Could .org debate bring back the glory days of ICANN public forums?

ICANN is going to devote 90 minutes to discussing the controversial acquisition of Public Interest Registry by Ethos Capital on Monday, and the sparks could fly.
It’s actually going to be the first formal session of the abridged, online-only ICANN 67 meeting, which had been due to take place in Cancun but will now be carried out fully online. The customary opening ceremony has been scrapped.
Seventy minutes will be devoted to taking questions and comments from the “room”. ICANN 67 is sticking to Cancun’s time zone and the .org session starts at 1400 UTC, which would have been 0900 at the venue.
ICANN warned that the sessions is devoted to the process ICANN is using to approve, or not, the acquisition, and that it “cannot address questions and comments that relate to the ISOC, PIR, Ethos Capital, or other parties involved in the proposed transfer”.
The deal is controversial largely because critics believe Ethos, as a private equity company, is much more likely to start to rip off .org registrars with price hikes than not-for-profit ISOC. But Ethos has offered to bake conditions into its contract that limit it to 10% increases per year on average.
Given the vast amount of interest in the .org deal from outside the usual ICANN community, we could see the kind of robust debate that was common in the ICANN public forum sessions during the birth throes of the new gTLD program, but which has been sadly lacking in recent years.
Newcomers wishing to get involved might like to first familiarize themselves with ICANN’s Expected Standards of Behavior. Anyone dropping the F-bomb or calling the deal “gay”, as happened during the recent .com comment period, will very likely be kicked and banned. Just imagine you’re talking to Titania McGrath and you should be okay.

Ethos volunteers for .org pricing handcuffs

Ethos Capital has volunteered to have price caps written back into Public Interest Registry’s .org contract, should ICANN approve its $1.1 billion proposed acquisition.
The private equity firm said Friday that it has offered to agree to a new, enforceable Public Interest Commitment that bakes its right to increase prices into the contract under a strict formula that goes like this:

Applicable Maximum Fee = $9.93 x (1.10n)

The $9.93 is the current wholesale price of a annual .org registration. The “n” refers to the number of full years the current .org registry agreement has been in play, starting June 30, 2019.
In other words, it’s a 10%-per-year increase on average, but PIR could skip a year here and there and be eligible for a bigger price increase the following year.
For example, PIR could up the fee by 10% or $0.99 to $10.92 this coming June if it wanted, but if it decided to wait a year (perhaps for public relations reasons) if could increase the price to $12.13 in June 2021, an increase of $2.20 or roughly 22%.
It could wait five years before the first price increase, and up it from $9.93 to $16.53, a 66% increase, in year six.
While price increases are of course unpopular and will remain so, the formula does answer the criticism posed on DI and elsewhere that Ethos’ previous public statements on pricing would allow PIR to front-load its fee hikes, potentially almost doubling the price in year one.
But the caps have a built-in expiry date. They only run for eight years. So by the middle of 2027, when PIR could already be charging $18.73, the registry would be free to raise prices by however much it pleases.
It’s a better deal for registrants than what they’d been facing before, which was a vague commitment to stick to PIR’s old habit of not raising prices by more than 10% a year, but it’s not perfect and it won’t sate those who are opposed to increased fees in principle.
On the upside, a PIC is arguably an even more powerful way to keep PIR in line after the acquisition. Whereas other parts of the contract are only enforceable by ICANN, a Public Interest Commitment could theoretically be enforced via the PIC Dispute Resolution Procedure by any .org registrant with the resources to lawyer up. Losing a PICDRP triggers ICANN Compliance into action, which could mean PIR losing its contract.
The PIC also addresses the concern, which always struck me as a bit of a red herring, that .org could become a more censorial regime under for-profit ownership.
Ethos says it will create a new seven-person .ORG Stewardship Council, made up of field experts in human rights, non-profits and such, which will have the right to advise PIR on proposed changes to PIR policy related to censorship and the use of private user/registrant data.
The Council would be made up initially of five members hand-picked by PIR. Another two, and all subsequent appointments, would be jointly nominated and approved by PIR and the Council. They’d serve terms of three years.
The proposed PIC, the proposed Council charter and Ethos’ announcement can all be found here.
Correlation does not necessarily equal causation, but it’s worth noting that the proposal comes after ICANN had started playing hard-ball with PIR, Ethos and the Internet Society (PIR’s current owner).
In fact, I was just putting the finishing touches to an opinion piece entitled “I’m beginning to think ICANN might block the .org deal” when the Ethos statement dropped.
In that now-spiked piece, I referred to two letters ICANN recently sent to PIR/ISOC and their lawyers, which bluntly asserted ICANN’s right to reject the acquisition for basically any reason, and speculated that the deal may not be a fait accompli after all.
In the first (pdf), Jones Day lawyer Jeffrey LeVee tells his counterpart at PIR’s law firm in no uncertain terms that ICANN is free to reject the change of control on grounds such as the “public interest” and the interests of the “.org community”.
Proskauer lawyer Lauren Boglivi had told ICANN (pdf) that its powers under the .org contract were limited to approve or reject the acquisition based only on technical concerns such as security, stability and reliability. LeVee wrote:

