Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices 31741

1Available at <http://www.ecommerce.gov>.

2 July 2, 1997 RFC and public comments are

located at: <http://www.ntia.doc.gov/ntiahome/

domainname/index.html>.

3The RFC, the Green Paper, and comments

received in response to both documents are

available on the Internet at the following address:

<http://www.ntia.doc.gov>. Additional comments

were submitted after March 23, 1998. These

comments have been considered and treated as part

of the official record and have been separately

posted at the same site, although the comments

were not received by the deadline established in the

February 20, 1998 Federal Register Notice.

4See Administrative Law Requirements at p. 19.

differences of juvenile fish as they pass

downstream through Lake Pateros and

Wells Dam. For modification 1, PUD GC

requests an increase in the take of

juvenile, endangered, UCR steelhead

associated with a study designed to

inventory fish species in Wells reservoir

on the Columbia River. ESA-listed fish

are proposed to be observed by SCUBA

divers or collected in beach seines,

anesthetized, examined, allowed to

recover, and released. Modification 1 is

requested to be valid for the duration of

the permit. Permit 1116 expires on

December 31, 2002.

Dated: June 4, 1998.

Patricia A. Montanio,

Deputy Director, Office of Protected

Resources, National Marine Fisheries Service.

[FR Doc. 98–15439 Filed 6–9–98; 8:45 am]

BILLING CODE 3510–22–F

DEPARTMENT OF COMMERCE

National Telecommunications and

Information Administration

[Docket Number: 980212036–8146–02]

Management of Internet Names and

Addresses

AGENCY: National Telecommunications

and Information Administration,

Commerce.

ACTION: Statement of policy.

SUMMARY: On July 1, 1997, as part of the

Clinton Administration’s Framework for

Global Electronic Commerce,1 the

President directed the Secretary of

Commerce to privatize the domain name

system (DNS) in a manner that increases

competition and facilitates international

participation in its management.

Accordingly, on July 2, 1997, the

Department of Commerce issued a

Request for Comments (RFC) on DNS

administration. The RFC solicited

public input on issues relating to the

overall framework of the DNS

administration, the creation of new toplevel domains, policies for domain

name registrars, and trademark issues.

During the comment period, more than

430 comments were received,

amounting to some 1500 pages.2

On January 30, 1998, the National

Telecommunications and Information

Administration (NTIA), an agency of the

Department of Commerce, issued for

comment, A Proposal to Improve the

Technical Management of Internet

Names and Addresses. The proposed

rulemaking, or ‘‘Green Paper,’’ was

published in the Federal Register on

February 20, 1998, providing

opportunity for public comment. NTIA

received more than 650 comments, as of

March 23, 1998, when the comment

period closed.3

The Green Paper proposed certain

actions designed to privatize the

management of Internet names and

addresses in a manner that allows for

the development of robust competition

and facilitates global participation in

Internet management. The Green Paper

proposed for discussion a variety of

issues relating to DNS management

including private sector creation of a

new not-for-profit corporation (the ‘‘new

corporation’’) managed by a globally

and functionally representative Board of

Directors.

EFFECTIVE DATE: This general statement

of policy is not subject to the delay in

effective date required of substantive

rules under 5 U.S.C. § 553(d). It does not

contain mandatory provisions and does

not itself have the force and effect of

law.4 Therefore, the effective date of this

policy statement is June 10, 1998.

FOR FURTHER INFORMATION CONTACT:

Karen Rose, Office of International

Affairs (OIA), Rm 4701, National

Telecommunications and Information

Administration (NTIA), U.S.

Department of Commerce, 14th and

Constitution Ave., NW, Washington,

DC., 20230. Telephone: (202) 482–0365.

E-mail: dnspolicy@ntia.doc.gov

Authority: 15 U.S.C. 1512; 15 U.S.C. 1525;

47 U.S.C. 902(b)(2)(H); 47 U.S.C. 902(b)(2)(I);

47 U.S.C. 902(b)(2)(M); 47 U.S.C. 904(c)(1).

SUPPLEMENTARY INFORMATION:

Background

Domain names are the familiar and

easy-to-remember names for Internet

computers (e.g.,

‘‘www.ecommerce.gov’’). They map to

unique Internet Protocol (IP) numbers

(e.g., 98.37.241.30) that serve as routing

addresses on the Internet. The domain

name system (DNS) translates Internet

names into the IP numbers needed for

transmission of information across the

network.

U.S. Role in DNS Development

More than 25 years ago, the U.S.

Government began funding research

necessary to develop packet-switching

technology and communications

networks, starting with the ‘‘ARPANET’’

network established by the Department

of Defense’s Advanced Research

Projects Agency (DARPA) in the 1960s.

ARPANET was later linked to other

networks established by other

government agencies, universities and

research facilities. During the 1970s,

DARPA also funded the development of

a ‘‘network of networks;’’ this became

known as the Internet, and the protocols

that allowed the networks to

intercommunicate became known as

Internet protocols (IP).

As part of the ARPANET development

work contracted to the University of

California at Los Angeles (UCLA), Dr.

Jon Postel, then a graduate student at

the university, undertook the

maintenance of a list of host names and

addresses and also a list of documents

prepared by ARPANET researchers,

called Requests for Comments (RFCs).

The lists and the RFCs were made

available to the network community

through the auspices of SRI

International, under contract to DARPA

and later the Defense Communication

Agency (DCA) (now the Defense

Information Systems Agency (DISA)) for

performing the functions of the Network

Information Center (the NIC).

After Dr. Postel moved from UCLA to

the Information Sciences Institute (ISI)

at the University of Southern California

(USC), he continued to maintain the list

of assigned Internet numbers and names

under contracts with DARPA. SRI

International continued to publish the

lists. As the lists grew, DARPA

permitted Dr. Postel to delegate

additional administrative aspects of the

list maintenance to SRI, under

continuing technical oversight. Dr.

Postel, under the DARPA contracts, also

published a list of technical parameters

that had been assigned for use by

protocol developers. Eventually these

functions collectively became known as

the Internet Assigned Numbers

Authority (IANA).

Until the early 1980s, the Internet was

managed by DARPA, and used primarily

for research purposes. Nonetheless, the

task of maintaining the name list

became onerous, and the Domain Name

System (DNS) was developed to

improve the process. Dr. Postel and SRI

participated in DARPA’s development

and establishment of the technology and

practices used by the DNS. By 1990,

ARPANET was completely phased out.
31742 Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices

5See Scientific and Advanced-Technology Act of

1992; Pub. L. 102–476 section 4(9), 106 Stat. 2297,

2300 (codified at 42 U.S.C. 1862 (a)).

6An unofficial diagram of the general geographic

location and institutional affiliations of the 13

Internet root servers, prepared by Anthony

Rutkowski, is available at <http://www.wia.org/pub/

rootserv.html>.

The National Science Foundation

(NSF) has statutory authority for

supporting and strengthening basic

scientific research, engineering, and

educational activities in the United

States, including the maintenance of

computer networks to connect research

and educational institutions. Beginning

in 1987, IBM, MCI and Merit developed

NSFNET, a national high-speed network

based on Internet protocols, under an

award from NSF. NSFNET, the largest of

the governmental networks, provided a

‘‘backbone’’ to connect other networks

serving more than 4,000 research and

educational institutions throughout the

country. The National Aeronautics and

Space Administration (NASA) and the

U.S. Department of Energy also

contributed backbone facilities.

In 1991–92, NSF assumed

responsibility for coordinating and

funding the management of the nonmilitary portion of the Internet

infrastructure. NSF solicited

competitive proposals to provide a

variety of infrastructure services,

including domain name registration

services. On December 31, 1992, NSF

entered into a cooperative agreement

with Network Solutions, Inc. (NSI) for

some of these services, including the

domain name registration services.

Since that time, NSI has managed key

registration, coordination, and

maintenance functions of the Internet

domain name system. NSI registers

domain names in the generic top level

domains (gTLDs) on a first come, first

served basis and also maintains a

directory linking domain names with

the IP numbers of domain name servers.

