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66–155 PDF 2011

ICANN GENERIC TOP-LEVEL DOMAINS (gTLD) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

INTELLECTUAL PROPERTY, 

COMPETITION, AND THE INTERNET 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

MAY 4, 2011 

Serial No. 112–37 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 

(II) 

COMMITTEE ON THE JUDICIARY 

LAMAR SMITH, Texas, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

DENNIS ROSS, Florida 

SANDY ADAMS, Florida 

BEN QUAYLE, Arizona 

[Vacant] 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

JUDY CHU, California 

TED DEUTCH, Florida 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

SEAN MCLAUGHLIN, Majority Chief of Staff and General Counsel 

PERRY APELBAUM, Minority Staff Director and Chief Counsel 

SUBCOMMITTEE ON INTELLECTUAL PROPERTY, COMPETITION, AND THE INTERNET

BOB GOODLATTE, Virginia, Chairman 

BEN QUAYLE, Arizona, Vice-Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

MIKE PENCE, Indiana 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

SANDY ADAMS, Florida 

[Vacant] 

MELVIN L. WATT, North Carolina 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

JUDY CHU, California 

TED DEUTCH, Florida 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

JERROLD NADLER, New York 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

BLAINE MERRITT, Chief Counsel 

STEPHANIE MOORE, Minority Counsel 

(III) 

C O N T E N T S 

MAY 4, 2011 

Page 

OPENING STATEMENTS 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Chairman, Subcommittee on Intellectual Property, Competition, and the Internet .................................................................................... 1 

The Honorable Melvin L. Watt, a Representative in Congress from the State 

of North Carolina, and Ranking Member, Subcommittee on Intellectual 

Property, Competition, and the Internet ............................................................ 3 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, Ranking Member, Committee on the Judiciary, and 

Member, Subcommittee on Intellectual Property, Competition, and the 

Internet ................................................................................................................. 4 

WITNESSES 

Kurt Pritz, Senior Vice President, Stakeholder Relations, Internet Corporation for Assigned Names and Numbers (ICANN) 

Oral Testimony ..................................................................................................... 6 

Prepared Statement ............................................................................................. 8 

Mei-lan Stark, Senior Vice President, Intellectual Property, Fox Group Legal, 

and Treasurer, International Trademark Association (INTA) 

Oral Testimony ..................................................................................................... 29 

Prepared Statement ............................................................................................. 31 

Michael D. Palage, President and CEO, Pharos Global 

Oral Testimony ..................................................................................................... 44 

Prepared Statement ............................................................................................. 45 

Steven J. Metalitz, Counsel, Coalition for Online Accountability 

Oral Testimony ..................................................................................................... 49 

Prepared Statement ............................................................................................. 51 

Steve DelBianco, Executive Director, NetChoice 

Oral Testimony ..................................................................................................... 66 

Prepared Statement ............................................................................................. 68 

Joshua Bourne, President, Coalition Against Domain Name Abuse (CADNA) 

Oral Testimony ..................................................................................................... 74 

Prepared Statement ............................................................................................. 77 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Letter from Kurt Pritz, Senior Vice President, Stakeholder Relations, Internet 

Corporation for Assigned Names and Numbers (ICANN), in response to 

post-hearing questions submitted by the Honorable Howard Coble, and 

further information on questions raised during the hearing ............................ 110 

Submission from Steve DelBianco, Executive Director, NetChoice, in response 

to request from Representative Melvin L. Watt during the hearing ............... 118 

(1) 

ICANN GENERIC TOP-LEVEL DOMAINS (gTLD) 

WEDNESDAY, MAY 4, 2011 

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON INTELLECTUAL PROPERTY,

COMPETITION, AND THE INTERNET, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:12 a.m., in room 

2141, Rayburn Office Building, the Honorable Bob Goodlatte 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Goodlatte, Coble, Chabot, Issa, Jordan, 

Poe, Griffin, Marino, Watt, Conyers, Lofgren, Jackson Lee, and Waters. 

Staff present: (Majority) Vishal Amin, Counsel; Olivia Lee, Clerk; 

and Stephanie Moore, Minority Counsel. 

Mr. GOODLATTE. Good morning. The Subcommittee on Intellectual Property, Competition, and the Internet will come to order. 

I have an opening statement. 

Today we are holding an oversight hearing on ICANN’s proposed 

generic top-level domain, or gTLD, proposal. We all understand the 

important role that ICANN, a nonprofit company, plays in supporting the infrastructure of the Internet while taking into account 

the needs of stakeholders and governments. But this proposed expansion of gTLD’s has raised many questions, both positive and 

negative. 

The gTLD proposal is designed to dramatically expand the number of top-level domains available. This expansion will raise significant revenue for ICANN, possibly launch new businesses to manage the new gTLD’s, and create more options for registrars to sell 

domain names to consumers. The investment and economic potential from these new domains may be significant, but investment in 

economic potential should not necessarily be the focus of whether 

the gTLD proposal moves forward. We need to ask ourselves the 

tough questions. 

How will this expansion affect trademark holders? 

Will it create opportunities for fraud, increased consumer confusion, and IP theft? 

Besides ICANN, who is asking for these new gTLD’s, consumers, 

registrars, or those looking to create businesses around these new 

top-level domains, is the gTLD proposal simply a solution that is 

in search of a problem that may or may not exist? 

2 

Given the concerns expressed by some of ICANN’s current enforcement efforts, how effective will ICANN be in enforcing its policies for an unlimited number of new gTLD’s? 

As we consider this proposal, it is important to remember that 

ICANN is a nonprofit corporation with a specific and clearly defined mission. As ICANN works to advance their proposal, governments and stakeholders need to be convinced that these gTLD’s are 

necessary, not that they are simply profitable, but they are necessary to ICANN’s mission to help ensure the safe functioning and 

infrastructure of the Internet. 

Some have raised the concern that this proposal appears to be 

driven more by money than need to establish a program that will 

raise incredible amounts of revenue, potentially hundreds of millions of dollars. I think stakeholders, governments, and those of us 

here in Congress would like to know how this revenue will be utilized. Does ICANN have sufficient contracting, budget, and compliance staff to properly handle such large amounts of money, to prevent waste and even fraud? I think that before ICANN makes its 

final decision to move this proposal forward, a clear and transparent long-term draft budget plan needs to be developed hopefully 

before ICANN’s June board meeting in Singapore. 

Learning from the experiences of other industries, I am certain 

that ICANN will take a tough line to ensure that their potential 

budget is not wasted on corporate retreats, outsized salaries, bonuses, and other perks that are oftentimes associated with for-profit entities. 

It is also important to remember that this hearing and all of our 

discussions on the new gTLD proposal are part of the backdrop for 

upcoming discussions between ICANN and the Commerce Department over renewal of ICANN’s authority over an IANA function. As 

the Commerce Department establishes the conditions for contract 

renewal, I think that it may make sense for the Department to consider new conditions. We all agree that ICANN should remain a 

separate nonprofit corporation, but there needs to be safeguards in 

place to ensure that its focus remains on its core mission. That way 

precious resources can be targeted toward building up ICANN’s 

core functions and ensure the stability of the Internet for everyone. 

ICANN will need to continue working hard to be an effective 

steward for the whole community of stakeholders and governments 

that use the Internet, not just those who stand to make a profit 

from it. The goal for today’s hearing will be to learn more about 

the positive and negative benefits for the Internet if the gTLD proposal moves forward. I would ask that we balance the costs and 

benefits of this proposal before a final decision is made to go forward, and in the end, if the costs of this proposal outweigh the benefits, it probably makes sense for ICANN to consider slowing down 

a bit, address the outstanding concerns, and extend the timeline for 

their final board decision. 

Today we are going to hear from witnesses that will describe 

some of the outstanding concerns and how they are or are not 

being addressed. A major concern revolves around intellectual 

property protections. With every new gTLD that is created, a brand 

holder will be forced to replicate their Internet domain portfolio. 

Apart from the massive cost to register, brand holders will also 

3 

need to set up policing operations to ensure that their trademarks 

are not being infringed. It doesn’t seem fair to create hundreds of 

new gTLD’s and then force brand owners to spend millions of dollars to police something that they did not create or operate. The 

rollout of these new gTLD’s will also complicate copyright enforcement, making it harder and more costly to find and stop online infringers. 

I understand that ICANN is working to address these and other 

concerns by establishing a trademark clearinghouse and developing 

specific safeguards to protect brand holders and possibly consider 

a globally recognized trademark block list. 

ICANN’s new Applicant Guidebook also includes protections that 

the law enforcement community believes will help take into account some of the cyber security concerns raised by the gTLD proposal. 

I look forward to hearing from all of our witnesses and hope that 

we can have a spirited discussion on the gTLD proposal and the 

steps that need to be taken to ensure that the backbone of the 

Internet remains strong, effective, and accountable to the global 

Internet community. 

It is now my pleasure to recognize the Ranking Member of the 

Subcommittee, the gentleman from North Carolina, Mr. Watt. 

Mr. WATT. Thank you, Mr. Chairman, and thank you for scheduling today’s hearing. 

The role of ICANN to the world community cannot be understated. As the entity charged with developing policy for the Internet, its reach is far and wide. ICANN’s website notes that it is, 

‘‘dedicated to keeping the Internet secure, stable, and interoperable.’’ It furthers states that it, quote, promotes competition and acknowledges that although it does not control content on the Internet, through its coordination role of the Internet’s naming system, 

it does have an important impact on the expansion and evolution 

of the Internet. 

Today’s focus on ICANN’s proposed expansion of the generic toplevel domain names complements our work in other areas to ensure 

that the Internet remains a free, robust, and trustworthy environment for legitimate commerce. Of particular interest in that regard 

is ICANN’s maintenance of the Whois database. Whois is intended 

to obtain personal contact information from domain name registrants, in part to provide the public access to the identity of the 

registrant. The accuracy of the Whois database is critical to providing accurate information to consumers, to assisting law enforcement, and to protecting intellectual property rights holders. 

With the proposed expansion of the gTLD’s comes increased concerns about whether ICANN will be able to enforce the assemblage 

of truthful information into the Whois database. This is especially 

important if, as anticipated, the new gTLD’s may be registered in 

a number of countries. ICANN maintains that the expansion of toplevel domain names will stimulate competition and innovation. 

These are both laudable goals. Safeguards must be in place, however, to protect against the initiatives that threaten the rights of 

IP right holders, potentially expose consumers to fraudulent markets, and provide sanctuary through anonymity and inaccuracy to 

cyber criminals. 

4 

An accurate Whois database is a prerequisite to each of those 

protections. And I hope to hear how ICANN intends to correct the 

existing database and guarantee that any expansion will have 

mechanisms in place to guarantee accuracy of information on the 

front end of all future domain name assignments. 

With that, Mr. Chairman, I thank you again for scheduling this 

important hearing and yield back. 

Mr. GOODLATTE. We have a very distinguished and unusually— 

before we get to that distinguished panel, we have a distinguished 

Ranking Member of the full Committee, and I want to recognize 

him for his comments. The gentleman from Michigan is recognized. 

Mr. CONYERS. Thank you, Chairman Goodlatte. I join you in your 

next assignment of welcoming all the witnesses, especially Mr. 

Pritz who carries a particularly large burden at this hearing. 

We are here to look at what will happen to trademark owners 

and to intellectual property protection as a result of this Subcommittee’s important work. I am worried that the benefits will not 

outweigh the concerns raised by so many stakeholders. I have 

heard from a lot of people on this. They are not anxious to have 

more new names issued because they believe that this expansion 

will require them to register countless domain names that will 

have to be registered to prevent online criminals from getting the 

names and confusing consumers. There are a lot of examples I 

could use to demonstrate that. 

So the bottom line is it hasn’t been made sufficiently clear that 

the new generic domain names will actually facilitate more open 

speech and commerce. 

It is also clear that trademark holders and businesses will have 

to play active defense to protect their trademarked brands and reputations. So new generic domains will, unfortunately, create new 

opportunities for the sale of counterfeit goods, copyright infringement, and some forms of cyber crime. And so consumers will have 

to navigate these new criminal enterprises and be further vigilant. 

Now, American and international law enforcement seeking to 

thwart crimes such as identity theft and child pornography could 

find it more difficult to locate and prosecute perpetrators using toplevel domains set up in nations without working relationships with 

the United States. And so I see pitfalls that accompany the debut 

of new gTLD’s. 

This hearing serves as an appropriate place to start exploring 

these issues, but it is clear that ICANN has more work to do with 

regard to transparency, to creating safeguards to protect against 

the cyber crimes and property infringements that seem to me to be 

quite worrisome. And so I applaud the Subcommittee Chairman 

and the Ranking Member for having this hearing today. 

I thank you for your time. 

Mr. GOODLATTE. I thank the Ranking Member. 

And now we will turn to that distinguished and unusually long 

panel of witnesses today. 

Each of the witnesses’ written statements will be entered into 

the record in its entirety, and I ask that each witness summarize 

their testimony in 5 minutes or less. To help you stay within that 

time, there is a timing light on the table. When the light switches 

from green to yellow, you have 1 minute to conclude your testiVerDate Aug 31 2005 16:23 Jul 10, 2011 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6601 H:\WORK\IP\050411\66155.000 HJUD PsN: 66155
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mony. When the light turns red, it signals that the witness’ 5 minutes have expired. 

Before I introduce our witnesses, I would like them to stand and 

be sworn. 

[Witnesses sworn.] 

Mr. GOODLATTE. Thank you and be seated. 

Our first witness is Mr. Kurt Pritz, Senior Vice President for 

Stakeholder Relations at ICANN. Mr. Pritz has served at ICANN 

for 7 years. He is charged with managing ICANN’s key stakeholder 

relationships and is leading ICANN’s implementation of the new 

gTLD program. His team delivered the first new gTLD document 

to the U.S. Government in 2004. Since then, he has led the effort 

to develop the gTLD Applicant Guidebook which was released in 

April, just a couple of weeks ago. 

Prior to joining ICANN, Mr. Pritz spent nearly a decade at Walt 

Disney Imagineering. He also served at Eaton Corporation. 

Mr. Pritz holds a B.S. and M.S. in physics, an M.B.A. and a J.D., 

and is admitted to the California State Bar. 

Our second witness is Mei-lan Stark. Ms. Stark serves as the 

Senior Vice President for Intellectual Property at Fox Entertainment Group. In this role, Ms. Stark heads the group responsible for 

all trademark, copyright, domain name, and patent work for all of 

Fox Entertainment, including 20th Century Fox, Fox Searchlight 

Pictures, and Blue Sky Animation. Her group also supports the 

broadcast television network Fox, the cable TV networks, including 

FX, Speed, Fox Sports, Fox News, and the National Geographic 

Channel. 

Prior to joining Fox, Ms. Stark spent several years with the Walt 

Disney Company and began her career as an IP attorney at Kilpatrick Stockton following her graduation from Yale Law School. 

Ms. Stark currently serves as the treasurer on the International 

Trademark Association board of directors. 

Our third witness is Mr. Michael Palage. Mr. Palage is an intellectual property attorney and an information technology consultant. He has been actively involved in ICANN operational and policy matters since its inception in both an individual and leadership 

role, including a 3-year term on the ICANN board of directors. He 

is also President and CEO of Pharos Global, Incorporated that provides consulting and management services to domain name registration authorities and has worked with over 45 percent of all 

new registry operators approved by ICANN over the last decade. 

Mr. Palage holds a BSEE from Drexel University and a J.D. from 

Temple University School of Law. 

Our fourth witness is Mr. Steven Metalitz. Mr. Metalitz is a 

partner at Mitchell, Silberberg and Knupp. He has been an active 

participant in ICANN since its inception and served six terms as 

President of ICANN’s intellectual property constituency and is currently its Vice President. He is also counsel to the Coalition on Online Accountability representing seven leading copyright industry 

companies, associations, and membership organizations on a range 

of ICANN-related matters. 

Earlier in his career, he held several senior staff positions with 

the U.S. Senate Judiciary Committee, including Chief Nominations 

6 

Counsel and Chief Counsel and Staff Director of its Subcommittee 

on Patents, Copyright and Trademarks. 

Mr. Metalitz received his B.A. from the University of Chicago 

and his law degree from Georgetown University. 

Our fifth witness is Mr. Steve DelBianco. Mr. DelBianco is the 

Executive Director of NetChoice where he focuses on issues dealing 

with Internet governance, online consumer protection, and Internet 

taxation. Mr. DelBianco has served as stakeholder advocate at 

meetings of the Internet Governance Forum and ICANN. 

Before joining NetChoice, he served as the President of Financial 

Dynamics, an IT consulting firm. 

Mr. DelBianco holds degrees in engineering and economics from 

the University of Pennsylvania and an M.B.A. from the Wharton 

School. 

Our sixth witness is Mr. Joshua Bourne. Mr. Bourne is the President of the Coalition Against Domain Name Abuse, or CADNA. 

CADNA is a nonprofit association dedicated to consumer protection 

through building awareness about and advocating action to stop 

online trademark infringement. Mr. Bourne is also co-founder of 

Fairwinds Partners, a domain name strategy consultancy based in 

Washington, D.C. Mr. Bourne has had over a decade of experience 

working with brand owners on actions to take within the domain 

name space. 

I want to welcome all of you and we will begin with Mr. Pritz. 

TESTIMONY OF KURT PRITZ, SENIOR VICE PRESIDENT, 

STAKEHOLDER RELATIONS, INTERNET CORPORATION FOR 

ASSIGNED NAMES AND NUMBERS (ICANN) 

Mr. PRITZ. Mr. Chairman, Ranking Member Watt, and Members 

of the Subcommittee, I am Kurt Pritz, Senior Vice President of 

Stakeholder Relations for ICANN, the Internet Corporation for Assigned Names and Numbers. And I am very pleased to be testifying 

before you today. 

With the Internet scaling to over 2 billion users and enabling 

more than $2 trillion in global commerce each day, ICANN is hard 

at work promoting the goals set out in ICANN’s mission: security, 

stability, and choice. 

ICANN, together with the Internet community, has increased 

competition in the registrar marketplace and lowered the price of 

domain name registrations. ICANN, together with the Internet 

community, deployed internationalized domain names allowing 

users to use their own language across the Internet, and ICANN, 

working with the NTIA and VeriSign, has made the Internet safer 

through the deployment of DNSSEC, a certification/verification 

technology. 

What is ICANN? We are a nonprofit public benefit corporation 

organized under California law. ICANN was created in 1998 by the 

United States Department of Commerce and Internet pioneers to 

be the private-led company that reflects the diversity of the Internet and enables the introduction of competition into the domain 

name system. By entrusting these mandates to a multi-stakeholder 

organization, the United States Government committed to take 

Internet policy out from a purely regulatory or a UN-type governance process. Lawrence Strickling, the Assistant Secretary of ComVerDate Aug 31 2005 16:23 Jul 10, 2011 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6601 H:\WORK\IP\050411\66155.000 HJUD PsN: 66155
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merce and head of the NTIA, recently confirmed that ICANN’s 

multi-stakeholder model is the best way to protect and preserve the 

security and stability of the Internet. 

ICANN’s multi-stakeholder model gives an effective role to all 

those who wish to participate: governments through ICANN’s Governmental Advisory Committee; business interests through 

ICANN’s Generic Name Supporting Organization; and Internet end 

users through ICANN’s At-Large Advisory Committee. They reflect 

the global diversity of the Internet and work toward developing 

policy and promote Internet stability and benefits for users. 

