U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

73–751 2012

OVERSIGHT OF THE INTERNET CORPORATION 

FOR ASSIGNED NAMES AND NUMBERS (ICANN) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS, 

TECHNOLOGY, AND THE INTERNET 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JUNE 4, 2009 

Serial No. 111–42 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 


tjames on DSK6SPTVN1PROD with HEARING
COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California 

Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JANICE D. SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER S. MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 


tjames on DSK6SPTVN1PROD with HEARING
(III) 

SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, AND THE INTERNET

RICK BOUCHER, Virginia 

Chairman 

EDWARD J. MARKEY, Massachusetts 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

DIANA DEGETTE, Colorado 

MICHAEL F. DOYLE, Pennsylvania 

JAY INSLEE, Washington 

ANTHONY D. WEINER, New York 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

CHRISTOPHER S. MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

JOHN D. DINGELL, Michigan (ex officio) 

FRED UPTON, Michigan 

Ranking Member 

J. DENNIS HASTERT, Illinois 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

VITO FOSELLA, New York 

GEORGE RADANOVICH, California 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 


tjames on DSK6SPTVN1PROD with HEARING

tjames on DSK6SPTVN1PROD with HEARING
(V) 

C O N T E N T S 

Page 

Hon. Rick Boucher, a Representative in Congress from the Commonwealth 

of Virginia, opening statement ............................................................................ 1 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 2 

Hon. Michael F. Doyle, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 4 

Hon. Lee Terry, a Representative in Congress from the State of Nebraska, 

opening statement ................................................................................................ 5 

Hon. Doris O. Matsui, a Representative in Congress from the State of California, opening statement .................................................................................... 6 

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, opening statement .................................................................................... 7 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 8 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 9 

Hon. John B. Shadegg, a Representative in Congress from the State of Arizona, opening statement ...................................................................................... 10 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, prepared statement ........................................................................... 140 

WITNESSES

Fiona Alexander, Associate Administrator, Office of International Affairs, National Telecommunications and Information Administration, U.S. Department of Commerce ............................................................................................... 12 

Prepared statement .......................................................................................... 15 

Answers to submitted questions ...................................................................... 155 

Paul Twomey, President and CEO, ICANN .......................................................... 19 

Prepared statement .......................................................................................... 21 

Answers to submitted questions ...................................................................... 159 

Kenneth J. Silva, Senior Vice President and Chief Technology Officer, 

Verisign ................................................................................................................. 30 

Prepared statement .......................................................................................... 32 

Christine N. Jones, General Counsel and Corporate Secretary, The Go Daddy 

Group, Inc. ............................................................................................................ 37 

Prepared statement .......................................................................................... 39 

Sarah Deutsch, Vice President and Associate General Counsel, Verizon Communications .......................................................................................................... 50 

Prepared statement .......................................................................................... 52 

Thomas M. Lenard, Ph.D., President and Senior Fellow, Technology Policy 

Institute ................................................................................................................ 58 

Prepared statement .......................................................................................... 60 

SUBMITTED MATERIAL

Letter of June 3, 2009, from eNom, Inc. to Subcommittee, submitted by 

Mr. Boucher .......................................................................................................... 142 

Letter of June 3, 2009, from CADNA to Mr. Boucher, submitted by Mr. 

Boucher ................................................................................................................. 147 

Prepared statement of Vince Cerf, former ICANN Chairman, submitted by 

Mr. Boucher .......................................................................................................... 151 


tjames on DSK6SPTVN1PROD with HEARING

tjames on DSK6SPTVN1PROD with HEARING
(1) 

OVERSIGHT OF THE INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS 

(ICANN) 

THURSDAY, JUNE 4, 2009 

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, 

AND THE INTERNET, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:07 a.m., in Room 

2123 of the Rayburn House Office Building, Hon. Rick Boucher 

[chairman of the subcommittee] presiding. 

Present: Representatives Boucher, Eshoo, Doyle, Inslee, Matsui, 

Christensen, Castor, Space, McNerney, Dingell, Weiner, Stearns, 

Upton, Shimkus, Shadegg, Terry, and Blackburn. 

Staff Present: Amy Levine, Subcommittee Counsel; Roger Sherman, Chief Counsel; Shawn Chang, Counsel; Tim Powderly, Counsel; Greg Guice, Counsel; Sarah Fisher, Special Assistant; Liz 

Eralzer, Intern; Pat Delgado, Chief of Staff, Mr. Waxman; Amy 

Bender, Minority Counsel; Neil Fried, Minority Counsel; and Garrett Golding, Minority Legislative Analyst. 

OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF VIRGINIA 

Mr. BOUCHER. The subcommittee will come to order. 

Our discussion this morning focuses on the activities of the Internet Corporation for Assigned Names and Numbers, commonly referred to as ICANN. 

Since 1998, ICANN 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 

November of 1998 has been renewed on several occasions, most recently as a Joint Project Agreement, which is now scheduled to expire on September 30 this year. 

One matter upon which we will focus this morning is whether 

Department of Commerce oversight should be retained through renewal of that agreement or, in the alternative, whether the time 

has come for that oversight to be relinquished, and for ICANN to 

operate, after September 30, 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 


tjames on DSK6SPTVN1PROD with HEARING
2 

separate contract, which is not scheduled to expire, the Department 

of Commerce has conferred upon ICANN the management of the 

master files of the domain name system, generally known as the 

root zone files. Under that non-expiring contract, ICANN also manages and coordinates the allocation of IP addresses. 

In considering whether the expiring contract should be renewed 

or should expire without renewal, key questions are whether 

ICANN’s decision-making is sufficiently transparent, or whether 

improvements are needed, and whether, under its existing structure and practices, ICANN is sufficiently accountable to Internet 

stakeholders and the global community of Internet users. I am 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 ICANN’s proposal to introduce new generic top-level domains, which could involve descriptions of various types of activities, locations, brands, or 

trademarked names. It is suggested that the creation of new toplevel domains would promote competition among registry operators 

of the TLDs, and would enhance consumer choice. 

Among the concerns that have been raised about a proliferation 

of new TLDs 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 TLDs, 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 the brand 

name, through the second level TLDs. So, as the number of top 

level TLDs 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 TLDs offset that cost, 

as a matter of public policy, a key question for us to consider. 

Other questions relate to ICANN’s capacity to manage all of the 

new top-level domains and assure the overall stability and security 

of the domain name system, and whether ICANN can assure that 

an adequate amount of competition would, in fact, arise in the bidding process for new TLDs. 

We will welcome our testimony this morning. We thank our witnesses for being with us, and sharing their views on these very important subjects, with regard to the future of Internet management 

and governance. 

Mr. BOUCHER. And at this time, I am pleased to recognize the 

ranking Republican on our subcommittee, the gentleman from Florida, Mr. Stearns. 

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Mr. STEARNS. Good morning, and thank you, Mr. Chairman. For 

more than a decade, ICANN has played a vital role in maintaining 

a stable and reliable Internet, and I think that is a very high 

achievement. 

ICANN has the critically important responsibility for managing 

the domain name system, the hierarchy of IP addresses and associVerDate Mar 15 2010 04:44 Jun 15, 2012 Jkt 073751 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 E:\HR\OC\A751.XXX A751

tjames on DSK6SPTVN1PROD with HEARING
3 

ated 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 of arrangements, including the Joint Projects Agreement. 

The key question before this committee is will the expiration of 

the JPA in September put the stability and security of the Internet 

at risk. I have some concerns, and want to hear from the panel on 

this matter. 

The JPA with the Department of Commerce has played an important role in ensuring that ICANN is accountable for its decisions, and conducts its mission in a manner that provides for 

stakeholders’ participation. The JPA should be extended, and the 

NTIA is in the process of seeking public comment on this issue. 

One major question for this hearing is whether there is a need 

to renew the JPA when it expires, and what the nature of U.S. engagement with ICANN would be in its absence. While it can never 

please all its stakeholders all the time, it needs appropriate governance mechanisms that will ensure its openness and accountability. 

Apart from ICANN’s 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 ICANN’s ongoing relationship with the Department of Commerce should then 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 GTLDs, which is a unit of letters or words beyond the 

rightmost dot, such as .com or .gov or .net. Over time, the number 

of GTLDs has expanded to 21. 

Last June, ICANN proposed to further expand the number of 

GTLDs. Under the proposal, which was put out for public comment, 

and must be finalized and approved by the Board of Directors, new 

GTLDs could include the names of organizations, companies, locations, or additional generic words. However, before ICANN expands 

this list, it should address concerns about the proposed expansion, 

and provide further opportunity for comments by all the stakeholders. 

In a letter to ICANN last December, NTIA raised a number of 

questions regarding the way in which it was proposed to administer the rollouts of these new GTLDs. Specifically, NTIA wondered 

whether it is prepared to implement measures to promote competition on registry prices, terms, and conditions, ensure the application process will respect, with respect to national and international 

laws, including intellectual property rights, enforce contract compliance, and design a rational fee structure. NTIA recommended that 

ICANN can resolve a number of these issues before expanding the 

GTLDs. 

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 GTLDs to prevent others 

from registering them, or pursue costly and time-consuming adminVerDate Mar 15 2010 04:44 Jun 15, 2012 Jkt 073751 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 E:\HR\OC\A751.XXX A751

tjames on DSK6SPTVN1PROD with HEARING
4 

istrative or legal processes against cybersquatters. I hope our witnesses will address these legitimate concerns also. 

Another and final point, that since ICANN is considered a not for 

profit organization, does a transparent mechanism exist to address 

any excess revenues. According to data from the Technology Policy 

Institute, its revenues have increased from $5 million in 2000 to 

over $60 million in 2009, while expenses have increased from 

under $3 million in 2000 to over $54 million in 2009. Thus, it will 

have a surplus of close to $7 million from Financial Year 2009. 

ICANN’s largest expense is personnel, accounting for close to $20 

million of the $54 million. According to its annual report, it employees 100 staff members. Although salary information and administrative costs were not available, I hope the witnesses today 

will address these issues on finance. 

Thank you, Mr. Chairman, for holding this hearing. 

Mr. BOUCHER. Thank you very much, Mr. Stearns. The gentleman from Pennsylvania, Mr. Doyle, is recognized for two minutes. 

OPENING STATEMENT OF HON. MICHAEL F. DOYLE, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF PENNSYLVANIA 

Mr. DOYLE. Thank you, Mr. Chairman, and I want to thank you 

for holding this important hearing. 

I own a few domains, and I have benefited from the competition 

among domains in 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 JPA with 

ICANN, and not relinquish control at this time. 

I am afraid ICANN seems better at furthering its own interests 

than those of the millions of Internet users that it is 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 FTC intervention. Why does ICANN allow them 

to continue to sell domain names? This is domain slamming and it 

continues today. When ICANN attempted to curb the abuse of domain tasting, the five day window when purchased domains were 

able to be returned and refunded, their solution was to make their 

fee nonrefundable. Well, that helped curb the abuse, but the money 

didn’t go for consumer protection or coordination towards IPv6, it 

went to the general budget, executive compensation, and cushioning ICANN’s $4.6 million stock 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 am glad to see witnesses talking about the GTLD 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 domains 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 .com are kept low in this economic 

downturn. 


tjames on DSK6SPTVN1PROD with HEARING
5 

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 ICANN. 

Thank you, Mr. Chairman. 

Mr. BOUCHER. Thank you very much, Mr. Doyle. The gentleman 

from Illinois, Mr. Shimkus, is recognized for two minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

We have a new Administration, everyone knows. We have a new 

individual getting close to being confirmed in NTIA. We have a 

change in the administration at the ICANN. This is now not a time 

to make changes. I would be supportive of extending the Joint 

Project Agreement. 

I look forward to the hearing, and I yield back my time. 

Mr. BOUCHER. Thank you very much, Mr. Shimkus. The 

gentlelady from the Virgin Islands, Mrs. Christensen, is recognized 

for two minutes. 

Mrs. CHRISTENSEN. Thank you Mr. Chairman and the ranking 

member for this hearing, and for giving me yet another list of new 

acronyms to add to others that I still haven’t committed to memory, but I am beginning to understand the concepts, and that is 

more important. 

We are here to review the progress ICANN has made, and 

whether it is ready for the Joint Project Agreement to expire on 9/ 

30/09, and for the management of the DNS to transfer from the 

MOU with the U.S. Government to the global community. Whether 

it is fully able to meet its mandates and the goals of stability, competition, bottom-up coordination, security, and broad representation, as well as transparency. There seem to be many concerns that 

it is not ready, and we need to determine if this is just a fear of 

the risks that any change would bring, whether they are legitimate 

concerns that still need to be addressed first, as some panelists will 

suggest. 

I am particularly interested in the bottom-up coordination and, 

of course, security, as well as understanding whether the projected 

plans ICANN has are not only realistic, but responsible, and 

whether or not they jeopardize stability and security. 

I want to applaud our chair and ranking member once again for 

the excellent oversight on 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. 

Mr. BOUCHER. Thank you, Mrs. Christensen. The gentlelady from 

Tennessee, Mrs. Blackburn, is recognized for two minutes. She was 

here a moment ago. All right, we will await her arrival at a later 

time. The gentleman from Nebraska, Mr. Terry, is recognized for 

two minutes. 

OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA 

Mr. TERRY. Thank you, Mr. Chairman, and appreciate you holding this hearing on what I believe could actually be a matter of national security. 


tjames on DSK6SPTVN1PROD with HEARING
6 

ICANN serves 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 ICANN should renew the Joint Project 

Agreement, or sign a similar agreement when the current agreement expires later this year. The goals of the JPA should continue 

to work towards increasing ICANN’s transparency, accountability, 

and openness, while developing mechanisms and procedures to 

transition the domain name system functions to the private sector, 

in a manner that promotes stability, security, competition, bottomup coordination, and representation. 

