On March 14, 2014, the United States Department of Commerce announced that it is asking the Internet Corporation for Assigned Names and Numbers (“ICANN”) to begin discussions on a transition proposal for replacing the Department with a non-governmental entity to serve as steward of the Internet’s Domain Name System (“DNS”). The Department’s announcement (the “Announcement”), and accompanying question-and-answer guidance, signals an effort to accelerate the transition to private-sector leadership of and supervision over the technical coordination of the DNS, which has proceeded sporadically since the late 1990s, when the Executive Branch set privatization as the eventual goal. The Department said it was acting “[t]o support and enhance the multistakeholder model of Internet policymaking and governance.” News reports have described speculation that the timing of the Announcement suggested a desire to pare back the U.S. Government’s role in Internet management in the aftermath of publicized disclosures of classified information involving foreign intelligence collection by the National Security Agency.
Also on March 14, ICANN announced that it was “inviting governments, the private sector, civil society, and other Internet organizations from the whole world” to participate in the development of the transition proposal. ICANN noted that the “responsibilities to be transitioned include the procedural role of administering changes to” the DNS and “to the authoritative root zone file–the database containing the lists of names and addresses of all top-level domains–as well as serving as the historic steward of the unique identifiers registries for Domain names, IP addresses, and protocol parameters.”
The immediate practical consequences for domain-name registration while the transition proposal is developed are likely to be limited. Nevertheless, while the Department’s current DNS stewardship is not ending in the short term, the contemplated private-sector supervision arrangement is likely to tend to bolster the influence that non-U.S. entities have on domain-name policy questions in the long run. That may please foreign critics of the current system while raising possible concerns about foreign governmental interference in Internet-management issues.
ICANN is a California non-profit corporation that, under contract with the National Telecommunications and Information Administration within the Department, performs specific Internet Assigned Numbers Authority (“IANA”) functions–which has left the Department to carry out what it terms a “largely symbolic” role. Although the contract expires on September 30, 2015 (at the end of the next federal fiscal year), the Department said that its “current role will remain unchanged” as “stakeholders work through the ICANN-convened process to develop a transition proposal.” The transition proposal will need to account for four principles the Department identified: (1) “[s]upport and enhance the multistakeholder model”; (2) “[m]aintain the security, stability, and resiliency of the Internet DNS”; (3) “[m]eet the needs and expectation of the global customers and partners of the IANA services”; and (4) “[m]aintain the openness of the Internet.” (In the accompanying question-and-answer guidance, the Department added that the transition contemplated also would entail changes to an existing cooperative agreement under which VeriSign carries out certain “root zone management functions.”)
While the Announcement’s principles explicitly recognize the needs of “global customers,” the Department also said that it would not “accept” a transition proposal for installing “a government-led or an inter-governmental organization” to manage the Internet DNS. Those remarks show that the transition proposal will need to strike a balance between two competing considerations. On one hand, inviting participation of non-U.S. entities could increase the legitimacy of a DNS management arrangement that some countries view as subordinate to U.S. interests given the U.S. Government’s stewardship role. On the other hand, increased foreign influence on DNS management could be detrimental to the private interests of U.S. companies and to public values–freedom of speech chief among them in this context–to which the U.S. Government adheres. In many countries, for example, there are informal or de facto ties between government officials and even nominally private entities that render private companies as effective instruments of state policy. Indeed, news accounts of the Announcement have given prominent attention to concerns about foreign involvement in this management role.
Because non-U.S. involvement also may raise concerns that Internet DNS management could be exploited by nations or organizations hostile to the United States, any transition proposal is likely to receive attention from other Executive Branch entities, such as the components responsible for cybersecurity. Congressional inquiries also seem probable. For example, the Appropriations Committee of the U.S. Senate has questioned the Department’s advocacy for U.S. interests in advising ICANN as part of the entity’s Government Advisory Committee.
Given the early stage of this process, it is unclear whether the Announcement suggests coming changes to the Department’s continuing role in advocating for U.S. private-sector interests concerning trademark enforcement in DNS administration. In October 2012, for example, as ICANN prepared to introduce new generic top-level domain names (gTLDs), the Department wrote to ICANN to underscore “industry stakeholder” concerns about “lack of progress on new trademark protection tools.” The Department emphasized the importance to the private sector of restraining the costs of resolving disputes over “cybersquatting claims” by new applicants for website names deploying well-known trademarked terms. But even after the Department gives up its DNS stewardship role, the Department’s continued participation on ICANN’s Government Advisory Committee should provide a channel for the Department to convey its views, including its views on trademark enforcement–which remains a sensitive area. Indeed, the World Intellectual Property Organization, a United Nations-affiliated non-governmental organization that administers private arbitrations over the inclusion of trademarks in domain names, observed on March 17 that the “expansion of the Internet domain name space, until now dominated by .com and a handful of other [gTLDs], is likely to disrupt existing strategies for trademark protection on the web.”
Of particular concern to U.S.-based trademark owners, ICANN’s current Uniform Dispute Resolution Policy for domain names allows trademark owners to assert rights in a trademark even if the mark is not registered by a governmental authority, which is consistent with U.S. law. Many countries, however, do not recognize these “common law” trademark rights. To the extent ICANN’s administration and focus become increasingly international, future revisions to the UDRP and similar policies–and future decisions interpreting these policies–could de-emphasize the protections available to unregistered marks as a matter of U.S. law.
