99–006

107TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 107–449

DOT KIDS IMPLEMENTATION AND EFFICIENCY ACT OF 2002

MAY 8, 2002.—Committed to the Committee of the Whole House on the State of the

Union and ordered to be printed

Mr. TAUZIN, from the Committee on Energy and Commerce,

submitted the following

R E P O R T

[To accompany H.R. 3833]

[Including cost estimate of the Congressional Budget Office]

The Committee on Energy and Commerce, to whom was referred

the bill (H.R. 3833) to facilitate the creation of a new, second-level

Internet domain within the United States country code domain

that will be a haven for material that promotes positive experiences for children and families using the Internet, provides a safe

online environment for children, and helps to prevent children from

being exposed to harmful material on the Internet, and for other

purposes, having considered the same, report favorably thereon

with an amendment and recommend that the bill as amended do

pass.

CONTENTS

Page

Amendment .............................................................................................................. 1

Purpose and Summary ............................................................................................ 5

Background and Need for Legislation .................................................................... 5

Hearings ................................................................................................................... 8

Committee Consideration ........................................................................................ 8

Committee Votes ...................................................................................................... 8

Committee Oversight Findings ............................................................................... 9

Statement of General Performance Goals and Objectives .................................... 9

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 9

Committee Cost Estimate ....................................................................................... 9

Congressional Budget Office Estimate ................................................................... 9

Federal Mandates Statement ................................................................................. 10

Advisory Committee Statement .............................................................................. 10

Constitutional Authority Statement ...................................................................... 10

Applicability to Legislative Branch ........................................................................ 10

Section-by-Section Analysis of the Legislation ...................................................... 10

Changes in Existing Law Made by the Bill, as Reported ..................................... 16

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AMENDMENT

The amendment is as follows:

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Dot Kids Implementation and Efficiency Act of

2002’’.

SEC. 2. FINDINGS AND PURPOSES.

(a) FINDINGS.—The Congress finds that—

(1) the World Wide Web presents a stimulating and entertaining opportunity

for children to learn, grow, and develop educationally and intellectually;

(2) Internet technology also makes available an extensive amount of information that is harmful to children, as studies indicate that a significant portion

of all material available on the Internet is related to pornography;

(3) young children, when trying to use the World Wide Web for positive purposes, are often presented—either mistakenly or intentionally—with material

that is inappropriate for their age, which can be extremely frustrating for children, parents, and educators;

(4) exposure of children to material that is inappropriate for them, including

pornography, can distort the education and development of the Nation’s youth

and represents a serious harm to American families that can lead to a host of

other problems for children, including inappropriate use of chat rooms, physical

molestation, harassment, and legal and financial difficulties;

(5) young boys and girls, older teens, troubled youth, frequent Internet users,

chat room participants, online risk takers, and those who communicate online

with strangers are at greater risk for receiving unwanted sexual solicitation on

the Internet;

(6) studies have shown that 19 percent of youth (ages 10 to 17) who used the

Internet regularly were the targets of unwanted sexual solicitation, but less

than 10 percent of the solicitations were reported to the police;

(7) children who come across illegal content should report it to the congressionally authorized CyberTipline, an online mechanism developed by the National Center for Missing and Exploited Children, for citizens to report sexual

crimes against children;

(8) the CyberTipline has received more than 64,400 reports, including reports

of child pornography, online enticement for sexual acts, child molestation (outside the family), and child prostitution;

(9) although the computer software and hardware industries, and other related industries, have developed innovative ways to help parents and educators

restrict material that is harmful to minors through parental control protections

and self-regulation, to date such efforts have not provided a national solution

to the problem of minors accessing harmful material on the World Wide Web;

(10) the creation of a ‘‘green-light’’ area within the United States country code

Internet domain, that will contain only content that is appropriate for children

under the age of 13, is analogous to the creation of a children’s section within

a library and will promote the positive experiences of children and families in

the United States; and

(11) while custody, care, and nurture of the child reside first with the parent,

the protection of the physical and psychological well-being of minors by shielding them from material that is harmful to them is a compelling governmental

interest.

(b) PURPOSES.—The purposes of this Act are—

(1) to facilitate the creation of a second-level domain within the United States

country code domain for the location of material that is suitable for minors and

not harmful to minors; and

(2) to ensure that the National Telecommunications and Information Administration oversees the creation of such a second-level domain and ensures the effective and efficient establishment and operation of the new domain.

SEC. 3. NTIA AUTHORITY.

Section 103(b)(3) of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 902(b)(3)) is amended—

(1) in subparagraph (A), by striking ‘‘and’’ at the end;

(2) in subparagraph (B), by striking the period at the end and inserting ‘‘;

and’’; and

(3) by adding at the end the following new subparagraph:

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‘‘(C) shall assign to the NTIA responsibility for providing for the establishment, and overseeing operation, of a second-level Internet domain within the United States country code domain in accordance with section 157.’’.

SEC. 4. CHILD-FRIENDLY SECOND-LEVEL INTERNET DOMAIN.

The National Telecommunications and Information Administration Organization

Act (47 U.S.C. 901 et seq.) is amended in part C by adding at the end the following

new section:

‘‘SEC. 157. CHILD-FRIENDLY SECOND-LEVEL INTERNET DOMAIN.

‘‘(a) RESPONSIBILITIES.—The NTIA shall require the registry selected to operate

and maintain the United States country code Internet domain to establish, operate,

and maintain a second-level domain within the United States country code domain

that provides access only to material that is suitable for minors and not harmful

to minors (in this section referred to as the ‘new domain’).

‘‘(b) CONDITIONS OF CONTRACT RENEWAL.—The NTIA may not renew any contract

to operate and maintain the domain with the initial registry, or enter into or renew

any such contract with any successor registry, unless such registry enters into an

agreement with the NTIA, during the 90-day period beginning upon the date of the

enactment of the Dot Kids Implementation and Efficiency Act of 2002 in the case

of the initial registry or during the 90-day period after selection in the case of any

successor registry, as applicable, which provides for the registry to carry out, and

the new domain operates pursuant to, the following requirements:

‘‘(1) Written content standards for the new domain, except that the NTIA

shall not have any authority to establish such standards.

‘‘(2) Written agreements with each registrar for the new domain that ensure

use of the new domain is in accordance with the standards and requirements

of the registry.

‘‘(3) Written agreements with registrars, which shall require registrars to

enter into written agreements with registrants, to use the new domain in accordance with the standards and requirements of the registry.

