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Former ICANN CEO Rod Beckstrom commenting on .Org deal

by — Policy & Law 9 Comments

Beckstrom posed arguments during forum last week.

On February 11, American University Washington College of Law held a program about the sale of .Org to private equity company Ethos Capital.

Former ICANN CEO Rod Beckstrom was in attendance, and he posed some good questions about the transaction. The video below starts playing at the point Beckstrom begins commenting:

After hearing of the deal, Beckstrom says, “I felt incredibly sad… I was just shocked. Not just because this non-profit asset was being monetized, but because of how it was handled.”

Beckstrom posed several questions, including the valuation of the deal and if ISOC/PIR are really operating in the public benefit, as required of non-profits.

Ethos adds legally-binding provisions to try to save .Org deal

by — Policy & Law 15 Comments

8-year price cap, censorship and data controls would be baked into registry agreement amendment.

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

Ethos Capital, the company that is trying to acquire the .Org registry, took a big step today to try to push it over the finish line. It agreed to add a Public Interest Commitment (PIC) (pdf) to the registry agreement with ICANN that would enforce some of the promises it has made publicly.

The move comes after ICANN sent a letter to Internet Society, which current controls .org, making it clear that ICANN believes it has the power to nix the deal on grounds beyond security and stability.

Among the commitments is to cap the .org price for the first eight years. The price increase will be capped at 10% per year on average, and now “on average” has some teeth. It can’t be front-loaded, although the trigger date will be backdated to June 2019.

The current wholesale price of a .org domain is $9.93. That means that, after eight years, the price could be around $21, more than double the current price.

After eight years, PIR could change the price as much as it wants. (That might be about the time Ethos decides to exit the business.)

Before the Ethos announcement, Public Interest Registry said it had no current plans to increase the price of .org domain names.

Additionally, the .Org Stewardship Council will have veto authority on changes to .org policies around censorship and freedom of expression, as well as the use of .org registrant and user data.

PIR will also establish a Community Enablement Fund to support initiatives benefitting .org registrants. It will contribute $10 million to this fund during the remaining lift of the current registry agreement. That’s about $1 million a year.

ICANN Board quizzes Internet Society over .Org sale

by — Policy & Law 14 Comments

Board questions how the deal is in the spirit of the original decision to assign .org contract to Internet Society.

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

ICANN’s Board of Directors is asking Internet Society (ISOC) pointed questions about the proposed sale of Public Interest Registry, which operates .org, to private equity company Ethos Capital.

Maarten Botterman, chair of the board, sent a letter (pdf) to Gonzalo Camarillo, chair of the ISOC Board of Trustees, on February 13. The letter asks 18 questions, and many of them relate to how .org will be run as it relates to Internet Society’s proposal when it was awarded the domain extension.

Botterman wrote:

When ISOC applied for and was awarded the right to manage .ORG in 2002, ISOC made commitments to the Internet community on how it would differentiate and uphold the
unique purpose of the .ORG TLD. ICANN awarded the management of the .ORG registry with the belief that ISOC was uniquely positioned to live up to these commitments for the long
run. These commitments have been maintained since that 2002 award, and ICANN has heard loud and clear that the community of .ORG registrants is concerned that these
commitments already have been abandoned or will be abandoned if the transfer to Ethos Capital is completed. ICANN has also heard concerns raised that the .ORG community was
not consulted by ISOC as part of the ISOC’s consideration of the proposed transaction.

That ICANN’s Board is considering the transaction and the spirit of the original deal to assign ISOC the .org contract is an interesting development.

Among the more interesting questions the board has asked ISOC:

  • There have been public statements that ISOC received multiple bids for the sale of PIR. Did ISOC solicit any responses from bidders as to how each would continue to uphold any/all of the 2002 Commitments?
  • What has Ethos Capital committed to do in regard to the 2002 Commitments? And are such commitments included in any of the transaction documents, organization documents or elsewhere in a manner that insures they will be sustained and enforceable by .ORG registrants or others in the future? [emphasis added]
  • We understand that ISOC received a written proposal from Ethos Capital in September 2019. Were any prior proposals made or prior discussions had with Ethos Capital or any of their representatives or advisors? If yes, when did those discussions occur? [This gets to the issue of if discussions were held in conjunction with ICANN dropping price caps on the .org domain.]
  • Please describe how, in deciding to sell PIR to Ethos Capital, ISOC balanced the interests of the .ORG community with ISOC’s interest in achieving a sizeable endowment to support ISOC’s future operations separate from PIR and .ORG?
  • Given the public reaction to the announced sale of PIR, will ISOC commit to completing any additional engagement with the .ORG community prior to consummating the proposed transaction with Ethos Capital? [PIR has pushed back on ICANN’s request for more time to evaluate the deal. Now ICANN is effectively going directly to ISOC with this request and a request to engage with the community.]

ICANN’s board has requested that ISOC respond by February 24.

California AG backs down on document requests — for now

by — Policy & Law 10 Comments

Attorney general had already narrowed the initial scope before ICANN published letter.

Seal for the California Attorney General

On January 30, ICANN published a letter from the California Attorney General that asked ICANN to answer 35 questions relating to pricing practices and the transaction to sell .org to Ethos Capital.

Oddly, ICANN waited until last Friday, February 7, to publish a communication (pdf) between ICANN’s attorney at Jones Day (who used to work for the California attorney general) and the attorney general that was sent on January 29, a day before ICANN published the attorney general’s initial letter.

That email outlines that ICANN would prioritize document production to just three of the 35 requests. The email also stated, “Finally, you also agreed that, until further notice, ICANN need not produce documents or materials called for in the other requests.”

It turns out that Jones Day sent a formal letter (pdf) to the attorney general on January 31, linking to publicly available information in response to the three requests. Again, that letter wasn’t published until last Friday.

Why ICANN published the attorney general’s letter and blogged about it on January 30 without noting that the initial request had been narrowed in scope is beyond me.

It’s unclear if the attorney general merely delayed the other requests until it reviewed the initial information, or if it’s backing down from further requests. We might find out on another Friday.

Breaking: California Attorney General delays .org sale

by — Policy & Law 21 Comments

Office that oversees California non-profits demands extensive documentation.

Graphic that states 'breaking news'

The California Attorney general has likely delayed approval of the .org sale to Ethos Capital by two months, if not more, after demanding extensive documentation from ICANN. The office supervises charitable organizations in California, where ICANN is based. [Update: PIR is pushing back on the delay.]

In a letter to ICANN (pdf), the attorney general has demanded responses to 35 questions and information requests. About half of the questions relate to ICANN’s decision to remove price caps on .org domain names. If it gets the answers it demands, it will get much more information than ICANN has previously disclosed about the process and thinking behind removing price caps on .org domain names last year.

It seems that the attorney general may wish to speak to individual members of ICANN’s board about the price removals. It has asked for their names and contact information.

The contract between ICANN and Public Interest Registry states that ICANN is not permitted to disclose Public Interest Registry’s confidential information unless there is a valid court order or ICANN’s counsel believes the disclosure is required by applicable law. ICANN believes that applies in this case and intends to provide the unredacted information to the Attorney General.

The current deadline for ICANN to approve or deny the sale is February 20. It is asking Public Interest Registry to extend this to April 20 as a result of the attorney general office’s request.

This is perhaps the biggest wrinkle so far in Internet Society’s plans to sell the registry for $1.135 billion to a private equity company. While many have weighed in, the California Attorney General may argue it has direct regulatory control over ICANN. It could also give ICANN a “reasonable” reason to deny the sale, depending on the outcome.