[CPWG] Fwd: Re: Reuters reports new cooperative formed to take over management of .ORG
Marita Moll
mmoll at ca.inter.net
Tue Jan 14 15:30:18 UTC 2020
More information in yesterday's /Register /article describes it as a
30-year debt.
"The few details that have emerged are a further cause of concern. The
$1.135bn purchase is 32 per cent funded by debt; $360m has been raised
from unnamed US financial institutions. PIR – the operator of the
registry – “has sufficient operational cash flow to service the loan,”
the documents claims, noting it is half what PIR has paid to ISOC each
year. In other words, debt repayments will be approximately $15m a year,
which points to 30-year loans."
https://www.theregister.co.uk/2020/01/14/icann_org_redacted/
Marita
On 1/14/2020 4:56 AM, Holly Raiche wrote:
> Agree
>
> I share your concerns about the assumption by by PIR of so much debt.
> It will make it that much harder for them to have a public interest
> focus with the burden of debt they are assuming. It will certainly
> make any insistence on a public interest focus that much harder - even
> if we insist on commitments by Ethos for such focus.
>
> Holly
>
>> On Jan 14, 2020, at 5:53 PM, Greg Shatan <greg at isoc-ny.org
>> <mailto:greg at isoc-ny.org>> wrote:
>>
>> 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 <mailto: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 <mailto: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
>> <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
>> <mailto: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 <mailto: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>
>> <mailto:wisdom.dk at GMAIL.COM>
>>
>> *Reply-To: *
>>
>>
>>
>> Wisdom Donkor <wisdom.dk at GMAIL.COM>
>> <mailto:wisdom.dk at GMAIL.COM>
>>
>> *To: *
>>
>>
>>
>> NCSG-DISCUSS at LISTSERV.SYR.EDU
>> <mailto: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
>> <http://www.aodirf.org/> / www.afrigeocon.org
>> <http://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 <mailto: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
>> <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>
>>
>> /“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 <http://www.aodirf.org/> /
>> www.afrigeocon.org <http://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 <mailto:greg at isoc-ny.org>
>>
>> President, ISOC-NY
>>
>> /"The Internet is for everyone"/
>>
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