given the -- my name is nearly expiring, let me close with a commitment and observation. my commitment is this. after the completion of this transition, ntia and the u.s. government will continue to be a forceful advocate to protect and advance american interest. we have always been active participants in icann and other international venues addressing internet freedom. nothing about the transition will reduce the level of effort we put in to representing american interests on these important issues. as to the observation, let me quote an analysis released yesterday by the r street institute whose mission is to promote free markets and limited government. quote, in reality, the internet isn't ours to give away. if congress blocks the transition, it will only make it more likely that the internet will be hijacked by authoritarian governments and special interests. mr. chairman, and members of the subcommittee, i urge you, do not give a gift to russia and other authoritarian nations by

blocking this transition. show your trust in the private sector and the work of american and global businesses, technical experts and civil society who have delivered a thoughtful consensus plan. please support this long-promised privatization. thank you. and i look forward to your questions. >> thank you, mr. strickling. mr. marby. >> mr. chairman, ranking members of the committee, thank you for inviting me here. i am honored to discuss this important issues and i welcome this opportunity to answer your questions. it marks the next step in the evolution of how the internet addressing system is coordinated. the transition was first envisioned in 1998 when icann was form and supported by democratic and republican administrations since. i'll leave you with one point today. no one controls the internet. you can think about it as a machine with many moving parts.

with icann being just one part of that machine. and icann can be replaced in that machine. it has nothing to do with content or freedom of cretion. icann had nothing to do with protecting free speech on the internet. we do not and cannot impact how sovereign states censor within their borders. the internet with its moving technical parts is currently running smoothly. it's a voluntarily arrangement between actors operating on a basis of trust. icann's primary job is to coordinator the top level of the naming and numbering systems. essentially, publish a telephone book for the internet. the technical feature that helps the operate like a single global network. i can make a small but significant role working together with other organizations such as the internet engineering task force.

the regional registries and internet providers to make the internet work. it is important to note that icann is not a regulator. the only power we have is for more than 2,000 contracts and agreements with registers and other entities across our multistakeholder community. because icann is a california public benefit non-profit organization with headquarters in los angeles and our bylaws and articles of incorporation subject icann to u.s. jurisdiction. icann is not now nor has it ever been exempt from antitrust laws. when icann's contract with the u.s. government expires, nothing will change the world's 3.4 billion internet users. the ending of this contract will not increase the role of governments of the internet or icann as an organization. in fact it will be a strict requirement that is currently

placed. governments that do not support a free and open internet do not support the transition. they hope we will fail or be delayed. the proposal submitted through the u.s. government were developed by u.s. industry, global businesses, technical experts, civil society and academia. stakeholders engaged in more than two years of discussion, debates and compromises they devoted thousands of hours of work to ensure the views of congress, the dchts commerce, the private sector and global stakeholers were all taken into account. the proposals build in additional checks and balances to hold icann organization and the board accountable after the transition. this is why the transition is widely supported by the u.s. business community. u.s. human rights organizations and global internet stakeholders. the u.s. chamber of commerce, microsoft, amazon, dell, the internet association, human rights watch, freedom house and numerous others have voiced support for the proposals submitted to the u.s.

government. the global internet community including all these u.s. companies, organizations and users has called for it. the organization is ready and we believe the transition should proceed on plan without delay. thank you. i'm looking forward for your questions. >> thank you, gentlemen. mr. strickling, you said you are here to testify in support of freedom. and you said freedom, quote, depends on the network of stakeholders. now you and i are both graduates of the harvard law school. somehow we have survived that. >> you better than me, it appears. >> the first amendment by its terms applies only to state action, to government action. the federal government fines the

states, the governments. the first amendment does not bind private corporations. would you agree with everything i've just said? >> yes, sir. >> so your testimony to this committee is that we should trust the stakeholders, none of whom are bound by the first amendment with protecting our rights and indeed you cited a number of the global technology companies. in your judgment, do the global technology companies have a strong and impeccable record of protecting free speech online? >> sir, i would like to make two comments in response to that. first off, in your opening remarks, you positted a vision or a scenario of icann and the u.s. government's role in it vis-a-vis the first amendment that does not comport with the

facts. >> i asked you just a simple question. do the global technology companies have a good record of protecting free speech online? >> i would believe that they do a fine job of that, but i am in no position of saying they've done a perfect job of that. but the comparison here that's important is how will it be different between the existing situation at icann and what will be in the future. when you talk about the first amendment protecting content online, you are talking about website providers who are operating at the second level, third level, at the domain name system. ntia, the department of commerce and the u.s. government has no role whatsoever with respect to who gets domain names at the second level or above. what content they put on those websites. and how it is handled internationally. so when you posit there's some first amendment protection that exists today, i'm not sure what you're talking about because when you're talking about

website owners, we're not involved in that. so there will be no first amendment protection from the united states that would extend in any way to protect people operating at that level of the domain name system. >> i will say it is remarkable and distressing to see a senior representative of the obama administration saying you have no idea what i'm talking about when it comes to first amendment protections. because i'll tell you what i'm talking about, sir. right now under the existing arrangement, if icann decided to delist a website because it disagreed with the political content, i'm assuming your agency would step in to prevent that? >> you're not positting a realistic scenario. icann would be involved -- >> you are saying -- >> top level domain level. we're talking dotcom, dotnet, dotweb. we're talking about the names then other people in the internet ecosystem would then use to develop their own websites. so icann would never be involved in the takedown of a second

level, third level site except to the extent it's involved as part of their contract compliance issues with regist r registrars. >> hold on a second. you just said they wouldn't do that except if they did it as part of their contract compliance. this is all under the context in which hay are operating rnd a contract with the u.s. government. >> it is not, senator. that's not correct. >> sir, please do not interrupt me. >> i apologize, and i will listen to your question. >> in a circumstance where the united states government relinquishes any oversight over this contract, the oversight instead shifts to multinational stakeholders. now you testified in response to the question i asked you earlier that's you think that the global technology companies have, i think the word you used was a fine record. protecting free speech. i will tell you, i for one am not comforted with trusting our freedom to companies with a,

quote, fine record, although you said not perfect, and i suspect there's a reason you said not perfect. because, for example, microsoft, facebook and youtube, which is owned by google, all of whom are supporting this transition, signed a code of conduct with the european union to remove so-called hate speech from european countries in less than 24 hours. that is not what i would call a fine record of protecting free speech work with governments to take down speech they disagree with. likewise, facebook recently faced serious allegations of censoring speech on its platform to silence conservative voices. and i would note this is not uniform one direction or another. progressives, leftists, verizon refused to distribute an optional opt-in text message from nyral pro choice america saying it does not accept programs from any group that seeks to promote an agenda or

distribute material that may be seen as troerchl or unsavory to any of our users. now that i would suggest is not a fine record of protecting the first amendment. listen, verizon, google, facebook, they aren't government entities. they aren't bound by the first amendment. but the united states government is. and for those of us that want the internet to remain free, want to avoid internet censoring, being told that we should trust these stakeholders when their conduct over and over again indeed recently, the journal of law, technology and policy at the university of illinois said, quote, prominent american corporations including cisco systems, mfrts, nortel networks, web sense and sun microsystems have all played a part in quickly equipping china with censorship equipment. you are asking the american people to trust private companies with control over their free speech and remove the

u.s. government role. >> i am not, senator. that is absolutely not correct. >> what is incorrect about it. >> the united states involvement is only at the -- with respect to the iana functions. that's what we contract with icann to perform. that deals at the highest level with the root zone file meaning top level domains. this has nothing to do with what choices individual companies make in terms of what they put on their own websites. it has nothing to do with what is happening with the content of what's passing on the internet day by day. we have no role in that. we have no authority over that. all we're suggesting is that contract in which all we do is verify that change to the root zone file have been made accurately. no longer has a technical reason to exist and no longer has a political reason to exist because, if anything, it's being used by authoritarian governments who do want to control government who do want to effect what goes over the

