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SEN. RICHARD C. SHELBY HOLDS A HEARING ON THE FY2016 FUNDING REQUEST AND BUDGET JUSTIFICATION FOR THE COMMERCE DEPARTMENT

 February 26, 2015 Thursday

 EVENT DATE: February 26, 2015

 TYPE: COMMITTEE HEARING

 LOCATION: WASHINGTON, D.C.

 COMMITTEE: SENATE COMMITTEE ON APPROPRIATIONS, SUBCOMMITTEE ON COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES

 SPEAKER: SEN. RICHARD C. SHELBY, CHAIRMAN

 WITNESSES:

SEN. RICHARD C. SHELBY, R-ALA. CHAIRMAN

WITNESSES: PENNY PRITZKER, SECRETARY, THE DEPARTMENT OF COMMERCE

…

SHELBY: Senator Langford.

LANGFORD: Thank you. Thanks for being here as well.

PRITZKER: Thank you.

LANGFORD: I'm grateful to be able to have the conversation. I want to talk a little bit about where we stand with ICAN (inaudible) conversation and DNA. So my questions--I'm sorry, DNS, not DNA. DNA would be fun to talk about as well, by the way, if you want to talk about that.

The budget request has a note in it that I thought was interesting. It says FY 2016 NTIA will continue to develop, implement and advocate policies positioned in the U.S. to meet growing complexities and political challenges related to internet governance and the domain-named system. Tell me the status of where you are headed on this. And obviously Congress has spoken back on it and is a little hesitant. So specifically, while you're talking about the status on it, how are you balancing the foreign policy objectives with United States commerce? And I mean commerce as a whole of our business world and how dependent we really are on this internet.

PRITZKER: Well, let me start by saying our NTIA role is stewardship of the internet. And so moving--our goal has been to continue to move ICAN to a multi-stakeholder model. And, in fact, we deal directly with ICAN and the leadership of ICAN and their CEO is coming in tomorrow.

LANGFORD: Can I interrupt for just a second? The question there is the why? And I think it's the foreign policy question.

PRITZKER: Why?

LANGFORD: Why try to move that outside of our stewardship? Has it been a problem that we've been the steward with it? Why remove American stewardship from the internet?

PRITZKER: Well, the challenge and we--we're not giving up our stewardship of the internet. But the challenge that we face with the ICAN-IANA transition is this is--and, first of all, we're not going to give up our position of overseeing the IANA domain name situation unless we can ourselves there's a multi-stakeholder process and it's not going to be jeopardized, that there's going to stability and resiliency and security in the domain name system and that it meets the needs of global customers, and it remains that the internet will remain free and open.

The challenge we face in our role is the perception of our goal in the global environment. There is a lot of pressure, as you said, from foreign governments to, in essence, take over control of the internet and try and create places where governments are in control of what's happening with the internet. We think that is the wrong direction to go, and therefore we feel we're really an oversight. ICAN is actually performing the IANA functions. And so our goal is that ICAN continue to perform those functions, but the appearance of our engagement creates this notion that the U.S. is a government in control and that's against where we ultimately--we want to be able to argue with the rest of the world. That's not what we want to see for the internet.

LANGFORD: Right. I understand. And the skepticism is when we release the first generation, there may be some good oversight of that. And then what happens five years from now, etc.? So what happens with China and Russia? I just want to be able to express some continuing skepticism.

PRITZKER: Senator, I share your concern about that. And one of the criteria that I've said is we've asked for ICAN to explain to us how they're going to be accountable to a multi-stakeholder process and there cannot be what I call a hostile takeover of ICAN.

LANGFORD: Correct, and I would affirm that.

…

KUNTZ: Let me ask about a very different field for a moment, if I might, which is ICAN. When I was in the private sector, I did some work around web domains and website acquisition and control. We had a trademark, the company I was in, that had been inappropriately taken over as a web domain by a company with no relationship to it, and I got involved in this.

This was a long time ago and I was struck at how at that point NTIA was playing a critical role in oversight of ICAN, the Internet Corporation for Assigned Names and Numbers, which I think is widely known to the small community of people who pay a lot of attention to this. And I'm frankly very concerned that there is a proposal to transition ICAN completely away from the Commerce Department oversight and management, and I just want to make sure that ICAN is really prepared to make that transition and will have adopted some core key principles about protection from government capture, budgetary restraint and a separation of functions, and this is something I wrote to you about back in December and co-sponsored a resolution that passed in the Senate calling for these reforms before there is any transition. I just wanted to make sure that I had your sense of whether you thought these reforms were important to complete before there was any movement towards it.

PRITZKER: Well, Senator, I share your concern. I think the transition at the IANA transition is one that's important because there are down sides for our engagement there. Having said that, making sure that we don't--that ICAN can responsibly continue to carry out that function, making sure that it is multi-stakeholder managed and driven, making sure it meets the needs of customers and in a timely and efficient manner, and that we remain a free and open internet. All of those are priorities.

We are awaiting proposals. We're not in any rush. We're working very carefully with ICAN, but we're waiting for proposals as to how they can make sure they would satisfy all those performance requirements and also proposals for how they will improve the accountability of ICAN so that there cannot be what I call a hostile takeover of the board of ICAN.

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