant percentage of the marketplace but now accounts for less than 

50 percent of the world market. The price for a .com registration 

today depends on where you purchase the name from, but in some 

instances the price of a domain name has been reduced significantly by as much as 80 percent. 

On June 4th the price of a .com domain name for a one-year registration at GoDaddy, the largest registrar by market share, was 

$8.95, or $6.95 if you are transferring from another registrar. The 

price at Network Solutions, now a separate registrar business here 

at the panel, and is now only partially owned by VeriSign, is 

$34.99 per year and they have varying plans relating to that that 

I am sure Mr. Mitchell can address. 

Small businesses today can choose from over 688 ICANN accredited registrars derived from 261 unique business groups located in 

39 different countries. In addition to the greater choice in registrars, consumers also have a greater choice regarding which toplevel domain they may use, some specialized for specific areas. 

7

Between 2000 and today 11 new generic top-level domains have 

been introduce. Four of those TLDs, .cat., .jobs, .mobi, and .travel 

have signed agreements with ICANN in 2005 and 2006. ICANN 

currently accredits domain name registrars to sell names in the following top-level domains, .aero, .biz, .cat, .com, .coop, .info, .jobs, 

.mobi, .museum, .name, .net, .org, .pro, and .travel. In addition, an 

agreement for the introduction of .tel was recently completed and 

negotiations continue relating to other top-level domains from the 

2004 found. 

I’ll now address the VeriSign settlement agreement and the proposed .com registry agreement. On October 24, 2005, ICANN announced a proposed settlement to end the long-standing dispute 

with VeriSign, the registry operator com and net. The proposed 

agreement between ICANN and VeriSign provided for the settlement of all existing disputes between ICANN and VeriSign and a 

commitment to prevent any future disagreements from resulting in 

costly and disruptive litigation. 

Under the current VeriSign com registry agreement, VeriSign 

has permitted an automatic renewal of the com agreement. That 

original renewal clause was a key factor in the negotiation of the 

2001 .com agreement and was added in exchange for concessions 

relating to the yielding of VeriSign’s rights in .org and opportunity 

for a rebidding process relating to the .net registry. Subsequently, 

.org was transferred to the public interest registry in 2001 and .net 

was rebid in 2005. Independent evaluators after a careful review 

re-awarded the net registry to VeriSign and a new agreement was 

executed between VeriSign and ICANN for net last year. As part 

of that rebid the wholesale price of net domain name registrations 

was lowered from $6.00 to $4.25 for the registrars. It is noteworthy, however, that the reduction in price was not in any measurable way past through by registrars to small businesses or consumers. 

The price of $6.00 which was set during the first .com registry 

agreement with ICANN in 1999 has not been subject to review or 

increase during the past seven years. ICANN agreed in the proposed new com agreement to allow VeriSign to increase the price 

of .com registration by up to 7 percent per annum. Following public 

comments, ICANN and VeriSign renegotiated the terms in December and January and agreed to limit those proposed increases to 7 

percent in four of the six years. 

Additionally, VeriSign could only raise their rates in two other 

years if VeriSign was able to show a need to do so to support the 

.com infrastructure and in specific support of the security or stability. Effectively, VeriSign can only raise the price of a .com registration by $1.86 before 2012 without providing justification. 

Following extensive review and opportunity for additional public 

comment, on February 28, 2006, the ICANN board of directors by 

a nine to five vote weighed the favors involving the continued conflict with VeriSign and the lawsuits with VeriSign against the proposed terms and voted in favor of settlement. 

Subsequently, ICANN submitted the .com registry agreement, 

the only part of the settlement process that the Department of 

Commerce is subject to review, and we await the result of the Department of Commerce’s review. The agreements between ICANN 

8

and VeriSign are likely to facilitate a more secure and stable .com 

registry and Internet. 

In the long run a structure to support VeriSign’s business and 

to encourage and provide incentives for VeriSign to invest in the 

stability and security of the .com registry is likely to be a much 

better choice than requiring them to cut cost for the benefit of a 

few parties. 

In conclusion, Mr. Chairman, ICANN supports the small business community through its actions. Due to the Universal DNS resolvability secured and coordinated by ICANN, the Internet works 

in the same way for every user of the Internet. ICANN remains 

committed to the stewardship of a stable and globally interoperable 

Internet and is committed to fostering competition in the domain 

name marketplace. Through private agreements ICANN has acted 

to enhance competition in the registry and registrar industry without undermining ICANN’s commitment to the overall stability and 

security of the Internet. 

[Mr. Jeffrey’s testimony may be found in the appendix.] 

Chairman BARTLETT. Thank you very much. 

Our third witness is the Honorable Richard White. 

Rick, I generally try to avoid being introduced that way because 

almost nobody thinks Congress is honorable. When introduced that 

way, it just gives the audience another excuse to reflect on all the 

reasons they don’t think Congress is honorable. 

Mr. WHITE. We are used to it, though, aren’t we, Mr. Chairman? 

Chairman BARTLETT. Fortunately, the average citizen out there 

believes that their Congress, not any specific Congressman, is considerably more honorable than the institution. Interesting, isn’t it? 

I am very pleased to welcome you back. Rick was representative of 

the 1st District of Washington from ’95 to ’98. While a member of 

Congress Rick founded and led the bipartisan Bicameral Internet 

Caucus and served as a member of the Energy and Commerce 

Committee. 

During that time her led policy development for a wide variety 

of Internet related issues including the Department of Commerce’s 

transition of Government management of the Internet to the private section. Currently Rick serves as a member of VeriSign’s 

Internet Advisory Board. 

Rick, welcome. The floor is yours. 

STATEMENT OF THE HONORABLE RICHARD WHITE, 

VERISIGN’S INTERNET ADVISORY BOARD 

Mr. WHITE. Thank you very much, Mr. Chairman. It is great to 

be back and thanks for that nice welcome. Also nice to see Congresswoman Kelly, my classmate. I am glad to see you have lasted 

a little longer than I did. I hope you are enjoying it. 

Let me say a couple words about this. I did submit a statement 

for the record and I hope you will have a chance to look at that. 

What I would really like to do is just focus on a couple things that 

I think is important to consider. After I left Congress I was CEO 

of a trade group for CEOs of technology companies. I just finished 

that up last year. Currently, as the Chairman said, an advisory 

group member for VeriSign. 

9

I am not an employee of VeriSign. I am not a consultant for 

VeriSign so I can’t really speak for the company. These are really 

my own opinions, although I have had the opportunity to observe 

their business so some of what I say here is kind of informed by 

what I’ve learned about being part of that group. 

I want to just make sure the Committee understands the context 

where this came up because I thought Ms. Burr did a great job of 

explaining why we came up with ICANN in the first place. I was 

chairman of the Internet Caucus at the time and I very clearly remember the day that Ira Magaziner came over from the administration. He had this idea about a White Paper. 

I think actually Mr. Horowitz might have been on my staff at the 

time. We went through and talked about how this ICANN thing 

would work, that it would be a good idea, and talked about. There 

have certainly been plenty of growing pains. I think in retrospect 

we might have done some things differently. We would probably all 

agree with that. At the time we all agreed it was important to get 

the international private Internet community involved and get the 

U.S. Government a little bit less involved. That was really the 

whole point. 