internet. it gives them the opportunity to argue for that in international venues, and attempt to arrest control away from the multistake holder body that performs these functions today. >> you testified before this committee that the american government would remain, i think the term you used was a, quote, forceful advocate. >> yes, sir. >> of free speech. >> yes, sir. >> that is very much the same language that is used on the ntia's q&a document that says the united states, quote, will continue to play an active leadership role in advocating for a free and open internet within icann as a member of the governmental advisory committee and another international venues. >> that's correct. >> with all due respect, simply peek told that we will argue for the first amendment and try to convince russia, try to convince china, try to convince iran the first amendment is a good idea,

within the governmental advisory committee if this transition goes forward, would the united states government have any greater ability to defend its position than would russia or china or iran? >> the important point to take away from the government advisory committee is that for it to render advice that has any force with the board, it has to be consensus advice. meaning it has to be advice to which no government objects, which means there will be no advice coming out of the governmental advisory committee that the united states doesn't agree to that requires the board to take any particular action with respect to. otherwise the board can continue to reject advice as they do today. >> just to clarify your answer to the question. if the transition goes forward on the governmental advisory committee, the united states would be on the very same footing as would russia or iran or china? >> that's correct. but what i'm telling you is that nothing will go forward that the

united states doesn't agree with. >> very good. we'll continue this questioning. senator coons. >> thank you, mr. chairman. so let me make sure assistant secretary strickling, mr. marby, we've got our basic facts right here, if we could. first, it's been presented today that this is a political agenda by the obama administration to, quote, relinquish the historic guardianship of the internet to an international body. if i understand your testimony correctly, the choices before us are continuing on a transition path that would privatize, not relinquish to the u.n. or itu or multigovernment international body, to privatize the dns function essentially -- >> yes. >> -- to allow icann to continue to perform its function, which is technical and does not

involve censorship of the internet. >> that's correct. >> is that correct? mr. marby, just to be clear, does icann have the ability to censor internet content? >> no, we don't. >> mr. assistant secretary, is this a political agenda of this administration, or has it enjoyed bipartisan support across several administrations and across a wide range of members of congress? >> this has been a longstanding commitment of administrations, both democratic and republican going back to 1998. >> and one of the questions asked by the chairman, do we have something to fear? is a question i'll put to you in a different way. what concerns should we have if this transition doesn't go forward? how would other stakeholders act? how would it embolden, as you said, authoritarian regimes. if we delay this transition for months or years, what's happens next? >> the longstanding debate on

internet governance over more than the last ten years has been, do the stakeholders who built the internet, the businesses, the technical experts, civil society who play an important role, should they be the ones making the decisions about how the internet grows and thrives? they've been the ones who have been doing it. you have to like the record they've created based on the incredible growth, innovation, job creation, that has occurred as a result of the internet. or on the other hand, do governments run it? several years ago in 2012, that debate took an ugly turn when at an international conference in dubai for the first time, a majority of governments wanted to give a u.n. agency, the international telecommunication union, more authority in this space. as i said in my -- in many speeches and in testimony before, people use the fact of this iana functions contract,

people being other governments, as an excuse to argue that if the u.s. is in there, we ought to be there as well. and we saw the outcome of that in dubai with a vote where the u.s. was in a minority. since then, we and in particular the state department have through international diplomacy worked hard to reverse that impression and have worked hard to build support for the multistakeholder model among governments in the developing world, governments that hadn't really made up their mind yet. i know people have said nothing about this transition is going to change the views of russia and chipna and they're right. we wouldn't dispute that. but russia and china can't do this by themselves. if this transition doesn't go forward, our credibility as a power in terms of supporting the multistakeholder model will be shot. there will be people that say the united states has reneged on its promises, and it will be

exploited by these foreign governments at conferences that will be starting up as early as october. >> let me make sure i understand you. on the one side we have governments that censor the internet and its content within their own countries. russia, china, iran, others. advocating for a transition of this function to a u.n. body like the itu or something else. a body run by governments. >> yes. >> and you're part of a multistakeholder process that's is instead the alternative seeking to privatize it. >> that's correct. >> to take this government agency, the ntia, out of a purely clerical function that does not censor or control content. >> that's correct. >> in order to take away an argument that authoritarian regimes have? >> yes. >> and if we don't proceed, those authoritarian regimes will have a strength in hand as they seek to persuade countries that are not yet clear on which way they're going to come down?

>> that's correct. >> and how many countries are in that middle ground where you think our delaying this transition might persuade them that the u.n., the itu, some multigovernment agency is better than this privatization? >> there would be dozens of governments in that category. what we know is that through the efforts of the state department and ntia, over the last two to three years, we have basically brought about 30 of those governments on board in support of the multistakeholder model. and the risk is that they and even like-minded governments who have been longstanding supporters of us will see a packtrack on the u.s. government's support of the model as perhaps an argument to go a different direction. >> got it. let me ask a few quick questions before i relinquish this round. mr. marby, will the icann continue to be subject to u.s. law after this transition? much has been made of the possibility that icann might decamp for another jurisdiction. >> we will be subject for

california law, yes. >> any reason to be concerned that icann might suddenly change its state of incorporation, its bylaws, its compliance with u.s. law, its headquarters in los angeles? >> not at all. the whole basis of it is built around california. everything is based on california law. but i would like to add my biggest concern is not about the governments which is a big risk. i also want the committee to understand that this system is voluntary system that nobody controls with different moving parts. if the transition doesn't happen, there could be another icann outside the united states with no protection of dotgov, dotmil or anything else. it works together for the benefit of it all but could be replaced. >> let's make sure we get that point. just because the structure, the architecture of the network of networks that is the internet was initially developed and designed in the united states by

u.s. agencies and companies, does not mean that that has to continue to be the case. and if the international >> that currently maintained this functioning internationally, if they lose confidence in the process toward privatization transition they may instead step up competing positions and the current network of networks might begin to track tour further and that would harm the internet's functioning and current architecture. >> yes. >> last, what safe guards are there against what's been raised against one of the things we should be concerned about? what safe guards are there against potential capture in the further. >> well, there's many. governments cannot sit as voting

members of voting directors. number two, in the committees we talked about there's a strengthening of the provision under which they can provide consensus advice to the board it's now defined as advice to which no country objects so that means that that advice to which the board has to provide special attention or special consideration now will only apply to advice that the united states government agrees with with. third to the extent that they created them powered community as a way to put -- exercise powers against the board in terms of he viewing and approving the budget. even removing board members, governments if they choose to participate in that and they have in the united states and

participate and and be able to participate in advice and produced. and through the provisions but this is one of our four criteria when we announced the transition in 2014 and quite thoroughly in making sure that the plan that they crafted will prevent that from ever happening.

and another un agency or multigovernment agency or the reture future where it fractured and competing ds functions have been set up or it's been underway and much of it private sector lead that is a privatization of a function that is essential to the operation of the internet but is in no way involved in censorship of the internet. is that your testimony today? >> yes, sir. >> in 2015 you testified that you would, quote, take a look and make sure that if there is a

way that we can strengthen u.s. governments rights to those name wes will do it. end of quote. while they affirmed that any change can only be made with the express approval of the u.s. government, we have come to learn that the affirmation has come not through a binding legal agreement but a mere exchange of letters and it remains possible that they could redell fwat these and follow up and has the ntia with the justice department and member of the working group regarding this language and if so, what was their response?

