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ICANN votes down controversial .org sale proposal

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New owner would create “unacceptable uncertainty” for nonprofits

US-IT-LIFESTYLE-HEALTH-VIRUS-ICANN Photo by MARK RALSTON/AFP via Getty Images

The organization that oversees internet domain names has rejected a proposal to transfer management of the .org top-level domain from a nonprofit to a private equity group. ICANN said it wouldn’t approve the sale of .org operator Public Interest Registry because it would create “unacceptable uncertainty” for the domain, citing concerns about debt and the intentions of the for-profit firm Ethos Capital.

In a blog post, ICANN’s board said the sale would have given up the current focus of PIR in favor of “an entity that is bound to serve the interests of its corporate stakeholders, and which has no meaningful plan to protect or serve the .org community.” It also noted that the sale would leave PIR with a $360 million debt that could destabilize its operation in the future.

PIR was founded by the Internet Society (or ISOC) to handle the .org domain in 2003. But in late 2019, ISOC announced that it would transfer control of .org to Ethos in exchange for a $1 billion endowment. The move immediately drew criticism from advocacy groups like the Electronic Frontier Foundation, as well as some original members of ICANN, including its first chair Esther Dyson. Opponents took issue with the prospect of an equity firm managing nonprofit domains, despite promises that it wouldn’t implement price hikes or act as a censor. In its decision, ICANN described seeing “significant opposition” to the deal from politicians and organizations and “virtually no counterbalancing support” from anyone except the parties involved and their advisors.

The .org controversy has put a generally low-profile organization in the spotlight, especially as ICANN’s decision has been delayed multiple times as it requested more information about the deal. Earlier this month, California’s attorney general Xavier Becerra urged ICANN to reject the sale, warning that it “may place at risk the operational stability of the .org registry.” The board echoed Becerra’s complaints in its decision.

Ethos and ISOC condemned the choice. “Today’s action opens the door for ICANN to unilaterally reject future transfer requests based on agenda-driven pressure by outside parties,” said Ethos in a statement. “Although the Internet Society respects ICANN’s role in supporting the Internet’s technical coordination functions, we are disappointed that ICANN has acted as a regulatory body it was never meant to be,” said ISOC. “Despite ICANN’s decision, our work to connect the unconnected and strengthen the Internet will continue.”

Others, however, celebrated. The EFF praised ICANN’s move, calling it “a major victory for the millions of nonprofits, civil society organizations, and individuals who make .org their home online.” A group of lawmakers including Sens. Ron Wyden (D-OR), Elizabeth Warren (D-MA), and Edward Markey (D-MA) as well as Rep. Anna Eshoo (D-CA) also commended the choice. “This deal would have saddled the .org registry with hundreds of millions of dollars of debt, putting it in an unstable position during this current economic crisis, solely to enrich a private equity firm at the expense of users and nonprofits,” said Wyden.

May 1st, 11:30AM ET: Added statements from ISOC and Ethos.

May 1st, 3:45PM ET: Added statements from lawmakers.