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

Kevin Murphy, February 5, 2020, Domain Policy

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.

As Cancun looms, ICANN bans China travel because of Coronavirus

Kevin Murphy, February 5, 2020, Domain Policy

ICANN has banned its staff from travelling to China because of Coronavirus.

The organization said at the weekend that it has implemented the ban, which includes connecting flights of “an abundance of caution”. The ban includes the mainland as well as Hong Kong and Macau.

The move matches travel bans imposed on staff by other multi-national technology outfits, and comes as countries including the US place precautionary restrictions on flights from China.

ICANN has in the recent past changed the venues of public meetings twice due to worries about the unrelated Zika virus, but it has no meetings lined up in China any time soon.

Next month, the community will meet in Cancun, Mexico. According to the European Centre for Disease Control, there are currently no reported cases of the disease in that country.

There are usually plenty of Chinese nationals at ICANN meetings, of course, which could put ICANN in a tricky ethical/practical position as 67 draws closer, depending on how the global spread of the disease progresses.

ICANN said: “As of now, we fully intend to move forward with ICANN67 in Cancún, Mexico.”

The ECDC says there have been 20,626 confirmed cases of the virus since it was identified in December, almost all in China, and 427 deaths, all Chinese.

Is the .co rebid biased toward Afilias? Yeah, kinda

Kevin Murphy, January 17, 2020, Domain Registries

The Colombian government has come under fire for opening up the .co registry contract for rebid in a way that seems predetermined to pick Afilias as the winner, displacing its fierce rival Neustar.

As I blogged in November, Colombia thinks it might be able to secure a better registry deal, so it plans to shortly open .co up to competitive proposals.

A company called .CO Internet, acquired by Neustar for $109 million in 2014, has been running the ccTLD for the last decade. There are currently around 2.3 million .co domains under management, according to Colombia.

With the renewal deadline looming, the government’s technology ministry, MinTIC, published an eyebrow-raising request for proposals last month.

What’s surprising about the RFP is that some of the four main technical performance criteria listed are so stringent that probably only two companies in the industry qualify — Verisign and Afilias, and so far Verisign has not been involved in the RFP process.

The companies that have been engaging with the government to date are Afilias, Neustar/.CO, Nominet, CentralNic and Donuts.

First, MinTIC wants a registry that’s had at least two million domains under management across its portfolio continuously for two years. All five registries qualify there.

Second, it wants a registry that’s been involved in the migration of a TLD of at least one million names, either as the gaining or losing back-end.

That immediately narrows the pack to just two of the five aforementioned registries — Neustar and Afilias.

Verisign would also qualify, if it’s in the bidding, but I suspect it’s not. Taking over .co would look like a “buy it to kill it” strategy, which would be horrible optics for the Colombian government.

There have only ever been three migrations over one million names, to my knowledge: the Verisign->Afilias .org transition of 2003, the Neustar->Afilias .au move of 2018, and last year’s Afilias->Neustar .in handover.

CentralNic, Nominet and Donuts have all moved numerous TLDs between back-ends, but with much smaller per-TLD domain volumes.

Third — and here’s the kicker — the successful .co bidder will have to show that it processes on average 25 million registry transactions — defined as “billable EPP (write) transactions, as well as all EPP search (read) transactions” — per day. (All of the RFP quotes in this post have been machine-translated from Spanish by Google and run by a few generous Spanish speakers for verification.)

The RFP is not entirely clear on what exact data points it’s looking at here, but my take is that qualifying transactions include, at an absolute minimum, attempts to create a domain, renew a domain, transfer a domain and check whether a domain is registered.

The vast majority of such transactions are in the check and create functions, and I believe a great deal of that activity relates to drop-catching, where registries are flooded with add requests for just-deleted domains.

Whichever way you split it, 25 million a day is a ludicrously high number. Literally only .com, which sees 2.3 billion checks and 1.5 billion adds per month, sees that kind of action.

According to Neustar, which actually runs .co, it only sees 6.4 million transactions per day on average. The requirement to handle 25 million a day is “exaggerated, unjustified and discriminatory” against Neustar, Neustar told MinTIC.

But the RFP allows for the bidding registries to spread their 25-million-a-day quota across all of the TLDs they manage, and this MAY sneak Afilias over the line.

I say MAY in big letters because I don’t believe the numbers that Afilias (and probably other registries too) reports to ICANN every month are reliable.

If you add up the reported, qualifying EPP transactions for September in Afilias’ top four legacy gTLDs — .org, .info, .mobi and .pro — you get to over 25 million per day.

