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Petition launched to fight .org deal

Kevin Murphy, November 21, 2019, Domain Registries

A petition has been opened on Change.org calling for the acquisition of Public Interest Registry by Ethos Capital.

The petition calls on ICANN, the Internet Society and PIR to “suspend” the sale “pending an open, transparent and multi-stakeholder public process about the future of .ORG.”

It was started by Jacob Malthouse, who worked at ICANN over a decade ago but is perhaps better known more recently as a founder and co-CEO of Big Room, the .eco gTLD registry. He appears to have left that company in August.

He blogged last week expressing his dismay with the news of the acquisition.

“This is a very sad day for the progressive movement. We need infrastructure like this and we need it to stay run by and for nonprofits, where it can be managed in a transparent and accountable fashion,” he wrote.

Almost two days in, the petition has attracted a piddling 32 signatures. That’s about 1% of the number of people who chose to email ICANN to protest .org price increases earlier this year, voices that ICANN nevertheless found unpersuasive.

The acquisition, for an undisclosed sum believed to be in the hundreds of millions of dollars at the least, was announced last week.

ICANN board meets to consider PIR acquisition TODAY

Kevin Murphy, November 21, 2019, Domain Policy

ICANN’s board of directors will gather today to consider whether the acquisition of Public Interest Registry by a private equity company means that it should reverse its own decision to allow PIR to raise .org prices arbitrarily.

Don’t get too excited. It looks like it’s largely a process formality that won’t lead to any big reversals, at least in the short term.

But I’ve also learned that the controversy could ultimately be heading to an Independent Review Process case, the final form of appeal under ICANN rules.

The board is due to meet today with just two named agenda items: Reconsideration Request 19-2 and Reconsideration Request 19-3.

Those are the appeals filed by the registrar Namecheap in July and rights group the Electronic Frontier Foundation in August.

Namecheap and EFF respectively wanted ICANN to reverse its decisions to remove PIR’s 10%-a-year price-raising caps and to oblige the registry to enforce the Uniform Rapid Suspension anti-cybersquatting policy.

Both parties now claim that the sale by the Internet Society of PIR to private equity firm Ethos Capital, announced last week, casts new light on the .org contract renewal.

The deal means PIR will change from being a non-profit to being a commercial venture, though PIR says it will stick to its founding principles of supporting the non-profit community.

I reported a couple of weeks ago that the board had thrown out both RfRs, but it turns out that was not technically correct.

The full ICANN board did in fact consider both appeals, but it was doing so in only a “preliminary” fashion, according to an ICANN spokesperson. ICANN told me:

On 3 November the Board considered “proposed determinations” for both reconsideration request 19-2 and 19-3. In essence, the Board was taking up the Board Accountability Mechanism Committee (BAMC) role, as the BAMC had not been able to reach quorum in early November due to certain recusals by BAMC members.

Once the Board adopted the proposed determinations (in lieu of the BAMC issuing a recommendation to the Board) the parties that submitted the reconsideration requests had 15 days to submit a rebuttal, for the Board’s full consideration of the matter, which is now on the agenda.

Normally, RfRs are considered first by the four-person BAMC, but in this case three of the members — Sarah Deutsch, Nigel Roberts, and Becky Burr — recused themselves out of the fear of appearing to present conflicts of interest.

The committee obviously failed to hit a quorum, so the full board took over its remit to give the RfRs their first pass.

The board decided that there had been no oversights or wrongdoing. Reconsideration always presents a high bar for requestors. The .org contract was negotiated, commented on, approved, and signed completely in compliance with ICANN’s governing rules, the board decided.

But the ICANN bylaws allow for a 15-day period following a BAMC recommendation during which rejected RfR appellants can submit a rebuttal.

And, guess what, both of them did just that, and both rebuttals raise the PIR acquisition as a key reason ICANN should think again about the .org contract changes.

The acquisition was announced a week ago, and it appears to have come as much of a surprise to ICANN as to everyone else. It’s a new fact that the ICANN board has not previously taken into account when considering the two RfRs, which could prove important.

Namecheap reckons that the deal means that PIR is now almost certain to raise .org prices. New gTLD registry Donuts was bough by Ethos affiliate Abry Partners last year, and this year set about raising prices across the large majority of its 200-odd gTLDs. Namecheap wrote in its rebuttal:

Within months of be acquired by Abry Partners, it raised prices in 2019 for 220 out of its 241 TLDs. Any statements by PIR now to not raise prices unreasonably are just words, and without price caps, there is no way that .org registrants are not used a source to generate revenue for acquisitions or to pay dividends to its shareholders.

