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U.S. House of Representatives,
Committee on Science,
Subcommittee on Basic Research,
Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:04 a.m., in room 2318, Rayburn House Office Building, Hon. Charles W. ''Chip'' Pickering, Acting Chairman of the Subcommittee, presiding.
    Chairman PICKERING. Good morning. I am Chip Pickering, Vice Chairman of the Basic Research Subcommittee, and I would like to welcome everyone to part one of our Subcommittee's two scheduled hearings on the domain name system.
    I would like to announce that today's hearing is the first hearing ever cybercast live over the Internet. I can not think of a more appropriate topic than the one that we are addressing today for this first ever cybercast.
    The purpose of these two hearings are to review the history and current status of the domain name system, the relationship between the National Science Foundation and Network Solutions Incorporated, NSF's role in the transition of the domain names system to a private sector control, a determination of the cooperative agreement with NSI in 1998, alternative proposals for the DNS transition to the private sector, and the appropriate role of the Federal Government in the future of the domain names system.
    Simply stated, the fundamental question we are seeking to answer is what role should the Federal Government play in the transition process, if any. At this first hearing, we want to briefly cover the history of how the domain names system got to where it is today, what is happening today, and what direction the Administration is taking to address the future transition.
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    At our second hearing on September 30, we have invited outside witnesses to present their views on what role the Federal Government should play in this process. The Subcommittee is very aware that there are many groups and many individuals who believe they have the right answer on transitioning the domain names system to the private sector. We hope to hear a wide spectrum of opinions.
    Today we have representatives from the National Science Foundation, Department of Commerce, Network Solutions, and the Internet Assigned Numbers Authority.
    Before I turn to the witnesses, I would like to express some of the Subcommittee's specific concerns. The Subcommittee has been told of different dates when the current Department of Defense, the DARPA contract with IANA is expiring. NSF has announced that it will terminate its current cooperative agreement with NSI at the end of March of next year. Finally, we are unsure of when the Administration is coming forward with the transition plan. The uncertainty in this sequence of events seems to counter the purpose of assuring Internet stability. We need a transition plan first and then have contracts expire in a deliberate step by step process that facilitates the transitioning of the domain names system to the private sector.
    Without a transition plan, the Subcommittee is concerned that NSF's position on terminating the cooperative agreement on March 31, 1998, is creating justified concern among the Internet community. Obviously the Subcommittee will seek an explanation from the Administration witnesses as to how this proposed sequence will actually work.
    Finally, the Subcommittee is interested in how the Administration is developing a process that will address concerns about creating competition in the .com and/or competition amongst top level domain names. The Subcommittee is unsure of the methodology that the Department of Commerce, NSF, and the interagency working group are using to formulate their transition plan.
    I certainly hope this hearing serves to inform both the Subcommittee and the Internet community on how we best transition the domain names system to the next phase.
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    I would like to recognize the Ranking Minority Member, Mr. Barcia, for his opening remarks.
    Mr. BARCIA. Thank you very much, Mr. Chairman. I am pleased that you have called this hearing to review the status of the Internet domain names system. I join you in welcoming our distinguished witnesses.
    I imagine that most users of the Internet today are unaware of what the domain name system is and what it does, let alone that there are any issues regarding it that may require public policy attention. Nevertheless, the evolution of the domain names system is extremely important because its future cannot be separated from the development of the Internet itself.
    Basically, the domain names system provides the addressing function for the Internet, the white pages directory. Without it, computers would be unable to locate and therefore communicate with other connected computers. In short, it is essential for the Internet to function at all.
    The impetus for today's hearing is the impending change in the control and operation of the domain names system, a change which is being precipitated in part by federal agency actions. Although the Internet became or began as a federally funded and controlled research project, it has since evolved to become an unregulated communications medium, made up largely of computer networks owned and operated by private sector organizations. In fact, the last vestige of federal control of the Internet arises from contractual arrangements entered into by NSF and DARPA, with the organizations that currently operate the domain names system.
    The fact that the federal agencies desire to relinquish their responsibilities for the domain names system is consistent with the changing nature of the Internet. It began as a federal networking research project. Then it became a communications tool, largely supporting the research and education communities. Now it is a major communications medium, increasingly dominated by commercial users.
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    I believe that the agencies are correct in their view that the time has come for control of the domain names system to pass to the private sector. But the question we will have to consider at this hearing is by what process will the federal role be handed off. A guiding principle ought to be that the transfer of the domain names system to private sector operation and control occur in a manner that will maintain the stability of the Internet, and also maintain a system with broad connectivity. I believe that this implies that the Federal Government cannot simply abandon its past responsibilities. Rather, it must first ensure that there's a plan that will provide for a transition to a new and widely acceptable set of organizational arrangements.
    By this, I do not mean that the government should specify these future arrangements, but only that the government has responsibility to initiate a process leading toward that goal. The process should be transparent to all stakeholders and incorporate their input. Unfortunately, I have seen no evidence to date of a transition strategy. I am concerned that the withdrawal by the Federal Government from the governance of the domain names system appears to be largely unplanned and may result in a situation with the potential to cause serious damage to the Internet. I hope the testimony this morning will convince me that I am mistaken.
    I look forward to hearing what actions the agencies represented here are taking to guide the transition of the domain names system to an alternative set of arrangements for its operation and control. I hope to learn from the organizations now responsible for the domain names system, how they expect the transition to occur, and what their roles in the transition will be. Getting the transition right is more important than getting it done quickly. An appropriate organizational arrangement for Administration and policy control of the domain names system will be a significant and necessary contribution to the goal of creating a robust and dependable Internet for support of electronic commerce, as well as for research, education, and private communications of all kinds.
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    Mr. Chairman, I again want to thank you for calling this timely hearing, and look forward to the testimony of our witnesses.
    Chairman PICKERING. Thank you. We now have a vote that is ongoing. We will adjourn briefly and return quickly, and then take the testimony. We look forward to that. Again, thank you and we will see you back in, I hope, 10 minutes.
    [Brief Recess.]
    Chairman PICKERING. Before we get started with testimony, the Science Committee has a policy to swear in witnesses at all hearings. I would ask that all witnesses please stand and raise your right hand.
    Do you solemnly swear or affirm that the testimony you will give before this Subcommittee will be the truth, the whole truth and nothing but the truth? Please be seated.
    Dr. Bordogna, if you would start with your testimony. Please, if you would, keep your testimony to 5 minutes and summarize. Then we will submit for the whole record your complete testimony.
    Mr. BORDOGNA. Thank you for allowing me the opportunity to testify on the National Science Foundation's role in fostering growth of the Internet; including our role in domain name registration, and also our role in fostering the development of next generation of information science and technology.
    At NSF, we are proud of our record of accomplishment in computer networking and communications. Through investments by NSF and other federal agencies, we have already seen advanced information technologies transform how research is conducted. We have glimpsed how they can dramatically improve teaching and learning in schools and classrooms at all levels of education. We have seen the Internet grow into a veritable global village. We have even seen a supercomputer crowned king of the world of chess. We hope to build on this record in the future, there is much more to be done.
