Nonprofits Urge Department Of Commerce: Select Internet Address Manager Through Open Competition

Dear Assistant Secretary Victory:

The non-profit civic, consumer, public advocacy, and policy organizations listed below respectfully call upon the Department of Commerce (DoC) to re-compete the three agreements under which the Internet Corporation for Assigned Names and Numbers (ICANN) manages the Domain Name System (DNS) when these agreements expire.

The history of United States telecommunications policy has proven time and again that competition inevitably yields better results than top-down management. Requiring ICANN to compete against qualified bidders will provide a strong incentive for ICANN to engage in a thorough housecleaning and pay careful heed to the comments of stakeholders.  It will also ensure that, if ICANN cannot put its house in order, the Department will have alternatives.  In this way, re-competing the DNS management contracts will benefit the ICANN reform process, the American people, and Internet users around the world.

Four years ago, the Department of Commerce embarked on a bold experiment to manage public resources through a new mechanism.  However well intentioned, and despite some efforts to address the concerns raised in the initial competition for the management contracts in 1998 relating to openness, transparency and accountability, there is general consensus that ICANN as currently constituted cannot carry out the functions assigned it by DoC.

Indeed, ICANN President Stuart Lynn, in a widely published paper, proclaimed that ICANN has failed in critical areas. ICANN has failed to gain the trust of the country code top level domain (ccTLD) administrators and has lost the trust of many in the technical community. 

Of particular concern, ICANN has deployed new top-level domains (TLDs) at a snail’s pace.  This has stunted the opportunity for free and open expression on the Internet.  At the only meeting at which the ICANN Board approved new TLDs, it did not even consider the possible opportunities for non-commercial and civic discourse.   Nor has it generally considered, as part of its overall policymaking, how its policies impact non-commercial speech.

Nor has ICANN complied with the transparency and accountability requirements of the MoU and its 1998 bylaws. It has not created an Independent Review Board. Although ICANN promised to create an At-Large membership that elects half the 18 member Board, ICANN abolished this provision of its bylaws.  In the one public election it permitted, ICANN retained four seats for its sitting unelected representatives, reducing public representatives from a majority to a minority on the 18-member board.

Finally, ICANN has not made the details of its finances known, even to one of its own directors. Its staff and executive committee routinely set policy in secret. As Representative Markey stated at one Congressional oversight hearing: “We know more about how the Cardinals select a new Pope at the Vatican than we do about ICANN’s internal affairs.”

ICANN has begun a process of internal reform. The signatories to this letter support this process and intend to participate in it.  Nevertheless, this does not change the need for DoC to take immediate steps to announce that it will rebid the MoUs when they expire.

The signatories expect that ICANN will undertake strenuous efforts to reform itself.  The necessary reforms, however, may well prove painful, and ICANN staff and directors may find it difficult to make the final decisions without the incentive of competition to compel consideration of alternatives that limit the scope of ICANN’s authority or impose suitable accountability mechanisms.

Furthermore, if ICANN cannot reform itself successfully, beginning now a process to re-compete the DNS management agreements provides DoC with a suitable alternative or with public comment on which to base new bidder requirements. Prudence would suggest that, while Commerce can hope for success of ICANN’s internal reform process, it must prepare for failure. Commerce’s duty to the American people requires Commerce to act with planning and forethought, rather than to accept, for lack of a better alternative, whatever solution ICANN may propose.

Finally, ICANN’s failures to date to fulfill its obligations under the existing agreements raise doubts as to ICANN’s ability to solve its own problems. ICANN’s current problems stem largely from its failure to work in an open and transparent manner. This has made it difficult for stakeholders to offer solutions to ICANN’s problems, discouraged stakeholder participation, and engendered mistrust. While ICANN’s Board and staff surely have worked with the best of intentions and to the best of their ability, bad processes produce bad results.