This is wrong. The parties’ contracts authorize ICANN to evaluate the reasonableness of the proposed change of control under the totality of circumstances, including the impact on the public interest and the interest of the .ORG community.

Now, the cynic in me saw nothing but a couple of posturing lawyers trying to rack up billable hours, but part of me wondered why ICANN would go to the trouble of defending its powers to reject the deal if it did not think there was a possibility of actually doing so.
The second letter (pdf) was sent by ICANN’s new chair, Maarten Bottermann, to his ISOC counterpart Gonzalo Camarillo.
The letter demonstrates that the ICANN board of directors is actually taking ownership of this issue, rather than delegating it to ICANN’s executive and legal teams, in large part due to the pressure exerted on it by the ICANN community and governments. Botterman wrote:

It is not often that such a contractual issue raises up to a Board-level concern, but as you might appreciate, PIR’s request is one of the most unique that ICANN has received.

He noted that the controversy over the deal had even made ICANN the target of a “governmental inquiry”, which is either a reference to the California attorney general’s probe or to a letter (pdf) received from the French foreign office, demanding answers about the transaction.
It’s notable from Botterman’s letter that ICANN has started digging into the deep history of PIR’s ownership of .org, much as I did last December, to determine whether the commitments it made to the non-profit community back in 2002 still hold up under a return to for-profit ownership.
Given these turns of events, I was entertaining the possibility that ICANN was readying itself to reject the deal.
But, given Ethos’ newly proposed binding commitments, I think the pendulum has swung back in favor of the acquisition eventually getting the nod.
I reserve the right to change my mind yet again as matters unfold.

Verisign shits on domainers, again

It’s probably no exaggeration to say that Verisign makes hundreds of millions of dollars a year from .com domain investors, and yet it’s been developing a habit in recent years of shitting on them whenever it serves its purpose.
The company’s submission to ICANN’s just-closed public comment period on the proposed new .com contract, which re-enables Verisign’s ability to increase its prices, is the latest such example.
In the letter, which is unsigned, Verisign accuses the Internet Commerce Association, as well as registrars Namecheap and Dynadot, of conducting a “deceptive” campaign to persuade .com registrants to submit comments opposing the deal.
It notes that ICA represents “speculators” — it never uses the term “investors” — as if this was some kind of closely guarded secret, and describes the practice of domaining in a way that implies that the practice is somehow “illegitimate”, like this:

More than any other group engaged in the ICANN multistakeholder process, these speculators are highly sensitive to even the smallest wholesale price changes because of the enormous portfolios of .com domain names they control.
…
Speculators sometimes sell these domain name registrations to other speculators, but often they pass these costs along when they sell the domain names to legitimate internet users who wish to use .com domain names to build websites. We believe this resale activity adds little value to the DNS.

