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.ORG Update

The proposed acquisition of Public Interest Registry (PIR) by Ethos Capital was announced on 13 November 2019 by the parties and the Internet Society (ISOC). This announcement has raised many questions. In light of this, we want to be transparent about where we are in the process.

On 14 November 2019, PIR formally notified ICANN of the proposed transaction. Under the .ORG Registry Agreement, PIR must obtain ICANN’s prior approval before any transaction that would result in a change of control of the registry operator. Typically, similar requests to ICANN are confidential; we asked PIR for permission to publish the notification and they declined our request.

According to the .ORG Registry Agreement and our processes for reviewing such requests, ICANN has 30 days to request additional information about the proposed transaction including information about the party acquiring control, its ultimate parent entity, and whether they meet the ICANN-adopted registry operator criteria (as well as financial resources, and operational and technical capabilities).

Public announcements made by PIR, ISOC, and Ethos Capital contain relevant facts that were not required in the request for approval. Today, we sent PIR an additional information request to ensure that we have a full understanding of this proposed acquisition. We have asked PIR to provide information related to the continuity of the operations of the .ORG registry, the nature of the proposed transaction, how the proposed new ownership structure would continue to adhere to the terms of our current agreement with PIR, and how they intend to act consistently with their promises to serve the .ORG community with more than 10 million domain name registrations.

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.

We acknowledge the questions and concerns that are being raised and directed to ISOC, PIR, and ICANN relating to this change. To ease those concerns and maintain trust in the .ORG community, we urge PIR, ISOC, and Ethos Capital to act in an open and transparent manner throughout this process. We have sent a letter to both ISOC and PIR today, asking them to please be clear and open in all of their communications. We have indicated our willingness to publish the request and related materials involved in ICANN’s review including the request for approval, the request for additional information, and PIR’s responses.

ICANN takes its responsibility in evaluating this proposed transaction very seriously. We will thoughtfully and thoroughly evaluate the proposed acquisition to ensure that the .ORG registry remains secure, reliable, and stable.

Comments

    Sam Lanfranco  06:56 UTC on 10 December 2019

    As a stakeholder in the .org community, and member of NCSG/NPOC there are a number of issues that concern me here, but a major one is that while Ethos Capital is making promises about the future, there is no track record for the newly formed Ethos, or evidence of expertise in the registry field by the investors. I would have fewer worries about this change in ownership if (IF!) PIR actually was incorporated as a Benefit Corporation (B Corp), if this sale goes forward. Incorporation as a B Corp (and not just B Lab "Certification") should become a condition of any sale of PIR, to any buyer.

    John Laprise  06:43 UTC on 11 December 2019

    When ALAC drafted it's comments supporting .org contractual changes, I was broadly supportive. However, ISOC's lack of transparency has caused me to reconsider my support. For an organization that purports to support the Internet, it's decision making processes were downright opaque, keeping any mention of the deal with Ethos Capital from virtually everyone. The involvement of Fadi Chehade in the transaction reeks of corruption and insider trading of the worst sort. I have no trust in the "promises" or "intentions" of either ISOC, PIR, nor Ethos Capital regarding .org. .org has become a DNS home for organizations that are the backbone of civil society, especially in countries where civil society is scorned if not actively persecuted. I have no confidence that Ethos Capital will protect current and future domain holders if the price is right. ICANN org should subject this transaction to the highest level of scrutiny and lay down binding demands to ensure that Ethos Capital and ISOC uphold transparency and protect the safety and security of .org and those who use it. If they are unable or unwilling to comply, ICANN should use all contractual authority to reallocate .org to a worthy steward rather than it's current holder. Best regards, John Laprise, At Large

    Joshua Ellinger  20:51 UTC on 15 December 2019

    At minimum, there should be multiple bidders, the bidding criteria should not be based solely on price, and former executives at ICANN should be forbidden from working for the bidders for a reasonable period of time. I also think that the bidders need to disclose the financial projections that they are providing to their limited partners to raise the money. In essence, you have decided to sell of something that is roughly equivalent to a public park that you have been given stewardship of. If a sufficient number of people decide that the transaction is corrupt, they will not only prevent the sale but insure that you are removed from your current role. The transaction is OBVIOUSLY corrupt -- the only question really is how many people object and what recourse is available. I have registered a number of domains. The prospect of paying $20/yr is not a burden for me. However, one of my .link domains registered in 2018 is now magically considered a 'premium' name and got repriced to $145/yr despite a public statement (per wiki) that ".LINK will be a specialty gTLD, with a flat pricing structure and fixed renewal costs, with no material price increases for the first five years. This moderately priced namespace is designed to offer registrants an attractive, competitive registration alternative or complement to existing registrations for the purpose of specialized content." Fortunately, I do not need it and will not renew it but I don't see why a private equity investor would do the same thing with .org. Maybe the contract prevents differential pricing. Maybe not. All I know is that private equity typically targets a 20% annual return and they will find a way to make that happen. Joshua Ellinger

    Ch'ng Zhu Lin  21:51 UTC on 15 December 2019

    ICANN should still publish the notification request, as this is a matter of public interest.

    Miles Wolbe  00:54 UTC on 16 December 2019

    Private Internet Access posted an excellent overview: ".ORGanized Takeover – a timeline of the ISOC, PIR & Ethos Capital Deal". Sadly, ICANN does not allow links in comments, so you'll need to search for the title in your favorite search engine. Here's a taste: March 2019 ICANN proposes removing price caps from .ORG registrations. It is unclear whether PIR requested this, whether ICANN offered it unsolicited, or if PIR worked behind the scenes to make this happen under the guise of contract harmonization. ICANN receives 3,300 comments uniformly opposed to the change and 6 in favor of removing price caps, and sides with the 0.2% minority. May 2019 PIR responded to the comments with an open letter that said, “We are a mission-based non-profit, and would never betray the trust that you have put into .ORG and us.” On 7 May, Chehadé registered the domain for EthosCapital.com. On 13 May, ICANN decided to lift the price caps anyway. On 14 May, Ethos Capital was incorporated as a new investment firm founded by Brooks. Ethos Capital has two staff: Brooks and Nora Abusitta-Ouri, a former ICANN SVP who later worked for Chehadé and was also a classmate of Chehadé.

    Sean Roberts  14:22 UTC on 16 December 2019

    John Jeffrey, your letter to Jon Nevett, PIR CEO, with the subject of Transparency echos my concerns. Without transparency, PIR is not living up to the ideals of a free and open internet. Thank you for time and attention to this important issue.

    Albert Braden  11:27 UTC on 17 December 2019

    ICANN board members, please try to resist the temptation to sell your soul to the highest bidder. Money isn't the only thing that matters.

    david kane  09:16 UTC on 09 January 2020

    Thank you, John Laprise, for your thoughtful analysis and suggestion that the inclusion of Fadi Chehade reeks of corruption. This whole deal is suspicious. Public protection is under attack.

    Chris Miller  12:31 UTC on 23 January 2020

    The whole .org deal reeks of shady financial arbitrage and blatant economic rent seeking, with no net benefit to society. Please oppose it.

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