```

[Senate Hearing 114-135]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-135

                 PRESERVING THE MULTISTAKEHOLDER MODEL 
                         OF INTERNET GOVERNANCE

=======================================================================

                                HEARING

                               BEFORE THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 25, 2015

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
                             
                             
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                    David Schwietert, Staff Director
                   Nick Rossi, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 25, 2015................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Nelson......................................    25
    Prepared statement...........................................    25
Statement of Senator Fischer.....................................    30
Statement of Senator Daines......................................    31
Statement of Senator Sullivan....................................    33
Statement of Senator Gardner.....................................    36
Statement of Senator Peters......................................    39
Statement of Senator Cantwell....................................    41
Statement of Senator Ayotte......................................    41
Statement of Senator McCaskill...................................    43
Statement of Senator Klobuchar...................................    45
Statement of Senator Markey......................................    47

                               Witnesses

Hon. Lawrence E. Strickling, Assistant Secretary for 
  Communications and Information, National Telecommunications and 
  Information Administration, U.S. Department of Commerce........     3
    Prepared statement...........................................     5
Fadi Chehade, President and Chief Executive Officer, Internet 
  Corporation for Assigned Names and Numbers (ICANN), A 
  California Public Benefit Nonprofit Corporation................    13
    Prepared statement...........................................    15
David A. Gross, Ambassador, Partner, Wiley Rein LLP, and former 
  U.S. Coordinator for International Communications and 
  Information Policy, U.S. Department of State...................    19
    Prepared statement...........................................    21

                                Appendix

Response to written questions submitted to Hon. Lawrence E. 
  Strickling by:
    Hon. John Thune..............................................    53
    Hon. Roy Blunt...............................................    54
    Hon. Maria Cantwell..........................................    56
Response to written questions submitted to Fadi Chehade by:
    Hon. John Thune..............................................    57
    Hon. Roy Blunt...............................................    57
    Hon. Steve Daines............................................    62
    Hon. Amy Klobuchar...........................................    62
Response to written question submitted to Ambassador David A. 
  Gross by:
    Hon. John Thune..............................................    63
    Hon. Maria Cantwell..........................................    63

 
      PRESERVING THE MULTISTAKEHOLDER MODEL OF INTERNET GOVERNANCE

                              ----------                              

                      WEDNESDAY, FEBRUARY 25, 2015

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m. in room 
SR-253, Russell Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Ayotte, Fischer, 
Sullivan, Gardner, Daines, Nelson, Cantwell, McCaskill, 
Klobuchar, Markey, and Peters.

             OPENING STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    The Chairman. Good morning. This hearing of the Commerce, 
Science, and Transportation Committee will get underway.
    Today we convene the Committee to evaluate the 
multistakeholder system of Internet governance. There has been 
no shortage of activity in this space in recent years, as I am 
sure each of our panelists can attest. The goal of everyone 
here is the same. We want one, global Internet that is not 
fragmented nor hijacked by authoritarian regimes. The question 
is how do we get there.
    This is the Commerce Committee's first hearing on Internet 
governance in quite some time but this is not the beginning of 
our oversight on this issue.
    Following last year's announcement by the National 
Telecommunications and Information Administration of its intent 
to transfer the Internet Assigned Numbers Authority, or IANA, 
functions to the global multistakeholder community, Senator 
Rubio and I led 33 of our Senate colleagues on an oversight 
letter to NTIA about the proposed transition.
    We stated our support for the current bottom up, 
multistakeholder approach to Internet governance and stressed 
the importance of standing firm on the Administration's promise 
that it would not accept a proposal that replaces NTIA's role 
with a government led or inter-governmental solution.
    We encouraged the multistakeholder community to act 
deliberately and transparently as it puts together a transition 
proposal. That remains as true today as when we first said it.
    In July, Senator Rubio and I weighed in on proposals to 
reform ICANN via the ``Enhancing ICANN Accountability'' work 
stream, to support specific accountability measures that we 
believe must be achieved before any transition of the IANA 
functions.
    We continue to believe the stakeholder community should 
demand robust and significant accountability reforms, such as 
curtailing governmental involvement in apolitical governance 
matters, requiring a higher vote threshold for the ICANN Board 
when making major decisions, providing additional oversight 
tools to the multistakeholder community, and adopting an 
independent dispute resolution process.
    Administrator Strickling has encouraged the 
multistakeholder community to address how to remove Board 
members and how to incorporate current accountability tools 
like the Affirmation of Commitments reviews. I completely 
agree.
    This morning we will hear from a mostly government panel 
about how best to ensure the multistakeholder model, but the 
private sector and civil society are active on this issue as 
well, and as the IANA transition process moves forward, it may 
be appropriate for the Committee to dive deeper and to hear 
from stakeholders who require an open and secure Internet to 
create jobs and to grow our economy.
    If an IANA transition plan is presented to NTIA, I will 
scrutinize that plan to make sure it both meets the 
requirements laid out by NTIA and adopts meaningful 
accountability reforms that Senator Rubio and I have called 
for.
    Administrator Strickling has been very clear that 
accountability reforms go hand and glove with a transition 
plan. I pledge that I will hold the Administration accountable 
for the red lines it has established throughout this process.
    In particular, I will be interested to see whether the 
stakeholder community can deliver a proposal that allows 
Internet users to continue to have faith the IANA functions are 
carried out effectively and seamlessly, and I will focus on the 
adequacy of the accountability reforms in any proposal.
    Some worry that in the absence of U.S. involvement in the 
IANA functions ICANN may be subject to capture by authoritarian 
regimes, and these are valid concerns. I also worry that in the 
absence of a contract with the U.S. Government ICANN could 
become an organization like FIFA, the international soccer 
organization that is flush with cash, unresponsive to those it 
supposedly serves, and I should say unaccountable to no one.
    The ICANN Board can demonstrate its own commitment to the 
multistakeholder model by accepting the stakeholder community's 
proposed reforms even if that means lessening the Board's 
powers in some areas.
    The multistakeholder community has one opportunity to get 
this right because the Internet is too important for democracy, 
for world culture, and the interconnected global economy to 
allow poor governance to jeopardize its future.
    The mantra for all of us should be measure twice, cut once.
    We have a distinguished panel here before us today to share 
their experiences and views, and I am looking forward to 
hearing from each of you.
    In the absence of our Ranking Member being here at the 
moment, we will skip right to opening statements from our 
panel. I want to welcome them here. We will start on the left 
with Mr. Strickling.
    Lawrence Strickling is the Assistant Secretary for 
Communications and Information and the Administrator of the 
National Telecommunications and Information Administration 
under the Department of Commerce.
    He will be followed by Mr. Fadi Chehade, Chief Executive 
Officer of the Internet Corporation for Assigned Names and 
Numbers, and then we will hear from Ambassador David Gross, and 
he is a partner with Wiley Rein and the former U.S. Coordinator 
for International Communications and Information Policy at the 
U.S. Department of State.
    We look forward to hearing your comments this morning, and 
we will start on my left and your right with Mr. Strickling. 
Welcome.

 STATEMENT OF HON. LAWRENCE E. STRICKLING, ASSISTANT SECRETARY 
FOR COMMUNICATIONS AND INFORMATION, NATIONAL TELECOMMUNICATIONS 
                        AND INFORMATION 
          ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE

    Mr. Strickling. Thank you, Chairman, and members of the 
Committee. I am very pleased to be here today to testify how 
the IANA transition will protect and preserve the security and 
stability of the global Internet.
    In 1998, the Department of Commerce launched the process of 
privatization that is the subject of today's hearing, stating 
then that the U.S. Government is committed to a transition that 
will allow the private sector to take over NTIA's limited 
management role.
    I would like to underscore that we are not talking about 
management of the whole Internet. We are talking about a few 
technical functions that are necessary to ensure that the 
plumbing of the Internet is working.
    ICANN develops policy through bottom up multistakeholder 
processes. These efforts are open to all stakeholders whether 
they are businesses, civil society organizations, technical 
experts, or governments. It is this global multistakeholder 
community that makes Internet policy today, whether it be 
setting domain name policy or developing Internet technical 
standards. I want to emphasize that NTIA does not exercise any 
control or oversight over policymaking at ICANN.
    The U.S. Government has been a vigorous supporter of the 
multistakeholder model. Both Republican and Democratic 
Administrations have consistently emphasized that the 
multistakeholder process is the best mechanism for making 
decisions about how the Internet should be managed.
    Congress agrees. Earlier this month, the Senate unanimously 
passed Senate Resolution 71, which states that the United 
States remains committed to the multistakeholder model of 
Internet governance in which the private sector works in 
collaboration with civil society, governments, and technical 
experts in a consensus fashion. We thank you for that show of 
support.
    In furtherance of this long-standing bipartisan policy of 
the United States, on March 14 of last year, NTIA announced the 
final phase of the privatization of the domain name system. We 
asked ICANN to convene global stakeholders to develop a 
proposal to transition the current role played by NTIA in the 
coordination of the domain name system.
    In making this announcement, we stated that the transition 
proposal must have broad community support and must satisfy 
four conditions. It must support and enhance the 
multistakeholder model. It must maintain the security, 
stability, and resiliency of the Internet domain name system. 
It must meet the needs and expectations of the global customers 
of the IANA services, and it must maintain the openness of the 
Internet.
    We made crystal clear, as the chairman mentioned, that we 
will not accept a proposal that replaces our role with a 
government led or inter-governmental solution.
    The business community, civil society, and other 
stakeholders responded to our announcement with strong 
statements of support, and they have responded enthusiastically 
to our call to develop a transition plan that will ensure the 
stability, security, and openness of the Internet.
    Today, after several months of planning, I want to 
emphasize the following points. Based on my firsthand 
observations of the community at work in Singapore earlier this 
month, I am confident that the global Internet community will 
work diligently to develop a consensus plan that meets the 
conditions we have laid out, but until such time, there will be 
no change in our current role.
    I also want to make clear that we have not set any deadline 
for the transition. September 2015 has been a target date 
because that is when the base period of our contract with ICANN 
expires. However, this should not be seen as a deadline.
    We have said from the start that if the community needs 
more time, we have the ability to extend the IANA functions' 
contract for up to 4 years. It is up to the community to 
determine a time line that works best for stakeholders as they 
develop a proposal that meets the conditions but also works.
    This transition benefits American interests. Our economic 
and political interests depend on a growing and innovative 
global Internet, especially in the developing world. Despite 
the symbolic role the U.S. Government has played over the 
years, the fact is that no country controls the Internet today 
and no country will control the Internet after the transition.
    The Internet's continued growth and innovation depends on 
building trust among all users worldwide and strengthening the 
engagement of all stakeholders.
    Since our announcement, we have seen a growing acceptance 
of the multistakeholder model around the world, especially in 
the governments of developing countries. Last April, Brazil 
hosted the successful NETmundial conference, which brought 
together a wide range of stakeholders, all on an equal footing 
with each other. At this meeting, not only did participants 
agree that Internet governance should be built on democratic 
multistakeholder processes, the entire meeting was a 
demonstration of the open participative and consensus driven 
governance.
    Last November at the International Telecommunication 
Union's Plenipotentiary Conference in Busan, Korea, the United 
States worked successfully with countries in both the developed 
and developing world to avoid expansion of the ITU's mandate 
into Internet issues.
    Building support for the multistakeholder model among other 
nations is the best strategy to limit the influence of 
authoritarian regimes and prevent attempts to expand their 
restrictive policies beyond their own borders. It is also the 
best strategy for protecting against the possible fragmentation 
of the Internet that some countries have threatened.
    In conclusion, all of these factors give me confidence that 
when the transition is completed, we will have a stronger and 
more secure Internet that will continue to grow and thrive 
throughout the world.
    Thank you, and I look forward to answering your questions.
    [The prepared statement of Mr. Strickling follows:]

Prepared Statement of Hon. Lawrence E. Strickling, Assistant Secretary 
  for Communications and Information, National Telecommunications and 
        Information Administration, U.S. Department of Commerce
    Chairman Thune, Ranking Member Nelson, and members of the 
Committee, thank you for this opportunity to testify on behalf of the 
National Telecommunications and Information Administration (NTIA) 
regarding NTIA's role in the Internet's domain name system and the 
transition of NTIA's stewardship over certain technical functions 
related to the Internet domain name system to the global 
multistakeholder community. I am pleased to appear before you to update 
you on the current status of the transition planning process as the 
global Internet community works to develop a transition proposal that 
will ensure the stability, security, and openness of the Internet.
I. Background
    The Domain Name System (DNS) is a critical component of the 
Internet infrastructure. It allows users to identify websites, mail 
servers, and other Internet destinations using easy-to-understand names 
(e.g., www.ntia.doc.gov) rather than the numeric network addresses 
(e.g., 170.110.225.163) necessary to retrieve information on the 
Internet. In this way, it functions similar to an ``address book'' for 
the Internet.
    On July 1, 1997, President Clinton issued an Executive Memorandum 
directing the Secretary of Commerce to privatize the Internet DNS in a 
manner that increases competition and facilitates international 
participation in its management.\1\ In June 1998, following a public 
comment process, NTIA issued a statement of policy on the privatization 
of the Internet DNS, known as the DNS White Paper.\2\ The White Paper 
concluded that the core functions relevant to the DNS should be 
performed under private sector management to promote the development of 
robust competition and facilitate global participation in Internet 
management.
---------------------------------------------------------------------------
    \1\ The White House, ``Memorandum for the Heads of Executive 
Departments and Agencies,'' (July 1, 1997), available at: Khttp://
clinton4.nara.gov/WH/New/Commerce/directive.html.
    \2\ NTIA, ``Statement of Policy, Management of Internet Names and 
Addresses,'' (DNS White Paper), 63 Fed. Reg. 31741 (1998), available 
at: http://www.ntia.doc.gov/federal-register-notice/1998/statement-
policy-management-internet-names-and-addresses.
---------------------------------------------------------------------------
    NTIA recognized that the Internet has succeeded in great measure 
because it is a decentralized system that encourages innovation and 
maximizes individual freedom. Where possible, market mechanisms that 
support competition and consumer choice should drive the management of 
the Internet because they lower costs, promote innovation, encourage 
diversity, and enhance user choice and satisfaction. Moreover, a 
private sector coordinating process would be more flexible than a 
government process and more likely to move rapidly enough to meet the 
changing needs of the Internet and of Internet users.
    To accomplish these policy objectives, NTIA stated that it was 
prepared to enter into an agreement with a new not-for-profit 
corporation formed by private sector Internet stakeholders to 
coordinate and manage policy for the Internet DNS. Private sector 
interests formed NewCo for this purpose, which was subsequently re-
named the Internet Corporation for Assigned Names and Numbers (ICANN). 
In the fall of 1998, NTIA entered into a Memorandum of Understanding 
(MOU) with ICANN to transition technical DNS coordination and 
management functions to the private sector.
    The MOU did not simply turn over management of the DNS to ICANN. 
Rather, the MOU outlined a process to design, develop, and test 
mechanisms, methods, and procedures to ensure that the private sector 
had the capability and resources to assume important responsibilities 
related to the technical coordination and management of the DNS. The 
MOU evolved through several iterations and revisions as ICANN tested 
these principles, learned valuable lessons, and matured as an 
organization.
II. Internet Assigned Numbers Authority (IANA) Functions
    In 1998, NTIA announced its intent to ensure the continued secure 
and stable performance of the IANA functions until the transition was 
complete. In 2000, NTIA entered into a sole-source, no-cost-to-the-
government contract with ICANN, designating it to perform these 
functions. NTIA and ICANN have subsequently entered into contracts for 
the performance of the IANA functions in 2001, 2003, and 2006. On July 
2, 2012, NTIA awarded ICANN the current IANA functions contract after 
conducting a full and open competitive procurement process. The base 
period of performance for this contract is October 1, 2012, to 
September 30, 2015. The contract also provides for two option periods 
of two years each; however, the parties have discretion to extend the 
contract for a shorter period than two years upon mutual agreement. If 
no action is taken, the contract will automatically expire on September 
30 of this year.
    The IANA functions are a set of interdependent technical functions 
that enable the continued efficient operation of the Internet. The IANA 
functions include: (1) the coordination of the assignment of technical 
Internet protocol parameters; (2) the administration of certain 
responsibilities associated with DNS root zone management; (3) the 
allocation of Internet numbering resources; and (4) other services 
related to the management of the .ARPA and .INT top-level domains 
(TLDs).
    As the IANA functions operator, ICANN performs administrative 
responsibilities associated with the registries related to the three 
primary IANA functions. First, ICANN is the registry for the protocol 
parameters, as defined by the Internet Engineering Task Force 
(IETF).\3\ Second, ICANN coordinates allocations of IP (Internet 
Protocol) and AS (Autonomous System) numbers to the Regional Internet 
Registries (RIRs).\4\ Third, ICANN processes root zone file change 
requests for TLDs and makes publicly available a Root Zone WHOIS 
database with current and verified contact information for all TLD 
registry operators. In all three cases, ICANN, as the IANA functions 
operator, applies the policies developed by the customers of the IANA 
functions. The ICANN Board does not have authority to make policy 
decisions or changes on its own.
---------------------------------------------------------------------------
    \3\ The Internet Engineering Task Force (IETF) is a large open 
international community of network designers, operators, vendors, and 
researchers concerned with the evolution of the Internet architecture 
and the smooth operation of the Internet. See, https://www.ietf.org/.
    \4\ Regional Internet Registries (RIRs) manage, distribute, and 
register Internet number resources (IPv4 and IPv6 addresses and 
Autonomous System Numbers) within their respective regions. See, 
https://www.nro.net/about-the-nro/regional-internet-registries.
---------------------------------------------------------------------------
    NTIA's responsibilities under the IANA functions contract are 
limited and clerical in nature. For example, NTIA does not have an 
operational role in the management of Internet numbering resources, 
Internet protocol parameters, the .ARPA TLD, or .INT TLD. In the root 
zone management function, NTIA verifies that ICANN has followed the 
policies and procedures established by the community when processing 
change requests, then authorizes the implementation of those changes. 
NTIA's role in root zone management does not involve the exercise of 
discretion or judgment with respect to such change requests.\5\ NTIA 
does not have a similar role in the management of Internet numbering 
resources, Internet protocol parameters, the .ARPA TLD, or .INT TLD.
---------------------------------------------------------------------------
    \5\ For further information on the NTIA role in root zone 
management and the IANA functions, see http://www.ntia.doc.gov/other-
publication/2014/ntia-s-role-root-zone-management.
---------------------------------------------------------------------------
    From the inception of ICANN, the U.S. Government and Internet 
stakeholders envisioned that the U.S. Government's role in the IANA 
functions would be temporary. The DNS White Paper stated that 
``agreement must be reached between the U.S. Government and the new 
corporation (ICANN) relating to the transfer of the functions currently 
performed by IANA.'' \6\
---------------------------------------------------------------------------
    \6\ DNS White Paper, supra n. 2.
---------------------------------------------------------------------------
    NTIA has fulfilled this temporary role not because of any statutory 
or legal responsibility, but as a temporary measure at the request of 
the President. Indeed, Congress never designated NTIA or any other 
specific agency responsibility for managing the Internet DNS. Thus, 
NTIA has no legal or statutory responsibility to manage the DNS. Just 
as Federal agencies can enter into contracts they need to fulfill their 
missions without specific legislative authority, Federal agencies can 
discontinue obtaining such services when they no longer need them. As 
NTIA made clear at the time of its Statement of Policy, it intended 
only to procure the IANA functions services until such time as the 
transition to private sector management of the Internet DNS was 
complete.
III. Affirmation of Commitments
    Since the formation of ICANN, NTIA has worked diligently with the 
global Internet community to improve ICANN's accountability and 
transparency to the community of stakeholders it serves. In 2009, NTIA 
and ICANN entered into the Affirmation of Commitments (Affirmation).\7\ 
The Affirmation signified a critical step in the transition to a 
multistakeholder, private sector-led model for DNS technical 
coordination, while also establishing an accountability framework of 
ongoing multistakeholder reviews of ICANN's performance. Key elements 
of the Affirmation include: an endorsement of the multistakeholder, 
private sector-led model; a commitment by ICANN to act in the interests 
of global Internet users (or public interest); and the establishment of 
mechanisms and timelines for continuing reviews of ICANN's execution of 
core tasks. The four subjects of the ongoing Affirmation Reviews are: 
ensuring accountability, transparency, and the interests of global 
Internet users; preserving the security, stability, and resiliency of 
the Internet DNS; promoting competition, consumer trust, and consumer 
choice in connection with any implementation of generic Top Level 
Domains (gTLDs); and meeting the needs of law enforcement and consumer 
protection in connection with WHOIS implementation and recognizing 
national laws. The success of the framework established by the 
Affirmation depends upon the full participation of stakeholders in 
reviewing ICANN's performance.
---------------------------------------------------------------------------
    \7\ ``Affirmation of Commitments by the United States Department of 
Commerce and the Internet Corporation for Assigned Names and Numbers'' 
(September 30, 2009), available at http://www.ntia.doc.gov/files/ntia/
publications/affirmation_of_commitments_2009.pdf
---------------------------------------------------------------------------
    ICANN has made significant progress in fulfilling the commitments 
established by the Affirmation. To date, two iterations of the 
Accountability and Transparency Review Team (ATRT) have occurred, in 
2010 and 2013. The reports of these teams, on which NTIA actively has 
participated with a broad array of international stakeholders from 
industry, civil society, the Internet technical community, and other 
governments, have served as a key accountability tool for ICANN--
evaluating progress and recommending improvements. Over time, ICANN has 
improved its performance by implementing key recommendations from the 
ATRT.
    Throughout the various iterations of NTIA's relationship with 
ICANN, NTIA has played no role in the internal governance or day-to-day 
operations of ICANN. NTIA has never had the contractual authority to 
exercise traditional regulatory oversight over ICANN.
IV. Final Steps in the Privatization of the DNS
    The multistakeholder model of Internet governance is the best 
mechanism for maintaining an open, resilient, and secure Internet 
because, among other things, it is informed by a broad foundation of 
interested parties and it is adaptable to innovation and changing 
conditions. This model includes all parties--including businesses, 
technical experts, civil society, and governments--arriving at 
consensus through a bottom-up process regarding policies affecting the 
underlying functioning of the Internet domain name system.
    ICANN and several other technical organizations embrace this model 
and exemplify what is possible when all stakeholders are able to 
participate. Specifically, within ICANN's structure, governments work 
in partnership with businesses, organizations, and individuals to 
provide public policy input on deliberations related to ICANN's mission 
of technical coordination, and provide advice directly to the ICANN 
Board. ICANN holds meetings approximately three times a year, at which 
global stakeholders meet to develop policies that ensure the Internet's 
ongoing security and stability. ICANN policy development originates in 
the three Supporting Organizations (SOs), which work with Advisory 
Committees composed of governments, individual user organizations, and 
technical communities in the policy development process. Over one 
hundred governments, including the United States, and observers from 
more than 30 international organizations directly advise the ICANN 
Board of Directors via the Governmental Advisory Committee (GAC).\8\
---------------------------------------------------------------------------
    \8\ See ICANN, ``Beginner's Guide to Participating in ICANN,'' 
available at: https://www.icann.org/en/system/files/files/
participating-08nov13-en.pdf. See also, ICANN Groups, available at: 
https://www.icann.org/resources/pages/groups-2012-02-06-en.
---------------------------------------------------------------------------
    The 112th U.S. Congress affirmed its support for the 
multistakeholder model in unanimous resolutions to ``preserve and 
advance the successful multi-stakeholder model that governs the 
Internet.'' \9\ More recently, a bipartisan group of Congressional 
leaders reiterated this position in stating that ``[t]he multi-
stakeholder model for Internet governance must prevail for more 
countries around the world to realize the transformative benefits of 
Internet connectivity.'' \10\ I am also pleased to note the recent 
unanimous passage of S. Res. 71, which stated that ``the United States 
remains committed to the multistakeholder model of Internet 
governance'' and that ``the [IANA] transition process demonstrates that 
the United States supports and is committed to the multistakeholder 
model of Internet governance.'' \11\
---------------------------------------------------------------------------
    \9\ See H.Con.Res. 127 and S.Con.Res. 50.
