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

Kevin Murphy, December 6, 2019, 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.

#SaveDotOrg to hold public web conference tomorrow with Ethos execs

Kevin Murphy, December 4, 2019, Domain Registries

The two top executives at Ethos Capital are due to confront non-profits that want to stymie its $1.13 billion acquisition of Public Interest Registry on a public call tomorrow.

The call has been put together by NTEN, a conference organizer that focuses on the use of tech by non-profits.

According to NTEN, the call will feature speakers from anti-deal Electronic Frontier Foundation, The National Council of Nonprofits, and Internet Society chapter leaders (some of whom are against the deal).

PIR boss Jon Nevett, as well as Ethos CEO Erik Brooks and chief purpose office Nora Abusitta have also agreed to attend. Andrew Sullivan, CEO of the Internet Society “has been invited but has not confirmed participation”, NTEN said.

It’s going to be the first time that those in favor of the deal will face off in public against those that want it scrapped.

The acquisition is controversial because it represents the .org gTLD going into private, for-profit hands for the first time in 17 years, with previous pricing restrictions removed.

So far, over 12,000 people have signed a petition at savedotorg.org to express their dismay with the deal.

You can find details about the call here, including an email address to submit questions in advance.

The call will happen online at 2000 UTC (1200 US Pacific Time) Thursday December 5. You may have to install some software in advance, though a browser-only option seems to be available too.

Are ISOC’s claims about .org’s history bogus?

Kevin Murphy, December 2, 2019, Domain Registries

The Internet Society has started to fight back against those trying to put a stop to its $1.13 billion sale of Public Interest Registry to Ethos Capital.

Among the tactics being deployed appears to be an attempt to play down the notion that .org has always been considered as a home for non-profits run by a non-profit.

Apparently, it’s perfectly fine for .org to transition back into commercial hands, because not-for-profit ISOC was never intended as its forever home and the TLD was never intended for non-profits anyway.

Is that bullshit?

Yes and no. Mostly yes. It turns out you get a different answer depending on when you look in .org’s storied history.

ISOC, it seems, is starting in 1994, in an internet standard written by Jon Postel (who was ICANN before there was an ICANN).

A statement published by ISOC last week tries to characterize .org as a home for the “miscellaneous”, quoting from RFC 1591

I also want to address some other misconceptions about .ORG. Although .ORG has often been thought of as a “home of non-profits”, the domain was not actually defined that way. In 1994, RFC 1591 described it this way: “ORG – This domain is intended as the miscellaneous TLD for organizations that didn’t fit anywhere else. Some non-government organizations may fit here.”

It’s an accurate quote.

.org is described in other RFCs in a similar way. The earliest reference is 1984’s RFC 920 which says .org means “Organization, any other domains meeting the second level requirements.”

RFC 1032 says:

“ORG” exists as a parent to subdomains that do not clearly fall within the other top-level domains. This may include technical-support groups, professional societies, or similar organizations.

I can’t find any mention of non-profits in any of the relevant DNS RFCs.

ISOC goes on to note that .org was managed by a for-profit entity — Network Solutions, then Verisign — from 1993 until PIR took over in 2003.

Again, that’s true, but while it might have been managed by a commercial entity, NetSol was pretty clear about who .org was for.

When it went public in 1997, the company told would-be investors in its S-1 registration statement:

The most common TLDs include .com, used primarily by commercial entities, .org for nonprofit organizations, .net for network service providers, .edu for universities and .gov for United States governmental entities

That’s pretty unambiguous: the .org registry in 1997 said that .org was for non-profits.

In 2001, when ICANN inked a deal with Verisign to spin off .org into a new registry, there was no ambiguity whatsoever.

In announcing the deal, ICANN said that it would “return the .org registry to its original purpose” and .org would return to “to its originally intended function as a registry operated by and for non-profit organizations” (my emphasis).

The price ICANN paid for extracting .org from Verisign’s clutches was the very first “presumptive renewal” clause being inserted into the .com contract, which has seen Verisign reap billions with no risk of ever losing its golden goose.

The prize was so potentially lucrative that Verisign even agreed to give a $5 million endowment — no questions asked — to the successor registry, for use relaunching or promoting .org.