The ICANN community follows clearly defined processes to form 

Internet policy. In 2007, through the bottom-up process, ICANN’s 

broad base of stakeholders recommended that new top-level domains, the names to the right of the dot, such as dot com and dot 

org, be introduced in order to realize the benefits accruing from the 

opening of markets, introducing competition, serving communities, 

and encouraging innovation. 

The ICANN community has also guided the implementation of 

that policy. Since 2008, ICANN stakeholders have contributed over 

2,400 comments on implementation work, participated in 47 separate public comment periods, discussed six versions of a draft program guidebook, and 55 explanatory memoranda and independent 

reports. ICANN reviews and considers every comment provided and 

proposes changes to facilitate the development of Internet community consensus. Comments are heard and acted upon. Good faith 

and intensive participation from the people at this table and those 

that they represent led to the creation of a suite of trademark and 

consumer protection mechanisms that will help make this environment safer than it is now. 

Participation by the governments through ICANN’s Governmental Advisory Committee led to additional improvements in 

those right protection mechanisms. 

In a diverse community, consensus building can be difficult and 

take time, and we have carefully spent the time needed to consider 

every possible perspective. After the ICANN Board of Directors 

considers the Applicant Guidebook on June 20th, the protections 

and processes will continue to evolve. The program calls for continual improvement and review. 

Today, after more than 7 years of policy development and implementation work, it is time to move to the next phase. Through extensive work mentioned earlier, new gTLD’s will offer more consumer protections and more trademark rights protections than 

exist today. Many stakeholders not represented at this table have 

waited years for the new gTLD program to launch, and careful 

planning on their part has been ongoing. 

We will continue working hard to promote Internet security, stability, and choice and do our best to fulfill the vision of a private 

sector, bottom-up, multi-stakeholder model. 

Thank you for inviting me to testify. I would be happy to answer 

any questions after this. 

[The prepared statement of Mr. Pritz follows:] 

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Mr. GOODLATTE. Thank you, Mr. Pritz. 

Ms. Stark, welcome. 

TESTIMONY OF MEI-LAN STARK, SENIOR VICE PRESIDENT, INTELLECTUAL PROPERTY, FOX GROUP LEGAL, AND TREASURER, INTERNATIONAL TRADEMARK ASSOCIATION (INTA) 

Ms. STARK. Good morning, Chairman Goodlatte, Ranking Member Watt, and the Members of the Subcommittee. Thank you for 

this opportunity to present the views of intellectual property owners on the issues related to the introduction of new gTLD’s. 

My name is Mei-lan Stark and I am Senior Vice President of Intellectual property at Fox Entertainment Group, and I am appearing here today on behalf of INTA where I serve on a voluntary 

basis as treasurer and as a member of the board of directors. INTA 

is a not-for-profit association with 5,600 member organizations in 

over 190 countries. 

It is an honor for me to appear before this Subcommittee which 

has long exercised leadership in the protection of IP and the fight 

against counterfeiting and piracy, including the consideration of 

rogue website legislation which will become even more important 

as new gTLD’s are launched. 

As trusted indicators of source and authenticity of goods and 

services, trademarks perform an important consumer protection 

role, preventing consumer confusion and allowing consumers to 

make rapid and informed choices among competitive offerings. But 

the societal benefits provided by intellectual property in general 

and trademarks in particular are threatened when the good will associated with a brand is misappropriated. So let me share a recent 

example that happened to Fox. 

Our local Fox affiliate in Detroit, Channel 2, operates a website 

at myfoxdetroit.com. Well, a third party registered the name 

‘‘myfox2detroit.com,’’ and that leads to a pornographic site. So it is 

not difficult to imagine a scenario in which a child is researching 

a school report, looks online to find information that was contained 

in the local Fox evening news and finds themselves inadvertently 

on this pornographic site. 

Mr. Chairman, there are currently 21 gTLD’s such as dot com, 

and these top-level domain names introduced over the past dozen 

years have proven to be an absolute bonanza for those who use the 

anonymity, flexibility, and market reach of the Internet to deceive 

consumers as in my example. 

Abusive domain name registrations also impose significant costs 

on business, costs that do not contribute to the creation of productive jobs, to innovation, or to overall financial health of companies. 

Given these costs, IP owners have been concerned about ICANN’s 

proposal from the outset and believe that ICANN has not met its 

burden of proof that the societal benefits of the proposed gTLD expansion outweigh the harms and is truly in the public interest. 

ICANN and others who will benefit financially as domain name 

registrars and registries suggest certain benefits that might arise 

from the proposal. However, the economists retained by ICANN, 

who delivered reports in 2010, did not confirm such benefits. They 

concluded that new, undifferentiated gTLD’s are not likely to improve competition and that any other purported benefits are specuVerDate Aug 31 2005 16:23 Jul 10, 2011 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6601 H:\WORK\IP\050411\66155.000 HJUD PsN: 66155
30 

lative at best. To the extent they exist at all, they are most likely 

to arise from differentiated gTLD’s such as IDN’s or communitybased domains. 

On the other hand, the economists had no difficulty in identifying the cost for businesses and Internet users, including the effects from abusive registration, the harm to consumers from the 

spread of malware, phishing, and counterfeit products, reduced investment in IP by owners as a result of increased opportunities for 

misappropriation, and finally the losses from failed gTLD’s themselves. 

So let me focus for a minute on misappropriation of IP. 

Despite recommendations from WIPO, the IPC, INTA, and the 

U.S. Government, and others, ICANN has not yet developed adequate trademark protection mechanisms. The ICANN Government 

Advisory Committee, or the GAC, made up of representatives of 

more than 100 countries, including the United States represented 

by the NTIA, has also recommended stronger rights protection 

mechanisms. We greatly appreciate the efforts of the NTIA and the 

GAC for identifying trademark and consumer protection as one of 

the 12 issues in ICANN’s proposal in need of resolution. 

Despite these objections from governments, IP owners, and others in the community, ICANN has announced that it will not undertake any more economic studies, that it does not plan to make 

any significant adjustments in the rights protection mechanisms, 

as announced, that it has the authority to accept only that part of 

the GAC advice with which it agrees, and that it hopes to finish 

this process and plans to begin the expansion of the gTLD space 

following the June meeting in Singapore. 

We encourage ICANN not to press for a resolution next month 

but to take the time necessary to address the legitimate concerns 

of the public including intellectual property owners as to the protection of intellectual property and consumers, ICANN’s commitment to enforce not only existing but all new registrar and registry 

agreements, the need to protect the investments in existing brands 

through defensive acquisition of new gTLD’s, and underlying all of 

the above, the concern that ICANN has not properly weighed the 

potential costs and benefits to the public to arrive at a demonstrable net public good. 

Mr. Chairman, thank you again for this opportunity to be here 

today. INTA looks forward to continuing to work with ICANN, the 

stakeholder community, and this Subcommittee in the responsible 

evolution of the domain names. 

[The prepared statement of Ms. Stark follows:] 

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Mr. GOODLATTE. Thank you, Ms. Stark. 

Mr. Palage, welcome. 


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TESTIMONY OF MICHAEL D. PALAGE, PRESIDENT AND CEO, 

PHAROS GLOBAL 

Mr. PALAGE. Chairman Goodlatte, Ranking Member Watt, and 

distinguished Members of the Subcommittee, my name is Michael 

Palage, and I would like to thank you for holding this important 

hearing on ICANN’s current proposal for the unlimited expansion 

of new generic top-level domains. 

Based upon my work with domain name registration authorities, 

I have a clear interest in wanting to see the new gTLD process 

move forward in a controlled, responsible manner. I have written 

extensively on this subject for pretty much over the last decade. 

And one of the reasons I have been so outspoken on this particular 

issue is ICANN’s failure to get it right threatens the very core of 

the private sector leadership model which has made the Internet 

what it is today. 

Over the last several months, ICANN has engaged in good faith 

negotiations with the Government Advisory Committee to resolve 

their outstanding differences. I am pleased to report, based upon 

the recent exchange between ICANN and GAC, that there appears 

now to be 14 remaining issues in which there is a material difference. My concern, however, is that there is very little time between now and June 20th in which to resolve these 14 remaining 

issues. 

While I believe that over 97 percent of the Applicant Guidebook 

is finalized in a manner which is mutually agreeable to the community, it is this remaining 3 percent which causes me concern between now and June 20th. So what I would like to do is discuss 

three specific proposals to be constructive, and these changes, hopefully will be able to address the concerns of government, law enforcement, intellectual property owners in providing an adequate 

safety net should ICANN move forward next month. 

The first change deals with a recent proposal that ICANN made 

in the draft Applicant Guidebook that includes the following statement. A consensus statement from the GAC that an application 

should not proceed as submitted will create a strong presumption 

for the board that that application should not be approved. Now, 

I think this has been a positive step taken by ICANN. However, 

I do not believe that it goes far enough. What I am proposing is 

a bylaw amendment that would treat that consensus advice on the 

same equal footing as a super majority vote from the GNSO. Now, 

the GNSO is the supporting organization within ICANN responsible for gTLD policy recommendations, and the current requirement under the ICANN bylaws is that a GNSO super majority vote 

requires a 66 percent vote by the ICANN board to override it. So 

what I am proposing is that the Government Advisory Committee 

should be treated on equal par. So again, this is a private-public 

partnership. We are asking that ICANN recognize in its bylaws the 

same equality. 

The second proposed change. Again, this would be a bylaw 

change. Under the current ICANN bylaws, there is a requirement 

that nine directors affirmatively vote in support of ICANN entering 

into a contract with a registry operator. I am proposing that the 

bylaws be changed to require 66 percent of nonconflicted directors 

to vote in favor of a contract before moving forward. While some 

45 

in the community may argue that a simple majority would be sufficient, I respectfully disagree. The entry of a string into the Internet’s authoritative root is not an insignificant undertaking. It is a 

change to the core foundation of the Internet. Just like two-thirds 

of the House and Senate are required to propose an amendment to 

the Constitution, I submit that a similar heightened standard 

should be applied in this standard. 

The third point which I would like to address is holding ICANN 

accountable. Having been involved in ICANN over the years, I have 

seen a number of changes by ICANN in its agreements with registry operators, as well as some of the memorandums of understanding that it has engaged with other institutions. But what I 

would like to talk about today is a recent amicus brief that ICANN 

filed in the Ninth Circuit, and in this it claimed protection under 

the Noerr-Pennington doctrine. 

Now, under this doctrine, private entities are immune from liabilities under the antitrust laws for attempts to influence the passage or enforcement of laws, even if those laws advocate it would 

have anticompetitive effects. Now, in its brief, ICANN made the 

following statement. Conduct in recommending the grant of registry operator rights is a core petitioning activity and its conduct 

in these decisions is not self-executing, but rather is implemented 

only by proposing conduct to the Department of Commerce which, 

in turn, decides whether to adopt ICANN’s proposals. 

As an organization that is potentially going to reap hundreds of 

millions of dollars in revenue, I don’t believe it is appropriate that 

they should be seeking to potentially avoid liability by claiming 

that it is not making self-executing decisions but mere recommendations. Therefore, I would encourage this Committee to 

work with the NTIA in any future IANA services agreement with 

these particular services to make sure that there is no future immunity going forward. 

Thank you again for allowing me to testify today and I look forward to answering any questions. 

[The prepared statement of Mr. Palage follows:] 

Prepared Statement of Michael D. Palage, President and CEO, Pharos Global 

Chairman Goodlatte, Ranking Member Watt, and distinguished members of the 

Subcommittee: My name is Michael Palage, and I would like to thank you for holding this important hearing on ICANN’s current proposal for the unlimited expansion 

of new generic top-level domains (gTLDs). 

While some in the community have questioned the timing and objective of these 

oversight hearings so close to ICANN’s self-proclaimed June 20th approval date, I 

am reminded of an old Chinese saying that ‘‘true gold does not fear the refiner’s 

fire.’’ If what ICANN has produced through this multi-year process is true gold, 

then there are no questions asked today which should not have a full and satisfactory answer. 

As someone that has worked with almost 50% of all new gTLDs approved by 

ICANN over the last decade (.INFO, .ASIA, .MOBI, .POST, .JOBS and .COOP) as 

well as currently working with several new gTLD applicants I have a clear financial 

interest in wanting to see the new gTLD process move forward. I have been involved 

in the new gTLD implementation process since day one and have written extensively on the shortcomings of this process. The reason I have been so outspoken is 

because ICANN’s failure to get it right threatens the very core of the private sector 

leadership model which has made the Internet what it is today. 

Over the last several months the ICANN Board has engaged in good faith negotiations with the Governmental Advisory Committee (GAC) of which the United States 

Government is an active member. During this time ICANN has been addressing a 

46 

scorecard produced by the GAC which identified 80 outstanding points of concern, 

many of which are directly related to the mandate of this committee: law enforcement, intellectually property protection, and mitigating malicious conduct. I’m 

pleased to report that only 14 issues remain in which material differences appear 

to remain. My concern, however, is that there is very little time between now and 

June 20th to resolve these key differences. 

Attached as an appendix to my witness statement is a compilation of articles 

which I have authored detailing the shortcomings in ICANN’s new gTLD implementation process. In an ideal world and with the benefit of 20/20 hindsight, ICANN 

could have gone about this implementation process in a more prudent fashion to 

prevent the showdown it now faces with government representatives from around 

the globe. 

The 14 remaining issues that the ICANN Board and the GAC must resolve before 

this process is finalized and the new gTLD Program starts fall within 4 broad subject matter areas: 

• community string designation; 

• registry/registrar separation; 

• intellectual property protections, and 

• geographic identifiers. 

While some of the other witnesses have or will delve into specifics of the intellectual property issues, I would like to focus on what I believe is the biggest stumbling 

block toward the successful conclusion of the new gTLD implementation process: 

community string designation. 

The current applicant guidebook provides a preference for applicants seeking a 

gTLD string if they achieve a ‘‘Community Priority Evaluation.’’ To achieve this designation, applicants need to undergo a separate community designation evaluation 

and receive a minimum of 14 out of 16 total points from criteria developed by 

ICANN. If there is no successful community based applicant for that string, 

ICANN’s default mechanism for resolving this contention is an auction between otherwise qualified applicants, without taking into account the quality of the application or which applicant would better represent the community. 

The GAC has recommended a broadening of the definition of community strings 

to include all applications seeking to represent a cultural, linguistic, religious, or 

ethnic community, as well as those strings involving a nationally regulated sector 

(i.e. .bank, .pharmacy, etc.) in order to ensure that these particular assets are not 

just given to the ‘‘highest bidder’’, but if delegated, are put into the hands of a registry that can best represent the interests of the natural community. The GAC has 

further recommended that an application/string should be rejected if: (i) in the absence of documented support from the affected community or (ii) the proposed string 

is either too broad to identify a single entity as the relevant authority, or is sufficiently contentious. 

To illustrate the concerns of the GAC consider the following example. The American Banking Association (ABA) and BITS, a division of the Financial Services 

Roundtable, have announced their intention to pursue a financial services gTLD. 

BITS has been active within the ICANN community over the past several years, including participation within the ICANN High Security Zone TLD Advisory Group, 

of which I served as chairman. If the ABA and BITS were to apply for specific financial services string and fail to score fourteen points, under ICANN’s current criteria 

a venture capital backed applicant with no formal ties to the financial services community could be awarded that gTLD string if they were the highest bidder. 

What many in the community struggle with is how a California public benefit corporation that is supposed to serve as a trustee of a global public resource can opt 

to award a top level domain like .bank to the party with the deepest pockets rather 

than giving it to a well-established and more responsible community-based organization. 

In an effort to be constructive and suggest improvements, there are two changes 

that could to be made in the next six weeks to address this and the other shortcomings in the Draft Applicant Guidebook that would allow for the new gTLD program to launch, while providing governments, law enforcement, and intellectual 

property owners adequate safety nets to address their concerns. 

One recent change to the Draft Applicant Guidebook reads as follows: ‘‘a consensus statement from the GAC that an application should not proceed as submitted 

. . . will create a strong presumption for the Board that the application should not 

be approved.’’ 

47 

1http://www.icann.org/en/legal/cfit-v-icann/cfit-v-icann-amicus-brief-13jul09-en.pdf 

While this may seem like a positive change, in light of recent actions taken by 

ICANN, it is potentially insufficient to address the concerns of the GAC. Specifically, ICANN’s Supporting Organization responsible for gTLD policy has a provision 

in the ICANN bylaws requiring the Board to accept a Supermajority vote of that 

Supporting Organizations Council, unless 66% of the ICANN Board members determines that ‘‘it is not in the best interests of the ICANN community or ICANN.’’ 

Instead of inserting text into the latest version of the Draft Applicant Guidebook 

that states there is a strong presumption that the Board will follow GAC Consensus 

Advice, I submit that the ICANN Bylaws should be amended to put GAC Consensus 

policy advice on parity with the gTLD Supporting Organization. If 66% of the 

ICANN Board disagrees with this GAC advice because it is not in the best interests 

of the ICANN community or ICANN, then is should not be accepted. Given the private-public partnership that ICANN is supposed to founded upon this should be a 

no-brainer. 

Second, under the current ICANN Bylaws there is a requirement for nine affirmative votes amongst the 16 sitting directors for ICANN to approve entering into a 

new gTLD registry contract with a prospective applicant. I propose that this should 

be changed to require 66% of non-conflicted directors to vote in favor of the contract 

before ICANN enters into a registry agreement. 

While ICANN is unlikely to accept this change, I would urge this committee to 

communicate this safeguard to the Department of Commerce so that the NTIA can 

incorporate it into any future IANA services agreement. This would ensure that 

ICANN or any other successor organization would be required to have a heightened 

level of approval from its Board prior to proposing entry of a string into the root. 

While some in the community may argue that a simple majority should be sufficient, I respectfully disagree. The entry of a string into the Internet’s Authoritative 

Root is not an insignificant undertaking. It is a change to the foundation of the 

internet. Just like it takes two-thirds of the House and Senate to propose an amendment to the US Constitution, I submit a similar heightened standard should apply 

in this situation. 

One of the concerns raised by the Government Advisory Committee has been the 

inclusion of terms and conditions into the new gTLD application which preclude an 

applicant’s recourse to the courts, and instead limit an aggrieved applicant to one 

of ICANN’s internal review mechanisms, e.g. its reconsideration process, internal 

independent review, and ombudsman. ICANN has obtained legal opinions from multiple jurisdictions supporting the reasonableness of this waiver. 

In seeking to hold ICANN accountable for its actions in connection with the new 

gTLD program it is interesting to look at ICANN’s actions and representations over 

the last decade. In the original registry agreements that ICANN entered into with 

each respective registry operator, there was a cross indemnification between the 

parties. Specifically, ICANN would indemnify the Registry Operator in connection 

with their compliance with an ICANN specification or policy. Beginning in 2004, 

this cross indemnification was systematically withdrawn from the agreement, and 

now there is only a one-way indemnification in ICANN’s favor. Therefore, a Registry 

Operator can be sued and held liable for doing what ICANN requires it to do, but 

have no recourse for indemnification under the registry agreement. 

In 2007, ICANN entered into a Memorandum of Understanding with the United 

Nations Economic and Social Commission for Western Asia (UN–ESCWA). Paragraph 5 of this Agreement claimed that ‘‘nothing in this MoU may be interpreted 

or construed as a waiver, expressed or implied, or a modification, of the privileges, 

immunities and facilities which ICANN enjoys by virtue of the international agreements and national laws applicable to it.’’ A California not-for profit corporation 

should not be allowed to claim privileges and immunities in a contract with a UN 

agency. 

