ASO uses super powers to demand ICANN turn over .org buyout docs
In an unprecedented move, ICANN’s Address Supporting Organization has exercised its special powers to demand ICANN hand over documents relating to the Ethos Capital acquisition of .org’s Public Interest Registry.
There’s a possibility, however small, that this could be the first shot in a war that could see the PIR acquisition scrapped.
Fair warning, this story is going to get pretty nerdy, which may not be compatible with the fuzzy-headedness that usually accompanies the first working day of the year. We’re heading into the overgrown weeds of the ICANN bylaws here, for which I apologize in advance.
The ASO — the arm of the ICANN community concerned with IP address policy — has asked ICANN Org for access to records concerning the $1.135 billion acquisition of PIR, which has attracted lots of criticism from non-profits, domainers and others since it was announced.
It’s unprecedented, and of interest to ICANN watchers, for a few reasons.
First, this is the ASO making the request. The ASO comprises the five Regional Internet Registries, the bodies responsible for handing out chunks of IP address space to ISPs around the world. It doesn’t normally get involved in policy related to domain names such as .org.
Second, it’s invoking an hitherto untested part of ICANN’s new bylaws that allows the certain community entities that make up the “Empowered Community” to make “Inspection Requests” of ICANN Org.
Third, and perhaps most importantly, there’s a hint of a threat that the ASO and other members of the EC may use their extraordinary powers to attempt to prevent the PIR acquisition from going ahead.
Before we unpick all of this, this is what the ASO has sent to ICANN, according to its December 31 statement:
As a Decisional Participant in the Empowered Community and pursuant to ICANN Bylaws section 22.7, the ASO hereby submits this Inspection Request to inspect the records of ICANN, including minutes of the Board or any Board Committee, for the purpose of determining whether the ASO’s may have need to use its empowered community powers in the near future relating to the potential assignment of the .org Registry Agreement. For this purpose, the ASO seeks to inspect any ICANN records which pertain to or provide relevant insight to the process by which ICANN will consider (and potentially approve) the assignment of the .org Registry Agreement, including the process by which input from the affected community will be obtained prior to ICANN’s consideration and potential approval of the assignment.
The Empowered Community is the entity that replaced the US government as ICANN’s primary overseer, following the IANA transition in late 2016.
Its members cover the breadth of the ICANN community, comprising the ASO, Generic Names Supporting Organization, Country Code Names Supporting Organization, Governmental Advisory Committee and At-Large Advisory Committee. Each member is a “Decisional Participant”.
Since the transition, its only real functions have been to approve appointments to the ICANN board of directors and to rubber-stamp the budget, but it does have some pretty powerful tools at its disposal, such as the nuclear ability to fire the entire board.
One of the powers enjoyed by each Decisional Participant, which has never been invoked publicly, is to make an Inspection Request — a demand to see ICANN’s accounts or documents related to the board’s decisions.
In this case, the ASO wants “records which pertain to or provide relevant insight to the process by which ICANN will consider (and potentially approve) the assignment of the .org Registry Agreement”.
But will it get this information? It seems the Inspection Request bylaw is a little bit like ICANN’s longstanding freedom-of-information commitment, the Documentary Information Disclosure Policy, with some key differences that arguably make the IR process less transparent.
Like DIDP, the IR process gives ICANN Org a whole buffet of rejection criteria to choose from. It can refuse requests for reasons of confidentiality or legal privilege, for example, or if it thinks the request is overly broad.
It can also reject a request if “is motivated by a Decisional Participant’s financial, commercial or political interests, or those of one or more of its constituents”, which makes the fact that this request is coming from the ASO particularly interesting.
If the GAC or the GNSO or the ccNSO, or even the ALAC, had made the request, ICANN could quite reasonably have thrown it out on the basis of “commercial or political interests”.
That’s not the case with the ASO, which makes me wonder (aloud, it seems) whether the ASO had received any nudges from other members of the EC before filing the request.
Inspection Requests also differ from DIDP in that any documents that are turned over are not necessarily published, and ICANN can also force the Decisional Participant to file a non-disclosure agreement covering their contents.
ICANN can even demand that an ASO member shows up at its Los Angeles headquarters in person to read (and, if they want, copy) the docs in question.
In short, ICANN has a lot of wriggle room to refuse or frustrate the ASO’s request, and it has a track record of not being particularly receptive to these kinds of demands.
The grey-hairs out there will recall that Karl Auerbach, one of its own directors, was forced to sue the organization back in 2002, just in order to have a look at its books.