‘‘(4) Rules and procedures for enforcement and oversight that minimize the

possibility that the new domain provides access to content that is not in accordance with the standards and requirements of the registry.

‘‘(5) A process for removing from the new domain any content that is not in

accordance with the standards and requirements of the registry.

‘‘(6) A process to provide registrants to the new domain with an opportunity

for a prompt, expeditious, and impartial dispute resolution process regarding

any material of the registrant excluded from the new domain.

‘‘(7) Continuous and uninterrupted service for the new domain during any

transition to a new registry selected to operate and maintain the United States

country code domain.

‘‘(8) Procedures and mechanisms to promote the accuracy of contact information submitted by registrants and retained by registrars in the new domain.

‘‘(9) Operationality of the new domain not later than one year after the date

of the enactment of the Dot Kids Implementation and Efficiency Act of 2002.

‘‘(10) Written agreements with registrars, which shall require registrars to

enter into written agreements with registrants, to prohibit two-way and

multiuser interactive services in the new domain, unless the registrant certifies

to the registrar that such service will be offered in compliance with the content

standards established pursuant to paragraph (1) and does not compromise the

safety or security of minors.

‘‘(11) Written agreements with registrars, which shall require registrars to

enter into written agreements with registrants, to prohibit hyperlinks in the

new domain that take new domain users outside of the new domain.

‘‘(12) Any other action that the NTIA considers necessary to establish, operate, or maintain the new domain in accordance with the purposes of this section.

‘‘(c) TREATMENT OF REGISTRY AND OTHER ENTITIES.—

‘‘(1) IN GENERAL.—Only to the extent that such entities carry out functions

under this section, the following entities are deemed to be interactive computer

services for purposes of section 230(c) of the Communications Act of 1934 (47

U.S.C. 230(c)):

‘‘(A) The registry that operates and maintains the new domain.

‘‘(B) Any entity that contracts with such registry to carry out functions

to ensure that content accessed through the new domain complies with the

limitations applicable to the new domain.

‘‘(C) Any registrar for the registry of the new domain that is operating

in compliance with its agreement with the registry.

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‘‘(2) SAVINGS PROVISION.—Nothing in paragraph (1) shall be construed to affect the applicability of any other provision of title II of the Communications

Act of 1934 to the entities covered by subparagraph (A), (B), or (C) of paragraph

(1).

‘‘(d) EDUCATION.—The NTIA shall carry out a program to publicize the availability

of the new domain and to educate the parents of minors regarding the process for

utilizing the new domain in combination and coordination with hardware and software technologies that provide for filtering or blocking. The program under this subsection shall be commenced not later than 30 days after the date that the new domain first becomes operational and accessible by the public.

‘‘(e) COORDINATION WITH FEDERAL GOVERNMENT.—The registry selected to operate

and maintain the new domain shall—

‘‘(1) consult with appropriate agencies of the Federal Government regarding

procedures and actions to prevent minors and families who use the new domain

from being targeted by adults and other children for predatory behavior, exploitation, or illegal actions; and

‘‘(2) establish such procedures and take such actions as may be necessary to

prevent such targeting.

The consultations, procedures, and actions required under this subsection shall be

commenced not later than 30 days after the date that the new domain first becomes

operational and accessible by the public.

‘‘(f) COMPLIANCE REPORT.—The registry shall prepare, on an annual basis, a report on the registry’s monitoring and enforcement procedures. The registry shall

submit each such report, setting forth the results of the review of its monitoring and

enforcement procedures, to the Committee on Energy and Commerce of the House

of Representatives and the Committee on Commerce, Science, and Transportation

of the Senate.

‘‘(g) SELECTION OF REGISTRY.—

‘‘(1) WITHDRAWAL OF REGISTRY.—

‘‘(A) IN GENERAL.—Upon a good faith showing by the registry of the new

domain to the NTIA of extreme financial hardship in the operation of the

new domain, the registry may elect to relinquish the right to operate and

maintain the new domain. If the registry elects to relinquish such right, the

NTIA shall select a subcontractor to operate and maintain the new domain

under the competitive bidding process established pursuant to paragraph

(2). The subcontractor shall have all of the rights and duties specified under

this Act, except that such duties shall not include the technical maintenance of the new domain.

‘‘(B) EXTREME FINANCIAL HARDSHIP.—For purposes of this paragraph, the

term ‘extreme financial hardship’ means that the costs of operating and

maintaining the new domain exceed the revenues generated from registrants by more than 25 percent for a period of more than 6 consecutive

quarters, following the first year of operation.

‘‘(2) COMPETITIVE BID SELECTION PROCESS.—The NTIA shall establish a process for soliciting applications and choosing a subcontractor to operate and maintain the new domain pursuant to paragraph (1), which process shall comply

with the following requirements:

‘‘(A) TIMING.—The selection process shall commence and complete not

later than 120 days after the registry elects to relinquish the new domain

for extreme financial hardship.

‘‘(B) NOTICE.—The selection process shall provide adequate notice to prospective applicants of—

‘‘(i) the opportunity to submit such an application; and

‘‘(ii) the criteria for selection under subparagraph (C).

‘‘(C) CRITERIA.—The selection shall be made pursuant to written, objective criteria designed to ensure—

‘‘(i) that the new domain is operated and maintained in accordance

with the requirements under subsection (b); and

‘‘(ii) that the subcontractor selected to operate and maintain the new

domain is the applicant most capable and qualified to do so.

‘‘(D) REVIEW.—Not more than 60 days after the conclusion of the period

established for submission of applications, the NTIA shall—

‘‘(i) review and apply the selection criteria established under subparagraph (C) to each application submitted; and

‘‘(ii) based upon such criteria and subject to submission of an application meeting such criteria, select an application and award to the applicant a subcontract for the operation and maintenance of the new domain.

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‘‘(E) FAILURE TO FIND SUBCONTRACTOR.—If the NTIA fails to find a suitable subcontractor pursuant to the process under this paragraph, the NTIA

shall permit the registry to cease operation of the new domain.

‘‘(h) SUSPENSION OF NEW DOMAIN.—If the NTIA finds, pursuant to its own review

or upon a good faith petition by the registry, that the new domain is not serving

its intended purpose, the NTIA shall instruct the registry to suspend operation of

the new domain until such time as the NTIA determines that the new domain can

be operated as intended.