But perhaps most egregious is the recent amicus brief that ICANN filed before 

the Ninth Circuit in which it claimed protection under the Noerr-Pennington Doctrine. Under this doctrine, private entities are immune from liability under the antitrust laws for attempts to influence the passage or enforcement of laws, even if the 

laws they advocate for would have anticompetitive effects. Specifically, ICANN 

claimed that its ‘‘conduct in recommending the grant of registry operation rights is 

core petitioning activity’’ and that its ‘‘conduct in these decisions is not self-executing, but rather is implemented only by proposing conduct to DOC, which, in turn, 

decides whether to adopt ICANN’s proposals.’’ 1

An organization that seemingly could reap hundreds of millions of dollars in revenue should not be able to avoid potential liability by claiming it was not making 

self-executing decisions but mere recommendations. When you look at ICANN’s acVerDate Aug 31 2005 16:23 Jul 10, 2011 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6621 H:\WORK\IP\050411\66155.000 HJUD PsN: 66155
48 

tions over the last decade you see a California not-for-profit corporation that acts 

more like a for-profit corporation in seeking to maximize revenue while minimizing 

liability, instead of striving to act as a trustee of a global public resource. 

I respectfully submit that the way to proactively address this fundamental wrong 

is to have the Department of Commerce include a provision in the next IANA services agreement that ICANN or any successor organization shall not be able to claim 

any immunity as a direct/indirect result of that agreement. 

APPENDIX

Michael Palage, What ICANN Can Learn from Humpty Dumpty, CircleID, April 29, 

2011, http://www.circleid.com/posts/whatlicannlcanllearnlfromlhumptyl 

dumpty/ 

Michael Palage, Bringing a Responsible Closure to the gTLD Implementation Process, CircleID April 18, 2011,http://www.circleid.com/posts/20110418lbringinglal 

responsiblelclosureltolthelgtldlimplementlprocess/ 

Michael Palage, David Taylor and Faisal Shaw, A Phased Array Early Warning 

System,, CircleID, April 7, 201, see http://www.circleid.com/posts/alphasedl 

arraylearlylwarninglsystem/ 

Michael Palage and Berin Szoka, Request for Comments on the Internet Assigned 

Numbers Authority (IANA) Functions, TechFreedom, National Telecommunication Infrastructure Agency, Notice of Inquiry, April 1, 2011, http:// 

www.ntia.doc.gov/comments/110207099–1099–01/comment.cfm?e=46EEF30B–3611– 

4088–A2FC–F49CEF8D0B3F 

Michael Palage, GAC New gTLD No Fly Zone, Circle ID, March 15, 2011, http:// 

www.circleid.com/posts/20110315lgaclnewlgtldlnolflylzone/ 

Michael Palage, New gTLDs and Children, CircleID, February 27, 2011, see http:// 

www.circleid.com/posts/newlgtldslandlchildren/ 

Michael Palage, New gTLD Auctions and Potential Unintended Consequences, 

CircleID, January 26, 2011, http://www.circleid.com/posts/newlgtldlauctionsl 

andlpotentiallunintendedlconsequences/ 

Michael Palage, MOPO—The Latest Speed Bump on ICANN’s New gTLD Superhighway, CircleID, September 10, 2010, http://www.circleid.com/posts/20100910l 

mopolthellatestlspeedlbumplonlicannslnewlgtldlsuperhighway/ 

Michael Palage, Top Three Reasons to Just Say No to ICANN’s Current EOI gTLD 

Proposal, Progress and Freedom Foundation, Progress Snapshot Release 6.3 January 2010, http://www.pff.org/issues-pubs/ps/2010/ps6.3-top-three-reasons-to-just-sayno.html 

Michael Palage, New gTLD Expressions of Interest: Proceed with Caution, Progress 

on Point 16.24, Nov. 2009, http://www.pff.org/issues-pubs/pops/2009/pop16.24-newgTLD-expressions-of-interest.pdf 

Michael Palage, New gTLDs: Let the Gaming Begin—Part I: TLD Front Running, 

Progress on Point 16.17, Aug. 2009, http://www.pff.org/issues-pubs/pops/2009/ 

pop16.17-new-gTLDs-gaming-front-running.pdf 

Michael Palage, ICANN’s Economic Reports: Finding the Missing Pieces to the Puzzle, Progress Snapshot 5.4, June 2009, http://www.pff.org/issues-pubs/ps/2009/ 

ps5.4icanns-economic-reports.html 

Michael Palage, ICANN’s Implementation Recommendation Team for New gTLDs: 

Safeguards Needed, Progress on Point 16.10, Mar. 25, 2009. 

Michael Palage, ICANN’s ‘‘Go/No-Go’’ Decision Concerning New gTLDs, Progress 

on Point 16.3, Feb. 2009, http://www.pff.org/issues-pubs/pops/2009/pop16.3gTLD 

gonogo.pdf. 

Mr. GOODLATTE. Thank you, Mr. Palage. 

Mr. Metalitz? 

49 

TESTIMONY OF STEVEN J. METALITZ, COUNSEL, 

COALITION FOR ONLINE ACCOUNTABILITY 

Mr. METALITZ. Mr. Chairman, Mr. Watt, thank you very much 

for the opportunity to testify here on behalf of the Coalition for Online Accountability. It is our sixth time presenting testimony to this 

Subcommittee or its predecessors, and we appreciate the continued 

oversight that this Subcommittee hearing represents. 

The new gTLD program is the initiative that more than any 

other is the yardstick by which the success of the ICANN model 

will be judged. That model is an innovative approach to the global 

management of a key Internet resource, not by governments 

through regulation and treaties, but by a private sector-led organization through contracts and agreements. 

Our coalition supports that model. We have striven for years to 

make that model work, but on the threshold of the launch of this 

new gTLD program, we have to ask the question: Is ICANN actually acting in accordance with that model? Our answer, which we 

deliver here with regret, is no. 

On some of the particulars of the new gTLD program, there are 

some positive signs. We discuss that in our written testimony. We 

appreciate these changes. Clearly the sixth iteration of the new 

gTLD Applicant Guidebook is far better than the version ICANN 

started out with. But in many areas, as our statement outlines, 

ICANN still has very far to go. 

More importantly, on the most fundamental question, we think 

ICANN seems to have gotten it wrong. From all over the world, 

ICANN heard calls for a measured, targeted rollout of new gTLD’s 

focused on those areas where there are clearly unmet needs. They 

heard this from copyright and trademark owners, but they also 

heard it from a wide swath of international business. They heard 

it from many governments including, I am glad to say, the U.S. 

Government. They even heard it from the expert economists they 

themselves hired. All of those calls ICANN has spurned. It is 

poised to plunge ahead with virtually the same framework it unveiled 3 years ago: fling open the doors to an unlimited number of 

new gTLD’s, process them through a system that is biased toward 

approval, and make virtually no differentiation of these proposals. 

One size fits all. Let the chips fall where they may. 

How did this happen? Under the ICANN model, the organization 

is supposed to be private sector-led, but on this issue, a very small 

and unrepresentative sliver of the private sector is leading, primarily the companies whose businesses are franchises created by 

ICANN itself, the accredited registrars on whom ICANN has bestowed a monopoly of the retail domain name registration business, 

present and future, and the existing gTLD registry operators, many 

of whom see this program as a bonanza to be outsourcing sources 

for their ostensible competitors. 

New gTLD’s are ICANN’s future, but what about the present? 

Remember, under the model, we are substituting contracts for regulation, but what we see are weak contracts that are weakly enforced. And I would like to illustrate this with an issue that has 

already been mentioned and that this Committee has been concerned with for more than a decade: accurate and reliable Whois 

50 

data. We all know that all Internet users need this to know who 

they are dealing with when they visit a website. 

Unfortunately, today just like 12 years ago when the Subcommittee first held a hearing on Whois, anyone who wants to register a domain name in dot com or dot net can simply lie about who 

they are. If you get caught and your registrar asks you to correct 

the data, you can just submit new and equally false data. No registrar will turn you down. ICANN will close its file, if it has even 

opened one. Or better yet, you don’t have to submit any contact 

data at all for public access. You just use a proxy registration service that substitutes its contact data for yours. One in five gTLD 

registrations is now done this way, and while there are legitimate 

uses for these services, they are especially attractive to wrongdoers. 

The registrar has the real data on who you are, but many of 

them will refuse to turn it over without a court subpoena even if 

there is overwhelming evidence that you are using the registration 

to commit piracy, counterfeiting, or other abuses. Why? Because 

there are weak contracts between ICANN and the registrars and 

they are weakly enforced through a contract compliance staff that 

does its best but never has enough resources to do the job right. 

At the last ICANN meeting in San Francisco, all the eyes were 

on the main hall where the ICANN board and the Government Advisory Committee were discussing the new gTLD program, 

ICANN’s future. But the reality of how the ICANN model works 

today was on display in a much smaller room. The issue was 

whether to move ahead with negotiation of a newer, stronger contract with registrars, one that would deal more effectively with this 

huge problem of unregulated proxy registrations, as well as a lot 

of other issues. Every business representative voted to move ahead. 

Every nonprofit, noncommercial representative voted to move 

ahead. But the registries and the registrars, the companies that 

ICANN set up in business, all voted no. Under ICANN math, that 

12 to 6 vote, there was no consensus and contract reform is at a 

standstill. 

So these realities of ICANN’s present are why we can’t be as optimistic as we would like to be about ICANN’s future, and in particular, we can’t be optimistic that the new gTLD rollout will overcome its fundamentally flawed premise and truly deliver benefits 

to the public without saddling third parties, notably trademark and 

copyright owners, with much of the costs. 

Thank you very much for this opportunity and I look forward to 

responding to any questions. 

[The prepared statement of Mr. Metalitz follows:] 

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Mr. GRIFFIN [presiding]. Thank you. 

Mr. DelBianco? 


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66 

TESTIMONY OF STEVE DELBIANCO, 

EXECUTIVE DIRECTOR, NetCHOICE 

Mr. DELBIANCO. Thank you and I would like to thank the Committee for holding an oversight hearing on whether ICANN, in its 

quest to launch the new top-level domains, has really stuck to its 

mission and is really meeting its obligations under the Affirmation 

of Commitments. 

I had the chance to testify at your last ICANN oversight hearing 

in September of 2009. And the questions dogging that hearing were 

things like was ICANN doing enough to mitigate abuse and minimize defensive registrations, the question of whether ICANN could 

ensure contract compliance for hundreds of new TLD’s. Now, some 

aspects of those questions are still on the table. You have heard 

them today. But a lot has changed since 2009. 

You remember on the day of that hearing, we were exactly 1 

week away from the expiration of the U.S. Government’s long-term 

agreement to transition ICANN to independence. Well, a week 

later, we had the Affirmation of Commitments, and I would submit 

that is a very promising framework for global accountability of 

ICANN. 

Now, also in that 2009 hearing, the Chairman and Members of 

the Committee might recall that I also brought a label-maker with 

me to the hearing to use as a simple metaphor for what a TLD produces, these little labels that they would sell to website owners 

which would help people and users to find the website. 

Well, since the 2009 hearing, ICANN has been listening to governments, businesses, and law enforcement concerns. So now the 

metaphorical label maker is way bigger and way more complicated. 

It has got trademark claims services. It has got rapid suspension, 

security standards, and community eligibility criteria. In fact, the 

new TLD metaphor doesn’t even work any more. It is not a label 

maker. It is one of those big T-shirt printing machines that you see 

at arcades and print shops, only it doesn’t print T-shirts, it prints 

TLD-shirts. The machine is so big that the guards in Rayburn 

wouldn’t let me bring it into the building. But I did manage to 

smuggle in a T-shirt that I printed with it. And I have got it here 

with you. And it has got dot steve on it, which is my favorite new 

TLD, dot steve. 

Now, this T-shirt is a lot more than just a little white strip that 

comes from a label maker because this will help people to find domains and it helps to define the guy who is wearing the shirt because all Steves, as you know, aspire to be as cool as Steve 

McQueen. So I think motorcycle.steve is going to be a very popular 

domain name. 

Okay. So now that the T-shirt maker is so big and so complex 

and expensive, TLD applicants are going to need even more funding and more technical and legal experts to run a new registry. 

Well, that is going to be phenomenonally challenging for a TLD 

that is going to serve a small community, particularly a small language or script community. But the Affirmation of Commitments 

that ICANN signed says they have to serve global Internet users, 

and that includes the 5 billion people who aren’t even online yet, 

and most of them don’t even use our Latin alphabet. Now, these 

67 

people do need names and email addresses in their own scripts and 

languages, and I think ICANN can address this three ways. 

First—and this is on the new TLD plan—they got to do some serious outreach all over the globe to tell businesses and organizations about the coming TLD revolution and how the next billion 

people are going to know how to get into the window when the applications begin. 

Second, ICANN has got to help smaller, less experienced applicants navigate the complex process and find affordable help for 

technical, financial, and legal process. 

Third, ICANN has got to give incentives, even discounted fees, 

to a TLD applicant so that they will offer lots of versions in different languages. I mean, we have got dot steve here and that is 

Latin script English language. But what about a dot stephanos in 

Greek letters? Or how about a dot stebu, which is Steve in Japanese letters? Those are necessary to serve the global public interest. And if ICANN doesn’t do these things, most of the new TLD’s 

we will see a year from today are going to be Latin scripts in the 

English language. 

Then I ask you how will ICANN claim that is serving the global 

public interest as required? And I fear that outcome is going to 

play into the hands of ICANN critics at the United Nations where 

China leads a group of governments—they call it the G-77, but it 

more like 130 countries—who are demanding that the UN, quote, 

solve the issue of unilateral control of critical Internet resources. 

Translation: they want to take away the U.S. dominance of critical 

Internet resources like the DNS and IANA. 

Now, if governments lose confidence and trust in ICANN through 

the expansion of these new gTLD’s, we could lose the multi-stakeholder private sector model of a single global Internet. And 

ICANN’s path, the government confidence building is through the 

reps on the GAC, the Governmental Advisory Committee. ICANN 

has got to cultivate the GAC as a partner and ally, not as an afterthought, which brings me to another TLD-shirt, only this time TLD 

doesn’t stand for top-level domain. It stands for top-level directive. 

Take a look at this one. You know how they say mind the gap 

when you board a train in Europe? Well, this is the T-shirt we use 

in San Francisco. It says mind the GAC. And I can tell you this 

T-shirt demands your attention too. When ICANN is evaluating a 

new TLD application, we should mind the GAC. When you apply 

for a city name or a sensitive string, you have got to mind the 

GAC. When you operate a TLD and you get Whois inquiries from 

law enforcement, you have got to mind the GAC. 

And GAC has begun to find its voice. We are just not always sure 

what the GAC is saying. Triple X is a great example. They approved it at the ICANN board meeting in March, but despite the 

fact that the GAC said there is no active support from the GAC for 

the introduction of dot xxx. Well, to those of us in the business and 

technical community, that really sounded like passive acceptance. 

So there is no surprise that the ICANN board approved xxx. They 

might have voted the other way if the GAC has been very clear because it is going to take a lot of time for us in the private sector 

and technical to understand what the GAC means. I mean, I have 

68 

been married 26 years and there are still a lot of times I have no 

idea what my wife really means when she says what she says. 

So I will close by saying that congressional oversight is very 

helpful here, but I don’t believe Congress should ask for specific 

changes to ICANN’s new process. Nor should Congress send one of 

those back-off warnings to the United Nations right now, as Chairman Goodlatte did back in 2005. In today’s atmosphere, I think 

that would provide ammunition to governments who complain 

about U.S. control of critical Internet resources, and it really raises 

the risk of having ICANN’s private sector model get displaced by 

the UN. And that UN is a place where every country gets one vote, 

but the private sector gets no votes at all. 

Thank you. 

[The prepared statement of Mr. DelBianco follows:] 

Prepared Statement of Steve DelBianco, Executive Director, NetChoice 

Chairman Goodlatte, Ranking Member Watt, and distinguished members of the 

Subcommittee: My name is Steve DelBianco, and I thank you for holding this oversight hearing on whether ICANN, in its drive to expand top-level domains, is staying true to its mission and accountable to Internet stakeholders. 

I serve as Executive Director of NetChoice, a coalition of e-commerce and online 

leaders such as eBay, Expedia, News Corporation, VeriSign, and Yahoo, plus several 

thousand small online businesses. At the state and federal level and in international 

venues, NetChoice works to improve the integrity and availability of the Internet. 

NetChoice attended the last 17 ICANN meetings, where I serve as Vice Chair for 

Policy Coordination for the Business Constituency. I have also participated in all 5 

meetings of the Internet Governance Forum (IGF) and testified in three previous 

Congressional hearings on ICANN and Internet governance. 

In our testimony we compare issues now before this subcommittee to issues in 

play during your September 2009 ICANN oversight hearing, ‘‘Expansion of Top 

Level Domains.’’ In the 19 months since your last ICANN hearing, many difficult 

questions have been answered but several critical oversight issues remain and merit 

the subcommittee’s attention. 

In your September 2009 hearing there was palpable tension between advocates 

and skeptics of ICANN’s new TLD program. ICANN management joined with businesses eager to operate new TLDs in predicting that innovation and competition 

would result from new domain labels. Other witnesses, including NetChoice, testified that online content and service innovation is not so dependent upon having new 

TLDs, since we’ve seen an explosion of new Internet sites and services under today’s 

limited set of top-level domains. 

However, we did acknowledge that one huge class of Internet users was truly in 

need of new TLDs. Over half of the world’s population reads and writes in scripts 

other than the Latin alphabet. These Internet users could not enter websites or 

email addresses in their native script and language, and we encouraged ICANN to 

accelerate availability of Internationalized Domain Names, or IDNs. 

Other business witnesses testified in the 2009 hearing that ICANN was failing 

to minimize defensive registrations and mitigate fraud as it expanded the TLD 

space. Early in the process of developing policies for new domains, these concerns 

were out-voted by others on ICANN’s policy council. Consequently, ICANN’s first 

draft Guidebook for new TLDs lacked even minimum requirements to reduce abusive registrations, and the second draft gave applicants a passing grade for merely 

describing intended mechanisms, even if they were likely to have little effect in preventing abusive registrations. 

The 2009 subcommittee heard conflicting views and questions on ICANN’s new 

TLD plan: Were the costs to registrants justified by planned benefits to global Internet users? Was ICANN doing enough to mitigate abuse? Was ICANN ready to ensure contract compliance over hundreds of new TLDs? 

On the day of that hearing, 23–September-2009, the US Government’s latest 

agreement to transition ICANN to independence was expiring in just one week. All 

in the hearing room were wondering how ICANN would fare in a post-transition 

world. 

Next, let’s examine what’s occurred in the 19 months since your 2009 oversight 

hearing. 

69 

1The ‘‘White Paper’’ on Management of Internet Names and Addresses, US Department of 

Commerce, Jun-1998, see http://www.ntia.doc.gov/ntiahome/domainname/6l5l98dns.htm 2 Affirmation of Commitments, 2009, http://icann.org/en/documents/affirmation-of-commitments-30sep09-en.htm 3 Ibid. 

