Updated: 11/21/97 09:51 AM Eastern Standard Time MEMORANDUM April 17, 1997 TO: Inspector General FROM: Acting Deputy Director: [W. Bordogna] SUBJECT: Agency Agency Response to OIG Report on the Administration of Internet Addresses Thank you for your Report on the Administration of Internet Addresses. It contains an interesting and thoughtful series of recommendations. As you know, NSF`s management has been considering for some time the nature of its relationship to the Internet and the terms of the existing Cooperative Agreement with Network Solutions, Inc. (NSI). Your report enabled us to better evaluate the range of alternatives available to NSF in deciding how best to direct the Foundation's resources towards matters of significance to our scientific and engineering communities, including our participation in the next-generation Internet. The Report recommends continued governmental oversight through Federal administration of current Internet addresses and the imposition of an excise tax on such addresses. It also recognizes that a regulatory structure would need to be created either within NSF or through some other new, governmental organization or independent commission. Several of the proposed options would require additional Federal legislation or a significant increase in Federal personnel. We do not believe, however, that such regulation and taxation are appropriate functions for the National Science Foundation. The long-term issues raised by your recommendations may indeed require additional governmental oversight, and we are confident that your Report will be of great interest to policy makers in other Executive Branch agencies and in the Congress. In the meantime, next-step solutions for the Internet registration process are being implemented. First, under the leadership of the Internet Society, an international organization whose members reflect the breadth of the entire internet community and consist of individuals, corporations, non-profit organizations, and government agencies, an "International Ad Hoc Committee" was formed and has proposed processes to introduce new top level domains, new registrars, and new ways to deal with trademark-domain name conflicts. This approach, or the adoption of other proposals that may come forth from the Internet community, will inject new and vigorous competition into the current domain name registration environment. Second, NSI -- consistent with the recommendations of NSF-supported workshops and on-going Internet discussions -- proposes to "spin off" the Internet number registration function to the American Registry for Internet Numbers, a not-for-profit corporation that will be a service provider-based membership organization similar to the organizations that currently register Internet numbers in Asia-Pacific and European communities. And finally, NSI has proposed the establishment of a new non-profit organization to fulfill its obligation under the terms of the Cooperative Agreement and provide a mechanism for the preservation and enhancement of the intellectual infrastructure of the Internet. The Internet is no longer primarily a medium for the exchange of information among computer networks in the scientific community. It has gone from the development stage to the application stage, and the administrative structure is presently sustained by the general purpose of the enterprise and by commercial participants. Because the operations that are covered by the Cooperative Agreement no longer require financial support from NSF and the expectations of the Cooperative Agreement have been fully met, we believe it is time for NSF to focus its attention on the next leading edge activities in this area. NSF has no plans to renew or to re-compete this Agreement when it ends in March 1998. At present, NSF is working with NSI to provide for the suitable disposition of the "intellectual infrastructure" fund and the resolution of other matters related to the conclusion of the Cooperative Agreement. If, by mutual agreement with NSI, NSF believes it would be appropriate to end the Cooperative Agreement even earlier that March 1998, we will do so. Thank you again for the Report. I am sure that it will be a useful document for any future discussion of these matters. ---------------------------- Office of Inspector General Report The Administration of Internet Addresses 7 February 1997 Executive Summary Internet addresses are a unique public resource. We consider it essential that federal oversight continue to ensure impartial and equitable allocation of internet addresses. The people, through taxpayer revenue, have already invested substantial funds in the development of the internet and the system now used to register internet addresses. To protect the taxpayers' investment, we believe that NSF should ensure that a portion of the fees obtained to register internet addresses be allocated to support further internet development. Our projections indicate that by proceeding in this manner NSF can generate more than $300 million over five years for NSF to invest in internet-related projects. In this way taxpayer investment in internet development and research can be appropriately leveraged, with a long-term objective of making NSF-supported network-related basic research, service, and development self-sustaining. Under our recommended approach, funds from internet registration fees that have already been paid and allocated to "intellectual infrastructure", with a present value of at least $12.8 million dollars, should also be made available or network-related basic research, service, and development projects approved by NSF. Preface: What's In a (Domain) Name? Worldwideweb addresses, such as "www.fastlane.nsf.gov", are now widely used by the general public. They generally consist of a series of letters and/or numbers separated by periods. The part of the address after the