It’s not wrong, but good grief! The chutzpah on this company is sometimes jaw-dropping.
It’s like a car manufacturer complaining that its billion-dollar range of off-road SUVs are mostly being used by obese city dwellers for the school run. Just take the billion dollars and stop complaining about your biggest customers!
It’s not the first time Verisign has rolled out this line of attack. Back in 2018, when price caps were being negotiated with the US government, it posted an article on CircleID accusing domainers of “exploit[ing] consumers” and “scalping”.
Verisign’s able to get away with this kind of attitude, of course, because most domainers have an almost erotically slavish devotion to .com. The company could spend all day every day emailing them disgustingly personalized “yo momma” jokes and they wouldn’t stop buying up its product by the millions.
The two sides are trapped in an emotionally abusive relationship but they can’t break up because they’re both making so much goddamn money out of it. They’re like the Clintons of the domain world, in other words.
Anyway, the gist of the company’s comment to ICANN is basically “Ignore the 9,000 other comments you’ve received, the commenters were suckered into writing them by lying registrars”.
Read it here (pdf).
As a matter of disclosure, Verisign cites the DI piece last week about covid-19.com as an example of why domainers suck. That wasn’t the intent of the article, but there you go.

9,000 people tell ICANN they don’t want .com price increases. Here’s what some of them said

The public have spoken: they don’t want Verisign to get the right to raise .com prices again.
ICANN’s public comment period on the amended .com contract closed on Friday, with just shy of 9,000 comments which appear to be overwhelmingly against price-raising powers.

Almost 2,000 of the comments have the same subject line, “Proposed Amendment 3 to the .COM Registry Agreement”, suggesting they were generated by the Internet Commerce Association’s semi-automated outrage tool.
It’s a lot, but it’s dwarfed by seemingly non-ICA submissions, which will make the opposition to the deal harder to ignore than with last year’s .org deal, where many of the 3,000 comments were written off as “akin to spam”.
.com’s wholesale fee has been frozen at $7.85 per year since 2012, but Verisign managed to persuade the Trump administration in 2018 to allow it to return to the old policy of being able to raise prices by 7% in four out of the contract’s six years.
After a year’s negotiation, ICANN agreed to incorporate that change into its Registry Agreement with Verisign. Some commentators, including the Registrars Stakeholder Group, are now saying that ICANN should put contracts out to comment BEFORE they are negotiated.
The RrSG said of price increases:

The RrSG is concerned that the proposed price increases are without sufficient justification or an analysis of its potentially substantial impact on the DNS. ICANN has not explained how increase domain name prices are in the public interest or how this furthers the security and stability of the DNS. The price increases appear only to benefit one company, which has the right to operate .com in perpetuity (and without a competitive bidding process). This is inconsistent with ICANN’s bottom-up multi-stakeholder model.

It’s also understandably pissed off that Verisign is to get the right to own its own registrar for the first time, which could shake up the retail domain market.
While the proposed contract does not allow the hypothetical Verisign registrar to sell .com domains, the registrars think they’ve spotted a loophole:

nothing in the amendment prevents Verisign from reselling .COM domains via another registrar. In theory, Verisign could resell .COM domain names at or below cost and still profit from the wholesale .COM price

Some registrars submitted separate comments that echoed the RrSG collective view.
GoDaddy commented that there should be an economic study on the potential impact of higher pricing on competition before any increases are allowed to go into effect, adding:

GoDaddy believes that ICANN has agreed to a framework for wholesale price increases in .COM that will negatively impact current and future registrants of .COM domain names, as well as the overall domain name industry, which is disproportionately dependent and impacted by changes in .COM pricing. We are further concerned that there is no effective competition to assist in establishing what is a reasonable price for .COM.

Namecheap, which has also been vocal in fighting .org price increases, noted that .com prices could go up by as much as 70% over the next decade, due to the compound impact of annual 7% rises, adding:

The .com registry is well-established, so due to gained efficiencies, the cost of .com domain names should remain static or go down. It is not clear how much registrars will pass these price increases along to consumers, but it is likely that most of this increase will be paid for by domain name registrants.

