The private equity firm says it’s agreeable to putting price caps into concrete agreements.
Ethos Capital founder Erik Brooks said that it is evaluating ways to put teeth behind its commitment to limiting price increases.
The firm will hold webinars in the coming weeks to discuss mechanisms to do this.
One idea that has been done by another registry is to cap prices in its agreement with registrars. .Club had such a term in its registry-registrar agreement; it limited price increases to 15% total or inflation over the first five years.
The challenge is how long this is enforceable. It’s one thing to restrict prices in an agreement that lasts for a few years. It’s another to restrict it in perpetuity.
No.
If someone’s about to rob you, you don’t start negotiating with them on how much they can take — you call in the authorities.
An open tender process should be done, just like ICANN did with their EBERO contracts: https://freespeech.com/2019/08/28/icann-demonstrates-its-hypocrisy-over-org-renewals-with-cost-savings-for-ebero-contracts/
Under such a regime, dot-org can be operated at less than $1/yr per domain, just like other tendered contracts have been done (e.g. dot-IN in India). That would then benefit all registrants of .org, saving them nearly $90 million/yr.
This is exactly how the toll-free number database contract is handled (ask Neustar).
PIR/ISOC gambled with their own future. It would be poetic justice for them to be wiped out of existence, by losing the dot-org contract. Go look at their IRS Form 990s before they were gifted this monopoly — they were nothing.
Exarctly George. You do not negotiate with terrorists.
Donuts promised no price increase. Donuts/Abry lied.
Stop giving these people a voice.
History is important. Erik Brooks is from ABRY Partners (PE firm that acquired Donuts.) Within months of acquiring Donuts, Erik Brooks raised prices on almost all of its TLD’s across the board. However, Donuts publicly promised to its customers, its registrants and the public at large – that it WOULD NOT raise prices.
Erik Books did not honor this public commitment.
Why would anybody trust Erik Books this time around?
I agree, this is not a unilateral negotiation. The answer is simple… This deal cannot and should not happen. I’m against unjustified price increases / additional taxes without representation. Totally unjust and a huge mess.
Agree George,
These guys are hoping to negotiate down from “unlimited” price increase to “only” 10% a year. 10% a year is absolutely insane and prices will skyrocket over time at that level. It sums to 260% every 10 years because of the compounding effect.
If Icann had teeth they would put the contract out to tender. This is what happened in Australia with .com.au when the registry was sold to private equity. The new private equity buyer was eventually stripped of the contract and the price more than halved.
The reason why this “non profit” registry is worth $1.1 billion is because .org registrants are massively overpaying due to no competition for the contract.
Well said.
As always George, thank you for your tireless work on these ongoing issues.
Seems clear this is about perception management and nothing more. They know full well that as time passes the ability to stop/reverse closes.
This is just a buy time tactic, nothing more.
“Today” is the time for stakeholders to decide to fight it, “tomorrow” it WILL be harder, moving quickly to impossible. They know this. They just want to run the clock out …
Ethos is transitioning into a for-profit company. Ethos has a fiduciary duty to its shareholders and it will be required to increase wholesale costs on .org domain names – to fulfill that obligation. While Erik Brooks says they have no intention of operating PIR differently going forward – this is not consistent with his fiduciary duty. Erik’s role is to maximize shareholder value and act in the best interest of the corporation – not its customers.
Don’t be fooled. Non-profit business are usually operated and run very differently from for-profit business.
As Jon Nevett said, .org is the crown jewel of domain names. It is unique. It has market power. And it is one of the oldest and most legacy TLD. It has a captive base of 10+ million registrants who are not able to switch to other domain extensions. When you have an extremely captive base of users – the operating business can act opportunistically by increase prices however it sees fit, without any corresponding impact on demand. This is because .org is a natural monopoly.
Remarkable ICANN chose to remove all pricing caps on this monopoly (without doing any homework or consider competition issues) and is sitting on the sidelines telling the world they no longer want to be in the business of price regulation.
ICANN failure!
Lets see if these mechanisms have a change of control provision in them , as you know Ethos is going to flip this to Abry , which is actually a related party transaction or some new entity when they merge it with Donuts for an eventual IPO
Agreed, we are not fools here. They seem to think they can just play this however they want. It’s all a shill. From the very get-go. From the time ICANN said it would increase prices. From the time 3200 comments were all submitted against doing so. From the time the ICANN Ombudsman called the valid comments submitted to all be SPAM. And ignored so many points people brought up! From the time the reconsideration request happened. Now ICANN is saying it is not going to change it’s course. Now to ICANN saying it can’t do anything. You want to talk about conspiracy to restrain trade and to allow a monopolist to profit from taxing the Internet? This is and should spell the end for ICANN. I just can’t believe how awful this all looks upon ICANN and that they have had so many opportunities to fix it, but they just keep digging their own grave here. Amazing. Astonishing.
I agree – the ultimately play here is to merge back into Donuts/ABRY partners and do an IPO – by that time .org will cost $26 each – they will still have 8,000,000 registrants – and they just returned billions in shareholder value, all at the detriment of its base of registrants – who are locked in and were forced to pay supracompeitive prices because ICANN no longer wants to regulate its monopoly contracts it awards with the presumptive right of renewal. And ICANN claims it is not able to do anything in this situation.
What does ICANN actually do if it no longer has control or authority over its TLD contracts?
Fool me once…
“Fool me once…” was underlined & erased reelecting US Pres. George W. Bush. The .org secretive snatch-and-grab depends on us simply squawking like helpless chickens but doing nothing more. Former & present ICANN personnel are a cartel operating in restraint of trade (insider profiteering smears & demeans colleagues truly working in public interest). We need transparency, accountability, and competitive tenders for .org and .com and .net registry services. Breakup the backroom cartels!
Believe half of what you see and none of what you hear
Ethos Capital just wants to milk .ORG and their customers dry.
They only care about how much money they can make off of .ORG for their company and shareholders.
Sad.
Yep they’ve done nothing but attempt to maximize profit since the government gave up control. Whatever “deal” they make will have a workaround in 6 months.
Everyone is missing the core problem. ICANN is the core problem.
What happens when Ethos Capital receives an offer in 2 years from a fund in China? An offer Ethos “can not” refuse and they sell again without a competitive bidding process.
The new operator can increase prices however they see fit on an extremely captive base of users. So even if you get some type of commitment from Ethos Capital not to increase prices by more than 10% per year, will this commitment transfer to the new owner?
The core problem is that ICANN is no longer regulating. ICANN removed all pricing caps in .ORG in June of 2019. ICANN ignored 3,200 public comments against this move. ICANN sided with only 6 public comments in favor of removing price caps. Keep in mind the 6 comments in favor had ties to the registries and were conflicted.
ICANN ignored ALL feedback in the public comment process. ICANN instead decided to go against the gain. ICANN made its own decision and deliberately chose to ignore the public.
What sucks – if ICANN took the public comment process seriously, we would NOT be in this situation. ICANN caused this. ICANN is directly facilitating supracompeitive prices on its registrants who have no alternatives.
This gives rise to serious antitrust concerns.
“The people” no longer wanted ICANN under US control.
“The people” got what they wanted.
That was “the vote” that mattered.
Of course hindsight is always 20/20.