last period ("gov" in the above examples) is called the "top-level domain name," and the part of the address immediately to the left of that last period ("nsf" in the examples) is called the "second-level domain name." Currently, top-level domain names are either a two-letter country code (such as "fr" for France) or one of the following three-letter codes; "gov", "org", "com", "net", "edu", "mil", or "int". Domain names map to internet number addresses, which actually identify each computer interface attached to the internet and are used to route information over the network. Internet number addresses consist of four 1-to-3 digit numbers separated by periods; for example, "128.150.1.1" is a numeric NSF address. Domain names are used because they are easy to remember; the Psmith company is more likely to attract potential customers to www.psmith.com than to 173.75.128.43. Domain names have to be unique: if "psmith.com" identifies a multinational corporation, it cannot also identify a journalist named Eustace Psmith. Some domain names may have significant commercial value; in our example, the corporation might be willing to outbid the journalist for the use of psmith.com. Currently, all second-level internet domain names in the top-level domains of gov, org, com, net, and edu are administered by Network Solutions Inc. ("NSI") under a cooperative agreement with NSF. Unless extended by NSF, this agreement will expire on 30 September 1998. In this memorandum we address how NSF should administer internet addresses in the future. I. Internet Address Registration Fees The internet can be traced back to a network created by the Department of Defense ("DoD"), and for a long time DoD handled all internet address registrations. In 1991, NSF assumed support or non-military registration services. On January 1, 1993, NSF entered a five-year cooperative agreement with NSI to provide registration services; that agreement was expected to cost approximately $1.0 million annually. In 1994, new registrations began to increase dramatically, primarily in the top-level com domain, and by 1995, NSI's cooperative agreement was costing NSF upwards of $1.9 million annually. In September 1995, NSF authorized NSI to charge registration fees for second-level domain name registration services. Under the new arrangement, NSI collects fees from the individuals registering in the top-level com, net, and org domains, and it collects $50 annual fees from NSF for registrations in the top-level gov and edu domains. For each $50 fee, $15 goes into a pool "for the preservation and enhancement of the `Intellectual Infrastructure' of the Internet in general conformance with approved Program Plans." [1] The remaining $35 is retained by NSI to cover its operating costs and profit. [2] The importance of the support of basic research by the federal government is acknowledged across the political spectrum. Through financial support of projects selected according to merit by peer review, NSF supports basic research in a broad range of science and engineering disciplines. The internet has been heavily funded and promoted by NFS at every stage of its development and expansion; indeed, we believe that NSF deserves substantial credit for the current explosion in the use of the internet. In addition, in contrast to the typical circumstances of NSF funding of innovative research or education projects, internet address registration concerns the allocation of a unique public resource. In this context, we believe that NSF should evaluate options available to recoup or otherwise protect the taxpayers' investment in network research and development. We have identified several approaches that would ensure fairness to the taxpayers, who funded the early network development programs, and would ensure an income stream for NSF to support peer-reviewed internet-related basic research, service, and development projects -- thereby reducing the need for taxpayer subsidies in the future. These options expand upon steps that NSF has taken in the past to apply registration revenue to network-related service and development costs under program income arrangements. [3] We invite NSF management to consider these additional alternatives, which are designed "to promote economy, efficiency, and effectiveness." [4] II. How Much Money Is Involved? A. Domain Name Registration Under the amended cooperative agreement, NSI charges $100 for an initial, two-year domain name registration and $50 for annual renewals. [5] In late 1996, NSI anticipated demand for second-level domain name registrations to grow from 41,700 to 75,000 per month by the end of March 1997. This proved an underestimate: domain name registrations exceeded 75,000 per month in September 1996. As of October 1996, NSI reported cumulative domain name registrations of 740,785, which would result in an annual revenue of more than $36 million. [6] More recently, the growth in domain name registrations has begun to moderate. For the nine months preceding the new registration fees regime, January 1995 through September 1995, cumulative domain name registrations grew an average of 15.8% per month; for the fifteen months since registration fees were instituted, October 1995 through December 1996, cumulative domain name registrations have grown an average of 13.5% per month. [7] The above chart shows the total number of domain name registrations and the growth rate over the past two years. The growth rate has varied, and obviously there is no way to know for sure how the growth rate will change in the future. For the purposes of this discussion, we will presume that the rate of growth will continue to decline at the same rate that it has since fees were instituted in 1995. As the chart below shows, this approach predicts that the number of domain name registrations will reach a plateau in mid-1999 of approximately 4 million, generating