[Urgent] [Public Comment] Proposed Renewal of .org Registry Agreement

[Kathy Kleiman]

Hi All,

You should see what’s going on out there: there are hundreds of comments 
opposing the proposed changes to the .ORG contract.  We should note that 
the new head of .ORG is Jon Nevett.Until recently, he served as founding 
counsel of Donuts where he wrote into ICANN contracts that Donuts could 
have complete control over takedowns of domain names in Donut’s almost 
300 gTLDs – absent due process or even justification. I highlight three 
comments below – and shortly will respond in a separate email to issues 
being raised by Amr.

I’m glad we (NCSG) are writing comments too!

Best, Kathy

1)1) CircleID: The Spurious Justifications for Eliminating Price Caps on 
.org and Other Legacy Domains 
<http://www.circleid.com/posts/20190423_spurious_justifications_for_eliminating_caps_on_legacy_domains/>, 
by Nat Cohen, Internet Commerce Association Board Member, 23 April

2)2) Comments of The Independent Packaging Association (a US 
non-profit), 
https://mm.icann.org/pipermail/comments-org-renewal-18mar19/2019q1/000003.html 
(pasted below)

Ladies and Gentlemen of ICANN,

Please add the voice of AICC, The Independent Packaging Association, to 
those against the removal of price caps for .org domain names for 
non-profits.As a smaller non-profit with revenues of less than $4Mio, 
there is not a lot of elasticity in our ability to absorb new cost.

Losing the protection of a prudent policy such as the one maintained by 
ICANN for these many years can be a devastating blow to our 
organization.We already face many challenges in the market that we 
represent, consolidation (loss) of members being primary.Our ability to 
communicate with our members through our .org domain remains our most 
powerful tool in providing content to our remaining members.A dramatic 
increase in cost could impair that important ability.

ICANN should see the protection of non-profits as part of the important 
role that it plays in the system if “unique identifiers” on the 
internet.Non-profit entities are not advantaged in their ability to 
communicate compared to for-profit corporations and entities because 
caps are in place.Rather, the caps protect the existence of non-profits, 
particularly smaller ones, of which there are many.Just as governmental 
units recognize and accommodate differences in non-profit and for-profit 
entities, so should ICANN in their management and pricing of domain names.

Non-profits in general and non-profit trade associations in particular, 
play vital roles in their members’ businesses and markets.Most members 
are for profit entities that grow because of the work of their 
non-profit associations.A change in the current cap policy would change 
the equation for so many non-profits that there would be an adverse 
effect, not just at the association level but in the value chain of 
multiple businesses.

Thank you for your kind consideration.

Very truly yours,

Michael D’Angelo

Vice President, AICC, The Independent Packaging Association

3) Comments of the National Council of Nonprofits, 
https://mm.icann.org/pipermail/comments-org-renewal-18mar19/2019q2/000918.html 
(pasted below)

Dear Mr. Weinstein:

On behalf of the National Council of Nonprofits, the largest network of 
charitable nonprofits in the United States, I write to express strong 
opposition to proposed Section 2.10 of the .org renewal agreement that 
would remove caps and permit unlimited price hikes on .org registrations 
and renewals.

The National Council of Nonprofits is a trusted resource that advocates 
for America's nonprofits nationwide. Through its network of state 
associations of nonprofits and 25,000-plus member charitable nonprofits, 
faith-based groups, and foundations, it serves as a central coordinator 
and mobilizer to help nonprofits achieve greater collective impact in 
local communities across the country. It identifies emerging trends, 
shares proven practices, and promotes solutions that benefit charitable 
nonprofits and the communities they serve. The membership of the Council 
of Nonprofits reflects the broad panoply of charitable missions 
recognized under Section 501(c)(3), each of which will be affected, 
either immediately or over time, by the outcome of proposed revisions to 
the .org renewal agreement.

