Member of the European Commission, responsible for Enterprise and the Information Society; Comments by Mr Erkki Liikanen, SIDN event Hague, 15 April 2004

"Internet governance the way ahead"

Firstly, I would like to thank SIDN⁽¹⁾ for their kind invitation to speak here today. Let me congratulate them on the one millionth registration under the dot-NL country-code Top Level Domain. This is a truly impressive achievement for a country of 16 million inhabitants. It illustrates the efficiency of SIDN as a registry manager. It also indicates the quality of the service provided to customers. With so many registrants, you must be doing something right.

Today on this occasion I would like to discuss the European Union's view on Internet governance. This is a topic that has become important for policy makers in all sorts of fora around the world in recent months. This is mainly of course due to the fact that the Internet has become an integral and important part of the fabric of our economies and societies. The rapid rate of adoption is largely due to the fact that it is:

- increasingly cheap,

- universally accessible,

- flexible in terms of applications,

- and heterogene.

The roll-out of broadband throughout Europe will further exploit the full potential the Internet offers to realise productivity gains, and thus creating growth and employment. At the same time it will allow to deliver on a whole range of socio-economic objectives and achieve an inclusive information society.

But such growth of the role of the Internet generates its own wealth of public policy issues. It is not therefore surprising that Internet governance has increasingly come to the attention of policy makers. The World Summit on Information Society in Geneva in December of last year decided that Internet governance warranted its own UN Working Group.

During the next two years we will try to identify exactly what policy makers should focus on.

Before addressing the specific questions, I would like to take the opportunity to make some general observations about the Internet from a policy makers perspective.

Firstly, the Internet as a communications technology is largely unprecedented. In the past, governments have needed to take a very direct role in the co-ordination and interoperability of communications networks such as the telegraph and the telephone.

The Internet however, started life as a fully interoperable and open global network as a function of its basic protocol. Previous communications networks such as telecommunications were also largely built up in the public sector as nationalised industries and then eventually privatised. The Internet on the other hand, has largely been the result of private sector investment from the outset.

Perhaps the biggest difference between the Internet and traditional communications technologies however, is the underlying architecture of the network. The usual analogy is that the Internet's infrastructure is less of a pyramid and more of a cloud.

Compared with the centralised nature of a traditional telecommunications network, the Internet exists primarily at the edges of the network, and not at its centre.

Importantly therefore, the Internet's architecture does not lend itself easily to hierarchical control. The strength of the design is that it avoids the possibility of single points of failure. This lack of concentration contributes to the impressive stability in the Internet's underlying infrastructure.

This leads to a key public policy objective that I believe all governments can agree to: the need to ensure the continued stability of the Internet. Whatever the relative merits of a government initiative might be, we will not be thanked by Internet users if any measure has the down-stream effect of destabilising the Internet's underlying architecture.

On the other hand, throughout Europe, millions of companies, organisations and citizens are increasingly dependent on a reliable Internet infrastructure. This means that governments will inevitably be asked difficult questions if there is any failure in this important infrastructure. For this reason, it is not realistic to expect governments to take a back seat completely and leave the Internet solely to market forces. The challenge for policy makers will be to find a policy approach that reinforces the Internet's reliability without hindering its potential for further growth.

At the moment, governments do clearly have legitimate concerns about the Internet:

· Spam is an increasing problem for example. I am pleased to note the recent landmark ruling of the Dutch Supreme Court. Hereby the Dutch internet provider XS4ALL is permitted to refuse spam on its network.

· It is the first time that a supreme court in Europe has ruled on the rights of spammers. It is an important step forward in dealing with this threat.

· Further steps are necessary however, both from regulators and from industry to develop the necessary technical solutions to help combat the threat that spam poses to users and to the Internet itself.

· Other concerns of governments include harmful and illegal content, respect for Intellectual Property Rights and privacy.

Some developing countries feel they have insufficient influence over the management of the Internet's key infrastructure, a complaint that we in the developed countries must listen to. The unique role that the US government still plays in part of the naming and addressing system is also a matter of concern for some, as is the role of ICANN.

This leads to the question of the view of the EU on the role of ICANN. I should perhaps state at the outset that I can only speak on behalf of the European Commission, but I think most of what I will say reflects the majority view of Member State governments as well.

In many ways, ICANN is a unique experiment in self-regulation. This is not surprising. The history of the Internet is unique in itself and this has called for innovative arrangements in governance. The expectation among governments at the outset was that ICANN would provide a neutral platform for consensus-building between the key actors who operate the naming and addressing infrastructure. It was also hoped that ICANN would provide a way for the US government to withdraw from its supervisory role. In this way, we could achieve a greater internationalisation and privatisation of certain key functions.