The only catch was that the new registry had to be a non-profit. Commercial registries — Verisign competitors such as Neustar — wouldn’t get the money.

ICANN and its community spent the remainder of 2001 and most of 2002 devising an RFP, accepting proposals from 11 would-be .org registries, and picking a winner.

The multistakeholder Domain Names Supporting Organization — roughly equivalent to today’s GNSO — was tasked with coming up with a set of principles governing who should get to run .org and how.

It came up with a report in January 2002 that stated, as its first bullet point:

The initial delegation of the .org TLD should be to a non-profit organization that is noncommercial in orientation and the initial board of which includes substantial representation of noncommercial .org registrants.

It went on to say that applicants “should be recognized non-profit entities” and to suggest a few measures to attract such entities to the bidding process.

These recommendations, which secured consensus support of the DNSO’s diverse stakeholders and a unanimous vote of the Names Council (the 2002 equivalent of the GNSO Council), nevertheless never made it into ICANN’s final RFP.

At some point during this process, ICANN decided that it would be unfair to exclude for-profit bidders, so there was no non-profit requirement in the final RFP.

As far as I can tell from the public record and my increasingly unreliable memory, it was Vint Cerf — father of the internet, creator of ISOC, then-chair of ICANN, and one of the few people currently cool with PIR being sold into commercial hands — that opened it up to for-profit bidders.

The decision was made at ICANN’s board meeting in Accra, Ghana, at ICANN 12. Back then, the board did its thinking aloud, in front of an audience, so we have a transcript.

The transcript shows that Cerf recommended that ICANN remain neutral on whether the successor registry was non-profit or for-profit. He put forward the idea that a commercial registry could quite easily create a non-profit entity in order to bid anyway, so it would be a kinda pointless restriction. The board agreed.

So in 2002, 11 entities, some of them commercial, submitted proposals to take over .org.

In ISOC’s bid, it stated that it would use the $5 million Verisign endowment “primarily to expanding outreach to non-commercial organizations on behalf of .ORG”.

ISOC/PIR took Verisign’s millions, as a non-profit, in order to pitch .org at other non-profits, in other words.

The evaluation process to pick Verisign’s successor was conducted by consultancy Gartner, a team of “academic CIOs” and ICANN’s Noncommercial Domain Name Holders’ Constituency (roughly equivalent to today’s Non-Commercial Stakeholders Group).

The NCDNHC was under strict instructions from ICANN management to not give consideration to whether the applicants were commercial or non-commercial, but its report (pdf) did “take notice of longstanding relationships between the bidders (whether for-profit or non-profit) and the noncommercial community available in the public record”.

It ranked the PIR bid as third of the 11 applicants, on the basis that .org money would go to support ISOC and the IETF, which NCDNHC considered “good works”.

ICANN’s preliminary and final evaluation reports were both opened for public comment, and comment from the applicants themselves, and on both occasions ISOC sought to play up its not-for-profit status. In August 2002, it said:

Overall, we believe ISOC’s experience as a not-for-profit, Internet-focused organization, combined with Afilias’ expertise as a stable and proven back end provider, enables us to fully meet all the criteria set forth by the ICANN Board.

In October 2002, it said:

We believe strongly that the voice of the non-commercial community is critical to the long-term success of .ORG. ISOC’s global membership and heritage and PIR’s non-profit status will ensure the registry remains sensitive to non-commercial concerns. Should the ICANN Board select ISOC’s proposal, PIR will execute extensive plans to ensure that this voice is heard.

ISOC’s application was of course ultimately determined to be the best of the bunch, and in October 2002 ICANN decided to award it the contract.

Then there was the small matter of the IANA redelegation. IANA is the arm of ICANN that deals with changes to the root zone. Whenever a TLD changes hands, IANA issues a report explaining how the redelegation came about.

In the case of .org, IANA echoed the previous feelings about .org’s “intended” purpose, stating:

the Internet Society is a long-established organization that is particularly knowledgeable about the needs of the organizations for which the .org top-level domain was intended. By establishing PIR as a subsidiary to serve as the successor operator of .org, the Internet Society has created a structure that can operate the .org TLD in a manner that will be sensitive to the needs of its intended users

So, does history tell us that .org is meant to be a TLD by and for non-profits?

