ICANN Board Blocks The Sale Of The .Org Registry

from the try-again dept

Last fall, we wrote about what appeared to be many of the sketchy details between the non-profit Internet Society (ISOC) agreeing to sell off the non-profit Public Interesty Registry (PIR), which runs the .org top level domain registry, to the very much for-profit private equity firm, Ethos Capital, which had recently been formed, and involved a bunch ex-ICANN execs and other internet registry folks. Even if the deal made perfect sense, there was a lot of questionable issues raised concerning who was involved, whether or not there was self-dealing, and how transparent the whole thing was. On the flipside, a number of very smart people I know and respect -- including some who worked for ISOC, insisted that the deal not only made sense, but was good for the future of the .org domain and the wider internet. In January, we had a long podcast with Mike Godwin, who is on the board of ISOC and voted for the deal, debating whether or not the deal made sense.

In the intervening months, many people and organizations had petitioned ICANN to block the deal, and ICANN had repeatedly delayed its vote -- with the last delay coming a few weeks ago right after California's Attorney General, Xavier Becerra, sent a pretty scathing letter about the deal.

On Thursday, ICANN's board voted to block the deal, saying that it just created too much uncertainty for non-profit organizations who rely on the .org top level domain.

The Board was presented with a unique and complex situation – impacting one of the largest registries with more than 10.5 million domain names registered. After completing its evaluation, the ICANN Board finds that the public interest is better served in withholding consent as a result of various factors that create unacceptable uncertainty over the future of the third largest gTLD registry. Factors that were considered in determining reasonableness include, but are not limited to:

  • A change from the fundamental public interest nature of PIR to an entity that is bound to serve the interests of its corporate stakeholders, and which has no meaningful plan to protect or serve the .ORG community.
  • ICANN is being asked to agree to contract with a wholly different form of entity; instead of maintaining its contract with the mission-based, not-for-profit that has responsibly operated the .ORG registry for nearly 20 years, with the protections for its own community embedded in its mission and status as a not-for-profit entity.
  • The US$360 million debt instrument forces PIR to service that debt and provide returns to its shareholders, which raises further question about how the .ORG registrants will be protected or will benefit from this conversion. This is a fundamental change in financial position from a not-for-profit entity.
  • There are additional uncertainties, such as an untested Stewardship Council that might not be properly independent, or why PIR needs to change its corporate form to pursue new business initiatives.
  • The transaction as proposed relies on ICANN as a backstop for enforcement of disputes between the .ORG community and the registry operator in an untested manner.
The entire Board stands by this decision. After thorough due diligence and robust discussion, we concluded that this is the right decision to take. While recognizing the disappointment for some, we call upon all involved to find a healthy way forward, with a keen eye to provide the best possible support to the .ORG community.

It will be interesting to see what happens next -- but if ISOC wants to sell off PIR, it's apparently going to need to go down a different path. In the meantime, ISOC's CEO sent out an email and a blog post talking about his disappointment, and (once again) explaining why he felt the deal made sense and was done appropriately, and promises to continue to move forward with helping to make a better internet. He also insists that PIR is not for sale, while taking a dig at ICANN in the process:

Now that we know that ICANN believes its remit to be much larger than we believe it is, we can state this clearly: neither PIR nor any of its operations are for sale now, and the Internet Society will resist vigorously any suggestion that they ought to be.

While most of the focus in these discussions has been specific to the impact on PIR and the .org domain, I do separately wonder if this whole mess will hurt ISOC itself in the very good work that it does. I hope not. Even as I came down pretty clearly against this deal, I can at least recognize that the people on the ISOC side at least were honestly trying to do what they believed made the most sense for everyone. However, a very large swath of the civil society, non-profit, and public interest world disagreed -- and I fear that this ends up damaging ISOC's overall credibility going forward. If that is the end result of this, it would be a huge shame.

Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: .org, non-profits, private equity, tlds
Companies: ethos capital, icann, isoc, pir


Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. icon
    Ehud Gavron (profile), 1 May 2020 @ 9:21pm

    "Free" as in speech, beer, and Internet

    TL;DR - It is absolutely wrong to sell the .ORG registry to a for-profit. Shareholder profits depend on the shareholders; some want immediate one-day day-trader style profits. Some want 90 day "I'll hold it for a quarter and see" profit, and some want to hold it for years and pass it on to their kids, like traditional 'Blue chip stocks'.

    It's been low cost for nonprofits, and should stay that way, and shareholders can go invest in the market. I hear Tesla is a good buy. No pun intended.

    End TL;DR

    IPv4 allocations and ASNs used to be free. Then people started grabbing and hoarding (just like toilet paper in the US during COVID-19). ARIN wasn't created to solve that, but to remove the functional aspects of managing that from InterNIC -- which was run by the US Department of Defense. To justify their creation, ARIN instituted fees. Other regional registries (i.e., RIPE, etc.) also got their chunk of the fat.

    The DNS registry was also free. Then people started registering gobs of domain names prophylactically to either tie up someone else's name or to sell it to them. Bang. Now domain names are not free.

    In the US:
    COM was supposed to be for commercial only.
    ORG was supposed to be for nonprofit only.
    EDU was supposed to be for colleges and universities and the like only.

    However, as the joy of receiving fees increased, the registrars now allowed pretty much anyone to get anything.

    When we prioritize profits over service what we get is the same quality of service we expect from Comcast, Charter, Frontier, Time Warner, and other Telcos. (Karl Bode has an excellent article in today's Techdirt about removing caps that shouldn't have been there in the first place.)

    The .ORG domain and IPv6 networks remain the last two elements of the original "InterNIC" that haven't been monetized to death. While I also respect Mike Godwin immensely, I disagree with his position that this should be sold... and

    As a preemptive argument I would add:
    If the .ORG was to be sold to someone, it should be a true arm's length transaction, for a fair price, with noticed returns over time. This leveraged buyout is ridiculous.

    This doesn't pass the smell test, and ICANN is weak weak weak for taking this long to address it. At least they did so "correctly". (IMO)

    E


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Advertisment

Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Loading...
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.