The sale of one of the world’s most known registries, .org, along with its parent company the Public Interest Registry (PIR) to a for-profit firm was announced without warning recently.
“The proposal would subject nonprofits to unpredictable and unrestricted price hikes,”
The .org registry has been synonymous with non-profits since it began. With over 10 million websites registered through the organization that has held the non-profit status since 2003.
That company, the Public Interest Registry (PIR), will shed its non-profit status as a result of the sale.
The registry was sold to a company that is essentially unknown in the internet industry as it was formed only months before the announcement of the purchase was made. Ethos Capital claims that it has knowledge of the domain industry, even though its founder does not appear to have any experience in the domain industry and the company only lists only two employees.
How did such a deal come together given the complexities involved?
Fadi Chehade, the ex-CEO of ICANN (the Internet Corporation for Assigned Names and Numbers), the company responsible for the way the domain-name system operates seems to be the key connection between Ethos Capital and PIR.
He seems to be responsible for the radical expansion of domain suffixes several years ago.
Chehade left his position as CEO of ICANN in 2016 and began working at Abry Partners shortly after, where the founder of Ethos Capital, Eric Brooks, was a former managing partner.
Chehade also registered the formal domain name for Ethos Capital back in May 2019, long before the June 30th decision to remove price caps on .org domain names, which greatly increased the value of PIR. However, Chehade is not listed as an employee and Ethos capital has not responded to may domain name blog websites about his connection to the company.
Furthering the questionable connections between the two companies, Abry Partners purchased a registry company in 2018 called Donuts whose CEO and co-founder, Jon Nevett, left and became the CEO of the Public Interest Registry and was the one who approved the sale of the non-profit to Ethos Capital.
The Chief Purpose Officer for Ethos Capital, Nora Abusitta-Ouri, one of only two employees listed by the firm, has held several positions at ICANN in the past. Akram Atallah was interim CEO of ICANN before Chehade took over, based upon Attallah’s recommendation, in 2012. Atallah took over again as interim CEO of ICANN in 2016. And when Jon Nevitt, former CEO of the Donuts registry firm, left his role at Donuts to become CEO of PIR, his previous role as CEO was taken over by Atallah who left ICANN quite suddenly for the position.
The revolving door at ICANN was not unnoticed by the US Government who publicly commented in 2018 when David Redl, the head of the US Telecommunications and Information Administration said “We need safeguards to ensure that ICANN staff and leadership are not only grounded ethically in their professional action at ICANN, but also in their action when they seek career opportunities outside of ICANN”. The US Government also commented on the potential conflict of interest in 2011 when a former ICANN chair walked into a for-profit position just 4 days after leaving as the Domain Name System overseer.
ICANN operates autonomously and is not required to limit the movement of board members to for-profit positions. In fact, there are almost no controls in place which guide the movement of executives from ICANN to for-profit positions or in holding shares in companies that could profit from the decisions made by ICANN.
Domain Price Cap Lifted, Ignoring Community Opinion
ICANN has made a number of controversial decisions lately that have affected the domain namespace.
Back in June 2019, they lifted the price cap on .org domain names for the next 10 years creating a potentially massive price increase for the 10 million existing .org names. This simple change massively increased the potential sales price of the .org registry by perhaps billions of dollars.
There was widespread opposition to lifting the price caps with only 6 comments supporting the decision, most of which seemed to be from organisations that would benefit financially from the decision. The overwhelming public response criticising the decision, with over 3000 against it, was not taken into account in ICANN’s decision. In fact, ICANN dismissed these opinions by stating that the overwhelming number of comments did not represent the community as a whole but merely represented a vocal minority.
Those who supported the decision have found themselves aghast at the recent sale. “I know for sure that this was not even hinted at during the last PIR Advisory Council meeting, but it will have major implications for the ISOC (The Internet Society) chapters. What are they/ISOC thinking?” Stephanie Perrin, the chair of the NonCommercial Stakeholder group expressed via email shortly after the decision was announced.
The Internet Society has always been perceived as a protector and supporter of the accessibility and openness of the internet. Internet freedom groups have denounced the purchase and the decision by ICANN to remove the price cap.
The president of the Electronic Privacy Information Centre, Marc Rotenberg, who was a founding board member and chair of PIR, stated he was “very disappointed” by the news of the sale. “We built the .org domain with the specific goal of promoting the noncommercial use of the internet,” he recently told Gizmodo. “There are critical elements of transparency and accountability that will be lost when the Public Interest Registry is acquired by a private equity firm.”
Elliot Harmon, the Activism Director of the EFF, the Electronic Frontier Foundation, was critical of the decision as well.
The decision to sell was also hotly contested by The National Council of Nonprofits. Rick Cohen of NCN stated “The proposal would subject nonprofits to unpredictable and unrestricted price hikes,” in comments submitted to ICANN leading up to the sale announcement.
The secrecy of the deal, the huge sums at stake, and the fact that no one knows where the capital came from or how much was paid has the internet up in arms about the nature of the purchase and what will come next.
Major concerns that the price of .org domain names will skyrocket when the deal, worth potentially billions of dollars, goes through early next year.