INET Conferences

The "Governance" Debacle: How the Ideal of Internetworking Got Buried by Politics

Milton MUELLER <mueller@syr.edu>
Syracuse University School of Information Studies
USA

Abstract

This paper criticizes the notion of "governance" as a departure from, and hostile to, the coordination of inter-networking, which is what the Internet is all about. The governance debate is no longer about how to facilitate inter-networking. Instead, it is focused on restricting the ability to inter-network in order to protect or advance the socioeconomic interests of various stakeholders. The institutional problems caused by the growth of the Internet have become a pretext for advancing unrelated political agendas, from the regulation of speech to the policing of trademark registrations. The paper shows that the history of radio broadcasting provides a clear example of how resource allocation problems can be exploited by governmental and private interests to impose a regulatory agenda upon a new medium. If this trend is to be avoided, Internet advocates and the Internet Society must rededicate themselves to a focused advocacy of inter-networking and discard initiatives, such as the gTLD-MoU, which stray from that agenda.

Contents

• Introduction
• The institutional crisis of internetworking
• The co-opted network
• A historical parallel
• Trademark as a case in point
• What is to be done?

Introduction

I don't know who came up with the term "Internet governance." But it seems to have become the label of choice for the evolution of what is more properly called the legal and institutional framework of computer networking. It was an unfortunate choice of a term. "Governance" means control, the "act, process, or power of governing." National governments and corporate boards engage in "governance." Corporate governance refers to how a specific company elects its board of directors and adopts policies. But the Internet is not a political community. Nor is it a corporation or any kind of a bounded organization. It is a method by which millions of autonomous corporations, organizations, governments, and individuals interconnect and communicate. "The Internet" is a myth; there is no "The" there. There is only a process of internetworking. This process does not need "governance." It needs only coordination.

Granted, internetworking of computers has reached an inflection point in its development. The old methods of coordination rested upon US government contracts and informal relationships among educators and researchers. Those methods lacked a defined legal and institutional framework and will no longer do. There is indeed a problem to be solved. That is what makes the siren song of "governance" so dangerous.

The institutional crisis of internetworking

Before we jump onto the governance bandwagon, let us be precise about what is the real issue before us. The problem may seem new and mysterious to computer scientists. To a political economist, on the other hand, the problem is old, obvious -- and fundamental.

What the Internet needs now is not "governance" but an institutional framework, a system of property rights. In essence, the US government opened up the internetworking process to private industry and the global public without doing anything to provide a well-defined legal basis (i.e., property rights) for its central coordinating functions. The US invited everyone to join the Root without ever defining who owned the Root. It offered to give everyone who asked for one a domain name for free, without ever considering the semantic and economic value of names in a global marketplace. It thrust the Internet into a competitive economy without ever considering the antitrust implications of monopoly contractors and central coordinating agencies. The coordinating functions still operated as if the Internet was a closed, noncommercial network. This led to a quite predictable crisis over who owned what and who had the authority to do what.

The coordination of internetworking requires that certain scarce resources -- names, numbers, space on root servers -- be allocated efficiently and smoothly. Allocation of scarce resources can only be performed efficiently when there are clearly defined, tradable property rights. Since 1995, when the constraints of the DNS system created by NSF (National Science Foundation) became manifest, the individuals and organizations that provided coordinating functions faced a crisis of legitimacy. Recall that in 1995, certain ITU representatives were pointing a finger at IANA and ISOC, claiming that they were engaged in an "illegitimate" attempt to privatize and profit from the sale of new TLDs.[1] A few months later, after ITU, ISOC, and IANA had joined forces in the gTLD-MoU, many people leveled similar "power grab" charges at ITU. The whole crisis was directly attributable to the ill-defined legal status of the central Internet coordination functions and the organizations that ran them. They literally did not know who or what they were. Were they supposed to be private, profit-making firms? Nonprofit membership organizations? Agents of the US government? Intergovernmental treaty organizations?

In addition to these identity crises, the absence of an institutional framework led to major conflicts over operational and resource allocation issues. Most notably: Who could create new TLDs? Who could profit from new TLDs? How could competition for registration services be introduced? The property-rights vacuum precluded anyone from providing an authoritative, legitimate answer to these questions. Therefore, the coordinating functions of the Internet could not be scaled up as internetworking and Internet-based commerce grew.

