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Lawmakers Press ICANN Chief on Accountability

WASHINGTON -- Members of a House panel grilled the head of the organization responsible for assigning Internet names today, airing complaints about the group's lack of accountability and its efforts to combat cyber-squatting.

In one testy exchange, Florida Republican Cliff Stearns took aim at the finances of the Internet Corporation for Assigned Names and Numbers (ICANN), noting that the last balance sheet of the nonprofit group showed a $7 million surplus.

"You should take that $7 million and make sure that cyber-squatters are gone," he said. "I think your job should be not just developing a surplus but actually implementing -- making it cheaper for consumers -- and actually doing your mission."

At that and several other moments throughout the lengthy hearing, ICANN CEO Paul Twomey was on the defensive.

He explained that ICANN, like many other nonprofits, is aiming to establish a reserve roughly equivalent to a year's worth of operating expenses.

Today's hearing comes as ICANN is nearing the end of its operating agreement with the U.S. government, and speculation has been building about how it should be organized going forward.

Since its inception in 1998, ICANN has operated under an agreement with the Department of Commerce, giving it a quasi-independent status with limited oversight. Nevertheless, many in the international community have complained that the United States exerts undue influence on the body that is charged with maintaining the World Wide Web.

ICANN's joint project agreement (JPA) with the Commerce Department expires on Sept. 30, and the representatives at today's hearing made it clear they would like to see it continue.

For his part, Twomey said he is interested in preserving ICANN's current structure as a nonprofit, private entity based in the United States. But he called for an end to the cycle of renewing and revising temporary agreements that has characterized ICANN's relationship with the U.S. government for more than a decade.

"A more permanent approach that enshrines what is working is vital," he said. "If the joint project agreement expires, nothing changes."

But the representatives, as well as several witnesses alongside Twomey, contended that ICANN has failed to adequately serve the stakeholders it was created to support, and that to end the minimal oversight the body has when the JPA expires would be a mistake.

Verizon (NYSE: VZ) Vice President Sarah Deutsch complained about ICANN's hands-off approach to mediating disputes with cyber-squatters. In many cases, she said, the practice of assigning a domain name that infringes on someone else's brand name is willingly enabled by the same registrars that have operating contracts with ICANN.

"To my knowledge, they haven't brought any action against a registrar," said Deutsch.

Twomey protested, noting ICANN's internal mechanism for resolving conflicts, and said that it was continuing to improve its protections for intellectual property.

But for much of the hearing, Twomey was the lone voice defending ICANN.

Christine Jones, general counsel for domain-name registrar GoDaddy, picked up a familiar line of criticism and blasted ICANN for being accountable only to itself.

"ICANN holds three open board meetings a year, the rest of their board meetings are done in private," she said, complaining that decisions about how it negotiates its contracts and handles its money are essentially done in secret. "We make requests for information. We basically get stonewalled."

Twomey, who is planning to step down as head of ICANN by the end of the year, called some of Jones' characterization of the group's operating practices as "just wrong." He said that under his watch, ICANN had undertaken a slew of initiatives to make it more transparent and accountable to its stakeholders, promising the representatives a report with more details.

The Commerce Department's National Telecommunications and Information Administration is collecting comments from the public about how to proceed with ICANN through Monday.