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Industry Standard

ICANN goes on the defensive

July 13, 1999
Web posted at: 12:07 p.m. EDT (1607 GMT)

by Elizabeth Wasserman domain name graphic

(IDG) -- Maybe it can, and maybe it can't. ICANN, the Internet Corporation for Assigned Names and Numbers, a nonprofit group created by the Clinton Administration to oversee the Net's addressing system, was supposed to bring order to a convoluted process.

But so far, ICANN has created more controversy than it's cured. Late last month, Congress began informally investigating ICANN, requesting that the group turn over a range of documents, including e-mail and notes from telephone conversations, and submit answers to a list of pointed questions. A growing chorus of critics is calling for hearings.

As a measure of just how bad things have gotten for ICANN, the U.S. Commerce Department, which has been ICANN's main backer, has called upon the organization to take certain steps to address the public's concerns.

Rep. Thomas Bliley, the Virginia Republican who chairs the House Commerce Committee, wants to know how ICANN's interim board was selected, when a permanent board will be elected and, among other issues, why ICANN thinks it has the power to institute a $1-per-domain-name fee.

"There are not going to be giant revelations. We're just telling the truth," says Esther Dyson, ICANN's interim chairwoman, and the editor of the technology newsletter Release 1.0. The most volatile issue by far is the $1-per-year fee ICANN has imposed on each domain name to fund the group's proposed $5.9 million annual budget. Some call this an illegal tax.

Dyson says ICANN's authority to impose a fee "comes from the consensus of various Internet communities" that ICANN should introduce competition in domain-name registration. Until now, such registration has been handled under a government contract by one company, Network Solutions (NSOL) of Herndon, Va.
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Commerce Department General Counsel Andrew Pincus called for an elimination of the fee in a letter to ICANN and in the department's response Friday to Bliley's questions. While Pincus maintained that ICANN is "legally empowered to impose such a fee," he suggested it postpone any imposition of a fee until nine elected members of ICANN's board are in place, which should be by November. He further stated that the department would work with ICANN to explore alternative funding sources from the private sector and, possibly, the federal government.

In ICANN's written response to Congress, released Friday, the group said that "ICANN has not 'imposed' any fee; it has entered into contracts with the registrars it has accredited," as required by its Memorandum of Understanding with the government, "for a volume-based payment designed to partially recover its costs."

ICANN also asserted that the modest fee will save money for consumers, as the Network Solutions monopoly on domain-name registration is replaced with a competitive system. "Thus, the likely result of the replacement of a situation where there is a single monopoly registrar with one where there are more than 50 competitive registrars offering name-registration services will be to reduce the cost to consumers of domain-name registration services, and to produce a profit margin for all registrars (including NSI) which is lower than that enjoyed today by NSI."

ICANN also points out that the fee will provide badly needed cash. At present it is running out of money, with just $100,000 in the bank and mounting unpaid bills. ICANN has been funded so far by $421,510 raised through donations from a private-sector initiative called the Global Internet Project, which is made up of IBM, MCI, AT&T and other companies.

The corporate funding is one reason for increased congressional interest in the political and industry forces behind the selection of ICANN's 10 unpaid interim board members.

Dyson was formally asked to head the panel by Joe Sims, an antitrust attorney working for the late Jon Postel, who headed the Internet Assigned Numbers Authority. The IANA was ICANN's small-scale, government-funded predecessor. But Dyson says the possibility she might be on the panel had been raised earlier both by White House advisor Ira Magaziner and by Roger Cochetti, the program director for IBM's Internet division in Washington, D.C. George Conrades, another interim board member, was approached by John Patrick, head of IBM's Internet Division in Washington.

Some critics allege that Dyson and ICANN are acting on behalf of IBM and other corporate interests. They point to the television commercial Dyson filmed for IBM in March. Dyson, who was paid between $30,000 and $50,000 for the commercial, points out that she is a businesswoman who "did not take a vow of chastity" when agreeing to sit on the ICANN board, which is a nonpaying position.

The critics' suspicion has grown because, aside from Dyson, few board members have joined the debate.

"The board members don't engage in the mailing-list discussions, except for Esther, and that raises questions as to how steeped in the issues they are," says Michael Froomkin, a professor of law at the University of Miami School of Law. Froomkin and two other influential academics -- David Farber of the University of Pennsylvania and David Post of Temple University -- recently started a Web site called ICANN Watch to track the group's activities. "[The board members] had enormous reputation capital depending upon who they were, but they spent some of it," says Froomkin.

Meanwhile, Network Solutions which Dyson has alleged is orchestrating opposition to ICANN to protect its monopoly has refused to recognize ICANN's authority to accredit domain-name registrars, the retailers of Net addresses. Don Telage, Network Solutions' chief policymaker, says the company will not sign a proposed agreement that gives ICANN the right to terminate the company's ability to register names within a 15-day period. With that suggestion, says Telage, "they went over the edge."

ICANN retorts that it neither has, nor claims any new authority to terminate NSI's right to register domain names, but contends that such requirements are contained in NSI's own contract with the government. "NSI agreed with the government it would operate under the same conditions as all the other new registrars, which have all signed the agreement," says ICANN.

Indeed, in his letter Pincus stated that NSI's cooperative agreement with the U.S. included entering into an accreditation agreement with ICANN. Under this authority, the department maintains it has the right to deny NSI's ability to register domain names if it refuses to sign the agreement.

According to James Love, a vocal ICANN critic who heads Ralph Nader's Consumer Project on Technology, ICANN is in the process of "getting control and ownership -- some call it god power -- over the Internet through the power to tax. We're supposed to feel comfortable because the current interim board members are nice people."

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