Prepared Statement of
A. Michael Froomkin
Professor of Law
University of Miami School of Law
P.O. Box 248087
Coral Gables, FL 33124
Senate Commerce, Science and Transportation Committee
February 14, 2001
Mr. Chairman and members of the Subcommittee, my name is Michael Froomkin. I would like to thank the Subcommittee for inviting me to appear today at this hearing on ICANN governance. I commend the Subcommittee for its wisdom and foresight in recognizing the importance of this issue.
I believe it is useful to separate this complex issue into three parts: (1) ICANN's mission or, if you will, ICANN's "jurisdiction"; (2) ICANN's internal organization; (3) The extent to which ICANN is subject to oversight by the Commerce Department, the U.S. Congress, or any other outside forces.
These three issues are intertwined. The nature and extent of ICANN's
powers over the Internet and over Internet users that determines the type
of internal governance structures which are appropriate for it. Similarly,
the nature and quality of both ICANN's powers and its internal representativeness,
not to mention checks and balances, determines the extent to which it needs
to be subjected to searching external oversight. In particular, it is appropriate
for this committee to enquire into the nature of the workings of the relationship
between the Department of Commerce and ICANN.
Summary of Testimony
ICANN's go-very-slow policy on new gTLDs had no technical basis. Why
then would ICANN adopt such a policy? The reason is that ICANN's policies
are a product of an internal deliberative process that under-weighs the
interests of the public at large and in so doing tends towards anti-competitive,
or competitively weak, outcomes skewed by special interests
ICANN routinely claims to be either a technical standards body or a
technical coordination body. If this were correct, then it might be proper
for the Department of Commerce to defer to ICANN's presumed technical expertise
and rely on ICANN's standards or allocation decisions without undertaking
independent Administrative Procedure Act (APA) -compliant processes of
its own. When, however, ICANN acts as policy-making rather than a standard-making
body, then due to ICANN's unrepresentative nature its decisions do not
carry any presumption of regularity or correctness and the US Government
cannot rubber-stamp its decisions without additional independent fact-finding
We would all be better off if ICANN could confine itself to true standards
issues, or to true technical coordination. If ICANN cannot, then ICANN
needs to be subjected to constant scrutiny.
Terminological note: A "registrar" is a firm that contracts with clients
("registrants") to collect their information and payment in order to make
a definitive and unique entry into a database containing all domain names
registered in a top-level domain (TLD). This database is maintained by
a "registry." Top-level domains are sometimes grouped into "generic TLDs"
(gTLDs), which are currently three- or four-letter transnational domains,
and "country code TLDs" (ccTLDs) which are currently two-letter TLDs. The
"root" is the master file containing the authoritative list of which TLDs
exist, and where to find the authoritative registries that have the data
for those TLDs. Registrants typically register second-level domains (e.g.
myname.com), but sometimes are limited to third-level domains (e.g. myname.genericword.com).
I. ICANN's Mission
ICANN's processes little resemble either standard-making or technical
coordination. To date, ICANN's "standard making" has produced no standards.
ICANN's "technical coordination" has been neither technical nor has it
coordinated anything. Rather, in its initial foray into the creation of
new gTLDs, ICANN has acted like a very badly organized administrative agency.
Instead of engaging in standards work, ICANN is instead engaged in recapitulating
the procedural early errors of federal administrative agencies such as
the Federal Communications Commission (FCC)..
What real standard-making would look like
A standard-based (or, at least, standardized) approach to gTLD creation
would required ICANN to craft a pre-announced, open, neutral, and objective
standard of competence rather than to pick and choose among the applicants
on the basis of the ICANN Board's vague and inconsistent ideas of aesthetic
merit, market appeal, capitalization, or experience. All applicants meeting
that standard would be accepted, unless there were so many that the number
threatened to destabilize the Internet (as noted below, if there is such
a number, it is very large). ICANN might also put in reasonable limits
on the number of TLDs per applicant, and on sequencing, in order to keep
all of them going online the same day, week, or month.