    \10\ Reps. Upton (R-MI), Waxman (D-CA), Royce (R-CA), Engel (D-NY), 
Re/code, ``Protecting the Internet From Government Control'' (Dec. 18, 
2014), available at: http://recode.net/2014/12/18/protecting-the-
internet-from-government-control/.
    \11\ S. Res. 71 (2015)
---------------------------------------------------------------------------
    Demonstrating its commitment to the multistakeholder approach, on 
March 14, 2014, NTIA announced its intent to complete the privatization 
of the domain name system first outlined in 1998. NTIA called upon 
ICANN to convene a multistakeholder process to develop the transition 
plan.\12\ While looking to stakeholders and those most directly served 
by the IANA functions to work through the technical details, NTIA 
established a clear framework to guide the discussion. Specifically, 
NTIA communicated to ICANN that the transition proposal must have broad 
community support and address four principles.
---------------------------------------------------------------------------
    \12\ ``NTIA Announces Intent to Transition Key Internet Domain Name 
Functions'' (Mar. 14, 2014), available at: http://www.ntia.doc.gov/
press-release/2014/ntia-announces-intent-transition-key-internet-
domain-name-functions.
---------------------------------------------------------------------------
    First, the transition proposal must support and enhance the 
multistakeholder model. Specifically, the process used to develop the 
proposal should be open, transparent, bottom-up, and garner broad, 
international stakeholder support. In addition, the proposal should 
include measures to ensure that changes made to any of the three IANA 
administered databases are consistent with the publicly documented IANA 
functions customer and partner accepted procedures, which are developed 
through the multistakeholder model.
    Second, the transition proposal must maintain the security, 
stability, and resiliency of the Internet DNS. For example, the 
decentralized distributed authority structure of the DNS needs to be 
preserved so as to avoid single points of failure, manipulation, or 
capture. In addition, integrity, transparency, and accountability in 
performing the functions must be preserved. The IANA services also need 
to be resistant to attacks and data corruption, be able to fully 
recover from degradation, if it occurs, and be performed in a stable 
legal environment.
    Third, the transition proposal must meet the needs and expectations 
of the global customers and partners of the IANA services. For example, 
mechanisms for the adherence to and development of customer service 
levels, including timeliness and reliability, should be clear, as 
should processes for transparency, accountability, and auditability. 
Consistent with the current system, the separation of policy 
development and operational activities should continue.
    Fourth, the transition proposal must maintain the openness of the 
Internet. The neutral and judgment-free administration of the technical 
DNS and IANA functions has created an environment in which the 
technical architecture has not been used to interfere with the exercise 
of free expression or the free flow of information. Any transition of 
the NTIA role must maintain this neutral and judgment-free 
administration, thereby maintaining the global interoperability of the 
Internet.
    In addition, NTIA explicitly stated that it would not accept a 
proposal that replaces the NTIA role with a government-led or an inter-
governmental organization solution.
    While the current IANA functions contract expires on September 30, 
2015, the contract can be extended for up to four years. Before any 
transition takes place, the businesses, civil society, and technical 
experts of the Internet must present a plan that has broad 
multistakeholder support and reflects the four key principles NTIA 
outlined in the announcement.
    By transitioning its very limited current role in the IANA 
functions to the global multistakeholder community, the United States 
is fulfilling objectives outlined more than 17 years ago, demonstrating 
its commitment to the multistakeholder model, and strengthening the 
engagement of all stakeholders. For years, countries such as Russia, 
Iran, and China have opposed the multistakeholder model and sought to 
increase governmental control over the Internet through bodies such as 
the International Telecommunication Union (ITU) and the United Nations. 
The United States and likeminded countries, however, have firmly 
demonstrated our support for the multistakeholder community, and we 
continue to advocate for broader worldwide acceptance of and 
participation in the multistakeholder model to ensure that the Internet 
remains open and interoperable.
    The world has witnessed significant progress in its collective 
efforts to expand support for multistakeholder Internet governance 
since the division that surfaced in December 2012 at the ITU World 
Conference on International Telecommunications (WCIT). We believe this 
is due in part to the transition and our support for the 
multistakeholder model. In April 2014, Brazil hosted the successful 
NetMundial conference at which a wide range of participants supported a 
statement reaffirming that Internet governance should be built on 
democratic multistakeholder processes.\13\ Following NetMundial, a 
High-Level Panel headed by the president of Estonia released a report 
once again affirming the power of multistakeholder policy development. 
The panel said it ``recognizes, fully supports, and adopts the IG 
[Internet governance] Principles produced in the NetMundial Statement. 
. . .'' \14\ In the fall of 2014, nations assembled at the ITU 
Plenipotentiary Conference in Busan, South Korea, rejected all efforts 
to expand the ITU's role in DNS issues handled by ICANN.\15\
---------------------------------------------------------------------------
    \13\ Michael Daniel, Lawrence E. Strickling, Daniel Sepulveda, 
Christopher Painter and Scott Busby, ``A Major Win for the Open 
Internet'' (Apr. 30, 2014), available at: http://www.ntia.doc.gov/blog/
2014/major-win-open-internet.
    \14\ See Panel on Global Internet Cooperation and Governance 
Mechanisms, ``Towards a Collaborative, Decentralized Internet 
Governance Ecosystem'' (May 2014), available at: http://
internetgovernancepanel.org/sites/default/files/ipdf/
XPL_ICAN1403_Internet%20Governance%20iPDF_06.pdf.
    \15\ U.S. Department of State, ``Outcomes from the International 
Telecommunication Union 2014 Plenipotentiary Conference in Busan, 
Republic of Korea'' (Nov. 10, 2014), available at: http://
www.state.gov/r/pa/prs/ps/2014/11/233914.htm.
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V. Stakeholder Response
    Following the March 2014 announcement, a broad array of Internet 
stakeholders issued public statements that demonstrate the importance 
of the transition:

   AT&T: ``This is an important step in the ongoing evolution 
        of the global Internet. NTIA is to be commended for its 
        historical stewardship, its current thoughtful and pro-active 
        approach, and its global leadership throughout. The U.S. is 
        looking to the future, promoting leadership and ideas from the 
        global multi-stakeholder community, and establishing clear 
        criteria to ensure the stability and security of a remarkably 
        well-functioning system. We expect that other governments and 
        stakeholders will join with the U.S. in committing to this 
        vision.'' \16\
---------------------------------------------------------------------------
    \16\ AT&T Public Policy Blog, ``The Continuing Evolution of the 
Global Internet'' (Mar. 14, 2014) (emphasis added), available at: 
http://www.attpublicpolicy.com/international/the-continuing-evolution-
of-the-global-internet/.

   Microsoft: ``The U.S. Department of Commerce National 
        Telecommunications and Information Administration's recent 
        announcement of its intent to transition key Internet domain 
        name functions to the global multi-stakeholder community is a 
        significant and welcome development.'' \17\
---------------------------------------------------------------------------
    \17\ David Tennenhouse, Microsoft on the Issues, ``Microsoft 
Applauds U.S. NTIA's Transition of Key Internet Domain Name Functions'' 
(Mar. 17, 2014) (emphasis added), available at: http://
blogs.microsoft.com/on-the-issues/2014/03/17/microsoft-applauds-us-
ntias-transition-of-key-internet-domain-name-functions/.

   Human Rights Organizations: ``[W]e write to express our 
        support for the Department of Commerce's National 
        Telecommunications and Information Administration (NTIA) 
        announcement of its intent to transition key Internet domain 
        name functions to the global multi-stakeholder community . . . 
        This move would alleviate international pressure on explicit 
        terms, deter government overreach on the issue of Internet 
        governance, and facilitate the exercise of human rights 
        online.'' \18\
---------------------------------------------------------------------------
    \18\ Access, Center for Democracy & Technology, Freedom House, 
Human Rights Watch, The Open Technology Institute at New America 
Foundation, Public Knowledge, ``Congress Should Support U.S. Plan to 
Alter Administration of Internet'' (Apr. 1, 2014) (emphasis added), 
available at: https://freedomhouse.org/article/congress-should-support-
us-plan-alter-administration-internet#.VJmLdl4AFA.

   The Internet Association (representing Amazon, Facebook, 
        Google, Netflix, Yahoo!, Twitter, Airbnb, and other Internet 
        economy firms): ``. . . we support the recent announcement 
        regarding the National Telecommunications and Information 
        Administration's (NTIA) oversight authority over important 
        technical Internet functions. . . . For our companies to 
        continue to innovate, to foster development and change, and 
        ultimately to succeed as businesses globally, we need the 
        continuation of the current bottom-up, multi-stakeholder model 
        of Internet governance. However, as the Internet continues to 
        evolve, so too must the models that govern it. . . . [I]t was 
        always envisaged that this oversight role held by the United 
        States would eventually transition to the private sector. The 
        announcement by NTIA is simply the fulfillment of this vision. 
        . . . For these reasons we encourage you to allow this process 
        to continue toward a successful conclusion.'' \19\
---------------------------------------------------------------------------
    \19\ Michael Beckerman, The Internet Association, Letter to Rep. 
Hal Rogers and Rep. Nita Lowey (May 8, 2014) (emphasis added), 
available at: http://internetassociation.org/wp-content/uploads/2014/
05/Internet-Association-Letter-on-Future-of-Internet-Governance-
Approps-.pdf.

   U.S. Chamber of Commerce: ``NTIA has steadfastly opposed a 
        transition to any mechanism that would deviate from the current 
        multi-stakeholder model of Internet governance and should be 
        allowed to take any needed steps to achieve the cautiousness 
        and transparency that we agree is essential for a safe and 
        smooth transition of the technical functions. Any hindering of 
        NTIA's ability to conduct the proper levels of due diligence 
        through the use of currently available resources could result 
        in harm to U.S. businesses and Internet users as a whole.'' 
        \20\
---------------------------------------------------------------------------
    \20\ R. Bruce Josten, U.S. Chamber of Commerce, Letter to U.S. 
House of Representatives (May 27, 2014) (emphasis added), available at: 
https://www.uschamber.com/sites/default/files/
140527_hr4660_commercejusticescienceappropriationsact2015_house.pdf.

   Verizon: ``We applaud NTIA for recognizing the global 
        relevance of the Internet Assigned Numbers Authority (IANA) 
        functions and the current maturity of multi-stakeholder 
        frameworks.'' \21\
---------------------------------------------------------------------------
    \21\ Verizon Policy Blog, ``Verizon Supports Global Multi-
stakeholder Process for Domain Names'' (Mar. 14, 2014), available at: 
http://publicpolicy.verizon.com/blog/entry/verizon-supports-global-
multi-stakeholder-process-for-domain-names.

   Ambassador David Gross, former United States Coordinator for 
        International Communications and Information Policy (George W. 
        Bush Administration): ``We believe that NTIA's decision to 
        initiate a process leading to the possible transition of the 
        IANA functions contract to a multi-stakeholder entity is a 
        critical step. . . . By allowing for the careful transition of 
        the IANA to a bottom-up multi-stakeholder entity, the United 
        States has affirmed its commitment to the multi-stakeholder 
        model.'' \22\
---------------------------------------------------------------------------
    \22\ Ambassador David A. Gross, Testimony Before the U.S. House 
Committee on Energy and Commerce (Apr. 2, 2014) (emphasis added), 
available at: http://docs.house.gov/meetings/IF/IF16/20140402/102044/
HHRG-113-IF16-Wstate-GrossD-20140402.pdf.

   Cisco: ``This is a significant milestone in the transition 
        of Internet governance to a global multi-stakeholder model, and 
        Cisco welcomes this development. We applaud the NTIA for 
        seeking to complete the final phase of the privatization of DNS 
        management, as outlined by the U.S. Government in 1997. Cisco 
        has long supported an open and innovative multi-stakeholder 
        Internet governance process and this next step in its 
        evolution.'' \23\
---------------------------------------------------------------------------
    \23\ Robert Pepper, ``Cisco Supports U.S. Department of Commerce 
Decision to Transition Internet Management Functions'' (Mar. 15, 2014) 
(emphasis added), available at: http://blogs.cisco.com/gov/cisco-
supports-u-s-department-of-commerce-decision-to-transition-internet-
management-functions/.

   USTelecom: ``We applaud NTIA for its responsible stewardship 
        of the Internet's Domain Name System (DNS) over the years and 
        are supportive of its proposal to transition the Internet 
        Assigned Numbers Authority (IANA) functions to the global 
        multi-stakeholder community.'' \24\
---------------------------------------------------------------------------
    \24\ Glenn Reynolds, ``USTelecom Statement on Global Internet 
Transition'' (Apr. 2, 2014), available at: http://www.ustelecom.org/
news/press-release/ustelecom-statement-global-internet-transition.

   Center for Democracy and Technology: ``CDT believes that 
        this transition is an important part of the evolution and 
        strengthening of multi-stakeholder governance of the 
        Internet.'' \25\
---------------------------------------------------------------------------
    \25\ Emma Llanso, Center for Democracy and Technology, ``Don't Let 
Domestic Politics Derail the NTIA Transition'' (Apr. 2, 2014) (emphasis 
added), available at: https://cdt.org/blog/dont-let-domestic-politics-
derail-the-ntia-transition/.

   Internet Technical Organizations: ``The leaders of the 
        Internet technical organizations responsible for coordination 
        of the Internet infrastructure (IETF, IAB, RIRs, ccTLD ROs, 
        ICANN, ISOC, and W3C), welcome the U.S. Government's 
        announcement of the suggested changes related to the IANA 
        functions contract.'' \26\
---------------------------------------------------------------------------
    \26\ Internet Society, ``Internet Technical Leaders Welcome IANA 
Globalization Progress'' (Mar. 14, 2014), available at: http://
www.internetsociety.org/news/internet-technical-leaders-welcome-iana-
globalization-progress.

   Computer and Communications Industry Association: ``The 
        technology industry welcomes the news that the U.S. Commerce 
        Department intends to complete the transition of relinquishing 
        its control over key Internet addressing functions to the 
        global multi-stakeholder community. This was a necessary next 
        step in the evolution of the Internet and supports the current 
        multi-stakeholder model of global Internet governance where all 
        stakeholders concerned with the well being and functioning of 
        the Internet help to shape the policies that make a bright 
        online future for everyone possible.'' \27\
---------------------------------------------------------------------------
    \27\ Computer and Communications Industry Association, ``Tech 
Industry Praises Liberation Of Internet Governance Functions From 
U.S.G.'' (Mar. 17, 2014), available at: https://www.ccianet.org/2014/
03/tech-industry-praises-liberation-internet-governance-functions-u-s-
g/.
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VI. Status of Multistakeholder Process to Develop Transition Proposal
    Since NTIA's March 2014 announcement, interested stakeholders have 
responded with great energy and participation to develop a transition 
plan. An IANA Stewardship Transition Coordination Group (ICG), 
representing more than a dozen Internet stakeholder communities, was 
established as a convener of the process to develop a transition 
proposal that will ensure the stability, security, and openness of the 
Internet. As set forth in its charter, the ICG is ``conduct[ing] itself 
transparently, consult[ing] with a broad range of stakeholders, and 
ensur[ing] that its proposals support the security and stability of the 
IANA functions.'' \28\ On September 8, 2014, the ICG issued a Request 
for Transition Proposals to the multistakeholder community, with a 
proposal submission deadline of January 15, 2015.\29\ The ICG requested 
one proposal for each of the three primary functions, i.e., the 
protocol parameters, numbering, and domain name-related functions, to 
be developed by the communities and parties most directly affected by 
each of the primary functions. Proposal development has to date been 
open and multistakeholder in participation.
---------------------------------------------------------------------------
    \28\ Charter for the IANA Stewardship Transition Coordination Group 
(Aug. 27, 2014), available at: https://www.icann.org/en/system/files/
files/charter-icg-27aug14-en.pdf.
    \29\ IANA Stewardship Transition Coordination Group, ``Request for 
Proposals'' (Sept. 8, 2014), available at: https://www.icann.org/en/
system/files/files/rfp-iana-stewardship-08sep14-en.pdf.
---------------------------------------------------------------------------
    As of February 2015, two of the three community groups have 
submitted their draft proposals, including the IETF, which is 
shepherding the protocol parameter proposal, and the five RIRs, which 
worked collaboratively in developing a draft numbering proposal. The 
third group, the ICANN Cross Community Working Group (CWG) on the 
naming related functions, continues to deliberate on how best to assure 
effective and accountable oversight of these naming functions in NTIA's 
absence. Upon receipt of the community proposals, the ICG will then 
work to develop a single consolidated proposal, which will go through 
various iterations of community review and comment.\30\
---------------------------------------------------------------------------
    \30\ See IANA Stewardship Transition Coordination Group, ``Process 
Timeline,'' (Dec. 2014), available at: https://www.icann.org/en/system/
files/files/icg-process-timeline-07jan15-en.pdf.
---------------------------------------------------------------------------
    On January 27, 2015, I delivered remarks at the State of the Net 
Conference, where I posed several questions for stakeholders to 
consider as they continue to develop the naming related proposal, to 
ensure that it appropriately addresses the principles NTIA established 
for the transition. I indicated that these questions need to be 
resolved prior to approval of any transition plan.\31\ At the ICANN 
meeting held in Singapore two weeks ago, I reiterated these remarks and 
questions. The subsequent community discussions in Singapore give me 
confidence that the domain name community (through the CWG) is working 
diligently to develop a proposal that not only considers appropriate 
accountability, but also what is necessary for the directly affected 
parties (registry operators) in terms of service levels and processes 
that preserve and maintain stable DNS root zone management that the 
community currently enjoys.
---------------------------------------------------------------------------
    \31\ Remarks by Lawrence E. Strickling, State of the Net 
Conference, Washington, DC, (Jan. 27, 2015), available at: http://
www.ntia.doc.gov/speechtestimony/2015/remarks-assistant-secretary-
strickling-state-net-conference-1272015.
---------------------------------------------------------------------------
    ICANN has also launched a parallel process to enhance its 
accountability to the global Internet community and to strengthen its 
accountability mechanisms in the absence of a contractual relationship 
with NTIA.\32\ A Cross Community Working Group (CCWG) on 
Accountability, composed of appointed representatives from ICANN's 
Supporting Organizations (SOs) and Advisory Committees (ACs) and open 
to all interested parties as participants, is examining accountability 
mechanisms regarding the entirety of ICANN operations.\33\ The CCWG 
charter identifies two work streams: the first is to identify 
accountability measures that need to be in place before the IANA 
transition; and the second to address accountability measures that 
should be adopted and implemented by ICANN in the longer term. The CCWG 
identified four distinct work areas: (1) overview of existing 
accountability mechanisms; (2) review of public comments filed in 
response to ICANN's proposed accountability process to categorize them 
as either Work Stream 1 or Work Stream 2 items; (3) review of 
accountability issues identified by the CWG; and (4) identification of 
contingencies or threat scenarios.\34\ The CCWG adopted an intensive 
work plan to address the near-term, IANA-specific measures involving 
weekly meetings in order to progress its work.\35\ While it got off to 
a slower start than the IANA transition process, the CCWG on 
Accountability is now making considerable progress, as evident at the 
ICANN Singapore meeting at which the group conducted numerous 
productive working sessions and meetings with stakeholders. The CCWG on 
Accountability is also cooperating and coordinating with the CWG 
working on the domain names transition proposal. This is a good and 
constructive development as it allows the CWG to return some of its 
focus on the domain name related functions and a little less on ICANN 
accountability. NTIA believes that this accountability process needs to 
include the ``stress testing'' of solutions to safeguard against future 
contingencies such as attempts to influence or take over ICANN 
functions that are not currently possible with the IANA functions 
contract in place.
---------------------------------------------------------------------------
    \32\ See Enhancing ICANN Accountability, ``Opportunity for public 
dialogue and community feedback'' (May 6, 2014), available at: https://
www.icann.org/resources/pages/enhancing-accountability-2014-05-06-en; 
see also, Enhancing ICANN Accountability: Process and Next Steps 
(Revised Oct. 10, 2104), available at: https://www.icann.org/resources/
pages/process-next-steps-2014-10-10-en.
    \33\ See ICANN Announcements, ``Proposed Charter for Enhancing 
ICANN Accountability Cross Community Working Group (CCWG) Submitted for 
Consideration'' (Nov. 5, 2014), available at: https://www.icann.org/
news/announcement-2014-11-05-en.
    \34\ Cross Community Working Group on Enhancing ICANN 
Accountability, ``Charter'' (Last Modified Dec. 11, 2014)(Adopted by 5 
organizations), available at: https://community.icann.org/display/
acctcrosscomm/Charter.
    \35\ See CCWG on Enhancing ICANN Accountability, ``Meetings,'' 
(last modified Jan. 6, 2015), available at: https://
community.icann.org/display/acctcrosscomm/Meetings.
---------------------------------------------------------------------------
    These two multistakeholder processes--the IANA stewardship 
transition and enhancing ICANN accountability--are directly linked, and 
NTIA has repeatedly said that both issues must be addressed before any 
transition takes place. ICANN has indicated that it expects to receive 
both the ICG transition and CCWG accountability proposals at roughly 
the same time and that it will forward them promptly and without 
modification to NTIA.\36\
---------------------------------------------------------------------------
    \36\ ICANN, ``ICANN 52 Board Statement on ICANN Sending IANA 
Stewardship Transition and Enhancing ICANN Accountability Proposals to 
NTIA'' (Feb. 12, 2015), available at: https://www.icann.org/news/
announcement-3-2015-02-12-en
---------------------------------------------------------------------------
    On the subject of timing, NTIA has not set a deadline for the 
transition. September 2015 has been a target date because that is when 
the base period of our contract with ICANN expires. However, we have 
the flexibility to extend the contract if the community needs more time 
to develop the best plan possible. It is up to the community to 
determine a timeline that works best for stakeholders as they develop a 
proposal that meets NTIA's conditions, but also a proposal that works.
    The Internet community is undertaking truly historic work. NTIA is 
confident that engaging the global Internet community to work out these 
important issues will strengthen the multistakeholder process and will 
result in ICANN's becoming even more directly accountable to the 
customers of the IANA functions and to the broader Internet community.
VII. Next Steps
    NTIA is committed to continuing to work closely with the 
stakeholder community as it develops a proposal that fully achieves the 
goals NTIA established, as well as continue our overarching commitment 
to strengthening the current multistakeholder model.
    In the year ahead, it will be absolutely critical to the interests 
of the United States that NTIA continue to monitor the discussions 
within the multistakeholder community as it develops a transition plan 
and provide feedback where appropriate. Specifically, NTIA will:

   participate in meetings and discussions with other 
        governments, the global stakeholder community, ICANN, and 
        VeriSign with respect to the transition or planning the 
        transition;

   if appropriate, amend the IANA functions contract to modify 
        the length of contract renewal option periods; and

   continue to represent the United States at the GAC meetings 
        held at ICANN meetings and intersessionally throughout the 
        year.

    Once the community develops and ICANN submits the consolidated 
proposal, we will ensure that the March 2014 criteria are fully 
addressed and that the proposal has been adequately ``stress tested'' 
to ensure the continued stability and security of the DNS. The 
community processes used to develop their proposal might also influence 
the work NTIA will need to undertake. For example, if the community 
conducts ``stress tests'' as well as tests and validates any new 
process or structures included in the proposal prior to submission, 
well-documented results may facilitate NTIA's review. This will also 
give confidence that any process, procedure or structure proposed 
actually works. In addition, NTIA will review and assess the changes 
made or proposed to enhance ICANN's accountability required in advance 
of initiating the transition.
VIII. Conclusion
    NTIA is cognizant of and appreciates the directive from Congress to 
inform the relevant Committees in advance of any decision related to 
the transition. As the proposal continues to take shape, we will update 
Congress accordingly. NTIA appreciates interest in this important topic 
and thanks Congress for its continued support for the multistakeholder 
model of Internet governance.

    The Chairman. Thank you, Mr. Strickling. Mr. Chehade?