So, as Mr. Jeffrey pointed out, what happened was they stood 

themselves up, they got a big chairman, and they readjusted a lot 

of things. They took VeriSign, or the company that became 

VeriSign, and took away some of their rights under the existing situation. No longer could they be in charge of the .org name. 

They made them go through a rebid process for the .net name. 

Then I think it was in the year 2000 they signed this agreement 

that we talked about that would govern VeriSign’s ability to administer the .com name which, of course, is the biggest one certainly 

in the United States and I think is by far the biggest overall. 

What we are really talking about today, just so the Committee 

understands, is basically the renewal that happened in the last few 

months of the agreement that was done between ICANN and 

VeriSign in the year 2000. Really in a lot of ways it is a big nonevent. There aren’t a lot of changes from what happened. It is still 

a six-year agreement like that one was. It will provides, as it did 

at that time, that if VeriSign fails to do a good job of administering 

this, they can be kicked out. You have to have somebody who is 

going to do a good job. On the other hand, if they do a pretty good 

job, there is the presumption that they will be renewed. 

It also does provide for the ability to raise prices but it puts a 

cap on their ability to raise prices. It is basically, I think, $1.86 all 

told that they could raise prices which basically would mean that 

from the year 2000 when there was a $6.00 price, and that is what 

it still is today, to the year 2012, the price for a wholesale name 

in .com could go up from $6.00 to $7.86. It is a price increase but 

it is not a huge price increase I think given the span of time that 

we are talking about. I just want to make sure that the Committee 

understood that. 

Let me give you a couple of other fact points that I think you 

ought to consider. From a small business perspective the Internet 

is an absolutely wonderful tool. Dan and I used to think about this 

a lot, but it gives them the ability to compete really on a pretty 

equal basis with a lot of big companies and that is a very good 

10

thing. A small business owner typically takes the Internet for 

granted now just like the rest of us do. 

It is the first place we go for information. It is the place where 

a small business owner can have e-commerce and do that sort of 

thing. They don’t really care about how it works. They just want 

it to work. The reason they can feel that way and the reason we 

can all feel that way is that under this agreement that VeriSign 

had with ICANN for the last six years, there hasn’t been a single 

minute of down time over that six-year period. 

They have run it well enough so that unlike the telephone company which is what we use to call five nines of reliability, 99.999 

percent. There has been 100 percent reliability of this network over 

this six-year period and I think there is every confidence that will 

continue over the next six-year period. I think that is a big reason 

why ICANN was so willing to make sure VeriSign got the job. 

Let me make sure you understand something else. It is not because the job has gotten easier. I have some information here that 

just was absolutely amazing to me when I was reading it. VeriSign 

had 13 computers to run this system in the year 2000. It has 1,300 

now to run the same portion of the system. It has servers that in 

the year 2000, I think, they had the number 60 and they have 

4,000 today to do the same thing just to have the capability they 

need to have to make sure this is a secure network. 

To put this in a little bit of perspective, you talked about your 

credit card transactions, Mr. Chairman. The number of transactions that VeriSign conducts in five days over this network is in 

excess of the number of credit card transactions in the world in a 

year. In five days they do more matching of numbers and routing 

of requests than you have credit card transactions in the whole 

world in a year. Another way to look at it, it is six times the daily 

number of phone calls in the United States. That is how many connections these computers have to make. Yet, they have done it 

without a flaw for six years. Not only that, just to make sure you 

understand, they do it while they are under attack. 

You know, we take for granted this system works pretty well, but 

every day there are upwards of 1,000 attacks on the system, teenagers trying to bring it down, but also malevolent actors trying to 

bring it down who are very sophisticated. You have seen a number 

of examples of that. Just to summarize, they have done a good job. 

This contract is, if anything, very consistent with what was talked 

about before. 

It has been negotiated under an arms-length agreement with 

ICANN which isn’t really all that fond of VeriSign and vice versa 

so it is an arms-length agreement by private parties working pretty 

much the way Ms. Burr and I had anticipated at the time we set 

up this whole system. 

My own view is that from a small business perspective, in particular, this will control any significant price increases. It will 

make sure this thing works great for the next six years. All in all 

it sounds like a great deal for small business to me so I would hardily recommend that the Committee take that approach. Thanks 

very much. I would be happy to answer questions. 

[The Honorable Richard White’s testimony may be found in the 

appendix.] 

11

Chairman BARTLETT. Thank you very much. those of us who 

have had the opportunity to be both audience and speaker recognize that five minutes can be a very short time for the speaker and 

a very long time for the audience. Yet, if it is your question that 

is being answered by the speaker, five minutes may have end up 

a very short time which is why we ask the witnesses to summarize 

their statements because there is generally more than ample opportunity to expand during the question and answer period. What may 

seem like an interminable witness testimony ends up being a very 

short segment during the discussion. 

Our next witness is Mr. W. G. Champion Mitchell. Mr. Mitchell 

is the Chairman and Chief Executive Officer of Network Solutions 

based in Herndon, VA. Network Solutions currently hosts millions 

of domain names and hundreds of thousands of e-mail boxes and 

websites for customers. In 1993 Network Solutions was awarded a 

grant from the National Science Foundation to develop the Internet’s domain name registration surface. After developing the technology, Network Solutions became the first and only domain name 

registrar until 1999 when the domain name industry opened up to 

competition. 

Mr. Mitchell, the floor is yours. 

STATEMENT OF W.G. CHAMPION MITCHELL, NETWORK 

SOLUTIONS LLC 

Mr. MITCHELL. Thank you, Mr. Chairman, and thank you for inviting me to be here, and thank the Committee for its interest in 

something that is so important, small businesses. I will certainly 

try to speak and rapidly as accent and cultural heritage allow me 

to. 

I am not going to go into all the reasons the Internet is important to small business. I gather from the members themselves that 

is quite clear to them. I would say one thing, Mr. Chairman. We 

are here today because the U.S. Government is required to be involved in this contract. This is not solely a dispute between private 

parties. The Department of commerce is required to approve this 

contract so it is U.S. Government involvement to an extent, at 

least. 

Far from making access to the Internet more reliable, more secure, and more affordable for small businesses, this proposed agreement between ICANN and VeriSign shocks the conscience and 

works against all of those things. We see two big problems from 

our standpoint with the contract as it stands. There are many people who see other problems but we have two big ones. The first one, 

and I hope Mr. White will forgive me, I will have to correct a significant factual inaccuracy in his testimony. 

Under the perpetual monopoly provision of the proposed contract, 

VeriSign cannot lose it if they ‘‘don’t do a good job.’’ Under the current contract, the one that is about to be renewed, VeriSign can 

lose that contract if it is in material breech of a provision of the 

contract or if they ask for a price increase which they have. Then 

it is supposed to go to competitive bid. Under the new contract 

those provisions are removed. They can come in and ask for a price 

increase anytime they want to. There are only three small provisions which they could lose it over. Even then it has to go to arbiVerDate 0ct 09 2002 00:07 Nov 18, 2006 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 G:\HEARINGS\30233.TXT MIKE
12

tration and then after arbitration they have 21 days to procure. 

There is no way they can lose it. It is perpetual monopoly. 