>> the answer to your first question is the united states does not wish to seed any sovereignty we might have and that's why we have done this as an exchange of the letters. the united states had the complete authority and control. that condition exists today and it will continue on into the future. to enter into a contract would in some respects risk indicating that they have rights in the control or authority over those names that it does not have today. so in evaluating the desirability of doing a contact it became clear understanding the history of these domain names that that was risky and might lead to conceding some form of authority over these names we enjoy today. >> what about consulting with the justice department? >> well, we consulted with the department of defense because it operates and i don't recall

whether there was a specific discussion with the department of justice about it but this was the course of action that the operator wish to take in terms of doing this as an exchange of letters as opposed to doing a contract. >> are they opposed to executing a binding legal agreement with the administration that would ensure that the u.s. continue to control certain top level domains like the ones i mentioned permanantly into the future? >> it's up to the u.s. government to decide how it would like the protection. we don't see that we have any rights over there today and i'd also like to restate the fact that if the transition doesn't two through, there will be no safe haven for those names. >> let me ask you, something that senator combs has touched

on. in your testimony you explained that ican place of incorporation isn't a subtle matter and that it and the location could potentially change your predecessor went so far as to announce in 2014 that it had given him the green light to work on a legal structure in switzerland. so no matter how much the administration and ican wish to down play this issue and it's an issue that hasn't truly been settled. so is it opposed to including requirements to ensure that the place of incorporation never changes from california or is it

impossible and a reason why this transition shouldn't two forward? >> i think it's fair to say the protection is tronger than tstr laws. it's built around carolina law. that's how we do things. so to be able to do, you have to go all the way down to where we are organized to be able to do that. so it's a stronger protection than just the by laws. >> thank you mr. chairman. thanks to both of you for being here. i'd like to start with you if that's okay. as i'm sure you're aware some observers and some legal scholars and other analysts of this industry have contended that any protection from antitrust liability that they

may have enjoyed in the past ended in 2009. a change in the level of oversight specified by the ntia contract. >> however, there's a 2015 decision rendered by a panel of the u.s. court of appeals. affirming that the dismissal brought by nail space it suggested that some insulation from may still remain. more to the point the 9th circuit's reasoning supports the conclusion that this continuing measure of protection. whatever sit that remains of the protection may fall away with the expiration of the contract.

in particular the 9th circuit reasoned it could not infer that it entered into an anticompetitive greem and the apparent insider driven process for new top level domains was, quote, fully consistent with it's agreement with the department of commerce closed quote. by way of explanation the court noded it was understood from the inception that it's board would include industry insiders and that the board would approve the application process. >> i'd like to ask you the question, given the uncertainty of the situation as far as antitrust law goes and the uncertainty that i think is acknowledged by the 9th circuit

in this opinion did ntia reach out to the department of justice, antitrust division for an opinion on possible liability risks that they might incur. that the board of directors might face following the removal of insulation from a normalized antitrust analysis brought about by the termination of the ntia contract. is that something that happened. >> during the evaluation of the transition plan there was an inner agency committee of federal agencies including the department of justice as part of that process the department of justice looked as whether there were any competition concerns that might result from this transition and they concluded that there were no. it's our view they have not enjoyed antitrust liability not going back to its creation in

the late 90s. so we have never seen the transition as take agoway something that they told today because we have not recognized that they have any antitrust ill immunity today. that's also the department of justice's view. so that the transition obviously wouldn't change that circumstance. because they wouldn't have it going forward. that was all evaluated as part of our overall review of the transition proposal. >> you don't dispute that some courts have seen it differently? you don't dispute that. >> i know the department of justice has offered a briefing for the chairman and members of the subcommittee to go into that in greater depth. i'm aware of a 2009 case that's cited as providing some level of

immunity. and that involved a predecessor. the court case that you're describing in the 9th circuit, i thought there was no cause of action stated. i don't believe they made any finding of immunity as part of their holding. >> it was a different sort of holding and they were immune if they were a government actor but there was a connection to this government entity that seemed to be significant in finding the liability. >> but am i correct that they found no cause of action? didn't dismiss the case. >> they found no cause of action. as my time is expiring i do want to know and let me ask this of you. it's a nonprofit corporation organized under california law

and it has been since it's inception and subject to both u.s. and california law post transition? >> yes. >> okay. so it's not in a position of saying we want to keep our options open. it's committed to staying in california, remaining a california corporation? >> as i said, it's built on california law. it's funded on california law and plus the different one is based around california law as well. >> thank you. i see my time is expired.

>> could i have 15 seconds please? >> sure. >> i thought that he answered my question and senator lee followed up. i'd like to know from you for clarification whether or not it's in the bylaws, is there no way that you can sit here and assure me that it will never change. >> and any decision that is made has to be made by the community and not by me. that's the way that this is set up. i'm here to execute the wish of the community. >> so you can't assure us that it will always be under california law in california.

>> to be able to change who we are because of the fact that we built on california law and i would say it's a hard thing to do. with no california law as the basis. you made a lot of references to the by laws. he told us we should trust the bylaws because it ensured that nothing could go out of the government advisory committee without consensusful does anything prevent it from changing the by laws any time it wishes? >> they're built into the system to be able to change the bilaws. >> so yes i can change the

bylaws. if we sit here today and say there's something in the bylaws after the transition i can change the bylaws and remove whatever the assurance is we're told to trust? >> if you are referring to the icann organization, the answer is no. >> icann cannot change it's ownbylaws. >> as i said, to be able to make sure that no one takes control of the icann it has three parts. don't have the possibility to go in and change it. the only ones that can do it are the kmcommunity. >> it's the community and u.s. businesses that had a questionable record of protecting free speech in the past and have the authority to change the by laws in the future; is that correct?

>> if someone wants to change this it's easier -- >> i'm not asking which is easier. i'm asking if the bylaws can be changed? >> there are so many checks and balances within the system i would say it's hard hi possible to do. >> this isn't a complicated question? can the bylaws be changed? either they can or they can't. >> i cannot do it. the community have checks and balances but they're built on california law. >> and under california law the bylaws can be changed by what you referred to as the state holders community, correct? >> after the checks and balances built into that system that all represent u.s. users as well.

>> now to follow up on your exchange can you tell this committee today that there is zero possibility that i can choose to prove abroad to a foreign jurisdiction? >> i don't have the mandate to take that decision as i explained early and we have no interest in moving icann. >> but you cannot say there is zero possibility it will occur. >> i'm only representing the organization. i would say it's highly unprobable to do that. >> well, then let me ask you, your predecessor and february 21st, 2014 where the french senate said quote, first to begin working on a parallel legal international structure maybe in switzerland. why was he telling the french senate something different from what you're telling them. >> first of all, i cannot read

it because it's too low and i can't explain that because i don't know which circumstances he said that. >> so you have no explanation for your predecessor making reference to creating an international organization in switzerland for icann. >> if you look back to the bylaws and how we set it up, also the u. s. government was satisfied with the protection we built in. >> talking about your predecessor, let's talk about another aspect of his record. which is that he stated if we do not engage with china at every level of our kmun we lose a part of our global legitimacy and after leaving icann he became co-chair of an advisory committee to the world internet conference organized by china. he did so after reporters without boarders called for a

boycott on that conference saying that china was an enemy of the internet. now do you agree with his views of china? >> maybe this is my english. i don't understand the question. >> do you agree with his views about china? about the legitimacy of china, of the need to work with them, even when they're censoring the internet. >> my understanding is about 300 million internet users in china. we are a nonpolitical technical kmun that works with the community to make sure that it functions technically. >> well let me ask you this, do you agree with what reporters without boarders said in

