Lawmakers worry about losing Internet influence in new deal

The U.S. will lose influence over the Internet due to a new agreement expected to take effect Wednesday.

The deal, which appears to give foreign governments more say in how the global network is run, has come under criticism from lobbyists for U.S. business and lawmakers who want to preserve U.S. oversight over the Internet Corporation for Assigned Names and Numbers (ICANN).

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For the past 10 years, the United States has delegated its authority over the Internet to ICANN, a nonprofit organization that has shared oversight with the Commerce Department of the Internet’s underlying technology, most notably the system that allocates domain names and Web addresses.

China and Russia, among other countries, have argued this gives the U.S. too much control over the worldwide network increasingly dominated by global users.

The new arrangement sets up four oversight panels, run by representatives from foreign governments, that will review ICANN’s affairs, according to sources familiar with the deal.

The panels will review competition among typical domains, such as .com, .biz and .net, as well as the security of the network and the handling of customer data.

They’ll also review the transparency and accountability of ICANN, which is the only panel on which the U.S. will have a permanent seat.

The deal allows ICANN to be more autonomous at a crucial time for the management of the Internet. ICANN next year plans to introduce new domain names that would allow companies and individuals to create their own suffixes — such as .food, .wine and .eco. The new domains would likely cost around $100,000 each.

The organization will also allow domain names in other languages and non-Latin characters, so that entire Web addresses can be written in Arabic or Japanese.

Currently, the system only allows for 280 country domains, such as .uk for Britain and .ca for Canada.

Companies are protesting plans to expand domain names, fearing they will have to defensively buy hundreds of Web addresses to avoid so-called cyber-squatters.

The U.S. Chamber of Commerce and companies including Dell, Nike and Marriott have shown similar resistance. Some lawmakers have urged ICANN to back off of the plan until it addresses trademark risks.

In a hearing last week, House Judiciary Committee Chairman John Conyers Jr. (D-Mich.) criticized ICANN for not resolving the complaints. But it is unclear how much weight Congress will have in the direction of the plan, which is already moving forward.

Congress directed ICANN to work out agreements with firms that register domain names and companies that want to protect their brands.

For example, Amazon.com fears it could have to buy .amazon or .books to protect its brand; otherwise, someone else could buy that domain and then force the company to pay hundreds of thousands of dollars to acquire it.

Steve DelBianco, executive director of NetChoice, a coalition of e-commerce companies, said expanding the number of domain names could cause fraud and consumer confusion.

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“From the private-sector standpoint, businesses that spend a trillion dollars building out the Internet have growing concerns for ICANN’s push for more [domains] without adequate protection,” he said. “We’re really dismayed by ICANN’s internal restructuring that has diminished the voting power of the e-commerce companies that contribute to the Web economy.”

ICANN Chief Operating Officer Doug Brent told the committee that new domain holders will be required to comply with stringent rules and that it would not be “unbridled expansion.” He acknowledged, though, that the organization has more work to do before embarking on the plan.

Last week, the Coalition Against Domain Name Abuse, which has 19 corporate members, asked the government to conduct a full audit of ICANN. The group argues that ICANN has not properly vetted the security and legal risks of its plan.

Firms that register new Web addresses make more than $2 billion a year in address-renewal fees, and adding hundreds of new domains would add to that revenue. Companies like GoDaddy.com, eNom and Network Solutions say the plan to add more domain names will lead to more competition among registry firms and will address consumer demand.

Sens. Olympia Snowe (R-Maine) and Bill Nelson (D-Fla.) in May called for a new agreement that improves ICANN’s accountability to both consumers and Internet stakeholders.

In the House, Reps. Henry Waxman (D-Calif.), Rick Boucher (D-Va.) and John Dingell (D-Mich.) urged the Commerce Department to remain involved in the management of ICANN.

“The Internet has become an indispensable tool for worldwide commerce and communication,” the congressmen said in a letter last month. “Its success depends upon … dependable and transparent management by ICANN.”

Brian Cute, vice president of registry Afilias, said the biggest issue is to make sure ICANN is accountable and transparent. “To the extent that any follow-on arrangement promotes that, we think it’s a good thing,” he said.

Commerce still will have a role in Internet oversight.

Under a separate contract, the Commerce Department has conferred on ICANN the management of the master files of the domain name system, the core “root” files governing the Internet.