[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




                   STAKEHOLDER PERSPECTIVES ON ICANN:
                 THE .SUCKS DOMAIN AND ESSENTIAL STEPS
                 TO GUARANTEE TRUST AND ACCOUNTABILITY
                      IN THE INTERNET'S OPERATION

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                     COURTS, INTELLECTUAL PROPERTY,
                            AND THE INTERNET

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 13, 2015

                               __________

                           Serial No. 114-23

                               __________

         Printed for the use of the Committee on the Judiciary

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      Available via the World Wide Web: http://judiciary.house.gov
      
                                   _______

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                       COMMITTEE ON THE JUDICIARY

                   BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        JERROLD NADLER, New York
LAMAR S. SMITH, Texas                ZOE LOFGREN, California
STEVE CHABOT, Ohio                   SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California          STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia            HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa                       Georgia
TRENT FRANKS, Arizona                PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas                 JUDY CHU, California
JIM JORDAN, Ohio                     TED DEUTCH, Florida
TED POE, Texas                       LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah                 KAREN BASS, California
TOM MARINO, Pennsylvania             CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina           SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho                 HAKEEM JEFFRIES, New York
BLAKE FARENTHOLD, Texas              DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia                SCOTT PETERS, California
RON DeSANTIS, Florida
MIMI WALTERS, California
KEN BUCK, Colorado
JOHN RATCLIFFE, Texas
DAVE TROTT, Michigan
MIKE BISHOP, Michigan

           Shelley Husband, Chief of Staff & General Counsel
        Perry Apelbaum, Minority Staff Director & Chief Counsel
                                 ------                                

    Subcommittee on Courts, Intellectual Property, and the Internet

                 DARRELL E. ISSA, California, Chairman

                  DOUG COLLINS, Georgia, Vice-Chairman

F. JAMES SENSENBRENNER, Jr.,         JERROLD NADLER, New York
Wisconsin                            JUDY CHU, California
LAMAR S. SMITH, Texas                TED DEUTCH, Florida
STEVE CHABOT, Ohio                   KAREN BASS, California
J. RANDY FORBES, Virginia            CEDRIC RICHMOND, Louisiana
TRENT FRANKS, Arizona                SUZAN DelBENE, Washington
JIM JORDAN, Ohio                     HAKEEM JEFFRIES, New York
TED POE, Texas                       DAVID N. CICILLINE, Rhode Island
JASON CHAFFETZ, Utah                 SCOTT PETERS, California
TOM MARINO, Pennsylvania             ZOE LOFGREN, California
BLAKE FARENTHOLD, Texas              STEVE COHEN, Tennessee
RON DeSANTIS, Florida                HENRY C. ``HANK'' JOHNSON, Jr.,
MIMI WALTERS, California               Georgia

                       Joe Keeley, Chief Counsel

                    Jason Everett, Minority Counsel
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                            C O N T E N T S

                              ----------                              

                              MAY 13, 2015

                                                                   Page

                           OPENING STATEMENTS

The Honorable Darrell E. Issa, a Representative in Congress from 
  the State of California, and Chairman, Subcommittee on Courts, 
  Intellectual Property, and the Internet........................     1
The Honorable Jerrold Nadler, a Representative in Congress from 
  the State of New York, and Ranking Member, Subcommittee on 
  Courts, Intellectual Property, and the Internet................     3
The Honorable Bob Goodlatte, a Representative in Congress from 
  the State of Virginia, and Chairman, Committee on the Judiciary     5
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Ranking Member, Committee on 
  the Judiciary..................................................     7

                               WITNESSES

Mei-Lan Stark, Immediate Past President, International Trademark 
  Association
  Oral Testimony.................................................     9
  Prepared Statement.............................................    11
Paul Misener, Vice President of Global Public Policy, Amazon.com, 
  Inc.
  Oral Testimony.................................................    18
  Prepared Statement.............................................    20
John C. Horton, President, LegitScript
  Oral Testimony.................................................    27
  Prepared Statement.............................................    29
Steven J. Metalitz, Counsel, Coalition for Online Accountability
  Oral Testimony.................................................    52
  Prepared Statement.............................................    54
Bill Woodcock, Executive Director, Packet Clearing House
  Oral Testimony.................................................    68
  Prepared Statement.............................................    70
Steve DelBianco, Executive Director, NetChoice
  Oral Testimony.................................................    76
  Prepared Statement.............................................    78
Philip S. Corwin, Counsel, Internet Commerce Association
  Oral Testimony.................................................    95
  Prepared Statement.............................................    97
Jonathan Zuck, President, ACT | The App Association
  Oral Testimony.................................................   127
  Prepared Statement.............................................   129

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Material submitted by the Honorable Darrell E. Issa, a 
  Representative in Congress from the State of California, and 
  Chairman, Subcommittee on Courts, Intellectual Property, and 
  the Internet...................................................   143
Additional material submitted by the Honorable Darrell E. Issa, a 
  Representative in Congress from the State of California, and 
  Chairman, Subcommittee on Courts, Intellectual Property, and 
  the Internet...................................................   158
Material submitted by the Honorable Zoe Lofgren, a Representative 
  in Congress from the State of California, and Member, 
  Subcommittee on Courts, Intellectual Property, and the Internet   176
Material submitted by the Honorable Doug Collins, a 
  Representative in Congress from the State of Georgia, and Vice-
  Chairman, Subcommittee on Courts, Intellectual Property, and 
  the Internet...................................................   186

                                APPENDIX
               Material Submitted for the Hearing Record

Response to Question posed during the hearing from Mei-Lan Stark, 
  Immediate Past President, International Trademark Association..   196
Response to Questions for the Record from Steven J. Metalitz, 
  Counsel, Coalition for Online Accountability...................   200
CircleID Article by Representative Bob Goodlatte and Senator 
  Chuck Grassley.................................................   203
TechPolicyDaily.com Article by Shane Tews........................   205
Letter from Terry Hart, Director of Legal Policy, The Copyright 
  Alliance.......................................................   208
Prepared Statement of Daniel Castro, Vice President, Information 
  Technology and Innovation Foundation (ITIF)....................   211
Prepared Statement of Milton L. Mueller, Ph.D., Professor, 
  Syracuse University School of Information Studies, The Internet 
  Governance Project.............................................   219
Prepared Statement of Donuts Inc.................................   222

 
  STAKEHOLDER PERSPECTIVES ON ICANN: THE .SUCKS DOMAIN AND ESSENTIAL 
STEPS TO GUARANTEE TRUST AND ACCOUNTABILITY IN THE INTERNET'S OPERATION

                              ----------                              


                        WEDNESDAY, MAY 13, 2015

                        House of Representatives

            Subcommittee on Courts, Intellectual Property, 
                            and the Internet

                       Committee on the Judiciary

                            Washington, DC.

    The Subcommittee met, pursuant to call, at 10:11 a.m., in 
room 2141, Rayburn Office Building, the Honorable Darrell E. 
Issa, (Chairman of the Subcommittee) presiding.
    Present: Representatives Issa, Goodlatte, Collins, Smith, 
Forbes, Jordan, Poe, Marino, Farenthold, Nadler, Conyers, 
Deutch, Bass, DelBene, Peters, Lofgren, and Johnson.
    Staff Present: (Majority) David Whitney, Oversight Counsel; 
Eric Bagwell, Clerk; and (Minority) Jason Everett, Minority 
Counsel.
    Mr. Issa. Good morning. I want to welcome you all to this 
intimate dais gathering here.
    The Subcommittee on Courts, Intellectual Property, and the 
Internet will come to order.
    Without objection, the Chair is authorized to declare 
recesses of the Subcommittee at any time.
    We welcome today a hearing with the stakeholders of 
prospective changes on ICANN. In particular, we will be dealing 
today with a number of new items, including the .SUCKS domain 
and essential steps to guarantee trust and accountability in 
Internet operations.
    Today's hearing comes approximately 14 months after the 
National Telecommunications and Information Administration 
announced its intention to relinquish the existing contract for 
the oversight of the Internet Assigned Numbers Authority, or 
IANA, to the global multi-stakeholder group coordinated by 
ICANN. Now, that is a mouthful. But in a nutshell, we have 
decided to give up our governance control that has been in 
place effectively since the beginning of the Internet.
    The United States has been a critical backstop against 
censorship and in promoting openness and free speech in the 
Internet once IANA's contract is surrendered. It is impossible 
to go back once this is done, and we cannot overstate the 
importance of such a transition. If it is to occur, it is 
important that it be done correctly and recognizing that the 
long-term aspirations of these organizations that contribute to 
the operations of the Internet must take the utmost caution in 
establishing a process to transition to a new form of control 
of this critical backbone function.
    Clearly, I was troubled by the NTIA's sudden announcement 
late on a Friday afternoon, which is known by all of us to bury 
a story. So on September 30, 2014, without first informing or 
engaging with the appropriate parties for collaboration, 
including the staff of this Committee--and I want to make it 
clear, a minor notice that something would be happening the 
next week, on a Thursday, without recognizing what it was going 
to be, and then having it stuck in on a Friday, is not 
collaboration. It is certainly not consultation.
    The process that we want to have must be deliberate, 
conscientious, and, in fact, include a bottom-up evaluation by 
all the stakeholders. So today's hearing is really about 
recognizing successes and failures throughout this process.
    But we have the largest group of witnesses I personally 
have ever had in my 15 years in Congress for a reason. Even 
without ICANN at the table, what we have is we have a small 
segment of the stakeholders. To have only eight is a 
disappointment, because there are millions. But to have eight 
is the bare minimum for us to begin to talk about the breadth 
of concern that seems to exist in a transition that, although 
anticipated for a long time, seems to be rushing forward just 
at a time in which particularly the domain name system has some 
serious questions and perhaps flaws.
    It is particularly important that now that it is about a 
year later, that we begin to ask the question: Is it 
appropriate to have the transition as scheduled, or should 
there be further delay with a short extension in order to 
ensure that the process that cannot be undone is done right the 
first time?
    An example that particularly concerns this Member is, in 
fact, that in light of the .AMAZON Web site, one that was not 
done in consultation with a company of Internet fame, nor 
necessarily in proper consultation with the countries in which 
Amazon flows, has been with some chaos and lessons to be 
learned, and I want to thank our witness for being here today 
so we can begin discussing what was learned and should be 
learned before sites such as .SUCKS, .PORN, or .IHATECONGRESS 
are put on the Internet. I know that .IHATECONGRESS would be 
well sold, perhaps over-subscribed. The question is, does it 
serve the responsibility to ensure sufficient naming so that 
all may have an appropriate name? Or, in fact, have we gotten 
into a business model that was never envisioned?
    There is no question in my mind that since there are 
billions of possibilities in IPv6, a series of three-digit 
numbers, there are enough numbers finally to take care of every 
point. But since names can be assigned by the dozens or even 
thousands to one number, are we simply exaggerating the number 
of names that are going to end up at a single point?
    In closing, the .SUCKS domain was approved by ICANN and 
auctioned last November to a company that now has the right to 
operate a new generic top-level domain. ICANN should not be the 
speech police. However, as I have done individual evaluation, 
and I now place into the record the DarrellIssa.SUCKS 
opportunity to buy, the process being done by the companies 
that gain the rights appears to this Member to be nothing more 
than legalized extortion. The typical price most Americans see 
if they go to GoDaddy or any other site to buy a name is in the 
dollars or tens of dollars. In the case of these sites, which 
can be often and most likely used in a pejorative way, the 
sites begin at $249 but are effectively being done as an 
auction. You are given an opportunity to bid, if you are the 
proper name owner, $2,500, with no guarantee that you won't be 
over-bid by somebody that hates you more than you love your own 
name.
    So as we begin this process, one of the key elements that 
we are going to be exploring is whether, in fact, naming and 
those sales should ever be done to settle past debts that ICANN 
has, or a bidding process that leads to an unreasonable cost to 
the legitimate owner of a name only to protect his name from 
either disparagement or dilution.
    And with that, I am pleased to recognize the Ranking Member 
for his opening statement.
    Mr. Nadler. Thank you, Mr. Chairman.
    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 
governance and functioning of the Internet.
    When we type a simple address into our Web browser, we 
rarely give a second thought to how our desired Web site 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 scheduling this hearing 
today.
    Most prominently since our last hearing, ICANN has 
continued to expand its new generic top-level domain program, 
gTLD, which supplements 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, as the Chairman has mentioned, of the .SUCKS 
gTLD. This has been contentious not only because of the term 
but also because of concerns voiced about the proposed pricing 
structure associated with the domain.
    For obvious reasons, many brand owners have chosen to 
defensively register their own names 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 $2,500 to register their names 
instead of the much lower prices, as low as $10 in some cases, 
that it charges 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 
their value in criticism.'' Legitimate criticism is fair, of 
course, and is 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 
sent a letter to ICANN suggesting that the roll-out 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 is only a contractual relationship with 
Vox Populi, it cannot act unless it receives guidance that the 
company is acting in some way 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 the situation and 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. We must consider instead 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 mechanism sufficiently addresses 
concerns raised by active parties.
    It is 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 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, which 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, I challenge us 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 don't want to 
spend any more time talking than needed. I yield back the 
balance of my time.
    Mr. Issa. I thank the gentleman. Thank you, Mr. Nadler.
    I now recognize the Chairman of the full Committee, Mr. 
Goodlatte, for his opening statement.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    Just over a year ago the Obama administration and 
specifically the NTIA announced plans to transition oversight 
over the Internet's domain name system to the Internet 
Corporation for Assigned Names and Numbers, or ICANN. The 
Administration's decision kicked off high-profile debates 
involving many far-reaching questions that relate to the future 
security, stability, resiliency and integrity of the global 
Internet's continued operation.
    At the core of NTIA's decision to entrust ICANN with the 
responsibility of convening the multi-stakeholder process to 
transition the IANA functions contract away from the United 
States is its determination that ICANN has matured as an 
organization. Presumably, NTIA has concluded that ICANN is not 
merely likely to conduct itself in a predictable, open, 
transparent and accountable manner in the future but that it 
generally exercises sound judgment and conducts itself in this 
manner already.
    Today's hearing before the Courts, Intellectual Property, 
and the Internet Subcommittee is the second to focus on aspects 
of the proposed transition of the IANA functions contract to 
the global multi-stakeholder community. Two overarching 
concerns that should be tested fully and appropriately 
validated before concluding any transition are: one, how 
representative that community is; and two, how effective the 
community is and will be in the future in compelling ICANN to 
operate in a manner that benefits not merely a privileged few 
but the global users of the Internet.
    We will direct our attention today to matters that relate 
to the processes being implemented by ICANN and affected 
stakeholders to advance the NTIA's proposal and also to the 
substantive concerns routinely expressed by a wide array of 
stakeholders about ICANN's trustworthiness, accountability, 
execution and transparency of its current and existing duties 
and initiatives.
    Regrettably, many of these issues relate to matters 
presented to successive leaders of ICANN and officials at the 
Commerce Department for years, and yet there remains 
substantial room for progress toward responsible outcomes.
    Despite these matters being neither novel nor 
unanticipated, ICANN too often fails to appreciate their 
seriousness and implement corrective measures in advance or 
determines that it is unable or unwilling to do so. In at least 
one instance, the Obama administration actually aided and 
abetted efforts within ICANN to expand the influence of foreign 
governments at the expense of American companies.
    We will hear what happened when the NTIA and the State 
Department refused to intervene as the governments of Brazil 
and Peru pressured ICANN's board to deny Amazon's application 
for the .AMAZON gTLD even though the application was complete 
and the word was in no way restricted.
    The multi-faceted debate over the .SUCKS gTLD, which has 
resulted in trademark owners being shaken down for $2,499--I 
love that $1.00 discount from the round $2,500--or more 
annually to protect their brands by a registry affiliated with 
a company in financial default to ICANN raises many troubling 
questions, including: one, how the registry gained approval in 
the first instance; and two, whether ICANN itself had a 
financial motive for allowing this bid to proceed.
    Beyond this, ICANN's Chief Contract Compliance Officer's 
recent public request to consumer protection officials in the 
United States and Canada to investigate the applicant that 
ICANN just awarded the new domain to demonstrates the absurdity 
and futility of ICANN's own enforcement processes.
    But frustration over ICANN's enforcement and compliance 
system is not new. For more than a decade, this Committee has 
worked to encourage ICANN to take meaningful action to suspend 
the accreditation of registrars who disregard abuse 
notifications, and even those who actively solicit criminal 
activity. Today, we will hear testimony from a witness who has 
documented ICANN's refusal to deal responsibly with registries 
that profit from the trafficking of counterfeit drugs and even 
controlled substances like heroin.
    Before concluding, I want to commend the witnesses here 
today and those who worked to submit statements to the 
Subcommittee for their extraordinary dedication and ongoing 
efforts to improve ICANN's responsiveness, accountability and 
transparency.
    As one of our experts who wasn't able to join us today 
observed, ``We think that after more than fifteen years of 
routinely interacting with each other, ICANN and NTIA may have 
become a little too close. Only Congress can review what NTIA 
does and keep pressure on them to make sure the ICANN/IANA 
transition is not overly influenced or dominated by the agenda 
of ICANN. Help us ensure that the transition responds to the 
needs of the much broader community of Internet users and 
providers.'' That is our goal and our obligation.
    And with that, Mr. Chairman, I yield back.
    Mr. Issa. I thank the gentleman.
    We now recognize the Ranking Member of the full Committee, 
the gentleman from Michigan, Mr. Conyers, for 5 minutes.
    Mr. Conyers. Thank you, Chairman Issa. And to the Members 
of the Committee, and the gentlelady witness with the seven men 
that have accompanied her here today. We welcome you and the 
interested citizens that join us for this discussion here in 
the Judiciary Committee.
    The Internet Corporation for Assigned Names and Numbers, 
ICANN, is a private-sector, non-profit corporation started in 
1998 to promote competition and to develop policy on the 
Internet's unique identifiers. The pending transition of key 
domain functions from United States stewardship to the global, 
multi-stakeholder community presents, of course, several new 
issues.
    Most importantly, ICANN and other stakeholders must abide 
by their contractual provisions to prohibit the use of domain 
names for the pirating of copyrighted material and other 
illegal activity. As many of you know, this Committee is deeply 
committed to addressing the problems of copyright and trademark 
infringement.
    Thus, from our perspective, it is critical that ICANN help 
prevent piracy and other unlawful conduct by both registrars 
and registrants. And to this end, ICANN prohibits registrants 
from engaging in unlawful conduct. In fact, ICANN released its 
Register Accreditation Agreement in 2013 which requires 
registrars to prevent abusive uses of registered domain names.
    Yet, there are reports that registrars are ignoring their 
obligations to deter online theft of copyrighted material, 
among other concerns. And worse, there are reports that ICANN 
is not enforcing the registrars' contractual obligations. This 
raises concerns about ICANN and Internet governance.
    Accordingly, I would like the distinguished witnesses to 
explain how ICANN and stakeholders can better respond to 
concerns about piracy and other illegal conduct, and how 
Congress can hold ICANN accountable.
    This leads to the next consideration. The National 
Telecommunications and Information Administration must adhere 
to its core guiding principles to ensure the security, 
protection, openness and stability of the network to complete 
the transition. The United States has long supported 
transitioning key Internet domain name functions to global 
multi-stakeholder communities. In fact, the House and Senate, 
on a bipartisan basis in the last Congress, clearly stated 
their support for a private, multi-stakeholder model of 
Internet governance.
    Nevertheless, any proposal for transition of the domain 
name system must meet certain core principles before it can be 
approved and finalized by the NTIA. These principles ensure 
that the United States will succeed in maintaining freedom, 
protections, openness, security and stability of the network. 
Adhering to these principles would build much-needed public 
support for the transition, and it would make it easier to 
receive our approval.
    Finally, we must ensure that NTIA abides by its commitment 
to facilitate a truly effective transition. The process should 
continue to be open and transparent and can confirm ICANN's 
accountability through core values and bylaws, and it should 
obtain international stakeholder consensus and support.
    So the hearing today should be the first of a number of 
oversight activities that our Committee conducts throughout the 
remainder of the transition process. Further hearings would 
allow stakeholders to update us on the transition and provide 
us with an opportunity to hear concerns. These hearings will 
also allow us to examine whether further safeguards are 
necessary.
    Accordingly, I thank the Chairman for holding today's 
hearings, and I look forward to hearing from this rather large 
number of witnesses. Thank you.
    Mr. Issa. I thank the gentleman. As I said in my opening 
statement, it is not a large group. It is a sub-segment of 
millions of people who would like to be sitting here at the 
witness table.
    It is now my pleasure to introduce the distinguished panel 
of witnesses. The witnesses' written statements will be entered 
into the record in their entirety. I ask you to please 
summarize within 5 minutes or less, considering the size of the 
witnesses. To help us stay within this time limit, you will 
notice, as my colleague and former Chairman of another 
Committee, Mr. Towns, would say, you will notice that there is 
a red, a yellow, and a green light, and every American knows 
that green means go, yellow means go faster, and red means you 
have to stop. So if you will obey those, or if you possibly 
could summarize in less time, it would be appreciated since it 
will leave more time for the many questions we will have.
    Before I introduce the witnesses, I would ask that all the 
witnesses please rise to take the oath required by the 
Committee. Please raise your right hand.
    Do you all solemnly swear that the testimony you are about 
to give will be the truth, the whole truth, and nothing but the 
truth?
    Please be seated.
    Let the record reflect that all witnesses answered in the 
affirmative.
    It is now my pleasure to introduce our panel of witnesses.
    Ms. Mei-lan Stark is the Immediate Past President of the 
International Trademark Association.
    Mr. Paul Misener is Vice President of Global Public Policy 
at Amazon.com, who has already been mentioned more than most 
witnesses.
    Mr. John Horton is President of LegitScript.
    Mr. Steve Metalitz is Counsel for the Coalition for Online 
Accountability.
    Mr. Bill Woodcock is Executive Director of Packet Clearing 
House.
    Mr. Steve DelBianco is Executive Director of NetChoice.
    Mr. Phil Corwin is Counsel for the Internet Commerce 
Association.
    And last but not least is Mr. Jonathan Zuck, President of 
ACT | The App Association.
    And with that, Madam, you get to go first.

