ICANN rejects sale of .org to private equity firm citing public interest

In a dramatic chain of events, the ICANN Board unanimously blocked its consent for Internet Society (ISOC) to change ownership of the non-profit Public Interest Registry (PIR) to the private equity firm Ethos Capital.

In July 2019, Timothy B. Lee, a reporter for Ars Technica, wrote a story about the Internet Corporation for Assigned Names and Numbers (ICANN) eliminating price caps on .org domains. This change was disconcerting because generic top-level domains (gTLD) are unregulated, and their prices have been rising at an alarming rate. Perhaps even more troubling was the number of people that were against it, yet it still passed. Lee summed it up well with this statement.

Fewer than 0.07 percent of commenters thought it would be a good idea to remove the price cap on .org domains, while more than 98 percent opposed the change.

The move to eliminate price caps on .org was a necessary precursor for the private equity firm, Ethos Capital, to acquire control over the third-largest TLD. Four months after ICANN eliminated price caps, it was announced Ethos Capital would be buying Public Interest Registry (PIR), a subsidiary of the non-profit company Internet Society (ISOC) that controls the .org TLD.

The acquisition announcement sparked an outcry of public opposition. Soon after that, the ICANN Board came under intense scrutiny, and details about the deal and the dealmakers began to leak out.

Founding and former members of ICANN, Michael Roberts and Esther Dyson, sent a joint letter to the Attorney General of California, urging them to intervene. The reason they sent it, as Roger Montti in Search Engine Journal pointed out, is because the California Attorney General can assert regulatory authority over ICANN since they are a registered non-profit in California. Among their assertions, they claimed Ethos Capital was using the distraction of coronavirus to get the sale approved quickly.

Those who seek to evade the process are attempting to rush it through under cover of the pandemic, which has appropriately overshadowed public concern.

On April 30, 2020, ICANN announced they were rejecting the sale of .org to Ethos Capital. In conjunction with public comments and increased scrutiny, it appears the letter to the California Attorney General did influence ICANN’s final decision. In ICANN’s official resolution and rationale document, it stated that the California Attorney General sent them a letter against the sale:

As the CA-AGO’s letter observes, his determination is buoyed by the significant opposition received from other organizations and politicians, with virtually no counterbalancing support except from the parties involved in the transaction and their advisors.”

For now, the .org TLD is conceivably safe from an acquisition by a private company. However, based on reporter Steve Lohr’s coverage in The New York Times, ISOC is still interested in selling it. The lack of price caps on the TLD also stands, which doesn’t bode well for the future of .org.

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Jon is the founder and Managing Editor of Coywolf. He has over 25 years of experience in web development, SaaS, internet strategy, digital marketing, and entrepreneurship. Follow @henshaw