No. 2, it has unreviewable price increases, unreviewable, unregulated, and unjustified price increases. The fact is that that the cost 

of technology has been going down. I am sure that Dell and Gateway would love to be here saying, ‘‘We haven’t had a price increase 

in six years.’’ Everybody else’s prices are going down and it is not 

needed. It enriches VeriSign at the expense of American small 

business. $1.86 may not sound like much. That is $1.3 billion dollars in monopoly taxes over the period of the contract of which 

more than half will be paid by U.S. small businesses. 

It is not a small thing. To put that in perspective, 700 million 

of monopoly profit to VeriSign from U.S. small businesses compares 

with an under $500 million SBA budget. If we had this and could 

use this money to fund small businesses to push them forward, I 

think it would be a lot better use of it than giving it to a monopolist. 

It is allowed to hike its fees more than 30 percent in four of the 

six years. ICANN is not left out. ICANN gets a slice of that monopoly profit. They will get about $200 million in fees over that time 

of which about half of it will come out of the monopoly profit. The 

notion that VeriSign has put forward in the media and before this 

Committee that the Internet has to choose between continuing 

safety and stability on the one hand, and a perpetual monopoly 

with unregulated price raises on the other is simply a false dichotomy. 

By the way, all of the examples that have been used in this Committee and in the testimony are ones which VeriSign has nothing 

to do with in defending the Internet. The Internet is vulnerable at 

many places. It is a largely fixed cost to defend the Internet so the 

more subscribers you have, the less it cost per subscriber to defend. 

In fact, VeriSign is going from 33 million .coms under management 

at the beginning of 2005 to 52 million plus this morning so that 

cost is going down, as well as the cost of your equipment and everything else. 

Monopoly being granted in perpetuity is not necessary. A five or 

six-year term is plenty of time to make an investment and recover 

it. VeriSign has not said that the Internet is unstable and they 

only had a five-year or six-year term in the contract. They made 

plenty of investment. 

By the way, you can have more money to protect the Internet if 

you are VeriSign. The contract allows it. It just says you have to 

come and cost justify it. In six years there has been no effort to cost 

justify an increase because there has been no cost to justify an increase. 

Competition has clearly helped in the registrar business. John’s 

testimony is absolutely right about that. Driven prices down as 

much as 80 percent. We haven’t seen the same thing in the registry 

business except on rare occasions such as with the .net rebid last 

year where VeriSign because of the rebid had to make commitments to improve the security of .net and, at the same time, drop 

the price from $6.00 to $3.50. That is what competition does. It 

gets you better security and lower prices at the same time. 

13

Let me be absolutely clear, and I am about to close down here, 

Mr. Chairman. Since I am a voice crying in the wilderness and a 

slow talker, just please bear with me for a minute more. I have no 

objection to VeriSign continuing to run the .com registry. That is 

not a problem. What I do have is an objection to it being done in 

a manner that gives a perpetual monopoly to a company with unregulated price increases at the cost of American business. 

As my friend on my right, Mr. DelBianco, here is going to testify 

in his testimony, he says the greatest threat of all to the Internet 

security is the UN or foreign interest taking over. They are waiting 

for a cause. Last year in Tunisia everybody thought there would be 

a firestorm. They backed off. 

As we say down south, they are hiding in the weeds and they are 

waiting for a cause. The cause is if I can, which was supposed to 

be set up to internationalize this with the approval of the Department of Commerce, gives a perpetual monopoly to an American monopolist, it is going to break lose and it is going to break lose this 

year in Athens. This does not have to be done. This contract is not 

up for renewal until November 2007. This September ICANN is 

supposed to undergo a review with the Department of Commerce 

to say what its policy is going to be in its relationship with these 

registries. 

I would submit to you, Mr. Chairman, members of the Committee, that this is more than getting the cart before the horse. 

This is executing on a policy before there is a strategy. This is a 

classic example of ready, fire, aim. For those reasons, we would ask 

the members of the Committee to become active and involved to see 

that the policy is set before the execution happens, and to protect 

small business from a perpetual monopoly with unregulated price 

increases. Thank you very much, Mr. Chairman. 

[Mr. Mitchell’s testimony may be found in the appendix.] 

Chairman BARTLETT. Thank you very much. 

Our next witness is Mr. Steven DelBianco. Mr. DelBianco is the 

Chief Executive Director of NetChoice, a Washington, D.C. based 

coalition of trade associations, e-commerce businesses, and online 

consumers who share the goal of promoting convenience, choice, 

and commerce on the net. Mr. DelBianco. 

STATEMENT OF STEVEN DELBIANCO, NETCHOICE 

Mr. DELBIANCO. Thank you, Chairman Bartlett, and members of 

the Committee. I should also say that I appear before you today as 

a small business survivor. In 1984 I did start a small IT business 

and built it into a couple of hundred employees before selling it and 

then moved downtown here to Washington for, of all things, to 

start a trade association that helps small IT businesses. 

NetChoice today is a vocal advocate against barriers to e-commerce. That is our battle cry. By barriers to e-commerce we mean 

a legacy, rules and regulations that are being used to inhibit commerce like regulations against online auctions, rules that would 

block the interstate shipment of wine, rules that would bury online 

sellers of caskets. These e-commerce barriers are brought to light 

for one reason, because the Internet works for small business. 

The question you have asked today is does ICANN’s new registry 

contract present a barrier to small businesses using the Internet? 

14

It is a key question because as ICANN has developed this new 

agreement, they have declared they want to use it as the template 

for all subsequent registry contracts in the future. To get you answers, we went straight to the source. We sponsored a Zogby interactive poll last week of 1,200 small businesses that use the Internet across the nation. Here are some top lines from the poll. 

Seventy-eight percent of small business owners say that a less 

reliable Internet would damage their business. No surprise. The 

same percentage said that reliability and performance were more 

important to them than lower fees for domain names. Two-thirds, 

68 percent, supported $1.86 increase in domain name fees to keep 

the Internet reliable and secure and 81 percent said plain out they 

are just unconcerned with that kind of a fee increase period. 

It is clear that small business is not worried about this fee increase. What are small businesses worried about other than security and stability? Our poll results show that small businesses are 

very concerned with abuses to the domain name system. Fifty-nine 

percent of small businesses reported last week they are concerned 

about cyber squatting. Cyber squatting is where a speculator buys 

and holds a domain name that is very closely related to the domain 

name of another legitimate business and then holds that name ransom. Sixty-nine percent said they were concerned about being exploited when their domain name is allowed to expire which is just 

another form of extortion which is that they have to pay an 

exhorbinate fee to reinstate an expired domain. A few weeks ago 

I bought DelBiancofamily.us from a registrar GoDaddy. They are 

a very affordable registrar. They charged only $8 for a one-year 

registration. But the fine print tells me right up front that if I 

allow it to expire inadvertently and then ask them to renew it for 

me, to reinstate it for me, they would charge me $80, ten times 

what I had to pay to get it. That doesn’t seem right, not to small 

businesses nor to consumers. 

We also know that small business is very concerned about something called parking. This is where a deceptive website preys on 

the fact that human beings make errors when we type in domain 

names. A simple typo takes you to a site you didn’t intend to go 

at. Parking sites generate ad revenue by steering the users who inadvertently landed there to competing businesses. 

Pool.com, for instance, has made a science out of this parking. 