december of 2015 that china is quote the world's leading enemy of the internet. do you agree with that? >> you're asking personal questions which i will now answer in a personal way. the reason i work for icann and took this job is internet is a vehicle to be able to open up hearts and mind of people around the world. when it comes to policies on top of the internet. irann cannot prevent any country or network owner to be able to prohibit access to information on the internet. what we do is to create the opportunity for networks. >> so let me just ask this question again because you didn't answer it. do you agree with reporters without boarders that china is the world's leading enemy of the

internet? >> there's many countries around the world that prohibit access to information. i think it's bad every time. >> do you think china is an enemy of the internet? >> i didn't say rank. i said do you agree china is enemy of the internet. >> there's a risk that china together with russia and other countries will use that possibility to move the supervision of icann to the un. >> is icann bound by the first amendment. >> i think you know the answer to that question. >> i'll asking your views. >> to my understanding, no. >> it to finally make a point that the criticism, the opposition to transferring control of the internet to

international authority of stake holders without authority of the u. s government is bipartisan critisism. it's across the spectrum because freedom, ensuring the internet free of censorship is and should be a bipartisan objective. i would note that former obama administration federal chair commission chairman has stated that it difficult to get straight answers out of icann and if commerce cuts the cord before these issues are ironed out there will be a lot of risk to consumers. that's the chairman of the federal trade commission appointed by president obama. and jeffrey bullock from the home state of the ranking member on this committee. and legitimate policy concerns have been brushed to the curve

by staffers and well skilled and manufacturing processes to disguise predetermined decisions and likewise i want to point to yet another famous right wing organization, the washington post. the washington post editorial board said, quote, it's bad enough that these authoritarian governments express online repression within their boarders. they should not be let anywhere near the governance of the internet's global infrastructure. no one has yet had a convincing explanation for how the multistake holder model will be ill immune to influences this criticism is widespread. it's bipartisan and unified behind the need to preserve

freedom online. >> thank you and very briefly without objection i'd like to enter each of the three stalts into the record. >> absolutely. >> first if i might briefly speak to my friend, neighbor and former colleague, now secretary of state, the come mens that he has made related very narrowly to.llc and .inc and whether or not they were being governed or managed in a way that could be misused by entities that are not legal corporations to represent that they are corporations and has nothing to do with the transition process that is before us today. let me ask two questions and then make a comment if i could. first to the assistant secretary is there anything about this transition that will newly empower foreign governments to sensor the internet?

>> no. >> is there anything about failing to make this transition that might empower foreign governments to have a greater role in the structure and architecture of the internet if we don't move forward. >> within their own countries govern ms can do what they wish today. that's what lead to the comments such as the chairman pointed out about china and the practices it engages in to restrict content from its own citizens. there's nothing about the way the internet runs today that gives us or icann or anyone else any ability to step in and change what those countries choose to do. our hope has to be that over time as the stake holder groups grow and influence an importance in their own countries that they bring about that change internally. that's the whole core of this model and what we're seeing in developing countries and what we have seen over the last several

years is that as countries see this, as businesses in these countries come to icann meetings and see how this works, as their civil society groups start to develop and they see how they can participate in this process, as they emerge and grow, you're seeing these movements being filled up in these developing countries to build this in support of freedom and stake holder control and against government control. that's what we risk losing if this transition doesn't go forward because countries give up hope once they see the united states is no longer serious about supporting this model. >> we're going to hear the second panel from a number of witnesses who support the concept of the transition who support the privatization of the

function but who say it's not ready yet. do you believe this transition plan has been adequately tested? and are you confident in the continued security and stability of the internet post transition? or should we listen to those that caution, who urge caution and delay? >> the transition is ready now. the only change that occurs is that the united states will no longer be in the middle of updates that take place today. today icann transmits a change to us and we transmit it there with instructions to go ahead and imple m the change. that one technical role would be eliminated. there has been testing over the last many months of the new system that will allow that to occur without the government in the middle and that system checked out over 90 days of testing error free.

so we are ready to go forward. today the united states government does not have control over the accountability of icann. that has to come from the community. now we have advocated and we have been a participant in improving the accountability over the years. >> they have nothing to do with the contract and will come in place with their own authority. >> so is it possible that the editorial from the washington post that was just shown and is

a year and a half old does not reflect the process in preparing for this transition? >> it was written before a transition plan had been completed. >> so it's not relevant. >> my time is about to run out. i want to ask a question that i think is posh. there was a big display put up of a quote from your predecessor and i want to be careful about this and get it right because i think the point that was being made demonstrates in which the whole thrust of this hearing gets exactly wrong the moment before us or the decision before us. he was testifying to the french senate and saying that we should begin to develop pair lel legal international structures perhaps

in switzerland. i don't know him. i haven't read into that testimony. i don't know anything other than what was put up here but it seals to me that what he is advocating for is exactly the negative outcome that you're saying is likely if we delay this transition. meaning, others who are fans perhaps of china or russia or other states, others that are suspicious of any u.s. role will begin to actively advocate for creating an alternative that isn't incorporated in the united states and isn't headquatered in california and isn't largely guided and lead by this stake holder community but is instead outside of the united states headquatered in switzerland athat reflected the possibility that a come immediately alternative competing group may

well be set up and may well be the first step toward a competing system. airplanes take off and land all over the world in various airports and there is essentially one global system by which airplanes and airports communicate with each other and convey their schedules and decide who is going to take off and land where and by which control towers make decisions about who is going to land what. >> they're not talking about the content of advertising of those airlines. they're not governing the conversations happening on the airplanes but there's one global system for the management of air traffic. >> imagine there's a competing system that didn't talk to a u. s.-lead system of managing air traffic we're not talking about

the content of the traffic, just how it flows. if i understood your testimony correctly, moving forward with this transition, which you have tested and which you have confidence is a way to show to the world that we can continue with the current architecture. he was talking about the real threat that a competing system through the internet through a come competing structure may move forward. is that connect? >> yes, that is correct and there are tests of those systems already today where you're looking to alternatives and is happening outside the u. s. >> the idea that that supports

that is thinking about it. and set up to the private sector-lead structure and transition to icann. it's comfortable aspects. and we have to be good to serve and the community. and this is a technical thing. and then the control and that's

why internet consists of so many different moving parts that works together under trust. under the assumption that the u.s. will leave this to expire and it's set up by the u.s. and the world is grateful for having this model because i think it's beneficial not only for the rest of the world but also for the unfortunately s. and u.s. businesses and today you can reach 3.4 billion around the world as the business potential and set up, working together and all of them are important and they can't be replaced. >> thank you. thank you. >> i want to ask one question with regard to the second panel coming up. and trying to register a top

level domain. they tried to register the ping domain name and wound up paying over $1 million to do that at auction. i think it's troubling that it was forced to pay for its own intellectual property. how will the transition address con serns of american trademark holders? and will the process of resolving these kind of claims change following the transition? >> let me start in terms of the impact by it itselfment what you're striebing is the process established by the community as to how it would expand the list of top levels available and as a result of this hundreds of new domains have gone into the route file. it has nothing to do with the performance of the functions so the contract that we have under which they perform updates does

not reach this policy making activity of icann so when the contract goes away it will still be up to the community of businesses and everyone to set the policies. now the example that you're talking about comes right out of the guide book that the community developed over years in terms of what to do when multiple parties seek the same domain name because it's not like the trademark world where people can like apple use apple as a trademark in one context and a different company could use apple in a totally different industry. >> unfortunately on the internet only one person can have .apple. how do we deal with the competing claims on the names and what the kmun decided and i mean all of the businesses that are now seeking domain namnames

names, they need to work it out and at the end of the day the process that they put in place to resolve at the end is an auction which can be conducted privately or under the icann. the parties decide that. has it been a great outcome? that's a good question. if they feel that the experience of dealing with these contention sets were people ask for the same domain name has worked out the way they expected it to when they set the policy several years ago. >> it's not in anyway within the scope of the contract that we have with icann.