Mostly, yes, I think it does.

Four big developments in the .org pricing scandal

Kevin Murphy, November 26, 2019, Domain Registries

The renewal of Public Interest Registry’s .org contract and its subsequent acquisition by Ethos Capital is the gift that keeps on giving in terms of newsworthy developments, so I thought I’d bundle up the most important into a single article.

First, ICANN has thrown out the appeal filed by Namecheap and provided a (kinda) explanation of how the recent contract renewal came about.

The board of directors voted to reject Namecheap’s Request for Reconsideration on Thursday, as I reported last week, but the decision was not published until last night.

Namecheap had demanded ICANN reverse its decision to remove the 10%-a-year cap on price increases previously in the .org contract, enabling PIR to unilaterally raise its prices by however much it wants.

It said that ICANN had “ignored” the more then 3,000 people and organizations that had submitted comments opposing the lifting of caps.

But the board said:

ICANN org’s Core Values do not require it to accede to each request or demand made in public comments or otherwise asserted through ICANN’s various communication channels. ICANN org ultimately determined that ICANN’s Mission was best served by replacing price caps in the .ORG/.INFO Renewed RAs with other pricing protections to promote competition in the registration of domain names, afford the same “protections to existing registrants” that are afforded to registrants of other TLDs, and treat registry operators equitably.

The board also decided to describe, in a roundabout kinda way, how it conducts renewal talks with pre-2012 legacy gTLDs, explaining that ICANN “prefers” to move these registries to the 2012 contract, but that it cannot force them over. The resolution states:

All registry agreements include a presumptive right of renewal clause. This clause provides a registry operator the right to renew the agreement at its expiration provided the registry operator is in good standing (e.g., the registry operator does not have any uncured breaches), and subject to the terms of their presumptive renewal clauses.

In the course of engaging with a legacy registry operator on renewing its agreement, ICANN org prefers to and proposes that the registry operator adopts the new form of registry agreement that is used by new gTLDs as the starting point for the negotiations. This new form includes several enhancements that benefit the domain name ecosystem such as better safeguards in dealing with domain name infrastructure abuse, emergency backend support, as well as adoption of new bilaterally negotiated provisions that ICANN org and the gTLD Registries Stakeholder Group conduct from time to time for updates to the form agreement, and adoption of new services (e.g., RDAP) and procedures.

Although ICANN org proposes the new form of registry agreement as a starting place for the renewal, because of the registry operator’s presumptive right of renewal ICANN org is not in a position to mandate the new form as a condition of renewal. If a registry operator states a strong preference for maintaining its existing legacy agreement form, ICANN org would accommodate such a position, and has done so in at least one such instance.

I believe the gTLD referred to in the last sentence is Verisign’s .net, which renewed in 2017 without substantially transitioning to the 2012-round contract.

On the acquisition, the board notes:

the Board acknowledges (and the Requestor points out in its Rebuttal) the recently announced acquisition of PIR, the current .ORG registry operator, and the results of that transaction is something that ICANN organization will be evaluating as part of its normal process in such circumstances.

That appears to be a nod to the fact that ICANN has the power to reject changes of control under exceptional circumstances, per the .org contract.

Despite the wholly predictable rejection of Namecheap’s RfR, appeals against the contract’s new terms may not be over.

For some reason I have yet to ascertain, the very similar RfR filed around the same time by the Electronic Frontier Foundation was not considered, despite being on the agenda for last Thursday’s board meeting.

Additionally, I hear Namecheap has applied for Cooperative Engagement Process status, meaning it is contemplating filing an Independent Review Process appeal.

Second, Ethos Capital, PIR’s new owner, launched a web site in which it attempts to calm many of the concerns, criticisms and conspiracy theories leveled its way since the acquisition was announced.

Found at keypointsabout.org, the site tries to clarify the timing and motivation of the deal.

