[CPWG] Fwd: Re: Reuters reports new cooperative formed to take over management of .ORG

Tue Jan 14 06:53:37 UTC 2020

I suggest we need a balance.  We can't be totally zeroed in on the Ethos
Capital deal, but neither can we be transaction-agnostic.  There are things
to say about this particular transaction and things to say about the bigger
picture.  We need to address both, albeit with a largely forward-looking
focus (i.e., what should be done).

Greg Shatan
greg at isoc-ny.org
President, ISOC-NY
*"The Internet is for everyone"*

On Mon, Jan 13, 2020 at 3:11 AM Hadia Abdelsalam Mokhtar EL miniawi <
Hadia at tra.gov.eg> wrote:

> Agree with Marita that it is better to keep our response owner neutral.
> Let our recommendations focus on the interest of the current registrants,
> the public interest aspect and the trust that the end users need.
>
>
>
> Hadia
>
>
>
> *From:* CPWG [mailto:cpwg-bounces at icann.org] *On Behalf Of *Greg Shatan
> *Sent:* Monday, January 13, 2020 8:19 AM
> *To:* Marita Moll
> *Cc:* CPWG
> *Subject:* Re: [CPWG] Fwd: Re: Reuters reports new cooperative formed to
> take over management of .ORG
>
>
>
> Based on my experience, this is how all private equity deals are
> financed.  Since this is business as usual, I would not read much into it
> re: uncertainty. It has nothing to do with “shortfalls,” as Kevin Murphy
> surmised. In the go-go years, it was not uncommon to see up to 80%
> financing, but banks are much more conservative now.
>
>
>
> The thing that concerns me is that they are going to saddle PIR with the
> $360 million of debt.  This is also not uncommon in PE deals, but this
> concept of “pushing down the debt” is one of the more toxic aspects of PE
> deals. I assume PIR is debt-free now. Going from debt-free to owing more
> than 1/3 of a billion dollars is not a step in the right direction for any
> company.  For a company that is allegedly going to embrace a public benefit
> approach, it is teeth-grindingly dissonant.
>
>
>
> The more this sounds like a “typical” PE deal, the more suspicious I get
> that there will be anything  special about this PE firm or Post-Acquisition
> PIR. Instead it sounds like business as usual.  That is not what is called
> for here.
>
>
>
> Greg
>
>
>
>
>
>
>
> On Sun, Jan 12, 2020 at 6:23 PM Marita Moll <mmoll at ca.inter.net> wrote:
>
> Well, this information shows that the financing of this deal is not
> necessarily in the bag -- given that is mostly leveraged. These sorts of
> things can fall through. So our response has to be owner-neutral -- setting
> conditions for any new owner - IMHO
>
>
>
> Marita
>
> On 1/12/2020 5:05 PM, Maureen Hilyard wrote:
>
> Hi Marita
>
>
>
> And still lots more rumours and other information to come, no doubt.
>
>
>
> I think we should keep ourselves focused on what we have set out to do -
> to produce some constructive and forward thinking advice to the Board,
> along the lines that Ethos is the new owner and what we might suggest to
> ICANN (and PIR) about preserving the interests of  current and future .org
> registrants through the contractual processes and other recommendations.
>
>
>
> Otherwise we will be stuck in the same hole forever, as more information
> is thrown in.
>
>
>
> Maureen
>
>
>
> On Sun, 12 Jan 2020, 9:18 AM Marita Moll, <mmoll at ca.inter.net> wrote:
>
> More information on the Ethos PIR takeover revealed in response to ICANN
> questions.
>
> Marita
>
> -------- Forwarded Message --------
>
> *Subject: *
>
> Re: Reuters reports new cooperative formed to take over management of .ORG
>
> *Date: *
>
> Sun, 12 Jan 2020 16:56:05 +0000
>
> *From: *
>
> Wisdom Donkor <wisdom.dk at GMAIL.COM> <wisdom.dk at GMAIL.COM>
>
> *Reply-To: *
>
> Wisdom Donkor <wisdom.dk at GMAIL.COM> <wisdom.dk at GMAIL.COM>
>
> *To: *
>
> NCSG-DISCUSS at LISTSERV.SYR.EDU
>
>
>
> DomainIncite has provided a summary of these documents:
>
> http://domainincite.com/25176-25176
>
> "here are the headlines:
>
> * The deal is being partly funded by an enormous loan.
> * Technically, Ethos isn’t the direct buyer. There are at least three
