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4 U.S. lawmakers question .Org sale

Presidential candidate Elizabeth Warren among those concerned about sales of .org registry.

Signatures of four U.S. Senators who are questioning the deal to sell .org, including Elizabeth Warren
Four Lawmakers sent a letter with questions about the sale of .org to Ethos Capital.

Three U.S. Senators and a U.S. Representative have sent a letter to Ethos Capital, Internet Society and Public Interest Registry questioning the decision to sell .org to Ethos.

Ron Wyden, D-Ore., Richard Blumenthal, D-Conn., and presidential candidate Elizabeth Warren, D-Mass., with Rep. Anna Eshoo, D-Calif. sent the letter that includes nine questions about the proposed sale.

Among the group’s concerns are:

  • Censorship
  • The potential that .org will move jurisdictions outside the United States
  • How prices will be controlled
  • How the proposed .org stewardship council will work, and if it will have veto power of decisions such as pricing

The Senators and Respresentative also want the registry transfer request and answers to ICANN’s latest questions to be made public.

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    • Andrew Allemann says

      In this case, they might have been doing it to bolster their anti-private equity or pro-non-profit stance. That said, be sending it out the Monday of Christmas week, it might have been a way of saying “hey, we did something but we don’t really care”

      • Kevin Murphy says

        Yeah, but who paid them?

        And who wrote this letter?

        The Senators whose names are on the letter did not write it.

        Who wrote it?

        Who paid the people who wrote it?

        • Bartleby says

          After the Senators became aware of the numerous concerns surrounding the sale of dot org, they directed their staff to write up a letter, with their full approval. Then the senior politicians released the letter so their stance could be known publicly. They took time out during Christmas week and in the middle of an impeachment to publicize their deep concerns with the proposed transaction and asked for further clarification from the various parties. They did this because it is an important issue and I think it shows they are serious about monitoring developments.

          The domain industry should be thankful that important politicians are interested enough to make sure the industry gets it right when it comes to important decisions such as this and that the governing body is impartial and acts according to its charter, not what its most connected and powerful constituents want. That is called fairness. It seems like some would like a “laissez faire” approach where the powerful elite can do what they want and get away with it without anyone chiming and getting in their way.

          If the after reviewing the information, the Senators – and it should be noted that the UN which also write a similar letter this week to PIR and ISOC – if they feel the transaction should proceed without changes, it will. But at least there will be some due process, thoughtful review, and possibly some compromise that incorporates feedback from various parts of the community. Compare that with the way ICANN has been operating recently and you will see Senators Warren, Wyden, Blumenthal and Rep Eshoo are showing what true democracy and a fair decision-making process looks like.

  1. Jolly St Nick says

    Ooh so cynical. That’s not how it works chief. In this country, Democrats actually do the right thing, most of the time. They don’t have to be bought to do it. They do it for the good of the people, not for the powerful corporations.

  2. John says

    Possibly the Senators should look into the root cause of the problem.

    ICANN caused this mess.

    ICANN removed all price caps in the .org domain extension in June of this year – despite the fact that 99% of the public comments opposed. ICANN provided no credible justification for its actions.

    It is important to understand ICANN has granted each TLD operator the right operate a monopoly in perpetuity – without ever facing a competitive bidding process (excludes all forms of competition.) Because .org and .com contracts will never subject to a competitive bidding process – the use of price caps have been used as a mechanism to make sure the TLD operator does not act opportunistically. (i.e. raising prices on its captive base of users – where substitutes do not exist.)

    Prior to June – the maximum price increase for a .org domain registration or renewal was 10% per year.
    But ICANN removed all pricing caps and now the .org registry operator can charge whatever amount it wants on a registration or renewals.

    The wholesale cost today is $9.75 for a .org renewal or registration.

    But now – it could cost $100, $1,000 or even $10,000. All of these prices are permitted under the new contract. Even $100,000 is permitted under the new contract.

    Price caps serve a vital consumer protection function. But ICANN does not seem to care.

    This is exactly why Ethos Capital (in coordination with ICANN ex-CEO Fadi Chehade) announced its acquisition of PIR (operator of .org domains.) Ethos realized the golden opportunity. An extremely captive base of users – who are highly price inelastic – and who will pay whatever amount — to renew their existing domain names. Because no substitutes exist. These .org registrants are locked-in and held hostage to their domain names – because they are not able to switch.

    Ethos Capital can raise prices and this will have no corresponding impact on demand. This type of market opportunity is the dream of any private equity company. Who would not want to operate a monopoly over the .org namespace??

    This opportunity would not have been possible if ICANN did not remove all pricing caps in the .org domain extension.

