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Why I Voted to Sell .ORG (circleid.com)
427 points by danyork 14 days ago | hide | past | web | favorite | 299 comments



I don’t understand how this “sale” is legal in the first place.

PIR is a legal 501(c)3 nonprofit. You can’t really sell a nonprofit to a for-profit company except in unusual and rare circumstances.

In California, I know you need a letter from the state Attorney General to do so.

There are also federal restrictions on sales like this, particularly around self-dealing transactions. This transaction was obviously self dealing.

Someone seriously needs to dig into this. The PIR board members could be in big legal trouble. And also ICANN, which is a 501(c)3 nonprofit as well and is subject to self-dealing restrictions.

This is obvious, plain as day corruption. In the business world, not much can be done. But these are two nonprofits (PIR and ICANN), so something can and should be done. These kind of transactions aren’t normally legal.

Like, just read the examples of what an illegal self dealing transaction is in the eyes of the IRS:

https://boardsource.org/resources/private-benefit-private-in...

“Keep Our City Beautiful, a membership organization, plants a city alley with elaborate flowering bushes. The alley is not heavily traveled but the decorations increase the attractiveness of the city’s main restaurant whose owner is a member of the organization.”

ICANN clearly engaged in an illegal self dealing transaction by allowing their former CEO to enrich himself with a deal that would otherwise not be possible.

Edit: please see https://news.ycombinator.com/item?id=21658324 for a “what you can do right now”


Not only that, isn't there a sense in which a TLD is not actually property at all? The DNS operates by consensus. There are a bunch of root server operators who all agree who operates the .org TLD and then list those NS records in their root servers.

What stops people from getting together, agreeing that a private equity firm would be a poor steward of the .org TLD, choosing somebody else to operate it instead, and pointing the NS records there instead?

Nobody really owns the DNS. It's a thing that works because there is a broad consensus on how it should work. If the consensus is that this is a dumb idea then what's stopping people from choosing not to go along with it?

And staging a coup over this would set a good precedent that these types of flagrant money grabs are not to be tolerated.


It’s correct enough to say that DNS is an application of consensus, but rather than considering that a distinction vs property, one might consider asking themselves in what sense property itself isn’t consensus.


Property is not based on consensus. Even if millions of people think Jeff Bezos has too much money, with nowhere near consensus that he should have it, a court will still convict anybody who tries to take his stuff.

The DNS really does operate on consensus. There is nobody forcing everybody to do it a particular way. We get real consensus because everybody has a strong interest in not creating global namespace conflicts through forks. But that doesn't mean you can't make a change to fix a mistake, it only means you need to get enough support behind it for it to become the consensus position.


However, a sufficiently large mob can easily take everything Bezos has, no matter what any court says.

Property is absolutely based on consensus, property beyond anything you control with your direct person is very much one of those polite fictions society collectively agrees to, like money and laws.

If the large majority of people, for whatever reason, decided to stop agreeing, such fictions would cease to exist.


A thing doesn't exist by consensus just because a consensus against it could destroy it, because a consensus against pretty much anything could destroy it. What makes it exist by consensus is that a rough consensus in favor of it is required to sustain it.

This isn't true of things like property rights which could be sustained even with only minority support provided the minority had a sufficient military advantage.

It is true of DNS because consensus is inherently required to prevent it from fragmenting and ceasing to exist as a single global namespace.


If tomorrow somehow everyone's memory got wiped so they could no longer remember say, Mt. Rushmore, It would continue to exist.

If the same thing happened with Bezos's wealth, it would cease existing, or at least the concept of him owning it would cease existing.

That's the difference. Ownership of property is entirely within people's minds.


If tomorrow somehow everyone's memory got wiped so they could no longer remember how to make Pad Thai then it would cease to exist as well (unless someone independently reinvents it). That doesn't mean Pad Thai exists by consensus.

If so much as one person still remembers and can prove it to everyone else, or it's documented somewhere on paper, then it would still exist. Likewise all Bezos would need is that documentation. Which is really how it works in practice. There are only a handful of people and documents concerned with exactly what someone owns. The large majority of people have no idea who owns an arbitrary piece of land or share of stock. The information comes from an authority, not a consensus.

Whereas if we're talking about the concept of property rights in general rather than specific ownership records then we're back to them being enforced by a government which it is in principle possible for them to do via superior force independent of popular support.


It's true, property exists exclusively as something someone enforces with violence directly or indirectly.


If everyone agrees that Jeff Bezos has too much money and that we should make an exception to normal property laws and strip him of his assets, that's exactly what would happen!

But most people don't think that. They wish they had as much money as him, maybe they think society is unfair to allow someone to have so much money. But you'd be hard pressed to find anyone who supports arbitrarily stripping someone of their (current) property.


I agree, even the current political elites aren't so daft as to say if 80% of the population is vehemently opposed to any US citizen having say more than 1 billion dollars in wealth, the Congress can surely enact taxes to insure that happens. Lucky for Bezos there is only a (large) minority that would like to see that happen so his Billions are currently safe.


> But you'd be hard pressed to find anyone who supports arbitrarily stripping someone of their (current) property.

Isn’t that what the Warren wealth tax is?


> a court will still convict anybody who tries to take his stuff

the ruling will be enforced if there is a consensus that it is a just ruling


> the ruling will be enforced if there is a consensus that it is a just ruling

The Supreme Court regularly makes rulings that are contrary to popular opinion. I see no evidence that the rulings are not being enforced despite the lack of consensus that they were just. They also regularly make rulings that align with the slight popular majority but the popular opinion is still about evenly split with no clear consensus one way or the other, and those rulings are enforced as well.


Following unpopular laws is itself a consensus, one where abandoning the rule of law altogether is seen as more harmful than enforcing one unpopular ruling.


You've now defined "consensus" as "anything you don't stage an armed rebellion over" ... which doesn't seem like a useful definition at all.


I'm not seeing anyone staging an armed rebellion over this definition...


How is it a consensus when people on the losing side often respond with violence, riots or protests? Lacking effective means to overthrow the government hardly implies agreement.


The current Supreme Court is hard right and currently under Executive Mandate, I wouldn't put anything past them if their overlords demand something of them.


OpenNIC is actually a parallel organization to the ICANN and they manage a register that is in sync but with a bunch of additional TLDs.

They could decide to fork .org and lobby ISPs and DNS to use their register instead.


Who owns the root DNS servers? Can those owners be convinced to stage such a coup? If not 100%, then you have forked a TLD.


Edit: sorry, re-reading your coup plot I see you wanted the owners of {A..M}.ROOT-SERVERS.NET to collude in direct action. It’s not an implausible idea at all, if the worst comes to the worst, even if it’s quite extreme. My original comment misses your point a bit...

...

If you want to fix this by direct action on the root servers, rather than ORG’s nameservers, the it doesn’t matter who owns the current root servers.

Their config is baked into your resolver’s installation files or source code, and my naive understanding is that it takes only one patch to change each one:

https://gitlab.isc.org/isc-projects/bind9/blob/master/lib/dn...

