NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's uplifting perspective on world, national, and local politics.

Tuesday, April 21st, 2020

ICANN delays decision on sale of .ORG Registry to private equity firm — again

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.

Xavier Becerra

Cal­i­for­nia Attor­ney Gen­er­al Xavier Becer­ra (offi­cial photo)

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.”

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