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    The phrase ''information is everywhere'' is more than just a cliche. We can now link to a rich array of information sources virtually anywhere and any time. We can check the weather at the beach and on Mars, see who won the late game, and keep tabs on the world financial markets, all without ever leaving our living rooms. There's an open question, however, if this increased access to information is enriching us as individuals and as a society. Mere access to widely distributed sources of information is one thing. Absorbing, refining and analyzing this information to glean useful knowledge is another altogether.
    NSF has launched an ambitious set of research and education activities called Knowledge and Distributed Intelligence, or KDI, to do just this. It aims to improve our ability to collect, represent, transmit and apply information. It will produce new knowledge bases and provide new insights into the behavior of large complex systems related to areas that are vital to progress across our economy and society.
    If I had to emphasize one item in my testimony today, it would be this: Knowledge and Distributed Intelligence represents the future direction for most NSF investments in networking for science, engineering and education. That is why NSF has been slowly withdrawing our support of technologies and concepts related to the original Internet. This shift includes our decommissioning of the original NSFNET backbone in 1995, and our recent determination that NSF should not support the Administration of Internet domain name registration. NSF's decision to end our support for the domain name registration is a direct result of the Internet's rapid transformation into a ubiquitous private sector communications system. The Internet is now the domain of the venture capitalist, not the adventurous academic.
    Of course when such a complex structure like the Internet undergoes rapid growth, there are bound to be growing pains. Many of the issues surrounding the registration of domain names today stem from decisions made when the Internet was conceived and used as a tool dedicated primarily for research and education.
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    I would like to give you a brief history of NSF's involvement in domain name registration. In April 1993, in order to serve an expanding base of research and education users, NSF, after an open competitive process, entered into a 5-year cooperative agreement with Network Solutions Incorporated, funding that organization to conduct registration for us. The objective was to provide Internet registration services for the non-military part of the Internet which, at that time, was still primarily composed of the research and education community.
    Because of the subsequent unexpected explosive growth in use by the commercial sector and related explosive growth in registration costs that soon ensued with respect to the use of the Internet, the NSF-NSI cooperative agreement was amended in September 1995. The agreement was changed so that NSI could charge fees to cover the costs of registering addresses and the domain names such as .COM, .NET, and .ORG, where most registrants were not part of NSF's recent education clientele.
    Thirty percent of the registration fees were to be set aside into ''an interest bearing account for the preservation and enhancement of the intellectual infrastructure of the Internet.'' This set aside currently is $30 million, and is growing at the rate of several million dollars per month. Today the vast majority of domain name registrants are commercial interests, whose activities now go well beyond the research and education community that NSF is chartered to serve. Now that the Internet is a global industry, the Internet community is struggling to find an appropriate structure commensurate with the demands and novel issues of this burgeoning enterprise.
    Whether or not there should be continuing form of federal oversight of Internet names and addresses once NSF funding of the cooperative agreement with NSI expires next March is a difficult issue. With that in mind, an interagency working group of which NSF is a member, co-chaired by the Office of Management and Budget and the Office of Science and Technology, is currently considering this matter. This group was put together in April.
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    In conclusion, while NSF has determined that our statutory mission dictates that our oversight of the Internet should be concluded, we also recognize our special relationship with the Internet. That is why we are committed to helping find solutions to the Internet's growing pains. We will do so by pursuing the following objectives: we will work to promote actions that will sustain stability of the Internet system and the transfer of oversight to appropriate entities, we will promote self-support of the Internet by working to spur private sector solutions to Internet registration, we will work to maintain U.S. leadership through our Knowledge and Distributed Intelligence investments in research and education that will help change how we learn and create, and how we work and how we live.

    As I mentioned earlier, we are proud at NSF of our record of accomplishment in fostering the growth of the Internet. We continue our present oversight responsibilities. We do so responsibly. We hope to build on this record in the future. We are committed to working with the Administration and the other relevant agencies to ensure a smooth transition to a regime where the Internet can continue to flourish as a stable global communications network of the 21st Century. Thank you.
    [The prepared statement of Mr. Bordogna follows:]
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    Chairman PICKERING. Thank you, Dr. Bordogna.
    Mr. Irving?
    Mr. IRVING. Thank you, Mr. Chairman. This is my first occasion to testify before the Science Committee. It is a particular pleasure to testify before my friend and colleague, Mr. Chairman, so thank you for this opportunity. I want to thank all of the members of this Committee for this opportunity. I am particularly pleased on behalf of the Administration.
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    We are going to hear a lot this morning about the impact of the Internet. I believe that there's not enough hyperbolic words about the Internet. It has been one of the most important developments of telecommunications and media, of communications any of us can experience in our lifetime. But what has really been amazing is the foresight and the vision. I look at the two quotes by Tennyson and from the Bible. Vision has been amazing. You are talking about a small group of academicians and scientists and researchers who came up with something this wonderful. When you think about the domain names system, it has been an incredibly resilient system. It has been a system that has worked, despite the growth.
    When I took my job as Assistant Secretary in 1993, there were 30,000 domain names at the end of 1993. Today there are 1.6 million domain names globally. In 4 years, that kind of growth is unprecedented. The fact that the system is still working is, I think, a testament to the people who have done so much hard work.
    But as we know, we have to make some changes. That is why the Clinton Administration supports the continued privatization and commercialization of the Internet, and is committed to completing the transition to private sector governance of the domain names system.
    We have been working on this since March of 1997 with an interagency group. On July 1, 1997, the President announced the Administration's Framework for Global Electronic Commerce. At that time, he directed my boss, Secretary Daley, to support efforts to make the government's domain names system private, competitive, and to create a contractually-based self-regulatory regime to deal with potential conflicts between domain name usage and trademark laws on a global basis.
    Mr. Chairman, you should know that this director has the highest priority in the Department of Commerce and throughout the Executive Branch. In fact, on July 2, the day after President Clinton announced the framework, the Department of Commerce issued a request for comments on the registration and Administration of Internet domain names. In that RFC, we posited, the interagency group posited six principles to evaluate domain name proposals. First, competition in and expansion of the domain name registration system should be encouraged, but interoperability of the Internet is essential.
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    The second principle was that the private sector should develop stable, consensus-based, self-governing mechanisms for domain name registration and management. We also said that the self-government mechanism should recognize the inherently global nature of the Internet and be able to evolve as necessary over time. We posited that the framework for accommodating competition should be open, robust, efficient and fair, that the framework should promote fair and expeditious resolutions of conflict, and that the framework should be adopted as quickly as prudent consideration of these issues would permit. We received 430 comments and over 1,500 pages from around the country and around the world in respond to that RFC.
    In general, the respondents supported the principles. The comments received reflected an overwhelming support for two things: private sector governance of, and increased competition in, domain name systems. The comments also agreed that the transformation of the Internet from its U.S. roots into a global medium should be reflected in the Administration of the domain names system.
    The interagency working group is studying the comments right now. We received them August 18, a little bit more than a month ago. We may refine the principles in light of the comments, but we do not expect to have any comprehensive revision. While the comments support transition to a private sector-driven, competitive system of domain name allocation and management, a number of issues do remain. One issue is technology. Technology to manage a fully competitive registry system involving shared top-level domains does not currently exist. Although almost everyone concedes that such technology can be developed, estimates about development time and costs do vary widely.