They snatch expiring domain names everyday at 2:00 in the afternoon. Pool’s president says, and I quote, ‘‘It’s like going to the horse 

races every day.’’ A fourth type of domain name abuse that we are 

concerned about is something called slamming. That is where a 

registrar other than the one that you originally used to buy your 

name sends a fraudulent invoice to you months ahead of your expiration telling you here is what it is going to cost to renew. 

If you fall for it and pay the bill, the slammer has taken over 

your domain account. Fortunately, our Federal Trade Commission 

stepped in and forced several registrars to stop slamming users in 

2003. So knowing these real concerns of small business, let’s turn 

to ICANN’s new registry contract for a moment. I think it is comforting to see that ICANN gets it about what really are barriers to 

small business. 

15

Three quick points. No. 1, security and stability is absolutely 

baked-in to their contract. Those words are mentioned 26 times in 

the 28-page agreement, not counting the appendices. No. 2, the 

contract states right up front that ICANN fully intends in the 

years ahead to resolve domain name disputes and stop some of 

these abuses that small business is concerned about. 

In fact, Section 3 of the contract, and it is a tough contract to 

read, says that the registry operator must implement any and all 

brand new policies that ICANN adopts over the life of the contract. 

If they fail to implement and fail to cure, they lose the renewal option. They lose the renewal option. It is plainly in the contract. 

Now, if a registry operator can meet unlimited upside obligations 

under a price cap over the term of a contract, I think you would 

agree they deserve a presumption of renewal. Third point I will address is that ICANN is seeking independence in this contract. Independence, as Champ said, from the United Nations and from other 

governments. 

The Government and the UN know how important and vital the 

Internet has become and anything that is that important, well, 

they want to control it. They will use any excuse to come out of the 

weeds. They are waiting for a cause, as Champ indicated. I would 

tell the members of this Committee that this group is looking for 

any excuse at all. They will take as an excuse the approval of this 

agreement and you can bet they would take as an excuse if this 

group or this Government intervened in some way to mess with the 

contract. If this agreement between ICANN and any registry is 

changed by our Department of Commerce in any way, foreign governments say, ‘‘You see, the U.S. won’t keep its hands off the Internet.’’ We lose either way. 

I also wanted to suggest that independence has another motive. 

The current contract that ICANN is proposing calls for a larger 

and more predictable revenue stream from the registry operator as 

opposed to the registrars. That is a move towards independence 

that really could be concerning to the large registrars who have a 

lot of control today. 

Last December I was in Vancouver and heard ICANN’s finance 

chair say that spending on critical initiatives was being delayed 

and diminished because the biggest registrars hadn’t approved the 

fees that were already in the adopted budget. Resalers of domain 

names cannot be allowed to control ICANN that way. 

So, to conclude, I would say that our poll shows plainly that 

ICANN’s new registry contract does address the real concerns of 

small business and should be approved. These real concerns, however, do not match the complaints of a few large registrars who 

have their own ax to grind. Too often the booming voice of a bigger 

business will drown out the voices of small business. 

I close by thanking you for listening to small business and I look 

forward to your questions. 

[Mr. DelBianco’s testimony may be found in the appendix.] 

Chairman BARTLETT. Thank you very much. Our next witness, 

and our last witness, is Mr. Craig Goren who is the Chief Executive Officer of Clarity Consulting. When I read the name of your 

organization, I thought what a creative name. It is one of those 

16

several times when I see a name that I ask myself, ‘‘Gee, why 

didn’t you think of that?’’ 

Another one of those names was Serendipity, Inc. What a great 

name for a company. Thank you, sir, for being so clever as to 

choose a name like Clarity Consulting. What other consulting firm 

would you want to go to? A Chicago based software development 

firm. Thank you and the floor is yours. 

STATEMENT OF CRAIG GOREN, CLARITY CONSULTING 

Mr. GOREN. Thank you. Ironically before I start with my notes, 

that domain name was available but a company that was selling 

domain names wanted about $25,000 for it at the time which we 

couldn’t afford. That’s one of the reasons why I am here actually. 

Mr. Chairman, thank you for inviting me to testify here today on 

the subject of Contracting the Internet: Does ICANN Create a Barrier to Small Business? I am the Chief Executive Officer of Clarity 

Consulting. We are a Chicago based software development consulting firm that specializes in building custom software solutions 

for clients that depend on the Internet from small innovative startup firms to Fortune 50 financial service firms. 

Additionally, I’m the co-founded of CenterPost, a small business 

that relies on the Internet to provide automated customer messaging solutions such as flight status alerts, appointment confirmations, and late payment reminders for clients like United Airlines, 

Wells Fargo, the Weather Channel, and so on and so forth. 

The Internet has become as essential as the phone, fax, and overnight delivery for all businesses both small and large purchasing 

products online, websites, e-mail, ATM machines. Thousands of 

other everyday business scenarios rely now on the Internet. Name 

resolution, the issue here today, is a technical term for the service 

provided by the registries, resold to companies like mine by the 

registrars, and it is ultimately what puts my name on the Internet. 

If there is a problem with DNS resolution, my business and, 

therefore, everyone else’s business essentially becomes invisible. 

When DNS service goes down, all of the critical infrastructure that 

supports the kind of services I just articulated go down as well. 

Just as business dependency on the Internet exist today, and on 

DNS exist today, and it has grown over the past several years, it 

will similarly continue to grow as new and new ways of using the 

Internet in business scenarios arise. 

I couldn’t have predicted blogging 10 years ago or iTunes or anything else but all of those kinds of services, as well as the negative 

services like denial services attacks and that sort of things, continue to tax the Internet. I just heard some testimony comparing 

the lowering of cost. I do agree there are economies of scale that 

need to be taken into consideration when we are talking about 

services like this. On the other hand, pulling price in the other direction should be consideration as to what kinds of new things are 

taxing the existing system. 

In terms of small businesses, however, let me state this up front 

and very clearly. My business, my client’s businesses, and even my 

competitor’s businesses now absolutely depend on a secure stable 

internet to provide products and services. Whatever the cost, business must be able to count on a network simply working. For my 

17

clients network up time must be so close to 100 percent the difference is undetectable. If it isn’t, planes are missed, checks 

bounce, e-mails are lost or millions of dollars are lost per minute 

in financial transactions. 

Mr. Chairman, your hearing today asks questions about the barriers to small business but the biggest barrier we fear is our reliance on the Internet infrastructure working properly and small 

businesses who can least afford to invest in redundancies and safeguards around the risk of DNS failure are most substantially exposed by the reliance on DNS and the Internet. 

It is my understanding that ICANN is including a provision for possible $1.86 wholesale cost a year increase to the registrars from 

their cost today of $6.00 a year in order to reinforce the infrastructure and enhance security as the Internet morphs over the coming 

years. Most small businesses pay about $10 to $50 a year to register their domain name. 

Even if the registrar elects to pass that $2.00 cost along to me, 

it is pretty much inconsequential in terms of the big picture for a 

small business in the overall cost in providing those services on the 

Internet. I would be happy to pay an additional $2.00 a year to 

guarantee equal or better service than what I have experienced 

over the past seven years, for example. 

In terms of the contract itself I want to take a moment to speak 

about what I consider the ridiculously deceptive and perverse misuse of the term perpetual monopoly. This is simply an contract 

with the potential for renewal. If we allow this absurd definition 

to stand, every service provider is a monopolist regardless of industry or size. 

