Delay .org deal because of… coronavirus? Gimme a break

Opponents of Public Interest Registry’s proposed acquisition by Ethos Capital are now claiming that ICANN should delay approval of the deal due to coronavirus.
A statement, released yesterday by digital rights group Access Now with the apparent approval of several other like-minded groups, outlines a few reasons why coronavirus means ICANN should reject, or at least delay its consideration of, the deal.
ICANN is currently working towards a March 20 deadline to deliver its verdict.
Peter Micek, general counsel for Access Now, said in the statement:

Far from routine, this transfer would further imperil crucial channels of trusted information in a precarious time. From Médecins Sans Frontières to Wikipedia to many of the world’s hospitals, organizations that disseminate accurate health information and connect affected communities with public resources depend on the .ORG domain. Now is not the time to shift the ground beneath their online activities.

Could a $0.97 increase in the cost of wikipedia.org this year see Wikipedia’s hive mind crumble and turn into the digital equivalent of Jenny McCarthy’s brain? Will it prompt MSF volunteers to retreat, screaming, from the front lines? I don’t think so.
The statement goes on to suggest that China would be able to use its substantial financial and political clout to lean on Ethos’ secretive backers to something something something coronavirus. Kenneth Roth, executive director of Human Rights Watch said:

The Chinese government routinely uses economic pressure to censor critics or inconvenient information, such as about its disastrous early cover-up of the coronavirus outbreak. Investors in the private equity firm that wants to buy the .ORG domain inevitably will have economic interests that Beijing could threaten.

While there may well be a nugget of truth in there, I fail to see how it applies to the current pandemic. Is the argument that China will pressure Ethos’ billionaire money men to close down domains belonging to organizations disseminating accurate Covid-19 information? It seems a stretch.
China already has substantial powers to shut down domains within its own borders, and requires registries operating in the country to comply with Draconian censorship rules. I’m not aware of any cases of these existing powers being exercised against domains globally.
A third argument is that ICANN is using coronavirus as a convenient smokescreen to quietly approve the acquisition while everyone else is busy ram-raiding corner stores for toilet paper.
Daniel Eriksson, head of technology at Transparency International, said in the statement:

If this transfer goes ahead during the current crisis as planned, we’ll look back on it as an example of vested interests taking advantage of the extraordinary situation created by the COVID-19 pandemic to further their own concerns at the expense of the broader good of society. We need to be vigilant against any such actions, and this is precisely the role of many civil society organizations that have a watchdog function. We need maximum transparency and integrity around the sale of .ORG, and that is simply not possible if the sale is rushed through at a moment when peoples’ attention is elsewhere.

Again, this seems like a stretch. The announcement of the acquisition predates the discovery of Covid-19 by weeks, and it has been subject to intense scrutiny, engagement, comment and unprecedented — albeit imperfect — levels of transparency ever since. This is an acquisition being negotiated to a large extent in the public square.
I’ll be generous and suggest a fourth explanation: this is probably just a poor-taste (but, let’s face it, successful) attempt to grab headlines by linking the #SaveDotOrg campaign, however thinly, to the pandemic currently occupying the world’s collective conscious.
There are plenty of good arguments that could be — and are being — made in favor of further delay and scrutiny of the deal, but I don’t think coronavirus is one of them.

ICANN chair: “all options open” on .org deal

ICANN has not yet decided to approve the acquisition of Public Interest Registry by Ethos Capital, but has not ruled out rejecting the deal either.
That’s according to chair Maarten Botterman, speaking to his Governmental Advisory Committee this evening.
At the online-only ICANN 67 meeting, he was asked by GAC chair Manal Ismail whether ICANN is considering withholding its consent for the $1.13 billion deal, which would see the .org registry return to for-profit hands for the first time in 18 years.
“At this moment all options remain open. We are open-minded to taking all input into account before it is time for us to decide,” Botterman replied.
“ICANN will consider the request based upon the totality of the information received,” he also said.
ICANN has the ability, under its registry agreement with PIR, to reject a change of control such as an acquisition, if it believes it’s not in the public interest.
Critics of the deal believe it would allow private equity firm Ethos and its anonymous backers to price-gouge non-profits such as charities, which need the money more.
But Ethos has offered to cap price increases at 10% per year on average for the next seven years, reimposing a price cap that PIR negotiated its way out of last year.