Should a rogue nation get the chance to control the DNS, it is 

a 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 it could very 

well be vital to our Nation’s security. 

Thank you, Mr. Chairman, and I yield back my time. 

Mr. BOUCHER. Thank you very much, Mr. Terry. The gentlelady 

from Florida, Ms. Castor, is recognized for two minutes. 

Ms. CASTOR. Well, thank you, Mr. Chairman, very much for calling this interesting hearing on the Internet Corporation for 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. I yield back the rest of my 

time. 

Mr. BOUCHER. Thank you very much, Ms. Castor. The gentleman 

from Michigan, Mr. Upton, is recognized for two minutes. 

Mr. UPTON. Thank you, Mr. Chairman. I would just like to say 

that I, too, join many of my colleagues, hoping that the JPA can 

be extended in a timely fashion, and I look forward to being a partner in that, and I believe that it will be certainly a bipartisan one 

as well. 

Since we have Ms. Alexander here, we have a pretty big date 

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. I know a lot of Americans are concerned about 

that, and don’t have quite the publicity we had back in February, 

but we all hope that it will be a pretty smooth transition, and we 

look forward to your thoughts about that as well. 

Mr. Chairman, I yield back. 

Mr. BOUCHER. Thank you very much, Mr. Upton. The gentlelady 

from California, Ms. Matsui, is recognized for two minutes. 

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. MATSUI. Thank you, Mr. Chairman. Thank you for calling today’s hearing. I applaud your leadership in addressing this imporVerDate Mar 15 2010 04:44 Jun 15, 2012 Jkt 073751 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 E:\HR\OC\A751.XXX A751

tjames on DSK6SPTVN1PROD with HEARING
7 

tant issue. I would also like to thank our panelists for being with 

us here this morning. 

As we all know, ICANN was created in 1998 to govern the allocation and designation of Internet domain names and addresses. Although certain responsibilities for the domain name system were 

transferred from the Department of Commerce to ICANN, Department of Commerce continues to exercise limited oversight of 

ICANN, through the Joint Project Agreement. Under this Agreement, the Department of Commerce affirmed its policy goals of preserving the security and stability of the Internet domain name system. This agreement is now set to expire on September 30 of this 

year. 

While I understand some of the reasons that ICANN does not 

want to extend the JPA agreement, such as how the U.S. role is 

viewed abroad, now may not be the time to say that ICANN should 

be on its own. Just last year, NTIA initiated a review of the agreement, and found that although ICANN has made progress in key 

areas concerning security and stability of the domain name 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 the Administration to carefully 

consider its agreement and partnership with ICANN. 

I thank you, Mr. Chairman, for holding this important hearing 

today, and I yield back the balance of my time. 

Mr. BOUCHER. Thank you very much, Ms. Matsui. Ms. Blackburn 

hasn’t returned. The gentleman from the State of Washington, Mr. 

Inslee, is recognized for two minutes. 

Mr. INSLEE. Thank you. I will reserve. Thank you, Mr. Chair. 

Mr. BOUCHER. Thank you, Mr. Inslee. You will have two minutes 

of time added to your questioning period. 

The gentleman from California, Mr. McNerney, is recognized for 

two minutes. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

This is an interesting and important hearing, so I am looking forward to it. It is important that we work together, to ensure that 

we have a fair and transparent system, maintaining and improving 

the Internet, in order to avoid potential difficulties. It is essential 

that we keep the Internet accessible and easily navigated to all, 

and I look forward to the testimony this morning. 

Thank you. 

Mr. BOUCHER. Thank you, Mr. McNerney. The gentlelady from 

California, Ms. Eshoo, is recognized for two minutes. 

OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. ESHOO. Thank you, Mr. Chairman, and good morning to all 

of the witnesses. 

Like any new organization, ICANN has gone through its share 

of growing pains, and since it was created 11 years ago, it has been 

a target for criticism among the global Internet community. 

I will have some questions today about the operation, and where 

you are right now, but I do think that progress has been made, and 

on the other hand, that many of the concerns, I think, have been 


tjames on DSK6SPTVN1PROD with HEARING
8 

appropriate, and ICANN continues to develop itself, and to do the 

thorough oversight over the technical and administrative functions 

under its jurisdiction, and that is a plus. 

I think that you have been successful in introducing competition 

to both the retail and the wholesale domain 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 heavily trafficked domains, .com 

and .net, are operated by VeriSign, a company headquartered in 

my district in Mountain View, California, and I know that Mr. 

Silva is here today, and I welcome him. VeriSign has maintained 

a 100 percent uptime for .com. It has never failed. That is something in and of itself, so to be congratulated for that. 

It is important to remember that ICANN was founded in a response to growing concerns about U.S. domination of the Internet, 

and today, I think many countries believe the U.S. continues to 

exert undue influence over ICANN and the administrative functions of the Internet, and 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. ICANN doesn’t have the independent authority and the governance structure to prevent other 

governments from using power over the DNS 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, and welcome all of you here, and I 

thank the chairman for having you here today, because I think it 

is important that you are. 

Yield back. 

Mr. BOUCHER. Thank you very much, Ms. Eshoo. The gentlelady 

from Tennessee, Mrs. Blackburn, is recognized for two minutes. 

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE 

Ms. BLACKBURN. 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 

and in and out, but please excuse us for that. 

Few international organizations quietly wield the power in the 

global community that ICANN currently wields. While most Americans have probably never heard of ICANN, it is this Californiabased organization, which is a nonprofit, and that is responsible for 

the management and the assignment of virtually IP address and 

domain name worldwide. Wow. That is the growing side of things. 

It is an enormous responsibility to be overseen by a nongovernmental organization. That reason alone necessitates this committee’s time and attention to provide proper oversight, notwithstanding the fact that our government’s only functional tool for 

overseeing ICANN activities stems from the JPA. And that does expire on September 30, which brings us to today. 

Now, there is a letter from Chairman Thrush, the January 25 

letter, in which he states that ICANN does not believe it should anVerDate Mar 15 2010 04:44 Jun 15, 2012 Jkt 073751 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 E:\HR\OC\A751.XXX A751

tjames on DSK6SPTVN1PROD with HEARING
9 

swer directly to the U.S. Government, and that the Memorandum 

of Understanding it signed in November ’08 is no longer necessary, 

and I am 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 unelected 

officials. The Internet, and this is what is so interesting to me, and 

I think it is really exciting, when you look at commerce and the 

growth of, especially small business commerce. The Internet consists of 174 million Web sites, 570 million computers, and more 

than 1.5 billion users. Coordination of this intricate web necessitates transparent decision-making, technical expertise, and evenhanded governance. Only U.S. sponsored oversight for a body 

tasked with overseeing the domain name and IP address system, 

for which ICANN is responsible, can ensure the Internet’s continued viability and fairness, as Twenty First Century Internet architecture evolves. 

It is, therefore, imperative for the U.S. Government to remain integrally linked to the organization, thereby securing the historic 

role, American role in the development and commercial governance 

of the Internet architecture. 

So, we are looking forward to hearing from you, and working 

with you, and Mr. Chairman, I yield back. 

Mr. BOUCHER. Thank you very much, Mrs. Blackburn. The gentleman from Michigan, Mr. Dingell, Chairman Emeritus of the full 

committee, is recognized for five minutes. 

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. DINGELL. Mr. Chairman, I thank you for your courtesy. I 

comment your for this hearing. It is very much needed. It is not 

a new issue. 

At issue today are a number of matters related to oversight of 

the Internet Corporation for Assigned Names and Numbers, 

ICANN. In particular, we will examine the pending expiration of 

the Joint Project Agreement, JPA, between National Telecommunications and Information Agency, NTIA, and ICANN, ICANN’s proposed plans to expand the number of available generic top-level domains, GTLDs, and the future of ICANN’s contract with VeriSign 

for registration of the .com top-level domain. 

Each of these interesting issues requires a number of careful considerations and ample participations by all affected stakeholders, 

before any change in policy is either ratified or understood. I am 

not satisfied that this has been the case with the matters I have 

just mentioned, and this committee has had troubles with these 

matters before. And I intend to ask such questions of our witnesses 

as will enable us to get very frank answers about all of them, and 

I urge my colleagues to do like. 

Before, however, engaging in a substantive dialog with the witnesses today, I would like to note the following. First, with regard 

to the expiration of the JPA between NTIA and ICANN, I wish to 

reiterate my insistence that ICANN remains far from a model of 


tjames on DSK6SPTVN1PROD with HEARING
10 

effective and sustainable self-governance, and I hope they are listening to that comment. 

Legitimate concerns about the lack of fairness, transparency, and 

accountability in ICANN’s functionings continue to be raised by 

stakeholders and the Internet community. Particularly, in a time 

of increased cyberattacks on the U.S. Government and domestic 

businesses, I find it wholly unwise to reduce further the participation of the Federal Government in determining the course of the 

Internet’s future development. 

Similarly, and limited through the oversight NTIA exercises over 

ICANN may be, given the recent observable effects of deregulation 

and inadequate oversight on the economy, I believe that here, we 

have an analogy. The JPA between NTIA and ICANN should be extended. 

Second, concerning GTLDs. I consider ICANN’s attention to the 

effect of dramatically increasing the number of available GTLDs on 

competition, pricing, and consumer 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 consumers, and the practice of cybersquatting, an 

unhealthy and dangerous situation. 

Finally, I continue to maintain that ICANN’s contract with 

VeriSign for the registry of the ‘‘.com’’ domain is characterized by 

a deplorable lack of transparency. If this is not going to be a government undertaking, and 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 it expires in 2012, and I will expect this hearing 

to produce some answers as to whether or not that should be extended, and whether or not it needs to have additional safeguards 

to assure that it is properly 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 today, and in answer to 

the questions which this committee has to ask. 

Thank you. 

Mr. BOUCHER. Thank you very much, Mr. Dingell. The gentleman from Arizona, Mr. Shadegg, is recognized for two minutes. 

OPENING STATEMENT OF HON. JOHN B. SHADEGG, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA 

Mr. SHADEGG. 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 have known and worked with for 

many years. The Go Daddy Group plays an 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 Ms. Jones, and look forward to her testimony, along with that 

of the other witnesses. 

ICANN has played a vital role in the development of the Internet, and has carried a huge burden, but as has been adequately exVerDate Mar 15 2010 04:44 Jun 15, 2012 Jkt 073751 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 E:\HR\OC\A751.XXX A751

tjames on DSK6SPTVN1PROD with HEARING
11 

pressed here, and I will be brief in my remarks, there are certainly 

problems, and it is apparent that 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. I applaud the 

work of ICANN to date, but I believe there are areas, indeed, significant areas, for improvement. 

Again, Mr. Chairman, I thank you for this hearing. I believe it 

is important that we learn more about how ICANN affects all of 

us, and both the key players in the Internet world, but all Americans, all people around the world who use the Internet, and I am 

interested in hearing how it affects the organizations that are represented here today. 

Again, I thank the witnesses, and I look forward to your testimony. 

Mr. BOUCHER. Thank you very much, Mr. Shadegg. The gentleman from New York, Mr. Weiner, is recognized for two minutes. 

Mr. WEINER. Mr. Chairman, in the interests of hearing from the 

panel, I will relinquish my time for opening statement. 

Mr. BOUCHER. Thank you very much, Mr. Weiner. 

We now turn to our panel of witnesses, and we welcome each of 

them to the subcommittee this morning. I will 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. In that position, she is the primary liaison between the Department and ICANN. 

Dr. Paul Twomey is President and Chief Executive Officer of 

ICANN. 

Mr. Kenneth Silva is Senior Vice President and Chief Technology 

Officer for VeriSign, the registry for the .com top-level domain. 

Ms. Christine Jones is the General Counsel and Corporate Secretary for Go Daddy. 

Ms. Sarah Deutsch is Vice President and Associate General 

Counsel for Verizon Communications. 

And Dr. Thomas Lenard 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. We 

will welcome your oral summaries, and we would ask that, in the 

interest of time and giving us plenty of opportunity to question you, 

that you keep those oral summaries to approximately five minutes. 

Ms. Alexander, we will be pleased to begin with you. 


tjames on DSK6SPTVN1PROD with HEARING
12 

STATEMENTS OF FIONA ALEXANDER, ASSOCIATE ADMINISTRATOR, OFFICE OF INTERNATIONAL AFFAIRS, NATIONAL 

TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE; PAUL TWOMEY, 

PRESIDENT AND CEO, ICANN; KENNETH J. SILVA, SENIOR 

VICE PRESIDENT AND CHIEF TECHNOLOGY OFFICER, 

VERISIGN; CHRISTINE N. JONES, GENERAL COUNSEL AND 

CORPORATE SECRETARY, THE GO DADDY GROUP, INC.; 

SARAH DEUTSCH, VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL, VERIZON COMMUNICATIONS; AND THOMAS 

M. LENARD, PH.D., PRESIDENT AND SENIOR FELLOW, TECHNOLOGY POLICY INSTITUTE 

STATEMENT OF FIONA ALEXANDER 

Ms. ALEXANDER. Chairman Boucher, Ranking Member Stearns, 

and members of the committee, thank you for this opportunity to 

testify on behalf of the National—— 

Mr. BOUCHER. Ms. Alexander, if you could pull that microphone 

slightly closer, and we can hear you better. 

Ms. ALEXANDER. Better? 