...though the changes would be fragmented until the patch had been rolled out to 100% of resolver codebases and all instances of each resolver updated and restarted. Not an easy solution without coordinating people as well as software.


It takes two to tango. Once you get majority support then the holdouts are the ones forking the TLD, and since forks are not in anybody's interest a consensus would be reached.


It's been tried and failed.

If I recall correctly it was OpenNIC which established some TLDs independent of ICANN. ICANN stomped on one of them, and ultimately won, with OpenNIC conceding control of the TLD. (Everyone peered the ICANN data and no one the OpenNIC, and OpenNIC stopped registering or serving the conflicting domain themselves.)


> Make .org domain names "accessible and reasonably priced for all", including limiting price increases to no more than 10% per year

This immediately stuck out to me as a really bad deal.

Rising with inflation, somewhere between 1 and 4% per year, would essentially keep prices stable. This is tricky when selling internationally, but roughly possible.

Rising by 10% each year is significantly faster than inflation, and would result in a $20 domain name doubling in price in 7 years, or 6x in 20 years.

This is the internet we're talking about, 20 year time horizons are important and yet still short sighted. In 100 years we're talking $275,000 rather than the $400 that inflation would get us to.

> Ethos has said that their plan is to "live within the spirit of historic practice,"

This is not what Private Equity does. It cuts costs and quality, raises prices, strips assets, and seeks to significantly increase profits. I think it's naive and short-sighted to take them at their word, as this article admits they are doing.


Not sure why OP tosses out 10% price hikes per year as reassuring. Maybe he’s too rich to make sense of small amounts of money like this. Even $10 is a nontrivial sum in some underdeveloped countries as is.

Also, this is just “what Ethos themselves have said about their intentions with regard to .org”, and we all know how good for-profit entities are at keeping promises that affect their bottom line.


His argument seems to be:

1: The Internet Society does great work protecting the Internet 2: Ethos is a worthy successor to the Internet Society as the steward of .org.

This is incoherent. THis blog post can be summed up in one sentence: "I reckon its fine."

Thanks for voting to sell .ORG Richard Barnes. I know he thinks its fine, I think jacking the prices up 10% year over year is nonsense. What do the financials look like and what's the internet getting out of this?

A money grab looks like a money grab.


.org registry was already a pretty good cash cow. According to their tax return[1], in 2018 they grossed ~$93m over ~$33m registry administration expense, ~$7m employee compensation (interestingly there's a 30% year over year increase here), and some other smaller expenses. They raised $48.7m for Internet Society. Note that out of registry administration expense, $18.1m went to Afilias[2] (this should also be in the tax return), a for-profit technical registry provider. So every time you paid your $10 .org registration fee, at least $5 went to Internet Society as a mandatory donation, somewhere between $0-2 went to Afilias the for-profit contractor, some small amount went to GoDaddy for marketing, etc. Anyway, a non-profit printing $50m/yr without begging for donations is certainly nothing to sneer at, and under the control of a for-profit entity they should expect more even if the price stays the same. And you bet the price won't stay the same.

[1] https://thenew.org/app/uploads/2019/09/PIR-2017_2018-990.zip

[2] https://domainnamewire.com/2019/10/28/pir-org-slashes-regist...


Of course, the previous CEO Brian Cute of PIR (the non-profit) was previously "Vice President of Discovery Services" at Affilias, the for-profit that they are paying to do PIRs job.

Basically, everywhere you look, you see a bunch of blood-leeching ticks on the internets backside.


As you said, according to the 2018 tax return revenues from PIR running .org resulted in $48,000,000.00 in cash grants handed over to the Internet Society.

How much is the sale worth? That $48M Grant was worth more than Internet Society's total revenue in 2016 according to wkipedia. ISOC just sold a sustainable $50Million revenue stream.

If LetsEncrypt copped a $0.10 fee per certificate, how much would it cost for Richard to rubber stamp a Symantec acquisition of LetsEncrypt?


> If LetsEncrypt copped a $0.10 fee per certificate, how much would it cost for Richard to rubber stamp a Symantec acquisition of LetsEncrypt?

Easy now, don't give him ideas.


Don't worry, they have your best interest at heart. With this extra money, we can fund our certificate mission for our own personal gain forever. It's very good for everyone.

There's no argument. Everything in that post has been designed to be indexed online and published as some kind of counter-argument against criticisms but that's it.

It's all bogus and he knows it. He is to busy counting money to care.


It's the exponential growth bias too. Repeated price hikes like this work out to become vastly more than most people expect, very quickly.


PE companies are very much in the business of valuing a revenue stream that goes up 10% per year highly. This article doesn't show thinking beyond 10-20 years, but most of the economic value comes even farther in the future. In 50 years, it could be 14000x the current price!

If you plug a 10%-growing revenue stream into a net-present-value formula with a discount rate less than 10%, you get infinity. The future revenue stream has infinite value. Even under reasonable economic uncertainty, you might be able to justify a P/E ratio of 100.

That hedge fund got a sweet deal.


1. The price cap is an informal agreement, not legally binding

2. The domain name market would probably not bear a 14000x increase.


So they run price discovery to figure out who gets $10 domains and who gets soaked for millions.

10% per year, so in 10 years it's 2.6x more, and 6.7x in 20 years.

That's way above the rate of inflation.


Changing domains is not easy, but if you bring up 20+ year horizons, then it is definitely viable to change domains to deal with rising costs.


What costs? They have to run some DNS and WHOIS servers, plus collect money.

This isn't rocket fusion, this is something every country, no matter how tiny, manages to deal with for their own national domain.

If they're in way over their heads maybe they should out-source components of it, but retain control over things like pricing.

Or, sure, sell it off. I'm sure nothing bad will happen like when .com went evil.


> costs

OP meant that current .org clients can ditch .org if/when costs for them (profits for .org) gets too high.

> ...

Many countries just contract some registrar/registry/regperson to provide the service.

But of course, it's dead simple. (The complications arise if you are .com and thousands of squatters try to catch dropping domains, etc.)


The costs of a .org domain should be proportional to the cost of providing a .org domain. What costs are there for running a registry that require a huge price-tag?

There are wholesale registrars that will provide white-label service for a couple of bucks a domain per year. The costs can't be that high.


"Costs" doesn't mean real operational costs and so on. It is used as an accounting/business concept. Simply any .org customer has a yearly associated cost for having/leasing that .org domain.

OP's comment doesn't distinguish between different sources of that cost. (Sure, it has many components, the cost for the network, servers, development, security, backup, payroll, legal, accounting, some sales, marketing, audits/compliance, insurance, whatever risk premium, maybe off site backups, disaster recovery, outreach, bonus projects, 20% time, blablabla. Plus profits.)

Obviously everyone knows that the profits is the part that will now grow much larger. And eventually the .org customers will ditch .org because of that. But OP is right, from .org customers' standpoint, it doesn't matter why, it just matters that their costs will rise and as soon as it crosses a point (cost of switching becomes less than the cost for remaining on .org) folks will leave.


