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As ICANN meets to decide .org’s fate, California AG says billion-dollar deal must be rejected

Kevin Murphy, April 16, 2020, 19:47:52 (UTC), Domain Policy

California Attorney General Xavier Becerra has urged ICANN to deny approval of Ethos Capital’s $1.13 billion acquisition of .org manager Public Interest Registry.

The call came in a letter (pdf) dated yesterday, just a day before ICANN’s board of directors was scheduled to meet to discuss the deal.

Becerra, who started looking into the deal in late January, wrote, right out of the gate:

I urge ICANN to reject the transfer of control over the .ORG registry to Ethos Capital. The proposed transfer raises serious concerns that cannot be overlooked.

Chief among his concerns is the fact that ICANN originally granted PIR the right to run .org largely because it was a non-profit with a committment to serve non-profits. He wrote:

If, as proposed, Ethos Capital is permitted to purchase PIR, it will no longer have the unique characteristics that ICANN valued at the time that it selected PIR as the nonprofit to be responsible for the .ORG registry. In effect, what is at stake is the transfer of the world’s second largest registry to a for-profit private equity firm that, by design, exists to profit from millions of nonprofit and non-commercial organizations

He’s also bothered about the lack of transparency about who Ethos is and what its plans are. The proposed new owners of PIR are hidden behind a complex hierarchy of dummy LLCs, and Ethos has so far refused to name its money men or to specify what additional services it might offer to boost its revenue.

Becerra also doesn’t buy the business plan, which would see PIR required to pay off a $300 million loan and, as a newly converted for-profit entity, start paying taxes.

He’s particularly scathing about the fact that ICANN approved the removal of PIR’s price caps last year despite receiving over 3,000 public comments opposing the changes and only half a dozen in favor.

“There is mounting concern that ICANN is no longer responsive to the needs of its stakeholders,” he writes.

Despite saying he “will take whatever action necessary to protect Californians and the nonprofit community”, Becerra does not specify what remedies are available to him.

But it looks like ICANN faces the risk of legal action no matter which way its board of directors votes (or voted) today.

Its current deadline to make a decision is April 20.

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Comments (4)

  1. A lot of it is about a loan. I wrote so during the very earliest days on one of these blogs.

    Somone’s back is against the wall here.

    It’s ALWAYS prudent to know the financials of those involved in large transactions. ICANN should NOT be above the rule of law, which exists (in theory) to protect us from these ‘passing the buck’ type deals…straddling someone with debt, based on lies/false is THE WAY you STEAL their stuff.

    The problem lays in that *IF* said debt was taken on with ill regard, then perhaps both parties are dirty – NO ONE RAISES their hand…the corruption consumes…the snakes’ nest together. That’s why we see ‘PIR’ “playing a role in the “new business” – they’re all dirty! …Yes, there is NO good outcome other than a complete restructure of ALL involved in this deal.

    There’s more to it, basically, this has been planned out well before we knew. The details are obfuscated, so *people* can’t investigate…Just as WHOIS block is being used to hide dubious deeds.

    ICANN EMBRACES this corruption, as long as they profit all the way down the line.

    Debt IS the tool of enslavement.

    While on the topic of debt…it’s bad now more than ever. GVT/Bankers going to straddle everyone with debt (USD terms) as being a ‘savior’. This economy is shot. There is no recovery, fiat is dead. They know this. Now they ‘save you’ with ‘bailout loans’…which is going to bite you in the ass!

    This debt is written on terms USD – ONLY IN NAME. It’s only in name! Imagine, USD can transform into ANYTHING. What if, to ‘save themselves’, USD becomes backed by some quasi-gold-standard, that is a partial backing, for starters.

    If you can’t understand SOUND money, you aren’t following…but here’s the outcome:

    The debt wrote in USD terms must be repaid. The problem is, with a new gold-backing – some ACCOUNTABILITY (inevitable) will be instilled. Suddenly, while banker vaults are packed with USD, USD now has SOME connection to gold to create REAL VALUE. Yes, the USD will DRY UP instantly, soon, after everyone is straddled with these loans.

    Now if you can imagine, the USD won’t be a FIAT (in the future, as I explained), it’s really gold…it only retains the name USD – in which your loans are still to be repaid in.

    During this transition, you will see a period of ‘stagflation’ (to STEM the inflation of unlimited printing / freely giving!). The point though, I am saying, wages will fall in REAL terms as this new system is rolled out! You will NEVER *earn* as much gold-backed USD when compared to the relativity of past…at least not at a 9-5 job.

    Now, you are straddled with ‘old debt’ taken then in terms of USD. Said USD becomes transformed as a proxy for gold (gold standard)! This ‘new’ USD (same bills people) IS A LOT HARDER TO *EARN*. You will be ENSLAVED by these loans! They are striking now!