Under a standards-based approach ICANN would have tried to answer these questions in the abstract, before trying to hold comparative hearings in which it attempted to decide to which of specific applicants it should allocate a new gTLD registry:
Today, reasonable people could no doubt disagree on the fine details of some of these questions, and perhaps on almost every aspect of others. Resolving these issues in the abstract would not necessarily be easy. It would, however, be valuable and appropriate work for an Internet standards body, and would greatly enhance competition in all the affected markets.
Once armed with a set of standards and definitions, ICANN or any other
allocation body, would be on strong ground to reject technically incompetent
or otherwise abusive applications for new gTLDs, such as those seeking
an unreasonably large number of TLDs. A thoughtful answer would inevitably
resolve a number of difficult questions, not least the terms on which a
marriage might be made between the Department of Commerce's "legacy" root
and the so-called "alternate" roots.
What technical coordination
would look like
An alternate approach to gTLD creation, one that would most certainly
enhance competition, would take its inspiration from the fundamental design
of the Internet itself-and from major league sports. The Internet was designed
to continue to function even if large parts of the network sustained damage.
Internet network design avoids, whenever possible, the creation of single
points of failure. When it comes to policy, however, ICANN is currently
a single point of failure for the network. A solution to this problem would
be to share out part of ICANN's current functions to a variety of institutions.
In this scenario, ICANN would become a true technical coordination body,
coordinating the activities of a large number of gTLD policy partners.
ICANN's functions would be: (1) to keep a master list of TLDs, (2) to ensure
that there were no 'name collisions' - two registries attempting to mange
the same TLD string; (3) to fix an annual quota of new gTLDs; (4) to run
an annual gTLD draft; (5) to coordinate the gTLD creation process so that
new gTLDs came on stream in an orderly fashion instead of all at once.
Each of ICANN's policy partners would be assigned one or more draft
choices, and then ICANN would randomly (or, perhaps, otherwise) assign
each one their draft picks. As each policy partner's turn came up, it would
be entitled to select a registry - imposing whatever conditions it wished
- to manage any gTLD that had not yet been claimed on ICANN's master list.
In keeping with the transnational and public/private nature of the Internet,
ICANN's policy partners could be a highly diverse mix of international,
national, and private "civil society" bodies.
While I think this alternate solution would best achieve the ends of
internationalization, competition, and diversity, it might well require
legislation since it is unclear if the Department of Commerce has the will
(or the authority) to implement such a plan, and we have seen no sign that
ICANN is about to divest itself of any policy authority unless forced to
What ICANN actually did: select
an arbitrarily small number of gTLDs based on arbitrary appraisals of aesthetic
merit, market appeal, capitalization, and experience.
Rather than adopt either a standards or a technical coordination approach,
ICANN instead adopted an arbitrary approach. First it set an arbitrarily
low ceiling on the number of TLDs, then it allocated most but not all of
that quota based on its arbitrary appraisals of the applicants aesthetic
merit, market appeal, capitalization, and experience.
ICANN's decision to impose
an arbitrary limit on the number of new gTLDs
The closest thing to technical standards work that ICANN has done to
date was to adopt an artificially low limit on the number of gTLDs it would
recommend the Commerce Department create - under the guise of a so-called
"proof of concept". The grounds on which ICANN based this arbitrarily low
limit on the number of new gTLDs demonstrate as clearly as anything else
that ICANN is not making technical decisions but instead making policy
choices on the basis a wholly inadequate an unrepresentative structure.
