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UNITED STATES DEPARTMENT OF COMMERCE Management of Internet Names and Addresses CONTINUED 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 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, non-governmental 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.
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 day-to-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:
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 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:
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 self-interested 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 pro-competitive, protecting against capture by a narrow group of stakeholders.
Typically this means that decision-making 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:
Further, the U.S. Government recommends that the new corporation adopt
policies whereby:
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
not-for-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:
ENDNOTES 1. Available 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>. 3. 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. 4. See Administrative Law Requirements at p. 19. 5. See Scientific and Advanced-Technology Act of 1992; Pub. L. 102-476 § 4(9), 106 Stat. 2297, 2300 (codified at 42 U.S.C. § 1862 (a)). 6. An 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>. 7. For 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. 8. Lengthy 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. 9. 9 See draft-Postel-iana-itld-admin-01.txt; available at <http://www.newdom.com/archive>. 10. For 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/in-drafts/files>. 12. The IAHC final report is available at <http://www.iahc.org/draft-iahc-recommend-00.html>. 13. See generally public comments received in response to July 2, 1997 RFC located at <http://www.ntia.doc.gov/ntiahome/domainname/email>. 14. For 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>. 15. See generally public comments received in response to July 2, 1997 RFC located at <http://www.ntia.doc.gov/ntiahome/domainname/email>. 16. 16The document was published in the Federal Register on February 20, 1998, (63 Fed. Reg. 8826 (Feb. 20, 1998)). 17. As used herein, the term "new corporation" is intended to refer to an entity formally organized under well recognized and established business law standards. 18. As 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. 19. 1998 Supplemental Appropriations and Rescissions Act; Pub. L. 105-174; 112 Stat. 58. 20. 20 Management principles for the .us domain space are set forth in Internet RFC 1480, (http://www.isi.edu/in-notes/rfc1480.txt). 21. These 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.
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