[CPWG] The PIR sale

Sat Dec 7 17:06:58 UTC 2019

Hi all.
While submitting my thoughts to Jonathan for the consolidated ALAC document to present to ICANN, it occurred to me that analysing the past facts there are also questions that we want to submit to Ethos/PIR and ISOC. Maybe some of the questions to Ethos/PIR and/or ISOC have been asked already in the meantime, but I kept them for completion.
I am therefore posting this - unfortunately long - contribution for discussion within ALAC.

The initial award of the contract to PIR
The core of the matter is whether ISOC/PIR were chosen because of their non profit status. The counter argument is that the Board insisted in having a bid that was open also to commercial parties. At the time I was not in any of the bodies who made the decisions, but as a former Chair of the DNSO General Assembly I had some exchange of opinions about this and I was firmly convinced that this stance has been taken in order to limit the possibility of Verisign to raise issues with USG that could invalid the bid and/or to appeal to the court for biased behaviour of ICANN. In simple words, although the orientation was to have .org managed by a non-profit, ICANN was very weak at the time and highly exposed to Verisign lawsuits, and therefore had to move carefully. The proof is in the pudding: when the contract was awarded to ISOC/PIR there were some constraints that were directly related to the Public Interest commitment of that bid.
The questions are therefore:

  *   to ICANN - did the consideration that ISOC/PIR was a non-profit, and therefore a further step towards achieving the declared purpose of ICANN about introducing diversification and competition in the domain name market, an element that the Board took into account in making a decision? If so, why is the situation so much changed that ICANN allows the major gTLDs to be concentrated in for-profit hands? Would this not be a risk of commercial organisations to form a cartel that can adversely influence the market? How is a monopoly by Verisign, that was the target of ICANN’s action at the time, substantially different from a cartel between the major commercial registry operators that will arise if PIR starts operating for profit? Does ICANN have sufficient guarantees that Verisign is not behind this operation to eliminate a competitor? The last question is not peregrine, considering the operation that Verisign has crafted about .web, creating a puppet company to successfully counter Afilias’ bid, all without ICANN seeing anything strange about it.
  *   to Ethos - what is the position of the company about the commitments in the initial contract, like for instance to have an Advisory Council that has been over the years a link between the non-commercial and non-profit community and the Registry? As a side note, the original commitment was to have a representative from the NCUC, under my PIR chairmanship we changed NCUC to NCSG and reserved one seat for ALAC as well, with the consideration that the scenario had changed after the ICANN reform. It would be important to keep this two-way communication with the new PIR.
  *   to ISOC - no questions

The Multi-Stakeholder model
There has been an effort over the years to progress towards equal representation of the stakeholders. This has been a success story for ICANN, who has been instrumental in the adoption of this philosophy in other fora (e.g. IGF) and in the stake-holderism becoming a reference in debates about governance models. ICANN has been proactive over the years in balancing commercial and non-commercial views and voices - even voting power. This is a clear sign of an approach that would value non-profits being an essential element that tries to balance the power of for-profit enterprises. One clear example in this sense is the review of the GNSO, when the commercial and non-commercial users were given equal power in the reviewed GNSO while the previous situation was that commercial companies had three constituencies (i.e. three votes) while the non-commercial users had only one. I was the Chair of the Structural Improvement Committee and of the GNSO Review Working Group at the time, so I have a lot of details that can be brought to the discussion. The example is indeed about action in the non-contracted party house, but indicates IMHO a general philosophy that ICANN has that would apply also to the contracted party house. This trend will be reversed if/when ICANN endorses the transfer of the .org registry to a commercial company. Moreover, PIR has been instrumental in some fights for the public interest, endorsing SSAC recommendations like the position against the wildcard that Verisign had introduced for its own profit and against the interest of the Internet users.
The questions are therefore:

  *   to ICANN - does the endorsement of a move of PIR to the commercial camp mark a change from the expoused commitment to equal multi-stakeholderism? If not, is ICANN willing to mark the point and suspend the approval in order to have Board, Staff and the Community to have a deeper look at the matter? If not, what are the measures that ICANN plans to propose to balance this shift from non-commercial to commercial power and marked presence? Does ICANN realise that this change will also alter the balance within the Registry Stakeholder Group and if so are there any measures that ICANN proposes to alleviate the consequences? Does ICANN realise that it will be losing an essential ally in fights that ICANN Advisory Committees, notably SSAC, is conducting for the benefit of the whole Internet community as opposed to the benefit of private interests? Who does ICANN think it will now have among large gTLD Registries as supporter of SSAC Recommendations - that are not binding - now that PIR is likely to change camp? Does ICANN realise that at this point in time the SSAC itself is likely to become irrelevant because the commercial registries cartel could simply disregard the advice? Does ICANN have a plan B and can this be shared with the community?
  *   to Ethos - over time PIR has taken a lot of commitments based on putting the Public Interest above the financial interest of the company itself. Does Ethos stick with this approach - and is therefore ready to sign a formal commitment? If not, does Ethos think that it is appropriate for a Registry that does not take formal commitments for the public interest to still be called “Public Interest Registry”? What is Ethos’ position vs formal recommendations that come from technical ICANN advisory committees like SSAC and RSSAC? What is Ethos’ position vs formal recommendations that come from ALAC, the advisory committee that is representing the user community and therefore the public interest?
  *   to ISOC - no questions

The sale itself
I have to confess that I have been taken by surprise by the sale. However, linking this with some trends in the years I have been on the PIR Board - also as Chair for a while - I now have a better picture of the whereabouts. The point here is that we need to put ourselves in a Trustee's shoes and follow the money -ooops, I meant follow the reasoning. If PIR is not considered a valid steady supply of money, it is obvious that an alternative has to be found. I personally do not believe the story that Ethos’ proposal came out of the blue and everybody in ISOC was taken by surprise. None of the actors in this soap opera came out of the blue, all are insiders. To try to make us to believe that there have not been contacts for months, or even years, is an insult to our intelligence.
This said, we must deal with the current situation and the way we got here is irrelevant - or at least less important - in this phase. The only fact is that the transaction happened in the dark, that those who knew pretend they did not know, that an asset that is earmarked as “Public Interest” is traded without any possible interaction with the voices that represent the public interest.
The questions are therefore:

  *   to ICANN - Is it normal that such a transaction, that has so much impact for the community, happens without a public comment period? Is it too late to start such public comment period before endorsing the change? We have public comments as a rule - or at least as a practice. People will not understand if ICANN gives a stamp of approval to a transaction of this importance without opening a consultation. Of course, it will be well understood that the result of the consultation will not be binding for ICANN’s decision, but not even to hold the PIR transfer until we have a feedback from the community will undermine ICANN’s image vs the public interest. ALAC should recommend to hold the transaction and open a public comment phase.
  *   to Ethos - when the asset was bought, was it understood that PIR via .org was playing a substantial role in the ecosystem being the only large gTLD operating in the public interest as non-profit? Does Ethos plan to continue this role - regardless the formal for-profit company form? What are the engagements that can be formalised in a binding contract that could support this approach? Are there any plans to further trade PIR assets to, e.g., a registrars consortium that via vertical integration could provide better return on investment at the detriment of the public interest? Would Ethos/PIR be ready to go beyond the simple affirmation of intents - that can be changed at any time and that do not carry weight in a court - and sign a formal commitment like a contract with ICANN?
  *   to ISOC - I remember ISOC putting a lot of pressure to PIR for the rebid of the back end contract. The issue was to make sure that we had a completely open and transparent bit, which of course PIR did. How comes that the requirements for a PIR subcontract do not apply for the mother company? Does ISOC realise that this is yet another instance of “do what I say, not what I do”? Do ISOC chapters realise that they have had no input - as vehicle from the field - in this transaction? Can we have an official statement from the ISOC Chapter representatives on the Board of Trustees - some Chapters are also ALAC ALSes - on why they supported this sale and how the public interest has played a role in this? Does ISOC realise that it has lost the trust from large part of the people who are aware of the domain name issues - who are the core of the supporters historically? Do the ISOC chapters realise that they are becoming irrelevant facing the role that the IETF Trustees have taken on the ISOC Board and the collusion with the organisational members?

In summary, my personal opinion is that we should ask ICANN to wait before granting its approval until after a consultation is carried on and until Ethos/PIR have cleared their position vis-à-vis taking binding commitments about their future behaviour in the Public Interest.
As for the questions to ISOC I would expect the ISOC Chapters - in particular those who are active in ALAC - to express their opinion on the sale.
Cheers,
Roberto
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