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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.

Surprise! ICANN throws out complaints about .org price caps

Kevin Murphy, November 4, 2019, Domain Policy

ICANN has rejected two appeals against its decision to lift price caps and introduce new anti-cybersquatting measures in the .org space.

In other news, gambling is going on in Rick’s Cafe.

NameCheap and the Electronic Frontier Foundation both filed Requests for Reconsideration with ICANN back in July and August concerning the .org contract renewal.

NameCheap argued that ICANN should have listened to the deluge of public comments complaining about the removal of price caps in Public Interest Registry’s .org contract, while EFF complained about the inclusion of the Uniform Rapid Suspension rights protection mechanism.

Reconsideration requests are usually handled by the Board Accountability Mechanisms Committee but this time around three of its four members (Sarah Deutsch, Nigel Roberts, and Becky Burr) decided to recuse themselves due to the possibility of perception of conflicts of interest.

That meant the committee couldn’t reach a quorum and the RfRs went to ICANN’s outside lawyers for review instead, before heading to the full ICANN board.

This hasn’t happened before, to my recollection.

Also unprecedented, the board’s full discussion of both requests was webcast live (and archived here), which negates the need for NameCheap or the EFF to demand recordings, which is their right under the bylaws.

But the upshot is basically the same as if the BAMC had considered the requests in private — both were denied in a unanimous (with the three recusals) vote.

Briefing the board yesterday, ICANN associate general counsel Elizabeth Le said:

There was no evidence to support that ICANN Org ignored public consultation. Indeed both renewals went out for public comments and there were over 3,700 comments received, all of which ICANN reviewed and evaluated and it was discussed in not only the report of public comments, but it was discussed through extensive briefings with the ICANN board…

Ultimately, the fact that the removal of the price caps was part of the Registry Agreements does not render the public comment process a sham or that ICANN failed to act in the public benefit or that ICANN Org ignored material information.

General counsel John Jeffrey and director Avri Doria both noted that the board may not have looked at each individual comment, but rather grouped together based on similarity. Doria said:

Whether one listens to the content once or listens to it 3,000 times, they have understood the same content. And so I really just wanted to emphasize the point that it’s not the number of comments, it’s the content of the comments.

This seems to prove the point I made back in April, when this controversy first emerged, that letter-writing campaigns don’t work on ICANN.

As if to add insult to injury, the board at the same meeting yesterday approved paying an annual bonus to the ICANN Ombudsman, who attracted criticism from NameCheap and the Internet Commerce Association after dismissing many of the public comments as “more akin to spam”.

After .org price outrage, ICANN says it has NOT scrapped public comments

Kevin Murphy, October 11, 2019, Domain Policy

ICANN this evening said that it will continue to open up gTLD registry contract amendments for public comment periods, despite posting information yesterday suggesting that it would stop doing so.

The organization recently formalized what it calls “internal guidelines” on when public comment periods are required, and provided a summary in a blog post yesterday.

It was very easy to infer from the wording of the post that ICANN, in the wake of the controversy over the renegotiation of Public Interest Registry’s .org contract, had decided to no longer ask for public comments on future legacy gTLD contract amendments.

I inferred as much, as did another domain news blogger and a few other interested parties I pinged today.

I asked ICANN if that was a correct inference and Cyrus Namazi, head of ICANN’s Global Domains Division, replied:

No, that is not correct. All Registry contract amendments will continue to be posted for public comment same as before.

He went on to say that contract changes that come about as a result of Registry Service Evaluation Process requests or stuff like change of ownership will continue to not be subject to full public comment periods (though RSEP does have its own, less-publicized comment system).

The ICANN blog post lists several scenarios in which ICANN is required to open a public comment period. On the list is this:

ICANN org base agreements with registry operators and registrars.

The word “base” raised at least eight eyebrows of people who read the post, including my two.

The “base” agreements ICANN has with registries and registrars are the 2013 Registrar Accreditation Agreement and the 2012/2017 Registry Agreement.

The RAA applies to all accredited registrars and the base RA applies to all new gTLD registries that applied in the 2012 round.

Registries that applied for, or were already running, gTLDs prior to 2012 all have bespoke contracts that have been gradually brought more — but not necessarily fully — into line with the 2012/17 RA in renewal renegotiations over the last several years.