By that definition every single vendor contract linked to renewal 

where some kind of service level agreement creates a monopoly 

and, therefore, my 50 percent firm based in Chicago is a monopoly 

and I am a monopolist. I don’t think anyone would agree with that. 

Such contracts in my opinion are ideal and I think most businesses 

large and small would support it. They are win/win/win. Buyer, 

vendor, and consumers all benefit. 

As a small business consumer I want my registrar’s registry, 

VeriSign in this case. I want their stockholders counting on keeping me happy and I want them scared out of their mind that if they 

screw up they lose all that forecasted revenue. 

On behalf of small businesses everywhere, my business, my employees, my customers, I urge you to make certain that the interest 

of all businesses are protected, not just the narrow group of players 

and competitors who may be seeking Government assistance for 

the competitive advantage of themselves. Any decision I and our 

Department of Commerce makes should take into account the need 

to preserve stability and security of the Internet ahead of everything else. 

The consequences of a registry service disruption are enormous. 

I can speculate on a lot of reasons, big money reasons, why certain 

companies might not like disagreement but it is not my position to 

do so. My testimony is to clarify one thing, the absurd notion that 

$2.00 a year over the next seven years for the price of my domain 

name is something that should play into part of whether or not to 

let this contract go further. 

18

[Mr. Goren’s testimony may be found in the appendix.] 

Chairman BARTLETT. Thank you all very much for your testimony. Because you do not all have the same perspective on this 

issue, because you are very much more knowledgeable collectively 

than we are, I would like to ask you to pay individual particular 

attention to the questions that are asked and the discussion that 

occurs. 

If at the end of this hearing we have not had the wit to ask important questions that you would have asked were you sitting here, 

we would ask you to please convey those questions to us and we 

will ask all of you to be ready to answer questions for the record 

because we want to make sure that this hearing provides as complete testimony as possible. 

With that, let me now turn to my friend Mrs. Kelly for her questions and comments. 

Ms. KELLY. Thank you, Mr. Chairman. I am glad to be here and 

to hear this discussion. It is kind of a complicated thing and it is 

not something that is generally understood by the American public. 

They are certainly not going to spend the time reading all in depth 

in the newspapers about it so I think a hearing like this is very 

important. 

I have a couple of concerns. It seems to me that none of you are 

arguing against VeriSign serving as a .com registry. You are asking 

that VeriSign be able to compete at a reasonable interval for that 

privileged market position that it has. Is that correct? 

Mr. MITCHELL. Yes, ma’am. That is correct. 

Mr. WHITE. Not quite. 

Ms. KELLY. Is there something unreasonable about this? Rick, 

my colleague from the class that we came in together with, go 

ahead and answer that with Mr. Mitchell. I would like to hear a 

dialogue between the two of you so I can understand this more 

completely. 

Mr. WHITE. Yes. Absolutely. You know, I think you remember, 

Congresswoman, you and I came in at a time when competition is 

something we absolutely believe in. There is nobody, I don’t think, 

who voted probably more than either one of us for competitive 

things when I was here and I think you are still probably still upholding that great tradition. But, you know, there are certain industries where—well, to start off with, what you have here is an 

arms-length contract between two private parties that don’t really 

like each other so it is hard to imagine there is too much collusion 

in that. We set it up exactly for that reason. 

Ms. KELLY. One second. Mr. Mitchell just shook his head, no, 

that is not true. I want to hear a dialogue. Go ahead and talk not 

to me but talk to each other because I would like to hear what you 

have to say to each other. 

Mr. MITCHELL. It’s not an arms-length contract between two 

independent parties. What you had was the regulator and the regulated getting into a room with the door closed without anybody 

being aware that it was happening and agree to essentially a perpetual renewal provision that gave a perpetual monopoly, and they 

are a monopoly. I mean, they are the only people you can get it 

from. 

19

That is the difference between them and the man from Clarity. 

He has thousands and we have got hundreds. Neither one of us are 

monopolies. They got into the room, they closed the door, and they 

made an agreement and here was the agreement. VeriSign gets a 

perpetual monopoly. Verisign gets a price increase without have 

had it reviewed or justified. ICANN gets $80 million of additional 

fees and gets removed from any review. 

Now, it is not true that the registrars have the right to approve 

the ICANN budget. They have no ability to say anything about approving the ICANN budget. What they do do is have a right to vote 

on the particular fees that they pay. It is only part of the ICANN 

budget but it is the only review that exist. 

I would be the first to agree that is not the best way to do it, 

that we should have reform of the way the ICANN budget gets reviewed. That is what should be happening this September with the 

MOU review and should be decided before we ever prematurely 

renew a contract that doesn’t come up for renewal until November 

of 2007. 

Ms. KELLY. Your position is that there should be stronger oversight? 

Mr. MITCHELL. I think in certain areas, yes, ma’am, there should 

be. In other places competition will take care of it. We don’t have 

to worry about pricing because we compete with 687 other registrars. 

Mr. WHITE. We would all like the Government to help us lower 

our wholesale cost. I mean, that is essentially what we are asking 

here. The fact is he didn’t disagree. These are private parties. Yes, 

there is a relationship that one is supposed to quasi-regulate the 

other but that doesn’t make this anything different from an armslength negotiation between two private parties. 

I would also say every registry is a monopoly for their particular 

name. If it is .com or .us or .mobi, you have got to have one as a 

technical matter. You have got to have somebody who is the final 

answer. How do you track it down? Somebody has got to have the 

computer that has that question in there. The idea that this is a 

monopoly situation is totally off in left field. 

To say one other thing, we also do have some businesses and we 

recognize them where it doesn’t make sense to have two dams built 

across the river so we can compete. It doesn’t make sense to sell 

Spectrum for cell phones to two different people and have them try 

to build out the same area. In areas where you have a huge investment that you have to make, hundreds of millions of dollars in this 

case, you have got to recognize the desire of the person making 

that investment to have a reasonable period of time and this is now 

different in those situations. 

Mr. MITCHELL. I would agree with certain things that he says 

and I want to be clear where we do agree because I think that is 

just as important, Congresswoman, as where we disagree. I agree 

that it is best to have one registry for a gTLD and I agree they 

have to have a reasonable period of time to recoup investment. I 

am a businessman. Five years is more than reasonable. We give 

the key to the commanding control of the United States military 

out on a contract that is bid to private parties just the way we are 

20

talking about this should be bid for terms of about five years. That 

is plenty. 

Last point, VeriSign most definitely is a monopoly. It is true that 

not every generic TLD is a monopoly. .name, I think, probably has 

6,000 total. They don’t have a monopoly. Who wants it? On the 

other hand, you have .com that has 78 percent of the market share 

in the United States. By anybody’s definition that is a monopoly. 

There is no substitute for .com. 

Ms. KELLY. So it is a check and balance system right now and 

that is what this Government is supposed to do. I am sitting here 

thinking that it sounds like we need—Mr. Chairman, I think we 

need to take a look at what is going on here in terms of that check 

and balance system. 

The other thing is having been a businesswoman before I got 

here, it seems to me when you are talking about increased price, 

and you are allowed to do that at VeriSign, I don’t know that is 

going to produce any better safety or security for anybody who is 

paying that additional cost. I haven’t heard anything today that 

tells me that is going to be the product of the increase. If your costs 

are going down, why are you increasing the cost to people? 