Mr. BOUCHER. That is better, thank you. 

Ms. ALEXANDER. Chairman Boucher, Ranking Member Stearns, 

and members of the subcommittee, thank you for this opportunity 

to testify on behalf of the National Telecommunications and Information Administration on issues related to the Internet’s domain 

name and addressing system. 

The Internet has become a significant and important medium for 

conducting research, communicating with others, and conducting 

business. Given the Internet’s importance in all of these facets of 

daily life and the country’s general economic well being, 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 the Internet DNS, 

including the Joint Project Agreement between the Department 

and ICANN. 

ICANN was created out of an effort to bring more coordination 

and sustainability to the management of the Internet DNS, as the 

Internet grew into a large scale global network. A 1997 Executive 

Memorandum directed the Secretary of Commerce to privatize 

Internet DNS in a manner that increases competition and facilitates international participation in its management. 

In June 1998, the Department issued a statement of policy on 

the privatization of the Internet DNS that concluded that the core 

functions should be primarily performed through private sector 

management. ICANN was formed by private sector interests for 

this purpose, and in the fall of 1998, the Department of Commerce 

entered into the Memorandum of Understanding, or MoU, with 

ICANN. 

The MoU did not simply turn over management of the DNS to 

ICANN. Rather, the purpose of this agreement was to design, develop, and test mechanisms, methods, and procedures to ensure 

that the private sector has the capability and the resources to assume important responsibilities related to the technical coordination and management of the DNS. This Agreement does not give 


tjames on DSK6SPTVN1PROD with HEARING
13 

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 operations of ICANN. 

Since 1998, the MoU has evolved through several iterations and 

revisions, as ICANN tested these principles, learned valuable lessons, and matured as an organization. In 2006, NTIA and ICANN 

signed a Joint Project Agreement extending the current MoU for 

three more years, until September 30 of this year. In anticipation 

of the September 30 expiration of the JPA, NTIA released a Notice 

of Inquiry on April 24, seeking comments regarding the progress of 

the transition, as well as a model of private sector leadership and 

bottom-up policy development which ICANN represents. The comment process for this docket closes on Monday, June 8. 

The Department’s commitment to preserving the security and 

stability of the Internet DNS, and the public record developed as 

a result of this comment process, will inform any decision about the 

JPA’s future. It is important to note, however, that regardless of 

whether the JPA is terminated, modified, or extended, the Department, through NTIA, will continue to be an active participant in 

ICANN, by representing the United States Government in 

ICANN’s Governmental Advisory Committee, and by filing comments as appropriate in ICANN’s various public consultation processes. 

In addition, the Department’s relationship with ICANN will continue, as ICANN currently performs the Internet Assigned Numbers Authority functions under contract to the Department. 

In addition to important institutional confidence issues associated with the JPA, the Department is actively engaged in discussion with stakeholders related to the introduction of new generic 

top-level domain names, or GTLDs. The Department acknowledges 

that the introduction of new GTLDs has been a longstanding goal 

of the JPA relationship, and that, subject to ongoing public consultation process at ICANN. The Department, in coordination with 

an interagency group has, in fact, filed public comments in this 

consultation, asking the threshold question of whether the potential consumer benefits outweigh the potential costs as a result of 

this exercise, and have been adequately addressed and determined, 

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 DNS. 

The Department believes it is critical to keep in mind the core 

principle, as articulated in the very first MoU, of the need to manage the Internet DNS in a manner that permits market mechanisms to support competition and consumer choice, so that lower 

costs are realized, innovation is promoted, and user choice and satisfaction are enhanced. 

Lastly, I would like this opportunity to update the committee on 

our efforts to improve the security of the DNS. I am happy to report that NTIA and its roots and management partners, ICANN 

and VeriSign, recently reached agreement to move forward with an 


tjames on DSK6SPTVN1PROD with HEARING
14 

interim approach to the deployment of the security technology 

known as Domain Name System Security Extensions, or DNSSEC, 

at the root zone level. This action is an important step toward protecting the integrity of DNS data, and mitigating attacks such as 

cache poisoning or other data modification threats. 

Given the importance of the Internet as a global medium to support economic growth and innovation, continuing to preserve the 

security and stability of the Internet DNS will guide any decisions 

that the Department of Commerce makes with respect to its future 

relationship with ICANN. 

NTIA looks forward to working with you, members of the committee, and the Congress on this important issue, as the September 

30, 2009 JPA expiration date approaches. 

Thank you again, Mr. Chairman, for this opportunity to testify 

this morning, and I will be happy to answer your questions. 

[The prepared statement of Ms. Alexander follows:] 


tjames on DSK6SPTVN1PROD with HEARING
15 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 20 here 73751A.001
16 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 21 here 73751A.002
17 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 22 here 73751A.003
18 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 23 here 73751A.004
19 

Mr. BOUCHER. Thank you, Ms. Alexander. Dr. Twomey. 

STATEMENT OF PAUL TWOMEY 

Mr. TWOMEY. Thank you, Chairman Boucher, Ranking Member 

Stearns, and esteemed members of the committee. Thank you for 

this opportunity to appear before you today, and to speak about the 

Joint Project Agreement conclusion and new generic top-level domains. 

The Joint Project Agreement, Memorandum of Understanding 

process has helped to grow ICANN to be a remarkable success 

story. The unique U.S. Government/ICANN relationship has been, 

is, and will continue to be critically important to ICANN’s success. 

The original Memorandum of Understanding used the word ‘‘test’’ 

when it was commenced almost 11 years ago. 

It was a test of whether a multi-stakeholder, private sector-led, 

California-based not for profit corporation could perform a narrow 

but crucial technical coordination function. After those 11 years, 

ICANN is a success for U.S.-based organization with global support 

and participation. It has been key to supporting a single, interoperable Internet on which 1.5 billion rely. In simple terms, it works. 

It has passed the test. 

Like other organizations, it must continually improve itself, but 

unlike many, this organization has continual improvement written 

into its bylaws. It also has an assertive community that keeps driving us to improve, and will never allow us to stop striving for the 

best that we can be. We are not seeking less accountability to this 

multi-stakeholder community. We want more. 

The question at hand is how to ensure that what works is made 

permanent. One thing the Joint Project Agreement is clearly not is 

an oversight mechanism. Now, Ms. Alexander has just pointed out 

again that the Department of Commerce has consistently said that 

the JPA is not an oversight agreement. 

Chairman Boucher, you made the point in your introductions 

about the IANA contract, the procurement contract. This is the key 

instrument for oversight from the United States Government, and 

I think you already, potentially, have some misapprehensions 

about the difference between the Joint Project Agreement and the 

IANA contract, is something we should explore. 

What we have been working together on for 11 years, with advice 

from the United 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 ICANN don’t have the confidence 

in that model. That will cause the international community to continue to look for alternatives. Indeed, with the mere speculation as 

to the possibility of renewal, they already are. 

If the U.S. does not have the confidence in a private sector-led 

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 ICANN model, we should 

expect ongoing challenges and alternatives from others. 

A hypothetical eighth temporary agreement would suggest that 

the basic principles are open to debate. Across the global technical 


tjames on DSK6SPTVN1PROD with HEARING
20 

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, 

still yes, then let us confirm that and enshrine it. 

A more permanent approach, that enshrines what is working, is 

vital. As the JPA concludes, the Department of Commerce and 

ICANN should use that opportunity to commit ICANN to retain a 

narrow mission, remain based in the United States, remain a not 

for profit, remain an independent organization, as it has been for 

almost 11 years, remain private sector, multi-stakeholder led, with 

international support, remain committed to continuous improvement, reinforcing that the IANA contract is the source of oversight, 

where responsibility for the global coordination of the DNS root, IP 

addressing, and other resources is found. None of these should rely 

on any temporary agreement, and being a California-based organization ensures ICANN is subject to Congressional oversight and 

U.S. legal process. 

Let me speak briefly to the issues of generic top-level domains, 

that portion of an Internet address that is to right of the dots, such 

as .com or .org. Currently, there are 21 GTLDs. ICANN is currently deciding how to lift that artificial limit. There are crucial 

concerns about trademark and intellectual property protections, 

once the expansion of GTLDs begins, if that is decided. 

We have heard those concerns, and we are acting to fix them. 

The ICANN Board has invited those who have voiced concern to 

give us solutions before we open up the application process. We 

have already received the recommendations. We are 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 in implementation until we 

have addressed these issues. We will get it right. We will not rush 

the answer. 

We are often asked why are we expanding the top-level domain 

space. First, we were asked to by the community and the United 

States Government. It was called for in the white paper that foreshadowed ICANN, and it is in the JPA. 

Second, there is demand. Geographic names like .nyc and .berlin 

are being proposed, along with others like .sport, .eco, and .green. 

Finally, billions of non-English speakers want to see top-level domains look like their language. It is not ICANN’s role to set artificial and arbitrary limits on innovation and community use of a 

public resource. Simply, competition in the domain space is embedded in our values and our bylaws. 

So, in conclusion, it is no surprise that the ICANN model is producing opportunities for choice, commerce, and individual expression, and doing so, while being attentive to our core mission, security, and stability. 

The United States Government has imbued these values into the 

ICANN model, and ICANN is made all the stronger for that. 

Thank you for inviting me, and I would be happy to take any 

questions. 

[The prepared statement of Dr. Twomey follows:] 


tjames on DSK6SPTVN1PROD with HEARING
21 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 27 here 73751A.005
22 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 28 here 73751A.006
23 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 29 here 73751A.007
24 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 30 here 73751A.008
25 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 31 here 73751A.009
26 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 32 here 73751A.010
27 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 33 here 73751A.011
28 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 34 here 73751A.012
29 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 35 here 73751A.013
30 

Mr. BOUCHER. Thank you very much, Dr. Twomey. Mr. Silva. 

STATEMENT OF KENNETH J. SILVA 

Mr. SILVA. Good morning, Chairman Boucher, Ranking Member 

Stearns, and other distinguished members of the subcommittee. My 

name is Ken Silva, and I serve as the Chief Technology Officer for 

VeriSign. 

Thank you for the opportunity to testify today. VeriSign operates 

digital infrastructure that enables and protects billions of interactions every day across the world’s voice and data networks. The 

company is headquartered in Mountain View, California. We have 

additional offices in Virginia, Delaware, and Massachusetts. Because our responsibility is global, we are also in 30 different countries. 

At a time of economic challenges and uncertainty, it would be 

easy to focus on the many 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 .com and .net domain registries, as well 

as the steward for 2 of the 13 root servers that serve as the nerve 

center of the Internet, VeriSign understands what it is at stake. 

Over the last 10 years, VeriSign has operated its infrastructure 

with 100 percent uptime. In other words, the systems that ensure 

the Internet is functional have never gone down. But the Internet 

is not a static system. It is a dynamic network of networks that 

continues to change. 

It is growing dramatically overseas, raising questions about its 

future governance, and the role of nations who do not share our 

values about freedom of expression, content, and commerce. It is 

increasingly relied upon by citizens, businesses, organizations, and 

governments, raising questions about whether it can continue to 

scale to meet the needs of over 2 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 the 

lifeline for commerce and communications. Recent incidents in 

China, India, Pakistan, and Estonia underscore 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 the technical coordinating body. The Department 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 force and capacity to create 

businesses and jobs. 

With that, we look forward to the outcome of the discussions between ICANN and the Department of Commerce over the JPA, parVerDate Mar 15 2010 04:44 Jun 15, 2012 Jkt 073751 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 E:\HR\OC\A751.XXX A751

tjames on DSK6SPTVN1PROD with HEARING
31 

ticularly as it relates to its impact on the security and stability of 

the Internet and its responsible stewardship. 

From our point of view, while ICANN has continued to make 

progress in certain areas, the basic circumstances giving rise to 

widespread community concerns over an expiration of the JPA remain largely unanswered. 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 .com and .net never 

go down, users and even some companies who rely on it for their 

business model take it for granted, but VeriSign, other private sector players, and government cannot. We must continually invest 

and work to improve in its capacity. To keep up with the demand, 

VeriSign systems that manage .com and .net traffic can now handle 

more than 10,000 times the query volume that they could handle 

in 2000. To put that in perspective, that increase is about 600 

times greater than Moore’s Law, the theory that computing power 

doubles every 18 months. VeriSign’s systems handle more than 50 

billion queries a day, and that is a 67 percent increase in just two 

years. Our investments include increasing capacity to support up 

to 4 trillion queries per day. 

We all know that the Internet that we use today is far different 

than it was 10 years ago, and we know that 10 years from now, 

it will be dramatically different than it is today. That is why 

VeriSign is 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’s cybersecurity czar will sit at the National Economic 

Council and the National Security Council, as it underscores the 

threat that cybersecurity attacks pose to our Nation. As CTO, I 

have had to identify and manage attacks every day. Cybercriminals 

cleverly manipulate the Internet’s advances, and the increased 

bandwidth and 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 and deploy infrastructure upgrades such as DNSSEC and IP version 6, in a way that is least 

disruptive to Internet users, developers, businesses, and governments. We must continue to work together to invest and develop 

in the infrastructure, so that it can continue its role as a platform 

for commerce and communications. 

I know that VeriSign, ICANN, and the rest of the Internet community will work diligently to ensure that the infrastructure remains reliable and secure. 

I thank you very much for your time, Mr. Chairman. 

[The prepared statement of Mr. Silva follows:] 


tjames on DSK6SPTVN1PROD with HEARING
32 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 39 here 73751A.014
33 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 40 here 73751A.015
34 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 41 here 73751A.016
35 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 42 here 73751A.017
36 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 43 here 73751A.018
37 

Mr. BOUCHER. Thank you very much, Mr. Silva. Ms. Jones. 

