Controversial sale of .org domain manager under review at ICANN

ICANN is looking into the pending sale of the .org domain manager from a nonprofit to a private equity firm and says it may try to block the transfer.

The .org domain is managed by the Public Internet Registry (PIR), which is an affiliate of the Internet Society, a non-profit organization. The Internet Society is trying to sell PIR to private equity firm Ethos Capital.

ICANN (Internet Corporation for Assigned Names and Numbers) said last week that he addressed requests for information to the PIR in order to determine whether the transfer should be authorized. “ICANN will carefully assess the responses, and then ICANN will have an additional 30 days to provide or deny consent to the request,” the organization said.

ICANN, which is also a non-profit organization, previously told the Financial Times that he “has no authority over the proposed acquisition”, giving the impression that the sale was virtually a done deal. But even that earlier statement gave ICANN some leeway. ICANN “has stated that its job is simply to” keep the .org domain running, “which implies that it could only stop the sale if the stability and security of the domain name infrastructure were threatened, “the Financial Times wrote in November. 28.

In its new statement last week, ICANN noted that the .org registry agreement between PIR and ICANN requires PIR to “obtain prior approval from ICANN prior to any transaction that would result in a change of control. registry operator ”.

ICANN can raise a “reasonable” objection

The Registry Agreement allows ICANN to request transaction details “including information about the party acquiring control, its ultimate parent, and whether they meet the registry operator criteria adopted by the Registry Operator. ICANN (as well as financial resources and operational and technical capacities), ”noted ICANN. ICANN’s 30-day review period begins after PIR provides these details.

Under the registry agreement, ICANN said it would apply “a standard of reasonableness” in determining whether to allow the change of control over the .org domain. As noted by Domain Name Wire in a new stories, whether ICANN can block the transfer using this standard “may ultimately be determined by the courts”.

The agreement between PIR and ICANN designates PIR as the registry operator for the .org top-level domain. It says that “neither party may assign any of its rights and obligations under this Agreement without the prior written approval of the other party, which approval shall not be unreasonably withheld.”

Concern about price increases, transparency

The pending sale comes months after ICANN approved a contract change that removes price caps on .org domain names. The sale raised concerns that Ethos Capital would impose significant price increases.

ICANN says it wants to make the transaction review process more transparent. But ICANN apparently needs PIR’s permission to publish PIR’s request for information and responses, and so far PIR has denied a request to release documents. In the last week letter at the PIR and the Internet Society, ICANN General Counsel and Secretary John Jeffrey urged the PIR to make the information public:

As you well know, transparency is the cornerstone of ICANN and how ICANN acts to protect the public interest while fulfilling its role. In light of the level of interest generated by the recently announced acquisition of PIR, both within the ICANN community and more generally, we continue to believe that it is essential that your application, as well as questions and answers following the request, and any other related documents, be made public.

Although PIR previously denied our request to publish the request, we urge you to reconsider your decision. We also think that it would be very useful for us to publish the questions that are put to you and your answers to those questions. We will of course provide you with the opportunity to draft portions of the materials which you believe contain personally identifiable information prior to posting and renewing this offer here.

Like you, [ISOC CEO] André [Sullivan], declared publicly during a webcast meeting you attended on December 5, 2019, you are uncomfortable with the lack of transparency. Many of us watching the communications about this transaction are also uncomfortable.

In summary, we again reiterate our belief that it is imperative that you commit to carrying out this process in an open and transparent manner, starting with posting the application and related material, and allowing us to post to you. our questions and your full answers.

We contacted PIR today and the organization said it was unable to respond to the request to release the documents due to confidentiality agreements. PIR told Ars:

PIR is committed to being transparent with ICANN and the Internet community, and PIR is working to answer ICANN’s questions and explain why this acquisition will be good for the .org community. But like any business in the midst of an acquisition, and in accordance with other changes of control that have been reviewed by ICANN, we are limited in what we can publicly release due to[it]y agreements with other parties and proprietary information regarding the transaction.

PIR defends the sale

PIR CEO Jon Nevett defended the pending sale in a blog post last week, calling it “the best way for the future of .org”.

“[A] diversified portfolio is much better, and less risky, than relying on a single company like Public Interest Registry, in a single industry, for almost all of its funding, ”Nevett wrote.

Under the ownership of the Internet Society, PIR has “been in perpetual ‘harvest’ mode, where PIR sends the fruits of our labor to support the incredible work they do,” continued Nevett. “A relationship with Ethos will allow us to invest in .org, which will allow us to offer more to the .org community and the Internet in general. “

But critics of the sale want written guarantees that the new owner won’t impose steep price increases. ICANN Non-Commercial Stakeholder Group (NCSG) called on the ICANN board to demand public interest protections in the sale. For example, the NCSG said that before any increase in wholesale prices, registrants of .org domain names should have “six months to renew their domains for periods of up to 20 years at the pre-existing annual rate.”

Ethos Capital should also commit to respecting content neutrality by committing to “not suspend or remove domains on the basis of their publication of political, cultural, social, ethnic, religious and personal content, even false, offensive. , indecent, or unethical material, like that protected by the US First Amendment, ”NCSG said.

If Ethos Capital refuses to make these commitments, ICANN should “exercise its right” of the registry agreement to withhold its approval, the NCSG said.

Contacted by Ars, PIR said its existing agreement with ICANN “requires PIR to provide six months notice of any price increase” and that “PIR under a new owner will honor the terms of this contract.” However, PIR did not commit to accepting NCSG’s proposals.

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