Except that the way trademark law works in the US you have to "defend" your marks or they can be considered abandoned. This means as long as renewing your domain is cheaper than the cost of hiring an attorney to send a Cease and Desist letter to the squatter who grabs it after you're better off paying. I'm guessing that horizon is more like 30-40 years off.


Is there any precedent where the abandonment of a domain has been accepted by the courts as abandonment of a trademark?


I do not know if anyone has lost a trademark over this, but in a practical sense you still need to be proactive--there is no trademark police force that will ensure nobody uses the domain inappropriately. Consider a donation-solicitation business that takes over abandoned .org domains to collect donations in your organization's name and then keep a percentage. You probably don't want that to happen, you certainly could make a reasonable trademark infringement case, but unless you take steps like sending them a C&D there's nothing stopping them. Even if all they did was put a CNAME for your old .org in that redirects to their own domain they could have a meaningful impact on your operations.


I suspect if you ran the .org domain for profit, and you raised the price to $275000 a year, you would find you'd rapidly lose all your customers. There are lots of other TLDs that are cheap, there's healthy competition, and .org stands to earn a lot more money by being competitive than by raising the prices into the stratosphere.

It is a bad deal. No way a for-profit company bought rights to .org without having an intention to make a profit on it. I have confidence in capitalism and it always, always seeks to maximize profit.


Wow, this is the kind of guy running the internet... he just sold out all the non-profits of the world. Jesus.

If you read carefully -- despite the title, he works hard to obscure it -- the "why" is he just wants the money.

His argument about why it's OK -- "Trust me, Ethos is totally trustworthy" -- is absurd and incoherent.

First of all, the point and purpose of private equity is to make money. To misconstrue the issue as distrust of private equity is backwards. I trust them 100% -- to fulfill their purpose to make money. They will extract money from this investment as effectively and efficiently as they can. Raising prices quickly is just one thing they might do, by the way. If they can find an opportunity to make a nice and quick profit that devastates .org they won't hesitate to take take it if it meets their current investment goals.


I wonder how he drew the short straw to ruin his reputation with this garbage.

The simplified timeline (as I understand it, willing to be corrected if I'm wrong);

1. PIR, or someone very close, seems to have lobbied to have price restriction of .org removed. My understanding is that PIR made the argument that they're a non-profit, they have no reason to raise pricing extortionately

2. This was passed, despite a large number of comments against the idea, Ethos was incorporated the following day

3. PIR sold itself to Ethos, a for profit company

The people involved seem to be moving between ICANN, PIR and private firms.

Given all these things I don't think it's unreasonable that people are deeply sceptical. Especially with the ambiguity of "no more than 10% per year" being throw around.


You forgot the part where Ethos is the same people who controlled PIR. It’s just a sleazy trick to take off the non profit veil, so they can start skimming the profits. Does anyone really believe the non profit PIR and ISOC couldn’t exist on their $90 million a year .org tithes?


Yeah I’d completely missed this part. Makes it even worse


This is what is more properly called incestuous relations between corporations. This will only serve those companies and people be-bopping between them with shadow titles. I don't know if this guy owns part of those companies and is benefiting or one of his bros at those companies convinced him with his "for the greater good" bullshit that MBAs learn in school.


10% per year is much, though. Even with this it's an unreasonable price hike.


For domain names it feels kind of double edged sword.

Higher prices cost you money, but keeps the domain sharks a little further away.

Keeping domain sharks away is nice.


You don’t need high base pricing to keep domain sharks away. Some throwaway alternatives that are less workable, but already seem fairer:

You could limit numbers of domains per entity, or increment the price for each new domain you buy.

If you try to buy a domain using a company with human directors it is 10x the price.

If you buy a domain with non-person owners (e.g. a shell company) then its 100x.

As an aside: I wish more things were taxed or priced higher based on the obscurity of the entity purchasing the item. It’s no cakewalk, but it still feels too easy for those with the resources to use company and legal structures to be able to act with a disproportionate lack of public scrutiny.


Seems about right to me, this stinks of whatever the non-profit version of regulatory capture is. I wonder how hard it would be to make a parallel ICANN.

I guess this is naiive, but how can a non profit sell itself to a for-profit, it seems all sorts of wrong.


I'm not skeptical, I'm outraged.

This is corruption plain and simple. I hope OpenNIC forks the .org registry and lobbies DNS to accept their records instead.


> despite a large number of comments against the idea

Despite virtually ALL comments being against the idea.


Yeah, and the fact that Ethos is run by a former CEO of ICANN is incredibly shady.


This author is just outright naive.

>Even in the worst case, if Ethos considers dramatically increasing prices (which, to be clear, we do not expect them to do!), the Registry Agreement for .org requires a 6-month notice period during which domain owners can lock in a 10-year registration at pre-increase rates. This should seriously discourage Ethos from doing this, because it would take 10 years for the new high rate to even take effect for existing registrants, and new registrations would likely fall off right away.

No, the worst case scenario is that they jack up prices and then run a massive campaign FUD campaign about non-profits without .org addresses. Or they start selling of Oxfam.org to competitors. Or hell, they start doing differential pricing, gouging the people they think can pay.

>We're all trying to make the Internet a better place

No we're not. Don't be an idiot. Private equity companies are making money from investments they have no interest in making anything a better place and it's insulting to expect people to believe that.


I think it's worse than naive. His two points are in impossible conflict. He wanted a pile of money for the Internet Society, enough to "secure that work's future". But the only way selling .org is worth a pile of money is if it gets extracted from nonprofits. With plenty of profits left over to feed the investors who put up the initial cash.

If the Internet Society wanted to secure their future, they should have raised a proper endowment. Or they could have kept .org and bumped the prices modestly so it made a profit equivalent to what an endowment would pay. Selling it to a PE company is guaranteed to be worse for .org registrants, because the amount of money extracted will be greater, and a PE firm will be way less accountable. Especially a shadowy one just created for this.

And for those not familiar with the horrors of PE, I recommend reading about what happened to Simmons Mattress once the financial engineers got a hold of it: https://www.nytimes.com/2009/10/05/business/economy/05simmon...


And extracting money from nonprofits, while an easy point to communicate, is just the tip of the iceberg - there's a horrible conflict of interest between the adoption of .org and the mission of .org now.

As I've written before, what happens if a large country says "we will block .org domains, or .org DNS resolutions, if you don't suspend an activist organization's domain globally?" Beforehand, the Internet Society could say "we don't believe that precedent is in the interest of the global community overall, and your threat is empty to us."

But now, there's both a profit motive AND an obligation to shareholders to take down the domain GLOBALLY, as the value of the company would decrease if .org domains were blocked to a large market. And, while I'm not a lawyer, I believe this decision would be permitted by the new 2019 rules. This gives censors tremendous leverage to spread censorship and chilling effects around the globe. DMCA takedowns will seem like child's play.

In the face of losing a large market opportunity, if even Google, with all its market power and all its public scrutiny, is willing to build things like Dragonfly, how can we take Ethos at its word?