ICANN has never claimed that the technical stability of the DNS would
in any way be threatened by the introduction of a very large number of
new gTLDs. Indeed, it could not easily make this claim, since all the technical
evidence is to the contrary. Rather, the dangers that ICANN seems concerned
about are social - potential consumer confusion, and a potential 'land
rush' mentality due to the enormous pent-up demand. (In my opinion, however,
ICANN has selected a policy that maximizes the risk of a 'land rush'. Panic
buying happens when consumers fear a shortage. Here, ICANN is proposing
the creation of a very small number of gTLDs, with no assurances as to
when if ever the next batch will be created. This gets it exactly backwards:
the way to avoid a land rush would be to have a very predictable path for
new gTLDs so that everyone understands that there's no need to panic since
plenty of names will always be available.)
I am not an expert on Internet engineering. However, my understanding
is that while experts do not agree on precisely how many gTLDs could be
created without adverse consequences to DNS response time, there appears
to be a technical consensus that we are nowhere near even the lowest possible
limit. ICANN At-Large Director Karl Auerbach, himself a technical expert,
has suggested that the smallest technically-mandated upper level for the
number of gTLDs might be as high as a million. (1)
Persons with long experience in DNS matters, including BIND author Paul
Vixie, apparently agree. (2) Others have
performed tests loading the entire .com file as if it were a root file,
and found that it works. In principle, this is not surprising, as there
is no technical difference between the root file containing the information
about TLDs and a second-level domain file. Given that there are currently
about sixteen million registrations in .com, if this argument is right,
then the maximum number of TLDs may be very high.
(3) Some experts worry, however, that a very large number of
new TLDs, such as a million, might affect DNS response time.
(4) If so, that still means that with fewer than 300 TLDs in
operation today (gTLDs + ccTLDs), we can afford to create tens of thousands,
and probably hundreds of thousands, more.
It is an article of faith among Internet entrepreneurs that possession
of a good domain name is a necessity for an Internet startup. Many traditional
firms also consider the acquisition of a memorable or short domain name
to be of strategic importance. Recently, for Internet startups, possession
of a "good" name was seen as a major asset - reputedly enough in some cases
to secure venture financing.
For some time now, however, it has also been an article of faith in
the Internet community that "all the good names are taken" Recently it
has seemed as if simply all the names that were a single word were
taken. This apparent shortage, especially in .com, has driven firms seeking
catchy names into the aftermarket. There does appear to be a reasonably
large stock of names in the existing gTLDs being held by domain name brokers
for resale in the aftermarket. Prices are very variable. Although few firms
paid millions of dollars like the purchasers of business.com, and loans.com,
it appears that at least until the .com bubble burst, the shortage of attractive
names in .com , and the resulting need to purchase them at high markups
in the aftermarket created what amounted to a substantial "startup tax"
on new businesses.
ICANN justifies its very tentative initial foray into gTLD creation
as a "proof of concept" but it has not disclosed the concept that is believes
it is trying to prove, nor described how one tells if the test is successful,
nor even when one might expect ICANN to do the evaluation. The "concept"
cannot be gTLD creation itself: There is no rocket science to the mechanics
of creating a new gTLD. From a technical perspective, creating a new gTLD
is exactly like creating a new ccTLD, and creating new ccTLDs is quite
routine. Indeed, .ps, a TLD for Palestine, was created less than a year
ago with no noticeable effect on the Internet at all.
In fairness, ICANN is not originally responsible for the gridlock in
gTLD creation policy, which in fact long predates it. Indeed the Department
of Commerce - which currently has the power to create new gTLDs - called
ICANN into being because it wanted to find a politically feasible way to
create new TLDs in the face of difficult political obstacles, not least
a belief in the intellectual property rights holders community that new
TLDs might add to the risk of customer confusion and trademark dilution.
This political fear, more than any mythical technical
consideration requiring a "test" or "proof of concept", explains why ICANN
imposed a needlessly low limit on the number of new gTLDs it would recommend
the Department of Commerce create in this first round, and why ICANN has
as yet not been able to consider when if ever it will contemplate future
rounds of gTLD recommendations. It does not explain, however, why ICANN
why ICANN persists in falsely claiming consensus for its artificially low
number of TLDs, nor why went about selecting its seven finalists in the
manner it did. Indeed, as described below, ICANN's gTLD selection procedures
were characterized by substantial failures.