‘‘(i) DEFINITIONS.—For purposes of this section, the following definitions shall

apply:

‘‘(1) HARMFUL TO MINORS.—The term ‘harmful to minors’ means, with respect

to material, that—

‘‘(A) the average person, applying contemporary community standards,

would find, taking the material as a whole and with respect to minors, that

it is designed to appeal to, or is designed to pander to, the prurient interest;

‘‘(B) the material depicts, describes, or represents, in a manner patently

offensive with respect to minors, an actual or simulated sexual act or sexual

contact, an actual or simulated normal or perverted sexual act, or a lewd

exhibition of the genitals or post-pubescent female breast; and

‘‘(C) taken as a whole, the material lacks serious, literary, artistic, political, or scientific value for minors.

‘‘(2) MINOR.—the term ‘minor’ means any person under 13 years of age.

‘‘(3) SUITABLE FOR MINORS.—The term ‘suitable for minors’ means, with respect to material, that it—

‘‘(A) is not psychologically or intellectually inappropriate for minors; and

‘‘(B) serves—

‘‘(i) the educational, informational, intellectual, or cognitive needs of

minors; or

‘‘(ii) the social, emotional, or entertainment needs of minors.’’.

PURPOSE AND SUMMARY

The purpose of H.R. 3833 is to facilitate the creation of a new,

second-level Internet domain within the United States country code

domain that will be a haven for material that promotes positive experiences for children and families using the Internet, provides a

safe online environment for children, and helps to prevent children

from being exposed to harmful material on the Internet, and for

other purposes.

BACKGROUND AND NEED FOR LEGISLATION

For all of the benefits the Internet and the World Wide Web have

brought to business, communication, and information sharing, one

of the biggest complaints the Internet faces is the easy accessibility

of ‘‘adult’’ content by children. Increasingly, children find themselves in front of a computer screen bombarded with images and

other content that are totally inappropriate for their years, and

parents feel increasingly powerless to prevent it.

By just navigating the World Wide Web, children can intentionally, or unintentionally, access sexually explicit, excessively violent, and other inappropriate material. There are innumerous pornographic sites on the Internet using ‘‘copycat URLs’’ to take advantage of innocent typographical mistakes of young Internet

users.

Similarly, many children and adults are surprised when a domain name registration has expired or if a website owner forgets

to renew. Often these domain names are quickly snapped up by

speculators who make a living trafficking in expired domain

names. These names, owned by church groups, nonprofit organizations, and municipalities, are then sold by speculators to pornographers who use the innocent sounding names for explicit material.

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However, the harm to which children can be exposed on the

Internet goes far beyond just stumbling upon inappropriate images.

A June 2000 study done by the National Center for Missing and

Exploited Children, the Crimes Against Children Research Center,

and the Department of Justice’s Office of Juvenile Justice and Delinquency Prevention, shows the harm posed to minors online also

can involve predation and sexual solicitation. Based on interviews

with a nationally representative sample of 1,501 youth ages 10 to

17 who use the Internet on a regular basis, approximately one in

five received a sexual solicitation or approach over the Internet in

the last year, one in 33 received an aggressive sexual solicitation

(i.e., a solicitor who asked to meet them somewhere, called them

on the telephone, sent them regular mail, money or gifts), one in

four had an unwanted exposure to pictures of naked people or people having sex in the last year, and one in 17 was threatened or

harassed. In homes with Internet access, only one third of parents

said they had filtering or blocking software on their computers.

The technology industry and the federal government have tried

to respond to the concerns of parents, educators and children. Software companies continue to offer new and improved Internet filters

to help sift through harmful content. However, as noted above, parental acceptance of such filtering and blocking technologies is not

widespread, and Internet filters are not completely effective.

Congress has also undertaken a number of efforts to protect children from harmful material on the Internet. As part of the Telecommunications Act of 1996, Congress passed the Communications

Decency Act (CDA) that prohibited Internet users from using the

Internet to communicate material that, under contemporary community standards, would be deemed patently offensive to minors

under 18. The U.S. Supreme Court found the CDA to be unconstitutional and in violation to the First Amendment of the U.S. Constitution.

In 1998, Congress passed the Child Online Protection Act

(COPA). COPA requires web publishers that distribute material

deemed ‘‘harmful to minors’’ to ensure that minors do not access

such material. COPA has been subject to litigation since enactment

and, in November 2001, the case was heard by the U.S. Supreme

Court and a decision should be forthcoming. During the 106th Congress, Congress enacted the Children’s Internet Protection Act

(CIPA), which requires entities that receive federal funding under

the section 254(h) of the Communications Act of 1934 (known as

the ‘‘E-rate program’’) and two other federal programs to annually

certify that they are employing an Internet safety policy and employing a technology protection measure (defined to include filtering and blocking technologies). Parts of CIPA are currently

being challenged in the court system. The Committee’s efforts to

pass H.R. 3833 should not be interpreted to undermine the efforts

undertaken by previous Congresses or as a response to previous efforts.

On November 1, 2001, the Subcommittee on Telecommunications

and the Internet held a hearing on H.R. 2417, the Dot Kids Domain Act of 2001. H.R. 2417 would have established a ‘‘.kids’’ generic top-level domain (similar to a .com or .org) through the Internet Corporation for Assigned Names and Numbers (ICANN), the

organization that coordinates the domain name system internationVerDate 11-MAY-2000 01:23 May 10, 2002 Jkt 079486 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR449.XXX pfrm12 PsN: HR449
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ally. Because ICANN had continually been unwilling to adopt a

‘‘.kids’’ generic top-level domain, the private sector took matters

into its own hands. Although outside the authoritative Internet

root, businesses such as KIDS Domain, operated through New.net,

entered the market to provide child-friendly content to children.

These pioneers were some of the first to recognize the importance

and value of giving children a way to find content on the Internet

that is specifically geared toward children and their interests.

These sites with ‘‘.kids’’ names currently reach over 100 million

Internet users. The Committee encourages these type of private

sector initiatives and hopes that such companies will continue to

create more Internet sites and content for children.

During the hearing, some witnesses expressed concerns about

creating a new ‘‘.kids’’ generic top level-domain through ICANN. To

assuage those concerns, H.R. 3833 was introduced. Instead of creating a generic top-level domain through ICANN, H.R. 3833 utilizes the ‘‘.us’’ country-code to create ‘‘.kids.us’’. Every nation has a two-letter country code top-level domain

(ccTLD) for use by that country. The ccTLD for the United States

is ‘‘.us’’. However, the ‘‘.us’’ ccTLD was originally organized with a

locality-based structure, used primarily by states, localities and

municipalities (i.e., ‘‘washington.dc.us’’). Because of this cumbersome and hierarchical structure, the usTLD has not been widely

used.

