Techonomy’s David Kirkpatrick discusses the structure and regulation of the Internet with Theresa Swinehart of the Internet Corporation for Assigned Names and Numbers (ICANN).

Read the full transcript below. (Transcript by Realtime Transcriptions.)

Kirkpatrick: So next I’m going to be joined on stage by Theresa Swinehart, who is with ICANN. Come on in, Theresa, which is—we all know kind of ICANN exists. It’s an Internet regulatory body that governs the allocation of Internet addresses. But it’s a lot more than that. It’s also in an extremely interesting place in the Internet ecosystem. It has a really interesting view into some of the challenges we face to our electronicized society.

If the Internet is the sort of interstitial tissue of modern economic life, ICANN really has a sensitive understanding of some of the threats to that. Tell us just a little bit, how should we think about what ICANN is and what it does.

Swinehart: I was thinking about it as I was listening to the discussions here, that there’s all these efforts underway around advertising and business opportunities and all of that. But if we take a step back and actually think about how we communicate with each other, you’re sitting here and you’re sending an email to friends in China. How does that actually work?

So ICANN is responsible for what is called the unique identifier system, which creates glazed eyes within about three seconds flat. What it actually means is the address equivalent would be on the outside of an envelope. So probably the country and zip code would be the way to equivalate it. It’s the domain name system and IP addresses that enable the communication to the right of the dot of the .com, .net, et cetera.

And so ICANN is responsible for coordinating that at a global level. And what’s unique about the model is that it’s called a multi-stakeholder model. It involves governments and everybody else. And this becomes very important as we look at Internet policy issues moving forward.

But that’s what we do in a heartbeat. We have a lot of visibility. We hit the media on a regular basis. But we really try to engage in policy making that enables that to function globally.

Kirkpatrick: But ICANN’s success and ability to continue doing that effectively depends on everyone effectively buying in to letting you do it. Right?

Swinehart: Correct.

Kirkpatrick: That’s sort of where I think the rubber meets the road in terms of the oddity of the moment we are living in, that there are a lot of people who were considering maybe not letting you do that or who have ideas for alternate regulatory methodologies that could Balkanize the Internet.

Maybe you should talk a little bit about some of those threats and what you worry about in terms of from where you sit, what the Internet could become. If it is the super highway of modern life, I mean clearly we want it to remain that way.

Swinehart: Absolutely. We want our communications to communicate—to go through. Right? That’s the fundamental thing. So what ICANN is responsible for enables this single interoperable communication mechanism. It got its legitimacy through a really complex process. It was started in about 1998 by the U.S. Administration in order to globalize and enable all around the world to participate in developing policies to make this feasible.

Now, the existing threats to it are really that the global economies are now relying heavily on the Internet. And at the national level, governments are becoming quite concerned about how is the Internet actually governed and how is this communications mechanism working. So there’s been tensions between do you allow this model, the responsibilities of ICANN to remain in the private sector in this multi-stakeholder approach that involves governments? Or do you take it over to, for example, the international telecommunications union.

Kirkpatrick: Which is part of the UN.

Swinehart: Which is part of the UN. Exactly. Then you run into the debate which affects not just domain names and IP addressing, but the broader Internet policy dialogues around privacy and spam and cybersecurity of do you want a traditional UN government-imposed regulatory model towards Internet policies or do we want to retain policies around the world that are private-sector led that have allowed for the continued innovation and investment that we have today?

I would argue that we need to continue the models that we have today, and we need to address preventing traditional telecom regulations or UN governmental controlled mechanisms that would really hamper business.

Kirkpatrick: What would be the worst kind of thing that would happen if, say, the ITU took over control of this part of the Internet? First of all, could they effectively take that authority away from you guys?

Swinehart: They could if it was ceded to them.

Kirkpatrick: You would have to cede it, wouldn’t you?

Swinehart: Well, we would have to cede it as an organization and the U.S. Administration would have to cede it. The political tensions that are arising now is that as you look at the evolution of the Internet, as you look at the population of the world, the Arabic speaking population, the Chinese speaking population, the countries that are coming online, they have a vested interest in how Internet policy is formed as well.

