Today on Capitol Hill, the House Energy and Commerce Committee is holding a hearing on the NTIA’s recent announcement that it will relinquish its small but important administrative role in the Internet’s domain name system. The announcement has alarmed some policymakers with a well-placed concern for the future of Internet freedom; hence the hearing. Tomorrow, I will be on a panel at ITIF discussing the IANA oversight transition, which promises to be a great discussion.

My general view is that if well executed, the transition of the DNS from government oversight to purely private control could actually help secure a measure of Internet freedom for another generation—but the transition is not without its potential pitfalls.

The NTIA’s technical administration of the DNS’ “root zone” is an artifact of the Internet’s origins as a U.S. military experiment. In 1989, the government began the process of privatizing the Internet by opening it up to general and commercial use. In 1998, the Commerce Department created ICANN to oversee the DNS on a day-to-day basis. The NTIA’s announcement is arguably the culmination of this single decades-long process of privatization.

The announcement also undercuts the primary justification used by authoritarian regimes to agitate for control of the Internet. Other governments have long cited the United States’ unilateral control of the root zone, arguing that they, too, should have roles in governing the Internet. By relinquishing its oversight of the DNS, the United States significantly undermines that argument and bolsters the case for private administration of the Internet.

The United States’ stewardship of the root zone is largely apolitical. This apolitical approach to DNS administration is precisely what is at stake during the transition, hence the three pitfalls the Obama administration must avoid to preserve it.

The first pitfall is the most serious but also the least likely to materialize. Despite the NTIA’s excellent track record, authoritarian regimes like Russia, China, and Iran have long lobbied for the ITU, a clumsy and heavily politicized U.N. technical agency, to take over the NTIA’s duties. In its announcement, the NTIA said it would not accept a proposal from an intergovernmental organization, a clear rebuke to the ITU.

Nevertheless, liberal governments would be wise to send the organization a clear message in the form of much-needed reform. The ITU should adopt the transparency we expect of communications standards bodies, and it should focus on its core competency—international coordination of radio spectrum—instead of on Internet governance. If the ITU resists these reforms at its Plenipotentiary Conference this fall, the United States and other countries should slash funding or quit the Union.

ICANN’s Governmental Advisory Committee (GAC) presents a second pitfall. Indeed, the GAC is already the source of much mischief. For example, France and Luxembourg objected to the creation of the .vin top-level domain on the grounds that “vin” (wine) is a regulated term in those countries. Brazil and Peru have held up Amazon.com’s application for .amazon despite the fact that they previously agreed to the list of reserved place names, and rivers and states were not on it. Last July, the U.S. government, reeling from the Edward Snowden revelations, threw Amazon and the rule of law under the bus at the GAC as a conciliatory measure.

ICANN created the GAC to appease other governments in light of the United States’ outsized role. Since the United States is giving up its special role, the case for the GAC is much diminished. In practice, the limits on the GAC’s power are gradually eroding. ICANN’s board seems increasingly hesitant to overrule it out of fear that governments will go back to the ITU and complain that the GAC “isn’t working.” As part of the transition of the root zone to ICANN, therefore, new limits need to be placed on the GAC’s power. Ideally, it would dissolve the GAC.

The third pitfall comes from ICANN itself. The organization is awash in cash from domain registration fees and new top-level domain name applications—which cost $185,000 each—and when the root zone transition is completed, it will face no external accountability. Long-time ICANN insiders speak of “mission creep,” noting that the supposedly purely technical organization increasingly deals with trademark policy and has aided police investigations in the past, a dangerous precedent.

How can we prevent an unaccountable, cash-rich technical organization from imposing its own internal politics on what is supposed to be an apolitical administrative role? In the long run, we may never be able to stop ICANN from becoming a government-like entity, which is why it is important to support research and experimentation in peer-to-peer, decentralized domain name systems. This matter is under discussion, among other places, at the Internet Engineering Task Force, which may ultimately play something of a counterweight to an independent ICANN.