     TESTIMONY OF MEI-LAN STARK, IMMEDIATE PAST PRESIDENT, 
              INTERNATIONAL TRADEMARK ASSOCIATION

    Ms. Stark. Good morning, Chairman Issa, Ranking Member 
Nadler, and Members of the Committee. Thank you for this 
opportunity to appear before you today. My name is Mei-lan 
Stark, and I am Senior Vice President of Intellectual Property 
for the Fox Entertainment Group, and I am appearing today on 
behalf of the International Trademark Association, otherwise 
known as INTA, where I am serving on a voluntary basis as their 
Immediate Past President.
    It was my privilege to testify before this Committee in 
2011. At that time, I shared with you the trademark community's 
concerns regarding the launch of ICANN's new generic top-level 
domain, or gTLD, program. Today, I offer trademark owners' 
perspectives on ICANN's performance regarding the .SUCKS launch 
and the concerns it raises for the potential relinquishment of 
the National Telecommunications Information Administration, or 
NTIA's, stewardship of the IANA function. We greatly appreciate 
the Committee's attention to these very important issues.
    The new gTLD program was designed to promote competition 
and innovation. It is a system based upon a participatory 
multi-stakeholder model, and as is true with any self-
regulatory model, trust and accountability are essential. That 
means the system must have strong mechanisms in place to 
conduct its operations in a reliable and transparent way.
    Intellectual property owners of all sizes, from all 
industries, both commercial and not-for-profit, must be able to 
trust that the new gTLD system will operate according to 
agreed-upon policies and procedures. This is necessary so that 
business owners can effectively protect their valuable 
trademarks in this new world. But more than that, trust and 
predictability are required to satisfy the purported goal of 
the new system, fostering innovation. After all, no business 
will invest resources in an unreliable system.
    The launch of .SUCKS by Vox Populi is an example of ICANN's 
operational deficiencies. The new gTLD program followed 
extensive public comment on how the system would operate and 
what intellectual property rights mechanisms would be 
mandatory. In response to grave concerns voiced by trademark 
owners during the public comment periods, ICANN did convene 
voluntary experts to address them, and that led to the 
implementation of new rights protection mechanisms to protect 
businesses and consumers from confusion, cyber-squatting, 
fraud, and other abuse.
    One such mechanism is the Trademark Clearinghouse, which 
allows trademark owners to pre-register domains corresponding 
to their trademarks before such names are made available to the 
general public. It appears that Vox Populi is using this very 
mechanism designed to protect trademarks and consumers to 
charge businesses and non-profits, both large and small, 
exorbitant fees to register their marks as domain names. Vox 
Populi co-opts the rights mechanisms developed by the multi-
stakeholder community and uses it as a means to identify who 
pays 250 times more for a domain name.
    ICANN was warned about these bad practices and was asked to 
resolve these issues before the .SUCKS launch, but ICANN chose 
to ignore that request, and the launch continues. The current 
.SUCKS controversy strongly suggests that the critical 
framework required for a successful transition of the IANA 
function does not yet exist. ICANN must enforce its own 
policies and contracts. The trademark community supports the 
multi-stakeholder model, and we are engaged in the processes 
that are shaping that framework. We support a transition, but 
not until we are assured of the necessary accountability and 
transparency.
    As ICANN's management of the .SUCKS launch reveals, we 
simply are not there yet. Until such accountability mechanisms 
are implemented, continued U.S. Government and congressional 
oversight is necessary.
    In conclusion, while there are many potential benefits from 
the new gTLD program, those benefits are unlikely to 
materialize unless the program is effectively and fairly 
administered. ICANN's decisions and actions directly impact not 
only the architecture and control of the Internet but 
ultimately how consumers experience the Internet. As a trade 
association dedicated to brands and the consumer protection 
that trademarks afford, INTA stands ready to help ICANN develop 
and implement a reliable framework that promotes fair 
competition, choice and trust.
    We very much appreciate the Committee's continued 
engagement in these matters and thank you again for the 
opportunity to discuss the challenges facing trademark owners 
under ICANN's current policies and practices.
    Thank you, Mr. Chairman.
    [The prepared statement of Ms. Stark follows:]
    
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                               __________
    Mr. Issa. Thank you.
    Mr. Misener?

         TESTIMONY OF PAUL MISENER, VICE PRESIDENT OF 
             GLOBAL PUBLIC POLICY, AMAZON.COM, INC.

    Mr. Misener. Thank you, Chairman Issa and Mr. Nadler, for 
your attention to this important topic, for holding this 
hearing, and for inviting me to testify.
    Amazon strongly supports the U.S. Government's policy goals 
of maintaining Internet stability, security, and freedom from 
government control. But NTIA's planned transition of Internet 
governance functions to ICANN carries the significant risk 
that, despite NTIA's intentions, ICANN's multi-stakeholder 
process could be dominated, coopted, or undermined by national 
governments, ultimately jeopardizing these policy goals.
    Amazon's recent experience in ICANN provides a warning that 
seriously calls into question ICANN's ability and willingness 
to uphold the multi-stakeholder model. The international 
community simply has not yet demonstrated its commitment to 
ICANN's multi-stakeholder process free from government control.
    Ideally, this risk would be addressable through a 
transparent, rules-based, accountable, multi-stakeholder 
process, so there is a very important question for Congress to 
ask: Is the current ICANN multi-stakeholder process actually 
working free from government control? From Amazon's experience, 
it is not.
    To the contrary, Amazon's experience provides a warning 
about government control of ICANN. Our familiarity with the 
multi-stakeholder process at ICANN comes from our application 
for several gTLDs, including .AMAZON. We believe the new gTLD 
program will provide a great opportunity for innovation and 
competition on the Internet, and we are thrilled to be a part 
of it. But our experience in the program raises serious 
concerns.
    In brief, the ICANN multi-stakeholder community worked for 
more than 3 years to develop rules for gTLD applicants, only to 
have ICANN ignore these rules under pressure from a handful of 
national governments, principally Brazil and Peru in the case 
of .AMAZON and related applications.
    Our repeated good-faith attempts to negotiate solutions 
with these governments, which have no legal rights to the term 
``amazon,'' were fruitless. Other national governments also 
quickly caved to the pressure, and eventually so did the United 
States. This willingness of ICANN, other governments, and even 
the U.S., to abandon the rules developed in a multi-stakeholder 
process because of pressure from a few national governments 
provides a warning that seriously calls into question the 
commitment of the international community to ICANN's multi-
stakeholder process free from government control.
    The implications of this flawed treatment of Amazon stretch 
well beyond unfairness to a single company. This wasn't just a 
matter of ICANN and national governments, including the U.S. 
Government, failing to defend an American company, the 
treatment of which had no basis under national law or 
international law. More importantly, these governments also 
failed to defend the ICANN multi-stakeholder process to which 
they supposedly were committed, or to demand ICANN 
accountability. And if ICANN feels empowered to disregard its 
rules and procedures, as well as snub the United States, before 
the NTIA planned transition, one can only imagine what ICANN 
would feel emboldened to do after a transition were 
consummated.
    From a U.S. perspective, the point is not only that my 
company's legally protected interests were sacrificed to 
geopolitics, it is the way they were sacrificed that undermines 
the whole ICANN multi-stakeholder model and sets a precedent 
for ICANN and the United States to quickly cave to future 
pressure from foreign governments.
    Perhaps ICANN intended to demonstrate that it would not 
play favorites with American interests. If so, it went way too 
far, and instead of treating U.S. interests no differently than 
those of other countries, it consciously broke its own rules 
and harmed an American company. Bluntly stated, ICANN's current 
multi-stakeholder process is not free from government control. 
The mishandling of Amazon's gTLD applications is a blemish on 
ICANN's record, and because of how the rules developed in an 
ICANN multi-stakeholder process were quickly abandoned in the 
face of modest government pressure, this blemish is 
disqualifying, at least until cleared.
    Favorable resolution of Amazon's lawful applications is a 
necessary first step, but this incident is only part of a 
broader question of whether ICANN and the international 
community are fully committed to the multi-stakeholder model 
free from government control. If the commitment is only 
superficial, the United States should recognize it and address 
it now, and NTIA's planned transition should not occur unless 
and until independent review and other robust accountability 
reform mechanisms proposed by the multi-stakeholder community 
are established for ICANN. The Internet stability, security, 
and freedom from government control are at stake.
    Thank you again for your attention to this topic, and I 
look forward to your questions.
    [The prepared statement of Mr. Misener follows:]
    
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                               __________
    Mr. Issa. Thank you.
    Mr. Horton?

