Order Code 97-868
Updated July 14, 2006
CRS Report for Congress
Received through the CRS Web
Internet Domain Names:
Background and Policy Issues
Lennard G. Kruger
Specialist in Science and Technology
Resources, Science, and Industry Division
Summary
To navigate the Internet requires using addresses (and corresponding names) that
identify the location of individual computers. As the Internet grew, the method for
allocating and designating those domain names became controversial. The
Administration issued a White Paper in June 1998 endorsing the creation of a new not-
for-profit corporation of private sector Internet stakeholders to administer policy for the
Internet name and address system. On November 25, 1998, the Department of
Commerce (DOC) formally approved a new corporation, called the Internet Corporation
for Assigned Names and Numbers (ICANN). A Memorandum of Understanding
(MOU) between ICANN and DOC has been extended through September 2006. The
109th Congress maintains oversight on how the Department of Commerce manages and
oversees ICANN’s activities and policies. This report will be updated as events warrant.
Background
The Internet is often described as a “network of networks” because it is not a single
physical entity but, in fact, hundreds of thousands of interconnected networks linking
millions of computers around the world. Computers connected to the Internet are
identified by a unique Internet Protocol (IP) number that designates their specific
location, thereby making it possible to send and receive messages and to access
information from computers anywhere on the Internet. Domain names were created to
provide users with a simple location name, rather than requiring them to use a long list
of numbers. For example, the IP number for the location of the THOMAS legislative
system at the Library of Congress is 140.147.248.9; the corresponding domain name is
“thomas.loc.gov”. Top Level Domains (TLDs) appear at the end of an address and are
either a given country code, such as .jp or .uk, or are generic designations (gTLDs), such
as .com, .org, .net, .edu, or .gov. The Domain Name System (DNS) is the distributed set
of databases residing in computers around the world that contain the address numbers,
mapped to corresponding domain names. Those computers, called root servers, must be
coordinated to ensure connectivity across the Internet.
Congressional Research Service ˜ The Library of Congress

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The Internet originated with research funding provided by the Department of Defense
Advanced Research Projects Agency (DARPA) to establish a military network. As its use
expanded, a civilian segment evolved with support from the National Science Foundation
(NSF) and other science agencies. While there are no formal statutory authorities or
international agreements governing the management and operation of the Internet and the
DNS, several entities have played key roles in the DNS. The Internet Assigned Numbers
Authority (IANA) makes technical decisions concerning root servers, determines
qualifications for applicants to manage country code TLDs, assigns unique protocol
parameters, and manages the IP address space, including delegating blocks of addresses
to registries around the world to assign to users in their geographic area. IANA operates
out of the University of Southern California’s Information Sciences Institute and has been
funded primarily by the Department of Defense.
NSF was responsible for registration of nonmilitary domain names, and in 1992 put
out a solicitation for managing network services, including domain name registration. In
1993, NSF signed a five-year cooperative agreement with a consortium of companies
called InterNic. Under this agreement, Network Solutions Inc. (NSI), a Herndon, Virginia
engineering and management consulting firm, became the sole Internet domain name
registration service for registering the .com, .net., and .org. gTLDs.
Recent History
Since the imposition of registration fees in 1995, criticism of NSI’s sole control over
registration of the gTLDs grew. In addition, there was an increase in trademark disputes
arising out of the enormous growth of registrations in the .com domain. There also was
concern that the role played by IANA lacked a legal foundation and required more
permanence to ensure the stability of the Internet and the domain name system. These
concerns prompted actions both in the United States and internationally.
An International Ad Hoc Committee (IAHC), a coalition of individuals representing
various constituencies, released a proposal for the administration and management of
gTLDs on February 4, 1997. The proposal recommended that seven new gTLDs be
created and that additional registrars be selected to compete with each other in the
granting of registration services for all new second level domain names. To assess
whether the IAHC proposal should be supported by the U.S. government, the executive
branch created an interagency group to address the domain name issue and assigned lead
responsibility to the National Telecommunications and Information Administration
(NTIA) of the Department of Commerce (DOC). On June 5, 1998, DOC issued a final
statement of policy, “Management of Internet Names and Addresses.” Called the White
Paper, the statement indicated that the U.S. government was prepared to recognize and
enter into agreement with “a new not-for-profit corporation formed by private sector
Internet stakeholders to administer policy for the Internet name and address system.”1 In
deciding upon an entity with which to enter such an agreement, the U.S. government
would assess whether the new system ensured stability, competition, private and bottom-
up coordination, and fair representation of the Internet community as a whole.
