I oppose the sale of .org to Ethos Capital

Public Interest Registry (PIR) is the organization that manages the .org top-level domain. The Internet Society (ISOC), a nonprofit organization, created PIR in 2002 and was its parent company until November 2019, when ISOC announced the sale of PIR to Ethos Capital for $1.135 billion, a private equity investment firm founded in 2019. PIR, which was established as a nonprofit, subsequently announced that it would cease to be a nonprofit and become a B Corporation.

Organizations such as the Electronic Frontier Foundation (EFF) have voiced concerns with the sale, such as the fact that Ethos could raise the annual registration fees charged by PIR; it would have an incentive to do so, having paid so much for PIR, and having financed the purchase with $360 million in loans. Ethos has made a non-binding commitment to not increase fees “by more than 10% per year on average.”

“On average”? What does that even mean? Is that an average across .org domains, or across multiple years? Might they increase a domain’s price by 100% in one year, and then not raise its price for nine? By 1,000%, and not raise its price for 99 years?

They wouldn’t even need to resort to such tricks to reap a hefty profit at the expense of .org customers; increasing the price by 10% anually doubles the cost every 8 years (log(2) / log(1.1) = 7.27). PIR has already operated .org for 16 years, and could operate it for decades more; even relatively slow exponential growth would harm .org registrants.

Keeping the .org prices steady, as has been the case for several years, has increased access for nonprofit organizations to owning domains, which is in the public interest. In my opinion, this is what the Public Interest Registry should be about.

Online Debate On The Sale

To the credit of those supportive of the sale, they have engaged in public discourse about why they believe it is a good idea to sell PIR and .org to private equity, beyond the obvious financial windfall of a $1.135 billion sale price for ISOC. I found one set of arguments, by Mike Godwin, a board member of ISOC, particularly questionable, in the article “Here’s How We Can Truly #SaveDotOrg”. I will contest them here.

Argument: Raising .org domain name renewal prices would cause mass migrations off of .org

But could it be at the public’s expense? What about the argument that the prices for domain-name renewals will soar? This argument ignores common sense — you don’t take over a successful business and price most of your customers out of the market or spur a mass migration to an alternative product. Not only would that permanently destroy any faith in .ORG — the business you just bought — but it also would undermine TLDs generally. (I’ve suggested, not entirely jokingly, that the proper response if anybody tries to extort huge renewal fees for .ORG is to launch a mass one-time conversion to the .WTF top-level domain. I’d happily lead any charge in the .WTF Resistance.) In any case, demand for TLDs isn’t inelastic, despite what the deal’s critics say — there are hundreds of TLDs and customers aren’t locked in.

Mike Godwin has written, “not entirely jokingly”, that the proper response in the case of a registrar hiking fees exorbitantly is to mass migrate from .org to the .WTF top-level domain.

Imagine this happened, and an internet user, looking for information on The Sierra Club (https://www.sierraclub.org/), sees a result for https://www.sierraclub.wtf. Something that looks like the information one is seeking with a slightly different domain name is a huge red flag. Would the user still be as inclined to donate, their donation receipts coming from sierraclub.wtf?

The Internet Corporation for Assigned Names and Numbers (ICANN), which administers generic top-level domains (gTLDs, such as .com, .net, and .org) hosts its site at icann.org; I bought icann.wtf for $4.06.

Organizations that have had .org domains for dozens of years, like wikipedia.org and icann.org, derive immense value from the maintenance of their historical .org website. They are almost completely insensitive to price. It would be a sad future if PIR held wikipedia.org hostage, causing donations to Wikimedia to flow from Wikimedia, the nonprofit that operates Wikipedia, to PIR, to private equity, to the investment vehicles of Republican billionares such as Ross Perot and Mitt Romney. But Wikimedia paying millions to keep wikipedia.org is still better than wikipedia.org transitioning to wikipedia.wtf or some other TLD, and the original wikipedia.org domain becoming a spam farm.

Further complicating things is the fact that .ngo and .ong are also assigned to PIR. .ngo is the obvious extensions for non-governmental organizations (NGOs) in English, and .ong for French, Spanish, Italian and other Romance languages. So the logical next choices of many organizations for switching off of .org have the same issues.

Argument: TLDs may fade away entirely

I’ve also been haunted by my uncertainty as to how long we will have today’s domain-name system with us. I’m 63, but it seems possible that even within my lifetime, the TLD system will grow, change unrecognizably, or even fade away entirely. Certain choices by ICANN leading to proliferating TLDs plus the growth of search engines and mobile device apps that don’t need TLDs to find things (plus, also, the possibility that Internet-of-Things and other developments may marginalize TLDs altogether) make the future of TLDs hard to predict no matter what we choose today. Most likely, in my view, is that if we have TLDs around in 20 years or 50 years […]

Domains are not going anywhere. Sure, mobile apps and IoT may put the domain name resolving requests out of view, but almost every nontrivial mobile app has a web backend accessed by domain name, and it’s a standard practice in IoT to resolve servers via domain name.

In fact, mobile apps and IoT are just another reason domain demand is inelastic to pricing; after deploying millions of applications / devices that expect to retrieve resources from a domain name, organizations would be loathe to break their existing install base by releasing their domain name.

In addition, though mobile apps and IoT are changing the landscape, old-fashioned web sites have stood the test of time, and will continue to do so. I personally hope that peer-to-peer networking chips away at the bottleneck of domain names and ICANN, but it’s not going to happen anytime soon, and it will not be a complete replacement.

Additional Arguments opposing the sale

On the other side of the discussion, here are some articles critical of the deal that I recommend reading.

What To Do About This

Sign the EFF Petition “Help stop the sale of Public Interest Registry to a Private Equity Firm”.

If you have a US representative, tell them you oppose this deal.

There will be a protest at ICANN today, January 24th, from 9 to 11 am. I hope that individuals and organizations continue to put pressure on ICANN to halt the deal; As the letter from US lawmakers points out, ICANN has a choice to withold consent in this transfer of a registry operator.

Alternatives to selling .org to private equity

ISOC, a nonprofit, owning PIR, also being a nonprofit, has worked fine for many years at this point. Them operating the domain for public benefit seems sensible to me, but since they have shown that they would be happier with .org in private hands, it makes sense to find another nonprofit to operate .org.

Cooperative Corporation of dot-org Registrants (CCOR) is one such nonprofit seeking to represent the community of .org domain name registrants. Mike Godwin argues against this option:

Another alternative future (other critics have embraced) would be for ICANN somehow to extra-legally end its contract with ISOC and hand over management of .ORG to a new consortium with even less capital (and that would deliberately accumulate less) and even less experience in stewardship of .ORG — transitioning .ORG from one parasitical relationship to a worse one, with less money to improve and maintain .ORG.

However, I find the this argument has the following flaws:

PIR is currently producing a surplus from its domain name registration fees; if things were to stay in the pre-deal form, perhaps they should be lowering .org fees, or eliminating them, such as in the case of the 2011 Tohoku earthquake and tsunami.

It’s troubing to imagine a future with .org belonging to a debt-burdened for-profit corporation. Let’s not let it happen.