debate The fight for .ORG: is it about MONEY or is it about CONTROL?

[Rob Monster]

As some here are aware, I previously presented the bullish case for .ORG:

https://www.namepros.com/threads/why-i-am-bullish-on-org-plutocratic-guilt.1161692/

Although I remain bullish on the .ORG TLD as a domain asset class, there is now a footnote on .ORG because of the change of control event and the precedent that it represents for a major registry.

In the wake of organized backlash against the Ethos/PIR.org deal from capable organizations such as EFF, it appears that propagandists are makeing a case for "nothing to see here". For example note this article:

https://www.nytimes.com/2019/12/05/opinion/dot-org-domain.html

This article was written by a Stanford undergrad with a Stanford prof as the byline. Fade Chehade is a Stanford alum. This looks like a propaganda instrument. In fact, I put the odds at 90:10 on that.

Ultimately, I am not convinced that this is not about money. After all, Donuts is not exactly killing it since Abry took over. However, they now control a whopping 242 TLDs. These people are not stupid nor are they lazy.

Fadi is a globalist and an elite technocrat. He has a keen understanding of power, governance and realpolitik. I believe he is entirely sincere about what he thinks it is at stake. Check out his short TED interview:

https://www.ted.com/talks/fadi_cheh...itizens_can_do_to_claim_power_on_the_internet

The timing of this talk was curious. September 2018 is when the digital censorship programs went into overdrive. As some folks know, I was on the front line of that when Godaddy booted Gab.

Fadi wants "Geneva conventions", "technocratic oaths" and "stewards" for acceptable use.

Fadi also comments on Artificial Intelligence. He is absolutely right. Most folks have no idea how much impact AI combined with structured data, wireless broadband, and open standards is going to change the word.

People with access to domains, hosting and vast libraries of open source code, are capable of wielding remarkable things. The tools are already amazing. I believe AI is also in the process of being democratized.

As power of internet publishing gravitates to individuals, the framework for governance on the Internet comes down to the gatekeepers, of which domain registries play a critical role for at least the next 10 years.

Blockchain is plodding along to create a decentralized alternative. It is not ready for prime time yet. However, domains can become more resilient. That is where Epik is focused.

Now that the main industry pundits have had their commentary on .ORG, I am curious to hear what the open source community has to say about the .ORG transaction and its implications. Let's hear it.

 

[bmugford]

Breaking: ICANN board withholds consent for a change of control of the Public Interest Registry (PIR)

The notice states that “The entire Board stands by this decision.”

https://onlinedomain.com/2020/05/01...-control-of-the-public-interest-registry-pir/

https://domainnamewire.com/2020/04/30/breaking-icann-rejects-org-sale-to-private-equity-company/

 

[Name Trader]

It's a win/win deal for Ethos/PIR, IMHO. Both PIR get a lot of money from this deal, even if you think they sold too cheaply, compared to the potential returns of Ethos potentially can, and will make from .ORG Registry. I don't think .ORG will look the same after another five years. Is this deal now set in stone? Or are there any regulatory hurdles still to overcome. Of course I voted for the money option in the poll. People don't invest this much money without thinking they are going to potentially make a lot more.

 

[Rob Monster]

It's a win/win deal for Ethos/PIR, IMHO. Both PIR get a lot of money from this deal, even if you think they sold too cheaply, compared to the potential returns of Ethos potentially can, and will make from .ORG Registry. I don't think .ORG will look the same after another five years. Is this deal now set in stone? Or are there any regulatory hurdles still to overcome. Of course I voted for the money option in the poll. People don't invest this much money without thinking they are going to potentially make a lot more.

Quick back of the envelope calculation:

Let's say there is an average of 10 million paid up .ORG domains for the next 5 years. Let's say the average net after rebates, incentives and marginal cost of cost of goods is $8.50 per domain-year.

Now, let's say there is $15 million in overhead which could be crushed down to $10 million without doing much brand damage. The result is $70 million in EBITDA.

The public annual report is here:

https://thenew.org/app/uploads/2019/09/PIR-2018-Annual-Report.pdf

It does not provide granular detail but we know from the tax filings that this used to fund a lot of grants.

