COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 29.07.1998 
COM(1998) 476 final 
COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 
INTERNET GOVERNANCE 
MANAGEMENT OF INTERNET NAMES AND ADDRESSES 
ANALYSIS AND ASSESSMENT FROM THE EUROPEAN COMMISSION 
OF THE UNITED STATES DEPARTMENT OF COMMERCE WHITE PAPER 

COMMUNICATION I ROM THE EUROPEAN COMMISSION TO 
HIE EUROPEAN PARLIAMENT AND TO THE COUNCIL 
INTERNET GOVERNANCE 
MANAGEMENT OF INTERNET NAMES AND ADDRESSES 
ANALYSIS AND ASSESSMENT FROM THE EUROPEAN COMMISSION 
OF THE UNITED STATES DEPARTMENT OF COMMERCE WHITE PAPER 
I. INTRODUCTION 
On 16 March 1998, the Council and the Commission addressed a joint reply based 
on a Proposal from the Commission1, from the European Union and its Member 
States to an inquiry initiated by the US Department of Commerce in the form of a 
Green Paper. The initial policy proposals of the US Green Paper regarding the 
organisation and management of Internet names and addresses received a number of 
comments and criticisms from the EU Council and the Commission. 
Since then, the Commission has met several times with the competent US officials. 
More recently, the US Government has finally published a White Paper setting out 
their policy in this area. As recently announced, US Government policy is 
substantially different from that which was proposed in the initial Green Paper. In 
many respects, it now responds to the comments and criticisms of the European 
Union, and a large number of other commentators., both internationally and even 
from within the United States. 
Consequently, the Commission can now confirm that the EU should act to 
participate fully in the process of organisation and management of the Internet 
that has been launched by the US While Paper. 
2. THE CORE OF THE US PROPOSALS: THE NEW IANA CORPORATION 
The core of the US proposals concerns the new IANA Corporation (Internet Adressing 
and Naming Authority) which will become the central regulatory body for the Internet's 
naming and addressing system. Although this may appear to be an highly technical area, 
it is clear that the industry recognises this as an important area. In fact the control over 
the Root Server system and the IP addresses is critical to the stability and inter-operability 
of the Internet and the policies for Registries and Registrars and the allocation of domain 
names have considerable commercial significance for the organisations concerned, users 
and trademark owners. 
COM/1998/1 I I of 20 February 1998. 
Consultations between the existing IANA organisation and other interested parties 
about the constitution of the new organisation have already begun, particularly in 
the United States. European responses to the US Green Paper stressed the 
importance of international participation and more specifically that the regional 
registration agencies (RIPE) and the national ccTLD Registries should have a direct 
role in the new organisation. 
furthermore, it is likely that the new organisation will have distinct "Councils" or 
"Committees" which will deal with Naming policy, Addressing policy and the 
representation of the views of industry and users, including public sector users. 
Consequently, the overall membership of the new IANA corporation, the 
participation of European interests in the respective Councils, and the election 
process for the Board of Directors itself, are all of importance at this time. 
When the private sector "stakeholders" have reached a consensus on the structure 
and organisation of the new IANA corporation, the US Government proposes to 
transfer certain responsibilities to it formally. 
This transfer of responsibility will also be the subject of international consultations, 
in which the EU will undoubtedly wish to participate. Although the timing and 
methodology of this process has not yet been defined, one should be aware of the 
fact that there will be demands that it be accomplished very quickly, before the end 
of this year. 
3. ASSESSMENT AND OUTSTANDING ISSUES 
The Commission's assessment of the US White Paper with respect to the points 
made in the EU Reply is generally favourable, although there are certain subjects on 
which further consultations and negotiations arc required.2 
I he principal outstanding issues relate to the applicability of Community and 
National law to the Internet generally and to the activities of the new Corporation in 
particular. While the US Government has asserted that the White Paper is not 
intended to extend US jurisdiction at the expense of other jurisdictions, the effect of 
incorporating the new Corporation as a not-for-profit US private corporation has to 
be assessed in detail from the legal point of view. 
In this context, the principal concerns relate to Competition law, trademark law, 
dispute resolution and more generally, international trade law. 
Many of these issues can be addressed in the framework of the new IANA 
Corporation, in WIPO, or in the context of competition policy. Given the private 
sector nature of the proposed system, a notification to the Commission pursuant to 
the competition rules will be necessary. In addition, the Commission will discuss 
these issues with the Department of Justice under the EU/US competition law co­
operation agreement. 
Internet Governance, Management of Internet Names and Addresses, United States Department of 
Commerce White Paper, Analysis and Assessment from the European Commission. 30 June 1998. 
The recent US White Paper does not, however, address the taxation problem. The 
continued application of current taxation systems is likely to be predicated on a 
sufficient and reliable identification system which should be an integral part of 
DNS. 
4. THE INTERNATIONAL DIMENSION 
A wide range of companies and organisations in the private sector in the EU, in the 
USA and in the world at large, are, or will be, critically interested in the future 
development of the Internet in general and in the management of the naming and 
addressing system in particular. In Europe, a sudden acceleration in the size and 
importance of the Internet has been recently experienced and the relevance of the 
Internet organisation and management is being given increasing priority. It is to be 
expected that many other areas of the World, including emerging economies will go 
through a similar experience in the foreseeable future. 