1 Management of Internet Names and Addresses, National Telecommunications and Information
Administration, Department of Commerce, Federal Register, Vol. 63, No. 111, June 10, 1998,
31741.

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In effect, the White Paper endorsed a process whereby the divergent interests of the
Internet community would come together and decide how Internet names and addresses
would be managed and administered. Accordingly, Internet constituencies from around
the world held a series of meetings during the summer of 1998 to discuss how the New
Corporation (NewCo) might be constituted and structured. Meanwhile, IANA, in
collaboration with NSI, released a proposed set of bylaws and articles of incorporation.
The proposed new corporation was called the Internet Corporation for Assigned Names
and Numbers (ICANN). After five iterations, the final version of ICANN’s bylaws and
articles of incorporation were submitted to the Department of Commerce on October 2,
1998. On November 25, 1998, DOC and ICANN signed an official Memorandum of
Understanding (MOU), whereby DOC and ICANN agreed to jointly design, develop, and
test the mechanisms, methods, and procedures necessary to transition management
responsibility for DNS functions to a private-sector not-for-profit entity.

The White Paper also signaled DOC’s intention to ramp down the government’s
Cooperative Agreement with NSI, with the objective of introducing competition into the
domain name space while maintaining stability and ensuring an orderly transition. During
this transition period, government obligations were to be terminated as DNS
responsibilities transferred to ICANN. Specifically, NSI committed to the development
of a Shared Registration System that permits all accredited registrars to provide
registration services within the .com, .net., and .org gTLDs. NSI (now VeriSign)
continues to administer the root server system until receiving further instruction from the
government.
After a year of negotiations, on November 10, 1999, ICANN, NSI, and DOC
formally signed agreements which provided that NSI (now VeriSign) was required to sell
its registrar operation by May 10, 2001 in order to retain control of the dot-com registry
until 2007. In April 2001, arguing that the registrar business was by then highly
competitive, VeriSign reached a new agreement with ICANN whereby its registry and
registrar businesses would not have to be separated. With DOC approval, ICANN and
VeriSign signed the formal agreement on May 25, 2001. The agreement provided that
VeriSign would continue to operate the .org registry until 2002; the .net registry until
June 30, 2005; and the .com registry until at least the expiration date of the current
agreement in 2007, and possibly beyond. In 2002, the ICANN Board selected Public
Interest Registry to operate .org for six years, and in 2005, selected Verisign to operate
the .net registry for an additional six years.
On September 17, 2003, ICANN and the Department of Commerce agreed to extend
their MOU until September 30, 2006. The MOU specifies transition tasks which ICANN
has agreed to address. ICANN will implement an objective process for selecting new Top
Level Domains; implement an effective strategy for multi-lingual communications and
international outreach; and develop a contingency plan, consistent with the international
nature of the Internet, to ensure continuity of operations in the event of a severe disruption
of operations. However, on June 30, 2005, Michael Gallagher, then-Assistant Secretary
of Commerce for Communications and Information and Administrator of NTIA, stated
the U.S. Government’s principles on the Internet’s domain name system. Specifically,
NTIA states that the U.S. Government “intends to preserve the security and stability” of
the DNS, and that “the United States is committed to taking no action that would have the
potential to adversely impact the effective and efficient operation of the DNS and will
therefore maintain its historic role in authorizing changes or modifications to the

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authoritative root zone file.” The NTIA statement also says that governments have
legitimate interests in the management of their country code top level domains, that
ICANN is the appropriate technical manager of the DNS, and that dialogue related to
Internet governance should continue in relevant multiple fora.2 On May 23, 2006, NTIA
announced an inquiry and public meeting seeking comment on the progress of the
transition of the technical coordination and management of the DNS to the private sector.
Issues
Congressional Committees (primarily the Senate Committee on Commerce, Science
and Transportation and the House Committee on Energy and Commerce) maintain
oversight on how the Department of Commerce manages and oversees ICANN’s activities
and policies. Some issues of current concern are discussed below.
