[CPWG] A white knight on the horizon for .ORG?

Wed Jan 8 21:48:49 UTC 2020

In my view the Cooperative idea is a non-starter, if its stated goal is to
take .ORG away from ISOC and leave ISOC with nothing.  This does more to
muddy the waters than to to clarify them -- though it is a great way to get
attention.

ISOC never said it didn't want to run .ORG. And there's no reason to
believe that the Ethos sale was contemplated when the contract was
renewed.  As for the price caps, ICANN has been the primary driver for
removing them, by getting all registries on the 2013 agreement.  There are
legitimate reasons for concern about the transaction, but these are not.
These are distractions.

As a matter of good governance, ISOC had to consider the concerns arising
from largely relying on a single source of income.  It's not unheard of,
but it's best avoided. (See footnote)  ISOC had no choice but to consider
whether it would be a more responsible steward of its mission (
https://www.internetsociety.org/mission/) by changing this situation, e.g.,
by selling PIR. I assume this has long been on ISOC's mind. That does not
mean that this sale to this buyer is the right decision -- but it provides
much-needed context.

Simply losing .ORG would be incredibly destructive of ISOC's mission and
operations, and would be the worst possible outcome from an ISOC governance
standpoint (and every other ISOC standpoint).  It's interesting that Dyson
et al. are making a proposal that would essentially bury ISOC.  It's
certainly not an outcome that ISOC would or could ever put on the table.

I would not jump to the conclusion that a sale of PIR is counter to the
interests of any other non-profit, much less every other non-profit.  Ethos
Capital is largely an unknown factor.  Whatever their strategy, their goal
is almost certainly to increase the value of PIR. Driving away its customer
base will do the opposite.  Ethos may be able to make investments in PIR
that ISOC could not (e.g., turning PIR from a consumer of back-end services
to a provider of back-end services), and which would make PIR a stronger
company.

That said, I'm still skeptical about Ethos Capital.  I have plenty of
experience with the private equity world and its hard to imagine any PE
(Private Equity) firm as the ideal home of .ORG.  On the other hand, PE
firms have many different approaches, and we can't jump to the conclusion
that Ethos will repeat some other PE horror story.  (And there have been
numerous PE horror stories, along with even more numerous PE success
stories.)  Their stated approach provides some comfort, though it's too
vague and too oriented toward loose "promises" rather than binding
commitments.  Their current investments (all minority holdings which may
have been contributed to the PE fund rather than originated by it) are
fairly standard tech investments that do not reveal any public interest
orientation.

As for community resistance, a lot of it still seems ill-informed and may
well be driven by "special interests" wielding the "community" as a tool.
The resistance is likely sincere on the part of many non-profits, based
only on the information they've been fed and concerns about Ethos arising
from lack of information.  (For a fascinating and disturbing example of
non-profits being manipulated to lobby against their own interests, see the
article about the Energy industry and NAACP chapters  at
https://www.nytimes.com/2020/01/05/business/energy-environment/naacp-utility-donations.html.)
And who knows if the opposition is "widespread"?  It's noisy, and its
gotten attention, but that's not the same thing...

On paper the sale of .ORG is a Good Thing for ISOC; in reality, it's only
good for ISOC if it's good for .ORG.  From an individual end-user
perspective, how do we define what "good" means and how do ensure that, if
the sale happens, it's good for end-users (and if it's not good for
end-users, it shouldn't happen)?  That is where we need to focus our
efforts.

Best regards,

Greg

Footnote: Cooper Union, the storied engineering school in New York, is
largely dependent on rent from the land it owns under the Chrysler
Building. For decades, this allowed Cooper Union to be tuition-free, but
costs outstripped revenue, deficits mounted. Cooper Union was in a bind and
roundly criticized for this over-reliance, particularly when they started
charging tuition for the first time in history.  Fortunately, they had
renegotiated the lease during the real estate boom of 2006 with a schedule
of future rent hikes that went from $7.8 million in 2017 to $32.5 million
in 2019 (and then $41 million in 2028), and they are on the road to
recovery.  But there's no such pot of gold at the end of the .ORG rainbow.)

