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Testimony of Assistant Secretary Victory on the Internet Corporation for Assigned Names and Numbers (ICANN)

July 31, 2003

Testimony of Nancy J. Victory
Assistant Secretary for Communications and Information
National Telecommunications and Information Administration
United States Department of Commerce

Before the

Subcommittee on Communications
Committee on Commerce, Science and Transportation
United States Senate

On the Internet Corporation for Assigned Names and Numbers (ICANN)

July 31, 2003


Thank you, Mr. Chairman. I would like to thank you and the members of the Subcommittee on Communications of the Senate Committee on Commerce, Science and Transportation for inviting me here today to testify on this important issue. I am Nancy J. Victory, Assistant Secretary for Communications and Information and Administrator of the National Telecommunications and Information Administration.

The Internet and the variety of applications that it supports provide tremendous opportunities for economic and social development around the world. What started as a small-scale system of links among U.S. academic institutions is now a gigantic global network connecting individual users, companies and institutions from any access point, regardless of national or geographic borders. The Internet continues to expand in terms of size and scope and has become a significant and important means of doing research, communicating with each other, and conducting business. In fact, e-commerce sales by U.S. retail establishments reached $11.921 billion during the first quarter of 2003 - a 25.9 percent increase over first quarter 2002. Given the Internet's importance in all of these facets of daily life and the country's general economic well-being, it is essential that the Internet - and its underlying domain name and addressing system (DNS) - remain stable and secure.

This is the primary concern of the Department of Commerce, which currently serves as the steward of critical elements of the DNS. The Department believes that the stability and security of this important global resource can best be achieved through privatization of the technical management of the DNS and continued global cooperation, via appropriate public-private partnerships that reflect the international nature of the Internet. Innovation, expanded services, broader participation, and lower prices will arise most easily in a market-driven arena, not in an environment that operates under substantial regulation.

The Internet Corporation for Assigned Names and Numbers (ICANN) is the private sector entity responsible for day-to-day management of the DNS. ICANN performs this function pursuant to a Memorandum of Understanding (MOU) with the Department of Commerce. The Department supports the ongoing work of ICANN and applauds its efforts to engage all critical stakeholders in its decision-making processes. We are particularly encouraged by the progress ICANN has made over the past year towards implementing a number of structural and procedural reforms, as well as moving forward on several of the tasks set forth in the MOU. The Department desires to see ICANN evolve into a stable and sustainable organization that is well equipped to weather a crisis.

Last year, when the Department of Commerce and ICANN chose to renew the MOU for a period of one year, both parties agreed that continued progress toward stability and sustainability required ICANN to focus on improvements in 5 major areas:

· Clarifying ICANN's mission and responsibilities;


· Ensuring transparency and accountability in its processes and decision making;


· Increasing its responsiveness to Internet stakeholders;


· Developing an effective advisory role for governments; and,


· Ensuring adequate and stable financial and personnel resources to carry out its mission and responsibilities.

The Department believes that ICANN has made significant strides this year in developing into a more stable, transparent and responsive organization. ICANN has completed a comprehensive reform effort that has resulted in major structural adjustments and refinements to its decision-making processes that allow for greater transparency and responsiveness to all critical Internet stakeholders. Specifically:

· ICANN has refined its mission and restructured its supporting organizations and advisory committees, including the establishment of a new supporting organization for country code Top Level Domain (ccTLD) managers;


· ICANN has implemented new, transparent, constituency-driven policy development processes;


· ICANN has established an at-large advisory committee and regional at-large organizations to encourage greater global public participation;


· ICANN has created liaisons between the Governmental Advisory Committee (GAC) and the other ICANN supporting organizations and advisory committees;


· ICANN has established a process for the ICANN board to solicit and receive GAC advice on public policy matters between meetings; and


· ICANN has restructured its staff to better respond to ICANN's technical policy, DNS management and financial responsibilities.

In addition, the organization has hired a new CEO with both management expertise and experience in dealing with this unique organization. It has also implemented a new nominating process to ensure qualified, committed and internationally representative board members. It recently appointed eight new board members with impressive credentials and very relevant experience.