4 p.3 of ICANN response, March 25, 2011, at http://www.ntia.doc.gov/comments/110207099– 

1099–01/attachments/ACF2EF%2Epdf 

ICANN’s transition from a US Government experiment to an independent, 

multi-stakeholder organization led by the private sector 

By September of 2009, the US Government had spent over a decade transitioning 

out of DNS management, as envisioned in President Clinton’s 1998 White Paper: 

‘‘The President directed the Secretary of Commerce to privatize the Domain 

Name System in a way that increases competition and facilitates international 

participation in its management.’’ And, ‘‘The U.S. Government is committed to 

a transition that will allow the private sector to take leadership for DNS management.’’ 1

The transition was expected to take a few years, but by 2009 ICANN and the Department of Commerce (DOC) had extended the transition several times, the latest 

being a Joint Project Agreement (JPA) that was expiring on September 30, 2009— 

just a week after the hearing. NetChoice was among those calling for another JPA 

extension to give ICANN time to develop permanent accountability mechanisms. We 

were even more concerned about ICANN’s vulnerability to government capture, especially after seeing proposals by the United Nations and European Commission to 

assume control over a newly-independent ICANN. 

A week later, we were surprised when DOC and ICANN unveiled their new agreement, the Affirmation of Commitments 2. The Affirmation established periodic reviews giving governments a defined oversight role in assessing ICANN’s performance. This was like a welcome mat for governments who’d been wary of ICANN’s 

unique multi-stakeholder process, and those who resented the legacy oversight role 

of the US government. The Affirmation also gave the global Internet community 

what it wanted: independence for ICANN in a framework bringing governments 

alongside private sector stakeholders, with a sharpened focus on security and serving global internet users. 

So, what’s happened since the Affirmation was signed? The first Affirmation review for ‘‘Ensuring accountability, transparency and the interests of global internet 

users’’ was completed last year, and generated sensible recommendations that 

ICANN has pledged to implement quickly. Two more Affirmation reviews are underway now. The second review is assessing ICANN’s plan for ‘‘Preserving security, stability and resiliency’’. A third review will ‘‘assess the extent to which WHOIS policy 

is effective and its implementation meets the legitimate needs of law enforcement 

and promotes consumer trust.’’ 

The fourth review required under the Affirmation addressed new gTLDs. Review 

9.3 addressed ICANN’s commitment for delivering promised results with its new 

gTLD plan: 

‘‘If and when new gTLDs (whether in ASCII or other language character sets) 

have been in operation for one year, ICANN will organize a review that will 

examine the extent to which the introduction or expansion of gTLDs has promoted competition, consumer trust and consumer choice, as well as effectiveness 

of (a) the application and evaluation process, and (b) safeguards put in place 

to mitigate issues involved in the introduction or expansion.’’ 3

It’s too early to know whether these Affirmation reviews will meet their overarching goal: to hold ICANN sufficiently accountable to global stakeholders so as to 

build acceptance of ICANN’s unique model of private-sector leadership. But the Affirmation deserves a chance to succeed, just as ICANN deserves a chance to show 

it can deliver new gTLDs responsibly and effectively. 

However, ICANN’s present board and management have adopted a different 

stance on the Affirmation and its oversight mechanisms. First, consider ICANN’s 

answer to the Commerce Department’s March 2011 Request for Comments on the 

Internet Assigned Numbers Authority (IANA) Functions. ICANN contends that the 

US ‘‘relinquished its oversight role’’ when it signed the Affirmation of Commitments.4 ICANN offered this insight to urge Commerce to similarly relinquish its 

oversight role for IANA functions. 

It’s true that DOC relinquished oversight for the transition process described 

above. But the US government did not relinquish its role of holding ICANN accountable to its Bylaws, Articles of Incorporation, and the Affirmation of Commitments. 

70 

Instead, the Affirmation broadens ICANN’s accountability to serve the global public 

interest from this point onward. 

Unless and until more governments sign the Affirmation, the US Commerce Department is the only entity to formally commit to the ICANN model and to holding 

ICANN accountable to its commitments. Commerce takes that commitment seriously, as shown by senior officials engaging in the Governmental Advisory Committee (GAC) and in Affirmation reviews. Many other ICANN stakeholders are engaging in Affirmation reviews too, with the expectation that this framework is how 

the global community will assess and improve ICANN’s adherence to core commitments and accountability to global Internet users. 

However, ICANN can terminate the Affirmation with just 120 days notice. And 

within a year of signing the Affirmation, ICANN’s chairman told a group of European parliamentarians that he saw the Affirmation as a temporary arrangement 

that he’d like to eventually terminate. 

This sentiment seems to hold true for more than just the Chairman of ICANN. 

In a meeting last summer in Brussels, we asked ICANN board members if the commitments in the Affirmation should be permanently adopted as part of ICANN’s official charter. One board member immediately disagreed, saying the Affirmation 

made no commitments not already in ICANN’s bylaws. We responded that the Affirmation includes important new commitments in paragraphs 3, 4, 7, and 8, plus 

those periodic reviews required in paragraph 9. But the present board saw no need 

to enshrine the Affirmation of Commitments as a permanent fixture in ICANN’s future. 

All of this to say that ICANN needs a persistent and powerful reminder that it 

serves at the pleasure of global stakeholders; that it has no permanent lock on managing the Internet’s name and address system. We believe that ICANN’s role in 

IANA functions should disappear the moment it walks away from the Affirmation 

of Commitments. 

China and the United Nations don’t support ICANN’s model of 

private sector leadership 

Several years after the US Government and the private sector created ICANN, 

governments around the world began waking-up to the idea that the Internet would 

be important to their future. And governments reflexively believe that anything that 

important just has to be run by governments. The United Nations (UN) jumped into 

Internet Governance at its 2005 World Summit on the Information Society. Discussions and resolutions there prompted Congress to respond, when Chairman Goodlatte and Congressman Boucher introduced HC Res 268 with these resolutions: 

(1) it is incumbent upon the US and other responsible governments to send 

clear signals to the marketplace that the current structure of oversight and 

management of the Internet’s domain name and addressing service works, 

and will continue to deliver tangible benefits to Internet users worldwide in 

the future; and 

(2) therefore the authoritative root zone server should remain physically located 

in the United States and the Secretary of Commerce should maintain oversight of ICANN so that ICANN can continue to manage the day-to-day operation of the Internet’s domain name and addressing system well, remain responsive to all Internet stakeholders worldwide, and otherwise fulfill its 

core technical mission. 

For the next 5 years, the UN determined to co-exist with ICANN by holding an 

annual meeting called the Internet Governance Forum (IGF). IGF meetings have become increasingly productive and substantive, yet some governments now want to 

reform the IGF by reducing private sector participation and addressing more of the 

issues that ICANN handles today. 

In its July-2010 statement to the UN, China’s government declared its priority 

for UN work on Internet governance, saying, ‘‘First, the future IGF should, in accordance with the provision of Tunis Agenda, focus on how to solve the issue of unilateral control of the Critical Internet Resources.’’ Translation: Unilateral control 

means US custody of the IANA contract and a US signature on ICANN’s Affirmation agreement. Critical Internet Resources means IP addresses, root servers, and 

the policy setting and management of the DNS. 

China wields tremendous voting power at the UN today. Its allies include over 

130 governments who support China’s call to reform the IGF, including migration 

of key ICANN and IANA functions to the International Telecommunication Union 

(ITU) of the United Nations. 

71 

Founded in 1865 to facilitate international telegraph agreements, the ITU predates the UN by more than 80 years. But while the ITU was still regulating telephone circuits, the Internet was evolving a multi-stakeholder model that draws on 

collective talents of industry, technologists, civil society, and Internet stakeholders 

around the world. In organizations like ICANN and the IETF representatives of 

governments, civil society and the private sector sit as equals, resolving matters 

through consensus building instead of political horse-trading. 

UN/ITU leadership hasn’t hidden their distaste for a model where governments 

share power with industry and civil society technologists. One ITU Secretary-General actually called this multi-stakeholder model a ‘‘waste of time,’’ and warned 

ICANN leaders that sooner or later governments would take greater control of the 

organization. 

The most obvious problem with ITU control of the Internet is the glacial pace at 

which UN organizations respond to changes in their policy environment. The ITU 

holds its major policy meeting once every four years—about the time it takes for 

a generation of Internet technology to be developed, deployed, and replaced by something better. 

More troubling is how the United Nations’ ‘‘one nation, one vote’’ policy is often 

manipulated by rich nations to influence the votes of needy nations. China is particularly adept at leveraging its economic investments in developing countries to 

curry votes in the UN. 

Our request to this subcommittee is to endorse the ICANN model and help resist 

efforts to impose the UN governance model on technology innovation that is truly 

changing the world. 

The Governmental Advisory Committee (GAC) has found its voice at ICANN 

It hasn’t been an easy learning process, but Governments and the private sector 

are gradually learning how to co-operate in a multi-stakeholder model. For its part, 

the GAC has been progressively engaging more deeply in ICANN policymaking for 

new gTLDS. It began with ‘‘GAC Principles Regarding New gTLDs’’ in March 2007, 

and added high-level comments on TLD Guidebook drafts in August 2009 and 

March 2010. Already this year, the GAC offered several detailed documents, including its extensive Scorecard for new gTLDs. 

A year ago, after the ICANN meeting in Brussels, we warned the ICANN board 

that it risked ICANN’s very existence if influential governments or the GAC felt 

alienated or ignored. But the ICANN board’s interaction with the GAC was still obviously and dangerously strained through the March 2011 meeting. 

While the current face-off between the GAC and ICANN Board is about the expansion of top-level domains, the underlying tension comes from more than just one 

policy decision—even one as big as new gTLDs. Even if the Board were 100 percent 

right on new gTLDs and the GAC were 100 percent wrong, ICANN’s failure to adequately cultivate its relationship with governments seems like self-destructive behavior. 

Support for the ICANN model among world governments is hardly universal. As 

noted above, many governments have been working through the United Nations to 

exert greater control over the Internet’s addressing system. 

Meanwhile, many members of the GAC are actively participating in ICANN’s 

multi-stakeholder process while asking their home governments to protect ICANN 

from UN encroachment. GAC members have the potential to be ICANN’s best advocates in the ongoing global debate over Internet governance, but first ICANN must 

adapt its processes to engage the GAC. 

Fortunately, the strained face-to-face ICANN meetings in San Francisco this 

March were a turning point. ICANN can also make major repairs to its GAC relationship by implementing recommendations of the Accountability & Transparency 

Review. Ultimately, the ICANN community must recognize that governments are 

stakeholders, too. That will involve helping governments to understand new TLD 

proposals and assisting them in addressing rational objections. And it may also involve ICANN being flexible with governments who lack a mechanism to pay fees required to file objections. 

The loss of government support is the largest threat to ICANN’s future. On the 

other hand, the GAC can be ICANN’s best ally if they’re treated right. When 

ICANN holds its next meeting on new gTLDs, we hope to see more community 

members sporting ‘‘MIND THE GAC’’ T-shirts. 

72 

5 John Paolillo, ‘‘Language Diversity on the Internet,’’ pp. 43–89, in John Paolillo, Daniel 

Pimienta, Daniel Prado, et al., Measuring Linguistic Diversity on the Internet, UNESCO Publications for the World Summit on the Information Society 2005. See http://www.uis.unesco.org/template/pdf/cscl/MeasuringLinguisticDiversitylEn.pdf 

Promoting Generic TLDs for half the world that doesn’t use 

our Latin alphabet 

In 2009, ICANN supported only Latin characters in domain names and email addresses. But, as noted in my 2009 testimony, over 56% of the world’s population 

reads and writes in scripts other than Latin 5. The lack of Internationalized Domain 

Names (IDNs) threatened to splinter the net if other governments emulated China’s 

solution to add Chinese TLDs within its borders. 

This chart helps to visualize the domain space of Latin and IDN scripts in generic 

and country-code top-level domains: 

The top half of this chart refers to 260+ Latin-script domains that were in the 

DNS in 2009. The bottom of the chart shows examples of generic and country-code 

domains that would use non-Latin scripts once ICANN made them available. For 

a decade, governments, business, and civil society clamored for IDNs in order to 

bring information, commerce, and communications to more of the world’s potential 

Internet users. 

When the gTLD expansion plan began to bog-down, it looked as if IDN domains 

would be delayed, too. In reaction to governments’ concerns about this delay, 

ICANN created a ‘fast track’ for IDNs—but only for country-code domains that are 

controlled by governments. In November 2009, ICANN launched the ‘‘fast track’’ for 


Delbia-1.eps Delbia-2.eps
73 

6 Affirmation of Commitments, 2009, http://icann.org/en/documents/affirmation-of-commitments-30sep09-en.htm 7GAC Communique—San Francisco, 18 March 2011, see http://gac.icann.org/system/files/GACcommunique-SFO.pdf 

Country Code domains (ccTLDs), but generic domains (such as .com and .org) were 

left on the slow track when it comes to serving the half of the world’s population 

that doesn’t use our alphabet. Websites seeking to reach non-Latin users now must 

use a country-code domain, where governments can enforce local restrictions on domain ownership and site content. 

For example, an Arabic user seeking to access YouTube.com in all-Arabic could 

only choose from among Arabic versions of YouTube domain that were permitted by 

governments who control Arabic country-code domains (youtube.sy in Syria; 

youtube.ly in Libya; etc.) It would undoubtedly be more convenient and empowering 

for Arabic users to access the global, generic address youtube.com—entirely in Arabic. 

But ICANN’s ccTLD fast track gave government-controlled ccTLDs a two-year 

head start against IDN versions of generic TLDs in terms of building market share 

of registrations and mindshare of Internet users. While non-government applicants 

can propose IDN versions of new gTLDs, they may find it hard to justify a million 

dollar investment to reach small linguistic communities, particularly if ICANN’s 

fast-track let a ccTLD get there first. 

In the upcoming round of new gTLDs, ICANN should actively promote and support gTLDs for small linguistic communities—particularly IDN scripts. ICANN can 

start by expanding its communications plan to educate global governments, businesses, and users about the ways that new gTLDs can serve local language communities. Next, ICANN should change its application fee schedule to create incentives 

for new gTLD applicants to offer versions of their TLD in additional scripts and languages. A simple incentive would be to reduce the $185,000 application fee for additional script versions. Moreover, the fee reductions could be structured to match the 

cost savings ICANN has acknowledged it would realize when evaluating multiple 

strings from the same applicant. 

By whatever methods, ICANN should be encouraged to promote generic TLDs to 

serve all scripts and languages in the new gTLD process. To do otherwise would fail 

to meet the Affirmation of Commitments, which stressed ‘‘the importance of global 

Internet users being able to use the Internet in their local languages and character 

sets.’’ 6

Lessons learned from the .xxx debate and decision 

The proposal for .xxx—the adult content gTLD—wasn’t even on the agenda during 

the subcommittee’s 2009 hearing. Now .xxx is part of the DNS, and the domain 

search.xxx resolves to the registry operator’s website. What lesson can the subcommittee and ICANN community learn from the .xxx decision? 

First, it’s essential to remember that .xxx won’t automatically expand adult Internet content, which already accounts for 12% of websites and 25% of search requests. 

The .xxx TLD just creates new labels for the 400 million adult pages already on the 

Internet, along with new services like micro-payments, virus checking, and content 

labeling. 

The main lesson for ICANN is to understand how to communicate and interact 

with governments and the GAC on sensitive TLDs like .xxx, since there may be 

many sensitive strings in the upcoming round of new gTLDs. ICANN and the GAC 

are already moving towards consensus on early warning mechanisms and objection 

processes for sensitive strings, but the .xxx controversy at ICANN’s last meeting 

demonstrates how difficult it can be for the private sector to comprehend nuanced 

government messages. 

Surprisingly, there is still a question of whether the GAC was expressing a consensus objection when it said, ‘‘There is no active support of the GAC for the introduction of a .xxx TLD.’’ 7 The lack of active support sounds like passive acceptance 

to a business or technical audience, so ICANN’s board voted to proceed with .xxx. 

But ICANN’s board might have voted the other way if it thought the GAC was 

clearly allied against .xxx. In the upcoming round, the GAC should be more explicit 

and ICANN should ask for clarification if it has any doubt about a GAC position. 

Finally, Commerce Department officials expressed disappointment with ICANN’s 

decision on .xxx, but there’s an upside to that disappointment. It demonstrates that 

the US government does not exercise unilateral control at ICANN, as China and 

others often complain. 

74 

ICANN has made significant improvements to respond to government and 

business concerns about its new gTLD program 

Our testimony has addressed oversight issues that concern ICANN’s plan for new 

TLDs. We explained how ICANN’s new Affirmation of Commitments should be used 

to hold ICANN accountable for its new gTLD policy decisions and compliance. We 

described the genuine threat from UN agencies and governments that don’t embrace 

the multi-stakeholder model. We recognized improvements in GAC—ICANN interaction and encouraged continued improvements there, including lessons learned 

from the .xxx decision. And we called on ICANN to proactively encourage new 

gTLDs for smaller language communities and non-Latin scripts in order to serve the 

next billion global Internet users. 

All of this provides context for the subcommittee to assess ICANN’s new gTLD 

plan, but we have not gone into specific substantive changes needed in the new 

gTLD Guidebook. NetChoice is continuing to press those points directly to ICANN 

via the public comment process. We are also seeking support from other stakeholders and from members of the GAC. In other words, we are still trying to use 

the ICANN process to make improvements in ICANN policies. 

This is not to say that the Committee shouldn’t inquire about detailed deficiencies 

in the new gTLD plan. Indeed, we share many of the specific concerns expressed 

by our business colleagues on this panel today. 

We just don’t think that this subcommittee should contemplate legislation or resolutions addressing specific changes to ICANN’s new gTLD process. Nor should Congress attempt to warn-off the UN and other governments with a resolution like that 

adopted in 2005, which would give China and its UN allies a proof point for their 

complaints about US control of ICANN. 

In 2011, we are growing more concerned about the long-term prospects for the 

ICANN model of private sector leadership. Congress can do more to help preserve 

the ICANN model by supporting the Affirmation of Commitments as a permanent 

fixture, and to support our Commerce and State Departments in their efforts to secure broader government participation in ICANN. 

Conclusion 

We believe that the appropriate role for Congress and the Commerce Department 

is to hold ICANN accountable to the Affirmation of Commitments. The White Paper 

vision for ICANN must be preserved: ICANN should be led by, and accountable to 

the private sector interests that will make the huge investments to bring 

connectivity, content, and commerce to the next billion Internet users. 

Congressional oversight is helpful to support NTIA and hold ICANN accountable 

to the Affirmation of Commitments—in all ways—not just for new gTLDs. But if 

Congress were to weigh-in on specific policies at ICANN, it would provoke those 

governments who complain the US maintains control over the domain name system. 

While there would be benefits of Congressional guidance to ICANN on new gTLDs, 

it could raise the risk of having ICANN’s private sector model displaced by a UN 

model where every government—no matter who—gets one vote, and where the private sector gets no votes at all. 

Mr. GRIFFIN. Thank you. 

Mr. Bourne? 

TESTIMONY OF JOSHUA BOURNE, PRESIDENT, 

COALITION AGAINST DOMAIN NAME ABUSE (CADNA) 

Mr. BOURNE. Well, I would like to thank Chairman Goodlatte, 

Ranking Member Watt, Members of the Committee for the opportunity to submit testimony and, more importantly, for convening 

this hearing on such an important topic, about which too few 

Americans and Internet users across the world have sufficient 

awareness or understanding. Your decision to convene this hearing 

is a continuation of your strong leadership on Internet issues and 

the protection of our intellectual property. 

To begin, I would like to provide a background on the organization I represent, the Coalition Against Domain Name Abuse. We 

75 

established CADNA 4 years ago, along with 10 companies, when 

we recognized there was no group dedicated to finding a meaningful and lasting public policy solution to the problems of 

cybersquatting and online infringement. Through our efforts to find 

creative and effective solutions to these problems, our coalition’s attention was drawn to the Internet Corporation for Assigned Names 

and Numbers due to the commanding role it plays in the formation 

and implementation of domain name policy. More importantly, we 

learned of the even more influential and unchecked role ICANN 

has in the general direction of Internet regulation and policy. 

