Letter to Commerce Secretary Mineta Concerning New Top Level Domain Names

Secretary Norman Mineta
United States Department of Commerce
14th Street and Constitution Avenue, NW
Washington D.C. 20230

Dear Secretary Mineta:

As you know, the Internet Corporation for Assigned Names and Numbers (ICANN) recently gave its tentative approval to seven new generic top-level domain names (gTLDs). ICANN staff are currently negotiating contracts with the registries for those seven gTLDs, and plan to conclude their negotiations by the end of the year. After these contracts are complete, they will be ratified by the ICANN Board and then, early in 2001, the names of these new gTLDs and the proposed operators of the associated registries will be forwarded to the National Telecommunications and Information Administration (NTIA) of the Department of Commerce. Under its contracts with ICANN and Network Solutions, Inc. (NSI), only NTIA can approve additions to the root file that determine which new gTLDs are visible to most Internet users.

We are writing to you now because we are concerned by media reports that NTIA is prepared to approve ICANN's recommendations without additional process. We seek reassurance from you that these reports are false; whether or not they may have any truth, we formally request that you hold a public hearing before taking any further action on this matter.

As detailed below, our concerns about the process by which TLDs other than country-code domains will be created fall into two main categories. These concerns are particularly strong because decisions on this subject may have a strong impact on the First Amendment right to freedom of speech. First, we believe that the Administrative Procedure Act (APA) applies to any decision by the Department of Commerce, or indeed any agency or agent of the U.S. Government, to create a new TLD outside the previously existing procedures described in the relevant Internet Requests For Comments (RFCs). We further believe that any attempt by the U.S. Government or its agents to decide such an important matter of public policy without adherence to principles of notice and public participation embodied in the APA would be wrong as a matter of principle, and indeed illegal not to mention potentially unconstitutional. Second, we believe that the processes used by ICANN to choose this particular group of seven registry operators, this particular group of seven gTLDs, and the particular conditions that will be imposed on users of these new gTLDs, were all woefully inadequate by any measure. We therefore believe that it is essential for you to carefully consider the substance of this decision rather than to rubber-stamp ICANN's recommendations, and to allow the public to comment before making any decisions. Indeed, we believe that it would be arbitrary and capricious, and a denial of basic due process, to do anything less.

Before outlining the grounds for these concerns, we should emphasize that we are not necessarily opposed to any of the registry operators or gTLDs selected by ICANN. We cannot, of course, have a firm opinion on the conditions that ICANN will require be imposed on registrants in the new gTLDs until the details of these are disclosed in January, although here the initial signs are more ominous. Indeed, one of our concerns is that the process to date has been so inadequate that considered judgments on the merits of the applications for new gTLDs are next to impossible. Rather our immediate concerns are with the prejudice to the rejected applicants, and to the Internet community as a whole, and as to the conditions that will be imposed on registrants in the new gTLDs; more generally, we also are concerned that NTIA's wholesale approval of ICANN's recommendations as to the gTLDs, their operators, and the contractual conditions they will impose on end-users, would each set very unfortunate precedents given the extraordinarily arbitrary process before ICANN to date. Setting such precedents would threaten to harm the long-term health of the Internet.

We believe that there are several major issues at stake in addition to which gTLDs are selected and who gets to run them. Many will emerge from the fine print of contracts currently being negotiated between ICANN and the prospective registry operators. These contracts may impact free speech rights and property rights by either extending ICANN's Uniform Domain Name Dispute Resolution Policy (UDRP) and/or providing additional pre-emptive rights to trademark holders or holders of existing domain names at the expense of the public at large. We believe that it would be a violation of federal law, and of due process, for NTIA to consent to any plan that required individuals to consent to the UDRP as a condition of enjoying a government benefit such as registration in a new gTLD. Each of these issues will require careful consideration in a public process before any decision is made.

Internet Domain Name Decisions May Have Serious Free Speech ImplicationsWhat each sector of the Internet has come to recognize is that a top-level domain makes content visible on the Net. For better or worse, domain names are the road signs for navigating cyberspace. But as long as there is an artificial scarcity of gTLDs, the competition for the most descriptive names will increase and the discord will grow. It is not simply a matter of whether a protest group can register Verizonsucks.com, but whether there will be room for McDonalds Farm of Scotland as well as McDonalds Hamburgers. Furthermore, existing trademark law specifies the rights that both McDonalds Farm and McDonalds Hamburgers have in their names. Any system that offers either one privileges in excess of what trademark law provides creates problems that should be avoided if possible.

