[CPWG] My thoughts on the PIR sale and ISOC: Lessons Being Learned

[David Mackey]

Greg,


Thank you for putting in the effort to create and share your post.


I agree with your commitment to the multistakeholder process. The
multistakeholder process something special. It’s still relatively new and
not easily defined. Work is required to understand it better, communicate
its value to others and apply it within ICANN, as well as between the
broader set of major Internet Organizations including ICANN, ISOC, IETF,
etc., if possible.


It’s not completely surprising that this type of exercise (ISOC/PIR) is
happening now, due to the value creation that the Internet has generated
over the last three decades. Let’s hope we figure out a way to continue the
innovation and value creation. I believe a great deal of the success of the
Internet comes from the multistakeholder process itself. Whatever happens,
let’s hope the multistakeholder process is not damaged along the way.


It’s obvious to me that you are a great asset to the At-Large ICANN
community. I have great confidence that your expertise and leadership will
keep the multistakeholder process alive and healthy in our At-Large
community.


Cheers!

David

On Thu, Feb 20, 2020 at 12:30 AM Greg Shatan <greg at isoc-ny.org> wrote:

> CPWG folks,
>
> I wrote the following on another list and thought it might be of interest
> here.  (Apologies for cross-posting.)
>
> Best regards,
>
> Greg
>
> ==========================
> *Greg Shatan*
> greg at isoc-ny.org
> *President, ISOC-NY*
>
> *"The Internet is for everyone"*
>
>
> ---------- Forwarded message ---------
> From: Greg Shatan <greg at isoc-ny.org>
> Date: Wed, Feb 19, 2020 at 7:15 PM
> Subject: ISOC & the PIR Sale: Lessons Being Learned
> To: ISOC Internet Policy <internetpolicy at elists.isoc.org>
>
>
> I started replying to a couple of threads on this list, and ended up
> mulling it over at some length (too much?) and decided it would be better
> as a free-standing email.
>
> The PIR/.ORG transaction is a watershed moment for ISOC.  What had once
> seemed (at least to ISOC and its Board) to be ISOC’s chance to transform
> its finances now seems to many to be a threat to ISOC’s essence, and even
> its very existence.
>
> From the ISOC-NY perspective, this entire affair points out the paucity of
> community-involved multistakeholder participation in ISOC’s critical
> decision-making processes (and other processes, too).  Navigating the very
> different worlds of non-profits, ICANN and billion-dollar private equity
> transactions has been a huge challenge for ISOC.  This has exposed cracks
> in ISOC’s processes and in its sense of self at every point where decisions
> had to be weighed and made.  ISOC’s claim to be even moderately
> multistakeholder in governance has been found wanting.
>
> A fair amount of the (most visible) opposition to the sale is alarmist,
> ill-informed and rife with self-dealing.  But that doesn't make the sale a
> Good Thing. It also doesn’t make all of their criticisms wrong or unfounded
> (even if they are overblown).
>
> Frustratingly, this fervent opposition tends to obscure a number of the
> more thoughtful and analytical critics and criticisms of the sale, coming
> from a variety of different angles.  Those who are not taking a hard line
> in opposing the sale are not supporters of the sale (though some of the
> hardliners want to say they are or convert them to their cause).  This is
> the skeptical but undecided “middle” portion of the community, trying to
> think this through and avoiding rushed judgments, even if they feel a bit
> queasy.
>
> The ultimate positions of these swing groups is important, maybe even more
> important than those of the entrenched opposition.  In one version of
> reality, these folks would have swung toward supporting the deal, their
> concerns addressed, their voices counted.  We are not in that version of
> reality.  For better or worse, I think these "swing groups" are now
> swinging toward opposition, or at least putting on the brakes until
> significant concerns can be addressed.
>
> The demise of the summit meeting being planned for the weekend of February
> 22, shows how troubled this whole steaming stew has become.  Speculating
> wildly, it sounds to me like some of the hardliners pulled out (or were
> never in) the meeting, because they have a plan, something up their
> sleeves, perhaps even a counterattack in mind.  This left the more moderate
> but concerned contingent in the lurch.  Apparently, this in turn caused one
> of the deal participants to shrink the meeting to irrelevancy, perhaps
> because the participants wanted to deal with the noisy hardliners, rather
> than the more low-profile opponents that were left on the agenda.  This
> move further alienated those in the moderate camp.
>
> This is a negative outcome for those who want the deal to go forward, and
> for all those involved in the deal regardless of outcome.
>
> The moderates were at least fact-checking the hardliners while still
> demanding facts and changes from the deal team. Potentially, at least some
> of this group could have been brought around to support the sale, with some