But those same records show that, for example, .mobi, .pro and .info had exactly the same number of EPP availability checks that month — 215,988,497 each.

This is clearly bad data.

I reported on this issue last May, when ICANN’s Security and Stability Advisory Committee informed ICANN that major registries were providing “not reliable” or possibly “fabricated” data about port 43 Whois queries.

Afilias, which was one of the apparent offenders, told me at the time that it was addressing the issue with ICANN, but it does not yet appear to have fully fixed its reporting to enable TLD-by-TLD breakdowns of its registry activity.

It is of course quite possible, even very likely, that Afilias has on average more than 25 million qualifying EPP transactions per day, but how’s it going to prove that to the Colombian government when the numbers it reports under contract to ICANN are clearly unreliable?

It’s a little harder to determine whether Neustar would qualify under the 25-million transaction rule, because some of its largest zones are ccTLDs — .co, .in and .us — that do not publicly report this kind of data. Its comments to the RFP suggest it would not.

Numbers aside, I’ll note that there’s very probably an inherent bias towards legacy gTLD operators like Afilias and against relative newcomers such as CentralNic if you’re counting EPP transactions. As I noted above, a lot of these transactions are coming from drop-catch activity, which is more prevalent on larger, older TLDs where there are more dropping domains that are more likely to have existing backlinks and traffic.

The fourth technical requirement in the Colombian RFP that looks a bit fishy is the requirement that the new registry must have channel relationships with at least 10 of the largest 25 registrars, as listed by a web site called domainstate.com.

I can’t say I’ve looked at domainstate.com very often, if at all, but a quick look at its numbers for September strongly suggests to me that it does not count post-2012 new gTLD registrations in its registrar league table. One registrar with almost four million domains under management doesn’t even show up on the list. This arguably could give an advantage to a registry that plays strongly in legacy gTLDs.

That said, it’s probably an academic point — I don’t think any of the bidders for the .co contract would have difficulty showing that they have 10 of the top 25 registrars on board, whichever way you calculate that league table.

Cumulatively, these four technical hurdles have led some to suggest that Afilias has somehow steered MinTIC towards creating an RFP only it could win.

Apart from what I’ve discussed here, I’ve no evidence that is the case, and Afilias has not yet responded to my request for comment today.

Luckily for the bidding registries, the Columbian RFP has not yet been finalized. Comments submitted by the bidders and others are apparently going to be taken on board, so the barriers to entry for respondents could be lowered before bids are finally accepted.

MinTIC posted an update last night that extends the period that the RFP could run, and the transition period should Neustar lose the contract. A handover, should one happen at all, could now happen as late as February next year.

Amazon governments vow revenge for “illegal and unjust” ICANN decision on .amazon

Kevin Murphy, January 17, 2020, Domain Policy

The eight nations of the Amazon Cooperation Treaty Organization are unhappy that ICANN is giving .amazon to Amazon the retailer and have vowed to spread the word that ICANN has acted “illegally”.

ACTO secretary general Alexandra Moreira has written (pdf) to ICANN CEO Göran Marby to say: “We consider this decision an illegal and unjust expropriation of our culture, tradition, history and image before the world.”

She said that ACTO is now “committed to disseminating news of this situation to all relevant groups”, adding:

the international community should be aware of the very real consequences or ramifications (be it economic, environmental, cultural or related to questions of sovereignty) of granting exclusive access to the domain “.Amazon” to a single company.

The delegation of .amazon to Amazon the company, “jeopardizes the continued well-being of the societies that live there”, she wrote, with no elaboration.

Amazon was last month told it could have the gTLD after a years-long battle with ACTO and the ICANN Governmental Advisory Committee, which had advised ICANN by consensus to reject the .amazon application.

That consensus broke last year when the US government basically said enough was enough and refused to continue back the eight South American governments’ plight.

Under the terms of Amazon’s contract, it has to protect hundreds of culturally sensitive second-level domains of ACTO’s choosing, and to give each of its members a single domain that they can use to promote their portion of the Amazonian region.

ACTO had wanted more, basically demanding joint ownership of .amazon, which Amazon refused.

It remains to be seen whether ACTO’s reaction will be limited to harsh language, or whether its members will actively try to disrupt ICANN activities. The next GAC-ICANN face-to-face, set for Cancun in March, could be interesting viewing.

SaveDotOrg to protest outside ICANN HQ. #lol

Kevin Murphy, January 16, 2020, Domain Registries

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.

ICANN gets a new European chief

Kevin Murphy, January 14, 2020, Domain Policy

ICANN has moved long-time head of North America stakeholder engagement Chris Mondini to head up the organization’s European office.