NSI also currently maintains the

authoritative database of Internet

registrations.

In 1992, the U.S. Congress gave NSF

statutory authority to allow commercial

activity on the NSFNET.5 This

facilitated connections between

NSFNET and newly forming

commercial network service providers,

paving the way for today’s Internet.

Thus, the U.S. Government has played

a pivotal role in creating the Internet as

we know it today. The U.S. Government

consistently encouraged bottom-up

development of networking

technologies, and throughout the course

of its development, computer scientists

from around the world have enriched

the Internet and facilitated exploitation

of its true potential. For example,

scientists at CERN, in Switzerland,

developed software, protocols and

conventions that formed the basis of

today’s vibrant World Wide Web. This

type of pioneering Internet research and

development continues in cooperative

organizations and consortia throughout

the world.

DNS Management Today

In recent years, commercial use of the

Internet has expanded rapidly. As a

legacy, however, major components of

the domain name system are still

performed by, or subject to, agreements

with agencies of the U.S. Government.

(1) Assignment of numerical

addresses to Internet users.

Every Internet computer has a unique

IP number. IANA, headed by Dr. Jon

Postel, coordinates this system by

allocating blocks of numerical addresses

to regional IP registries (ARIN in North

America, RIPE in Europe, and APNIC in

the Asia/Pacific region), under contract

with DARPA. In turn, larger Internet

service providers apply to the regional

IP registries for blocks of IP addresses.

The recipients of those address blocks

then reassign addresses to smaller

Internet service providers and to end

users.

(2) Management of the system of

registering names for Internet users.

The domain name space is

constructed as a hierarchy. It is divided

into top-level domains (TLDs), with

each TLD then divided into secondlevel domains (SLDs), and so on. More

than 200 national, or country-code,

TLDs (ccTLDs) are administered by their

corresponding governments or by

private entities with the appropriate

national government’s acquiescence. A

small set of gTLDs do not carry any

national identifier, but denote the

intended function of that portion of the

domain space. For example, .com was

established for commercial users, .org

for not-for-profit organizations, and .net

for network service providers. The

registration and propagation of these

key gTLDs are performed by NSI, under

a five-year cooperative agreement with

NSF. This agreement expires on

September 30, 1998.

(3) Operation of the root server

system.

The root server system is a set of

thirteen file servers, which together

contain authoritative databases listing

all TLDs. Currently, NSI operates the

‘‘A’’ root server, which maintains the

authoritative root database and

replicates changes to the other root

servers on a daily basis.

Different organizations, including

NSI, operate the other 12 root servers.6

The U.S. Government plays a role in the

operation of about half of the Internet’s

root servers. Universal name

consistency on the Internet cannot be

guaranteed without a set of authoritative

and consistent roots. Without such

consistency messages could not be

routed with any certainty to the

intended addresses.

(4) Protocol Assignment.

The Internet protocol suite, as defined

by the Internet Engineering Task Force

(IETF), contains many technical

parameters, including protocol

numbers, port numbers, autonomous

system numbers, management

information base object identifiers and

others. The common use of these

protocols by the Internet community

requires that the particular values used

in these fields be assigned uniquely.

Currently, IANA, under contract with

DARPA, makes these assignments and

maintains a registry of the assigned

values.

The Need for Change

From its origins as a U.S.-based

research vehicle, the Internet is rapidly

becoming an international medium for

commerce, education and

communication. The traditional means

of organizing its technical functions

need to evolve as well. The pressures for

change are coming from many different

quarters:

—There is widespread dissatisfaction

about the absence of competition in

domain name registration.

—Conflicts between trademark holders

and domain name holders are

becoming more common. Mechanisms

for resolving these conflicts are

expensive and cumbersome.

—Many commercial interests, staking

their future on the successful growth

of the Internet, are calling for a more

formal and robust management

structure.

—An increasing percentage of Internet

users reside outside of the U.S., and

those stakeholders want to participate

in Internet coordination.

—As Internet names increasingly have

commercial value, the decision to add

new top-level domains cannot be

made on an ad hoc basis by entities

or individuals that are not formally

accountable to the Internet

community.

—As the Internet becomes commercial,

it becomes less appropriate for U.S.

research agencies to direct and fund

these functions.

The Internet technical community has

been actively debating DNS
Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices 31743

7For further information about these systems see:

name.space: <http://namespace.pgmedia.net>;

AlterNIC: <http://www.alternic.net>; eDNS: <http:/

/www.edns.net>. Reference to these organizations

does not constitute an endorsement of their

commercial activities.

8Lengthy discussions by the Internet technical

community on DNS issues generally and on the

Postel DNS proposal took place on the newdom,

com-priv, ietf and domain-policy Internet mailing

lists.

9See draft-Postel-iana-itld-admin-01.txt; available

at <http://www.newdom.com/archive>.

10For further information about the IAHC see:

<http://www.iahc.org> and related links. Reference

to this organization does not constitute an

endorsement of the commercial activities of its

related organizations.

11 December 1996 draft: draft-iahc-gtldspec-00.txt;

available at <http://info.internet.isi.edu:80/indrafts/files>.

12The IAHC final report is available at <http://

www.iahc.org/draft-iahc-recommend-00.html>.

13See generally public comments received in

response to July 2, 1997 RFC located at <http://

www.ntia.doc.gov/ntiahome/domainname/email>.

14For a discussion, see Congressional testimony

of Assistant Secretary of Commerce Larry Irving,

Before the House Committee on Science,

Subcommittee on Basic Research, September 25,

1997 available at <http://www.ntia.doc.gov/

ntiahome/domainname/email>.

15See generally public comments received in

response to July 2, 1997 RFC located at <http://

www.ntia.doc.gov/ntiahome/domainname/email>.

16The document was published in the Federal

Register on February 20, 1998, (63 FR 8826 (Feb.

20, 1998)).

management policy for several years.

Experimental registry systems offering

name registration services in an

alternative set of exclusive domains

developed as early as January 1996.

Although visible to only a fraction of

Internet users, alternative systems such

as the name.space, AlterNIC, and eDNS

affiliated registries 7 contributed to the

community’s dialogue on the evolution

of DNS administration.

In May of 1996, Dr. Postel proposed

the creation of multiple, exclusive,

competing top-level domain name

registries. This proposal called for the

introduction of up to 50 new competing

domain name registries, each with the

exclusive right to register names in up

to three new top-level domains, for a

total of 150 new TLDs. While some

supported the proposal, the plan drew

much criticism from the Internet

technical community.8 The paper was

revised and reissued.9 The Internet

Society’s (ISOC) board of trustees

endorsed, in principle, the slightly

revised but substantively similar version

of the draft in June of 1996.

After considerable debate and

redrafting failed to produce a consensus

on DNS change, IANA and the Internet

Society (ISOC) organized the

International Ad Hoc Committee 10

(IAHC or the Ad Hoc Committee) in

September 1996, to resolve DNS

management issues. The World

Intellectual Property Organization

(WIPO) and the International

Telecommunications Union (ITU)

participated in the IAHC. The Federal

Networking Council (FNC) participated

in the early deliberations of the Ad Hoc

Committee.

The IAHC issued a draft plan in

December 1996 that introduced unique

and thoughtful concepts for the

evolution of DNS administration.11 The

final report proposed a memorandum of

understanding (MoU) that would have

established, initially, seven new gTLDs

to be operated on a nonexclusive basis

by a consortium of new private domain

name registrars called the Council of

Registrars (CORE).12 Policy oversight

would have been undertaken in a

separate council called the Policy

Oversight Committee (POC) with seats

allocated to specified stakeholder

groups. Further, the plan formally

introduced mechanisms for resolving

trademark/domain name disputes.

Under the MoU, registrants for secondlevel domains would have been

required to submit to mediation and

arbitration, facilitated by WIPO, in the

event of conflict with trademark

holders.