For the $1.13 billion purchase price, that looks like a fully priced PE deal.

Yes, it looks like a financial layup for anyone who can borrow with a cost of capital in low single digits as the backers surely can.

Yes, the EBITDA could be expanded through price increases, increasing domains under management, and cutting costs. However, if Donuts is the success formula, I don't see that happening.

If this was just a question of a private sector owner just doing a better job of milking the cow than the non-profit governance that preceded it, I don't think the public should care all that much.

However, what if Jon Nevett was a cut-out CEO installed for the single purpose of selling .ORG to private equity. In retrospect, that logic actually seems rather probable to me.

So, my working hypothesis is that this is not about financial return but about control and that Fadi is the point man connecting the dots, not as a public servant but as a "captain of the digital universe".

The fact that there is a guy of Fadi's caliber trying to buy namespaces just validates the hypothesis that for at least the next 10 years, domain names are going to be essential for digital communication.

 

[jmcc]

https://www.nytimes.com/2019/12/05/opinion/dot-org-domain.html

This article was written by a Stanford undergrad with a Stanford prof as the byline.

It is propaganda, Rob.
It is what is known in Journalism as "knocking copy". It sets up a pile of strawman arguments about .ORG and proceeds to demolish them. The problem is that neither of the two on the by-line are experts in domain names but the association of utterly irrelevant academic credentials and Stanford give the article an air of authority.

It is a money deal more so than control. If you had read the Domnomics book, , you would have seen that most of the revenue that a registry makes after the first few years of operation comes from renewals. The .ORG basically has a lot of registrants who would find it rather expensive to rebrand so there's a bunch of registrations that are effectively golden handcuffs registrations. That means that they will keep renewing. The other aspect is that the .ORG is quite unlike the other legacy gTLDs in that the percentage of reregistrations in .ORG (also in the book) is lower than that for .COM and .NET. This means that people register their domain name in .ORG and keep renewing it. Those domain names may not be used but they are renewed without fail. That's a very important metric for assessing the quality of a TLD. It also has a high level of brand protection registrations. These are the gold standard of registrations. They mark the TLD as being important enough to warrant a business protecting their brand in the TLD. Those too renew well.

Price-wise, Ethos can effectively sweat the assets with price rises safe in the knowledge that many of the registrants will pay the higher fee. But it was the decision on PIR in 2018 to stop volume discounting that improved the quality of the gTLD. That got rid of a lot of heavily discounted junk registrations that had no chance of renewing. It also improved the quality of the websites on the gTLD because people were less likely to see some of the affiliate landing pages (gambling/adult) that have plagued other gTLDs offering discounted registrations. It also has fewer toxic registrars and hosters (these are registrars that base their business model on following discounting offers from registries). It would not be unthinkable to see .ORG registrations drop back to around the 7 million level. As long as the core of NGO and do-gooder operations maintain their .ORG registration, there would actually be no major problem apart from lost revenue that was not exactly long-term.

As a gTLD, the .ORG doesn't exactly need domainers in the same way that new gTLDs need domainers to drive interesting and registrations. It is a mature gTLD and as such there will probably be more focus on getting more of the kind of registrations that renew well and are used by high profile organisations. It definitely is a money deal rather than a control one. People insist on writing off the new gTLDs as failures when, in reality, some of them are far from being failures and have renewal rates that are better than those of some of the legacy gTLDs. The .ORG has the highest renewal rate of the main legacy gTLDs. If anything can damage that, it is a reaction from the NGO/do-gooder sector but most registrants will keep paying the renewal fees.

Regards...jmcc

 

[jmcc]

The Californian Attorney General is very much against the takeover of .ORG by Ethos. Looks like ICANN might be in a whole world of trouble over this.

Regards...jmcc

 

[bmugford]

I would like to give a special thanks to the California Attorney General Xavier Becerra for standing up to ICANN.

https://domainnamewire.com/2020/04/21/icanns-attorney-general-problem/

Considered the opinions expressed in the California Attorney General’s Office letter sent to ICANN on 15 April 2020

 

[Internet.Domains]

The fight for .ORG: is it about MONEY or is it about CONTROL?