    With regard to governance, the government structures proposed to date are not adequately democratic or representative of the ever-expanding Internet community. There are still trademark issues. You know that additional consensus is needed with respect to important intellectual property problems, especially but not exclusively in the area of trademark. A private sector-driven system over the course of next year needs to be developed.
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    The U.S. government must act promptly to assure the Internet community that it will preserve the stability and the integrity of the Internet during the transition period. We understand that. We understand that we have to make sure this works, but that means that we must fund IANA during the transition and must utilize the ramp-down option if necessary, get documentation needed to share the .com.
    The interagency working group will issue recommendations with respect to each of the questions. We are trying not to pre-judge where we are going to come out, but we do think that the final recommendations from the group are likely to contain the following elements. One, the memorandum of understanding proposed by the ad hoc committee should be amended, or another vehicle should be created, to reflect the concerns about governance, dispute resolution, and trademark voiced in the comments received by the group.
    We also believe that the government should support private sector development, testing and deployment based on the procedures set forth in the ad hoc committee's memorandum of understanding and the Council of Registrar's memorandum of understanding, or another vehicle, of technology needed to administer shared top-level domains.
    We believe the United States should work with the global Internet community to establish an independent, self-sufficient policy oversight body with sufficient authority, global credibility, and the structure and process that will minimize the risk of anti-competitive conduct to carry out the core aspects of Internet governance that must be undertaken.
    Though I have outlined a transition roadmap in very broad terms, the Administration does not underestimate either the importance or the complexity of this task. I look forward to working with all interested parties, particularly the Congress, throughout this important transition period. I look forward to the questions of the members of this Committee. Thank you, Mr. Chairman.
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    [The prepared statement and attachments of Mr. Irving follow:]
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    Chairman PICKERING. Thank you, Mr. Irving. Let me just say I enjoyed working with you when we tried to find the solutions on the telecommunications legislation that is bringing about needed changes in that area. I look forward to working with you on Internet solutions because it is truly a visionary and explosive and dynamic area. We appreciate your leadership and help in these areas.
    Dr. Postel?
    Mr. POSTEL. Good morning. My name is Jon Postel. I am the Director of the Computer Networks Research Division of the Information Sciences Institute of the University of Southern California. I am also the head of the thing called the Internet Assigned Numbers Authority. I am very pleased to be asked to testify on the domain names system. I will try to give you some background on the IANA and its current role in the operation of the domain names system.
    Let me step back and give a bit of history. I was fortunate enough to have been a graduate student in computer science at the time the ARPANET first began, some time ago. Since then, I have worked on government-sponsored projects in research and development of computer communication protocols and procedures since then. Many of the results of my work have been incorporated in the ARPANET and into the Internet.
    As a side task to this research work, I took on the task of keeping some lists of names and numbers and conventions that were parts of the protocols that were developed to support the computer communication. Over the years, this task grew fairly slowly even though the ARPANET and then the Internet grew very rapidly. In about 1989, the name Internet Assigned Numbers Authority or IANA was adopted to describe this sort of keeping of the list function and coordination activity.
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    Currently, the IANA coordinates the assignment and the use of various Internet protocol conventions, manages at the top level the Internet address space, and has a role in the management of domain names. Specifically regarding domain names, it's involved in the technical decisions about the locations and equipment used for the root name servers, the qualifications of applicants to manage what's called the country code top level domains, and in evaluating additions to the established set of top level domain names of the generic top level domain names.
    This IANA role seems to be somewhat difficult to understand, but perhaps an analogy with the telephone system can help. When telephone engineers decide that a new area code is needed because the number of telephone numbers in a metropolitan area say has grown, they need to attain a new area code. To do this, they contact an office that manages something called the North American Telephone Numbering Plan, or the Naming Authority Council. This authority keeps a list of area codes that have already been used and the ones that are available and a few other conventions of the system. So in some ways, the IANA is the equivalent of the Telephone Naming Authority, numbering authority for the Internet.
    The role of IANA is much more one of coordination than of control. The IANA tends to implement the consensus of the Internet community and its policies and decisions about the allocations of addresses, names and the maintenance of those various protocol conventions.
    I would also like to point out that the Internet operates in a climate of sort of a dynamic tension between competition and cooperation. Much of the work of the decision making in the Internet is based on a consensus-building approach. There are many examples of this. Perhaps the most basic is the competition between service providers. Service providers compete vigorously to obtain the most customers, but at the same time, they must cooperate to provide the end to end service that the customers demand of being able to contact anyone else anywhere in the Internet. There are many other examples of the way things work in the Internet, where there is a tension between cooperation and competition.
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    On the subject of the domain names system, which is the topic of this hearing, I will make a few remarks. The main reason for concern about the domain names system at this time is that registration of domain names has become a business rather than a public service. There is essentially one company in a substantially monopoly position. It is important that there be competition in a business environment to provide good service at fair prices due to the market forces that apply in such a situation. So I think the motivation for the transition that we are going through is essentially to overcome this sort of monopoly situation and evolve into a competitive situation.
    I believe the plan developed by the IAHC process is the best available alternative of the way to introduce this competition, and that the plan as developed as this concept of shared registries, which allow name portability between registration service providers. They are somewhat akin to the 800 number portability in the telephone system.
    This transition is a very important matter and is appropriate for the government to be concerned about it. However, the evolution of the Internet through the IAHC plan seems to be on track. I think it is very important for the government to be concerned, and yet not get involved as long as good things seem to be happening through that plan.
    There are a few issues that were mentioned in the charter for this hearing. I would like to touch on those very briefly. As I have just said, the federal role should be one of being supportive of the DNS transition to a fully self-regulated system, but not necessarily take any particular action as long as that seems to be going on track.
    There is a question about the database and the data that's been developed by Network Solutions in its work to date. My view is that the data that's currently publicly available that is used to operate the system should be made publicly available and made available to the government. There may be other data that Network Solutions has developed for its business purposes. That is completely a separate matter.
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    On the issue of the infrastructure funds, this fund has been developed of $30 million or so, I think care should be taken to understand that fund was contributed by a certain set of people, the businesses and the users of the Internet, and that the use of that fund should benefit those people that contributed to it, and not necessarily be diverted to other interesting government projects. On the Administration plan, it's I think still in the formation stages, so I don't really have any comments yet on that plan.
    In conclusion, I would like to say I think the general plan developed by the international ad hoc committee should move ahead in a steady and careful fashion. The plan provides for competition between registration agents serving the user community. It calls for cooperation in managing and maintaining the unique data base of registered names. This again is modeled on something that we do in many places in the Internet.
    There may be aspects of the plan that need some adjustments or fine tuning. I think those can be accommodated as the plan moves foreword. I expect that there's a role for the IANA to continue to be involved in the sort of high level overall management of the Internet.
    I have tried to keep these remarks brief, and would be pleased to expand on any of these topics in response to your questions. Thank you.
    [The prepared statement and attachments of Mr. Postel follow:]
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    Chairman PICKERING. Thank you.