I'm all for the role of private equity in helping companies to grow - while there are certainly firms that operate in bad faith, the PE industry overall doesn't deserve the bad rap it gets in the media. Of all the things that the private market can do to drive innovation, the existence of PE is critical. (Not every company should IPO or be gobbled up by a strategic.)

But IMO this sale should absolutely be disallowed from a humanitarian and international security perspective. The incentives are just too badly aligned.


The ISOC-Ethos deal timeline is a conflict of interest story with executive musical chairs:

https://www.privateinternetaccess.com/blog/2019/11/isoc-pir-...

It stinks.


Sounds like what happens with drugs. The big name pharma companies avoid getting their names dirty by selling drugs to corps willing to bump prices past the absurd.

I sure hope the author got a kickback since his decision was not for the benefit of others. Only worse thing than corrupt board member, is a fool given authority.


Why could the Internet Society not have been the one raising prices by 10% ad infinitum. Need capital? Borrow it and pledge .org as security. There’s basically unlimited funds available in this manner because the .org cashflow stream is as reliable as anything.

How naive indeed. What a shame.


Because it's harder to justify being the person who raises prices that much, while claiming to "enable the internet for all" or whatever their mission statement is. With the right PR, you can sell out and try and keep a straight face.


Seems like they missed the right pr then?


In the short term, sure. But in the long term, they have a pile of cash they're not giving back and somebody else (who doesn't give a shit) takes the blame.

Because they are a non-profit who can't pay themselves ridiculous salaries. Instead, they can now work at Ethos and draw ridiculous salaries.


Outsourcing “being the bad guy” is fairly common in the business world.


I don't think that "nonprofit" = "good".

See

https://newint.org/features/2005/10/01/keynote/

we might be better off if Oxfam's domain name was sold off to somebody else.

People who liked that "phenomenon of bullshit jobs" essay might think that "working for a nonprofit" is "meaningful", but people who work for non-profits frequently suffer from moral injury, get burned out, underpaid, and wind up questioning their values.

Back when I was involved in third-party politics and had many social entrepreneur friends I made my own decision that I don't give money to 501c(3) organizations, since they are a privileged class that doesn't have to pay taxes -- being a 501c(3) organization also means sticking to rules that ensure that you will be working on the symptoms of problems rather than the root causes.

Particularly in the developing world, people would benefit from for-profit organizations that are responsive to their needs as opposed to non-profits who work for rich donors and mindless governments.


>Particularly in the developing world, people would benefit from for-profit organizations that are responsive to their needs as opposed to non-profits who work for rich donors and mindless governments.

If there was profit to be made there would an business filling that need.

A foodbank in Detroit or non profit school in Ethiopia for girls are there because business and the like aren't.


The definition of "undeveloped" is that institutions haven't been developed to meet a need.

People an an "undeveloped" area are going to have a bad year now and then when Oxfam will come and tell everyone what an important thing they are doing.

If an area becomes "developed" then for-profit businesses have been created to fulfill people's needs and they don't need Oxfam.

If the rich tip the scales so that all the money ends up in their pockets, they give a little bit to Oxfam. In a fair system, people would create the institutions that they need and we wouldn't need Oxfam.


Help me understand what you mean by "worse than naive" here. Richard Barnes isn't going to see a dollar of this money and wouldn't need it anyways. I understand people disagreeing with him, but, despite being automatically disinclined to extend good faith to anything published at CircleID, I don't understand where anyone derives bad faith from this piece.

I thought it was tremendously useful, if only to understand what was in the minds of the people who unanimously voted to sell .ORG.


> Help me understand what you mean by "worse than naive" here.

"Naive" in this context generally means they were overly trusting when there was no evidence to suggest trust was warranted. I'd interpret "worse than naive" as saying that they are actually evidence to the contrary.

The logic presented is, "We need more money, so we sold it to this private equity firm. But don't worry, they're not going to try to squeeze lots of money from it."

The starting point for any for-profit company -- no matter how ethically run -- is that they buy things because the expected value to them will be higher than the cash they paid for it. We must assume that the expected value of PIR to the equity company is higher than the amount they paid IS for it. Which means, either IS is actually getting less (or at best the same) money than they would have for keeping PIR, or it means that Ethos is going to charge significantly more than IS is. The fact that Ethos bought PIR is prima facae evidence that it's a bad deal for either IS or for the internet as a whole.

I mean, there are other possibilities, but none is really good. It's possible that someone at Ethos capital actually did want to do IS a favor, and way over-paid for PIR. But that's just a form of embezzlement; I certainly wouldn't feel any better to know that .org was bought by someone who was either incompetent or a criminal.

If you want to set up a long-term self-funding organization to do good rather than making money, you don't do private equity; you set up a foundation. Ethos, or whoever wants to make the world a better place, could provide a loan to such an organization.

And even if you do decide to buy something, you put your promises in writing in the form of a contract.

And even supposing Ethos really does mean all the things they say. Suppose something happens and they go bust and have to liquidate their assets. What happens then?

There are just so many red flags here, that "too trusting" doesn't even begin to describe it.


Your scenarios are not mutually exclusive. To maximize their expected value, you say that they could:

1. Earn less than IS would

2. Charge more than IS would

It's actually:

1. They could earn less than IS would, because they're generous, incompetent, or some other reason

2. They could earn more than IS would, because they increase the prices, run PIR more efficiently than IS would, increase the number of registrations more than IS would, or some other reason

In scenario two, which is the most interesting, they could jack up prices, but they could also run the business better, such as running the business more efficiently or driving more business through advertising. I agree with you that the former is likelier, but not necessarily the only reason why the deal would have a positive expected value for Ethos. It could be that the deal is a win-win one, where IS gets more money than they'd be able to make out of PIR, and yet, Ethos comes ahead too by running it better than IS could.


If you have some evidence that this is the case, feel free to give it. But they've already outsourced the running of the registry to somebody else, so any obvious efficiency gains have presumably already been taken. And if they haven't, there's no reason to think a fresh-minted PE company would do any better than hiring a competent manager.

I think Richard's piece leaves out everything of substance. I don't understand how this helps the ISOC mission, users of .org, the public interest of the Internet at large, or anyone at all except of course Ethos Capital.

PIR, the registrar in question generated $48 Million in support grants for ISOC in 2018 tax return. He's trying to make the case that selling this $50million revenue from grants is worth it. He think the governance of .org and the maximum possible cost increase will be fine.

What possible reasons has he given for any of that?

He vaguely indicates that it'll be fine, and instead asserts that $28/yr could be affordable? It is, but why not just jack up the price in the first place, if its a money thing? They could be getting $100-Million in ten years, why sell it off to a private capital investment firm with no track record of "Governance" and a mandate only to private shareholders and investors?

If you happen to check https://ethoscapital.mu/investments/ to read all about their clear mandate for Governance (whatever that means the the context of "Exposure to a Diversified Pool of Unlisted Assets") hopefully the irony[0][1] of their using the .mu (Mauritius) tld is not lost on you. Sorry if this last bit seems petty, but just wow. What about any of this makes anyone think this doesn't look like a gift to private equity? I would like to see the sale price.

