A better way to govern the Internet

A previously obscure nonprofit corporation that essentially governs the Internet — the Internet Corporation for Assigned Names and Numbers (ICANN) — has featured prominently in recent news stories due to the U.S. Department of Commerce’s plan to relinquish its key oversight role. Details of this transition will be high on the agenda as ICANN stakeholders meet in Los Angeles this week. Many observers fear that ICANN could soon be subject to the heavy-handed influences of governments that do not share the values that have led to the innovation, flexibility and openness that has hitherto characterized the Internet.

The United States’ proposed withdrawal is the opportunity for a rethinking of ICANN’s governance structure. Moreover, we believe that there is a reasonable solution to ICANN’s longstanding accountability problem that would mitigate concerns of government influence.

{mosads}The accountability of ICANN is a serious problem that has been present since ICANN was created in 1998 as a nonprofit organization incorporated in California. The Department of Commerce at that time retained some residual control through a contract with the ICANN-operated Internet Assigned Names Authority (IANA) to administer the Domain Name System (DNS) — the system of Internet addresses that allows us to access Web pages and to communicate through email.

From the beginning, Commerce’s touch was light and became progressively lighter. Consequently, ICANN, as a nonprofit corporation with a self-perpetuating board of directors, has lacked effective accountability: It has no shareholder-owners to whom it has to answer; it has no donors to whom it is accountable, since it has funded itself through fees on the owners of most domain names; and its customers — the users of the Internet — face a monopoly and have no good alternatives.

ICANN often describes itself as accountable to “the Internet community” or to its “stakeholders.” And ICANN is very good at airing proposed actions (such as its periodic decisions to expand the number of generic top level domains, or gTLDs, such as .com, .org, .edu, etc.) and holding public meetings at which “the community members” are encouraged to voice their views. But “voice” is the operative word. At the end of the day, the ICANN board can do what it wants, largely unchecked — except by the threat that the Department of Commerce might pull the contract. And now even that threat will likely evaporate.

The users of the Internet have been lucky that the organization has functioned reasonably well over the past 16 years. Likely, the U.S. control of the IANA contract helped. But with an organization that is largely accountable to itself, and with no meaningful external controls, there is little assurance that our luck will continue.

Our research shows that many organizations that have coordination and standard-setting functions similar to ICANN’s are governed by their direct users, who have a strong interest in the organization doing its job effectively. In the case of ICANN, those direct users would be the Registry companies that coordinate the gTLDs; the Registrar companies that assign and register the second-level domain names that companies and organizations use (such as aol.com); and the Regional Internet Registries that are responsible for distributing the specific Internet protocol (IP) addresses that are necessary for the Internet to function.

Representatives from these three groups of firms should constitute ICANN’s board of directors — or at least a majority of the board. These groups have a strong incentive and the ability to focus ICANN on the technical tasks of keeping the Internet running smoothly and apolitically and of addressing potential problems that affect the DNS, such as trademark issues. Their interests are also aligned with the business and individual users of the DNS.

The inevitable alternative to this type of fundamental restructuring is a growing government role. Indeed, this is already happening. ICANN recently proposed a change in its bylaws that would require a two-thirds vote of its board in order to reject a recommendation of its Government Advisory Committee, composed of 137 governments and international organizations. Thus, unless something stops this momentum, governments will soon be in control.

The Department of Commerce has publicly stated that it will not accept a transition plan that replaces the U.S. role with a “government led or intergovernmental solution.” It now needs to make good on that pledge. Our proposal provides a workable private-sector accountability solution that would ensure that the Internet continues to be a catalyst of innovation and freedom throughout the world.

Lenard is president and senior fellow at the Technology Policy Institute. White is a professor of economics at New York University’s Stern School of Business.