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Ethos promises to keep .org for many many many many years

Kevin Murphy, December 6, 2019, 21:29:52 (UTC), Domain Services

Ethos Capital doesn’t plan to flip .org manager Public Interest Registry any time soon, according to its CEO.

Erik Brooks said that private equity firm Ethos, which intends to buy PIR from the Internet Society for over a billion dollars, plans to keep hold of the company for “many, many, many, many years”.

He was talking last night during a public conference call organized by NTEN, which also included the CEOs of ISOC and PIR, as well as critics from the Electronic Frontier Foundation, the the National Council of Nonprofits and the Irish chapter of ISOC.

The call was set up because many believe .org’s transition back into for-profit hands, coupled with its recently gained ability to raise prices arbitrarily, means .org’s non-profit registrants are in for a hard time as Ethos profit-takes.

While Brooks and chief purpose officer Nora Abusitta made all the right noises to settle such concerns, promising to not unreasonably raise prices and to stick with PIR’s commitment to non-profits, some participants remained skeptical.

Brooks said that his vision for Ethos, which he founded earlier this year, is “fundamentally broader and more expansive than traditional investing” where “success is defined as success for all participants, success for customers, employees, vendors, the community impacted by the company”.

PIR CEO Jon Nevett said he was initially concerned about the deal — which was negotiated between ISOC and Ethos without PIR’s participation — he is now “convinced that they’re here to do the right thing”.

He said that rather than funneling all of PIR’s spare .org reg cash to ISOC as happens currently, it will now be able to invest some of it in improving .org instead.

Brooks said he understand the community concerns about price increase.

“We are absolutely committed to staying within the spirit of how PIR has operated with the price system they have operated with before,” he said. That means 10% a year on average, as Ethos has stated before.

He added that “working on some mechanisms and some ideas that will give registrants more assurance” that this is just not PR spin, and that these will be communicated publicly over the coming weeks.

The fact that ICANN lifted the previous 10% contractual price cap just a few months before the deal was sealed did not factor into Ethos’ thinking, he said.

While what Ethos is describing is all well and good, there’s no telling what a future owner of PIR would do, should Ethos sell it or float it on the public markets.

That looked like a possibility, especially given that some say that Ethos is under-paying by a considerable margin for the registry.

But Brooks, asked what Ethos’ exit runway for PIR looked like, said that the company was committed to owning the registry “for an extraordinarily long period of time… dramatically outside the normal window of somebody owning a business… many, many, many, many years”.

Ethos’ own backers — which apparently include investment vehicles linked to Mitt Romney and the late Ross Perot — are on board with this long-term plan, he said.

So, assuming Brooks is a man of his word, .org registrants only have to look forward to price increases of no more than 10% a year for some time to come, which is kinda the situation they were in at the start of the year.

But not everyone is as trusting/gullible as me.

The EFF’s Mitch Stoltz, who was on the call, later published a blog post that seemed to shift gears somewhat away from pricing concerns towards the potential for future censorship of .org domains.

“Ethos Capital has a financial incentive to engage in censorship—and, of course, in price increases,” he wrote.

He alluded to that PIR had briefly toyed with the idea of a “UDRP for copyright” a few years ago, but had backed down under community pressure, something that he doesn’t believe Ethos would necessarily do.

Asked about the censorship issue by Stotlz during the call, Brooks said he had not given the issue a great deal of consideration but that he expected PIR’s practices on this kind of thing to continue on as they are today.

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Comments (6)

  1. Brad Mugford says:

    “Trust us” is not going to work, especially when it comes to a for-profit private equity firm.

    That is not a protection mechanism for the millions of current registrants.

    I don’t trust companies with de facto monopolies to do the right thing unless they are compelled in some way. Their allegiance will always be to shareholders.

    This deal is clearly not in the interest of the multi-stakeholder model that ICANN is supposed to support. All registrants are getting is the shaft.

    Technology is driving operating costs lower but registration prices higher. That makes no sense. It only works with a monopoly.

    ISOC already threw all the registrants under the bus. This deal reflects very poorly on their organization.

    ICANN should reject this deal and the contract should be put out for public bidding in the interest of the public.

    Brad

  2. Jay says:

    It’s bullcrap. NONE of these registries are doing ANYTHING helpful or right.

    .US operators outside of the US? What do you consider this: https://discount99.us/imprint

    Global Shopping Collective GmbH

    Marktplatz 7/8
    15806 Zossen
    Germany
    http://globalshoppingcollective.com

    FAILURES.

  3. Snoopy says:

    These guys will flip it at the first decent offer. I do wonder how many times this is going to get passed around and where it could end up as private’s equity aren’t likely to be long term holders.

  4. So much BS in a single call is unprecedented

  5. Rob says:

    Pure Genius.

    If I was Verisign, I would offer Ethos $2B the day after they acquire it and get it back.

    If I was Ethos, I would raise the price to $ 19.95 immediately. All this speculation about 7% or 10% is crap.

    I take my hat off to the people at Ethos.

    Hell of a deal.

  6. Richard Funden says:

    100 % in the first year and then nothing for 10 years also is 10% per year on average…

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