[0] https://business.mega.mu/2013/07/29/internet-210-government-...

[1] https://web.archive.org/web/20141110042124/http://news.islan...


>I thought it was tremendously useful, if only to understand what was in the minds of the people who unanimously voted to sell .ORG.

That felt more like a smokescreen than a true insight into the process. It's a lot of fluff and empty grandstanding while not really justifying the sale in any coherent way. The way I read it he's basically saying "being a registrar for .org is our biggest activity and one that gives us a steady and stable income but we also want to do other things, so we decided to get rid of that for some short-term gains".

If that's truly what was in the mind of the people who voted to sell they need to test the water supply in that building, there was clearly something messing with their reasoning skills.

If there's truly a grand master plan that makes sense behind all of that then they should share it. For now the only plan that makes any sense to me involves several thick layers of corruption.


> Help me understand what you mean by "worse than naive" here

"Worse than naive" doesn't necessarily mean "bad faith" but possibly causing losses to other people without deriving a gain can still be "worse than naive". It's a quote rephrased for kindness.


I mean what I say: I don't think he can possibly be as naive as this piece suggests, and I don't think any of the plausible alternatives interpretations (e.g., incredibly negligent, corrupt, a fool) is better than this babe-in-the-woods confection.

If you'd like to assert that he's really this naive, feel free to make a case for it. Or if you have some interpretation that's better, I'd be glad to read that as well.


Yeah this is a frankly insane take for me.

>For those who might be unfamiliar with the Internet Society, our mission is as follows:

Nobody cares, that's utterly irrelevant as long as operating .org doesn't go against the Society's mission statement (which it clearly doesn't). By the author's own admission "While it's true that running .org provided a relatively steady income stream, it effectively staked most of our revenue on a single business". So you are staked so heavily in a single business that instead of using the income and stability it provides to diversify you just get rid of it altogether? Utter nonsense. That's just greed and short-term gains.

I hope this is naivety and not pure gaslighting.


I also find it insulting that he belittles "leasing domain names" as beneath the mission of the Internet Society. Management of .org is actually extremely important to all of those who are involved in non-profits. So are we to assume that selling off .org to private equity for a quick cash grab is in line with their "mission"?


It's also hilarious, considering that they're only in that business because they asked to be [1]:

> ICANN circulated a request for proposals in May 2002 for a new organization to manage the .org domain. The Internet Society (ISOC) teamed with Afilias to put forth one of eleven proposals ICANN received. ISOC won an endorsement within ICANN and was recommended to the selection committee

[1] https://en.wikipedia.org/wiki/Public_Interest_Registry


LOL

"The Internet Society supports and promotes the development of the Internet as a global technical infrastructure, a resource to enrich people’s lives, and a force for good in society.

Our work aligns with our goals for the Internet to be open, globally-connected, secure, and trustworthy. We seek collaboration with all who share these goals.

Together, we focus on:

Building and supporting the communities that make the Internet work; Advancing the development and application of Internet infrastructure, technologies, and open standards; and Advocating for policy that is consistent with our view of the Internet"

https://www.internetsociety.org/mission/


"As an organization the WWF staked most of our revenue on a single business. That's why we've acquired a controlling interest in Raytheon..."


How did they get to being in a position to make that decision if they are naive about such things?


Because he's not naive. Humans are self justification machines and he's just exercising the semi-delusional post decision making process we all frequently exercise ourselves.


>This should seriously discourage Ethos from doing this, because it would take 10 years for the new high rate to even take effect for existing registrants, and new registrations would likely fall off right away.

It's the exact opposite of that. As soon as you announce a price hike, you don't get a giant loss of money, you get a giant flood of money as tons of people pre-pay for 10 years.


You even kinda get the best of both worlds, a cash infusion and more money in the long run.

The org TLD has 14 million registrations in it right now. If Ethos announces a 50% price hike (increasing the base charge from $9 to $13.50), my guess is 2% of the domains would be immediately renewed for the 10-year max at the old price.

So right off the bat, Ethos have 280,000 domains * ($9 * 10 years) = $25,200,000 in new cash. Now that means they've lost out on $37,800,000 from the price hikes but that was collected over the next ten years and assumes that all of those domains would have continued for ten years. They've no choice now; the money is paid.

If Ethos lose another 10% of org registrations because people don't want to pay the increased cost, that leaves 12,348,000 domains left. Assume another 10% of those either don't renew for some other reason or renewed for more than one year but less than ten. Now you're at 11,113,200 remaining domains that, in the year after the announcement, bring in an additional $50,009,400.

So just by announcing a price hike and not-so-subtly encouraging domain owners to "take advantage to lock in today's price for years to come," Ethos bring in $75,209,400 with two-thirds of that being new recurring revenue and the remaining third suitable for distribution as bonuses to all of the executives who made such a clever scheme what it is.


It occurs to me that I should probably extend all the .org domains I control (for a non-profit) to 10 years, now.


I have three org domains I really care about and have already bumped them out as long as currently-PIR will let me. Sucks to have to but two of these domains are so old, I have no idea what all would break if I let them go.


Also keeping in mind that if one locks in the domain for 10 years, they are going to be much more likely to renew at whatever the ungodly sum is when the 10 year period is over.


"The foxes have assured us that they will limit their consumption in the hen house for a ten year period"


This is the best summary thus far, lol


> during which domain owners can lock in a 10-year registration at pre-increase rates.

That is not what is written in the Registry Agreement.

"Registry Operator shall offer registrars the option to obtain domain name registration renewals at the current price ... for periods of one (1) to ten (10) years at the discretion of the registrar, but no greater than ten (10) years."


In practice, this says the same thing. There's no reason for registrars not to let their customers lock in the low price for 10 years. There's stiff competition among registrars and their margins on domain name sales are razor thin. They make their money by selling various add-on services. It's better for them if registry prices are low because that encourages people to buy more domains, and thus more add-on services.

For example, Namecheap came out strongly against removing .org price caps: https://www.namecheap.com/blog/ensuring-icann-keep-domain-pr...


The registrar can simply raise the registration price of Wikipedia.org to a million dollars a year, and keep the random ones the same price, to extract any value from .org websites that rely on their domain name. The 10% a year is not a legal commitment, just an easily breakable informal promise.


If their registrar did that, Wikipedia would change registrars to one that didn't - and they'd be able to keep their .org. There's competition among registrars, unlike registries.


Their margins on new domain sales are thin, but the cost of changing domain names for a big owner of a prestigious .org domain could be huge. So jack up the renewal price to gouge existing domain owners, then drop the prices again to entice in new registrants.


Or follow the model of banks profiting off of debit cards by charging exorbitant fees for common mistakes. They didn't need that a high percentage of their customers to pay overdraft fees before they were making billions. Forget to renew your domain on time? No problem, we've held on to it for you, just please pay this $150 "redemption fee".


If a registrar did that, the .org domain owner would change to a better registrar, and they'd be able to keep their .org domain. There's competition among registrars, unlike registries.


