Back in January, we reported that the Internet Corporation for Assigned Names and Numbers (ICANN) was considering allowing the Internet Society (ISOC) to sell the .ORG registry to Ethos Capital, a private equity firm, for $1.13 billion.
ICANN is a California-based multi-stakeholder group that, among other things, oversees the many companies that manage registries of domains.
ICANN has yet to reach a final determination as to whether or not ISOC should be allowed to sell the .ORG registry to Ethos. And while it said it was going to make a decision this month, it is once again punting to a later date, thanks to a strongly worded letter from California’s attorney general Xavier Becerra.
In the letter, addressed to ICANN’s board chair and the corporation’s President and CEO, Becerra explained that his office has been keeping an eye on ICANN and has grave concerns about the transfer of the .ORG registry to Ethos Capital.
The letter sternly reminded ICANN that it needs to act in the best interest of everyone, not just those who stand to make a profit from this proposed transaction.
Becerra pointed out that ICANN’s articles of incorporation clearly state that ICANN is “not organized for the private gain of any person […] recognizing the fact that the Internet is an international network of networks, owned by no single nation, individual or organization.”
Becerra also noted that there is a lack of transparency not just surrounding what Ethos Capital plans to do with the acquisition, but also about the investment firm itself. “PIR, the nonprofit arm of ICANN, has dutifully managed the .ORG registry for more than sixteen years,” the letter states.
“Permitting Ethos Capital or any other business to take control of the registry, without clarity about the potential changes, poses meaningful concerns to the nonprofit community.”
The ICANN board subsequently put off the final decision about the sale until May 4th, the fourth time it has delayed its decision. It’s reported that the board received AG Becerra’s letter just hours before this announcement.
The announcement states:
“Since January, we have been providing information and fully cooperating with the California Attorney General’s review. We appreciate receiving the Attorney General’s letter and are carefully reviewing and considering it as part of our evaluation of the change of control and PIR’s entity conversion. Throughout this process, we have listened carefully to the community, and have demanded more safeguards and greater transparency from PIR.”
ICANN suggested that the Attorney General’s letter does not take into account recent work done by PIR to ensure that Ethos Capital would be “responsible to the community” in the event they acquire the .ORG registry.
Becerra contends that while PIR purports to support the free and open nature of the Internet, “its actions, from the secretive nature of the transaction, to actively seeking to transfer the .ORG registry to an unknown entity, are contrary to its mission and potentially disruptive to the same system it claims to champion and support.”
The letter does not threaten any legal action against ICANN. It ends by saying the office of the Attorney General of California will continue to monitor the situation, implying that it is prepared to act if the sale does go forward.
“My office is committed to protecting California’s and the public’s interest in a properly functioning and accessible .ORG domain system,” it says.
“ISOC and PIR are charitable organizations that are accountable to their community stakeholders and to the public at large. In contrast, a private equity firm is accountable only to its investors.”