On October 29, 2001, the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA)

announced that it had entered into a contract with NeuStar, Inc.

(NeuStar) to act as the registry, or operator, of the ‘‘.us’’ ccTLD.

The term of the contract runs four years with two optional one-year

extensions that are to be exercised at the sole discretion of the

NTIA. NeuStar received this contract at no cost, and is allowed to

finance the operation of the domain by establishing and collecting

fees for registration in the ‘‘.us’’ space. The contract obligated

NeuStar to enhance and improve the ‘‘.us’’ space and reserved the

exclusive right to—but did not obligate—NeuStar to use the second-level domain ‘‘.kids’’ within the ‘‘.us’’ space (i.e., ‘‘.kids.us’’).

Moreover, the contract offered no detail as to how NeuStar would

establish, operate, or maintain ‘‘.kids.us’’, if it chose to do so.

Notwithstanding the fact that the NTIA contract does not obligate NeuStar to launch a ‘‘.kids.us’’, recognizing the interest the

Committee has in creating a safe space on the Internet for children, both NTIA and NeuStar committed to Members of the Committee to expeditiously launch ‘‘.kids.us’’. H.R. 3833 is the enabling

legislation to effectuate that commitment.

Under the bill, the domain will be filled only with material that

is appropriate for children under 13 years of age. Specifically, the

content on ‘‘.kids.us’’ must be ‘‘suitable for minors’’ and ‘‘not harmful to minors.’’ These two standards represent the range of childfriendly content that will be allowed in the new domain. On one

side of the content spectrum, the domain should house material

that is ‘‘suitable for minors,’’ meaning wholesome, educational, informational and entertaining material. On the other side of the

content spectrum, the domain should not lodge material that is

‘‘harmful to minors,’’ as that phrase is defined in the bill and interpreted by the courts.

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Although the new domain is a content-based restriction, the

Committee believes, based on current Supreme Court precedent,

that H.R. 3833 is Constitutionally sound. This bill is narrowly tailored to meet a compelling government interest and is the least restrictive of protected speech. Supreme Court precedent is clear in

establishing the government’s compelling interest in protecting

children from exposure to sexually explicit material (See Ginsberg

v. New York, 390 U.S. 629 (1968); FCC v. Pacifica Foundation, 438

U.S. 726 (1978); and Sable Communications of Cal. v. FCC, 492

U.S. 115 (1989)). For instance, laws that require pornography to be

sold behind the counter or in shrink wrap at a newsstand, or laws

and regulations that limit the broadcast of certain content between

certain hours of the night, are in place in order to protect children

from material that is not appropriate for their age.

Importantly, H.R. 3833 recognizes and protects the First Amendment rights of adults and is carefully drafted not to impose any unnecessary burden on those rights. Indeed, the bill is no different

than creating a children’s section of a public library. The use of this

child-friendly domain is completely voluntary—parents may chose

to use it, and website operators may opt to be located within it.

Should adults want to express certain views that are not ‘‘suitable

for minors’’ or are deemed ‘‘harmful to minors,’’ the bill does nothing to prevent an adult from utilizing the vast remainder of the

‘‘.us’’ domain or the entirety of the World Wide Web to express and

share those views.

HEARINGS

The Subcommittee on Telecommunications and the Internet held

a legislative hearing on November 1, 2001 on H.R. 2417, the ‘‘Dot

Kids Domain Name Act of 2001’’ and an amendment in the nature

of a substitute which would have created a ‘‘.kids’’ space within the

‘‘.us’’ ccTLD. The Committee received testimony from: Nancy Victory, Administrator, National Telecommunications and Information

Administration; David Hernand, Chief Executive Officer, New.net;

Page Howe, President and Chief Executive Officer, KIDS Domain,

Inc.; Bruce A. Taylor, President and Chief Counsel, The National

Law Center for Children and Families; and Donna Rice Hughes,

Children’s Internet Advocate.

COMMITTEE CONSIDERATION

On Thursday, March 7, 2002, the Subcommittee on Telecommunications and the Internet met in open markup session and

approved H.R. 3833 for Full Committee consideration, without

amendment, by a voice vote. On Wednesday, April 10, 2002, the

Committee on Energy and Commerce met in open markup session

and favorably ordered reported H.R. 3833, as amended, by voice

vote.

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion

to report legislation and amendments thereto. There were no

record votes taken in connection with ordering H.R. 3833 reported.

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A motion by Mr. Tauzin to order H.R. 3833 reported to the House,

with an amendment, was agreed to by a voice vote.

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House

of Representatives, the Committee has not held oversight or legislative hearings on this legislation.

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The goal of H.R. 3833 is to create a safe space for children on

the Internet within the United States country code.

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the

House of Representatives, the Committee finds that H.R. 3833, the

Dot Kids Implementation and Efficiency Act, would result in no

new or increased budget authority, entitlement authority, or tax

expenditures or revenues.

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by

the Director of the Congressional Budget Office pursuant to section

402 of the Congressional Budget Act of 1974.

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House

of Representatives, the following is the cost estimate provided by

the Congressional Budget Office pursuant to section 402 of the

Congressional Budget Act of 1974:

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, April 23, 2002.

Hon. W.J. ‘‘BILLY’’ TAUZIN,

Chairman, Committee on Energy and Commerce,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3833, the Dot Kids Implementation and Efficiency Act of 2002.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contracts are Ken Johnson (for federal costs), and Jean Talarcio (for the private-sector impact).

Sincerely,

BARRY B. ANDERSON

(For Dan L. Crippen, Director).

Enclosure.

H.R. 3833—Dot Kids Implementation and Efficiency Act of 2002

H.R. 3833 would require that the contractor that administers the

U.S. Internet domain establish a second-level domain that would

contain only material suitable for minors. The bill also would require the National Telecommunications and Information AdminisVerDate 11-MAY-2000 06:14 May 10, 2002 Jkt 099006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\HR449.XXX pfrm12 PsN: HR449
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tration (NTIA) within the Department of Commerce to publicize

the new domain and educate parents on its use.

Based on information from the Department of Commerce, CBO

estimates that launching a publicity and education campaign for

the new domain would cost less than $500,000 per year, subject to

the availability of appropriated funds. H.R. 3833 would not affect

direct spending or receipts; therefore, pay-as-you-go procedures

would not apply.