      TESTIMONY OF JOHN C. HORTON, PRESIDENT, LEGITSCRIPT

    Mr. Horton. Mr. Chairman, when my company, LegitScript, 
identifies an illegal, unsafe Internet pharmacy, we notify the 
domain name registrar. When a registrar is notified that the 
domain name is being used for illegal activity, ICANN's 
accreditation scheme requires the registrar to do two things: 
first, to investigate the claims; and second, to respond 
appropriately.
    The good news is most registrars voluntarily disable domain 
names used to sell illegal, unsafe medicines that put patients' 
health and safety at risk. However, cyber criminals are 
rational economic actors and carefully choose the registrar 
that they believe will protect them. LegitScript's data 
indicate that just 12 among about 900 registrars maintain half 
of all illegal Internet pharmacy registrations. In first place 
is Rebel, a registrar in the Momentous Group, which operates 
.SUCKS, which has only 0.05 percent of the total domain name 
market but over 17 percent of the illegal online pharmacy 
market.
    Now, I'd like to talk about our experience notifying ICANN 
compliance about the few registrars that are a safe haven for 
criminal activity. Consider the Web site HealthPlugins.com, 
selling morphine, Percocet, and other addictive drugs without a 
prescription. The domain name was registered with Paknic in 
Pakistan, which refused to take action on this and hundreds of 
other illegal online pharmacies. ICANN closed our complaint 
against this registrar, finding that it responded appropriately 
despite leaving hundreds of illegal Internet pharmacies online.
    Now, if you want to buy heroin online, you can do it at 
smackjunkshot.com. We notified the registrar, Webnic of 
Malaysia, which had told us in the past that it could not just 
suspend domain names because it would lose money. We submitted 
a complaint to ICANN, which closed the complaint, finding that 
the registrar responded appropriately by leaving a domain name 
used to sell heroin untouched, as well as hundreds of other 
illegal online pharmacies.
    Finally, let's consider an example from a Momentous 
registrar, freeworldpharmacy.com, one of hundreds of illegal 
online pharmacy domain names that we have notified the company 
about. Mr. Chairman, these are the drugs that were sold to us 
without a valid prescription being required from 
freeworldpharmacy.com. And so that Momentous could have no 
doubt about the domain names used for illegal purposes, we sent 
a photo of these very drugs just a few weeks ago to Momentous. 
They took no action, and we have an ICANN complaint pending 
against Momentous right now. In the past, however, we have 
notified Momentous about illegal online pharmacies, including 
this one. They took little or no action, and ICANN has closed 
our complaints.
    I could go on and on. In these folders, these two folders, 
I have screenshots of another 750 illegal online pharmacies 
that only continue operating because ICANN closed complaints 
against the registrar that took no action. We only stopped at 
750 in the interest of time.
    The point is cyber criminals cluster at a small number of 
safe-haven registrars who are running circles around ICANN 
compliance by persuading them that they are responding 
appropriately by doing nothing about domain names that they 
know full well are being used for illegal purposes, and those 
registrars are laughing all the way to the bank.
    In all of these cases, when we or law enforcement have 
asked ICANN what a registrar could possibly have done that 
constitutes an appropriate response in light of the ongoing use 
of domain names for illegal activity, ICANN compliance refuses 
to disclose it, keeping it a secret between ICANN and the 
registrar.
    The fundamental problem with this is a lack of transparency 
on the part of ICANN's compliance team. No reasonable person 
would believe that a registrar is responding appropriately to 
evidence that a domain name is being used to sell heroin by 
doing nothing. By finding that a registrar is responding 
appropriately in these cases, ICANN in essence gives a green 
light to the registrar to continue facilitating and profiting 
from the illegal activity, thereby putting Internet users at 
risk. By refusing to explain what the registrar did that 
supposedly constitutes an appropriate response, ICANN lends the 
impression that it is participating in a cover-up.
    Accordingly, in the spirit of ICANN's longstanding 
commitment to transparency, I want to publicly challenge ICANN 
to disclose what steps these registrars took that purportedly 
constitute an appropriate response despite being notified by 
LegitScript and in many cases by drug safety regulators and law 
enforcement that the domain names are being used to put 
everyday Internet users' health and safety at risk. This lack 
of transparency and turning a blind eye to ongoing criminal 
activity, in my view, is emblematic and at the core of ICANN's 
problems with trust and accountability.
    Thank you.
    [The prepared statement of Mr. Horton follows:]
    
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                               __________
    Mr. Issa. Thank you.
    Mr. Metalitz?

           TESTIMONY OF STEVEN J. METALITZ, COUNSEL, 
              COALITION FOR ONLINE ACCOUNTABILITY

    Mr. Metalitz. Mr. Chairman, Mr. Nadler, Members of the 
Subcommittee, thanks very much for inviting me to offer once 
again the perspectives of the Coalition for Online 
Accountability. Our coalition represents U.S. associations, 
organizations and companies that depend on the rules set by 
ICANN to enable us to enforce copyrights and trademarks online.
    First I would like to salute the Subcommittee for the 
crucial role it has played in providing oversight of ICANN 
issues over the past 15 years. Maintaining that long-
established oversight record is critical to U.S. businesses 
that depend on copyright and trademark protection, and to the 
millions of American workers that they employ.
    My colleagues at the table, and especially on my left, will 
have a lot to say about the IANA transition process and the 
accompanying effort to improve ICANN's accountability 
mechanisms. I think those accountability efforts are basically 
on the right track. But as a wise man once said, the past is 
prologue, and so is the present. So rather than speculate about 
ICANN's future, I would like to focus on the way in which ICANN 
is now handling the critical domain name system functions over 
which the U.S. Government ceded its contractual control years 
ago.
    As several Members of the Subcommittee have already noted, 
what ICANN is doing and not doing today is highly relevant to 
the terms and conditions of the IANA transition and to what 
accountability mechanisms are needed in the future. So very 
briefly, let's look at ICANN's current track record on three 
key issues: contract compliance, WHOIS, and the new gTLD 
launch.
    We hear a lot about the ICANN multi-stakeholder model. What 
does that really mean? I think it boils down to this: replacing 
governmental regulation with private contracts and community 
oversight in managing the domain name system. For this model to 
work, the contracts must be strong and clear, and they must be 
vigorously and transparently enforced.
    Now, as John Horton has already mentioned, under the 2013 
revision of the Registrar Accreditation Agreement, domain name 
registrars have new obligations to investigate and respond to 
complaints that the domain names they sponsor are being used 
for illegal activities, and that includes specifically 
copyright or trademark infringement. By now, most registrars 
have signed the 2013 agreement, but I have to report that 
registrars are not responding to these complaints even when the 
facts are clear and the evidence of wrongdoing is overwhelming.
    Just as concerning, to date, ICANN is not yet taking action 
to clarify and enforce these RAA provisions, and as the 
previous witness said, it is acting with a lack of transparency 
in its compliance efforts.
    Unless and until ICANN shows that it can effectively 
enforce the agreements that it has signed, its readiness for 
the completion of the transition will remain in question, and 
this track record must be taken into account in fashioning the 
enhanced accountability mechanisms that must accompany any 
further transition.
    The 2013 RAA also set in motion long-overdue steps toward 
developing ground rules for the widespread phenomenon of proxy 
registration services. These have a legitimate role, but today 
the registered contact data for more than one-fifth of all gTLD 
registrations, tens of millions, lurks in the shadows rather 
than in the sunlight of the publicly accessible WHOIS database. 
Further progress in bringing predictability and consistency to 
this proxy world is critical. If ICANN cannot do this, then the 
role of the WHOIS database in letting Internet users know who 
they are dealing with online, critical for accountability and 
transparency, will be seriously compromised. The next several 
months may show whether ICANN is up to the task.
    Finally, although ICANN is only about halfway through the 
current new gTLD launch, it is already starting to review the 
process. That review needs to be searching and comprehensive. 
We need to question and reevaluate the ship's heading, not just 
rearrange the deck chairs for the next voyage.
    The review has to address the fundamental issue of whether 
the rollout of an unlimited number of new top-level domains 
actually benefitted the general public and brought greater 
choice to consumers or whether it simply enriched 
intermediaries and speculators.
    In conclusion, thank you again for this Subcommittee's 
continuing oversight of this fascinating experiment in non-
governmental administration of critical Internet resources that 
we call ICANN. Our coalition urges you to continue that role, 
especially with regard to contract compliance, WHOIS, and the 
new gTLD review.
    I look forward to your questions. Thank you.
    [The prepared statement of Mr. Metalitz follows:]
   
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                               __________
    Mr. Issa. Thank you.
    Mr. Woodcock?

TESTIMONY OF BILL WOODCOCK, EXECUTIVE DIRECTOR, PACKET CLEARING 
                             HOUSE

    Mr. Woodcock. Mr. Chairman, Ranking Member, and Members of 
the Committee, good morning and thank you for the opportunity 
to testify. My name is Bill Woodcock. I am the Executive 
Director of Packet Clearing House, the international 
organization that builds and supports critical Internet 
infrastructure, including the core of the domain name system.
    I have served on the Board of Trustees of the American 
Registry for Internet Numbers for the past 14 years, and I have 
been continuously involved in the IANA process since the mid-
1980's. Most relevant to the proceeding at hand, I am one of 
the two North American representatives to the CRISP team, the 
process through which the Internet numbers multi-stakeholder 
community has developed its IANA oversight transition proposal.
    I am here today to explain why it is in the interests of 
both the U.S. Government and other Internet stakeholders to 
ensure that the IANA oversight transition occurs on schedule 
and with undiminished strength of accountability.
    The IANA function comprises three discrete activities 
serving three different communities: the domain name community, 
which is represented by the other seven witnesses at the table 
here; the Internet protocols community, which sets Internet 
standards; and the Internet numbers community, which manages 
the Internet addresses that allow our devices to communicate. 
These three functions are completely independent of and 
separable from each other.
    Two of the three communities, protocols and numbers, 
produced the requested transition plans on schedule in January. 
The names proposal, however, is still a work in progress. The 
protocols and numbers communities finished promptly because the 
IANA functions that serve them are very simple. The IANA 
function that serves names is, as you have been hearing, 
substantially more complex. The names community will not reach 
consensus in sufficient time to achieve a September 30 
transition, but the numbers and protocols transitions are ready 
to be implemented now. Moving them forward as planned would 
show good faith on the part of the U.S. Government and assure 
the world that the USG is a productive participant in the 
multi-stakeholder process rather than an obstacle.
    At the same time, allowing the names community the further 
time it needs would show that the U.S. Government is neither 
throwing caution to the wind nor abandoning its 
responsibilities before ICANN accountability can be firmly 
established.
    If NTIA delays the protocols and numbers transitions, it 
will further the interests of those Nations that are already 
displeased with the exceptional nature of the U.S. Government's 
role in IANA oversight. A shift in the balance of Internet 
governance from the multi-stakeholder model of the U.S. 
Government and the Internet community to the intergovernmental 
model advocated by China and the ITU would be disastrous. But a 
timely transition of strong stakeholder oversight of the IANA 
function would achieve the goals of both the U.S. Government 
and the global Internet community, responsible administration 
of a critical resource with strong contractual responsibility 
to stakeholders enforced within a jurisdiction that ensures 
that accountability is guaranteed by the rule of law.
    Under pressure from foreign governments to 
internationalize, ICANN has over the past 5 years gone from 
being a U.S. operation to one with offices and staff in 
Beijing, Geneva, Istanbul, Brussels, Montevideo, Seoul, and 
Singapore. This is clear evidence of other governments' 
influence on ICANN, influence that will only grow stronger over 
time.
    In my written testimony I cite facts, to demonstrate that 
the United States is the legal venue of choice of the 
international Internet community whenever it is an available 
option, across a sample of more than 142,000 Internet 
contractual agreements that we analyzed. Strongly accountable 
contractual oversight of the IANA function allows the Internet 
community to ensure that performance of the IANA function is 
never relocated to a jurisdiction with weaker rule of law or 
lesser protections against organizational capture.
    ICANN has performed the IANA function successfully because 
it has been disciplined by the mechanisms of U.S. Government 
procurement, the right to remedy uncured defects with 
mechanisms up to and including contract termination, and the 
right to seek superior performance in the marketplace through 
periodic re-competition. We believe retaining these same strong 
accountability mechanisms after the transition is essential to 
ensure responsible performance of the IANA function.
    No good can come from delaying the transition of the 
protocols and numbers functions. At the same time, no good can 
come from hurrying the names community into an incompletely 
considered compromise. Their issues require carefully crafted 
solutions involving significant ICANN accountability reforms. 
But these policy-level reforms are irrelevant to the simple 
mechanical tasks the IANA performs on behalf of the protocols 
and numbers communities.
    In conclusion, only the U.S. Government can ensure that 
commitment to a successful IANA transition is realized and act 
as the guarantor of the success of the multi-stakeholder 
governance model. The interests of the U.S. Government and of 
the global Internet stakeholder community are both served by a 
transition of the IANA protocols and numbers functions on time, 
on September 30 of this year, as long as the communities are 
contractually empowered to enforce the accountability of the 
IANA function operator in the same manner that the U.S. 
Government has successfully done for the past 16 years. I ask 
you to use Congress' unique power of oversight over NTIA to 
ensure that our commitments are met and the transition of the 
protocols and numbers functions occur as scheduled.
    Thank you for your time.
    [The prepared statement of Mr. Woodcock follows:]
    
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                               __________
    Mr. Issa. Thank you.
    Mr. Del--I am doing great. And it is a famous name, too.
    Mr. DelBianco?

  TESTIMONY OF STEVE DelBIANCO, EXECUTIVE DIRECTOR, NETCHOICE

    Mr. DelBianco. Thank you, Chairman Issa, Ranking Member 
Nadler, Members of the Committee. You have heard a lot today 
about operational problems at ICANN, but what would really 
.SUCK is an unaccountable ICANN after the transition when we 
have lost the leverage for hearings like this to have much 
effect on the organization.
    Over 17 years, our government has protected ICANN's multi-
stakeholder model from government encroachment and helped ICANN 
to mature, and that is saying something, because the goal for a 
computer scientist is to build something that can last at least 
as long as it takes to finish building it, and ICANN is still a 
work in process.
    But it is not sustainable for the U.S. to retain its unique 
role forever, particularly in a post-Snowden political climate. 
So NTIA asked the community for proposals to replace the 
stewardship role for IANA, and Chairman Goodlatte asked in a 
blog post earlier this year, ``What guarantees and capabilities 
and conditions should first be demanded and stress-tested by 
the global community?''
    Well, the global community has answered with hundreds of 
meetings in the last several months, tens of thousands of man 
hours, many of them overnight since we cycle through global 
time zones, and our community proposals run a very good start. 
They give the community new powers to challenge board actions 
via independent review panels and issue binding decisions, to 
veto bylaws changes proposed by the ICANN board so they can't 
undo what we have done, to veto strategic plans and budgets 
proposed by the board, and to remove individual board directors 
or spill the entire board if we need to.
    Stress testing has helped us to assess whether these new 
powers would let the community challenge an ICANN decision for 
inaction and to hold the board accountable. As an aside, we saw 
little need to stress test the technical operations of the core 
Internet functions that Bill talked about because they are 
provided by very experienced operators who are actually stress 
tested every day.
    However, stress tests did help us see that ICANN's bylaws 
have to change in other ways. The first stress test in my April 
24 testimony to your Committee was ICANN quitting its 
affirmation of commitments. So the community has said let's 
move some of the commitments and reviews from the affirmation 
into ICANN's bylaws.
    Another stress test was the governments changing the way 
they make their decisions at ICANN by moving to majority 
voting. That would expand government power over ICANN 
decisions. So we, the community, have proposed changing ICANN 
bylaws to seek a mutually acceptable solution with the 
governments, but only where their decision was reached through 
true consensus.
    Added transparency and powers would also help us to avoid 
situations like .SUCKS, which I tend to look at as more like a 
set of stress tests, of decisions made by ICANN to pass 
evaluation on an applicant who owed substantial fees, or the 
decision to negotiate a special million-dollar fee with a 
single applicant.
    So turning back to the community proposals for transition, 
we need details--I understand that--and we need review by 
global stakeholders. So this will not be ready by September of 
2015. The timeline on the display board in front of you and on 
some of the paper that I distributed shows that we just can't 
get there from where we are. But even with an extension in 
time, we worry that ICANN's board and management will resist 
the approval of these plans and impede its implementation.
    The role of Congress, then, in this historic transition 
could be critical. What Congress can do while we still have the 
leverage is to insist that NTIA require ICANN to accept and 
implement the final community proposals as a condition of the 
IANA transition they seek. This is, after all, our last chance 
to use the leverage we are about to relinquish. So let's leave 
a lasting legacy where the Internet community gets the same 
kind of accountability from ICANN that shareholders demand 
today from their corporations, that my members demand from my 
trade association and, frankly, that voters and citizens demand 
from you. I don't think the global community deserves anything 
less than that which we use for the other institutions we count 
upon to make our lives work better.
    I thank you, Mr. Chairman, and look forward to your 
questions.
    [The prepared statement of Mr. DelBianco follows:]
    
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                               __________
    Mr. Issa. Thank you.
    Mr. Corwin?