4 years later, both the CADNA member companies and I are 

much getter educated in regards to the problems that Internet 

users around the world currently face, as well as the precarious 

power that ICANN wields, which could potentially help to resolve 

or further perpetuate these problems. CADNA has grown to a coalition to over 20 companies based both here in the U.S. and abroad. 

We have members representing a broad range of commercial industries, including financial services, retail, hospitality, pharmaceutical and others. I am proud to say that we are a leading voice 

on domain name policy, ICANN issues, and on ICANN’s proposed 

gTLD program. 

Despite the prevalence of the Internet in daily lives of most 

Americans, knowledge of Internet governance is decidedly scant. 

Very few people understand how the Internet operates or who has 

control over the domain name system. It is in this opaque context 

that ICANN operates, remaining free to develop policies without 

scrutiny from the general public or even for most members of the 

government. 

Let me state up front that CADNA agrees with the ICANN 

model. We support the bottom-up, multi-stakeholder concept of 

ICANN governance. The problem is not ICANN itself. The problem 

is that ICANN has been captured by a constituency that stands to 

profit from its actions. When conceived in 1998, the bottom-up concept failed to develop checks against capture. At that time, nobody 

anticipated that any one constituency would develop strong economic interest in ICANN’s actions and stand to gain so much financially from ICANN-developed policy. Few could foresee how bad 

actors would eventually place familiar brand names in domain 

names to confuse and engage their targets, just as Ms. Stark referred to earlier. The reality that has unfolded over the past 13 

years shows that ICANN’s original mission of bottom-up policy development in the interests of the entire Internet community has 

fallen short. At present, there is the ICANN community and there 

is the Internet community, and unfortunately, the interests of the 

two communities are not aligned. 

Instead of representing the true community of Internet users, 

ICANN’s community is predominantly comprised of companies with 

vested interest in selling domain names. What better way to sell 

domain names than through a mass introduction of new gTLD’s? 

Brand owners will have no choice but to pay for the acquisition and 

maintenance of each defensive registration across as many of an 

anticipated 400 new gTLD’s as possible to prevent infringement of 

their intellectual property. To this day, while the strongly biased 

ICANN community demands it, ICANN has not presented any conVerDate Aug 31 2005 16:23 Jul 10, 2011 Jkt 000000 PO 00000 Frm 00079 Fmt 6633 Sfmt 6601 H:\WORK\IP\050411\66155.000 HJUD PsN: 66155
76 

vincing economic justification for the new gTLD program showing 

actual demand for this mass rollout to the public. In fact, many 

small business owners and nonprofit organizations, with the exception of ICANN, are deeply concerned about the negative impact 

new gTLD’s will have on their business and cost of defensive registrations. 

Before ICANN goes through with its plan to roll out an estimated 400 new gTLD’s in the coming months, the United States 

Government should leverage the upcoming renewal of the IANA 

contract to require an audit of ICANN. CADNA has long proposed 

the formation of a Federal commission composed of Internet experts, private sector representatives, academic representatives, government officials, and foreign government observers to fully audit 

ICANN before renewing the IANA contract. 

CADNA urges you and your Committee to consider the implications of a flawed ICANN. The experiment is not lost. It just needs 

to be reviewed and adjusted, if necessary, just like any other new 

model created by private industry or government. ICANN cannot 

self-correct and needs external correction to make it accountable 

and aligned with what is good for the Internet and its 1.8 billion 

global users. While ICANN’s gTLD initiative is what brings us together today, the underlying and most important subject of the 

hearing is ICANN as an institution and whether or not it serves 

the public interest. ICANN is a California-incorporated 501(c)(3). 

Before it is too late and other questionable policies are pursued, 

consider the leverage of the IANA contract renewal and bring 

ICANN into the 21st century. 

Thank you for this opportunity to testify before you today. 

[The prepared statement of Mr. Bourne follows:] 

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Mr. GRIFFIN. Thank you, Mr. Bourne. 

Mr. Pritz, I want to start with you. I want to get to the fundamental reason for why you are doing what you are doing. Can you 

just sort of tell us why are you creating the new gTLD’s and is it 

because of a consumer need, there is a real demonstrated consumer 

need? And if so, how will consumers benefit from this expansion? 

Mr. PRITZ. Certainly. Thanks for the question. 

First, I want to parse the definition of ICANN. The new gTLD 

program is from the large ICANN, the ICANN community that is 

comprised of all the people participating in this multi-stakeholder 

model. So this process involves ICANN staff taking and synthesizing the results of the community input into a program and implementation plan. 

So where does this come from? It comes from the very birth of 

ICANN. In 1998 in a hearing, it was discussed that one of the primary purposes of this new corporation that was to provide Internet 

governance was to provide increased competition and opportunities 

for innovation. It was specified right at that time we could do that 

in two ways. ICANN could do that in two ways. 

One was by introducing competition into the registrar marketplace. At the time ICANN was formed, there was one registrar, 

NSI, and they charged $75 or $80 for a domain name. That was 

a fairly straightforward introduction of competition. ICANN created a registrar marketplace where there are now 930-some odd 

registrars, and as you know, the price of a domain name is $8 or 

$10. 

The other very specific instance that was discussed at that hearing was: how should the introduction of new top-level domains be 

introduced. It was perceived then, as now, that new TLDs will provide opportunity for innovation and more choice for consumers. At 

that time, it was specifically left for this new corporation to decide 

that. 

So ICANN has actually spent 10 years—the big ICANN—looking 

at that problem. There have been two trial rounds of new gTLD introduction in 2000 and 2003, and there were significant lessons 

learned there. And then the GNSO, which is ICANN’s primary policymaking organization, convened this 19-month intensive policymaking process where they considered this question, and they almost unanimously resolved that new gTLD’s would provide innovation and choice. These are the experts that we all rely on in the 

Internet multi-stakeholder model that are knowledgeable of that 

model and will understand the benefits. 

Mr. GRIFFIN. I am limited on time, so let me get a little followup here. 

So assuming there is a consumer benefit—just assume that for 

the sake of argument—do you see these changes giving opportunity 

to rogue sites or for more rogue sites and parasitic sites to spring 

up? Do you concede that? 

Mr. PRITZ. I think that new registrants will continue to register 

names, and whether they are all in dot com, dot net, and dot org 

now or whether they will register them in a broader base of sites, 

I think that the introduction of new consumer protection mechanisms and new rights protection mechanisms in the new gTLD’s 

will actually make them a safer environment. It gives us more tools 

81 

for fighting them, and it provides more safeguards for trademark 

owners than exist now. So we are moving into a safer environment. 

I just want to point out, for example, the example Ms. Stark gave 

of the rogue site regarding Fox—you know, that example ended in 

dot com. Most of the abuse occurs in dot com because there is a 

concentration of names there, and that is where abuse pays off. 

That is where defensive registrations occur. 

Mr. GRIFFIN. I am growing short on time, so I will ask this last 

question. But could you comment on some of the safeguards that 

will be implemented or that you foresee being implemented that 

would help mitigate the opportunity for rogue sites, parasitic sites 

to increase as a result of these changes? 

Mr. PRITZ. Yes. Well, as far as rogue sites go, there are three 

avenues. You know, this is a very, very important question and is 

not necessarily purely related to new gTLD’s. But there are essentially three avenues for enforcement. 

One is ICANN’s contracts with registries and registrars that can 

be enforced. So there are provisions for investigation of false Whois 

and other provisions. So there is ICANN’s contractual duties. 

There are the obligations of law enforcement. When there is 

cybersquatting, that is illegal, and ICANN works closely with various law enforcement agencies in order to bring opportunities for 

more enforcement to them. 

And third is competition authorities. So ICANN can refer to 

issues where there is infringement that unfairly creates barriers to 

competition to those authorities. 

Finally, if you remember the question, Chairman, ICANN works 

actively with registries and registrars to identify and work in partnership to take down rogue websites. In fact, the latest version of 

the contract that we are proposing with VeriSign for dot net allows 

them to suspend certain rules in the contract to act affirmatively 

to take down those sites, but understand that when we do act in 

that way, that has to be done very, very carefully because that 

power could be abused too. 

Mr. GOODLATTE [presiding]. Thank you. 

The Chair now recognizes the gentleman from North Carolina, 

Mr. Watt. 

Mr. WATT. Thank you, Mr. Chairman. 

Is there anybody on this panel who thinks that these new gTLD’s 

is a bad idea? 

[No response.] 

Mr. WATT. So I am just trying to be clear on where people stand 

on this. I heard concerns being expressed about the steps toward 

implementation. Is there anybody here who thinks this should not 

be done? 

Ms. STARK. Can I comment to that? 

Mr. WATT. Well, I don’t want you to comment. Either you think 

that it should be or it shouldn’t be. Your testimony seems to be the 

clearest that you had some problems with the implementation of it, 

but I never did hear you say you thought this was a bad idea. 

Ms. STARK. I don’t think anybody in this community thinks it is 

an outright bad idea. What—— 

Mr. WATT. Okay, all right. You know, these are not trick questions. I am just trying to get through my own thought process here. 

82 

Then what is the compelling good idea/reason that this has to be 

done as far as you are concerned, Ms. Stark? Just give me one compelling good reason to do it. 

Ms. STARK. To have it? 

Mr. WATT. Yes. 

Ms. STARK. I think that the idea of opening up spaces for expression in what Steve DelBianco talked about, non-Latin languages 

is—— 

Mr. WATT. Okay. Then you think other languages. And that can’t 

be done in the dot com, dot net lingo just as well? 

Ms. STARK. Not today, not the way the system is currently—— 

Mr. WATT. Well, not the way it is done today, but you know, 

what is the difference? You all keep talking about innovation. 

Changing somebody’s name is not innovation. Allowing somebody 

to use a different name is not innovation. That is not adding anything new to life that I can tell. 

Mr. DelBianco, Mr. Metalitz, help me here. 

Mr. DELBIANCO. Ranking Member, you are right. Just adding a 

new label to an existing page or content doesn’t really truly create 

innovation. However, 56 percent of the planet cannot even type in 

the domain name in their own language. 

Mr. WATT. But that is not a function of whether you call something ‘‘steve’’ or whether you call it ‘‘net,’’ is it? You can put the 

‘‘steve’’ in front of the ‘‘net,’’ ‘‘dot net’’ or you can put it ‘‘dot net 

dot steve dot watt dot steven,’’ you know. You still haven’t created 

anything new, have you? 

Mr. DELBIANCO. You haven’t there, but 56 of the planet can’t use 

our alphabet when they read and write. So there is no capability 

to do Greek letters, Japanese or Chinese letters. 

Mr. WATT. Tell me how this is going to make that better as opposed to what we have right now.. 

Mr. DELBIANCO. It will enable for the first time that an Arabic 

user could actually type an entire email address in all Arabic or a 

website name. He can’t do that at all today. 

Mr. WATT. Why can’t the current system evolve to do that without new gTLD’s? 

Mr. DELBIANCO. This is that evolution. 

Mr. WATT. Okay. Go ahead. 

Mr. METALITZ. The current system is, to some extent, evolving to 

do that because in the country code top-level domains, operated one 

per country, including in countries that use these scripts, they are 

already moving into the internationalized domain names world 

where they can type it all in in their own script. But again, that 

is only one domain per country. It is dot cn in China. There would 

be dot eg in Egypt, for example. They now have their equivalents 

in their own scripts, and that means that the next billion people 

that are coming onto the Internet—some of them simply are so uncomfortable using the Latin alphabet that they are not going to be 

able to participate. That is the theory. 

ICANN is already addressing this at the country code level, and 

I think the area where there is the best argument for new gTLD’s 

is in this area. 

Mr. WATT. I am taking a lot of time here. Would you all please, 

each one of you, write to me after this hearing what you think the 

83 

most powerful, persuasive reason is that we need to do this so that 

I will at least understand that part of it? 

What stops now—well, I see people do it in front of the names 

of the dot net and the dot com, a bunch of stuff that I don’t like. 

It seems to me that this is going to proliferate it behind the dot— 

offensive names, ‘‘nazi this,’’ ‘‘nigger this.’’ You know, it ain’t only 

‘‘steve’’ that we are talking about. What is it that stops that from 

happening now, Mr. Pritz? And what is built into this new system 

that will stop it from happening behind the dot as opposed to in 

front of the dot? 

Mr. PRITZ. So there are a variety of protections in the new process whereby almost anyone can object to a proposed name. So the 

purpose of the new TLD is published and that TLD can be objected 

to. Governments can object to new TLD’s. Also there will always 

be that abuse. The purpose for the program, though, is really to 

provide increased opportunities for these new TLD’s to represent 

communities to tie to communities, dot navajo to tie to small businesses, to hook up—— 

Mr. WATT. You are answering my last question, Mr. Pritz. I 

didn’t ask that question. That was the last question. That was the 

question before. I am asking you a new question. That is a new 

question I ask now. I gave you the opportunity to write me and tell 

me the answer to the last question I asked. I am trying to ask a 

new question now. Did you understand the question I asked? 

Mr. PRITZ. Yes, I did. 

Mr. WATT. All right. Answer that question because I am out of 

time already. 

Mr. PRITZ. So there can be that, but there are also significant 

benefits to the program that outweigh the costs. 

Mr. WATT. All right. I give up, Mr. Chairman. I am out of time. 

Mr. GOODLATTE. You asked a good question and I think there 

will be some follow-up here. 

Before we get into some more of that, I want to go down the line. 

I will start with you, Mr. Bourne. There are obviously benefits to 

doing this, at least to a limited expansion of top-level domains. I 

am not sure about the unlimited nature of it. But let me just ask 

each one of you, right now, if they move into this as quickly as 

launching it in June, will they be able to manage and enforce their 

policy with respect to unlimited numbers of TLD’s, and will they 

be able to adequately police the registries that will manage these 

TLD’s? Mr. Bourne? 

Mr. BOURNE. I don’t think so. I don’t believe so. 

There have been a great deal of issues with compliance to date 

as is. The issue with the scale of the rollout is really what concerns 

me the most. I have talked to businesses and I personally have considered what innovation might be possible in a new TLD space. For 

the most part, I am not that moved by those opportunities. It will 

take many, many years for new TLD’s to potentially organize communities mainly because there is such a strong bias toward dot 

com today. The nature of a massive rollout can have only one intended purpose, which is to create chaos and create massive optin and buy-in from companies in particular. 

Mr. GOODLATTE. Okay. We have to go down the line here. So, Mr. 

DelBianco? 

84 

Mr. DELBIANCO. Mr. Chairman, in your opening statement, you 

used the analogy of a backbone. Backbone is what you called it, a 

DNS. And adding hundreds of new top-level domains is like adding, 

well, hundreds of new vertebrae to a backbone. And the question 

will be does the nervous system extend into those new vertebrae 

because the nervous system of ICANN is the monitoring, supervision, and compliance measures that you asked about. Will it 

work? Well, you don’t want to necessarily add 500 new vertebrae 

at once. They are going to have to do it in small batches, and as 

soon as they go into the root, as soon as those websites begin to 

light up, that is where monitoring and compliance is going to be 

so essential. It will be up to us in the community, government representatives, including U.S. Government through NTIA, to really 

ride herd on ICANN and beef up that compliance function. It is up 

to us to make sure we don’t blow this because if we mess it up, 

ICANN probably gets replaced by something from the United Nations. 

Mr. GOODLATTE. Mr. Metalitz? 

Mr. METALITZ. Mr. Chairman, I think the answer to your question is no. ICANN is not capable of doing this today and certainly 

would not be capable of doing it if there is a massive rollout as 

they plan, up to 500 or 1,000 new gTLD’s. To use the nervous system analogy, I think if this were to occur, we would have a high 

risk of a nervous breakdown. 

Mr. GOODLATTE. Mr. Palage? 

Mr. PALAGE. Serious concerns about the scalability of resources, 

but have them positively encouraged by some recent hires and investment in this area by ICANN. 

Mr. GOODLATTE. Investments that could handle the rollout of 

multiple numbers of top-level domains compared to the number we 

have today? 

Mr. PALAGE. Considering it is going to be an 18- to 24-month 

process, that does provide ICANN scalability. So if they continue 

to hire based upon current recent hiring levels going forward, potentially. But again, I do have serious concerns right now but have 

been encouraged by some positive steps they have taken. 

Mr. GOODLATTE. Ms. Stark? 

Ms. STARK. I think we are very concerned. Compliance issues 

have been one of the toughest that we faced so far in the space of 

only 21 gTLD’s that took over a dozen years to implement and 

launch. You are talking about exponentially increasing that space, 

exponentially increasing the number of registrar and registry 

agreements that would require compliance, and given the track 

record, we don’t have a lot of confidence that it would be successful. 

Mr. GOODLATTE. Mr. Pritz? 

Mr. PRITZ. The answer is yes. ICANN has a very strong—— 

Mr. GOODLATTE. How many? In the next, say, 24 months, how 

many of these new gTLD’s will we see? 

Mr. PRITZ. We will see maybe 200. 

Mr. GOODLATTE. You think you can do 10 times the number that 

you administer now. It has taken decades to get to the point where 

you have good competency where you are now, and some criticize 

what you are doing now. But leave that as it may be, you can scale 

up a multiple of 10 times in 24 months. 

85 

Mr. PRITZ. Right. So 10 times sounds like a lot, but 200 is a pretty small factory. We also provide support for 250 ccTLD’s through 

our IANA function. In the last 18 months, ICANN has terminated 

50 registrars. We have sent out non-renewal or breach notices. We 

have sent out over 7,000 compliance notices. We have in place 

manpower plans and staffing plans for scaling the compliance function. ICANN recently hired a new director of compliance, Maguy 

Serad, with 20 years experience in compliance, and we have also 

added additional staff in that area. 

Mr. GOODLATTE. So let me ask you about this. So considering 

these large number of domains will be defensive, will you commit 

today that if this proposal proceeds, ICANN will create a block list 

of globally recognized trademarks to be administered by ICANN’s 

new trademark clearinghouse for future gTLD’s that will protect 

nonprofits like the Red Cross or the Olympics, universities, or 

other brand holders? 

Mr. PRITZ. So, first, we don’t necessarily ascribe to the assumption that there will be large numbers of defensive registrations. 

First, there are new protections in this new version of—— 

Mr. GOODLATTE. Why not make the commitment? 

Mr. PRITZ. That was one of the recommendations of the implementation recommendation team. WIPO has been working on a list 

of globally protected marks for 10 years. 

Mr. GOODLATTE. I have heard that ICANN is already excluding 

some of their own technical marks on a block list for new gTLD’s. 

If it is good enough for ICANN and for technical marks, it should 

be simple enough to include all brand holders. 

Mr. PRITZ. So all brand owners is a vast number. 

Mr. GOODLATTE. It sure is. But you just told me that you are 

ready to implement the rollout of 200 new gTLD’s. 

Mr. PRITZ. Right. 

Mr. GOODLATTE. But now when I ask you about a block list to 

protect all the legitimate businesses and nonprofits and other entities that want protection from this sudden explosion in the number 

of these top-level domains, you tell me, well, to do it for all of them, 

that is a lot. So I will go back to my first question. Are you ready? 

Mr. PRITZ. Yes, we are. 

Mr. GOODLATTE. You are ready but you are not ready to protect 

the people who may be victimized by this. 

Mr. PRITZ. No. We are ready. 