Although the IAHC proposal gained

support in many quarters of the Internet

community, the IAHC process was

criticized for its aggressive technology

development and implementation

schedule, for being dominated by the

Internet engineering community, and for

lacking participation by and input from

business interests and others in the

Internet community.13 Others criticized

the plan for failing to solve the

competitive problems that were such a

source of dissatisfaction among Internet

users and for imposing unnecessary

burdens on trademark holders.

Although the POC responded by

revising the original plan,

demonstrating a commendable degree of

flexibility, the proposal was not able to

overcome initial criticism of both the

plan and the process by which the plan

was developed.14 Important segments of

the Internet community remained

outside the IAHC process, criticizing it

as insufficiently representative.15

As a result of the pressure to change

DNS management, and in order to

facilitate its withdrawal from DNS

management, the U.S. Government,

through the Department of Commerce

and NTIA, sought public comment on

the direction of U.S. policy with respect

to DNS, issuing the Green Paper on

January 30, 1998.16 The approach

outlined in the Green Paper adopted

elements of other proposals, such as the

early Postel drafts and the IAHC gTLD–

MoU.

Comments and Response: The

following are summaries of and

responses to the major comments that

were received in response to NTIA’s

issuance of A Proposal to Improve the

Technical Management of Internet

Names and Addresses. As used herein,

quantitative terms such as ‘‘some,’’

‘‘many,’’ and ‘‘the majority of,’’ reflect,

roughly speaking, the proportion of

comments addressing a particular issue

but are not intended to summarize all

comments received or the complete

substance of all such comments.

1. Principles for a New System

The Green Paper set out four

principles to guide the evolution of the

domain name system: stability,

competition, private bottom-up

coordination, and representation.

Comments: In general, commenters

supported these principles, in some

cases highlighting the importance of one

or more of the principles. For example,

a number of commenters emphasized

the importance of establishing a body

that fully reflects the broad diversity of

the Internet community. Others stressed

the need to preserve the bottom-up

tradition of Internet governance. A

limited number of commenters

proposed additional principles for the

new system, including principles

related to the protection of human

rights, free speech, open

communication, and the preservation of

the Internet as a public trust. Finally,

some commenters who agreed that

Internet stability is an important

principle, nonetheless objected to the

U.S. Government’s assertion of any

participatory role in ensuring such

stability.

Response: The U.S. Government

policy applies only to management of

Internet names and addresses and does

not set out a system of Internet

‘‘governance.’’ Existing human rights

and free speech protections will not be

disturbed and, therefore, need not be

specifically included in the core

principles for DNS management. In

addition, this policy is not intended to

displace other legal regimes

(international law, competition law, tax

law and principles of international

taxation, intellectual property law, etc.)

that may already apply. The continued

applicability of these systems as well as

the principle of representation should

ensure that DNS management proceeds

in the interest of the Internet

community as a whole. Finally, the U.S.

Government believes that it would be

irresponsible to withdraw from its

existing management role without
31744 Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices

17As used herein, the term ‘‘new corporation’’ is

intended to refer to an entity formally organized

under well recognized and established business law

standards.

18As noted in the Summary, the President

directed the Secretary of Commerce to privatize

DNS in a manner that increases competition and

facilitates international participation in its

management. Accordingly, the Department of

Commerce will lead the coordination of the U.S.

government’s role in this transition.

taking steps to ensure the stability of the

Internet during its transition to private

sector management. On balance, the

comments did not present any

consensus for amending the principles

outlined in the Green Paper.

2. The Coordinated Functions

The Green Paper identified four DNS

functions to be performed on a

coordinated, centralized basis in order

to ensure that the Internet runs

smoothly:

1. To set policy for and direct the

allocation of IP number blocks;

2. To oversee the operation of the

Internet root server system;

3. To oversee policy for determining

the circumstances under which new top

level domains would be added to the

root system; and

4. To coordinate the development of

other technical protocol parameters as

needed to maintain universal

connectivity on the Internet.

Comments: Most commenters agreed

that these functions should be

coordinated centrally, although a few

argued that a system of authoritative

roots is not technically necessary to

ensure DNS stability. A number of

commenters, however, noted that the

fourth function, as delineated in the

Green Paper, overstated the functions

currently performed by IANA,

attributing to it central management

over an expanded set of functions, some

of which are now carried out by the

IETF.

Response: In order to preserve

universal connectivity and the smooth

operation of the Internet, the U.S.

Government continues to believe, along

with most commenters, that these four

functions should be coordinated. In the

absence of an authoritative root system,

the potential for name collisions among

competing sources for the same domain

name could undermine the smooth

functioning and stability of the Internet.

The Green Paper was not, however,

intended to expand the responsibilities

associated with Internet protocols

beyond those currently performed by

IANA. Specifically, management of DNS

by the new corporation does not

encompass the development of Internet

technical parameters for other purposes

by other organizations such as IETF.

The fourth function should be restated

accordingly:

• To coordinate the assignment of

other Internet technical parameters as

needed to maintain universal

connectivity on the Internet.

3. Separation of Name and Number

Authority

Comments: A number of commenters

suggested that management of the

domain name system should be

separated from management of the IP

number system. These commenters

expressed the view that the numbering

system is relatively technical and

straightforward. They feared that tight

linkage of domain name and IP number

policy development would embroil the

IP numbering system in the kind of

controversy that has surrounded domain

name issuance in recent months. These

commenters also expressed concern that

the development of alternative name

and number systems could be inhibited

by this controversy or delayed by those

with vested interests in the existing

system.

Response: The concerns expressed by

the commenters are legitimate, but

domain names and IP numbers must

ultimately be coordinated to preserve

universal connectivity on the Internet.

Also, there are significant costs

associated with establishing and

operating two separate management

entities.

However, there are organizational

structures that could minimize the risks

identified by commenters. For example,

separate name and number councils

could be formed within a single

organization. Policy could be

determined within the appropriate

council that would submit its

recommendations to the new

corporation’s Board of Directors for

ratification.

4. Creation of the New Corporation and

Management of the DNS

The Green Paper called for the

creation of a new private, not-for-profit

corporation 17 responsible for

coordinating specific DNS functions for

the benefit of the Internet as a whole.

Under the Green Paper proposal, the

U.S. Government 18 would gradually

transfer these functions to the new

corporation beginning as soon as

possible, with the goal of having the

new corporation carry out operational

responsibility by October 1998. Under

the Green Paper proposal, the U.S.

Government would continue to

participate in policy oversight until

such time as the new corporation was

established and stable, phasing out as

soon as possible, but in no event later

than September 30, 2000. The Green

Paper suggested that the new

corporation be incorporated in the

United States in order to promote

stability and facilitate the continued

reliance on technical expertise residing

in the United States, including IANA

staff at USC/ISI.

Comments: Almost all commenters

supported the creation of a new, private

not-for-profit corporation to manage

DNS. Many suggested that IANA should

evolve into the new corporation. A

small number of commenters asserted

that the U.S. Government should

continue to manage Internet names and

addresses. Another small number of

commenters suggested that DNS should

be managed by international

governmental institutions such as the

United Nations or the International

Telecommunications Union. Many

commenters urged the U.S. Government

to commit to a more aggressive timeline

for the new corporation’s assumption of

management responsibility. Some

commenters also suggested that the

proposal to headquarter the new

corporation in the United States

represented an inappropriate attempt to

impose U.S. law on the Internet as a

whole.

Response: The U.S. Government is

committed to a transition that will allow

the private sector to take leadership for

DNS management. Most commenters

shared this goal. While international

organizations may provide specific

expertise or act as advisors to the new

corporation, the U.S. continues to

believe, as do most commenters, that

neither national governments acting as

sovereigns nor intergovernmental

organizations acting as representatives

of governments should participate in

management of Internet names and

addresses. Of course, national

governments now have, and will

continue to have, authority to manage or

establish policy for their own ccTLDs.

The U.S. Government would prefer

that this transition be complete before

the year 2000. To the extent that the

new corporation is established and

operationally stable, September 30, 2000

is intended to be, and remains, an

‘‘outside’’ date.