A very large share of the more than 10 million .org domains are 
registered to charitable nonprofits organized under Section 501(c)(3) of 
the Internal Revenue Code. The realities of this significant segment of 
the United States economy are illustrative of the challenges this 
proposed change would inflict on organizations dedicated to the public 
good and serving their communities. More than 1.3 million charitable 
nonprofits feed, heal, shelter, educate, inspire, enlighten, and nurture 
people of every age, gender, race, and socioeconomic status, from coast 
to coast, border to border, and beyond. Despite the collective size of 
the sector, most charitable nonprofits are relatively small: 97 percent 
have budgets of less than $5 million annually, 92 percent operate with 
less than $1 million per year, and 88 percent spend less than $500,000 
annually for their work. The "typical" charitable nonprofit is 
community-based, serving local needs. Accordingly, it should be no 
surprise that relatively few charitable nonprofits have an endowment 
upon which to rely when revenue shortfalls occur. Indeed, most 
charitable nonprofits have limited reserves - about 50 percent have less 
than one month of cash reserves, according to one analysis of nonprofit 
financial records. See OLIVER WYMAN AND SEACHANGE CAPITAL PARTNERS, The 
Financial Health of the United States Nonprofit Sector (Jan. 2018).

It is in this context that we urge ICANN to reconsider its proposal to 
treat the .org community as just another commercial domain. The stated 
rational for eliminating caps on price hikes is the desire to put the 
.org domain "[i]n alignment with the base registry agreement...." 
Stripped of the jargon in the proposal is the suggestion that a domain 
populated almost exclusively by tax-exempt, nonprofit organizations is 
no different from long-established and emerging commercial-oriented 
domains. This mindset seeks to treat disparate entities as the same, 
something that laws and society fully reject.

Nonprofits are not just like for-profit businesses

Nonprofit entities, the organizations using the .org domain, may only 
maintain their tax-exempt status if they remain dedicated to the public 
good, prevent private inurement to individuals associated with the 
organization, disclose their finances through detailed reporting, limit 
their lobbying activities, and, in the case of charitable nonprofits, 
refrain from any partisan, election-related activities. In other words, 
the price of admission into the nonprofit community is much higher than 
entry as a for-profit entity. The two distinct sectors are just that - 
separate and distinct. Application of a for-profit approach to 
nonprofits is usually doomed from the outset.

While there are many other distinctions between the for-profit and 
nonprofit sectors, one in particular pertaining to budgets and 
regulations is worth noting here. The federal government has completely 
different rules that regulate government contracting with for-profit 
contractors (Federal Acquisition Regulations or FAR) and federal 
grantmaking with nonprofits (the OMB Uniform Guidance). The reason for 
the separate rules governing how the federal government purchases goods 
and services are based on the real and practical differences between 
for-profit and nonprofit entities. Notably, nonprofits do not receive 
reimbursements in excess of costs - hence the nonprofit name. In the 
context of these comments, that means that charitable nonprofits do not 
receive profits from which to pay ever-increasing .org domain expenses.

Nonprofits cannot pass on cost increases

The ICANN proposal would subject nonprofits to unpredictable and 
unrestricted price hikes. Unlike for-profit businesses, nonprofits 
typically do not have revenue flexibility to absorb new and unexpected 
costs or to raise prices on consumers to overcome the hit to their 
bottom lines. It is a regrettable truth that the public and donors 
fixate on nonprofit overhead expenses in relation to direct program 
costs. "Overhead" includes such things as accounting services, training, 
legal compliance, and costs associated with maintaining a presence on 
the internet. All nonprofits must have a presence on the internet so 
that their clients and potential beneficiaries can find them, so that 
volunteers can learn what opportunities are available to serve, and so 
donors can have a secure platform on which to give. Yet, higher domain 
costs would result in higher overhead costs, leading to the appearance 
of out-of-line expenses for the nonprofits. The "overhead myth" is an 
indisputably flawed and destructive metric, but one that remains 
pervasive. This proposal to permit unfettered cost increases plays into 
the myth and undermines valuable and legitimate organizations. All for a 
misguided and arbitrary goal of aligning things that are dissimilar.

Domain names are essential to nonprofits

As noted, nonprofits rely on an easy-to-reach internet presence to be 
found by those who need their services and for potential donors to learn 
about and support the organization. The domain name is an important part 
of being found. If domain names are no longer affordable, nonprofits 
will be forced to use less substantial subdomain. Donors are much more 
likely to donate at nonprofit.org than nonprofit.wixsite.com. Nonprofits 
that are no longer able to afford to keep a domain also risk 
longstanding domains being taken over by others, causing branding 
confusion and the potential for domains associated with charitable works 
being used for less-than-charitable purposes.

