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What’s next for .Org in light of COVID-19

by — Policy & Law 6 Comments

A pandemic throws a new wrinkle in the deal to sell off .org.

Logo for .org domain, featuring a blue circle with white letters spelling ORGPublic Interest Registry, Ethos Capital and Internet Society have agreed to extend the deadline for ICANN to make a decision on the sale of .org to April 20. They want ICANN to decide by this date.

So what happens now?

COVID-19 was a wrinkle no one foresaw. With California in lockdown, both ICANN and the California Attorney General (which is investigating the deal) have a lot on their plates. I could see this going either way: the California AG could decide it has more significant issues to deal with and let this deal slide, or it could ask for more time, which would put the deal at higher risk. We’re in unprecedented territory here, so it’s hard to bet on which of these is more likely.

The world is also now in a cash crunch. Lots of buyers are backing out of deals or renegotiating the terms. But in this highly public deal, it would be almost impossible for Ethos to go back to Internet Society and ask for better terms.

It’s possible that Ethos’ backers are having second thoughts. I also wonder if the $360 million in loans Ethos plans to use to partially finance the deal are in jeopardy.

Of course, COVID-19 will pass. If you were investing in anything right now, a good registry like .org (or .com) is probably the safest bet.

My money has always been for this deal to still happen. But I didn’t think the world’s fifth-biggest economy would go into shutdown, either. Its largest economy probably isn’t far behind

.Org update: Two more opportunities to comment on proposed takeover

by — Policy & Law 7 Comments

PIR and ICANN offering more opportunities to provide feedback.

Logo for .org domain, featuring a blue circle with white letters spelling ORGPeople with opinions on Ethos Capital’s planned takeover of Public Interest Registry (PIR), the group that operates the .org top level domain name, have two upcoming opportunities to be heard.

First, PIR has opened a brief public engagement about the proposed sale. It’s asking for people in the “.ORG Community” to provide feedback on the voluntary (but, apparently, legally binding) plan to restrict pricing and controls over freedom of expression.

PIR will then provide a summary report of the feedback. Notably, it will also publish all of the comments it received. The comments won’t be available during the period like ICANN provides during its comment periods, but this means PIR won’t be able to merely cherry pick comments that it likes.

But the window is limited—comments will be accepted until March 13.

Second, ICANN announced that it will allocate time for community discussion about .org during ICANN67. The conference, which was originally slated for Cancun, is now an online-only event due to the novel coronavirus.

ICANN’s notice states:

This is an opportunity for the ICANN community to ensure that it understands the scope of ICANN’s role in this matter, and to provide feedback. Please note that the Board and the ICANN org cannot address questions and comments that relate to the ISOC, PIR, Ethos Capital, or other parties involved in the proposed transfer.

It will be interesting to see how ICANN defines its role in the matter.

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 16 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.

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