In all cases, the renegotiated legacy contracts have been subject to public comment, but in no cases have the comments had any meaningful impact on their ultimate approval by ICANN.

The most recent such renewal was Public Interest Registry’s .org contract.

Among the changes were the introduction of the Uniform Rapid Suspension anti-cybersquatting policy, and the removal of price caps that had limited PIR to a 10% increase per year.

The comment period on this contract attracted over 3,200 comments, almost all of which objected to the price regulation changes or the URS.

But the contract was signed regardless, unaffected by the comments, which caused one registrar, NameCheap, to describe the process as a “sham”.

With this apparently specific reference to “base” agreements coming so soon thereafter, it’s easy to see how we could have assumed ICANN had decided to cut off public comment on these contentious issues altogether, but that appears to not be the case.

What this seems to mean is that when .com next comes up for renewal, it will be open for comment.

PIR’s “new” .org domain is just temporary. Help it pick another new one!

Kevin Murphy, September 18, 2019, Domain Registries

Public Interest Registry unveiled a fancy new set of logos and a swanky new web site yesterday, but CEO Jon Nevett tells us that its new domain name is temporary.

The new site and logos are undeniably superior to those they replace, but what raised eyebrows was the fact that the non-profit company has replaced its old pir.org domain with thenew.org, and deprecated the PIR brand almost entirely on its site.

The old PIR domain now redirects to the new thenew one, but the older domain still ranks higher in search engines.

But Nevett tells us it’s not a permanent move.

“Think of it more as a marketing campaign,” Nevett said. “This is a limited campaign, then we’ll move to another name.”

The campaign is basically about PIR going back to its roots and repositioning itself as the .org guys.

It’s only been six years since PIR last rebranded. In September 2013, the company started calling itself “Your Public Interest Registry” in its logo, deliberately playing down the “.org”.

Then-CEO Brian Cute told us at the time that playing up .org “made a lot of sense when we were a single-product company” but that with the imminent launch of sister TLDs .ngo and .ong, the decision was made to lead with the PIR branding instead.

.ngo and .ong — for “non-governmental organization” in English and other languages — haven’t exactly flown off the shelves. Neither one has ever topped 5,000 domains under management, while .org, while declining for a few years, still sits comfortably at over 10 million domains.

“I wouldn’t say so,” Nevett said, when I asked him whether PIR is now essentially back to being a single-product company. “But .org is the flagship, and we’re going back to leading with .org as the key brand. It’s what we’re known for and to say otherwise would be silly.”

People outside the industry have no idea what PIR is, he said, but they all know what .org is.

Some suspect that the rebranding is a portent of PIR gearing up to raise prices, given its newly granted ability to up its registry fees beyond the 10% annual price increase cap that it has it has been to date contractually bound to.

But Nevett said the rebranding is “not at all related to a price increase”. He told me several times that PIR still has “no plans to raise prices”.

He said the rebranding was first put in motion over a year ago, after Cute’s departure but before Nevett’s hiring, during Jay Daley’s interim interregnum.

Anyway, here are the new logos:

PIR logos

To the untrained eye, like both of mine, the new, primary .org logo may just look like two blue circles and the word “org”, but PIR’s press release tells us it’s communicating so much more:

The open “ORG” lettering on either side of the sphere signals that .ORG is an open domain for anyone; it serves as a powerful and inclusive global connector. The logo uses a deep royal blue, evoking feelings of trust, security, and reliability that reflect .ORG’s long-standing reputation.

Because I don’t want to alienate any of PIR’s utterly lovely public relations agency people (the same PR agency that came up with the new branding), I’m not going to pass any comment whatsoever on this piffle.

I think the new logos and web site are improvements. They’re also long-term investments, while the new domain name is not.

“For three to six months we’ll be leading with the marketing campaign of thenew.org, after that we’ll be using a new name as the lead,” Nevett said.

But it won’t be back to pir.org or thenew.org, he said.

Which begs the question: what domain will PIR switch to?

During the course of our conversation, Nevett made the mistake of asking me what I thought the next domain should be, and I made the mistake of saying that I should open the question up to my readers.

So… what should PIR’s next domain be?

Be nice.

.org price cap complaints more like “spam” says Ombudsman

Kevin Murphy, September 11, 2019, Domain Policy

ICANN’s Ombudsman has sided with with ICANN in the fight over the lifting of price caps on .org domains, saying many of the thousands of comments objecting to the move were “more akin to spam”.