>> this will be the final round of questions for the first pa l panel. >> if congress passes an appropriation writer this month mandating that ntia renew the contract with icann will you commit that ntia will comply with that man day? >> we'll follow your direction sir. >> so you are aware and that means it. >> that's what we did. >> you are aware of the section 5 act already makes clear that

none of the funds maybe used to relinquish during fiscal year 2016 with respect to internet domain name functions including responsibility with the effect to the authoritative file and it's existing federal law. >> that's correct. >> passed by congress and signed by the president. >> that's correct. and i have followed that as well as all members of my staff. >> so your testimony as follows. >> absolutely. >> you're aware when none of the funds maybe spent carrying out a function, that means not only dollars but time. >> i have done nothing to relinquish the responsibility of ntia with respect to the internet domain name system during this physical year.

>> so it's my understanding that ntia awarded a contract in the amount to harvard university to study the transition plan, is that correct? >> we asked for expertise, that's correct. >> it's my understanding that the ntia paid the professor $9,207 to conduct a he view of the transition plan. >> that sounds correct, yes. we absolutely retained her. >> it is my understanding that the ntia incurred expenses of $1,658 for two meetings in new york with experts relating solely to the transition. is that correct. >> we had two meetings in new yorkful i don't remember the dollar amount but that sounds right. >> you have used government salaries staff and prepare and draft the iana transition proposal assessment report. is that correct? >> just as congress directed us

to, yes, sir. and exceeding an amount available and an appropriation or fund for the expenditure. are you aware of that? >> i'll aware of the antideficiency act, yes, sir. >> how would you explain to this committee, your conduct, expenditures we went through, all working to relinquish the control of the internet. how is that consistent with federal law and the antiefficiency act. >> well, you just added a word

that's not in the writer. you added working to relinquish responsibility. i have not relinquished any responsibility but the profession does not reach preparatory activities and indeed congress expected us to engage in preparatory activities because at the time the first rider was passed in 2014 we were directed to conduct a review of any transition plan that we received. congress understood and that we would be engaged in activities preparing for the transition but those themselves do not relinquish responsibility. >> do you have an opinion stating as you put in preparatory functions are not included in this rider? >> we were so adviced. >> do you have a written opinion.

>> i would ask you to submit that legal advice to this committee. >> i understand. i will take that back. >> but you do not have an opinion from the office of legal council of the united states department of justice to that effect? >> i'm not aware of one, no. >> i would point out that under your interpretation that i consider to be tortured interpretation of this language and i am faithful to the text. your interpretation is preparatory conduct is not encompassed in this so that the commerce dlt can can do absolutely everything required to relinquish the internet and the responsibility right up until the moment of pushing the button and -- >> i'm sorry. >> and your position is every single act of preparation can be done and as long as it actually hasn't been culminated with the

relinquishment, that is perfectly okay. i'm going to say two things. number one, i'm going to ask you, if that interpretation is right, why on earth would congress pass this? this is a meaningless ryder. if your interpretation is right, what is congress prohibiting? >> they prohibited us from relinquishing responsibility but let me ask you this, senator, what is the responsibility you referred to there? the only responsibility we have is not based on any statutory operation. >> i understand. >> let me finish. if i may -- >> no, you may not. you may answer my questions. i understand -- >> i am telling you the responsibility we have has been to privatize the domain name system. >> i understand that you have a political mandate to do that but let me be very clear. the fact that you disagree with the policy judgment of the congress of the united states as reflected by federal law, you're entitled to disagree with it. here's what you're not entitled

to do, sir, and i want to speak for a moment to the employees who work for you. to the government employees at the ntia and the department of commerce. these legal prohibitions have been passed into law by congress and signed by the president. if your political superiors instruct you to proceed with this transition, to spend your time you have an obligation to violate federal law and let me note for you, if you don't, if your superiors direct you to do it and you carry out those orders you are risking personal criminal liability of up to two years in prison. and i would note, this administration that has politically mandated handing

over oversight of the internet, this administration is not going to prosecute it. but in january of 2017, a new administration will be in washington. we don't know who that will be but i am advising the employees of the department of commerce, your political superiors do not have the authority to instruct you to violate federal law and violate what congress has passed. he told us that he disagreed with congress. he entitled to disagree with congress. he is not entitled to instruct employees to violate federal law and each of you should be on notice to work hard and have long distinguished careers that political appointees cannot instruct you to violate federal law. >> senator, we have followed the law. we have not relinquished our responsibility. i am outraged that you're accusing us of doing that

especially when the very conduct that you raised if i may read to you, the committee directs ntia to conduct a review and analysis of any proposed transition in the contract so we are directed to do that as part of the spending bill that was passed for fiscal year 2015 and carried forward in fiscal year 2016. it's clear that congress never intended to relinquish the responsibility to mean all the activities we were engaged in because we were directed specifically to conduct the review of the plan. >> a committee report cannot change clear statutory text and you under your interpretation which i consider not a reasonable interpretation of federal law because it renders federal law absurd and meaningless, under your interpretation this had no effect whatsoever and they need

to make an interpretation. are they willing to risk their own careers based on what i need to be a political interpretation. i hope the answer to that was no. and you are welcome to disagree with it. but you are not welcome to disobey federal law passed by congress. >> i have not disobeyed any federal law with respect to this. >> giving you the opportunity, given that exchange to put on the record your understanding of whether you were employees have something to fear.

and your interpretation would render it absurd and meaningless. what i understood your view to be is that congress at the same time directed you, let's give a metaph metaphor. it's the he kwequivalent of sayg we're going to urge the department of homeland security or the fbi to plan and prepare for a future acquisition of a headquaters while at the same time saying you should not build a new headquaters in this year. that's not absurd is it? >> not at all. we were preserving a status quo. >> so your understanding was that there's no absurdity or profound tension between being told and continue to engage in responsible professional review of this transition plan but do not execute on that transition plan in one fiscal year. >> absolutely. >> that's your understanding and

you have gotten guidance that supports that view. >> yes. >> so do you have any fears from yourself or your employees that you're in violation of statutes or the directions of congress? >> i do not. plus as i said before our responsibility that stems solely from an executive memorandum of 1997 has been to privatize the domain name system. there's no federal statute or federal regulation directing ntia or any other agency of the federal government to run the domain name system. >> thank you. i'm going to defer to my colleague. >> thank you. thank you mr. chairman and thank you for your service. >> i want to thank you for the work you do. i worked on this issue as a member of the commerce committee so i have been familiar with it for awhile and i know at first

when peel hear about this it seems like why can't our own government just control all of this. this is an international internet and one of the crucial aspects is it is based on the open free flow of information and it's not run or controlled by any one government it's now been over a decade and ntia is simply working to transition it's role. however we do know that there are other government across the world that want to control the internet or want to stop the spread of information on the internet to their citizens and limit the democratic values that it provides by allowing people to freely share in information across the world. can you expand on just stepping back a little here, could you expand on why this transition is important to sending a clear

message that the internet should be run by the multistake holder process, by people from various govern ms and not by one government. >> and that's been the long policy of congress specifically as well. back in 2012 both houses of congress passed resolutions supporting the multistake holder model. >> what year was that? >> 2012 and this senate passed a resolution reaffirming it's support for the multistake holder model in 2015. >> in 2012 were the republicans in control of the house when that happened? i think so. >> i think they were. >> they were, yes. >> continue on. >> but the point is that support for the multistake holder model has been bipartisan here in congress so it's been important that we have served as a beacon to the rest of the world of the importance that civil society, businesses, technical experts