Mr. WHITE. Let me help you with that one. I think you make two 

really good points. To deal with your first point—I’m sorry, I just 

missed the point I was going to make. Oh, I know. I wanted to say 

that ICANN was set up, Congresswoman Kelly, to do exactly what 

you are talking about. There is supposed to be oversight but it is 

supposed to be done by ICANN, experts in the field, a private selfregulatory organization. 

It is not supposed to be done by members of Congress. I would 

ask why in the world would this Committee get involved in this? 

I mean, you have a arms-lengthy deal between these private parties just exactly the way it is supposed to work. You have 100 percent performance by this company. Talk about international concern. If anything is going to get the international community upset, 

it is when you overrule the decision made by the body set up to 

support their interest. 

I guess I would suggest to you that this is not a place where 

oversight by this committee as called for because you have already 

gone through the process that was required that actually this Congress and this Government set up almost 10 years ago. 

Ms. KELLY. I will do anything to support small business. That is 

my point. I appreciate you giving me a little extra time here, Mr. 

Chairman, but this is really serious for the small business person. 

If they are going to pay more money, they ought to be getting 

something more for their money. 

Mr. DELBIANCO. Congresswoman, may I react to that, please? I 

did take some time to examine the process that ICANN was going 

through at soliciting input on this proposed contract. It is far from 

being in a smoke filled room because whatever happened behind a 

closed door, everything was shown to the full public of the world 

and you wouldn’t believe the number of comments that showed up 

on these world wide database, world wide bulletin boards and commentary. All of us can download and print the entire agreement, 

every bit of it. None of this is closed. What amazes me most of all 

in the agreement is that VeriSign or any other registry operator is 

21

willing to sign on to a limited price cap, whatever it is. I told you 

it is $1.86. We don’t really care in small business. As a small business I would be scared to death to sign an agreement that obligated me to any and all new policies that ICANN comes up with. 

Any and all new policies for security and stability, any and all new 

policies to resolve disputes bout domain names and squatting and 

renewal. 

In other words, ICANN is promising to invent new policies as 

problems occur to be reactive and I am glad but they are putting 

folks on the hook for a fixed price to deliver anything and everything it takes to make ICANN happy. that strikes me that ICANN 

is getting a contract here that is good for us that use the Internet 

but awfully tough for a registry operator. That is why the price increase, I believe, whatever it is, is justified. 

Mr. MITCHELL. If I may respond to that, again, the statement of 

facts are inaccurate. VeriSign is allowed to get a price increase 

anytime it wants to if regulation increases its cost. There is no cap 

on that. If they come to ICANN and say, ‘‘Your new regulations 

have increased our cost and here it is,’’ they get a price increase. 

This contract, the proposed contract, the existing contract, all 

provide for that. I think any American small business would dearly 

love to have a guaranteed price increase and they didn’t have to 

compete with anybody. Perhaps the ultimate test of a monopolist 

is when you can call all of your customers greedy, price harlots, 

and know they have to come to you tomorrow and buy at whatever 

price you charge. I think that is better than the Herfindahl index 

test for monopoly. Thank you, ma’am. 

Ms. BURR. If I could just at the risk of being heretical suggest 

that this debate about perpetual renewal is a total sideshow. I 

think almost everybody at the table would say that it is okay with 

them for VeriSign to continue to run .com. Frankly, for other registries who are coming and hoping to compete with .com, the security and the ability to raise money and investment that comes with 

having a perpetual presumption of renewal is critical. 

The real issue here is every registry is a monopoly for that registry, and there is no question that VeriSign and .com has a dominant position in the domain name registration world. The real 

question ought to be is VeriSign in a position to misuse its dominant position and, if so, are the kinds of checks and balances that 

we have in place by law adequate? Does the Justice Department 

have ability to get at this and look at it? 

If you want to give ICANN the job of being the substitute Justice 

Department, do they have the ability and the legitimacy to be that? 

I think there is a very important question about what are the 

checks and balances on VeriSign’s ability to misuse its market position but I hate to get sort of completely side derailed by this perpetual renewal issue. 

Mr. WHITE. I agree. There are many other issues and these are 

all to be taken up. If you would look at the notice that Commerce 

has put out on the renewal of the memorandum of understanding, 

these are all to be taken up as part of that process. 

My key point is let’s give the answer to the policy issue so that 

it can do what it is supposed to do which is embody those in the 

contract and a contract that doesn’t come up for renewal until NoVerDate 0ct 09 2002 00:07 Nov 18, 2006 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 G:\HEARINGS\30233.TXT MIKE
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vember of 2007. The memorandum of understanding has to be completed by September 2006 so you have 14 between the two. 

Chairman BARTLETT. Before turning to our next member for 

questions, let me ask for a clarification. I seem to be hearing two 

things about the $1.86. One was that it was permissible price increase during the performance period up to 2012. The other was 

that it was a per year increase. Which is correct? 

Mr. MITCHELL. It is 7 percent per year, Mr. Chairman, which is 

a total of $1.86. The first year is 42 cents. 

Chairman BARTLETT. Okay. So it was $1.86 over the performance 

period, not per year. I seem to be hearing two things. 

Mr. MITCHELL. They are both correct. One, it is a total price increase of $1.86. 

Chairman BARTLETT. But not $1.86 per year. 

Mr. MITCHELL. Yes, it is $1.86 per year of registration so that if 

I go and register a domain name, which many of our customers do 

for three years, then you would pay three times a $1.86. 

Mr. WHITE. It is a yearly fee. It is a yearly fee. 

Mr. JEFFREY. As a point of clarification, 7 percent per year is 

available to VeriSign to increase prices if they deem it necessary. 

They have indicated they may not choose to use that 7 percent increase that is available. That is one thing. That is four of the six 

years and that is now it goes to $1.86. The other two years they 

can present a 7 percent increase but only if justified by security 

and stability infrastructure changes or requirements. 

Chairman BARTLETT. So it is $1.86 or 7 percent, whichever is 

greater, up to the $1.86 after which you have to justify it. 

Mr. MITCHELL. Yes, sir. 

Chairman BARTLETT. Okay. That is a fair statement. Thank you 

very much. 

Ms. Musgrave. 

Ms. MUSGRAVE. Thank you, Mr. Chairman. 

Mr. Goren, you indicated a level of comfort with the rate increase 

and you don’t see anything unfair about it. Probably one of the reason that you are all here today is because some small businesses 

are not happy with it. Could you maybe give me some insight? You 

are comfortable. Why are other small businesses complaining? 

Mr. GOREN. I have not heard of a single small business complaining. 

Ms. MUSGRAVE. Not a single one? 

Mr. GOREN. Not a single small business. I have run this by many 

colleagues. There is a complicated business relationship that exist 

here along with the technology. It is kind of difficult when I talk 

to friends and colleagues to explain sort of in layman’s terms but 

the nomenclature of registry versus registrant and that sort of 

thing confuses people. This is the wholesale fee that we are talking 

about. 

I have the sort of distinct advantage of naiveness because I don’t 

know what is going on behind the scenes. I just have my view as 

a small business and my client’s viewpoint. I have no knowledge 

of what they pay wholesale prior to me doing a little bit of research 

before appearing here today. Typically of the people that I have informally surveyed, small business pays about anywhere from $10 

23

to $50 a year for their domain name services fees from registrant 

along with some other fees. 

