Lecture Series: Increasing Challenges of Internet Governance: Competition, Authority and Security

About the speakers (L to R): Anthony Rutkowski is Vice-President for Internet Strategy at VeriSign, Inc. As an engineer and lawyer, Rutkowski has 30 years of diverse experience in business, public policy, and education. He was the founding Executive Director of the Internet Society and has served as top advisor to the Secretary General of the International Telecommunication Union. All of Rutkowski's publications are listed on his website: www.ngi.org/rutkowski.html. Milton Mueller is Associate Professor at the Syracuse University School of Information Studies, where he directs the graduate program in Telecommunications and Network Management. A leading academic analyst of ICANN, Mueller's research covers telecommunications industry liberalization and trademark-domain name conflicts. He is the author of Telecom Policy and Digital Convergence, Universal Service: Interconnection, Competition, and Monopoly in the Making of American Telecommunications and the soon to be released book Ruling the Root: Internet Governance and the Taming of Cyberspace. Rob Frieden is Professor of Telecommunications at the Pennsylvania State University. As a leading analyst in the field of telecommunications and Internet infrastructure, he has authored many comprehensive works on international telecommunications, cable, satellite television and communications law. He recently published Managing Internet-Driven Change in International Telecommunications. Frieden's other books include The Cable and Satellite Television Industries and The International Telecommunications Handbook.

Rapporteur's Report

On October 29, 2001, the Project on the Information Revolution and World Politics convened a panel discussion on the increasing challenges of Internet governance. Introducing the topic, panel moderator William Drake stated that the question of governance has been very controversial in Internet circles and could become even more so in the years ahead.

On the one hand, the rapid globalization and commercialization of the Internet has raised a wide array of technical and policy issues for which many stakeholders around the world see the need for governance mechanisms. On the other hand, many of these and other stakeholders disagree strongly about what sort of arrangements are required and who should play what roles in defining them. Indeed, for the more libertarian Internet mavens, the very notion of Internet "governance" is anathema, in part because they equate it with bureaucratic and backward looking government regulation. But at its most basic level, governance simply means the development and application of authoritative rules that shape behavior in various realms of social activity. These rules are not necessarily synonymous with government, nor are they necessarily collective, participatory or even legitimate.

Drake argued that the demand for governance can be viewed as arising with respect to two closely interrelated levels of activity. (In truth, he noted, technological change makes the boundary between these two levels permeable, but the distinction is still useful as a way of characterizing the distinct types of governance dynamics arising in different issue-areas.) The two levels are: 1) the provision of the Internet's underlying infrastructure and services, and 2) the communications and commerce conducted over this infrastructure. With regard to first, while the U.S. government has played a bounded but key role (particularly in the early era research and education networking), with the commercialization of the 1990s many of the key decisions have been undertaken by private entities. Examples include the management of the Domain Name System (DNS), the organization of network peering and interconnection, the preservation of network security and reliability, and the adoption of technical standards. With regard to the second, governments and intergovernmental organizations have been more extensively involved in the effort to establish and enforce rules of the game. Examples here include issues such as intellectual property, contracts, commercial codes, digital signatures, consumer protection, taxation, jurisdiction, freedom of speech vs. censorship, and the protection of personal privacy. Drake concluded by noting that while the panel would concentrate on the first set of issues, it would be useful to keep in mind their relationships to the broader nexus of governance problems.

The first speaker, Rob Frieden, began by explaining how the evolution from a government-incubated to a commercial Internet has increased the stakes of governance, with technological convergence bringing to the surface a philosophical rift between traditional telecommunications players and newer Internet players. He characterized these two groups as "Bellheads" and "Netheads," respectively. Having begun as a government-incubated medium, the Internet has become more business-oriented, privately controlled, and hierarchical. The transformation of the Internet to a commercial medium, coupled with the downturn of the dotcom economy, has led stakeholders to recognize the need for collective means to set behavioral rules and manage conflicts. In the traditional telecommunications environment, intergovernmental organizations played key roles in such matters. However, parallel institutions indigenous to the more freewheeling Internet environment have been slow to develop.

Unfortunately, technological convergence does not promote philosophical convergence. Frieden noted a clash of cultures between Bellheads and Netheads, who do not necessarily see their shared interests. Bellheads are comfortable operating in a regulated environment, whereas Netheads are not. During the booming tech economy, popular conceptions characterized Bellheads as "slow-minded, muddling transporters providing the telecommunications backbone for the more nimble, profitable new-world-order dotcom entrepreneurs who added value to that transportation function." Bellheads, craving a safe and unremarkable environment, are able to work the regulatory system and benefit from it. They realize the value of quality of service issues, customer care, billing and revenue enhancement.