            TESTIMONY OF PHILIP S. CORWIN, COUNSEL, 
                 INTERNET COMMERCE ASSOCIATION

    Mr. Corwin. Chairman Issa, Ranking Member Nadler, 
Subcommittee Members, I am Philip Corwin on behalf of the 
Internet Commerce Association, a domain industry trade group 
and member of ICANN's business constituency which I represent 
on ICANN's GNSO council.
    I commend the Subcommittee for this hearing. Congress has a 
legitimate interest in an IANA transition and enhanced ICANN 
accountability that proceeds soundly and effectively. The 
stakes include the security and stability of the DNS, Internet 
free expression, and uncensored information.
    Two cliches are apropos today. The first is, ``If it ain't 
broke, don't fix it.'' The ICA consensus is that U.S. 
stewardship has been benign and beneficial and that ICANN 
accountability should proceed on its own merits. But the second 
is, ``You can't put the toothpaste back in the tube.'' The 
NTIA's announcement raised global expectations. Hundreds of 
ICANN community members have already expended thousands of 
hours in designing transition and accountability measures. 
Therefore, Congress should not reflexively oppose the IANA 
transition but should exercise strong oversight and support of 
ICANN stakeholders.
    While enhanced ICANN accountability measures are overdue, 
they will operate best only if ICANN's board and senior staff 
embrace a culture of accountability that assumes responsibility 
for the fallout of ICANN decisions and encompasses early 
consultation with the multi-stakeholder community that provides 
its organizational legitimacy.
    We are some distance from that culture. The road to the 
NTIA's announcement led through Montevideo and Brasilia and was 
paved by ICANN's misappropriation of the Snowden disclosures. 
The CEO's travels in South America were backed by a secret 
September 2013 ICANN board resolution. These actions were not 
transparent or accountable and reflected no community 
consultation.
    ICANN's community is now on the right stewardship and 
accountability track, but a final package will not be ready by 
September 30, much less the implementation of required pre-
transition accountability measures. Therefore, NTIA should 
announce an ICANN contract extension soon. The final package 
must set key community rights in tandem with ICANN 
accountabilities in its bylaws and articles of incorporation.
    Turning to .SUCKS, ICANN's request that the FTC and OCA in 
Canada determine its legality was an abdication of 
responsibility rather than its embrace. ICANN had more than a 
year to explore and take appropriate action under multiple 
contract options. There are other new TLD program issues. While 
the jury is still out on the program's ultimate success, the 
total number of new domains seems larger than market demand and 
many TLDs are practically giving domains away, which aids 
spammers and phishers. Major unresolved consumer protection and 
technical issues remain unsolved, as well as uncertainty about 
spending $60 million in auction fees that ICANN has collected.
    The rights protection mechanisms for new TLDs are working 
well, but any review of domain dispute procedures should set 
standard contracts between ICANN and arbitration providers that 
ensure uniform administration. There are no such contracts 
today. ICANN must start taking responsibility for fair 
administration of domain disputes.
    Finally, besides ensuring full satisfaction of NTIA's 
principles, Congress should confirm that ICANN's continued 
post-transition U.S. jurisdiction is accepted and not a new 
irritation for those who would make ICANN a multilateral 
organization. You should also know that the transition does not 
mean ICANN will assume technical operation of key Internet 
functions. ICANN lacks the technical capacity to do so and is 
dependent on the experience and expertise of stakeholders for 
maintaining core functions. While the NTIA's announcement 
requires stakeholders to address certain important policies, 
there is no equivalent need to revamp DNS technical operations. 
The continued operational excellence of those operations will 
bolster the confidence of global users and the Internet's 
stability, security, and resilience.
    I hope my testimony has been helpful to your inquiry. I 
would be happy to answer any questions, and I yield back the 
remaining 30 seconds of my time.
    [The prepared statement of Mr. Corwin follows:]
    
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                               __________
    Mr. Issa. Thank you, Mr. Corwin.
    Mr. Zuck?

            TESTIMONY OF JONATHAN ZUCK, PRESIDENT, 
                   ACT | THE APP ASSOCIATION

    Mr. Zuck. Thank you, Chairman Issa, Ranking Member Nadler, 
and Members of the Subcommittee. Thanks for the opportunity to 
do clean-up here today, and I guess we will see, as the 
television series in the late '70's said, if eight is, in fact, 
enough.
    ACT | The App Association represents over 5,000 app 
developers and information technology firms, with businesses in 
every congressional district, and part of a really booming 
industry. When we talk about the domain name system, as we are 
today, it is important to remember that these small businesses, 
like the ones I represent, are actually the majority of the 
domain name holders. Small businesses around the world have 
used the World Wide Web to create presence for themselves and 
distribution for their products that simply wasn't available in 
the physical world, on par with our larger brethren. This 
ability and integrity of the DNS is more important to small 
businesses than to any other community.
    The basic question we have in front of us today is whether 
or not ICANN is ready to be independent of the United States 
Government. The simple answer that one can glean from the 
testimony you have already heard is no, but with the caveat 
that it can be with the enhanced accountability sought by the 
multi-stakeholder community with the proposed measures that 
were released on May 4th.
    If you will allow me to paraphrase Winston Churchill, ICANN 
is the worst model for Internet governance, except for all the 
others. My personal journey here has been somewhat circuitous. 
I am a former software developer that went on to represent 
software developers, and for a number of years small businesses 
I represent were indifferent to the inner workings of ICANN 
because the DNS seemed to be working, until some articles came 
out in 2005 suggesting that governments wanted the function of 
ICANN to be intergovernmental instead of multi-stakeholder, as 
it has been. Suddenly, all of these small businesses were 
wearing ``ICANN Rocks'' t-shirts and asking me to get involved 
directly in the ICANN process.
    So over the past 10 years, in some 30 meetings in 
windowless conference rooms around the world, we have worked 
together with the community and the NTIA to make ICANN a 
stronger, better managed, and more accountable organization. I 
am pleased to say we have achieved some success in a number of 
areas, and my constant refrain on performance metrics has led 
me to have the nickname ``Metrics Man'' inside of the 
community, and it is a nickname I wear with pride.
    Of course, as you have already heard today, there is still 
a lot to be done to create the ICANN the multi-stakeholder 
community deserves. As a member of the intellectual property 
constituency within ICANN, I stand with my colleagues in 
frustration with ICANN's handling of the new gTLD program and 
the needs of rights holders in particular. .SUCKS is just one 
example and a frightening precedent for what lies ahead for 
those trying to protect their intellectual property.
    ICANN needs to find better mechanisms to protect IP while 
increasing consumer choice and competition in the domain name 
space. And they have to get serious about enforcing their 
contracts. If digital archery is anything to go by, ICANN 
should certainly leave the tech to the experts and keep 
themselves in a management role.
    Finally, ICANN needs to find better ways to involve small 
businesses and to resolve their issues when they arise. The 
system is currently overwhelming and over-costly for companies 
that I represent to be meaningfully involved in the multi-
stakeholder process. It is for these reasons that I view the 
pending IANA functions contract expiration as an opportunity on 
which to capitalize rather than something frightening to be 
avoided. What has been missing from all the reform efforts 
inside ICANN has been the teeth to make these reforms binding. 
It is certainly the case that NTIA provided an essential 
guidance and protection of ICANN throughout the years, but the 
true utility of this unique relationship reached its pinnacle 
with the affirmation of commitments in 2009. The announcement 
by NTIA of their plans to sunset the IANA functions contract 
has spurred a discussion of real ICANN accountability, the 
likes of which the organization has never seen.
    As others have mentioned, thousands of people hours in the 
community have set forth a proposed accountability framework 
that promises binding accountability to the multi-stakeholder 
community. This new ICANN, ICANN 3.0, if you will, will be 
stronger, answer to the community it serves, and create an 
environment of constructive reform that will allow it to 
develop and grow as the Internet adds its next billion users.
    That said, it is true that we have just one chance to get 
it right, and I believe that is where Congress can play a 
critical role. As Chairman Goodlatte wrote in his recent op-ed, 
it is certainly Congress' role to ensure that the proposed 
framework is indeed the work of the bottom-up multi-stakeholder 
process, the proposed framework passes various stress tests or 
worst-case scenarios, and the proposed framework, if accepted, 
is sufficiently implemented prior to the IANA functions 
contract expiration.
    Real accountability, when you boil it down, is about power, 
and the power needs to be in the hands of the community before 
it is any less in the hands of the U.S. Government.
    So once again, I thank you for the opportunity to speak 
today, and I hope you will join me in making the most of this 
historic opportunity. I am happy to take any questions.
    [The prepared statement of Mr. Zuck follows:]
    
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                               __________
    Mr. Issa. Thank you, and thank you for paraphrasing 
Churchill. He never actually delineated whether the British 
parliamentary system or the U.S. republic system and federalism 
was better, so perhaps we can work that out in ICANN.
    Mr. Nadler. The English and Scots are finding out.
    Mr. Issa. English and Scots are finding out says the 
Ranking Member.
    With that, I ask unanimous consent that a rather lengthy 
letter to John O. Jeffrey from David Hosp be placed in the 
record, this letter from the offices of Fish and Richardson. It 
was referred to by the Ranking Member and I am sure will come 
up in our discussions.
    Without objection, so ordered.
    [The information referred to follows:]
    