Ethos volunteers for .org pricing handcuffs

Ethos Capital has volunteered to have price caps written back into Public Interest Registry’s .org contract, should ICANN approve its $1.1 billion proposed acquisition.
The private equity firm said Friday that it has offered to agree to a new, enforceable Public Interest Commitment that bakes its right to increase prices into the contract under a strict formula that goes like this:

Applicable Maximum Fee = $9.93 x (1.10n)

The $9.93 is the current wholesale price of a annual .org registration. The “n” refers to the number of full years the current .org registry agreement has been in play, starting June 30, 2019.
In other words, it’s a 10%-per-year increase on average, but PIR could skip a year here and there and be eligible for a bigger price increase the following year.
For example, PIR could up the fee by 10% or $0.99 to $10.92 this coming June if it wanted, but if it decided to wait a year (perhaps for public relations reasons) if could increase the price to $12.13 in June 2021, an increase of $2.20 or roughly 22%.
It could wait five years before the first price increase, and up it from $9.93 to $16.53, a 66% increase, in year six.
While price increases are of course unpopular and will remain so, the formula does answer the criticism posed on DI and elsewhere that Ethos’ previous public statements on pricing would allow PIR to front-load its fee hikes, potentially almost doubling the price in year one.
But the caps have a built-in expiry date. They only run for eight years. So by the middle of 2027, when PIR could already be charging $18.73, the registry would be free to raise prices by however much it pleases.
It’s a better deal for registrants than what they’d been facing before, which was a vague commitment to stick to PIR’s old habit of not raising prices by more than 10% a year, but it’s not perfect and it won’t sate those who are opposed to increased fees in principle.
On the upside, a PIC is arguably an even more powerful way to keep PIR in line after the acquisition. Whereas other parts of the contract are only enforceable by ICANN, a Public Interest Commitment could theoretically be enforced via the PIC Dispute Resolution Procedure by any .org registrant with the resources to lawyer up. Losing a PICDRP triggers ICANN Compliance into action, which could mean PIR losing its contract.
The PIC also addresses the concern, which always struck me as a bit of a red herring, that .org could become a more censorial regime under for-profit ownership.
Ethos says it will create a new seven-person .ORG Stewardship Council, made up of field experts in human rights, non-profits and such, which will have the right to advise PIR on proposed changes to PIR policy related to censorship and the use of private user/registrant data.
The Council would be made up initially of five members hand-picked by PIR. Another two, and all subsequent appointments, would be jointly nominated and approved by PIR and the Council. They’d serve terms of three years.
The proposed PIC, the proposed Council charter and Ethos’ announcement can all be found here.
Correlation does not necessarily equal causation, but it’s worth noting that the proposal comes after ICANN had started playing hard-ball with PIR, Ethos and the Internet Society (PIR’s current owner).
In fact, I was just putting the finishing touches to an opinion piece entitled “I’m beginning to think ICANN might block the .org deal” when the Ethos statement dropped.
In that now-spiked piece, I referred to two letters ICANN recently sent to PIR/ISOC and their lawyers, which bluntly asserted ICANN’s right to reject the acquisition for basically any reason, and speculated that the deal may not be a fait accompli after all.
In the first (pdf), Jones Day lawyer Jeffrey LeVee tells his counterpart at PIR’s law firm in no uncertain terms that ICANN is free to reject the change of control on grounds such as the “public interest” and the interests of the “.org community”.
Proskauer lawyer Lauren Boglivi had told ICANN (pdf) that its powers under the .org contract were limited to approve or reject the acquisition based only on technical concerns such as security, stability and reliability. LeVee wrote:

This is wrong. The parties’ contracts authorize ICANN to evaluate the reasonableness of the proposed change of control under the totality of circumstances, including the impact on the public interest and the interest of the .ORG community.

Now, the cynic in me saw nothing but a couple of posturing lawyers trying to rack up billable hours, but part of me wondered why ICANN would go to the trouble of defending its powers to reject the deal if it did not think there was a possibility of actually doing so.
The second letter (pdf) was sent by ICANN’s new chair, Maarten Bottermann, to his ISOC counterpart Gonzalo Camarillo.
The letter demonstrates that the ICANN board of directors is actually taking ownership of this issue, rather than delegating it to ICANN’s executive and legal teams, in large part due to the pressure exerted on it by the ICANN community and governments. Botterman wrote:

It is not often that such a contractual issue raises up to a Board-level concern, but as you might appreciate, PIR’s request is one of the most unique that ICANN has received.

