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Is the U.S. Government About to Give Away the Internet?

By Daniel Castro March 14, 2014

The economic benefits of the Internet are in jeopardy as a growing and largely unrecognized global movement seeks to change the governance of the Internet.

A coalition of nations is calling for the U.S. to give up the reins of the Internet. And if the Obama Administration doesn’t aggressively resist these calls, the world could be faced with a splintered Internet that would stifle innovation, commerce, and the free flow and diversity of ideas that are bedrock tenets of world’s biggest economic engine.

[Editor's Note:  Since this piece was published the Obama Administration has indicated that it will hand over its Internet governance role.  You can read about that move in this Ideas Lab post.]

This is how we got here: A couple of years ago, in recognition of the 25th anniversary of the registration of the first .com domain name, ITIF released a report that found that the annual global economic benefit of the commercial Internet equaled $1.5 trillion, more than the global sales of medicine, investment in renewable energy, and government investment in R&D, combined.

Unfortunately, many of the economic benefits of the Internet are in jeopardy as a growing, significant, and largely unrecognized global movement seeks to change the governance of the Internet in ways that could have disastrous consequences for consumers and businesses around the world.

The Domain Name System (DNS) is how URLs (e.g., ITIF.org) get translated into the unique Internet Protocol addresses (e.g., 69.65.119.60) that ensure someone gets to where they want to go on the Internet. In 1998, the Clinton Administration unilaterally established the Internet Corporation for Assigned Names and Numbers (ICANN), a not-for-profit corporation tasked by the U.S. Department of Commerce with managing the DNS and establishing the policies for the accreditation of Domain Name registrars. The Department of Commerce created ICANN to move the administration of the DNS to the private sector in an effort to increase competition and encourage international participation in its management.

The explosion of new domain names registered to addresses ending in now-familiar extensions such as .com, .net, and .org followed. All of these new domains were able to find each other due to the technical management of how computers are connected to the Internet—administered by the Internet Assigned Numbers Authority (IANA) under contract with the U.S. government. Just the .com and .net domains handle over 80 billion queries each day, and $200 billion in e-commerce transactions annually. In short, the key pieces that make the Internet run seamlessly are overseen by the U.S. government.

While the ultimate goal was to transition the technical coordination of the Domain Name System to the private sector over time, the U.S. government wisely retained supervisory contractual control over ICANN, IANA, and the root servers to ensure the security and stability of the Internet and to make sure that ICANN was indeed fulfilling its responsibilities in an accountable and transparent manner. These arrangements have been extended and amended multiple times, most recently in 2013.

ITIF has argued before that U.S. government oversight has played an essential role in maintaining the security, stability, and openness of the Internet and in ensuring that ICANN satisfies its responsibilities in effectively managing the Internet’s Domain Name and Addressing System. This supervision has provided the necessary assurance to the millions of companies around the world that invest in and use the Internet for business that it will continue to be governed in a fair, open, and transparent manner. And under this supervision, we have witnessed an incredible amount of innovation and social benefits for consumers. Given the continued importance of the Internet to the global economy, it is important that the U.S. government continue to support an Internet governance structure that protects the economic and social benefits of the global networked economy.

Without the U.S. government providing an effective backstop to ICANN’s original operating principles, there would be no mechanism in place to stop foreign governments from interfering with ICANN’s operations. For example, Internet users and businesses worry that countries such as Russia or China may manipulate ICANN to censor online content that is outside their borders. Currently, the U.S. government acts as a deterrent since it has publicly committed to ensuring that ICANN operates openly and transparently. It is unreasonable, however, to expect all foreign governments to continue to respect ICANN’s operating principles in the absence of the U.S. government’s oversight and protection of core values.

These points may sound familiar to those who follow the issue closely. They should. ITIF made similar arguments in 2008 as part of the Department of Commerce review of its contractual arrangements with ICANN, as well as in 2012, when we warned that countries like Russia were trying to sidestep ICANN entirely and bring the IANA function under the control of the International Telecommunication Union (ITU).

But today they take on a new urgency. Other governments, notably the BRIC nations, with a much different vision of how the Internet should be governed, have renewed their calls for the U.S. government to give up all remaining control over ICANN. And, as a result of growing distrust of the U.S. government brought about by the Edward Snowden revelations, they have been able to enlist the European Union and others to join in. This group is expected to push hard for reforms that would reduce U.S. government oversight at two upcoming international meetings in the next two months.

The Obama Administration should resist these calls.

First, the Snowden disclosures are merely a pretext. While the NSA revelations have rightly angered many people around the world, they have nothing to do with Internet governance. The U.S. Department of Commerce has not once abused its oversight of ICANN to aid the intelligence community.

Second, there is currently no viable alternative arrangement for the management of ICANN that would preserve the integrity of the architecture of the Internet. Without the current oversight by the United States, ICANN would not be accountable to anyone, and would be motivated only by the interests of those individuals who control the organization. Such a change would not bode well for the United States. Last year, the head of ICANN, Fadi Chehade, praised Brazilian President Dilma Rousseff after her U.N. speech criticizing the U.S. and organized an Internet summit in Montevideo to be followed by one in São Paulo in April of this year where “data nationalism” will likely be a key part of the discussion.

Yes, Internet architecture is technical and, frankly, quite boring to outsiders. But it is an issue with huge consequences that demands attention from policymakers. It is too important to get wrong. And if the Obama Administration gives away its oversight of the Internet, it will be gone forever.

Daniel Castro is a Senior Analyst with the Information Technology and Innovation Foundation.