Mr. GOODLATTE. All right. Are you worried that most of the new 

gTLD’s that will be created will end up being unprofitable if these 

defensive registrations are taken out of the picture? 

Mr. PRITZ. No, I don’t think the business models for new gTLD’s 

will rely on defensive registrations. I think it is demonstrable that 

there will not be defensive registrations in these new TLD’s. Defensive registrations occur primarily in com because that is where the 

abuse is and that is where the action is. There have been other 

new TLD’s introduced. They are small. There are no defensive registrations there. 

Mr. GOODLATTE. Look, according to your draft 2012 budget, your 

new application fees could net over $92 million on top of your current $70 million operating budget with costs of administering this 

new program around $35 million. What are your plans for the rest 

86 

of the money, and why don’t those plans include a block of not only 

your technical marks, but everybody else’s legitimate brands? 

Mr. PRITZ. ICANN’s policy is that the fees for evaluating new 

TLD’s be done on a cost recovery basis, and that is what it is. That 

fee has been very carefully calculated to cover the costs of evaluation. Because of all the issues we are talking about here today—— 

Mr. GOODLATTE. I thought your own budget contemplated the cost of administering this new program at around $35 million, and 

you could have fees of $92 million. So what happens to the other 

$57 million? 

Mr. PRITZ. So of the $185,000, $100,000 of it goes directly to the 

evaluation. We are doing a very comprehensive evaluation because 

of the concerns we have heard here today. Every new TLD application is evaluated six different ways, six different tests, three 

against the applicant to test their financial and technical wherewithal, to do background checks to try to prevent the sort of abusive behavior we are talking about. We also test the TLD string, 

it is called, at the end to ensure that it doesn’t break the Internet 

or doesn’t tend to cause user confusion. 

Mr. GOODLATTE. Let me ask you about one other area of expenditures because it looks to a lot of us like you are getting a lot of 

money here. We would like to see some commitment to using some 

of those resources to protecting intellectual property rights. You 

seem to be intending to protect your own intellectual property 

rights. Why not protect others since you are creating a major problem for them? So what are you going to use the money for? Do you 

know how much money ICANN has disbursed in bonuses since 

2007? 

Mr. PRITZ. No, I don’t, but I know—— 

Mr. GOODLATTE. Can you get that for us? 

Mr. PRITZ. Yes. I know it is posted—— 

Mr. GOODLATTE. Would you submit that to the Committee? 

Mr. PRITZ. It is already posted and I will get it for you. 

Mr. GOODLATTE. And do you know what the largest bonus awarded was? 

Mr. PRITZ. No, I don’t. 

Mr. GOODLATTE. What the average was? 

Mr. PRITZ. No. 

Mr. GOODLATTE. Are any ICANN employees’ or contractors’ bonuses tied to the gTLD proposal or to completing it by June? 

Mr. PRITZ. My bonus is tied. I can talk about me. My bonus is 

tied to moving the program forward. It has never been tied to a 

successful launch of the program. 

Mr. GOODLATTE. What is the difference between a successful 

launch and moving the program forward? 

Mr. PRITZ. Oh, that we will listen to community input, we will 

publish a next version of the Applicant Guidebook. There have 

been six versions of that. We will furnish the board with the right 

amount of documentation in order to consider the issues that are 

raised by the community. 

Mr. GOODLATTE. But no member of ICANN bonus is tied to actually launching this. 

Mr. PRITZ. Yes. I don’t know. I know my bonus is not and I am 

the manager of the program. 

87 

Mr. GOODLATTE. We would be very interested in knowing whether people have a financial interest in moving this forward and particularly in moving it forward hastily by June. So if you would provide that information to the Committee, that would be very helpful 

to not only us but a lot of other people who are interested in what 

is going on here. 

My time has expired. We will now recognize the Ranking Member of the full Committee, Mr. Conyers. 

Mr. CONYERS. Thank you, Chairman Goodlatte. 

First on a public consumer note, I have had a number of the ladies here in the Judiciary Committee tell me that it is freezing in 

here. I don’t know if this is part of the deficit plan that the opposition has in mind of balancing the budget, but all I can tell you, 

Bob, is that when I was Chairman, I had the room warmer than 

you do now. [Laughter.] 

Mr. GOODLATTE. I thought this topic would heat the room up. 

Maybe we just over-compensated, but we will check on that. I 

thank the Ranking Member for calling that to our attention. 

Mr. CONYERS. Now, my fear, members of the panel, is that we 

may be talking about a done deal. We are acting like there is something that can interfere or make this thing better, but I have got 

the notion, Mr. Pritz, that there is going to be a vote in June and 

I think a lot of people already know what the outcome is going to 

be, don’t you? 

Mr. PRITZ. Honestly, I have never gained in trying to predict 

what our board of directors is going to do. 

Mr. CONYERS. Well, the chairman of the board of directors thinks 

that it is. Chairman Peter Dengate Thrush was quoted as saying: 

You notice we have set up a special meeting early in the week because we want to have a party. We want to have a resolution to 

celebrate. End quote. 

Mr. PRITZ. First, I want to point out that Peter Dengate Thrush 

is an intellectual property attorney and has paid particular attention to the issues that are raised here. 

Second, while there has been talk in this Committee about this 

being a sudden event or quickly considered, I want to tell you that 

this has been the result of a very well managed, deliberate process 

to develop not just the policy for introducing new TLD’s, but the 

manner in which they are introduced. And several times during the 

process, we have stopped. So when intellectual property interests 

came to ICANN, after we published the first version of the Applicant Guidebook and said we want more property rights protection 

in that guidebook, we tolled the process, convened—— 

Mr. CONYERS. All well and good, but the chairman of the board 

just told us all publicly—this isn’t a private communication I am 

quoting. He said publicly it’s a done deal, and you are giving me 

a lot of additional assurances, but I think the chairman of the 

board might know, as well or better than you, what the board is 

going to do. 

Mr. PRITZ. Certainly they have targeted approval of this process 

for this meeting in Singapore. And ICANN is a very transparent 

and open place, and when the board has thoughts, they signal 

those to the community and identify those to the community and 

make those statements public. 

88 

Mr. CONYERS. Well, Thrush has already made it public. Not only 

has he predicted that it is going to carry, but he wants it done 

early enough to celebrate. 

I hope I get a copy of what you all send the Ranking Member, 

Mel Watt, because I want to read it as well. 

But I think I am going to have to communicate with the board 

chairman to ask if he can assure this Committee that we won’t be 

going through with this early meeting to have a resolution to celebrate because I think it ought to be held up. And you know better 

than the rest of us, Chairman Goodlatte, we may need another 

hearing on this matter. I think this is not cause to celebrate. This 

is going to change the shape of this medium as we know it, and 

I would like to personally request of him to delay this early meeting and the consideration of this resolution as we have a lot of 

work to do. I am more troubled about this circumstance that 

caused us to come here than I was in the beginning. 

And if I could get an additional minute, Mr. Chairman. 

Mr. GOODLATTE. Without objection. 

Mr. CONYERS. I would like to ask Attorney Stark and Mr. 

DelBianco to just briefly comment on my proposal. 

Ms. STARK. Congressman Conyers, we would very much appreciate—additional time basically is all we are asking for. We are not 

wholesale against the expansion of the gTLD space, but we do believe that there are very complex issues that have not yet been resolved and that will impose tremendous implications for the public 

and costs on brand owners and the public as well. And as a result, 

we feel like this has such enormity, the scale of it, the magnitude 

of the change, the implications for the public, that it behooves everybody to take the time necessary to make sure that we do our 

best to get it right. And we just don’t feel that the current version 

of the draft Applicant Guidebook and registry agreement do that, 

that there are still some very, very fundamental issues that remain 

open for discussion and need to be resolved. 

Mr. DELBIANCO. Chairman Conyers, there is one positive aspect 

of having Peter Dengate Thrush schedule a party because he really 

wants a lot of the right guests to show up at his party, and if he 

throws a party and there are no governments in the room celebrating, there is no law enforcement there toasting an effective 

plan, there is no businesses, banking and financial institutions 

there, he is going to wake up with one heck of a hangover after 

that party. So the key for this is the pressure is on him and the 

pressure is on ICANN to get those guests to the party. 

And how do they do it? They need to mind the GAC. If they pay 

attention to what the GAC has asked for—Governmental Advisory 

Committee—and deliver those safeguards, those responsible ways 

of delivering integrity, then we will all show up at that party and 

we can focus on launching TLD’s in a responsible way. I feel like 

pressure on making the party the right party is more important 

than the U.S. Government unilaterally asking for a delay since, as 

I said earlier, that plays into the hands of 200 nations who don’t 

even show up at ICANN and might want to follow China’s lead 

saying their party is at the UN. 

Mr. CONYERS. Joshua Bourne, could you comment? 

89 

Mr. BOURNE. I will. What I would caution the Subcommittee is 

to not just ask for a delay and further study on this TLD policy, 

instead to consider where it came from and whether that organization is functioning as it should and whether this policy, maybe if 

it is curtailed some or some additional trademark protections are 

put in place—will this be followed by another policy and another 

policy and the same kind of charter changes that have occurred in 

earlier introduced new TLD’s to keep them afloat will follow new 

charter changes in the future when these new TLD orphans could 

end up destitute. We just do not see the demand in the user community for hundreds of new generic top-level domains today. The 

demand is within the ICANN community. 

ICANN was captured. ICANN was a private enterprise that was 

set up to control scarce resources, making it ripe for capture. 

ICANN was set up in a way to try to make it more independent 

by allowing it to raise its operating budget as a function of how 

many domains get registered or renewed. That has aligned its interest with anybody who can help them grow that operating budget 

and do their job. ICANN is probably under tremendous pressure 

from various commercial interests in the domain name business 

who absolutely want this to move forward as quickly as possible. 

Our numbers show that anywhere between $500 million and $1 billion will be spent by companies to protect their IP. For what benefit? 

So I go back to my original proposal which is band aids in a way 

would be to—sure, more intellectual property protection is useful 

and critical but they are just band aids. If we fix ICANN, ICANN 

will be accountable, predictable, have a long-term point of view, 

have an interest in protecting the public interest. And I think there 

is only one opportunity left really to do that, which is to work with 

NTIA on their renewal of the IANA contract and ensure that that 

leads to potential fundamental changes to how ICANN is structured and how it—— 

Mr. GOODLATTE. The time of the gentleman has expired. 

The gentleman from North Carolina is recognized for 5 minutes. 

Mr. COBLE. Thank you, Mr. Chairman. 

Good to have you all with us this morning. 

Mr. Bourne, I have several constituents who have invested to 

protect their trademark and corporate brands on the Internet. They 

expressed concerns that the new gTLD’s will amount to another 

added cost to protecting their market brand. What do you say in 

response to that? 

Mr. BOURNE. Congressman Coble, they are right to be concerned. 

If I understand that question correctly, the math that we have conducted showed that even a small trademark owner acting conservatively might spend a half a million dollars which they will have 

to respend every 2 years to own this duplicative, superfluous domain name portfolio. When you drill down on the numbers that 

lead to that half a million dollars a year for a small portfolio, we 

conclude only 3,600 defensive registrations per TLD. Just 5 years 

ago—or 4 years ago—excuse me—when dot asia launched, there 

were 15,000 approved trademark applications during their sunrise 

period. So predicting one-quarter of the level of participation, a 

90 

small brand owner might have to own another half million dollars 

worth of domain names. 

Mr. COBLE. I thank you. 

Mr. Chairman, I think you touched on this in your line of questioning too. 

Mr. Pritz, let me ask you this. What protections, if any, are provided to ensure that ICANN will not approve new global top-level 

domains that will gravate problems we are already experiencing 

with online parasites and therefore simply become new havens for 

counterfeit, infringing, and possibly criminal activity? 

Mr. PRITZ. There are several ways. One is in the application 

process for the new TLD’s. There are new trademark protections 

put into those new TLD’s and new consumer protections. So, for example, we convened a team of experts in Internet security and stability, and they gave nine concrete recommendations for mitigation 

of malicious conduct in new TLD’s. All of those are incorporated 

into the Applicant Guidebook. There are measures such as background checks of applicants and the removal of records that might 

be used for malicious conduct purposes. So that will help create a 

safer environment. Plus, we have provided tools to trademark holders that I could explain some detail that will allow them to avoid 

these negative impacts. 

Mr. COBLE. I thank the panel for your contribution. 

Mr. Chairman, I yield back. 

Mr. GOODLATTE. I thank the gentleman. 

The gentlewoman from California, Ms. Lofgren, is recognized for 

5 minutes. 

Ms. LOFGREN. Thank you, Mr. Chairman. 

Before asking my questions, I have been reflecting on how we got 

here and the discussions that we had in the 1990’s when we actually supported the effort to establish ICANN. If you will recall, the 

Internet belonged to us because we invented it, but as it became 

commercially viable, the question was could the Department of 

Commerce and the U.S. Government control it, and we decided— 

and I am sure you will recall, Mr. Chairman, since we all participated in this Committee in the discussion and the decision-making—that it would be better to have a nonprofit that had multiple 

stakeholders and that that would be more viable in the international community. And although ICANN has not been without 

its missteps over the years, it actually has worked better than I 

thought. We sort of boldly asserted that this was going to work and 

it has. 

Now, I am agnostic about whether these domain names are 

rolled out in June and how many, but I do think it is important 

to have this discussion in that broader context which is that China 

has a different agenda here about the Internet than we do and we 

need to make these decisions mindful that the freedom of the Internet is really what this is about. 

I am interested. Mr. Pritz, you mentioned you thought there 

would be 200 new gTLD’s. Do you have an estimate of how many 

of those 200 would be in an alphabet other than what we use in 

English? 

Mr. PRITZ. No. My estimate—— 

Ms. LOFGREN. Do you have a guess? 

91 

Mr. PRITZ. 20 percent. 

Ms. LOFGREN. Yes. I mean, to have the country level control of 

these domains means that China is going to decide what their citizens have access to, and so it is enormously important that we 

maintain ICANN and that we have private sector involvement if 

we are going to have a free Internet without breaking it and without allowing regimes with an agenda that is quite different than 

a free agenda to actually control this whole thing. And I think we 

are much closer to that challenge than we have acknowledged here. 

The trademark issue, I think, has merit and I think ICANN has 

addressed it. Maybe they need to do more. I don’t know. But I do 

think that if we are going to suggest that the United States has 

the ability to establish the trademarks for the rest of the world instead of WIPO, we are actually inviting China to rally poor nations 

to take over the control of the Internet. 

And I understand everybody is coming from a point of view and 

that is legitimate and that is why you are here as witnesses. But 

let’s put this in a perspective because a world where China dominates the control of the Internet is not a world that trademark 

owners will value in terms of protection of intellectual property. 

So I guess that is not a lot of questions, but I am just concerned 

that we are on dangerous ground here. 

Maybe this is a question I can ask you, Mr. DelBianco. You suggested that the Government Advisory Committee really needs to be 

dealt with in a very positive way. I think that is correct, but understanding that the agenda really isn’t about the actual agenda, it is 

an agenda that really is for a takeover. How do you put the GAC 

agenda in the broader political context that we are talking about 

here? 

Mr. DELBIANCO. Thank you, Congresswoman Lofgren and Mr. 

Chairman. I think you are exactly naming the point of the problem. 

When you think about it, there are well over 300 nations who participate at the United Nations. There are 250 different country code 

top-level domains, so the countries that have already jumped into 

the Internet at least with a Latin script. But inside of the GAC, 

we only have about 100 member countries, and of those 100, only 

about 60 show up at the typical ICANN meeting, and of those 60, 

well, roughly six do most of the talking. So we don’t have broad 

participation in the GAC yet. The GAC is certainly very firm in 

what it now wants and I support most of what they have asked for. 

But we need to broaden that participation. 

And one more thing: make it a higher-level, more senior-level 

person from each of those governments. I mean, if they are sending 

a very high-level diplomat to New York and take their seat at the 

UN, we need a high-level economic and business development and 

technology person representing that government at the GAC. 

Ms. LOFGREN. If I could ask Mr. Pritz. Do you believe that your 

analysis on the domain name expansion that you have discussed 

here will be effective in maintaining the private sector ICANN 

model as compared to the UN government-controlled model as we 

look down the road a year or 2? 

Mr. PRITZ. Yes, I do because ICANN has been responsive to the 

broad Internet community, including governments, and it is those 

governments that would work to create a model where it is a govVerDate Aug 31 2005 16:23 Jul 10, 2011 Jkt 000000 PO 00000 Frm 00095 Fmt 6633 Sfmt 6601 H:\WORK\IP\050411\66155.000 HJUD PsN: 66155
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ernment-controlled model. So, for example, China looked to ICANN 

to create internationalized domain names. The threat there was 

that China was going to establish an alternate root system. 

Ms. LOFGREN. And that is still a threat. We could break the 

Internet if we—— 

Mr. PRITZ. That is right and that is why it is important to be responsive to governments, and that is why it is important to have 

the GAC have a very effective role within ICANN and ICANN listen to all the governments across that. And so ICANN was responsive to the needs of the international community by creating IDN’s 

just as ICANN is trying to be responsive to the broad community 

in closing this 7-year period of discussion on all the issues. Essentially there are now new issues. And the ICANN community that 

trusts this model has said every issue has been discussed. There 

have been no new issues raised in recent months. And so the confidence of governments and the rest of the Internet community in 

the ICANN model is based on their trusting that ICANN has listened and that ICANN can bring this process to a close after 7 

years of careful listening to all interests, including the people at 

this table. 

Ms. LOFGREN. Thank you, Mr. Chairman. 

Mr. GOODLATTE. I thank the gentlewoman. 

The gentleman from California, Mr. Issa, is recognized. 

Mr. ISSA. Thank you, Mr. Chairman. 

Mr. Pritz, I look at the movement from IPv4 to IPv6, sort of go 

back to the numbers. We went from having 4.5 billion real URL’s 

to having—I love to say this because I can’t say it any other way 

than the way they say it—5 times 10 to the 28th combinations of 

numbers for each human being on the planet. We are not short of 

addresses. Right? 

Mr. PRITZ. Right. 

Mr. ISSA. And effectively an IPv6 address costs nothing to deliver 

to an individual. It is a fraction of a fraction of a fraction of a fraction of a penny to resolve. So the cost of the Internet operation on 

a per-event or on a per-location basis is a rounding error of zero. 

Would you agree to that? 

Mr. PRITZ. Yes, for IP addresses. 

Mr. ISSA. For IP addresses. So there is plenty of abundance. 

Our real discussion here today is a plain name resolution question of uniqueness and price. A lot of people, as I have been listening—and I apologize. I have a hearing next door, so I have been 

running back and forth. 

A lot of people are concentrating on the other side of the issue, 

you know, how many do I have to buy, who is going to be camping 

on, will there be confusion. There is a lot of that. I mean, to be honest, no matter what the number is, when I type in my name on 

Google, I am more likely to get somebody who truly dislikes my 

politics and has gone to great lengths to disparage me than I am 

to get my puff piece, as hard as I try. [Laughter.] 

So the whole resolution process—there is no question. There are 

problems. 

But let’s go through another question that wasn’t asked here 

today. Why is it that I got to pay GoDaddy from $10 to $10,000 

for a name and not from a tenth of a cent to 10 cents for a name? 

93 

Why is it we are not driving the infinite possible down to the predictable consumer price that would normally occur in a free market? 

Mr. PRITZ. So I think that for domain names, through the introduction of competition like the creation of GoDaddy, has driven 

down the price of domain names from $80 to $6, which is a stunning bargain, right, when you think about it. 

