.org registry

[Jason Laker]

Colleagues

I have been a quiet member of NCUC for a while as I have wanted to become
versed in the issues before being more active.

With that being said, the article I am posting here has special resonance
since I live in California.  I strongly agree with our Attorney General and
urge ICANN not to proceed with the sale.

https://www.theregister.co.uk/AMP/2020/04/17/icann_california_org_sale_delay/

ICANN delays .org sale after California’s attorney general intervenes at
last minute, tears non-profit a new one over sale DNS overseer accused of
ignoring the very people it is supposed to represent

By Kieren McCarthy in San Francisco
<https://www.theregister.co.uk/Author/Kieren-McCarthy>

17th April 2020 00:40 GMT
ICANN has again delayed a decision on the sale of the .org registry,
pushing the issue off for anothermonth multiple sources with knowledge of
Thursday's meeting, have told*The Register*.

The organization’s board of directors was due to decide today on whether to
approve the $1.13bn sale
<https://www.theregister.co.uk/2020/02/25/org_purchaser_promises/> of the
.org domain from the Internet Society to private equity firm Ethos Capital,
but a last-minute letter from California’s attorney general Xavier Becerra
appears to have upended the plan.

Rather than take a vote, the ICANN board debated the issue and ultimately
decided to put off a decision until May 4 - the fourth such delay. The
organization formally acknowledged the decision late on Thursday evening
local time.

"We have agreed to extend the review period to 4 May 2020, to permit
additional time to complete our review," it said
<https://www.icann.org/news/announcement-2020-04-16-en?fbclid=IwAR07So9XSCFAg3sN4GUhwD7-j5Cla3HqBNQiM916MbcAeAFFW-498LNMq50#.Xpj0zAIPYc4.twitter>
.

The attorney general’s letter
<https://www.icann.org/en/system/files/correspondence/becerra-to-botterman-marby-15apr20-en.pdf>
[PDF] arrived just hours before the meeting and told the non-profit
organization in stark terms that it should not approve the sale as it
“raises serious concerns that cannot be overlooked.”

"Empowering a for-profit entity that could undermine the accessibility and
affordability of the .org domain, which serves nonprofits, should concern
all of us," the California AG's office told *The Reg*.

"We're urging ICANN to deny the request to transfer control of the .org
domain to a for-profit private equity firm. In California, we're committed
to an Internet that serves everyone and we're simply concerned that this
transfer puts profits above the public interest."

Those concerns include the fact that the .org registry, which acts as the
online home to hundreds of thousands of non-profit organizations, would be
turned into a for-profit organization as part of the sale.

“If, as proposed, Ethos Capital is permitted to purchase PIR, it will no
longer have the unique characteristics that ICANN valued at the time that
it selected PIR as the nonprofit to be responsible for the .ORG registry,”
Becerra’s letter notes.

“In effect, what is at stake is the transfer of the world’s second largest
registry to a for-profit private equity firm that, by design, exists to
profit from millions of nonprofit and non-commercial organizations.”

Ethos Capital is also under fire for its unusual corporation structure (the
purchase involves no less than six different companies, all of which were
registered on the same day in October) and for refusing to answer specific
questions about its ownership.
Just who's buying?

“Little is known about Ethos Capital and its multiple proposed
subsidiaries,” the letter states. “Even less is known about how these
for-profit corporate entities and private investors will operate their
businesses… Given the lack of transparency regarding Ethos’ future plans,
approval of the transfer may place at risk the operational stability of the
.ORG registry.”

But the issue is broader than that. ICANN’s behavior during the entire
process has come under increasingly fire, particularly as it became clear
that the organization’s staff was pushing for approval of the deal despite
near universal opposition to it from the internet community.

Earlier this week, ICANN’s founding CEO and chair wrote a letter to Becerra
urging him to act and accusing their former organization of abandoning its
core principles
<https://www.theregister.co.uk/2020/04/16/icann_abandon_core_values/>,
accepting commitments it knows it cannot enforce, circumventing its own
decision-making processes and using the coronavirus pandemic to push
through the $1.13bn sale.

The impact on ICANN’s reputation is also made clear in Becerra’s letter:
“There is mounting concern that ICANN is no longer responsive to the needs
of its stakeholders,” it reads before running through a series of concerns
over how the organization has handled the situation.

It also criticizes ICANN’s weak economic understanding of the
multi-billion-dollar market it oversees, noting that Ethos Capital’s
financing arrangements are risky, especially given the current economic
climate.
ISOC too

It’s not just ICANN that is at the end of fierce criticism however: the
attorney general slams the Internet Society for proposing it sell .org to
Ethos in the first place: “ISOC purports to support the Internet, yet its
actions, from the secretive nature of the transaction, to actively seeking
to transfer the .ORG registry to an unknown entity, are contrary to its
mission and potentially disruptive to the same system it claims to champion
and support.”

It asks why ISOC didn’t provide more information about the sale, or run a
competitive bidding process, or consult with its stakeholders, or consider
other alternatives.

While the letter stopped short of threatening action against ICANN if it
does approve the sale, it made clear that the attorney general holds
significant authority over the organization and is prepared to act,
particularly since the sale will affect hundreds of thousands of other
non-profits.

“My office is committed to protecting California’s and the public’s
interest in a properly functioning and accessible .ORG domain system,” it
notes, adding: “ISOC and PIR are charitable organizations that are
accountable to their community stakeholders and to the public at large. In
contrast, a private equity firm is accountable only to its investors.

“Given the concerns stated above, and based on the information provided,
the .ORG registry and the global Intercommunity – of which innumerable
Californians are a part – are better served if ICANN withholds approval of
the proposed sale and transfer of PIR and the .ORG registry to the private
equity firm Ethos Capital. This office will continue to evaluate this
matter, and will take whatever action necessary to protect Californians and
the nonprofit community.”
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