    Mr. Battista?

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    Mr. BATTISTA. Good morning, Mr. Chairman, members of the Subcommittee. My name is Gabe Battista, and I am the Chief Executive Officer of Network Solutions. I welcome the opportunity to appear before you today to address what I believe to be a critical issue facing the future growth and stability of the Internet and management of the domain names system.
    Network Solutions is located in Herndon, Virginia. We have approximately 250 people, and is a wholly-owned subsidiary of SAIC. Since 1992, when Network Solutions signed the cooperative agreement with the National Science Foundation, we have provided domain name registration services and other services that are essential to the operation of the Internet. My company has worked hard to meet the demands of all Internet users in spite of the unanticipated exponential growth in Internet usage and domain name registration.
    For example, at the end of 1994, we registered an average of 200 names per month. Last month, we registered 125,000 names. In spite of this tremendous growth, we have significantly improved the registration process and timeline. Just 2 years ago, the registration process took weeks to complete. Today, most registrants receive an acknowledgement within 30 minutes and their registration has been propagated throughout the Internet, ready for their use by the next morning.
    Improving services and dealing with growth at this rate has presented quite a challenge to our employees. I am certainly proud of the job they have done. NSI takes its responsibilities under the cooperative agreement seriously. We believe that a stable and efficient domain name registration service is a critical component of the Internet. We have invested millions of dollars to this end, and built the most fully capable registration system and processes in the world.
    But all of our investment will be for naught if some key issues involving the future management and the stability of the Internet are not resolved. Of greater concern is the potential impact this instability might have on the growth of electronic commerce and the continued expansion of the Internet as the medium for business and personal communications.
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    There were four key issues addressed in the Committee's written correspondence to me which I will respond to briefly. The subjects are complex and my submitted written testimony has a more detailed discussion of each issue as well as a discussion of issues which are related and must be considered in tandem.
    The first issue, Federal Government involvement. NSI feels very strongly that there is an appropriate and necessary role for the U.S. government in sponsoring a period of managed transition. Since April 1997, we have proposed that an appropriate federal agency sponsor a new legally chartered international public advisory group. We propose that this group be charged with three broad goals during the transition period. First, transition the critical Internet functions from a volunteer status to a legal framework in a manner that imposes accountability and safeguards for the operation of the Internet.
    Two, introduce additional competition to domain name registration in a manner that maintains the stability and reliability of the domain name system and promotes private investment in this new emerging service sector.
    Three, provide a forum for the intellectual property experts of the world to address the relationship between global domain names and trademarks. There is currently a vacuum in law. This, together with the legal exposure that registries like NSI experience, leads to complex policies and multi-party trademark infringement and dilution lawsuits. Our proposal assumes that the U.S. government's role will decrease with time, and that the international public advisory group so formed will be the leader of the lasting international self governance organization for the Internet.
    It is important that the Internet systems be mature before a truly broad-based self-governing body can function independently. As the founder of the Internet and its largest user, the U.S. government has a responsibility and the right to shepherd the process forward.
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    Second issue, transfer from NSF sponsorship. Following the conversion of NSI's registration activities to user funding, the NSF's role has diminished. Under the terms of the cooperative agreement, NSI operates independently with monthly reports and quarterly reviews with the National Science Foundation. NSF still supplies guidance and stability in new legal matters such as the anti-trust suit by PGMedia against NSI, where PGMedia has demanded that its new TLDs be added to the Internet. Without NSF sponsorship, NSI would not have the necessary legal guidance to deal with this or other legal matters.
    In the discussion of a transition, there has been some confusion on the issue of the NSI database. Allow me to clarify this issue as best I can. NSI makes the critical part of its database available publicly through its on-line directory service called Who Is. We have done this throughout the cooperative agreement with the National Science Foundation, and the service is without charge. It is immensely helpful and one of the most active sites on the Internet, with a volume of 2,000 queries per second. The database contains the domain name information, the 32 bit numerical IP address and the contact data for the domain name holder. All of this data is available to the Internet public for their use. As a consequence, it is not clear what data base is in question here. Private billing and dispute data is maintained by NSI as a confidential data base in the same manner as all commercial enterprises.
    Third issue, intellectual infrastructure funds. As part of the agreement with the National Science Foundation to convert to user funding, we agreed to set aside 30 percent of the revenues NSI collects for domain name registration to be used to improve the intellectual infrastructure of the Internet. These funds have been dutily deposited in a separate interest-bearing account and await disposition. In the spring of 1997, NSI briefed the National Science Foundation's senior management on this matter and offered three options for fund disposition. We at NSI continue to work with the National Science Foundation and await their decision on the use of the funds, and will promptly expedite their decision.
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    Fourth key issue, Department of Commerce activities. NSI has supported the recent activity of the Department of Commerce to address the issue of domain name registration and governance of the Internet. We submitted a very comprehensive and operationally detailed 42-page filing to Commerce in response to their notice of inquiry. Our goal was to educate NTIA about the operational realities of today's Internet. We believe that the best hope of a stable transition lies with the Department of Commerce process, and we are prepared to make our unique experience and detailed knowledge available to facilitate this process.
    I would like to thank you, Mr. Chairman, and members of the Subcommittee for allowing me to reflect on these issues. I will be happy to answer any questions you may have to the best of my ability. Thank you.
    [The prepared statement and attachments of Mr. Battista follow:]
    Insert offset folios 54-68

    Chairman PICKERING. Thank you. I appreciate each of your testimony. It is great to be with one of the founding fathers of the Internet, Dr. Postel, and your leadership in this role. As one of the younger members of the Committee, I hope that we see instead of an X generation, Internet generation, one that's connected and learning and engaged. So this is an exciting area for me.
    As I laid out in my opening statement, there are some concerns that we do this right and that we have the transition plan in place prior to the expiration of the cooperative agreement. So my questions will be trying to clarify and get some sense as in the interagency process. Is it truly coordinated? Are you working together? Are we with the same voice? Will this Committee have the information possible to encourage you in that process, that we make sure that the transition is in fact in the right sequence and make sense as we go forward.
    To that end, Dr. Bordogna, I would like to mention from Mr. Irving's testimony, a quote. We believe that the government should, if necessary, utilize the NSI ramp down option in the cooperative agreement, providing the option to rely on the current system through Fiscal Year 1998.
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    NSF's testimony indicates that the cooperative agreement will be terminated on March 31, 1998. Have you consulted with the Department of Commerce on this matter and the bottom line, will the cooperative agreement be extended?
    Mr. BORDOGNA. Mr. Chairman, yes, the partnership is working well. We argue the issues because there's no consensus yet on exactly what to do, but we are fully engaged in that.
    NSF's position on the cooperative agreement has been one of proactively trying to get everyone to see that the end is coming and is a transition coming up. So one reason we announced to the world, because it didn't know, that the 31st of March 1998 is the end of the agreement, that wasn't intended to say we're going to stop at that point, but it was to get everyone working. So we were precipitating, trying to precipitate the fact that something has to happen here.