IANA has functioned as a government

contractor, albeit with considerable

latitude, for some time now. Moreover,

IANA is not formally organized or

constituted. It describes a function more

than an entity, and as such does not

currently provide a legal foundation for

the new corporation. This is not to say,
Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices 31745

however, that IANA could not be

reconstituted by a broad-based,

representative group of Internet

stakeholders or that individuals

associated with IANA should not

themselves play important foundation

roles in the formation of the new

corporation. We believe, and many

commenters also suggested, that the

private sector organizers will want Dr.

Postel and other IANA staff to be

involved in the creation of the new

corporation.

Because of the significant U.S.-based

DNS expertise and in order to preserve

stability, it makes sense to headquarter

the new corporation in the United

States. Further, the mere fact that the

new corporation would be incorporated

in the United States would not remove

it from the jurisdiction of other nations.

Finally, we note that the new

corporation must be headquartered

somewhere, and similar objections

would inevitably arise if it were

incorporated in another location.

5. Structure of the New Corporation

The Green Paper proposed a 15-

member Board, consisting of three

representatives of regional number

registries, two members designated by

the Internet Architecture Board (IAB),

two members representing domain

name registries and domain name

registrars, seven members representing

Internet users, and the Chief Executive

Officer of the new corporation.

Comments: Commenters expressed a

variety of positions on the composition

of the Board of Directors for the new

corporation. In general, however, most

commenters supported the

establishment of a Board of Directors

that would be representative of the

functional and geographic diversity of

the Internet. For the most part,

commenters agreed that the groups

listed in the Green Paper included

individuals and entities likely to be

materially affected by changes in DNS.

Most of those who criticized the

proposed allocation of Board seats

called for increased representation of

their particular interest group on the

Board of Directors. Specifically, a

number of commenters suggested that

the allocation set forth in the Green

Paper did not adequately reflect the

special interests of (1) trademark

holders, (2) Internet service providers,

or (3) the not-for-profit community.

Others commented that the Green Paper

did not adequately ensure that the

Board would be globally representative.

Response: The Green Paper attempted

to describe a manageably sized Board of

Directors that reflected the diversity of

the Internet. It is probably impossible to

allocate Board seats in a way that

satisfies all parties concerned. On

balance, we believe the concerns raised

about the representation of specific

groups are best addressed by a

thoughtful allocation of the ‘‘user’’ seats

as determined by the organizers of the

new corporation and its Board of

Directors, as discussed below.

The Green Paper identified several

international membership associations

and organizations to designate Board

members such as APNIC, ARIN, RIPE,

and the Internet Architecture Board. We

continue to believe that as use of the

Internet expands outside the United

States, it is increasingly likely that a

properly open and transparent DNS

management entity will have board

members from around the world.

Although we do not set any mandatory

minimums for global representation,

this policy statement is designed to

identify global representativeness as an

important priority.

6. Registrars and Registries

The Green Paper proposed moving the

system for registering second level

domains and the management of generic

top-level domains into a competitive

environment by creating two marketdriven businesses, registration of second

level domain names and the

management of gTLD registries.

a. Competitive Registrars

Comments: Commenters strongly

supported establishment of a

competitive registrar system whereby

registrars would obtain domain names

for customers in any gTLD. Few

disagreed with this position. The Green

Paper proposed a set of requirements to

be imposed by the new corporation on

all would-be registrars. Commenters for

the most part did not take exception to

the proposed criteria, but a number of

commenters suggested that it was

inappropriate for the United States

government to establish them.

Response: In response to the

comments received, the U.S.

Government believes that the new

corporation, rather than the U.S.

Government, should establish minimum

criteria for registrars that are procompetitive and provide some measure

of stability for Internet users without

being so onerous as to prevent entry by

would-be domain name registrars from

around the world. Accordingly, the

proposed criteria are not part of this

policy statement.

b. Competitive Registries

Comments: Many commenters voiced

strong opposition to the idea of

competitive and/or for-profit domain

name registries, citing one of several

concerns. Some suggested that top level

domain names are not, by nature, ever

truly generic. As such, they will tend to

function as ‘‘natural monopolies’’ and

should be regulated as a public trust and

operated for the benefit of the Internet

community as a whole. Others

suggested that even if competition

initially exists among various domain

name registries, lack of portability in the

naming systems would create lock-in

and switching costs, making

competition unsustainable in the long

run. Finally, other commenters

suggested that no new registry could

compete meaningfully with NSI unless

all domain name registries were not-forprofit and/or noncompeting.

Some commenters asserted that an

experiment involving the creation of

additional for-profit registries would be

too risky, and irreversible once

undertaken. A related concern raised by

commenters addressed the rights that

for-profit operators might assert with

respect to the information contained in

registries they operate. These

commenters argued that registries

would have inadequate incentives to

abide by DNS policies and procedures

unless the new corporation could

terminate a particular entity’s license to

operate a registry. For-profit operators,

under this line of reasoning, would be

more likely to disrupt the Internet by

resisting license terminations.

Commenters who supported

competitive registries conceded that, in

the absence of domain name portability,

domain name registries could impose

switching costs on users who change

domain name registries. They

cautioned, however, that it would be

premature to conclude that switching

costs provide a sufficient basis for

precluding the proposed move to

competitive domain name registries and

cited a number of factors that could

protect against registry opportunism.

These commenters concluded that the

potential benefits to customers from

enhanced competition outweighed the

risk of such opportunism. The responses

to the Green Paper also included public

comments on the proposed criteria for

registries.

Response: Both sides of this argument

have considerable merit. It is possible

that additional discussion and

information will shed light on this

issue, and therefore, as discussed below,

the U.S. Government has concluded that

the issue should be left for further

consideration and final action by the

new corporation. The U.S. Government

is of the view, however, that

competitive systems generally result in

greater innovation, consumer choice,
31746 Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices

and satisfaction in the long run.

Moreover, the pressure of competition is

likely to be the most effective means of

discouraging registries from acting

monopolistically. Further, in response

to the comments received, the U.S.

government believes that new

corporation should establish and

implement appropriate criteria for gTLD

registries. Accordingly, the proposed

criteria are not part of this policy

statement.

7. The Creation of New gTLDs

The Green Paper suggested that

during the period of transition to the

new corporation, the U.S. Government,

in cooperation with IANA, would

undertake a process to add up to five

new gTLDs to the authoritative root.

Noting that formation of the new

corporation would involve some delay,

the Green Paper contemplated new

gTLDs in the short term to enhance

competition and provide information to

the technical community and to policy

makers, while offering entities that

wished to enter into the registry

business an opportunity to begin

offering service to customers. The Green

Paper, however, noted that ideally the

addition of new TLDs would be left to

the new corporation.

Comments: The comments evidenced

very strong support for limiting

government involvement during the

transition period on the matter of

adding new gTLDs. Specifically, most

commenters—both U.S. and non-U.S.—

suggested that it would be more

appropriate for the new, globally

representative, corporation to decide

these issues once it is up and running.

Few believed that speed should

outweigh process considerations in this

matter. Others warned, however, that

relegating this contentious decision to a

new and untested entity early in its

development could fracture the

organization. Others argued that the

market for a large or unlimited number

of new gTLDs should be opened

immediately. They asserted that there

are no technical impediments to the

addition of a host of gTLDs, and the

market will decide which TLDs succeed

and which do not. Further, they pointed

out that there are no artificial or

arbitrary limits in other media on the

number of places in which trademark

holders must defend against dilution.

Response: The challenge of deciding

policy for the addition of new domains

will be formidable. We agree with the

many commenters who said that the

new corporation would be the most

appropriate body to make these

decisions based on global input.

Accordingly, as supported by the

preponderance of comments, the U.S.

Government will not implement new

gTLDs at this time.

At least in the short run, a prudent

concern for the stability of the system

suggests that expansion of gTLDs

proceed at a deliberate and controlled

pace to allow for evaluation of the

impact of the new gTLDs and wellreasoned evolution of the domain space.