Based on the politics you mentioned it would seem to be about both, money and control. Money and control is interchangeable. That brings me to what you mentioned.

Blockchain is plodding along to create a decentralized alternative.

Developers working on the decentralized web (web3.0) are often using free speech, democratic governance and open participation as motivational factors. Often they want the attributes of communism, socialism and capitalism blended.

Regardless, where we end up with technology, politics on a technological level will always be about money and control. Or control and money.

 

[Bernard Wright]

Money and control is interchangeable.

Agreed. I'm not savvy enough to be able to read into the nuance of the deal. I don't foresee a transition of power from the corporation to the individual. I think a false perception of such power could be sold, and many would walk around with the wool pulled over their eyes. For instance, a day could come when the masses realize that it's better to decentralize their online activity, and seek refuge in myowndomain.org instead of Twitter/FB/etc. So .org puts together some social-media-ready package for every user who purchases a .org (similar to the blog feature offered by Epik), and these .org sites are built to function much like a decentralized social media platform. Everyone is told this is the new way of empowering oneself. But in time .org slowly becomes as oppressive and manipulative as the pastures the masses had left behind in Silicon Valley.

.org would be a pretty weak TLD for this, actually, but perhaps Fadi could build some street cred or alliances by holding .org, and thereby wield more weight when he builds the endgame tld.

I'm not a techie. I'm just a skeptic and I know I don't know much. But I think "it's all about the money" might be short-sighted. AI is becoming reality. IoT is turning people into order takers from their own appliances. I can't even dry my own laundry without having to override some "smart" setting. XR will immerse people in worlds that guide them, through amusements, down any path that is most stimulating and dopamine-releasing. Again, I don't foresee this as a path toward individual empowerment. I think those at the reigns will have unprecedented influence over the thoughts, emotions, values, behavior, etc. of billions of people. Maybe .org is just one part of a larger puzzle, and folks like me don't have the knowledge or experience to conceptualize what the puzzle will be. But I do think there is a puzzle.

I voted not sure.

 

[Rob Monster]

There is a difference between capitalism and crony capitalism.

Brad

Well, we totally agree there.

While it may not work for everyone, I like old school free market capitalism combined with philanthropy. People can make fortunes and then leave a positive legacy.

The .ORG registry grew to prominence around a promise of public benefit. It was the Raison D'etre of the entire TLD.

On the surface, this looks like an old school greed-is-good corporate raider stuff:

I could live with that if it were not for the shrinking pool of compelling namespaces. Unfortunately, that's where I draw the line. This deal sucks on too many levels.

 

[bmugford]

I still don't understand this hype...
How many domainers really invest in .ORG? At least they have 100 domains...
I'm almost sure: very minority...

I am not a big fan of this "How does it effect me?" mindset in general. It is self-centered.
It would effect millions of other people and organizations in a negative way.

The legacy extensions (COM/NET/ORG) existed far before the current internet did and should be treated with respect.

These are not new extensions where a party actually owns them.
They are essentially a public utility, and should be treated as such.

There is a reason regulation is needed with a defacto monopoly, like other local utility companies.

Everyone would be at the complete mercy and whim of them with no protections for the current or future registrants.

It also doesn't help that so many charities and non-profits would be effected in a negative way.

Putting this kind of monopoly into the hands of a private equity company with no track record is irresponsible, and just plain wrong.

Brad

 

[Internet.Domains]

For instance, a day could come when the masses realize that it's better to decentralize their online activity,

Theres a large and growing community growing around "decentralization." As it relates to the internet there is many developers currently expanding the "decentralized web." ICANN, by showing conventional centralization, and the corruption that surrounds that centralization, is only fueling decentralization.