Drop-catch specialist TurnCommerce/NameBright called for .com to be put out for competitive bidding:

There is simply no legitimate argument that competition for registry contracts—especially the largest registry contract—is bad for the domain name system or for consumers. Without the prospect of competitive pressure, Verisign has no incentive to be efficient, innovative, and effective. In the time that Verisign has operated the registry, prices have increased, we believe innovation has stalled, while Verisign’s operating costs have apparently declined.

As far as I can tell, the Registries Stakeholder Group, of which Verisign is a member, did not submit a comment. But some other constituencies did.
The Business Constituency generally supports ICANN’s somewhat hands-off approach to price regulation, but it did complain that there should have been a public consultation before the bilateral contract talks began a year ago. It wrote:

The BC has no practical objection to price increases that average just 4.5% per year for businesses who register .COM domains. Some BC members are concerned that Verisign has not provided justification for increasing .COM prices, though we are not aware of any requirement for gTLD operators to provide such justification. And while some BC members would prefer that ICANN seek competitive bids to operate existing registries, the BC has generally supported presumptive renewal performance incentives in registry agreements.

If you’re picking up hints of internal BC dissent in that comment, it’s almost certainly because BC member Zak Muscovitch is also general counsel of the ICA and was one of several contributors to its drafting.
The only other formal GNSO stakeholder group to submit a comment appears to be the Intellectual Property Constituency, but it took no position on pricing.
The At-Large Advisory Committee, which according to its web site “acts on the interests of Internet users”, sent a borderline humorous “Valentine” to the ICANN board that does not mention pricing but does congratulate ICANN on securing a $20 million Verisign bung, which is earmarked for DNS security work.
Here’s a sample of 10 public comments I clicked on randomly:

I’m writing to express disappointment and concern regarding the recent ICANN changes made to their contract with Verisign. These changes potentially create a lot of harm and unnecessary expense to customers for years to come. Please take customers into consideration before going forward with this.

Please don’t increase .com prices. As a small business owner we feel every price increase in our family business. We want to be able to keep the domain name that we have spent years building as our small business home on the web.

I’m here to tell you to stop this proposed price increase. You are being greedy. 40% price hikes with no caps in sight are ridiculous, stop it. I’m tired of getting ripped off by big secretive corporations and sleazy government agencies, and now this includes YOU!. We aren’t going to just put up with it, I, and a lot of others are here to fight! We demand to know
what you are doing with the money you propose to reap from us, aside from lining your pockets! Proveme wrong, give the internet community the clarity it deserves, and now demands!

This is a disgrace and not right.

I disagree with the changes that this amendment (3) will make to the domain registry system. I believe that this increase of fees will stifle innovation and takes the web further towards privatization and big money.
I know that I would not have taken as many opportunities or risks if prices were significantly higher and domains were a larger cost of business.
I urge you to reconsider these changes and reject this amendment.

I am writing in opposition to the proposed Verisign deal with respect to .com domains. I believe the current arrangement should be kept and strict price controls from ICANN should be preserved for .com domains. Verisign has no business exerting control or influence over ICANN, and the deal as proposed will be bad for consumers and anyone who holds a .com domain.
Please do not proceed with the proposed changes.

Please stop trying to fuck up the internet. It has been excessively adapted to suit capitalism. I think many more than just me have had enough. Stop being a shady ass business.

I do not agree with the extraordinary increase in prices for .com domains that appears to be a direct response to a bribe paid by Verisign company to the board of ICANN.
We live in perilous times, where democracy is threatened in every side by the resurgence of corruption, cronyism, and the far right.
You appear to be allowing the backbone of the internet become corrupted by greed, which would horrify the founding fathers of this essential technology.
Show some integrity and don’t give in to the basest of your natures.

I am a registrant of more .com domain names. I am against the proposed price increase to .COM domains. Verisign is merely your manager of the .COM Registry – it has no business dictating the price. ICANN is supposed to govern the domain name system in the public interest.