New top level domains could be created

to enhance competition and to enable

the new corporation to evaluate the

functioning, in the new environment, of

the root server system and the software

systems that enable shared registration.

8. The Trademark Dilemma

When a trademark is used as a

domain name without the trademark

owner’s consent, consumers may be

misled about the source of the product

or service offered on the Internet, and

trademark owners may not be able to

protect their rights without very

expensive litigation. For cyberspace to

function as an effective commercial

market, businesses must have

confidence that their trademarks can be

protected. On the other hand,

management of the Internet must

respond to the needs of the Internet

community as a whole, and not

trademark owners exclusively. The

Green Paper proposed a number of steps

to balance the needs of domain name

holders with the legitimate concerns of

trademark owners in the interest of the

Internet community as a whole. The

proposals were designed to provide

trademark holders with the same rights

they have in the physical world, to

ensure transparency, and to guarantee a

dispute resolution mechanism with

resort to a court system.

The Green Paper also noted that

trademark holders have expressed

concern that domain name registrants in

faraway places may be able to infringe

their rights with no convenient

jurisdiction available in which the

trademark owner could enforce a

judgment protecting those rights. The

Green Paper solicited comments on an

arrangement whereby, at the time of

registration, registrants would agree to

submit a contested domain name to the

jurisdiction of the courts where the

registry is domiciled, where the registry

database is maintained, or where the

‘‘A’’ root server is maintained.

Comments: Commenters largely

agreed that domain name registries

should maintain up-to-date, readily

searchable domain name databases that

contain the information necessary to

locate a domain name holder. In general

commenters did not take specific issue

with the database specifications

proposed in Appendix 2 of the Green

Paper, although some commenters

proposed additional requirements. A

few commenters noted, however, that

privacy issues should be considered in

this context.

A number of commenters objected to

NSI’s current business practice of

allowing registrants to use domain

names before they have actually paid

any registration fees. These commenters

pointed out that this practice has

encouraged cybersquatters and

increased the number of conflicts

between domain name holders and

trademark holders. They suggested that

domain name applicants should be

required to pay before a desired domain

name becomes available for use.

Most commenters also favored

creation of an on-line dispute resolution

mechanism to provide inexpensive and

efficient alternatives to litigation for

resolving disputes between trademark

owners and domain name registrants.

The Green Paper contemplated that each

registry would establish specified

minimum dispute resolution

procedures, but remain free to establish

additional trademark protection and

dispute resolution mechanisms. Most

commenters did not agree with this

approach, favoring instead a uniform

approach to resolving trademark/

domain name disputes.

Some commenters noted that

temporary suspension of a domain name

in the event of an objection by a

trademark holder within a specified

period of time after registration would

significantly extend trademark holders’

rights beyond what is accorded in the

real world. They argued that such a

provision would create a de facto

waiting period for name use, as holders

would need to suspend the use of their

name until after the objection window

had passed to forestall an interruption

in service. Further, they argue that such

a system could be used anticompetitively to stall a competitor’s

entry into the marketplace.

The suggestion that domain name

registrants be required to agree at the

time of registration to submit disputed

domain names to the jurisdiction of

specified courts was supported by U.S.

trademark holders but drew strong

protest from trademark holders and

domain name registrants outside the

United States. A number of commenters

characterized this as an inappropriate

attempt to establish U.S. trademark law

as the law of the Internet. Others

suggested that existing jurisdictional

arrangements are satisfactory. They

argue that establishing a mechanism

whereby the judgment of a court can be

enforced absent personal jurisdiction
Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices 31747

over the infringer would upset the

balance between the interests of

trademark holders and those of other

members of the Internet community.

Response: The U.S. Government will

seek international support to call upon

the World Intellectual Property

Organization (WIPO) to initiate a

balanced and transparent process,

which includes the participation of

trademark holders and members of the

Internet community who are not

trademark holders, to (1) develop

recommendations for a uniform

approach to resolving trademark/

domain name disputes involving

cyberpiracy (as opposed to conflicts

between trademark holders with

legitimate competing rights), (2)

recommend a process for protecting

famous trademarks in the generic top

level domains, and (3) evaluate the

effects, based on studies conducted by

independent organizations, such as the

National Research Council of the

National Academy of Sciences, of

adding new gTLDs and related dispute

resolution procedures on trademark and

intellectual property holders. These

findings and recommendations could be

submitted to the board of the new

corporation for its consideration in

conjunction with its development of

registry and registrar policy and the

creation and introduction of new gTLDs.

In trademark/domain name conflicts,

there are issues of jurisdiction over the

domain name in controversy and

jurisdiction over the legal persons (the

trademark holder and the domain name

holder). This document does not

attempt to resolve questions of personal

jurisdiction in trademark/domain name

conflicts. The legal issues are numerous,

involving contract, conflict of laws,

trademark, and other questions. In

addition, determining how these various

legal principles will be applied to the

borderless Internet with an unlimited

possibility of factual scenarios will

require a great deal of thought and

deliberation. Obtaining agreement by

the parties that jurisdiction over the

domain name will be exercised by an

alternative dispute resolution body is

likely to be at least somewhat less

controversial than agreement that the

parties will subject themselves to the

personal jurisdiction of a particular

national court. Thus, the references to

jurisdiction in this policy statement are

limited to jurisdiction over the domain

name in dispute, and not to the domain

name holder.

In order to strike a balance between

those commenters who thought that

registrars and registries should not

themselves be engaged in disputes

between trademark owners and domain

name holders and those commenters

who thought that trademark owners

should have access to a reliable and upto-date database, we believe that a

database should be maintained that

permits trademark owners to obtain the

contact information necessary to protect

their trademarks.

Further, it should be clear that

whatever dispute resolution mechanism

is put in place by the new corporation,

that mechanism should be directed

toward disputes about cybersquatting

and cyberpiracy and not to settling the

disputes between two parties with

legitimate competing interests in a

particular mark. Where legitimate

competing rights are concerned,

disputes are rightly settled in an

appropriate court.

Under the revised plan, we

recommend that domain name holders

agree to submit infringing domain

names to the jurisdiction of a court

where the ‘‘A’’ root server is

maintained, where the registry is

domiciled, where the registry database

is maintained, or where the registrar is

domiciled. We believe that allowing

trademark infringement suits to be

brought wherever registrars and

registries are located will help ensure

that all trademark holders ‘‘ both U.S.

and non-U.S. ‘‘ have the opportunity to

bring suits in a convenient jurisdiction

and enforce the judgments of those

courts.

Under the revised plan, we also

recommend that, whatever options are

chosen by the new corporation, each

registrar should insist that payment be

made for the domain name before it

becomes available to the applicant. The

failure to make a domain name

applicant pay for its use of a domain

name has encouraged cyberpirates and

is a practice that should end as soon as

possible.

9. Competition Concerns

Comments: Several commenters

suggested that the U.S. Government

should provide full antitrust immunity

or indemnification for the new

corporation. Others noted that potential

antitrust liability would provide an

important safeguard against institutional

inflexibility and abuses of power.

Response: Applicable antitrust law

will provide accountability to and

protection for the international Internet

community. Legal challenges and

lawsuits can be expected within the

normal course of business for any

enterprise and the new corporation

should anticipate this reality.

The Green Paper envisioned the new

corporation as operating on principles

similar to those of a standard-setting

body. Under this model, due process

requirements and other appropriate

processes that ensure transparency,

equity and fair play in the development

of policies or practices would need to be

included in the new corporation’s

originating documents. For example, the

new corporation’s activities would need

to be open to all persons who are

directly affected by the entity, with no

undue financial barriers to participation

or unreasonable restrictions on

participation based on technical or other

such requirements. Entities and

individuals would need to be able to

participate by expressing a position and

its basis, having that position

considered, and appealing if adversely

affected. Further, the decision making

process would need to reflect a balance

of interests and should not be

dominated by any single interest

category. If the new corporation behaves

this way, it should be less vulnerable to

antitrust challenges.