Conversely, Netheads espouse libertarianism; while they recognize the need for some degree of rule setting, they prefer for voluntary coordination over public policy approaches. They embrace change and risk, and are disinclined to work in the complex intergovernmental or international organizations that populate the field of Internet governance. Frieden also pointed out that Netheads tend to lack traditional business and management skills, as well as the willingness to compromise, which occasionally leads them into expensive litigation. Nethead companies are less concerned about the bottom line than the creation of "incredible technology." Yet while Netheads dominated early in the development of the Internet, Frieden asserted that the Bellheads increasingly are in charge: they possess the money, control the first and last mile, and own the tier one Internet service providers. Although Bellheads are still playing catch-up, they are nevertheless in a position to reassert themselves and take advantage of their incumbency.

Frieden explained that mediating between the Nethead and Bellhead cultures poses a significant challenge for Internet governance, given the former's aversion to extensive governmental involvement and the latter's exploitation of the government role. Several organizations have explored whether and how they may assist in developing rules of the road: these include the International Telecommunication Union (ITU), a Bellhead organization that is now seeking legitimacy and perhaps a broader portfolio in the Internet arena; the World Trade Organization; and the World Intellectual Property Organization. The ITU, a specialized agency of the United Nations and the oldest intergovernmental organization in the world, has historically set standards in telecommunications and worked to resolve conflict, a function which might be extrapolated to issues of Internet governance. For example, conflicting standards between dial-up modems initially discouraged consumers from purchasing modems, until the ITU forged a consensus. In another instance, the ITU has coordinated telephone numbering plans, such that a given telephone user can dial a certain set of numbers and receive connection to a telephone anywhere in the world. Might that approach be extended, Frieden asked, to the numbers that represent world-wide web addresses?

However, many Internet players are reluctant to extend legacy regulatory approaches into new and different arenas, so this sort of extrapolation may not play well in the United States with the Federal Communications Commission. Moreover, determining who resolves conflicts depends on the issues involved: for instance, while public databases and directories may not be subject to copyright, names and numbers do point to highly valued intellectual property. In essence, the Internet triggers jurisdictional concerns, litigation concerns, and regulatory concerns that often cannot insulate transactions from the development of new regulations. Hence, Frieden concluded, the core Nethead philosophy is not sustainable, and Internet governance will increasingly involve governmental authority in the years ahead.

Milton Mueller, the second speaker, focused his remarks on the political dynamics of the Internet Corporation for Assigned Names and Numbers (ICANN), a unique organization that plays a key role in infrastructure governance. ICANN is primarily concerned with managing the DNS, a function from which 90% of its revenue stems. Domain names have sparked a morass of legal problems, ranging from trademark domain conflicts to de facto economic regulation of the domain name industry. Such problems include, for instance, the question of who has the right to such names as McDonalds.com. Moreover, each IP number and domain name must be unique, necessitating a central coordinating body to assign these numbers and names, and supervise technical management of the DNS.

Before ICANN's creation, there were inherent problems in creating a coordinating authority: what should the U.S. government's role be, for instance? Unilateral U.S. action has not always been perceived as legitimate by the rest of the world. In turn, the U.S. was not pleased with the proposal that such issues fall under the purview of the ITU, since U.S. interests have often suffered in ITU processes.

The U.S. government's solution to the domain name management problem, noted Mueller, was the creation of a private sector governance authority, or technical management agency, that would be grounded in the community of Internet technicians yet also internationally representative, including representation from business and trademark owners. It would be open, transparent, and a completely new kind of entity. Informed by a philosophy of industry self-regulation, the U.S. Commerce Department White Paper that created ICANN was very concerned with keeping government out of this process, Mueller explained.

However, as the U.S. learned when turning ICANN into a reality, other governments were not willing to stand aside and let the U.S. create what was perceived to be a private sector, U.S. dominated organization. Hence, a Government Advisory Committee (GAC) was created, which technically gave governments an official channel of communication into ICANN, but no policy-making role.

There has been divergence between the initial goals and reality, Mueller posited. He noted that there is already government participation in ICANN, since the U.S. Department of Commerce never quite let go of its stake, most notably its control over the Internet's root file. Moreover, as a private corporation heavily influenced by U.S. law firms, ICANN has been protected from external pressures, such as accountability. This has created tension between its lawyers' efforts and its role as a globally representative policymaking organization that hinges on bottom-up representation of the Internet community.

Many - particularly the Europeans - seek a role for international organizations and governments within the ICANN structure; in fact, the first chairman of GAC favored an aggressive role for national governments, Mueller noted. Recently, GAC has been trying to gain control of the country code allocation process. Country codes, the top-level two letter codes such as ".uk" and ".au", were distributed by early Internet architects and now rest in the hands of individual entrepreneurs rather than Communications Ministries or other traditional levers of power in the telecommunications sectors of national governments. Citing their economic value, several governments seek to gain control of these codes as well as country names that precede new domains such as ".bus" and ".info."