It also said:

The timing and the nature of this entire process is suspicious, and in a well-regulated industry, would draw significant scrutiny from regulators. For ICANN not to scrutinize this transaction closely in a completely transparent and accountable fashion (including public disclosure of pertinent information regarding the nature, cost, the terms of any debt associated with the acquisition, timeline of all parties involved, and the principals involved) would demonstrate that ICANN org and the ICANN Board do not function as a trusted or reliable internet steward.

Namecheap also takes issue with the fact that ICANN’s ruling on its RfR (pdf) draws heavily on a 2009 economic analysis by Professor Dennis Carlton, which concluded that price caps were unnecessary in the new gTLD program.

The registrar trashes this analysis as being based on more opinion than fact, and says it is based on outdated market data.

Meanwhile, the EFF’s rebuttal makes the acquisition one of four reasons why it thinks ICANN should reverse course. It said;

ICANN must carefully reexamine the .ORG Registry Agreement in light of this news. Without the oversight and participation of the nonprofit community, measures that give the registry authority to institute new [Rights Protection Mechanisms] or make other major policy changes invite management decisions that conflict with the needs of the .ORG community.

Quite often, RfRs are declined by ICANN because the requestor does not present any new information that the board has not already considered. But in this case, the fact of the PIR acquisition is empirically new information, as it’s only week-old news.

Will this help Namecheap and the EFF with their cause? The board will certainly have to consider this new information, but I still think it’s unlikely that it will change its mind.

But I’ve also learned that Namecheap has filed with ICANN to trigger a Cooperative Engagement Process procedure.

The CEP is an often-lengthy bilateral process where ICANN and an aggrieved party attempt to resolve their differences in closed-door talks.

When CEP fails, it often leads to an Independent Review Process complaint, when both sides lawyer up and three retired judges are roped in to adjudicate. These typically cost both sides hundreds of thousands of dollars in legal fees.

CEP and IRP cases are usually measured in years rather than months, so the PIR acquisition could be under scrutiny for a long time to come.

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.

Industry veteran Jay Daley tapped to lead IETF

Kevin Murphy, October 28, 2019, Domain Policy

The Internet Engineering Task Force has named domain industry veteran Jay Daley as its new executive director.

In a blog post last week, the IETF said that Daley beat 133 other “highly qualified applicants” for the job.

He’s the first person to hold the executive director title since the IETF formalized itself into an LLC entity owned by the Internet Society a year ago.

Daley’s most-recent activity in the domain industry was as interim CEO of Public Interest Registry between Brian Cute and Jon Nevett, a position he held for about six months last year.

He continues to sit on PIR’s board of directors

PIR is of course another ISOC subsidiary and its biggest funding source, due to the tens of millions of dollars of .org registry fees it donates every year.

Daley was previously CEO of .nz ccTLD registry NZRS and head of technology at .uk registry Nominet.

ISOC New York challenges Neustar’s .nyc contract

Kevin Murphy, February 8, 2017, Domain Registries

The New York chapter of the Internet Society has called upon the city to delay the renewal of Neustar’s contract to run the .nyc gTLD, citing numerous concerns about how it is being managed.

In a letter (pdf) to Mayor Bill de Blasio, the group calls for a “town hall” and community consultation and for the city to “make appropriate adjustments” before the contract is renewed.

Its beef appears to be what it sees as .nyc’s lackluster performance in the market and the lack of promised community engagement.

The ISOC-NY letter contains a list of over a dozen “observations and nitpicks”.

These include a decline in .nyc registration volume, that fact that most .nyc names are parked, and the fact that Whois privacy is banned from the gTLD.

Neustar’s current contract is due to be renewed March, according to the letter.

(This post was updated February 8 to correct the expiry date of Neustar’s contract.)

Trump’s ‘Muslim ban’ draws fire, creates confusion in ICANN community

Kevin Murphy, January 31, 2017, Domain Policy

At least two senior-level ICANN community members, including a new member of its board of directors, have been affected by US President Donald Trump’s controversial travel restrictions, imposed this weekend on the citizens of seven Muslim-majority nations.

The so-called “Muslim ban” has also attracted criticism from other members of the community.

Kaveh Ranjbar, Amsterdam-based chief information officer for RIPE/NCC and an ICANN director, said that he is unable to attend this week’s board retreat in Los Angeles because he holds an Iranian passport.