On Wed, Jan 8, 2020 at 2:51 PM David Mackey <mackey361 at gmail.com> wrote:

> Alan,
>
> Agreed. Your points make sense from an iSOC centric perspective.
>
> I guess there's irony in that iSOC's organizational interests seem to be
> in conflict with interests of other stakeholders in the larger Internet
> community. Who could have seen that coming? Multistakeholder model?
>
> I guess it's not totally surprising as we've seen the Internet expand over
> decades across the globe to the point where organizations like PIR are
> valued in the billions of dollars. As the Internet continues to expand, and
> as the value to global society increases, we probably can all agree that an
> end user's perspective is probably worth more than ever before, and yet
> still so hard to understand and express.
>
> Cheers!
> David
>
>
> On Wed, Jan 8, 2020 at 1:46 PM Alan Greenberg <alan.greenberg at mcgill.ca>
> wrote:
>
>> "It's hard to understand why the iSOC organization is pushing back
>> against strong community resistance."
>>
>>
>> Its not so hard to understand.
>>
>> - The deal will be good for ISOC. It gives them financial security and
>> gets them out of the Domain name business.
>>
>> - They believe that this will work out well for .ORG (and with the recent
>> assurances, perhaps they are right).
>>
>> - If this deal is cancelled (or not allowed by ICANN), it is not clear
>> that there will be a replacement that puts .ORG in non-profit hands and
>> will be nearly as lucrative to ISOC - which implies they might have to
>> scale down operations.
>>
>> Alan
>>
>>
>>
>> At 08/01/2020 01:24 PM, David Mackey wrote:
>>
>> Maybe a bonanza for lawyers, but also it also comes with tarnished
>> reputations for .ORG, PIR, iSOC, Andrew Sullivan, etc.
>>
>> It's hard to understand why the iSOC organization is pushing back against
>> strong community resistance.
>>
>> So much for consensus building with the multistakeholder model. Maybe
>> we're headed back towards the days of pre-ICANN Internet Governance with
>> the associated financial costs and time-delays to resolve disputes.
>>
>> On Wed, Jan 8, 2020 at 9:54 AM Alan Greenberg <alan.greenberg at mcgill.ca
>> > wrote:
>> I don't see how a proposal to ICANN can imply $ to ISOC. The only way I
>> can interpret this is as Evan has: an outright cancellation of the
>> agreement by ICANN and re-delegate to the new corp.
>>
>> An interesting concept, but if nothing else, the resultant lawsuits would
>> likely to be a bonanza for lawyers...
>>
>> Alan
>>
>> At 08/01/2020 09:25 AM, Evan Leibovitch wrote:
>>
>> From what I can gather from what's been written so far, they're going to
>> demand ICANN to simply re-delegate the registry to them and leave ISOC with
>> nothing (though the actual proposal to ICANN may be different and indeed
>> include compensation of some sort). Looks like they want to make the case
>> that .ORG is a resource that needs a custodian rather than commodity that
>> can be tossed around at will. It's comprised of an interesting group that
>> includes ICANN's first president and the USG person in charge of handing
>> TLD control to it.
>>
>> - Evan
>>
>>
>> On Wed, 8 Jan 2020 at 07:05, Jacqueline Morris <jam at jacquelinemorris.com
>> > wrote: Hi Evan Do you know if there is a monetary  value on this bid
>> that is public yet? Will it give ISOC the endowment that it is looking for? Jacqueline
>> A. Morris Technology should be like oxygen: Ubiquitous, Necessary,
>> Invisible and Free. (after Chris Lehmann
>> <http://twitter.com/chrislehmann> )
>>
>> On Wed, Jan 8, 2020 at 3:27 AM Evan Leibovitch <evan at telly.org> wrote: Looks
>> like Esther Dyson and others are forming a co-operative to offer an
>> alternative bid to Ethos:
>>
>>
>> https://www.nytimes.com/2020/01/07/technology/dot-org-private-equity-battle.html
>> It is unfortunate that the proposed alternative is yet another US
>> corporation, though the bulk of .ORG registrants are American so this will
>> likely be unchallenged.
>> Chance of ISOC accepting to even evaluate this alternative bid without
>> pressure is slim given that many deals like Ethos' contain penalties for
>> backing out. But the pressure is certainly there, and not abating.
>> -- Evan Leibovitch, Toronto Canada @evanleibovitch or @el56 _______________________________________________
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