STATEMENT OF CHRISTINE N. JONES 

Ms. JONES. Chairman Boucher, Ranking Member Stearns, and 

members of the committee, I am Christine Jones. I am from Go 

Daddy. 

At the outset, I would like to thank you, Chairman Boucher, for 

all of your work, and the committee’s work, and for holding this 

hearing. We are happy to be here with ICANN and VeriSign. We 

are ICANN’s largest registrar benefactor and VeriSign’s largest 

customer, so we are always happy to participate with them. 

As the world’s largest registrar, Go Daddy works 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 

NTIA and ICANN be continued, along with appropriate improvements in accountability, transparency, and democracy in governing 

principles. 

Continuing the JPA between ICANN and the NTIA will not only 

provide the framework for ensuring a continued focus on Internet 

security and stability issues, but will 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 JPA, the DNS white paper, first published 

back in 1998, 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 DNS. 

We believe those principles, even 11 years later, remain relevant. 

ICANN has made great progress toward achieving some, but not 

all, of these goals. Specifically, ICANN has not yet achieved competition, nor the private bottom-up coordination and representation 

called for in the ICANN bylaws. We believe the renewed JPA must 

be revised to include openness and transparency as overall guiding 

principles, if we are ever to see an effective transition of Internet 

DNS 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 JPA, if such assistance would 

be helpful. 

I want to talk about the extension of the JPA that you mentioned, Mr. Chairman, for a minute. I want to reiterate, we are in 

favor of renewal of the JPA between ICANN and the NTIA 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 

ICANN will benefit from continued relationship. But we are aware 

that both VeriSign’s ex parte letter and the recent letter from Senators Nelson and Snow mention considering a one year extension 

of the current JPA. If that arrangement would provide time to consider new or additional terms of a renewed JPA, then we would 

support such an extension as well. 

On the new GTLDs, we are not opposed, Go Daddy is not opposed to the concept of introducing new GTLDs. In fact, as Mr. 

Twomey said, the community has been calling for that for quite 


tjames on DSK6SPTVN1PROD with HEARING
38 

some time, but we have taken exception to the methodology by 

which they have been introduced. Loud voices, from both the intellectual property community and the registrant community have 

been virtually ignored in this process, and ICANN can’t seem to establish a guideline by which the new GTLDs will be chosen. 

In the interests of time, I am going to defer the IP expert on this 

panel to talk about GTLDs, but I would 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 and 

stability 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 Web sites and domain names engaged in illegal activities. 

We work with law enforcement agencies at all levels, and routinely 

assist in a wide variety of criminal and civil investigations and, 

like our friends at VeriSign, we respond to and fight cyberattacks 

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 and Internet privacy issues a top priority in his Administration. 

As the President said on Friday: ‘‘America’s economic prosperity 

in the 21st century will depend on cybersecurity. This is also a 

matter of public safety and national security. It is now clear the 

cyberthreat 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 JPA. 

I would be happy to answer any questions for you or other members of the panel. Thank you. 

[The prepared statement of Ms. Jones follows:] 


tjames on DSK6SPTVN1PROD with HEARING
39 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 46 here 73751A.019
40 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 47 here 73751A.020
41 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 48 here 73751A.021
42 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 49 here 73751A.022
43 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 50 here 73751A.023
44 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 51 here 73751A.024
45 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 52 here 73751A.025
46 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 53 here 73751A.026
47 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 54 here 73751A.027
48 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 55 here 73751A.028
49 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 56 here 73751A.029
50 

Mr. BOUCHER. Thank you very much, Ms. Jones. Ms. Deutsch, 

we will be happy to hear from you. 

STATEMENT OF SARAH DEUTSCH 

Ms. DEUTSCH. Chairman Boucher, Ranking Member Stearns, and 

members of the subcommittee. Thanks for the opportunity to participate in this important hearing addressing issues related to 

ICANN. 

Verizon supports ICANN. We wish to see it succeed as an independent and accountable model of private sector leadership. 

ICANN must be given the time and support it needs to make that 

smooth transition. 

My focus today is on ICANN’s plans to expand the existing domain name space. ICANN plans to accept as many as 500 initial 

applications for new generic top-level domains, or GTLDs. I will 

refer to GTLDs simply as names. In the future, there may be unlimited number of new names. Future names could include anything one could imagine, from .bank to .health to .congress. ICANN 

financially benefits from this expansion. It will bring in more than 

$90 million from the initial round of applications alone. It will also 

collect ongoing fees of $75,000 per applicant from manual renewals 

of each new name, and it collects a $0.25 transaction fee from every 

domain 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 concern. ICANN has acknowledged the many concerns, but 

it has not adequately addressed them. Nevertheless, it plans to 

begin accepting applications for the new TLDs starting in early 

2010. 

Verizon believes there are four fundamental concerns that 

ICANN needs to address fully before commencing any introduction 

of new TLDs. First, ICANN must complete an impartial and comprehensive economic study of the domain name marketplace. That 

study must explore whether there is even a need for so many new 

names in the first place. ICANN’s Board supported that study in 

2007, yet it was never undertaken. 

Second, ICANN must ensure that consumers are adequately protected from online confusion and fraud. If, as predicted, there are 

more than 1,000 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.phone, for example, that they 

have reached an authorized Verizon Web site, versus one set up by 

a cybersquatter or an international phishing scam. 

Third, ICANN’s rapid expansion may be at odds with its 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. 

Fourth, trademark and brand protection remain a critical concern. Trademark protection, of course, is directly tied to consumer 

protection. Trademarks help consumers reach the Web sites and 


tjames on DSK6SPTVN1PROD with HEARING
51 

brands they know and trust. When users go online, however, they 

can easily be confused or diverted, and unfortunately, brands like 

Verizon, household brands, have been targets for cybersquatters. 

Cybersquatters have registered tens of thousands of variations of 

our trademarks over the past few years, and here is a little stack. 

You need to know that many of these cybersquatters are ICANNaccredited registrars. They have set up large scale operations, earning millions of dollars a year from their illegal activities. To protect 

our customers, we have brought many high profile lawsuits against 

ICANN registrars in recent years. ICANN’s 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 ICANN acknowledges the concerns 

raised by trademark owners, by convening a small group of experts 

to offer possible solutions to address cybersquatting in an expanding GTLD 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 sum, any new TLD rollout must be delayed until all threshold 

concerns are fully addressed. ICANN should proceed slowly and 

cautiously in expanding the domain name space, to protect the 

Internet and its users. 

Finally, one note on the JPA. Numerous thoughtful suggestions 

have been made to improve ICANN processes 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. 

[The prepared statement of Ms. Deutsch follows:] 


tjames on DSK6SPTVN1PROD with HEARING
52 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 60 here 73751A.030
53 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 61 here 73751A.031
54 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 62 here 73751A.032
55 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 63 here 73751A.033
56 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 64 here 73751A.034
57 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 65 here 73751A.035
58 

Mr. BOUCHER. Thank you very much, Ms. Deutsch. Dr. Lenard. 

STATEMENT OF THOMAS M. LENARD 

Mr. LENARD. Thank you, Chairman Boucher, Ranking Member 

Stearns. 

Mr. BOUCHER. And Dr. Lenard, if you could turn on your microphone and move it over, that would help us hear you. 

Mr. LENARD. Thank you, Chairman Boucher, Ranking Member 

Stearns, and members of the subcommittee. My name is Thomas 

Lenard, and I am President and Senior Fellow at the Technology 

Policy Institute. 

TPI is a nonpartisan, nonprofit think tank that focuses on the economics of innovation, technical change, and related regulation in 

the United States and around the world. I appreciate the opportunity to present my views on ICANN. 

The expiration of the JPA this September provides a much needed opportunity for a thorough evaluation of the structure, governance, and mission of ICANN, and the subcommittee’s examination 

of these issues is very important. 

One of those issues is ICANN’s lack of accountability, which is 

a recurring issue, and which is an issue that we recently addressed 

in a study that was published by TPI, that I co-authored with Professor Lawrence White of the NYU Stern School of Business. 

The problem of the lack of accountability is not an indictment of 

ICANN’s staff or leadership. It is simply a function of ICANN’s institutional design, its non-corporation status, combined with the 

way it is funded and governed. ICANN’s customers have nowhere 

else to go. Its Board members are not answerable to any shareholders, and its decisions can’t be appealed to any court in the way 

that regulatory decisions in the U.S. routinely are. ICANN’s 

funders, the registries and the registrars, can’t stop funding 

ICANN without going out of business themselves. 

To study ways in which ICANN could become more accountable, 

we examined the structures of a number of organizations that perform similar coordination and standard setting functions. We 

learned a couple of things. First, none of the organizations we considered operates with the independence that ICANN enjoys, 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 ICANN 

as well. The registries and the registrars have a strong incentive 

to assure that ICANN fulfills its responsibilities of managing the 

domain name system efficiently, and this is in the interests of the 

businesses and the consumers who are the Internet’s end users. We 

recognize that this proposal may be viewed as radical, but it has 

already served to stimulate a discussion of ICANN governance 

issues that otherwise might not have taken place. 

Our study also addressed ICANN’s mission. ICANN’s scope 

should be clearly delineated. It should hew closely to the technical 

functions in administering the domain name system. ICANN also, 

we believe, should have a clear mission of encouraging competition 

and a minimal role as a regulator. This means allowing relatively 


tjames on DSK6SPTVN1PROD with HEARING
59 

free entry into the market for GTLDs, in order to bring the benefits 

of competition to consumers and, as we have heard, ICANN is moving in that direction currently. 

But as part of this, and in order for the, and really, for the free 

entry of GTLDs 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 registries. There needs 

to be a thorough examination of how this should be done and who 

should do it. As was alluded to, ICANN is doing that now, but 

ICANN 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 merit a 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, 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 JPA and, more importantly, ensure a vibrant, innovative, and competitive Internet for the future. 

Thank you very much. 

[The prepared statement of Dr. Lenard follows:] 


tjames on DSK6SPTVN1PROD with HEARING
60 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 68 here 73751A.036
61 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 69 here 73751A.037
62 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 70 here 73751A.038
63 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 71 here 73751A.039
64 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 72 here 73751A.040
65 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 73 here 73751A.041
66 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 74 here 73751A.042
67 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 75 here 73751A.043
68 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 76 here 73751A.044
69 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 77 here 73751A.045
70 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 78 here 73751A.046
71 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 79 here 73751A.047
72 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 80 here 73751A.048
73 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 81 here 73751A.049
74 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 82 here 73751A.050
75 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 83 here 73751A.051
76 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 84 here 73751A.052
77 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 85 here 73751A.053
78 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 86 here 73751A.054
79 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 87 here 73751A.055
80 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 88 here 73751A.056
81 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 89 here 73751A.057
82 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 90 here 73751A.058
83 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 91 here 73751A.059
84 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 92 here 73751A.060
85 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 93 here 73751A.061
86 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 94 here 73751A.062
87 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 95 here 73751A.063
88 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 96 here 73751A.064
89 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 97 here 73751A.065
90 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 98 here 73751A.066
91 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 99 here 73751A.067
92 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 100 here 73751A.068
93 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 101 here 73751A.069
94 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 102 here 73751A.070
95 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 103 here 73751A.071
96 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 104 here 73751A.072
97 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 105 here 73751A.073
98 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 106 here 73751A.074
99 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 107 here 73751A.075
100 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 108 here 73751A.076
101 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 109 here 73751A.077
102 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 110 here 73751A.078
103 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 111 here 73751A.079
104 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 112 here 73751A.080
105 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 113 here 73751A.081
106 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 114 here 73751A.082
107 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 115 here 73751A.083
108 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 116 here 73751A.084
109 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 117 here 73751A.085
110 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 118 here 73751A.086
111 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 119 here 73751A.087
112 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 120 here 73751A.088
113 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 121 here 73751A.089
114 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 122 here 73751A.090
115 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 123 here 73751A.091
116 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 124 here 73751A.092
117 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 125 here 73751A.093
118 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 126 here 73751A.094
119 

Mr. BOUCHER. Thank you very much, Dr. Lenard. Thanks to all 

of the witnesses for your informative comments this morning. 

Dr. Twomey, we are 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 in their questions are going to focus on the expiration of the Joint Project 

Agreement, which occurs this September. So, I am 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 volume of cybersquatting that occurring, and 

mentioned that some of the companies engaged 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 received, and an indication of what you are 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 toplevel domains, but with the expanded responsibilities that would 

come for oversight and policing if you proliferate the number of 

TLDs, because that inevitably is going to mean that companies 

have to acquire more second level domains, and that incurs costs 

on their part, and the opportunity for cybersquatting simply increases. 

And so, according to Ms. Deutsch, today, cybersquatting is not effectively being policed, and that leads to an even heightened level 

of concern about how you would oversee and police if the number 

of TLDs increases. 

So, with that general question, we would welcome your answer. 

Mr. TWOMEY. Thank you, Mr. Chairman. We share the same general concerns Ms. Deutsch outlined. There is validity, we don’t dispute the validity of some of these concerns, but we also think there 

are mechanisms in place and mechanisms being discussed to help 

address these issues. 

Let me come, quite specifically to enforcement mechanisms now. 

ICANN established and put in place now, I think eight years ago, 

nine years ago, a process called the Uniform Dispute Resolution 

Process, which is essentially a fairly cheap online arbitration mechanism to allow contesting parties to determine who should actually 

own a particular domain name. 