Governance. The United Nations (UN), at the December 2003 World Summit
on the Information Society (WSIS), debated and agreed to study the issue of how to
achieve greater international involvement in the governance of the Internet and the
domain name system in particular. The study was conducted by the UN’s Working Group
on Internet Governance (WGIG). On July 14, 2005, the WGIG released its report, stating
that no single government should have a preeminent role in relation to international
Internet governance, calling for further internationalization of Internet governance, and
proposing the creation of a new global forum for Internet stakeholders. Four possible
models were put forth, including two involving the creation of new Internet governance
bodies linked to the UN. Under three of the four models, ICANN would either be
supplanted or made accountable to a higher intergovernmental body. The report’s
conclusions were scheduled to be considered during the second phase of the WSIS to be
held in Tunis in November 2005. U.S. officials stated their opposition to transferring
control and administration of the domain name system from ICANN to any international
body. Similarly, the 109th Congress expressed its support for maintaining U.S. control
over ICANN (H.Con.Res. 268 and S.Res. 323).
The European Union (EU) initially supported the U.S. position. However, during
September 2005 preparatory meetings, the EU seemingly shifted its support towards an
approach which favored an enhanced international role in governing the Internet. Conflict
at the WSIS Tunis Summit over control of the domain name system was averted by the
announcement, on November 15, 2005, of an Internet governance agreement between the
U.S., the EU, and over 100 other nations. Under this agreement, ICANN and the U.S.
will remain in control of the domain name system. A new international group under the
auspices of the UN will be formed — the Internet Governance Forum — which will
provide an ongoing forum for all stakeholders (both governments and nongovernmental
groups) to discuss and debate Internet policy issues. The Internet Governance Forum is
slated to run for five years and will not have binding authority. The group will hold its
first meeting on October 30-November 2, 2006 in Athens, Greece.
ICANN-Verisign Agreement and the .com registry. As part of a legal
settlement of a long-running dispute between ICANN and Verisign, on February 28, 2006,
the ICANN Board of Directors approved (by a vote of 9-5) a new .com registry agreement
2 See [http://www.ntia.doc.gov/ntiahome/domainname/USDNSprinciples_06302005.pdf].

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with Verisign. Under this settlement, Verisign will run the .com registry until 2012 (with
a presumption that the agreement will be renewed beyond that date), and will be able to
raise domain registration fees by 7% in four of the next six years. These registration fees
refer to the current $6 fee that a registrar (such as GoDaddy or Register.com) pays the
.com registry operator (Verisign) for each .com domain name registration purchased by
the consumer. Under the agreement, Verisign will pay ICANN a one-time sum of
$625,000 to implement the agreement, as well as a yearly registry fee, starting at $6
million per year, and going up over the next two years to approximately $12 million.
Critics of the ICANN-Verisign settlement assert that the agreement is
anticompetitive, giving Verisign a virtually permanent monopoly over the lucrative .com
registry, while also enabling Verisign to raise registration fees without justification.
Defenders of the settlement argue that the agreement is necessary to ensure the stability
and security of the Internet by ensuring the financial stability of ICANN, and by allowing
Verisign the flexibility to raise revenue for upgrading its infrastructure. The ICANN-
Verisign .com agreement must be approved by the NTIA at the Department of Commerce.
Protecting Children on the Internet.
In the 107th Congress, legislation sought
to create a “kids-friendly top level domain name” that would contain only age-appropriate
content. The Dot Kids Implementation and Efficiency Act of 2002 was signed into law
on December 4, 2002 (P.L. 107-317) and authorizes the National Telecommunications
and Information Administration (NTIA) to require the .us registry operator (currently
NeuStar) to establish, operate, and maintain a second level domain within the .us TLD
that is restricted to material suitable for minors. In the 108th Congress, P.L. 108-21
(PROTECT Act), contains a provision (Sec. 108: Misleading Domain Names on the
Internet) which makes it a punishable crime to knowingly use a misleading domain name
with the intent to deceive a person into viewing obscenity on the Internet. Increased
penalties are provided for deceiving minors into viewing harmful material. In the 109th
Congress, H.R. 4472, passed by the House on March 8, 2006, would increase the
maximum sentence from four years to 20 years for deceiving minors into viewing harmful
material.