Mr. ISSA. I can send a letter across the country for 47 cents. Everything is a relative stunning bargain. 

Mr. PRITZ. Right. 

Mr. ISSA. $6, if I have to buy 6,000 different variations of a 

name, is no longer a deal. 6 cents, if I have to buy 10,000, may be 

more de minimis to a corporation. 

My question to you because it was a question that wasn’t asked 

is how is it from an ICANN standpoint that I am being—we have 

got protection issues, and I know that is a big part of this. And if 

it hadn’t been asked so often, I wouldn’t go to a new line of questioning. 

My question is, first of all, why in the world are there so many 

reserved names? If I want a good name from GoDaddy—and I am 

using them because I happen to have a lot of mine with them, and 

I use Zone in it to move things around. But at the end of the day, 

I have got a whole bunch of them and they are one of them that 

I buy from. But the good names that I might want have already 

been pre-grabbed and marketed in an upward way higher. 

Why is it in a way that they are not being driven down? Real 

competition would imply that those names are being driven down 

to a penny to a user and prohibited from being camped on in order 

to resell. Why is it that is not the number one issue of ICANN, to 

stop camping on for profit either through, obviously, diversion, but 

the other part of it, simply making me buy and pay $6,000 or 

$8,000 or $10,000 for a name simply because you thought I would 

need it and you camped on it? Why is it that is not the number 

one issue at ICANN in an infinite universe in which the incremental cost of that name is a rounding error of zero? Because the 

name is just as cheap as the IPv6 address is before you, quote, 

mark it up. 

Mr. PRITZ. A couple of reasons. One is it is ICANN’s mission, 

right, to encourage competition, and one of the benefits of competition is to drive down costs and prices. If there are more top-level 

domains, that camping will be less effective. Domainers, those that 

invest in those names, are against new gTLD’s because they are 

going to lose the value of their beach front property. 

A second reason is that we don’t want to drive the capital out 

of those markets by creating domain names for a penny. All the security and intellectual property protections and protections against 

consumers and the work of registrars and registries in enforcing 

their agreement and protecting registrants and having an infrastructure that always resolves the name 100 percent of the time— 

that is what costs money. The resolution of the IP addresses 

doesn’t cost money. 

Mr. ISSA. My time has expired. If I could have an additional 30 

seconds, Mr. Chairman. 

94 

Mr. GOODLATTE. Without objection, the gentleman is recognized 

for an additional minute. 

Mr. ISSA. Thank you, sir. 

Mr. Bourne, looking at the other side of that coin, why is it that 

if I own dei@dei.com because I was early enough to grab my initials—I don’t own issa.com. The International Sanitary Supply Association got there first. [Laughter.] 

Mr. ISSA. And that was before people started comparing me to organizations like that. [Laughter.] 

So why is it, though, that if I wanted a dei@dei equivalent for 

a penny times every possible registrant—why is it that as a, quote, 

user—let’s assume the registered trade name is that. Let’s say 

Viper, for example, viper.com, which is an asset of my former company. I don’t own it. Why is it they shouldn’t be able to, for a penny 

apiece, buy thousands of them? Because before they are sold to, 

quote, the new user, essentially a registered trademark owner, in 

order to protect them—why is it I am looking at $187,000 to protect all the different ways right now? And I know that dot com— 

that is the one that everybody wants. So they want vipers.com and 

1viper.com. They want all the things that are close enough. And 

there is no question that is where the action is. But why is it that 

from a consumer standpoint the trademark owner shouldn’t broadly be able to get that with certain limitations? Mr. Bourne or anyone else that wants to answer. 

Mr. BOURNE. Well, they ultimately could, but I believe that—— 

Mr. ISSA. For a penny. 

Mr. BOURNE. Pardon me? 

Mr. ISSA. For a penny. 

Mr. BOURNE. It is possible, but domains are driven by supply and 

demand. So the reason why the prices are higher for dot coms or 

that name that you wanted is because it is more in demand. I have 

seen, because my company monitors these things, the single word, 

dictionary term, commercially relevant dot infos not being renewed, 

being returned to the available names pool, and the bidding in the 

aftermarket is between $50 and $100. The similar term in dot com 

might be worth $50,000, $100,000. 

So I think I understand the point that you are making which is 

that if there isn’t a volume of these things, then the prices will go 

down. However, based on how the market interacts with names, 

demand is the highest for terms in extensions that are the most 

valuable and oftentimes because of—— 

Mr. ISSA. So dot xxx is clearly going to be where the action is 

after dot com you are saying? 

Mr. BOURNE. I don’t think so actually. I think that needs to still 

play out. I mean, the reality for brand owners is that—just imagine 

a group of Disney executives sitting around wondering whether to 

register disney.xxx, and there are hundreds of other characters and 

brand names. 

Mr. ISSA. The characters would be different on that site. 

Mr. BOURNE. It would be a problem if it was owned by a third 

party. So they are going to register all of those more than likely 

or protect them through whatever sunrise mechanism is available 

to them. To the companies in that industry, they may or may not 

choose to be there. 

95 

For the most part, I think that brand owners view all of these 

as defensive registrations, and the public, for people that register 

domain names, aren’t interested. 

Mr. ISSA. Thank you. I yield back. Or wait a second. Yes, sir? 

Mr. DELBIANCO. Congressman Issa, viper.com has value because 

some people in this planet—they still guess. They heard about you 

on the radio. They saw you on one of your puff pieces, and they 

go to viper and they type in viper.com as a default. The new gTLD 

program will probably change this guess/assumption behavior that 

people do. For all they know, viper could be viper.auto because it 

is an auto security system or viper.cars or viper.security. And after 

a while, folks will stop guessing because it is a fruitless endeavor. 

They will jump into Google’s search engine and they will search for 

viper. They will take a look at the different links that come up, and 

they are going to try to suggest which is the right one because is 

viper.com, the right one for you, or maybe viper.auto? Over time, 

those TLD’s like dot auto have got to build the integrity to make 

that the preferred destination. That is the only way you will see 

those prices begin to come down. 

Mr. ISSA. Thank you. Thank you, Mr. Chairman. 

Mr. GOODLATTE. In the meantime, you are buying all of them. 

Mr. ISSA. In the meantime, I am buying all of them, including 

all of those stopissa.com types. [Laughter.] 

Mr. GOODLATTE. The Chair is pleased to recognize the gentlewoman from California, Ms. Waters, for 5 minutes. 

Ms. WATERS. Thank you very much, Mr. Chairman and Members. This has been a very interesting discussion and debate. I wish 

you could say that it has been very enlightening, but I think that 

I, along with perhaps some others on this Committee, still have a 

lot of questions. 

I want to go to Mr. Metalitz who raised some very significant 

questions in his testimony, particularly as it relates to, I believe, 

the phase II study that indicated that some additional thought and 

direction should be given to this whole thing. What are you saying 

about this effort, Mr. Metalitz? What are you saying about ICANN? 

And what are you suggesting should or should not be done? 

Mr. METALITZ. Well, Ms. Waters, I think what the economists 

were suggesting in the phase II study was that you should be differentiating between new top-level domains that are simply trying 

to create a new dot com—we have a dot com. We don’t need another dot com on the one hand, and on the other hand, there may 

be new top-level domains that really would add value to the public 

and particularly globally. 

Ms. WATERS. Such as? 

Mr. METALITZ. Well, we mentioned before the ones that are in 

the non-Latin script so that people in these countries that don’t use 

our alphabet would be able to participate more fully in the Internet. 

So the phase II study said you should be taking these differences 

into account in how you set the scope of this rollout and the pace 

of this rollout, and that advice was actually echoing what a lot of 

governments were saying. It is echoing what a lot of the business 

community was saying. We are not opposed to new gTLD’s, but 

96 

let’s use some common sense and try to figure out where they are 

likely to do the most good. 

Ms. WATERS. You sound as if in your testimony you are saying 

that ICANN has been ignoring this kind of advice, resisting—— 

Mr. METALITZ. Yes. 

Ms. WATERS [continuing]. And moving forward in its own way. 

Mr. METALITZ. The ICANN staff concluded that this advice was 

fine for the future. They are not going to use it in this round of 

new gTLD’s. So basically it has had no effect. 

Ms. WATERS. May I ask will ICANN’s plan maintain their dominance in domain name registry? 

Mr. METALITZ. I am sorry. 

Ms. WATERS. Will they maintain their dominance in domain 

name registry? 

Mr. METALITZ. Will ICANN maintain the dominance? 

Ms. WATERS. Yes. 

Mr. METALITZ. Well, I think people have mentioned before this 

threat of perhaps an alternative root, but basically the ICANN 

unique root is the main game in town. I mean, that is where people 

go to find these sites on the Internet. So really these decisions that 

ICANN makes are extremely consequential for the public both in 

terms of the ability to participate globally and also in terms of preventing consumer confusion. That is a huge risk when we go from 

a very small handful of gTLD’s to a very large number, potentially 

hundreds or thousands or more. 

Ms. WATERS. What problems would be created on the ICANN 

plan to open up the floodgates for unlimited domain name registrations? What kind of problems do you see? Ms. Stark? 

Ms. STARK. Congresswoman Waters, thank you. I think that is 

a really important question. And one of the things that we think 

is critical is this whole concept that we have been talking about at 

length at this hearing which is the defensive registrations that 

brand owners will have to engage in. I mean, I think Mr. Pritz has 

said, well, when you look at the defensive registrations, you are 

seeing that primarily in dot com and not so much in dot biz or dot 

info or some of these other existing gTLD’s. But that is looking 

back with 20/20 hindsight, and we won’t have that advantage when 

these new gTLD’s are rolled out to know which of those spaces are 

going to be phenomenonally successful, which will be moderately 

successful, which will have no relevance to either our company or 

our markets. So our history has proven that we don’t have any 

choice but to engage in extensive defensive registrations from the 

outset in order to protect the irretrievable dilution of our brand 

and to ensure the integrity of the online experience for our customers and fans. So it is only later, once the market has played 

out, that you are maybe able to scale back those efforts, but initially they are going to be astronomical. And those costs are already significant in a world of 21 gTLD’s. They become absolutely 

staggering in a world of hundreds. 

You know, at one point ICANN—I think Mr. Pritz revised that 

number today to 200, but at one point had said there could be as 

many as 400 of these, and that might even be a conservative number. Well, conservatively a large corporation is looking to register 

maybe 300 defensive names in those 400 spaces. In the sunrise peVerDate Aug 31 2005 16:23 Jul 10, 2011 Jkt 000000 PO 00000 Frm 00100 Fmt 6633 Sfmt 6601 H:\WORK\IP\050411\66155.000 HJUD PsN: 66155
97 

riod, that cost is maybe about $100 a name. That is $12 million for 

an individual company. And that is just the cost of defensive registrations. That is not about the personnel to manage and monitor 

that portfolio, to monitor the new gTLD spaces for abuses, and 

then of course, the cost to actually go and enforce and do something 

about things like myfox2detroit. 

Ms. WATERS. So you are basically also telling me that small businesses or startup companies will be at a great disadvantage. 

Ms. STARK. They will because many of those companies aren’t 

going to have the luxury of even deciding whether they have 

enough resources to devote purely to defensive registrations that 

spur no innovation, that don’t create productive jobs, and that literally sit dormant simply because they can’t afford to have their 

brand name quashed in the new space. 

Ms. WATERS. Thank you very much, Mr. Chairman. My time is 

up, but I am hopeful that somehow there will be some discussion 

about money. ICANN is a nonprofit. I am looking at the salaries 

of the CEO and wondering with these new gTLD’s and the costs 

who is going to benefit and where will all of this new money end 

up. This article, which you are probably very much aware of—you 

released salaries. Beckstrom over $2 million guaranteed. CFO, 

$270K, per lawyer, 230. Does that continue to rise with all of the 

new systems, gTLD’s? You can answer that. He is going to let me 

continue. 

Mr. PRITZ. I would be happy to answer that. 

ICANN salaries, first of all, are set in accordance with IRS regulations. It is a not-for-profit organization. ICANN salaries are set 

with the advice of competent firms that give advice on salary setting so that ICANN can be competitive in recruiting excellent talent, and we position ourselves to be about at the two-thirds level. 

If you think about how salaries are reported, salary ranges are reported and set. For officers, non-conflicted board members set 

ICANN salaries. 

So ICANN’s CEO compensation is set, first, based on the compensation of the past CEO and, second, with the idea that we need 

an excellent person in this position. This is an environment where 

we are processing billions of transactions and facilitating trillions 

of dollars in economic commerce. It is a very important job, as we 

have indicated here today. The salary of the CEO is generally, I 

think, less than that of trade association CEO’s or some big hospital administration, so entities that are also not-for-profits. 

Ms. WATERS. Thank you very much, Mr. Chairman. I yield back. 

Mr. GOODLATTE. A very good question, Ms. Waters. 

The Chair recognizes the gentleman from Pennsylvania, Mr. 

Marino, for 5 minutes. 

Mr. MARINO. Thank you, Mr. Chairman. 

I apologize for being late. I am jockeying three hearings this 

morning, and I hope I am not asking a question that has already 

been asked. 

But given my law enforcement background, I want to talk a little 

bit about security, fraud, crime in general. The question is simple. 

We will start at this end of the table. 

98 

What role does ICANN play in promoting cyber security and how 

do you see gTLD expansion impacting efforts to address fraud, 

crime, and security? 

Mr. BOURNE. Thank you, Congressman Marino. My sense is they 

play very little role in that. In fact, they will be the first to tell you 

that they have zero accountability and responsibility for what ends 

up on a website. It is not within their mandate, and they will be 

the first to tell you that. 

The community, those who are like-minded and interested in 

consumer protection, will try to duke it out and try to eke out some 

kind of a solution that will limit the downside. However, it was the 

University of Chicago who late last year found that 77 percent of 

Whois records are defective somehow, and that is an important 

point that I will just follow up on right now. 

There is enormous counter-party risk each and every time somebody gets on the Internet. It prevents wholesome people from buying goods from websites that could be perfectly law-abiding. It is 

small business owners. People are nervous about who they are 

dealing with online because there is no phone book that they can 

depend on. 

Several years ago, ICANN had the opportunity to address that 

counter-party risk, to address that defect in the Whois database, 

and at the end of a very long process, decided to do nothing. And 

I believe the reason is because the ICANN community is so dominated by the registrars and the companies that have those relationships with the registrants that they obfuscated the process realizing that any solution would be on their shoulders lessening their 

bottom line. However, you see a policy like this one fast-tracked, 

it should be clear it is because of that revenue orientation. 

Thank you. 

Mr. MARINO. Go ahead. Bear in mind I have 5 minutes. That is 

all right. 

Mr. DELBIANCO. Make it very quick. Three things. 

We need to make sure we implement a system where names get 

suspended quickly if that name is where fraud and abuse is happening. So, for instance, there is a plan called Uniform Rapid Suspension. It is not particularly rapid, but we are working on that 

and the GAC is insisting on it. 

Second would be that if a TLD, if dot steve really did tolerate a 

lot of abuse and fraud and didn’t respond to law enforcement, there 

is a mechanism in there to take that TLD away from that operator 

and suspend it. 

And the third is something called Whois. It is not entirely related 

to the new TLD program, but ICANN has got to increase the compliance of accuracy in Whois and stop allowing bad actors to hide 

behind things like a proxy or privacy registration. 

Mr. MARINO. Thank you. 

Mr. METALITZ. I think there is no question that the new gTLD 

rollout will increase the opportunities for fraud and abuse of the 

kind you are talking about. 

Mr. MARINO. You bet. 

Mr. METALITZ. The question is whether ICANN has built in 

enough protections. I think they have made some progress. I think 

it isn’t adequate to this point. And the Uniform Rapid Suspension 

99 

is a good example. That is targeted at one particular kind of abuse. 

It is basically targeted at cybersquatting which is very important, 

but it really doesn’t deal at all with many of the other types of misconduct that is going to be taking place, facilitated by these new 

top-level domain spaces. 

And finally, in the last version of the Applicant Guidebook, there 

is a mention that ICANN would encourage and give an extra point 

in the evaluation to top-level domains that had another type of 

rapid takedown or suspension systems regarding malicious or abusive behaviors. The door is open a crack, I think, to press ICANN 

to do more in this area. 

Mr. MARINO. Thank you. Anyone else care to comment on that? 

Sir? 

Mr. PRITZ. Certainly. Thank you, Congressman. 

Certainly when ICANN managed this process and looked at this 

very question, we decided, in ICANN style, to convene a set of experts in Internet security and cybersquatting who developed a set 

of protections that are implemented in the Applicant Guidebook 

particularly to address this problem. Will it eliminate the problem? 

No. Will there be a safer environment? Yes. 

With Whois, we are requiring a thicker version of Whois in every 

registry. So registrants need to provide more information to be 

easier to find. So that was an improvement. ICANN is also undertaking several initiatives in the Whois program. 

And finally, there are trademark protections implemented that I 

have described. One is the rapid takedown. Another is new remedies directly against registries that facilitate infringing behavior. 

So I think it is those three things. 

Mr. PALAGE. While I appreciate ICANN’s effort to create the ultimate black box, I think the answer to your question is we don’t 

know. For every new, innovative business model, there is probably 

a new, innovative business model for criminals to defraud. And I 

think this goes back to a point that many people have made here 

today. There is a need in the public-private partnership which 

ICANN is, for the private sector to work with governments through 

the GAC and through law enforcement to proactively address those 

concerns when they happen. And I think that is probably one of the 

most important things, is the flexibility for the unknown. 

Mr. MARINO. And this is a rhetorical question. We will think 

about this some other day. Who and how do we pay for this? 

I yield my time. 

Mr. GOODLATTE. I thank the gentleman. 

The gentlewoman from Texas, Ms. Jackson Lee, is recognized for 

5 minutes. 

Ms. JACKSON LEE. Mr. Chairman, I thank you and I thank Mr. 

Watt for this hearing. 

And I would just like to inquire, Mr. Chairman—Mr. Chairman, 

I am inquiring. A question to you. As I have listened in the time 

that I was here—I had a previous hearing—I think there are 

enough questions being raised that I would be interested in another hearing being held, more information coming forward. So I 

make that request whether it be a full or whether it be your Subcommittee. I think this is an important question to be able to address. 

100 

Mr. GOODLATTE. Well, it is an important question, and we are 

closely monitoring what is taking place. And the possibility of another hearing certainly is there. I wouldn’t want to say at this 

point in time what or when we might do. 

But go ahead and ask your questions now, and if you have additional questions, we certainly can submit them in writing to the 

witnesses. 

Ms. JACKSON LEE. I will do so. I always think a full airing of the 

answers is important. But I thank you for that thoughtful answer 

and hopefully we will have that opportunity. 

I think the idea of structuring the domain names that business 

will have to engage in and the expansion that has been proposed 

by ICANN—I can understand that it is a useful tool for allowing 

more businesses to use websites with new domain name extensions. But if I have to express my concerns on the record, it is that 

the expansion of the so-called generic top-level domain names does 

not occur too quickly and at the expense of doing harm to the owners of intellectual property, job creation, and consumer protection 

and competition. 

I am going to look forward to holding some meetings to understand and vet this a little bit more extensively because I have always said that job creation is crucial to, I think, the purpose and 

the mission of this Committee. 

So my first question to you, Mr. Pritz—and I think you are going 

to answer Ms. Waters’ question on salaries. I would like it to be 

a little bit more extensive. Maybe you can put it in writing. I am 

not asking for an answer, but to respond back in writing to the 

Committee that we all have access to understanding those salaries 

in light of where we are today in the economy. 