        STATEMENT OF FADI CHEHADE, PRESIDENT AND CHIEF 
          EXECUTIVE OFFICER, INTERNET CORPORATION FOR 
       ASSIGNED NAMES AND NUMBERS (ICANN), A CALIFORNIA 
              PUBLIC BENEFIT NONPROFIT CORPORATION

    Mr. Chehade. Mr. Chairman, Ranking Member, members of the 
Committee, I am Fadi Chehade. I am the President and CEO of 
ICANN. I am very honored to be in front of you today.
    Thirty-five years ago, I started my American journey. I was 
peeling onions in the back of a restaurant and going to 
community college to learn English. Here I am in front of you. 
This is the American dream that actually I lived.
    The reason I bring it up today is because at the heart of 
what we are discussing is keeping that dream. What is that 
dream? It is about values that keep our lives, our system open, 
inclusive, and really an opportunity for anyone who is really 
ready to work hard to participate in the system.
    The Internet is no different than the system. It is the 
greatest American invention, and it is an invention that 
supports these values, the values of openness, of inclusivity, 
of participatory openness to anyone who is willing to come and 
make a real difference.
    We have taken that Internet to the world and today we look 
at it driving a $4.2 trillion global digital economy and 
growing. It is the fastest growing part of the global economy.
    I with you agree we must maintain the values of that 
system. If that system in any way is jeopardized, if its 
stability is punctured, we all stand to lose, America and the 
world.
    It is based on these values that almost two decades ago 
this country created the multistakeholder institution called 
ICANN. We did it because we believed that a private sector-led 
institution that has the checks and balances and governance of 
the great institutions of this country can actually govern the 
Internet.
    For 20 years almost, that is what we have done. ICANN has 
grown to become a global institution that is respected, that is 
trusted, and it has in its core the values of the American 
system that I have witnessed personally and that the Internet 
embodies.
    Therefore, I want to give you first an unequivocal 
assurance that whatever we do here must and will retain the 
values with which we started this endeavor.
    For example, the letter that the chairman and Senator Rubio 
sent us and prepared on how to strengthen the accountability of 
ICANN includes six very powerful and very good ideas on how we 
can take this forward. Frankly, many of these are already in 
motion at ICANN. Those that are not, the community is now 
discussing actively.
    For example, you mentioned how we can limit the possibility 
of governance exercising undue influence at ICANN. Already, 
governments cannot be on our Board. Governments can only give 
advice. We will strengthen this further, as you suggested in 
your letter.
    Another concrete idea you gave us in your letter is to make 
sure our Affirmation of Commitments to the world are enshrined 
in our bylaws. We are very actively looking at doing that right 
now, and I believe this is a good idea, and I hope our 
stakeholders will agree with me.
    These Affirmation of Commitments by the way are very clear 
that the jurisdiction of ICANN shall remain in the United 
States of America, and we stand by this.
    I have been in this town now for 24 hours and I heard the 
same question asked again and again, why. Why is this 
transition necessary. In a world where cybersecurity and issues 
of the Internet are growing and on our minds, why give up 
American oversight now at a time when the world and we need it 
most.
    Some answer this question by saying because if we are true 
to our beliefs, if we believe in private sector led 
multistakeholder institutions, we cannot be ourselves as the 
U.S. Government engaged when we believe in that model. 
Therefore, we should be an example to the world and let the 
multistakeholder model thrive, as Senator Rubio and Senator 
McCaskill's Resolution in 2012 affirms, and we believe in these 
concepts.
    Others say we should do it because if the U.S. does not 
step back, some governments who do not share our values will 
step in into inter-governmental bodies and try and force us to 
control what we do at ICANN and other aspects of Internet 
governance.
    Both of these parties may have a point, but I want to 
finish by telling you why I believe this is the time to do this 
transition. Multiple administrations over the last two decades 
have supported the multistakeholder model. This transition is 
not a surprise. This is the planned progression we have all 
believed in and supported for almost two decades.
    It is now time to show the world that when we say we 
believe in private sector led multistakeholder institutions, we 
do what we say. The world is watching, and I think we will not 
let them down.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Chehade follows:]

   Prepared Statement of Fadi Chehade, President and Chief Executive 
 Officer, Internet Corporation for Assigned Names and Numbers (ICANN), 
           A California Public Benefit Nonprofit Corporation
    Mr. Chairman, Ranking Member, and members of the Committee, I am 
Fadi Chehade, the President and CEO of ICANN, the Internet Corporation 
for Assigned Names and Numbers. I am very pleased to be testifying 
before you today.
    The subject of today's hearing, ``Preserving the Multistakeholder 
Model of Internet Governance'' comes at a very timely point in the work 
of ICANN's multistakeholder community. Nearly one year ago, on March 
14, 2014, the Department of Commerce's National Telecommunications and 
Information Administration announced its intent to continue its ongoing 
transition of Internet governance oversight to the multistakeholder 
model by calling upon the ICANN community to convene a process to 
develop a proposal that meets a clear set of criteria for that 
transition and that will ensure that no government-led solution or 
intergovernmental organization could gain control of the IANA 
functions.
    The U.S. Government demonstrated great vision in its initial 
decision so many years ago to privatize the management of the domain 
name system. Republican and Democratic Administrations have remained 
true to the vision, gradually reducing government oversight of the 
ICANN multistakeholder community. In this light, the announcement to 
complete the privatization and transfer NTIA's stewardship of the IANA 
functions to the multistakeholder community is the logical extension of 
the U.S. Government's long-standing support for the multistakeholder 
model.
How Did We Get Here?: A Brief Background
    NTIA's announcement was a long time coming. In 1998, NTIA entered 
into the IANA (or Internet Assigned Numbers Authority) Functions 
Contract with ICANN. That same year, ICANN was purpose-built to perform 
the IANA functions, which consist of the coordination of unique 
Internet identifiers (domain names, IP numbers and protocol 
parameters). ICANN has performed the IANA functions pursuant to its no-
fee contract with the U.S. Government ever since, while maintaining the 
security, stability and resiliency of the Internet. This technical 
mandate does not give ICANN control over content on the Internet; 
instead it is key to maintaining a single, global, unified and 
interoperable Internet.
    The relationship between ICANN and NTIA has remained strong over 
the past 17 years. For many reasons, I expect that our relationship 
with the U.S. Government will remain strong even when the IANA 
Functions Contract comes to an end. Apart from its stewardship role, 
NTIA represents the U.S. Government within ICANN's Governmental 
Advisory Committee. It is also our partner in the Affirmation of 
Commitments. Further, ICANN has its global headquarters in the United 
States, and there are no plans for that to change.
    At the time of ICANN's formation, it was envisioned that the U.S. 
Government would transition its stewardship role over the key unique 
Internet identifier functions within two years. This temporary 
arrangement lasted far longer than anyone anticipated, but ICANN is now 
recognized as mature enough to perform its work under a 
multistakeholder-based stewardship model as opposed to any single 
government control. The successful completion of the transition is 
essential to the upholding of the multistakeholder model for Internet 
policy and governance. The eyes of the world are watching this process 
and ICANN and the U.S.'s commitment to see this transition through. 
NTIA's announcement preserves and prolongs the free and open Internet 
that has brought so much economic growth and social and cultural 
development.
    Both ICANN and the U.S. Government have championed the 
multistakeholder model, in which standards and policies are developed 
by large and small businesses, the technical community, not-for-profit 
organizations, civil society, intellectual property experts, 
governments, academia, and Internet users from around the globe. 
American corporations--such as AT&T, Cisco, Google, Microsoft, Neustar, 
Verisign and Verizon--and the Internet technical community (the 
Internet Architecture Board, Internet Engineering Task Force, the 
Internet Society, the Regional Internet Registries and the World Wide 
Web Consortium) also participate in and demonstrate support for the 
multistakeholder model. These entities have welcomed the U.S. 
Government's announcement as the way to bring more countries to support 
the multistakeholder approach to Internet governance, moving them away 
from a model in which only governments hold sway.
    A few weeks after NTIA's announcement, I was called to testify 
before the House of Representatives' Energy and Commerce Subcommittee 
on Communications and Technology on ``Ensuring the Security, Stability, 
Resilience, and Freedom of the Internet.'' There, Assistant Secretary 
for Communications and Information Lawrence Strickling and I testified 
about the work initiated following NTIA's announcement. Much work has 
progressed since that time, and I will discuss that below.
    There are areas however in which not much has changed. There are 
still many who challenge multistakeholder governance of the Internet 
when one single government is seen as exercising control over the IANA 
functions. There are other governments and intergovernmental 
organizations that are eager to challenge the U.S.'s unique stewardship 
role. I testified in March 2014 of the threats posed by governments who 
seek to use United Nations processes to challenge that singular 
stewardship model and assert more diverse participation of other 
governments in Internet governance, and the import of the U.S. stepping 
out of the stewardship role to diffuse that threat.
    If we succeed, we will diffuse arguments that are being strongly 
used now by governments that seek to expand their perceived limited and 
advisory role in Internet governance while one other single government 
enjoys a special role. Success will also lessen support for the 
creation of intergovernmental mechanisms for Internet policy 
development at the UN General Assembly, or for governments to expand 
control over the management of core Internet resources and possibly 
fragmenting the Internet.
    Congress itself recognized the threat by those who argue for 
increased government control over the Internet, and reaffirmed its 
commitment to the multistakeholder model of Internet governance, in its 
2012 S.Con.Res.50 and H.Con.Res.127. This announcement by NTIA to end 
its stewardship role over the IANA functions further cements this 
commitment.
    Without a completion of this transition, we risk not only the 
continued vitality of the multistakeholder model, but the ability to 
maintain a unified, global Internet free from governmental 
interference. The global community now sees this transition effort as a 
fork in the road for the multistakeholder model of Internet Governance; 
we are being watched closely. The timely transition will encourage 
governments to participate in the multistakeholder model with the 
private sector, with the technical community, civil society and 
academia to keep one, global, non-fragmented, stable and resilient 
Internet. This will benefit U.S. businesses and end users and will 
promote the long-standing U.S. objective of maintaining a single open, 
free, innovative global Internet. As Ambassador David Gross testified 
at that same March 2014 hearing, the transition will lead to a ``better 
Internet'' and ``better Internet Governance situation.''
Multistakeholder Work Towards the Transition
    The multistakeholder community has stepped up to the task that NTIA 
laid before it. The support for the transition has been broad and deep, 
with a demonstrated commitment to transparency in the dialogues. After 
community consultation, an IANA Stewardship Transition Coordination 
Group, or ICG, was formed with 30 members from across a variety of 
stakeholders, including not only the customers of the IANA functions, 
but also representatives from the business community, civil society, 
governments, root server operators, and security and stability advisory 
members. The ICG, in turn, submitted a request for proposals from each 
of the operational communities that are in direct operational or 
service relationships with ICANN as the IANA functions operator. Each 
of these three operational communities quickly organized discussions--
many happening outside of ICANN--to respond to the ICG:

   The protocol parameters community, through the Internet 
        Engineering Task Force, conducted an open dialogue in which all 
        could participate. This community delivered its response to the 
        ICG in January of this year.

   The numbering community, through a team convened by the five 
        Regional Internet Registries (from North American, Asia-
        Pacific, Europe, Africa and the Latin American/Caribbean 
        regions), held open dialogues throughout the communities they 
        serve. The team also delivered its proposal in January of this 
        year.

   The naming community formed a Cross-Community Working Group, 
        made up of business, operators, governments and civil society, 
        to develop its proposal. The work is ongoing.

    The hallmark of the proposal developments at each stage is open, 
with global participation across stakeholders.
    A tremendous number of hours have been devoted to this work, and I 
am humbled by the devotion of the volunteers who are working so hard 
toward this effort. Some highlights include:

   90 meetings/calls, 5 of which were ICANN-funded face-to-face 
        meetings

   Over 9,700 mailing list exchanges

   190 hours of meetings/calls, not including drafting/document 
        development

   7 transition working or engagement sessions at ICANN 
        Meetings

     This does not include community-run sessions where the 
            transition was discussed, or when members of working groups 
            presented to other parts of the ICANN community

   Over 250 events globally for awareness building and 
        discussion

     In at least 63 different countries spanning North 
            America, Latin America/Caribbean, Europe, Asia, Africa, the 
            Middle East, and Australasia/Pacific

    When all proposals are in, the ICG is charged with assessing them 
and assembling a complete proposal for the transition. The proposal 
will be submitted to ICANN, which will in turn submit it (along with 
the accountability proposal discussed below) to NTIA for consideration. 
NTIA has specified that the proposal must meet certain criteria, which 
are:

   Support and enhance the multistakeholder model;

   Maintain the security, stability, and resiliency of the 
        Internet DNS;

   Meet the needs and expectation of the global customers and 
        partners of the IANA services; and,

   Maintain the openness of the Internet.

    In addition, the NTIA made clear that it will not accept a proposal 
that replaces the NTIA role with a government-led or an inter-
governmental organization solution.
    It is important to note that within the transition process, each of 
the communities served by the IANA functions have stated their 
satisfaction with ICANN's performance of those functions. ICANN has 
received repeated high marks on an annual IANA Functions Satisfaction 
Survey. Even as ICANN is facilitating this important process, my key 
focus remains on maintaining operational excellence and the security, 
stability and resiliency of the Internet DNS.
    ICANN's Performance Standards for timeliness and accuracy of 
processing stakeholder's requests are published on a monthly basis. In 
addition, ICANN is subject to an annual audit of the security of the 
IANA functions systems. Further, after an independent assessment, the 
IANA Functions Department received recognition from an international 
organization for its business excellence. We are ready operationally to 
maintain this quality of work even without NTIA in its stewardship 
role.
Enhancing ICANN Accountability--A Parallel Process
    When NTIA made its announcement, many in the ICANN community 
questioned whether ICANN could remain accountable without the perceived 
backstop of NTIA in the absence of the IANA Functions Contract. As a 
result, ICANN initiated the Enhancing ICANN Accountability process, 
another cross-community effort, to arrive at recommendations for how 
ICANN's accountability mechanisms can be enhanced or newly developed to 
address the community concerns. NTIA is supportive of this effort, and 
has made clear that the issues of accountability are related to the 
transition of the stewardship over the IANA functions; NTIA will only 
consider the stewardship transition proposal alongside recommendations 
on how ICANN's accountability can be improved.
    The group performing the Enhancing ICANN Accountability review has 
broad representation across the multistakeholder community, with 
members from business, civil society, governments and others. Asst. 
Secretary Strickling served as one of the selectors of experts to 
advise the accountability working group, including experts on global 
accountability and governance. The group has 25 designated members and 
over 130 participants from across the globe, and has made substantial 
progress towards the development of recommendations in the few months 
it has been active. Their work is open,transparent and fully accessible 
around the globe.
    The work relating to accountability in light of the changing 
historical relationship with the U.S. is looking at whether and how to 
enhance opportunities for community input into key processes within 
ICANN, such as the budget approval and key Bylaws changes. It is also 
considering enhancing opportunities for review and redress of ICANN 
decisions. Though the Affirmation of Commitments between ICANN and the 
Department of Commerce is not impacted by the transition announcement, 
and no change in that relationship is anticipated, the accountability 
group is considering if there are some items set out within that 
Affirmation that are so important that they should be housed within the 
ICANN Bylaws. The group is aware of the need to ``stress test'' their 
proposed solutions against key potential risks, and has been very 
active in defining those risks.
    The community work is very much in line with the ideas put forward 
by Chairman Thune and Senator Rubio in a July 31, 2014 letter submitted 
to ICANN on enhancing ICANN accountability. There, six concrete ideas 
were set forth on how ICANN could enhance its accountability. Some of 
these protections already exist, and those that do not are already 
under discussion within the accountability working group. For example:

   The letter discussed the import of limiting possibility of 
        governments exercising undue influence through mechanisms such 
        as not allowing government representatives to sit on the ICANN 
        Board; limiting governments to an advisory role within ICANN 
        through the Governmental Advisory Committee; and amending 
        bylaws to require board to consider only consensus advice 
        issued by the Governmental Advisory Committee.

     The ICANN Bylaws already prohibit a government 
            representative from holding a voting position on the ICANN 
            Board, and governments hold only an advisory role through 
            the Governmental Advisory Committee. These are important 
            items that need to remain in place.

     The accountability group is already discussing issues 
            relating to consensus advice from the Governmental Advisory 
            Committee and how to address this concern.

   There was a call to keep the IANA functions operations as 
        separate from the policy-development processes that define 
        those policies that are implemented through the IANA function.

     That exists today and there are no recommendations to 
            modify that separation.

   The recommendation that major decisions of the Board, 
        including changes to Bylaws, should be increased to 4/5 of all 
        voting members is in line with the community discussions. The 
        community is also considering mechanisms for enhanced community 
        participation in these key decisions.

   In the letter, there is a call for increased oversight tools 
        for the community such as a requirement for an annual audit 
        over the organization and the development of an Inspector 
        General's office to develop reports on the activities of the 
        community; the development of a Freedom of Information Act-like 
        process for document disclosure; and a form of 
        ``parliamentarian'' to guide people through ICANN processes.

     Through the Audit Committee of the ICANN Board, ICANN 
            has an independent financial audit performed each year by 
            an external audit firm; these financial audits are 
            available online, and have consistently returned with clean 
            results. If this process can be enhanced, I would be in 
            full support.

     Similarly, ICANN maintains a document disclosure 
            process (called the Documentary Information Disclosure 
            Policy) through which requests for non-public information 
            are weighed against community-vetted, publicly available 
            conditions for non-disclosure. I understand that the 
            accountability process will likely be suggesting 
            enhancements to this disclosure process.

     I am in full support of any tools, such as a 
            parliamentarian, that make ICANN's processes easier to 
            follow and more open for participation.

   The recommendation for enhanced, independent dispute 
        resolution processes to provide confidence to community that 
        redress is possible when board or staff errs or fairness of 
        process is called into question is one of the main focuses of 
        the accountability work today, and I expect to see significant 
        progress on this issue.

   Finally, there was a call to amend the ICANN Bylaws to make 
        the Affirmation of Commitments, including the community 
        reviews, a permanent part of ICANN, removing the ability for a 
        120-day termination of the Affirmation.

     First, ICANN is deeply committed to the Affirmation of 
            Commitments and has no plans to terminate our obligations 
            under that agreement. Notwithstanding that fact, the 
            accountability group is already working on this exact idea 
            of incorporating the Affirmation of Commitments into the 
            Bylaws, including requirements for higher voting thresholds 
            in the event of future attempts to modify these 
            obligations.

    I, along with my fellow Board members, confirmed to the community, 
and confirm to you today, that we are open to considering any possible 
recommendations, even if those recommendations result in enhanced 
community input in the removal of Board members for cause. We are 
committed to this process and to a positive outcome.
ICANN's 52nd Public Meeting Focused on Transition Activities
    I have just returned from Singapore, where ICANN convened its 52nd 
public meeting, which we call ICANN52. We had over 1,800 people in 
attendance at this meeting, including representatives from across 
business and civil society, including 21st Century Fox, Apple, the 
Center for Democracy and Technology, Facebook, Google, the Heritage 
Foundation, the Motion Picture Association of America and others. 
Volunteers were in sessions starting at 7:00 a.m., often not concluding 
their meeting days until well into the evening. The week was marked 
with intense, serious deliberations. Volunteers returned from such an 
intense week of ICANN52 without pause to continue with rigorous 
schedules of conference calls to maintain the momentum and bring this 
work to a close.
Next Steps
    Where do we go from here? The base term on the current IANA 
Functions Contract is set to expire in September of this year. However, 
I have been clear--as has Asst. Secretary Strickling--that the end of 
the current contract term is not an artificial deadline. This is the 
community's process and I am not imposing any deadline on the 
completion of any of the work underway. It is important to get this 
done right. Remarkably, the global response to the NTIA announcement 
has ICANN currently in a place where it is still feasible to deliver a 
proposal to NTIA in time for a transition to occur at the expiration of 
the contract. Much work has been completed in a relatively short time. 
The areas where work is still ongoing, particularly within the names 
community and the accountability working group, have intensive work 
schedules over the next few weeks with the hope of having documents 
available for consultation shortly. Of course, if more time is needed, 
it can be taken; there are opportunities for extensions under the 
current IANA Functions Contract, and we are committed to tracking this 
issue closely with the NTIA to address any timing concerns.
    I am aware of the Congressional interest in this topic, both on the 
Senate and House sides. The February 5, 2015 designation of an 
``Internet Governance Awareness Week'' to correspond to ICANN52 was 
appreciated in helping to call further attention to the important 
issues raised through this transition process. As discussed, the 
ICANN52 participants met your call for focusing on important issues 
such as accountability and maintaining the global, unified Internet 
that we have all come to rely on. And we stand with you on this. For 
example, there remains clear consensus on the need to maintain the IANA 
functions operations as separate from the policy-development processes 
that define those policies that are implemented through the IANA 
function. That exists today and there are no recommendations to modify 
that separation. I stand with you on making sure that the stewardship 
role is not now, nor susceptible in the future, to being led by any 
government, group of governments, or intergovernmental solution. 
Similarly I stand with you that no other stakeholder or group of 
stakeholders should be in a position to exercise undue influence over 
ICANN.
    Finally, I wish to assure you that the transition will not take 
place in the dead of night. The community work is conducted in an open 
and transparent manner, including calls for public comment on draft 
proposals. Once the proposals are finalized, there will be ample time 
for Congress and other interested parties to review them. I look 
forward to meeting with you again to discuss the final proposals.
    Thank you for inviting me to testify. I would be happy to answer 
any questions you may have.

    The Chairman. Thank you, Mr. Chehade. Ambassador Gross?

 STATEMENT OF DAVID A. GROSS, AMBASSADOR, PARTNER, WILEY REIN 
      LLP, AND FORMER U.S. COORDINATOR FOR INTERNATIONAL 
COMMUNICATIONS AND INFORMATION POLICY, U.S. DEPARTMENT OF STATE

    Ambassador Gross. Thank you very much, Mr. Chairman, 
Ranking Member, members of the Committee. It is a great honor 
and privilege to be back here. Thank you very much for the 
invitation to testify.
    This hearing is a very timely hearing, not only for the 
reasons that my colleagues up here on the panel have 
identified, but also for at least two other reasons. One is 
Internet freedom is on the decline. Freedom House has said for 
the last 4 years Internet freedom has been declining. This is 
an issue that concerns everyone and should concern everyone.
    Second is we are at a time of a global inflection point 
with regard to Internet access. The GSMA, the wireless 
association, the global wireless association, has said that in 
2013 there had been about 2.2 billion subscribers for Internet 
and mobile services, and for most of the world, they get their 
Internet through wireless technology. That is about a third of 
the global population.
    They estimate that in less than 5 years, by 2020, that 
there will be an additional 1.6 billion people worldwide who 
will become mobile Internet subscribers, a total of about 3.8 
billion people, about half the world's population, will have 
Internet access because of that technology.
    We are at a time when this is critically important because 
we are at the cusp not only of ensuring that the world's 
population has Internet access but will get Internet access for 
the first time.
    The members of the Internet Governance Coalition, of which 
I have the privilege of leading, has an extraordinary interest 
in the issues before us today. They are committed fulsomely to 
the five points that Assistant Secretary Strickling laid out in 
his announcement in March on behalf of the Administration, 
including the announcement that any transition will ensure that 
no government or inter-governmental organization can find a way 
of controlling these functions.
    Our members have been very actively involved in this 
process from the beginning. Importantly, I am here to tell you 
that we are not only actively involved in this, but we are 
watching this process like a hawk to ensure that any proposal 
that comes out of this process meets the five-part test set 
forth as the standard by the Administration and by Assistant 
Secretary Strickling, and we will be amongst the first to say 
if we do not think it meets that test.
    We are optimistic and I am optimistic that it will come 
forward with a proposal that can be adopted that will meet that 
test, but time will tell.
    Importantly, the Administration has made clear, and we 
wholeheartedly agree, that there is no rush to a decision. As 
Assistant Secretary Strickling has indicated, the September 30 
date is a date when the current contract expires but it can be 
automatically renewed.
    We believe that it is much more important to get this right 
than to rush, and we wholeheartedly agree in making sure that 
the process goes fulsomely to a happy and successful 
conclusion.