So what ends up happening is the ITU or any other organization could establish a policy. It then becomes the choice of a country to implement that policy or regulation. But we’re not operating within boundaries anymore. We’re operating in an environment where our business opportunities don’t recognize national boundaries. We expect to be able to communicate. We expect to be able to provide services across national borders. And so you don’t want to have a patchwork of national laws existing.

Kirkpatrick: I mean, the Internet and the way it’s regulated today is sort of a beautiful, you know, open-source kind of unregulated environment that’s global, which is really quite extraordinary, and you’re a key piece of that. But it is easy to imagine the numerous challenges to that kind of neutrality that the Internet represents.

Certainly we’ve heard of China and Russia and a number of other countries who generally take a different view of what should and should not be allowed in terms of Internet dialogue to raise their voices more and more loudly. We know China has the great firewall already. So they don’t really have the Internet as we know it there yet. And, therefore, they probably couldn’t care less whether we have it as we know it outside of China either.

So if it were run by the UN, would we potentially be in a situation where somebody could veto a regulation that would continue to make it the way it is? I mean, is that the kind of thing that is almost inevitable, were the regulation to be put into a more politicized environment?

Swinehart: It could happen, yes. I think the most recent example is the International Telecommunications Union was looking at the telecom regulations, and there was a large dialogue about whether to include, for example, regulating over the top traffic in that treaty, or whether to regulate spam and whether that should be part of that treaty.

Now, the treaty was adopted at the ITU. It was not signed by all countries, though. And so it was not signed by many of the European countries. It was not signed by the United States. So, yes, you have the ability to veto, and you have the ability to decline implementation of a regulation. However, again, it goes back to the point of you want a global communications medium, and from a business standpoint, you want as simplified a way to address policy issues that impact your business. And once you get into a patchwork of policies that you need to deal with in a different way in Germany versus South Africa, versus Malaysia, that becomes very expensive.

Kirkpatrick: Is it right to think of ICANN as essentially an American organization?

Swinehart: Yes.

Kirkpatrick: That’s a problem, though, isn’t it? Given the changing views towards the United States globally and the truly international nature of the Internet. And just to quickly follow up on that.

Swinehart: I want to add on to that.

Kirkpatrick: Please do. I want to get the Snowden word out first. If it’s an American thing, and we’ve just seen how the American mindset really works in terms of what privacy really means on the Internet and what is and is not off bounds, I think we can probably all agree that the U.S. government has recently shown that it doesn’t really care much about what anybody thinks about anything it does if it’s to its political commercial advantage.

Swinehart: Right.

Kirkpatrick: So that must be making your life a lot harder as an American organization, trying to stay in this neutral zone. Right?

Swinehart: Actually, not. I’ll explain why. So is it a U.S. organization? Yes, it is based in the United States. It’s a not-for-profit based in California by historic means. Does it serve a global community and does it have a global presence and global footprint? Absolutely, we have staff around the world.

Part of the structure of the organization is called the governmental advisory committee. By the way, it’s the only multi-stakeholder organization that has a formal relationship of governments. There’s over 140 governments that participate in this on a regular basis and are attending every meeting that we attend. The one coming up in Argentina early next week.

So as an organization, it may have a physical presence in the United States, but it is actually a global organization and has offices in Istanbul and different places. So that goes to that aspect of it.

With regards to the situation of the NSA and what has been revealed by Snowden, ICANN doesn’t deal with content and we don’t provide access to the Internet. Again, we go back and coordinate the Internet’s unique identifier system. So we serve that community. I think as with any entity that is based in the United States, do you feel the repercussions of U.S. engagement in international foras, for example, in the UN foras? I would suspect that the issues around the NSA will have an impact on the ability to be engaging in different ways on Internet policy issues.

But I would also say that it’s now been revealed in the media that not just the United States has been undertaking activities. So I think—

Kirkpatrick: Just the U.S. is better at it, that’s all.

Swinehart: We apparently have certain skills as a country. But the point being, I think this makes it even more important to be cognizant of what is emerging around Internet policy issues on a global level that impact consumers, that impact business opportunities, that impact business or may prevent business opportunities, or innovation and investment. Because we have other countries now that have conducted similar things. I think that’s going to create a tension globally.

