<html>
<head>
<meta http-equiv="content-type" content="text/html; charset=UTF-8">
</head>
<body text="#000000" bgcolor="#FFFFFF">
<p><font face="Verdana">In the below I try to assess if Ethos had
been an applying party at the original 2002 process of
re-delegation of .org by ICANN whether it stood any chance of
getting .org... It appears clear that it would not have.. .For
that reason and on that basis ICANN should not clear ISOC's sale
of .org to Ethos... parminder </font><br>
</p>
<div class="moz-forward-container"><br>
<br>
-------- Forwarded Message --------
<table class="moz-email-headers-table" cellspacing="0"
cellpadding="0" border="0">
<tbody>
<tr>
<th valign="BASELINE" nowrap="nowrap" align="RIGHT">Subject:
</th>
<td>[Internet Policy] Would ICANN itself have given .org to
Ethos? Was: on the proposed transfer of PRI</td>
</tr>
<tr>
<th valign="BASELINE" nowrap="nowrap" align="RIGHT">Date: </th>
<td>Mon, 20 Jan 2020 09:56:31 +0530</td>
</tr>
<tr>
<th valign="BASELINE" nowrap="nowrap" align="RIGHT">From: </th>
<td>parminder via InternetPolicy
<a class="moz-txt-link-rfc2396E" href="mailto:internetpolicy@elists.isoc.org"><internetpolicy@elists.isoc.org></a></td>
</tr>
<tr>
<th valign="BASELINE" nowrap="nowrap" align="RIGHT">Reply-To:
</th>
<td>parminder <a class="moz-txt-link-rfc2396E" href="mailto:parminder@itforchange.net"><parminder@itforchange.net></a></td>
</tr>
<tr>
<th valign="BASELINE" nowrap="nowrap" align="RIGHT">To: </th>
<td>parminder via InternetPolicy
<a class="moz-txt-link-rfc2396E" href="mailto:internetpolicy@elists.isoc.org"><internetpolicy@elists.isoc.org></a></td>
</tr>
</tbody>
</table>
<br>
<br>
<meta http-equiv="Content-Type" content="text/html; charset=UTF-8">
<p><tt> Andrew/ All, <br>
</tt></p>
<tt> </tt>
<p><tt>Thanks for your response. No more questions at this stage,
but following is my summary of how the Ethos deal may be
assessed in relation to ICANN </tt><tt>'s original criteria
for delegating .org. </tt><tt><br>
</tt></p>
<p><tt>Let me first state why meeting these original criteria of
ICANN for an .org manager are important. It is a well known
and self-evident legal maxim that 'what cannot be done
directly also cannot be done indirectly'. If Ethos would have
failed to get .org originally delegated from ICANN -- i.e.
Ethos would not have met ICANN's original criteria -- it
cannot obtain .org indirectly through ISOC. ISOC should have
taken care of that, but if it has not, ICANN should. It must
assess Ethos's offer as if Ethos is applying anew directly to
ICANN for being given .org. Meaning that ICANN should
comprehensively assess Ethos's offer on those original
criteria it applied in 2002 (apart from any other relevant
ones), and if it does not meet them cancel the deal. </tt><tt>
</tt></p>
<tt> </tt>
<p><tt>On being asked Andrew replied that ISOC did consider those
criteria. However the following discussion leaves one unsure
what his affirmative response means.</tt></p>
<tt> </tt>
<p><tt>First about the process of consideration of ICANN's
original criteria:</tt></p>
<tt> </tt>
<p><tt>When pressed for more clarity, in responding to both
Richard and me, Andrew said things like; these criteria </tt><tt>were</tt><tt>
considered in an executive session by trustees, and that
Andrew believed that trustees had access to all the needed
documents, and that each trustee made her/his own evaluation
etc... From this I understand that while the matter of
original ICANN criteria did come up in a f2f meeting, it was
all quite informal, and likely no thorough discussion going
over each criteria took place. People were given access to all
the documents and - as I understand -- they were supposed to
point out if they saw any problem. There c</tt><tt>ertainly </tt><tt>has
been no formal elaborate assessment of the deal employing
ICANN's original criteria for delegation of .org. Asking a
group of people their opinion, reservations etc in a f2f
meeting, where they are believed to have access to all
documents and information, does not come close to meeting the
requirements of due diligence in transfer a community asset as
important as .org.<br>
</tt></p>
<p><tt>It is not clear why when ICANN chose to go through such an
elaborate process to delegate .org, ISOC thought it could pass
off .org so easily and summarily, with little evidence of
similar evaluation, other than financial and legal
assessments. I understand ISOC did take on high flying
financial and legal advisers. But financial and legal
assessments seem oriented to protecting ISOC's own interest
and not those of outsiders, of ICANN or the community. If ISOC
had also retained a community advisor -- i.e. if its own
community instincts alone could not be relied upon -- s/he
would have advised to take the latter mentioned community