One of the problems with cybersquatting is one person’s 

cybersquatter might be somebody else’s true trademark, in the 

sense that there are 180 something regimes, jurisdictions in the 

world. There are some 48 trademark headings. I might be getting 

the exact numbers wrong, but the key point is that people can have 

multiple trademarks for different sorts of companies in different 

parts of the world, who have got a claim for a particular name. So, 

it is not ICANN’s role to be an intellectual property arbitrator. But 

we have actually put in place a mechanism for that sort of arbitration, the World Intellectual Property Organization and other entities offer that arbitration, and I think so far, there has been some 

36,000 decisions made under that regime we have incorporated to 

help those issues presently at the second level. 

There is a similar issue applies, then, at top-level domains, and 

we have proposed that there would be a similar arbitration that 


tjames on DSK6SPTVN1PROD with HEARING
120 

people could object to when a first application was made, so that 

you could say no, I have got a claim on that name, or that is related to me. And so, there is an existing mechanism that is put forward for arbitration. 

Thirdly, we are very much interested in these proposals put forward recently by the intellectual property community at the request of the ICANN Board, for looking at variations of sunrise periods, single registration periods for companies who want to be clear 

their famous names, et cetera. So, we are actually looking to address this quite detailed. We would like to hear the response more 

in the community for the proposals they have put forward. 

When it comes to the issue of enforcement of registrars, which 

you have raised, we have significant resources dedicated to enforcement. We have been, I think, if you look at the last months, I think 

nearly every month, we have de-accredited registrars for various 

breaches of their agreements, and this issue of whether a registrar 

is actually performing blatant cybersecurity or blatant 

cybersquatting activities is a matter of, we would investigate quite 

closely. 

But I would make the point on some cybersquatting issues, that 

it is not our business to an arbitrator or an intellectual property 

contention. We actually have that, if you like, a set of independent 

arbitrators, for them to give us that advice. 

Mr. BOUCHER. Ms. Deutsch, would you like to respond to those 

comments, and I mean, you have heard how Dr. Twomey would address the issue of cybersquatting, and he has defined current practice. 

To what extent is current practice not adequate? 

Ms. DEUTSCH. First of all, we are not saying that it is ICANN’s 

role to arbitrate the proceedings. On the other hand, it is its role 

to enforce against its registrars, and to my knowledge, they haven’t 

brought any action against a registrar. These are 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 act in bad faith. So, they have taken no action 

against them. 

Mr. BOUCHER. Well, let me stop you at that point. Dr. Twomey, 

what is your reply to that? Have you ever proceeded against any 

of these certified registrars, because of their activities? 

Mr. TWOMEY. From my recollection, Chairman, we have proceeded against registrars for those activities. Often, we find, with 

a particular registrar, that if they are in breach along those lines, 

they are in breach in other ways. And sometimes, to move quickly 

on the de-accreditation process, we have publicly moved on another 

breach. 

If I can give you just a small example, and an easy example you 

would understand, often we find registrars who might be at the 

edge of such behavior, for instance, don’t pay their fees. And sometimes, it is easier simply to move on the failure to pay a fee. We 

can clearly prove it very quickly, and move on de-accreditation. 

But I can report to you, in the compliance activity, this particular 

issue is often examined, and that in a lot of the conversations, communications with the registrars, particular issues that is raised. 


tjames on DSK6SPTVN1PROD with HEARING
121 

Mr. BOUCHER. Well, I find the issue of enforcement against 

cybersquatting to be particularly troubling, and I think it might be 

helpful to the subcommittee, because other members have raised 

this concern as well. 

If you would supply to us a letter that describes exactly what you 

are doing in this area and, perhaps, without naming particular registrars that you may have proceeded against, give us at least some 

quantitative sense of the extent to which you have addressed this 

concern. So, actual number of proceedings, perhaps numbers of registrars that have been decertified where cybersquatting, in fact, 

has been alleged. I think that would be helpful. 

My time has expired. We may, depending on how long this first 

round takes, have a second round of questions. I do have some additional ones. 

But at this time, I want to recognize the gentleman from Florida, 

Mr. Stearns, for five minutes. 

Mr. STEARNS. Thank you, Mr. Chairman. 

Mr. Lenard, you had mentioned, in your opening statement, 

some fees. I see here that registrars pay an application fee of 

$2,500, annual accreditation fees of $4,000. You mentioned some 

$75,000 fee, I thought. Did you mention that in your statement, 

opening statement? Just put the mike on, if you would. 

Mr. LENARD. It is not in the opening statement. It could be in 

our report, but I would have to get back to you on that. 

Mr. STEARNS. Yes, Ms. Deutsch. 

Ms. DEUTSCH. I mentioned it, I think. 

Mr. STEARNS. Yes, what was that for? 

Ms. DEUTSCH. I think it is an annual renewal fee for the new 

TLD applicants, so once they get awarded one of these names, then 

every year thereafter, I understand they pay a $75,000. 

Mr. STEARNS. That sounds pretty steep to me. Doesn’t it sound 

to you, Ms. Deutsch? 

Now, Mr. Twomey, ICANN had a $7 million surplus in 2009, and 

you added these new TLDs, you could generate another $90 million. Yet, you are 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 operate as a not for profit? You are operating a for profit corporation, and your profits are going to balloon 

based upon these TLDs. So, why aren’t you folding, I mean, you are 

not building automobiles here. You are trying to make it cheaper 

for people. Why aren’t these fees coming down? 

Mr. TWOMEY. Thank you, Mr. Stearns. Perhaps I can clarify 

some of the issues raised here. 

ICANN is, as you said, a not for profit, and our focus is to—— 

Mr. STEARNS. No, you don’t want to tell me that. Just tell me—— 

Mr. TWOMEY. Sorry. 

Mr. STEARNS. Why can’t you bring your fees down, if you have 

got a $7 million profit? 

Mr. TWOMEY. That is fine. Let me just talk to the point. 

We are in the process of, our budgeting process is an open process. We do it through the community. It is a bottom-up—— 

Mr. STEARNS. What are you going to do with the $7 million profit? 


tjames on DSK6SPTVN1PROD with HEARING
122 

Mr. TWOMEY. And the $7 million process is a contribution to a 

reserve fund. 

Mr. STEARNS. And why do you need a reserve fund if you are a 

not for profit? 

Mr. TWOMEY. We have taken advice from, if you look at most 

nonprofits, that they have, all have some reserve fund. 

Mr. STEARNS. How big is your reserve fund going to be? How big 

is it today? 

Mr. TWOMEY. It is about $34 million. 

Mr. STEARNS. So, you have got $34 million, and you are adding another $7 to it, that would bring it up to $41. 

Mr. TWOMEY. And our aim is to bring it to one year’s operating 

expenses, and then stop the process of building the reserve fund. 

So, we are not, and I can make the further point that our, we have 

actually reduced our fees by 25 percent in the last three years, in 

applications, and the $75,000—— 

Mr. STEARNS. Ms. Deutsch, do you think their fees should be 

brought down? 

Ms. DEUTSCH. I do. I think they have—— 

Mr. STEARNS. Mr. Lenard, what do you think? 

Mr. LENARD. Yes. I mean, I think—— 

Mr. STEARNS. Do you think they want to have, they are now at $41 million surplus. 

Mr. LENARD. I think, you know, an organization with an assured 

source of income. It is not obvious to me why they need a full 

year’s—— 

Mr. STEARNS. Now, Mr. Twomey, when I look at your annual report, it looks like your salary is, you don’t even take a salary out 

of this. You arrange for Argo Pacific to be a consultant, so that 

ICANN pays Argo Pacific your salary, then you collect for them. 

Why do you do that? Why don’t you collect money like the CFO and 

everyone else in ICANN gets directly from ICANN, but you seem 

to get it from a consultant. Why is that? 

Mr. TWOMEY. Congressman, I am an Australian citizen, and we 

have arrangements with various parts of our employees who have 

different mechanisms. When I was first asked to be President and 

CEO, via decision of the Board, this was all decided by the Board, 

not by me, was to contract with a company—— 

Mr. STEARNS. That was their recommendation, then? 

Mr. TWOMEY. That is right. 

Mr. STEARNS. And do you live in Marina del Rey? 

Mr. TWOMEY. I live, my home is in Sydney, Australia. 

Mr. STEARNS. So, do you ever show up in ICANN’s headquarters? 

Mr. TWOMEY. Yes. We have offices—— 

Mr. STEARNS. I mean, do you work there 40 hours a week? 

Mr. TWOMEY. I work more than 40 hours a week in various 

ICANN offices. 

Mr. STEARNS. In Australia. But I mean, are you actually—— 

Mr. TWOMEY. No, I would in Australia less than one week out 

of every four. 

Mr. STEARNS. When you do the exchange rate, what is the total 

salary, including the health, retirement, saving, and welfare benefits that you get when you do the exchange with Australia. What 

is, in an Australian dollar—— 


tjames on DSK6SPTVN1PROD with HEARING
123 

Mr. TWOMEY. In Australian dollars, it is about $800,000 total. 

Mr. STEARNS. $800,000 is what you get. Well, my concern is, and 

I don’t have a lot of time here, but it seems to me that if you are 

operating a not for profit, and you are paying a CEO, like you, and 

a subcontractor out of a corporation, that your job is to bring the 

cost down for the consumers and the registrars, and I just, in light 

of the fact that Mr. Boucher talked about the four things that Ms. 

Deutsch talked about, I don’t see you attacking these. You should 

take that $7 million, and make sure these cybersquatters are gone. 

And she gives a list there, it looked like about 10,000 

cybersquatters. I mean, why don’t you take some of this surplus 

that you are 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 

Verizon has talked about. 

Dr. Lenard, anything you would suggest more? I mean, this idea 

that he is developing this huge surplus in this not for profit organization. I mean, that just doesn’t seem appropriate, considering Ms. 

Deutsch talked about $75,000 for a fee. 

Mr. LENARD. Yes. I mean, I think it is related to the general 

issue of accountability, and the fact that ICANN is largely accountable to itself. 

Mr. STEARNS. So, it could make the surplus four times that if it 

wanted. Yes, thank you, Mr. Chairman. 

Mr. BOUCHER. Thank you very much, Mr. Stearns. The gentleman from Michigan, Mr. Dingell, is recognized for five minutes. 

Mr. DINGELL. Mr. Chairman, thank you. This question to the 

panel, yes or no answer. 

Ladies and gentlemen, the results of the midterm review of the 

Joint Project Agreement between NTIA and ICANN, completed in 

February ’08, indicated that further work was required to increase 

institutional confidence in ICANN. These areas included long-term 

stability, accountability, responsiveness, continued private sector 

leadership, stakeholder participation, increased contract compliance, and enhanced competition. 

Has ICANN, to date, adequately addressed these concerns? 

Starting with Ms. Alexander, yes or no. 

Ms. ALEXANDER. Thank you very much, Congressman. Given that 

we have an open proceeding on this—— 

Mr. DINGELL. Just yes or no. 

Ms. ALEXANDER [continuing]. Particular issue, I am not in a position to answer yes or no with the open proceeding. 

Mr. DINGELL. Next panelist, yes or no. 

Mr. TWOMEY. I would say yes, in respect. 

Mr. DINGELL. Next panelist. 

Mr. SILVA. I would say no. 

Mr. DINGELL. Next panelist. 

Ms. JONES. No, sir, Mr. Chairman. 

Mr. DINGELL. Thank you. Next panelist. 

Ms. DEUTSCH. No, sir. 

Mr. LENARD. No, sir. 

Mr. DINGELL. Ms. Alexander and the other panelists, again, if 

the JPA terminates and is not extended, does NTIA, do you have 


tjames on DSK6SPTVN1PROD with HEARING
124 

concerns about the ability of ICANN to ensure stability and security on the Internet. Yes or no. 

Ms. ALEXANDER. Yes, thank you very much, Congressman. Again, 

given the fact that we have an open proceeding—— 

Mr. DINGELL. I am sorry, but my time is limited, and I have got 

a pile of questions here. 

Ms. ALEXANDER. Thank you. 

Mr. DINGELL. Sir. Question. 

Mr. TWOMEY. No, I think it has little impact. 

Mr. DINGELL. Next panelist. 

Mr. SILVA. I would say that I have concerns about the security 

and stability. 

Mr. DINGELL. Next panelist. 

Ms. JONES. Yes. 

Mr. DINGELL. Next panelist. 

Ms. DEUTSCH. Yes. 

Mr. DINGELL. Next panelist. 

Mr. LENARD. Yes. 

Mr. DINGELL. Now, recently, in view of reports that the U.S. Government has been subject to cyberattacks from abroad, do you believe that upon expiration of the JPA, the U.S. Government will 

have adequate input into ICANN’s efforts to ensure the stability 

and the security of the Internet? Again, yes or no, if you please. 

Ms. ALEXANDER. Thank you very much. Security and stability 

will guide the Department of Commerce in all of these areas. 

Mr. DINGELL. Next panelist. 

Mr. TWOMEY. Yes, comprehensively, because it is not covered 

within the JPA details to start with. 

Mr. DINGELL. Thank you. Next panelist. 

Mr. SILVA. I don’t know the answer to that definitively, but I 

would share those concerns. 

Mr. DINGELL. Next panelist. 

Ms. JONES. Yes, we would continue to have concerns there. 

Mr. DINGELL. Thank you. Next panelist. 

Ms. DEUTSCH. We would, as well. 

Mr. LENARD. I agree. We would have concerns. 

Mr. DINGELL. Now, NTIA, oh. This to Mr. Silva. As permitted 

under its contract with ICANN, VeriSign raises prices that it 

charged for the .com registry in 2007 and 2008. 

