Money & Business

ICANN Rejects Sale of .Org Domain to Private Equity Firm

By / May 1, 2020 (marekuliasz/iStock/Getty Images Plus)

The board of the Internet Corporation for Assigned Names and Numbers heeded objections from associations, nonprofits, and a state attorney general who warned that a for-profit firm would put its stakeholders above the public interest if it were to acquire control of the .org domain registry.

The controversial sale of the Public Interest Registry, which oversees more than 10 million .org internet addresses held by nonprofit organizations, to a private equity firm was blocked April 30 by the Internet Corporation for Assigned Names and Numbers.

ICANN declined to approve “a change from the fundamental public interest nature of PIR to an entity that is bound to serve the interests of its corporate stakeholders, and which has no meaningful plan to protect or serve the .ORG community.”

The Internet Society, which currently owns PIR, reached an agreement to sell the registry for a reported $1.1 billion to the public equity firm Ethos Capital LLC in November 2019. The previous June, ICANN had announced that it would remove longstanding caps on renewal fees for owners of .org domains.

The sale was opposed by numerous nonprofit organizations, including ASAE, which raised concerns that a for-profit owner would drive registry prices higher and insufficiently protect the public interest.

“It is expected that Ethos’ interest in acquiring Public Interest Registry is to increase .ORG registration and renewal fees,” ASAE wrote in a December 2019 letter to the departments of Justice and Commerce and the Federal Trade Commission. “Doing so would subject millions of associations and nonprofit organizations to what would most likely be an unstable pricing environment, forcing them to divert valuable resources from their exempt purpose in order to protect their online brand.”

The attorney general of California also objected to the sale, prompting ICANN to delay a decision that had been expected earlier this year.

In a statement Thursday, ICANN 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. 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 [generic top-level domain] registry.”

Among its reasons, ICANN noted that it 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, with the protections for its own community embedded in its mission and status as a not-for-profit entity.”

Associations and other nonprofits welcomed the news. “ASAE and the nonprofit world had well-founded concerns about the motives behind this proposed $1 billion transaction and, regardless of the promises made by Ethos to be accountable and transparent, it was clear that a profit-minded corporate entity would elevate the interests of its own stakeholders above the public interest,” said ASAE President and CEO Susan Robertson, CAE. “The .ORG community, which includes 10 million associations and nonprofits, deserves to maintain their online presence without being subject to exploitative pricing and the threat of censorship.”

In a statement, PIR called the decision “disappointing” but added, “PIR’s responsibility is to operate the exemplary .ORG registry at the highest level of excellence and in furtherance of .ORG’s ideals. We are as committed as ever to this important mission and to providing continued support to the amazing .ORG community.”

Julie Shoop

Julie Shoop is the Editor-in-Chief of Associations Now. More »

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