Today, Congressman Jerrold Nadler (NY-10), Ranking Member of the Subcommittee on Courts, Intellectual Property and the Internet, delivered the following statement at a hearing on stakeholder perspectives on the Internet Corporation for Assigned Names and Numbers, or ICANN:

"Today, we continue our examination of the Internet Corporation for Assigned Names and Numbers, or ICANN.  This may not be a glamorous topic, but it is fundamental to the entire governance and functioning of the Internet.  When we type in a simple address into our web browser, we rarely give a second thought to how our desired website loads almost instantly onto our screen.  But, there is a complicated and unseen architecture that makes this process work, administered in part by ICANN, and we must ensure that it operates smoothly, transparently, and with proper accountability.  Since this Subcommittee last considered issues related to ICANN, there have been many developments that warrant further analysis and I appreciate the Chairman holding this hearing today.

“Most prominently, since our last hearing, ICANN has continued to expand its new generic top-level domain program (gTLD), which supplements the existing top level domains, such as .com, .net, and .org, with new ones consisting of brand names or generic terms like .music, .news, or .books.  Supporters of this expansion argue that it will increase consumer choice, competition, and innovation.  As of last month, there were over 500 new top level domains added to the Internet, and we expect hundreds more soon. However, this expansion has also raised a host of issues related to determining which names are allocated, to whom they are allocated, and what it should cost to register a domain.

“We have seen this most vividly in the controversy surrounding ICANN’s approval of the .sucks TLD.  This has been contentious, not only because of the term, but also because of concerns voiced about the proposed pricing structures associated with the domain.  For obvious reasons, many brand owners have chosen to defensively register their name in this domain to prevent others from using it in a negative context.  However, the company that administers the .sucks domain, Vox Populi, has chosen to charge brand owners $2500 to register their names instead of the much lower prices – as low as $10, in some cases – that it is charging the public to register these names.

“According to Vox Populi, the .sucks domain “is designed to help consumers find their voices and allow companies to find the value in criticism.”  Legitimate criticism is fair and is, of course, protected speech.  However, this tiered pricing scheme, which allows critics to register a name for a nominal charge while brand owners must pay exorbitant prices to protect their brands, looks to many people like extortion.

“For example, ICANN’s Intellectual Property Constituency (IPC) sent a letter to ICANN suggesting that the rollout not continue because it “can best be described as predatory, exploitative and coercive.”  In response to these concerns, ICANN asked the United States’ Federal Trade Commission and Canada’s Office of Consumer Affairs to consider whether Vox Populi, which is based in Canada, is violating any laws or regulations.  According to ICANN, because it is not a law enforcement agency and merely has a contractual relationship with Vox Populi, it cannot act unless it receives guidance that the company is acting illegally.  Many stakeholders have expressed concern that ICANN’s response is inadequate and simply passes the buck to regulators rather than taking responsibility for administering its own contracts.

“Given Vox Populi’s scathing letter in response to ICANN, it is clear that this issue will not be resolved quickly.  Congress must closely monitor this situation and I hope ICANN will provide answers about how it intends to protect intellectual property rights holders and consumers as the rollout of the .sucks top-level domain continues.

“But, this should not be just about one top level domain expansion.  Instead, we must consider what we can learn from the .sucks experience and apply these lessons to future top level domains.  We should also consider whether there are satisfactory safeguards in place to protect trademarks and intellectual property from being misused during this process and whether ICANN’s rights protection mechanisms sufficiently address concerns raised by active parties. 

“It’s important to recognize that this discussion occurs in the context of oversight responsibility for ICANN’s ministerial IANA functions transitioning from the National Telecommunications and Information Administration (NTIA) in the U.S. Commerce Department to an international multi-stakeholder process.  This transition is completely separate and apart from ICANN’s role in the top-level domain expansion.  However, to the extent that stakeholders have expressed concerns about ICANN’s level of transparency and accountability when it comes to managing the gTLD expansion or its other responsibilities, it is fair to ask whether appropriate transparency and accountability will exist once the multi-stakeholder process begins.

“Unfortunately, at times the debate over the ICANN transition has veered into a partisan battle based on imagined fears that the transition will cause the Internet to be dominated by repressive governments overseas.  I hope that today’s hearing will be free of such overheated rhetoric.  In reality, this transition continues a privatization process that started in 1998, was continued through the Bush Administration, and has been supported by various Congresses.  Ensuring effective private-sector management of these networks, and transitioning functions served by the United States government, has been a goal shared by Republicans and Democrats alike over the years.  I continue to believe that we need to ensure that the transition process, and the model developed through the process, produces a management structure that supports a secure, open, and truly global Internet.  The NTIA has established criteria to help ensure this occurs, and I am confident that the agency and ICANN will agree to update us periodically.   

“Before we delve into a discussion of any shortcomings of ICANN, I first want to thank its staff and its leadership for bringing together the multi-stakeholder process and for their hard work in building a strong and effective Internet.  I hope that today’s hearing will not devolve into a discussion that simply blames ICANN for all of the things that have gone wrong in this transition.  Rather, our challenge here is to figure out ways we can improve it.  I would like our conversation to be more constructive, and I am hopeful that we can work together in a bipartisan fashion to determine how best to improve the current system.  Since we have eight excellent witnesses, I do not want to spend any more time talking than needed, and I yield back the balance of my time."

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