Now, we have held a hearing with the U.S. Office of the Intellectual Property Enforcement Coordinator about rogue websites and 

massive job-killing problems with counterfeiting in intellectual 

property and theft. And the businesses know that my interest has 

always been to promote American genius, and sometimes that is 

stolen. And the coordination of law enforcement is an important aspect. 

What means is ICANN and its licensees who grant domain 

names taking to work with law enforcement to combat this thievery of the intellectual property and genius of America? 

Mr. PRITZ. We work very closely with law enforcement agencies 

across the world. We have regular meetings with representatives 

from the FBI. We hold three ICANN meetings every year. At every 

meeting, we have a session that is coordinated by law enforcement 

to discuss domain abuses and ways to remedy those, and we have 

teams of people that cooperate with law enforcement to do that. 

And we worked also with law enforcement in crafting this version 

of the—— 

Ms. JACKSON LEE. Do we need to give you more resources, or do 

you need a different structure to help you block what is an ongoing 

effort by those who seek to steal intellectual property from the 

United States? 

Mr. PRITZ. So I will answer that by saying ICANN makes significant investment and will use, to a certain extent, the increased revenue from this program to increase its activities cooperating with 

101 

law enforcement and work with them on rapid takedown mechanisms. We have also worked with registries to allow them to work 

to take down names that are infringing in a hurry. 

Ms. JACKSON LEE. But you are concerned with this issue. Is that 

right? 

Mr. PRITZ. Yes, we are very—— 

Ms. JACKSON LEE. And you are concerned with the impact on 

smaller businesses and single entrepreneurs. You consider them an 

important component to this process of intellectual property. 

Mr. PRITZ. Yes, and we consider this new gTLD program to have 

the greatest beneficial effect on small businesses. One of the positive aspects of it will be that this program can bring those small 

businesses closer to its customers and will also allow for the creation of new businesses and jobs in that way. 

Ms. JACKSON LEE. Let me quickly go to each person. Just give 

me a quick—it could slow down. Ms. Stark, could we slow this process down to get in the concerns that you are expressing heard. Yes 

or no? 

Ms. STARK. I think that it is important to take the real time necessary to put into place the effective rights protection mechanisms 

so that we can truly reach the goal that we all have which is to 

ensure the integrity of that consumer experience. 

Ms. JACKSON LEE. Mr. Palage? 

Mr. PALAGE. I would not oppose a delay. However, if this new 

gTLD process launches on June 20th, I want to make sure everybody on that plane has a parachute. 

Ms. JACKSON LEE. Mr. Metalitz? 

Mr. METALITZ. I am not really sure that the timing of this is the 

crucial question. I think if we stretch out the process but it remains on this path of an unlimited opening of new gTLD’s, hundreds at a time without any differentiation—— 

Ms. JACKSON LEE. You need restraints. 

Mr. DelBianco? 

Mr. DELBIANCO. Don’t slow it down. Raise the bar and mind the 

GAC. 

Ms. JACKSON LEE. Joshua Bourne? Mr. Bourne? 

Mr. BOURNE. I believe that the ICANN community is so heavily 

biased in one direction that what you get will be fully predictable 

today or tomorrow unless ICANN is truly looked at under a microscope and potentially some adjustments are made to how they form 

policy. 

Ms. JACKSON LEE. I thank you. 

I thank you, Mr. Chairman. I think the key question is how do 

we create jobs and encourage businesses and answer Mr. Bourne’s 

question and get the product that is going to be helpful to everyone 

in this room. And I think we can do that, and I hope that we are 

going to be engaged as this Committee, in terms of the oversight, 

as we move forward. 

With that, Mr. Chairman, I yield back. 

Mr. GOODLATTE. I thank the gentlewoman. 

I have a couple of oversight questions I am going to ask myself. 

I had the opportunity to ask Mr. Pritz at length about blocks, and 

I did not ask some of the other folks and I would particularly like 

to ask Ms. Stark. Would you be supportive of a globally recognized 

102 

trademarks block list administered by ICANN’s new trademark 

clearinghouse for the gTLD program? And do you think this block 

list would be easy to administer, more difficult? Do you think that 

the fact that ICANN already does it for technical marks from registration by new TLD’s now would indicate that this is something 

that could be a success? What is your opinion on this? 

Ms. STARK. Mr. Chairman, I think that is a wonderful point, and 

I really appreciate you raising it. 

I do think that the block list is something that was originally recommended by the implementation recommendation team as one of 

the protections that would go the farthest and be the most helpful 

in protecting from the outset intellectual property abuses in this 

new expanded space. 

I think that the fact that we already have within the system this 

idea of a trademark clearinghouse shows that it should be something that ought to be able to be administered by ICANN and could 

be effective. The trademark clearinghouse in some ways is an offshoot or a watered-down version of the idea of a block list. So I absolutely think it is administrable and I absolutely think that it 

could be very beneficial to mark owners. 

Mr. GOODLATTE. Mr. Palage? 

Mr. PALAGE. 10 years ago, I served as the chair of ICANN’s 

working group B which was entrusted with addressing protection 

of famous trademarks, and we addressed the issue of a block list 

back in 1999. The difficulties then, which still exist today, is devising that list. I do think it is something that we continue to need 

to move forward with and that WIPO perhaps provides the best 

path forward on providing something that works on a global basis. 

But in the short—— 

Mr. GOODLATTE. So Mr. Issa and I and others who are interested 

in this would be out of luck. Is that what you are telling me? 

Mr. PALAGE. That is the problem of coordinating a global resource. It is not easy. 

But I do think the point that you have made earlier about 

ICANN including its names on a protected list—ICANN did have 

a reserved name working group in which I participated, and in that 

I basically called for the removal of that list so that ICANN should 

have to rely upon the very same trademark protections that it is 

asking the private sector to rely upon. So until that list by WIPO 

is created, I think ICANN’s list should be removed and they should 

have to sleep in the same bed they are asking businesses to sleep 

in. 

Mr. GOODLATTE. Mr. Metalitz? 

Mr. METALITZ. Yes, I would just say, as Ms. Stark pointed out, 

this was recommended by the team of experts that ICANN asked 

the intellectual property constituency to bring into existence. And 

then the proposal simply died on the vine. We asked ICANN for 

some research assistance, in terms of developing some objective criteria. Never got it. 

I don’t think this is an insurmountable problem. It is a difficult 

problem to figure out who gets on the block list and what the criteria are, but I think if we put good minds to work on it, we could 

quickly come up with something. 

Mr. GOODLATTE. Thank you. 

103 

Ms. Stark, can you estimate the potential costs to your one company for defensive registrations? What ends up happening if a domain goes into litigation? 

Ms. STARK. Well, the litigation costs would be extraordinary. But 

yes, if there were, say, 400 new generic top-level domain names 

that were launched, we have done our own benchmarking within 

our company with all the divisions, and we would probably be looking at a list that is a minimum of 300 to 400 names that we would 

have to defensively register in each of those new spaces. If you anticipate a sunrise registration cost in each of those domains as 

being an average of $100 apiece, you are talking about a minimum 

of a $12 million investment. 

Mr. GOODLATTE. Over what period of time? 

Ms. STARK. Initially as they roll out each of those 400—— 

Mr. GOODLATTE. And are there ongoing costs as well? 

Ms. STARK. There would be tremendous ongoing costs. We would 

have to hire personnel to monitor that portfolio to determine renewal of that portfolio. We will have to still look at all those gTLD 

spaces for the abuses that take place such as the one I gave in my 

example in my testimony of myfox2detroit, and then, of course, all 

the resources that are taken to enforce against those misuses, including litigation against phishing and scam operations and other 

fraudulent behavior, as well as—— 

Mr. GOODLATTE. What does a small business do? It is already 

trying to combat rogue websites and so on that are posing as being 

them. Mr. Palage? 

Mr. PALAGE. As a small business operator, what I try to do is 

work closely with my clients so that they know how to get in contact with me. So I think, as I said—— 

Mr. GOODLATTE. Great, but what if you are looking for new clients? Or what if somebody has head of you and they are just trying 

to find you on the Internet? 

Mr. PALAGE. This goes back to, I think, the point Mr. DelBianco 

raised of the search engines, Google and Bing. I am very fortunate. 

When you type in ‘‘Mike Palage,’’ the first two pages on Google and 

the majority links on Bing will point people to me. 

Mr. GOODLATTE. ‘‘Goodlatte’’ is the same way. But these are 

names that are a little more unusual then ‘‘Smith’’ or ‘‘Jones’’ or 

various businesses that have more common names or more easily 

confused names. 

Mr. PALAGE. So again, as a small business, I did not get my initial desired dot com name and I have looked again at some of the 

other alternative strings, particularly since those are a number of 

the clients that I work with. So I think the future is going to be 

about empowering these new TLD operators to distinguish themselves because if all we are doing is duplicating the name space, 

then ICANN has failed. We need to sit there and create—there has 

to be real choice and real differentiation and empowerment in 

these new gTLD’s, not a mere duplication. 

Mr. GOODLATTE. Ms. Stark, you wanted to add something? 

Ms. STARK. I do. Thank you, Mr. Chairman. 

I think the real challenge and risk for small business owners is 

that they spend all this time and resource coming up with a name 

that they think can represent them in the marketplace that they 

104 

are working to establish the good will behind and get consumers 

to recognize, and that in this new unlimited gTLD space, especially 

if we have a plethora of undifferentiated gTLD’s such as Mr. 

Palage is mentioning, all that could be for naught overnight. 

I mean, the power of it being diluted to the point of it not being 

meaningful anymore in the marketplace is really a powerful concern. And so I think that is one of the real extreme challenges for 

any small business owner as they are going forward. They already 

are trying to put their marketing resources into good search engine 

optimization practices, into actual formal marketing, and to have 

to divert those resources into defensive registrations that are really 

not productive is really tragic. 

Mr. GOODLATTE. Mr. Palage, do you think that ICANN’s Government Advisory Committee should have greater authority, perhaps 

even veto authority over new programs or proposals that go beyond 

ICANN’s core mission? 

Mr. PALAGE. As I said in both my written and oral testimony, I 

think they need to be on equal footing. It is a private-public partnership, and GAC consensus should be treated the same way that 

a super majority vote out of the GNSO Council should have. So 

what I am basically proposing is if there is GAC consensus, it 

would take two-thirds of the ICANN board to reject that recommendation, the same as with the GNSO right now under the existing ICANN bylaws. 

Mr. GOODLATTE. Mr. DelBianco, what do you think about that? 

Mr. DELBIANCO. I agree with Mr. Palage’s idea of a super majority. 

Let’s also make sure that the GAC is a little clearer with us than 

they have been in the past when they truly object to something. I 

think you were out of the room at the time, Mr. Chairman, but 

when the GAC registered its opinion on dot xxx, all it said to the 

ICANN community was the words there was ‘‘no active support.’’ 

That left all of us in the ICANN community wondering whether 

that meant go, stop, we don’t care, leave it up to you. So we would 

like the GAC to be as clear as they can when they do want to exercise, as you call it, a veto. 

Mr. GOODLATTE. ‘‘No active support’’? That was the language? 

Mr. DELBIANCO. Yes. 

Mr. GOODLATTE. I don’t think that would indicate ‘‘go.’’ It might 

indicate other things, but it doesn’t indicate ‘‘go.’’ 

Mr. DELBIANCO. Right, but we didn’t think it really indicated absolutely, unequivocally ‘‘no.’’ 

Mr. GOODLATTE. Right, got you. 

Does the gentleman from North Carolina or the gentleman from 

Michigan have any additional questions? 

Mr. WATT. Mr. Chairman, I just want to reiterate the first question. You know, I keep hearing all of these objections and yet nobody on this panel—Ms. Stark says it is going to cost her $12 million. Yet, she thinks this is a good idea apparently. I am having 

trouble finding the compelling good reasons for doing this. So I 

wanted to just go back and reask each one of you to give me your 

most compelling, good reason for doing this. Period. Maybe it is the 

way this hearing is structured that we have gotten all of the negative comments about it. 

105 

I understand that we got to protect ourselves from China insisting that the UN do it, but it seems to me that this is a false proxy 

for doing that because as soon as we get more name domains, 

gTLD’s, whatever they are called, out there, then there is going to 

be some other reason that China wants the UN to do this. 

I don’t see how this adds to innovation. I still don’t understand 

that. It adds to people changing names, but I don’t know how that 

adds to any intellectual innovation that I can see. Now, maybe I 

am just missing something here, but please be serious about your 

written response. This is not a trick question. I am just trying to 

understand. I understand what Ms. Lofgren said about the dangers 

of not proliferating names, but that just seems to me to be a proxy 

for some other concerns that are out there that maybe I just am 

missing something here. 

I yield back. 

Mr. GOODLATTE. I think the gentleman’s point is well founded. 

If you do this wrong, you could create a greater risk of China or 

someone else moving forward with an international governmental 

takeover of the Internet, which we have resisted and I have resisted with Ms. Lofgren. You could create a greater risk than going 

slow or doing less. 

The gentleman from Michigan? 

Mr. CONYERS. Yes, sir. Could I yield to Mr. Palage who wanted 

to make a comment? 

Mr. PALAGE. Yes, thank you. The one word I would use is ‘‘empowerment’’ for where TLD’s can make a positive difference. So I 

am concerned about the unlimited rollout, but in a controlled, responsible manner, you can have—— 

Mr. WATT. Write it to me. 

Mr. PALAGE. I will. 

Mr. GOODLATTE. Well, thank you all. 

Mr. CONYERS. Just one second. 

Mr. WATT. He was answering my question. 

Mr. GOODLATTE. The Chairman emeritus is maintaining the 

floor. 

Mr. CONYERS. I just was thinking that this concern about China, 

if we don’t do something. Am I being too pessimistic to think that 

China is going to do something regardless. I mean, if you think 

they are waiting to see the outcome of this before they start organizing developing countries, you got another thought coming. 

Could someone comment? All right. I will recognize you again 

and then we will go to my friend. 

Mr. PALAGE. I was in Beijing in January working with a number 

of Chinese businesses that are considering moving forward with 

gTLD initiatives and will be returning to China next month. 

Mr. CONYERS. So what do you draw out of that? 

Mr. PALAGE. I think the statement is what happens if we don’t 

do anything. I think there are some people that may take the initiative to move forward. So this is about moving forward in a responsible manner so that, going back to Mr. DelBianco, everyone 

is at the party. So when we have the party, we want to make sure 

that all the important people are there. 

Mr. CONYERS. Well, Mr. Palage, what I think is that China is 

going to move forward whether there is a party or not, and whatVerDate Aug 31 2005 16:23 Jul 10, 2011 Jkt 000000 PO 00000 Frm 00109 Fmt 6633 Sfmt 6601 H:\WORK\IP\050411\66155.000 HJUD PsN: 66155
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ever we do here—I mean, I just don’t get the sense that this largest 

country in the world is waiting to see what the Subcommittee in 

Judiciary does and how well we persuade you. I don’t think they 

are operating at that kind of minute level. They could maybe care 

less. 

Mr. DELBIANCO. Mr. Chairman, I might suggest to you that 

China doesn’t really care about the new TLD’s. Prior to the launch 

of the new TLD’s, they had already created their Chinese versions 

of com and org. They only worked in China, but they worked anyway. 

China’s main concern is the fact that we are having this hearing 

in this city in this room before this Committee because that is a 

screaming billboard to them that says that the U.S. Government is 

exercising sort of a legacy control and oversight over the domain 

name system and critical Internet resources. That is what bothers 

them. The don’t believe that this Government should have anything like the oversight role that we have and that we should have, 

since we actually created the Internet, launched ICANN, wrote the 

Affirmation of Commitments. 

I invite China to sign the Affirmation of Commitments and join 

us in committing and helping ICANN to be successful. They are 

probably not going to do that. But let’s do all we can to deny them 

of 130 other votes at the UN by serving the interests of hundreds 

of countries who maybe aren’t participating in ICANN yet, but 

other countries who know that the Internet is going to be a large 

part of the economic growth and prosperity of their citizens. 

Mr. CONYERS. And the last word to Mr. Bourne. 

Mr. BOURNE. I would just echo what Mr. DelBianco just said in 

the sense that they are going to do what they want to do regardless. 

I think that a greater concern is to do this wrong and fail, as Mr. 

Palage pointed out. And I think it is possible to avoid that through 

exercising caution but also enabling a process to reconsider the decisions that were made 13 years ago and potentially put ICANN on 

a path to be truly independent rather than possessed by certain 

commercial interests that drive that process. 

Mr. CONYERS. Thank you, Mr. Chairman. 

Mr. GOODLATTE. I think you wanted to say something. 

Mr. PRITZ. Yes, thank you. I agree with everything Steve 

DelBianco said about China, but certainly that is not the reason for 

moving forward, to avoid what some other country is going to do. 

The reason for moving forward is to realize the benefits of this program. It is impossible to predict innovation. We could discuss for 

a long time the examples of Google and MySpace and Facebook and 

all the unanticipated benefits and unanticipated good for Internet 

users that have sprung from the Internet. And this initiative, as 

developed by the broad Internet community, not the ICANN staff, 

has identified this and worked on this for 7 years as the way to 

bring the most benefit to users. 

Mr. CONYERS. Then you are for more hearings in the Committee? 

Mr. PRITZ. Well, no. I am for more hearings to review this process to see how it works, to make midcourse corrections, but the 

process has been reviewed for 7 years. Every issue that has been 

raised has been discussed. 

107 

Mr. CONYERS. Well, not here. 

Mr. PRITZ. No, certainly not here. That is what the ICANN 

multi-stakeholder model is about. Right? It has been discussed for 

7 years—— 

Mr. CONYERS. Look, we trust you infinitely, but do you mind if 

we make our own inquiry? 

Mr. PRITZ. Of course, not. 

Mr. CONYERS. Well, then can you get this June 20th date postponed? Because this is all immaterial as far as the chairman of 

your board is concerned. 

Mr. GOODLATTE. Let me just say that I don’t know how much attention China is paying to what we are doing here today, but I do 

hope that the executive branch of our own Government is paying 

attention to what we are doing here today because they have the 

critical role that our Government has in representing our collective 

interests with regard to ICANN’s move forward. 

I am just going to close with the advice, Mr. Pritz, that no one 

wants to hold back the development of the Internet, but it just 

seems to me that there is an unleashing here of something that 

ought to be done in a more orderly process with a little more attention paid to the input coming in from governmental entities because I think that the end result is going to be very critical to the 

future of ICANN. And all of us here want ICANN to succeed and 

to not have some kind of international governmental entity where 

some of the roles of some interests around the world are not really 

in terms of seeing the explosive growth of the Internet and the 

freedom that the Internet brings with it taking place, but rather 

to serve the interests of particular governmental leaders and governmental entities. 

So we would caution you, I think, that doing this too quickly, 

doing this without consideration for how the Internet is going to 

impact a lot of individuals, large and small, and entities, large and 

small, that operate on the Internet is absolutely critical and there 

should be nothing magical about June for moving forward on this. 

So I thank all of the witnesses for their testimony today. This 

has been the lively hearing I thought it would be. 

Without objection, all Members will have 5 legislative days to 

submit to the Chair additional written questions for the witnesses 

which we will forward and ask the witnesses to respond to as 

promptly as they can so that their answers may be made a part 

of the record. 

Without objection, all Members will have 5 legislative days to 

submit any additional materials for inclusion in the record. 

With that, again I thank the witnesses and this hearing is adjourned. 

[Whereupon, at 12:43 p.m., the Subcommittee was adjourned.] 

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