On timing, Ethos says:

Ethos Capital first approached the Internet Society in September 2019, well after PIR’s contract renewal with ICANN had finished… PIR was not for sale at the time the price caps were lifted on .ORG. The removal of .ORG’s price restrictions earlier this year was not unique to .ORG and was in no way motivated by a desire to sell PIR.

The .org contract was signed at the end of July, so while Ethos may well have been lusting after PIR before the renewal, it apparently did not run towards it with its trousers around its ankles until at least a month later.

On its pricing intentions, Ethos says:

The current price of a .ORG domain name is approximately $10 per year. 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.

This sounds rather specific, but it’s vague enough to give PIR leeway to, say, introduce a 100% increase immediately and then freeze prices until it averages out at 10% per year. I don’t think the company will do something so extreme, but it would technically be possible the way it’s described here.

On the connections to Abry Partners and former ICANN CEO Fadi Chehade, Ethos says that while founder and CEO Erik Brooks is a 20-year veteran of Abry (which also owns Donuts) “Abry Partners is not involved in this transaction.”

It adds, however, that Chehade’s company, Chehade & Company, where Ethos chief purpose officer Nora Abusitta-Ouri has worked “is an adviser to Ethos”.

What this means, at the very least, is that the new owner of .org allowed an outside contractor to register the domain matching its name in the very gTLD it runs, which most domain veterans will recognize as a rookie mistake.

Ethos goes on to list VidMob Inc, Whistle Sports Inc, Adhark Inc and LiquidX Inc as other companies Ethos has invested in, perhaps rubbishing the hypothesis (which I, admittedly, have publicly floated) that Ethos was a vehicle created by Abry purely to buy up PIR.

Third, Ethos may be funded by “billionaire Republicans”.

.eco registry founder Jacob Malthouse, who’s trying to rouse up support for the #SaveDotOrg campaign, dug up an email apparently sent by ISOC CEO Andrew Sullivan to a members mailing list in the wake of the acquisition announcement, which names some of the backers of the deal.

They are: Perot Holdings, FMR LLC and Solamere Capital.

What they have in common is that they’re all — at least according to Malthouse’s since-amended original post — founded/owned/affiliated with prominent billionaire US Republicans. I’m not sure I’d fully agree with that characterization.

Perot was founded by Ross Perot, who stood for US president as an independent a few times but spent the last couple of decades of his life (which ended in July) as a Republican. I’d say his political affiliation died with him.

FMR, or Fidelity Investments, is run by Abigail Johnson, who inherited the role from her father and grandfather. While she’s made donations to Republicans including local senator, Mitt Romney, she also gave Hillary Clinton a tonne of cash to support her 2016 presidential election run, so I’m not sure I’d necessarily characterize her as die-hard GOP.

Romney himself was involved in the founding of Solamere Capital, the third apparent Ethos investor, but according to its web site he stepped down at the start of this year, long before Ethos was even founded, in order to re-join the US Senate.

I’m not sure what the big deal about these connections is anyway, unless you’re of the (often not unreasonable) belief that you don’t get to be a billionaire Republican without being just a little bit Evil.

Fourth, a bunch of non-profits are campaigning to get the deal scrapped.

The #SaveDotOrg campaign now has its matching .org address and web site, savedotorg.org.

It appears to have been set up by the EFF, but its supporters also include the non-profits American Alliance of Museums, American Society of Association Executives, Aspiration, Association of Junior Leagues International, Inc., Creative Commons, Crisis Text Line, Demand Progress Education Fund, DoSomething.org, European Climate Foundation, Free Software Foundation, Girl Scouts of the USA, Independent Sector, Internet Archive, Meals on Wheels America, National Council of Nonprofits, National Human Services Assembly, NTEN, Palante Technology Cooperative, Public Knowledge, R Street Institute, TechSoup, VolunteerMatch, Volunteers of America, Wikimedia Foundation, YMCA of the USA and YWCA USA.

The letter (pdf) states:

Non-governmental organizations all over the world rely on the .ORG top-level domain. Decisions affecting .ORG must be made with the consultation of the NGO community, overseen by a trusted community leader. If the Internet Society (ISOC) can no longer be that leader, it should work with the NGO community and the Internet Corporation for Assigned Names and Numbers (ICANN) to find an appropriate replacement.