criteria more seriously. But ISOC treated .org just as an
ordinary business and asset about the sale of which they
basically only needed to look at their own - narrowly
organisational - side of things. <br>
</tt></p>
<tt> </tt>
<p><tt>This is very disappointing, and shows an indecent haste and
eagerness to grab the deal, without, in any seriousness,</tt><tt>
going into</tt><tt> why ISOC was handed over this community
asset, in trust, in the first place. ISOC simply considering
.org as its private asset for it to do whatever it wanted to
do with it is not acceptable. ISOC knew that the deal will
finally have to be cleared by ICANN, and in this regard ICANN
is obviously expected to look closely at its original criteria
for delegating .org. If not as its basic fiduciary duty to
ICANN and community, even just for ensuring the sustainability
of the process that it was getting itself and other actors
into, ISOC needed to thoroughly and formally go into the
original criteria to assess Ethos's offer. <br>
</tt></p>
<p><tt> When ICANN itself went through a very transparent,
multi-step drawn out process to decide on giving .org to ISOC,
why should the latter be summarily and extremely
non-transparently</tt><tt> able to </tt><tt> pass it off to
Ethos? There is a mis-carriage of due process here. <br>
</tt></p>
<p><tt> ICANN should pull</tt><tt> up</tt><tt> ISOC for such
dereliction of a basic fiduciary duty to it and to the
community, and also for, in general, a thoroughly</tt><tt> </tt><tt>inadequate
due process. It should accordingly annul the Ethos deal on
this procedural flaw alone.</tt></p>
<tt> </tt>
<p><tt>Next, let us examine the substance of how the Ethos deal
qualifies or not wrt to ICANN's original criteria:<br>
</tt></p>
<tt> </tt>
<p><tt>We can see three kinds of criteria, technical, community
and general business plan related. They can be</tt><tt><a
moz-do-not-send="true"
href="https://archive.icann.org/en/tlds/org/preliminary-evaluation-report-19aug02.htm">
found in this document</a></tt><tt>. </tt><tt><br>
</tt> </p>
<tt> </tt>
<p><tt>In the below email, Andrew dismisses technical criteria to
be irrelevant because PIR as a whole is being transferred. No
matter that PIR is to change so substantially, and that a
newly formed investment company with no domain industry
experience will be in complete charge. I dont consider it
indirect change of control, it is quite direct, just legally
wrapped well which kind of deception one should not give in
to. There have been concerns on this list about possible
corners-cutting on technical elements by Ethos given the need
to cut costs and little public/ community accountability.
Therefore assessment and guarantees about continued technical
soundness may still be required. But I will concede that on
technical operations level, the criteria as presented and
applied in 2002 would have been met by Ethos's offer, or of
anyone else buying the whole PIR, in that PIR-Afilias continue
to manage operations.</tt></p>
<tt> </tt>
<p><tt>This brings the focus to other kinds of criteria, as being
key to determining whether Ethos deal can be considered
acceptable or not.</tt></p>
<p><tt>Of these other criteria, the community criteria 4, 5 and 6
are most important... As argued earlier, these community
criteria primarily contributed to ISOC's original selection,
most so criterion 6 of community support. This will be evident
from reading the original assessment documents, which like
Andrew I too encourage people to go through. They are almost
all linked from </tt><tt><a moz-do-not-send="true"
href="https://archive.icann.org/en/tlds/org/preliminary-evaluation-report-19aug02.htm">this
document</a></tt><tt>. </tt><tt><br>
</tt> </p>
<tt> </tt>
<p><tt>Andrew earlier dismissed criteria 4 on "differentiation of
.org tld from commercial tlds " as also irrelevant because
Ethos will retain PIR and follow the same policies. To quote
Andrew's email of 18th " Ethos is taking over PIR and that
they intend to continue PIR's policies. To the extent that PIR
has differentiated .org, then, this criterion is automatically
satisfied." I do not find such rushing to automatic or
'self-evident' qualification at all satisfactory because Ethos
</tt><tt>now </tt><tt>would have a controlling say and will
fully determine what PIR does - that is the whole point and
meaning of change of ownership. After paying up more than a
billion dollars, Ethos will need to earn a lot of money and
quickly. It would likely do whatever it takes to earn such
amounts. It therefore needs to be affirmed and established
anew whether criterion 4 is fulfilled. But it is evident from
Andrew's response that ISOC does not think so and more or less
did nothing to probe on this issue, taking it for granted that
PIR's exiting policies will be continued. Indeed we hear that
