ICANN For Beginners

Causes of ICANN
Formation of ICANN
ICANN's First Two Years
Why Worry?
Further Reading
ICANN Links
Return to ICANNWatch.org

Causes of ICANN

Despite being famously decentralized and un-hierarchical, the Internet relies on an underlying centralized hierarchy built into the domain name system (DNS). Domain names (such as “www.icannwatch.org”) are the unique identifiers that people depend on to route e-mail, find web pages, and connect to other Internet resources. The need to enforce uniqueness, that is, to prevent two people from attempting to use the exact same domain name, creates a need for some sort of body to monitor or allocate naming. However, control over the DNS confers substantial power over the Internet. Whoever controls the DNS decides what new families of “top-level” domain names can exist (e.g., new suffixes like .xxx or .union) and how names and essential routing numbers will be assigned to websites and other Internet resources.

When the Internet was small, the DNS was run by a combination of volunteers, the National Science Foundation (NSF), and U.S. government civilian and military contractors and grant recipients. As the paymaster for these contractors, the U.S. government became the de facto ruler of the DNS. The Internet’s exponential growth placed strains on the somewhat ad hoc system for managing the DNS, and what had been primarily technical issues became political, legal, and economic problems that attracted high-level official attention. In particular, as attractive domain names in .com began to become scarce, disputes over attractive names became increasingly common, and pressure mounted for the creation of new “top-level” domain suffixes such as .shop or .web. Although technically trivial to implement, the proposals ran into intense counter-pressure from intellectual property rights holders who already faced mounting problems with cybersquatters—speculators who registered domain names corresponding to trademarks and held them for profit. Meanwhile, other governments, notably the European Union, began to express understandable concern about the United States’ control of a critical element of a global communication and commercial resource on which they foresaw their economies and societies becoming ever-more dependent.

Formation of ICANN

ICANN is formally a private nonprofit California corporation created, in response to a summoning by U.S. government officials.

In June 1998, the US Department of Commerce (DoC) and an interagency task force headed by Presidential Senior Adviser Ira Magaziner responded to concerns about the DNS system with the Statement of Policy on the Privatization of Internet Domain Name System, known as the DNS White Paper. Embracing the rhetoric of privatization, the DNS White Paper called for the creation of a private nonprofit corporation to take over the DNS and institute various reforms.

Shortly thereafter, an international group, after meeting in secret, incorporated ICANN as a private nonprofit California corporation. After some negotiation, DoC lent ICANN much of its authority over management of the DNS.

ICANN's First Two Years

In its first two years of life, ICANN has made a number of decisions with potentially long-term effects.

ICANN pushed Network Solutions, Inc. (NSI), the monopoly registry and dominant registrar, to allow more competition among registrars. Most people seem to think this was a good thing.

ICANN also instituted mandatory arbitration of trademark claims. ICANN’s “Uniform Dispute Resolution Policy” (UDRP) requires every registrant in .com, .org, or .net to agree to arbitration before ICANN-selected arbitration providers if any trademark owners anywhere in the world feel aggrieved by their registration of a term similar to that trademark. The UDRP is very controversial -- trademark holders argue it does not go far enough; civil liberties groups argue that the design of the system violates basic norms of due process, and that the arbitrators are not acting fairly enough.

Contrary to its early promises that half of its Board of Directors would be elected from an at-large membership, ICANN announced

that it had no members, and

only 5 of 18 instead of 9 of 18 directors would be elected at large, and

four of the initial self-selected directors would stay in office and

ICANN would conduct a study to determine whether there should be any member elected directors at all!

Most recently, ICANN identified seven new gTLDs that it plans to recommend be added to the root. It also rejected 35 other applications. The selection process was very controversial, and some of the losing applicants are protesting.

Why Worry?

Democratic theory suggests that the absence of accountability tends to breed arbitrariness and self-dealing. In addition to avoiding governmental accountability mechanisms, ICANN lacks much of the accountability normally found in corporations and in nonprofits. Ordinary corporations have shareholders and competitors. ICANN does not because it is nonprofit and has a unique relationship with the Department of Commerce. Many nonprofit organizations have members who can challenge corporate misbehavior. ICANN has taken steps to ensure that its “members” are denied such legal redress under California law. All but the wealthiest nonprofits are constrained by needing to raise funds; ICANN faced such constraints in its early days, but it has now leveraged its control over the legacy root into promises of contributions from the registrars that have agreed to accept ICANN’s authority over them in exchange for the ability to sell registrations in .com, .org and .net, and from NSI, the dominant registrar and monopoly .com/.org/.net registry, which agreed to pay $2.25 million to ICANN this year as part of agreements hammered out with DoC and ICANN.

The result is a body that, to date, has been subject to minimal accountability. Only DoC (and, in one special set of cases, NSI or registrars) currently has the power to hold ICANN accountable. NSI currently has no incentive to use its limited power, and DoC has nothing to complain of so long as ICANN is executing the instructions set out in the White Paper. The accountability gap will get worse if DoC gives full control of the DNS to ICANN. But it should be noted that opinions may differ as to whether DoC could legally give away its interest in DNS to ICANN without an act of Congress. It is likewise unclear what precisely “giving away control” would consist of beyond DoC’s interest in its contracts with the maintainer of the root, since the most important part of anyone’s “control” over the root is publishing data that other parties, many of whom are independent of the government, choose to rely on.