[governance] New developments regarding .ORG

[Ayden Férdeline]

Dear all,

For information purposes, here are some of the latest developments regarding the proposed sale of .ORG:

Letter from National Association of State Charities Officials to ICANN

More and more public officials are expressing concern about the effects on .ORG registrants of the proposed sale of the Public Interest Registry to Ethos Capital. The National Association of State Charities Officials has sent a letter to ICANN expressing their significant concerns:

https://www.nasconet.org/wp-content/uploads/2020/01/NASCO-ltr-011720.pdf

Ethos Capital seeking to cut spend on technical infrastructure by 99%

[This interview](https://www.berkeleyside.com/2020/01/16/a-private-equity-firm-wants-to-buy-org-for-1-billion-a-berkeley-based-cooperative-says-not-so-fast?fbclid=IwAR27YNOQPMVyzX4zlu3FD_WjK9SqnbwhKIQOHZfAGEv9KHrK9A871UzUJIw) with the executive director of the Packet Clearing House states, "[Ethos Capital] said they’re entertaining bids with an operating cost of $330,000. The current operating cost is just over $30 million, so that would be a 99% cut in spending. You don’t get 15 years of uninterrupted service for $330,000 a year." We also learn that, "Ethos has already bought five companies to monetize the private information they’d be harvesting if they got .org."

Washington Post op-ed from founding board chair of ICANN

Internet pioneer and founding board chair of ICANN, Esther Dyson, has penned this op-ed in the Washington Post in which she "call[s] on my successors at ICANN to honor the principles upon which the Internet and dot-org were founded and to commit to handling this matter in the open. This proposed transaction is murky, but nothing could be clearer than this principle: The future of a public-interest service — run by and serving nonprofits — is at stake."

https://www.washingtonpost.com/opinions/dont-give-your-dot-org-domain-away-to-a-private-company/2020/01/17/c858d250-3950-11ea-bb7b-265f4554af6d_story.html

Protest this Friday in Los Angeles

A protest is being planned outside ICANN's Los Angeles headquarters for this Friday, timed to coincidence with a crucial ICANN board meeting.

https://savedotorg.org/index.php/savedotorg-protest-at-icann/

Another ICANN insider involved in the sale

The Register reports that "another former ICANN executive – its former head of compliance – is also involved in the deal".

https://www.theregister.co.uk/2020/01/14/icann_org_redacted/

Six U.S. lawmakers send additional letter asking ICANN to reject the sale

Presidential candidate Elizabeth Warren, Rony Wyden, Richard Blumenthal, Edward Markey, Anna Eshoo, and Mark Pocan have sent a joint letter to ICANN outlining concerns. The entire letter is worth reading, but in particular they note, "private equity buyouts in a range of industries have been shown to result in higher costs and worse outcomes for consumers and other stakeholders….the private equity takeover will saddle PIR with debt and give an unproven private equity firm substantial authority and virtually unlimited power to raise prices, reduce or modify services, monetize its power over the top-level domain, and fail to run the domain in a manner consistent with the public interest."

... "Moreover, PIR's new expenses after its acquisitions will not be limited to debt service. PIR will transition from a non-profit entity to an LLC, [20] requiring its members to pay taxes on its income. Ethos Capital and its investors will also presumably demand that PIR provide returns on its investment through dividends, fees, and other financial maneuvers that will have the effect of taking money out of PIR. While little data is available publicly about the returns promised to investors in most PE funds, including this one, the performance of funds launched by publicly traded PE firms is instructive of investors' expectation. According to Bain & Company, annual returns from "[p ]ublicly traded PE firms like Apollo, KKR[,] and Blackstone" averaged "in the mid to high single digits over the past five years." [21] To provide similar returns on its initial investment, we estimate that PIR would have to generate about an additional $50-$70 million each year on top of its debt service. [22]"

https://www.warren.senate.gov/imo/media/doc/2020.01.16%20Letter%20to%20ICANN%20about%20sale%20of%20.ORG%20registry.pdf

Kind regards,

Ayden Férdeline
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