    Now 10+ million registrants will be forced to pay higher amounts to register or renew domain names.
    Despite the fact that the cost to operate .org have declined:

    Year Cost to operate the .ORG Registry
    2010 $27,672,049
    2011 $28,704,215
    2012 $29,081,068
    2013 $31,970,956
    2014 $33,173,705
    2015 $34,978,686
    2016 $37,978,497
    2017 $37,806,841
    2018 $18,066,321

    In 2018, PIR’s cost to operate .org were slashed in half. This cost reduction was achieved through a competitive bidding process on the back-end. But ICANN has refused to put the main PIR contact out for competitive bid – and has directly ignored DOJ Antitrust Division advice.

    The United States Department of Justice Antitrust Division said “ICANN should require competitive bidding for renewal of a gTLD registry agreement, rather than granting the incumbent operator a perpetual right to renew without competition.”

    ICANN has created and continues to facilitate total market failure in the DNS.

  3. John says

    Perplexing ICANN has ignored United States Department of Justice, Antitrust Division advice.

    Actually, ICANN is doing exactly OPPOSITE what DOJ has recommended. ICANN is directly facilitating supracompetitive pricing on a captive base of users.

    Anyone concerned about ICANN’s actions should read this letter very carefully:

    https://www.icann.org/en/system/files/files/baker-to-dengate-thrush-18dec08-en.pdf

    Quite extraordinary how much DOJ got right back in 2008.

    — The creation of additional gTLDs is unlikely to constrain the exercise of market power by existing TLDs

    — Competition from new gTLD created is not likely to prevent the exercise of market power by new or existing TLD registries.

    — The Division makes two specific recommendations. First, ICANN’s general approach to new gTLDs should be revised to give greater consideration to consumer interest. ICANN should move carefully weigh potential consumers harms against potential consumer benefits before adding new gTLDs and renewing new gTLD registry agreements. Second, the RFP process and proposed registry agreement should include provisions that would enable ICANN to constrain new registry operators from exercising market power. In particular, ICANN should establish competitive mechanism for authorizing new gTLDs and renewal of gTLD registry agreements whereby prospective gTLD operators would compete for gTLDs by proposing registry terms – including MAXIMUM FEE SCHEDULES – that would provide consumer benefits. (emphasis added)

    — Many registrants do not perceive .com and other gTLD’s and country code TLD’s to be substitutes.

    — The proposed registry agreement does not include any price caps that would limit the ability of new gTLD registry operators to charge the highest possible prices for domain in the new gTLDs. Similarly, the proposed agreement does not include any restrictions against price discrimination, building and tying.

    — The proposed registry agreement also allows for the perpetual renewal of every new gTLD registry without regard to competitive effects or consumer-based objections.

    — ICANN’s request for bids should expressly call for bids to specify an internal maximum price that would be charged by the operator for domain registrations, as well as limitations on price increases over time.

    — ICANN should require competitive bidding for renewal of a gTLD registry agreement, rather than granting the incumbent operator a perpetual right to renew without competition.

    — Experience with the .net TLD and other gTLDs have showed that competitive bidding in the award of gTLD registry agreements, and periodic rebidding, has served as an effective tool for managing the interest of registrants in gTLDs.

    — Indeed, competitive bidding has resulted in lower domain prices and higher operating specifications than what ICANN has achieved through non-competitive negotiations.

    — In particular, competitive bidding prompts bidders to propose and accept registry improvements, higher operating standards, and lower registration fees to win the contract.

    The following two lines sum it up quite well:

    — ICANN’s approach to TLD management demonstrates that it has adopted an ineffective approach with respect to its obligation to promote competition at the registry level.

    — To date, we believe that ICANN has not come close to fulfilling its obligations to employ competitive principles in its management of TLD registry operations.

  4. 168 says

    The Demos were in control when
    jurisdiction was released in 2016 and, LOL they want answers now?

    Were the Repubs that tried to stop release contacted?

    Kevins got it right- who wrote the letter?
    Ask all the Q’s you want. Haven’t seen any legal requirement to answer.
    censorship? – Senators should know laws and courts control?
    Not some wonky comittee.

    Interesting “concerns” dont address exclusive non-profit use
    if this is really all about non-profit
    “interests”

    Look forward to hearing about this in the debates…

    Happy Holidays!

  5. Mark says

    I’ll bet you “dollar to donuts” that your going to see this “premium” crapola start. First, they should tie them up in a lawsuit. That’s first. Next they should put this exalted crew under oath do some depositions, and find out how this little deal transpired. Then… they should be made to grandfather every existing .org domain. Watch how fast they exit the deal.lol. Who is kidding whom.

    • Domainer says

      Mark, very insightful.

      In Washington, it is the lobbyist that bring this into the forefront.

      The big question is –
      “who are paying the different lobbyists??”

      There are always multiple working lobbyist groups (or law firms) on both sides, pushing one position or another. in many cases, it is a case of which side has the most money, influence and access.

      I’m not a trumpie but DC is a swamp.

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