a big positive of the Ethos deal is that Ethos will be able to
invest in PIR to provide new and varied services. But we know
nothing whether these new services, and new orientation, would
go towards better differentiation of .org from commercial tlds
or less differentiation. </tt><tt>It may entirely depend on
what could be more profitable, and there are good arguments
both ways. And do remember, Ethos has little community
connection, much less accountability, to check its activities
-- a 'very big change' from the </tt><tt>situation of </tt><tt>ISOC
owning org. It is really unfortunate that ISOC itself does not
think so. <br>
</tt> </p>
<tt> </tt>
<p><tt>On criterion 5, see my email before this one to Joe, all
indications are that nothing in Ethos's original offer at the
time it got accepted by ISOC contained anything to satisfy
this criterion. There was nothing to meet the requirement of '</tt><tt>giving
.org registrants a direct say in the management of the .org
registry to teaming with non-commercial entities with broad
roots in the non-commercial community' (</tt><tt><tt><a
href="https://archive.icann.org/en/tlds/org/ncdnhc-evaluation-report-09sep02.pdf"
moz-do-not-send="true">NCUC report</a>)</tt>. After the
public outcry against the deal Ethos seem to be shifting the
role of the stewardship council somewhat, but I dont see it
still get any kind of satisfactory score on criterion 5. In
any case, it no way absolves ISOC from not having applied
criterion 5 when they closed the deal. </tt> </p>
<tt> </tt>
<p><tt>As for criterion 6, the most important one in my
understanding</tt><tt>, the Ethos deal draws a complete blank.
Strangely, this criterion gets dismissed out of hand by Andrew
as having always been 'problematic'. It is quite amusing for
ISOC CEO to say so when this criterion played a big part in
ISOC getting .org in the first place. Andrew says that this
criterion is problematic because it is impermissible or
difficult to do a survey of registrants. But how this
criterion was employed in the original evaluation (see </tt><tt><a
moz-do-not-send="true"
href="https://archive.icann.org/en/tlds/org/ncdnhc-evaluation-report-09sep02.pdf">NCUC
report</a></tt><tt>) is very precise and clear and did not
involve anything like undertaking a survey. It involved
letters of support and comments on a public board. It is a bit
self serving to declare all this as problematic when eager to
see a deal through... Well of course what was really
problematic was that when a deal is secret it is simply not
possible to obtain letters of support or get comments on a
public board. Anyway, criterion 6 was also clearly not
considered. Even more importantly, it is not at all met. </tt><tt><br>
</tt> </p>
<tt> </tt>
<p><tt>Meanwhile, it is quite easy now, post the deal, to make an
assessment under criterion 6 -- there is solid widespread
opposition to the deal from non commercial community and
almost nil support. So the deal clearly falls foul of the most
important criterion 6, even as judged post facto. ISOC did not
have access to this information at the time of the deal
(although in my opinion the deal was insisted by Ethos to be
kept secret precisely in anticipation of such an opposition),
but ICANN does have this information, which should make its
job of disallowing the deal quite straight-forward. With such
level of demonstrated community opposition, and absence of
community support, no party could have got .org delegated to
it during the original process in 2002. So it should be now.
ICANN can and should refuse delegation of .org to Ethos on
this ground alone. Unless of course anyone can prove that
circumstances have so changed as to make this criterion
irrelevant today. I myself can think of no such possible
reason, but am open to hear arguments to the contrary.</tt><tt><br>
</tt> </p>
<tt> </tt>
<p><tt>That leaves us with financial and business plan criteria,
about which Richard has been arguing so ably; with Ethos
having to make a lot of money very quickly, meaning get a
pretty high RoI, it is bothersome that we know almost nothing
about how it is planning to do so... This goes very badly vis
a vis the very important criterion 11 which is about realistic
plans and sound analysis. </tt><tt>I get this feeling - even
from the discussions here -- that apart from assessing that
Ethos will quickly pay up the promised sale proceedings, ISOC
too does not know much about Ethos's future plans in any good
detail, or about the analysis these are based on. ISOC seems
to be shrugging off these matters as not greatly of their
concern, it being upto Ethos to run their business well and
successfully (if this is untrue I did not get much evidence of
that in many long discussions here but I can be corrected).