H.R. 3833 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would

impose no costs on state, local, or tribal governments. H.R. 3833

would outline conditions of a new agreement between the NTIA

and the registry currently under contract with the NTIA to manage

the U.S. country code Internet domain. The new agreement would

require the registry to establish, operate, and maintain a second

level domain that provides access only to material that is suitable

for and not harmful to children under 13 years of age. Any costs

resulting from the agreement would be incurred voluntarily by the

registry as a party to that agreement.

The CBO staff contacts for this estimate are Ken Johnson (for

federal costs), and Jean Talarico (for the private-sector impact).

This estimate was approved by Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office

pursuant to section 423 of the Unfunded Mandates Reform Act.

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the

Federal Advisory Committee Act were created by this legislation.

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House

of Representatives, the Committee finds that the Constitutional authority for this legislation is provided in Article I, section 8, clause

3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes.

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the

terms and conditions of employment or access to public services or

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act.

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

Section 1 establishes the short title of the bill as the ‘‘Dot Kids

Implementation and Efficiency Act of 2002.’’

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Section 2. Findings and purposes

Section 2 makes certain Congressional findings and describes the

purposes of the bill.

Section 3. NTIA authority

Section 3 amends the National Telecommunications and Information Administration Organization Act (47 U.S.C. § 901 et seq.)

(NTIA Act) to specifically provide NTIA with responsibility to establish and oversee the ‘‘.kids.us’’ domain consistent with the requirements of the new section 157 of the NTIA Act, as added by

this bill.

Section 4. Child-friendly second-level internet domain

Section 4 of the bill adds a new section 157 to the NTIA Organization Act. New section 157(a) mandates NTIA to require the registry, or operator, selected to operate and maintain the United

States country code (‘‘.us’’) to establish, operate, and maintain a

second-level domain (‘‘.kids.us’’ or ‘‘new domain’’) that provides access only to material that is ‘‘suitable for minors’’ and ‘‘not harmful

to minors.’’ New section 157(b) provides that the NTIA shall not renew the ‘‘.us’’ registry contract with the initial registry unless the initial

registry enters into an agreement with the NTIA, within 90 days

of enactment of the bill, to provide the ‘‘.kids.us’’ domain consistent

with the duties in new section 157(b)(1)–(12). Additionally, new

section 157(b) makes the same requirement of any successor registry within 90 days of selection by NTIA. Under the terms of the

current contract between NeuStar and the NTIA, after the fouryear term of the contract, the NTIA has the sole discretion to exercise two one-year options. These duties outlined in new section

157(b)(1)–(12) are not requirements the registry must perform pursuant to the terms of the contract. However, should NeuStar, or

any successor registry, opt not to enter into an agreement with the

NTIA to undertake the duties outlined in new section 157(b)(1)– (12), then the NTIA shall exercise its existing contractual right not

to renew the registry of the ‘‘.us’’ contract for the two one-year options.

Pursuant to new section 157(b)(1), the registry must draft written content standards for the new domain (NTIA has no authority

to establish such standards). These content standards must be consistent with the ‘‘suitable for minors’’ and ‘‘not harmful to minors’’ standards in the bill. Under new section 157(b)(2), the registry

must enter into written agreements with registrars to ensure that

use of the new domain is in accordance with the standards of the

registry and require registrars to enter into written agreements

with registrants to use the domain in accordance with the standards of the registry. New section 157(b)(3) requires agreements

with registrars that require them to contractually obligate registrants to use the new domain in accordance with the standards

of the registry. New section 157(b)(4) requires the registry to create

rules for oversight and enforcement that minimize the chance the

new domain will allow access to material that is not in accordance

with the standards of the registry. The Committee understands

that no system can guarantee 100% effectiveness in finding and

keeping inappropriate images from the eyes of children. Even the

12

technology industry has found it difficult to keep pace with Internet hackers. However, this bill is drafted to encourage the maximum effectiveness that the Committee acknowledges is significantly better than the current Internet environment.

Under new section 157(b)(5), the registry must create a process

for removing content not in accordance with the standards of the

registry. New section 157(b)(6) provides that the registry must create a process allowing prompt, expeditious and impartial dispute

resolution for material excluded from the new domain. While this

process need not provide a formal and protracted hearing, it should

accord registrants with the basic protections of due process. Under

new section 157(b)(7), the registry must provide for continuous and

uninterrupted service of the new domain during any transition to

a new registry.

New section 157(b)(8) requires the registry to promote the accuracy of the registrant contact data maintained by the registrars so

it may locate registrants who act contrary to the standards of the

registry or in violation of the law. The Committee recognizes the

so-called ‘‘who-is’’ database contact information may assist individuals and companies to locate website owners. With respect to a

subdomain specifically dedicated to children, however, where children themselves may have individual websites, the public listing of

home address, phone, and contact information may be information

that many parents elect or desire not to publicly post in order to

protect the safety of their children. That is why an increased emphasis on non-public contact data held by registrars is of particular

importance and usefulness. New section 157(b)(9) mandates that

the registry must be operational within one year of enactment.

‘‘Operational’’ is intended to mean that the new domain is available

to, and accessible by, the public.

Pursuant to new section 157(b)(10), the registry must enter into

written agreements with registrars that require registrars to contract with registrants to prohibit two-way and multiuser interactive services, unless the registrant can certify that such services

can be offered in compliance with the content standards created by

the registry and will not compromise the safety or security of the

minors. The Committee is aware of some organizations, such as the

I–SAFE Foundation, that are working on models to make such

interactive services safe for children. This language is intended to

cover communications with an upstream and downstream transmission, such as chat, instant messaging and e-mail. Since most

child predators utilize these kind of communication mediums to

lure or harass children, special care should be taken in the new domain to protect minors from the dangers inherent in such interactive communications. This language is not meant to prohibit such

things as interactive games, assuming there is no transfer of personally identifiable information or the users do not have the ability

to pursue or stalk children. Although physical harm can occur

when a predator uses the Internet to meet a child, emotional and

psychological harm can also result from harassing and inappropriate communications. The language in new section 157(b)(10) is

intended to cover both such communications. Moreover, any communications on the new domain, whether it be static content, advertising, or interactive communications, must also be consistent

13

with the Child Online Privacy Protection Act (15 U.S.C. § 6501 et

seq.) and other applicable law.