> I would encourage people to look at what Ethos themselves have said about their intentions with regard to .org > Make .org domain names "accessible and reasonably priced for all", including limiting price increases to no more than 10% per year

Just that statement alone means prices could double every 7 years.


Without explicit agreements/laws in place I have to sadly agree, and any natural monopoly will get abused at some point if owned by profit-seeking companies. That's just how it is. Doesn't matter if they are now sweet-talking you into doing this deal, the fact is that once they are in the position of power, they can do whatever they want. Of course there are some limits what the customers can take, but when their end-goal is maximizing profit extraction it's just dumb to assume it will be all butterflies and rainbows.

As an example if you even need any, the government of Finland decided to let government-majority owned electricity company (Fortum) to sell off their electricity distribution (Caruna) to some private investors. I don't know what the investors promised but quickly after the deal was made, the prices started to rise, the company structure was made that the company in Finland is paying ridiculously high interest rates (8.5%) on loans to some Dutch holding company, with an effective tax rate of couple %.

And even in general, why do they have to sell .org? I don't see any concrete benefits whatsoever for the normal user.


Yes unless it's regulated, any monopoly that is "for profit" will want to maximize profits. So they will walk the balance beam between raising prices and buying lawyers and lobbyists to insure congress critters don't regulate them.


Agree. Very naive. A 10% increase forever versus 10 year temporary stay of prices for some lucky few who manage to opt out.

10 is pretty small compared to forever.

I'll take the guaranteed 10% nest egg until retirement, please.


You're very nice, because "naive" is a very generous interpretation.


It's just funny to me that he felt the need to start listing out his credentials before explaining his stand.


That's reasonable in this case, people often complain (and sometimes reasonably so) that the people in this bureaucratic entities are far removed from the "real world" and don't really understand what they're dealing with.


Too bad his credentials did not make his argument good. I bet if he actually had a good argument ... well then nobody would be complaining that his argument is bad.


If anything it makes it worse, he can't plead ignorance.


Yeah, his argument and conclusion are so bad that they're more likely to make me do a double-take on the value of his credentials.


The funny thing is that despite his credentials, he made such a spectacular blunder. It makes one wonder when the other shoe will drop for "Let's Encrypt".


Well, they already only take bug reports from people who enter into a contract with Microsoft!?


Really? I've never heard of that. Can you elaborate?


Well ... try reporting a bug without doing so and see how far you get?!


The last time .org was up one of the bidders considered that Oxfam and redx (red cross ) where not valid users of .org

At the time I worked for one of the bidders Poptel, so I got to hear a lot of the inside stories


I'd like to hear the reasoning behind that.


I'd like to hear the reasoning behind that

Something like: Oxfam is a fundraising organisation that just does enough charity work to generate photos for their marketing. It’s a long way from what most people believe a charity is - volunteers doing good works and raising money to directly buy the supplies and equipment.


I agree the author seems very naive and you're right to zone in on the only substantive thing he did say. However I'm still unclear about some points. For example can they sell oxfam.org from under Oxfam's nose? How does that work?


They can't "sell it from under their nose", they just can demand any renewal price for it they like, and delete the domain if that price is not being paid.


Ok so they can arbitrarily set a unique price for a specific domain?


> > We're all trying to make the Internet a better place

> No we're not. Don't be an idiot. Private equity companies are making money from investments they have no interest in making anything a better place and it's insulting to expect people to believe that.

I'm kind of a conservative (read classical liberal) free market kind of guy - but this is a total shit-show IMO. I simply don't see anything that will prevent market failure in this case - there is nothing I can see that incentivises good behavior.


> there is nothing I can see that incentivises good behavior.

Competition with all the other registries?

For the most cost sensitive domain owners, they typically have a presence on social media and contact with users via email. And, of course, they're usually discovered by search engine rather than domain. So the switching costs are quite low and the demand extremely elastic.


How much would it cost society as a whole if WikiPedia switched away form .org? Think of all the printed links, now defunct. Think of the value of that domain to an occupant with less scruples, once left behind. The confused people who will find themselves on a WikiPedia-esque, ad and scam ridden copy.

And that’s just WikiPedia.

This is a shitshow of historic proportions for the internet as a whole. It will be remembered as a landmark in the ever metastasising cancer of monetisation that is suffocating the World Wide Web from within.


Not all consumers are equal.

Wikipedia sized organizations would easily absorb the relatively trivial cost, so, they wouldn't switch. Their demand is relatively inelastic to price.

The people switching are going to be the far more numerous smaller operations, who are elastic to price.

And, of course, anyone signing up for a new domain is highly elastic.

Because there are lots of people who are highly elastic, the overall demand is highly elastic.


Wikipedia could absorb a trivial cost increase so it's likely that a PE firm would target them with more steep increases. From what I've read about their price increase limiting "agreement" it isn't one, it's just a statement and isn't laid out in any binding contracts.

Maybe Wikipedia gets it's registration price bumped up to 3 million because the PE firm thinks the org can absorb the cost.


Why wouldn’t Wikipedia hedge against this outcome by extending their domain for 10 years tomorrow, and paying $100 to do that?


What happens after the 10 years are up? I very much hope that Wikipedia will be able to stay on the Internet for longer than that.


It can't be laid out in a binding contract because it's a new contract each time you renew the name. This is something every renter has dealt with since forever.

So, yes, they could absolutely start trying to shake down the biggest non-profit organizations. Those are also organizations that are highly sympathetic and have literally hundreds of millions of viewers, and thus immense political clout.


It could be laid out in a binding contract for the purchase of .org that the PE firm is prevented from reoffering a name renewal above the rate they previously offered it and the agreed adjustment - it just appears that isn't actually contractually laid out anywhere and is simply a PR statement.

Contract law certainly isn't something to trivially walk into, but there are ways this could have been done.


A domain only has One registry


The author is not naive. He is most likely malicious.


> This author is just outright naive.

No, it's you who is being naive. The author is a sly fucker who adeptly spins his atrocious sell-out.


Please follow the site guidelines when posting here.

https://news.ycombinator.com/newsguidelines.html


IRS Form 13909 can be used to submit complaints about non-profit organizations to the IRS. Here are two pre-filled Form 13909's, one for ICANN and one for ISOC. Just print it out, add your personal information to both, and mail it to the address listed on the bottom of the form.

https://yukari.sr.ht/dotorg-form-13909.pdf

Alternatively, this file can be opened with LibreOffice Draw to make edits and prepare your document digitally:

https://yukari.sr.ht/dotorg-form-13909.odg

lodraw crash course: F2 + click drag to make a new text box, Ctrl+[ to reduce the font size to something reasonable, red icon in the toolbar along the top to export as PDF. You can send the document by email to eoclass@irs.gov.


I’m doing this! Both for PIR and ICANN.

Please see my other comment on this thread. It is likely this “sale” could be considered illegal.

Here is the information for ICANN which can be used for the above form as well:

https://www.icann.org/en/system/files/files/fy18-irs-tax-for...

Remember that the founder of this PE firm was at ICANN, so this transaction is self-dealing on ICANN’s end as well.


