ICANN Delays .Org Sale After Scathing Letter from California's Attorney General

Ars Technica reports: ICANN, the nonprofit that oversees the Internet's domain name system, has given itself another two weeks to decide whether to allow control of the .org domain to be sold to private equity firm Ethos Capital. The decision comes after ICANN received a blizzard of letters from people opposed to the transaction, including California Attorney General Xavier Becerra.

Becerra's letter was significant because ICANN is incorporated in California. That means it's Becerra's job to make sure that ICANN is living up to the commitments in its articles of incorporation, which promise that ICANN will operate "for the benefit of the Internet community as a whole." Becerra questioned whether ICANN was really doing that. "There is mounting concern that ICANN is no longer responsive to the needs of its stakeholders," he wrote...

Ethos Capital's plan is to buy the Public Interest Registry (PIR) from its current parent organization, the nonprofit Internet Society. To help finance the sale, Ethos will saddle PIR with $300 million in debt — a common tactic in the world of leveraged buyouts. Becerra warns that this tactic could endanger the financial viability of the PIR — especially in light of the economic uncertainty created by the coronavirus. "If the sale goes through and PIR's business model fails to meet expectations, it may have to make significant cuts in operations," Becerra warns. "Such cuts would undoubtedly affect the stability of the .org registry."

Becerra also blasts the Internet Society for considering the sale in the first place. "ISOC purports to support the Internet, yet its actions, from the secretive nature of the transaction, to actively seeking to transfer the .org registry to an unknown entity, are contrary to its mission and potentially disruptive to the same system it claims to champion and support," he writes.

Becerra ends his letter with a warning: "This office will continue to evaluate this matter, and will take whatever action necessary to protect Californians and the nonprofit community."
ICANN's first CEO Michael Roberts, and original board chair Esther Dyson also harshly criticized the proposed sale this week, calling it "totally inappropriate..."

"ICANN has not meaningfully acted to address the likely proposed service cuts, increase in prices or trafficking of data of non-profits to obtain additional revenue."

Re: I'm not anti-vaccine by any means

[backslashdot]

I agree, no way I am registering a domain these days. Donâ(TM)t care how good it is, not registering it until this COVID stuff is over.

Dupe

[Anubis IV]

The previous story is still on the front page even.

Solution

[backslashdot]

Transfer it to the control of the EFF, Mozilla, Wikimedia, Apache, OSI, FSF, etc. There are many non-profit orgs that could handle its management.

Re:

[cholokoy]

Greed still rules. This was supposed to be the low-cost part of domains as it is mostly for non-profits but seems like its going like the dodo.

Re:

[Joce640k]

Call me skeptical/curmudgeon if you like, but ... I find it hard to believe a company who calls itself "Ethos Capital" has any ethics at all.

That name is pure doublespeak.

Take the .org registry off them.

[robbak]

It really is that simple. If they are no longer wanting to run the .org registry as a public service, then pass the registry on to someone who will. It is clear from their announcements made on this matter that they have been running it as a cash cow for a long time now, so they don't deserve it anyway.

The .org registry should not be a profit center. They are providing services to non-profits, so the prices should be as low as possible, and they should be verifying that applicants are entitled to a .org domain.

Re:

[Anonymous Coward]

Clearly al that sweet new money from the expansion of top-level domains (and its consequent disruption to assumptions used in many, many networks) is running out and they "need" a new infusion of money.

Those meetings in exotic places don't pay for themselves.

and they should be verifying that applicants are entitled to a .org domain.

When I registered a domain name for my family, I had a choice of .net, .com or .org. Which one should I have chosen?

Re:

[drinkypoo]

"they should be verifying that applicants are entitled to a .org domain."

You can't have my .org. Go away.

Re:

[bradley13]

" they have been running it as a cash cow for a long time now"

There's nothing wrong with earning money for providing a service. A non-profit organization (ISOC) gets funding by providing a valuable service to other non-profits.

The problem comes when specific individuals get greedy. In this case, trying to sell off .org to a shady investment company. I guarantee that specific (as yet unknown) individuals will get a huge payday if this deal goes through. ISOC as a whole doesn't even want it - look at the prot

Here's another take on this you may not thought of

[Rick Schumann]

So ICANN is also run as a non-profit, right? If .ORG registry becomes wholly owned and operated as for-profit, how close are we to ICANN being bought up by some for-profit corporation, and from there basically the entire internet is compromised even more than it already is?
For instance, how would you feel about Google owning ICANN? Or Zuckerberg/Facebook?
Still somewhat unlikely, it'd likely be blocked, but it's possible.
What we're dealing with is not just the future of the Internet, but the soul of the Internet. If some for-profit company can decide who can and can't have a domain registered then it's totally corrupted.

Re: Here's another take on this you may not though

[joab_son_of_zeruiah]

This deal has stunk from the get-go. There are rules on how sales of assets of nonprofits to for-profits work. Basically the non-profit has to show that the price of the asset is not too low, which would result in violation of the nonprofit tax status and possibly create an unjust enrichment. It is not sufficient to have just a willing buyer / seller agreement. In sales to for-profits this can be impossible unless a market already exists to determine the value of the asset. So the proposed sale may be extremely questionable â" after all the .org registry is a unique thingâ"which is why the AG is involved. And the letter itself is a warning shot over the bow to the ICANN board hinting that there might be personal exposure to criminal breach of fiduciary responsibility claims. I saw this all play out earlier in my career when I was part of a for-profit subsidiary of a not-for-profit health care system. They literally could not sell us because there was no fair market value. Then the internet bubble popped. So they shut it down. Iâ(TM)m wondering how stupid the ICANN board is to have gotten this far. And how corrupt they might be given the ease with which private personal side-deals could be structured as a kickbacks. One would never know without subpoena of financial records. Going through with the deal would expose the ICANN board to that LOL. The moral of the story: donâ(TM)t fuck with non-profits. No problem to sell or even give an asset to another non-profit.

Re:

[Rick Schumann]

Someone needs to mod you up as 'informative'. Thanks for the perspective.

I don't know who tries to get rich here

[gweihir]

but can these honor-less scum please be stopped? The damage they will do is tremendous.

A breath of fresh air.

[MrKaos]

Thank you Attorney General Xavier Becerra!!!

That kind of integrity should be applauded.

comment

[tanu7898]

this is very interesting [thehometutions.in]

Worked out fine for Toys-R-Us

[kwelch007]

why not .ORG too?