The Internet Corporation for Assigned Names and Numbers (ICANN) Board has rejected the proposed change of control and entity from the Internet Society (ISOC) to Ethos Capital, a victory for those who want the non-profit, public entity to maintain management and operation of the .ORG domain.
The ICANN Board shot down the agreed-upon $1.1 billion acquisition that originally came Nov. 13 of last year. The Public Interest Registry (PIR) announced that ISOC, its parent organization, had reached an agreement to be acquired by Ethos Capital. PIR would be converted in the deal from a Pennsylvania not-for-profit corporation to a for-profit Pennsylvania limited liability company.
PIR, which includes 35 employees, operates the .ORG generic top-level domain (gTLD) as a not-for-profit organization and manages its 10.5 million registered domains. ICANN's role is to "ensure the stable and secure operation of the Internet's unique identifier systems" and consider "the global public interest," it wrote in the April 30 press release announcing the news.
ICANN had to give approval or withhold consent of any proposed change of control. PIR serves the public’s interest as "trusted stewards of the .ORG domain," operating the .ORG domain where millions of groups and individuals have established and grown their online identities, according to its website. "Today’s decision by ICANN sets a dangerous precedent with broad industry implications," Ethos Capital officials said in a statement April 30. "ICANN has overstepped its purview, which is limited to ensuring routine transfers of indirect control (such as the sale of PIR) do not impact the registry’s security, stability and reliability. Today’s action opens the door for ICANN to unilaterally reject future transfer requests based on agenda-driven pressure by outside parties."
ICANN Board officials said it was presented with a "unique and complex situation, impacting one of the largest registries with more than 10.5 million domain names registered." It concluded the public interest is better served by its decision because the acquisition would "create unacceptable uncertainty over the future of the third largest gTLD registry."
Specifically, concerns included:
- Ethos was bound to serve the interests of its corporate stakeholders and has no meaningful plan to protect or serve the .ORG community.
- ICANN was being asked to agree to contract with a wholly different form of entity; instead of maintaining its contract with the mission-based, not-for-profit that has responsibly operated the .ORG registry for nearly 20 years.
- PIR would be left with a $360 million debt instrument that forces it to service that debt and provide returns to its shareholders, which raises further question about how the .ORG registrants will be protected or will benefit from this conversion.
The acquisition drew a wide range of opposition, including that of four US Democratic Senators, one of which was former presidential candidate Elizabeth Warren, D-Massachusetts. Hundreds of open internet activists applauded the move.
BREAKING: great news this Friday! Concerns for the public interest prevail and ICANN rejects proposed .org sale to Ethos Capital #SaveDotOrg ↘️ https://t.co/NbtxaCsqud— Marietje Schaake 😷🏡 (@MarietjeSchaake) May 1, 2020
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