Something needs to be done. We all recognize that. My purpose is to alert us to a disturbing fact: the global response to the problem has taken a sharp wrong turn.

The co-opted network

The guiding principle of the governance debate is no longer the facilitation of internetworking. Instead, everyone seems to be focused on restricting the ability to internetwork in order to protect or advance the socio-economic interests of various stakeholders. The institutional problem of coordinating internetworking, which is difficult enough to solve, has become a pretext for addressing a variety of unrelated political agendas, from the regulation of speech to the policing of trademark registrations. The simple but revolutionary idea of enabling internetworking has been all but buried by an avalanche of political dung.

In short, instead of solving the institutional problems of internetworking, we are indeed getting "Internet governance."

Consider the following. Two years ago, the debate over domain naming was basically about how to create new TLDs in order to facilitate more and better internetworking. IANA was proposing to create 300 new TLDs. Competing name server companies were confidently positioning themselves for this eventuality by homesteading desirable strings. In this speech, I do not wish to defend or attack these specific activities. I merely want to call your attention to how vastly the parameters of the debate have changed.

Today, virtually all DNS reform proposals with a chance of being implemented would severely -- and arbitrarily -- limit the number of TLDs. The gTLD-MoU proposed only 7; the US Department of Commerce Green Paper proposed only 5. Both proposals subject the allocation of second-level domain names to complicated review procedures in order to protect the interests of large multinational trademark holders. Obviously, the primary concern here is not the efficient coordination of internetworking or scaling up the domain name distribution process. The growth of internetworking has been limited, confined, subordinated to an alternative political agenda. The tail is wagging the dog.

Instead of internetworking, we have the following menu of control:

• Trademark "protection" (really a potentially huge and extra-legal expansion of the power of multinational trademark holders).
• Censorship of domain names. (Both the gTLD-MoU and the US Department of Commerce have steadfastly refused to include a free expression principle in their proposals for Internet "governance," and all parties, including NSI, are promising that domain names will only be authorized if they are in "good taste."[2] Isn't it only a matter of time before this principle is extended to content?)
• Market entry regulation. (All proposals seem to find it necessary to impose fixed limits on the number of firms who can enter the market for registries.)
• Geopolitical concerns about representation. (The US opposed the gTLD-MoU because it was based in Geneva; the EU opposed the US/Magaziner proposals because it was based in US jurisdiction. If "governance" is in the offing, then this kind of political positioning is to be expected.)

Why is this happening? Can it be stopped, or is the process of co-optation inevitable?

A historical parallel

There are historical precedents for this, and it is instructive to consider them. The popular expansion of radio broadcasting in the early 1920s led to a similar institutional problem. Broadcasting utilized a new resource -- radio frequencies -- that required the distribution of exclusive rights.[3] In the US, existing organizations and legal-institutional mechanisms did not have a clear, generally accepted method for resolving competing claims to radio frequency channels. The absence of well-defined property rights in radio bands led to legal conflicts over rights. There was a belief on the part of many businesspeople that broadcasting could not develop as a commercial medium until a more stable regime was defined on a national basis. The US Congress then nationalized radio frequencies and created the Federal Radio Commission (which later became the FCC).

Note well: the catalyst of government action was a lack of clarity in the institutional environment as to how property rights would be defined. Yet the results of government intervention in broadcasting went far beyond what was needed to solve that immediate problem. The new FRC did not simply license broadcasters to eliminate interference. It also established sweeping regulatory controls over who could broadcast, the geographic distribution of broadcast licenses, and broadcast content. Research has shown that these controls reflected the political agenda of the Congress and certain large broadcaster interests.[4] Congress wanted to ensure that the new medium would be under its thumb. Large broadcasters wanted to restrict the number of players in the market.

In short, the need to solve a property-rights problem became the pretext for a major act of political intervention designed to bring the medium "under control." Isn't this precisely what is happening to the Internet today?