 

[Mister Funsky]

It's one of those 'good ole boys' backroom kinda deals...hope it hits the fan and flies back in their faces. add: this means it is all about the Benjamins

 

[Rob Monster]

It’s worth noting that some of those media pioneers who owned newspapers in the past despite becoming very rich and powerful, but contributed a lot in the way of protecting Humanity and this Planet by promoting the ideas and principles of Freedom, Human Rights, and Civilized Behavior and by keeping an oversight over the institutions of Democracy and Government around the World. But then there were also a few who misused and abused their status and influence which caused a lot of damage to the public at large, so we just have to put the spotlight on those who are involved in controlling .org and demand transparency and oversight by ICANN to make sure that whatever they are doing is in the public interest in the long run

IMO

An old classic for you:

 

[Rob Monster]

Politics on domainers forum? Honestly, I never wanted to go that deep. But, since the subject and content are appropriate -

Blockchain may be good alternative. At least it would not disappear. But, we are all domainers here. Are there any good news for us then? Rob, what do you think? Younger generations are already happy to use facebook and the like for all their social and business needs, gmail - for e-mails etc., they purchase smart speakers (to be tracked and surveilled at home) and use android smartphones + whatsapp (to be surveilled on the go, without even rudimentary non-techie efforts to "debloat"). Any space for domains in a long run? Excluding "geeks and nerds" registrants...

Globalist agenda is likely still the same, with or without .org acquisition. It should not be hard to make .org (to begin with) domains expensive and/or difficult to acquire and/or hard to use. And well-controlled. On ICANN level. Just by developing new policies for example asking for notarized copies of non-profit official registration docs, and lets say $500/year extra fee. Current ICANN state can be well described by the latin proverb piscis primum a capite foetat (the fish rots from the head down - trouble starts at the top). Why acquire the registry for "globalist agenda" purposes, if ICANN is already on the "dark side"?
So I voted for money+financial return.

With RDAP done, I believe the next big move is going to be to require ID verification to register, renew or transfer domains. That will be governed at the registry level since they are in the ideal position to enforce policies regardless of whether ICANN tries to move the goalposts versus what has been contracted.

With all of the lawlessness that exists on the Internet, the case can be made to the public that this is needed for internet safety. The case will be compelling and events can make that narrative even more so. Think of it as a Patriot Act for the Internet, all in the interest of "moral duty" and "stewardship".

Registrars and registries will initially have sovereignty to set their own policies when it comes to deploying much of these changes. To drive to an industry standard will require a lot of coordination (aka manufactured consensus). Some people may think this can be done with a few leveraged buyouts.

The technology to sovereignly do cool stuff outside of the wall gardens (e.g. Facebook, etc) is increasing very rapidly. There are a staggering number of high quality open source code repositories that is accessible to a fast-growing international community that is able to turn domains into useful decentralized tools.

Fascinating times. Domains matter.

 

[tonyk2000]

Some people may think this can be done with a few leveraged buyouts.

And/or shutting down or deaccrediting some registrars Such as easydns:
https://easydns.com/blog/ - interesting reading.
Also:
https://easydns.com/blog/2019/12/06/its-called-f-you-money-for-a-reason-why-isoc-sold-org-to-vcs/
written by Mark E. Jeftovic

 

[bmugford]

It is about money and power. Money leads to power and vice versa.

Sign the petition - https://savedotorg.org/

 

[bmugford]

What Makes Ethos Capital A Responsible Steward Of PIR?
( Commentary by Nora Abusitta-Ouri, Ethos Capital. )

read more (keypointsabout org)

The only reason private equity companies exist is to make money. This deal is clearly about making money for both ETHOS and ISOC. It only happened after the price caps were removed by ICANN.

Also, this brand new entity has absolutely no actual track record that they can point to.

Unless there are actual legal protections written into the contract, there are no protections in place. Any other feel good mumbo jumbo is not going to change that.

This deal is clearly not beneficial to the vast majority of stake-holders.
Allowing this transaction to go through would be the height of irresponsibility by ICANN.

Brad

 

[Lox]

ASO Issues Inspection Request to ICANN

On 27 December 2019, the Number Resource Organization (NRO), acting as the Address Supporting Organization (ASO), submitted the following correspondence to ICANN regarding the Internet Society’s proposed transfer of ownership of PIR, the .org registry, to Ethos Capital: ...

read more (The Number Resource Organization)

 

[bmugford]

In related news, I would suggest people send ICANN a comment about their proposed raising of .COM registration prices.