    There's a 6-month flexibility period built into the cooperative agreement, so certainly there is more time beyond that to continue working. NSF is not going to walk away from its responsibility for being the oversight entity at the moment. We get increasingly worried about our ability to oversee something which is not really in our statutory mission. We want to move our energies to the frontier again and sort of create the next generation of technology in this area.
    So there is room, depending on how the partnership decides to go, to be real flexible in this.
    Chairman PICKERING. Would you agree that the transition plan needs to be in place prior to the expiration of the contract or cooperative agreement?
    Mr. BORDOGNA. I think a transition plan has to be in place. NSF is continuing to argue that, as we move along, NSF is not the proper place to continue to place the oversight for all of this. So we would like very much to be able to transfer within the government the oversight in some way. We are arguing about that.
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    So the bottom line is NSF is going to continue to accept its present responsibility for oversight here. That's the glue at the moment. And continue to move the pace on what's going to happen. But we want to keep the pressure on to get resolution, a careful one, well thought out, so that we can go onto our other business.
    Chairman PICKERING. Would you say that the transition plan, instead of extending the contract in the transition plan should be expedited, accelerated and be in place by the March 31 deadline?
    Mr. BORDOGNA. Well, we should not be precipitous. We should not be irrational. Again, our motivation of this is to keep the pressure on all of us to do a good job and in a time that can get NSF to go onto its other business.
    So we can go beyond March. We do have a 6-month formal flexibility. But we want to keep pressure on to try to get this done before we have to really go onto our other business. That's our hope in this.
    Chairman PICKERING. But you do agree a plan should be in place prior to the expiration?
    Mr. BORDOGNA. I would like to see a plan in place by the expiration, but the expiration is the 31st of March. I think the key here is the 31st of March, is 6 months after that. So our position, we prefer 31 of March, we're not the people that do it. But we have flexibility here to continue beyond it.
    Chairman PICKERING. Mr. Irving, I tried, let me see if I can—to get the view from the Department of Commerce, as you know, the Presidential directive dated July 1 has required the Department of Commerce to support efforts to make governance of the domain names system private and competitive. Does your testimony reflect the Administration's position? Has this policy been coordinated amongst the other agencies or does your testimony only represent the Department of Commerce's position?
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    Mr. IRVING. Thank you. While my title is Assistant Secretary of Commerce, I am here today on behalf of the Administration. My testimony has been shared with, reviewed by, edited, vetted by all of the people who might have an interest within the Administration. We are talking to each other, with each other.
    I guess I would disagree with Dr. Bordogna on only one thing. Within the group, we don't argue. We discuss and we deliberate, much like the Congress, but we never argue. We have tried very hard to come up with consensus positions. So in appearing before you today, I am not appearing just as a representative of the Department of Commerce. I am representing the Administration.
    Chairman PICKERING. We are in a new era of civility, I would agree with that.
    Who should be managing the transition plan? In your view, should it be the Department of Commerce? Would you be ready to take over that function?
    Mr. IRVING. The Department of Commerce will be working with other agencies. The NEC, the National Economic Council, the Office of Science and Technology Policy, the National Institute of Science and Technology, NSF, the Patent and Trademark Office, and others may all have an appropriate role. We are trying now to make sure that we come up with a plan and a policy that reflects what the best role of each of those entities is.
    I understand NSF's desire to ramp down. What we are really trying to get to, Mr. Chairman, is private sector leadership, private sector direction, private sector governance. I don't think the Department of Commerce any more than NSF for the long term should be charged with running the domain names system. This should be a private sector initiative. This should be private sector governance. We have got to get to that point. The transition of how we get there is the only thing we are discussing. There is no present or future inclination of anybody within government to continue the role of governance or direction. We want to get it to the private sector.
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    Chairman PICKERING. I agree. I think we share that objective from the Congressional perspective as well, that we want to see private competitive solutions as we do the transition. The question is, how do we get there, who leads, what is the process. I guess my question to follow up is should there be a lead agency in the interagency process? If so, who should take the lead? Who should be accountable? Who should be responsible?
    Mr. IRVING. The President has directed the Secretary of Commerce to come with some solutions. The Commerce Department is ready to be accountable, but in being accountable, we're making sure that we have a transparent and inclusive process.
    I heard the Congressman very clearly about transparency and inclusiveness. We want to make sure that the process is; we believe it has been a month after the—a day after the President issued a directive, we had an RFC out on the streets. About 6 weeks after that, we had 430 comments. A month after that, I'm here testifying, within a very short time, we'll have some recommendations and a timeline for you. We're on the job, and we're ready to give you our best product that's reflective of all of the agencies, and the Commerce Department will be accountable because the President asked us to be accountable, but we are going to share this work with our colleagues.
    Chairman PICKERING. And will that process, that plan, be ready by March 31, 1998?
    Mr. IRVING. We will have—there are a couple of different issues, and I want to make sure we're talking—I'm saying the same thing that you're asking me. We hope to come to you with a comprehensive plan from the interagency working group within approximately a month. That plan will then have timelines and tasks that we have to fulfill. We agree that, with regard to how long NSF has to continue with regard to its role, what the role of IANA—we need to have all of those things in place. Our submission to the President, which we will certainly ensure the Congress has a chance to review, we believe will have all of those things in place, and we hope to have that in a very short time.
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    And I heard the question of fast versus right. Most of the commentors said it is more important to get it right. We agree with that. That doesn't mean we can't it right in an expeditious fashion, and we will endeavor to do exactly that.
    Chairman PICKERING. Would you recommend an extension of the cooperative agreement for 6 months?
    Mr. IRVING. I think the honest answer is we have not been able to see any credible circumstance under which you could get to where I think all of us want to get without extension of the option, without the exercise of the option. We don't believe it.
    And I want to correct one mistake that I've just been clarified: We now chair that interagency work group, OSTP. But in the directive, the President said the Department of Commerce would be accountable. You're going to hold me accountable if we don't come up with the project, and we're ready to accept that accountability.
    Chairman PICKERING. Thank you, Mr. Irving.
    Mr. Battista, will NSI allow competition within the ''.COM'' name space?
    Mr. BATTISTA. Mr. Chairman, we're on the record in public forum recently, at the ITAA conference, that we welcome competition both in the extension of top-level domains and competition within ''.COM.'' We believe that is the best for the growth of the industry, the best to serve the end user, and are willing to work very closely with the Department of Commerce as they put in place that transition plan to facilitate competition in Internet domain name registrations.
    Chairman PICKERING. Thank you.
    Dr. Postel, what is the annual funding level needed to support IANA?
    Mr. POSTEL. We recently did a calculation on this, and the funding level for the current operation for the calendar year 1998 would be approximately $650,000.
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    Chairman PICKERING. Okay. And what are the various sources of support of that $650,000 between federal contracts——
    Mr. POSTEL. Well, the current contract——
    Chairman PICKERING (continuing). —non-Federal——
    Mr. POSTEL. The current funding for the IANA has been through federal contracts and a contribution from the Network Solutions company of about 10 percent of the budget.
    Chairman PICKERING. Okay. And those contracts and funding sources will expire at what time, what date?
    Mr. POSTEL. We currently have funding in place through December 31, this year.