He noted that the controversy over the deal had even made ICANN the target of a “governmental inquiry”, which is either a reference to the California attorney general’s probe or to a letter (pdf) received from the French foreign office, demanding answers about the transaction.
It’s notable from Botterman’s letter that ICANN has started digging into the deep history of PIR’s ownership of .org, much as I did last December, to determine whether the commitments it made to the non-profit community back in 2002 still hold up under a return to for-profit ownership.
Given these turns of events, I was entertaining the possibility that ICANN was readying itself to reject the deal.
But, given Ethos’ newly proposed binding commitments, I think the pendulum has swung back in favor of the acquisition eventually getting the nod.
I reserve the right to change my mind yet again as matters unfold.

Ethos’ .org pricing promise may be misleading

The more Ethos Capital protests that its plans for .org pricing are not as bad as its critics think, the less I believe it.
Since November, the would-be buyer of Public Interest Registry has being publicly committing to maintain what it calls PIR’s “historic practices” related to pricing.
PIR, under its last ICANN contract, was allowed to raise prices by up to 10% per year, but it did not always exercise that right. In fact, the wholesale price of .org has been fixed at $9.93 since August 2016.
Ethos has described its price increase plans in a very specific, consistent way. In November it said:

Our plan is to live within the spirit of historic practice when it comes to pricing, which means, potentially, annual price increases of up to 10 percent on average — which today would equate to approximately $1 per year.

Last month, chief purpose officer Nora Abusitta-Ouri wrote:

We committed to limiting any potential increase in the price of a .ORG domain registration to no more than 10% per year on average

Last week, she wrote:

Ethos has committed to limiting any potential increase in the price of a .ORG domain registration to no more than 10% per year on average

Over the weekend, she added:

we are not saying that we will raise prices 10% every year — our commitment is that any price increase would not exceed 10% per year on average, if at all.

Clearly, the talking point has been copy-pasted a few times, and it always includes the words “10% per year on average”.
On average.
What does that mean? What are we averaging out here? It can’t be across the .org customer base, as registries aren’t allowed to vary pricing by registrant, so we must be talking about time. PIR has a 10-year contract with ICANN, so we must be talking about prices going up no more than 10% per year “on average” over the next decade.
If PIR, under Ethos’ stewardship, decides to raise prices by exactly 10% every year starting in 2020, the wholesale cost of a .org domain will be $25.76 by 2029, a 159% increase on today’s rate.
Assuming for the sake of this thought experiment that .org stays flat at 10 million registrations (it’s actually a little more today, but it’s declining), Ethos would be looking at a $258 million-a-year business by 2029, up from today’s $99 million.
Over the course of the 10-year contract, .org would be worth a cumulative $1.74 billion in reg revenue, up from the $993 million it would see without price increases.
But Ethos is only promising that price increases will be no more than 10% per year on average, remember, and it’s even hinted that there could be some years with no increases at all.
I noted in November that this commitment could see Ethos raise prices in excess of 10% early on, then freeze them so the increase averages back down to 10% over time.
It would of course make the most sense to front-load the price increases, to maximize the return.
At one extreme, Ethos could raise the price to $25.76 a year immediately, then lock the price down until 2029. That would make .org a $258 million-a-year business overnight, and making the cumulative 10-year revenue around the $2.58 billion mark.
Or, it could raise prices by 20% in alternate years, adding up to $1.77 billion in total top-line and a price to registrants of $24.71 by 2028.
There’s an infinity of variations on these strategies, and Ethos’ modeling is certainly more complex than the envelope upon which I just jotted these simplified figures down, but it’s pretty clear that while the company may well stick to the letter of its promises, it gets its best returns if it raises prices hard and early.
The more I read “on average” repeated in Ethos’ literature, the more convinced I become that this is exactly what it has in mind.

