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ICANN delays .Org sale approval, calls for more transparency

by — Policy & Law 0 Comments

Sale to Ethos delayed as ICANN requests more information.

Image of an airport flight board in which all flights are delayed

ICANN has delayed its approval of the sale of .Org to private equity company Ethos Capital by requesting more information.

According to its contract with Public Interest Registry (PIR) to run .org, ICANN had 30 days from when PIR notified it of the transaction to request more information. It has now done so. After it receives the responses, it has 30 days to either approve or withhold its consent of the registry transfer.

ICANN notes:

ICANN will thoroughly evaluate the responses and then ICANN has 30 additional days to provide or withhold its consent to the request. The Registry Agreement requires a standard of reasonableness for ICANN’s determination.

What’s reasonableness? That’s a good question, which might ultimately have to be determined by the courts.

ICANN also disclosed that PIR denied ICANN’s request to make its request for registry transfer public. ICANN questioned this decision in light of Internet Society CEO Andrew Sullivan saying he wished there were more transparency.

In a letter, ICANN General Counsel Jeff Jeffrey wrote (pdf):

As you, Andrew, ISOC’s CEO stated publicly during a webcast meeting in which you participated on 5 December 2019, you are uncomfortable with the lack of transparency. Many of us watching the communications on this transaction are also uncomfortable.

The webcast was this one with NTEN.

 

Video: watch the Q&A with Ethos, Internet Society and PIR

by — Policy & Law 4 Comments

Ethos tries to assuage concerns, but non-profits have more questions.

Logo for .org domain, featuring a blue circle with white letters spelling ORG

Last week NTEN, a group that helps non-profits use technology, held a Q&A with the three parties involved with the sale of .org: Private equity firm Ethos, Internet Society (ISOC), and Public Interest Registry.

It was an interesting call and the first time we’ve really heard from Ethos, other than carefully worded statements on its website.

Questions related to: why ISOC didn’t put the .org contract out to bid, why the rush to complete the detal, how long Ethos plans to hold its investment, how Ethos can assure the community that it won’t raise prices much, and several other topics.

You can watch the full session here:

 

How Ethos Capital could restrict .org price increases

by — Policy & Law 17 Comments

The private equity firm says it’s agreeable to putting price caps into concrete agreements.

Logo for .org domain, featuring a blue circle with white letters spelling ORGNTEN, a group that represents non-profits, held a conference call today with a number of participants impacted by the Internet Society’s transaction to sell .org to Ethos Capital.

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.

After losing UDRP, PureTalk sues to upgrade its domain name

by — Policy & Law 5 Comments

Company tries to get PureTalk(.)com through ACPA.

Logo for Pure Talk MVNO

Pure Talk lost a UDRP, so it filed a lawsuit to try to upgrade its domain from PureTalkUSA.com to PureTalk.com.

Pure Talk, a mobile virtual network operator, has filed a lawsuit (pdf) to try to obtain the domain name PureTalk(.)com. The company uses the domain name PureTalkUSA.com.

This is the company’s second attempt to get control of the domain without buying it. In June, the company filed a cybersquatting claim under UDRP. The panelist denied the claim because the domain was registered before Pure Talk had any trademark rights, so it couldn’t have been registered in bad faith.

Now, the company is trying its hand with an in rem lawsuit against the domain for violating the Anticybersquatting Consumer Protection Act (ACPA). The lawsuit suggests that the domain was transferred to another owner after Pure Talk obtained trademark rights. That argument works in UDRP, but it can be harder under ACPA. I’m not sure why the company didn’t point out the potential ownership transfer in its UDRP.

Intriguingly, the company’s trademark for Pure Talk states a first use date of 2017. PureTalkUSA.com has been used for much longer, though.

The lawsuit also erroneously states that the registry for the domain is “VeriSign, Inc. d/b/a Public Interest Registry” and refers to Public Interest Registry as the registry a second time. Public Interest Registry is the registry for .org, not .com. Verisign is the .com registry.

But the in rem lawsuit strategy might just work. The domain owner needs to show up to defend the domain in court, or the judge might issue a default judgment.

ISOC is leaving money on the table with .org, but…

by — Policy & Law 12 Comments

A secretive deal was the only way ISOC could get a deal done.

Picture of two men holding cash in secret back room

I’ve written a lot about how Internet Society’s (ISOC) deal to sell the .org registry to a private equity company impacts the internet’s users and non-profits. From a credibility standpoint, it’s a bad deal for ISOC.

But from a financial standpoint, it makes sense for ISOC to sell the registry.

The registry throws off cash to ISOC each year but there is risk. There’s risk that the importance of domain names changes over time. There’s risk that the base of .org domains declines.

By selling the registry and creating an endowment, ISOC secures its future. And a $1.135 billion endowment is nice security.

The way the process played out, however, means that ISOC is leaving money on the table.

I’ve heard from multiple people who would have paid more. These are people who have the capability to acquire companies for over a billion dollars. A competitive bidding process would have led to a greater windfall for ISOC.

So why was the deal done without public consultation and not put out to bid? I suspect that if people caught wind of what ISOC was up to, the blowback would have been so big that the deal would have never gone through. This was a deal that needed to be consummated in secret.

From ISOC’s perspective, $1.135 billion is enough. Getting a few hundred million dollars more at the risk of not getting anything was too great.