10. The NSI Agreement

Comments: Many commenters

expressed concern about continued

administration of key gTLDs by NSI.

They argued that this would give NSI an

unfair advantage in the marketplace and

allow NSI to leverage economies of scale

across their gTLD operations. Some

commenters also believe the Green

Paper approach would have entrenched

and institutionalized NSI’s dominant

market position over the key domain

name going forward. Further, many

commenters expressed doubt that a

level playing field between NSI and the

new registry market entrants could

emerge if NSI retained control over

.com, .net, and .org.

Response: The cooperative agreement

between NSI and the U.S. Government

is currently in its ramp down period.

The U.S. Government and NSI will

shortly commence discussions about the

terms and conditions governing the

ramp-down of the cooperative

agreement. Through these discussions,

the U.S. Government expects NSI to

agree to take specific actions, including

commitments as to pricing and equal

access, designed to permit the

development of competition in domain

name registration and to approximate

what would be expected in the presence

of marketplace competition. The U.S.

Government expects NSI to agree to act

in a manner consistent with this policy

statement, including recognizing the

role of the new corporation to establish

and implement DNS policy and to

establish terms (including licensing

terms) applicable to new and existing

gTLD registries under which registries,

registrars and gTLDs are permitted to
31748 Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices

19 1998 Supplemental Appropriations and

Rescissions Act; Pub. L. 105–174; 112 Stat. 58.

20Management principles for the .us domain

space are set forth in Internet RFC 1480, (http://

www.isi.edu/in-notes/rfc1480.txt).

operate. Further, the U.S. Government

expects NSI to agree to make available

on an ongoing basis appropriate

databases, software, documentation

thereof, technical expertise, and other

intellectual property for DNS

management and shared registration of

domain names.

11. A Global Perspective

Comments: A number of commenters

expressed concern that the Green Paper

did not go far enough in globalizing the

administration of the domain name

system. Some believed that

international organizations should have

a role in administering the DNS. Others

complained that incorporating the new

corporation in the United States would

entrench control over the Internet with

the U.S. Government. Still others

believed that the awarding by the U.S.

Government of up to five new gTLDs

would enforce the existing dominance

of U.S. entities over the gTLD system.

Response: The U.S. Government

believes that the Internet is a global

medium and that its technical

management should fully reflect the

global diversity of Internet users. We

recognize the need for and fully support

mechanisms that would ensure

international input into the management

of the domain name system. In

withdrawing the U.S. Government from

DNS management and promoting the

establishment of a new, nongovernmental entity to manage Internet

names and addresses, a key U.S.

Government objective has been to

ensure that the increasingly global

Internet user community has a voice in

decisions affecting the Internet’s

technical management.

We believe this process has reflected

our commitment. Many of the

comments on the Green Paper were filed

by foreign entities, including

governments. Our dialogue has been

open to all Internet users—foreign and

domestic, government and private—

during this process, and we will

continue to consult with the

international community as we begin to

implement the transition plan outlined

in this paper.

12. The Intellectual Infrastructure Fund

In 1995, NSF authorized NSI to assess

domain name registrants a $50 fee per

year for the first two years, 30 percent

of which was to be deposited in the

Intellectual Infrastructure Fund (IIF), a

fund to be used for the preservation and

enhancement of the intellectual

infrastructure of the Internet.

Comments: Very few comments

referenced the IIF. In general, the

comments received on the issue

supported either refunding the IIF

portion of the domain name registration

fee to domain registrants from whom it

had been collected or applying the

funds toward Internet infrastructure

development projects generally,

including funding the establishment of

the new corporation.

Response: As proposed in the Green

Paper, allocation of a portion of domain

name registration fees to this fund

terminated as of March 31, 1998. NSI

has reduced its registration fees

accordingly. The IIF remains the subject

of litigation. The U.S. Government takes

the position that its collection has

recently been ratified by the U.S.

Congress,19 and has moved to dismiss

the claim that it was unlawfully

collected. This matter has not been

finally resolved, however.

13. The .us Domain

At present, the IANA administers .us

as a locality-based hierarchy in which

second-level domain space is allocated

to states and U.S. territories.20 This

name space is further subdivided into

localities. General registration under

localities is performed on an exclusive

basis by private firms that have

requested delegation from IANA. The

.us name space has typically been used

by branches of state and local

governments, although some

commercial names have been assigned.

Where registration for a locality has not

been delegated, the IANA itself serves as

the registrar.

Comments: Many commenters

suggested that the pressure for unique

identifiers in the .com gTLD could be

relieved if commercial use of the .us

space was encouraged. Commercial

users and trademark holders, however,

find the current locality-based system

too cumbersome and complicated for

commercial use. They called for

expanded use of the .us TLD to alleviate

some of the pressure for new generic

TLDs and reduce conflicts between

American companies and others vying

for the same domain name. Most

commenters support an evolution of the

.us domain designed to make this name

space more attractive to commercial

users.

Response: Clearly, there is much

opportunity for enhancing the .us

domain space, and .us could be

expanded in many ways without

displacing the current structure. Over

the next few months, the U.S.

Government will work with the private

sector and state and local governments

to determine how best to make the .us

domain more attractive to commercial

users. Accordingly, the Department of

Commerce will seek public input on

this important issue.

Administrative Law Requirements

On February 20, 1998, NTIA

published for public comment a

proposed rule regarding the domain

name registration system. That proposed

rule sought comment on substantive

regulatory provisions, including but not

limited to a variety of specific

requirements for the membership of the

new corporation, the creation during a

transition period of a specified number

of new generic top level domains and

minimum dispute resolution and other

procedures related to trademarks. As

discussed elsewhere in this document,

in response to public comment these

aspects of the original proposal have

been eliminated. In light of the public

comment and the changes to the

proposal made as a result, as well as the

continued rapid technological

development of the Internet, the

Department of Commerce has

determined that it should issue a

general statement of policy, rather than

define or impose a substantive

regulatory regime for the domain name

system. As such, this policy statement is

not a substantive rule, does not contain

mandatory provisions and does not

itself have the force and effect of law.

The Assistant General Counsel for

Legislation and Regulation, Department

of Commerce, certified to the Chief

Counsel for Advocacy, Small Business

Administration, that, for purposes of the

Regulatory Flexibility Act, 5 U.S.C. 601

et seq., the proposed rule on this matter,

if adopted, would not have a significant

economic impact on a substantial

number of small entities. The factual

basis for this certification was published

along with the proposed rule. No

comments were received regarding this

certification. As such, and because this

final rule is a general statement of

policy, no final regulatory flexibility

analysis has been prepared.

This general statement of policy does

not contain any reporting or record

keeping requirements subject to the

Paperwork Reduction Act, 44 U.S.C. ch.

35 (PRA). However, at the time the U.S.

Government might seek to enter into

agreements as described in this policy

statement, a determination will be made

as to whether any reporting or record

keeping requirements subject to the PRA

are being implemented. If so, the NTIA

will, at that time, seek approval under

the PRA for such requirement(s) from

the Office of Management and Budget.
Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices 31749

This statement has been determined

to be not significant for purposes of

Office of Management and Budget

review under Executive Order 12866,

entitled Regulatory Planning and

Review.

Revised Policy Statement

This document provides the U.S.

Government’s policy regarding the

privatization of the domain name

system in a manner that allows for the

development of robust competition and

that facilitates global participation in

the management of Internet names and

addresses.

The policy that follows does not

propose a monolithic structure for

Internet governance. We doubt that the

Internet should be governed by one plan

or one body or even by a series of plans

and bodies. Rather, we seek a stable

process to address the narrow issues of

management and administration of

Internet names and numbers on an

ongoing basis.

As set out below, the U.S.

Government is prepared to recognize, by

entering into agreement with, and to

seek international support for, a new,

not-for-profit corporation formed by

private sector Internet stakeholders to

administer policy for the Internet name

and address system. Under such

agreement(s) or understanding(s), the

new corporation would undertake

various responsibilities for the

administration of the domain name

system now performed by or on behalf

of the U.S. Government or by third

parties under arrangements or

agreements with the U.S. Government.