“I have checked this with ICANN’s general counsel and they have tried an external counsel with expertise in immigration,” Ranjbar told DI. “Their advice was that I might be able to travel but they were not sure. As you know the situation is really fluid and things change real fast.”

“After checking with the airline and looking at similar cases, I decided not to even try, because I did not want to risk deportation or being detained in the US,” he said.

Ranjbar was born in Iran but holds dual Dutch-Iranian citizenship.

He said he will participate remotely in the board retreat, likely until with 3am each day.

“However, the work of ICANN board is no different than any other board, it is mostly free exchange of ideas and discussing and challenging positions, outside of the formal setting of the meetings, that’s how you get a feel on your other colleagues positions and will be informed enough about their positions which will enable you to support or oppose with proper grounds and arguments,” he said. “I will miss that critical part.”

Non-Commercial Users Constituency chair Farzaneh Badiei is also affected. She’s Iranian, but recently relocated to the US on an academic visa.

She told NCUC members that she’s effectively stuck there, unable to attend an intersessional meeting in Iceland or ICANN’s March meeting in Denmark, for fear of not being allowed to return.

“I have been advised to take precautionary measures in light of the current draft executive order that might not allow current visa holders re-entry to the United States,” she said.

ICANN is still evaluating the situation.

“We are still trying to fully understand the potential impact of the President’s Executive Order on our community, Board and staff travelers. We want to ensure ICANN’s continued accessibility and openness,” a spokesperson said on Sunday.

ICANN does have Iranian-born staffers, but I’m not aware that any have reported travel problems as a result of the Trump move.

The travel ban has drawn fire from other related organizations.

Internet Society CEO Kathy Brown wrote that she was “deeply troubled” by the ban, adding:

Not only will the purported bans place an unwarranted burden on people in our organization, it is an anathema to the Internet Society whose values rest firmly on a commitment to an open, globally connected community dedicated to the open, global Internet. We are encouraged by the countries who have rejected the U.S. action this weekend and by the human rights organizations that have stood in solidarity with countless refugees and travelers who were so abruptly halted in entering the U.S.

The chairs of the IETF, IAOC and IAB indicated in a joint statement that they may reconsider holding future meetings in the US:

the recent action by the United States government to bar entry by individuals from specific nations raises concerns for us—not only because upcoming IETF meetings are currently scheduled to take place in the U.S., but also because the action raises uncertainty about the ability of U.S.-based IETF participants to travel to and return from IETF meetings held outside the United States….

Our next meeting is planned for Chicago, and we believe it is too late to change that venue. We recognize, however, that we may have to review our other planned meeting locations when the situation becomes clearer. We are already reviewing what to do as far as location for the next open North American meeting slot.

Meanwhile, the Internet Governance Project’s Milton Mueller blogged:

This has significant implications for Internet governance. Coordination and policy making for a global medium based on cooperation and voluntary standards requires open transnational institutions. Participation in those institutions requires the ability to freely travel. The United States can no longer be considered the leader, either politically or ideologically, of an open global Internet if its own society is mired in protective barriers… What a stroke of good fortune that the prior administration succeeded in freeing ICANN from the U.S. government in its waning months.

The travel ban is said to be “temporary”, lasting just 90 days, but some fear it may evolve into a permanent fixture of US policy.

$33 million .org contract up for grabs

Kevin Murphy, February 16, 2016, Domain Registries

Public Interest Registry, operator of .org, has put its back-end registry services contract up for grabs.

The deal could be worth around $33 million a year, judging by its current relationship with incumbent back-end Afilias.

PIR said in a statement today:

The organisation desires to contract with a qualified back-end registry services provider that shares a similar reputation and holds itself to the highest operational and ethical standards. The selected back-end registry service provider should be a “valued business partner” – an organisation that combines outstanding qualifications in service delivery with the ability to engage Public Interest Registry in a business relationship that seeks strategic and innovative approaches to enhance the capability and efficiency of service delivery.

The contract was actually supposed to end in January, according to the Internet Society resolution that approved it back in 2010.

According to PIR’s most recent available tax return (pdf), Afilias was paid $33.2 million in 2014.

It was paid $31 million in 2013 when its total revenue for the year we know to be $77 million. So it’s a pretty big deal for Afilias.

The payments are mainly, but not exclusively, for domain name registry services, according to PIR’s tax returns.

Afilias also operates a few additional services related to PIR’s expansion in the non-governmental organization market, such as a database of NGOs used for validation purposes.

But if we over-simplify things, a roughly $33 million annual payout for a 10-million-domain zone works to something in the ballpark of $3 per name per year.