Kirkpatrick: I want to hear audience comments and questions, but I just want to ask one last question to try to maybe ask the same question again. I mean, the threat is Balkanization, really. That the Internet itself no longer is a whole and gets fragmented. And there’s something fundamentally idealistic about the structure that ICANN has today which flows from American values. I think that would be almost universally agreed.

Meanwhile, the moral high ground of American values has been seriously impaired by not just the Snowden thing. You could argue the drones and a bunch of other things. Even the way we consume energy, if you really wanted to get into it. I don’t think the U.S. increasingly has the moral high ground.

Swinehart: That’s true.

Kirkpatrick: So if the ICANN model with its sort of American idealism is going to survive, what do you think has to happen? I mean, how optimistic are you that it can survive?

Swinehart: I am actually quite optimistic. I think that the interest is really to try to maintain the mechanisms by which the Internet has functioned, which is a decentralized mechanism. I think it was touched upon earlier that has led to the opportunities of the disruptive technologies and other items that are coming to fore today. And so I think it is feasible to keep this going and to keep that enabled. But primarily not so much based on the principles and values of which it all started from, but because of the reliance of users on it.

Kirkpatrick: Because the economic value is so great at this point.

Swinehart: The economic value, and we’re looking at health opportunities and educational opportunities around the world. And from that perspective, that then becomes an important part of economic growth and social values for our countries.

Kirkpatrick: Do countries like Russia and China get that, though?

Swinehart: They get economic growth and value.

Kirkpatrick: But do they get that logic that you just said?

Swinehart: They do, yeah. I would suspect. You would have to ask the Chinese.

Kirkpatrick: I’m glad you think so.

Who has a comment or question about ICANN? Back in the back there. Please identify yourself. Oh, it’s Jody.

Westby: Jody, yeah. Jody Westby, Global Cyber Risk.

First of all, David, you’re dreaming if you think the Internet is this open-wavy, unregulated thing, because it’s highly regulated today. Second is, the ITU has never asked for regulation of the Internet. They don’t want it. They didn’t ask for it when they were doing the telecom regulation treaty.

Kirkpatrick: And you have advised them. So you should reveal that, right?

Westby: I haven’t advised them, but I deal with them closely.

Kirkpatrick: You deal with them very closely, yeah.

Westby: The issue at that session was about nonbinding resolutions, that the U.S. government decided to make such a big deal about that it refused to sign this treaty. Got others to join. Doesn’t have anything to do with the real parts of the treaty, and they can still sign. So that’s—the ITU hasn’t asked for ICANN.

The real part about ICANN is its relationship with the U.S. Department of Commerce and IANA. And that is the number and naming system, and that is the part that people say is critical to our national security. Recently, there was this incredible statement that ICANN joined which said, basically, maybe we need to break away from IANA, and that was pretty amazing. And it was in part, I think, because of the Snowden thing.

So I would really like to hear what you would have to say about how does ICANN view IANA, and is that really a national security issue? How do you break away from, well, you started by the U.S. government? You still have this contract with the U.S. government. But can you get away from it and are people saying to you this is a national security issue?

Kirkpatrick: Quickly define IANA for everyone in the audience.

Westby: Internet address naming numbering systems, something like that.

Kirkpatrick: Which is administered by the Department of Commerce. Is that what you said?

Westby: Well—

Kirkpatrick: This gets complicated. Go ahead.

Swinehart: It is the contract with the U.S. Department of Commerce that enables the policies to be developed around IP addressing and domain names and all of that.

And I think you touch on an important point. I mean, in the early stages, the relationship between ICANN and the Department of Commerce and in relation to the IANA function was quite different. You had, you know, an MOU relationship in all of that. That evolved over time to what was called a joint project agreement. And then it evolved into an affirmation of commitments and all of that.

So I think you’re seeing an evolution over time on how to address many of these concerns, and the statement that you allude to, I refer to as the Montevideo Statement, that had come out of a meeting among many of the Internet-related organizations, is yet the next stage in looking at this process. It’s not something that happens overnight. But it is—it’s been a very progressive and very rapidly progressing—

Kirkpatrick: But is it a way of slightly distancing them from the more Americanism of the whole?—

Swinehart: Looking at some of the issues on how to deal with that, yes.

Kirkpatrick: Jody, can I just quickly ask you, because you’re so involved in security, do you worry about the Balkanization of the Internet as a fundamental threat to global economic health and commerce and communications, real fast?