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                               __________
    Mr. Issa. I will now recognize myself, and I will start 
with a simple question for all eight panelists. The question is 
simple; hopefully the answer will be yes or no.
    Do we need more time? Do we need to exercise the extension 
in order to get it right in the transition?
    Ms. Stark. So, what I would say is it is not about focusing 
on a specific date, Chairman. It is what you said: We have to 
get it right. The stakes are very, very high. Rather than 
trying to put an artificial timeline to this, I think what is 
important is to focus on the work that is being done and the 
progress that is being made.
    Mr. Issa. I will come back to you on this, I promise. But 
briefly, do we need more time than the short time remaining on 
the existing transition?
    Ms. Stark. Certainly for public comment. INTA has actually 
formally requested an extension of time on the comment periods 
for the accountability----
    Mr. Issa. To each of you, do we need more time?
    Mr. Misener. Yes.
    Mr. Horton. Yes, although that is not the fundamental 
problem.
    Mr. Metalitz. Yes, we do.
    Mr. Woodcock. For protocols and numbers, absolutely not. We 
have already been waiting for 4 months. For names, absolutely, 
yes. They need the time to get it right.
    Mr. DelBianco. Yes, we need more time, as the chart 
indicates. And a piecemeal approach, as Mr. Woodcock has 
discussed, leaves a very small piece of the meal for the naming 
community.
    Mr. Issa. Mr. Corwin?
    Mr. Corwin. Chairman, absolutely, we need more time, and in 
particular I would single out that the proposal put out by the 
working group on the naming functions, they need to schedule a 
second comment period. They put out an incomplete proposal for 
only 28 days comment, and they can't send it on to the next 
step until they give us a full proposal.
    Mr. Issa. Mr. Zuck, clean up. What would Churchill say?
    Mr. Zuck. Churchill would say that of course we need more 
time, but not indefinitely. I mean, I think something along the 
lines of 6 months would be enough to really get the proposal 
locked down and get the public comment and feedback and get 
something implemented.
    Mr. Issa. So paraphrasing for all of you, you do support a 
multi-stakeholder transition as long as all the prerequisites 
are met, it is a bottom-up approach, and the transition is one 
that we can live with for the long run. Good.
    Ms. Stark, I am going to go back to you. In light of, if 
you will, .SUCKS, .AMAZON, perhaps the drug explanations that 
were so articulately said, do we need and how do we get, sort 
of point by point, how do we get to the kind of consistency and 
enforcement that is necessary to protect trademark holders, 
copyright holders, and obviously the unlawful acts on the 
Internet that are prohibited?
    Ms. Stark. So, I think that the answer--thank you very much 
for that question, because I think it gets really to the heart 
of the matter. I think the real answer is that ICANN needs to 
actually enforce its existing contracts and policies. In a lot 
of these regards, we are not asking for something new or more. 
We had a multi-stakeholder process from the bottom up that 
developed the rights protection mechanisms, that developed the 
WHOIS policies and other things that exist in the contracts, 
but we are not seeing proper resources devoted to compliance 
and enforcement.
    Mr. Issa. Do you think there need to be management changes 
or structural changes in the management to get that done? In 
other words, they used to do something, they are doing it less 
well rather than better. Do you see that as a management 
failure?
    Ms. Stark. You know, I don't feel that I am qualified to 
speak about their management.
    Mr. Issa. You don't need to name names. [Laughter.]
    Ms. Stark. But what I do think is that it is very important 
for this model to work, that all relevant interests are 
represented and listened to, and that that input is actually 
analyzed in a meaningful way and then incorporated into 
policies and procedures.
    Mr. Issa. Now I am going to ask one more question. It will 
probably get several comments.
    Whether it is .SUCKS, or if you were going to have a German 
version of it, apparently it would be .SAUGT, I have no idea 
what it would be in Italian, in Chinese, in all the other 
possible languages. What I do know is there are 1,025,000 
recognized names in the English language, and if we assume for 
a moment that we are going to promote and allow a proliferation 
of dot-somethings simply to gain more money, do you believe 
that inherently the stakeholders--and I will leave those who 
sell names out of the stakeholder business--the stakeholders, 
the actual users, the people who want perhaps one name for each 
function, perhaps only one name, period, are well served by 
trying to use every possible name in 209-plus languages?
    If I see no answer, I will assume that you all think it is 
really a bad idea to simply proliferate names that end up with 
people having to buy thousands of them.
    Mr. DelBianco. Thank you, Chairman Issa. The notion of more 
names comes about because we find ourselves 10 or 11 years ago 
with 20 generic top-level domains and none of them in a script 
other than the Latin script. In other words, nothing in Chinese 
or Korean or Japanese or Arabic. We hadn't built the Internet 
out.
    So what the community did is allowed people to propose 
names. That is why we ended up with thousands of names 
proposed. There were no rules or structure about knowing that 
we would have one in the complaint category and one in the car 
category. If the community were to move in that direction for 
the next round, we would need several years probably of policy 
to come up with the structure of how many would we have in each 
category.
    There are plenty of conversations along the lines of what 
you suggested, the idea of categories as opposed to wide-open 
season, like we have had in this round. But it would take the 
community to develop that.
    Mr. Issa. Okay. Quickly, because my time has expired.
    Mr. Metalitz. Yes, I would agree. What you have described 
is how ICANN approached this most recent round. And while the 
jury is still out because they are only halfway through the 
round, I think we are going to find that the public has not 
been served by letting anybody who wants to get any domain 
name, top-level domain that they wish without any criteria and 
without ICANN really making any decisions, letting them do 
that.
    Mr. Woodcock. There are technical security reasons for 
allowing a brand TLD, allowing corporations to register their 
own top-level domain in order to be able to secure it more 
effectively.
    Mr. Issa. I will close with just one statement. That letter 
from Fish and Richardson says to me please don't say that this 
is legalized extortion. Please don't say that when we have an 
auctioning process that not only makes more money in debt 
relief to ICANN but, in fact, charges exorbitant prices to the 
very people who already own the intellectual property that is 
effectively being ransomed, please don't call it legalized 
extortion.
    Well, I take great pride that under speech and debate, 
right or wrong, I call it legalized extortion.
    I now recognize the Ranking Member.
    Mr. Nadler. Thank you, Mr. Chairman.
    Mr. Metalitz--I hope I got that right. Mr. Metalitz, a 
recent NetNames study found that 24 percent of global Internet 
traffic is dedicated to the infringing transfer of copyrighted 
content. Other data indicate that 68 percent of the top 500 
pirate sites reside on U.S. registries; 59 percent reside on 
.com, .net, and .org, giving them an air of legitimacy. What 
contractual requirements and obligations should registries, 
registrars and registrants have to deal with this that we don't 
have?
    Mr. Metalitz. Thank you for that question, Mr. Nadler. You 
have correctly stated that we have a huge problem in the legacy 
top-level domains, com and net and org, and that the 
contractual restrictions in their contracts with ICANN are not 
sufficient. One of the things that has been pointed out is 
there may be ways that we can use some of the advances that 
were made in the gTLD space. The new gTLDs had to take on some 
additional commitments to respond to copyright, piracy, and 
trademark counterfeiting in their spaces. We should look at 
applying those to the legacy gTLDs as well. That is part of the 
ICANN answer. Obviously, there may be things that can be done 
on a legislative level because these registries are based in 
the United States.
    Mr. Nadler. To look back----
    Mr. Metalitz. Pardon?
    Mr. Nadler. To look back and apply some of what is being 
applied to the new domain names to the old ones.
    Mr. Metalitz. Yes, and it is a step forward that this 
registrar accreditation agreement does apply to registrations 
in .com and .net. So pirate sites or sites engaged in illegal 
pharmacies can be addressed that way, if those agreements are 
enforced.
    Mr. Nadler. Okay, thank you.
    Ms. Stark, what are your views on the legality of the fee 
structure for early registration of certain premium .SUCKS 
domains at nearly $2,500? I understand there are a set of 
rights protection mechanisms and operators of new gTLDs which 
are intended to achieve the laudable goal of combatting cyber-
squatting. As the chief trademark counsel of a major U.S. 
corporation, do you believe the structure being forwarded by 
Vox Populi with the ascent of ICANN violates at least the 
spirit of the registry agreement? And what can be done about 
it?
    Ms. Stark. I absolutely do believe that it violates the 
spirit of the agreement. I mean, the whole purpose of these 
rights protection mechanisms, like the clearinghouse, were to 
make an efficient system for intellectual property owners to 
protect their rights, and ultimately to help protect consumers 
from confusion and other types of abuse online. So when you 
take that mechanism and use it and turn it on its head to 
create some sort of premium pricing structure so that people 
who are being responsible and taking advantage of the 
mechanisms that the community developed to help them navigate 
this new world and you turn that on its head and turn it into a 
premium pricing structure, I absolutely think that violates the 
spirit----
    Mr. Nadler. So that should be banned.
    Ms. Stark. I do think that you don't----
    Mr. Nadler. That pricing structure, that is, should be 
banned.
    Ms. Stark. I don't think that you want to necessarily set 
premium--I am not saying there can't be premium pricing or that 
you can't have all kinds of pricing arrangements. I just don't 
think that you want to do it in a way that takes something that 
is meant to protect trademark owners and harm them.
    Mr. Nadler. Well, it would be easy--I don't know that it 
would be right, but it would be easy to say no premium pricing 
arrangements. If you didn't say that, how would you distinguish 
decent ones from ones that shouldn't be allowed?
    Ms. Stark. So, I think that is a process that has to come 
up through the community in the multi-stakeholder process. 
There are many different relevant stakeholders in that process, 
and if there are going to be limits on what happens in pricing, 
that should come from the community.
    Mr. Nadler. Okay. So Congress shouldn't do anything about 
this. We should leave it to the multi-stakeholder process.
    Ms. Stark. I think if we really are going to believe in the 
model, there should be oversight but that the model should be 
allowed to work.
    Mr. Nadler. Okay, than you.
    Mr. Zuck, the concerns over new gTLDs and potential IP and 
trademark infringements are well known. But there are extensive 
infringements in the .com space. I understand there are over 
65,000 .com's that incorporate the word ``sucks,'' for example. 
Shouldn't these be equally concerning? And what can you tell 
the Committee about plans for adding additional rights 
protections to legacy gTLDs like .com?
    Mr. Zuck. Thank you for the question. It is, in fact, the 
case that a lot of these issues have come up in the old TLDs, 
as you mentioned, and ``sucks'' shows up plenty of different 
places. So there is a constant and ongoing debate about whether 
there is a difference between the second-level and the top-
level domain in terms of the terms used. I think a strong 
argument can be made that there is closer monitoring needed for 
the top-level domains, the stuff to the right of the period, 
than is necessarily necessary inside of an individual domain.
    I think, as Mr. Metalitz said, I think taking some of the 
new contract arrangements that have been developed for the new 
gTLDs and applying them to the old ones can go a long way. But 
the reality is that a lot of the principles of protection are 
already in place, and it is just an execution issue of getting 
those contracts better enforced. That is the best thing that we 
can do, and to make sure the WHOIS database is accurate so that 
IP owners can go after infringers. Those are the key issues.
    Mr. Nadler. Thank you.
    Mr. Corwin, my last question, because I see the warning 
light is on. In your testimony you say there are too many new 
gTLDs. Will the market take care of an over-supply, or should 
ICANN have limited the number of applications from the outset, 
or should they now limit the number?
    Mr. Corwin. I am not sure I said there are too many. I said 
that the jury is still out on the overall success of the 
program. So far--and I represent professional domain investors, 
and they are being very selective about which new gTLDs they 
are acquiring, new domains.
    The way I have thought about it is what company would 
introduce 1,400 new products in an 18-month period? I don't 
know any company that would do that. The market gets confused 
when there is that much new choice and new product. Even people 
within the community have a hard time keeping up with all the 
new names introduced each week, and as a result we see some of 
the leading top-level domains in terms of total registrations 
offering domains free or for 49 cents to a dollar to hype up 
their numbers, but it is not clear that anyone is going to 
renew those domains when they push the prices up to market 
price.
    So the jury is out, but I just don't personally see market 
demand for 1,400 new ones, of which 800 are for the general 
public.
    Could I just speak briefly to your last question?
    Mr. Nadler. By all means.
    Mr. Corwin. The .SUCKS second-level domain treatment under 
the World Intellectual Property Organization arbitration 
guidance, particularly in North America and the U.S. where we 
have the First Amendment, is if you have company name 
Sucks.com, if it is a Web site used for legitimate criticism of 
a company or an individual, it is not infringement. If it is 
using that name and then infringing on their trademarks or 
their copyright and intellectual property, it is infringement. 
So you have to look at the content of the Web site. But the big 
difference is that nobody with a .com Sucks site is asking 
$2,500 a year to register it.
    Mr. Nadler. Why is that? If I may, why is nobody doing that 
on the legacy TLDs?
    Mr. Corwin. Excuse me?
    Mr. Nadler. Why is nobody doing that on .com? You are 
saying they are doing it on the new ones, they are not doing it 
on the old ones. Why?
    Mr. Corwin. A .com site pricing is frozen right now under a 
Commerce Department decision, and the other incumbent top-level 
domains tended to price around the same amount as .com, around 
$8 per domain per year, simply to be competitive. They couldn't 
get too high above that price and attract customers.
    Mr. Nadler. My time has expired. Thank you.
    Mr. Issa. Would the gentleman briefly yield for a follow-
up?
    Mr. Nadler. I will yield my non-existent time gladly.
    Mr. Issa. Thank you. [Laughter.]
    I just want to follow up and understand this. I have 
looked, and JerryNadlerSucks.com and .org both are available. 
DarrellIssaSucks.com and .org, for anyone that wants them, are 
available, and I am sure someone will find them. But they are, 
in fact, at GoDaddy $9.99 and $7.99, respectively.
    Mr. Nadler. We are not in great demand.
    Mr. Issa. We are not in great demand. But my understanding 
is that AmazonSucks.com has been bought up by Amazon. The fact 
is that there has already been a long legacy of buying names to 
try to protect them. This latest shakedown is because there is 
now a new name and a new opportunity, and it is not available 
for first-come/first-serve. In other words, GoDaddy and the 
other sellers are not out there competing, something that we 
believe in, to try to sell you a name that multiple people can 
sell. You have an exclusive holder of a name who is holding it 
ransom as a form of extortion. Isn't that correct?
    Mr. Corwin. Certainly there is a big difference between 
DarrellIssaSucks.com--excuse me for saying that; it is not my 
personal belief--being available----
    Mr. Issa. The hearing is young. [Laughter.]
    Mr. Corwin. If it is registered, if it is criticizing your 
views on politics, it is okay. If it----
    Mr. Issa. But I am only dealing with the price.
    Mr. Corwin. But you can still acquire it for $9.99 a year, 
not $2,500 a year.
    To answer what Ms. Stark said, there was an ICANN staff 
report on new rights protection mechanisms, and this was the 
numbers as of February. At that time there were 4 million total 
registrations in new TLDs, but there were 25 million claims 
notices generated. Now, let me explain that. When someone 
starts to register a term that is registered in the Trademark 
Clearinghouse, let's say it is Amazon, they get a notice that 
your use of this domain may be infringing, and then it is their 
decision. If they want a Web site about the Amazon rain forest, 
they can go ahead. If they want to pretend they are Amazon, 
they do it at their own risk.
    In my opinion, there were not six times as many attempts to 
register infringing domains as there were actual domains 
registered at that point in time, and I have written an article 
about this. I have talked to the Trademark Clearinghouse people 
at the INTA meeting last week in San Diego. The only 
explanation I can get is that some parties--and they may be 
operators of new registries--began registrations not with the 
intent of registering domains but to find out--every time they 
get a claims notice back they say, oh, that name is in the 
clearinghouse, and now I can set a premium price for it. So a 
mechanism that was put in place to protect trademark holders is 
now being used to set extremely high prices from trademark 
holders.
    Mr. Issa. I thank the gentleman. Our time has expired.
    Mr. Forbes?
    Mr. Forbes. Mr. Chairman, thank you.
    One aspect of the proposed transfer that we have not talked 
about in this Committee but has received attention in the House 
Armed Services Committee on which I serve is what happens to 
the .mil and .gov top-level domains? Even though .mil and .gov 
are used by the U.S. military, first responders, and Federal 
and state government agencies, the U.S. Government may not 
actually own those domains. So I would like to ask Mr. Corwin 
and Mr. DelBianco whether you agree that a reasonable condition 
of the IANA transition should include a written agreement that 
the U.S. Government has an exclusive, perpetual, no-cost right 
to those domains.
    Mr. DelBianco. Thank you, Representative Forbes. It is 
quite easy, I think, for ICANN to give DOD and GSA permanent 
contracts, permanent, irrevocable contracts for .mil and .gov. 
What is harder, though, is to ensure that we have legal reach 
to force ICANN to honor those contracts, and let me explain.
    This is about the risks of having a .gov or .mil be 
redirected during an emergency, like a coordinated attack on 
U.S. systems and infrastructure. For over 100 countries, their 
.gov domain is at the second level, to the left of the dot of 
gov.ca for Canada or .uk for the U.K. Another 50 countries have 
.mil to the left of the dot for their country code.
    What is the difference? Well, their .gov and .mil is housed 
in a server on their soil, under their law and under their 
total control. For the U.S., it is a little different. As the 
inventor of the Internet, our .mil and .gov are at the top 
level, or the root of the DNS, and that is what the IANA 
contract is all about.
    So we ought to ensure that ICANN remains subject to U.S. 
law and that the root remains physically on U.S. soil to 
address the concerns that you brought up, and we have a stress 
test on that, you will be glad to know we found that Article 18 
of ICANN's bylaws requires the principal office of ICANN to 
stay in California, and if ICANN board attempted to change the 
bylaws, one of those new powers I described earlier could block 
that change.
    But if this community and this Committee feels strongly, we 
could move Article 18 to the fundamental bylaws of the 
transition. That would mean that the community would have to 
give 75 percent approval of the board's attempt to leave the 
United States' jurisdiction.
    Mr. Forbes. Good.
    Mr. Corwin?
    Mr. Corwin. Just to add to that, this is the legacy of the 
fact that the United States invented the Internet and created 
these two top-level domains for military and government use. 
The transition should, of course, ensure that there are 
permanent contracts for the U.S. to continue operating them in 
perpetuity.
    This is also why it is important that ICANN's jurisdiction 
stay within the U.S. It is also important to maintain U.S. 
jurisdiction because--I want to commend ICANN. ICANN has funded 
two very expert outside law firms to work at the direction of 
the community to design the new accountability measures, but 
they are being designed to fit within the framework of 
California public benefit corporation law, and if the 
jurisdiction ever changes, the accountability measures may no 
longer work or work as effectively.
    So keeping these requires a contract, and making sure that 
it stays stable over the decades requires maintaining U.S. 
jurisdiction.
    Mr. Forbes. Good. Thank you.
    Ms. Stark and Mr. Misener, I am not sure if I will be able 
to get this question in my time, but if you were to visit 
ICANN's Web site and read the description for the Government 
Advisory Committee, it states: ``The GAC is not a decision-
making body. However, there are growing concerns regarding the 
GAC's influence over ICANN's multi-stakeholder process.''
    As representatives who are involved in the multi-
stakeholder process at ICANN, can you shed some light on any 
notable examples where the GAC has interfered in the multi-
stakeholder process which directly impacted your company or 
your respective companies? And what can be done to curb the 
growing influence of the GAC over the ICANN board of directors? 
And what type of unintended consequences do you think the IANA 
transition will have on the GAC?
    Either one of you can get that. I only have about 60 
seconds.
    Mr. Misener. Thank you, Mr. Forbes, very much. We have a 
very clear example of where the Government Advisory Committee 
stepped in and caused the board to reverse what had been a 
fairly straightforward process in which we had applied for a 
.AMAZON and some affiliated top-level domain names.
    We support the proposed accountability reforms for ICANN, 
and I think they are a great idea. But I think, very 
importantly, they can't just be applied prospectively. ICANN 
always should have been accountable, and they shouldn't just 
now start to be accountable when they are forced to be so.
    Mr. Forbes. Ms. Stark, anything you would like to add?
    Ms. Stark. I would just say that we do think that the 
Government Advisory Council plays a very important role in the 
process and should be advisory. But as the Amazon example 
shows, it is dangerous when any one or a few governments are 
able to block what has been the process that was created by the 
full multi-stakeholder community.
    Mr. Forbes. Mr. Chairman, thank you, and I yield back.
    Mr. Issa. Thank you.
    I now ask unanimous consent that the letter that prompted 
the earlier letter from IPC be placed in the record.
    Without objection, so ordered.
    We also are in receipt of a letter from ICANN that I would 
like placed in the record.
    Without objection, so ordered.
    [The information referred to follows:]
    