Given some of the numbers I’ve heard thrown around over the last few years, I expect there are a few back-end providers out there that would be more than happy to offer a cheaper deal.

It will be the first time Afilias has had to fight for the .org contract since 2010, thought PIR has done a couple of analyses over the last few years to make sure it’s getting a fair deal in line with market prices.

Since 2010 the number of back-end registry providers has exploded due to the advent of the new gTLD program, so there will be more competition for the .org contract.

That said, none of the new providers are yet proven at the scale of .org, which has over 10.6 million names at the last count.

PIR expects to award the contract before December 2016.

Interested vendors have until March 5 to express their interest on this web site.

IPv4 addresses to run out Thursday

Kevin Murphy, February 1, 2011, Domain Tech

ICANN will announce the final depletion of its pool of IPv4 addresses this Thursday.

The Number Resource Organization will hold a “ceremony and press conference to make a significant announcement and to discuss the global transition to the next generation of Internet addresses”.

The NRO is ICANN’s supporting organization representing Regional Internet Registries, the outfits responsible for handing out IP addresses to network operators.

ICANN, the Internet Society and the Internet Architecture Board will also participate in the event, scheduled for Thursday February 3 at 1430 UTC. It will be webcast here.

Today, APNIC, the Asia-Pacific RIR, said that it has been assigned two /8 blocks of addresses, meaning IANA is down to its Final Five chunks.

Thursday’s ceremony will presumably entail ICANN/IANA officially handing out these last five blocks to the five RIRs, one each, as called for by its allocation policy.

After that, it’s all gone. No more IPv4. The age of IPv6 is upon us.

It is currently estimated that the RIRs will themselves run out of IPv4 in September. After that, if they need IP addresses they’ll receive IPv6.

IPv4 is rapidly becoming a scarce commodity.

Many people, including ICANN chairman Peter Dengate Thrush, have predicted a “gray market” for addresses to appear, with address blocks changing hands for less than the cost of upgrading to IPv6.

The focus on Thursday, however, will be all about the measures network operators need to implement in order to remain viable on an internet increasingly running IPv6 equipment.

Google and Facebook to cut off thousands for World IPv6 Day

Kevin Murphy, January 12, 2011, Domain Tech

Some of the internet’s biggest companies are going to deliberately break their web sites for a day, for hundreds of thousands of users, in order to raise awareness of IPv6.

Google, Facebook and Yahoo are among the companies that will go into production with the protocol for 24 hours, starting at midnight UTC, June 8, for World IPv6 Day.

For the day, the companies will make their sites accessible using a dual stack of IPv4 and IPv6. Most users will be unaffected and will be able to access the services as normal.

But Google predicted on its blog that 0.05% of users may “experience connectivity problems, often due to misconfigured or misbehaving home network devices.”

Facebook purportedly has 500 million users, so presumably it’s expecting 250,000 of them to be cut off from its site for the day, with a corresponding dip in ad impressions and revenue.

World IPv6 Day is being overseen by the Internet Society. ICANN/IANA does not appear to have a role, despite it having global responsibility over IP address allocations.

ISOC’s site says:

The goal of the Test Drive Day is to motivate organizations across the industry – Internet service providers, hardware makers, operating system vendors and web companies – to prepare their services for IPv6 to ensure a successful transition as IPv4 addresses run out.

The IPv4 pool is estimated to be exhausted next month, when IANA allocates the final five /8 blocks to the Regional Internet Registries. The RIRs are expected to run out of addresses in November.

Not too long after that, IPv6 will be the only choice if you want to obtain IP addresses through official channels. If you want IPv4, you’ll have to head to the gray market.

New TLDs get their own conference

Kevin Murphy, September 28, 2010, Domain Registries

Former ICANN staffer Kieren McCarthy is organizing a conference dedicated to new top-level domains, set to run in San Francisco for two days next February.

The .nxt conference will be hosted by the Internet Society’s SF Bay Area chapter. Pricing is expected to be in the $300 to $500 range.

The organizers are currently looking for speakers, exhibitors and attendees from registries, registrars, potential TLD applicants, consultants and marketers.

McCarthy told me that the idea is to focus more on the business opportunity side of things, rather than the policy-making that dominates ICANN meetings.

“Once all the argument is over and the rules are set, I thought it would be great to have a conference focused on what we were all going to do with the Internet,” he said in an email.

The agenda is expected to be split into four tracks: policy, implementation, models and marketing, tackling subjects such as how to run a registry and how to effectively market a TLD.