Proposal would divert scarce resources away from community needs

Many of the comments to-date express concerns over the arbitrary nature 
of the proposal and presume that the underlying motivation relates to 
greed rather than fairness or public service. We make no judgment about 
the motives, but do flag the significant consequences of this action if 
actually implemented. Quite literally, the profits derived by this 
unwarranted change will ultimately be paid by the people nonprofits will 
not be able to serve. Every $1 in increased prices on the 10+ million 
.org domain users would generate more revenue each year than is utilized 
by all but the top one-percent of charitable nonprofits. Each one-dollar 
hike in costs per domain would divert more than $10 million from 
nonprofit missions for the enrichment of the monopoly. By anyone's 
estimate, this money would be better spent delivering an additional 
1,600,000 meals by Meals on Wheels to seniors to help maintain their 
health, independence and quality of life. Or $10 million could enable 
nonprofits to provide vision screenings for every two- and 
three-year-olds in California. Or pay for one million middle school 
students to attend performances of "Hamilton" or "To Kill a 
Mockingbird". Nonprofits should not need to choose between paying for a 
domain name and helping people.

We close by reiterating the quotes from comments you have already 
received from charitable nonprofits, comments that we wholeheartedly 
endorse:

"I am writing to oppose lifting price caps on .org and .info domains. 
This change could lead to tax-exempt organizations paying thousands of 
dollars per year to maintain domain names, which would make it 
impossible for many community nonprofits to maintain a web presence. 
This would have a detrimental affect the public's ability to obtain 
information and services, and could put small nonprofit organizations 
out of business."

Comments of Dawn 
Merritt<https://mm.icann.org/pipermail/comments-org-renewal-18mar19/2019q1/000002.html>, 
Izaak Walton League of America, March 25, 2019

"Many of these organizations have long-held .org domain names and a 
substantial percentage of their meager funding is tied to donors being 
able to find them via those domains. The massive potential price 
increases (as opposed to the moderate ones that are already possible) 
would prohibit smaller organizations and personal projects from having a 
place on the Internet. This is an anti-competitive practice aimed 
squarely at eliminating smaller organizations and nonprofits from having 
a presence on the Internet."

~ Comments of Chris 
Raters<https://mm.icann.org/pipermail/comments-org-renewal-18mar19/2019q2/000115.html>, 
April 24, 2019

"The organization to which I belong is a registered nonprofit 
charity.Our domain is an essential part of our identity and our ability 
to engage our members and raise money for our operations.We are granted 
nonprofit charitable status because we bring a much needed benefit to 
the music and arts community.A significant increase in the price of our 
domain would diminish our ability to offer these benefits and threaten 
our survival."

~ Comments of Jerry 
Silver<https://mm.icann.org/pipermail/comments-org-renewal-18mar19/2019q2/000263.html>, 
AROKIS Centre of Music Society, April 25, 2019

  "Why, in God's name, would anyone decide that .org domains in 
particular should be a market free-for-all?"

~ Comment from the 
administrator<https://mm.icann.org/pipermail/comments-org-renewal-18mar19/2019q2/000098.html> 
of dozens of domain names for various nonprofit ministries, April 24, 2019

Conclusion

For all of the foregoing reasons, the networks of the National Council 
of Nonprofits strongly oppose the proposed revisions that would remove 
caps and permit unlimited price hikes on .org registrations and renewals.

Sincerely,

David L. Thompson

Vice President of Public Policy

National Council of Nonprofits

1001 G Street NW, Suite 700E

Washington, DC 20001

---------------------------

/Kathryn Kleiman, //Visiting Research Scholar, Princeton University's 
Center for Information Technology Policy/

On 4/25/2019 9:59 AM, Rafik Dammak wrote:
> Hi all,
>
> We have a suggested draft comment ( attached) on proposed renewal of 
> .org agreement 
> https://www.icann.org/public-comments/org-renewal-2019-03-18-en . The 
> deadline for submission is the 29th April and for NCSG PC to review 
> and endorse. Please share your comments abd input.
>
> Best Regards,
>
> Rafik
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