annual revenue from registration fees of approximately $200 million. We regard this as a conservative estimate. At the current return of $15 to the "Intellectual Infrastructure" pool for each $50 fee, the current rate scheme for name registration at that time will be generating more than $60 million per year in revenue for infrastructure development of the internet. B. Number Registration Currently, fees are not charged at all for internet number addresses. This means that the costs of the services supported by the fees falls only on those registering names. An NSF official discussing the imposition of the current registration fee structure explained: "While it is difficult to describe the `typical' Internet user, generally speaking, they fall into three categories: there are large organizations and corporations, which have a single, or relatively few, domain names. For those users, the costs [of domain name registration] are insignificant. There are those who have Internet access through on-line services such as America Online, Prodigy and CompuServe. These services each have a single domain name for all the end users. That means America Online will pay a single $50 fee annually, regardless of how many subscribes the service has. The third group are small business and individuals who have their own domain name." [8] Because internet number addresses, like names, must be unique, number addresses must also be registered. Some customers, such as internet service providers, large companies, and government agencies, have only one second-level domain name but use a great many number addresses, reflecting a greater use of the internet than other customers with only one or just a few number addresses. It seems reasonable that single-domain-name users that desire numerous internet number addresses should pay for them. Imposing fees on number as well as name address registration would more equitably distribute the cost burden associated with supported services through the internet community. [9] To date, 2 billion internet number addresses have been allocated world-wide. [10] A flat rate fee for internet number addresses would reflect the fact that from an end-user perspective number addresses, unlike names, are used to route information through the network, number address are not equivalent from an engineering perspective. The fee structure could be chosen to provide financial incentives for "best practices" in assigning number addresses within computer networks. Given the large number of internet number addresses, even a nominal fee (such as 10¢) on domestically held numbers would raise substantial funds for internet-related basic research, service, and development. Many of these number addresses are not actually in use, but are held by one of three regional registries. Furthermore, for historical reasons, organizations that received number addresses early in the development of the internet have been allocated many more numbers than they actually use. For example, NSF has been allocated more than 66,000 number addresses, but actually uses fewer than ten percent of them. Imposing number address fees would provide an incentive to conserve this limited internet resource. [11] C. Projected Above-Cost Revenues Under the Government Performance and Results Act, starting in fiscal year 1997 NSF must submit a strategic plan for all program activities covering a period of at least five years. On the basis of the assumptions dismissed above, we estimate that by retaining the above-cost revenue from name/or number registration over a five-year planning period beginning in 1998, NSF would be able to allocate more than $300 million in additional funds for network-related basic research, service, and development costs. III. What Should Be Done A. Federal Oversight of Internet Addresses Should Continue No one disputes the importance of the internet to the government and society. In announcing the "Next Generation Internet" initiative, the White House noted that the internet provides students ready access to remote library collections, brings market information to business entrepreneurs, and allows citizens ready access to the records of their elected representatives. [12] That initiative calls for "creative" investments to "enable a new generation of applications that support scientific research, national security, distance education, environmental monitoring, and health care." [13] NSF was identified by the White House as one of the implementing agencies for the initiative. The growing dependence of the nation on the internet underscores the importance of its continued availability to the public. For the internet to operate, the origination and destination points for information routed over the network must have unique addresses. Just as using the telephone system requires a phone number, using the internet requires an internet number address. The people, through their elected representatives, have historically exercised control over these internet addresses. In our view, public administration of this unique public resource should continue. Government authority over internet addresses, which continues to be administered under federal awards, is a matter of historical fact, but some have questioned the government's legal authority in this area. Some have complained, for example, that NSF has given a "monopoly" to NSI. NSI is acting pursuant to a legally binding agreement with NSF, in a manner that NSF has scrutinized and determined to be acceptable. The NSF/NSI agreement has not conveyed any authority to NSI that extends beyond the duration of the agreement. The agreement expires on 30 September 1998, and the agency has not yet decided upon a process for overseeing internet addresses after the period of the cooperative agreement ends. If, after the period of the cooperative agreement ends, NSI were not operating under NSF