You can either do it via ICANN -

https://www.icann.org/public-comments/com-amendment-3-2020-01-03-en

or the ICA form -

https://www.internetcommerce.org/comment-com/

I submitted the following -

I am strongly opposed to the proposed price increase to .COM domains.

The following entry is from ICANN's website-

"ICANN is a not-for-profit public-benefit corporation with participants
from all over the world dedicated to keeping the Internet secure, stable
and interoperable."

ICANN is supposed to operate for the public benefit. I don't believe this
policy would fall under "public benefit".

There is no financial justification to raise the price. It is simply
because they can.

Advancements in technology are driving the cost of operating a registry
down, yet domain prices keep going up for registrants.

Verisign is merely the manager, not the owner, of the .COM Registry. It
is allowed to operate the extension by contract and should have no role in
setting the price.

There is no "public benefit" justification to these changes. It is simply
a handout to a company with a de facto monopoly at the expense of
registrants.

This is on the heels of the .ORG contract debacle where ICANN ignored the
overwhelming public sentiment against it, and moved forward in removing
price caps.

Now we also have the pending .ORG sale to a private equity company which
involves several former ICANN leaders and connected parties. This deal is
currently being investigated by the California Attorney General.

ICANN is facing a crisis in credibility. Is ICANN working in the public
interest or not?

Brad Mugford
DataCube.com

 

[Lox]

ICANN Should Reject the Proposed Transfer of the .ORG Registry.

Signed by 4 US Senators; Ed Markey, Ron Wyden, Richard Blumenthal, Elizabeth Warren and US Representative Anna Eshoo.

In the months since Ethos announced its intent to purchase PIR from ISOC, the .ORG community has been vocal and virtually unanimous in its opposition to the sale. Over 800 organizations and 25,000 people have signed a petition urging ICANN to block the proposed change of control.

Ethos, PIR, and ISOC have fielded questions from us, from the community, and from ICANN, and they have provided answers on pricing, business plans, and transparency that continue to indicate that the sale would not benefit the public or .ORG registrants.

Because the proposed sale of .ORG is against the public interest and would violate ICANN’s commitment to “preserve and enhance...the operational stability, reliability, security...and openness of the DNS and the Internet, we again urge you to reject this private equity takeover of the .ORG registry.

Download PDF (ICANN) + Attached PDF

 

[Rob Monster]

Further to thesis that Jon Nevett was an installed cut-out for Fadi, take note:

https://www.linkedin.com/in/jon-nevett-343a301/

He leaves Donuts after Abry acquires Donuts and lands at PIR.org.

Smells like a cut-out.

 

[Lox]

That part of Donuts & co game we know. What we don't know is where does the Ethos get the money / backing. We need to make a clear distinction between investing in and funded by x's.

 

[oldtimer]

I believe that its both about power (control) and money (profit).

To have power and to make money is not automatically a bad thing, it all depends on the motives and the intents of those who are involved. If their motives and intents are to serve people better by providing more affordable products and services and by creating a safer and more secure environment that empowers the average person to enjoy more freedom, innovation, and financial equality then it doesn't matter who is in charge of .org , but if this deal is made for the wrong reasons then it should be of concern to all and that's why having oversight by ICANN or other entities that have a say in this matter is of most importance.

Seeking power and money started by owning newspapers in the past then expanded to controlling radio, TV, and cable channels and was followed by owning social media companies and finally has expanded to include Internet extensions and registries. And eventually it's going to end up with who has the more powerful AI as that will be the ultimate source of power and money in the future.

The question should be:

who's a Force for Good that wants to serve Humanity and this Planet and who's only looking after what's good for themselves.

IMO

 

[oldtimer]

It’s worth noting that some of those media pioneers who owned newspapers in the past despite becoming very rich and powerful, but contributed a lot in the way of protecting Humanity and this Planet by promoting the ideas and principles of Freedom, Human Rights, and Civilized Behavior and by keeping an oversight over the institutions of Democracy and Government around the World. But then there were also a few who misused and abused their status and influence which caused a lot of damage to the public at large, so we just have to put the spotlight on those who are involved in controlling .org and demand transparency and oversight by ICANN to make sure that whatever they are doing is in the public interest in the long run

IMO