Under new section 157(b)(11) the registry must enter into agreements with registrars that require registrars to contract with registrants to prohibit hyperlinks that take users of ‘‘.kids.us’’ outside

of ‘‘.kids.us’’ domain. The new domain is meant to be a safe space

for children and such safety cannot be assured if only a few clicks

of the mouse can transport minors to material that may not be

‘‘suitable for minors’’ or may be ‘‘harmful to minors.’’ Finally, new

section 157(b)(12) allows the NTIA to take any other action that

may be necessary to establish, operate or maintain the new domain

consistent with the bill.

In order to provide incentives for rigorous and thorough content

control, new section 157(c) provides limited liability protection for

the actions taken by certain entities on the ‘‘.kids.us’’ domain. This

provision utilizes existing section 230(c) of the Communications Act

of 1934 (47 U.S.C. § 230(c)), otherwise known as the ‘‘Good Samaritan’’ protections. New section 157(c) expands the definition of ‘‘interactive computer services’’ in section 230(c) to include those

functions undertaken by the ‘‘.kids.us’’ registry, registrars, and any

company contracted with the registry, such as independent monitoring companies, only to the extent that such entities carry out

the functions under this bill. These entities will have the current

protections afforded to Internet Service Providers (ISPs) for any actions voluntarily taken in good faith to restrict access to or availability of material that the provider considers to be obscene, lewd,

lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.

Additionally under section 230(c), neither the ‘‘.kids.us’’ registry,

registrars, nor parties contracted to operate the new domain, shall

be treated as the publisher or speaker of any information provided

by another information content provider.

As noted in new section 157(c)(2), nothing in this section shall be

construed to affect the application of any other provision of title II

of the Communications Act of 1934 (47 U.S.C. § 201 et seq.) to the

parties protected in this bill. The section 230(c) protections will

continue to apply to entities that clearly fall within the definition

of ‘‘interactive computer service’’ in section 230(f)(2), such as the

entity hosting the third party’s web site. New section 157(c) is only

intended to clarify that the new domain registry, registrars, and

entities under contract to the registry would also fall within the

scope of section 230(c) protections.

New section 157(c) is intended to shield the ‘‘.kids.us’’ registry,

registrars, and parties who contract with the registry, from liability

based on self-policing efforts to intercept and take down material

that is not ‘‘suitable for minors’’ or is ‘‘harmful to minors.’’ The

Committee notes that ISPs have successfully defended many lawsuits using section 230(c). The courts have correctly interpreted

section 230(c), which was aimed at protecting against liability for

such claims as negligence (See, e.g., Doe v. America Online, 783

So.2d 1010 (Fla. 2001)) and defamation (Ben Ezra, Weinstein, and

Co. v. America Online, 206 F.3d 980 (2000); Zeran v. America Online, 129 F.3d 327 (1997)). The Committee intends these interpretations of section 230(c) to be equally applicable to those entities covered by H.R. 3833.

14

New section 157(d) requires the NTIA to carry out a program to

publicize the availability of the ‘‘.kids.us’’ domain and to educate

parents about filtering and blocking technologies that can be used

in conjunction with the new domain to provide a safe environment

for children on the Internet. The Committee expects that the NTIA

will fulfill this obligation by advertising the new domain on its

website, incorporating the availability of the website into speeches,

and drafting and distributing pamphlets to schools, libraries, and

parents.

New section 157(e) requires the new domain registry to, within

30 days of the new domain becoming publicly accessible, consult

with appropriate federal government agencies regarding steps that

can be taken to prevent minors from being targeted for predatory

behavior, exploitation, or other illegal actions. The Committee expects the new domain registry will also communicate with children’s organizations, including the National Center for Missing and

Exploited Children, among others, to make the new domain as safe

as possible for minors. Under new section 157(e), the new domain

registry must take such actions as may be necessary to prevent the

targeting of minors for illegal purposes.

New section 157(f) requires the new domain registry to prepare

an annual compliance report, detailing the registry’s monitoring

and enforcement procedures, to be submitted to the Committee on

Energy and Commerce of the U.S. House of Representatives and

the Committee on Commerce, Science, and Transportation of the

U.S. Senate.

New section 157(g)(1)(A) deals with consumer acceptance of the

new domain. The Committee expects that the ‘‘.us’’ country code

will be remarkably profitable, and also expects the ‘‘.kids.us’’ domain to be successful. The Committee recognizes, however, that the

‘‘.kids.us’’ domain could pose a potential financial drain on the registry should consumer acceptance be slow. If the new domain registry can make a good faith showing to the NTIA that it suffers

‘‘extreme financial hardship’’ in the operation of the new domain,

the registry may relinquish the right to operate and maintain the

new domain. Should the ‘‘.kids.us’’ registry elect to relinquish the

new domain, the NTIA shall select a subcontractor to operate and

maintain the new domain under a competitive bidding process. For

purposes of this bill, a subcontractor of the ‘‘.kids.us’’ domain will

have all of the rights and duties of the registry under the bill, but

shall not include the technical maintenance of the new domain.

‘‘Extreme financial hardship’’ is defined in new section 157(g)(1)(B)

as the costs of operating and maintaining the new domain exceeding the revenues generated by registrants by more than 25 percent

for a period of more than six (6) consecutive quarters, following the

first year of operation.

New section 157(g)(2) sets forth the competitive bid process for

the NTIA’s selection of a subcontractor for the new domain. The selection process shall begin and end not later than 120 days after

the new domain registry elects to relinquish the ‘‘.kids.us’’ domain

for ‘‘extreme financial hardship.’’ The NTIA must provide adequate

notice to prospective applicants of the opportunity to submit an application and the criteria used to select the subcontractor. The selection criteria must be written and objective and must ensure that

the new domain is operated and maintained under the requireVerDate 11-MAY-2000 01:23 May 10, 2002 Jkt 079486 PO 00000 Frm 00014 Fmt 6659 Sfmt 6602 E:\HR\OC\HR449.XXX pfrm12 PsN: HR449
15

ments of new section 157(b) and that the subcontractor selected is

the most capable and qualified to operate and maintain the new

domain. Not more than 60 days after the conclusion of the period

for submission of applications, the NTIA must review and apply

the selection criteria to each application and, based on that criteria,

select an application and award to the applicant a subcontract to

operate and maintain the new domain. If the NTIA fails to find a

subcontractor pursuant to this process, the NTIA shall permit the

registry to cease operation of the ‘‘.kids.us’’ domain.

New section 157(h) allows the NTIA, upon its own review or a

good faith petition by the registry, to suspend operation of the

‘‘.kids.us’’ domain if the new domain cannot be operated as it was

intended. The Committee intends the new domain to be a safe

space on the Internet for children. However, there is no guarantee

that ‘‘.kids.us’’ will prevent all inappropriate and harmful content.