direction and were somehow able to continue to provide its current registration services and collect registration fees, nothing would currently prevent NSI from using it de facto control of internet addresses to profit from granting access to the internet. [14] In light of the significant public interest in the continuing stability of the internet and the large federal investments at stake, we recommend that federal oversight of internet addresses continue. [15] B. Federal Oversight of Internet Addresses Should Generate Income for the Government The federal government has made major investments in the creation of the internet. Operational networks developed by federal agencies include ARPANET (DoD), ESNET (Department of Energy ("DOE")), and the NASA Science Internet, as well as NSF's NSFNET backbone and regional networks. In addition to developing operational precursors and subsidizing their use by the research and education community, federal funding has supported research and development of related technologies. For example, from FY 1990 through FY 1995, NSF funding for the Networking and Communications Research and Infrastructure division ("NCRI") within the Directorate for Computer and Information Science and Engineering ("CISE") exceeded $230 million. [16] During this period NCRI funding supported fundamental research on communications theory and data networks as well as the NSFNET program. [17] The federal government will continue to invest in the internet in the foreseeable future. NSF's support for networking and communications research and infrastructure was approximately $55 million in FY 1996. [18] In its Justification of Estimates of Appropriations to the Congress for FY 1997, NSF identified "networking and communications research focusing on new technologies for high bandwidth communications, and on the convergence of computing and communications" as a high-priority activity for CISE; the total CISE budget request for FY 1997 was $277 million. [19] In the fall of 1996, the President identified the need for a $500 million investment in the next generation internet over the next five years. [20] The contributions of NSF and the other implementing agencies toward this new initiative would total $100 million in FY 1998. In response to the initiative, NSF is expected to include additional funding for the High Performance Computing & Communications program in its FY 1998 budget request. In the increasingly difficult budget environment that faces us, NSF must be able to find creative ways to leverage its assets to further its support of peer reviewed basic research in a broad range of science and engineering disciplines. We believe it would be appropriate for income from the administration of internet addresses to supplement the government's investment in the internet and related technologies. We estimate the above-cost annual income from name registrations will exceed $60 million a year. Income from registration fees could ultimately make NSF's investment in the internet self-sustaining, with revenue to be used to fund network-related basic research, service, and development. With this income, for example, NSF could fund much of the NCRI budget or the next generation internet initiative. [21] C. Disbursement of the "Intellectual Infrastructure" Pool Under NSF's cooperative agreement with NSI, as amended, the gross income from registration fees "will be treated as `Program Income'" and allocated as follows: "a. 70% will be available to [NSI] as consideration for the services provided[;] "b. the remaining 30% will be placed into an interest-bearing account which will be used for the preservation and enhancement of the `Intellectual Infrastructure' of the Internet in general conformance with approved Program Plans. [NSI] will develop and implement mechanisms to ensure the involvement of the Internet communities in determining and overseeing disbursements from this account. [NSI] will also establish and maintain publicly available records of all deposits to and and disbursements from the account." For the same reasons that future above-cost revenues from internet address registrations should come back to NSF, we believe it would be best if the funds going into this pool could be provided to NSF to be used to support internet-related research, development, and education projects selected by merit-based peer review. [22] Alternatively, NSF should ensure that the funds in the pool are used to support only specific NSF-approved network-related basic research, service, and development projects, in coordination with related projects supported directly by NSF. According to NSI, $12,817,262 has been deposited in the pool through 22 January 1997. [23] At a minimum, our recommend approach would result in use of this $12.8 million for network-related basic research, service, and development projects approved by NSF. [24] We estimate that the total amount of registration user fees charged by NSI under the cooperative agreement will reach nearly $400 million by 30 September 1998, when the agreement expires, with a total of $120 million owed to the infrastructure pool at that time. D. Fair and Open Decisionmaking To ensure that the internet address allocation rules and fee structure adopted by NSF are fair, NSF should follow procedures for facilitating public participation and open decisionmaking. For example, NSF went through a public process when it was considering how the NSFNET program should evolve. NSF should disseminate the draft policies and requests for comments broadly, on the internet as well as via traditional means, and NSF should accept comments via the internet. E. Options for Federal Administration of Internet Addresses We suggest three different administrative options: traditional agency administration, administration through a performance-based organization ("PBO"), or administration through an