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It actually will be Obama who decides whether to end US government oversight of the internet

Letters flying in IANA transition showdown

By Kieren McCarthy, 13 Sep 2016

The decision whether to end US government oversight of the internet will likely come down to a personal decision by President Obama on Thursday.

In an extraordinary series of arguments and counter-arguments this past week, a last-minute push by Republicans looks likely to succeed in placing a funding freeze on the Department of Commerce (DoC) to prevent it from handing over the IANA contract to internet body ICANN.

But the path remains open for the Obama Administration to approve the transition regardless of such a block, thanks to formal opinions from the US Government Accountability Office (GAO).

In the end, it will come down to a judgment call by the president; one he is likely to make on Thursday following a Senate hearing on the transition. That hearing will be held the day before the US government is contractually obliged to inform ICANN whether it intends to extend its current contract; a contract that ends on September 30.


There has been an enormous flurry of letters this week over the transition.

The most notable one, and the one that sent Washington into a frenzy, came from four Congressional chairmen and was sent to Commerce Secretary Penny Pritzker and Attorney General Loretta Lynch.

The letter outlined a range of concerns with the transition, highlighting in particular ICANN's ongoing lack of accountability, concerns over anti-trust protections being lifted, and a question over whether the IANA contract was, in fact, a US government asset and so required explicit approval of Congress before it could be handed over.

The letter [PDF] asked that Pritzker and Lynch "reconsider the Administration's current plans to transition the IANA function on October 1, 2016."

In response, on Tuesday a number of tech companies including Amazon, Google, Facebook, Twitter and a significant number of internet infrastructure companies sent their own letter [PDF] to Congressional leaders arguing that the transition should proceed. "It is imperative that Congress does not take action to delay the October 1st transition date," it concludes.

Notably, neither letter includes the claims that the IANA transition will lead to the internet being taken over by Russia, China, Iran and other authoritarian regimes.

That argument has, however, been heavily used by the most vocal opponent to the transition, Senator Ted Cruz, in order to put himself in the forefront of public awareness of the issue. Despite being highly inaccurate, the rhetoric has seemingly been effective in building support in Congress to block the transition.

Despite every serious news organization reporting, correctly, that the transition in no way amounts to "giving the internet away," the claim continues to persist. And Cruz has used his position as chair of a Senate subcommittee to call a hearing on the transition on Wednesday, which has again played to Washington's sense of drama and may prove critical in deciding whether Congress will add a rider to a funding bill in an effort to prevent the IANA transition from happening.

Serious politicians, meanwhile, have been drawn to the other arguments against the move, which have in turn also been heavily pushed by right-wing think tanks and commentators: most notably, the Heritage Foundation and Gordon Crovitz of The Wall Street Journal.


The anti-trust argument – that ICANN will no longer be immune to anti-trust laws once US government protection is removed – has seen its own back-and-forth. The reasoning is that ICANN will become subject to pressures it hasn't faced before and may not be equipped to deal with, and/or it will seek to regain anti-trust protection by setting up as an international body – raising the specter of a "UN-style body" overseeing the internet.

In response, ICANN's general counsel has written a letter arguing that the organization has always been subject to anti-trust laws. That much is true, although it has long been an argument in internet governance circles. In addition, the general counsel's claim is not helped by the fact that he argued the complete opposite a few years ago. ICANN was immune from antitrust law because it doesn't engage in trade or commerce, the organization claimed when it was sued in 2012.

Government property

The argument that the IANA contract is government property and so requires Congress' explicit approval to be given away has been an ongoing and persistent claim throughout the two-year transition period.

One group has threatened to sue the US government over it, and the Congressional committee chairmen also raised the matter in their letter. The DoC, for its part, argued back in 2014 that the contract was not government property. And this week, it obtained a formal letter from the GAO agreeing with that assessment.

The GAO letter [PDF] states three critical things:

  1. "It is unlikely that either the authoritative root zone file, or the Internet domain name system as a whole, is US Government property."
  2. "The US Government does have certain rights under a series of contracts and agreements related to the domain name system and the IANA functions, and has title to limited intellectual and tangible property related to performance of these functions." But...
  3. "We find that almost all of US Government property that we have identified will be retained and not transferred or otherwise disposed of in connection with the proposed transition."