Mondini will take over the role of vice president of stakeholder engagement for Europe and will also become managing director of the Brussels office.

He replaces Jean-Jacques Sahel, who quit to join Google’s Asia policy team a few months ago.

As attendees at ICANN’s recent Montreal meeting may recall, American Mondini speaks (to my ear) pretty decent French, which will no doubt come in handy after he crosses the pond.

He will continue to lead Global Business Engagement initiatives worldwide and will continue to report to senior VP Sally Costerton.

Mondini has been with ICANN for over eight years, having joined during the Beckstrom years in 2011.

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

Kevin Murphy, January 12, 2020, Domain Registries

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.

Registrar terminated after what looks like domain hijacking

Kevin Murphy, January 10, 2020, Domain Registrars

ICANN has canned its first registrar of the year.

Los Angeles-based World Biz Domains will be going out of bizness after ICANN terminated its registrar contract earlier this week, following its non-responsiveness to what appears to be case of domain hijacking.

It’s a nothing registrar, with fewer than 100 domains under management, but it once had over 5,000.

The termination comes following the suspension I blogged about in October, which was related to the transfers to World Biz of 15 potentially valuable domains in late 2018.

The names were all either short numerics or the names of famous places in Singapore and Malaysia.

ICANN spent most of last year demanding records showing that the transfers were legit, but was ghosted.

World Biz allegedly also had failed to deliver Whois records in the proper format, and was behind on its ICANN accreditation fees.

The company will lose its accreditation officially on January 22.

.gay prices and availability revealed as registry promises to give 20% of revenue to charity

Kevin Murphy, January 10, 2020, Domain Registries

The long-fought, once-controversial gTLD .gay is to launch a month from now.

Top Level Design, which won the string at auction against three other applicants last February, this week informed registrars that its sunrise period will begin February 10 this year. General availability will start May 20.

The registry, which beat a mission-focused, restricted “community” applicant for .gay, also said that it will give 20% of its top-line registration revenue to two LGBT charities — GLAAD and CenterLink.

With base registry fee of $25 per domain, that’s at least $5 going to gay charities for every domain sold. Registrars are being encouraged to match that donation at the retail level.

There will also be six tiers of “premium” domains — $100, $250, $650, $2,000, $5,000 and $12,500 — for which the 20% donation will also apply. Premium domains will renew at premium prices.

Top Level Design also says it is to enforce an anti-bullying policy. Any registrant using a .gay domain for “harassment, threats, and hate speech” will stand to lose their name. It’s a complaint-based enforcement policy; the registry will not actively monitor content.

Registrants who have forums on their .gay web sites will also have to police their user-generated content, to keep it in line with registry policy.

Its official policy even includes helpline numbers for bullied gay people who are feeling suicidal.

The registry appears to be making the right noises when it comes to calming concerns that an unrestricted, non-community .gay space could do more harm than good.

The key area where it diverges from the community application, which had been backed by dozens of gay-rights groups, is the lack of a ban on pornography. I’d hazard a guess that a good chunk of registration volume will come from that space.

The launch will comprise two sunrise periods and an early access period, before .gay goes to GA.

The first sunrise is the ICANN-mandated period, open only to those trademark owners with listings in the official Trademark Clearinghouse. That will run from February 10 to March 31. A second sunrise will be open to other trademarks, validated by back-end provider CentralNic. That runs from April 6 to May 6.

Both sunrise periods will include the automatic reservation of 10 potentially confusing Latin internationalized domain name variants, generated by CentralNic algorithm. This will include strings that transpose 0 and O or e and ë, for example.

EAP, the period in which early birds can grab the names they want for premium fees that decrease every day, runs from May 11 to May 17. Prices are not yet available.

GA is May 20.

Top Level Design originally planned to launch .gay last year, timed to coincide with National Coming Out Day in the US.

The new GA date appears to land on the anniversary of a landmark gay rights ruling in the US Supreme Court, Romer v Evans, but this may just be a coincidence.

.gay is launching about a month before the 50th anniversary of the Stonewall Riots, in June, so we might see some marketing around that event.

Registrars signing up to sell .gay domains are also being given some schooling, apparently courtesy of GLAAD, about what language is currently cool and uncool to use in marketing.

Apparently, the terms “homosexual”, “sexual preference” and “transvestite” are considered offensive nowadays and are therefore verboten in registrar marketing. “Queer”, as a partially reclaimed offensive term, should be used with caution.

I suppose Top Level Design had better hope the word “gay” is not added to this list any time soon, otherwise it has a serious problem on its hands.

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

Kevin Murphy, January 8, 2020, Domain Registries

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.