We are talking about the likes of Register.com, GoDaddy, Network Solutions, that sort of thing. When I buy the services and I 

select my vendor, I have no notion of their underlying cost structure nor frankly do I care. I don’t make my purchasing decision 

based upon that. 

As an aside, to prove that point, if you go to, say, Register.com 

to purchase your domain name or GoDaddy or that sort of thing, 

you will find that regardless of which kind of domain name you intend to purchase, and I learned, by the way, that they have underlying different cost structures, the price of the consumer, me, the 

small business, happens to be priced the same within each registrant, or about the same. I think it is about $8 to $10 a year for 

GoDaddy. It is about $35 a year for Register.com. 

Clearly from my perspective whether it goes up—whether that 

$1.86 a year gets passed along to me or not compared to all of the 

other issues that I have with my registrants and the DNS issue 

resolution and mail servers going down, if I give up the latte I 

bought this morning in order to ensure that reliability remains the 

same, I would do it in a heartbeat. 

Mr. DELBIANCO. Congresswoman, I do have an example of a 

small business. It was during the debate, during that public and 

very transparent debate that ICANN was conducting and a small 

business objected to the whole idea of the price increase. It was a 

woman who wrote an e-mail. It is still on the website at ICANN. 

She objected to how much these fees would impact the ability for 

her to buy her websites that she uses. It was a pretty emotional 

appeal because her website, she said, was a nonprofit called 

Catholicpenpals.com. I was too curious to resist so I went to the 

website and her website said, ‘‘This domain name is for sale.’’ 

There were no pen pals there. 

If you want to find small businesses that object to even a minuscule price increase, pay attention to the small businesses who make 

their living squatting and parking and snatching domain names 

with an effort to catch people unawares, put ads in front of them 

and earn revenue or, worse still, to extort people into paying exorbitant sums to buy a domain name that is misleading to their consumers and truly belongs to them. 

Mr. MITCHELL. And I abhor all those practices. I think any responsible person does. There are small businesses that are very 

cost sensitive and I will give you a specific example and it doesn’t 

have to do with this $2.00 price but it will give you some sense of 

what real small businesses feel. 

About six weeks ago a young man called me from upstate New 

York. His domain was on automatic renewal with us. When we 

have that we charge his credit card 45 days before the renewal 

date so in case he just forgot to take it off, he can do a charge back 

and we won’t have renewed the name. Neither of us can get penalized. 

He called me virtually in tears because we had done that renewal 45 days ahead of when he planned it. He runs his cash so 

tight every month to try to keep his business alive that we had acVerDate 0ct 09 2002 00:07 Nov 18, 2006 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 G:\HEARINGS\30233.TXT MIKE
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tually pushed him up to the limit of his credit card and he was 

having to bounce a payment. We, of course, reversed it. 

We wrote the people. There are people out there who care. I will 

agree that most people like Mr. Goren aren’t going to care that 

much about $2.00. I don’t think you are buying anymore stability 

or reliability with it, by the way. I think you are just putting 

money into somebody’s pocket. If we are going to put it in somebody’s pocket, let us take what American small business pays 

which is over $700 million under this proposal and put it somewhere that it can be used to increase the competitiveness of American small business, not to a monopolist pocketbook. 

Mr. WHITE. Mr. Mitchell. 

Mr. GOREN. Let me speak to that for a second, please. So you 

charged this person that was practically in tears $45 for a service 

essentially that wholesale you payed $6.00 for. 

Mr. MITCHELL. No, I didn’t charge him $45. 

Mr. GOREN. You were going to and it put him in a cash flow 

issue. 

Mr. MITCHELL. You are wrong. 

Mr. GOREN. What did you charge him? 

Mr. MITCHELL. I said 45 days. 

Mr. GOREN. What did you charge him? 

Ms. MUSGRAVE. Probably for us to understand this, let’s go one 

at a time. How about it, guys? 

Mr. GOREN. Let’s say you charged him the cheapest I have seen, $10, and he had a problem with that on his credit card. Under the 

example, and this is why the details are important, not at a macro 

level but at an individual small business viewpoint level, that same 

person, I think, would have objected to $12.00 just as much as $10 

in that scenario. It is not the cost of that service to that person 

that is driving whether or not they want that domain name. It is 

not that cost. It is simply not that cost. If that person has a problem being charged 45 days ahead of time, it is pretty misleading—

because of their credit care issues, it is misleading to suggest that 

a $2.00 increase would have made it even worse. 

Mr. MITCHELL. I didn’t mean to suggest that. I said this was not appropo specifically to the $2.00— 

Mr. GOREN. If it is not appropo— 

Mr. MITCHELL. —but to how tight some small businesses run. 

Let me say something— 

Mr. GOREN. No one runs their domain as tight as $2.00. 

Mr. MITCHELL. Let me say something specifically to what Mr. 

DelBianco said. He talked about the comments and the open and 

transparent nature of the comments. After the deal was cut they 

put it out for comment. That is quite true. Here is the interesting 

part. Every constituency of ICANN that spoke other than the one 

that VeriSign is a member of spoke vociferously against this. 

VeriSign’s own constituency, the registry constituency, didn’t come 

out for it. What they said is, ‘‘If they are going to get that deal, 

we want it too.’’ Yet, with complete opposition ICANN went forward. That is how much good transparency has been in this particular exercise. 

Mr. WHITE. Just so we do find out, how much did you charge this 

person for the domain name? 

25

Mr. MITCHELL. I think we charged the person $35.00. 

Mr. WHITE. $35. 

Mr. GOREN. So it would have been $37.00 if you— 

Ms. MUSGRAVE. Thank you, Mr. Chairman. 

Chairman BARTLETT. Thank you very much. As Chairman I have 

stood aside because this is exactly the kind of hearing I like. I have 

known ever since I came here that the great wisdom of this country 

was not inside the beltway but outside the beltway so thank you 

very much for making this a very interesting and informative hearing. 

Before I yield again to my colleagues for a possible second round 

of questioning, I would like to go down the list of witnesses. It was 

my anticipation that the primary purpose of this hearing was to get 

information on the record because there are a lot of people out 

there who had some questions about exactly what was going on. 

If, in fact, there was something that we as a Committee ought 

to be doing, I would just like to go down the list starting with our 

first witness and go on down if, in fact, there is something we as 

a Committee ought to be doing other than just having this kind of 

a hearing that gets the information out on the record so it is available to people. If there is something specific we ought to be doing, 

now is the time to tell us what that is. Let’s just start down and 

go down the list. 

Ms. BURR. I think that getting the information out and on the 

record is an important task. 

Chairman BARTLETT. Thank you. Okay. 

Mr. Jeffrey. 

Mr. JEFFREY. We agree. We applaud you for having the hearing. 

We are not hiding the information about this agreement. There 

have been two public comment periods and we certainly think that 

this hearing is a good thing because we want people to understand 

what the agreement is about. 

Chairman BARTLETT. Okay. 

Mr. White. 

Mr. WHITE. I think this hearing has been fine. I wouldn’t do anything else. I think you are treading on dangerous territory if you 

do. 

Chairman BARTLETT. Mr. Mitchell. 

Mr. MITCHELL. Well, I think I will put aside whatever it is they 

told me I was supposed to say and just talk to you all. I am sure 

that somebody will chide me afterwards. First, Mr. Chairman, 

thank you. Thank you, Congresswoman Kelly for your time and 

your patience with us. You have been very kind. 