Possibly the strangest new gTLD acquisition yet

The company running .icu has taken over a similar-sounding but ugly dot-brand from a Chinese games company.
ShortDot took over the ICANN registry agreement for .cyou from a Chinese games company in November, recently updated ICANN records show.
The seller is Beijing Gamease Age Digital Technology Co, which makes massively multiplayer online games targeted at the Chinese market.
The company is branded as Changyou.com and CYOU is its Nasdaq ticker symbol. The .cyou gTLD was not technically a dot-brand under ICANN rules.
Changyou signed its registry agreement with ICANN five years ago, but never registered any .cyou domains.
The decision to dump .cyou is no doubt related to the fact that Changyou is currently in the process of being reacquired and delisted by Sohu, its majority owner and former parent. The domain presumably soon will have no meaning for the company, even defensively.
It’s such a clumsy, otherwise meaningless string, that surely there was one one potential home for it: the .icu registry. Just as .icu can be read as “I see you”, .cyou can be read as “see you”.
ShortDot has had an inexplicable success with .icu in the last 12 months, during which it has become the industry volume leader in new gTLD sales. Today’s zone files show over SIX MILLION domains have been registered. That’s up from about 400,000 a year ago.
Most of its sales are coming via Chinese registrars, which are selling .icu names for under a dollar for the first year. It has yet to see its first junk drop.
If SpamHaus statistics are any guide, the buyers are largely domainers, rather than spammers. SpamHaus says .icu has under a 2% “badness” rating.
So, while .cyou would look like utter rubbish to any other registry, if ShortDot can bundle it with .icu, perhaps persuading a portion of its registrants to double-up, it may be worth a bit of money.
The registry expects to launch its new acquisition in June.
It’s the second branded gTLD ShortDot has acquired and repurposed after .bond, which used to belong to a university of the same name.

California .org probe — existential crisis or blessed relief for ICANN?

Does the California attorney general’s probe into ICANN’s relationship with the .org registry represent an existential crisis for ICANN, or could it be better seen as a great opportunity to palm off responsibility to a higher power?
It was recently revealed that AG Xavier Becerra is looking into ICANN’s actions related to not only the proposed acquisition of Public Interest Registry by Ethos Capital, but also the removal of price caps from the .org registry contract.
The AG’s office says it wants to “to analyze the impact to the nonprofit community, including to ICANN, of this proposed transfer”.
Because ICANN is a California-based non-profit, the AG says he has the power to levy penalties or revoke ICANN’s corporate registration.
Becerra’s office sent ICANN a list of 35 searching questions (pdf) related to both deals on January 23, demanding a response by February 7.
While many of the questions demand documentation already in the public domain, published on ICANN’s web site, Becerra also wants to get his hands on redacted portions of PIR’s communications with ICANN, as well as all emails between ICANN, Ethos, PIR and the Internet Society, which currently owns PIR.
At the very least, the investigation complicates ICANN’s own probe of the acquisition. ICANN has to approve transfers of control of gTLD registries, and it’s currently poring over documentation provided by PIR detailing the structure of the deal.
It’s already delayed approval once, saying last month (pdf) that it expected to give a yay or nay to PIR by February 17.
Following the AG’s letter, ICANN asked PIR (pdf) to extend that deadline to April 20, to allow it time to deal with the new concerns.
It emerged yesterday that PIR has told ICANN to get (partially) stuffed (pdf), allowing an extension only to February 29, saying further delay “is neither necessary nor warranted at this time”.
But PIR did give its reluctant consent to ICANN disclosing previously confidential information to the AG, despite taking issue with ICANN’s opinion that AG letters are arguably equivalent to subpoenas, so it was under a legal obligation to do so.
It’s not entirely clear what could come of this predicament.
PIR says that while ICANN is able to approve or decline changes of control, it has no authority under the .org Registry Agreement to deny PIR changing its legal status from non-profit to for-profit entity.
And while California no doubt has jurisdiction over ICANN, PIR is based in Pennsylvania, so it would be up to Becerra’s counterpart in that state (a fellow Democrat, as it happens) to attempt to obstruct PIR’s planned conversion.
If that were to happen, it would interfere with Ethos’ somewhat convoluted acquisition plan.
Some of the AG’s 35 questions are pretty basic, stuff like “describe in detail the authority ICANN has to regulate, license, and/or oversee the domain name system” and “provide an explanation of ICANN’s authority to regulate the registration fees charged for .org domains”.
That’s either coming from a place of ignorance, or from somebody who’s deliberately questioning ICANN’s very existence as the central coordinating body of the DNS.
That would be frightening indeed.
But at the same time, this intervention from a governmental body may come as a relief to ICANN.
ICANN doesn’t like making difficult decisions when it comes to the big legal questions, or indeed anything with the potential to be controversial and ergo litigation bait.
Take, for example, its ongoing pleas to European data protection authorities to fix its GDPR problem, or its longstanding deferment to US competition authorities when it comes to issues such as the price of a .com domain and the introduction of new registry services, or its outsourcing to expert third parties of almost every potential wedge issue to be found the new gTLD program.
An opinion on .org one way or the other from the California AG could provide a lovely smokescreen for ICANN to approve or reject the .org deal without actually taking responsibility for the decision, a prospect I suspect would we well-received by the Org.
Whether it will actually receive this blessing is an open question.