    Chairman PICKERING. Do we—if you were to extend to conform to the cooperative agreements and the transition plan, would those contracts need to be negotiated based on that transition plan—to make sure that you would have adequate funding through that period of time?
    Mr. POSTEL. Right, yes. Well, I mean, we will need funding for the operation for next year, and there may be some negotiations with the government, the task force, to obtain either all or part of that funding for calendar 1998 from government sources. Otherwise, we'll have to seek funding from private sources.
    Chairman PICKERING. Well, I thank each of you. Let me turn to the Ranking Member, Mr. Barcia, for any questions as he may have on these issues.
    Mr. BARCIA. Thank you, Mr. Chairman, and again I want to thank the witnesses for their insightful testimony. And I, too, have a few questions that I'd like to receive responses to.
    The first for Dr. Bordogna: the testimony of the Department of Commerce suggests that NSF should receive a copy and documentation of all software and data generated by NSI the cooperative agreement in such form and in sufficient detail as to permit shared registration of the ''.COM'' top-level domain space.
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    First, does NSF fund—excuse me—does NSF intend to do this; and then secondly, how else can NSF provide for open competition for registration of second-level domain names under the ''.COM'' top-level domain at the conclusion of the cooperative agreement with NSI?
    Mr. BORDOGNA. Well, there are a couple of questions there. The first is, under the law and under our cooperative agreement, and our statutory authority, the ownership of the database material belongs to the awardee, but NSF retains the right to get a copy of it at the termination of the agreement. So that's the fact there, and we can do that or not do it, depending on how the interagency partnership decides to proceed. So that's fact and that's what we would do there.
    At the end of the cooperative agreement, of course, we all hope that, whether it's on March 31 or 6 months hence, that we'll have a policy in place to obviate NSF having to make a decision about the registration of ''.COM.'' If we were to just drop this on 31st March, which we're not going to do, and just let it float, then the marketplace would have to pick it up some way. And NSI is an entity which does registration. So they would continue to do the registration, as they're doing it now.
    So NSF's position, of course, is to sustain, help sustain this ability of the Internet, keep things going, and have a policy in place before we take any action to really terminate.
    Chairman PICKERING. And a question for Mr. Battista: If NSF seeks to obtain the software and associated database, would it be delivered in a timely fashion and in a form allowing continuation of the domain name systems service under whatever future structure emerges?
    Mr. BATTISTA. Congressman Barcia, as stated in my testimony, the information now required to ensure efficient operations of the Internet, which includes domain name, IP addresses, and contact data, is publicly available. We want to work, going forward, to make that information available in a constructive way with the Department of Commerce and their oversight, to ensure to bring about a competitive medium for ''.COM'' and for top-level domain name registration.
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    Mr. BARCIA. Would you object, for example, if NSF, under your current cooperative agreement, were to pursue the development and testing of software that would allow for multiple registrars for a ''.COM?''
    Mr. BATTISTA. Not at all. I think with the proper oversight—there's a criticality involved here on stability, and I think the whole transition to competition, especially in sharing a ''.COM,'' will require two things: for intricate technology to be developed; it must be beta tested; it must be shown to be operational before we live test it on the Internet, because we can't afford to have our electronic commerce vehicle be in a state of risk, and also proper processes and procedures that will allow for the competition among various competitors have to be put in place, as was in put in place in competition of 800 database. Both of those are critically important, and we'll work to pursue the quick resolution of those issues, so competition can come about.
    Mr. BARCIA. And one final question, and that would be directed to Dr. Bordogna, Mr. Battista, and Dr. Postel. What would be involved—and either one of you or all of you could respond—what would be involved technically in opening ''.COM'' to allow for multiple companies to provide registration services? And please indicate the time and resources that might be involved in developing and validating the necessary software.
    Mr. BATTISTA. Congressman Barcia, I want to emphasize that for electronic commerce to continue to flourish on the Internet there's really three things that have to occur. One, it has to be a zero-defects situation with high reliability and a high level of redundancy. I believe—and this is certainly reiteration of what I said in a previous response—that there needs to be clear oversight in determining how this process occurs. I believe the technology can be developed, but it's complicated. I think that the technology alone could require 6 to 12 months' development. It's not just to develop the technology; it's also to beta test it and make sure it works, and to make sure that this vehicle for commerce operates in a zero-defects way.
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    But the second issue, which might be the more complicated of the two, I think as we've learned in the telecommunications business through my previous career, is the actual process and procedure for allowing competitors to compete in a fair and open way, and how that impacts the customer. For example—one example—a customer is presently operating with one registrar and decides to shift to another. How does that handoff occur? Is there a void in the handoff? Will that leave the user not being able to use the Internet? Those kinds of clear procedures and processes have to be worked out. We believe they have to be worked out with oversight. It just doesn't involve registrars in this country. It involves registrars around the world.
    So I think the time frame to do all of that with a clear plan in place, if that can be done by September 1988, would be 12 to 18 months from today.
    Mr. BARCIA. I thank you for that response. Would you have any idea of the cost involved in an effort of that magnitude?
    Mr. BATTISTA. I suspect that the technological cost for the development of the beta testing and operationally working, working correctly, it would be unfair for me to estimate that cost at this time. I just don't know. It would not be a minimal cost, but I don't think it would be an overwhelming cost.
    Mr. BARCIA. Thank you very much.
    Mr. POSTEL. I'd like to add to that. While I agree with Mr. Battista about the significant issues in terms of quality of service and zero-defects management, I think I disagree somewhat with the time scales. I think I can be done more quickly. It will take months, not days. It will take several months. And I think we have some examples of systems in other parts of the world where there are shared registries. They do not handle the volume that the ''.COM'' domain has, so they may need some substantial work, but I think it can be done in less, much less than 18 months.
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    Chairman PICKERING. Thank you. Just a quick followup along that line, on the infrastructure fund, the 30 percent. Currently, we have about $30 million in that fund. As I understand, about $2 million per month is now coming into that fund. We had a previous hearing on NDI, the next initiative for Internet and research.
    One of the issues raised in that hearing was the problem that major research centers which happen to be in rural areas have in possibly connecting, the connectivity and the cost associated with that. Would these funds—would that be a possible use? Would it, in your view, be a good use of those funds?
    Mr. BORDOGNA. Again, to begin my answer, the exact words in the cooperative agreement on this fund are the preservation—set the money in an interest-bearing account for the preservation and enhancement of the intellectual infrastructure of the Internet, which is a very interpretable phrase, except it's intellectual infrastructure. So it just can't be a pedantic use of this. There has to be some thought to it.
    To NSI's credit, they husbanded this very well. It's not been used. So it's sitting there for us to do a lot of thinking about, which we are doing. We want to do that thinking in concert with our partners and also as we roll off and try to develop this new policy. So I see it as part of the whole. Many, many suggestions have been given forth for the use of that money. NSF does not have a position at the moment, but it's a very open kind of discussion, except for the cooperative agreement and how you interpret that.
    Some people have suggested that the 30 percent should be given back to the people who gave it. That's not in accordance with the cooperative agreement, which says it has to be used for intellectual enhancement of the Internet because they may use it in all kinds of eclectic ways.