For what reason did VeriSign do so? 

Mr. SILVA. Sir, specifically, these fee increases were used to invest in the infrastructure, and to build that out. As a matter of 

fact, we have publicly stated we created a project called Project 

Titan, for which we are investing over $100 million and 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 has happened recently in China, specifically, those 

were, part of those were DNS 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 .com. 

Mr. DINGELL. Thank you. Similarly, does VeriSign plan to raise 

its prices again in 2009? Yes or no. 


tjames on DSK6SPTVN1PROD with HEARING
125 

Mr. SILVA. That is, I am not in a position in the company to answer that question yes or no. 

Mr. DINGELL. You can’t. 

Mr. SILVA. That is not my role in the company. 

Mr. DINGELL. All right. Ms. Alexander, allegations have been 

made that the six year contracts agreed upon in 2006, between 

ICANN and VeriSign, for the registry of the domain .com, suffers 

from lack of transparency. 

Upon review, does the Department of Commerce share this view? 

Yes or no. 

Ms. ALEXANDER. Thank you very much, Mr. Congressman. The 

Department did, in fact, approve this agreement in 2006, after consultation with the Department of Justice and other national security agencies, and also, registrars, ISPs, and trade associations. 

Based on those consultations, we actually amended our cooperative agreement with VeriSign, to retain the right to approve any 

substantial modifications to those contracts going forward. 

Mr. DINGELL. All right. Mr. Chairman, I have two more questions I think are very useful here. Ms. Alexander, given these allegations, does the Department intend to ratify another agreement 

between ICANN and VeriSign on the expiration of the current 

agreement? Yes or no. 

Ms. ALEXANDER. The agreement expires in 2012, and at that 

time, when the information is furnished to the Department, we will 

again, once again, conduct a fulsome review of that, discussing it 

with the Department of Justice, other stakeholders, and figuring 

out the best way forward. 

Mr. DINGELL. Thank you. Now, other panelists, if you please. Let 

us return to the earlier question. Allegations have been made that 

the six year contract agreed upon between ICANN and VeriSign in 

2006 lacks transparency. 

Do you agree with that statement? Yes or no. 

Mr. TWOMEY. The contract is on public record, so I don’t agree 

with it. 

Mr. SILVA. I don’t agree with that statement. 

Ms. JONES. We agree that the manner in which the contract was 

negotiated lacks transparency, but inasmuch as the contract has 

now been published and we know what it says, I guess it is transparent now. We don’t necessarily agree with the outcome. 

Mr. DINGELL. But it wasn’t transparent earlier. 

Ms. JONES. I am sorry. 

Mr. DINGELL. It wasn’t transparent earlier. 

Ms. JONES. That is correct. 

Mr. DINGELL. Next panelist. 

Ms. DEUTSCH. I am unfortunately not an expert on that particular question, so I don’t know the answer. 

Mr. DINGELL. Next panelist, please. 

Mr. LENARD. I am not an expert on that contract, either, so—— 

Mr. DINGELL. Mr. Chairman, I ask unanimous consent that I be 

permitted to write a letter to the panelists, making further inquiries, and that the record remain open, so that both that letter and 

their response can be included in the record of the day. 

Mr. BOUCHER. Without objection. 

Mr. DINGELL. Thank you. 


tjames on DSK6SPTVN1PROD with HEARING
126 

Mr. BOUCHER. And other members, I am sure, are going to want 

to propound questions to you, as well. So, as you receive those inquiries, making a prompt reply would be very helpful to us. 

And without objection, the record shall remain open until replies 

are received. 

The gentleman from Arizona, Mr. Shadegg, is recognized for five 

minutes. 

Mr. SHADEGG. Thank you, Mr. Chairman. 

Ms. Jones, I would like to begin with you. I believe you testified 

that Go Daddy would like ICANN to operate in a more transparent 

and accountable manner. How would you like to see that happen, 

and do you believe the JPA can be strengthened to achieve that 

goal? 

Ms. JONES. I will answer your second question first. Yes. 

Mr. SHADEGG. OK. 

Ms. JONES. There are a multitude of ways in which we think accountability can be improved. I will give you an example. ICANN 

holds three open board meetings a year. The rest of their meetings 

of the Board are done in private. 

We have repeatedly asked for those meetings to produce transcripts. It is 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 would actually like to know what is going on in those meetings. That would 

be an example. 

The way they negotiate contracts with registries. We would love 

to know what is going on in those meetings. Let us make them accountable for the decisions they make, particularly as they relate 

to the questions that Mr. Stearns asked about prices, what they 

are 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 would like to see. All of that can be and will be, if 

we have any input, written into the JPA in its new version. 

Mr. SHADEGG. Does ICANN set the standards by which you operate when you issue a name? 

Ms. JONES. Generally. We are accredited by ICANN and then, we 

operate with a contract with, for example, VeriSign, on a .com. And 

ICANN, I think its 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 disputes, because we don’t 

decide the outcome of those disputes, but we operate at their luxury. So, inasmuch as they are our accrediting body, yes. They make 

the rules for us. 

Mr. SHADEGG. Dr. Twomey, can you tell me what steps ICANN 

has taken to address the concerns raised during the JPA midterm 

review that further work was needed to increase institutional confidence in ICANN? 

Mr. TWOMEY. Thank you, Congressman, and I appreciate your 

question. 

I have to say, in response to the last answer you heard, I have 

got to be quite clear. It was just wrong. ICANN publishes its agendas for all meetings, seven days before the meetings. The Board 

meetings, their decisions are released within three days, and withVerDate Mar 15 2010 04:44 Jun 15, 2012 Jkt 073751 PO 00000 Frm 00132 Fmt 6633 Sfmt 6633 E:\HR\OC\A751.XXX A751

tjames on DSK6SPTVN1PROD with HEARING
127 

in a couple of days after that, a full transcript of the Board is released. 

Mr. SHADEGG. A full transcript of the Board meeting? 

Mr. TWOMEY. A full transcript of the Board discussions. Transcript of how, full details of the Board discussion. 

Mr. SHADEGG. Well, wait, wait. There is a difference details and 

transcript. Is it a transcript, taken like a court report, the gentleman here is taking right now, or is it a—— 

Mr. TWOMEY. It is a comprehensive set of minutes. 

Mr. SHADEGG. It is a set of minutes. 

Mr. TWOMEY. It is a comprehensive set of minutes. 

Mr. SHADEGG. But it is not a transcript. 

Mr. TWOMEY. But it is not this decision and that decision. It is 

a full description of the—— 

Mr. SHADEGG. I think we are familiar—— 

Mr. TWOMEY [continuing]. Of each Board member, so—— 

Mr. SHADEGG. I think we are familiar with Board minutes versus 

a transcript. 

Mr. TWOMEY. No, I think—— 

Mr. SHADEGG. And what Ms. Jones said was they would like a 

transcript of the discussions that occurred, and the reasoning that 

occurred, Board minutes summarize that, rather than produce it in 

a word for word discussion. 

Mr. TWOMEY. Congressman, I will be happy to share with you examples, and I will send them to you for you to make that judgment. 

In terms of transparency, we have three minutes a year. We 

have public meetings. We have the fully minute and posted Board 

meetings. We translate all our documentation into the five of the 

UN languages. We transcribe discussions at our meetings, full 

transcripts at the meetings. We have 53 public consultations in 

2008. We had one every week. 

We have an independent ombudsman. We have corporate blogs. 

We have full public comment, to come to your question of transparency. I think it is—— 

Mr. SHADEGG. I think you are still trying to respond to my question to Ms. Jones, and I asked you if ICANN had taken work, or 

taken steps to increase confidence in, institutional confidence in 

ICANN. I was asking you what steps you have taken, and I don’t 

believe—well, are these all steps you have taken since that midterm review? 

Mr. TWOMEY. Well, no, they are not. Many of these we had in 

place, but we have taken more steps on transparency. We have 

taken, we have produced in more detail our accountability, a full 

description of our accountability processes. We have improved, extensively, the participation, openness and participation in meetings, to full online participation in all meetings. We have, in, we 

have proposed now to amend our bylaws to further expand our 

Internet, independent review mechanisms, including basically setting up, expanding our Review Panel processes. 

So, there has been a series of steps. Again, I, they are actually 

quite comprehensive, so I would be happy to respond to those more 

in detail with you in writing. 

Mr. SHADEGG. Mr. Chairman, my time has expired, but I would 

like to hear, I would like to allow the other panelists to comment 


tjames on DSK6SPTVN1PROD with HEARING
128 

on the steps that ICANN has taken since the midterm review. If 

there is anyone on the panel that would like to comment on those 

steps. 

Ms. JONES. I will comment. 

So, again, we commend the progress that they have made. We 

don’t disagree that he is sitting on top of a numerous page document that describes their accountability functions. That they publish minutes, detailed minutes from their Board meetings. I think 

I said that in my answer before, but we still think, and we know 

from the current version of the JPA, that there are goals articulated in that document that they have yet to fulfill. 

Has progress been made in the last 18 months? Is there more 

room for progress to be made in the next 18 months? Absolutely. 

And that is why we feel like an extension today and a renewed 

version in the future will help define the progress that is yet to be 

made in the future. 

Mr. SHADEGG. Anybody else like to comment? Yes, Doctor. 

Mr. LENARD. The only thing I would observe is that I think, although they get conflated in this discussion, I think there is a big 

difference between transparency and accountability. You can be 

very transparent and be totally unaccountable, and—— 

Mr. SHADEGG. Excellent point. 

Mr. LENARD. The way we have viewed accountability in the work 

we have done is basically accountability to some external party, 

which you can be very transparent, and still not have that, so—— 

Mr. SHADEGG. Thank you very much. 

Mr. BOUCHER. Thank you very much, Mr. Shadegg. 

Mr. SHADEGG. Thank you, Mr. Chairman. 

Mr. BOUCHER. The gentlelady from the Virgin Islands, Mrs. 

Christensen, is recognized for five minutes. 

Mrs. CHRISTENSEN. Thank you, Mr. Chairman. 

My first question would be to you, Ms. Alexander. Do you, on the 

fees, in 2000, GAO conducted a review on the Department of Commerce’s relationship with ICANN, and noted that, as a project partner with the Department under the Memorandum of Understanding, ICANN is allowed to collect fees, but is limited to recovering only the actual cost. 

Does NTIA believe that the fees being charged by ICANN are 

consistent with the Department’s policy to allow project partners to 

cover only actual project costs, and are you concerned that the potential revenue to be generated by ICANN’s proposal, which may 

exceed $100 million, do you believe that those fees should be limited to the actual costs of managing the new GTLDs? 

Ms. ALEXANDER. Thank you very much, Congresswoman, for the 

question. 

There are a variety of different fees that ICANN charges, and it 

is very difficult, in the panel discussions, everyone is talking about 

different fees. But to the extent the question you are raising, yes. 

The Department still believes that ICANN, as a nonprofit, should 

be charging fees that are consistent with what their costs are. 

And in our letter that we filed last year, in the GTLD public consultation process, we actually raised the issue, with the actual better explanation of the fee structure and disposition of excess revenues, if there were to be any. 


tjames on DSK6SPTVN1PROD with HEARING
129 

Mrs. CHRISTENSEN. Thank you. Mr. Twomey, Dr. Twomey, on the 

accountability issue. 

You mentioned that just recently, ICANN released proposals to 

establish a new independent review tribunal, to review ICANN’s 

Board decisions. And one, I am wondering why it took so long to 

recognize that need, but doesn’t ICANN also, don’t your bylaws already provide an independent review mechanism to review 

ICANN’s Board action, and has it ever been used? 

Mr. TWOMEY. Thank you, Congresswoman. And you are quite 

right. We actually have a series of existing mechanisms for, multiple series of accountabilities. On the particular one about appeals, 

we have an independent ombudsman. We have a Board review 

process. We have an Independent Review Panel, which is an independent arbitration mechanism, that is presently being utilized by 

one particular party. So we are actually presently, that is presently 

being utilized by one party. 

I should reinforce for all the members, we are under U.S. law, 

and we have been accountable before the U.S. courts on many occasions. So, we get sued under U.S. courts. The provisions I have 

pointed to were further consultations with our community since the 

midterm review, with some further things we were putting into the 

accountability process. 

But I would also recommend to you and other members of the 

panel, to the committee, that as being a not for profit under the 

Californian law, we are also accountable to the California Attorney 

General. So, we have multiple legal accountabilities already under 

the California Code, as well as under courts. So, there is a range 

of those ways of being accountable. 

Mrs. CHRISTENSEN. Ms. Jones, how would you respond to 

ICANN’s argument that as a California-based not for profit, it is 

bound by state and federal laws concerning contract, tort, and antitrust? 

Ms. JONES. Well, I think every organization that is organized in 

any state is accountable to its state’s attorney general. I don’t think 

that is the point we are making here. 

And by the way, if I could respond to your earlier point about the 

Independent Review Board. 

Mrs. CHRISTENSEN. The tribunal, sure. 

Ms. JONES. Just, we could throw in another acronym, but I will 

try to forego that for your purposes. 

Mrs. CHRISTENSEN. OK. 

Ms. JONES. If the ICANN Board appoints the members of the Review Board, it is, by definition, not independent, and therefore, not 

accountable. All of the review mechanisms we have in place right 

now, the ombudsman, the re-review, they are all reviewing ICANN. 