In a September 2001 meeting in Montevideo, Uruguay, the GAC passed a communiqué that, recognizing the new top level domain of ".info," requested ICANN to reserve all country names under this domain for governments who might wish to assert rights. Mueller said that under its bylaws, ICANN should have called upon its domain name supporting organization to write the necessary policy. Instead, ICANN immediately agreed to freeze the names, and came up with an action plan to create a discussion group that included the board, GAC, WIPO, and the registry, but not the domain name supporting organization. This omission carries large implications, since the domain name supporting organization serves as the primary channel through which policy changes involving the domain name system proceed. In addition, since current international law contains no provisions for granting property rights of names to national governments, the domain name system remains critical for the allocation of intellectual property rights in the Internet environment. Mueller concluded by noting that governments are now asserting various kinds of power over the domain name system, and that ICANN may be evolving from a private corporation into a formal intergovernmental regime, one that has never been delegated authority from the U.S. Congress or any formal system of law.

The third speaker, Anthony Rutkowski began by arguing that that the concept of Internet governance is an oxymoron that should be discarded. In his view, the Internet is not a public network subject to authoritative rules, but rather as set of protocols that allows 200 million users to share resources located on their computers. Much of these resources are not accessible to the general public, but instead remain hidden by firewalls.

Hence, Rutkowski noted there is no such thing as the public Internet, comparable to the public telephony network or other public works facilities. From a regulatory standpoint, the Internet is a private user network explicitly unregulated by the Federal Communications Commission twenty years ago. Of course, from a management point of view, the existing laws and rules of society and physics apply: fraud, theft, defamation, contracts, antitrust, Einstein's speed of light, etc. As such, governments should selectively intervene, but only in a narrow context to support the security and stability of certain infrastructure components. Their purpose should not be to devise new governmental systems that apply to chaotic systems, Rutkowski said.

Nevertheless, traditional telecommunications organizations like the ITU sometimes do attempt to extend the reach of old regulatory paradigms into this new environment. As an example, Rutkowski cited controversial proposals to create a system called ENUM that would provide universal identifiers linking customers' telephone and fax numbers, e-mail addresses, and other URLs. In the past year and a half, the ITU has sought to create a special international regulatory regime to implement this model. However, Rutkowski pointed out that since the ITU plan necessitates placing identifying information in the public domain, privacy considerations prevent it from gaining customer demand. Furthermore, new technologies are outpacing these plans: on October 26, for example, Microsoft launched Windows XP, enabling customers to transform their computers into telephones by installing a headset and microphone. This immediately creates a larger market for these types of services. As this example shows, Rutkowski concluded, institutions grounded in intergovernmental or governmental schema are ill-equipped to deal with industry-driven rate of change in the Internet sector.

During the question and answer period, one audience member raised the view, often heard abroad, that the Internet is a "global medium run by the United States." Rutkowski and Frieden responded by noting that the Internet is not run by the United States but is managed and governed by the people who purchase and provide computers, software, transportation and content. Frieden asserted that if other countries increased indigenous content and traffic routing, more power would accrue to non-U.S. actors. "What exists in a particular country is the result of entrepreneurial action and individual user choice," Rutkowski said. Mueller agreed with the other panelists regarding the Internet as a whole, but pointed out that the top level domain name system and IP addresses do not fall under individual consumer choice but instead are controlled by a centralized policy process. Mueller explained that cooperative administrative organizations called regional Internet address registries do not allow IP addresses to shift around in the marketplace. Similarly, ICANN controls domain names. Rutkowski countered Mueller's argument by raising the issue of search engines as an equitable way of presenting content and sites on the Internet, to which one audience member objected, claiming that some companies have paid to have their sites top search results.

In light of the crisis begun on September 11, other audience members focused on infrastructure security issues as they relate to the private sector. One person wondered whether profit-seeking companies such as VeriSign tend to dangerously under-invest in maintaining the security of the infrastructure. Rutkowski replied with the statement that business-oriented companies act in the larger interest of their customer base, "far beyond the pieces of the Internet that are our responsibility or that we have any control over." Mueller noted that while DNS roots are vulnerable to denial of service attacks, the concept of alternate root systems has been met with hostility in ICANN circles.

The final question addressed the assignment of top-level country codes and international traffic routing, given recent international turbulence. Rutkowski explained that the assignment of country codes follows an ISO3166-1 standard list of two-letter country codes determined by an international agency that is not controlled by the United States. This list recently acknowledged Palestine as a country but not Chechnya, thus making the former but not the latter eligible for a top-level country code. Some panelists were concerned about interfering with connectivity for narrow political reasons in places such as Afghanistan, pointing out that it may encourage countries like China to create its own root or domain name system and exploit it for political purposes. Rutkowski indicated that such activities were historically commonplace in time of war for telecommunication services.

Report prepared by Pavani Reddy