    One of the favorite kind of comments you get is let's start a new foundation which could be the seed money for attracting from corporate America bigger investment and grow a foundation, which in perpetuity have an endowment of some kind; use this as a seed way to get a lot of people to invest.
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    Another is, which is an obvious one: people would say NSF does intellectual enhancement of everything, NSF, take it; use it wisely for moving the frontier in this technology, which could be NGI, be connections, and all those kinds of things, one of which you mentioned.
    So no decision is made. We're going to make a decision. It's sitting there. It's preserved, and we prefer to keep thinking about this as we go toward a policy, so we don't do something precipitative that we might obviate a use that might come down line as we roll the policy.
    Chairman PICKERING. If you don't mind, I would appreciate you providing to the Committee a range of options and various proposals, and any pros and cons that you may se of the various proposals, that as we go forward not only on this transition, but in the NGI, that we would have a good base of knowledge and information, as we also try from our perspective to give any direction that we think may be appropriate.
    Mr. BORDOGNA. We'd be glad to do that.
    [The following information was received for the record:]
    Insert offset folio 69

    Mr. IRVING. If I could, I would just like to briefly comment. When you work for a President from Arkansas and a Vice President from Tennessee, you're very sensitized to the needs of rural America, and we are. But I think it's also important that when we look at the disposition of the fund that we also remember the global nature of that fund and be cognizant that some of those funds were acquired from global players. And as NSF comes back to some of those recommendations, I think I'd be remiss, because this is going to be cybercast, if I didn't assure our friends through the global community that we are aware of the fact that they put some of the money in that fund as well, and therefore might want to have some input into how those funds are dispersed.
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    Chairman PICKERING. Let me just say I believe Mississippi, Arkansas, and Tennessee would make a good consortium for those funds.
    Mr. BORDOGNA. I'd like to add something to this to give you a little bit more of a flavor, as long as Larry brought this issue in. I mentioned Knowledge and Distributed Intelligence as a strong theme driving a lot of NSF's investments right now. So that all of this is connected. There's a piece of money there that we'd like to see used in terms of some larger strategy, which includes greater connectivity accessibility from everyone. NSF has just changed the supercomputer investment to a shared infrastructure—so accessibility from everywhere in the United States.
    So that's why we're being very careful on this. We want to make sure it's done in a holistic way.
    Chairman PICKERING. I agree.
    Mr. Irving, let me come back to the transition and the schedule. Your testimony implies general support for the IAHC plan, but indicates the need for certain modifications to address concerns raised by the Internet community. What role, if any, do federal agencies have in assisting with instituting changes to the IAHC plan?
    Mr. IRVING. I think all we can really do is recommend. I think one of the things we do want to do is we want to serve as a force to get our private sector, both domestically and internationally, more involved in the IAHC process. I think one of the concerns is that, among some, is that it hasn't been as private sector—there hasn't been as much private sector involvement as would be optimal. I think one of the reasons for that is the private sector hasn't involved itself as much as would be optimal.
    And so what we want to do is we can serve as fora; we could serve as a catalyst; we could serve as a bully pulpit; we could serve as a megaphone; we could serve as a conduit of information. I think that's an appropriate role for government. But, again, we want to make sure that people know this is just a transition role for us; that we don't have any designs, aspirations, or inclinations toward governance. And in order for this thing to work, there's some folks in IAHC who spent a lot of time and a lot of energy that have done some good things.
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    Let's see what the good things are, and then get the private sector to say what they don't like, what's not working, and really get the totality of the community. Holistic has been a word that's used; it's a good word. Globally and internationally, domestically, let's get the people who are the stakeholders involved in talking to each other and involved in coming up with a governance system that works for everyone.
    Chairman PICKERING. Again, we want to see the government out of the Internet. We want to see the private sector governance and the process and procedures that are necessary to continue this great success story.
    There's one thing that concerns me a little bit, though, in making sure that our act is together from the federal side. Does the IAHC plan stop receiving applications to become registrars on October 16 of this year? Is that correct?
    Mr. POSTEL. Well, I think that that's one of the things that's fairly flexible.
    Chairman PICKERING. Okay.
    Mr. POSTEL. That was written into the plan originally, but I think that that particular deadline will not prevent further applications in the future.
    Chairman PICKERING. I just want to make sure. There's certain pressure points as we go forward in the transition that I want to make sure that in the coordinating responsibility that we all have that we're all on the same timeline, and that it is in fact a workable transition.
    You also, Mr. Irving, indicate the need to establish an independent, self-sufficient policy oversight body to carry out core aspects of Internet governance. Through what process would such an entity be established?
    Mr. IRVING. Again, I think it's going to have to be a private sector-led, voluntary effort. We can call for it. we can exhort people to do it, but they're going to have to step up to the plate. I think, again, the folks involved in the IAHC process, the present iPOC process, and the private sector are the ones who are going to have to coordinate it. If you're going to get the government out of it, you've kind of got to get the government out of it. And all government can really do is call the things and pull people together and say let's reason together, but I don't think we should be the people who run it.
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    It may be necessary for us to talk to our friends a little bit more, raise our voice a little bit in talking to our friends, to make sure they hear the message, but I really do think if you and I are going to agree that the private sector is going to run this thing, we've got the private sector onboard and make sure that they're stepping up to the plate. And I've been a little—actually more than a little concerned—about the level of involvement that some of the people have been critical of the IAHC process have shown in terms of stepping up to the plate and being participants in the process to make this what we want: a nongovernmental entity, a non-government-led, non-governmental governance.
    Chairman PICKERING. Well, anything that we can do to encourage our friends in the private sector, in coordination with the Administration, we'd be glad to do that.
    I have some other questions that I'm going to submit to the record. I'm going to have to leave to vote right now. Mr. Barcia will be returning. I have another conflict with a Committee, but I want to thank each and every one of you and look forward to working with you on this very critical issue.
    Mr. IRVING. Thank you, Mr. Chairman.
    [Brief Recess.]
    Mr. BARCIA (presiding). The Committee will reconvene, and I apologize; I got back as quickly as I could, but an elevator detained me a little longer than I expected.
    What consequences, if the private sector in fact doesn't achieve a consensus, will there be if, in fact, we all think it is attainable, but it simply doesn't happen? Would any one of the panelists care to respond? I mean, do we have a hammer at all or any leverage at all, if the private sector does not actually come together, achieve a consensus? And at what point—perhaps Mr. Irving—would the government then assume some accountability or control, if the private sector does not emerge as a major force in achieving a consensus?
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    Mr. IRVING. I think without your question is the answer. I think that the hammer is the fear of continued government involvement or IGO involvement. I think that most in the private sector recognize that it is to their benefit, to their advantage, to not have the government, either individually or collectively, running this thing. And I think that there's enough loose talk around by some IOs and some IGOs about what they could do and what they should do, that most in the private sector will step up to the plate and say, we need to do this.