Trademark as a case in point

The so-called conflict between domain names and trademark registration provides the clearest example of how the ideal of internetworking is being hijacked by political agendas unrelated to the immediate problem of solving the resource allocation problem.

Domain name registrations frequently correspond to the character strings of registered trademarks. Trademark owners have argued that this violates the rights of trademark holders. Policy makers have responded to these claims by making or proposing major changes in the way Internet domain names are distributed. For example, NSI allowed trademark holders to trigger a suspension of a user's domain name, without any court proceeding, whenever the domain name character string corresponds to a registered trademark.[5] The January 30 draft proposal of the US Department of Commerce proposed a similar policy.[6] An even more extreme policy was proposed by the gTLD-MoU group, which attempted to give famous name holders a right to preempt all character strings similar to or corresponding to their name in all TLDs, as well as an extensive review and challenge process administered by WIPO.[7]

Why is this happening? Is it because the Internet poses a major, imminent threat to trademark rights? It is instructive to examine the facts.

I am currently directing a research project that is systematically collecting empirical evidence about legal and administrative conflicts between domain name registrants and trademark holders. The project is identifying as many known cases of conflict between trademark holders and domain name registrations as possible, and placing each of them in one of three categories:

1. Cases in which there is a clear attempt to trade off a name and/or to confuse customers by using a trademarked name as a domain name;
2. Cases in which there is no attempt to confuse customers or illegitimately trade off a trademarked name, but in which two organizations claim the same character string; and
3. Cases in which trademarked names were warehoused by name speculators in the hopes of selling them.

One might expect, given all the noise about "trademark violations," that most of the conflicts between domain names and trademarks would be unambiguously in category 1. In fact, the results so far show that almost all of the so-called domain name trademark cases -- perhaps as many as 98%--fall into categories 2 and 3. Indeed, a large share of what is commonly referred to as "trademark conflict" has been concerned with category 2: cases in which, for example, the Juno lighting company and the Juno e-mail company fight over the domain name juno.com. This finding has important implications for the arguments advanced by trademark holders and the policies proposed to resolve these disputes.

Under real trademark law in the physical world, only category 1 activities are actionable. Category 3 (name speculation) does not necessarily constitute trademark infringement, although this is a genuinely new legal issue posed by the Internet. Warehoused names are not put into commercial use, and "usage in commerce" is a critical ingredient of trademark infringement.[8] Category 2 conflicts also are not intrinsically illegal in the real world. Trademark law establishes clear geographic, jurisdictional, and industrial boundaries between the users of similar names. Settled trademark law makes it clear that "A mark may not be expanded beyond the specific good or service for which it was originally intended."[9] Because the geographic, industrial, and jurisdictional categories that regulate the application of trademark law cannot exist in Internet domain names, settled trademark law cannot determine whether the Juno lighting company or the Juno e-mail company has any special right to the domain name juno.com. In other words, most of the conflict over domain names has occurred in arenas where a strict application of existing legislation and case law would not support the claims of trademark owners.

Furthermore, in the real world, trademark infringement disputes cannot be initiated until a name is actually put into use. Real-world trademark law does not provide trademark owners with a centralized, prior review of name selections by all businesses, nor does it permit 30-day challenges after a selection is made. Litigation must be based on demonstrable infringing behavior and a finding of consumer confusion. Yet in the distribution of domain names trademark holders are demanding such prior review rights, and many parties appear to be willing to give it to them.

Empirical evidence thus supports a much more political interpretation of the domain name/trademark conflict. Trademark holders have been able to shape the domain name controversy in a way that allows them to assert broader and stronger intellectual property rights in cyberspace than they have in the physical world. What they have done is project into the "green field" of cyberspace a new conception of what they think their property rights in Internet names ought to be. The intellectual property interests have a far greater command of legal and political resources than their opponents do. Because the institution defining and enforcing property rights in domain names is still in its formative stages, the trademark interests may be able to warp its development to reflect their desire for an expansion of their rights.

What is to be done?

The Internet is at a historic juncture in its development. The analysis and historical precedent cited above are intended to be realistic, not fatalistic. We can avoid the mistakes of the past and change the Internet's fate, but only if we are consciously aware of the forces affecting it and what will happen if we don't actively intervene.