Thanks for the ICANN info, I'll prepare a similar form for them. Do you have some resources I can use to summarize ICANN's questionable activities?


The former CEO of ICANN basically started the PE firm PIR was “sold” to:

https://www.privateinternetaccess.com/blog/2019/11/isoc-pir-...

ICANN, by lifting the price restriction, was likely “in” on this deal.

When a nonprofit does something to greatly enrich a former CEO, that’s likely self dealing and illegal in the IRS’ eyes. The CA attorney general should also take action (ICANN is CA based).


Thanks for this.

Additionally, it might be beneficial for folks to file complaints with the Washington, D.C. Department of Consumer and Regulatory Affairs [1], since the Internet Society is incorporated in D.C., and with the Virginia Department of Agriculture and Consumer Services [2], since its principle place of business is Virginia and is registered as a foreign corporation there.

[1] https://dcra.dc.gov/ [2] http://www.vdacs.virginia.gov/about-agency-directory.shtml


I also wrote this letter to the Attorneys General of VA and CA:

https://yukari.sr.ht/ag-letter.pdf


>The Internet Society is tasked with protecting the interests of the internet names registry, among other things. They have removed price limits on “.org”,

It was ICANN which approved contract removing price limits, not Internet Society. (of course probably all of ICANN/ISOC/PIR/Ethos were involved in the deal, but anyway this statement is incorrect)

I wonder how effective these copy-pasted mass complaints to organizations/politicians/etc. are. It seems to be just waste of time, it's not that receiving same mail X times gives additional information?


The mass complaints work very well when backed by an organized effort to lobby, press attention, etc. There are people vulnerable to political and social pressure who make decisions based on this stuff, e.g. the CA attorney general (in the case of ICANN)


PIR is abandoning its nonprofit status anyways, to become B corporation instead: https://en.wikipedia.org/wiki/Public_Interest_Registry


They are becoming a company, but they haven't committed to become a B Corp. only to "explore" the certification. Like I "explore" using my phone less. ;)

Also becoming a B corp is different from getting the certification. the latter is just a reporting standard.


Bcorp doesn’t mean much. Add some stuff to the bylaws. Doesn’t mean they actually have to follow them. The Honest Company is a BCorp and still had multiple class actions against it and hundreds of FTC complaints.


You can also just stop being one when it becomes inconvenient. That's what Etsy did.


Right. This guy was appointed to ISOC by IETF, unfortunately this year, so his term lasts until 2022. However there are 4 board members whose term is up in 2020 [1], one appointed by the IETF. According to BCP77 [2] The IETF will choose its appointee in January. Nominations for candidates for all 4 positions apparently close next week, Dec 6 [3] so anyone who has the time and interest to scrutinise the nominees (or even propose new ones) needs to act on this pretty soon.

[1] https://www.internetsociety.org/board-of-trustees/ [2] https://tools.ietf.org/html/bcp77 [3] https://www.internetsociety.org/board-of-trustees/elections/...


I think it's worth noting some of the timeline of this [1]:

> On May 13, 2019, ICANN announced that they would remove the price cap on .org registrations (despite 98% disapproval in public comments [2])

> On May 14, 2019, the private equity firm Ethos Capital was founded by former ICANN chief executive Fadi Chehadé and investor Erik Brooks.

> On November 13, 2019, it was announced that the Public Interest Registry (that manages .org) had agreed to be acquired by Ethos Capital, as its first investment.

> Subsequently, PIR announced it would abandon its non-profit status to become a B Corporation.

Is the author unaware of this, in on the deal, or just remarkably naive?

[1] https://en.wikipedia.org/wiki/Public_Interest_Registry [2] https://www.theregister.co.uk/2019/11/20/org_registry_sale_s...


Of course they are aware. This post is PR bullshit to cover up the facts you mentioned.


In which a patsy sets out the arguments by which he was manipulated.

A large part of his motivation appears to be delusions of grandeur within an organization, the Internet Society, which, up to now, has been of no relevance whatsoever, and which has only now achieved a degree of prominence through an act of apparently naive stupidity.


Good point. They claim they need the money to further in their mission to improve the internet, but they’re throwing out the one good thing they’re well-known for doing (and I’m doing so, trashing their reputation amongst the public) in order to (so they claim) bankroll other things that most people have never heard of in relation to them. That’s an incredibly shortsighted gamble and reeks of excuses.


Yeah, this really read as a long winded way of saying "I want to be more important, so we sold our soul (and source of revenue) to make that happen".

It stinks and his justification was cringeworthy to read.


Not totally irrelevant, they have been a leading advocate for DNSSEC. Perhaps infamous would be a better word.


Maybe he got a kickback


For all the good you've done in the past and now, Richard, this is just one long disappointing read. Between the lines, the text is "we don't have the people to maintain PIR and decided that rather than hire people for it, we should sell it" and then a for-profit shell was set up and PIR was funneled over to it, and now it's no longer your problem to have to deal with. From your perspective, that's not making things better: that's walking away from them. And now you've made it _our_ problem, one _we don't have the power to fix_ and from our perspective, that's not you making the internet better: that's making our internet worse.


For PIR, an organization that literally does nothing but collect money as it has outsourced all of its principal obligations, they sure have a hugely inflated wage bill at an easy 5 million a year, for a ton of various directors and VPs.

If anything, this has been a good wakeup call that fees for .org could and should be slashed by some 80%.


> "we don't have the people to maintain PIR and decided that rather than hire people for it, we should sell it"

Except, unless I am misunderstanding something there, they had outsourced running the registry to Afilias anyway? So it's not even that ...


> Make .org domain names "accessible and reasonably priced for all", including limiting price increases to no more than 10% per year

There is nothing reasonable about the current prices. It’s literally a few hundred bytes of data mostly static data.

“10% per year” means it will double every seven years. “Up to” means they will be doing it at the maximum. And unless this is legally codified I doubt they would adhere to that either.


I wonder if he really believes this when he was typing it. I find it difficult to understand the rationale of selling ORG to private equity and the justify it as good for the internet. I hope this line of BS turns out to be true, but giving ORG over to a bunch of MBAs with experience in day trading does not a confident nerd make.


This is what happens when the PR or fund raising people get in charge of a charity - suddenly it becomes all about raising awareness or funds and not about doing....

Why provide a service ( like .org ) when you can 'raise awareness'? Or raise funds for others to do stuff.

The great thing about being the fund raising or awareness part is it's

1. where the money is

2. where the exposure is

3. and you have no responsibility for actually delivering stuff!!!

So you can justify higher salaries for the people running the charity....

https://hbr.org/2011/09/you-should-be-able-to-get-rich


"While it's true that running .org provided a relatively steady income stream, it effectively staked most of our revenue on a single business, and required a certain amount of our resources to be spent managing that business, distracting from the broader mission."

So, now they don't have any significant income stream anymore? Great! So once they run out of money from the sell, they're closing down? That is, unless they find some other way to generate a profit to burn on non-profitable-but-good things (like they're doing now). For which .org was the perfect fit?