Despite these potential pitfalls, it is time for an Internet that is fully in private hands. The Obama administration deserves credit for proposing to complete the privatization of the Internet, but we must also carefully monitor the process to intercept any blunders that might result in politicization of the root zone.

The Internet began as a U.S. military project. For two decades, the government restricted access to the network to government, academic, and other authorized non-commercial use. In 1989, the U.S. gave up control—it allowed private, commercial use of the Internet, a decision that allowed it to flourish and grow as few could imagine at the time.

Late Friday, the NTIA announced its intent to give up the last vestiges of its control over the Internet, the last real evidence that it began as a government experiment. Control of the Domain Name System’s (DNS’s) Root Zone File has remained with the agency despite the creation of ICANN in 1998 to perform the other high-level domain name functions, called the IANA functions.

The NTIA announcement is not a huge surprise. The U.S. government has always said it eventually planned to devolve IANA oversight, albeit with lapsed deadlines and changes of course along the way.

The U.S. giving up control over the Root Zone File is a step toward a world in which governments no longer assert oversight over the technology of communication. Just as freedom of the printing press was important to the founding generation in America, an unfettered Internet is essential to our right to unimpeded communication. I am heartened to see that the U.S. will not consider any proposal that involves IANA oversight by an intergovernmental body.

Relatedly, next month’s global multistakeholder meeting in Brazil will consider principles and roadmaps for the future of Internet governance. I have made two contributions to the meeting, a set of proposed high-level principles that would limit the involvement of governments in Internet governance to facilitating participation by their nationals, and a proposal to support experimentation in peer-to-peer domain name systems. I view these proposals as related: the first keeps governments away from Internet governance and the second provides a check against ICANN simply becoming another government in control of the Internet.

PFF Adjunct Fellow Mike Palage, who served on the ICANN board from 2003 to 2006, filed these comments (PDF) on the NTIA’s recent Notice of Inquiry regarding ICANN’s future.  Mike’s four key points were as follows:

1. ICANN’s Periodic Review of its internal operations and supporting organizations has failed, and has become nothing more than a “perpetual motion machine of public comments and documentation producing no meaningful results.” Only a second Evolution and Reform Process can solve ICANN’s current deficiencies;
2. ICANN must hardcode into its policies and its contracts the principle that its policies cannot supersede national laws;
3. ICANN must cease any operational role in technical infrastructure as required by its bylaws and focus instead on its mission as a technical coordinator; and
4. Congress must avoid “kicking the JPA can down the road” and instead provide much-needed leadership by creating a solid foundation for ICANN 3.0 in legislation after proper consultation with the Government Accountability Office.

I’ve been working closely with PFF’s new Adjunct Fellow Michael Palage on ICANN issues.  Here is his latest note , from the PFF blog.

ICANN recently proclaimed that the “Joint Project Agreement” (one of two contractual arrangements that ICANN has with the U.S. Department of Commerce (DoC) governing ICANN’s operations) will come to an end in September 2009. ICANN’s insistence on this point first became clear back in October 2008 at ICANN’s Washington, D.C. public forum on Improving Institutional Confidence when Peter Dengate Thrush, Chair of ICANN’s Board declared:

the Joint Project Agreement will conclude in September 2009. This is a legal fact, the date of expiry of the agreement. It’s not that anyone’s declared it or cancelled it; it was set up to expire in September 2009.

ICANN’s recently published 2008 Annual Report stuck to this theme:

“As we approach the conclusion of the Joint Project Agreement between the United States Department of Commerce and ICANN in September 2009…” – His Excellency Dr. Tarek Kamel, Minister of Communications and Information Technology, Arab Republic of Egypt

“Concluding the JPA in September 2009 is the next logical step in transition of the DNS to private sector management.” – ICANN Staff

“This consultation’s aim was for the community to discuss possible changes to ICANN in the lead-up to the completion of the JPA in September 2009.” – ICANN Staff

ICANN’s effort to make the termination of the JPA seem inevitable is concerning on two fronts. First, ICANN fails to mention that the current JPA appears to be merely an extension/revision of the original 1998 Memorandum of Understand (MoU) with DoC, which was set to expire in September 2000. Thus, because the JPA does not appear to be a free-standing agreement, but merely a continuation of MOU-as Bret Fausset argues in his excellent analysis of the relationship between the MoU and the JPA (also discussed by Milton Mueller). Therefore, it would be more correct to talk about whether the “MoU/JPA”-meaning the entire agreement as modified by the most current JPA-will expire or be extended.