The U.S. Government would also ensure

that the new corporation has

appropriate access to needed databases

and software developed under those

agreements.

The Coordinated Functions

Management of number addresses is

best done on a coordinated basis.

Internet numbers are a unique, and at

least currently, a limited resource. As

technology evolves, changes may be

needed in the number allocation system.

These changes should also be

coordinated.

Similarly, coordination of the root

server network is necessary if the whole

system is to work smoothly. While dayto-day operational tasks, such as the

actual operation and maintenance of the

Internet root servers, can be dispersed,

overall policy guidance and control of

the TLDs and the Internet root server

system should be vested in a single

organization that is representative of

Internet users around the globe.

Further, changes made in the

administration or the number of gTLDs

contained in the authoritative root

system will have considerable impact

on Internet users throughout the world.

In order to promote continuity and

reasonable predictability in functions

related to the root zone, the

development of policies for the

addition, allocation, and management of

gTLDs and the establishment of domain

name registries and domain name

registrars to host gTLDs should be

coordinated.

Finally, coordinated maintenance and

dissemination of the protocol

parameters for Internet addressing will

best preserve the stability and

interconnectivity of the Internet. We are

not, however, proposing to expand the

functional responsibilities of the new

corporation beyond those exercised by

IANA currently.

In order to facilitate the needed

coordination, Internet stakeholders are

invited to work together to form a new,

private, not-for-profit corporation to

manage DNS functions. The following

discussion reflects current U.S.

Government views of the characteristics

of an appropriate management entity.

What follows is designed to describe the

characteristics of an appropriate entity

generally.

Principles for a New System

In making a decision to enter into an

agreement to establish a process to

transfer current U.S. Government

management of DNS to such a new

entity, the U.S. will be guided by, and

consider the proposed entity’s

commitment to, the following

principles:

1. Stability. The U.S. Government

should end its role in the Internet

number and name address system in a

manner that ensures the stability of the

Internet. The introduction of a new

management system should not disrupt

current operations or create competing

root systems. During the transition and

thereafter, the stability of the Internet

should be the first priority of any DNS

management system. Security and

reliability of the DNS are important

aspects of stability, and as a new DNS

management system is introduced, a

comprehensive security strategy should

be developed.

2. Competition. The Internet succeeds

in great measure because it is a

decentralized system that encourages

innovation and maximizes individual

freedom. Where possible, market

mechanisms that support competition

and consumer choice should drive the

management of the Internet because

they will lower costs, promote

innovation, encourage diversity, and

enhance user choice and satisfaction.

3. Private, Bottom-Up Coordination.

Certain management functions require

coordination. In these cases,

responsible, private-sector action is

preferable to government control. A

private coordinating process is likely to

be more flexible than government and to

move rapidly enough to meet the

changing needs of the Internet and of

Internet users. The private process

should, as far as possible, reflect the

bottom-up governance that has

characterized development of the

Internet to date.

4. Representation. The new

corporation should operate as a private

entity for the benefit of the Internet

community as a whole. The

development of sound, fair, and widely

accepted policies for the management of

DNS will depend on input from the

broad and growing community of

Internet users. Management structures

should reflect the functional and

geographic diversity of the Internet and

its users. Mechanisms should be

established to ensure international

participation in decision making.

Purpose. The new corporation

ultimately should have the authority to

manage and perform a specific set of

functions related to coordination of the

domain name system, including the

authority necessary to:

(1) Set policy for and direct allocation

of IP number blocks to regional Internet

number registries;

(2) Oversee operation of the

authoritative Internet root server system;

(3) Oversee policy for determining the

circumstances under which new TLDs

are added to the root system; and

(4) Coordinate the assignment of other

Internet technical parameters as needed

to maintain universal connectivity on

the Internet.

Funding. Once established, the new

corporation could be funded by domain

name registries, regional IP registries, or

other entities identified by the Board.

Staff. We anticipate that the new

corporation would want to make

arrangements with current IANA staff to

provide continuity and expertise over

the course of transition. The new

corporation should secure necessary

expertise to bring rigorous management

to the organization.

Incorporation. We anticipate that the

new corporation’s organizers will

include representatives of regional

Internet number registries, Internet

engineers and computer scientists,

domain name registries, domain name

registrars, commercial and

noncommercial users, Internet service

providers, international trademark
31750 Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices

21These databases would also benefit domain

name holders by making it less expensive for new

registrars and registries to identify potential

customers, enhancing competition and lowering

prices.

holders and Internet experts highly

respected throughout the international

Internet community. These

incorporators should include substantial

representation from around the world.

As these functions are now performed

in the United States, by U.S. residents,

and to ensure stability, the new

corporation should be headquartered in

the United States, and incorporated in

the U.S. as a not-for-profit corporation.

It should, however, have a board of

directors from around the world.

Moreover, incorporation in the United

States is not intended to supplant or

displace the laws of other countries

where applicable.

Structure. The Internet community is

already global and diverse and likely to

become more so over time. The

organization and its board should derive

legitimacy from the participation of key

stakeholders. Since the organization

will be concerned mainly with numbers,

names and protocols, its board should

represent membership organizations in

each of these areas, as well as the direct

interests of Internet users.

The Board of Directors for the new

corporation should be balanced to

equitably represent the interests of IP

number registries, domain name

registries, domain name registrars, the

technical community, Internet service

providers (ISPs), and Internet users

(commercial, not-for-profit, and

individuals) from around the world.

Since these constituencies are

international, we would expect the

board of directors to be broadly

representative of the global Internet

community.

As outlined in appropriate

organizational documents, (Charter,

Bylaws, etc.) the new corporation

should:

(1) Appoint, on an interim basis, an

initial Board of Directors (an Interim

Board) consisting of individuals

representing the functional and

geographic diversity of the Internet

community. The Interim Board would

likely need access to legal counsel with

expertise in corporate law, competition

law, intellectual property law, and

emerging Internet law. The Interim

Board could serve for a fixed period,

until the Board of Directors is elected

and installed, and we anticipate that

members of the Interim Board would

not themselves serve on the Board of

Directors of the new corporation for a

fixed period thereafter.

(2) Direct the Interim Board to

establish a system for electing a Board

of Directors for the new corporation that

insures that the new corporation’s Board

of Directors reflects the geographical

and functional diversity of the Internet,

and is sufficiently flexible to permit

evolution to reflect changes in the

constituency of Internet stakeholders.

Nominations to the Board of Directors

should preserve, as much as possible,

the tradition of bottom-up governance of

the Internet, and Board Members should

be elected from membership or other

associations open to all or through other

mechanisms that ensure broad

representation and participation in the

election process.

(3) Direct the Interim Board to

develop policies for the addition of

TLDs, and establish the qualifications

for domain name registries and domain

name registrars within the system.

(4) Restrict official government

representation on the Board of Directors

without precluding governments and

intergovernmental organizations from

participating as Internet users or in a

non-voting advisory capacity.

Governance. The organizing

documents (Charter, Bylaws, etc.)

should provide that the new corporation

is governed on the basis of a sound and

transparent decision-making process,

which protects against capture by a selfinterested faction, and which provides

for robust, professional management of

the new corporation. The new

corporation could rely on separate,

diverse, and robust name and number

councils responsible for developing,

reviewing, and recommending for the

board’s approval policy related to

matters within each council’s

competence. Such councils, if

developed, should also abide by rules

and decision-making processes that are

sound, transparent, protect against

capture by a self-interested party and

provide an open process for the

presentation of petitions for

consideration. The elected Board of

Directors, however, should have final

authority to approve or reject policies

recommended by the councils.

Operations. The new corporation’s

processes should be fair, open and procompetitive, protecting against capture

by a narrow group of stakeholders.