play in charting the course of internet. particularly the technical aspects reflected today and as i testified earlier there's been a long struggle between those authoritarian govern ms that are threatened by their citizens being more actively engaged in managing internet resources who have sought to bring internet governance under the authority of the united nations or international telecommunication union. that's what is at risk here. >> what you're say as good what we tried to do is set up a process so that it is the internet governed by the multistake holders instead of going over to the u.s.? >> absolutely. that's been the battle we have been fighting for more than ten years. >> who wants it to go to the un? >> countries lead by russia, china and other countries that are threatened by free and open

internet. they feel that if it can be brought into a frame work where only governments can make decisions then they'll be able to preserve their ability to sensor within their own borders sometimes. >> and will the united states continue to be an important stake holder under the icann establishment when that gets completed. >> we will continue to participate. >> how will that be? >> that will be done through the government advisory committee but we in the state department will also be advocates for internet freedom and internet governance issues in all international venues. >> at the commerce committee hearing on this topic in may i asked ambassador gross about the accountability working group and he testified that accountability is kitticly porn and agreed with the report that they have or will complete all the tasks by the transition proposal.

what aspects of the accountability proposal give you confidence that they'll remain accountable after the transition? >> well, what the proposal has done is first it's preserved largely the existing structure of icann and what it's done is created a set of powers for the community to be able to exercise if the icann board takes an action that the community disagrees with. these powers include being able to reject a budget. and it serves as important accountability over how icann conducts it's going forward. >> is the ranking member of the

aebt trust subcommittee focused on the issues. they were discussed earlier and my staff told me and i understand that icann is, has and will be treated as a private party and like any private party when it's compelled to act by the u. s. government it's not liable for the compelled actions. beyond that argument icann can claim no i immunity. is that your understand? >> they never had anti-trust immunity and won't have it going forward. >> how does it effect their ability to claim immunity. >> won't effect it one bit. >> thank you very much. >> i thank both of the witnesses for your testimony. the first panel will now be excused and we'll welcome the second panel to come and testify.

>> now i'd like to introduce our second panel on this important topic. we'll have 7 witnesses testifying on the second panel the president and founder of tech free tom. a graduate of the university of duke and university of virginia school of law and a senior fellow and center for internet freedom at the progress and freedom foundation. prior to that he was a lawyer in private practice. jonathan is theth of act. the app association and specializes in issues including internet governance, privacy, security and business period development. he has been a member of the

community for over ten years and has chaired the affirmation of commitment review of competition, choice and trust in the new manufacturing corporation. the parent company, the top three golf equipment brand. a graduate of pepper dine university school of law. and work force arizona council. and becky birth. deputy officer and graduate of yale university law center previously worked at the washington, d.c. office while joining the private sector she served national affairs at the

telecommunication information. mr. john who ton is products and web sites including internet pharmacies. prior to joining he worked in the office of national drug control policy where he worked on prescription drugs. mr. steve, executive director and he has spent 16 years as an advocate pertaining to the online consumer -- he'll also serve as the elected policy and mr. paul rosen wine, is former

of policy and founder of red branch consulting in addition to serving as a senior adviser to and cum laudy graduate of the university high school and san diego and received his b.a. we'll each of the witnesses to stand and raise your right hand.

>> let me clear at the start i do support the transition. the united states should be involved yes let's make that transition. but the case has not been made for severing the ultimate con yule link. too many important questions are remained unanswered about that, i will work after the transition, discipline and see by law stand up under california

nonprofit. and the united states always had to exclude from administering this copy the one that points to. had put the and yet ntaa has dismissed these questions. ntia has essentially dell grated immigration community and failed forms and proposal, the only additional input ntia sought was

that of hand picked set of experts hired on a no-big contract, that was designed to awkward questions under the rug. and yet increasingly it is. they do offer many advantages but when government uses them to circumvent the administrative law it upsets the law, which brings me concerned about which is simply who decides. congress they made a decision not to exercise their option to renew the contract. it is just logically impossible that ntia could have made this decision without expanding taxpayer dollars because

taxpayers pay the salaries of everyone at ntia. the committee report and all of the talk about spending money on other preparatory activities is a red herring it distracts from the real issue which is the time spent making a decision that is clearly already been made. and i would say that ntia's attempt to read this rider into a blif i don't know is a blatant violation. i will leave you with this quote, the power of the purse has long been recognized as the most important curve in the constitution. the appropriations cause was intended to give congress exclusive control of funds spent by the government and to give the democratic elected presidential of the people an absolute check on executive action on requiring an expenditure of funds. no that wasn't james madison, although he did say something much like that. it was written in 1987 by members of congress of both parties. in the official committee reports about the iran contour

affair. in other words, defending the power of the purse didn't use to be a partisan issue and it shouldn't be, senators i urge you to defend your constitutional prerogatives but i also urng you to focus on negotiating a sound footing in the future. yes that means an extension of some kind of contract for trial period, it's not obstructing the transition indefinitely. there is a compromise that gets us out of it. it involves getting them out of the editing of the file without relinquishing the ultimate contract yule right that is the thing that's in the past and it needs to at least in trial period. again thank you for inviting me to testify here today. >> thank you, sir. >> chairman cruz, members of the committee, thanks for inviting me to speak today and mom thanks for watching. i'm a former software developer

and i have no apologyist, my icann meeting i compared them to a referee that refused to committee to their calls. in fact my work began with the very concerns raised here today that the functions might be taken over by some sort of intergovernmental body. for that reason my members committed me to engaging over the last 11 years and improving the operational excellence and trying to bring about continuous reform inside the organization and i am harped so much about performance metrics that i'm known as metrics man inside. what's been missing, however, is a comprehensive framework for accountability. and there was nothing that was going to make that happen with respect to the u.s.' contract with ican, it wasn't happening. when the announcement was made about the transition, confess i was one of the people guilty of making a big deal about it because it represented an opportunity to really focus the

community on building for accountability of that i believe was always necessary, not linked to the transition but to the proper functioning of icann. my written testimony deals with a lot of the objections that have been raised and i'm sure they'll deal with a lot of them in questions. unfortunate game that we'll be playing. i feel that sort of the techie, the guy that was programming sockets in the late '80s. it might behoove me to talk about the environment in which we operate. the real question is whether or not they're ready for the transition, i believe the real answer is that it has already occurred. first as chairman cruz mentioned we wisely gave away the internet during the reagan administration. it's a set of protocols and best practices that allow networks of networks to cooperate together as a single unit it is entirely voluntary and that is the genius

of the internet. there isn't police force or if they have to. it's in everyone's best interest to do so, that's terribly important because they only do so because it's in their best interest to do so, we need to preserve that environment. we have to set do you know the notion of control because we don't have it. and think in terms of influence that we do have but we're threatened to lose. let me share a quick story in late 80s and 90s the preferred method to navigate was something called gopher, it came out of the university of minnesota. and it was fairly rigid system. in 1993 the university of minnesota decided to start charging for it. this might have been the entire reason, it was something that sped the whole world's transition away from the united states built technology to a swiss built technology called the worldwide web, that we now

use today. so the internet community is perfectly cable of making a change. it's an example we're attempting to exert control where none exist results only in a loss of influence. let's talk about the function contract briefly as it had been said before, it's a spreadsheet or database on the web and the u.s.' role in approving editions and subtractions has become obsolete. should the united states be in position of telling europe could they have dot eu example. it's disconnected from the parade that you will hear and the transition has to be kept different from those things. the accountability mechanisms that have been put in place will give parties more opportunities to hold it to account than they've ever enjoyed under this, so-called stewardship of the

