Communication from the Commission to the Council and the European Parliament - Internet Governance - Management of Internet names and adresses - Analysis and assessment from the European Commission of the United States Department of Commerce White Paper
Date: 1998-07-29
Institutions: European Commission
Subjects: United States, competition, information network, management

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  W H I TE  PAPER 

COMMUNICATION  I ROM  THE  EUROPEAN  COMMISSION  TO 
H IE  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. 

in  this  area.  As  recently  announced,  US  Government  policy 

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 
is 
their  policy 
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 
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. 

the  new  IANA  corporation, 

the  overall  membership  of 

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. 

T HE  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 
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  coordination  of 

for 

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. 

T HE  R O LE  O E T I IE  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 
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)) 

legal  framework, 

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. 

this  effect 

the  Commission  has  already  organised  an 
'lb 
consultation  meeting  with  the  European  private  sector  interests  concerned 
Brussels on  7 July  1998. 

information  and 
in 

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 

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 

immediately 

(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. 
to  the 
to  encourage  a  more 
invited 
They  are  particularly 
development  of the  Internet  than  has  prevailed  in the  past. 

international  approach 

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 
ISSN 0254-1475 

COM(98) 476  final 
COM(98) 476  final 

DOCUMENTS 
DOCUMENTS 

EN 
EN 

01  05  06  16 
01  05  06  16 

Catalogue  number  :  CB-CO-98-504-EN-C 
Catalogue  number  :  CB-CO-98-504-EN-C 

ISBN  92-78-38738-X 
ISBN  92-78-38738-X 

Office  for  Official  Publications  of  the  Emofeixn  Communities 
Office  lor Official  Publications of  the European  Communities 

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