Nevertheless, it might seem that despite any procedural irregularities,
ICANN's recommendation that the Department of Commerce create a small number
of new gTLDs can only be good for competition as it will increase supply
and thus drive down prices. And indeed, supply will increase. Unfortunately,
of the new gTLDs, only .biz and maybe .info are likely to be of attractive
to the majority of startups and other Internet newcomers. Because there
are only two such domains, and because there is no easily foreseeable date
at which additional gTLDs might become available, there is a substantial
risk of a speculative frenzy in which domain name brokers, cybersquatters,
and amateur arbitragers all seek to register the catchy names that have
not already been snapped up by trademark holders who took advantage of
their pre-registration period. I am concerned that the faction which controls
ICANN will use this very predictable speculative frenzy as 'evidence' that
new gTLDs are a bad idea, or that the number must be kept down in the future.
The surest way to drive down and keep down the price of domain names,
thus eliminating the "startup tax" and enhancing the ability of new firms
to enter new markets and incidentally greatly reducing, perhaps even almost
eliminating, cybersquatting, is to create healthy expectations. As soon
as participants in the market understand that a steady supply of new domain
names in attractive gTLDs will continue to become available on a predictable
schedule, the bottom will fall out of the after-market, and the incentive
(albeit not the opportunities) for cybersquatting will be greatly reduced,
thus helping e-commerce by making attractive names available on reasonable
terms to a much greater number, and wider variety, of persons and firms.
Selection of gTLDs
In ICANN's recent gTLD process, ICANN acted not as a standards or coordination
body, but as if it were allocating scarce broadcast spectrum is some kind
of comparative hearing process. ICANN created no standard. It 'coordinated'
no projects with running code being deployed by outside parties. Rather,
ICANN acted like a foundation grant committee, trying to pick 'winners.'
In practice, ICANN's exercise of its gatekeeper committee role contributes
to the artificial shortage of gTLDs. Worse, the selection processes ICANN
employed were amateurish and arbitrary.
Although all applicants were charged the same non-refundable $50,000
fee, a sum that immediately skewed the process towards commercial uses
and away from non-profit or experimental uses, it appears not all applicants
received equal treatment. During the Los Angeles ICANN Board Meeting, it
transpired that the staff had not subjected all the proposals to the same
level of analysis. Thus, when Board members sought more detailed information
about proposals that interested them, but which the staff had relegated
to the second tier, that information sometimes did not exist, although
it existed for the staff's preferred picks.
ICANN then attempted to hold a one-day comparative hearing between more
than 40 applicants, each of whom had complex applications that referenced
multiple possible gTLDs. During this process, each applicant was given
three minutes to speak.
Both before and during the one-day Board meeting, both the staff and
the Board seemed excessively concerned with avoiding risk. Although true
competition in a fully competitive market requires that participants be
allowed to fail if they deserve to do so, there are reasonable arguments
as to why it makes sense to have a body like ICANN require potential registry
operators to meet some minimum standard of technical competence. One can
even make a case for requiring a showing of some financial resources, and
for requiring the advance preparation of basic registry policy documents
spelling out who will be allowed to register names and under what terms.
Perhaps there are other neutral criteria that should also be required and
assessed. This is a far cry from ICANN's apparent tendency to tend to prefer
established institutions and big corporations, and to downplay the value
of experience in running code. If in 1985 the Internet itself had been
a proposal placed before a committee that behaved as ICANN did in 2000,
the Internet would have been rejected as too risky. Risk aversion of this
type is antithetical to entrepreneurship and competition.
Worst of all, ICANN applied its criteria arbitrarily, even making them
up as it went along. The striking arbitrariness of the ICANN decision-making
process is illustrated by the rejection of the ".union" proposal based
on unfounded last-minute speculation by an ICANN board member that the
international labor organizations proposing the gTLD were somehow undemocratic.