> corporate entities involved in the acquisition that we haven’t heard of
> before.
> * Ethos won’t reveal the names of the directors of PIR’s would-be owner.
> * Another former senior ICANN staffer and long-time Fadi Chehadé
> collaborator has been revealed as having an interest in the acquisition."
>
>
>
> Cheers,
>
>
> *WISDOM DONKOR*
>
> President & CEO
>
> Africa Open Data and Internet Research Foundation
>
> P.O. Box CT 2439, Cantonments, Accra | www.aodirf.org  /
> www.afrigeocon.org
>
> Tel: +233 20 812 8851
>
> Skype: wisdom_dk | Facebook: kwasi wisdom |  Twitter: @wisdom_dk
>
> __________________________________________________
>
> Specialization:
>
> E-government Network Infrastructure and E-application, Internet
> Governance,  Open Data policies platforms & Community Development, Cyber
> Security,  Domain Name Systems, Software Engineering, Event Planning &
> Management,
>
>
>
>
>
> On Wed, Jan 8, 2020 at 10:28 AM Wisdom Donkor <wisdom.dk at gmail.com> wrote:
>
> In this 7 January 2020 article
> <https://www.cnbc.com/2020/01/07/reuters-america-internet-nonprofit-leaders-fight-deal-to-sell-control-of-org-domain.html?__source=sharebar%7Ctwitter&par=sharebar> we
> learn that, "*prominent internet executives told Reuters they have
> created a nonprofit cooperative they are offering as an alternative owner
> of .org.*"
>
>
>
> This would appear to me to pose an existential threat to ISOC, as this
> nonprofit cooperative - whose membership appears to me to have more
> political muscle than ISOC has - is not proposing to buy PIR from ISOC, but
> to instead have the .ORG Registry Agreement assigned to it by ICANN.
>
>
>
> The full article is here, and I have extracted some relevant quotes below:
> https://www.cnbc.com/2020/01/07/reuters-america-internet-nonprofit-leaders-fight-deal-to-sell-control-of-org-domain.html?__source=sharebar|twitter&par=sharebar
>
>
>
> *“What offended me about the Ethos Capital deal and the way it unfolded is
> that it seems to have completely betrayed this concept of stewardship,”
> said Andrew McLaughlin, who oversaw the transfer of internet governance
> from the U.S. Commerce Department to ICANN, completed in 2016.*
>
>
>
> *Maher and others said the idea of the new cooperative is not to offer a
> competing financial bid for .org, which brings in roughly $100 million in
> revenue from domain sales. Instead, they hope that the unusual new entity,
> formally a California Consumer Cooperative Corporation, can manage the
> domain for security and stability and make sure it does not become a tool
> for censorship.*
>
>
>
> *... The initial seven directors of the cooperative include former
> founding ICANN President Michael Roberts, MacArthur Foundation
> philanthropist Jeff Ubois and Bill Woodcock, whose Packet Clearing House
> now runs the technical aspects of the .org system under contract.*
>
>
>
> *The new group has briefed members of the U.S. Congress and hopes to
> prompt the Internet Society to reconsider the sale. But its best shot at
> stopping the pending sale lies with ICANN, which can veto any change in
> ownership out of concern for the security, reliability or stability of the
> .org domain.*
>
>
>
> Best wishes,
>
>
>
> *WISDOM DONKOR*
>
> President & CEO
>
> Africa Open Data and Internet Research Foundation
>
> P.O. Box CT 2439, Cantonments, Accra | www.aodirf.org  /
> www.afrigeocon.org
>
> Tel: +233 20 812 8851
>
> Skype: wisdom_dk | Facebook: kwasi wisdom |  Twitter: @wisdom_dk
>
> __________________________________________________
>
> Specialization:
>
> E-government Network Infrastructure and E-application, Internet
> Governance,  Open Data policies platforms & Community Development, Cyber
> Security,  Domain Name Systems, Software Engineering, Event Planning &
> Management,
>
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>
> --
>
> Greg Shatan
>
> greg at isoc-ny.org
>
> President, ISOC-NY
>
> *"The Internet is for everyone"*
> _______________________________________________
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>
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