Herb Waye was weighing in on two Requests for Reconsideration, filed by NameCheap and the Electronic Frontier Foundation in July and August after ICANN and Public Interest Registry signed their controversial new registry agreement.

NameCheap wants ICANN to reverse its decision to allow PIR to raise .org prices by however much it chooses, while the EFF complained primarily about the fact that the Uniform Rapid Suspension anti-cybersquatting measure now appears in the contract.

In both cases, the requestors fumed that ICANN seemed to “ignore” the more than 3,200 comments that were filed in objection back in April, with NameCheap calling the public comment process a “sham”.

But Waye pointed to the fact that many of these comments were filed by people using a semi-automated web form hosted by the pro-domainer Internet Commerce Association.

As far as comments go for ICANN, 3200+ appears to be quite a sizeable number. But, seeing as how the public comments can be filled out and submitted electronically, it is not unexpected that many of the comments are, in actuality, more akin to spam.

With this eyebrow-raising comparison fresh in my mind, I had to giggle when, a few pages later, Waye writes (emphasis in original):

I am charged with being the eyes and ears of the Community. I must look at the matter through the lens of what the Requestor is asking and calling out. The Ombuds is charged with being the watchful eyes of the ICANN Community. The Ombuds is also charged with being the alert “ears” of the Community — with listening — with making individuals, whether Requestors or complainants or those just dropping by for an informal chat, feel heard.

Waye goes on to state that the ICANN board of directors was kept well-briefed on the status of the contract negotiations and that it had been provided with ICANN staff’s summary of the public comments.

He says that allowing ICANN’s CEO to execute the contract without a formal board vote did not go against ICANN rules (which Waye says he has “an admittedly layman’s understanding” of) because contractual matters are always delegated to senior staff.

In short, he sees no reason for ICANN to accept either Request for Reconsideration.

The Ombudsman is not the decision-maker here — the two RfRs will be thrown out considered by ICANN’s Board Accountability Mechanisms Committee at its next meeting, before going to the full board.

But I think we’ve got a pretty good indication here of which way the wind is blowing.

You can access the RfR materials and Waye’s responses here.

Can NameCheap reverse .org price cap scrap?

Kevin Murphy, July 25, 2019, Domain Policy

NameCheap has taken it upon itself to fight ICANN’s decision to remove price increase caps on .org. But does it stand a snowball’s chance in hell of winning?

The registrar has filed a Request for Reconsideration with ICANN, appealing the organization’s signing of a Registry Agreement with Public Interest Registry that allows PIR to raise prices by however much it wants, more or less whenever that it wants.

NameCheap, which had over 390,000 .org domains under management at the last count, says it is fighting for 700-odd of its customers whose comments, filed with ICANN, were allegedly not taken into account when the decision was made, along with registrars and everyone else that may be adversely impacted by unfettered .org price increases.

NameCheap thinks its business could be harmed if price increases are uncapped, with customers perhaps letting their domains expire instead of renewing. It’s RfR states:

The decision by ICANN org to unilaterally remove the price caps when renewing legacy TLDs with little (if any) evidence to support the decision goes against ICANN’s Commitments and Core Values, and will result in harm to millions of internet users throughout the world.

Unrestricted price increases for legacy TLDs will stifle internet innovation, harm lesser served regions and groups, and significantly disrupt the internet ecosystem. An incredible variety of public comments was submitted to ICANN from all continents (except Antarctica) imploring ICANN to maintain the legacy TLD price caps — which were completely discounted and ignored by ICANN org.

Before the new contract was signed, PIR was limited to a 10% increase in its .org registry fee every year. It didn’t always exercise that right, and has said twice in recent months that it still has no plans to increase its prices.

The new contract — which has already been signed and is in effect — was subjected to a public comment period that attracted over 3,200 comments, almost all of them expressing support for maintaining the caps.

Despite not-for-profit PIR’s protestations, many commenters came from the position that giving PIR the power to increase its fee without limit would very possibly lead to price gouging.

That ICANN allegedly “ignored” these comments is the key pillar of NameCheap’s RfR case.

The public comment period was a “sham”, the registrar claims.

But is this enough to make ICANN change its mind and (somehow) unsign the .org contract?

There are three ways, under ICANN’s bylaws, to win an RfR.