It claims that the new .org contract gives PIR powers to “do significant harm” to non-profits, should they be abused.

The campaign has had a little traction on social media and so far has over 8,000 signatures.

I attempt to answer ICA’s questions about the “terrible blunder” .org acquisition

Kevin Murphy, November 19, 2019, Domain Policy

The Internet Commerce Association launched a withering attack on ICANN late last week, accusing the organization of a “terrible blunder” by lifting pricing restrictions on .org domain names.

As by now you’re no doubt aware, .org manager Public Interest Registry was acquired last week by a private equity firm with ties to ICANN’s former CEO, in a deal likely to have delivered hundreds of millions of dollars, if not more, to former owner the Internet Society.

The deal means PIR is now almost certain to exercise its newfound right to raise its prices arbitrarily, adding tens of millions to its annual top line at the expense of .org registrants.

While such a price increase is likely to have little impact on most registrants — an annual increase of even 100% would only add about $10 to the per-domain cost — it would certainly prove onerous to many of the high-volume domain investors ICA represents.

So ICA chief Zak Muscovitch whipped off a letter to ICANN (pdf) on Friday, demanding that ICANN use its contractual powers to terminate PIR’s registry agreement and put .org out for open tender. He wrote:

If you were led to believe that removing price caps on .Org domain names was a sound approach because the registry would remain in the hands of a nonprofit foundation, you have clearly been misled. If you were led to believe that despite being the effective owner of the .org registry, you were somehow forced to let your service providers tell you how much they can charge, instead of the other way around, you have been led astray. If you have been told that .Org does not have market power within the nonprofit sector, you have been led astray. If you have been told that competition from other gTLDs will constrain .org prices, you have been led astray.

I think the letter has about as much chance of working as an ice sculptor in hell, but Muscovitch does include a list of seven questions for ICANN that I’m going to attempt to answer to the best of my ability here.

First, he asks:

Were you aware whether ISOC was in talks to sell the registry when you approved the removal of the price caps?

I put the same question to PIR CEO Jon Nevett last week, and he told me: “I don’t know when the talks started with ISOC and the buyer, but neither ICANN nor PIR knew about it when finalizing the .ORG [Registry Agreement].”

I’ve no particular reason to believe he’s lying.

If ISOC was in such talks at that time, why was this material fact not disclosed to you by the registry operator, prior to you approving the renewal agreement?

The acquisition talks between ISOC and Ethos Capital certainly could have been going on prior to the .org contract being signed, which happened June 30 this year.

The main piece of evidence here is that Fadi Chehadé of private equity firm and presumed Ethos affiliate Abry Partners registered the domain ethoscapital.org on May 7, according to Whois records. A company of the same name was formed in Delaware a week later.

Given that Ethos appears to be an Abry vehicle set up purely to acquire PIR, it seems likely that talks were already underway at this point.

The domain ethoscapital.com, which Ethos is currently using as its primary, seems to have been acquired on the secondary market around August. The acquisition was announced November 13.

To Muscovitch’s question, though, I return to Nevett’s line that PIR knew nothing about the acquisition talks before the RA was finalized.

The RA was finalized and opened to public comment in March.

It’s quite possible Ethos and ISOC entered talks in the three months after the deal had been finalized but before it had been signed.

When did you first learn of the negotiations to sell the .Org registry?

An excellent question I’ve also posed but as yet have no answer to.

Did you base your decision to approve the removal of price caps, at least in part, on the expectation or belief that the registry would continue to be operated by a nonprofit organization with a public commitment to maintaining a stable pricing environment, instead of on behalf of a private equity firm whose objective is to maximize profits for its funders?

Cheekily, I’m going to take ICANN at its word and say the answer is “yes”.

One of the controversies concerning the .org renewal was that ICANN seemingly ignored thousands of comments calling for the retention of price caps.

This, ICANN has denied, saying that it “reviewed and evaluated” every comment.

Among the very few comments that weren’t outright condemnations of the decision to remove price caps were two nuanced, arguably ambivalent, analyses from two influential ICANN structures — the At-Large Advisory Committee and the Non-Commercial Stakeholders Group.