ntia. the community is capable of strong action. they face down and make sure these mechanisms were put in place. they face down the united states government, too, to make sure that accountability was a part of this discussion. it was not originated by the ntia or by the community. here is the harsh reality. if the united states decided to just poll the contract and hand it over to stanford, for example, the global community could certainly just ignore it. and that is the harsh reality that we have to think about. we can go on with business as usual, worse, still, the united states could pass some sort of resolution that said that there should be an alternate route, maybe all or some, et cetera, would adopt this new route, leaving the fragmentation that senator kuntz talked about so eloquently in the early part of the testimony. it's these things we need to be really focused on. this transition is only symbolic, the only question

we're asking today is whether or not the united states is going to contain -- continue to have its leadership position in the world and its advocacy for the stake holder model. this should be better turned, internet freedom, one of the consequences of the united states losing the moral high ground. i will argue those consequences are dire, thank you, and i look forward to all of your questions. >> thank you. >> good morning. >> my name is dawn grove, i'm corporate counsel. i chair the arizona counsel and i chair on the board of

directors of chamber in commerce and industry both of which oppose the current transition. the corporation is parent of ping and ping registry, ping is one of the top three golf equipment brands in the u.s. and provides over 8,800 jobs in arizona. we are a closely held private family business started by my grandfather in his garage and we've been passionately designing a manufacturing custom fit premium golf equipment and other products in arizona for over 57 years. we have vigilantly protected our brand. and that name, in many categories, including for domain name registry services, our name is our life blood, reflects the innovation design and services that we put into every one of our products. we believe the transition through now and its current state will endanger

manufacturer's rates to trademark brand names, severely disadvantage states rights, jeopardize national security and prevent the safeguarding of the internet freedoms we've come to depend on. through its affiliated country, paid icans set application fee for dot ping and in our application we informed our well-known rights of the famous ping marks. wealthy insider based in india that had ever made or sold a ping product had not trademarked the name throughout the world, filed a competing application with icann for dot ping. we expected it with its actual knowledge of the india company's of domain decisions against its affiliate and knowledge of our trademark rights and our global brand to follow the own charter, bylaws and applicant guide book and disqualify the competing applicant.

i believe mr. strickland also said that there were somehow equal applications. i find that stunning. we eventually discovered that due to the dependence on the sale of second-level domain names, which the indian company would have sold more of since our registry is a closed dot brand, they had no incentive to follow its rules and bylaws and the lawyers made it clear that they would consider our application breached if we took them to court. under duress, we ended up paying the $1.5 million at auction to keep our name. i cannot begin to tell you how scarey it was for my family to go into that auction knowing that we might lose our name after 57 years, 56. our experience is not unique and i'm sure you're familiar with the many independent review

complaints filed against them and with the abuses of the trademark clearinghouse with the dot sux registry. it's more than a technical matter or a spreadsheet. it's currently accountable for both policy and technical functions and we heard secretary strickland say that today about the policy that they make following the transition of global stake holders, they'll be a stand alone monopoly accountable only to its stake holders, including 162 foreign government members and 35 observers, the governmental advisory committee or -- and under proposed accountability reforms, they consensus advice must be taken unless over written by super majority of the board. this is a major change from the status quo and it gives more power in the -- in going forwad than it ever had before. moreover, state governments are excluded from voting.

states such as texas, california, new york whose gdp and populations dwarf that will have no voting right of the table. if the plan is so complete and so inclusive, where is the seat at the table for the 50 sovereign states. it also appears that both ntia and ican are operating under the contractor that continues absent the contract. if we supply that conclusion such as defense contracting that will lead to chaos. the internet is no less important national security. the so-called empowered community, convoluted structure of stake holders that will be activated in times of crisis, assuming they can all agree it is a crisis is not suitable to provide day-to-day oversight of the board. the community requested and the board rejected a streamlined single member model of

governance that would have provided a method of governance -- a method for day-to-day oversight by the community. it doesn't take much imagination to see how the stage will be set for an enhanced to step into that role since the community will not have that ability for that day-to-day oversight. in the rush to meet the deadline, some of the most important work was left undone, work stream two issues such as the permanent jurisdiction and the protection of human rights, like free speech, they don't get addressed until after the transition. make no mistake, there are participants involved who desire to leave california and be reconstituted in other jurisdiction outside of the easy reach of the u.s. corp.s and who will cherry picked which ones are observed and which are not. my hope is they'll intervene to safeguard the free and open internet for the use of the

world. and also require the repairing of the structure to ensure the trademark rights, states rights, human rights, such as free speech and free exercise of religion, our national security and the security of our friends and allies around the world. . thank you. >> thank you ms. grove. >> my apologies. good morning and thank you all for inviting me to testify. as my testimony notes, i have been elected to the icann board of directors and i will take that seat in november, but i'm here today in my personal capacity and not as a member elect of the board. as head of the office of international affairs, i led the

team that issued the 1998 policy statement known as the white paper. the purpose of that policy was to preserve private sector management of the dns not to create it out, i want to say that again, at the time that i began looking at this, the private sector in the form of the technical community was managing and coordinating the -- without material government funding or oversight. the national science foundation intended to let its $0 mou with network solutions expire and they're no longer funding dns related activities at the university of southern california. both agencies were satisfied with the management plan developed and supported by the technical community. but there was a problem. in 1997 the technical community was no longer fully representative of the diversity of stake holders, businesses and

commercial users in the united states and elsewhere who were also demanding a seat at the table. when it appears that the communities plan would not garner sufficient support from nontechnical segments of the internet community. the commerce department stepped in on a temporary basis. i submit that what he said about what we've always had the right to exclude is actually not correct. as my written testimony makes clear, we acquired our limited and temporary right when network solutions agreed that it would not change the authoritative route without the u.s. government approval and that it would look to a designated alternative after the transition. our goal was to allow private sector management of the dns that existed at the time to

evolve to accommodate the increasing diversity of internet stake holders. now, i am -- have never been shy about criticizing, icann i think many people will testify to that. i can say what started out in 1998 as an experiment to observe private sector leadership meant and to prevent takeover of that function by an intergovernmental body now has the processes, procedures, safeguards and tools to ensure that the dns continues to be coordinated by the private sector, broadly construed and in the public interest. the maturity of the model has been tested and proven resilient. it's time to finish what we started in 1998. first, the transition will not create intensives for it to change its status or move offshore. the white paper affirmatively anticipated that competition law

would serve as a healthy constraint on that and they've operated for 18 years subject to the antitrust laws of the united states and every other jurisdiction in which it does business. it's been sued under antitrust laws and no court has found that it enjoys immunity from those suits. in addition the revised bylaws direct powerful barriers to the corporation in a different jurisdiction or as an international organization. second, the transition need not and should not be delayed pending completion of work stream, too. the form of continuous improvement was built into the design of the accountability group. the task to determine what work needed to be undertaken in advance of the transition turned on analysis of whether the community would have sufficient tools to ensure that work stream out comes could be implemented and not as some as suggested on

whether or not the issue directly involved replacing the u.s. role in the process. human rights, which -- which means freedom of expression is a case in point. an effort by a government or misguided governmental advisory committee that caused them to engage in content regulation would flatly violate the bylaws and be subject to immediate and binding review through the enhanced independent review process. finally, let me just say, a proof of concept period is unnecessary and would be counter productive, the process getting to this point has shown that the community can come together and work on difficult problems and create sound, solutions in an extraordinarily diverse ecosystem. the deliverables have been rigorously studied and pronounced sound. delay now would raise questions