Yes, there is something the Committee should do, I believe. We 

believe a couple of things. No. 1, that the Committee should reach 

its own decision on whether this is good, bad, or indifferent for 

small business and tell the Department of Commerce what it 

thinks whatever your decision is. And second, if you want me to, 

I will tell you what I think it should be, but otherwise I will leave 

it to you, Mr. Chairman. 

The second thing would be, and I think this is vitally important, 

we have heard today many issues come out about how the Internet 

is governed, how ICANN is run, and they are very important, and 

there are legitimate arguments on both sides. 

26

These are all going to be aired between now and September of 

this year in the memorandum of understanding review. Those 

should be settled before anybody tries for a new registry agreement 

that is not due until November 2007. I would urge the Committee 

to so say to the Department of Commerce. Thank you, Mr. Chairman, so much for letting me be here. 

Chairman BARTLETT. Thank you very much. Mr. Mitchell has 

volunteered that he would make a judicial statement for the record. 

We will hold the record open so that all of you can do that. We 

want this to be a full and complete a hearing as possible and encourage you if there is something that could be amplified on to 

please make that available to us. The last two, Mr. DelBianco. 

Mr. DELBIANCO. Thank you, Mr. Chairman. What I will do right 

away is we just finished the analysis of the poll we did on 1,200 

American small businesses that have websites. Those are the results I quoted in my testimony and I will just put that into the 

record and make it available to anyone else here who would like 

to have it. 

Mr. MITCHELL. May we be allowed to review it and comment on 

it in the record? 

Mr. DELBIANCO. Of course. 

Mr. MITCHELL. Okay. 

Mr. DELBIANCO. I think the record stays open. I did want to suggest this. The Government needs to act with caution that intervening at what ICANN is trying to do in its private contracts. As 

Mr. Mitchell said, the UN and other governments are hiding in the 

grass and they will look for any excuse to pounce on ICANN for 

lacking the independence it needs so we need to be cautious about 

messing with what ICANN has set up. Thank you, Mr. Chairman. 

Chairman BARTLETT. Thank you. 

Mr. Goren. 

Mr. GOREN. I guess what I would like to see done is really what 

I would like to see not done and that is I would like to see small 

businesses represented properly and I don’t believe that $2.00 a 

year for a domain name is something that small businesses really 

care about. On the other hand, I am very concerned that people 

and parties with other specific big money interest in economies of 

skill in terms of tens of thousands of domains use small businesses 

to misrepresent their interest in terms of gaining other types of advantages that would come at the expense of small businesses like 

stability and all the other complex things that are going to happen 

with the Internet should we decide to change registries and the 

Government may not be exactly aware of all the kinds of technical 

issues and trouble and additional buried cost that would come 

along with such a thing. 

Chairman BARTLETT. Thank you very much. 

Mrs. Kelly, you have additional comments and questions? 

Ms. KELLY. I just would ask unanimous consent that this dialogue that has been proposed be allowed to be in the record and 

hope you will so move. That is the first thing. So moved? 

Chairman BARTLETT. I don’t think we have to move. I think I 

saw the clerk taking it down and I don’t think we have any option 

but that it is part of the office record. Am I correct? Thank you. 

27

Ms. KELLY. But it will be coming back to the Committee. I think you are right, Mr. Goren, in the fact that $2.00 isn’t really that big 

a deal for the average person. What is important that there be 

somebody watching to make sure we don’t foul up somewhere in 

the way this is being handled. That is the overriding. I think that 

is what Mrs. Burr was talking about. It is important if it is not broken, we are not going to need to fix it. 

I know from having been in this position for a little while that 

the best way to make sure it doesn’t get broken is to keep a good 

handle on the oversight. That is really where we are coming from, 

I think, to make sure that nothing is going to harm our ability for 

the Internet to grow and to grow our economic base by letting our 

small businesses get in and get active. Is that a correct statement 

and would you agree with that? 

Mr. GOREN. I would agree with that, Congresswoman. The point 

that I was trying to make to clarify that is that the only argument 

I have actually heard brought up in what I thought was an oversight process that has been going on both privately and publicly, 

the only concern that was brought up, and particularly with this 

Committee, the House Committee on Small Business, was the cost 

issue. If that is the only concern, then I can’t see anything else. As 

a small business owner who started two small businesses, I would 

be happy to comment on other potential issues but the only issue 

I have heard on the table is this $2.00 a year. 

Ms. KELLY. I have started a couple of my own small businesses 

and run them, too, so I understand that there are things out there. 

In general I feel very strongly that we in Government can do the 

best job by not getting involved in things that are working. On the 

other hand, I also know that when you talk about an increase in 

cost, if my costs increase, I have to pass those on to the customer. 

If my costs increase, I want something for my money. I didn’t 

hear anything here that said I am going to get more safety or higher quality for an increase in cost. I would be very interested, Mr. 

White, my friend, if you would answer more specifically if you 

would like to add to what you are saying to address that in particular. 

Mr. WHITE. Absolutely. I will because I tried to make the point 

but we will try to send you some additional information. The challenge of running this is orders of magnitude greater even than the 

increase in traffic because people like Mr. Mitchell have gotten 

very sophisticated at using the system to maximum the revenue 

they can get which is what they should be doing but it puts a lot 

more demands on the registries— 

Mr. MITCHELL. I— 

Mr. WHITE. Mr. Mitchell, you have had a lot of opportunities to 

talk. Would you mind if I said something? 

Mr. MITCHELL. Well, you just kind of cast— 

Ms. KELLY. One second, Mr. Mitchell. Let him finish. 

Mr. WHITE. I just wanted to say that it has become a lot more 

difficult and they have done a great job and they are going to have 

to continue to invest to make sure that it stays at the level of performance that we’ve had. That is something that we shouldn’t underestimate. We will make sure we get you all that information so 

that becomes clear. 

28

Ms. KELLY. Thank you. 

Thank you very much, Mr. Chairman, for doing a second round. 

Chairman BARTLETT. Thank you. 

Mr. Mitchell, you had a comment or observation? 

Mr. MITCHELL. Yes. Mr. Chairman, thank you. These little asides 

about how we are profitable and we are the big business are getting just a tad old. 

Mr. WHITE. You should be in my seat then. 

Mr. MITCHELL. There are things that are done on the Internet, 

one of them that Mr. White mentioned, the ad game that goes on. 

We don’t participate in that. So people ought to be a little bit careful about throwing aspersions at folks. As for who has gotten the 

big money here, I wish I had VeriSign’s revenue and VeriSign’s 

size or VeriSign’s profits. I think we need to follow the money, too. 

Thank you, Mr. Chairman. 

Chairman BARTLETT. Thank you. 

Ms. Musgrave, do you have additional questions or comments? 

Mr. MITCHELL. No, thank you. 

Chairman BARTLETT. Okay. I want to thank you all very much 

for a very good hearing. We will hold the record open for two weeks 

and we really hope that you will contribute additional observations 

to the record. Thank you all very much for a good hearing and we 

stand in adjournment. 

Mr. MITCHELL. Thank you, Mr. Chairman, and thank you members. 

[Whereupon, at 3:34 p.m. the Committee adjourned.]

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