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    Mr. Issa. We now go to the gentleman from Michigan for his 
thoughtful questions and comments.
    Mr. Conyers. Thank you, Mr. Chairman.
    I would like to follow up on a Nadler-type question, which 
I would start off with Mr. Metalitz. We have discussed 
something about the obligations on registrars and ICANN. Now, 
in your view, are the registrars meeting these obligations, and 
is ICANN enforcing them sufficiently?
    Mr. Metalitz. Thank you, Mr. Conyers. Well, with respect to 
the particular obligations I talked about in my testimony, the 
obligation to investigate and respond when they receive a 
report that a domain name that they have sold is being used to 
carry out illegal activity, no, I do not think that the 
registrars are complying with that, and I do not think that 
ICANN is yet requiring them to do so. This is something we are 
continuing to engage both with ICANN and with registrars about. 
But if you take a snapshot today, these provisions are not 
being enforced.
    Mr. Conyers. Mr. Horton, do you concur with that view? Turn 
on your mic.
    Mr. Horton. My apologies, Mr. Conyers. I concur with part 
of it. Our experience has been a little bit different. As I 
testified, we have actually seen that most domain name 
registrars voluntarily terminate services to illegal online 
pharmacies, and that may be because of the health and safety 
risks involved in that particular area. It is a relatively 
small number of domain name registrars that are responsible for 
most of the problem. But again, I am only talking about one 
particular area of abuse. We don't keep data on these other 
types of areas.
    I do concur, however, that when a complaint is submitted to 
ICANN compliance, that they are not requiring compliance with 
Section 3.18. The core problem is this phrase ``to respond 
appropriately.'' What does that mean? They have latitude to 
interpret that, and they have not done so in an effective way.
    Mr. Conyers. Ms. Stark, how do you weigh in on this 
question?
    Ms. Stark. I agree with Mr. Horton that there are some 
registrars that are very good about responding. But I do think 
that ICANN has not devoted enough resources in general to 
compliance, and that there are important parts of the contract 
that need greater attention from ICANN directly.
    Mr. Conyers. Now, Mr. Zuck, you are on ICANN's IP working 
group. How does your experience stack up to the other 
contributions that have been made thus far?
    Mr. Zuck. Thank you for the question, Congressman. I guess 
our experience has been similar. I have been kind of assigned 
within the intellectual property constituency to be sort of the 
hound dog to the compliance department inside ICANN, and I was 
horrified to discover a few years ago that their database of 
complaints and responses was a folder in Outlook some 10 years 
into the organization's growth.
    So I think that they have come a long way from the 
standpoint of even keeping track of what they are doing over 
the past 5 years, and they still need to do a lot better job, 
and I think that the new gTLD program came at a time that made 
it easy to overwhelm them, but I think they have made some 
progress. But there is certainly a long way to go in terms of 
contract compliance within ICANN. It is not quite the horror 
that it was 5 years ago.
    Mr. Conyers. What other suggestions or experience would you 
like to make on this subject?
    Mr. DelBianco. Thank you, Mr. Conyers. Steve DelBianco 
here. Two other improvements we are making as part of our 
proposal. One is to make sure that when the community feels 
like compliance isn't happening, the community would have 
standing for the first time to be able to file for an 
independent review panel, and the community wouldn't have to 
come up with the $1 million it takes to pay for the attorneys 
and panelists.
    Mr. Conyers. Gosh.
    Mr. DelBianco. So we are building in the ability to 
challenge those decisions, and when the panel comes back with a 
decision, it will be binding on ICANN.
    The second would be that every year when ICANN puts forth a 
budget, if that budget lacks adequate funding for the systems 
that they need in compliance, like Mr. Zuck talked about, lacks 
the funding for compliance officers, we as a community can veto 
the budget until ICANN board comes back with the right budget.
    Mr. Conyers. Yes, sir.
    Mr. Metalitz. Just a footnote to that. Let's not kid 
ourselves about this. There are many issues here where the 
community, the entire community might not see eye to eye. That 
community includes the registrars and registries that, in fact, 
provide over 90 percent of the funding for ICANN, and this is 
the problem that ICANN is facing in trying to develop a culture 
of compliance. It is very difficult to do that when you have to 
negotiate with and enforce rules against the people that are 
writing the checks that pay your salary.
    So this is a problem that is inherent in the model, and I 
think it is something where maybe the community as a whole may 
not see the need, but certainly if you look at American 
businesses that depend on copyright and trademark protection, 
we certainly see the need, and we need some mechanism to make 
sure that ICANN responds appropriately.
    Mr. Conyers. I see that Mr. Horton concurs with that view.
    Mr. Horton. Mr. Conyers, I do, and I think that the 
additional thing that I would urge is transparency. As I 
testified, I think the core problem is that ICANN compliance is 
making decisions about what constitutes an appropriate response 
and then does not explain why. If they are making the right 
decision, what do they have to be afraid about in disclosing it 
to the multi-stakeholder community?
    Mr. Conyers. Thank you all very much.
    Mr. Chairman, I yield back.
    Mr. Marino [presiding]. The Chair now recognizes the 
gentleman from Texas, Mr. Farenthold.
    Mr. Farenthold. Thank you, Mr. Chairman.
    Mr. Metalitz, I understand the importance of protecting 
intellectual property, and what you are asking ICANN to do 
here, though, kind of sounds a lot like what you all tried and 
failed to get Congress to do with SOPA and PIPA. Isn't there in 
effect the forcing down and takedown of Web sites outside of 
the reach of U.S. law on the basis of an allegation of 
infringement without any type of hearing or due process? That 
is kind of troubling to me. Would you like to comment?
    Mr. Metalitz. Yes, I would. I think this is really an issue 
of whether ICANN will enforce the contracts that it has entered 
into. These contracts were negotiated. They were subject to 
public comment. There was a lot of public input, and throughout 
the community there was agreement that these would be the 
contractual standards. Those included concern about how domain 
names were used. Anytime you are talking about how a domain 
name is used, it is often being used to point to content, 
whether it is sales of illegal drugs, whether it is streaming 
and downloading of pirated material. So this is all firmly 
within----
    Mr. Farenthold. The concern remains similar to SOPA and 
PIPA, that you will cast such a broad net that you will 
infringe on people's free speech rights.
    Mr. Metalitz. I think that is a concern, but I think if we 
can have this dialogue with ICANN about the way in which they 
will interpret, apply, and enforce this requirement to 
investigate and to respond appropriately, we can have that 
discussion about what the safeguards would be. But we need 
first to get ICANN to commit to enforcing, and transparently 
doing so, these contracts they have entered into.
    Mr. Farenthold. All right. And, Mr. Misener, given ICANN's 
accountability problems and the tendency to bend to the will of 
government, how can we in Congress ensure that ICANN's problems 
won't become worse and threaten the stability of the Internet 
after the U.S. Government terminates its contract with ICANN?
    Mr. Misener. Thanks, Mr. Farenthold, very much. I think 
what Congress needs to do is ensure that NTIA insists on these 
accountability reforms, that they be made in ICANN's bylaws as 
a condition precedent to the actual transition of the IANA 
functions. Also, of course, it would be a very positive sign if 
ICANN were to move ahead with the .AMAZON applications, which 
were very lawfully filed, and the government interference came 
in and----
    Mr. Farenthold. I am concerned about--actually, I am going 
to do that question second, and I will open this to folks on 
the panel.
    At what point do we see such an explosion in top-level 
domains that it becomes worthless? The idea behind more top-
level domains was to give more people the ability to register a 
domain name. But if I have to register blake.com, blake.net, 
blake.org, blake.biz, blake.us, blake.sucks, where does it 
stop? Why shouldn't just general intellectual property law say 
you can't register somebody's trademark in any global top-level 
domain, rather than, as Chairman Issa pointed out, extorting 
companies to register potentially thousands of variations of 
their domain names?
    Mr. Corwin, you seem eager to jump on that.
    Mr. Corwin. Well, I think we are carrying out this 
experiment now with the first round of top-level domains and we 
are going to see what the market demand is. It was very 
expensive for these applicants to bid for each of these so-
called strings. There was a $185,000 application fee. The 
average cost, when you put in the consultants and attorneys and 
the back-end technical providers, you are talking about half-a-
million to a million dollars per application just before you 
open it. If there is no market for this, it is hard to think 
that those types of applicants will be there at the next round. 
There may be .BRAND applicants. Hopefully there will be more 
applicants in foreign letter characters, Arabic and such.
    But the key thing here--and then there are other costs. 
Dot-SUCKS, for example, had to spend an additional $3 million 
to win an auction because they were one of three applicants for 
that.
    So I think the market will take care of this to some 
extent.
    Mr. Farenthold. I see a business opportunity in registering 
.SUX.
    Mr. Corwin. But in terms of pejorative terms like that, 
``sucks,'' there has to be some type of public interest 
standard. If that is allowed to proceed, why wouldn't we see in 
the second round applications for .LIAR, .CRIMINAL, .BLOWS the 
type of top-level domain that no person or company wants to be 
associated with?
    Mr. Farenthold [continuing]. Blake.sucks.com defensively.
    Mr. Corwin. The program should provide names that people 
want for positive reasons, not that they want to buy to protect 
themselves.
    Mr. Farenthold. Ms. Stark, did you want to add something? I 
am running out of time. Quickly.
    Ms. Stark. I do. I just want to say that I don't think 
trademark owners in general are battling against free speech, 
and that is what a total prohibition of any domain names that 
contain an existing trademark would be. Trademarks are created 
out of language, and there are fair uses, and there needs to be 
a balance between free speech and what is intellectual property 
protection.
    But I will say that in such an expansive new world, every 
brand owner of every size, my company included, is very 
resource challenged on how we are going to adequately protect 
what are valuable corporate assets that we have invested in for 
decades in this new world.
    Mr. Farenthold. Thank you.
    I see my time has expired, Mr. Chairman.
    Mr. Marino. Thank you.
    The Chair now recognizes the Congresswoman from Washington, 
Ms. DelBene.
    Ms. DelBene. Thank you, Mr. Chair, and thanks to all of you 
for being here with us today.
    Mr. Misener, I wanted to follow up on the opinion on 
Amazon's application for .AMAZON. It seems like it has 
basically been a draw at this point. The opinion found there 
wasn't a basis for ICANN to turn down your application but also 
found that Amazon didn't have a clear right to have its 
application granted. So I wondered if you could explain for the 
Committee the process that you went through and what 
information was made available concerning ICANN's decision-
making process for you, and kind of what comes next.
    Mr. Misener. Thank you very much, Ms. DelBene. It really 
wasn't and isn't a draw. It is a loss for us. The reason why is 
we are the ones who filed the application for .AMAZON and its 
Chinese and Japanese language equivalents, and we have, to 
date, been denied. No one else filed for those. No one else has 
intellectual property rights to those names, including the 
countries in that region.
    Those countries exerted influence over the Government 
Advisory Committee, which then persuaded the board to deny our 
applications. We followed the rules that had been developed 
over that 3-year process, that multi-stakeholder process. It 
was very clear in the guidelines, which are the rules that 
govern the application process, that the name ``Amazon'' was 
not in the prohibited class of geographic names. There is a 
whole list of lists, actually, within the guidebook, a very 
expansive list that includes things like Brazil and .BR and 
Peru, but nowhere is Amazon included in any of these lists.
    So that process, which had developed the list of lists, 
just simply was ignored, under pressure from these other 
governments. Unfortunately, and it pains me to say so, but the 
U.S. Government ended up abstaining when they could have 
objected to this treatment of an American company.
    Ms. DelBene. And so what comes next now on your side?
    Mr. Misener. Unclear. We have other options, I suppose, 
legally. But the main thing, it seems to me, is during this 
extended, now IANA transition process, ICANN should take this 
opportunity to make itself whole in this regard. The adoption 
of accountability reforms is coming, and those accountability 
reforms should not just be applied prospectively. They should 
be applied as if they existed today. ICANN always should have 
been accountable, and if ICANN considers the new, improved 
review processes that are going to be adopted and considers 
them being applicable from Day 1, then that I think would solve 
our problem.
    Ms. DelBene. Thank you.
    Mr. Misener. Thank you.
    Ms. DelBene. Ms. Stark, I understand that part of the 
process for launching the new gTLDs is that ICANN established a 
committee of trademark law experts that made recommendations 
for stronger and more efficient protection of trademarks, and 
that many of their recommendations were adopted by ICANN, 
including a newer, faster, and cheaper procedure to take down a 
domain name that is violating a trademark owner's rights.
    Can you compare what happened there and contrast that with 
how things existed in the .com regime, and provide any examples 
for the Committee of instances where a domain name was taken 
down based on those rules?
    Ms. Stark. I am sorry, I don't have an example just off the 
top of my mind, but thank you for that question because the 
rights protection mechanisms are, of course, of great concern 
to INTA and all of its members. I think the new mechanism that 
you are talking about is the URS system, and there is one key 
difference with that that has made it maybe not the most 
optimal solution for trademark owners, and that is that at the 
end of the day, the domain name that is in question and that 
may be problematic is not actually reassigned to the owner, the 
trademark owner, at the end of that process.
    So, yes, there are some efficiencies to the process, but I 
think that the ultimate resolution can be less than ideal for a 
lot of brand owners. So you will see that, even though it might 
be more expensive and take more time, there are a lot of brand 
owners who are still resorting to what is called the UDRP, the 
Uniform Dispute Resolution Process, because that does include a 
transfer of the domain name at the end of the proceeding.
    Ms. DelBene. So do you think we have the right process in 
place, or what do you think we should do differently based on 
your learning now as we look towards----
    Ms. Stark. You know, I would say that the process is always 
evolving, as we have seen with ICANN in general, and that while 
we have constantly tried to be an important voice in that 
multi-stakeholder community, to achieve the right balance 
between rights protection and innovation and competition and 
choice and free speech, I don't know that we have totally 
gotten to the right place. I think that the IPC in particular, 
but as well the BC, and even the Brand Registry Group within 
the ICANN community, are continuing to think hard about these 
kinds of issues, and as we see new spaces get launched, and as 
we see new behaviors, what we can do to make sure that the 
right balance is achieved.
    Ms. DelBene. Thank you.
    My time has expired. Thank you, Mr. Chair.
    Mr. Marino. Thank you.
    I am going to recognize myself for 5 minutes of 
questioning.
    This question is for Ms. Stark. But, Mr. Metalitz and Mr. 
Zuck, if you have a different answer, would you please respond 
briefly?
    Today, U.S. companies face ever-increasing intellectual 
property threats as more and more Web sites provide access to 
pirated content and counterfeit goods. I would like to ask 
about the registrar's accreditation agreement that required new 
obligations for registrars when presented with evidence of 
copyright or trademark infringements or other illegal 
activities.
    Ms. Stark?
    Ms. Stark. Thank you very much for that question. I think 
that piracy, of course, is really of great concern to my 
company in particular, but also counterfeit merchandise and 
other products like you have talked about in the pharmaceutical 
world are very important to INTA and its members. So this is an 
issue very near and dear to our hearts.
    What I would say is, at a minimum, what we need to see is 
ICANN enforcing what already exists in the contracts. That 
would be WHOIS. That would be also contract compliance. If they 
have registrars who are not responding in the appropriate ways 
when they are notified of this type of illegal and infringing 
behavior, then there needs to be some teeth in the mechanisms 
that already exist, and I think that would be the thing we 
would hope to see the most.
    Mr. Marino. Thank you.
    Mr. Metalitz, do you find that successful?
    Mr. Metalitz. Yes. I would just add to that that the 
requirement that Ms. Stark is referring to is to take 
reasonable and prompt steps to investigate and respond 
appropriately to reports of abuse, including reports of the 
kind of illegal activity you are talking about. That is what 
needs to be enforced. This is not a question of any kind of 
automatic takedown. It is investigating and responding 
appropriately. That is not happening now, and we don't have the 
transparency to even see what ICANN thinks is appropriate in 
this setting.
    Mr. Marino. Thank you.
    Mr. Zuck?
    Mr. Zuck. Yes. Piracy is a growing concern for the app 
industry around the world. And so I support what has been said 
before, but I would also suggest that these new accountability 
measures we are putting in place is in large measure what has 
been missing from the universe in which we have been operating 
to date. So having the ability to actually enforce some 
discipline upon ICANN and to enact real and binding reform 
inside of ICANN I believe is the key to getting the kind of 
contractual compliance office inside ICANN that we have all 
been waiting for.
    Mr. Marino. This question is for Mr. DelBianco. In 
testimony before the Subcommittee last year, NTIA Administrator 
Strickling spoke of the importance of ensuring a stable legal 
environment for the IANA services. He subsequently informed the 
Committee that while he considered the U.S. to provide such an 
environment, that the stakeholders that are developing the 
transition plan are better placed to examine whether ICANN 
should continue to remain subject to U.S. law post-transition 
or not, he declined to answer whether protections need to be in 
place before the transition occurs to ensure that ICANN remains 
subject to U.S. law after completion, thereby admitting the 
possibility that this is negotiable.
    It seems to me that it is essential that ICANN and IANA 
function operators remain subject to U.S. law going forward, 
and that there is no better legal environment to ensure the 
continued stability of these operations. I would like the 
record to reflect the opinion of you concerning this. What say 
you? I know I threw a lot at you right there.
    Mr. DelBianco. You did, but you started by pronouncing my 
name perfectly, which comes from Marino to DelBianco. No 
problem.
    In an answer I gave earlier to Representative Forbes, I was 
reflecting not only my own revised opinion but that of the 
Community Working Group, who took a look at whether ICANN's new 
bylaws should reflect a commitment that was made in the 
affirmation of commitments, a commitment to maintain its 
headquarters in the United States. And when you maintain 
headquarters or principal offices in the United States, that 
would mean that their legal presence includes the United 
States.
    At the Commerce hearing in the Senate in February, ICANN 
CEO Fadi Chehade? repeated his commitment that they would honor 
that. But the working group did not believe that any one 
person's commitment would matter and that the affirmation, 
frankly, could be discarded by ICANN with 120 days' notice.
    So we followed through on your question by ensuring that 
the bylaws of ICANN reflect that its principal offices would 
remain in California, and while the community might be able to 
approve a change to that, the board could not do it on its own. 
The board could not change the bylaws to remove the presence in 
California unless the community elected to approve that, if we 
make it a fundamental bylaw. That is 75 percent of community 
voting members, and we have the voting ratio set up in our 
proposal. That would mean that it would be a very popular 
decision to vacate the principal offices in California. It 
would have to have overwhelming support, 75 percent of the 
global community, not easy to get.
    Mr. Marino. Thank you. My time has expired.
    The Chair recognizes the Congresswoman from California, Ms. 
Lofgren.
    Ms. Lofgren. Well, thank you.
    As the chair of the California Democratic delegation, we 
thank you for keeping the facility in California.
    I would like to ask unanimous consent to put in the record 
a letter dated today from the Electronic Frontier Foundation, 
Mr. Chairman.
    Mr. Marino. Without objection.
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    Ms. Lofgren. I would note that basically the Electronic 
Frontier Foundation makes the point that those who are 
suggesting that ICANN require the suspension of Internet domain 