On June 1, 2005, ICANN announced that it had entered into commercial and
technical negotiations with a registry company (ICM Registry) to operate a new “.xxx”
domain, which would be designated for use by adult websites. Registration by adult
websites into the .xxx domain would be purely voluntary, and those sites would not be
required to give up their existing (for the most part, .com) sites. Announcement of a .xxx
domain has proven controversial. With the ICANN Board scheduled to consider final
approval of the .xxx domain on August 16, 2005, the Department of Commerce sent a
letter to ICANN requesting that adequate additional time be provided to allow ICANN
to address the objections of individuals expressing concerns about the impact of
pornography on families and children and opposing the creation of a new top level
domain devoted to adult content. ICANN’s Governmental Advisory Committee (GAC)
also requested more time before the final decision. At the March Board meeting in New
Zealand, the ICANN Board authorized ICANN staff to continue negotiations with ICM
Registry to address concerns raised by the DOC and the GAC. However, on May 10,
2006, the Board voted 9-5 against the establishment of a .xxx top level domain. ICM has
filed a reconsideration request with ICANN, and has also filed a judicial appeal to require
the Department of Commerce to fully release (without redactions or omissions) all
internal documents relating to its interactions with ICANN over the .xxx issue.

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Meanwhile, on March 16, 2006, Senator Baucus introduced the Cyber Safety for Kids Act
of 2006 (S. 2426), which would require NTIA to compel ICANN to establish a new top
level domain name — such as .xxx — exclusively for material harmful to minors.
Websites with material harmful to minors would be required to switch to the new domain.
Those that do not would face civil penalties from NTIA.3
Privacy. Any person or entity who registers a domain name is required to provide
contact information (phone number, address, email) which is entered into a public online
database (the “WHOIS” database). The scope and accessibility of WHOIS database
information has been an issue of contention. Privacy advocates have argued that access
to such information should be limited, while many businesses, intellectual property
interests, law enforcement agencies, and the U.S. Government have argued that complete
and accurate WHOIS information should continue to be publicly accessible. Over the
past several years, ICANN has debated this issue through its Generic Names Supporting
Organization (GNSO), which is developing policy recommendations on what data should
be publicly available through the WHOIS database. On April 12, 2006, the GNSO
approved an official “working definition” for the purpose of the public display of WHOIS
information. The GNSO supported a narrow technical definition favored by privacy
advocates, registries, registrars, and non-commercial user constituencies, rather then a
more expansive definition favored by intellectual property interests, business
constituencies, Internet service providers, law enforcement agencies, and the Department
of Commerce (through its participation in ICANN’s Governmental Advisory Committee).
At ICANN’s June 2006 meeting, opponents of limiting access to WHOIS data continued
urging ICANN to reconsider the working definition. The GNSO will next decide what
data should be available for public access in the context of the working definition.4
Meanwhile, over the past several years, with the WHOIS database continuing to be
publically accessible, registrants who wish to maintain their privacy have been able to
register anonymously using a proxy service offered by some registrars. In February 2005,
the National Telecommunications and Information Administration (NTIA) – which has
authority over the .us domain name – notified Neustar (the company that administers .us)
that proxy or private domain registrations will no longer be allowed for .us domain name
registrations, and that registrars must provide correct WHOIS information for all existing
customers by January 26, 2006. According to NTIA, this action will provide an assurance
of accuracy to the public and to law enforcement officials. The NTIA policy is opposed
by privacy groups and registrars who argue that the privacy, anonymity, and safety of
people registering .us domain names will be needlessly compromised. A lawsuit is
pending in U.S. District Court that challenges the NTIA policy.
In a related development, during the 108th Congress, the Fraudulent Online Identity
Sanctions Act was incorporated as Title II of H.R. 3632, the Intellectual Property
Protection and Courts Amendments Act of 2004, signed by the President on December
23, 2004 (P.L. 108-482). The act increases criminal penalties for those who submit false
contact information when registering a domain name that is subsequently used to commit
a crime or engage in copyright or trademark infringement.
3 See CRS Report RL33224, Constitutionality of Requiring Sexually Explicit Material on the
Internet to be Under a Separate Domain Name
, by Henry Cohen.
4 See ICANN “Whois Services” page, available at [http://www.icann.org/topics/whois-services/]