XYZ expands gTLD stable as L’Oreal exits the domain game

XYZ.com has acquired four new gTLDs from the cosmetics company L’Oreal.
The portfolio registry expanded its stable with the additions of .makeup, .beauty, .hair and .skin, all of which had their contracts change hands last month, ICANN records show.
XYZ seems to have told Domain Name Wire last week that it plans to relaunch its new acquisitions this year alongside another recent purchase, .quest (sorry for the delay, Andrew, I’ve been sick).
For L’Oreal, the deal marks the end of its lofty ambitions in the new gTLD space. The company applied for 14 strings back in 2012, a mixture of generic dictionary words and brands.
Now, none remain.
A bunch of its dot-brand applications were dumped prior to contract signing. The others were turned off, unused, after L’Oreal asked ICANN to terminate its contracts.
The four non-branded strings XYZ picked up were originally intended as “closed generics” — an attempt to close competitors out of the market for industry-relevant keywords — but that was scuppered when ICANN decided to ban the concept.
L’Oreal attempted to worm its way around the ban by pricing domains at $5,500 wholesale and imposing extremely restrictive registration policies. This was pretty effective at warding off unwanted sales.
But the company did actually attempt something fairly innovative with .makeup, as I documented in 2017, registering the names of a couple hundred beauty-obsessed social media influencers in an attempt to create a registry-owned social media portal focused on pushing L’Oreal products.
The hub site, at welove.makeup, now bounces web visitors to makeup.com.
To the best of my knowledge, L’Oreal didn’t do anything with its other generics.
Still, L’Oreal’s loss is XYZ’s gain. All four are fairly strong strings that could find a market, in my view.
XYZ now has 13 gTLDs under direct contract (12 of which were acquired post-2012) and partial stakes, with Uniregistry, in three others.

SaveDotOrg to protest outside ICANN HQ. #lol

Good grief.
Just when you thought the outrage over .org manager Public Interest Registry’s imminent sale to Ethos Capital couldn’t get any weirder, the #SaveDotOrg campaign has announced that it is going to physically protest ICANN’s headquarters in Los Angeles next week.
From 0900 until 1100 local time, Friday January 24, they’ll gather to demand that non-profit voices are heard in ICANN’s decision whether to approve the acquisition. From the announcement:

Join us in demanding that ICANN commit to a process that includes the voices and priorities of nonprofits and grassroots organizations. The .ORG domain isn’t up for sale without our participation. We’ll rally outside ICANN’s offices in Los Angeles on Friday, January 24. This is an important moment in the SaveDotOrg campaign, and we want you to join us!

Sloganed T-shirts and signs will be available.
The event is being organized by NTEN, the Electronic Frontier Foundation and Fight For The Future. All very lovely people; I can’t see this turning into some Hong Kong-style riot situation.
Unusual as it is, this kind of direct action against ICANN is not unprecedented.
Back in 2011, a group of pornographers and civil liberties activists gathered outside the Westin St Francis hotel in San Francisco to, where ICANN was holding its public meeting, protest the imminent approval of .xxx, which they thought was a threat to free speech online. About 25 people showed up, by my count, chanting slogans such as “We want porn! No triple-X!”. Buttman was there.
Those protesters, it turns out many years later, really had nothing to worry about; nobody has been forced to buy a .xxx domain, and my friends tell me porn is still very much available on the internet.
I rather suspect the #SaveDotOrg guys are in the same boat. Of all the arguments against the acquisition, the one claiming that free speech is at risk still seems to me the least convincing.