A solution to these problems lies in introducing a multitude of new top-level domains, both commercial and non-commercial. More gTLDs will allow Internet speakers to use recognizable channels with less fear of treading on the intellectual property rights of others. McDonalds.com can easily coexist with McDonalds.farm.

ICANN has been far too tentative in allocating the domain space. It has moved far too slowly to add new gTLDs.

ICANN's decision making raises significant issues under the First Amendment of the United States Constitution. ICANN operates under a delegation of authority from the US government, and the Department of Commerce exercises its authority to approve decisions regarding new gTLDs. Thus, whether one focuses on ICANN's actions or the Department of Commerce's, it is clear that the creation of new gTLDs is subject to the mandates of the Constitution. By severely limiting the domain space and by making decisions based on criteria which appear to go well beyond technical issues, it can be reasonably argued that ICANN and/or the Department of Commerce is making content and viewpoint based decisions regarding the value of new gTLDs. In its current form this decision making process would appear to violate basic Constitutional precepts.

As will be explained later, throughout this process, ICANN has failed to recognize the needs of individual Internet users and non-commercial organizations. The combination of artificial domain names scarcity, arbitrary rules for selection of new gTLDs, arbitrary rules for the assignment of names within the new gTLDs, and limits on Domain Name System (DNS) expansion present a serious threat to freedom of expression.

Specific Concerns Relating to this ProceedingBased on this analysis, it would seem especially important for decisions to be made through an open and transparent process. Unfortunately, ICANN's decision making process was characterized by a large number of arbitrary decisions, process failures, and plain mistakes of fact. The process got off to a bad start when ICANN announced that it would require a $50,000 non-refundable fee from domain name applicants, thus skewing the pool towards those organizations able to afford a $50,000 lottery ticket. Despite having received a large number of applications, and thus ample funding, ICANN proceeded to run a chaotic process. The timetable for applications was rushed. Deadlines for public comment were missed, and the period for public input was small.

ICANN's staff report - the main document on which the Board was to base its decisions - was particularly poor. The report appears to have been filled with inaccurate statements about applicants, and to have applied wildly inconsistent criteria to similarly situated applications. The staff report further discriminated against applications the staff decided were unworthy by only subjecting them to limited analysis. As a result, when the Board sought more information about these applications, the staff was unable to supply it, effectively tying the Board's hands since it lacked an adequate record on which to base decisions.

The centrality of the staff report also made the public comment period illusory. The Report was posted online only a few days before the ICANN board meeting, making informed public comment impossible as many participants were already en route to the LA meeting when it became available. Even the applicants themselves were restricted to three-minute comment periods before the Board.

As to the ICANN Board's actual decision-making process, two things are evident. First, this was not a standard-making process. At no time in its deliberations did the ICANN Board ever consider any technical standards issue. The sole questions were those of allocation: which social policies to further by providing a gTLD, which applicants were worthy to manage those gTLDs, which business plans impressed the Board as best-financed, and which names struck the Board as most attractive. To fully appreciate the arbitrary nature of the proceedings one must observe them in their entirety; a recording is available at http://cyber.law.harvard.edu/scripts/rammaker.asp?s=cyber&dir=icann&file=icann-111600&start=0-09-04

Further details are also available in the eight petitions for reconsideration filed by various participants after the Board meeting, at http://www.icann.org/reconsideration

For present purposes, two examples may suffice: ICANN rejected the ".union" proposal based on unfounded speculation that the international labor organizations that proposed the gTLD were somehow undemocratic. The procedures being used gave the proponents no opportunity to reply to this unfounded accusation. Later, ".iii" was rejected because the Board was concerned that the name was difficult to pronounce, even though the ability to pronounce a proposed gTLD had never before been mentioned as a decision criterion.

The Need for a Proper Notice, Comment, and a HearingWhile the need for notice, hearings, and independent deliberation are likely to exist whenever NTIA is faced with a decision whether to create new gTLDs that do not fall under the existing RFCs, the extraordinary poor quality of the ICANN process that produced this list of seven gTLDs and registries underlines the need for NTIA to conduct its own investigation, and produce a reliable record justifying any decision it might take. True, reasonable people might differ as to whether NTIA's decision to create new gTLDs is more properly characterized as rulemaking, rulemaking via adjudication, simple adjudication, or competitive allocation of an artificially scarce resource. Whichever one of these views one takes, however, it is clear that when NTIA, whether acting in reliance on ICANN's recommendations or independently of them, acts to create new gTLDs or to accept proposed registries which intend to impose set conditions on users, NTIA is taking the sort of official action that falls under the APA.

