Breaking News: ICANN stops .org sale

In huge news, ICANN has put a stop to the sale of the .org registry to Ethos Capital. 

The Ethos capital .org registry purchase has been in process for months now, drawing harsh criticism from many sectors of the internet. 

The sale of the .org domain registry to a private equity firm Ethos Capital would have transferred the registry from a non-profit firm to a private company for $1.135 billion US dollars. 

ICANN posted on its website that: 

After completing its evaluation, the ICANN Board finds 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 registry.

ICANN stated that the reasons it withheld consent were: 

  • The sale would not be in the interests of the public and instead would serve the corporate stakeholders
  • There was no meaningful plan to protect and serve the community housed on the .org domains
  • ICANN was being asked to shift its relationship and contract with a non-profit mission-based .org registry to one that did not respect the original mission and not-for-profit status of the original entity
  • The transaction relies on ICANN to resolve disputes in an untested way between the registry operator and the .org community 
  • The $360 million USD debt that PIR needed to finance the sale would bring the protection of the .org registrants into further question.

Interestingly, the resolution by ICANN does not close the door on the deal completely. In the resolution, ICANN has made note that it will still consider any new notice by PIR in the future. 

This is huge news as just 2 weeks ago ICANN had planned to decide on the sale of the .org registry on April 17th. 

Then on 15 April, the California Attorney General, Xavier Becerra, wrote a letter to ICANN urging it to reject the deal. 

The Attorney General said that the deal “puts profits above the public interest” in his original letter. And many of the factors that ICANN laid out above were also highlighted in the letter from the Attorney General. 

The US Attorney General in California had initially raised concerns about the sale in January, which delayed the sale for several months. As ICANN is incorporated in California, the voice of the AG has some influence over the company.

Many people have raised concerns about the AG voicing opinions about the sale of the .org registry and about ICANN in general. Especially as U.S. government oversight has been removed as much as possible from ICANN so that the internet and internet governance was not split by the assertion of control by the U.S. government or the state of California. 

The critics of the deal will likely celebrate as financial experts have been critical of the financial structure of Ethos Capital from the start. Ethos Capital had 6 different shell companies around it, registered just days before Ethos Capital inquired about purchasing the registry. The experts warned that it looked like an “asset-stripping arrangement” that could end up leaving .org registrants holding the bag for potential debt that the company could accrue. 

Although ICANN, in its statement, has stated that “the entire board stands by this decision”, the truth is the CEO was happy to support the deal and it took the considerable intervention by the California Attorney General to stop the deal from going forward. 

Some opponents of the deal have said that the sale of the .org registry might have brought additional oversight and scrutiny of ICANN. Particularly if they went against the opinion of the Attorney General of California. ICANN may have considered that it was safer going against the deal with PIR than the California Attorney General.