ALAC’s eight-page comment (pdf) was very much of the “on the one hand…” variety, but it paid special attention to ISOC’s public interest works when putting forward the view that uncapped pricing might be a good thing, noting (and quoting itself):

a significant portion of .ORG registration fees “are returned to serve the Internet community [through] redistribution of .org funds into the community by the Internet Society, to support Internet development.”… ISOC’s goals and priorities, while far broader than At-Large (and even ICANN), parallel those of At-Large and the interests of end-users. Many At-Large Structures are also ISOC Chapters, further demonstrating the commonality of interests.

NCSG, meanwhile, said in its comments (pdf) that price caps should remain, but increased from the 10%-per-year level. It acknowledged that some .org money flows into funding NCSG.

So there’s two influential groups, both with organizational and/or funding ties to ISOC, saying price increases may be a good thing because ISOC acts in the public interest.

And ICANN said it read and absorbed all the comments, so I’m cheekily going to say that yes, ICANN at least in part renewed the .org contract in the belief that PIR would continue to be a non-profit and act in the public interest.

Had you been aware of the planned sale of the .Org registry to a private equity firm, would you have treated the renewal of the .Org registry agreement and the removal of price caps as worthy of robust discussion and a vote by the Board, such that perhaps the terms of the agreement would have been modified?

I’m going to go out on a limb here and say hell, no. ICANN doesn’t want to be a pricing regulator, regardless of the registry operator, in my view. It’s only the US government that’s preventing it lifting price restrictions on .com, I reckon.

What involvement did your former CEO, Mr. Chehade and your former SVP, Ms. Abusitta-Ouri, have in the decision to employ the base gTLD registry agreement for legacy TLDs during their tenure, if any?

In Chehadé’s case, the answer is fairly clear. Even if he did not have a hands-on role in the decision to cajole legacy gTLD registries toward the 2012 agreement, it all happened on his watch so he bears ultimate responsibility.

It’s worth noting, perhaps, that most of the legacy gTLD agreements that migrated over to the new gTLD agreement’s standard language happened not only while Chehadé was at the helm, but also after he’d already accepted his new job at Abry.

He announced his early resignation in May 2015, telling the AFP at the time that he already had a job lined up in the commercial sector, but he declined to give specifics.

He’d probably made his mind up to quit some time before the announcement. He registered the domain name chehade.company, which he now uses for his investment vehicle Chehadé & Company, in the April.

He revealed he was joining Abry as senior advisor on digital strategy in August that year, but didn’t actually leave until March 2016.

During that interim, lame-duck period ICANN negotiated and signed (all in October 2015) renewals for 2003-round gTLDs .pro, .cat and .travel, all of which incorporated 2012 contract language related to, for example, the Uniform Rapid Suspension process.

Three months before Chehadé’s resignation announcement, ICANN signed a very similar deal with .jobs, the first time it had incorporated 2012 language into a legacy gTLD contract.

These contracts were all signed for ICANN not by Chehadé but by his long-time buddy, frequent co-worker and then-president of the Global Domains Division, Akram Atallah (who is now CEO of Donuts, which is owned by Abry).

Since Chehadé’s departure, ICANN has also taken the same contract renewal stance with TLDs including .xxx, .mobi, .museum and .aero.

By 2016 it had become standard operating practice at ICANN to nudge registries towards the 2012-round contract, as Atallah explained to then-ICA lead Phil Corwin at ICANN’s Hyderabad meeting in November 2016. Atallah stated (pdf):

So basically the negotiations are — the registries come and ask for something, and we tell them please adopt the new gTLD contract. And if they push back on it and they say they don’t want something, we can’t force them to take it. It’s a negotiation between two parties. And I think it’s within the remit of the corporation to negotiate its contracts. If the policy comes back and says that the URS is not something that we want to have as a policy, of course, we would support that.

As regards Nora Abusitta-Ouri, Ethos’s “chief purpose officer”, her former job title of “senior VP for development and public responsibility programs” suggests she had little to no involvement in gTLD contractual issues.