    That successful conclusion is affirmance of the role of the 
private sector in the multistakeholder approach that many 
administrations have endorsed, that have gone to the mat to 
defend globally, and importantly, has had the fulsome support 
of the Congress, especially led by the Senate.
    We are greatly appreciative of that. We believe that 
important involvement is critical to a successful outcome in 
this process, and we support the process with the hope and 
expectation that it will meet not only the needs of our 
community but importantly the approximately 3.3 billion people 
around the world who will have or soon will have Internet 
access.
    Thank you very much.
    [The prepared statement of Ambassador Gross follows:]

 Prepared Statement of David A. Gross, Ambassador, Partner, Wiley Rein 
 LLP, and former U.S. Coordinator for International Communications and 
              Information Policy, U.S. Department of State
Summary
    The Internet Governance Coalition welcomed the opportunity to 
participate actively in the IANA functions transition process commenced 
by NTIA last year, and NTIA's affirmation that any transitional 
proposal must support and address the following four principles:

   Support and enhance the multistakeholder model;

   Maintain the security, stability, and resiliency of the 
        Internet DNS;

   Meet the needs and expectations of the global customers and 
        partners of the IANA services; and,

   Maintain the openness of the Internet.

    The principles articulated by NTIA and its explicit commitment not 
to accept proposals replacing its role with a government-led or an 
inter-governmental organization, together with those found in the 
Coalition's submission to the 2014 NETmundial conference, are essential 
for ensuring that all global citizens are able to take advantage of the 
Internet's full transformative capabilities, both now and in the 
future.
    Coalition members work closely with other stakeholders in the 
process initiated by NTIA and coordinated by ICANN. Challenges will 
continue to be faced in the days ahead, and debates on the best form of 
Internet governance will remain a focus at future meetings, including 
the Internet Governance Forum and the UN's World Summit on the 
Information Society review. While the expiration of the current IANA 
functions contract approaches, it is most important that the transition 
process not be rushed, and that NTIA take the necessary time to ensure 
that any proposals ensure the continuation of a safe, secure, open, 
interoperable, and sustainable Internet, as well as a transparent and 
accountable ICANN.
                                 ______
                                 
    Chairman, Ranking Member, Members of the Committee, good morning 
and thank you for the opportunity to testify before you today.
    My name is David A. Gross. Formerly, I had the great honor of 
serving in the Department of State as the United States Coordinator for 
International Communications and Information Policy from 2001 to 2009. 
During this time, I led the United States delegations to the 
preparatory meetings and I was the co-head of the United States 
delegations to both actual phases of the United Nations' World Summit 
on the Information Society (WSIS) in Geneva (2003) and Tunis (2005), 
which, among other things, focused on the role of governments regarding 
Internet governance and resulted in the creation of the Internet 
Governance Forum (IGF). Today I am appearing on behalf of the Internet 
Governance Coalition, an industry coalition with broad representation 
from the communications, Internet, and related industries, including 
Amazon, AT&T, Inc., Cisco Systems, Inc., Comcast NBCUniversal, 
Facebook, Go Daddy, Google Inc., Juniper Networks Inc., Microsoft 
Corporation, Telefonica, S.A., The Walt Disney Company, Time Warner 
Cable Inc., Twenty-First Century Fox Inc., and Verizon Communications 
Inc.
    I am pleased to testify on important issues related to the National 
Telecommunications and Information Administration (NTIA) process of 
transitioning key Internet domain name functions to the global 
multistakeholder community. The primary focus of my testimony is to 
emphasize our firm belief that a thriving Internet depends on a 
governance structure that is open, transparent, and representative of 
all stakeholders. The current multistakeholder model for Internet 
governance has facilitated the historic Internet-driven economic, 
social, and political development of the past two decades. The 
decentralized structure of the Internet has enabled individuals to 
access information and services, to connect and to communicate, and to 
share ideas and knowledge globally. By offering new possibilities for 
entrepreneurial creativity, the Internet has become a powerful engine 
for unparalleled technological innovation, economic growth and the 
preservation and promotion of cultural diversity.
    We wish to commend the leadership of Assistant Secretary Strickling 
and the extraordinary group of professionals at NTIA for their tireless 
support of the multistakeholder model of Internet governance. The 
Internet has been allowed to mature into the global ``network of 
networks'' that it is today, in large part because of the stewardship 
by NTIA, ably supported by the Department of State and other Federal 
agencies. Similarly, ICANN has matured substantially since its 
inception in 1998, focusing on implementing accountability and 
transparency mechanisms and practices, such that it is now possible for 
NTIA to evaluate and possibly approve a transition plan for the further 
evolution of ICANN.
    Indeed, as described in NTIA's recent ``Report on the Transition of 
the Stewardship of the Internet Assigned Numbers Authority (IANA) 
Functions,'' as directed by the Consolidated and Further Continuing 
Appropriations Act, 2015 Public Law 113-235,\1\ the process to develop 
a transition proposal already is well underway. An IANA Stewardship 
Transition Coordination Group (``ICG''), representing more than a dozen 
Internet stakeholder communities, has been established to guide the 
process to develop a transition proposal. On September 8, 2014, the ICG 
issued a Request for Transition Proposals to the multistakeholder 
community, requesting one proposal for each of the three primary 
functions: the protocol parameters, numbering, and domain name-related 
functions. The Internet community currently is in various states of 
proposal development. The IETF and the five Regional Internet 
Registries have submitted final proposals, and a Cross Community 
Working Group on the domain name-related functions is finalizing its 
draft proposal. The ICG expects to submit, through ICANN, a final 
transition proposal to NTIA by the end of July 2015.
---------------------------------------------------------------------------
    \1\ http://www.ntia.doc.gov/files/ntia/publications/
iana_report_013015.pdf
---------------------------------------------------------------------------
    ICANN also has launched a parallel process to enhance its 
accountability to the global Internet community. This process is 
directly linked to the IANA functions transition process, and NTIA 
reiterated in its recent Report that both issues must be addressed 
before any transition takes place. A Cross Community Working Group on 
Accountability, composed of representatives from ICANN's Supporting 
Organizations and Advisory Committees, and open to all interested 
parties, has been established to identify both the accountability 
measures that need to be in place before the IANA transition as well as 
measures that should be adopted for the longer term.\2\
---------------------------------------------------------------------------
    \2\ https://community.icann.org/display/acctcrosscomm/
CCWG+on+Enhancing+ICANN+Acco
untability
---------------------------------------------------------------------------
    We believe that these processes--transitioning the IANA functions 
and implementing enhanced accountability and transparency--are both 
critical steps. United States oversight of the IANA functions has long 
been an issue of concern to the global community. By allowing for the 
careful transition of the IANA to a bottom-up multistakeholder entity, 
the United States has affirmed its commitment to the multistakeholder 
model. Further, the accountability review that is under way must 
provide ICANN stakeholders additional and robust accountability and 
transparency mechanisms to ensure future stability in the absence of 
NTIA's current role, and these additional mechanisms must be in place 
prior to or simultaneous with the transition. If the principles NTIA 
identified for the transition are met--which is a critical condition 
for this process to work--the United States will also succeed in 
maintaining the freedom, openness, security, and stability of the 
network we have all enjoyed since its inception.
    For these reasons, the Coalition welcomes NTIA's affirmation that 
any transitional proposal must support and address the following four 
bedrock principles:

   Support and enhance the multistakeholder model;

   Maintain the security, stability, and resiliency of the 
        Internet DNS;

   Meet the needs and expectation of the global customers and 
        partners of the IANA services; and,

   Maintain the openness of the Internet.

    These principles, together with NTIA's critically important, 
explicit commitment not to accept any proposal that could replace its 
role with a government-led or an inter-governmental organization, are 
consistent with the statement that the Coalition made in its submission 
to the April 2014 ``Global Multistakeholder Meeting on the Future of 
Internet Governance,'' also known as NETmundial, held in Sao Paulo, 
Brazil. A copy of that statement, entitled ``Sustaining Principles for 
Internet Policy and Governance'' is attached to this testimony.
    To be clear, the principles articulated by NTIA and those found in 
the Coalition's NETmundial statement are, we believe, essential for 
ensuring that all global citizens--regardless of their location--are 
able to take advantage of the Internet's full transformative 
capabilities, both now and in the future.
    Coalition members have been working closely and look forward to 
continuing to work with other stakeholders involved in the process 
initiated by NTIA and coordinated by ICANN. But we also wish to 
underscore the reality of the current international environment: there 
are great challenges associated with ensuring a safe, secure, open, 
interoperable, and sustainable Internet that have been faced during 
numerous international meetings and treaty conferences in recent years. 
Debates on the best form of Internet governance certainly will be a 
focus at future meetings, including the 2015 Internet Governance Forum 
and the United Nation's World Summit on the Information Society review, 
which is scheduled to conclude in December, 2015.
    Through these various processes, we must join together to be 
vigilant to ensure a safe and open Internet, as well as to ensure that 
whatever policies and structures are adopted foster innovation and 
investment in Internet networks, services, and other sectors of the 
Internet ecosystem, including ensuring the protection of intellectual 
property and the protection of human rights. We are also resolute that 
policies must support opening and maintaining international markets in 
a way that allows for the seamless flow of digital services, 
applications, products and information.
    Similarly, policies must stimulate sustainable investment in and 
deployment of Internet networks and the industries and services that 
create demand for those networks. These goals are best advanced through 
the rule of law, which governments have the primary responsibility for 
advancing, and establishing predictability in decision-making.
    Finally, we urge all governments to adopt policies that support 
increased transparency and openness in intergovernmental organizations, 
to promote inclusiveness in existing multistakeholder mechanisms, and 
to ensure that all stakeholders can participate meaningfully in key 
Internet policy and governance discussions. The quality of Internet 
governance decisions increases when diverse stakeholders choose to 
actively and consistently participate.
    We are encouraged by NTIA's and ICANN's commitments to working 
closely with all stakeholders to ensure that they develop a transition 
proposal that fully achieves the goals NTIA established and that 
continues strengthening the multistakeholder model. It will be critical 
that NTIA continue to engage the multistakeholder community as it 
develops its transition plan. While the expiration of the current IANA 
functions contract is approaching, it is important that the transition 
process not be rushed and that NTIA take the necessary time to ensure 
that any transition proposals ensure the continuation of a safe, 
secure, open, interoperable, and sustainable Internet. In this regard, 
we welcome the commitment of Assistant Secretary Strickling to extend 
the current contract if the global community requires additional time.
    I would like to thank the Committee for allowing me, on behalf of 
the Internet Governance Coalition, to present our views at a time of 
great importance for preserving the fundamental principles that have 
governed the Internet. This is a particularly important period in the 
Internet's evolution, and re-enforces the timeliness of this hearing. 
We welcome the initiative undertaken by Assistant Secretary Strickling, 
and we are prepared to join with others in ensuring that the process 
that has been initiated continues to affirm these guiding principles 
that have been at the core of the Internet's extraordinary growth 
during the past two decades.
                                 ______
                                 
                              Attachment: 
   Internet Governance Coalition submission to NETmundial, April 2014
Sustaining Principles for Internet Policy and Governance

   Area: SET OF INTERNET GOVERNANCE PRINCIPLES

   Entitled by: David A. Gross Region: Americas

   Organization: Internet Governance Coalition Sector: Private 
        Sector

   Keywords: Internet governance multistakeholder
Abstract
    The Internet Governance Coalition extends our sincere appreciation 
to Brazil for hosting the ``Global Multistakeholder Meeting on the 
Future of Internet Governance,'' to be held in Sao Paulo. The Meeting 
is taking place at a time when the topic of Internet governance is an 
issue of great interest around the world. The many major conferences 
and work efforts scheduled this year exemplify the accelerated pace of 
Internet governance discussions and make 2014 a particularly important 
year in the ongoing evolution of the Internet. Indeed, there are a host 
of institutions, each with different core functions and strengths, that 
address issues related to Internet governance. We believe that 
preserving and advancing open and consultative decision-making is 
essential to ensuring that global citizens are able to take advantage 
of this transformative platform both now and in the future. As such, we 
respectfully submit seven principles which we believe are essential to 
Internet governance.
Document
    The Internet Governance Coalition (the ``Coalition'') extends our 
sincere appreciation to Brazil for hosting the ``Global 
Multistakeholder Meeting on the Future of Internet Governance,'' to be 
held in Sao Paulo. The Meeting is taking place at a time when the topic 
of Internet governance is an issue of great interest around the world. 
The many major conferences and work efforts scheduled this year 
exemplify the accelerated pace of Internet governance discussions and 
make 2014 a particularly important year in the ongoing evolution of the 
Internet. Indeed, there are a host of institutions, each with different 
core functions and strengths, that address issues related to Internet 
governance.
    The Coalition represents leading international Internet and telecom 
companies, including: Amazon, AT&T, Inc., Cisco Systems, Inc., Comcast 
NBCUniversal, Google Inc., Juniper Networks Inc., Microsoft 
Corporation, Telefonica, S.A., The Walt Disney Company, Time Warner 
Cable Inc., Twenty-First Century Fox Inc., and Verizon Communications 
Inc. We believe a thriving Internet depends on a governance structure 
that is open, transparent, and representative of all stakeholders. The 
multistakeholder model approach to Internet governance has allowed for 
the creation of decentralized structures that have resulted in historic 
economic, social, and political development. This decentralized 
structure of the Internet has enabled individuals to access information 
and services, to connect and to communicate, and to share ideas and 
knowledge globally. By offering new possibilities for entrepreneurial 
creativity, the Internet has become a powerful engine for technological 
innovation, economic growth, and the preservation and promotion of 
cultural diversity. We believe this model, strengthened as necessary, 
will continue to best serve these shared goals and Internet users far 
into the future.
    These concepts are rooted in the 2005 Tunis Agenda for the 
Information Society that provided the foundational principles for 
Internet governance, which affirmed the multistakeholder, transparent, 
and democratic governance of the Internet, while at the same time 
recognizing the sovereignty of governments and rule of law. It is 
precisely because of this multistakeholder governance model that the 
Internet has grown into the transformative platform it is today. To say 
nothing of the broader social benefits from the Internet, its economic 
contributions have been astonishing. According to McKinsey Global 
Institute, the Internet accounts for 21 percent of GDP growth in the 
last five years in developed countries, and in 30 surveyed developing 
countries.
    We believe that preserving and advancing open and consultative 
decision-making is essential to ensuring that global citizens are able 
to take advantage of this transformative platform both now and in the 
future. As such, we support the following principles which we believe 
are essential to Internet governance:

   Policies must ensure a safe, secure, open, interoperable, 
        and sustainable Internet.

   Policies must stimulate sustainable investment in and 
        deployment of Internet networks and the industries and services 
        that create demand for those networks.

   Policies must support opening and maintaining international 
        markets in a way that allows for the seamless flow of digital 
        services, applications, products, and information.

   Policies must foster innovation across Internet networks, 
        services, and other sectors in the Internet ecosystem, 
        including ensuring the protection of intellectual property.

   Policies must support increased transparency and openness in 
        intergovernmental organizations and multistakeholder 
        mechanisms, to ensure that all stakeholders can participate 
        meaningfully in key Internet policy discussions. The quality of 
        Internet governance decisions increases when diverse 
        stakeholders choose to actively and consistently participate.

   Policies must support capacity building and implementation 
        of best practices in relation to network security.

   Policies must support the rule of law which governments have 
        primary responsibility for advancing.

    The Coalition looks forward to working with all stakeholders to 
prepare for a successful Meeting in Brazil, and welcomes this 
opportunity for dialogue on these important issues. International 
consensus on Internet policies is unlikely to be realized at only one 
meeting. These debates will continue at future meetings, including the 
2014 Internet Governance Forum, WSIS Review, and ITU Plenipotentiary, 
that, together with the ``The Global Multistakeholder Meeting,'' 
promise to make significant contributions to the ongoing global 
dialogue on Internet governance.
    The Coalition again extends its appreciation to the host country of 
Brazil and to CGI.br and/1net for their extraordinary and constructive 
work in organizing the Meeting.
            Respectfully submitted,
                             Internet Governance Coalition.

    The Chairman. Thank you, Ambassador Gross. I want to yield 
now to my partner on this committee, our Ranking Member, the 
Senator from Florida, Senator Nelson, for an opening statement.

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Mr. Chairman, I support the 
multistakeholder model of ICANN. As an institution, it 
represents one in which the Internet's diverse stakeholders can 
come together and make sure the Internet remains free, open, 
secure, and a global network.
    Mr. Chairman, I will give you a present today. I will cease 
my opening comments.
    [Laughter.]
    Senator Nelson. I will seek permission to enter it into the 
record so we can get into the questions.
    [The prepared statement of Senator Nelson follows:]

   Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida
    Thank you Chairman Thune for holding this hearing today.
    The Internet is one of our country's great research and development 
success stories. With the support of the Department of Defense and 
other U.S. Government agencies, a small community of computer 
researchers worked for many years to develop the technology and 
standards necessary to allow computer users on different networks to 
easily share digital information with each other. Those standards still 
lie at the heart of the Internet today.
    While the Internet may have had its birth here in the United 
States, it has quickly transformed the entire world. That's why the 
U.S. Government began nearly two decades ago to take steps to transfer 
control of the technical and operational aspects of the Internet to the 
private citizens, businesses, and institutions that were rapidly 
adopting it across the globe.
    It was that effort that led to ICANN. I strongly support the 
multistakeholder model that ICANN, as an institution, represents: one 
in which the Internet's diverse stakeholders can come together and make 
sure that the Internet remains a free, open, and global network.
    I also support the National Telecommunications and Information 
Administration's (NTIA) announcement last year that it would complete 
the work of privatizing the technical elements of the Internet begun in 
1998. I know that there are legitimate concerns about this transition. 
Many of those will be discussed during this hearing, but NTIA has been 
handling this transition in the right way. For example, NTIA has made 
clear that these functions may not be handed over to another government 
or an inter-governmental body.
    That is a critical precondition for the transition. In addition, 
the transition must preserve and protect the security, the stability 
and the openness that everyone has come to expect from the Internet. I 
will be watching this issue closely.
    NTIA also has embraced parallel efforts to make sure ICANN remains 
accountable to the global Internet community. Such efforts will give 
stakeholders the confidence they need to develop an effective 
transition plan.
    Finally, it is important to note that the United States Congress 
and the administration have always spoken with a united voice in 
support of the multistakeholder model to international Internet 
governance.
    We may disagree on how best to protect consumers, ensure public 
safety, or promote competition in our domestic laws and regulations, 
but that disagreement should end at our borders.
    We must continue to send a powerful signal to the rest of the world 
that the U.S. is committed to the multistakeholder model of 
international Internet governance--that we really do believe in a free 
and open Internet and want to preserve and advance the current 
multistakeholder model of global Internet governance.
    I want to thank the witnesses for appearing before the Committee 
today and for their thoughtful comments on these issues. I look forward 
to hearing your testimony.

    The Chairman. I thank the Senator from Florida but would 
just assure him we always enjoy listening to your wise 
comments, so free feel to proceed if you want to.
    Let me start by asking Mr. Chehade: ICANN's own governance 
guidelines state that ``The fundamental responsibility of its 
directors is to act in the best interest of ICANN and in the 
global public interest, taking into account the interests of 
the Internet community as a whole, rather than any individual 
group or interest.'' That is a quote.
    There must be times, however, when what is best for ICANN, 
the organization or its Board isn't necessarily what is best 
for the Internet community.
    The question is what if the stakeholder community proposes 
to diminish the power of the Board in some way?
    Mr. Chehade. The stakeholder community already proposed 
measures to review the decisions of Board members, to make sure 
they can recall Board members if necessary, and the Board in 
Singapore at our recent meeting a few weeks ago indicated its 
openness to all these measures in order to make sure that the 
community keeps a very close eye on our Board, its decisions, 
and to ensure that its powers are always bound by the words you 
read, Mr. Chairman, that our main goal is to ensure the public 
interest and to have full public responsibility.
    Yes, the Board is considering these, and we are looking 
forward to the stakeholders to come back with proposals. I can 
assure you we will be taking them very seriously and adopting 
them where possible.
    The Chairman. Will the ICANN Board send a proposal to NTIA 
that lessens the Board's power or authority?
    Mr. Chehade. We will if the community and the stakeholders 
present us with a proposal. We will give it to NTIA, and we 
committed already that we will not change the proposal, that if 
we have views on that proposal, we should participate with the 
community.
    Once that proposal comes from our stakeholders, we will 
pass it on to NTIA as is.
    The Chairman. Thank you. Ambassador Gross, the United 
Nations' ITU has a broad framework of regulations and tariffs 
for telecommunication services but not for Internet services.
    My understanding is that Democrat and Republican 
Administrations alike, including the current one, have argued 
the ITU should not impose similar regulations on the Internet.
    In your opinion, will the FCC's reclassifying of the 
Internet as a telecommunication service for domestic regulation 
strengthen or weaken our ability to keep the ITU from 
regulating or tariffing the Internet?
    Ambassador Gross. Thank you very much for that question. I 
will start with a disclaimer and then perhaps give you an 
answer.
    The disclaimer is, of course, we are all waiting to see 
what the FCC does, presumably tomorrow, and the details will be 
important in answering your question fully.
    It has been a long policy, starting with the Clinton 
Administration, and very vigorously pursued by the Bush 
Administration, and I will say by the first part of the Obama 
Administration, that is the first term of so, to be very clear 
that the ITU should have no jurisdiction with regard to 
Internet and Internet related issues.
    We have made the point repeatedly that the Constitution of 
the ITU sets forth in Article I that its scope is on 
telecommunications. We have argued consistently that 
telecommunications is not the same as the Internet, that the 
Internet is fundamentally different, and therefore, the ITU 
does not have jurisdiction on Internet related issues.
    We will have to see what the FCC does and says tomorrow. If 
they were to find that the Internet or Internet services are a 
telecommunication service, that will undoubtedly make the job 
of my successors much more complicated than it has been in the 
past in ensuring that the ITU does not seek to have 
jurisdiction over the Internet.
    It is certainly an issue because many governments around 
the world have sought to have the ITU have such jurisdiction, 
and to date, we have been very successful in ensuring that the 
ITU does not.
    I hope that will be the same going forward. Clearly, we 
continue to believe that the multistakeholder approach, which 
is fundamentally different than an inter-governmental approach, 
is the appropriate way for dealing with Internet related 
issues.
    The Chairman. Mr. Strickling, it seems like reclassifying 
broadband, as the Administration is talking about doing, is 
losing a valuable argument, as Ambassador Gross just said.
    How do you prevent ITU involvement when you are pushing to 
reclassify the Internet under Title II of the Communications 
Act, and is the Administration aware of that inherent 
contradiction?
    Mr. Strickling. So, I do not think it is quite as stark as 
your description suggests it is, Senator. First off, the 
jurisdiction or the activities of the ITU are set in their 
Constitution, Convention, and in the international 
telecommunications regulations.
    Just last November, we were in Korea, at which point there 
was an international discussion among governments in terms of 
whether to modify the Constitution or the Convention to bring 
in some of these issues.
    It is quite typical that at all of these international 
conferences going back to at least 2006, there are countries 
that seek to bring Internet related issues into the 
Constitution or Convention or ITRs of the ITU. We have opposed 
that.
    Countries in Europe and Canada have opposed it, and 
interestingly, both Europe and Canada view Internet access as a 
telecommunication service, and this argument has never come up 
that because they view it as telecommunications that somehow 
that answers the question at the ITU.
    What matters is what is the right place for these issues to 
be debated and discussed and resolved, and on that, we have 
made great progress in the last year with the developing world, 
the governments of the developing world, in building their 
support for the multistakeholder model as the right place to 
deal with these questions.
    That was reflected in the outcomes in Korea, where as a 
group of nations, we rejected proposals of countries such as 
Russia, as again as they have made in past years to bring these 
issues into the ITU.
    I fundamentally do not think this is going to change going 
forward. The United States is opposed to an inter-governmental 
resolution of these Internet issues. We will remain opposed to 
that. What is key is having the support of governments around 
the rest of the world to share that view with us.