Requestors can show that the board or staff did something that contradicts “ICANN’s Mission, Commitments, Core Values and/or established ICANN policy(ies)”

They also win if they can show the decision was was taken “without consideration of material information” or with “reliance on false or inaccurate relevant information”.

It’s quite a high bar, and most RfRs are rejected by the Board Accountability Mechanisms Committee, which is the court of first instance for reconsideration requests.

Requestors rarely show up with sufficient new information sufficiently persuasive to kick the legs from under ICANN’s original decision, and the question of something contradicting ICANN’s core principles is usually a matter of interpretation.

For example, in this case, NameCheap is arguing that failing to side with the commenters who disagreed with the removal of price caps amounts to a breach of ICANN’s Core Value to make all decisions in consultation with stakeholders:

The ICANN org will decide whether to accept or reject public comment, and will unilaterally make its own decisions — even if that ignores the public benefit or almost unanimous feedback to the contrary, and is based upon conclusory statements not supported by the evidence. This shows that the public comment process is basically a sham, and that ICANN org will do as it pleases in this and other matters.

But one of ICANN’s stated reasons for approving the contract was to abide by its Core Value to depend “on market mechanisms to promote and sustain a competitive environment in the DNS market”. It doesn’t want to be a price regulator, in other words.

So we have a clash of Core Values here. It will be pretty easy for ICANN’s lawyers — who drafted the contract and will draft the resolutions of the BAMC and the full board — to argue that the Core Values were respected.

I think NameCheap is going to have a hard time here.

Even if it were to win, how on earth does one unsign a contract? As far as I can tell, ICANN has no termination rights that would apply here.

Where the RfR will certainly succeed is to force the ICANN board itself to take ownership, on the record, of the .org contract decision.

As ICANN explained to DI earlier this month, while the board was very much kept in the loop on the state of negotiations, it was senior staff that made all the calls on the new contract.

But an RfR means that the BAMC, which comprises five directors, will first have to raise their hands to confirm the .org decision was kosher.

NameCheap will then get a chance to file a rebuttal before the BAMC decision is handed to the full ICANN board for a confirmatory vote.

While the first two board discussions of the .org contract were not minuted, the bylaws contain an interesting feature related to RfRs that I’d never noticed before today:

If the Requestor so requests, the Board shall post both a recording and a transcript of the substantive Board discussion from the meeting at which the Board considered the Board Accountability Mechanisms Committee’s recommendation.

I sincerely hope NameCheap invokes this right, as I think it’s pretty important that we get some additional clarity on ICANN’s thinking here.

ICANN explains how .org pricing decision was made

ICANN has responded to questions about how its decision to lift price caps on .org, along with .biz and .info, was made.

The buck stops with CEO Göran Marby, it seems, according to an ICANN statement, sent to DI last night.

ICANN confirmed that was no formal vote of the board of directors, though there were two “consultations” between staff and board and the board did not object to the staff’s plans.

The removal of price caps on .org — which had been limited to a 10% increase per year — proved controversial.

ICANN approved the changes to Public Interest Registry’s contract despite receiving over opposing messages from 3,200 people and organizations during its open public comment period.

Given that the board of directors had not voted, it was not at all clear how the decision to disregard these comments had been made and by whom.

The Internet Commerce Association, which coordinated much of the response to the comment period, has since written to ICANN to ask for clarity on this and other points.

ICANN’s response to DI may shed a little light.

ICANN staff first briefed the board about the RA changes at its retreat in Los Angeles from January 25 to 28 this year, according to the statement.

That briefing covered the reasons ICANN thinks it is desirable to migrate legacy gTLD Registry Agreements to the 2012-round’s base RA, which has no pricing controls.

The base RA “provides additional safeguards and security and stability requirements compared to legacy agreements” and “creates efficiencies for ICANN org in administration and compliance enforcement”, ICANN said.

Migrating old gTLDs to the standardized new contract complies with ICANN’s bylaws commitment “to introduce and promote competition in the registration of domain names and, where feasible and appropriate, depend upon market mechanisms to promote and sustain a competitive environment in the DNS market”, ICANN said.

They also contain provisions forcing the registry to give advance notice of price changes and to give registrants the chance to lock-in prices for 10 years by renewing during the notice period, the board was told.