What we are saying is we want them to be accountable to the community. If we are going to have a community-based Review Board, 

that is an actual international organization that can say, the 

ICANN Board made a decision, and we are going to take a look at 

it, and determine if it was appropriate or not. That is 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 


tjames on DSK6SPTVN1PROD with HEARING
130 

have Verizon spending millions upon millions of dollars in litigation every year? It is not necessary. 

That Board should be independent. It should be appointed by 

independent constituents, and review the decisions without input 

from the Board itself. 

Mrs. CHRISTENSEN. I tend to agree, but Dr. Twomey, do you 

think it is independent? I see you shaking your head. I will give 

you a chance to respond. 

Mr. TWOMEY. Well, I just want to, again, one of the statements 

is just wrong. The Independent Review Panel is not set by the 

ICANN Board. The Independent Review Panel’s members are 

drawn by the International Center for Dispute Resolution, an international arbitration body, and we follow traditional international 

arbitration mechanisms, so that we don’t set the panel members 

whatsoever. The independent review arbitration body is the one 

who puts forward panel members. We don’t. 

Mrs. CHRISTENSEN. Go ahead. 

Ms. JONES. I just wonder if he can give us an example of one 

that has been used. And I know I am not allowed to ask questions. 

Mrs. CHRISTENSEN. Well, I think at the end of one of my questions, I asked that the Independent Review Board that already exists has ever been utilized, and that will be my last question. 

Mr. TWOMEY. Thank you, Congresswoman. 

As I said before, it is actually being utilized at the moment. We 

are actually actively in an arbitration in that Review Panel at the 

moment. 

Mr. BOUCHER. Thank you very much, Mrs. Christensen. The 

gentlelady from California, Ms. Matsui, is recognized for five minutes. 

Ms. MATSUI. Thank you, Mr. Chairman. 

Under the Joint Partnership Agreement, the U.S. Government 

affirmed its goals of preserving the security and stability of the 

Internet domain system. I want to focus on cyberattacks, mostly 

initiated abroad. They continue to pose a threat to consumers, businesses, and to government. 

Mr. Silva, in your oral testimony, you mentioned that a number 

of cyberattacks are initiated by individuals or groups in foreign 

countries, like Estonia and Russia. Given the increase we are witnessing in cyberattacks globally and, I guess, the United States, 

critical infrastructure, it seems to me, that many of our cybersecurity efforts tend to be more reactive and not proactive enough. 

The President’s announcement this week of a newly created National Cybersecurity Advisor will certainly bring renewed focus and 

coordination on this 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 cybercriminals? 

Mr. SILVA. Thank you. I believe that in concert with the announcement that the President made was also a report that was 

published, which was the result of a 60 day review by Dr. Hathaway and her term. 

I believe that that outlined some very positive steps that the government can take, and there were some good recommendations, 

which I certainly support in that document. As for consumers, I believe that consumers first need to be educated on the issue. 


tjames on DSK6SPTVN1PROD with HEARING
131 

Unfortunately, cybercrime is something that always seems to 

happen to someone else until it happens to them. And it is unfortunate, because they have probably already been a victim of it and 

don’t even know it. In the confiscated machines of the attackers 

who have conducted phishing attacks, 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. 

Ms. MATSUI. OK. 

Mr. SILVA. 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 system. 

Ms. MATSUI. OK. Ms. Jones, in your testimony, you state that 

one of your major concerns is that ICANN is not adequately prepared to defend itself against cyberattack. What are some of your 

specific concerns about this? 

Ms. JONES. The type of attack that we are talking about is the 

entire organization being taken over by another entity, and that 

could come in the form of an international organization, another 

government, some kind of other business, and that is not to say 

that they can’t ever build a protection against being taken over, but 

we are just concerned that today, and I think even Dr. Twomey 

said this in his testimony, they need to establish a permanent, long 

lasting set of principles upon which we can prevent them from 

being taken over. 

Now, I can tell you, if you take a look at the record from the 

WSNS round of talks, conversations about the UN or the ITU taking over ICANN, there are plenty of 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 function. 

Ms. MATSUI. Then let me follow up here. Dr. Twomey, what assurances could you provide us that the United States will always 

play a critical role with the organization, let us say, if the JPA is 

allowed to expire in September? 

Mr. TWOMEY. Excellent question. First and foremost, and very 

importantly, is the IANA contract. The procurement contract is at 

the core of the link with the United States Government with 

ICANN. Because the actual operation of IANA functions is at the 

core of what ICANN does. So, that is the first and foremost instrument. 

Secondly, as I said before, we are based in the United States, 

covered by United States law, covered by the purview of people like 

this committee, as well. Thirdly, is that we have quite comprehensive interactions with the United States Government as part of its 

leading place in the ICANN Government Committee, and fourthly, 

because like any leading government, we need to be closely engaged. We have been heavily engaged, for instance, on cybersecurity issues, but also, on other issues, competition, choice, and whatever. 

So, there is multiple layers of that engagement. I have to say, 

that is one of the reasons why I actually 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 


tjames on DSK6SPTVN1PROD with HEARING
132 

changes. I think that is the key point we are trying to make, and 

I am concerned by some of the statements made today, is that if 

the Joint Project Agreement expires, nothing changes in the way 

in which ICANN interacts and continues its role, or the importance 

of the link with the United States Government. 

Ms. MATSUI. OK. I see my time has expired. I probably have 

some other questions in the second round. Thank you very much, 

Mr. Chairman. 

Mr. BOUCHER. Thank you very much, Ms. Matsui. We have a series of three recorded votes pending on the floor of the House, and 

additional members who have questions they want to propound to 

you. 

We also probably 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 are going to recess, while these recorded 

votes are completed. We will ask for your patience. Please remain 

in the room or nearby, and the subcommittee will reconvene shortly. 

[Recess.] 

Mr. BOUCHER. The subcommittee will reconvene, and at this 

time, I am pleased to recognize the gentlelady from California, Ms. 

Eshoo, for her questions, and she is recognized for five minutes. 

Ms. ESHOO. Thank you, Mr. 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 first, 

I want to start out with a few observations, and then ask a couple 

of questions. I will go as quickly as possible, because we only have 

five minutes. 

In my opening statement, I thought it was important to acknowledge that ICANN, as an organization, has had several noteworthy 

accomplishments, and I mentioned some of those. And so, I want 

to be fair in acknowledging that. That is one side of the ledger, and 

it is an important side, and I salute you for the accomplishments 

that you have achieved. 

On the other side of the page, I think that there is some work 

to be done. I think that to allow the spinning off of ICANN 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 is 

troubling to me are the following things. 

First of all, it is with much curiosity to me that, as the United 

States of America is the mother, the father of the Internet, and 

that its ultimate trademark, so to speak, imprimatur, is that it is 

open. And we have had many debates, many fights, to define what 

is 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 ICANN operates does not match that. And I don’t think 

that is healthy. And I don’t think it really promotes what the Internet is about. If ICANN 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 would love 

to take it over. And hey, God bless them. They have got good taste. 


tjames on DSK6SPTVN1PROD with HEARING
133 

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 Agreement in 

the JPA. 

It is my understanding, Mr. Twomey, that in 2003, that there 

were public members, and they were voted off the Board. Is that 

correct, or is it incorrect? 

Mr. TWOMEY. There was a round of Board members who were 

elected worldwide. It was much earlier than that. It was in 1999 

and 2000. 

Ms. ESHOO. I don’t know what you are saying. Were they public 

members, or just regular members, and then, they rotated off the 

Board? 

Mr. TWOMEY. These were Board members. Some—the Board—— 

Ms. ESHOO. Are there any public members? 

Mr. TWOMEY. There is—members—even you mean consumers, 

representing consumers, yes, there are. 

Ms. ESHOO. And who are they? And how many are there? 

Mr. TWOMEY. There is one member on the Board now, Wendy 

Seltzer, and she is a member of the Board, and we are looking at, 

potentially looking at increasing those numbers. 

Ms. ESHOO. Looking at increasing. So, one out of how many? 

Mr. TWOMEY. Well, that is out of 21. 

Ms. ESHOO. That is a pretty lousy ratio, if I might say so myself. 

Mr. TWOMEY. But I would say that the same group helped select 

nearly half of the Board members in terms of our nominating committee, so the same group of people, the same consumer voices involved in that—— 

Ms. ESHOO. Well, I think I have gotten my answer. It is not very 

good. 

Let me ask you this, Dr. Twomey. What are the specific problems 

that you are trying to address, by seeking complete independence 

from the Commerce Department? In other words, 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 and 

NTIA have a very loose affiliation with you. I mean, this is not a 

heavy hand, and I am not suggesting it should be. But what do you 

want to accomplish by spinning off? What is in your way now? 

What is in the way? 

Mr. TWOMEY. Congresswoman, let me be very clear. We are not 

looking for independence. I mean, there is—— 

Ms. ESHOO. What are you looking for, then? 

Mr. TWOMEY. We are looking for the continuation of the model. 

Ms. ESHOO. Do you want the JPA? You want to continue in it? 

Mr. TWOMEY. We think the JPA should come to its conclusion, 

because it has completed its task. 

Ms. ESHOO. What does that mean? You want it to come to a conclusion? What does that mean, it comes to an end, and there isn’t 

any JPA anymore? 

Mr. TWOMEY. Well, what we think is we should move away from 

temporary, these sort of temporary documents. The JPA, at the moment, is a two page document, two pages. 

Ms. ESHOO. Well, why is it so menacing to you, then, if it is only 

two pages. 


tjames on DSK6SPTVN1PROD with HEARING
134 

Mr. TWOMEY. And so, what we are suggesting is, what we are actually suggesting is that we should actually put in place some of 

the principles that the members of the committee think are important, we should put them into a more permanent statement at the 

end of the JPA process. 

Ms. ESHOO. You know what I think this is, and I hope I am 

wrong, but this is the impression that I am 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, our role, you know, 

can’t be and should not be, in my view, leapfrogged over. Is 

that—— 

Mr. TWOMEY. That is not the intention at all. 

Ms. ESHOO. That is not the intention. 

Mr. TWOMEY. Not at all. 

Ms. ESHOO. Is there any sensibility around that, or is it totally 

false? 

Mr. TWOMEY. There is a balance, right, in this broad debate, of 

how to have an organization that is accountable to the United 

States, in the way you are putting forward, and at the same time, 

engages all of the country code operators of the world, all of the 

governments who are in our Government Committee, all of the people who make the system work. 

And so, we are not looking to—— 

Ms. ESHOO. Well, I don’t know whether you have told us what 

the problem with the JPA arrangement is, which is a mystery to 

me that you want out of it, but it seems to me, Mr. Twomey, that 

you have been saying to us that stakeholders want to be independent, and we have stakeholders that are testifying, that are 

saying absolutely not. 

So, there is a division of approach here, and that is why I think 

we have some more work to do on it, and I hope that what we can 

count on, when we get to a rewrite or an extension of the JPA, 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 seems 

to me that we have got some experts here today, and plenty of others, but I really do not believe that this thing should just be spun 

off. I don’t think A, it is necessary, B, putting on my hat, and I 

know I am going over time, but I think I am 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, in 

the role that it plays. 

And so, I think just allowing ICANN to go off, to spin off, to become I don’t know what, is 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. 

Mr. BOUCHER. Thank you very much, Ms. Eshoo. 

I am 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. 


tjames on DSK6SPTVN1PROD with HEARING
135 

[The information appears at the conclusion of the hearing.] 

Mr. BOUCHER. Mr. Stearns and I both have some additional 

questions we would like to propound, and so, we are going to open 

a second round of questioning for such members of the subcommittee as desire to propound additional questions. 

And Mr. Twomey, 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 real competition will emerge 

in the bidding for these domains? Have you taken any kind of survey of potential bidders? 

As a related question, will you have any kind of bar on existing 

registrars being able to bid for these domains? In other words, registrars who currently administer other top-level domains? 

And what other assurances can you put in place that there will 

be real competition, in the event that new top-levels are authorized? 

Mr. TWOMEY. Well, thank you, Chairman. From all of the feedback we have received in the process, which has been going, this 

discussion of new GTLDs has been going for ten years. The policy 

process took five years, with all of the stakeholders involved. We 

are now going through this how do you implement 18 month discussion. 

In that process, it has been clear to us that there is a range of 

people who are very interested in applying. Some are in pretty general terms, they are looking for general terms in English, .shops 

and .webs, that sort of thing. Quite a lot of people interested in geographic terms. As I mentioned before, some of those cities, Berlin, 

New York City, Paris. 

Interest from indigenous communities. There is some talk about 

potentially a .maori or a .sami, so people are looking to represent 

that. There is clearly interest from some companies for brand 

names, and you wouldn’t be surprised, Chairman, to know that 

companies are not monolithic. So, not only will be hear from intellectual property lawyers from inside the company that is concerned. We also hear from their marketing departments and the 

product development departments that they are really interested in 

having a top-level domain. So, we are hearing that difference. And 

I think the—— 

Mr. BOUCHER. Well, you have talked about areas where you 

might have one bidder. If it is an indigenous tribe, for example, potentially, you would have that tribe bidding to operate, or someone 

associated with it, I don’t know. But do you think you would have 

real competition in the bidding for such a top-level domain? Would 

you have a variety of bidders seeking—— 

Mr. TWOMEY. The process would be fully open, so if other bidders 

wished to bid—— 

Mr. BOUCHER. 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? 

Mr. TWOMEY. We are trying to make the process as open, as 

transparent, and as—— 


tjames on DSK6SPTVN1PROD with HEARING
136 

Mr. BOUCHER. Well, you are answering my question with a process answer, and I am really asking a more fundamental question. 

It is almost an empirical question. Have you actually done a survey, and identified, within these various TLDs that you might 

issue, more than one bidder, or any bidders for some of them? 