    Today, we are in a good position. That could change in the 
future, and what is important here, particularly with this 
transition, is we carry out this transition in a responsible 
way, in a way that meets our conditions, and demonstrate to 
countries that might still be somewhat skeptical about this 
that the process works and it is the superior way of dealing 
with Internet issues.
    The Chairman. Thank you. I hope you are right, but I think 
we are sending entirely the wrong message with 
reclassification. The U.S. obviously is going to be in a very 
influential role in this process. I would certainly hope that 
you are correct, that this is not going to be a factor.
    I will turn to my colleague, Senator Nelson, and then after 
that, I have Senator Fischer, Senator Daines, Senator Gardner, 
Senator Sullivan, and I believe the Senator from Michigan and 
the Senator from Missouri following.
    Senator Nelson?
    Senator Nelson. Mr. Chehade, you know what is on 
everybody's mind. We have these state actors that are trying to 
do us in, Russia, China, North Korea, Iran. There are a bunch 
of non-state actors trying to do us in.
    Would you discuss this in light of the proposal, and how is 
this transition going not to have an adverse effect upon U.S. 
national security?
    Mr. Chehade. Thank you, Senator Nelson. There is no 
question that there are countries that do not share our values, 
and they do not share the values of openness, the values of an 
Internet that serves everyone, that all of us here share. There 
is no question.
    Boy, would they like to be able to change the nature of the 
Internet as an open platform. They would like to do that. How 
would this transition either empower them or weaken them is the 
real question.
    I am here to tell you that after a couple of years of 
traveling the world and meeting with many global leaders, this 
transition when it is finished, affirming our belief in the 
multistakeholder model, will actually turn many, many middle 
governments on our side. Many governments are looking for a 
model that they can sell to their own people and say this is a 
good model, and we have equal participation in it.
    I am not going to be able to assure you that those on the 
edges of this debate are going to walk away and suddenly love 
our open platform, but I will assure you that I have met tens 
of governments who are looking for a stable solution that they 
can tell their people is a good solution.
    I believe ICANN, as an open multistakeholder institution, 
that is inclusive, that allows anyone to participate, we do not 
have a membership model, anyone is welcome, and where 
governments have an advisory role but they are all equally at 
the table rather than having one government have an unique 
role, is a model we can attract many middle governments to.
    That is our best security against the edge governments 
trying to change this model.
    Senator Nelson. Did your consultations include the national 
security organizations and the Department of Defense?
    Mr. Chehade. Yes, working through NTIA, which has, of 
course, an interagency process. Everything we have done working 
with NTIA has been discussed and deliberated across agencies, 
including those that you bring up.
    Senator Nelson. All right. Discuss that internal 
administration consultation process.
    Mr. Chehade. I think it is best I ask Secretary Strickling 
to do that because he and his team lead that process today.
    Mr. Strickling. Yes, Senator. Prior to our announcement 
last March, this issue had received a tremendous amount of 
interagency review, including all of the security agencies. We 
obtained their views and discussed any concerns they might have 
had prior to proceeding with the announcement we made last 
March.
    Mr. Chehade. If I may add, Senator Nelson, we have as part 
of our coordination work 13 root services. These are very 
important services that are in the plumbing of the Internet. 
Ten of these are in the United States. The other three are in 
Sweden, the Netherlands, and Japan.
    Of the 10 in the United States, one is with the Department 
of Defense. They are keenly engaged and aware, and in fact, 
they participate in the operational aspects of the system ICANN 
oversees.
    Senator Nelson. Mr. Secretary, would you talk about how 
IANA services can be resistant to attacks?
    Mr. Strickling. So, what we are talking about are a series 
of basically data bases that are managed by ICANN. In the case 
of the root zone file, that is actually managed by Verisign, 
pursuant to a cooperative arrangement we have with Verisign.
    Both ICANN and Verisign engage and employ the most modern 
and sophisticated of protections against attacks. To date, we 
have not had an issue with the IANA functions being subjected 
to a cyber attack of any consequence.
    Again, Mr. Chehade may have more details.
    Senator Nelson. Let me ask you, I assume that one of your 
reasons would be you want to decentralize distributed authority 
structure so as to avoid single points of failure, manipulation 
or capture. Describe that to us.
    Mr. Strickling. I am not sure to what extent that bore into 
our decision to complete the privatization of ICANN. I think 
what you are describing is solid practice, and I think Mr. 
Chehade again may want to describe how that is put into 
practice at ICANN.
    Again, my understanding is Verisign employs the most modern 
and up to date principles of how to protect itself against 
cyber attacks.
    Senator Nelson. OK. Mr. Chehade, stability, security.
    Mr. Chehade. That is our mission and that is all we care 
about. It is more important than anything else we do. In fact, 
the record is clear in ICANN's 16 plus years operating what we 
do. We have not had a single nanosecond of down time, and that 
is the core mission that we will pursue.
    You brought up, Senator Nelson, the concept of distributed 
management. I think you are spot on, this is actually both from 
a technical standpoint as well as from an organizational 
standpoint a very sound approach to stability. If we have a 
central point of failure, either technically or operationally, 
I think we are much more prone to be brought down.
    From the beginning, the wise architecture of the system we 
coordinate was to ensure that multiple roots are established, 
multiple systems are in place, and therefore, of the 13 root 
services, it will have to have all 13 be down before our 
services are affected, and that is nearly impossible given that 
all 13 are operated by different organizations under different 
rules but common principles that are guided and coordinated by 
ICANN.
    The Chairman. Thank you, Senator Nelson. Senator Fischer?

                STATEMENT OF HON. DEB FISCHER, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Fischer. Thank you, Mr. Chairman. Mr. Chehade, the 
NTIA stated and Mr. Strickling highlighted this point, that it 
would not accept a proposal that puts government or 
intergovernmental organizations in the lead role NTIA has with 
ICANN.
    I want to bring your attention to proposed changes to 
ICANN's consideration related to the Governmental Advisory 
Committee's advice. The GAC's advice to ICANN provides a 
government perspective on policies, and I understand there is a 
proposal that could increase the likelihood that GAC's advice 
is taken unless two-thirds of voting members deny it.
    If we really are concerned about government getting 
involved and having government intrude into ICANN, why are some 
contemplating this move? Why would we give government such 
power?
    Mr. Chehade. Thank you, Senator, and you are right. This 
would be congruent with the stated goals. The Board has looked 
at that matter and has pushed it back, so it is off the table.
    Senator Fischer. It is off the table?
    Mr. Chehade. It is off the table.
    Senator Fischer. Thank you. Mr. Strickling, how would you 
respond to allegations that the Administration's process and 
the factors that weighed even in looking at that procedure and 
that process--have they been fully disclosed? Where did it come 
from?
    Mr. Strickling. I am sorry. Which process?
    Senator Fischer. I am sorry. With the transition.
    Mr. Strickling. This transition has been planned since 
1998, at the time ICANN was formed. It was the decision of the 
Government that the U.S. Government should get out of this 
business back in 1998. The original plan was to have it done in 
2000. 9/11 intervened, and of course, the transition was not 
completed at that point in time.
    Over the last few years, we have seen ICANN continue to 
grow and mature as an organization to where we felt they had 
gotten to a stage at which their level of accountability and 
transparency, and quite frankly, their performance of the 
functions, justified proceeding to complete this privatization 
that had been planned in 1998.
    At the same time, we were seeing growing support for the 
multistakeholder model internationally, which again gave us 
further encouragement that this was a good time to complete 
that transition.
    Senator Fischer. I believe it was released to Congress or 
released on March 14, 2014.
    Mr. Strickling. That is correct.
    Senator Fischer. Congress was not informed about that. I 
would question the transparency and the process that is 
involved.
    Mr. Strickling. Senator, I was up here briefing many 
members of Congress prior to the announcement on the 14th, so 
we did endeavor to brief leadership up here on both sides in 
terms of what was being planned.
    Senator Fischer. Would you be more open to briefing's in 
the future where all members could have that information?
    Mr. Strickling. Absolutely, Senator. As you know, based on 
the rider in our appropriations last December, Congress has 
imposed or asked us to report regularly to Congress. We have 
already submitted the first written report here at the end of 
January. We will be reporting on a regular basis.
    In my meetings with leadership, we have offered to come up 
here at any time to update staff or members of the progress of 
the transition plan, so we would be happy to do that directly 
with you.
    Senator Fischer. I would appreciate it, sir. Thank you. 
Thank you, Mr. Chairman.
    Senator Nelson [presiding]. Thank you, Senator.
    Senator Daines?

                STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. Thank you. Back in the 1990s, I spent six 
years of my 12 years working for Procter & Gamble in Mainland, 
China, launching an American business, selling products into 
that market.
    One of our great concerns was protecting American IP. As we 
consider the transition of IANA from the U.S. Department of 
Commerce to ICANN, I want to express my concern and serious 
interest in protecting American intellectual property in this 
process.
    By the way, Mr. Chehade, I was so struck by your testimony 
about the American dream, and that resonated with me 
personally.
    As I look at what is going on with IP, in fact, given the 
nature here of the fact that we can have our Iphones up here on 
the dais, I did a quick Google search on Pirate Bay. What does 
it return? It returns to me Proxy Bay because Pirate Bay has 
been trying to take down, you can hit a list of Pirate Bay 
proxy sites and mirrors. I tapped that and I can find 35 
proxies and mirror redirects right now on Pirate Bay.
    The concern is how do we protect American intellectual 
property, and this is software, music, games, it is the core of 
IP. I spent 13 years in a software company, a cloud computer 
company that we took public as well. I have lived in consumer 
products as well as cloud computing.
    We know when you have a cloud company or technology 
company, if you ever close up the doors and move on, all that 
is left are cubicles, some computers. Its intellectual property 
is what you create there, the people.
    How do we protect IP in this transition when I am looking 
right here at real time examples, and in fact, if you look at--
it is ``.sx.'' I had to look up where is .sx. Well, it is Sint 
Maarten in the Netherlands. If you look up ``.lu,'' it is 
Luxembourg. These are the proxy mobile mirror redirects that we 
see on Pirate Bay.
    Help me out on IP. Please, Mr. Chehade?
    Mr. Chehade. Thank you, Senator. As the founder of many 
software companies, one of which was acquired by IBM, I am 
very, very aware of the importance of protecting our IP. I work 
very hard to protect my own IP, and I know it is the greatest 
asset that can be challenged through these open networks.
    Let me first be clear that ICANN has nothing to do with 
content. We do not deal with content. Our work is very limited 
to the names, numbers, and protocol parameters, which are way 
down in the plumbing of the Internet.
    Therefore, ICANN does not have a particular role in 
managing or enforcing at a high level IP and content around the 
world. Having said that, I think the world needs good policies 
around that to help us and to protect IP, not just American IP 
but all IP of people who work hard around the world.
    I hope these policies will arrive through a 
multistakeholder process, which brings me back to ICANN. I will 
answer you directly on two levels.
    One, everything we can do on our side to protect IP in the 
domain name system, we are doing. For example, in partnership 
with IBM, ICANN launched the first global trademark 
clearinghouse. Nobody had done that before.
    When somebody tries to register, you know, IBM.sx, 
somewhere, we can actually flag that and make sure we manage 
that ahead of time before IBM has to go fight for retrieving 
its name from a domain somewhere in Sint Maarten. We are doing 
our part as best we can.
    The second thing we are doing is we are cooperating with 
other efforts to protect IP. That is important. We cannot just 
say we have nothing to do with content, we are going to step 
back. Where we can, we cooperate, so if law enforcement 
agencies, within the law, serve us with requests for help to 
protect IP, we are always doing that in a very active way.
    Senator Daines. Let me follow up on that. Given ICANN's 
agreements with registrars that include requirements to deter 
illegal activity on these domains sponsored by the registrar, 
do you think it is an appropriate response by registrar's to do 
nothing when informed illegal activity is occurring on a domain 
they might sponsor?
    Mr. Chehade. Frankly, I assure you that if a registrar is 
served with legal notice in their country that they are 
breaching any laws, they are reacting. We are putting them on 
notice.
    I am sure you know, Senator, our new agreements, the new 
registrar agreement and the new registry agreement, are far 
stronger, the ones we just enacted recently, than what we had 
before, making sure that these registrars and registries 
understand they are part of the system that needs to respect 
and protect these rights.
    It is a complicated issue, and I just appointed a new, very 
experienced American attorney, Allen Grogan, as head of 
Compliance, reporting to me. He is also very focused on 
consumer advocacy and issues of IP. His background is as an IP 
attorney. Ensuring that ICANN does everything in its power to 
support these contracts and to enforce them.
    Senator Daines. Thank you very much. Helpful. Mr. Gross, I 
was struck by a comment you made that I wrote down as 
``Internet freedom is in decline.'' How do you measure that?
    Ambassador Gross. Thank you very much, Senator. It is 
actually not my statistic, it is really from Freedom House. 
Freedom House, which of course, enjoys bipartisan support and 
has been around for many, many years, does an annual report on 
Internet freedom. The statistic I gave you is a basis from 
their most recent report.
    They also do a report, of course, on freedom in the world 
generally, which was just released as well. I have always found 
them to be a very useful guide for how those things are 
measured.
    Senator Daines. What do you think is the greatest threat to 
Internet freedom?
    Ambassador Gross. I think it is the rise of government 
control of various aspects of the Internet, particularly 
content within the borders of those countries. We see the rise 
of protectionism. We see the rise of control over speech. I 
think at the core of those, they are probably the primary 
drivers of that change.
    Senator Daines. Thank you. I am out of time. Thank you, Mr. 
Chairman.
    Senator Nelson. Thank you, Senator Daines. Senator 
Sullivan?

                STATEMENT OF HON. DAN SULLIVAN, 
                    U.S. SENATOR FROM ALASKA

    Senator Sullivan. Thank you, Mr. Chairman. I want to thank 
the panelists. In full disclosure, Mr. Chairman, I will let you 
know that I have worked very closely with Ambassador Gross in 
previous jobs the two of us have held together, and I can tell 
you no finer public servant for the United States than 
ambassador David Gross. It is really wonderful to see him and 
some of our previous team together.
    I would like to put forward these questions really for 
everybody. Mr. Chairman, you mentioned kind of the elephant in 
the room here, right, you mentioned what is on everybody's 
mind.
    We have a system, I think, that has been kind of the wonder 
of the world in many ways. It is very clear we have countries 
that do not share our interests, particularly with regard to 
open Internet freedom, Russia, China.
    I will be a little bit more frank and a little bit more 
blunt, I think we have an Administration that with all due 
respect to what has been said, has not been very adept at 
global negotiations on some of the key strategic interests to 
the country, of which an open Internet to me is one.
    We have the Chinese and the Russians and others who seem 
very, very determined on this issue. As you know, they just put 
forward another proposal last month that looks to be very 
focused on gaining more control over the Internet.
    Again, I worry that we are just going to continue to back 
pedal the way we have in other areas, like the Iran 
negotiations going on right now, particularly with a determined 
group of countries.
    I guess I just want to start with some basic questions. Mr. 
Strickling, I think you mentioned one government having an 
unique role was not the plan. I am assuming you are referring 
to the United States.
    Mr. Strickling. Yes, sir.
    Senator Sullivan. Is there a problem with one government 
having an unique role, particularly when that government has 
done a fantastic job? It goes to the broader issue. If there is 
not a problem, what are we trying to fix here?
    I am not sure I am convinced by hey, we were going to 
transition in 1998, but 9/11 happened and holy cow, we waited 
for 15 years. I think we waited for a long time because we did 
not see there was a problem.
    I would be very interested in what is the problem, and 
finally, there have been a lot of articles in the paper very 
concerned about this, I certainly am, but one of those actually 
raised a very important issue that I would also like you to 
address, your legal authority to do this.
    Again, another issue with this Administration I have a 
problem with is taking action where you have no legal authority 
under the Constitution. The Congress has the power to transfer 
Federal Government property. ICANN is Federal Government 
property, it is valuable property. I do not think you have been 
authorized by Congress to take this action yet.
    I know I have thrown a lot of questions out to you but feel 
free, all of you, to jump in, please, on these questions. Thank 
you.
    Mr. Strickling. So, let me start with your second question, 
which is there is no Government property that is the subject of 
this contract. All the contract does is designate ICANN to 
perform the IANA functions. They were given no assets of the 
United States with which to perform these functions.
    The domain name file----
    Senator Sullivan. Is there a Commerce Department legal 
opinion on this issue?
    Mr. Strickling. Yes, there is, sir.
    Senator Sullivan. Can we see that?
    Mr. Strickling. I will take that back. I am not in a 
position today to say yes or no, but I will take your request 
back.
    Senator Sullivan. I think a lot of people would dispute 
what you are saying right now on that issue.
    Mr. Strickling. Well, I think the GAO agrees with us as 
well based on a study they did back in 2000 when they looked at 
this question. The fact of the matter is all the contract 
does--for which we receive no compensation, ICANN pays nothing 
to the United States for this--it simply designated them to 
perform a role that until 1998 was being performed in the U.S. 
Government.
    So, the question was how do you take this function and now 
have it performed by somebody outside of the Government?
    Senator Sullivan. How about the issue of what is the 
problem. This has done very, very well under an unique 
government role, our Government, our country. A lot of people 
do not have a problem with this in this country. What is the 
problem we are trying to fix?
    Mr. Strickling. Well, there has been a problem, sir. At the 
end of 2012, when the world's governments got together in Dubai 
for the ITU WCIT, the World Conference on International 
Telecommunications, you had around 80 countries who voted to 
say the ITU needs to be more involved in Internet governance. 
These were largely countries in the developing world who were 
siding with the more authoritarian regimes.
    Part of the impetus for this was at that time the continued 
irritation that many governments feel and which has been 
exploited by the authoritarian countries that the United States 
with this special role with ICANN is in a position to control 
the Internet in these developing countries and to turn it off 
in these countries, and to otherwise interfere with the ability 
of countries to manage their own affairs with respect to the 
Internet.
    After this announcement was made, the next two large 
international meetings at which governments came together, you 
saw a major change in position among developing countries. We 
did not see any change in the position of the authoritarian 
countries, and you are not. They are not going to change their 
views on this.
    The key to succeeding in this on the global stage is to 
bring the rest of the world along with us, and that is what we 
saw at the NETmundial Conference in Brazil last April, where 
the only countries that spoke out in opposition to the 
multistakeholder model of Internet governance were Russia and 
Cuba.
    We then fast forward to the ITU Plenipotentiary Conference 
in Busan last November, and again, you had Russia with the same 
proposals it has been making for 10 years, that these functions 
ought to be transferred to the ITU and managed by governments, 
and that was beaten back in a coalition of both developed and 
developing countries.
    So, we have seen immediate results or significant results 
by the basis of our being able to take this issue off the table 
for these countries, to get them to look at what is really best 
for them without this overhang of an U.S. role that was unique 
among governments and which was a source of irritation to 
governments, and which was being exploited to our detriment by 
foreign governments.
    The fact of the matter is that the role we play with 
respect to the IANA functions is a clerical role. It is clearly 
stewardship. As I said before, we do not provide any oversight 
of the policy judgments that ICANN and the multistakeholder 
community make.
    We participate as a government in the Government Advisory 
Committee, and we will continue to do that in the future, and 
will be vigorous advocates for a free and open Internet.
    The specific role we play with respect to the IANA 
functions is totally administrative and clerical. Yet, it has 
been exploited by other governments, authoritarian governments, 
to our detriment.
    We have taken that off the table by announcing the 
transition, and as we complete it, we will continue to see the 
benefits of that through the continued adoption and support for 
this model by the developing world.
    Senator Sullivan. Thank you. Mr. Chairman, the questions I 
posed, I know we did not get to them, but I would ask they be 
submitted for the record so the other witnesses have the 
opportunity to answer those as well.
    The Chairman. Without objection.
    Thank you, Senator Sullivan. Senator Gardner?

                STATEMENT OF HON. CORY GARDNER, 
                   U.S. SENATOR FROM COLORADO

    Senator Gardner. Thank you, Mr. Chairman, and thank you to 
the witnesses for being here.
    Mr. Strickling, it is exciting to be here when we are not 
talking about Eagle Net or anything like that. It is good to be 
here with you.
    Mr. Strickling. I have some great statistics for you about 
Eagle Net.
    Senator Gardner. You are off the hook, at least today, so 
thanks for the opportunity to visit with all of you. My first 
question is to you, just to ask about the process and the 
proposals before us right now and the proposals moving forward.
    Who else will examine this proposal?
    Mr. Strickling. The proposal when it is completed and 
submitted here, we will put it out and have a large public 
discussion about it. The Chairman has indicated to me he would 
like to have a conversation about it back here at some point in 
the future, so we certainly anticipate and will welcome the 
opportunity to come up either in briefings or a hearing before 
any of the committees with jurisdiction to talk about it up 
here as well.
    We want to make sure that the proposal meets our 
conditions, so we will have a full public explication of what 
is in the proposal, a demonstration that it supports, and we 
will invite anyone to respond and react to it.
    Senator Gardner. What would the process with receiving 
feedback from the multistakeholder community look like? How do 
you anticipate that part of the process looking?
    Mr. Strickling. Well, the goal is that the multistakeholder 
community will have already provided that input before the 
proposal gets to us.
    We have said we want a proposal that has broad community 
support. The process that the community is engaging in, in 
addition to having these working groups, pulls in public 
comment at a number of points in the process. We would expect 
again anybody who has ideas in this regard, we encourage them 
to participate.
    As you heard Fadi Chehade say in his earlier remarks, even 
some of the matters that have been raised in correspondence 
from Congress to us or to ICANN has been put into the process 
to make sure that the community is taking up those issues.
    I think all of us have a responsibility between now and the 
completion of the process to make sure the issues are getting 
into the groups, to make sure they are able to have a full 
discussion of them, and we will expect the proposal that comes 
to us will have the full support of the community.
    Senator Gardner. Ambassador, I believe it was your 
testimony where we talked about great challenges associated 
with ensuring a safe, secure, open, interoperable, and 
sustainable Internet.
    From the information that you have gathered, in as simple 
terms as you can make it for this committee, what could happen 
if the transition process moves forward too quickly without 
proper oversight or precaution?
    Ambassador Gross. Thank you very much, Senator. The concern 
is multiple. One, of course, and I will preface it by saying I 
have no expectation this will in fact be a problem. We are 
committed or the Coalition with whom I work is committed to 
ensuring that if it creates any of the problems I will mention 
in a moment, that we would be strongly opposed to it, and I 
have full expectation that such a proposal would be rejected by 
NTIA and by the Administration.
    Having said that, there are key aspects to what it is that 
is currently being performed that go to the stability and 
reliability of the Internet. If there are challenges to how 
that process works, it could undercut the ability to have an 
Internet that works smoothly, seamlessly, and as Mr. Chehade 
said, flawlessly to date.
    This is a huge and important set of issues. Similarly, as 
has often been discussed at the hearing, we are keenly 
concerned about the ability of governments to directly or 
indirectly take control. We are assured by the statement by 
NTIA that they will accept no such proposal, and we will be 
watching that with great care. That, too, could have an impact 
on the various things that you listed.
    Senator Gardner. Thank you. Mr. Chehade, I will give you a 
chance to answer that question as well, but I want to add 
another question to it and perhaps Mr. Strickling could follow 
up on this.
    In the Thune and Rubio letter in 2014, it talked about 
increased oversight tools, annual audits. You have talked a 
little bit about that. I think you said you would look at 
additional--be supportive of additional oversights.
    In talking about additional oversight and audits that are 
mentioned in their letter, is there a concern that could be a 
problem? Would it be helpful?
    Mr. Chehade. Extremely helpful. We have no concern with the 
six concrete suggestions that came in Senator Thune and Senator 
Rubio's proposed letter. We have already fed these into the 
system. This is very welcome.
    We hope the Senators will continue to help us in order to 
make sure we put every possible belt and suspender on this 
institution as we move forward, not just to protect it today 
and after the transition, but for the next decades.
    Senator Gardner. Are there additional audits or additional 
oversight that might be helpful as well, in addition to those?
    Mr. Chehade. Yes, absolutely. In fact, our community itself 
is looking at tens of possible different mechanisms in addition 
to these six concrete ones that came through your letter.
    We have experts involved. We have stakeholders of all walks 
of life, government, as well as businesses involved.