In other words, a green light to the transition if a government official is comfortable with accepting the word "unlikely" as sufficient justification.


One of the key arguments against the transition is that ICANN itself is not sufficiently accountable to take over such a critical role. The issue of ICANN and its persistent lack of accountability and transparency has haunted the organization ever since it was instituted in 1998.

Despite numerous efforts and an entire separate process tied with the IANA transition, the organization maintains a wholly unsatisfactory degree of accountability. And as recently as last month, that was exposed when an independent review concluded that both ICANN's staff and board have broken the organization's bylaws and failed to live up to their responsibilities.

The Congressional committee chairmen's letter made several references to this and even quoted from a Register story that highlighted the lengths that ICANN's general counsel had gone to in order to avoid scrutiny.

The counter-argument to accountability concerns has come in the tech companies' letter to Congress in which they argue that the proposed reforms to ICANN will prove sufficient to improve the organization's functioning.

"The final proposal includes significant and concrete measures to enhance ICANN's accountability to its global community. We believe that this important proposal will assure the continuing security, stability and resiliency of this system," it argues.

The counter-argument to that has been made repeatedly by the Heritage Foundation and others: rather than approve the transition and hope the new measures work, let's delay the move for one or two years to make sure they do actually work.

The crunch: money money money money

All of those points and counter-points amount to nought, however, against what Congress is likely to do in order to halt the transition.

The Congressional push is to include language in a "continuing resolution" that funds the US government's functioning that specifically prohibits the Department of Commerce from spending any funds on the IANA transition.

Congress has passed resolutions doing exactly this three times, but it has not prevented the transition from moving forward because the DoC has effectively argued that ICANN, and not it, has been running the process. The transition would require the DoC to act, however, and so the constraints would be in force.

In what may prove to be the critical piece, the GAO has produced a document that appears to argue that the US government can move forward with the transition even if Congress acts to block the use of funds.

The GAO letter [PDF] is extremely legally dense and spends most the time arguing that if Congress did approve a similar financial constraint this month, it would apply to the DoC. However, it then notes:

As we noted, the 2016 Appropriation enacted a two-year appropriation, available in both fiscal years 2016 and 2017. In this regard, under section 539(b), if amounts appropriated under the 2016 Appropriation are unobligated at the end of fiscal year 2016 and, thus, remain available for obligation in fiscal year 2017, these funds are not subject to the prohibition of section 539(a). Because these amounts have already been appropriated in the 2016 Appropriation, they are available independent of a fiscal year 2017 continuing resolution unless Congress, in the continuing resolution, were to act to override section 539(b).

It concludes: "Thus, absent any legislation to the contrary, in fiscal year 2017, NTIA [National Telecommunications and Information Administration] could use unobligated balances appropriated by the 2016 Appropriation to relinquish these responsibilities."

Fiscal Year 2017, of course, starts on October 1, 2016. But it's not at all clear whether the GAO is saying the NTIA can use any money it has left in its budget (which we can safely assume it will find) to approve the transition unless Congress passes legislation otherwise.

And does that mean legislation as in an actual law, or would new language within a continuing resolution be sufficient to stop the NTIA from using leftover funds?

No one we have spoken to seems clear on the point. We have left a message with the GAO asking for clarity.

The hearing

One thing is for sure: it will all come to a head in Washington on Wednesday at Ted Cruz's hearing.

Assistant commerce secretary Larry Strickling will be attending, as will ICANN's CEO and a number of others both for and against the transition. Ted Cruz will undoubtedly use the enormous spotlight to harangue those who want the transition to move ahead – the question is whether he is able to tip the balance in favor of extending the contract and so stop the transition.

Ultimately the decision will be made in the West Wing later that day or early the next morning, when President Obama will have to make the call whether to push ahead despite likely Congressional action – and risk making the internet a political football for the foreseeable future – or whether to take the safer approach and simply have the DoC extend its contract for a year, leaving the matter to whoever takes over the office from him.

It's a high-stakes decision. And one that could impact the internet for generations. ®

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