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Why Does A Technical Manager Function As A Regulator?

Unlike ICANN, the National Telecommunications and Information Administration (NTIA) responded graciously, promptly and substantively to inquiries from the Center for Regulatory Effectiveness (CRE) regarding governance of the internet.

CRE sent a letter [PDF] to NTIA in mid-March asking about public access to documents prepared by ICANN under Memorandum of Understanding (MOU) with NTIA. NTIA provided a quick and clear response [PDF] to CRE's questions. NTIA also reiterated its commitment to achieving transparency and accountability in ICANN's processes.

NTIA's response to CRE, although clear and comprehensive, raised a number of important questions about ICANN and their governance of the internet. Specifically:

1. Why does a private administrative body act as a regulator?

The NTIA letter stated that the agency treats their meetings with ICANN in the same manner as they treat their meetings with "other private sector entities." NTIA's statement is consistent with their assertion that ICANN is responsible for the day-to-day technical management of the internet domain name and numbering system (DNS).

Regrettably, ICANN has gone far beyond day-to-day technical management and has assumed de facto regulatory responsibilities with regard to the domain name system (DNS). For example, ICANN sets price controls on registry services. Thus, the question that needs to be answered is why is a private technical administrative entity acting as a public regulatory body?

2. Why does ICANN have confidential business information?

In their response to CRE's inquiry as to whether the agency will release ICANN's Strategic Plan developed pursuant to the MOU, NTIA stated that they would not release reports, including the Strategic Plan that contain "proprietary and business confidential information."

Confidential business information is usually considered to be "trade secrets" or other competitively sensitive information. ICANN, however, has no competitors. Furthermore, ICANN is organized as a non-profit public benefit corporation that, according to its Articles of Incorporation, "is organized, and will be operated, exclusively for charitable, educational, and scientific purposes..."

Thus, by discussing ICANN's proprietary and business confidential information interests, NTIA has raised a serious question as to whether the organization is operating according to its own Articles of Incorporation as well as in adherence of California corporate law and Internal Revenue Service regulations.

3. How can transparency be achieved through privacy?

NTIA's letter to CRE stated that they share the goal of "transparency and accountability in ICANN's processes." However, since the letter also noted their meetings with ICANN were conducted in private and that key ICANN documents were not subject to public scrutiny, the question is raised as to how ICANN can achieve transparency in their operations while excluding the public from oversight of their organization?

It appears, based on the NTIA letter, that ICANN is a chimera, an organization that usurps the public power of a federal regulatory agency while maintaining the privacy and other privileges accorded to private businesses. ICANN's governance of the internet, therefore, seems to combine the worst of both worlds, the power of a federal agency with the lack of accountability of a private business. The question thus arises, how is this situation in the public interest? CRE believes that ICANN needs to function only as a day-to-day technical manager, not a regulator.

For more information, please see ICANNfocus.org.

By Bruce Levinson, SVP, Regulatory Intervention - Center for Regulatory Effectiveness
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