But this was not so in the original delegation by ICANN, where
plans for the future being realistic and the corresponding
analysis being sound was an important criteria for delegation.
(But then a billion dollar were not being dangled in front of
the deciding party at that time!)<br>
</tt> </p>
<tt> </tt>
<p><tt>So, in sum, firstly ISOC has failed to undertaken the
appropriate due diligence to subject Ethos's offer adequately
to the original criteria under which it itself got, in trust,
the community asset of .org. This includes transparency about
the process. Further, if one examines these original criteria,
it is evident that the Ethos deal fails badly to meet them. It
is clear that had Ethos applied for getting .org directly from
ICANN it would not have got it. </tt><tt><br>
</tt> </p>
<tt> </tt>
<p><tt>In the circumstances, ICANN should first ask ISOC for its
basis of selling .org to Ethos, and for providing the
evaluation of the sale inter alia on the 11 criteria that
ICANN itself had originally applied in 2002 to delegate .org.
This should be provided in a formal manner, with each
criterion and its application to Ethos fully argued. Referring
to evaluation reports of the original delegation would be
useful in this regard. ICANN should then make its own
evaluation of the Ethos deal using these original criteria and
others that it may consider relevant. <br>
</tt></p>
<p><tt>Consequently, as we are sure as per the above that such an
evaluation would not be positive, ICANN should annul the deal.</tt></p>
<p><tt>In assessing the Ethos deal, ICANN has to ask itself this
simple question: Would ICANN itself have given .org to Ethos?
It has a detailed old process to refresh its mind and help
make this judgement. If it would not have, ISOC too cant pass
on .org to Ethos. That is why ICANN comes in, and it must stop
the deal. <br>
</tt></p>
<tt> </tt>
<p><tt>This is the best way out. That way ISOC would bear no
contractual liability for pulling back from the deal. </tt><tt><br>
</tt> </p>
<tt> </tt>
<p><tt>parminder</tt></p>
<p><br>
</p>
<div class="moz-cite-prefix">On 18/01/20 10:50 PM, Andrew Sullivan
via InternetPolicy wrote:<br>
</div>
<blockquote type="cite"
cite="mid:20200118172004.t27d4qpvyp4lqt4x@outlook.office365.com">
<pre class="moz-quote-pre" wrap="">Hi,
On Sat, Jan 18, 2020 at 07:50:27PM +0530, parminder via InternetPolicy wrote:
</pre>
<blockquote type="cite">
<pre class="moz-quote-pre" wrap="">I very much saw those documents, as well as other evaluations reports,
to conclude that community criteria, and especially community support,
was in a good part responsible for ISOC's selection.
</pre>
</blockquote>
<pre class="moz-quote-pre" wrap="">Ok. The reports are available for anyone to peruse and I encourage
those interested in this bit of history to do so. Those who do may
find your reference to the NCUC puzzling, but it's easily explained:
NCUC is a successor organization. The one that existed at the time
was called NDNHC.
</pre>
<blockquote type="cite">
<pre class="moz-quote-pre" wrap="">It is entirely possible that I may have missed it in the many
discussions and documents, but does Ethos quality for this primary
technical criteria either -- of having '*actually **/operated/** a TLD
of significant scale for some period of time, not just shown the
potential for doing so...' ?*
</pre>
</blockquote>
<pre class="moz-quote-pre" wrap="">This question again shows the trouble with attempting to use the 2002
criteria in a straight way, since the conditions are different. In
2002, what was being planned was a new registry operator. Verisign,
who operated the registry before, was giving it up, and the new
operator would take over the policy and operational responsibility for
everything to do with the registry. That is not what is happening
here. PIR is retaining the registry agreement, and the responsibility
for operating the registry. They are also leaving alone the agreement
they have with Afilias for back end services. All of that remains
exactly the same. If it were changing, the ICANN process would be
different (quite correctly, because it would have operational
implications for the registry). That path is the "direct change of
control" one.
This path is _indirect_ change of control, when the entity that
controls the entity with the agreement with ICANN changes. Actually
having operated a TLD is not relevant for that case. And indeed, of
course, if it had been relevant in 2002 then ISOC's bid would have
failed utterly, because ISOC had never operated a registry. That
issue was overcome because of the involvement of Afilias; but if the
objection was satisfied that way last time, it should be satisfied the
same way this time. Nothing is changing about the PIR-Afilias
agreement as a result of this transaction, as PIR and Ethos have both
said repeatedly.
Best regards,
A
</pre>
</blockquote>
</div>
</body>
</html>