ICANN Board Withholds Consent for a Change of Control of the Public Interest Registry (PIR)

[Nuno M. Garcia]

Hi everyone.

Milton, you have a great text, and of course, being a Senator in this
community, your actual responsibility is bigger than for most of us.

But in all honesty I have to point out that while you claim that the ghost
of "rapacious capitalism" was partly responsible for the "ideological
nonsense." of the decision for no-go from ICANN, your text is also filled
with ideological biases and prejudices.

For example in the same paragraph you cry wolf, you also write "Worldwide,
the existence of open competitive markets has done more to support,
strengthen and expand access to information and communications than any
nonprofit or government program.".

You surely know this is not at all fair nor true,
You surely know that if not for the ARPANET government program, there would
be no Internet.
You surely know that, because there is no such thing as "worldwide", there
are many particular and fragile realities, and there are places where the
"open competitive markets" do not or cannot exist.

And this is the fundamental problem you fail to address in your article.
While trying to answer the question for the "worldwide", you miss, forget,
leave behind the most fragile of the communities.

And knowing this, still you wrote it and continued in this lane throughout
the article.

I am a computer network scientist. Among my tools I strive to include
rigour, balance and as much truth as possible.

With that paragraph, my dear Senator, I am lost for your argument, which is
a pity because I too read the mail from Vint Cerf, and tend to agree with
him.

Yet, I cannot agree with your particular line of reasoning. And it's a
shame, as it may turn out that, after all, you have a good point in your
analysis.

So, to conclude, I think maybe this is what is wrong with the whole
process.

Maybe there are too many ideological barriers, too many biases, and, for
the good and for the bad, the system is too big, too complex, has a huge
inertia (as we all know), and changing something, even if for the good
reasons, has to be done with preliminary caution. For example, before doing
things (in this case, things that were hidden from the majority of us, with
as you very well acknowledge "shady aspects"), the incumbents / proponents
need to amass at least an equal amount of energy to make the system move
(being energy here freely interpreted as people / interests / communities).

And, finally, to change things, we need to have fresh and informed
perspectives on things. Preferably as unbiased as possible.

Hopefully this will be a lesson learned by all of us.

Warm regards, please stay safe and healthy,

Nuno Garcia,
Portugal

On Mon, 4 May 2020 at 18:47, Mueller, Milton L <milton at gatech.edu> wrote:

> I wrote something about this that puts it into a broader perspective.
>
> What was accomplished by stopping the sale?
>
>
> https://www.internetgovernance.org/2020/05/01/no-real-winners-in-dot-org-decision/
>
>
>
> *From:* NCSG-Discuss <NCSG-DISCUSS at LISTSERV.SYR.EDU> *On Behalf Of *Joly
> MacFie
> *Sent:* Friday, May 1, 2020 12:31 AM
> *To:* NCSG-DISCUSS at LISTSERV.SYR.EDU
> *Subject:* Re: ICANN Board Withholds Consent for a Change of Control of
> the Public Interest Registry (PIR)
>
>
>
> “ This proposed transaction has posed difficult questions to the ICANN Board
> and the community, and the totality of the circumstances supports a denial
> in this instance. If PIR is able to provide additional information that
> resolves the concerns raised by the Board, PIR remains able to re-submit or
> initiate a new Change of Control Request.”
>
>
>
> In other words, back to the drawing board.
>
>
>
> Joly
>
>
>
> On Thu, Apr 30, 2020 at 11:40 PM Caleb Olumuyiwa Ogundele <
> muyiwacaleb at gmail.com> wrote:
>
> In case you missed this.
>
>
>
> ______________________________________________________
>
>
>
> Today, the ICANN Board made the decision to reject the proposed change of
> control and entity conversion request that Public Interest Registry (PIR)
> submitted to ICANN.
>
> After completing extensive due diligence, the ICANN Board finds that
> withholding consent of the transfer of PIR from the Internet Society (ISOC)
> to Ethos Capital is reasonable, and the right thing to do.
>
> ICANN's role is to ensure the stable and secure operation of the
> Internet's unique identifier systems. We are dedicated to making the right
> decision, knowing that whatever we decide will be well received by some,
> and not by others. It is our responsibility to weigh all factors from
> an ICANN Bylaws and policies perspective, including considering the global
> public interest. We have done this diligently, ensuring as much
> transparency as possible and welcoming input from stakeholders throughout.
>
> On 13 November 2019, PIR announced
> <https://thenew.org/the-internet-society-public-interest-registry-a-new-era-of-opportunity/> that ISOC,
> its parent organization, had reached an agreement with Ethos Capital, under
> which Ethos Capital would acquire PIR and all of its assets from ISOC.
> Under the agreement, PIR would also be converted from a Pennsylvania
> not-for-profit corporation to a for-profit Pennsylvania limited liability
> company. ISOC created and agreed to the transaction details that are under
> review.
>
> On 14 November 2019, PIR formally submitted
> <https://www.icann.org/en/system/files/correspondence/cimbolic-to-icann-14nov19-en.pdf> to ICANN a
> "Notice of Indirect Change of Control and Entity Conversion" in advance of
> closing the proposed transaction between Ethos Capital and ISOC. Since
> 2003, PIR has operated the .ORG generic top-level domain (gTLD) as a
> not-for-profit organization, as well as six other gTLDs. Per the gTLD Registry
> Agreements
> <https://newgtlds.icann.org/sites/default/files/agreements/agreement-approved-31jul17-en.html#article7.5>, ICANN must
> either approve or withhold consent of a proposed change of control, the
> deadline for which is 4 May 2020.
>
> ICANN's role has been to evaluate the reasonableness of PIR's request for
> indirect change of control and entity conversion. In doing
> so, ICANN evaluated an extensive amount and variety of information related
> to the proposed transaction, including details of the transaction
> structure, financing, and other funding sources of Ethos Capital, the
> parties involved, the role of the Pennsylvania authorities, information
> related to financial resources and operational and technical capability,
> how the new for-profit PIR under the control of Ethos Capital would be
> responsive to the needs of the non-commercial community, what input the
> .ORG community had provided to PIR or ISOC on the proposed transaction, and
> how that community input would be reflected in the operations of PIR
> following its conversion.
>
> Throughout this process, the ICANN Board has worked thoughtfully and
> thoroughly to determine if it is reasonable under PIR's Registry Agreements
> for ICANN to either approve or withhold consent to the proposed change of
> control. Before making our determination, the Board, among other things:
>
> ·       Conducted thorough due diligence
>
> ·       Received and reviewed hundreds of pages of documentation and
> responses provided by PIR, ISOC and Ethos Capital following ICANN issuing
> three requests for more information
>
> ·       Was briefed extensively by ICANN org
>
> ·       Received and considered more than 30 letters from stakeholders
>
> ·       Considered input from an ICANN67 public forum, views of the
> community and others who weighed in after we received PIR's Public Interest
> Commitments
>
> ·       Considered the opinions expressed in the California Attorney
> General's Office letter sent to ICANN on 15 April 2020
>
> 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.
>
> The Board would like to thank the global community and stakeholders for
> their engagement.
>
> The resolution and rationale document, which expands upon this decision is
> available, here
> <https://www.icann.org/resources/board-material/resolutions-2020-04-30-en>
> .
>
> --
>
> --------------------------------------
> Joly MacFie  +2185659365
>
> --------------------------------------
>
> -
>
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