While her LinkedIn profile doesn’t mention it, she appears to have become chief engagement officer at Chehadé & Company after her stint at ICANN ended in July 2016.

What restrictions do you have in place with respect to cooling-off periods for former executives?

Fuck all, clearly.

Selling off PIR, did ISOC just throw .org registrants under a bus?

Kevin Murphy, November 13, 2019, Domain Registries

Public Interest Registry is to lose its not-for-profit status, dramatically increasing the chances of .org price increases, under an acquisition deal announced this evening.

The Internet Society is selling PIR to a brand-new private investment firm called Ethos Capital Investors, which is run by two people with ties to the domain industry.

PIR CEO Jon Nevett told DI today that the company is no longer a non-profit following the transaction, and that ISOC will no longer receive a slice of every .org registration fee.

There’s a lot to unpick here.

The biggest concern is arguably that the deal substantially increases risk for .org registrants.

PIR was recently, and very controversially, granted the right to raise its prices from $9.93 per year to whatever-the-hell-it-wants per year, due to a renegotiation of its ICANN contract that scrapped its longstanding 10%-per-year price increase caps.

Many domain investors and non-profits called for the caps to remain. Uncontrolled pricing could lead to smaller charities, for example, being priced out of their decades-held domains, it was claimed.

But PIR repeatedly assured concerned registrants that it was “a mission driven non-profit registry and currently has no specific plans for any price changes”.

That tune has changed, if only a little, today. Nevett told us:

Our goal has always been to make .ORG accessible and reasonably priced — and that will continue under our new ownership. PIR has made reasonable decisions on price in the past, and we will uphold this spirit going forward. We would never make dramatic price increases as we know it would harm our registrants, as well as our registrars.

PIR also says it plans to establish an advisory council and fund to ensure its founding principles are upheld, and to apply for “B Corporation” certification.

B Corp is a private program run by a non-profit called B Lab that certifies companies that meet certain social, environmental and transparency standards, but it has no legal recognition in, for example, the US tax code.

Nevett told us today that he does not know how long ISOC was negotiating the sale, but that neither PIR nor ICANN knew of it during their contract talks.

We know very little about the new owner. Its web site, which appears to have been created very recently, merely provides bios of its two principals.

These are founder and CEO Erik Brooks, who this year quit the private equity firm Abry Partners after 20 years.

Abry, you may recall, is the company that hired former ICANN CEO Fadi Chehade in 2016 and gobbled up new gTLD registry Donuts in September last year.

His second is Nora Abusitta-Ouri, named as “chief purpose officer”, who’s apparently tasked with overseeing the moral “ethos” of the company’s investments.

Abusitta-Ouri is a former ICANN staffer who most recently held the role of senior VP for development and public responsibility programs until her 2016 departure. She’s also executive director of the Digital Ethos Foundation.

In short, based on what little information is publicly available, it appears that Ethos was set up purely for the purpose of acquiring PIR. It’s not at all clear where the money to fund the deal is coming from.

The acquisition price has not been disclosed, but given that PIR was grossing over $90 million a year at the last count, I doubt Brooks and Abusitta-Ouri are paying out of their own pockets.

Whoever’s backing this is going to want a return, and the best way to quickly soup up PIR’s growth would be to take advantage of its newfound ability to raise .org prices arbitrarily.

More than half of PIR’s revenue before today — close to $50 million a year — was handed directly to ISOC, to fund its capacity-building and education projects worldwide.

That’s all over now, which begs the question of how it will continue to fund itself in future. My guess is that, now that it has hundreds of millions of dollars in the bank, and is talking about an “endowment”, it’s going to stash its windfall in high-interest accounts and live off that income.

Meanwhile, whatever assurances .org registrants had that PIR was going to remain a non-profit concern have been utterly trashed.

UPDATE: Thanks to domain lawyer John Berryhill for pointing out in the comments that the domain name ethoscapital.org was registered by Abry’s Fadi Chehadé on May 7 this year. Additionally, a commenter on Domain Name Wire tonight noted that a company called Ethos Capital LLC was formed in Delaware on May 14, a day after ICANN published its summary of the .org contract renewal’s public comment period.