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

Ethos Capital doesn’t plan to flip .org manager Public Interest Registry any time soon, according to its CEO.
Erik Brooks said that private equity firm Ethos, which intends to buy PIR from the Internet Society for over a billion dollars, plans to keep hold of the company for “many, many, many, many years”.
He was talking last night during a public conference call organized by NTEN, which also included the CEOs of ISOC and PIR, as well as critics from the Electronic Frontier Foundation, the the National Council of Nonprofits and the Irish chapter of ISOC.
The call was set up because many believe .org’s transition back into for-profit hands, coupled with its recently gained ability to raise prices arbitrarily, means .org’s non-profit registrants are in for a hard time as Ethos profit-takes.
While Brooks and chief purpose officer Nora Abusitta made all the right noises to settle such concerns, promising to not unreasonably raise prices and to stick with PIR’s commitment to non-profits, some participants remained skeptical.
Brooks said that his vision for Ethos, which he founded earlier this year, is “fundamentally broader and more expansive than traditional investing” where “success is defined as success for all participants, success for customers, employees, vendors, the community impacted by the company”.
PIR CEO Jon Nevett said he was initially concerned about the deal — which was negotiated between ISOC and Ethos without PIR’s participation — he is now “convinced that they’re here to do the right thing”.
He said that rather than funneling all of PIR’s spare .org reg cash to ISOC as happens currently, it will now be able to invest some of it in improving .org instead.
Brooks said he understand the community concerns about price increase.
“We are absolutely committed to staying within the spirit of how PIR has operated with the price system they have operated with before,” he said. That means 10% a year on average, as Ethos has stated before.
He added that “working on some mechanisms and some ideas that will give registrants more assurance” that this is just not PR spin, and that these will be communicated publicly over the coming weeks.
The fact that ICANN lifted the previous 10% contractual price cap just a few months before the deal was sealed did not factor into Ethos’ thinking, he said.
While what Ethos is describing is all well and good, there’s no telling what a future owner of PIR would do, should Ethos sell it or float it on the public markets.
That looked like a possibility, especially given that some say that Ethos is under-paying by a considerable margin for the registry.
But Brooks, asked what Ethos’ exit runway for PIR looked like, said that the company was committed to owning the registry “for an extraordinarily long period of time… dramatically outside the normal window of somebody owning a business… many, many, many, many years”.
Ethos’ own backers — which apparently include investment vehicles linked to Mitt Romney and the late Ross Perot — are on board with this long-term plan, he said.
So, assuming Brooks is a man of his word, .org registrants only have to look forward to price increases of no more than 10% a year for some time to come, which is kinda the situation they were in at the start of the year.
But not everyone is as trusting/gullible as me.
The EFF’s Mitch Stoltz, who was on the call, later published a blog post that seemed to shift gears somewhat away from pricing concerns towards the potential for future censorship of .org domains.
“Ethos Capital has a financial incentive to engage in censorship—and, of course, in price increases,” he wrote.
He alluded to that PIR had briefly toyed with the idea of a “UDRP for copyright” a few years ago, but had backed down under community pressure, something that he doesn’t believe Ethos would necessarily do.
Asked about the censorship issue by Stotlz during the call, Brooks said he had not given the issue a great deal of consideration but that he expected PIR’s practices on this kind of thing to continue on as they are today.

#SaveDotOrg to hold public web conference tomorrow with Ethos execs

The two top executives at Ethos Capital are due to confront non-profits that want to stymie its $1.13 billion acquisition of Public Interest Registry on a public call tomorrow.
The call has been put together by NTEN, a conference organizer that focuses on the use of tech by non-profits.
According to NTEN, the call will feature speakers from anti-deal Electronic Frontier Foundation, The National Council of Nonprofits, and Internet Society chapter leaders (some of whom are against the deal).
PIR boss Jon Nevett, as well as Ethos CEO Erik Brooks and chief purpose office Nora Abusitta have also agreed to attend. Andrew Sullivan, CEO of the Internet Society “has been invited but has not confirmed participation”, NTEN said.
It’s going to be the first time that those in favor of the deal will face off in public against those that want it scrapped.
The acquisition is controversial because it represents the .org gTLD going into private, for-profit hands for the first time in 17 years, with previous pricing restrictions removed.
So far, over 12,000 people have signed a petition at savedotorg.org to express their dismay with the deal.
You can find details about the call here, including an email address to submit questions in advance.
The call will happen online at 2000 UTC (1200 US Pacific Time) Thursday December 5. You may have to install some software in advance, though a browser-only option seems to be available too.