Westby: Well, Balkanization isn’t going to happen because of anything of ICANN or IANA. It may happen because of our U.S. government and all the surveillance and countries saying, “We’re going to keep everything here, don’t let it out. We want to ensure our customers that everything is safe.” And technologically, that’s pretty silly to say. But I think that’s what we’re going to see.

It’s just this incredible blowing up of trust in U.S. companies and the IT industry and how data flows around the world and who has access to it.

Kirkpatrick: Thank you for answering that. Over here.

Sprague: Steven Sprague from Wave Systems. I can actually come right off of what Jody’s comment was.

Kirkpatrick: Also in the security business.

Sprague: The challenge is that mobile is really a transformation from a spectral and copper controlled infrastructure that has been driven and controlled communications and media for the last couple hundred years, most likely, in government. And what we’re moving to is a device identity-based model with more encryption. Snowden will increase that encryption effect. And so what happens is we end up with an infinite number of device identity networks that disintermediate all the carriers.

So a modern network looks like iPad with iTunes, not iPhone with iTunes, but iPad with iTunes where registration and control of the network is based on the identity of the device. Not the identity of the human and not the copper wire or the spectrum.

So I would love to hear your comment on as we transform from what has been typically a spectrally licensed model, both copper and air, and move to a device identity model where transport is completely just a utility, I think that that has enormous implications on even the effects of aspects of ICANN and other pieces along the line here. We end up with an infinite number of smaller networks. Everyone gets to run their own carrier.

Kirkpatrick: I hate to say this, but quickly, go ahead.

Swinehart: I agree with you that we will have challenges in that space. That’s one reason why we need to ensure that we try to get ahead of those discussions in order to try to address them.

Kirkpatrick: Peter, that sounds like something we can discuss more in the—

Swinehart: In the afternoon, later.

Kirkpatrick: I think it’s a very interesting point you made. Go ahead, over here.

Cochrane: Todd Cochrane, Geek News Central. The upcoming meeting in Argentina, I understand you’re facing some challenges with the Brazil contingent and others that are basically trying to wrestle some control back. Is this true? There’s been a few articles on that. I’m wondering what is going to happen in this upcoming meeting.

Swinehart: You’re referring to the meeting that’s being hosted in Brazil next May, I think it is? Yeah. So out of the Montevideo meeting, there was also a discussion around catalyzing the Internet community and the global community more to look at improving Internet cooperation. I think over time we’ve seen that we have emerging Internet policy issues that really need to be looked at how to address in the best way, but through multi-stakeholder processes. So that Brazil meeting is an opportunity to have that kind of dialogue in the future and have it outside of a UN framework. So that would be that particular meeting that’s occurring, which will be next year.

At the ICANN meeting in Buenos Aires that’s coming up, we have quite a full agenda, including updates on strategic planning. It’s an operational meeting for us. Does that answer your question?

Kirkpatrick: He’s not listening.

Who has another comment or question? I mean, we’re getting close to the end here. I mean, I’m really pleased that ICANN is out there like this talking to the public more, and that’s sort of a new thing, right, for ICANN to be really aggressively trying to get its message out. Why did that happen and what is the fundamental goal that ICANN has in bringing someone in your seniority to a place like this in the desert and, you know, talking more? It’s been a fairly low-key organization to start with.

Swinehart: It has. We find it very important to create a better understanding of what the organization does, but also what role it plays in—if you want to call it the Internet ecosystem. Because this space is evolving. There’s important issues that are coming up in this space, and we think it’s important that people are aware of what the organization does. Also to get feedback on what it can do better, so it’s a two-way dialogue. And to reach audiences that may not traditionally be engaged with the forum, but can help us also improve how we conduct our mission and how we conduct the scope of our work.

Again, we’re just one of the players in the Internet space, but one of the players that plays one of the important roles.

Kirkpatrick: We have a highly diverse audience. Do you want feedback from them?

Swinehart: I would love to.

Kirkpatrick: They will probably give you some at the breaks, and stay around and you’ll hear that. And I think it’s great that you’ve come and helped us understand a little more about some of the complex issues governing the Internet’s structure. So thanks so much.

Swinehart: Thanks a lot. Thanks for having me.

Kirkpatrick: Appreciate it. Take care.