    When Ambassador Gross says we are watching, he is right, 
but many of the members of his Coalition, companies like AT&T 
and Cisco and others, are all part of the process as well. They 
are participating today.
    They will make sure that we never come back to you with 
anything that does not take care of these five fundamental 
principles. These principles are rooted in all the efforts we 
are undertaking today.
    When you ask Secretary Strickling whether you will check 
them and then Ambassador Gross says we will check them, but the 
reality is the entire community of stakeholders is checking 
them because we know that if we do not, it is dead on arrival, 
we do not have a proposal.
    Second, because we believe in them. These are our values. 
Many of the people at ICANN are the people who created the 
Internet. We do not want an Internet that is controlled by 
governments anyway.
    On your earlier question, Senator Gardner, I can assure you 
nothing will happen in the dark here. Everything we are doing 
today is transparent, open, and when that proposal is ready, we 
will come back to you, even if Senator Thune does not invite 
us, we will come back to you.
    [Laughter.]
    Mr. Chehade. We will show you these proposals. We will 
discuss them with you. We need to all have consensus. This is 
good for America first, and this is good for the Internet, and 
this is good for the world. I believe all these are the same. 
What is good for America should be good for the world.
    Senator Gardner. I am out of time. Mr. Secretary, would you 
want to add to that?
    Mr. Strickling. In addition to the accountability tools you 
have talked about, when you talk to the community, what they 
are really worried about is what happens when the Board does 
not carry out the views of the community.
    What we see in the work to date is discussions of how to 
create an escalating series of appeal mechanisms to get the 
Board to do what the community wants. The one piece that is 
missing in the current structure is the ability to remove Board 
members if they still fail to act as the community wants.
    I think there was a lot of progress made in Singapore at 
the beginning of February where this issue really was brought 
out into the open and discussed quite directly with members of 
the Board, because today, under the by-laws, the community 
cannot remove a Board member, they can only be removed by vote 
of other Board members.
    There was a direct willingness expressed by members of the 
Board to see a provision added to their by-laws under which as 
the final option, when all else fails, the actual removal of 
Board members in order to make sure ICANN continues to act in 
the interest of the global Internet community.
    I thought that was a very positive advance to see that 
being discussed and being accepted by Board members, and we 
will see how that works into the overall community proposal 
that we get.
    Senator Gardner. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Gardner. Senator Peters?

                STATEMENT OF HON. GARY PETERS, 
                   U.S. SENATOR FROM MICHIGAN

    Senator Peters. Thank you, Mr. Chairman. Thanks to the 
witnesses for being here today and this interesting 
conversation, appreciate you taking the time to come and talk 
with us.
    Mr. Strickling, NTIA's decision to start the process to 
transition the IANA functions, certainly, the contract to a 
multistakeholder entity is a very clear affirmation of the U.S. 
commitment to a multistakeholder model of Internet governance, 
and the transition of IANA functions has been certainly a long 
time coming, but I believe now is the time to get it done. We 
also have to make sure obviously that we are getting it done 
correctly and right.
    Mr. Strickling. We all agree.
    Senator Peters. Right. If you could further expand on what 
sort of changes you have seen in the past year since your 
announcement with regard to the international debate on 
Internet governance, and if you would expand--you have 
mentioned some of this--expand on the responses of other 
governments. Importantly, how have perceptions generally 
changed over this last year?
    Mr. Strickling. I think our announcement really 
reverberated through the governments of other countries, 
particularly those in the developing world. Again, the fact 
that the U.S. had this unique relationship with ICANN has been 
a source of irritation, as I described earlier in response to 
other questions.
    What we have seen as a result, and I briefly summarized 
some of the actions of last year, in particular, the NETmundial 
Conference in Brazil. That conference was hosted by a nation, 
Brazil, that until that time had expressed a certain amount of 
skepticism about ICANN and the multistakeholder model as 
practice in ICANN, even though in Brazil itself domestically, 
they were one of the first countries to adopt a 
multistakeholder model to deal with Internet issues 
domestically.
    Really, it was not that they were hostile on 
multistakeholder, but I think they could not get past the fact 
that the United States had this particular relationship with 
ICANN, which they felt was unfair to other governments, and 
could be exploited in some fashion to their detriment. In fact, 
it could not be, but that did not mean they did not have the 
perception of that.
    We saw an immediate change in perception in Brazil and in 
the countries that attended that conference, as I mentioned 
before. At the end of that conference, the only two nations 
that stood up and said we do not like the multistakeholder 
model were Russia and Cuba. Other governments there, 
particularly those in the developing world, all joined in to 
the final documents of that conference, which expressed very 
direct support for that.
    I think the other key milestone was the Plenipotentiary in 
Korea. Again, I do not want to repeat all of what I said 
earlier. A coalition of the United States working with both 
countries in the developed world and developing world were able 
to beat back these proposals, largely driven by Russia at that 
conference, to bring the ITU more into direct Internet 
governance matters.
    I think our announcement as well as other diplomatic 
efforts over the last year have resulted in very direct 
benefits to us in terms of the international community's 
response and reaction to supporting this model.
    Senator Peters. That sounds very positive and we are 
certainly moving well down the road. I guess that leads to the 
obvious question. What happens if this transition does not 
occur? What are the risks involved if this does not occur?
    Mr. Strickling. I really hesitate to speculate on that 
because it would really matter why it did not happen. I think 
it would be tragic though if the community does deliver a 
proposal that meets all the conditions, that there is consensus 
it meets the conditions, and we do not proceed with the 
transition.
    I think that would have a very negative impact on our 
interests internationally. I think all of the good work we have 
done in the last 2 years with the developing world, we could 
lose that overnight if something were to intervene to prevent a 
good proposal from being implemented.
    Senator Peters. Right. Ambassador Gross, NTIA's 
announcement to transition the IANA contract to a 
multistakeholder entity has certainly received very broad 
support from a wide variety of stakeholders. If you could just 
comment on what United States' corporations and entities 
participate in this model, and can you describe kind of their 
feelings with this transition?
    Importantly, what would happen to these businesses if a 
multistakeholder model is somehow undermined in this 
transition? What would be the response from these businesses?
    Ambassador Gross. Thank you very much. Obviously, I cannot 
speak on behalf of all corporations, but I will speak on behalf 
of our Coalition, which, Senator, as you point out, is an 
extraordinary group of companies, a cross section of those 
major U.S. and multinational companies that are involved in 
Internet related issues in one way or another.
    They are very comfortable with the approach that is being 
taken because of the assurances, the strong assurances, that 
have been made about the five principles we have been talking 
about this morning.
    As Mr. Chehade has pointed out, many of our members are 
actively involved in the formulation of the process that will 
come forward at an appropriate time, and that is a very 
positive one.
    All the companies are very interested, acutely interested, 
and are supportive as long as it meets that five part test. As 
I have indicated before, and I have no reason to think it will 
be anything other than a successful outcome at this stage, but 
it is far from assured, nevertheless, if it were not to be, we 
would be amongst the first--I realize Mr. Chehade believes he 
will be the first--it does not matter, there will be many who 
will be speaking out on what the problems are, and in theory, 
therefore, how those problems could be solved.
    We do think that this would be a productive approach, 
assuming it meets that five part test.
    Senator Peters. Thank you. I am out of time, Mr. Chairman.
    Senator Nelson [presiding]. Thank you. Senator Cantwell?

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman. Obviously, we 
are here talking about best practices and how the U.S. can also 
influence Internet governance. Tomorrow, we are likely to hear 
from the FCC on its net neutrality rulings, and I hope our 
strong net neutrality rules can be the basis for an open 
Internet practice.
    I was trying to get, Mr. Strickling, your comments on do 
you think net neutrality is consistent with good government 
principles?
    Mr. Strickling. Absolutely, Senator. In terms of how it 
relates to what we are doing here, both with the IANA 
transition and with respect to net neutrality principles, both 
have as a goal a free and open Internet. I think in that sense, 
they are both very much aligned.
    Senator Cantwell. What else can we do to promote this idea 
on a global basis? Obviously, the Europeans are regulated in a 
different way than we are already. Tomorrow is about us taking 
a step probably a little closer to their approach. What else do 
we need to do to promote this?
    Mr. Strickling. Again, as I said earlier, this transition 
is really important in terms of being able to demonstrate the 
values that we hold in terms of a free and open Internet, the 
multistakeholder model of Internet governance, and proving how 
it can work.
    We are demonstrating that in a most concrete way to other 
governments around the world. I think the best thing we can do 
internationally is continue to keep our eye on that target, 
continue to encourage the community to develop a strong 
proposal for us, and then if we get a good proposal that meets 
all the conditions, to proceed with completion of the 
transition.
    That will be as concrete a demonstration to the rest of the 
world as anything else we can do in this area in the next 12 
months.
    Senator Cantwell. What about the threat that we heard some 
discussions today about, the NSA going back toward a clipper 
chip proposal?
    Mr. Strickling. I cannot comment on that. I am not sure 
exactly what the proposal is you are talking about.
    Senator Cantwell. OK. Obviously, a government back door to 
encryption products could become a challenge to an open 
Internet. Maybe we will submit a question for the record. Thank 
you, Mr. Chairman.
    Senator Nelson. Senator Ayotte?

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Hi. I appreciate all of you being here. One 
thing I am trying to understand, Mr. Strickling, you said you 
were encouraged by the meeting and discussion of the 
stakeholders about removal of a Board member.
    The reason I see this as a critical issue is because I know 
the actual ICANN by-laws prohibit a government representative 
from holding a voting position on ICANN, but let's have some 
straight talk here.
    The oligarchs in Russia. They may be technically private 
citizens, but with much more government beholdenness than our 
average private representative would be, and even in countries 
like Argentina, China, Iran. We can go on and on. There are a 
lot of countries where it is not quite the same thing as us 
putting a private representative on the Board.
    I see this removal provision as critical. You said there 
was a good discussion, there were a lot of stakeholders saying 
this is a good thing. How do we come to a decision so that is 
part of the terms, and if it is not part of the terms, is that 
a deal breaker?
    Mr. Strickling. So, on your last point, I would say not 
necessarily. We need to see the complete proposal and be able 
to evaluate it in the context of our conditions.
    Senator Ayotte. Just so we are clear in this committee, 
that is not a deal breaker, from your perspective?
    Mr. Strickling. I am saying I would have to evaluate that 
in the total context of the proposal.
    Senator Ayotte. Yes, I take that as an answer that it is 
not a deal breaker.
    Mr. Strickling. Right, not necessarily, but we would want 
to look at it in the total context of the proposal. For us, 
what is key is does the proposal meet the conditions we 
described.
    On the issue of removal of the Board, the challenge that 
the community is facing is that when you get to this point 
where the Board is not being responsive or the institution is 
not being responsive to the needs, desires, and the goals of 
the community, there are two choices, at least two choices.
    One is let's take the business somewhere else and create a 
new organization to perform all these same roles, or do we 
change the people in the organization and maintain the 
organization as it is.
    Because we are so concerned about maintaining security and 
stability of the Internet along the lines of some of the 
questions the ranking member asked earlier, I am a little 
nervous about a proposal that would come to us to say well, if 
we do not like what ICANN is doing, we will just pick up the 
business and send it somewhere else, because now potentially 
you are creating a whole new set of accountability issues that 
have to be overcome.
    Senator Ayotte. You understand my issue in terms of the 
concern about this removal provision, it is not insignificant 
because as you have described it, Mr. Chehade, we have everyone 
equally at the table, so the U.S. has this unique role that we 
are going to be giving up here, and frankly, what you have said 
about the developing countries, to my knowledge, we do not 
block access that developing countries have, we have not 
engaged in behavior that other countries have, like Russia, and 
some of the other bad players that I have mentioned have 
engaged in.
    We have sort of a track record there. As I look at where we 
are with everyone equally at the table, it depends on who is at 
the table in terms of the outcomes of where you get on 
important issues that could impact the freedom of the Internet.
    Without this mechanism to remove people from the table that 
truly are not representative, that are really representing a 
government type position of countries like China, Russia, who 
block their citizens' access to the Internet and do not have a 
free and open Internet, and there are a lot of countries in 
that category, unfortunately, that worries me as I think about 
the concerns we have going forward about this transition.
    Mr. Strickling. Senator, it might help if we spend just a 
minute to talk about the structure of the ICANN Board. It has 
16 members. Eight of them come from specific segments of the 
community.
    In other words, the organization that supports generic top 
level domains, which are large companies. They have two seats 
on the Board. The registries, the Number Registries have two 
seats on the Board. Mr. Chehade gets a seat on the Board.
    Half of the Board is designated based on these 
contingencies and supporting organizations of ICANN. The other 
eight are put on the Board through an at-large--I am sorry--
through a nominating committee process, and no more than three 
a year can be added through that process. Again, the nominating 
committee is made up of representatives of the supporting 
organizations.
    There is a prohibition against anybody from a government 
sitting on the Board, but more importantly, when you look at 
who is actually putting people on the Board, the likelihood 
that any of those groups are going to be putting one, two, or 
certainly a majority of people on the Board who represent the 
interests of these countries we all are concerned about is 
virtually zero.
    Senator Ayotte. Then why was it such an important topic of 
discussion, if it is that insignificant. As I look at this, we 
have the members who are on the Board now, but who makes these 
decisions, especially in a decisionmaking process where 
everyone equally has a seat at the table? Very significant, as 
we look at this.
    My time is up. It seems to me that this issue should be a 
deal breaker. I think it is something you all should be saying 
is something that needs to be in the provisions of what the 
stakeholders agree with.
    Senator Nelson. Thank you. Senator McCaskill?

              STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. Thank you. Senator Rubio and I, as you 
probably are aware, did a resolution that had no opposition 
that spoke to the challenges that you all face.
    I will tell you the moment of truth came for me, I was in a 
position that I had heard from some stakeholders here in this 
country about their concerns about this transition, and I was 
in an international meeting.
    There were representatives of the European Union there that 
are in charge of this issue for the European Union, and a 
number of other countries. We are not talking about Russia and 
China, but our friends.
    The negativity toward the United States of America was so 
thick you could cut it with a knife. I was sitting there, and I 
thought what in the world, this is terrible. They were really 
antagonistic and negative. I was the only one there in the room 
that was representing the American government, but there were a 
lot of businesses in the room, small and large, that were 
American businesses, and none of them said a word.
    I was shocked, because I thought surely the American 
businesses are going to rise up and defend our country. This is 
awful. Then I gathered them after it was over, and these small 
and large businesses alike said you need to understand, this is 
a business issue for us. This is hurting our international 
business because there is a sense in the world that this is not 
a true multistakeholder process.
    I get the other side of this equation and how important it 
is for American businesses for us to get this right. I just 
wanted to get that on the record because I think there is a 
natural inclination of all of us, we do not want to give up our 
power, why should we ever give up our power.
    Well, in the instance it is going to help American 
businesses, it might be wise as long as we do it carefully. I 
certainly understand the point that Senator Ayotte was making, 
and accountability is incredibly important, and I think you 
need to go slowly and make sure we get it right.
    I think the process for nominating is appropriate enough 
that I do not think anybody could ever control this Board that 
was from a country that did not relish the openness of the 
Internet like we do.
    Let me ask you this about the deadline for completing the 
transition, I know we are running up on the first deadline, and 
there is a 2-year option to continue the contract.
    I am worried that a 2-year option would send the wrong 
signal to the international community, so could some of you 
speak to the likelihood of us doing an extension, because I do 
not want to rush this. I want to make sure we get it right.
    What is the possibility of an extension of a matter of 
months as opposed to a matter of years?
    Mr. Strickling. So, the way the contract is structured, the 
U.S. Government can unilaterally extend the contract for 2 
years based on an option that is in the contract. Of course, 
between the contracting parties, ICANN and the United States, 
we can mutually agree to an extension of a shorter period, and 
we will certainly take a look at that if and when we need to 
look at an extension.
    Senator McCaskill. You do not want to speak to whether or 
not an extension is going to be necessary because you are 
afraid if you do, an extension is going to be necessary?
    [Laughter.]
    Mr. Strickling. Thank you, Senator.
    [Laughter.]
    Senator McCaskill. I think this is hard, but we have done 
it in other places where we have a global interest, certainly 
in our airways, which this committee is aware of. We have had 
international organizations with various stakeholders that have 
allowed us to operate in a truly borderless world that air 
traffic represents, and so does the Internet.
    I wish you well, and we will anxiously await the details of 
how this is actually going to work, particularly in the area of 
accountability. Thank you, Mr. Chairman.
    The Chairman. Thanks, Senator McCaskill. My neighbor from 
across the border, Senator Klobuchar.

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Chairman Thune, and 
thank you for holding this important hearing. As some of you 
recall, I actually chaired this hearing at one point a few 
years back and know how important this issue is.
    I understand there has been a recent meeting in Singapore 
to discuss the transition of the handling of the contract for 
the Internet Assigned Numbers Authority from the NTIA, and I 
also thank you for the update you have given us today.
    I was going to start with you, Mr. Chehade. I know you were 
in our office yesterday. In 2011, I sent a letter with Senator 
Ayotte to ICANN expressing some concerns about the expansion of 
the top level domain names in the system and asking that ICANN 
work with all the stakeholders to mitigate some of the 
challenges and risks to consumers, businesses, and law 
enforcement that could come in expanding those domain names.
    While this is a different issue than today's topic of 
general governance, it does touch on the need for 
accountability, which some of the Senators have discussed in 
coordination.
    Can you update me on how ICANN has accounted for some of 
the concerns that Senator Ayotte and I raised in 2011, and how 
it is working with law enforcement in protecting consumers and 
businesses from fraud?
    Mr. Chehade. Thank you, Senator, and thanks for your 
continued attention to the work of ICANN. I can assure you that 
we have come a long way since 2011. The new program is now up 
and running and serving the world.
    We have new domain name system activities in multiple 
scripts, in Arabic, Chinese, Cyrillic. People around the world 
are benefiting from the diverse system, from a couple dozen top 
level domains, we now have hundreds in the root, and it is 
working. Everything is working well.
    Yes, are there continued matters we need to attend to, 
absolutely, but let me give you a couple of examples of things 
we have done.
    We worked very closely with law enforcement to strengthen 
our agreements with all the registrar's and all the registries. 
Since your letter, we have now signed new agreements with most 
of these players. These agreements incorporate many of the law 
enforcement asks to ensure that all these players participate 
in a lawful way in the system and give trust to the consumer 
that the system works well.
    That has been done. We have also increased the size of our 
Compliance Department remarkably. It is now one of our largest 
departments, led by an attorney who understands IP, understands 
the law, and is also focused on consumer advocacy. This is new. 
We did not have that before.
    A third example of our attention is the new trademark 
clearinghouse, which was built in partnership with IBM and 
others to ensure that trademarks are protected in the domain 
name system.
    Senator Klobuchar. Very good. Thank you. I am also glad you 
found an attorney that understands the law. There is not that 
many of them.
    I understand ICANN has made significant efforts to improve 
accountability but in the past it faced some serious problems 
with this. I know there is an accountability working group 
working on ways to improve accountability, both before the 
transition occurs and in the longer term.
    Assistant Secretary Strickling, what are the essential 
aspects of accountability that NTIA would need to see in place 
before the transition occurs, and then I will turn to 
Ambassador Gross and ask you what accountability do you and the 
companies you represent see as necessary prior to the 
transition.
    Mr. Strickling. First off, with respect to overall 
accountability at ICANN, I would say based on my personal 
experience of having served on the first two accountability and 
transparency review teams that were convened in 2010 and 2013 
under our Affirmation of Commitments with ICANN, that ICANN has 
made great progress on accountability.
    But it is always a situation where the standard is very 
high and where it can always improve, but I would tell you that 
based on any similar organization I have ever dealt with, I 
would say this organization is as accountable and transparent 
as anything else I have seen out there.
    Again, we should not just pause there and say that is good 
enough, we should not improve, and that is the spirit in which 
we have worked on these ATRTs the last two times, and it is the 
spirit in which the community has come together to look at 
additional accountability measures as part of this transition.
    The specific issue that is before the working groups is 
what does it mean for the U.S. to step away from this historic 
or traditional stewardship role we have had. There has been a 
perception that by virtue of this contract, we are kind of the 
parent in the room in case ICANN starts to do things people are 
worried about.
    As I said earlier in my testimony, that has also been a 
source of tremendous irritation to a lot of other countries 
around the world that do not understand why the U.S. should 
have that particular role.
    The accountability team which is working on this, which is 
made up of people from around the world, is looking at what 
does it mean for the U.S. not to be there any longer.
    From our point of view, we have not specified a particular 
set of practices that we expect to see in any plan that comes 
back, but what we do expect is that a plan that comes back will 
have the broad support of the community, will have considered 
all the various options, and will have to answer the 
fundamental question, which is what happens at the end of the 
day if the ICANN Board is not doing what the community wants.
    Senator Klobuchar. Thank you. Ambassador Gross, if you 
could really briefly answer because I am out of time.
    Ambassador Gross. Yes, very briefly. I would endorse what 
the Assistant Secretary said. The accountability piece is 
critically important. It is related obviously to the IANA 
transition. It is independent of it as well.
    It is critically important because the ability for those 
who feel otherwise aggrieved to come to the U.S. Government or 
to Congress will no longer be in the same way that it is today. 
All companies and all individuals need to know that in fact 
ICANN is accountable in a productive and appropriate fashion.
    Senator Klobuchar. Thank you. Mr. Chehade, I have a 
question I will put on the record about stress testing. Even 
hearing those words brings up memories from the past for us 
with the fiscal crisis, but I will do it on the record, about 
the accountability process that you are going to put in place 
with that. I am curious about that.
    Thank you very much.
    The Chairman. Thank you, Senator Klobuchar. Senator Markey?

               STATEMENT OF HON. EDWARD MARKEY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Markey. Thank you, Mr. Chairman, very much. Thank 
you for being here. Obviously, this is a critical long-term 
issue. We have to make sure we get it right. We need a 
decentralized form of open governance, multistakeholder 
governance, protections which are built in to make sure the 
system does not get captured, that we still have the capacity 
for job growth, for freedom of speech, for innovation that has 
characterized the Internet from its very origins when it did 
get privatized in 1991.
    From 1991 on, we have seen this tremendous change, and of 
course, the 1996 Act actually spurred the need to have an ICANN 
in order to have an international governance system.
    My first question would be to you, Mr. Strickling. There 
was a college student from Holliston, Massachusetts who came up 
with the idea of Instagram but then sold the idea to a Harvard 
dropout at Facebook, and then boom. Once again, revolutionized 
the way in which we communicate.
    Talk a little bit about how this IANA transition could 
impact that and what protections we have built in to make sure 
there is no change in the incentives for innovation in the 
system.
    Mr. Strickling. Well, I think you have put your finger on 
it in the sense that the overall goal here is to have a 
growing, striving, innovating Internet. Our belief is, and I 
think the record demonstrates this to be the case, that it is 
the multistakeholder model of governance that has allowed the 
Internet to grow and thrive, that under a different model, 
where governments, for example, were making these choices, we 
would not see the kind of flexibility, not see the kind of 
innovation that we have actually been able to see.
    Above all, we want to protect that model. I think the IANA 
transition by being the most direct and concrete demonstration 
of the multistakeholder model at work on a difficult issue that 
engages everybody in the community, whether they come from the 
United States or any other part of the world, whether they come 
from business or civil society or from the technical community, 
is the absolute best demonstration we can make that this is a 
powerful process, that it delivers outcomes, and that it is a 
model that we all should aspire to and protect.
    Senator Markey. Thank you. Mr. Chehade, this new system 
needs to be stress tested?
    Mr. Chehade. Yes.
    Senator Markey. In order to make sure that it will work and 
it cannot be compromised. If you could lay out for us what are 
the stress tests, how long will they take, and what are the 
safeguards built in to make sure the reporting back is accurate 
in terms of the system and its safeguards.
    Mr. Chehade. Absolutely, it must be stress tested, and I 
must commend many members of our stakeholders, some of them in 
this room, who have been developing a series of stress tests, 
without which we are not coming back to you with a complete 
proposal.
