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ICANN Board Withholds Consent for a Change of Control of the Public Interest Registry (PIR)

Today, the ICANN Board made the decision to reject the proposed change of control and entity conversion request that Public Interest Registry (PIR) submitted to ICANN.

After completing extensive due diligence, the ICANN Board finds that withholding consent of the transfer of PIR from the Internet Society (ISOC) to Ethos Capital is reasonable, and the right thing to do.

ICANN's role is to ensure the stable and secure operation of the Internet's unique identifier systems. We are dedicated to making the right decision, knowing that whatever we decide will be well received by some, and not by others. It is our responsibility to weigh all factors from an ICANN Bylaws and policies perspective, including considering the global public interest. We have done this diligently, ensuring as much transparency as possible and welcoming input from stakeholders throughout.

On 13 November 2019, PIR announced that ISOC, its parent organization, had reached an agreement with Ethos Capital, under which Ethos Capital would acquire PIR and all of its assets from ISOC. Under the agreement, PIR would also be converted from a Pennsylvania not-for-profit corporation to a for-profit Pennsylvania limited liability company. ISOC created and agreed to the transaction details that are under review.

On 14 November 2019, PIR formally submitted to ICANN a "Notice of Indirect Change of Control and Entity Conversion" in advance of closing the proposed transaction between Ethos Capital and ISOC. Since 2003, PIR has operated the .ORG generic top-level domain (gTLD) as a not-for-profit organization, as well as six other gTLDs. Per the gTLD Registry Agreements, ICANN must either approve or withhold consent of a proposed change of control, the deadline for which is 4 May 2020.

ICANN's role has been to evaluate the reasonableness of PIR's request for indirect change of control and entity conversion. In doing so, ICANN evaluated an extensive amount and variety of information related to the proposed transaction, including details of the transaction structure, financing, and other funding sources of Ethos Capital, the parties involved, the role of the Pennsylvania authorities, information related to financial resources and operational and technical capability, how the new for-profit PIR under the control of Ethos Capital would be responsive to the needs of the non-commercial community, what input the .ORG community had provided to PIR or ISOC on the proposed transaction, and how that community input would be reflected in the operations of PIR following its conversion.

Throughout this process, the ICANN Board has worked thoughtfully and thoroughly to determine if it is reasonable under PIR's Registry Agreements for ICANN to either approve or withhold consent to the proposed change of control. Before making our determination, the Board, among other things:

  • Conducted thorough due diligence
  • Received and reviewed hundreds of pages of documentation and responses provided by PIR, ISOC and Ethos Capital following ICANN issuing three requests for more information
  • Was briefed extensively by ICANN org
  • Received and considered more than 30 letters from stakeholders
  • Considered input from an ICANN67 public forum, views of the community and others who weighed in after we received PIR's Public Interest Commitments
  • Considered the opinions expressed in the California Attorney General's Office letter sent to ICANN on 15 April 2020

The Board was presented with a unique and complex situation – impacting one of the largest registries with more than 10.5 million domain names registered. After completing its evaluation, the ICANN Board finds that the public interest is better served in withholding consent as a result of various factors that create unacceptable uncertainty over the future of the third largest gTLD registry. Factors that were considered in determining reasonableness include, but are not limited to:

  • A change from the fundamental public interest nature of PIR to an entity that is bound to serve the interests of its corporate stakeholders, and which has no meaningful plan to protect or serve the .ORG community.
  • ICANN is being asked to agree to contract with a wholly different form of entity; instead of maintaining its contract with the mission-based, not-for-profit that has responsibly operated the .ORG registry for nearly 20 years, with the protections for its own community embedded in its mission and status as a not-for-profit entity.
  • The US$360 million debt instrument forces PIR to service that debt and provide returns to its shareholders, which raises further question about how the .ORG registrants will be protected or will benefit from this conversion. This is a fundamental change in financial position from a not-for-profit entity.
  • There are additional uncertainties, such as an untested Stewardship Council that might not be properly independent, or why PIR needs to change its corporate form to pursue new business initiatives.
  • The transaction as proposed relies on ICANN as a backstop for enforcement of disputes between the .ORG community and the registry operator in an untested manner.

The entire Board stands by this decision. After thorough due diligence and robust discussion, we concluded that this is the right decision to take. While recognizing the disappointment for some, we call upon all involved to find a healthy way forward, with a keen eye to provide the best possible support to the .ORG community.

The Board would like to thank the global community and stakeholders for their engagement.

The resolution and rationale document, which expands upon this decision is available, here.


    Bill Maggs  22:18 UTC on 30 April 2020

    How will governance change to close up the holes big enough to drive a truck through that this sorry affair exposed?

    William Stewart  05:48 UTC on 01 May 2020

    Very well done. Congratulations on listening and doing the right thing. This was fundamentally important, for many reasons. Great thanks.

    David Mussington  06:16 UTC on 01 May 2020

    I have to say I found the entire proposal to transfer the .org registry to a for profit company mystifying. I am glad that the board was able to intervene. A sterling example of wise board oversight and governance.

    Pavle Kostovic  07:01 UTC on 01 May 2020

    I'm grateful that the board intervened here. I respect the mission of ICANN, and am grateful that the .ORG community will stay under a non-profit guiding group. What concerns me heavily is how this was ever brought into question. How did this proposal come about? Who was interested principally in selling this vital TLD to a for-profit LLC, and how was that ever justified as serving the public good?

    Angelbane Na  08:30 UTC on 01 May 2020

    They only stopped this because the California Attorney General sent a letter to the Board,Chair and CEO of ICANN. ICANN itself did no real due diligence they just got caught trying to give away the cookie jar to a bunch of vultures.

    Garrick J Williams  14:27 UTC on 01 May 2020

    A good decision, but a decision that took way too long to make. The FCC's Ajit Pai repealing the 2015 Open Internet Order to reclassify broadband providers as "information services" instead of public utility providers was already a huge blow to the open Internet. Disturbs me to think that the domain for nonprofit websites was mere hours away from getting privatized.

    Geoffrey Dewan  16:22 UTC on 01 May 2020

    Ethos is yet another great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. This story has been replayed countless times over the last four decades to the detriment of all. Thank you for stopping this latest incarnation of the Internet Encosure Act.

    George McIntyre  04:58 UTC on 02 May 2020

    Geoffrey. You’re confusing the South African Ethos Capital (dot mu) with the Ethos Capital (dot com) that tried to purchase PIR. Yours has indeed been around for the last four decades, the one we’re talking about has been founded only last year.

    Vika Mpisane  05:25 UTC on 02 May 2020

    Well, at least public interest seems to have stood strong against the threat of increased .org prices. Having a commercial player running .org, which is being operated on not-for-profit basis, was always going to be really challenging unless there were clear checks and balances to protect the not-for-profit community interests, especially the ever affordable .org. pricing.

    John Larsen  05:22 UTC on 05 May 2020

    Thanks for a very well written article.

Domain Name System
Internationalized Domain Name ,IDN,"IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet ""a-z"". An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European ""0-9"". The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed ""ASCII characters"" (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of ""Unicode characters"" that provides the basis for IDNs. The ""hostname rule"" requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen ""-"". The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of ""labels"" (separated by ""dots""). The ASCII form of an IDN label is termed an ""A-label"". All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a ""U-label"". The difference may be illustrated with the Hindi word for ""test"" — परीका — appearing here as a U-label would (in the Devanagari script). A special form of ""ASCII compatible encoding"" (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an ""LDH label"". Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as"""" is not an IDN."