Thanks first for your hard work.
Please keep prices as they are and avoid this change that could have dire consequences for the entire internet as other less democratic countries will start soon offering alternative domains to .com. Furthermore, any increase will cause difficulties for us who are part of the third world.

If you’ve got more time on your hands than I have, you can peruse all 9,000 comments at your leisure over here. If you find anything good, please do drop a link in the comments.
Some poor bastard at ICANN now has the job of going through and summarizing all of them into ICANN’s official comment report, which has a March 6 deadline.

ICA will help you support .com price increases (but doesn’t want you to)

The Internet Commerce Association has released a new version of its semi-automated commenting tool, making it a bit easier for domainers and others to complain to ICANN about the proposed .com price increases.
Surprisingly, the tool will also help you file a comment in support of Verisign’s 7%-a-year price-raising powers, though obviously ICA would prefer you do not.
The tool is based on the one ICA launched last year when Public Interest Registry was due to get its .org price caps lifted by ICANN, but ICA general counsel Zak Muscovitch says that it’s been refined following feedback.
It allows users to identify what kind of registrant they are (domainer, end user, or just concerned netizen) and select from several options to create pre-written comments that reflect their own views. They can also enter their own free text before hitting submit.
One of the options is “I support the proposed price increase which allows for a 31% price increase through 2024”, but I can’t imagine anyone apart from Verisign staff and shareholders checking that particular box.
The .org version of the tool caused a bit of a stir last year after ICANN’s Ombudsman compared submissions made through it to “spam”. He caught some flak for that.
Muscovitch tells DI that it’s not just domainers using the service. Some registrars are directly contacting their customers to encourage them to submit comments, he said, so the views of “the public at large” are being reflected.
At the time of publication about 350 comments have been submitted, more than half of which appear to have originated via the ICA tool.
The public comment period closes February 14.
If you don’t fancy using the ICA tool, submitting a comment directly to ICANN doesn’t appear to be particularly difficult. You simply go here, click the “Submit Comment” button, and ICANN will open up your mail client’s compose window with the appropriate address pre-populated.
Perhaps predictably, I remain skeptical that this kind of thing will have any impact on ICANN’s decision to approve a contract it spent a year negotiating.
But it can’t hurt, right? After all, the reason Verisign only gets to raise prices in four out of six years is because so many people complained about the much more expansive proposed powers back in 2006, and ICANN is still reeling from the outrage over .org…

Ethos’ .org pricing promise may be misleading

The more Ethos Capital protests that its plans for .org pricing are not as bad as its critics think, the less I believe it.
Since November, the would-be buyer of Public Interest Registry has being publicly committing to maintain what it calls PIR’s “historic practices” related to pricing.
PIR, under its last ICANN contract, was allowed to raise prices by up to 10% per year, but it did not always exercise that right. In fact, the wholesale price of .org has been fixed at $9.93 since August 2016.
Ethos has described its price increase plans in a very specific, consistent way. In November it said:

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.

Last month, chief purpose officer Nora Abusitta-Ouri wrote:

We committed to limiting any potential increase in the price of a .ORG domain registration to no more than 10% per year on average

Last week, she wrote:

Ethos has committed to limiting any potential increase in the price of a .ORG domain registration to no more than 10% per year on average

Over the weekend, she added:

we are not saying that we will raise prices 10% every year — our commitment is that any price increase would not exceed 10% per year on average, if at all.