As pricey .new launches, Google reveals first set of big-name users including rapper Drake

Google Registry has opened up its .new gTLD for registration for the first time, but whether you get to buy one or not will depend on a team of Google judges.
The company opened up its “Limited Registration Period” on Monday, and it doing so revealed a bunch of early-adopter registrants including eBay, Bitly, Spotify, Github, Medium, Stripe and the Canadian musician Drake.
It’s not an open registration period. If you want a .new domain you’re going to need to present Google with a business case, showing how you intend to use your chosen domain.
These applications will be judged by Google in seven roughly month-long batches, the first of which ends January 5 and the last of which ends June 21 next year.
Competing applications for the same domain in the same batch will be decided in a beauty contest by Google itself. Needless to say, if you’re champing at the bit for a .new domain, you’ll be wanting to apply in as early a batch as possible.
If you’re lucky enough to get to register a domain, you’ll have 100 days to put it to its promised use, otherwise Google will suspend the name and keep your money.
Registry pricing has not been disclosed, but 101domain is listing .new names at $550 retail. You need the nod from Google before you get to buy the domain from a registrar.
Google says the pricing, which it acknowledges is “high”, is partly to pay for ongoing compliance monitoring. If you run a paid-for service in a .new domain, you’ll have to give Google a free account so it can check you’re sticking to your original plan.
It seems Google is going to be fairly strict about usage, which as I’ve previously reported is tied to “action generation or online creation flows”.
What this basically means is that when you type a live .new domain into your browser, you’ll be taken immediately to a page where you can create something, such as a text document, graphic design, auction listing, or blog post.
The only exception to this rule is when the web site needs a user to be logged in and redirects them to a login page instead. Most of the first tranche of registrants are currently doing this.
Google’s own .new domains include doc.new, which takes uses to a fresh sheet of blank paper at Google Docs.
The gTLD’s major anchors tenants have now been revealed at registry web site whats.new, and they include:

• eBay: type sell.new into your browser address bar and you’ll be taken to a page where you can create a new auction/sales page.
• Medium: story.new takes you to a blog post creation page.
• Spotify: create a new music playlist at playlist.new
• Webex: open up a web conference at webex.new or letsmeet.new.
• Bitly: create a shortened link at link.new.
• OVO Sound: this is a record label in the Warner Music stable, founded by Drake. It currently appears to be being used to plug two of OVO’s artists, which I think is a horrible waste of a nice domain. There’s no “content creation” that I can see, and I reckon it could be a prime candidate for deletion unless “listen to this crappy Drake song” counts as “action generation”.

There are a few more anchor tenants publicized at whats.new, but you get the idea.
.new will enter general availability next July.

Three more dot-brands fizzle out. Total now 69, dudes

Three more dot-brand registries have opted to kill off their own gTLDs, bringing the total to date to 69.
The three self-terminating gTLDs, which all informed ICANN of their intentions in October and November, are: .工行 (.xn--estv75g), .nadex and .vistaprint.
The .vistaprint termination is perhaps of note, given that online printing company Vistaprint was one of the bidders in the 2016 auction of .web, due to its application for .webs being ruled confusingly similar.
It wound up paying just a dollar for that gTLD, due to the complexity of the .web contention set, but even that appears to have been a defensive move.
Since then, Vistaprint has also terminated its .vista contract, and my records show that it has been “in contracting” with ICANN for .webs since August 2016. Clearly, it’s in no rush to ever actually use the thing.
Also noteworthy, .工行 becomes only the second internationalized domain name gTLD to self-terminate, after Walmart called it quits on its pre-delegation contract for .一号店.
.工行 was owned by the state-owned Industrial and Commercial Bank of China (ICBC), which by many measures is the largest bank in the world. It had revenue of over $105 billion last year, so whatever factors drove its decision to dump its dot-brand, cost was not one of them.
Finally, Nadex, an online stock-trading platform, evidently couldn’t find a use for .nadex, so it’s jumped ship too.
Hundreds of dot-brands remain, collectively managing thousands of domains and web sites.