    Now bankers stole the treasury gold and enslaved you all to work for gold dust…and lord have mercy if you have *any* debt.

  2. There is now a new deadline: May 4.

    This is also a very important point:
    “My office is also concerned that the .ORG registry agreement with ICANN contains a presumption in favor of renewing the agreement following its expiration.  This automatic renewal provision leaves the nonprofit community that uses the .ORG registry with no protection.  While the automatic renewal provision made some sense when the .ORG registry was operated by PIR and ISOC that had solid track records, it makes no sense to extend this provision to operators that have no experience operating a Registry.”

  3. John Berryhill says:

    Once again, it is time to shift gears from….

    “If ICANN doesn’t do (insert demand here), then government authorities will start making uncomfortable demands.”


    “If ICANN simply bends to cater to the parochial interests of government authorities, then it will lose the value of balanced consensus reached in the multi-stakeholder model.”

    A neck brace can help ease those sudden painful sensations whenever the gears are shifted.

    • John says:

      But the key issue is that there is no “balanced consensus” in the ICANN multi-stakeholder model anymore. ICANN is no longer performing its function and acting in the public interest.

      It is obvious to everyone that ICANN has been entirely captured by the registries – and only makes decisions that financially benefit those registries (Verisign and PIR.) ICANN is no longer a multi-stakeholder model and making decisions for the public interest.

      ICANN ignores all other stakeholders……

      ICANN board and staff decided to ignore 3,000 comments in opposition (almost 100% unanimous opposition) to the removal of all pricing caps in .org — and removed all pricing caps in .Org anyway. This is not “balanced consensus”.

      ICANN board and staff decided to ignore 9,000 comments against handing Verisign a 31% price hike over the next 4 years (despite the fact that ICANN had Verisign on the hook to maintain prices fixed at $7.85 through 2024.) Again, there was almost 100% opposition – but ICANN did not take into consideration community feedback. In ICANN’s own words:

      “”“As anticipated, the proposed increase to the maximum wholesale price for .COM registry services generated significant community attention, and comments related to this aspect of the proposed agreement make up 95 percent of the 9,043 comments received.”””

      However, ICANN instead, decided to use all of Verisign’s talking points to justify its actions. This is not “balanced consensus.” This is 100% capture by Verisign.

      There was absolutely no justification for modifying the Verisign agreement more than 4 years early!

      ICANN board and staff chose to ignore the unanimous concern that Verisign’s $20 million payment was nothing more than quid pro quo – in exchange for billions in extra monopoly rents. This is not “balanced consensus.”

      As Kieren McCarthy, a prior ICANN employee, recently said about ICANN:
      “””Not only did the organization use its unique position to extract $20m from Verisign in return for renewing the contract, it also effectively ignored its own public comment process and laid bare its determined ignorance of the multi-billion-dollar market that it oversees.”””

      With regards to 7% price hikes for .com domains – how did 7% ever originate? This was a ICANN staff and board decision – not the multi-stakeholders. ICANN staff and board decided to give Verisign the ability to raise prices by 7% as a result of strong-arm litigation in 2006 –– but the community and multi-stakeholders did not decide on this. This was not “balanced consensus.”

      ICANN staff has decided to continue regulating .Net prices – with 10% annual escalating prices. But the multi-stakeholders never agreed on this.

      ICANN staff decided to charge Verisign an extra $0.75 for each .Net registration – the community did not decide this. This “special” extra fee was entirely decided by ICANN staff and board members. Not the “balanced consensus.”

      ICANN staff decided that the new base gTLD agreement should apply to legacy TLD’s – but the community and multi-stakeholders did not decide this. In fact, all stakeholders were under the assumption that the gTLD agreement was designed and developed only for the new gTLD’s – and not legacy extensions, such as .com and .org. But ICANN rejected this feedback – and is plowing ahead anyway. Applying the new gTLD agreement to legacy extensions is entirely ICANN’s doing – and the community has not had any chance to weigh in on this significant and fundamental change.

      Bottom line, ICANN is not fulfilling is role anymore. ICANN is not behaving for the public benefit.

      As a result, the California AG is forced to look into ICANN actions. Had ICANN been doing its job all along – and making decisions for the public benefit – most notably not removing all pricing caps by a monopoly operator and NOT amending the .com Registry Agreement more than 4 years early – so another monopoly, VeriSign can increase its prices on a captive base of users – we would not be in this mess.

      ICANN is not, and never has been exempted from antitrust laws.
      “Applicable antitrust law will provide accountability to and
      protection for the international Internet community.”

      “ICANN does not have antitrust immunity. U.S. competition laws will continue to apply to ICANN, as they do today.”

      Because ICANN is failing to adhere to its competition mandate – this is a ripe opportunity for an investigation.

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