Accordingly the Department stated that the U.S. government was prepared to enter into an agreement to transition the Internet’s name and number process to a new not-for-profit organization. Subsequently, the Department entered into an MOU with ICANN to guide the transition. ICANN Has Increased Competition, But Progress Has Been Much Slower on other Key Issues

ICANN has made significant progress in carrying out MOU tasks related to one of the guiding principles of the transition effort—increasing competition. However, progress has been much slower on activities designed to address the other guiding principles: increasing the stability and security of the Internet; ensuring representation of the Internet community in domain name policy-making; and using private, bottom-up coordination. The Department’s Public Assessment of the Transition’s Progress Has Been Limited

As mentioned previously, the Department is responsible for general oversight of work done under the MOU, as well as the responsibility for determining when ICANN, the private sector entity chosen by the Department to carry out the transition, has demonstrated that it has the resources and capability to manage the domain name system. Department officials said that they carry out their oversight of ICANN’s MOU-related activities mainly through ongoing informal discussions with ICANN officials. In response, Department officials said that they welcomed the call for the reform of ICANN and would follow ICANN’s reform activities and process closely. Until these issues are resolved, the timing and eventual outcome of the transition effort remain highly uncertain, and ICANN’s legitimacy and effectiveness as the private sector manager of the domain name system remain in question. Recommendation

In view of the critical importance of a stable and secure Internet domain name system to governments, business, and other interests, we recommend that the Secretary of Commerce issue a status report detailing the Department’s assessment of the progress that has been made on transition tasks, the work that remains to be done on the joint project, and the estimated timeframe for completing the transition. One critical set of rules, collectively known as the domain name system, links names like www.senate.gov with the underlying numerical addresses that computers use to communicate with each other. The paper includes the four guiding principles of privatization: stability; competition; representation; and private, bottom-up coordination. Nov. 1998

The Internet Corporation for Assigned Names and Numbers (ICANN) incorporates in California.
Why GAO Did This Study

This testimony discusses privatizing the management of the Internet domain name system.

What GAO Found

This system is a vital aspect of the Internet that works like an automated telephone directory, allowing users to reach Web sites using easy-to-understand domain names like www.senate.gov , instead of the string of numbers that computers use when communicating with each other. The U.S. government supported the development of the domain name system, and, in 1997, the President charged the Department of Commerce with transitioning it to private management. The Department issued a policy statement, called the "White Paper," that defined the four guiding principles for the privatization effort as stability, competition, representation, and private, bottom-up coordination. After reviewing several proposals from private sector organizations, the Department chose the Internet Corporation for Assigned Names and Numbers (ICANN), a not-for-profit corporation, to carry out the transition. In November 1998, the Department entered into an agreement with ICANN in the form of a Memorandum of Understanding (MOU) under which the two parties agreed to collaborate on a joint transition project. Progress on and completion of each task is assessed by the Department on a case-by-case basis, with input from ICANN. The timing and eventual outcome of the transition remains highly uncertain. ICANN has made significant progress in carrying out MOU tasks related to one of the guiding principles of the transition effort--increasing competition--but progress has been much slower in the areas of increasing the stability and security of the Internet; ensuring representation of the Internet community in domain name policy-making; and using private bottom-up coordination. Although the transition is well behind schedule, the Department's public assessment of the progress being made on the transition has been limited for several reasons. First, the Department carries out its oversight of ICANN's MOU-related activities mainly through informal discussions with ICANN officials. Second, although the transition is past its original September 2000 completion date, the Department has not provided a written assessment of ICANN's progress since mid-1999. Third, although the Department stated that it welcomed the call for the reform of ICANN, they have not yet taken public position on reforms being proposed.