about the united states commitment to a process that it initiated decades ago and serve only the interest of the handful of governments who would like to see this process fail. thank you very much. >> thank you. >> mr. chairman, ranking member, i'm the ceo, relates to consumer against cyber crime, particularly in the health care space. today i can argue that it is accountable and transparent to take over stewardship of the internet. my testimony argues that it is not. some proponents of the transition would have this believe that it's merely a technical organization. that's false. one of the most important jobs is to accredit domain registrars and make sure they comply with their accreditation agreement. it says registrars are suppose to investigate and respond appropriately when they get a complaint that a domain name is

being used for illegal or pay bu z -- or abusive purposes. if the registrar doesn't, they're suppose to hold the registrar accountable. i'm going to give a couple of examples of why it's a failed system. let me first explain why this is important. first and most obviously, this is a consumer protection issue. the victims of illegal or fraudulent schemes are typically internet users often vulnerable populations. the second reason, however, is that in any sector, the payment processing world, search engine advertising or registrars, you need some sort of system for voluntarily addressing and preventing abusive activity. if that system does not work, is corrupt or not transparent you leave the organization vulnerable to governments looking for an excuse to step in and exercise more control over that failed system under the guides of fixing the problem. third, it's imperative that voluntary abuse policies only

address harmful activity like child pornography, fake drugs or spam, et cetera, and not free speech. that's why, before they become totally independent it's imperative that demonstrate compliance system that is accountable and transparent. unfortunately they fails that test. once systemic problem is compliance is regular dismissal of complaints against registrars who ignore the contractual requirement to investigate and respond appropriately to abuse complaints. in some cases the registrar clearly indicates no matter how compelling the evidence, they won't do anything. not only do they close these compliance, when asked what the registrar did to meet the contractual requirement despite all evidence indicating that it did nothing, they say that it's privileged information between it and the registrar. this is like in reverse. registrars are first athis

warted a secret process after which the reasons for dismissing the complaint are never disclosed. because one of the most important rule -- role social security not transparent, nobody, including the multi stake holder community can possibly hold them accountable in the future. a similar problem is the accreditation of registrars that function as an arm of enterprise, the problem with this giving the ability to register the domain names giving them a press to print their own money. it's a criminal network that sold addicted without a prescription for years causing a number of deaths. this criminal enterprise obtained its own accreditation, the only purpose of which to generate pharmacy domain names. the revenue from the pharmaceutical sales was flipped into the trafficking of meth from north korea, smuggling weapons into africa and diverting u.s. technology reportedly missile guided systems to iran.

although now the accredited for unrelated reasons which critical to understand at that the individual in question could not have funded those activities if the company had not maintained for years accreditation as a registrar from ican despite it being obvious to many that it was a shelf for criminality. the remain others today whose business model depends in material part on providing a safe haven for online crime. this is a problem for internet safety and for the future and independent of the internet. any time you have a failed system for voluntary compliance does not work, criminality and fraud are linked at. you hand governments the perfect excuse to try and exercise more control. voluntary effective and processes are imperative for any industry to remain independent, enabling them to tell governments, we don't need you to step in and fix our problem. we've got this. that is what we should all want for icann or any other

organization entrusted with its functions. but the accreditation compliance systems are a mess. you don't buy your 16-year-old a car if they still back into your garage door every time they leave a house. before improving, the u.s. government has an obligation to u.s. users and to ensure that the operations including its compliance and accreditation functions are accountable and transparent. to date, icann has failed this test. thank you. >> i'm executive director of net choice which is the trading association. i've been involved in icann for over a decade and was a leader that developed over the past two years. this is not an obama administration plan or proposal. it was developed by the private

sector, mostly u.s. and businesses in civil society, using the leverage of this transition to force icann to accept tough new accountability measures. we've heard the sound bites about this transition being an internet give away to an international body like the un. if that were remotely true, i will first american engineers gave away the recipe 30 years ago and that engineers and every country interconnect the network that we have. we don't own the internet any more than the texas government owns the recipe for barbecue brisket. they created in 1998 in order to privatize, the internet is working well, while the dns works well because icann has coordinated for 18 years and will continue to do so after the

transition. there is no new international body. the third, we designed explicit protections against government censorship. many government sensor web content at the edge of the internet when online traffic crosses their borders, neither we or icann can do anything to stop that type of kcensorship. we ensure they cannot extend it. i applied 37 stress test against the new model of which the most famous stress test 18 where we asked what if a majority of governments wanted to advise icann regarding a censorship topic. first, the new bylaws allow one government to veto that kind of advice. if no government vetoed the advice, the icann board could still reject that advice with 60% of its directors if the board caved to governance we have the power, for the first time, to be able to challenge icann on accepting that advice.

and the government gets no say in the community decision about making that challenge. the rolling that's binding and enforceable in court and then for good measure we empower the community to fire the board of directors if that's not good enough. delaying this transition, mr. chairman, creates far more risks than benefits. in this hearing today we've heard some creative reasons to block or delay and i welcome the chance to address each of them in transitioning. what if we renege on the 18-year transition plan and promise made in 2014 and dismiss the private sector's accountability plan. two consequences, first an indefinite delay rekindles the fire of the un who has long wanted to control. it feeds into the myth that the contract let's the u.s. government somehow control the internet and that is the sound bite that russia and china will use to persuade moderate governments that the u.n. should

step into the shoes. second we stand to lose the new accountability mechanisms that we design. the board said that the new bylaws take effect at transition then they commit it to say that they will try to keep what we could if transition were deferred. that means we need to strip out of the new bylaws, all of the accountability features that it assumed the transition will occur. that's a total loss for the private sector who want the power to fire if it fails at serving names, protocols of customers. rescuing the names, relitigating matters that were approved only as compromised package. many governments and the board resisted other parts of it as well. those compromises may be i irretrievab irretrievable. they'll try to improve on their previous compromise when the bylaws reopen. i know those of you have seen similar compromises come undone. there's a very real risk that we

won't rescue the strong accountability powers we need. so please weigh those down side risks against the benefits of transition. these new bylaws give the private sector, true accountability power over icann the same way corporations are accountable to the shareholders, the same are accountable to my members and senators are accountable to the voters. that accountability is strong -- u.s. of ntia. in closing we have to now decide which road to take on this transition. we deliver or we delay. as yogi bear said when you come to a fork in the road, take it. that is take the new model of icann accountability and preserve the open internet. i look forward to your questions. >> thank you. >> senator cruz, senator, thank you very much for inviting me to appear today before the committee to discuss the

stewardship transition and thank you, particularly, for your fortitude in such a lengthy panel and such a long hearing it demonstrates your commitment to hearing something about the issue. for two years i've worked on -- within icann on the proposed transition. alongside many of my copanelists, unlike them, i think the effort for which i have the greatest admiration has produced a proposal that is not yet complete and is in many ways too flawed. in the written testimony i spoke to five specific issues which i thought were important to discuss, at the risk of going off script a bit, i want to directly address a question you had asked earlier today, senator, which is whether or not there is a need for a testing period, which is something that i have advocated. in response to that, strickland told you there was no need because the technical aspects of

this transition had been tested for 90 days and worked perfectly. that's absolutely true. but it's incomplete. the reason is that those technical transitions had been tied as all the copanelists hear have said, to preform of the accountability provisions that address how icann manages its policy. it is true that it's such a technical decision there's a host of policy that hides behind that is operated. we address sintellectual propery claims. it includes such things as whether or not dot amazon, top domains will be delegated and to whom. those are controversies without saying whether or not you resolved you can see they are