Although some seepage of inappropriate content into the new domain may be inevitable, H.R. 3833 is designed to ensure that such

harmful content is removed as soon as practicable. This provision

is not applicable for such occasional occurrences. New section

157(h) is designed to suspend the operation of the new domain

should it become so populated with harmful and inappropriate content that it no longer is a place suitable for children under the age

of 13. The Committee expects this to be used sparingly, as an effort

of last resort.

New section 157(i) contains the definitions for the bill. New section 157(i)(1) defines ‘‘harmful to minors’’ as material that (A) the

average person, applying contemporary community standards,

would find, taking the material as a whole and with respect to minors, that it is designed to appeal to, or is designed to pander to,

the prurient interest; (B) the material depicts, describes, or represents, in a manner patently offensive with respect to minors, an

actual or simulated normal or perverted sexual act, or a lewd exhibition of the genitals or post-pubescent female breast; and (c) taken

as a whole, the material lacks serious, literary, artistic, political, or

scientific value for minors.

This definition of ‘‘harmful to minors’’ was taken from the ‘‘harmful to minors’’ test set forth by the U.S. Supreme Court in Ginsberg

v. New York, 390 U.S. 629 (1968), as modified by Miller v. California, 413 U.S. 15 (1973) in identifying ‘‘patently offensive’’ material. H.R. 3833 mirrors many of the state laws already in place that

have been upheld by the Supreme Court. The Committee intends

for the definition of harmful to minors to parallel the Ginsberg and

Miller definitions of obscenity and harmful to minors, as those definitions were later refined in Smith v. U.S., 431 U.S. 291 (1977) and

Pope v. Illinois, 481 U.S. 497 (1987).

The Committee further recognizes that the applicability of community standards in the context of the World Wide Web is difficult.

However, it is an ‘‘adult’’ standard, rather than a ‘‘geographic’’

standard, and one that is reasonably constant among adults in

America with respect to what is inappropriate for children under

13 years of age.

New section 157(i)(2) defines ‘‘minor’’ as any person under 13

years of age.

New section 157(i)(3) defines ‘‘suitable for minors’’ as material

that (A) is not psychologically or intellectually inappropriate for miVerDate 11-MAY-2000 01:23 May 10, 2002 Jkt 079486 PO 00000 Frm 00015 Fmt 6659 Sfmt 6602 E:\HR\OC\HR449.XXX pfrm12 PsN: HR449
16

nors, and (B) serves (i) the educational, informational, intellectual,

or cognitive needs of minors; or (ii) the social, emotional, or entertainment needs of minors. This definition is a combination of language from the Supreme Court case of Board of Education v. Pico,

457 U.S. 853 (1982) and the Children’s Television Act of 1990 (47

U.S.C. § 303 et seq.) and its regulations (47 CFR part 73.671). The

Committee believes that this definition of ‘‘suitable for minors’’ is

broad enough to include programming that is healthy for children

and is attractive to children. Moreover, this definition is narrowly

tailored to preclude Constitutional vagueness concerns.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic,

existing law in which no change is proposed is shown in roman):

NATIONAL TELECOMMUNICATIONS AND INFORMATION

ADMINISTRATION ORGANIZATION ACT

* * * * * * *

TITLE I—NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

PART A—ORGANIZATION AND FUNCTIONS

* * * * * * *

SEC. 103. ESTABLISHMENT; ASSIGNED FUNCTIONS.

(a) * * *

(b) ASSIGNED FUNCTIONS.—

(1) * * *

* * * * * * *

(3) ADDITIONAL COMMUNICATIONS AND INFORMATION FUNCTIONS.—In addition to the functions described in paragraph (2),

the Secretary under paragraph (1)—

(A) may assign to the NTIA the performance of functions

under section 504(a) of the Communications Satellite Act

of 1962 (47 U.S.C. 753(a)); øand¿

(B) shall assign to the NTIA the administration of the

Public Telecommunications Facilities Program under sections 390 through 393 of the Communications Act of 1934

(47 U.S.C. 390–393), and the National Endowment for

Children’s Educational Television under section 394 of the

Communications Act of 1934 (47 U.S.C. 394)ø.¿; and

(C) shall assign to the NTIA responsibility for providing

for the establishment, and overseeing operation, of a second-level Internet domain within the United States country

code domain in accordance with section 157.

* * * * * * *

17

PART C—SPECIAL AND TEMPORARY

PROVISIONS

* * * * * * *

SEC. 157. CHILD-FRIENDLY SECOND-LEVEL INTERNET DOMAIN.

(a) RESPONSIBILITIES.—The NTIA shall require the registry selected to operate and maintain the United States country code Internet domain to establish, operate, and maintain a second-level domain within the United States country code domain that provides

access only to material that is suitable for minors and not harmful

to minors (in this section referred to as the ‘‘new domain’’).

(b) CONDITIONS OF CONTRACT RENEWAL.—The NTIA may not

renew any contract to operate and maintain the domain with the

initial registry, or enter into or renew any such contract with any

successor registry, unless such registry enters into an agreement

with the NTIA, during the 90-day period beginning upon the date

of the enactment of the Dot Kids Implementation and Efficiency Act

of 2002 in the case of the initial registry or during the 90-day period

after selection in the case of any successor registry, as applicable,

which provides for the registry to carry out, and the new domain

operates pursuant to, the following requirements:

(1) Written content standards for the new domain, except that

the NTIA shall not have any authority to establish such standards.

(2) Written agreements with each registrar for the new domain that ensure use of the new domain is in accordance with

the standards and requirements of the registry.

(3) Written agreements with registrars, which shall require

registrars to enter into written agreements with registrants, to

use the new domain in accordance with the standards and requirements of the registry.

(4) Rules and procedures for enforcement and oversight that

minimize the possibility that the new domain provides access to

content that is not in accordance with the standards and requirements of the registry.

(5) A process for removing from the new domain any content

that is not in accordance with the standards and requirements

of the registry.

(6) A process to provide registrants to the new domain with

an opportunity for a prompt, expeditious, and impartial dispute

resolution process regarding any material of the registrant excluded from the new domain.

(7) Continuous and uninterrupted service for the new domain

during any transition to a new registry selected to operate and

maintain the United States country code domain.

(8) Procedures and mechanisms to promote the accuracy of

contact information submitted by registrants and retained by

registrars in the new domain.

