April 30, 2020; Electronic Frontier Foundation
That “special meeting” of the ICANN board turned out to be as important as we predicted yesterday when it comes to the prospective sale of the .ORG top-level internet domain to private equity firm Ethos Capital. Last night, as reported by the Electronic Frontier Foundation (EFF), the Internet Corporation for Assigned Names and Numbers officially withheld its consent, preventing the sale from going forward. Here’s ICANN’s reasons why:
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:
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- 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.
One of the key reasons cited by the ICANN board was the letter sent by California Attorney General Xavier Becerra, who found “serious concerns” about transparency, disclosure, and care for the nonprofit and “non-commercial” community who use the .org top-level domain. ICANN also thanked “the global community and stakeholders for their engagement,” among whom must be counted internet advocacy organizations and thousands of invested netizens—maybe even you.—Jason Schneiderman