Although previous MoUs with the USG have been extended, ICANN seems to be playing a game of chicken with the USG-hinting that it will not extend the current MoU/JPA if ICANN believes that it has completed its mission. Since it seems possible that ICANN really might walk away from the MoU/JPA without global stakeholder consensus that it has fully completed its obligations under the MoU/JPA, it is critical that we think about the consequences of such a unilateral move by ICANN. ICANN would likely argue that the bilateral contracts it has in place with registry operators-from which ICANN has carefully removed most references to the USG in recent years-provide a sufficient legal basis for ICANN to continue its current operations without direct USG oversight.

Some stakeholders have expressed concern about the idea of ICANN not being directly held accountable to any government entity, but ICANN appears to have attempted to preemptively address this concern, when it acknowledged in its 2008 Annual report that “[t]he California attorney general is the legal overseer of California nonprofit public benefit corporations such as ICANN.”

With the future stability and security of the Internet hanging in the balance, a neutral third party ought to analyze the current existing relationship between the USG and ICANN- before ICANN decides in September 2009 whether to renew the MoU/JPA or walk away. The General Accounting Office (GAO) is the ideal candidate for such a task, given its well-established reputation for independent analysis and prior experience studying these matters-especially its detailed 2000 analysis of the early stages of DoC’s relationship with ICANN.

In conducting a new study, GAO ought to consider the following issues:

• Since the original 2000 GAO report on ICANN, ICANN’s annual budget has skyrocketed to more than $60 million. That budget is set to grow significantly once ICANN begins accepting applications for new gTLDs on a large scale: Using ICANN’s own projections of new gTLD applicants and the minimum fees that will be assessed suggests that ICANN’s budget will soon exceed $100 million. As ICANN’s budget grows, one must ask: Are these fees-paid by largely gTLD registrants, registrars, and registries-consistent with the GAO’s conclusion in its 2000 report that ICANN is limited to recovering only actual costs (because “ICANN is a project partner with the Department under the memorandum of understanding, and it is the Department’s policy to allow project partners to recover only actual project costs”)?

• If ICANN walked away from the MoU/JPA without the USG formally acknowledging that ICANN had successful fulfilled its obligations under the agreement, would ICANN be able to rely upon its existing contracts with registry operators to continue collecting fees?

• In its 2000 report, the GAO asked whether the DoC “had the authority to transfer control of the authoritative root server to ICANN.” The GAO did not definitively answer this question, but concluded that it was “uncertain whether transferring control would involve the transfer of government property to a private entity” thus giving rise to implications involving the Property Clause of the U.S. Constitution (Art. IV, § 3, cl. 2.), which requires statutory authority for the disposal of government property.

• GAO investigated, but did not resolve, whether or not an act of Congress would thus be required to transfer control of the root server to ICANN. But GAO did not undertake the same analysis as to whether the contractual rights associated with the top-level domains themselves constituted “government property” requiring Congressional action for any to transfer to ICANN. This may have been because U.S. courts had, at that time, held that domain names were not “property” in general, but simply a contractual right to a service provided by the registration authority. But potentially changed with the Ninth Circuit’s 2003 decision in Kremen v. Network Solutions concerning sex.com. Thus, if the GAO concludes that ICANN’s gTLD contracts with registry operators involve property rights and that statutory authority would be required for the DoC to transfer these rights to ICANN, it is difficult to see how ICANN would be able to enforce these rights if ICANN ended its relationship with the USG as a project partner by walking away from the MoU/JPA-regardless of ICANN’s success in removing references to the USG in these contracts.

These are just some of the initial questions the GAO needs to answer well before September 2009, independent of whether the USG and ICANN decide to extend the MoU/JPA. The stakes are just too high for these questions to remain unanswered.