independent commission. Each of these options could accommodate different ways of registering domain names. For example, registration service could be performed by several different organizations in competition with one another for customers; alternatively, a single organization could be competitively selected to provide the service at a reasonable profit for a fixed period. All of these options would, however, ensure that federal oversight of internet addresses continues and that income generated from the administration of internet addresses would be used to supplement federal investment in network-related basic research, service, and development. Under the first option, either agency personnel would administer the internet addresses or agency personnel would oversee the administration of the internet addresses by a private contractor. Under either the PBO or independent commission options, a new governmental organization would be created to administer the internet addresses. We briefly outline the pros and cons of these options, assuming oversight by NSF. [25] 1. Traditional Agency Administration NSF's technical expertise, history of involvement, and continuing investment in internet-related research, development, and education make it a natural choice for the role of oversight agency. NSF possesses the requisite understanding of the important technical issues and the confidence of the research community to apportion the funds derived from the administration of the internet addresses wisely through its peer-review process among its research programs to the benefit of the nation as a whole, as well as the internet community. However, without additional hiring authority, direct NSF administration of internet addresses would divert its existing staff into administrative tasks at the expense of the very projects that qualify NSF to be the oversight agency. Alternatively, NSF could oversee the administration of internet addresses by a private contractor. Because substantial NSF staff time would be required to administer the internet address or to oversee the contractor performing that duty, these options would only be acceptable if sufficient (1) personnel (FTEs) and (2) budget authority can be allocated to this function. A benefit of choosing to oversee a private contractor's administration of internet addresses is that it allows NSF to seek a third party to perform a function that it has no direct experience performing. Under this alternative, the contractor's role would be limited to providing the registration services specified by NSF; responsibility for developing the rules for allocating the address space and the fee structure would remain with NSF. This restriction would allow NSF to fully realize the efficiency gains that could be realized through a competitively bid contract for registration services. NSF could also encourage competition by allowing several contractors to provide registration services in different parts of the name and/or number address space. 2. Administration By a Performance-Based Organization In March 1996, the Vice President proposed the creation of PBOs within the federal government as part of the ongoing reinventing government initiative. The purpose of PBOs is to restructure agency activities so that certain functions that "resemble the activities of a business and can be measured by business standards" are provided on a business-like basis. [26] PBOs are headed by chief executive officers who are hired under contract and are held accountable for results. In order to achieve those results, PBOs are exempted from many government rules, such as personnel rules, that preclude federal agencies from operating like private sector organizations. PBO proposals generally concern the transfer of existing government functions that are separable from policy-making and regulatory activity to a new organization within an existing government department. In considering whether to adopt a PBO structure for some of its functions, the President's Management Council emphasizes that PBO functions must be separable from policy-making and regulatory activity. Internet address administration could be considered for PBO status within NSF, because the "business" of allocating internet addresses is fully separable from NSF's policy-oriented function of providing financial support to research and education in science and engineering. At the same time, however, in our view the public interest requires internet address administration to remain a governmental activity, to ensure continuity and fairness, and to provide revenue to support research and education in science and engineering, in particular, research in next-generation computer networking. Transferring this service to a PBO would serve to separate this "business" activity from NSF's research support activities, and encourage NSF to concentrate its attention through the PBO on: (1) the internet community receiving the service and (2) the revenue produced from the service, rather than viewing its relationship with the incumbent registration services provider in the context of its research support activities. The PBO should be authorized to select an efficient method of delivering registration services. The revenue received from the internet address administration would not be retained by the PBO, except to the extent required to support its administrative duties, because deciding how best to allocate these funds to internet-related research is within the scope of NSF's statutory mandate to support basic research. The President's Management Council suggests using three criteria in evaluating PBO candidates: (1) "Does the [candidate] have a clear mission and provide a service that is measurable? ... [(2)] Does the [candidate] have the capacity to measure progress toward meeting its mission and objectives? ... [(3)] Is there a clear line of accountability to an agency head and does he or she support the transformation of the unit to a PBO?" [27] We believe these criteria are met in this case, and NSF may wish to seek legislative authority to create a PBO. The internet address administration service is well-defined. Because the service has been provided pursuant to agreements overseen by NSF, the agency has the capacity to measure progress toward meeting measurable service objectives. Finally, because the PBO would return revenue to the agency in addition to providing a measurable service to the client community, a basis for performance accountability is assured. 