names based on accusations of copyright or trademark 
infringement are effectively making the same proposal that was 
the centerpiece of the Stop Online Piracy Act, otherwise known 
as SOPA, that was dropped by this Committee after millions of 
people melted the phone lines here in the Congress, and at that 
time 83 Internet engineers warned that we cannot have a free 
and open Internet unless its naming and routing system sits 
above the political concerns and objectives of any one industry 
or company, and that the only way a domain name registrar can 
address copyright infringement accusations is by suspending its 
domain name. It goes on with other issues.
    My colleague, Mr. Farenthold, was talking about the 
contractual obligations that ICANN has, but one of the things I 
believe he did not mention that I think is key is that the 
registrars are required to take an action where there is a 
court order or an administrative finding, not based on mere 
allegations of wrongdoing, and I think that is an essential 
element that has been missing here in this discussion.
    I think we are still in the brave new world of the 
Internet, and one of the things that I think is interesting is 
whose law applies where. In listening, Mr. Horton and Mr. 
Metalitz, to your testimony, talking about Web sites that are 
selling pharmaceuticals, whose law applies? If you go to a 
chemist in Britain and you buy aspirin, you can get aspirin 
with codeine over the counter. You can't get that in the United 
States. If you go to Mexico, you can buy antibiotics over the 
counter. You certainly can't do that here. But you can't buy 
Sudafed in Mexico even though you can do that here.
    So I notice, Mr. Horton, that your redress was really to 
U.S. sites, as well as you, Mr. Metalitz, even though the Web 
sites complained of were really apparently operating in other 
countries and, so far as I know, complying with the laws of 
those countries. For example, the Romania server that you 
mentioned, Mr. Metalitz. I am not an expert on Romanian 
copyright law, but I believe they do have a right to make 
private copies for personal use or for what is called normal 
familial groups that would probably be infringement here in the 
United States. So whose law applies?
    Mr. Horton. I will go first. Congresswoman Lofgren, that is 
absolutely incorrect. First of all, as to your point about a 
court order, ICANN has stated in writing that a court order is 
not required in order for a registrar to take voluntary action 
and suspend a domain name.
    The rogue Internet pharmacies that we notify registrars 
about are not operating legally anywhere. There is not a single 
country in the world in which it is lawful to sell prescription 
drugs without a prescription, to practice pharmacy without a 
pharmacy license, or to violate that country's drug safety 
laws. Every single domain name that we notify a registrar about 
is operating illegally everywhere it targets, and most of this 
is common sense. This is very easily verifiable on the face of 
the Web site, like the heroin Web site that I mentioned.
    Mr. Metalitz. If I can respond on the copyright issue.
    Ms. Lofgren. Yes.
    Mr. Metalitz. First of all, I don't have the EFF letter, 
but as you read it----
    Ms. Lofgren. I just got it, too.
    Mr. Metalitz. I don't think anybody on this panel is 
advocating what that letter says. We are advocating enforcement 
of a provision that says registrars shall take reasonable and 
prompt steps to investigate and respond appropriately to any 
reports of abuse. There is nothing in here about automatic 
takedown or without any verification. So that is point one.
    Number two, on the applicable law, I think actually this is 
less of a problem in the copyright area than in almost any 
other area because we have a much clearer international 
standard. One-hundred-seventy countries belong to the Bern 
Convention. Approximately the same number of countries belong 
to the World Trade Organization----
    Ms. Lofgren. Well, if I may interrupt, in Britain, for 
example, they don't have a First Amendment, and they broadly 
constrain what we would consider to be inviolable free speech. 
They outlaw some of what their press does. That would not be 
effective here in the United States.
    Mr. Metalitz. In copyright and in trademark as well, there 
is much more of a uniform international norm than there is on 
free speech issues or on any of these other issues. So, it is 
not a non-issue, but----
    Ms. Lofgren. Well, my time is up and, Mr. Johnson, I want 
to respect his time. I will pursue this further after the 
hearing, and I think there are some things that need to be 
clarified.
    I thank the Chairman for his indulgence.
    Mr. Marino. The Chair recognizes the gentleman from 
Georgia, Congressman Johnson.
    Mr. Johnson. Thank you.
    I would like for you to continue your comments.
    Mr. Metalitz. Yes. Thank you very much, Mr. Johnson. My 
only other point was, I mean, the example about private copying 
under Romanian law, this is not an issue of private copying. 
The itemvn.com Web site that we cite in our testimony is 
streaming and allowing downloads of music that hasn't been 
released yet, and before it is released it is available on that 
site without any license. So this is not private copying at 
all.
    Mr. Johnson. So what we are really talking about is the 
ICANN Government Advisory Committee enforcing the rules that 
the stakeholders have agreed to in the 4-year process that it 
took to come up with this applicant guidebook, and you just 
want enforcement of the rules.
    Mr. Metalitz. Essentially that is right, Mr. Johnson. This 
is a contract that we are talking about here that was entered 
into between ICANN and all of these registrars. It was a multi-
year process to develop this contract, but it is down on paper 
now. Let's make sure that it is enforced and that we understand 
what the ground rules are.
    Mr. Johnson. And, Mr. Misener, you complain of Amazon's 
adherence to the rules in applying for a gTLD which 
incorporated your very name that you have a trademark on. 
Though it may denote some geographic area, that geographic area 
or that geographic name was not among the names that were set 
forth in the applicant guide book which were to be prohibited 
from being assigned. So you applied for .AMAZON, and the 
countries of Brazil and Peru, through which the Amazon River 
runs, objected. I don't know what the basis of their objection 
was, but apparently your view would be that there was no basis 
in the rules to object based on geography. So you engaged in 
negotiations with those two governments and nothing happened, 
and so when it went to a decision the ICANN Government Advisory 
Committee recommended disapproval or denied your approval. Your 
contention is that there is no basis in the rules for that 
denial. What is your remedy?
    Mr. Misener. Mr. Johnson, thank you so much. That was a 
perfect summary of our circumstance.
    The remedy, frankly, is to ensure that NTIA ensures----
    Mr. Johnson. Well, outside of the NTIA adherence to its 
guide book, how can you enforce, or is there some kind of 
independent review? Because if you are going to have some 
accountability and some reliability and transparency and a rule 
of law, which is what the guidebook represents, a rule of law, 
there can be disputes about the meaning and intent of the 
rules, and so you would have to have some body to make a fair 
and impartial decision based on the clear language of the 
guidebook. What remedy exists to enable Amazon to have a day in 
court, if you would?
    Mr. Misener. Thank you, Mr. Johnson. There is not a good 
remedy right now within ICANN. One of the proposed reforms for 
ICANN accountability would establish a stronger independent 
review process within the body. So that process presumably 
would have allowed us to have our day in court without the 
government influence that occurred. We are just afraid because, 
frankly, there is very strong bipartisan support in the United 
States, also support between Congress and the Administration 
that the Internet should remain free of government control, and 
right now it is not.
    Mr. Johnson. Let me stop you right there and ask Mr. 
Woodcock, why did the U.S. abstain from weighing in on the 
decision as to Amazon's registration of that name?
    Mr. Woodcock. Fundamentally this is an issue that I have no 
particular expertise on because it is not my area.
    Mr. Johnson. Excuse me. Does anybody know why? Can anybody 
say why? Was it a procedural advantage that the U.S. would 
retain from abstaining? Anybody know?
    Yes, Mr. Zuck.
    Mr. Zuck. I guess I don't know for sure what their 
motivations were, but I continue to believe that the IANA 
contract itself is a cumbersome and unwieldy form of 
accountability, and that the U.S. finds itself in a very 
difficult position to exercise its will over ICANN in that way, 
and the other ways that it can exercise its will is through the 
GAC, through the international organizations which participate. 
But I think the replacement of that accountability mechanism 
with real accountability to the community is the key going 
forward.
    Mr. DelBianco. And, Mr. Johnson, I wasn't in the room. None 
of us were in the GAC room when they made the decision whether 
to block the .AMAZON. So you can chalk it up to perhaps it was 
politics. Maybe it was substantive. But more than likely, it 
was about the politics that go on as Nations decide how to 
support or oppose each other. But after that happened, the 
ICANN board had the opportunity to respectfully say we don't 
agree with your advice, and the board itself has that 
opportunity. In today's world, if we don't like the decision of 
the board, it is incredibly expensive, and only a few parties 
would have standing to be able to challenge that board decision 
and to have it be reviewed by an independent panel, and if that 
panel came back and said the board was wrong, the board could 
still ignore the panel.
    This is why the reforms we have described would turn that 
upside-down so that aggrieved parties could appeal, and if the 
community, 75 percent of us, agreed, ICANN would pay the legal 
fees. And if the panel came back and said your decision was 
wrong, the board would have to do it over.
    Mr. Johnson. Thank you.
    Mr. Issa [presiding]. Thank you.
    I am just going to make a very quick follow-up as a close. 
In the Fiscal Year 2016 Commerce-Justice-State, language has 
been inserted for a second year--it was in last year--and it 
prohibits NTIA from using funds to relinquish IANA function. In 
other words, until the end of the Fiscal Year 2016, this 
transition would not be allowed to go forward.
    Does anyone see that as anything other than the minimum 
that we should do within Congress' authority? In other words, 
slow down this process. It is not a renewal. It simply allows 
them not to relinquish.
    Yes, sir?
    Mr. Woodcock. Again, I think that there is a huge 
distinction to be made between the names community and the 
protocols and numbers community. The protocols and numbers 
community are peers, if you will, with ICANN. They develop 
policy globally through the multi-stakeholder process, and the 
result of that policy is merely copied over through the IANA 
process.
    Mr. Issa. I understand that the numbers resolve just fine, 
and nobody knows that I am 143196, et cetera. The reality, 
though, is that governance is a package deal, wouldn't you say? 
That trying to separate them would create a greater 
bureaucracy.
    Mr. Woodcock. I disagree, respectfully. The three are 
completely separable. There are no interconnections between 
those three functions, and moving two forward on schedule would 
show good faith that the U.S. Government is not willfully 
impeding a global process.
    Mr. Issa. Noted.
    Anyone else?
    Yes, sir.
    Mr. DelBianco. Thank you, Mr. Issa. I believe you said it 
right, governance is a package deal, especially when we are 
saying that leverage is necessary to get ICANN to agree to the 
rather tough reforms we are trying to impose upon them. So I do 
think we should keep them together. I think the Commerce 
Department will make a responsible extension of the IANA 
contract, and then what Congress does with respect to the 
rider, all of which are moving parts that have to overlay.
    The chart I had up earlier showed that possibly the 
earliest is next spring, 2016. It might well likely leak into 
much later in 2016, and yet Commerce needs to have enough 
leeway to spend the resources necessary to answer your 
questions and to make sure that the stress tests have been 
applied, to make sure that the conditions have been met. Thank 
you.
    Mr. Issa. Thank you.
    Mr. Misener, the Administration abstained from weighing in. 
Do you believe that they should have weighed in on this issue 
rather than leaving it as it ended up?
    Mr. Misener. Yes. They should have maintained their 
opposition to this treatment of Amazon. They initially were 
supportive, but 2 years ago I met with the relevant leaders of 
both NTIA and State, and they told us that they were going to 
abstain. We objected both on our private interests, but also on 
the precedent that had been set for the multi-stakeholder model 
and the U.S. support of that model and its commitment to it. We 
were disappointed, for sure.
    Mr. Issa. And ICANN, as I understand it, had the ability 
not to issue the name, period, simply to take it back and say 
it was a big mistake, we are not going to have a .AMAZON. Isn't 
that right?
    Mr. Misener. Well, that would have been an abrogation of 
the multi-stakeholder process which came up with that very 
definitive list of list of names on which Amazon was not 
included.
    Mr. Issa. You know, George Carlin had seven names he used 
on television, only to find out it locked him out of 
television. Isn't it possible, or isn't it prudent that even 
when names bubble up through a multi-stakeholder process, that 
when down the road you discover, like the first day of battle 
you discover that your battle plan had flaws in it because the 
enemy found them, shouldn't there be a process to go back 
through that loop and say is it really necessary to have 
.thisisstupid?
    Mr. Misener. Well, certainly we are looking for an 
accountability process to be adopted so that there can be 
strong accountability for the organization. But we have 
something like 1,600 trademarks worldwide that incorporate 
Amazon, 149 different countries worldwide, including in Brazil 
and Peru. Those are protected trademarks. That is our global 
brand. It is our core business brand. So we feel very slighted 
by the participants in the GAC who decided that some 
geopolitical interest simply trumped our IPR.
    Mr. Issa. It is interesting that in over 200 years of this 
Nation, and obviously longer than that ago that the Amazon 
River was named, nobody seemed to have come up and named their 
company Amazon. And yet you do it, and the next thing you know 
it is a great name for the whole world to have in a .AMAZON.
    Let me just close with a question.
    Mr. Johnson. Mr. Chairman?
    Mr. Issa. Yes, sir.
    Mr. Johnson. If I might just ask one question.
    Mr. Issa. Of course.
    Mr. Johnson. Is it a fact that the name .AMAZON is still 
available to a different registrant?
    Mr. Misener. It could be, and that is a serious concern of 
ours, that this could come up in a subsequent round and then be 
available to someone else who might have obtained that name, 
and then we would be in a very difficult position to try to 
protect our IPR worldwide.
    Mr. Johnson. Thank you, Mr. Chairman.
    Mr. Issa. Great question.
    Earlier I named some other sites that end in .com. I just 
want a yes or no because I think these two questions could be a 
good yes or no. Isn't it true that the most desirable ending, 
by far, is .com for almost anybody who wants it? It is the 
first choice of every registrant? Is that correct? Does anyone 
disagree with that?
    Yes, Mr. Corwin.
    Mr. Corwin. Representing a trade group of domain investors 
which carefully watches what market value is placed on Web 
sites, .com domains, short non-infringing dictionary words with 
.com continue to command the highest price in the marketplace. 
That doesn't mean it will last forever, that there won't be 
other new TLDs which challenge that dominance down the road. 
But in today's marketplace a good short, non-infringing name 
with .com is a very valuable asset.
    Mr. Issa. And .com sells first. If people go to find 
something--I use GoDaddy, but you could go to any of them--they 
put a name in, and if .com is available, that is the one they 
take. It is even the default on many of them.
    Mr. Corwin. In fact, even individuals and companies that 
have acquired new TLDs, in many cases that new domain, when you 
type it in, it redirects you and you end up at their older .com 
Web site. So I am not saying----
    Mr. Issa. It is the opposite of whitehouse.com, which takes 
you to all kinds of non-.com sites.
    Mr. Corwin. Yes, don't send your school child to 
whitehouse.com.
    I think as .brands enter the market, big corporations 
advertising at .company, the consumer will start to be educated 
to think more about the right of the dot. But we remain 
primarily in a .com world today.
    Mr. Issa. Okay, and I will get to you very quickly. But 
when Network Solutions had a monopoly, when it was one place, 
they made a lot of money selling these things at less than $15, 
right?
    I have a basic question. If we assume for a moment that the 
charter of ICANN is or should be the interest of commerce--in 
other words, a fiduciary obligation to promote commerce, not to 
enrich themselves, or even enrich people who sell the names--
then is there any real excuse to have a $2,500 price tag on 
any, absolutely any name at all? In other words, first come, 
first served. If you want a name, why does that name need to 
rise above the $10 that .com's are being sold for every day? I 
paid more or less the $10 when I bought DEI.com years ago. I 
think the price was slightly higher when Network Solutions had 
it, but it was still de minimis.
    Mr. Zuck. I feel like we enter into dangerous waters when 
we start talking about trying to control prices in that way.
    Mr. Issa. I didn't ask about controlling prices. I asked 
about----
    Mr. Zuck. I understand. I guess I am saying that----
    Mr. Issa. But please hear the question one more time. If 
the entity, ICANN, has an obligation in its charter, does or 
should have, that says it exists to make that product available 
at the lowest possible price, its process of putting those 
names out--for example, no exclusives, sell the auction, don't 
buy exclusive rights, three people buy it. So when I talk about 
competition gets you an appropriate price and a monopoly gets 
you a monopolistic price, I understand you are saying we 
shouldn't be fixing prices, but we have an entity that has 
.SUCKS and is using its monopolistic power to extort money.
    My question is that if we assume that ICANN exists for the 
public benefit, whether it is Amazon in your fight or any of 
them, and if there were fair competition, meaning people 
wanting to get these out there and nobody being able to camp on 
them unless they pay the fee and own it themselves, obviously 
you would have a reselling market, but in the primary, original 
sale market, is there any reason cost-wise that these names 
would have to cost more than $10 a year?
    Mr. Zuck. Cost-wise, I don't know. But if the market will 
bear that amount of money, it will show up in the secondary 
market anyway. WallStreet.com sold for a million dollars. So 
the truth of the matter is, whether it happens at the outset or 
in the secondary market, it is going to be a function of 
whether there is demand for that name.
    Mr. Issa. Yes, Mr. Corwin.
    Mr. Corwin. It really depends on the specific top-level 
domain. As I said, there was substantial up-front investment to 
apply for each one. Let me give you an example.
    Mr. Issa. There was substantial up-front to apply because 
that was the model ICANN was using.
    Mr. Corwin. I think if it gives positive value to the 
domain registrant and they believe it is worth it, and there 
may be other costs involved--the American Bankers Association 
and the Financial Roundtable applied for and they are getting 
.bank. That is only open to regulated financial institutions. 
They perceive value in that because it will be a tool for 
preventing phishing and other financial scams that are carried 
out through incumbent TLDs, and that validation process and 
other security measures associated with a top-level domain can 
justify a higher price to the registrant.
    You have to investigate each case, but we don't want people 
being coerced to buy domains at much higher prices than they 
would ever pay if they didn't feel that if someone else gets 
that name, it is going to cause them reputational harm.
    Mr. Issa. There does seem to be two prices, the price when 
there is competition and the price when there is extortion.
    I am going to go to Mr. Collins, but I will go quickly to 
you, ma'am. Go ahead, Ms. Stark.
    Ms. Stark. So, I wanted to just address the principle 
underlying your question, Chairman Issa, which is isn't there a 
responsibility to promote commerce and competition, and I think 
by extension innovation? What I would say about the .SUCKS 
example is there are just over 36,000 trademarks in the 
Trademark Clearinghouse today. If each of those brand owners 
take their set of marks that they have in that clearinghouse 
and register them in the .SUCKS space for the $2,499 it costs, 
that is $90 million a year, because you have to renew those 
names each year. So that is $90 million.
    And I think that those costs ultimately, as with any 
business, get passed on to the consumer. So when you break it 
down at its heart, this turns out to be a tax on businesses and 
on innovation and on consumers.
    Mr. Issa. I certainly agree. It couldn't have been said 
better.
    Mr. Collins?
    Mr. Collins. Thank you, Mr. Chairman.
    Again, I think this is interesting to see the results and 
also the discussion over ICANN because of the transition of 
ICANN and the termination of the IANA contract. The two main 
issues are, first, should we terminate that contract? Second, 
are we ready at this moment to terminate that contract?
    The Committee a while back, last year actually, explored 
the first question in previous hearings, so my question and my 
line of thought is going to focus on the second. But based on 
the evidence I have seen--and I want to ask unanimous consent, 
Mr. Chairman, to enter into the record a laundry list of recent 
ICANN failures that should really----
    Mr. Issa. Without objection, the laundry list is placed in 
the record.
    [The information referred to follows:]
    