I am also pleased to note that the ICANN GAC, of which the United States is an active participant, has undergone an evolution of its own. The establishment of GAC liaisons to each of the other ICANN supporting organizations is intended to encourage communications between the GAC and the relevant constituent groups with respect to public policy issues. In addition, the GAC has established internal working groups on relevant public policy issues to facilitate their analysis and to engage in dialogue with ICANN supporting organizations and committees as needed.

While ICANN has made a great deal of progress, both the Department of Commerce and ICANN recognize that much is still to be done for ICANN to evolve into the stable and sustainable DNS management organization we would all like it to be. These include:

· Ensuring Root Server Security. The root server system forms a critical component of the DNS by linking domain names to the corresponding numerical addresses. Ensuring the security of this function is therefore of the utmost importance. While the request for specific information set forth in the Cooperative Research and Development Agreement (CRADA) was met, ICANN needs to continue to exchange views and ideas with the root server system operators to solidify relationships that guarantee the security of this resource. The formation of ICANN's Security and Stability Advisory Committee, of which many of the root server operators are members, is a first step in the right direction.

· Securing Agreements with Regional Internet Registries. As the entity responsible for the allocation of numbering resources within their respective geographic region, the Regional Internet Registries (RIRs) play a crucial role. Although productive talks are underway, legal agreements between the RIRs and ICANN have not yet been completed. Finalizing these agreements to formalize the relationship between ICANN and the RIRs remains essential not only to ICANN's ability to perform its address allocation responsibilities, but also to the overall stability of the Internet.


· Enhancing Accountability Mechanisms. As the Internet continues to play a significant role in our daily lives, transparent mechanisms that provide accountably to all stakeholders are important. While ICANN has initiated a review of suitable international arbitration providers to constitute an Independent Review Panel and has called for the establishment of an Office of Ombudsman, these mechanisms must be finalized to ensure appropriate accountability to all ICANN stakeholders.


· Developing Agreements with ccTLD Operators. The fastest growing segment of the DNS is within the ccTLD community. While ICANN continues to make progress towards establishing stable agreements with ccTLD operators, forward movement has been slow. This is largely attributable to the complexities resulting from the convergence of national sovereignty assertions, international law considerations, and the general concerns of global and local Internet communities. Despite these competing pressures, ICANN must develop a framework agreement that would appeal to the majority of ccTLD operators, while recognizing the various national sovereignty issues involved. The establishment of a country code Name Supporting Organization (ccNSO) during the last year represents significant progress towards this end.


· Refining the Processes for Selecting New TLDs. Determining the circumstances under which new top level domains (TLDs) would be added to the DNS was one of the key functions identified in the White Paper. While ICANN has approved the addition of seven new TLDs, much work remains to be done in this area with respect to developing an appropriate long-term strategy. This strategy should use predictable, transparent and objective procedures that preserve the stability of the Internet. While the ICANN Board has recently taken welcomed steps in this regard - charging its CEO with providing a detailed policy development plan and schedule for the introduction of new TLDs and preparing to issue a Request for Proposals for new sponsored TLDs - this remains one of ICANN's core yet-to-be-accomplished objectives.

The current MOU between the Department of Commerce and ICANN expires at the end of September. The Department is currently in the process of reviewing ICANN's accomplishments and assessing what actions remain under the MOU. This review will underlie any decision to extend the MOU and, if so, how best to modify the agreement to focus ICANN's and the Department's efforts going forward. The Department stands ready to continue its stewardship obligations of critical elements of the DNS during the transition period and to assist the global Internet community in maintaining a stable and secure Internet. To this end, the Department remains committed to working diligently with ICANN and all critical Internet stakeholders to assist ICANN in its evolution and to preserve and enhance this global resource.

Finally, I would like to thank the Members of this Committee for their support and cooperation during my tenure at NTIA. With your help, NTIA has been able to log a number of accomplishments, including helping to make the Internet more secure and accessible for a wide variety of users. I particularly want to commend the Congress for its vision and leadership in establishing the space. The Internet can be a wonderful resource for children, and soon we will be have a safe place for children under 13 where they can discover and explore educational, fun, and age appropriate content. I hope I can count on you and your colleagues to develop websites in the space, giving our nation's children a better understanding of the workings of Congress and the issues before you.

Thank you and I would be happy to answer any questions that you may have.