3. Administration By an Independent Commission Under this option, an independent entity, similar to the Arctic Research Commission ("ARC"), would be created by federal legislation to provide federal oversight of internet addresses and ensure future funding for network-related basic research, service, and development. To ensure broad representation on the Federal Internet Commission ("Commission"), its members would be selected by the President from the academic community, the internet-user community, private industry, and the general public. The Director of NSF would serve as an ex officio member of the Commission. In order that the Commission be self-sustaining, administrative costs associated with its oversight duties would be recovered from the address registration fees. To minimize administrative costs, the Commission would be authorized to use NSF staff services and facilities on a cost-reimbursable basis and NSF would budget for the Commission's activities under the Research and Related Appropriations heading, as is the case with ARC. If this option is pursued, we recommend that the enabling legislation charge the Commission with the selection of an efficient method for providing registration services and the development of a fee structure for internet address registration that would make NSF's investment in the internet self-sustaining, with revenue to be used to fund network-related basic research, service and development. We further recommend that the legislation require the Commission to remit revenue from those fees in excess of reasonable administrative costs to NSF far disbursement in support of peer-reviewed, network-related basic research, service, and development projects. IV. Conclusion The current federal oversight of name and number internet addresses is the natural consequence of federal financial support of internet development. Continued federal oversight of this unique public resource is required by the nation's increasing dependence on the internet, which is being fostered by additional federal investments in this technology. NSF's history of involvement with the internet, its technical expertise, and its continuing investment in related research programs uniquely qualify it to perform that oversight role. NSF's oversight would ensure the protection of the public interest in the resource, the availability of funds to support future network-related basic research, service, and development, fairness to the internet community, and fairness to the taxpayers. V. Recommendations 1. We recommend that NSF continue the cooperative agreement with NSI through the end of its term (30 September 1998) to ensure full funding of the infrastructure pool. 2. We recommend that NSF use the income from the administration of internet addresses to supplement direct federal appropriations, with an ultimate objective of making NSF's investment in network-related basic research, service, and development self-sustaining. 3. We recommend that NSF ensure that the "Intellectual Infrastructure" pool which is being funded by NSI be used to support only specific NSF-approved network-related basic research, service, and development projects, in coordination with related projects supported directly by NSF. 4. We recommend that NSF: (1) determine which administrative option providing federal oversight of internet addresses (by NSF, a performance-based organization, or an independent commission) would best ensure that income generated from the administration of internet addresses supplements federal investment in network-related basic research, service, and development; (2) seek Congressional approval, as appropriate, of its selected oversight structure; and (3) adopt fair and open procedures that facilitate public participation (via the internet as well as traditional means) in the development of the internet address allocation rules and fee structure. 5. Absent such federal oversight of internet name and number addresses, we recommend that NSF urge the Federal Communications Commission to consider exercising its authority under the Communications Act of 1934, as amended, to ensure impartial and equitable allocation of internet addresses. End Notes 1. Return to Text Cooperative Agreement No. NCR-9218742, Amendment No. 04 (13 September 1995). NSI initially proposed to pay 30 percent of the registration fees directly to NSF. Leter from NSI to Staff Associate, NCRI/CISE (5 May 1995). 2. Return to Text We have not at this time evaluated the profit NSI derives from this fee arrangement. See also note 24. 3. Return to Text Cooperative Agreement No. NCR-9218742, art. 15 (1 January 1993) (directing that registration fees be used to pay project expenses of related InterNIC awards charged to NSF). 4. Return to Text Inspector General Act, 5 U.S.C. app. §2(2)(A). 