> significant safeguards and adjustments.  Without some serious support from
> within this group, the deal participants, their advisors, and the few
> active proponents of the deal look pretty isolated.
>
> The traditional playbook of M&A dealmakers at this point would likely be
> to “Get The Deal Done,” by any means necessary.  The Proskauer letter is
> solidly within the tradition.  The traditional “Get The Deal Done” playbook
> would focus efforts on those with the clear, formal power to stop the deal
> (ICANN, government regulators, AGs), convincing, mollifying, co-opting
> neutralizing or defeating them.  Meanwhile, the noise of the rabble would
> be more or less ignored (and guess what? We’re all rabble).  The deal
> participants would be limited to carefully-crafted statements and sound
> bites and carefully orchestrated situations.  No matter how many words,
> ultimately they would say very little.
>
> The traditional playbook has certainly informed the buyer's decisions. It
> has seemed to inform much of PIR and ISOC's thinking as well.
>
> The traditional playbook has been a disaster at every turn. If the deal
> participants keep following this playbook, there's still a possibility the
> deal will get through and close, while leaving scorched earth in every
> direction and a persistent stench wafting over the land. More likely every
> day, taking the traditional approach will continue to harden and grow the
> opposition to the deal and spawn more significant, powerful and effective
> opponents and methods of killing the deal.
>
> The private equity veterans, investment bankers and lawyers involved in
> the deal have likely been very persuasive in convincing the other deal
> participants to "stay the course." Sadly, these experts had little or no
> idea what they were getting themselves into.  The world of investment
> banks, private investment firms, Big Law, big finance and private equity
> could not be more different than the world of domain names, ICANN,
> non-profits, domain investors, social activists and Internet pioneers.
> This is a culture clash.
>
> As someone with experience in both worlds, it's been frustrating to watch
> this slow motion train wreck.  At every major inflection point, I’ve
> thought I should tell ISOC that "this is going to get worse before it gets
> better."  And I hoped for the best.  At this point, the message feels like
> "this is going to get worse and it may not get better.”  Unfortunately,
> this is almost as much a product of the way the deal has been handled as it
> is a product of the fundamentals of the deal.
>
> To my mind, the only way this deal gets done in a satisfactory way (and
> maybe if at all) is if there is a radical restructuring of the deal, of the
> buyer, of the post-ISOC shape of PIR combined with an embrace of radical
> transparency, the adoption of genuine accountability, and a true
> multistakeholder stake and meaningful voice in PIR.
>
> No matter what the outcome, ISOC will come through this facing some real
> challenges. It is dented and scuffed. It didn't help that PIR and Ethos
> have adopted a low public profile (at least in person), leaving ISOC (and
> particularly Andrew Sullivan) swinging in the wind while trying to explain
> and defend the transaction, including parts that have nothing to do with
> ISOC.  This has been unfair to ISOC (and particularly Andrew Sullivan).
>
> Though worse for wear, ISOC is still structurally sound. It is not a given
> that ISOC will remain so as things move forward. How ISOC handles matters,
> how it defines itself, how it makes decisions and how it communicates from
> this moment on (both during and after the denouement of this entire
> affair), will speak volumes about its long-term identity and even
> viability.  ISOC needs to figure this moment out, and who it wants to be.
>
> I, for one, want ISOC to come through this better and stronger than
> before, more multistakeholder, more meaningful and more engaged.  A noisy
> few want quite the opposite (and quite a number of them want something for
> themselves). Many others opposing the sale know little about ISOC, and may
> not have heard of it at all just a few months ago.  Most of what these
> people have heard is so negative (some of it true, some slanted and some
> "fake news") that ISOC is merely a cartoon villain to them.  This increases
> both the difficulty and the stakes for ISOC "getting it right" from now on.
>
> The rest of this month (and beyond) will be a true test for all involved.
> Innovative, inclusive, empathic thinking will likely be rewarded.
> Accepting outcomes that are not any one party’s ideal solution will be
> required, if there are going to be real winners.  (Not surprisingly, this
> is often the successful result of the bottom-up consensus-driven
> multistakeholder process.)  If the various participants choose to battle it
> out instead, it seems likely there will be no real winners – only survivors.
>
> Greg
>
> ==========================
> *Greg Shatan*
> greg at isoc-ny.org
> *President, ISOC-NY*
>
> *"The Internet is for everyone"*
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