Secrets of the .org deal revealed, but much info remains private

ICANN has published a ream of new information about the proposed acquisition of Public Interest Registry by Ethos Capital, a deal widely criticized for what it could mean for millions of .org registrants.
The documentation was provided to ICANN by Ethos, PIR and the Internet Society, PIR’s current owner, on the understanding that certain confidential information would remain private or would be redacted.
Almost all of the juicy financial details remain unpublished, but there’s still plenty of interesting revelations among the packet’s 27 pages.
Before we dive into the details, here are the headlines:

• The deal is being partly funded by an enormous loan.
• Technically, Ethos isn’t the direct buyer. There are at least three corporate entities involved in the acquisition that we haven’t heard of before.
• Ethos won’t reveal the names of the directors of PIR’s would-be owner.
• Another former senior ICANN staffer and long-time Fadi Chehadé collaborator has been revealed as having an interest in the acquisition.

Most of the info relates to the proposed corporate ownership structure of PIR during and following the acquisition, and it’s a little bit more complex than Ethos simply signing a check to ISOC and taking the reins at PIR.
First, PIR is going to undergo what it calls a “statutory conversion” in its home state of Pennsylvania, changing its name from Public Interest Registry to Public Interest Registry LLC — essentially changing from a non-profit to a for-profit.
The company notes that this is not a change of entity — PIR will still be PIR — but is rather a change of its company type and legal name.
At the same time, a newly created non-profit fully owned by ISOC called Connected Giving Foundation will take 100% ownership of PIR LLC, before immediately selling its entire stake to the Ethos group.
But the buyer is not, directly, Ethos Capital. Instead, it’s an acquisition vehicle, created October 24 last year in Delaware, called Purpose Domains Direct, LLC. That company is owned in turn by another vehicle, formed the same day in Delaware, called Purpose Domains Holdings LLC.
Ethos controls both of these companies. It’s not unusual for acquisitions to be carried out via subsidiaries in this way.
That said, Ethos appears reluctant to reveal the names of these companies’ directors.
In its letter to ICANN asking for approval of the acquisition, apparently sent November 14 (one day after the public announcement), the names of the three Purpose Domains Direct directors are redacted. Corporation-friendly Delaware doesn’t make it easy to get at this information either.
However, in December 20 answers to a list of dozens of questions posed by ICANN about the deal, Ethos discloses that it has expanded its proposed board to five directors — the CEO of PIR (currently Jon Nevett), alongside two people selected by Ethos and two selected by “one or more minority equity holders”.
The minority owners are not named, but they could be the three entities revealed by ISOC’s CEO last November, which include funds managed by the Perot and Romney families.
The board will therefore be controlled by Ethos and PIR together, the documents state. No proposed directors other than Nevett are named and it’s not known whether the three redacted names from the November letter are still in line for seats.
The identities of individuals involved in the deal have been of keen interest since it emerged, shortly after the acquisition was announced, that former ICANN CEO Fadi Chehadé was acting as an adviser to Ethos, closely enough that he actually registered at least one domain name on Ethos’ behalf.
Ethos chief purpose officer Nora Abusitta-Ouri was a senior VP at ICANN until 2016, and CEO Erik Brooks worked for 20 years at Donuts owner Abry Partners, the private equity firm where Chehadé now works as a senior advisor.
Abry is not involved in the acquisition, the new documentation states. Neither are any current ICANN staffers or any other registries or registrars.
But it turns out that yet another former senior ICANN staffer is in fact involved.
The new documentation reveals that Allen Grogan, who worked as head of contracting for the new gTLD program and then chief of contract compliance at ICANN between 2013 and 2017, is also acting as an “advisor” on the deal.
It’s not clear whether Grogan is on the payroll of Ethos, Abry, Chehadé & Company, PIR, ISOC, or none of the above, but the smart money would surely be on him having being brought on board by Chehadé. Like so many senior ICANN officers hired during Chehadé’s tenure, the two men worked together for years at other companies.
The final nugget of new information that leaped out at me in the new docs is how the deal will be funded.
The packet reveals, I believe for the first time, that a good chunk of the $1.135 billion proposed purchase price is actually being paid for with new debt.
Ethos says that Purpose Domains Direct has taken out a total of $360 million in loans from various US banks to make up the shortfall left by its own investors.
The company said that PIR — a mature, high-margin business — will easily have the money to service this debt and, as a for-profit, pay its taxes. Repayments will be less than half of what it currently pays to ISOC every year, the documents state.
The documents were published here (pdf) on Saturday. Let me know if you spot something interesting I missed.