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

The Internet Society has started to fight back against those trying to put a stop to its $1.13 billion sale of Public Interest Registry to Ethos Capital.
Among the tactics being deployed appears to be an attempt to play down the notion that .org has always been considered as a home for non-profits run by a non-profit.
Apparently, it’s perfectly fine for .org to transition back into commercial hands, because not-for-profit ISOC was never intended as its forever home and the TLD was never intended for non-profits anyway.
Is that bullshit?
Yes and no. Mostly yes. It turns out you get a different answer depending on when you look in .org’s storied history.
ISOC, it seems, is starting in 1994, in an internet standard written by Jon Postel (who was ICANN before there was an ICANN).
A statement published by ISOC last week tries to characterize .org as a home for the “miscellaneous”, quoting from RFC 1591

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

It’s an accurate quote.
.org is described in other RFCs in a similar way. The earliest reference is 1984’s RFC 920 which says .org means “Organization, any other domains meeting the second level requirements.”
RFC 1032 says:

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

I can’t find any mention of non-profits in any of the relevant DNS RFCs.
ISOC goes on to note that .org was managed by a for-profit entity — Network Solutions, then Verisign — from 1993 until PIR took over in 2003.
Again, that’s true, but while it might have been managed by a commercial entity, NetSol was pretty clear about who .org was for.
When it went public in 1997, the company told would-be investors in its S-1 registration statement:

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

That’s pretty unambiguous: the .org registry in 1997 said that .org was for non-profits.
In 2001, when ICANN inked a deal with Verisign to spin off .org into a new registry, there was no ambiguity whatsoever.
In announcing the deal, ICANN said that it would “return the .org registry to its original purpose” and .org would return to “to its originally intended function as a registry operated by and for non-profit organizations” (my emphasis).
The price ICANN paid for extracting .org from Verisign’s clutches was the very first “presumptive renewal” clause being inserted into the .com contract, which has seen Verisign reap billions with no risk of ever losing its golden goose.
The prize was so potentially lucrative that Verisign even agreed to give a $5 million endowment — no questions asked — to the successor registry, for use relaunching or promoting .org.
The only catch was that the new registry had to be a non-profit. Commercial registries — Verisign competitors such as Neustar — wouldn’t get the money.
ICANN and its community spent the remainder of 2001 and most of 2002 devising an RFP, accepting proposals from 11 would-be .org registries, and picking a winner.
The multistakeholder Domain Names Supporting Organization — roughly equivalent to today’s GNSO — was tasked with coming up with a set of principles governing who should get to run .org and how.
It came up with a report in January 2002 that stated, as its first bullet point:

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

It went on to say that applicants “should be recognized non-profit entities” and to suggest a few measures to attract such entities to the bidding process.
These recommendations, which secured consensus support of the DNSO’s diverse stakeholders and a unanimous vote of the Names Council (the 2002 equivalent of the GNSO Council), nevertheless never made it into ICANN’s final RFP.
At some point during this process, ICANN decided that it would be unfair to exclude for-profit bidders, so there was no non-profit requirement in the final RFP.
As far as I can tell from the public record and my increasingly unreliable memory, it was Vint Cerf — father of the internet, creator of ISOC, then-chair of ICANN, and one of the few people currently cool with PIR being sold into commercial hands — that opened it up to for-profit bidders.
The decision was made at ICANN’s board meeting in Accra, Ghana, at ICANN 12. Back then, the board did its thinking aloud, in front of an audience, so we have a transcript.
The transcript shows that Cerf recommended that ICANN remain neutral on whether the successor registry was non-profit or for-profit. He put forward the idea that a commercial registry could quite easily create a non-profit entity in order to bid anyway, so it would be a kinda pointless restriction. The board agreed.
So in 2002, 11 entities, some of them commercial, submitted proposals to take over .org.
In ISOC’s bid, it stated that it would use the $5 million Verisign endowment “primarily to expanding outreach to non-commercial organizations on behalf of .ORG”.
ISOC/PIR took Verisign’s millions, as a non-profit, in order to pitch .org at other non-profits, in other words.
The evaluation process to pick Verisign’s successor was conducted by consultancy Gartner, a team of “academic CIOs” and ICANN’s Noncommercial Domain Name Holders’ Constituency (roughly equivalent to today’s Non-Commercial Stakeholders Group).
The NCDNHC was under strict instructions from ICANN management to not give consideration to whether the applicants were commercial or non-commercial, but its report (pdf) did “take notice of longstanding relationships between the bidders (whether for-profit or non-profit) and the noncommercial community available in the public record”.
It ranked the PIR bid as third of the 11 applicants, on the basis that .org money would go to support ISOC and the IETF, which NCDNHC considered “good works”.
ICANN’s preliminary and final evaluation reports were both opened for public comment, and comment from the applicants themselves, and on both occasions ISOC sought to play up its not-for-profit status. In August 2002, it said:

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

In October 2002, it said:

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

ISOC’s application was of course ultimately determined to be the best of the bunch, and in October 2002 ICANN decided to award it the contract.
Then there was the small matter of the IANA redelegation. IANA is the arm of ICANN that deals with changes to the root zone. Whenever a TLD changes hands, IANA issues a report explaining how the redelegation came about.
In the case of .org, IANA echoed the previous feelings about .org’s “intended” purpose, stating:

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

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

Governments kill off another gTLD bid

Another proposed new gTLD has been killed off by governmental intervention.
A Thailand-based company call Better Living Management Company applied for .thai back in 2012, but quickly ran into opposition from the Thai government, which thought the string too culturally sensitive.
The ICANN Governmental Advisory Committee did not object to Thailand’s objection, and issued consensus advice asking ICANN to reject the application, which it did in November 2013.
BLM filed an Independent Review Process complaint in April 2014, alleging irregularities within the GAC, but the appeal was quickly shelved.
Now, five years later, the company has finally withdrawn it application, meaning it gets most of its application fee back as a refund.
Part of the reason the application failed is likely the fact that the Thai ccTLD registry, Thai Network Information Center Foundation, already runs the internationalized domain name ccTLD .ไทย, which means “.thai” in Thai.
Other applications to be killed off by GAC advice include .islam, .halal, .gcc and one of the .africa bids.

Four big developments in the .org pricing scandal

The renewal of Public Interest Registry’s .org contract and its subsequent acquisition by Ethos Capital is the gift that keeps on giving in terms of newsworthy developments, so I thought I’d bundle up the most important into a single article.
First, ICANN has thrown out the appeal filed by Namecheap and provided a (kinda) explanation of how the recent contract renewal came about.
The board of directors voted to reject Namecheap’s Request for Reconsideration on Thursday, as I reported last week, but the decision was not published until last night.
Namecheap had demanded ICANN reverse its decision to remove the 10%-a-year cap on price increases previously in the .org contract, enabling PIR to unilaterally raise its prices by however much it wants.
It said that ICANN had “ignored” the more then 3,000 people and organizations that had submitted comments opposing the lifting of caps.
But the board said:

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

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

All registry agreements include a presumptive right of renewal clause. This clause provides a registry operator the right to renew the agreement at its expiration provided the registry operator is in good standing (e.g., the registry operator does not have any uncured breaches), and subject to the terms of their presumptive renewal clauses.
In the course of engaging with a legacy registry operator on renewing its agreement, ICANN org prefers to and proposes that the registry operator adopts the new form of registry agreement that is used by new gTLDs as the starting point for the negotiations. This new form includes several enhancements that benefit the domain name ecosystem such as better safeguards in dealing with domain name infrastructure abuse, emergency backend support, as well as adoption of new bilaterally negotiated provisions that ICANN org and the gTLD Registries Stakeholder Group conduct from time to time for updates to the form agreement, and adoption of new services (e.g., RDAP) and procedures.
Although ICANN org proposes the new form of registry agreement as a starting place for the renewal, because of the registry operator’s presumptive right of renewal ICANN org is not in a position to mandate the new form as a condition of renewal. If a registry operator states a strong preference for maintaining its existing legacy agreement form, ICANN org would accommodate such a position, and has done so in at least one such instance.

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

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

That appears to be a nod to the fact that ICANN has the power to reject changes of control under exceptional circumstances, per the .org contract.
Despite the wholly predictable rejection of Namecheap’s RfR, appeals against the contract’s new terms may not be over.
For some reason I have yet to ascertain, the very similar RfR filed around the same time by the Electronic Frontier Foundation was not considered, despite being on the agenda for last Thursday’s board meeting.
Additionally, I hear Namecheap has applied for Cooperative Engagement Process status, meaning it is contemplating filing an Independent Review Process appeal.
Second, Ethos Capital, PIR’s new owner, launched a web site in which it attempts to calm many of the concerns, criticisms and conspiracy theories leveled its way since the acquisition was announced.
Found at keypointsabout.org, the site tries to clarify the timing and motivation of the deal.
On timing, Ethos says:

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

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

The current price of a .ORG domain name is approximately $10 per year. Our plan is to live within the spirit of historic practice when it comes to pricing, which means, potentially, annual price increases of up to 10 percent on average — which today would equate to approximately $1 per year.