Clearly, the talking point has been copy-pasted a few times, and it always includes the words “10% per year on average”.
On average.
What does that mean? What are we averaging out here? It can’t be across the .org customer base, as registries aren’t allowed to vary pricing by registrant, so we must be talking about time. PIR has a 10-year contract with ICANN, so we must be talking about prices going up no more than 10% per year “on average” over the next decade.
If PIR, under Ethos’ stewardship, decides to raise prices by exactly 10% every year starting in 2020, the wholesale cost of a .org domain will be $25.76 by 2029, a 159% increase on today’s rate.
Assuming for the sake of this thought experiment that .org stays flat at 10 million registrations (it’s actually a little more today, but it’s declining), Ethos would be looking at a $258 million-a-year business by 2029, up from today’s $99 million.
Over the course of the 10-year contract, .org would be worth a cumulative $1.74 billion in reg revenue, up from the $993 million it would see without price increases.
But Ethos is only promising that price increases will be no more than 10% per year on average, remember, and it’s even hinted that there could be some years with no increases at all.
I noted in November that this commitment could see Ethos raise prices in excess of 10% early on, then freeze them so the increase averages back down to 10% over time.
It would of course make the most sense to front-load the price increases, to maximize the return.
At one extreme, Ethos could raise the price to $25.76 a year immediately, then lock the price down until 2029. That would make .org a $258 million-a-year business overnight, and making the cumulative 10-year revenue around the $2.58 billion mark.
Or, it could raise prices by 20% in alternate years, adding up to $1.77 billion in total top-line and a price to registrants of $24.71 by 2028.
There’s an infinity of variations on these strategies, and Ethos’ modeling is certainly more complex than the envelope upon which I just jotted these simplified figures down, but it’s pretty clear that while the company may well stick to the letter of its promises, it gets its best returns if it raises prices hard and early.
The more I read “on average” repeated in Ethos’ literature, the more convinced I become that this is exactly what it has in mind.

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

Does the California attorney general’s probe into ICANN’s relationship with the .org registry represent an existential crisis for ICANN, or could it be better seen as a great opportunity to palm off responsibility to a higher power?
It was recently revealed that AG Xavier Becerra is looking into ICANN’s actions related to not only the proposed acquisition of Public Interest Registry by Ethos Capital, but also the removal of price caps from the .org registry contract.
The AG’s office says it wants to “to analyze the impact to the nonprofit community, including to ICANN, of this proposed transfer”.
Because ICANN is a California-based non-profit, the AG says he has the power to levy penalties or revoke ICANN’s corporate registration.
Becerra’s office sent ICANN a list of 35 searching questions (pdf) related to both deals on January 23, demanding a response by February 7.
While many of the questions demand documentation already in the public domain, published on ICANN’s web site, Becerra also wants to get his hands on redacted portions of PIR’s communications with ICANN, as well as all emails between ICANN, Ethos, PIR and the Internet Society, which currently owns PIR.
At the very least, the investigation complicates ICANN’s own probe of the acquisition. ICANN has to approve transfers of control of gTLD registries, and it’s currently poring over documentation provided by PIR detailing the structure of the deal.
It’s already delayed approval once, saying last month (pdf) that it expected to give a yay or nay to PIR by February 17.
Following the AG’s letter, ICANN asked PIR (pdf) to extend that deadline to April 20, to allow it time to deal with the new concerns.
It emerged yesterday that PIR has told ICANN to get (partially) stuffed (pdf), allowing an extension only to February 29, saying further delay “is neither necessary nor warranted at this time”.
But PIR did give its reluctant consent to ICANN disclosing previously confidential information to the AG, despite taking issue with ICANN’s opinion that AG letters are arguably equivalent to subpoenas, so it was under a legal obligation to do so.
It’s not entirely clear what could come of this predicament.
PIR says that while ICANN is able to approve or decline changes of control, it has no authority under the .org Registry Agreement to deny PIR changing its legal status from non-profit to for-profit entity.
And while California no doubt has jurisdiction over ICANN, PIR is based in Pennsylvania, so it would be up to Becerra’s counterpart in that state (a fellow Democrat, as it happens) to attempt to obstruct PIR’s planned conversion.
If that were to happen, it would interfere with Ethos’ somewhat convoluted acquisition plan.
Some of the AG’s 35 questions are pretty basic, stuff like “describe in detail the authority ICANN has to regulate, license, and/or oversee the domain name system” and “provide an explanation of ICANN’s authority to regulate the registration fees charged for .org domains”.
That’s either coming from a place of ignorance, or from somebody who’s deliberately questioning ICANN’s very existence as the central coordinating body of the DNS.
That would be frightening indeed.
But at the same time, this intervention from a governmental body may come as a relief to ICANN.
ICANN doesn’t like making difficult decisions when it comes to the big legal questions, or indeed anything with the potential to be controversial and ergo litigation bait.
Take, for example, its ongoing pleas to European data protection authorities to fix its GDPR problem, or its longstanding deferment to US competition authorities when it comes to issues such as the price of a .com domain and the introduction of new registry services, or its outsourcing to expert third parties of almost every potential wedge issue to be found the new gTLD program.
An opinion on .org one way or the other from the California AG could provide a lovely smokescreen for ICANN to approve or reject the .org deal without actually taking responsibility for the decision, a prospect I suspect would we well-received by the Org.
Whether it will actually receive this blessing is an open question.

