Should .Org Domains Be Privately Owned? California May Answer the $1B Question

California Attorney General Xavier Becerra has stepped into the fight over whether a private equity firm should be allowed to purchase control of the registry for all dot-org internet domains in a deal that's worth more than $1 billion.

The Internet Corporation for Assigned Names and Numbers, which oversees what's essentially the address book of the internet from its Playa Vista, California offices, announced Friday that it was notified by Becerra's office last week that the AG wants to analyze the impact of the sale to the nonprofit community. Though you don't need to be a nonprofit to own a dot-org domain, the registry is the online home to many such organizations and media, including well known names like Farm Aid, The Sierra Club, Amnesty International, Girl Scouts of the USA, The Associated Press, ProPublica.

There are multiple dueling narratives on the issue, but the essential facts include the following:

• In November 2019, Ethos Capital announced the deal to acquire the nonprofit Public Interest Registry (PIR), which manages the dot-org domain. The company's officials, including founder and CEO Erik Brooks, say that the firm is devoted to not just making money but also doing public good and helping grow the dot-org registry.
• ICANN still needs to bless the deal and originally had until mid-February to do so. Though as a result of the review, the deadline for a decision has been pushed back to April 20, said ICANN spokesman Brad White, who declined other comment at this time.
• More than 21,000 people, 660 organizations and six members of Congress have written letters to say they oppose the deal, which internet governance experts worry will lead to unsavory efforts to make back the more than $1 billion to please investors at the expense of nonprofits doing good or monetize the data's registry at the expense of the public.
• The Internet Society, a nonprofit that controls and created PIR, has said the deal with Ethos would give it the $1.135-billion endowment necessary to continue other good works it does for the internet and to grow its efforts into the future, without depending solely on the fees PIR gains from dot-org registry users.
• Ethos has made multiple written statements on a website it put up jointly with PIR and The Internet Society, that it will not raise prices of the dot-org registry more than 10% annually on the dot-org registry, even if it technically can under current rules that were lifted in the months preceding the deal's announcement. Right now it costs roughly $10 for an annual dot-org domain renewal fee.

Internet groups like the nonprofit Electronic Frontier Foundation, a digital rights group, have derided Ethos Capital for not detailing its financial backers or more about those involved in its firm. Its staff attorneys say that none of the promises made by the company are binding.

The Internet Society "is selling out the interests of dot-org users," said Mitch Stoltz, EFF senior staff attorney, noting that the nonprofit was given $5 million in 2002 to be a good steward for dot-org and run it in the public interest.

"Now they're treating it like a building they can sell for cash, and they're not giving sufficient thought to what happens to the people who depend on it."

ICANN's headquarters in Playa Vista. upload.wikimedia.org

In a recent interview, Ethos Capital's Chief Purpose Officer, Nora Abusitta-Ouri, said the deal is a very long-term investment by the company and that it intends to do what it can to assure dot-org registry owners. She said that Ethos plans to put assurances in its binding documents, too.

"We're putting our price commitment in our founding documents, we're applying for B Corp. certification, we're setting up a stewardship council that will have a mandate to fulfill the promises we've made around pricing," said Abusitta-Ouri, adding that it will remain around its historic price range. "If I own a dot-org today and this transaction closes, nothing is going to change for me."

ICANN was previously tied to the U.S. government, but went nonprofit independent and the U.S. ceded control in 2016. But because the world of internet governance is so small, many of the individuals who have connections to the deal or would potentially benefit from it going through are also in that same world.

Stoltz of the EFF said the controversy, which has involved protesters outside ICANN's offices last week, "raises a big question about who ICANN is accountable to, if anyone, because it really looks like they are allowing a handful of industry insiders to make buckets of money by monetizing a piece of the internet's governance that had historically been run for the public benefit."

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