    Today, they include about 25 of them that we plan to go 
through. They come in multiple categories, financial crisis or 
insolvency, issues of failure to meet operational expectations, 
legal action stress tests, failure of accountability, failure 
of accountability to external stakeholders.
    They have already outlined every possible scenario that we 
should be testing for, and ensuring that this institution, 
which has been built over the last two decades, is ready and 
able, not just today, but in the future to withstand these 
stress tests.
    We will report on these back to Secretary Strickling as 
part of our proposal.
    Senator Markey. OK. Mr. Strickling, without question, human 
rights and an open Internet are intrinsically linked. Talk, if 
you would, about the safeguards we are building in to make sure 
that censorship does not reign in this new era, that we are not 
opening up a new era where there is a dramatic change in the 
personality of the Internet, as we are trying to reform its 
governance, we also want to simultaneously make sure that its 
essential personality remains the same, and that human rights 
and free speech and this openness as part of its baked in 
personality remains intact. Could you talk about that?
    Mr. Strickling. So, I totally agree with your comment. One 
of the reasons that we have insisted on there being no 
government solution or inter-governmental solution is the fear 
that would bring these extraneous issues into the management of 
the domain name system in a way that might affect free 
expression.
    As you know, Senator, there is nothing about the system 
today that prevents individual countries from acting within 
their own borders to censor or block content. That will not 
change going forward.
    What we are insisting upon is that nothing come out of this 
process that would allow those countries to be able to extend 
those beliefs into the domain name system at large, and again, 
based on what we have seen, I am confident that we will get a 
proposal that protects against that.
    Senator Markey. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Markey. Senator Nelson?
    Senator Nelson. Thank you, Mr. Chairman. Last year in the 
omnibus appropriations, a rider was placed that prevents NTIA 
from spending funds on the transition to an IANA contract 
before September 30 of this year, 2015.
    Can you explain NTIA's interpretation of that rider, Mr. 
Secretary?
    Mr. Strickling. Yes, sir. We have interpreted that 
resolution or interpreted that language to prevent us from 
allowing the transition to occur before September 30.
    Senator Nelson. And we know----
    Mr. Strickling. If I can continue, in consultation with 
members and staffs up here on the Hill, we sought to clarify 
whether that would in any way restrict our ability to continue 
to monitor the transition planning process which is going on in 
the community and is not subject to any restrictions in the 
legislation, and in fact, as you know, the rider imposes 
reporting requirements on us, so it is clear that Congress 
intended us to continue to monitor the process and report back 
on what is happening.
    Within that, we also indicated our need, and I think the 
needs of serving American interests, that we provide feedback 
where we thought it was appropriate, and we have engaged in 
that.
    Again, I am very careful not to steer decisionmaking one 
way or the other, but I think through a series of questions 
that we have been asking and will continue to ask, we are 
trying to make sure that the process considers all the issues 
before reaching a final result.
    We take very seriously the fact that no transition will 
take place before September 30.
    Senator Nelson. What happens if that rider is continued?
    Mr. Strickling. Again, I would not want to speculate on 
that. I am hoping the process within the community will result 
in a proposal that will demonstrate to Congress and the valid 
concerns people have up here about the process, that in fact it 
is being handled in a responsible fashion, that the transition 
will meet the conditions and there will be no need to extend 
that particular provision past September 30.
    Senator Nelson. Is the world going to stop revolving if it 
is extended?
    Mr. Strickling. I do not like to speculate on what will or 
will not happen in the future, but I am pretty confident the 
world will not stop revolving; yes, sir.
    [Laughter.]
    Senator Nelson. Senator Klobuchar, when she left, talked 
about stress testing. NTIA favors stress testing any new ICANN 
accountability measures in order to judge their effectiveness. 
Why do you think that step is essential?
    Mr. Strickling. Well, again, we need to have a proposal 
that has been well thought through, that has considered all the 
options, that can answer any question anybody might have. I 
think scenario's, no matter how unlikely they may seem to 
people, need to be raised.
    The stress testing is really a set of kind of scenario 
planning or contingency planning where you posit possible 
situations and then evaluate the extent to which the 
organization and the instruments of accountability allow one to 
protect against bad things from happening.
    So, yes, we have been strong supporters of stress testing 
from the beginning, and we think a good proposal requires that 
level of evaluation and testing to ensure that it will survive 
the kinds of challenges that people worry might happen at some 
point in the future.
    Senator Nelson. Mr. Ambassador, do you want to comment?
    Ambassador Gross. I would be happy to comment. I think the 
Assistant Secretary stated it very well. Let me just add by 
saying as a way of reassuring not only this committee but also 
our members and the population as a whole that they have gone 
beyond stress testing, or in the process of going beyond stress 
testing.
    For example, one of the issues that has been raised by the 
Assistant Secretary is implementation, no change should be 
made, not only in terms of getting it done right, making sure 
that as part of getting any proposal done right, it is stress 
tested, and that there is sufficient time for full 
implementation to ensure that this goes smoothly is taken. Only 
then is my understanding would a transition take place.
    Mr. Strickling. That is correct.
    Senator Nelson. Thank you.
    The Chairman. Thank you, Senator Nelson. I just have a 
couple of quick questions here, and I think we will close this 
out.
    Mr. Strickling, you recently gave a speech at the State of 
the Net Conference in which you raised several questions about 
draft proposals for the IANA functions. You suggested there was 
risk in making the proposal too complicated and creating new 
committees might just lead to new accountability questions.
    Were your questions meant to indicate that NTIA is unhappy 
with the direction the proposals are going?
    Mr. Strickling. No, sir. We just want to make sure that the 
community is fully evaluating and understanding the 
implications of the various proposals it is looking at.
    In no way have we said that any particular proposal that 
either has already been put on paper or might be put on paper 
would not satisfy the conditions, although as Ambassador Gross 
just mentioned, implementation is very much part of this.
    So, if one is going to propose--if the community is going 
to propose building new organizations to engage in any of these 
functions or any of this accountability, there will have to be 
time put in place to allow those organizations to be 
constructed, tested, and we need to make sure they do not 
create new accountability problems of their own.
    I viewed my questions as simply trying to make sure the 
community understood fully the ramifications of the kinds of 
proposals that it might be looking at, and I encourage this 
body and everyone else in this process to ask questions, too, 
because it will only result in a stronger proposal.
    The Chairman. Should your comments there be interpreted by 
stakeholders as additional requirements in terms of the 
transition beyond those that were included in NTIA's initial 
IANA transition announcement?
    Mr. Strickling. I do not think anything that I raised in my 
questions goes beyond the conditions. For example, if a new 
organization were to be proposed, that in my mind directly 
implicates the condition that we do nothing to disturb the 
security and stability of the existing system, it is working 
well. All of the customers of the IANA functions today, all 
three of them, say they are getting good service from ICANN.
    We want to be very careful that we do not get a proposal 
that might upset that security or stability that exists today.
    The Chairman. Final question. How will you consult with 
Congress in the event ICANN presents NTIA with an IANA 
transition plan this year?
    Mr. Strickling. As I said earlier in my testimony and as I 
said to you when we met, we want to work very closely with both 
houses up here on the Hill in terms of making sure there is a 
full explication of the proposal and make sure it has the full 
airing as any of the committees up here would like to pursue.
    The Chairman. I appreciate that. I wanted to get that on 
the record one more time.
    Senator Nelson, anything else from you?
    Senator Nelson. No.
    The Chairman. If not, we will wrap this up and keep the 
record open for a couple of weeks for additional testimony to 
be provided. And thanks to our panelists today for their great 
testimony and for their answers to our questions. I am sure 
this is an issue that we will continue to pay a great deal of 
attention to going forward.
    Thank you all very much. The hearing is adjourned.
    [Whereupon, at 11:46 a.m., the hearing was adjourned.]

                            A P P E N D I X

     Response to Written Questions Submitted by Hon. John Thune to 
                      Hon. Lawrence E. Strickling
    Question 1. The IANA contract with ICANN allows for two, two-year 
renewals. You have acknowledged that the policy rider in the current 
appropriations bill bars you from transitioning the IANA functions 
during this Fiscal Year. If that is the case, why have you not already 
extended the contract? What are the considerations of NTIA in extending 
the contract for a period of less than two years?
    Answer. The Act restricts NTIA from using appropriated dollars to 
transition key Internet domain name functions during Fiscal Year 2015, 
which coincides with the end of the base period of the IANA contract on 
September 30, 2015. As a contractual matter, the Department may extend 
the term of the contract by written notice to the Contractor (ICANN) 
within 15 calendar days before the expiration of the contract, provided 
we give the Contractor preliminary written notice of our intent to 
extend at least 30 calendar days before the contract expires.
    We have set certain conditions before a transition would be 
appropriate. The IANA Stewardship Transition Coordination Group (ICG) 
and the Cross Community Working Group on Enhancing ICANN Accountability 
(CCWG on Accountability), which represent a broad range of Internet 
stakeholders, including industry, governments, civil society, and the 
technical community, have been working diligently through a number of 
working groups to complete a transition proposal. However, it is 
becoming increasingly likely that some extension of the contract may be 
necessary. Accordingly, NTIA is conferring with the working groups to 
get an update on their progress and the associated timeframes going 
forward to make a final decision on an extension.

    Question 2. Do you believe the ``stress tests'' developed by the 
community are adequate to identify problems that could confront ICANN 
if the U.S. Government relinquishes the IANA functions contract? 
Specifically, do the stress tests properly assess the risk of 
governments or government-affiliated individuals gaining a controlling 
role over ICANN?
    Answer. The CCWG on Accountability has identified 26 potential 
stress tests. The stress tests address a range of potential 
contingencies, such as a financial crisis; evidence of major corruption 
or fraud; litigation; the unilateral expansion of ICANN's mandate by 
its Board; and the failure of the ICANN Board to comply with ICANN's 
Bylaws. There are also stress tests related to the possibility that 
ICANN is ``captured'' by a single stakeholder segment, including 
governments via the Governmental Advisory Committee (GAC).
    While the specific issue you raise has been identified, as have 
others, it is premature at this time to make judgments about whether 
the risks have been properly addressed. Thus far, we have been pleased 
by the diligent efforts to identify and develop a set of stress tests 
that reflect the broadest range of potential contingencies necessary to 
protect the future management of the IANA functions and ensure ICANN 
accountability.

    Question 3. I understand there has been some consternation from 
U.S. stakeholders about Secretary Pritzker's participation in the 
NetMundial initiative. Please explain why it is in our national 
interest for Secretary Pritzker to use her valuable time on this 
endeavor and what her participation will be going forward.
    Answer. We take seriously the concerns raised by all stakeholders, 
including those voiced by the business community regarding the 
NetMundial Initiative (NMI) initiative. Secretary Pritzker agreed to 
serve on the NETmundial Initiative (NMI) Coordination Council to 
explore whether there is a gap in the Internet governance landscape 
that could be filled by this multistakeholder Initiative, as opposed to 
having governments take more of a role to solve Internet issues by 
themselves. That said, the Department has expressed to the other NMI 
Coordination Council members that the continued lack of industry 
support and participation needs to be remedied in order to justify 
proceeding with NMI. The Department plans to review the comments filed 
by stakeholders in response to a draft ``terms of reference'' for NMI 
before determining its future engagement in NMI. See, http://
comments.netmun
dial.org/.

    Question 4. Proponents of the IANA transition often argue that one 
of its benefits is it demonstrates U.S. commitment to the 
multistakeholder model. These proponents believe that by moving forward 
with the transition the United States deflates attempts to expand the 
jurisdiction of the International Telecommunications Union or other 
intergovernmental bodies to include Internet governance. Please share 
with the Committee any examples of countries or stakeholders having 
renewed faith in U.S. support for the multistakeholder model due to the 
IANA transition.
    Answer. In 2012, at the ITU World Conference on International 
Telecommunications (WCIT), despite opposition from the U.S. and a 
number of likeminded countries, a majority of ITU Member States (i.e., 
governments) in attendance voted in favor of a stronger role for 
governments in Internet governance. Since then, there has been 
significant progress in the support shown by other countries for 
multistakeholder Internet governance. Specifically, in April 2014, 
Brazil hosted the successful NetMundial conference at which nearly all 
countries in attendance supported a statement reaffirming that Internet 
governance should be built on democratic multistakeholder processes. In 
the fall of 2014, the Member States assembled at the ITU 
Plenipotentiary Conference in Busan, South Korea, rejected efforts to 
expand the ITU's role in DNS issues handled by ICANN and agreed to take 
steps towards including all stakeholders in previously closed 
discussions related to Internet issues.
    A broad group of stakeholders has also directly expressed its 
support for NTIA's March 14, 2014, announcement of its intent to 
complete the privatization of the domain name system. These include 
Internet technical community leaders, U.S. companies such as AT&T, 
Verizon, Microsoft, Google, Cisco, and Comcast, and associations like 
the Chamber of Commerce, USTelecom, the Internet Association, the 
Computer and Communications Industry Association, and the Software and 
Information Industry Association. Human rights and Internet freedom 
organizations, including Freedom House, Human Rights Watch, the Center 
for Democracy and Technology, and Public Knowledge, also released 
statements of support.
    A number of countries have also taken the opportunity to express 
their support of the IANA transition and multistakeholder model, either 
directly or indirectly through their participation in the ongoing 
transition process. Many governments--including the UK, Germany, 
Mexico, Netherlands, Republic of Korea, Brazil, Norway, Australia, 
Denmark, Switzerland, Egypt, and Qatar--voiced their support for the 
announcement and/or the multistakeholder model at the March 2014 ICANN 
Governmental Advisory Committee (GAC) meeting in Singapore and the June 
2014 ICANN High Level Governmental Meeting in London. Following the 
inaugural meeting of the U.S.-E.U. Cyber Dialogue in December 2014, the 
government participants jointly agreed ``that no single entity, 
company, organization or government should seek to control the Internet 
and expressed their full support for multi-stakeholder governance 
structures of the Internet that are inclusive, transparent, 
accountable, and technically sound.'' They further welcomed the 
multistakeholder community's engagement and efforts regarding the IANA 
transition, recognizing the positive progress of the initiative.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                      Hon. Lawrence E. Strickling
    Question 1. Mr. Strickling, on March 14, 2014, NTIA announced its 
intent to end the U.S. Government's stewardship role over Internet 
governance, and privatize IANA functions. Although you have not set a 
deadline, and have mentioned that NTIA can extend the contract, you did 
say that September 30, 2015, is ``a date for the community to use.'' 
Thus, ICANN and the stakeholder community have less than two years to 
design a proposal for the privatization of IANA functions, and 
transparency and accountability reforms at ICANN. What is NTIA's plan 
to extend the contract if, in fact, ICANN fails to produce a transition 
proposal in conjunction with accountability reforms?
    Answer. NTIA has not set a deadline for the transition. September 
2015 has been a target date because that is when the base period of our 
contract with ICANN expires. However, we have the flexibility to extend 
the contract if necessary. The current IANA functions contract contains 
provisions to extend the contract, including the possibility of 
exercising two two-year option periods. In order to exercise one of 
these options to extend the contract, the Department must provide 
written notice to the Contractor (ICANN) within 15 calendar days before 
the expiration of the contract, provided that the Government gives the 
Contractor a preliminary written notice of its intent to exercise an 
option to extend at least 30 calendar days before the contract expires.
    We are committed to providing the time needed to develop the best 
plan possible to ensure the security and stability of the Internet. The 
IANA Stewardship Transition Coordination Group (ICG) and the Cross 
Community Working Group on Enhancing ICANN Accountability (CCWG on 
Accountability), which represent a broad range of Internet 
stakeholders, including industry, governments, civil society, and the 
technical community, have been working diligently through a number of 
working groups to complete a transition proposal. However, it is 
becoming increasingly likely that some extension of the contract may be 
necessary. Accordingly, NTIA is conferring with the working groups to 
get an update on their progress and the associated timeframes going 
forward to make a final decision on an extension.

    Question 2. You have stated on numerous occasions that September 30 
is not a hard deadline, and that NTIA will renew the IANA contract if 
ICANN fails to produce an acceptable transition proposal in conjunction 
with transparency and accountability reforms at ICANN. As I understand 
it, the transparency and accountability reforms are to be ``stress 
tested'' by ICANN and the stakeholder community.
    Will NTIA evaluate these ``stress tests'' and factor them into its 
decision on the overall transition proposal?
    If so, what criteria will NTIA use to evaluate these ``stress 
tests?''
    How can ``stress tests'' predict changes in context as the Internet 
evolves and geopolitics change?
    What recourse will NTIA, the global community of stakeholders, or 
the American people have if circumstances change in the next 5, 10, or 
20 years?
    Answer. Once we receive a complete consolidated proposal, we will 
ensure that the proposal fully satisfies the March 2014 criteria and 
that the proposal has been adequately ``stress tested'' to ensure the 
continued stability and security of the DNS.
    The CCWG on Accountability has identified 26 potential stress 
tests. The stress tests assess a range of potential contingencies, such 
as a financial crisis; evidence of major corruption or fraud; 
litigation; the unilateral expansion of ICANN's mandate by its Board; 
and the failure of the ICANN Board to comply with ICANN's Bylaws. There 
are also stress tests related to the possibility that ICANN is 
``captured'' by a single stakeholder segment, including governments via 
the Governmental Advisory Committee (GAC). Thus far, we have been 
pleased by the diligent efforts to identify and develop a set of stress 
tests that reflects the broadest range of potential contingencies 
necessary to protect the future management of the IANA functions and 
ensure ICANN accountability.
    The processes used to develop and evaluate the proposal will 
influence the work NTIA needs to undertake as part of its review. For 
example, NTIA will review any documented ``stress tests'' and consider 
whether new processes or structures address the comprehensive set of 
contingencies that have been identified. Such stress-testing will also 
provide confidence that any process, procedure, or structure proposed 
actually works. In addition, NTIA will review and assess the changes 
made or proposed to enhance ICANN's accountability in advance of 
initiating the transition. This will include an assessment of the 
proposed responses to the contingencies identified in the stress tests 
and ensuring that they address NTIA's criteria.
    NTIA continues to believe that the best mechanism for ensuring an 
open, secure, and resilient Internet now and into the future is the 
strength of the multistakeholder model. The real strength lies with the 
broad group of stakeholders, both within the U.S. and globally, who 
today are the ones driving the process and have the ability to course-
correct should circumstances change in the future. NTIA believes that 
the successful completion of the privatization of the DNS will only 
further strengthen the multistakeholder model against challenges it 
will face tomorrow and far into the future.
    NTIA will remain an active participant in ICANN going forward to 
ensure the continued stability and security of the DNS. In particular, 
we will continue our active role as a member of the GAC as well as a 
stakeholder with interests in the IANA functions. NTIA--as well as 
other U.S. Government agencies--also participates in other 
multistakeholder bodies with direct ties to the IANA functions, 
including the Internet Engineering Task Force (the organization 
directly tied to the protocol parameters function) and the Regional 
Internet Registries (the organizations most directly tied to the 
Internet numbering resources function).
                                 ______
                                 
   Response to Written Question Submitted by Hon. Maria Cantwell to 
                      Hon. Lawrence E. Strickling
    Question. In January 2014 the AWS-3 auction was completed. It was 
the most successful auction of radio spectrum so far, drawing nearly 
$45 billion in bids for 65 megahertz of spectrum. The auction was an 
important milestone in the administration's efforts to meet the 
President's goal of making available 500 megahertz of spectrum for 
wireless broadband by 2020.
    Larry Strickling, the Assistant Secretary of NTIA said that the 
auction ``represents a paradigm shift in our approach to making 
spectrum available for commercial wireless providers.''
    He was talking about the growing phenomenon of spectrum sharing and 
the fact that NTIA has been working with Federal agencies to identify 
Federal bands that could be repurposed for commercial use.
    NTIA is to be commended because we know some Federal users are 
harder to convince than others.
    I am very encouraged that NTIA is continuing to work with 
government spectrum users to identify spectrum bands for mobile 
broadband.
    What can we in Congress do to encourage Federal spectrum users or 
Federal agencies to work with NTIA to identify more spectrum for 
commercial use in light of the impending spectrum crunch?
    Answer. I appreciate your recognition of the work that Federal 
agencies and NTIA have performed towards enabling access to additional 
spectrum for commercial purposes through a combination of relocation 
and sharing opportunities.
    Drawing more than $40 billion in bids for 65 megahertz of spectrum, 
the AWS-3 auction was clearly a ringing financial success, but it also 
is an important milestone in the Obama administration's efforts to meet 
the President's goal of making available 500 megahertz of spectrum for 
wireless broadband by 2020. The auction proceeds will help fund the 
Nation's first nationwide public safety broadband network being 
established by the First Responder Network Authority (FirstNet), as 
well as pay for deficit reduction, relocation costs Federal agencies 
will incur to vacate or share bands for commercial use and other 
priorities.
    The success of the auction was made possible in part by an 
unprecedented level of collaboration between NTIA, affected Federal 
agencies, wireless industry representatives, the FCC, and Congress. 
Congress played an important role in the successful AWS-3 auction in 
several respects. It passed the Middle Class Tax Relief and Job 
Creation Act of 2012 that enabled the auction of AWS-3 spectrum and 
updated the way in which Federal users receive payment for relocation 
and sharing costs. Congress also worked closely with NTIA, the FCC, and 
Federal agencies to ensure timely and efficient transition planning in 
preparation for the auction. This leadership helped all parties work 
collaboratively and achieve a successful outcome that expanded 
broadband opportunities and reduced the deficit, while maintaining 
essential Federal agency missions. As a result, the NTIA is building on 
the lessons learned from these AWS-3 efforts to establish a repeatable 
and sustainable collaboration framework between NTIA, FCC, Federal 
agencies, industry, and Congress to maximize the value and use of this 
important resource.
    We welcome efforts to look at additional reforms that would further 
expedite and expand these collaborative efforts and maximize the 
benefits of spectrum access for both government and commercial users. 
One area for consideration is enhancing the flexibility to utilize the 
Spectrum Relocation Fund (SRF) for up-front studies and research and 
development (R&D) activities that are not specifically tied to an 
eligible frequency band. These enhancements would be in addition to the 
existing statutory requirements the SRF fulfills. The FY 2016 
President's Budget included a proposal that could increase flexibility 
in the use of the SRF and highlighted that targeted investments can 
return more than they cost in the form of enhanced auction value or 
sharing arrangements. We welcome continued dialogue on all innovative 
ideas to improve upon the already successful collaboration between 
Federal and commercial entities.
    In the meantime, NTIA continues to work closely with the FCC and 
the Federal agencies towards the Administration's goals of making 
available 500 megahertz of spectrum for wireless broadband by 2020. We 
are collaborating with the FCC on making 100 megahertz of spectrum 
available for small cell mobile broadband use in the 3.5 GHz band on a 
shared basis with military radar systems. Meanwhile we also are 
evaluating the feasibility of increased sharing for unlicensed devices 
in the 5 GHz band while protecting important incumbent systems. NTIA is 
also working with Federal agencies to quantify their use of nearly 1000 
megahertz of spectrum, spanning several key bands. The results of this 
quantification assessment will help to prioritize these bands for more 
detailed study, and to ultimately identify additional Federal spectrum 
that could potentially be repurposed (with a focus on spectrum sharing) 
for commercial broadband services. We are also investigating approaches 
to enhance Federal access to non-federal bands (bi-directional sharing) 
to the benefit of both. As we move forward, we are cognizant of the 
growing spectrum needs of both commercial and governmental entities and 
will work to identify strategies that enhance collaboration and sharing 
among all parties.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                         Fadi Chehade
    Question 1. It seems a plurality of the Internet community wants 
ICANN to stay in the United States, and I am not aware of consensus 
support for moving to a particular country. Under what circumstances 
would ICANN move its headquarters outside the United States? Do you 
need consensus of the community to move to a particular location?
    Answer. The Affirmation of Commitments that ICANN holds with the 
United States Department of Commerce includes a commitment that ICANN 
will remain headquartered in the United States. As I testified during 
the hearing before the Committee, ICANN stands by the Affirmation of 
Commitments and all of the commitments set out within it.
