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ICANN is nothing but the gTLD-MoU in slow motion.
-Richard Sexton, October 1999
In its first two-and-a-half years of operation, ICANN worked with the U.S. Department of Commerce to transform administration of the DNS root into the platform for contract-based governance of the Internet. The new regime defined and distributed property rights in the domain name space and imposed economic regulation on the domain name industry. The property system that ICANN created was a highly regulated and conservative one, analogous in many respects to broadcast licensing in the United States. Its essential features can be summarized as follows:
Network Solutions' monopoly profits were redistributed to a broader class of claimants by regulating its wholesale rates and transforming .com, .net, and .org into shared domains.
The administration of the domain name space was linked directly to intellectual property protection. Trademark protection became one of the major determinants of the contractual features of registering a domain name, of policies regarding access to information about domain name registrants, and of policies governing the creation of new top-level domains.
End users were stripped of most of their property rights in domain names and deliberately deprived of most opportunities for representation in ICANN's processes.
Artificial scarcity in top-level domains was maintained. Just as in broadcast licensing, artificial scarcity fostered a regime of merit assignment and weak property rights for licensees.
Network Solutions succeeded in retaining a long-term property right over the .com registry. The Generic Top-Level Domain Memorandum of Understanding (gTLD-MoU) faction's attempt to require all registries to be nonprofit was unsuccessful.
National governments and intergovernmental organizations won a limited role within ICANN's structure and used it to assert rights over the delegation and assignment of country codes, names of geographic and urban places, and names for international organizations (so far with only partial success).
The U.S. government retained residual authority over the DNS root. Instead of giving up that authority after two years, as originally contemplated, the government has held on to it indefinitely.
As noted in chapter 4, the initial formation of property rights always creates conflicts over the distribution of wealth. These conflicts were resolved in ways that favored members of the 'dominant coalition' or those whose de facto control of important resources gave them significant bargaining power. Figure 9.1 shows the organizational structure of ICANN.
Figure 9.1: ICANN Organization Chart
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