ICANN Board Provision, Administration's Legal Authority Over IANA Questioned at Hearing

NTIA Administrator Larry Strickling replied to challenges by Senate Commerce Committee members about the Internet Assigned Numbers Authority transition’s purpose and political viability Wednesday. The hearing was the first on the IANA transition this Congress. Strickling told us it signaled a shift in opinion on Capitol Hill about the transition, one that’s moved from rejection to cautious acceptance. Also testifying were ICANN CEO Fadi Chehade and attorney David Gross of Wiley Rein on behalf of the Internet Governance Coalition, as expected (see 1502240059). Chehade said last year’s proposal (see 1408210028), which would have required a two-thirds vote by the ICANN board to reject advice from the Governmental Advisory Committee -- rather than the current simple majority -- has been “taken off the table.”

Strickling said after the hearing that his and the committee’s opinions of the transition are in the “same place.” Both believe the transition must be “done right,” he said. That shows an “interesting pivot” since the transition’s announcement almost a year ago, Strickling said. “Some of the initial reaction was, ‘Don’t do it.’” Strickling pointed to the Senate’s recent passage of S. Res. 71 (see 1502060057), which affirmed the multistakeholder model, as emblematic of a larger shift on the transition. The resolution suggested “how the transition should happen,” rather than “not at all,” said Strickling.

Chehade told the committee that although authoritarian countries wouldn’t be persuaded by the success of the multistakeholder model, the transition’s success would convince many “middle governments” of the model’s viability. Chehade told Chairman John Thune, R-S.D., that ICANN’s board would be willing to send a transition proposal to NTIA that would reduce the board’s power as long as the proposal had the community’s consensus. Thune pointed out that if the FCC decides to classify broadband as a Title II Communications Act service, it might allow the ITU to include Internet governance matters in its remit. That would contradict the longstanding U.S. position that the ITU should only deal with telecom matters, Thune said.

The committee was “engaged and knowledgeable and ready for this hearing,” said NetChoice Executive Director Steve DelBianco afterward. Sens. Steve Daines, R-Mont., and Dan Sullivan, R-Alaska, “showed in-depth knowledge of the industry, as well as the politics behind decisions” like the transition, he said. DelBianco said he appreciated that some of the committee’s Democratic members quizzed the witnesses on “stress tests” for the transition and accountability proposals.

“Is there a problem with one government having a unique role, particularly” when it’s “done a fantastic job?” asked Sullivan. “If there’s not a problem, what are trying to fix?” Sullivan said he wasn’t “convinced” Strickling’s argument that the transition was delayed after the Sept. 11, 2001, terrorist attacks. The transition didn’t happen because there wasn’t a “problem,” he said. Sullivan also questioned the “legal authority” of the administration to transition ICANN, which is the “federal government’s property.”

“There is no government property that is the subject of the [IANA] contract,” Strickling said in response. “All the contract does is designate ICANN to perform the IANA functions; they were given no assets” of the U.S. to perform the functions, he said. “Is there a Commerce Department legal opinion on this issue?” asked Sullivan. Strickling said there is such an opinion, but he didn’t have it on hand. “I think a lot of people would dispute what you’re saying,” Sullivan said. “I think the GAO would agree with us as well” based on a previous study, said Strickling.

Sullivan asked Strickling whether there was a real problem that prompted the transition, considering IANA’s success within U.S. jurisdiction. “There has been a problem, sir,” said Strickling. He cited the 2012 World Conference on International Telecommunications, where about 80 countries voted for the ITU’s increased involvement in Internet governance. “Part of the impetus” behind the votes “was, at that time, the continued irritation” many countries felt, and which was “exploited” by authoritarian countries,” that the U.S.’s special relationship with ICANN allowed it to “control the Internet” in developing countries, Strickling said. After the announcement of the IANA transition, many countries changed their position in favor of the multistakeholder model, he said, citing the last year’s NETmundial conference in Sao Paulo, Brazil. The “exploitation” of the IANA issue by authoritarian governments has been “taken off the table,” Strickling said.

The ICANN community should have the ability to remove board members, said committee member Kelly Ayotte, R-N.H. That should be a “deal breaker" for the transition, she said. “Oligarchs in Russia” are “technically private citizens,” but the concept of private interests is vastly different between Russia and the U.S., Ayotte said, referring to the possibility of the installation of board member from an authoritarian regime. Strickling said such a proposal wouldn’t “necessarily” be a mandatory stipulation of the transition, because such a proposal would need to be evaluated in the “context of our condition.” “Just so we’re clear … that [proposal] is not a deal breaker?” asked Ayotte. “I’m saying we’d have to evaluate it,” Strickling said.

The transition is a “business issue,” said Sen. Claire McCaskill, D-Mo. U.S. businesses are being hurt internationally due to the perception that “this isn’t a true multistakeholder process,” she said. McCaskill expressed concern about the international blowback of extending the transition tentative Sept. 30 deadline by another two years. She asked about the possibility of granting an extension for a “matter of months.” Strickling said ICANN and NTIA could “mutually agree” on a shorter extension if necessary. McCaskill asked Strickling whether he didn’t want to address whether an extension would be “necessary because you’re afraid if you do, an extension is going to be necessary?” “Thank you, senator,” he responded.