To be sure, history suggests caution in specifying any definite timetable for achieving the privatization of the Department’s DNS stewardship function. Although privatization has long been a goal, progress toward achieving it has been slow. As the Department noted in the Announcement, the U.S. Government expressed a commitment to achieving a transition of its DNS stewardship role to the private sector in 1998. Unforeseen circumstances, of course, may affect whether privatization can be achieved by the expiration of the current contract term in September 2015.
About the Authors
Howard S. Hogan is a partner in the Washington, D.C. office of Gibson, Dunn & Crutcher and is Co-Chair of the Fashion, Retail and Consumer Products group. Mr. Hogan’s practice focuses on intellectual property litigation and counseling, including trademark, copyright, patent, false advertising, right of publicity, licensing, and trade secret matters. Mr. Hogan has represented various corporations and individuals in a broad range of industries, including financial services, sports, fashion, cosmetics, entertainment, transportation, pharmaceuticals, and online services. A significant portion of Mr. Hogan’s practice involves computer, Internet, and new media-related issues.
Indraneel Sur is an associate in the New York office of Gibson, Dunn & Crutcher and a member of the Firm’s Litigation Practice Group. Mr. Sur’s practice draws on previous government service. In 2010 and 2011, Mr. Sur served as a trial attorney at the United States Department of Justice in Washington, D.C., in the Federal Programs Branch of its Civil Division, where he represented the Government in national security cases in Federal District Court. Among other matters, Mr. Sur drafted briefs on behalf of the Government in habeas and Bivens cases brought by detainees at the United States Naval Station at Guantanamo Bay, Cuba.
 The DNS “links the series of numbers that identify servers connected to the Internet to easy-to-remember addresses.” GAO, Dep’t of Commerce: Relationship with the Internet Corporation for Assigned Names and Numbers, GAO/OGC-00-33R, at 1 (July 7, 2000), available at http://www.gao.gov/assets/90/
 U.S. Dep’t of Commerce, NTIA Announces Intent to Transition Key Internet Domain Name Functions (March 14, 2014), available at http://www.ntia.doc.gov/press-
 U.S. Dep’t of Commerce, IANA Functions and Related Root Zone Management Transition Questions and Answers (March 14, 2014), available at http://www.ntia.doc.gov/files/
 See Gautham Nagesh, ICANN 101: Who Will Oversee the Internet? Wall St. J. Washington Wire Blog (Mar. 17, 2014, 10:36 AM), http://blogs.wsj.com/washwire/
 ICANN, Administrator of Domain Name System Launches Global Multistakeholder Accountability Process (Mar. 14, 2014), available at http://www.icann.org/en/news/
 The four functions are (1) the coordination of the assignment of technical Internet protocol parameters; (2) the administration of certain responsibilities associated with Internet DNS root zone management; (3) the allocation of Internet numbering resources; and (4) other services related to the management of two specific “Top Level Domains” (TLDs) (“.arpa” and “.int”). See The Internet Assigned Numbers Authority (IANA) Functions–Further Notice of Inquiry, 76 Fed. Reg. 34,658, 34,659 (June 14, 2011).
 See Council on Foreign Relations, Defending an Open, Global, Secure, and Resilient Internet, Independent Task Force Report No. 70, at 25 (2013) (“[m]any states are already skeptical of ICANN’s autonomy from U.S. government control, given its history and the Commerce Department’s contract with ICANN”).
 See, e.g., Brendan Sasso, When U.S. Steps Back, Will Russia and China Control the Internet? Some fear foreign powers will fill the void, Nat’l J. (Mar. 17, 2014) (describing “fear” of “opening the door to an Internet takeover by Russia, China, or other countries that are eager to censor speech and limit the flow of ideas”), available at http://www.nationaljournal.
 See, e.g., Improving Critical Infrastructure Cybersecurity, Exec. Order No. 13636, § 8, 78 Fed. Reg. 11739, 117341-42 (Feb. 12, 2013) (directing Secretary of Homeland Security to coordinate establishment of incentives for voluntary private-sector compliance with certain federal cybersecurity recommendations).
 See S. Rep. No. 113-78 at 18 (2013) (“The [Senate Appropriations] Committee is concerned that the Department of Commerce . . . has not been a strong advocate for U.S. companies and consumers” in advising ICANN).
 Letter from Lawrence E. Strickling, Asst. Sec’y for Commc’ns & Info., U.S. Dep’t of Commerce, to Stephen D. Crocker, Chairman of the Bd. of Directors, ICANN, at 1 (Oct. 4, 2012), available at www.ntia.doc.gov/files/ntia/
 World Intellectual Property Org., Expansion of Domain Name Space May Shift Trademark Protection Strategies (Mar. 17, 2014), available at http://www.wipo.int/pressroom/
 See, e.g., World Intellectual Property Org., WIPO Overview of WIPO Panel Views on Selected UDRP Questions (2d ed. 2011), available at http://www.wipo.int/amc/en/
 By 2002, a report to Congress contained criticism that the transition was not on pace. See GAO, Internet Management: Limited Progress on Privatization Project Makes Outcome Uncertain, GAO-02-805T, at 2 (June 12, 2002) (“[T]he timing and eventual outcome of the transition remains highly uncertain.”), available at http://www.gao.gov/assets/110/