But what’s perhaps most tantalizing about the ASO’s request is its excuse for wanting to inspect the documents in question.
It says it need the info “for the purpose of determining whether the ASO’s [sic] may have need to use its empowered community powers in the near future relating to the potential assignment of the .org Registry Agreement”.
One way of interpreting this is that the ASO needed to state a reason for its request and this is pretty much all it’s got.
But what powers does the Empowered Community have that could potentially cover the acquisition of PIR by Ethos? It certainly does not have the power to directly approve or reject the transfer of control of a gTLD contract.
The EC has nine bulleted powers in the ICANN bylaws. Some of them are explicitly about things like budgets and bylaws amendments, which could not possibly come into play here. I reckon only four could feasibly apply:
(i) Appoint and remove individual Directors (other than the President);
(ii) Recall the entire Board;
…
(viii) Initiate a Community Reconsideration Request, mediation or a Community IRP; and
(ix) Take necessary and appropriate action to enforce its powers and rights, including through the community mechanism contained in Annex D or an action filed in a court of competent jurisdiction.
Short of lawyering up or having the entire board taken out and shot, it seems like the most likely power that could be invoked at first would be the Community Reconsideration Request.
Judging by the bylaws, this is virtually identical to the normal Request for Reconsideration process, a process which very rarely results in ICANN actually reconsidering its decisions.
The major difference is that at least three of the five members of the Empowered Community has to vote in favor of filing such a request, and no more than one may object.
If they manage to muster up this consent — which could take many weeks — the fact that the reconsideration request comes from the “Community” rather than a single entity appears to make substantially no difference to how it is rejected considered by ICANN.
Threatening ICANN with a Community Reconsideration Request is a little like threatening to jump through an increasingly narrow series of hoops, only to find the last one leads into a pit filled with ICANN lawyers with laser beams attached to their heads.
A Community Independent Review Process, however, is a different kettle of snakes.
It’s substantially the same as a regular IRP — where ICANN’s fate is decided by a panel of three retired judges — except ICANN has to pay the complainant’s legal fees as well as its own.
ICANN’s track record with IRPs is not fantastic. It can and does lose them fairly regularly.
Could the ASO’s letter be the first portent of a community-led IRP bubbling up behind the scenes? Could such a move delay the PIR acquisition, putting Ethos’ plan for a profit-driven, price-raising .org on hold for a year or two? It’s certainly not impossible.
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The way you described ICANN reconsideration process looked like a Dr. Evil lair. #ohwait
The Packet Clearing House produced a technical analysis which concluded that transitioning .org from non-profit to for-profit ownership would result in three days of registry downtime per year from profit-maximizing efficiencies and cost-cutting. This seems to be a more logical influence for encouraging the ASO’s move than one or more of the other Decisional Participants.
Not so much that it has anything to do with for-profit vs. non-profit… After all, Verisign did a perfectly competent job of operating .ORG in the public interest, with reasonably high reliability, prior to the 2002 transition. The issue is that any operator that’s starting more than a billion dollars in the hole, with an annual nut of nearly $200M to pay, and only $50M in revenue, is going to have to do three things: cut costs, raise prices, and find other revenue sources. Ethos appears to be preparing to do all three of those. On the cost-cutting side, the numbers that have been floating around are $300k/year, which is a 99% cut in operational spending relative to current. One can argue about just how much down-time that would produce, and there’s no way to predict when the next big DDoS will come, but there’s no question that less spending = less preparedness = more down-time. That’s inescapable fact. It’s also the case that the current $30M/year in operational spending is supporting large server clusters in 200 cities around the world, whereas $300k/year isn’t really enough to answer the phone 24/7, much less operate enough infrastructure to withstand significant DDoS attacks.
So, one can perhaps quibble over whether it would be two days or four days or whether we’d be really lucky and there would be no major attacks for a while, but there’s no actual question of being able to maintain .COM/.NET level operational reliability at 1% of the cost.
ICANN Rejects request.
Approves sale.
Fate decided.
ASO recall
.org deal completes
ASO -Takes control of ICANN
Board moves on to advisory positions
Ethos puts 10% cap in writing.
Zero .org domain investors drop .org domains. No beef protests ???????
Ethos modifies TOS – non-profit use.
offers umbrella services.
1st endowment payment sent.
Lots of PR coming soon.
The only loosers in this deal are investors.
So what. Sorry to say but .002% complaints wont stop sale.
Hard to believe few were aware at the top
of this regulatory heap.
Haven’t seen any valid legal reason to prevent sale posted by anyone.
Stop the sale! On what legal ground?!
life goes on