ICANN claims to be a standards body. There is substantial case law regarding the extent to which federal agencies may rely on the work of standards bodies. That case law does not apply to this decision for two reasons. First, in choosing these seven gTLDs, ICANN was not acting as a standards body. The allocation of a disputed and valuable resource to some claimants over others is not an act of standard-setting. Even if it were, the quality of ICANN's procedures in reaching this decision were so far below any minimum reasonable standard that it would violate due process to rely on them. Second, agencies that adopt the decisions of outside standards bodies usually do so pursuant to legislation or a rulemaking setting out the procedures by which the standards will become federal policy; no such legislation or rule exists here. What is more, when such procedures exist they require that the adopting agency engage in a process of independent deliberation, ordinarily including public notice and comment, before adopting the standards. We therefore request that NTIA do no less here.

Indeed, we believe that on the facts of this matter NTIA is obligated to apply the APA. To begin with, ICANN's authority is entirely derivative of its agreements with the Department of Commerce, or from agreements with NSI that the Department required NSI to sign; without these agreements ICANN would be an irrelevance. Similarly, all of ICANN's funding originates from the authority that the Department of Commerce has given it. In these circumstances we believe that ICANN is a state actor, and its decisions are vulnerable to challenge as violative of statutory requirements and of due process. As NTIA retains the final decision on the creation of new gTLDs, however, the most critical moment is yet to come. NTIA's forthcoming decision to adopt, amend, or reject ICANN's recommendations is surely a moment of administrative decision to which the APA applies. To hold otherwise would be to admit the existence of end-runs to rulemaking or adjudication never contemplated by Congress, and alien to our system of ordered government.

We recognize that the Department of Commerce has maintained that its relations with ICANN are not subject to the APA, or indeed to any legal constraint other than those relating to relations with a government contractor and/or a participant in a cooperative research agreement. For the reasons set out above we do not agree with this characterization as we believe it twists forms to obliterate substance. But whatever the balance of the legal arguments, it is surely correct that when the Department contemplates decisions which will shape the very nature of the Internet naming system, it should proceed with deliberation, and act only on the basis of reliable information. The need for reliable information, proper public participation, and transparent and accountable decision-making is even stronger when the Department contemplates making the sort of social policy choices - as opposed to mere technical standard-setting - embodied in creating new gTLDs and imposing conditions on their use. Thus, we submit that even if the Department does not accept that the APA applies to this decision, basic requirements of fairness, due process, and the need to make reasonable decisions counsels strongly in favor of the Department choosing to comply with the APA's carefully crafted requirements for notice, public access, the making of an official record, and deliberation. For NTIA to take a decision of this import without these ordinary elements of administrative regularity would lessen public confidence in the quality of the Department's decision-making, and would substantially prejudice the rights of many persons with interests in the matter.

There is no question but that if an agency had acted as the ICANN Board did, its decisions would not satisfy even cursory judicial review. In the circumstances, therefore, it would be unreasonable and a denial of due process for NTIA to rely on the outcome of such a flawed process without conducting its own investigations and public comment period.

Were NTIA to maintain its position that it should treat the TLD-creation issue as a pure matter of contract to which the principles animating the APA have no relevance, it would open itself up to the possibility of protracted litigation. Such a lawsuit would doubtlessly delay the creation of new gTLDs. We call on you therefore to acknowledge that the APA applies to this forthcoming decision and to act accordingly; in the alternative we request that even if you maintain the APA is formally inapplicable, you decide that the public interest requires that you choose voluntarily to adhere to it. We believe that in either case a reasonable first step would be have a hearing to discuss the many issues this matter raises as soon as possible.

Sincerely,

Barry Steinhardt, Associate Director
Laura W. Murphy, Washington National Office Director
American Civil Liberties Union

Barbara Simons
Past-President
Association for Computing Machinery

Hans Klein
Chair
Computer Professionals for Social Responsibility

Andrew Shen
Policy Analyst
Electronic Privacy Information Center

A. Michael Froomkin
Professor
University of Miami (Florida) School of Law

Cc: Secretary-Designate Donald Evans
Representative Billy Tauzin
Representative Fred Upton