(9) Operationality of the new domain not later than one year

after the date of the enactment of the Dot Kids Implementation

and Efficiency Act of 2002.

(10) Written agreements with registrars, which shall require

registrars to enter into written agreements with registrants, to

prohibit two-way and multiuser interactive services in the new

18

domain, unless the registrant certifies to the registrar that such

service will be offered in compliance with the content standards

established pursuant to paragraph (1) and does not compromise

the safety or security of minors.

(11) Written agreements with registrars, which shall require

registrars to enter into written agreements with registrants, to

prohibit hyperlinks in the new domain that take new domain

users outside of the new domain.

(12) Any other action that the NTIA considers necessary to establish, operate, or maintain the new domain in accordance

with the purposes of this section.

(c) TREATMENT OF REGISTRY AND OTHER ENTITIES.— (1) IN GENERAL.—Only to the extent that such entities carry

out functions under this section, the following entities are

deemed to be interactive computer services for purposes of section 230(c) of the Communications Act of 1934 (47 U.S.C.

230(c)):

(A) The registry that operates and maintains the new domain.

(B) Any entity that contracts with such registry to carry

out functions to ensure that content accessed through the

new domain complies with the limitations applicable to the

new domain.

(C) Any registrar for the registry of the new domain that

is operating in compliance with its agreement with the registry.

(2) SAVINGS PROVISION.—Nothing in paragraph (1) shall be

construed to affect the applicability of any other provision of

title II of the Communications Act of 1934 to the entities covered by subparagraph (A), (B), or (C) of paragraph (1).

(d) EDUCATION.—The NTIA shall carry out a program to publicize

the availability of the new domain and to educate the parents of minors regarding the process for utilizing the new domain in combination and coordination with hardware and software technologies that

provide for filtering or blocking. The program under this subsection

shall be commenced not later than 30 days after the date that the

new domain first becomes operational and accessible by the public.

(e) COORDINATION WITH FEDERAL GOVERNMENT.—The registry selected to operate and maintain the new domain shall— (1) consult with appropriate agencies of the Federal Government regarding procedures and actions to prevent minors and

families who use the new domain from being targeted by adults

and other children for predatory behavior, exploitation, or illegal actions; and

(2) establish such procedures and take such actions as may

be necessary to prevent such targeting.

The consultations, procedures, and actions required under this subsection shall be commenced not later than 30 days after the date

that the new domain first becomes operational and accessible by the

public.

(f) COMPLIANCE REPORT.—The registry shall prepare, on an annual basis, a report on the registry’s monitoring and enforcement

procedures. The registry shall submit each such report, setting forth

the results of the review of its monitoring and enforcement procedures, to the Committee on Energy and Commerce of the House of

19

Representatives and the Committee on Commerce, Science, and

Transportation of the Senate.

(g) SELECTION OF REGISTRY.—

(1) WITHDRAWAL OF REGISTRY.—

(A) IN GENERAL.—Upon a good faith showing by the registry of the new domain to the NTIA of extreme financial

hardship in the operation of the new domain, the registry

may elect to relinquish the right to operate and maintain

the new domain. If the registry elects to relinquish such

right, the NTIA shall select a subcontractor to operate and

maintain the new domain under the competitive bidding

process established pursuant to paragraph (2). The subcontractor shall have all of the rights and duties specified

under this Act, except that such duties shall not include the

technical maintenance of the new domain.

(B) EXTREME FINANCIAL HARDSHIP.—For purposes of this

paragraph, the term ‘‘extreme financial hardship’’ means

that the costs of operating and maintaining the new domain exceed the revenues generated from registrants by

more than 25 percent for a period of more than 6 consecutive quarters, following the first year of operation.

(2) COMPETITIVE BID SELECTION PROCESS.—The NTIA shall

establish a process for soliciting applications and choosing a

subcontractor to operate and maintain the new domain pursuant to paragraph (1), which process shall comply with the following requirements:

(A) TIMING.—The selection process shall commence and

complete not later than 120 days after the registry elects to

relinquish the new domain for extreme financial hardship.

(B) NOTICE.—The selection process shall provide adequate notice to prospective applicants of—

(i) the opportunity to submit such an application;

and

(ii) the criteria for selection under subparagraph (C).

(C) CRITERIA.—The selection shall be made pursuant to

written, objective criteria designed to ensure—

(i) that the new domain is operated and maintained

in accordance with the requirements under subsection

(b); and

(ii) that the subcontractor selected to operate and

maintain the new domain is the applicant most capable and qualified to do so.

(D) REVIEW.—Not more than 60 days after the conclusion

of the period established for submission of applications, the

NTIA shall—

(i) review and apply the selection criteria established

under subparagraph (C) to each application submitted;

and

(ii) based upon such criteria and subject to submission of an application meeting such criteria, select an

application and award to the applicant a subcontract

for the operation and maintenance of the new domain.

(E) FAILURE TO FIND SUBCONTRACTOR.—If the NTIA fails

to find a suitable subcontractor pursuant to the process

20

under this paragraph, the NTIA shall permit the registry

to cease operation of the new domain.

(h) SUSPENSION OF NEW DOMAIN.—If the NTIA finds, pursuant

to its own review or upon a good faith petition by the registry, that

the new domain is not serving its intended purpose, the NTIA shall

instruct the registry to suspend operation of the new domain until

such time as the NTIA determines that the new domain can be operated as intended.

(i) DEFINITIONS.—For purposes of this section, the following definitions shall apply:

(1) HARMFUL TO MINORS.—The term ‘‘harmful to minors’’ means, with respect to material, that— (A) the average person, applying contemporary community standards, would find, taking the material as a whole

and with respect to minors, that it is designed to appeal to,

or is designed to pander to, the prurient interest;

(B) the material depicts, describes, or represents, in a

manner patently offensive with respect to minors, an actual

or simulated sexual act or sexual contact, an actual or simulated normal or perverted sexual act, or a lewd exhibition

of the genitals or post-pubescent female breast; and

(C) taken as a whole, the material lacks serious, literary,

artistic, political, or scientific value for minors.

(2) MINOR.—the term ‘‘minor’’ means any person under 13

years of age.

(3) SUITABLE FOR MINORS.—The term ‘‘suitable for minors’’ means, with respect to material, that it— (A) is not psychologically or intellectually inappropriate

for minors; and

(B) serves— (i) the educational, informational, intellectual, or

cognitive needs of minors; or

(ii) the social, emotional, or entertainment needs of

minors.

Æ