Non-coms want .org’s future carved in stone

ICANN’s non-commercial stakeholders have “demanded” changes to Public Interest Registry’s .org contract, to protect registrants for the next couple of decades.
The NCSG sent a letter to ICANN chair Maarten Botterman this week which stopped short of demanding, as others have, that ICANN reverse its decision to unfetter PIR from the 10%-a-year cap on prices increases it has previously been subject to.
Instead, it asks ICANN to strengthen the already existing notification obligations PIR has when it increases prices.
Today, if PIR wants to up its fee it has to give its registrars six months notice, and registrants are allowed to lock in the current pricing by renewing for up to 10 years.
NCSG wants to ensure registrants get the same kind of advance notification, either from PIR or its registrars, and for the lock-in period doubled to 20 years.
The group is concerned that, now that PIR seems set to become a for-profit venture following its $1.135 billion acquisition by Ethos Capital, there’s a risk the registry may attempt to exploit the registrants of its over 10 million .org domains.
I think it unlikely that ICANN, should it pay any attention at all to the letter, will agree to the 20-year renewal ask, given that the contract only runs for 10 years and that gTLD registries are forbidden from selling domains for periods of longer than a decade.
It would require adjustments with other parts of the contract, such as transaction reporting requirements, and would probably need some industry-wide tinkering with the EPP registry protocols too.
In some respects, the stance on pricing could be seen as a softening of NCSG’s previous position.
In April, it said that price caps should remain, but that they should be increased from the 10% a year level. If that view remains, the letter does not restate it.
The NCSG also wants the oft-criticized Uniform Rapid Suspension policy removed from the .org contract, on the basis that it was only ever supposed to be applied to gTLDs applied for in the 2012 round and not legacy gTLDs.
URS has been incorporated in all but one of the legacy gTLD contracts that have been renewed since 2012.
Finally, NCSG asks that ICANN essentially write the US First Amendment into the .org agreement, writing that it wants:

A strong commitment that the administration of the ORG domain will remain content-neutral; that is, the registry will not suspend or take away domains based on their publication of political, cultural, social, ethnic, religious, and personal content, even untrue, offensive, indecent, or unethical material, like that protected under the U.S. First Amendment.

The fear that a .org in commercial hands will be more susceptible to censorship pressures is something that the Electronic Frontier Foundation has also recently raised.
The basis for the NCSG’s demands are rooted in the original redelegation of .org from Verisign to PIR in early 2003, which came after a competitive bidding process that saw PIR beat 10 rival applicants, partly on the basis of its commitment to non-profit registrants.
You may recall I did a deep-dive into .org’s history last week that covered what was said by whom during that process.
NCSG writes:

The ORG situation is unique because of its origins in a competitive RFP that was specifically earmarked for noncommercial registrants. How ICANN handles this case, however, will have enormous precedential consequences for the stability of the DNS and ICANN’s own reputation and status. Changes in ownership are likely to be increasingly common going forward. Domain name users want stability and predictability in their basic infrastructure, which means that the obligations, service commitments and pricing cannot be adjusted dramatically as ownership changes.

NCSG’s letter has not yet been published by ICANN, but the Internet Governance Project’s Milton Mueller has copied its text in a blog post here.

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.