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                               __________
    Mr. Collins. Thank you. And my wife's part is took out, so 
it is just mine.
    I believe ICANN is engaged in a pattern of behavior that 
indicates their lack of commitment to follow through on their 
contractual obligations that exist today. A multi-stakeholder 
model is effective when the community agreements are respected 
and enforced and when the administrator of ICANN takes 
seriously the responsibilities to live up to the commitments 
they made.
    I am concerned about the lack of accountability and 
transparency I have observed on the part of ICANN. In fact, it 
is probably like an old commercial that we have seen on TV, the 
Cheez-It commercial. I just don't think they are ready, mature 
enough to be baked into a system, into a cracker. This is the 
part that just bothers me because there just doesn't seem to be 
the understanding of the concern that most of us have and that 
has been discussed here today.
    So, a couple of questions. I want to start with Ms. Stark. 
The first is in 2011, you told Congress that the first round of 
new gTLDs would cost the business community conservatively $12 
million in defensive registration fees. Some claim that that 
number was an overstatement. Was it?
    Ms. Stark. No. I would actually say that for some companies 
that are really interested in protecting a whole host of 
brands, the numbers could be even worse. In 2011, I had noted 
that a large corporation might look to register maybe 300 
defensive names in what was then anticipated to be about 400 
spaces, and we averaged that out at just a cost of $100 a name, 
right? That is how we got to that $12 million.
    Well, I think the costs today remain unknown. We haven't 
even delegated maybe half of the names into the space now. But 
you are not looking at 400 names any longer. You are looking at 
over 1,300 new spaces, and from our calculations the average 
sunrise registration in the spaces that have gone forward is 
more like in the $300 to $350 range when you average it across 
all those spaces. So that, again, was triple what we were 
talking about in 2011.
    And then if you look at this .SUCKS example that we have 
been discussing throughout today, you are talking about for a 
single mark it costing $2,499 a year. And like I said, if the 
brand owners register all the marks they put into that 
clearinghouse, that is a cost to business of $90 million a 
year. It is extraordinary.
    Mr. Collins. It is. I want to say right here just one more 
question, and it is a concern that rogue Web site operators are 
increasingly engaging in domain hopping, switching from one TLD 
to another to maintain their brand. For example, there are 
several sites that trade on the piratebay name, even though the 
sites' operators have been convicted of criminal copyright 
infringement. Some of these sites are existing TLDs, the 
piratebay.com, the piratebay.org, and others with new gTLDs.
    Do you think it is fair that rights owners or law 
enforcement take action against one domain only to have the 
same problem arise, basically trading on the same name with a 
different TLD?
    Ms. Stark. I think that that is an extraordinary challenge 
for companies like mine, and I very much appreciate you raising 
it. We are always looking for ways in which to more efficiently 
address these problems without having to tackle people as they 
hop around the world and hop around the Internet from name to 
name to name. I don't know that I have a solution to that, but 
I do think that it really creates a resource challenge when 
what we are trying to do is get out legitimate content to 
people and spur innovation and productivity in that same 
Internet world, and what they are trying to do is simply steal 
it.
    Mr. Collins. And I think this is something that is very 
important because it is sort of the tree here. We are following 
this out, and you can do it in other cases, criminal cases. You 
can do it in others. But especially in this kind of case where 
you have had this blatant kind of hopping around that is 
against, so I appreciate that.
    Mr. Metalitz, how important is it for accuracy and 
integrity of the WHOIS database through the function of 
accountability and the rule of law to the online ecosystem? And 
also, how do these issues intersect with the public interest 
commitment, the registrar accreditation agreement, and the 
other ICANN standards of online accountability?
    Mr. Metalitz. Thank you for that question. WHOIS is 
extremely important. It is a key element of accountability and 
transparency to know who you are dealing with online. ICANN was 
given stewardship of this database 15 years ago, back in the 
monopoly days, right after the monopoly days that the Chairman 
was referring to, and it has not fared well during that period. 
It is less accessible, and it is certainly less accurate, 
apparently less accurate now than it was then, and we have a 
problem now that 20 percent of the registrations in the gTLDs 
are registered to proxy services. It just puts a barrier 
between you and finding out who you are dealing with online.
    I think your previous question to Ms. Stark was very well 
put, and we have two problems there. One is we have some legacy 
registries such as .org. So even after old piratebay.org was 
brought to their attention, and piratebay has been the subject 
of orders in many countries, the people who ran it have gone to 
jail in Sweden for copyright infringement, even after that, 
.org would not take any action on the operators of that 
registry.
    Then we also have a problem with the country code top-level 
domains, the two-letter domains that ICANN has no control over, 
and some of them have been quite cooperative, but some have 
not. So this is another frontier that we still need to deal 
with in this effort to try to enforce our copyrights.
    Mr. Collins. And I think that is something that the 
Chairman and I have worked on a great deal, because if we 
continue this hopping around, if we continue this non-
transparency and this non-accountability, then we are simply 
setting ways that are affecting business. It is affecting 
really that ingenuity, that spirit that we are trying to 
incorporate, and especially when it comes to just blatant 
stealing and copyright infringement, let's just call it what it 
is. So I appreciate that.
    I know Amazon has had an amazing story with ICANN and the 
problems there, and we could go into that. So I wanted to 
recognize that fact. I have seen that. And for all of us here, 
I think it is just an example that ICANN there is the problems 
here, and it is not ready, and I think that is the thing we go 
back to.
    With that, Mr. Chairman, I yield back.
    Mr. Issa. Thank you.
    I am going to close with a question. It is somewhat 
rhetorical, but I will let you weigh in if you want to, and it 
is similar to what Mr. Zuck and I had sort of a back and forth 
on.
    ICANN is a California-registered non-profit. Now, non-
profits, even though they pay their CEO millions of dollars, 
non-profits can only be non-profits if they, in fact, exist for 
a public benefit. So ICANN, contrary to Mr. Zuck and I's back 
and forth, has an obligation for service, and I am of the 
opinion that in a number of examples we have seen here today, 
including how they oversee, if you will, the multi-stakeholder 
process, they seem to have lost track of that. And certainly 
when you see that a relatively de minimis amount of money--it 
cost me less than $10 to get Issa.cc, which happens to be 
international, but it came through the process of you buy it 
online, and a number of others--most times when you want a 
name, if it is available, it costs you $10 or less. But when, 
in fact, it is a name that exists for the purpose of causing 
you to buy it in defense, it has an extortionary price.
    My closing comments--and I will let anyone weigh in who 
wants to--is doesn't Congress have an obligation, along with 
the State of California I might say, to look at ICANN and say, 
you know, ICANN is making a ton of money, they seem to be in 
the operation of making a ton of money. It looks like in the 
case of .SUCKS that they simply wanted to recover a $900,000, 
$1 million IOU from a company that had failed to meet its 
earlier commitments, and this deal was a way to do it with an 
extra incentive to clear up an old balance.
    If somebody disagrees, I would love to hear it. If you 
agree, briefly, and then we will call it a day.
    Mr. DelBianco. At 17 years old, ICANN is really just a 
nascent institution. It is an evolving institution in the most 
rapidly changing industry the world has ever seen. So, guess 
what? Every year, every week, we are going to have new 
problems, just like the ones you have adequately described. And 
when these problems come up, we can't anticipate to say we 
check the box to say they have solved all the problems that 
they have, and they have solved all the problems that will ever 
be in order to say are they ready.
    What we really need to say is that when they make bad 
decisions or implement good decisions poorly, we have got to be 
able to hold them to account, challenge their bad decisions, 
like this decision on the million-dollar fee to the .SUCKS. We 
ought to be able to challenge it, to know about it, and if they 
don't listen to what the community believes, we fire the entire 
board and start with a new board under the same public service 
principles.
    Mr. Issa. Mr. Corwin?
    Mr. Corwin. As a public benefit corporation, they certainly 
have an obligation to act in the public interest, and there has 
been a tremendous amount of money generated by the new top-
level domain program, about a third of a billion dollars in 
application fees alone.
    There is something going on right now that----
    Mr. Issa. Of course ultimately, the auction process, that 
is not serving the public interest. That is making them money. 
The public interest is served when a company like Amazon gets 
value, and I will put it in a term that hopefully you will all 
agree with.
    Horses running alone run slower than a horse with a jockey 
on it. But a horse with a 500-pound jockey doesn't run at all.
    We, in fact, have a phenomenal horse. The naming system is 
what makes a string of first four and now six series of 
sequential numbers actually be usable by the public. That is 
the jockey that is making this enterprise work. When I type 
``fox.fox'' for ``fox.com,'' I get what I want in most cases. 
It works, where numbers would never do that. But if I simply 
put hundreds or thousands of $10 to $2,500 purchases on the 
back of an enterprise, I put a 500-pound jockey on that 
enterprise, as you said so well, Ms. Stark. I am taxing an 
enterprise.
    That public benefit corporation has an obligation to these 
companies. They have an obligation to the stakeholder. The real 
stakeholder is commerce. It is not their enrichment in fees and 
a new set of profiteers that simply are in the business of 
hijacking the system and causing other enterprises to pay for, 
effectively, a heavier jockey.
    We have to end it after this.
    Mr. Woodcock. I think part of the issue is that there is a 
certain degree of complexity and unwieldy-ness to the current 
system. The accountability measures are there to NTIA, but it 
is a three-party system where the services that ICANN provides 
are provided to the community, but we rely on NTIA to provide 
the discipline to ICANN. Making ICANN directly responsible to 
the industry so that industry can provide its own self-
governance is something I think everyone on this panel can 
probably agree to.
    Mr. Issa. Thank you.
    This will be the very last comment because it is time to 
go.
    Mr. Metalitz. Yes, thank you, Mr. Chairman. If I could just 
add the perspective of someone who has followed ICANN very 
closely over the past 15 years and had many opportunities to 
share my perspectives with this Subcommittee, which I really 
appreciate.
    ICANN is an experiment, and experiments don't always work 
out neatly, and they don't always work out effectively at a 
particular snapshot. I think if you take the longer view, many 
of the problems we are talking about here show progress. These 
contracts that ICANN is not yet enforcing, they didn't even 
have these contracts until 2 years ago. And similarly on WHOIS, 
they are taking on the problem of proxy registrations. I don't 
know if they will be able to deal with it effectively, but they 
weren't even taking it on a few years ago.
    So I think we have to look at the bigger picture to see--
you are absolutely right, that as a public benefit corporation, 
ICANN needs to serve the public interest, and I think the 
oversight of this Subcommittee is an important factor. 
Continued oversight will be an important factor in making sure 
they do so.
    Mr. Issa. Thank you, and this concludes today's hearing. I 
want to thank all of our witnesses today.
    Without objection, all Members will have 5 legislative days 
to submit additional written questions for the witnesses and 
additional material for the record.
    I thank you, and we stand adjourned.
    [Whereupon, at 12:44 p.m., the Subcommittee was adjourned.]










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