Typically this means that decisionmaking processes should be sound and

transparent; the basis for corporate

decisions should be recorded and made

publicly available. Super-majority or

even consensus requirements may be

useful to protect against capture by a

self-interested faction. The new

corporation does not need any special

grant of immunity from the antitrust

laws so long as its policies and practices

are reasonably based on, and no broader

than necessary to promote the legitimate

coordinating objectives of the new

corporation. Finally, the commercial

importance of the Internet necessitates

that the operation of the DNS system,

and the operation of the authoritative

root server system should be secure,

stable, and robust.

The new corporation’s charter should

provide a mechanism whereby its

governing body will evolve to reflect

changes in the constituency of Internet

stakeholders. The new corporation

could, for example, establish an open

process for the presentation of petitions

to expand board representation.

Trademark Issues. Trademark holders

and domain name registrants and others

should have access to searchable

databases of registered domain names

that provide information necessary to

contact a domain name registrant when

a conflict arises between a trademark

holder and a domain name holder.21 To

this end, we anticipate that the policies

established by the new corporation

would provide that following

information would be included in all

registry databases and available to

anyone with access to the Internet:

—Up-to-date registration and contact

information;

—Up-to-date and historical chain of

registration information for the

domain name;

—A mail address for service of process;

—The date of domain name registration;

—The date that any objection to the

registration of the domain name is

filed; and

—Any other information determined by

the new corporation to be reasonably

necessary to resolve disputes between

domain name registrants and

trademark holders expeditiously.

Further, the U.S. Government

recommends that the new corporation

adopt policies whereby:

(1) Domain registrants pay registration

fees at the time of registration or

renewal and agree to submit infringing

domain names to the authority of a

court of law in the jurisdiction in which

the registry, registry database, registrar,

or the ‘‘A’’ root servers are located.

(2) Domain name registrants would

agree, at the time of registration or

renewal, that in cases involving

cyberpiracy or cybersquatting (as

opposed to conflicts between legitimate

competing rights holders), they would

submit to and be bound by alternative

dispute resolution systems identified by

the new corporation for the purpose of

resolving those conflicts. Registries and

Registrars should be required to abide

by decisions of the ADR system.
Federal Register / Vol. 63, No. 111 /Wednesday, June 10, 1998 / Notices 31751

(3) Domain name registrants would

agree, at the time of registration or

renewal, to abide by processes adopted

by the new corporation that exclude,

either pro-actively or retroactively,

certain famous trademarks from being

used as domain names (in one or more

TLDs) except by the designated

trademark holder.

(4) Nothing in the domain name

registration agreement or in the

operation of the new corporation should

limit the rights that can be asserted by

a domain name registrant or trademark

owner under national laws.

The Transition

Based on the processes described

above, the U.S. Government believes

that certain actions should be taken to

accomplish the objectives set forth

above. Some of these steps must be

taken by the government itself, while

others will need to be taken by the

private sector. For example, a new notfor-profit organization must be

established by the private sector and its

Interim Board chosen. Agreement must

be reached between the U.S.

Government and the new corporation

relating to transfer of the functions

currently performed by IANA. NSI and

the U.S. Government must reach

agreement on the terms and conditions

of NSI’s evolution into one competitor

among many in the registrar and registry

marketplaces. A process must be laid

out for making the management of the

root server system more robust and

secure. A relationship between the U.S.

Government and the new corporation

must be developed to transition DNS

management to the private sector and to

transfer management functions.

During the transition the U.S.

Government expects to:

(1) Ramp down the cooperative

agreement with NSI with the objective

of introducing competition into the

domain name space. Under the ramp

down agreement NSI will agree to (a)

take specific actions, including

commitments as to pricing and equal

access, designed to permit the

development of competition in domain

name registration and to approximate

what would be expected in the presence

of marketplace competition, (b)

recognize the role of the new

corporation to establish and implement

DNS policy and to establish terms

(including licensing terms) applicable to

new and existing gTLDs and registries

under which registries, registrars and

gTLDs are permitted to operate, (c) make

available on an ongoing basis

appropriate databases, software,

documentation thereof, technical

expertise, and other intellectual

property for DNS management and

shared registration of domain names;

(2) Enter into agreement with the new

corporation under which it assumes

responsibility for management of the

domain name space;

(3) Ask WIPO to convene an

international process including

individuals from the private sector and

government to develop a set of

recommendations for trademark/domain

name dispute resolutions and other

issues to be presented to the Interim

Board for its consideration as soon as

possible;

(4) Consult with the international

community, including other interested

governments as it makes decisions on

the transfer; and

(5) Undertake, in cooperation with

IANA, NSI, the IAB, and other relevant

organizations from the public and

private sector, a review of the root

server system to recommend means to

increase the security and professional

management of the system. The

recommendations of the study should

be implemented as part of the transition

process; and the new corporation

should develop a comprehensive

security strategy for DNS management

and operations.

Dated: June 4, 1998.

William M. Daley,

Secretary of Commerce.

[FR Doc. 98–15392 Filed 6–9–98; 8:45 am]

BILLING CODE 3510–60–P

COMMISSION OF FINE ARTS

Notice of Meeting

The next meeting of the Commission

of Fine Arts is scheduled for June 18,

1998 at 10:00 a.m. in the Commission’s

offices at the National Building Museum

(Pension Building), Suite 312, Judiciary

Square, 441 F Street, N.W., Washington,

D.C. 20001. The meeting will focus on

a variety of projects affecting the

appearance of the city.

Inquiries regarding the agenda and

requests to submit written or oral

statements should be addressed to

Charles H. Atherton, Secretary,

Commission of Fine Arts, at the above

address or call 202–504–2200.

Individuals requiring sign language

interpretation for the hearing impaired

should contact the Secretary at least 10

days before the meeting date.

Dated in Washington, D.C., June 2, 1998.

Charles H. Atherton,

Secretary.

[FR Doc. 98–15372 Filed 6–9–98; 8:45 am]

BILLING CODE 6330–01–M

COMMITTEE FOR THE

IMPLEMENTATION OF TEXTILE

AGREEMENTS

Adjustment of Import Limits for Certain

Cotton, Wool and Man-Made Fiber

Textile Products and Silk Blend and

Other Vegetable Fiber Apparel

Produced or Manufactured in the

Philippines

June 5, 1998.

AGENCY: Committee for the

Implementation of Textile Agreements

(CITA).

ACTION: Issuing a directive to the

Commissioner of Customs adjusting

limits.

EFFECTIVE DATE: June 10, 1998.

FOR FURTHER INFORMATION CONTACT:

Janet Heinzen, International Trade

Specialist, Office of Textiles and

Apparel, U.S. Department of Commerce,

(202) 482–4212. For information on the

quota status of these limits, refer to the

Quota Status Reports posted on the

bulletin boards of each Customs port or

call (202) 927–5850. For information on

embargoes and quota re-openings, call

(202) 482–3715.

SUPPLEMENTARY INFORMATION:

Authority: Section 204 of the Agricultural

Act of 1956, as amended (7 U.S.C. 1854);

Executive Order 11651 of March 3, 1972, as

amended.

The current limits for certain

categories are being adjusted, variously,

for special shift and carryover.

A description of the textile and

apparel categories in terms of HTS

numbers is available in the

CORRELATION: Textile and Apparel

Categories with the Harmonized Tariff

Schedule of the United States (see

Federal Register notice 62 FR 66057,

published on December 17, 1997). Also

see 62 FR 64361, published on

December 5, 1997.

Troy H. Cribb,

Chairman, Committee for the Implementation

of Textile Agreements.

Committee for the Implementation of Textile

Agreements

June 5, 1998.

Commissioner of Customs,

Department of the Treasury, Washington, DC

20229.

Dear Commissioner: This directive

amends, but does not cancel, the directive

issued to you on December 1, 1997, by the

Chairman, Committee for the Implementation

of Textile Agreements. That directive

concerns imports of certain cotton, wool and

man-made fiber textiles and textile products

and silk blend and other vegetable fiber

apparel, produced or manufactured in the

Philippines and exported during the twelve-