    Similarly, ICANN's Bylaws set forth that its principal office is in 
the County of Los Angeles (Article XVIII). Any change to a provision 
within ICANN's Bylaws can only occur after public comment, so there 
would have to be input from the Internet community on that issue if 
such a change was ever contemplated, as well as a 
2/3 majority of the Board voting in favor. The Enhancing ICANN 
Accountability process that is underway is considering issues such as 
whether there are particular Bylaws provisions that are so fundamental 
that a higher voting threshold of directors must be achieved before 
passage, or that the community may hold a veto power over attempts to 
change. It remains to be seen whether the community will recommend that 
additional protections be placed around this Bylaws provision relating 
to ICANN's headquarters, however, the anticipated enhancements to 
ICANN's accountability that will be achieved through the Accountability 
work will only serve to make ICANN more accountable to the Internet 
community for decisions of this import.

    Question 2. I understand ICANN recently commissioned a legal 
opinion to examine whether California law permits certain 
accountability reforms. I am concerned this legal opinion may be used 
to discourage community recommendations on accountability. Will you 
commit to facilitating the community in getting its own, independent 
legal opinion?
    Answer. Upon request of the Chairs of the Cross-Community Working 
Group on Enhancing ICANN Accountability, ICANN requested one of its 
primary law firms, Jones Day, to answer a series of questions relating 
to proposals to reform ICANN's accountability practices. Responses to 
the Cross-Community Working Group's questions were delivered during 
ICANN's 52nd Public Meeting in Singapore in February 2015. Since the 
Jones Day responses were provided, as was anticipated, the Cross-
Community Working Group has now identified not one, but two law firms 
that ICANN has retained for the provision of open, transparent legal 
advice to inform the accountability process.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                         Fadi Chehade
    Question 1. Many in the United States fear that once the current 
relationship with the U.S. Government ends that ICANN will seek to move 
its headquarters to another jurisdiction under pressure from foreign 
governments--one not subject to 1st Amendment Rights. Such a move would 
be exceptionally destabilizing to Internet governance, and would pose a 
serious threat to free speech. Can you pledge that ICANN will remain 
incorporated in the United States?
    Answer. As noted in my response to Chairman Thune's first question 
for the record, the Affirmation of Commitments that ICANN holds with 
the United States Department of Commerce includes a commitment that 
ICANN will remain headquartered in the United States. As I testified 
during the hearing before the Committee, ICANN stands by the 
Affirmation of Commitments and all of the commitments set out within 
it.

    Question 2. Over the past few months, ICANN has been criticized for 
how it's evaluating community-based applications. Just one example 
involves the accounting industry's interest in applying for the .CPA 
domain. It appears ICANN is denying information on how applications are 
being reviewed, and has rejected most of the reconsideration requests 
submitted by applicants.
    This one example raises questions of whether ICANN is committed to 
transparency and accountability. The ideas exist on paper, but they 
aren't functional or accessible to actual applicants.
    Can you explain how you are working with applicants generally, and 
accountants specifically, to understand the process and how you deal 
with them as you change your internal criteria?
    Answer. While I am not able to discuss the ongoing processing of 
any specific application for a new generic Top-Level Domain, ICANN has 
been evaluating applications in accordance with the Applicant Guidebook 
and the criteria developed through years of public consultation. There 
is extensive public documentation regarding the Community Priority 
Evaluation component that is referenced within the question, at http://
newgtlds.icann.org/en/applicants/cpe.
    While the New gTLD Program--after public consultation--was designed 
to not include the ability to appeal from panel determinations (such as 
the Community Priority Evaluation), what is being seen now is that the 
community may deem such an appeals right to be important in future 
rounds. ICANN has already committed to a group of reviews necessary 
over the first application round of the New gTLD Program, and any 
changes that are put in place for subsequent rounds will be part of 
public consultations. Information about the programmatic reviews, 
including assessing stakeholder experience in launching and operating 
the New gTLD Program and applying lessons learned as the Program moves 
forward, is available at http://newgtlds.icann.org/en/reviews. This is 
how potential changes to criteria for the evaluation of applications 
will be developed.
    The Enhancing ICANN Accountability process may also impact some of 
the concerns noted within your question. The Cross-Community Working 
Group on Enhancing ICANN Accountability has highlighted ICANN's 
Reconsideration Process as an area where improvements may be needed, 
and efforts are currently underway to identify reforms to the 
Reconsideration Process (in addition to other accountability 
mechanisms).

    Question 3. In January, at an inter-sessional ICANN meeting, you 
stated that a contract is an ``enforceable instrument,'' and that ICANN 
must do more to enforce various contractual provisions with registrars 
and registries. I agree that ICANN must do more to prohibit illegality 
online, whether it take the form of illegal drug sales, illegal 
counterfeit activity, or illegal distributions of copyrighted 
materials. What is ICANN doing to ensure registrars and registries take 
action to deter illegal activity over domains they sponsor?
    Answer. First, ICANN performs proactive monitoring activities to 
ensure that its accredited registrars act in compliance with Sections 
3.18.1, 3.18.2 and 3.18.3 of the 2013 Registrar Accreditation 
Agreement, particularly as those sections relate to publishing the 
registrar's abuse contacts and procedures for handling complaints. 
These are key provisions through which suspected illegal activity can 
be raised to registrars. These provisions were incorporated into the 
Registrar Accreditation Agreement based on recommendations from law 
enforcement and as a result of negotiations with registrars. The 
Registrar Accreditation Agreement is available at https://
www.icann.org/resources/pages/approved-with-specs-2013-09-17-en.
    As part of the obligations that a registrar undertakes under 
Section 3.18 of the Registrar Accreditation Agreement, a registrar must 
have a dedicated abuse point of contact to receive complaints from law 
enforcement, consumer protection, quasi-governmental or similar 
authorities and must review complaints from those sources within 24 
hours of receipt. What constitutes an appropriate response to a 
complaint varies based on the facts and circumstances. Registrars are 
required to comply with court orders from courts of competent 
jurisdiction, and further, registrars may choose to take action without 
being compelled to do so by a court order. A number of registrars have 
suspended or disabled websites because of allegations of illegal 
activity, including infringement, child pornography, illegal drug sales 
and other activities. Registrars are not required to respond in a way 
that would be a contravention of applicable law and are not required to 
be the arbiter of what constitutes illegal activity in every 
jurisdiction, which is a function that is typically performed by 
courts.
    When ICANN's Contractual Compliance Department receives a report of 
potential illegal activity, ICANN forwards the report to the registrar 
(after confirming that the complainant itself sent the abuse report to 
the registrar abuse contact). Registrars must take reasonable and 
prompt steps to investigate and respond appropriately to the abuse 
report. Generally this requires that the registrar forward the 
complaint to the registered name holder or explain why the registrar 
believes that forwarding the compliant should not be required.
    Based on the abuse report and to ensure that the registrars are 
abiding by their contractual requirements, ICANN requests that the 
registrar provide: (1) the steps taken to investigate and respond to 
the abuse report; (2) the time taken to respond to the abuse report; 
(3) the correspondence with the complainant and the registered name 
holder; and/or (4) (if applicable) other data or evidence identified 
based on the registrar's response.
    If a registrar fails to fulfill its obligations under Section 3.18, 
ICANN generally attempts to work constructively with the registrar to 
bring it into compliance with its contractual obligations. If a 
registrar continues to fail to fulfill its obligations, ICANN's 
Contractual Compliance Department can and does impose remedies up to 
and including suspension or termination of the registrar's 
accreditation agreement with ICANN. ICANN has no direct relationship 
with registered name holders and no ability--either technical or 
legal--to disable or edit the content of a registered name holder's 
website.

    Question 4. Your new gTLD agreements obligate registries to ensure 
that registrars have a provision in their agreements that prohibits 
domain name operators from engaging in ``piracy, trademark or copyright 
infringement, fraudulent or deceptive practices, counterfeiting or 
otherwise engaging in activity contrary to applicable law,'' and 
providing (consistent with applicable law) that registrars include 
``consequences for such activities including suspension of the domain 
name.'' Has ICANN seen procedures from registries or registrars to 
ensure such illegal activity does not occur, and what consequences do 
they have in place should such activity occur?
    Answer. Yes, some registrars have taken actions to suspend or 
disable a registered name holder's website as a result of allegations 
of unlawful activity, including infringement, child pornography, 
illegal drug sales and other activities. Allegations of illegal 
activity can raise complex questions of law and fact, and in some cases 
a registrar may conclude that it is not competent to determine whether 
illegal activity is occurring. In those cases, a registrar may defer to 
law enforcement or private parties to seek adjudication from a court of 
competent jurisdiction as to whether the conduct in question is 
unlawful.

    Question 5. The community group that's designing enhanced 
accountability measures for ICANN is looking for independent legal 
advice on how to empower the community to override board decisions and 
budget proposals.
    Is it true that ICANN's legal counsel wrote a memo saying the 
community could not override board decisions?
    Would it be appropriate for the community to seek a second opinion?
    Answer. As discussed within my answer to Chairman Thune's Question 
2, ICANN provided--at the request of the Cross-Community Working Group 
on Enhancing ICANN Accountability--responses from Jones Day to a series 
of accountability-related questions. Since that time, the Cross-
Community Working Group has identified two law firms that ICANN has 
retained, and those law firms are providing legal advice to the Working 
Group in furtherance of the accountability work. Across Jones Day's 
advice, as well as the advice that has been provided to date by the two 
firms reporting to the Cross-Community Working Group (Sidley Austin LLP 
and Adler & Colvin), each firm has identified that pursuant to the laws 
under which ICANN is incorporated, it is the Board that bears the 
ultimate responsibility for corporate decisions. However, each of the 
firms, including Jones Day, also provided ideas of how the ICANN 
community could be better empowered to have input into and/or challenge 
decisions of the Board, as well as how the community can better hold 
the Board accountable for decisions with which the community does not 
agree. Counsel have suggested a range of solutions that would be 
acceptable under law, including providing the community with rights to 
remove Board members and identifying ways that the community could hold 
a ``veto'' right over specific decisions, such as the approval of the 
annual budget.
    The Enhancing ICANN Accountability work is ongoing, and ICANN 
remains committed to supporting the efforts of the Cross-Community 
Working Group as it develops recommendations.

    Question 6. Earlier this month, the Senate unanimously passed a 
resolution Senator Hatch and I spearheaded to draw public attention to 
the very reason you're here today--the transition of key Internet 
functions away from U.S. oversight. The resolution set forth a series 
of reforms that should be made before any transfer.
    I want to ask you a series of yes or no questions about those 
reforms--and please limit your answer to yes or no.

    Do you agree that ICANN's authority is and should be limited to the 
coordination of Internet unique identifiers in order to avoid ``mission 
creep?''
    Do you agree that there should be a separation of the functions of 
policy-making, implementation and an independent adjudication or 
arbitration for dispute resolution?
    Do you agree that policy making must remain with the broad 
multistakeholder community?
    Do you agree that ICANN actions must reflect true, if rough, 
consensus?
    Do you agree that the Board of Directors is responsible for policy 
implementation?
    Do you agree that the dispute resolution function must necessarily 
involve the power to order remedial action?
    Do you agree that today there is no truly independent adjudication 
or arbitration authority with this power?
    Do you agree that it is essential ICANN undertake structural 
reforms to ensure that it is protected against undue influence or 
capture by one or more governments, multilateral organizations, or a 
single set of commercial or noncommercial stakeholders?
    Do you agree that in the absence of the Affirmation agreement with 
the U.S. Government that structural changes to reinforce and expand 
ICANN's transparency and accountability are necessary?
    Do you agree that before the transfer occurs all necessary reforms 
are embedded in ICANN's articles of incorporation and bylaws and 
subject to independent adjudication or arbitration for dispute 
resolution?
    Answer. Thank you for your continued support of ICANN's multi-
stakeholder model, and for keeping these issues front-and-center. 
Recognizing how busy Congress is (inherent in your request for extreme 
brevity), I offer these concise answers, constrained only by the need 
to respond with maximum accuracy.

   Do you agree that ICANN's authority is and should be limited 
        to the coordination of Internet unique identifiers in order to 
        avoid ``mission creep?''
    Answer. I support the mission of ICANN as set out in the ICANN 
Bylaws:

    The mission of The Internet Corporation for Assigned Names and 
Numbers (``ICANN'') is to coordinate, at the overall level, the global 
Internet's systems of unique identifiers, and in particular to ensure 
the stable and secure operation of the Internet's unique identifier 
systems. In particular, ICANN:

  1.  Coordinates the allocation and assignment of the three sets of 
        unique identifiers for the Internet, which are

      a.  Domain names (forming a system referred to as ``DNS'');

      b.  Internet protocol (``IP'') addresses and autonomous system 
            (``AS'') numbers; and

      c.  Protocol port and parameter numbers.

  2.  Coordinates the operation and evolution of the DNS root name 
        server system.

  3.  Coordinates policy development reasonably and appropriately 
        related to these technical functions.

    Adherence to this mission is key to ICANN's continued success.

   Do you agree that there should be a separation of the 
        functions of policy-making, implementation and an independent 
        adjudication or arbitration for dispute resolution?
    Answer. Within the IANA Functions Department of ICANN, there 
already exists today a commitment by ICANN that the IANA functions 
staff responsible for performing the implementation of community-
developed policies are not permitted to participated in the policy 
development work. This commitment today is embodied in the IANA 
Functions Contract, is an important part of each the proposals that 
have been developed to date in the IANA Functions Stewardship 
Transition process, and is expected to remain in place.
    There are, of course, many other policies developed across the 
ICANN community that don't impact the performance of the IANA 
functions. Policies related to generic domain names occur within the 
Generic Names Supporting Organization, or GNSO; those relating to 
country-code domain names occur within the Country-Code Names 
Supporting Organization, or ccNSO. These different communities each 
have expectations on how they then are involved in the implementation 
of the policies that they develop and are approved by ICANN (as 
applicable). Often there is a need for coordination with those who 
develop the policy when it comes time for implementation.
    If and when matters are referred to independent adjudication or 
arbitration, independence from policy development, implementation, or 
any of the parties within the adjudication or arbitration is an 
essential factor of assessing those overseeing that adjudication or 
arbitration.

   Do you agree that policy making must remain with the broad 
        multistakeholder community?
    Answer. Yes. Each of the policy bodies I discussed above relies on 
the multistakeholder model, and I support policy development's 
remaining within those multistakeholder groups. These policy bodies and 
how they develop policy are incorporated in the ICANN Bylaws.

   Do you agree that ICANN actions must reflect true, if rough, 
        consensus?
    Answer. The Supporting Organizations that are charged with 
developing policy do so through the submission of consensus-based 
recommendations to the ICANN Board. The ICANN Board then considers 
those recommendations, and has specific processes surrounding its 
approval or rejection of those recommendations, often tied to the level 
of consensus present within the underlying policy development process. 
The ICANN Board is not where policies are developed. As President and 
CEO of ICANN, it is not up to me to define the thresholds or consensus 
requirements of the policy development groups or advisory committees 
that have inputs into ICANN's processes.

   Do you agree that the Board of Directors is responsible for 
        policy implementation?
    Answer. The ICANN Board of Directors is responsible for the 
assessment of and approval of policy recommendations that come to it 
through defined processes. Once approved, the Board retains a general 
responsibility for the oversight of the affairs of the organization, 
and that includes oversight of how I, as President and CEO, work with 
the ICANN staff to implement those approved policies.

   Do you agree that the dispute resolution function must 
        necessarily involve the power to order remedial action?
    Answer. The Cross-Community Working Group on Enhancing ICANN 
Accountability is working on creating refinements to ICANN's 
accountability mechanisms. They are working closely with their retained 
legal advisors to identify the full scope of recommended changes to 
ICANN's accountability measures such as the Reconsideration Process and 
the Independent Review Process, including what the outcomes of those 
processes should be. The ICANN Board has expressed support for the 
Enhancing ICANN Accountability work, and I stand with my colleagues on 
the Board.

   Do you agree that today there is no truly independent 
        adjudication or arbitration authority with this power?
    Answer. There are a variety of dispute mechanisms available 
throughout ICANN today, as well as the accountability mechanisms such 
as the Reconsideration Process and the Independent Review Process. 
Depending on the nature of the issue at hand, remedial powers could be 
exercised, such as arbitration as required in ICANN's registry and 
registrar agreements. Existing accountability mechanisms, such as the 
Reconsideration Process, which can require a ``do over'' of a decision 
or action, could also result in remedial action being achieved. Of 
course, the sufficiency of the Reconsideration and Independent Review 
Processes and the outcomes of those processes are key items under 
consideration within the Enhancing ICANN Accountability work and we are 
awaiting the Cross-Community Working Group's recommendations.

   Do you agree that it is essential ICANN undertake structural 
        reforms to ensure that it is protected against undue influence 
        or capture by one or more governments, multilateral 
        organizations, or a single set of commercial or noncommercial 
        stakeholders?
    Answer. I agree that a key question facing ICANN today, as well as 
a key stress test of any reforms that are being developed through the 
Enhancing ICANN Accountability process, is how well are we protecting 
against undue capture or influence by one or more governments, 
multilateral organizations, or a single set of commercial or 
noncommercial stakeholders, across the organization. This also includes 
that the community itself must meet high standards of accountability in 
any proposed community mechanism, including the development of proper 
checks and balances to mitigate against the possibility of capture. The 
Cross-Community Working Group has identified that ``the community, 
however it is constituted, must itself meet high standards of 
accountability'' within the enhancements that are being developed.
    As stated in NTIA's original announcement, and as reinforced by the 
ICANN community and Congress, protections against capture must be a 
central component of any structural change of the organization.

   Do you agree that in the absence of the Affirmation 
        agreement with the U.S. Government that structural changes to 
        reinforce and expand ICANN's transparency and accountability 
        are necessary?
    Answer. ICANN has no plans to withdraw from the Affirmation of 
Commitments.
    While there is no suggestion that the Affirmation of Commitments 
should or will be terminated, ICANN supports the recommendations of 
Chairman Thune and Senator Rubio to incorporate the provisions of the 
Affirmation of Commitments into the ICANN Bylaws to help provide 
assurances of ICANN's intent to maintain its commitments thereunder. 
This is also a central focus of work within the Enhancing ICANN 
Accountability process. Further, as indicated above, ICANN supports the 
work of the Cross-Community Working Group on Enhancing ICANN 
Accountability and is awaiting its recommendations on how ICANN's 
accountability and transparency can be enhanced and reinforced.

   Do you agree that before the transfer occurs all necessary 
        reforms are embedded in ICANN's articles of incorporation and 
        bylaws and subject to independent adjudication or arbitration 
        for dispute resolution?
    Answer. The final proposals on the stewardship transition and 
enhancing ICANN accountability will delineate the key enhancements that 
must be in place or committed before the transition can take place. 
ICANN is committed to working with the multistakeholder community to 
achieve this goal prior to a transition.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Steve Daines to 
                         Fadi Chehade
    Question. As you mentioned in your testimony, ICANN has contracts 
with registrars that prohibit illegal activity. Specifically, under 
section 3.18 of the 2013 registrar accreditation agreement, section 
registrars must take ``reasonable and prompt steps to investigate and 
respond appropriately to any reports of illegal activity.'' Please 
explain what ICANN is doing to ensure registrars abide by this 
provision, and explain what processes and analysis ICANN performs when 
it receives a complaint that a registrar has not complied with this 
obligation.
    Answer. Please refer to my answer to Senator Blunt's Question 3, 
which also was focused on Section 3.18 of the 2013 Registrar 
Accreditation Agreement and ICANN's enforcement of those requirements.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Amy Klobuchar to 
                         Fadi Chehade
    Question. Mr. Chehade, you mentioned stress testing as a way to 
ensure that accountability processes are structured properly in advance 
of the transition. Can you expand on how these stress tests would be 
conducted and analyzed?
    Answer. Within the Cross-Community Working Group on Enhancing ICANN 
Accountability, a sub-group of members has identified 25 different 
stress tests to date against which the recommended solutions of the 
CCWG will be tested.\1\ These stress tests are grouped into five areas, 
including Insolvency, Failure to Meet Operational Obligations, Legal/
Legislative Action, Failure of Accountability to others within ICANN 
community (including ``capture'' by a specific entity or interest 
group), and Failure of Accountability to External Stakeholders.
---------------------------------------------------------------------------
    \1\ The work of the sub-group addressing the stress tests can be 
followed at https://community.icann.org/display/acctcrosscomm/ST-WP+--
+Stress+Tests+Work+Party.
---------------------------------------------------------------------------
    For each stress test, the sub-group has identified the specific 
scenario as an example against which they propose to test, the 
anticipated consequence (or impact to the community) if the scenario 
were to occur, structures that are currently in place within ICANN to 
help mitigate against either the occurrence of the scenario or the 
severity of the impact, and then a mapping to the proposed 
accountability enhancements that are currently under discussion within 
the full Cross-Community Working Group.
    Many of the stress tests are related to satisfying the criteria 
that NTIA set out for the transition:

   Support and enhance the multistakeholder model;

   Maintain the security, stability, and resiliency of the 
        Internet DNS;

   Meet the needs and expectation of the global customers and 
        partners of the IANA services;

   Maintain the openness of the Internet; and

   Not replace NTIA's role with a government-led or an inter-
        governmental organization solution.

    These criteria, against which the transition proposal will be 
judged, shape the scenarios that are being tested.
    An example of where the stress tests align with these criteria are 
in the series of scenarios focused on the balance of power among the 
ICANN stakeholder participants. Prior to implementation, proposed 
accountability enhancements will be tested against the following 
questions:

   Do they make ICANN more susceptible to ``capture'' (or the 
        assertion of undue influence) by one stakeholder or group of 
        stakeholders?

   Can any individual or group make use the redress and review 
        processes in a way that paralyzes the work of ICANN?

   Does any group of stakeholders have the ability to modify 
        its internal procedures in a way that shifts how it interacts 
        among the rest of the stakeholders within ICANN?
    Thank you for your interest in ICANN. We would be happy to answer 
any additional questions you may have on this or any other ICANN-
related issue.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                       Ambassador David A. Gross
    Question. At the recent plenipotentiary in Busan, how did the U.S. 
Government use the IANA transition to push back on proposals to enhance 
the role of the International Telecommunications Union over Internet 
governance?
    Answer. I appreciate receiving this question ``[a]t the recent 
plenipotentiary in Busan, how did the U.S. Government use the IANA 
transition to push back on proposals to enhance the role of the 
International Telecommunication Union over Internet governance.'' 
Because of the significant number of government to government private 
bilateral meetings during PP-14 that did not include me or any other 
Internet Governance Coalition member, this question can only be 
answered by a representative of the United States Government.
    Thank you very much.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Maria Cantwell to 
                       Ambassador David A. Gross
    Question. In January 2014 the AWS-3 auction was completed. It was 
the most successful auction of radio spectrum so far, drawing nearly 
$45 billion in bids for 65 megahertz of spectrum. The auction was an 
important milestone in the administration's efforts to meet the 
President's goal of making available 500 megahertz of spectrum for 
wireless broadband by 2020.
    Larry Strickling, the Assistant Secretary of NTIA said that the 
auction ``represents a paradigm shift in our approach to making 
spectrum available for commercial wireless providers.''
    He was talking about the growing phenomenon of spectrum sharing and 
the fact that NTIA has been working with Federal agencies to identify 
Federal bands that could be repurposed for commercial use.
    NTIA is to be commended because we know some Federal users are 
harder to convince than others.
    I am very encouraged that NTIA is continuing to work with 
government spectrum users to identify spectrum bands for mobile 
broadband.
    What can we in Congress do to encourage Federal spectrum users or 
Federal agencies to work with NTIA to identify more spectrum for 
commercial use in light of the impending spectrum crunch?
    Answer. I appreciate receiving the question about what Congress can 
``do to encourage Federal spectrum users or Federal agencies to work 
with NTIA to identify more spectrum for commercial use in light of the 
impending spectrum crunch.'' The Internet Governance Coalition, which I 
represent, recognizes the critical importance of spectrum to the 
current and future communications infrastructure of the United States; 
however, the Coalition does not have a specific policy position on this 
matter.
    The Coalition does believe that it is vital that additional 
spectrum be made available to support the continued growth of America's 
digital economy.
    Thank you very much.

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