ICANN Blocks Sale Of .Org Domain Registry To Ethos Capital
ICANN, the organization that oversees domain name registries, blocked the sale of the dot org domain name registry to a private equity investment company. Icann has blocked the sale of the .org domain name to private equity group Ethos Capital. The internet watchdog said it was not acceptable for the domain to move from a not-for-profit organisation to a for-profit company that had not provided any meaningful plan to protect or serve the .org community.
The Internet Society, the nonprofit that runs the .org registry, last year announced plans to hand over control to investment firm Ethos Capital as part of a $1.1 billion transaction. A subsidiary of the Internet Society called the Public Interest Registry owns the registry. That subsidiary, in turn, has a contract with ICANN that requires ICANN to give its approval before any change in ownership can take place. That’s what enabled the internet body to block the deal.
BREAKING: ICANN has voted to REJECT the sale of the .ORG registry to private equity firm Ethos Capital. This is a major victory for the millions of nonprofits, civil society organizations, and individuals who make .ORG their home online. #SaveDotOrg https://t.co/K2qk85c3Ug pic.twitter.com/sFLcwZqU1B
— EFF (@EFF) May 1, 2020
More than 10 million .org domains are registered worldwide, mainly by nonprofits. Nearly 900 of those organizations, including NPR and the Wikimedia Foundation, signed a public letter urging the Internet Society to not go through with the sale. In a statement explaining its decision, ICANN’s board said that “the public interest is better served in withholding consent as a result of various factors that create unacceptable uncertainty over the future of the third largest gTLD (generic Top Level Domain) registry.”
Under the proposed sale to Ethos Capital, Public Interest Registry would have been converted from a nonprofit to a for-profit corporation, and taken on $360 million in debt. ICANN’s board on Thursday said there was too much uncertainty about whether the registry could repay that amount, potentially jeopardizing its “long-term financial stability.”
To address concerns about accountability, Ethos and the registry had put forward a number of so-called “Public Interest Commitments,” which they said would be legally binding through the registry’s contract with ICANN.
But ICANN’s board said it should not have to serve as a backstop to keep the registry accountable to its community. The board also cast doubt on whether members of a proposed stewardship council could be “truly independent” of the new company’s financial interests.California’s Attorney General, the board noted, also said the debt burden and other aspects of the sale raised “serious concerns” for the nonprofit community, and had asked ICANN to block the proposal.
Oversight by Pennsylvania Attorney General Josh Shapiro, who has jurisdiction over state charities, was another factor in the board’s decision. To become a for-profit, Public Interest Registry would need to get approval from the Pennsylvania Orphans’ Court, and Shapiro’s office has the power to review and weigh in on such a request.
Despite ICANN’s veto of the proposed sale, this is not necessarily the end of this attempted purchase of the Public Interest Registry; ICANN has said that if additional information can be provided to assuage its concerns, another proposal may be submitted.
Others, however, celebrated. The EFF praised ICANN’s move, calling it “a major victory for the millions of nonprofits, civil society organizations, and individuals who make .org their home online.” A group of lawmakers including Sens. Ron Wyden (D-OR), Elizabeth Warren (D-MA), and Edward Markey (D-MA) as well as Rep. Anna Eshoo (D-CA) also commended the choice. “This deal would have saddled the .org registry with hundreds of millions of dollars of debt, putting it in an unstable position during this current economic crisis, solely to enrich a private equity firm at the expense of users and nonprofits,” said Wyden.