Let's begin by understanding and applying the distinction between an "institutional framework" and "governance." The difference is subtle but important. The former supplies impersonal rules within which individuals and organizations can transact independently and autonomously. The latter tells individuals and organizations how to act; it regulates their behavior. The Internet needs a stable, defined institutional framework. It does not need "governance."

Second, let's stay focused. Internetworking is a cause that needs its own dedicated advocates. For these advocates, the sole criterion for the evaluation of all proposals relating to the Internet should be this: does it advance internetworking? Does it make it easier, cheaper, and more technically robust for individuals to interconnect and interoperate information systems? It is not the purpose of the Internet or its supporting institutions to solve trademark problems, regulate content, equalize the global distribution of wealth and power, shelter the homeless, or end world hunger. However worthy or unworthy those other causes may be, we cannot allow the institutional framework of the Internet to become subordinated to other agendas. There are patent and trademark offices and numerous laws and institutions to take care of intellectual property concerns, for example. The Internet -- and the Internet Society -- should take care of internetworking. Full stop.

One of the most distressing developments of recent years is that the Internet Society seems to have become fundamentally confused about this point. ISOC's participation in the gTLD-MoU was an act of political overreaching that has proven to be a divisive and expensive mistake. In forming a political alliance with the ITU, WIPO, and trademark interests, ISOC opted for "governance" over internetworking as its lodestone. That is, it attempted to set up a legal and administrative framework that sought to control and limit the practice of internetworking in order to protect other interests. The fact that ISOC called it "self-governance" rather than simple "governance" did not change the plan's substance. ISOC has to decide which side it is on.

[1] Robert Shaw, an adviser at the International Telecommunication Union, said of the Postel draft: "Personally, I think this is totally without any legitimacy. ...The domain name server space is a global resource and neither IANA nor ISOC have the right to appoint themselves as the taxing authority for the root level to the tune of potentially millions of dollars a year." Quoted in Ken Hart, "Net plan masks power bid," CommunicationsWeek International, Issue 170 (9 September 1996).

[2] On March 18, 1998, for example, Network Solutions refused to register "pimpshit.com," despite the fact that it has already registered piss.com and shit.com.

[3] Indeed, the early days of broadcasting were closely analogous to the Internet, in that the technology and practice were driven by young "amateur" operators outside of established business and governmental institutions. See S. Douglas, Inventing American Broadcasting, 1899-1920. Baltimore: Johns Hopkins University Press, 1987.

[4] T. Hazlett, "The Rationality of U.S. Regulation of the Broadcast Spectrum," 33 Journal of Law and Economics, (April 1990) 133-175. NSI dispute resolution policy has now gone through five iterations. The earliest versions allowed NSI to suspend a domain name registration 30 days after presentation of a trademark registration by a challenger. See http://www.patents.com/nsi.sht for a complete discussion of all versions of the policy.

[5] "If an objection to registration is raised within 30 days after registration of the domain name, a brief period of suspension during the pendency of the dispute will be provided by the registries." Appendix 2--Minimum Dispute Resolution and Other Procedures Related to Trademarks, National Telecommunications and Information Administration, 15 CFR Chapter XXIII, Improvement of Technical Management of Internet Names and Addresses, Proposed Rule, Federal Register: February 20, 1998 (Volume 63, Number 34) Pages 8825-8833.

[6] See http://www.gtld-mou.org/

[7] In the Panavision case, wherein a name speculator was found guilty of infringement because of his use of the name panavision.com, the Judge's verdict hinged on the issue of commercial use. Had the name speculator not actually put up information for public display on the panavision.com Web site, the case for infringement would have failed.

[8] Park 'N' Fly v. Dollar Park and Fly, Inc., 469 U. S. 189, 204, 105 S. Ct. 658, 667, 224 USPQ 327, 333 (Sup Ct, 1985.

[9] Unlike many of ISOC's harshest critics, I do not believe that there was any malevolent intent behind ISOC's participation in the gTLD-MoU. Unfortunately, the polarization that has occurred in the wake of the plan has forced both advocates and proponents to dig deep trenches and refuse to emerge from them. It's time to put that sorry episode behind us.