While ICANN has had its successes, it has yet to fully deliver on either of these objectives.

We know for example that progress on the country-code names supporting organisation (ccNSO) has been slow. Many European country-code top level domains (ccTLDs) have yet to join. Some have even indicated that they are unlikely to do so in the near future. I am pleased that dot-NL has taken the lead among European ccTLDs in this respect, and I hope others will follow, but there is clearly some way to go before the rest of the Community are fully integrated in the ICANN process.

This is worrying for two reasons:

· Firstly, European country-code top level domains (ccTLDs) account for a significant majority of country-code top level domain names world-wide. ICANN will have a problem establishing legitimacy in country-code top level domain matters while most of the large ones stay outside the country-code names supporting organisation (ccNSO).

· Secondly, policy makers will understandably be surprised and concerned when the organisation that they have helped set up to further self-regulation is not being supported by the organisations who were supposed to do the self-regulating.

Put simply, ccTLDs cannot have it both ways either ICANN works or governments will need to step in.

The absence of any clear picture about the longer-term intentions of the US government for ICANN is also not helpful.

That said, ICANN has turned out to be an effective mechanism for co-ordination of many of the key functions of Internet naming and addressing. Many of the other constituencies have less problems than the country-code names supporting organisations (ccTLDs) do. ICANN also provides an opportunity for governments to participate in the governance process via the Governmental Advisory Committee (GAC). The high levels of participation at ICANN meetings can be seen as a sign that there is a need and a demand for such a body.

The experiment therefore continues. It has not failed, nor has ICANN completely achieved all of its targets. However there is enough promise for us to continue with the project. But ICANN needs to continue to improve. It must strengthen its role as a facilitator of global co-operation between the numerous bodies that manage the naming and addressing infrastructure, such as SIDN. As part of a self-regulatory mechanism, the naming and addressing bodies themselves will need to judge how successful ICANN is. But governments will inevitably be watching too.

We will play our part to ensure that ICANN receives the support it needs from public policy makers to do its job. The critics of ICANN are numerous however, and include governments not convinced that self-regulation is the best model for governance. Those who wish to continue to support self-regulation need to make sure that ICANN works and delivers an inclusive and efficient mechanism for self-regulation. This challenge is for the private sector, governments and ultimately for ICANN itself.

But Internet Governance means more than just ICANN. In the world of the country-code names supporting organisations (ccTLDs), the vast majority of operational and policy decisions are made by the ccTLDs themselves at local level. This is how it should be.

Country-code names supporting organisations (ccTLDs) should be responsive to the needs of their local Internet communities, including their local governments and ICANN's role is to provide a mechanism for global co-ordination when problems cannot be dealt with at national level.

In many ways this is analogous to the political EU principle of subsidiarity only do things in the center when there is a clear need to. To a large extent, this also allows national governments to decide for themselves what kind of relationship they want with their ccTLDs. I note that in Europe a variety of models exist, with some governments running their ccTLDs and others maintaining an arms-length relationship with a private sector operator. Both approaches seem to work, which is a endorsement of the principle of subsidiarity in this area of Internet governance.

How does this all relate to dot.eu ?

· Firstly, it represents a good example of governance at the regional level. ICANN have been informed of our intentions, but the decision-making process has been carried out in its entirety here in Europe, in consultation with the local Internet community and the various public institutions.

· Secondly, dot.eu has been about finding a balance between public policy objectives and self-regulation. To achieve this, our approach has been to provide a set of public policy parameters within which a private sector operator could manage the registry. This we will achieve when EURID finally sign the contract with the European Commission in the coming weeks.

· Thirdly, dot.eu is an example of governance involving all the stakeholders.

EURID will need to take account of the public policy rules defined by governments and legally be answerable to the European Commission under the terms of its contract, but its registration policy will be defined in conjunction with the local Internet community. This multi-stakeholder approach based upon public-private partnership is, I believe, the cornerstone of all good Internet governance.

This is an approach that we will also propose other governments to accept in the UN process.

Good governance is about fairness, transparency and accountability. It is also about making the right decisions in the interests of those being governed. The role of governments is to:

· ensure that public policy interests are protected in any governance structures for the Internet. And to:

· make sure that the private sector is allowed to innovate and develop the Internet further. And this without any undue hindrance from inappropriate regulation.

We also need to keep the bigger picture in mind. A lot of attention is paid to the problems that occur on the Internet, particularly regarding content. This can distract us from the Internet's key impact on society. It is an amazing technology. Its main impact by far has been overwhelmingly positive. Its contribution to productivity, rates of innovation, communication and learning is unprecedented. Its potential to contribute even more to economic and social development is abundantly clear. When we talk of Internet governance, our main objective must be to ensure that this potential is realised.

Thank you.