5. Return to Text These registration fees apply only to second-level domain names in the top-level domains of gov, org, com, net, and edu. 6. Return to Text The cumulative domain name registrations statistic includes 3807 second-level domain names in the two-letter country code domains, which must be excluded when estimating revenue from registration fees. Thus, 740,785 minus 3,807 is 736,978, times $50 is $36,848,900. This and other estimates in the memorandum generally rely on the fact that every registration generates $50 per year. 7. Return to Text We define the growth rate for December 1995, for example, as the ratio of the difference between the cumulative domain name registrations reported for December 1995 and November 1995 to the cumulative domain name registrations reported for November 1995. Our calculations include cumulative registration statistics from InterNIC's 24 September 1996, Quarterly Review (through October 1995) and from InterNIC News, December 1996 and January 1997 (November 1995 through December 1996). 8. Return to Text Staff Associate, NCRI/CISE, email message concerning "New F[requently] A[sked] Q[uestions] (Gen[eral]) Public Version) on Fee Imposition" (13 September 1995). 9. Return to Text For example, organizations that extensively subdivide their domain name space and assign many number addresses within that subdivided name space would also pay the number address registration fees. 10. Return to Text This does not include the billion numbers (the upper half of the class A address space) held in reserve by the Internet Assigned Numbers Authority, operated by the Information Sciences Institute at the University of Southern California. See Philip J. Nesser II, An Appeal to the Internet Community to Return Unused IP Networks (Prefixes) to the IANA, Request for Comments 1917 (February 1996) (www.internic.net/rfc1917.txt). 11. Return to Text For a brief discussion of the limited number of IP addresses, see Philip J. Nesser II, An Appeal to the Internet Community to Return Unused IP Networks (Prefixes) to the IANA, Request for Comments 1917 (February 1996) (www.internic.net/rfc/rfc1917.txt). See also K. Hubbard et al., Internet Registry IP Allocation Guidelines (November 1996). Neither of these documents discusses the use of internet number address fees as a conservation incentive. 12. Return to Text Office of the Press Secretary, The White House, Background on Clinton-Glore Administration's Next-Generation Internet Initiative (10 October 1996). 13. Return to Text Id. 14. Return to Text Under the plan we recommend, one option is to ensure some level of competition among private contractors seeking to provide registration services under NSF oversight. See infra part E.1. 15. Return to Text Absent such federal oversight of internet name and number addresses, we recommend that NSF urge the Federal Communications Commission to consider exercising its authority under the Communications Act of 1934, as amended, to ensure impartial and equitable allocation of internet addresses. 16. Return to Text This total is computed from data available through the NSF Executive Information System. 17. Return to Text NSF, Justification of Estimates of Appropriations to the Congress Fiscal Year 1992, at CISE-23; NSF, Justification of Estimates of Appropriations to the Congress Fiscal Year 1995, at 113. 18. Return to Text NSF, Justification of Estimates of Appropriations to the Congress Fiscal Year 1997, at 93. 19. Return to Text Id. at 94. 20. Return to Text Steve Holland, "Clinton: `Every Home Connected to the Internet'," Reuters (10 October 1996). 21. Return to Text NSF should determine how the funds from the fees could be received by NSF, either under current authority or pursuant to legislative amendment. For example, NSF has authority to credit to its Research and Related Activities appropriation "receipts for scientific support services and materials furnished by ... other National Science Foundation supported researchy facilities" and may be able to receive income from the fees pursuant to this provision. 22. Return to Text NSF should determine whether the funds in the pool could be either (1) transferred by NSI to NSF, under NSF's authority to credit to its Research and Related Activities appropriation "receipts for scientific support services and materials furnished by ... other National Science Foundation supported research facilities", to supplement the NCRI budget to support internet-related research, development, and education projects, or (2) donated by NSI, without restriction, to the NSF trust fund, and then transferred to supplement the NCRI budget to support internet-related research, development, and education projects. 23. Return to Text Donald Telage, Alternatives for Disbursing Internet Intellectual Infrastructure Funds, Presented to: The National Science Foundation (30) January 1997). This total reflects collections through December 1996 and includes interest earned. Id. 24. Return to Text This number is a minimum estimate of available funds because NSI is owed additional fees for domain name registration. David S. Hilzenrath, Master of Internet Domains Says It Loses at Monopoly, Wash. Post, 24 January 1997, at D1, D3. In our view, this collection issue is separate from the issue of revenues discussed above and will ultimately be resolved. It a person or entity registered or renewed a domain name, then it is obligated to pay, and under the terms of the cooperative agreement NSI is obligated to collect. Accordingly, this revenue is owed to the pool. This situation will be clarified when we audit NSI's costs, revenues, and practices under the cooperative agreement. 25. Return to Text Unlike NSF, DOD and DOE are mission agencies; their involvement in internet-related research and development has been constrained by their primary goals. The Federal Communications Commission has confronted similar resource allocation issues, as a regulator, in connection with the telephone numbering system and radio frequency spectrum, but does not now invert in basic scientific research. 26. Return to Text Vice President Al Gore, Address at the National Press Club, in Washington, D.C. (4 March 1996). 27. Return to Text Reinvention's Next Steps: Governing in a Balanced Budget World, Background papers Supporting a Speech by Vice President Al Gore (4 March 1996).