It would consequently be appropriate for the EU to participate fully in encouraging 
the appropriate multilateral environment for the coordination of international 
policies in this area, including the necessary contribution of the international 
organisations. The international community can and should provide an appropriate 
political and legal framework for the future management of the Internet by the 
proposed private industry self-regulatory body, in the interests of its own stability.3 
The US Government has also recognised that the Internet now has a major 
international dimension, an important step forward, which the EU can endorse and 
encourage. Such a realisation has not come lightly in certain US circles which still 
identify the Internet with US R&D programmes and US-based organisations. 
The US White Paper has the merit of recognising that an US-centric approach is 
increasingly out-dated. Accordingly, there is now an opportunity for European and 
other international interests to take up the challenge to participate fully in the next 
phase of Internet development. 
5. THE ROLE OETIIE PRIVATE SECTOR 
In Europe, the Commission and the Member States have a role of information and 
sensibilisation which should be directed towards ensuring that Europe obtains and 
maintains the influence and participation that is commensurate with our economic 
and social interests in this field. This must take account of the fact that the Internet 
is currently growing more rapidly in Europe than anywhere else in the world. 
These interests include the European Registries and Registrar organisations. Those 
European Registrars that have already established their interest in participating in 
Note that the Joint EU-US Declaration on electronic commerce states that: "The role of government is 
to provide a clear, consistent and predictable legal framework, to promote a pro-competitive 
environment in which electronic commerce can flourish and to ensure adequate protection of public 
interests such as privacy, intellectual property rights, prevention of fraud, consumer protection and 
public safety." (Point 3 (ii)) 
the proposed CORE Registry should, according to the terms of the White Paper, also 
have early access to the existing gTLD Registry, notably .COM, .NET and .ORG. 
The telecommunications operators are already important carriers of Internet traffic 
and are in most cases, also entering the market as Internet service providers (ISPs). 
Other European ISPs have established their international identity through the Euro-
ISP A organisation. 
More generally, European industry will find that it has a critical interest in the 
economy, efficiency and security of the Internet as increasing proportions of their 
day-to-day business migrates towards the Internet. 
The participation of user groups should also be encouraged, with a view to ensuring 
that the Internet community at large can play its role in the future organisation and 
management of the Internet. 
'lb this effect the Commission has already organised an information and 
consultation meeting with the European private sector interests concerned in 
Brussels on 7 July 1998. 
6. IMPLEMENTATION AND FOLLOW-UP 
The problems identified in the EU Reply have been to a large extent addressed 
by the revised US Policy Statement. The US Government has recognised that the 
Internet is a global resource, and that the critical world wide web technology was 
invented and developed by Europeans in Europe4. The US Government has also 
abstained from direct regulation of the Internet DNS and has referred all pending 
decisions to the new IANA corporation, which is to be created. 
However, the window of opportunity is very short: As a result of the delay in 
concluding the US consultation procedures, there remain in effect barely four 
months for the new IANA corporation to appoint its interim Board of Directors, 
become incorporated and to begin the process of taking the regulatory decisions 
which have been postponed several times during the past two years. 
The Commission proposes that the EU should act in the following manner: 
(i) The question of the membership and structure of the new corporation should 
be addressed with the utmost urgency. 
(ii) In keeping with the belief that a comprehensive multi-lateral process is 
required in this area, the European Union and the Member States together with 
the United States and the other international partners concerned, including the 
appropriate international organisations, should participate in the process of 
setting up the future organisation, and contribute to defining its basic operating 
principles. In particular, the Commission considers that it is important to 
ensure that the eventually adopted legal construction is compatible with 
Community law. 
(iii) The Commission and the Member States should draw the urgent attention of 
the private sector to this matter. Accordingly, the Commission will convene 
the necessary meetings to facilitate the consultation and information of the 
private sector organisations concerned. 
(iv) The national ccTLD Registries in the Member States, should become active 
and organised members of the new IANA corporation and take steps to ensure 
their appropriate representation in the IANA Names Council and possibly on 
the IANA Board of Directors. 
(v) The Commission should immediately take up discussions with the US 
authorities and the international community about the obligation for registries 
and registrars to provide necessary information to identify operators of Internet 
domain names for tax purpose 
(vi) The Commission and the Member States should recognise the growing 
importance of their roles as Internet users. Indeed, in the context of a private-sector self-
regulatory organisation, the main official input from the public authorities to the long-
term Internet management structures will be in their capacities as major users of the 
Internet and providers of information and services to the public 
Accordingly the Commission envisages convening a meeting of those responsible for the 
development of the use of the Internet in the Member Stales and in the EU Institutions to 
discuss how their activities and interests will interact with the proposed new organisation. 
The European Parliament and the Council are invited to lake note of this Communication 
and to agree to the proposed EU approach to the implementation of the US White Paper. 
They are particularly invited to encourage a more international approach to the 
development of the Internet than has prevailed in the past. 
Given the importance of the Internet in the areas of economic, social, and cultural 
activities, Member States are invited to actively encourage and facilitate the participation 
of the European private and public sector organisations concerned with the use of the 
Internet, and their participation in the membership and organisation of the new IANA 
Corporation. 
ISSN 0254-1475 
COM(98) 476 final 
DOCUMENTS 
EN 01 05 06 16 
Catalogue number : CB-CO-98-504-EN-C 
ISBN 92-78-38738-X 
Office lor Official Publications of the European Communities 
L-2985 Luxembourg ISSN 0254-1475 
COM(98) 476 final 
DOCUMENTS 
EN 01 05 06 16 
Catalogue number : CB-CO-98-504-EN-C 
ISBN 92-78-38738-X 
Office for Official Publications of the Emofeixn Communities 
L-2985 Luxemteowg