Mr. TWOMEY. We are expecting, for some of them, there will be 

multiple bidders. It has been quite clear, some of the people have 

made clear that there would be multiple bidders, and we see—— 

Mr. BOUCHER. Would you demand that assurance, that there will 

be multiple bidders, before you would authorize a particular new 

top-level domain? 

Mr. TWOMEY. The policy process to date is not prescriptive on 

that, because we would think there would be instances where people would like to have a top-level domain, for instance, if it was a 

company brand name, where that company itself would want to 

have the brand, and not want to have to bid to another person. I 

mean, that would go to the very heart of the issue we said before 

about cybersquatting. 

Mr. BOUCHER. Well, fair enough, but if your top-level domain is 

more generic. In other words, if it is .phone, you would certainly 

want more than one bidder. You would anticipate multiple bidders 

for such a top-level domain, would you not? 

And my question is, would you conduct some sort of empirical 

survey in advance, just to be sure that there actually would be a 

sufficient level of competition in the bidding for administering that 

TLD? 

Mr. TWOMEY. One of the things we are putting forward is to have 

an extensive, is to have an extensive promotion of the process, before it would open. So that people were aware the process was 

available. 

To come to the specific question you are asking, we are not putting forward that we choose the string, and then say, who wants 

to bid for this. We are actually saying it is not appropriate for us 

to decide what string people should bid for, but the process should 

be open and flat, and that it is up to people who think there is an 

opportunity to put forward a string. 

Mr. BOUCHER. Well, the reason I am 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 TLDs, but potentially, multiple 

new TLDs 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 in the bidding 

for those TLDs, then that public policy justification seems to me to 

be diminished substantially. So, I think it is a legitimate are. 

Let me ask if anyone else on the panel wants to comment on that 

question. Ms. Deutsch. 

Ms. DEUTSCH. Yes, I would just raise, I guess three points. First 

of all, I don’t think you got a clear answer, but to our knowledge, 

there has never been that empirical study on the need for new 

TLDs. 

Second, we already think, you know, there are 21 GTLDs today. 

We think there is sufficient competition in the market today. 


tjames on DSK6SPTVN1PROD with HEARING
137 

Maybe there, you know, could be a few more slowly released, or the 

international domain names might be something to think about, 

but 88 percent of all Internet traffic goes to .com. That is still the 

premier piece of real estate, so there is nothing to say that the addition of all these new ones still won’t leave .com in that dominant 

space. And third, we think, you know, there is not that bidding 

process. It is more like speculating. People can bid, but you are not 

going to know who else is bidding for what names. If you happen 

to bid for the same name, maybe there will be some competition. 

Mr. BOUCHER. OK. Mr. Stearns. 

Mr. STEARNS. Thank you, Mr. Chairman. 

Mr. Twomey, I think you mentioned to the gentlelady from California that you have 21 Board members. How many of those are 

U.S. citizens? I was told by staff that two thirds are not. 

Mr. TWOMEY. Board members are required to come from one of 

five regions in the world. 

Mr. STEARNS. OK. 

Mr. TWOMEY. And North America is one of those regions. 

Mr. STEARNS. Right. 

Mr. TWOMEY. And each region has to be represented on the 

Board. 

Mr. STEARNS. Yes. 

Mr. TWOMEY. As it does on each of the Councils of our supporting 

organizations. The present number, I think, is seven or eight. I will 

have to check the specific—— 

Mr. STEARNS. OK. But roughly, I’m right. Two thirds are from 

other countries, which—and of the 100 employees you have, how 

many are from the United States? Is it the same ratio? About two 

thirds are from other countries? 

Mr. TWOMEY. No, it is much more from the United States. 

Mr. STEARNS. OK, 50/50, you think? 

Mr. TWOMEY. It is well over 50 percent. It is over 50 percent. 

Mr. STEARNS. So, 50 percent are from other countries. Yes. In 

looking through your P&L statement, just going back to this net 

cash reserve, you are up to about $46 million, 425, and you indicated that if you go ahead with these TLDs, it could generate another $90 million. 

So, does that mean if you were at $150 million in revenue, that 

you would try to get this cash reserve up to $150 million? Was that 

your statement? 

Mr. TWOMEY. No, that is not the statement. 

Mr. STEARNS. OK. 

Mr. TWOMEY. 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, the committee have raised, or those concerns we 

have, about 20 percent of our budget is dedicated to security and 

stability issues. 

We have increased quite significantly our allocations to compliance work, and we are now looking at allocating more money to the 

compliance work. The issues with GTLD funding is that we are required by the community to be cost recovery only for that, that 

there be no cross-subsidy for anybody who is applying for a new 

GTLD. 


tjames on DSK6SPTVN1PROD with HEARING
138 

We expect that the fees you are referring are one-off application 

fees to be dealt with only in that year, and that the actual revenues would come down. 

Mr. STEARNS. But you still indicated you, earlier, that you want 

to have a reserve fund equal to your revenues. 

Mr. TWOMEY. I am on public record of saying that they should 

be equal to about one year of the present operational basis. 

Mr. STEARNS. Yes, so, if you are doing $61 million, you want to 

do $61 million in reserve. 

Mr. TWOMEY. It is around—I am on public record as saying I 

think the number should be around $50 million. 

Mr. STEARNS. So, it is not what you said earlier, that it will be 

equivalent to one year’s revenue. 

Mr. TWOMEY. That was the advice we had received, but I think 

it should be—about the one. I have to reinforce why that is important. It is important for security and stability. In the early days of 

ICANN, we received multiple lawsuits, which we defended quite 

correctly. 

Mr. STEARNS. Don’t you have insurance to cover a lot of those 

multiple lawsuits? 

Mr. TWOMEY. We had some insurance, but we have no confidence 

that would cover all the process. 

Mr. STEARNS. Yes. OK, I understand that. 

Ms. Alexander, I mean frankly, they are an international organization. They don’t necessarily want to be in the United States. I 

mean, maybe Mr. Twomey wants to take them to Australia. I 

mean, if they wanted to leave, what could we do to stop them, after 

the contract expires in September? What could we, what legal 

things could we do? 

You might not be able to answer this, because you are not, I 

don’t know. What legal things could we do? 

Ms. ALEXANDER. Thank you very much, Mr. Stearns. 

I think, with respect to JPA, I am not in a position to answer 

those questions. But to the extent that ICANN remains the IANA 

functions contractor, that needs to be located in the United States. 

Mr. STEARNS. There is a legal contract, a need to be in the 

United States. 

Ms. ALEXANDER. Yes, sir. 

Mr. STEARNS. OK. Now, Mr. Twomey, let us say, you know, you 

wanted to be free from the contract with the Commerce Department, and you wanted to be separate and independent, and that is 

what you and the people would do. 

Would you be willing to have competition, have some, another 

agency set up and compete with you? 

Mr. TWOMEY. The functions that are being, well, there is a couple 

of propositions there. We are not looking to be more independent 

than we are now. So, I want to keep reinforcing that. We are an 

independent organization under the law. 

Mr. STEARNS. No, I understand. 

Mr. TWOMEY. But the actual functions are, in the original design 

work, functions that needed to be essentially coordinated across the 

global Internet. This is the allocation of this coordination of domain 

names and IP addressing. 


tjames on DSK6SPTVN1PROD with HEARING
139 

And in the original analysis, which was done back in the 1990s, 

as to how to bring that forward. It was seen that they were functions that were unique, that needed to be coordinated at one place. 

That is why the original white paper called for such an organization, and the Internet community responded to it. 

I think the analysis at the technical level remains that is the 

case. So, we are very carefully structured to try to deal with many 

antitrust issues, and have, the antitrust issues inside ICANN have 

been tested and tried several times in U.S. courts, which have confirmed the model. 

If the technical analysis were to say that you could have multiple 

mechanisms of doing that coordination, then potentially, you know, 

we wouldn’t stand against it, but the technical analysis does not 

support it. 

Mr. STEARNS. Ms. Alexander, this is my last question. This is 

changing the subject totally here. I am going back to the DTV transition. 

About 725,000 more households have to prepare themselves for 

the DTV transition, using the stimulus money. Based upon the 

Nielsen Rating data, and information from the NTIA itself, at that 

pace, about 900,000 will have used the money to prepare by June 

12. That means we will have spent more than $700 per household 

for a $50 device. Does that make sense? Assuming my mathematics 

is correct. 

Ms. ALEXANDER. Thank you very much, Congressman. I just 

want to reassure you that the DTV transition is a high priority for 

the Secretary of Commerce. 

Mr. STEARNS. I notice you are reading that, so that is what they 

told you to tell me. 

Ms. ALEXANDER. And acting Assistant Secretary Anna Gomez. I 

am not the subject matter expert on this area. We would be happy 

to provide further answers to these questions, for the committee. 

Mr. STEARNS. Yes. All right. Thank you, Mr. Chairman. 

Mr. BOUCHER. Thank you very much, Mr. Stearns. 

The thanks of the subcommittee to our panel of witnesses. You 

have been here for a long time. This has been, I think, a very interesting and informative discussion, and we appreciate your contributions to it. 

I am 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. 

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. 

We are going to keep the record open from this hearing to receive 

those replies for a period of about one month, so please be prompt 

in getting those responses back. 

We appreciate very much your attendance this morning, and 

your informative presentations, and this hearing stands adjourned. 

[Whereupon, at 1:00 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 


tjames on DSK6SPTVN1PROD with HEARING
140 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 149 here 73751A.095
141 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 150 here 73751A.096
142 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 151 here 73751A.097
143 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 152 here 73751A.098
144 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 153 here 73751A.099
145 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 154 here 73751A.100
146 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 155 here 73751A.101
147 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 156 here 73751A.102
148 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 157 here 73751A.103
149 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 158 here 73751A.104
150 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 159 here 73751A.105
151 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 160 here 73751A.106
152 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 161 here 73751A.107
153 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 162 here 73751A.108
154 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 163 here 73751A.109
155 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 164 here 73751A.110
156 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 165 here 73751A.111
157 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 166 here 73751A.112
158 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 167 here 73751A.113
159 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 168 here 73751A.114
160 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 169 here 73751A.115
161 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 170 here 73751A.116
162 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 171 here 73751A.117
163 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 172 here 73751A.118
164 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 173 here 73751A.119
165 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 174 here 73751A.120
166 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 175 here 73751A.121
167 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 176 here 73751A.122
168 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 177 here 73751A.123
169 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 178 here 73751A.124
170 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 179 here 73751A.125
171 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 180 here 73751A.126
172 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 181 here 73751A.127
173 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 182 here 73751A.128
174 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 183 here 73751A.129
175 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 184 here 73751A.130
176 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 185 here 73751A.131
177 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 186 here 73751A.132
178 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 187 here 73751A.133
179 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 188 here 73751A.134
180 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 189 here 73751A.135
181 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 190 here 73751A.136
182 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 191 here 73751A.137
183 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 192 here 73751A.138
184 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 193 here 73751A.139
185 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 194 here 73751A.140
186 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 195 here 73751A.141
187 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 196 here 73751A.142
188 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 197 here 73751A.143
189 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 198 here 73751A.144
190 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 199 here 73751A.145
191 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 200 here 73751A.146
192 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 201 here 73751A.147
193 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 202 here 73751A.148
194 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 203 here 73751A.149
195 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 204 here 73751A.150
196 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 205 here 73751A.151
197 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 206 here 73751A.152
198 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 207 here 73751A.153
199 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 208 here 73751A.154
200 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 209 here 73751A.155
201 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 210 here 73751A.156
202 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 211 here 73751A.157
203 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 212 here 73751A.158
204 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 213 here 73751A.159
205 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 214 here 73751A.160
206 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 215 here 73751A.161
207 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 216 here 73751A.162
208 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 217 here 73751A.163
209 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 218 here 73751A.164
210 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 219 here 73751A.165
211 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 220 here 73751A.166
212 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 221 here 73751A.167
213 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 222 here 73751A.168
214 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 223 here 73751A.169
215 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 224 here 73751A.170
216 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 225 here 73751A.171
217 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 226 here 73751A.172
218 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 227 here 73751A.173
219 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 228 here 73751A.174
220 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 229 here 73751A.175
221 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 230 here 73751A.176
222 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 231 here 73751A.177
223 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 232 here 73751A.178
224 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 233 here 73751A.179
225 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 234 here 73751A.180
226 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 235 here 73751A.181
227 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 236 here 73751A.182
228 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 237 here 73751A.183
229 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 238 here 73751A.184
230 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 239 here 73751A.185
231 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 240 here 73751A.186
232 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 241 here 73751A.187
233 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 242 here 73751A.188
234 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 243 here 73751A.189
235 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 244 here 73751A.190
236 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 245 here 73751A.191
237 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 246 here 73751A.192
238 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 247 here 73751A.193
239 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 248 here 73751A.194
240 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 249 here 73751A.195
241 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 250 here 73751A.196
242 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 251 here 73751A.197
243 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 252 here 73751A.198
244 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 253 here 73751A.199
245 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 254 here 73751A.200
246 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 255 here 73751A.201
247 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 256 here 73751A.202
248 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 257 here 73751A.203
249 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 258 here 73751A.204
250 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 259 here 73751A.205
251 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 260 here 73751A.206
252 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 261 here 73751A.207
253 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 262 here 73751A.208
254 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 263 here 73751A.209
255 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 264 here 73751A.210
256 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 265 here 73751A.211
257 


tjames on DSK6SPTVN1PROD with HEARINGInsert graphic folio 266 here 73751A.212