(That this same Board member was at the time recused from the process only
adds to the strangeness.) The procedures ICANN designed gave the applicants
no opportunity to reply to unfounded accusations. ICANN then rejected ".iii"
because someone on the Board was concerned that the name was difficult
to pronounce, even though the ability to pronounce a proposed gTLD had
never before been mentioned as a decision criterion. I am not in a position
to vouch for the accuracy of each of the claims of error made by the firms
that filed reconsideration requests after the Los Angeles meeting (available
but as a group these make for very sobering reading.
If ICANN were to limit itself to either standard making or technical
coordination it would have approached its mission very differently from
the arbitrary and amateurish procedures it used. It is critical to note
that the relevant standards of comparison for ICANN's decision making are
not the private sector. As a non-profit standards body contracting with
the US government, ICANN should either be held to standards of openness,
professionalism, and neutrality appropriate for standard-making or, if
making political and social choices, be treated as a state actor and expected
to act in conformity with fundamental norms of due process. Suggestions
heard from some victorious gTLD applicants that ICANN's processes compare
favorably with those used for procurement in the private sector are both
erroneous and irrelevant. ICANN is not engaged in procurement. It is not
"buying" anything. And ICANN paid almost no attention to the prices proposed
by would-be registries.
II. Internal Organization
ICANN's go-very-slow policy on new gTLDs had no technical basis. Why
then would ICANN adopt such a policy? The reason is that it is a product
of an internal deliberative process that under-weighs the interests of
the public at large and in so doing tends towards anti-competitive, or
competitively weak, outcomes skewed by special interests.
The source of this predisposition is the distribution of decision-making
authority on the ICANN Board, and in ICANN's subsidiary institutions, which
have been manipulated to neuter the public voice, and the role of individuals,
non-profits, and civil society groups. Originally, half of ICANN's governing
Board would have been elected by at-large members of ICANN. Instead, ICANN
has worked at every turn to prevent this.
In July, 1999, ICANN Chair Esther Dyson told the House Commerce Committee's
Subcommittee on Oversight and Investigation that ICANN's "highest priority"
was to elect nine at-large Board members, (6)
exactly as ICANN had committed to do as an original condition of being
approved by the Department of Commerce. Instead, ICANN reneged on its commitment
to the United States government, and to the public, that half its Board
would be elected by an at-large membership. Thus, today:
ICANN is a highly complex organization (see attached charts, prepared by Tony Rutkowski). It is simply impossible for anyone to keep track of what is happening in all the different pieces,
except an organization capable of deploying a fleet of lawyers. Similarly,
because ICANN sees its mission as global, it meets four times a year on
four different continents. Next month's meeting, for example, is in Australia.
The result of this laudable attempt at internationalization is that only
interests wealthy enough to attend all these meetings - with several representatives
- can achieve the continuity of participation required to influence ICANN's
decisions in any sort of a consistent manner. The result tends to be a
'consensus' of those with the necessary expense accounts.
III. External Checks on ICANN
I do not deny that one can identify potentially serious social issues
that might be caused as side effects of the creation of new gTLDs. I do
submit that ICANN has no competence to deal with them, and that its actions
have to date in creating special domain name registration rights for trademark
holders, well in excess of the rights granted to them by Congress, have
been anti-competitive, unfair, and counterproductive.
ICANN's mandate and its competence is, at most, for technical matters.
Social policy issues such as the intellectual property consequences of
new gTLDs, the number of days a person should have to respond to an arbitration
over a domain name, or issues of content management, should not be decided
by engineers or by the people who happen to have seized control of ICANN.
Rather, they should be decided via the means we traditionally use for making
social policy choices - markets and representative democracy.