    I guess the Borgs say, ''Resistance is futile;'' I guess I would say that in this instance failure is not an option. We have to have private sector. We can't allow resistance from the private sector's unwillingness to step up to the plate, because the alternative I think would put the Internet in a place that none of us want to put it. With the growth of domain name systems, with the problems we're seeing, with the need for electronic commerce to continue to grow this Net, we really are going to need a solution, and we need a solution quickly, and we need a solution that's the right solution. And I think a hearing like the hearing that this Committee is holding today will help focus on the private sector and help focus the folks at IAHC and help focus us in government on what we need to do to coordinate a solution. But I honestly, truly, do not believe that there is an option to private sector governance, and I believe that the private sector understands that, because I don't think any of them want bureaucrats in Washington or Brussels or Geneva, or anywhere else, running the system.
    Mr. BARCIA. Would that be the consensus—or Mr. Battista?
    Mr. BATTISTA. Well, I'd just like to add to that. I mean, we are quite pleased that the Department of Commerce is taking the leadership in putting together this transition plan, and I think that fact in itself will attract the more responses from the private sector in that transition plan, because I believe that whole process will be—will allow the different thoughts on the future of the governance of the domain name system to flourish and find a solution. And I laud the Department of Commerce and Larry Irving and the group that will come together and drive that solution that will, indeed, attract the private sector to participant. And I agree, if we don't do it, there will be a different problem. But I think this is the proper vehicle. I think it's the vehicle that's some of the private communities have been waiting for, and we're anxious to get started.
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    Mr. BARCIA. Thank you.
    I have some questions I'd like to direct to both Dr. Bordogna and Mr. Battista. Under the NSI cooperative agreement, 30 percent of funds collected from domain name registrations is set aside for a special Internet development fund, which now totals approximately $30 million. Could you please describe the process for determining how those funds will be used and who has the final authority for determining the disposition of the fund itself?
    Mr. BORDOGNA. Congressman Barcia, we did discuss this, I believe, when you were out of the room. So let me just summarize again, because we want you to understand this, and we appreciate the question very much.
    It's an issue. Of all the issues involved in this, it's not a major issue. In the first place, the cooperative agreement specifies how this is supposed to be used, and it's for the preservation—I'm using the exact words today because most people don't quite know what this is—''preservation and enhancement of intellectual infrastructure of the Internet,'' and that's very interpretable. So there are many options within that.
    As we mentioned before, there are a number of options, and actually Congressman Pickering asked us to submit for the record what these options might be. But they range from giving back to 30 percent—these are things that are hopping around. Mr. Irving pointed out that some of these registrations came from abroad, and it does—and if you're going to preserve and enhance intellectual infrastructure for the Internet, shoot that money back out there is not very responsible, because it can be done in a collective way or it can be not done at all.
    So I'm going to give you the range. A very favorite range—and I do want to repeat this one again because a very favorite option of many people, is maybe we can still—the private sector, which we're trying to move this responsibility to, can start a foundation where that money can be used as a seed capital and have this grow to a very, very big foundation, the income from whose endowment can be used in perpetuity, and that's a very interesting one.
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    Another simple one is to give to NSF because we know how to invest in intellectual infrastructure, and the discourse we had on this issue before was the question of accessibility to everybody around the United States. Can we use this money to ensure accessibility from small States? Can we use this money to couple with other activities going on in the Federal Government that we're investing in? And we ended up using the word ''holistic,'' and what we want to do is—the reason NSF—NSI has been very responsible in husbanding the money. It's an interest-bearing account, not been touched. So things are good.
    And NSF would like, with our partners, to keep looking at that, not make a decision yet because a decision may obviate some better use we think of as we roll out this policy. So that's where we sit on that. I think we're all very comfortable with that, and we'll find a good use for it.
    Mr. BARCIA. I appreciate the elaboration on your response, and I apologize that I was out of the room, of course, when you answered that previously.
    Mr. Battista, did you want to add to Dr. Bordogna's——
    Mr. BATTISTA. No, only that we're in concert. We're working diligently, certainly setting aside the money, as Dr. Bordogna has said, and coming forth with recommendations, and trying to explore the best way to meet the commitment in a cooperative agreement.
    Mr. BARCIA. Just one—just one final thought that I have or question, and that would be: Who would be the final authority to make those determinations? I appreciate the explanations, but ultimately which authority or which individual would have the final say in distributing those funds and basically determining the distribution of those funds?
    Mr. BORDOGNA. Well, NSF, we have a cooperative agreement in which we have direction for NSI to use the money in a certain way. So, as Mr. Battista says, we're doing this in concert, trying to share it, but NSF has the final authority through the cooperative agreement.
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    Mr. BARCIA. Okay. That's the question I was looking for. Thank you for the answer.
    I have a question also for Dr. Postel. Could you please describe briefly the role of the DNS, route servers, and the management structure for these resources, and what weaknesses exist in this structure?
    Mr. POSTEL. The root servers are the machines that hold the database that just describes the top-level domains. The top-level domains are like COM, NET, ORG, and the country codes, like JP for Japan. There is a—the root server knows where the servers for those machines are and contains that sort of key central database. There are 13 root server machines distributed, mostly in the United States; there are three outside the United States now. And the management of those has been shared between Network Solutions and the IANA, in that the actual operation of the database, of maintaining the database and updating what's called the primary root server has been a duty that Network Solutions has carried out.
    Decisions about what top-level domains go into the root servers, into that database, are based on essentially a consensus from the community, and the IANA's role is to interpret that consensus and to make those changes. We should say that there are very few of those changes, that the existing set of generic top-level domains has not changed since 1988. Although there have been requests, we've basically said, well, we're going to set those aside until there's a consensus plan for adding the top-level domains, such as the IAHC plan.
    Under the country codes, new organizations come forward in various countries and saying, ''We'd like to get our country code working in the Internet,'' and we process those in a fairly routine manner.
    Mr. BARCIA. As a followup, Dr. Bordogna, could you perhaps give us some guidance on whether or not NSF has given consideration to establishing an organization separate from NSI to be responsible for the operation, updating, and maintenance of the root servers, perhaps modeled on the approach taken to establish the American registry for Internet numbers?
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    Mr. BORDOGNA. No, we haven't gone that far in our thinking. The separation—the creation of the ARIN was simply another step in our trying to keep—since we're the oversight group—keep things moving. So we announced to the world 31st of March of 1998 is when things are going to happen; people are going to start thinking about this, and get into a discourse, and then we moved ahead and said, well, separating off ARIN is another kind of step that gives a signal of separation, but we haven't gone beyond that in our thinking. We're working with the partnership now to decide what to do next.
    Mr. BARCIA. Do you think that would be a feasible thing to attempt?
    Mr. BORDOGNA. I don't know. I haven't given it thought.
    Mr. BARCIA. I want to thank, of course, filling in for our distinguished Chairman, Mr. Pickering, also for the opportunity for having some fleeting time here in the Chairman's seat—thank each of the witnesses, and of course all the people who attended the hearing today, for your testimony, your very valuable insight into this daunting challenge I think that we face, but, hopefully, we'll succeed in seeing a smooth and strong transition.
    And I believe we'll have an additional hearing on September 30. So, hopefully, we'll see some of you again.
    And the meeting is adjourned.
    [Whereupon, at 11:47 a.m., the Subcommittee was adjourned, to reconvene at the call of the Chair.]