Now .org critics actually want to take over the registry, blocking billion-dollar sale

A group of ICANN alumni and non-profits want to block the $1.135 billion sale of .org manager Public Interest Registry and for ICANN to hand over the reins to a new not-for-profit entity.
The Cooperative Corporation of .ORG Registrants was reportedly formed in California this week, supported by a long list of opponents of the .org deal, which would see the Internet Society sell PIR to a new private equity company called Ethos Capital.
Currently not-for-profit .org would become commercial again, answerable to shareholders who want to see a return on their investment. PIR recently had its 10%-a-year price caps lifted by ICANN, enabling it to increase its annual registry fees by as much as it wants.
Founding directors of the new co-op reportedly include ICANN founding chair Esther Dyson and founding CEO Mike Roberts, neither of whom have been heavily involved in ICANN or the domain name industry for the better part of two decades.
According to Reuters, Also on the board are Wikimedia Foundation CEO Katherine Maher, Jeff Ubois of the MacArthur Foundation, and Bill Woodcock, executive director of Packet Clearing House, which provides .org, via back-end Afilias, with DNS resolution services.
Dyson told the New York Times: “If you’re owned by private equity, your incentive is to make a profit. Our incentive is to serve and protect nonprofits and the public.”
The new registry would not have a profit motive, and excess funds would be returned to the non-profit community.
While the new group has yet to make a formal, public proposal, the idea is reportedly to persuade ICANN to block the sale of PIR to Ethos — something nobody can seem to agree is even within its powers — and instead transfer stewardship to this new co-op.
It’s a crazily ambitious goal.
The group would be basically asking ICANN to cut off ISOC’s primary funding source. PIR currently gives tens of millions of dollars a year to its owner, and after the Ethos deal ISOC intends to live off the interest of its billion-dollar windfall.
If ICANN canceled the PIR contract and handed .org to a third party, ISOC would get nothing, potentially crippling it and subsidiaries such as the IETF.
I can’t imagine such a decision, on the outside chance ICANN actually went down this path, not resulting in litigation.
The Cooperative Corporation of .ORG Registrants is reportedly also being backed by other supporters of the #SaveDotOrg campaign (which now has over 20,000 supporters), including the free speech advocates at the Electronic Frontier Foundation and NTEN, a conference/community hub for non-profits.
This campaign last month managed to persuade a group of four Democrat members of Congress — Ron Wyden, Richard Blumenthal, Elizabeth Warren and Anna Eshoo — to express their concerns about the Ethos deal and ask ISOC/Ethos/PIR a series of pointed questions about its potential ramifications.
In its response this week (pdf), the leaders of the three entities avoided directly answering the bulleted questions, but did make some commitments that I believe are new.
Notably, they said that the registry would reincorporate as a Public Benefit LLC before the acquisition closes. This is a relatively new form of legal entity, which has been described like this:

A Public Benefit LLC is a for-profit entity; however, in operating a Public Benefit LLC, the LLC’s management can take into account social, economic and political considerations without violating its fiduciary duty to act in the best interests of the company.

In other words, PIR would be free to place the needs of .org’s non-profit registrants ahead of the needs of its own shareholders without opening itself up to legal action.
A “statement of public benefit” would be in its certificate of formation, and would include a commitment “to limit any potential increase in the price of a .ORG domain registration to no more than 10% per year on average”.
I’ve noted before that this is worded vaguely enough to give Ethos some flexibility to raise prices by over 10%, but the fact that it’s offering to bake a commitment on pricing into its corporate DNA may be seen as a step in the right direction by critics.
It’s also proposing a “Stewardship Council”, which would be “an independent and transparent body” tasked with providing policy guidance to PIR and overseeing a new “Community Investment Fund” that would be used for initiatives such as the annual .org awards program.