Since ICANN's decisions as to its gTLD recommendations were not based
on purely technical criteria, as a formal matter ICANN is making social
policy choices, not just acting as a standards body. It is therefore right
that ICANN's decisions are subject to external checks. Indeed, as I argue
in my article Wrong Turn in Cyberspace: Using ICANN to Route Around
the APA and the Constitution, 50 Duke L.J. 17 (2000), available
, as a matter of law ICANN as currently constituted amounts to a state
actor, and thus is subject to the same Due Process constraints as apply
to any federal agency. Accordingly, its arbitrary and capricious decisions
violate both the APA and the Due Process Clause of the Constitution.
ICANN and the U.S. Department of Commerce dispute this characterization.
They prefer to rely on form over reality, and insist that ICANN is legally
private despite the fact that ICANN derives all of its authority and revenue
from Commerce's loan to ICANN of authority over the root. It follows, however,
that if this characterization of ICANN as a purely private body is correct,
then there are strict limits on the extent to which the Department of Commerce
can implement ICANN's recommendations without violating the Administrative
Procedures Act, or the Constitution's Due Process clause.
Once ICANN makes its formal recommendations, the Department of Commerce
will have to decide how to proceed. Rubber-stamping of ICANN's decisions
by the Department of Commerce would amount to adopting ICANN's arbitrary
and capricious choices, since the U.S. government would essentially endorse
both ICANN's practices and its conclusions.
The Department of Commerce has maintained that its relations with ICANN
are not subject to the APA, or indeed to any legal constraint other than
those relating to relations with a government contractor and/or a participant
in a cooperative research agreement. But whatever the legal arguments,
when contemplating decisions which will shape the very nature of the Internet
naming system, Commerce should proceed with deliberation, and act only
on the basis of reliable information. The need for reliable information,
proper public participation, and transparent and accountable decision-making
is even stronger when Commerce contemplates making the sort of social policy
choices - as opposed to mere technical standard-setting - embodied in creating
new gTLDs and imposing conditions on their use. Basic requirements of fairness,
due process, and the need to make reasonable decisions counsel in favor
of notice, public access, the making of an official record, and deliberation.
There is no question but that if a federal agency had acted as the ICANN
Board did, its decisions would not satisfy even cursory judicial review.
In the circumstances, therefore, it would be unreasonable and a denial
of due process for Commerce to rely on the outcome of such a flawed process
without conducting its own review.
ICANN faces a choice: On one path it becomes a true standards body, or a true technical coordination body, and leaves the social policy choices to those - like Congress - who have the legitimacy to make them. On the other path, the one it currently seems to be following, it is a state actor. In that case, its actions to date have been far too arbitrary to survive judicial review.
1. Posting of Karl Auerbach, karl@CaveBear.com, http://www.dnso.org/wgroups/wg-c/Arc01/msg00195.html .
2. E-mail from Paul Vixie, BIND 8 Primary Author, to Eric Brunner (Dec. 15, 1999) ("A million names under '.' isn't fundamentally harder to write code or operate computers for than are a million names under 'COM.'"), http://www.dnso.org/wgroups/wg-c/Arc01/msg00203.html .
3. See Quickstats, at http://www.dotcom.com/facts/quickstats.html (reporting twenty million registrations, of which 80% are in .com).
4. See, e.g., E-mail from Paul V. Mockapetris, BIND Author, to Paul Vixie, BIND 8 Primary Author, & Eric Brunner (Dec. 15, 1999) (querying whether one million new TLDs would impose performance costs on DNS), http://www.dnso.org/wgroups/wg-c/Arc01/msg00202.html .
5. See IANA Report on Request for Delegation of the .ps Top-Level Domain, at http://www.icann.org/general/ps-report-22mar00.htm (Mar. 22, 2000).
6. Testimony of Esther Dyson, Chair, ICANN, before the House Commerce Committee, Subcommittee on Oversight and Investigations, July 22, 1999, http://www.icann.org/dyson-testimony-22july99.htm .