This sounds rather specific, but it’s vague enough to give PIR leeway to, say, introduce a 100% increase immediately and then freeze prices until it averages out at 10% per year. I don’t think the company will do something so extreme, but it would technically be possible the way it’s described here.
On the connections to Abry Partners and former ICANN CEO Fadi Chehade, Ethos says that while founder and CEO Erik Brooks is a 20-year veteran of Abry (which also owns Donuts) “Abry Partners is not involved in this transaction.”
It adds, however, that Chehade’s company, Chehade & Company, where Ethos chief purpose officer Nora Abusitta-Ouri has worked “is an adviser to Ethos”.
What this means, at the very least, is that the new owner of .org allowed an outside contractor to register the domain matching its name in the very gTLD it runs, which most domain veterans will recognize as a rookie mistake.
Ethos goes on to list VidMob Inc, Whistle Sports Inc, Adhark Inc and LiquidX Inc as other companies Ethos has invested in, perhaps rubbishing the hypothesis (which I, admittedly, have publicly floated) that Ethos was a vehicle created by Abry purely to buy up PIR.
Third, Ethos may be funded by “billionaire Republicans”.
.eco registry founder Jacob Malthouse, who’s trying to rouse up support for the #SaveDotOrg campaign, dug up an email apparently sent by ISOC CEO Andrew Sullivan to a members mailing list in the wake of the acquisition announcement, which names some of the backers of the deal.
They are: Perot Holdings, FMR LLC and Solamere Capital.
What they have in common is that they’re all — at least according to Malthouse’s since-amended original post — founded/owned/affiliated with prominent billionaire US Republicans. I’m not sure I’d fully agree with that characterization.
Perot was founded by Ross Perot, who stood for US president as an independent a few times but spent the last couple of decades of his life (which ended in July) as a Republican. I’d say his political affiliation died with him.
FMR, or Fidelity Investments, is run by Abigail Johnson, who inherited the role from her father and grandfather. While she’s made donations to Republicans including local senator, Mitt Romney, she also gave Hillary Clinton a tonne of cash to support her 2016 presidential election run, so I’m not sure I’d necessarily characterize her as die-hard GOP.
Romney himself was involved in the founding of Solamere Capital, the third apparent Ethos investor, but according to its web site he stepped down at the start of this year, long before Ethos was even founded, in order to re-join the US Senate.
I’m not sure what the big deal about these connections is anyway, unless you’re of the (often not unreasonable) belief that you don’t get to be a billionaire Republican without being just a little bit Evil.
Fourth, a bunch of non-profits are campaigning to get the deal scrapped.
The #SaveDotOrg campaign now has its matching .org address and web site, savedotorg.org.
It appears to have been set up by the EFF, but its supporters also include the non-profits American Alliance of Museums, American Society of Association Executives, Aspiration, Association of Junior Leagues International, Inc., Creative Commons, Crisis Text Line, Demand Progress Education Fund, DoSomething.org, European Climate Foundation, Free Software Foundation, Girl Scouts of the USA, Independent Sector, Internet Archive, Meals on Wheels America, National Council of Nonprofits, National Human Services Assembly, NTEN, Palante Technology Cooperative, Public Knowledge, R Street Institute, TechSoup, VolunteerMatch, Volunteers of America, Wikimedia Foundation, YMCA of the USA and YWCA USA.
The letter (pdf) states:

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

It claims that the new .org contract gives PIR powers to “do significant harm” to non-profits, should they be abused.
The campaign has had a little traction on social media and so far has over 8,000 signatures.

Petition launched to fight .org deal

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

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.

XYZ buys dormant gTLD from “pyramid scheme” operator

XYZ.com has bought another unused dot-brand to add to its portfolio.
It’s taken over the contract for .quest from original registry Quest ION Ltd, a subsidiary of a Hong Kong-based multi-level marketing company called QNet, according to ICANN records.
The gTLD will become the 13th that XYZ has a stake in, and the second dormant dot-brand that it’s acquired, after .monster.
.quest has been delegated for a few years, but its owner had no live domains beyond the mandatory NIC site.
I have to say I was unfamiliar with the company until today, but QNet’s Wikipedia page makes it sound sufficiently dodgy that I’m surprised nobody raised questions about its suitability to be a registry during the ICANN application process.
Its multi-level marketing business model has been described as a “pyramid scheme” or “Ponzi scheme” by various governments and has seen QNet hit by serious legal challenges in many countries on at least four continents.
Loads of its executives, including at least one listed on the gTLD application, have been arrested over the years.
But I guess that’s water under the bridge now, because XYZ has taken control of .quest.
There’s no word yet on a launch date.