After the January briefing, Marby made the call to continue negotiations. The statement says:

After consultation with the Board at the Los Angeles workshop, and with the Board’s support, the CEO decided to continue the plan to complete the renewal negotiations utilizing the Base RA. The Board has delegated the authority to sign contracts to the CEO or his designee.

A second board briefing took place after the public comment periods, at the board’s workshop in Marrakech last month.

The board was presented with ICANN’s staff summary of the public comments (pdf), along with other briefing documents, then Marby made the call to move forward with signing.

Following the discussion with the Board in Marrakech, and consistent with the Board’s support, the CEO made the decision for ICANN org to continue with renewal agreements as proposed, using the Base gTLD Registry Agreement.

Both LA and Marrakech briefings “were closed sessions and are not minuted”, ICANN said.

But it appears that the board of directors, while not voting, had at least two opportunities to object to the new contracts but chose not to stand in staff’s way.

At the root of the decision appears to be ICANN Org’s unswerving, doctrinal mission to make its life easier and stay out of price regulation to the greatest extent possible.

Reasonable people can disagree, I think, on whether this is a worthy goal. I’m on the fence.

But it does beg the question: what’s going to happen to .com?

Charities “could move to .ngo” if .org prices rise

File this one under “wrong-headed argument of the day”.

The head of policy at the Charities Aid Foundation reportedly has said that the recent removal of price increase caps at .org could lead to charities moving to other TLDs, “like .ngo”, which would cause confusion among charitable givers.

Rhodri Davies told The Telegraph (registration required) newspaper:

One of the benefits at the moment is you have at least at least one very well known and globally recognised domain name, that indicates to people that what they’re looking at is likely to be a charity or a social purpose organisation. If in the future, the pricing changes, and suddenly organisations have all sorts of different domain names, it’s going to be much harder for the public to know what it is they’re looking at. And that will get confusing and will probably have a negative impact on on people’s trust

The Telegraph gave .ngo (for non-governmental organization) as an example of a TLD they could move to. It’s not clear whether that was the example Davies gave or something the reporter came up with.

While Davies’ argument is of course sound — if charities were forced en masse to leave .org due to oppressive pricing, it would almost certainly lead to new opportunities for fraud — the choice of .ngo as an alternative destination is a weird one.

.ngo, like .org, is run by Public Interest Registry. It also runs .ong, which means the same thing in other languages.

But as 2012-round new gTLDs, neither .ngo or .ong have ever been subject to any pricing controls whatsoever.

At $30 a year, PIR’s wholesale price for .ngo is already a little more than three times higher than what it charges for .org domains. I find it difficult to imagine that .org will be the more expensive option any time soon.

.org domains currently cost $9.93 per year, and PIR has said it has no current plans to increase prices.

PIR does not have a monopoly on charity-related TLDs. Donuts runs .charity itself, which is believed to wholesale for $20 a year. It’s quite a new TLD, on the market for about a year, and has around 1,500 domains under management compared to .org’s 10 million.

Of course, .charity doesn’t have price caps either.

In the gTLD world, the only major TLDs left with ICANN-imposed price restrictions are Verisign’s .com and .net.

.org now has no price caps, but “no specific plans” to raise prices

ICANN has rubber-stamped Public Interest Registry’s new .org contract, removing the price caps that have been in effect for the best part of two decades.

That’s despite a huge outcry against the changes, which saw the vast majority of respondents to ICANN’s public comment period condemn the removal of caps.

The new contract, signed yesterday, completely removes the section that limited PIR to a 10% annual price increase.

It also makes PIR pay the $25,000 annual ICANN fee that all the other registries have to pay. Its ICANN transaction tax remains at $0.25.

PIR, a non-profit which funnels money to the Internet Society, is now allowed to raise its wholesale registry fee by however much it likes, pretty much whenever it likes.

But PIR again insisted that it does not plan to screw over the registrants of its almost 11 million .org domains.

The company said in a statement:

Regarding the removal of price caps, we would like to underscore that Public Interest Registry is a mission driven non-profit registry and currently has no specific plans for any price changes for .ORG. Should there be a need for a sensible price increase at some point in the future, we will provide advanced notice to the public. The .ORG community is considered in every decision we make, and we are incredibly proud of the more than 15 years we have spent as a responsible steward of .ORG. PIR remains committed to acting in the best interest of the .ORG community for years to come.

That basically restates the comments it made before the contract was signed.

The current price of a .org is not public information, but PIR has told me previously that it’s under $10 a year and “at cost” registrar Cloudflare sells for $9.93 per year.

The last price increase was three years ago, reported variously as either $0.88 or $0.87.

ICANN received over 3,200 comments about the contract when it was first proposed, almost all of them opposed to the lifting of caps.

Opposition initially came from domainers alerted by an Internet Commerce Association awareness campaign, but later expanded to include general .org registrants and major non-profit organizations, as the word spread.

Notable support for the changes came from ICANN’s Business Constituency, which argued from its established position that ICANN should not be a price regulator, and from the Non-Commercial Stakeholders Group, which caps should remain but should be raised from the 10%-a-year limit.

There’s a bit of a meme doing the rounds that ICANN has been hit by “regulatory capture” in this case, following a blog post from ReviewSignal.com blogger Kevin Ohashi last week, which sought to demonstrate how those filing comments in favor of the new contract had a vested interest in the outcome (as if the thousands of .org registrants filing opposing comments did not).

But I find the argument a bit flimsy. Nobody fingered by Ohashi had any decision-making power here.

In fact, the decision appears to have been made almost entirely by ICANN employees (its lawyers and Global Domains Division staff) “in consultation with the ICANN board of directors”.

There does not appear to have been a formal vote of the board. If there was such a vote, ICANN has broke the habit of a lifetime and not published any details of the meeting at which it took place.

After the public comment period closed, ICANN senior director for gTLD accounts and services Russ Weinstein prepared and published this comment summary (pdf), which rounds up the arguments for and against the proposed changes to the contract, then attempts to provide justification for the fait accompli.

On the price caps, Weinstein argues that standardizing .org along the lines of most of the other 1,200 gTLDs in existence fits with ICANN’s mission to enable competition in the domain name industry and “depend upon market mechanisms to promote and sustain a competitive environment”.

He also states:

Aligning with the Base gTLD Registry Agreement would also afford protections to existing registrants. The registry operator must provide six months’ notice to registrars for price changes and enable registrants to renew for up to 10 years prior to the change taking effect, thus enabling a registrant to lock in current prices for up to 10 years in advance of a pricing change.

This appears to be misleading. While it’s true that the new contract has the six-month notice period for price increases, so did the old one.

The new contract language takes several sentences to say what the old version did in one, and may remove some ambiguity, but both describe the notice period and lock-in opportunity.

If there’s a problem with how the new .org contract was signed off, it appears to be the lack of transparency.

It’s signed by GDD senior VP Cyrus Namazi, but who made the ultimate decision to sign it despite the outrage? Namazi? CEO Göran Marby? It certainly doesn’t seem to have been put before the board for a formal vote.

What kind of “consultation” between GDD and the board occurred? Is it recorded or noted anywhere? Was the board briefed about the vast number of negative comments the price cap proposal elicited?

Are public comment periods, which almost never have any impact on the end result, just a sham?

In my view, .org (along with .com and .net) are special cases among gTLDs that deserve a more thorough, broad and thoughtful consideration than the new .org contract received.

UPDATE: This article was updated at 1600 UTC to correct information related to .org’s current wholesale price.

Dodgy registrars could be banned from .org promotions

The worse a registrar is at tackling abuse, the more likely it is to be excluded from promotions in the .org space, according to a new policy from Public Interest Registry.

The .org registry said today that it is introducing a new “Quality Performance Index” to rate its registrars according to the quality of their registrations.

They’ll be ranked according to three criteria: abuse takedown, renewal rates, and domain usage.

Those that score above a certain threshold will be pre-qualified for promotions. The others will be encouraged to talk to their PIR rep about things they could do to get their scores up.

This kind of mechanism should in theory make it relatively easy to separate registrars into conscientious corporate citizens on the one hand and fly-by-night spam-friendly jerks on the other.

Keeping the bad guys away from the discounts could go a long way to keeping .org a relatively healthy zone.

But I expect there may be concern from the middle-ground of the registrar space, where we have well-meaning but under-resourced registrars that may find their scores wanting.

An additional concern may be that PIR said it intends to change the score threshold depending on the promotion, which appears to give it the ability to exclude registrars more or less at will.

The QPI initiative also extends to PIR’s newer, lesser-used gTLDs.