I mean, if THEY would have increased prices by 10% per-year for the next few years, well, I think people would have been mad, too. But not as much as now, since at least the money would have flown to some "good use"(tm). But now? Cash flows to private investors, who expect (surprise!) to EARN money on that deal.


Yeah this makes zero sense. If Ethos are going to keep the prices reasonable (yeah right), they'll make the same amount of money as PIR did, so they won't have paid more for it than PIR would earn anyway.


What it comes down to is the board wanted a large pile of cash so they could do more of whatever it is they like doing, which apparently is not what many of us think their core mission should be.

I look forward to reading how much the board members are being paid now, and how much they will be paid in a years time.


Most non-profit boards pay $0. The Internet Society is one of them, with Barnes taking $0 from the organization (as board members, they also have to disclose if a related organization pays them):

https://projects.propublica.org/nonprofits/display_990/54165...

There are a few exceptions to the boards-get-paid-$0, but they're rare and doubt personal financial motivations are part of the decision.


But funnily enough the trustees of the Public Interest Registry (the .Org subsidiary) were all being paid before it was sold.

https://projects.propublica.org/nonprofits/organizations/331...


Even if Ethos’ ‘intentions’ are to be taken at face value, $26 is still a ridiculous price for basically no service. But these intentions are essentially worthless or they’d be put in writing.

Why would there be no non-profit willing to do this ‘work’ providing this ‘service’ for whatever price you want? You should know, your organization provides much more service for no money at all.


I never actually stopped to consider why they chose to sell of the TLD. I thought this was just a terrible organizational decision. Call me naive, but it didn't occur to me that it was about the cash infusion. I can't believe they want to jeopardize such an important part of the structure of the internet for a one time cash infusion. Absolutely disgusting.

>If we take Ethos at their word

What a child


> This transaction will put that bigger mission on a solid footing

I don't understand how that should be true. Either Ethos would have too pay too much or Ethos would have to be able to run this business more cost effective. Both sounds questionable.

> While it's true that running .org provided a relatively steady income stream, ... > Establishing a more diverse portfolio of investments will allow us to have more predictable revenue over time.

Relatively steady sound pretty predictable to me. It will be interesting to see who from the inner circle will benefit from those future "investments".

> Even in the worst case, ... the Registry Agreement for .org requires a 6-month notice period during which domain owners can lock in a 10-year registration at pre-increase rates.

That is wrong: "Registry Operator shall offer registrars the option to obtain domain name registration renewals at the current price ... for periods of one (1) to ten (10) years at the discretion of the registrar, but no greater than ten (10) years."


One of the big issues with this post is that it is trying to sell the terms of the deal.

But the issue people have with it in the Internet Policy Community is not the terms, which we no nothing about.

It is that the way it was done is a radical departure from how decisions are normally made.

Usually you start by saying "I have a problem". In this case it would be "We don't want to run .ORG anymore."

And then you engage the community in an open bottom-up consultative process to come up with the optimal solution.

ISOC applied to run .ORG in 2002. They won a competition to run it against 10 other groups. Here is the original application they submitted to ICANN:

https://archive.icann.org/en/tlds/org/applications/isoc/

They said things like:

"PIR will institute mechanisms for promoting the registry's operation in a manner that is responsive to the needs, concerns, and views of the non-commercial Internet user community."

And:

".ORG is the home of non-commercial entities on the Internet"

https://archive.icann.org/en/tlds/org/applications/isoc/sect...

After running .ORG since 2002, and growing it to over 10 million domains under management under this promise, ISOC's Board suddenly and with no prior consultation, decided to privatize it. They took that decision in a private negotiation over less than 3 months.

That decision making process is not how the Internet maintains a stable and secure infrastructure. It needs careful decision making to ensure reliable, stable, and resilient operations.


If this was supposed to reassure people then I want to meet those people as I have something to sell them. 10% per year price increases are insane! You can’t exactly just change domain names to a cheaper option either, like say insurance. Your whole identity is locked to it.

This only makes me more convinced that it’s a bad move.


So much bullshit and so littke valid argument in this big post. But don't worry 'Make .org domain names "accessible and reasonably priced for all", including limiting price increases to no more than 10% per year' It can ONLY increase of 10% per year. Like if it is a low number...


And i dont think this is written on a contract, sounded like a mere intention.


1. We know that there's no limit in the contract, because if there was, they would just say that.

2. The reason there isn't a limit in the contract is because Ethos don't actually intend to limit themselves to 10% yearly. If they did, they would have agreed to write it into the contract, which would have let them pay less for .org


This is so monumentally wrong that I have to wonder whether some kind of class action lawsuit is inevitable. As the owner of a .org domain name, I feel duped. I thought I was dealing (ultimately, not counting intermediate registrars) with a non-profit organisation that had some permanent commitment to the public good. Now I’m just renting from a landlord whose interests are guaranteed to be the opposite of mine.


> So if we take Ethos at their word, they should be just as good a steward for .org as the Internet Society has been

Sigh.. I'm guessing the author is/was not aware of the serious conflict of interest among the decision-makers and private stake holders who passed through the revolving doors of IS, ICANN, PIR, Ethos.

Voting with such naivete, especially underestimating the greed of a for-profit organization, is not being a good steward. They've let down the public in this decision.


The Netherlands chapter of the ISOC is objecting to the .ORG sale ( https://domainnamewire.com/tag/internet-society/ ):

We believe that the 2019 decision of ISOC Global to sell PIR to private equity firm Ethos Capital is not in line with ICANN’s criteria from 2002 and the subsequent promise from ISOC Global. Despite ISOC Global’s assurances to the contrary, we share the misgivings of the international community about giving a single privately owned entity the power to raise tariffs, implement rights protection mechanisms possibly leading to censorship, and suspend domains at the request of local governments. We also fear that ISOC Global’s reputation has been severely harmed by even contemplating this transaction.

We therefore call on ISOC Global’s leadership to reverse this decision immediately, and do its utmost to restore faith in ISOC as the one global organisation that through its many professionals and dedicated volunteers sincerely strives for an internet for everyone.


What is it with international supervisory bodies and blatant corruption (or maybe incredible incompetence)? This has real parallels to the International Olympic Committee and FIFA. I guess the parallels for all of them are a monopolistic position (and in many cases an essentially government granted one) with basically no oversight. Those conditions just seem to breed corruption.


So this is "we need the money to survive, and we completely trust these private equity guys to do the right thing"

10%/year should be reaping quite some profit after a while. I wouldn't be surprised if this is a pump-and-dump kind of deal, where PE substantially raise prices and then sell the entity at a big profit, given the effectively locked-in forward profits.


Idealistic greed is different from regular greed. Idealistic greed is always about expanding the mission. To do work that's even more important. To reach even more people. To expand the battle or skirmish into a full-on war (see this: https://news.ycombinator.com/item?id=21612488). It can lead to ruin just as easily as regular greed can, particularly when you consider that the people you end up negotiating with, who often specialize in regular greed, are usually better at it, and aren't hobbled and constrained the way you are by your vision or mission.


This is so incredibly naive, and he made at least one decision based on flawed understanding of the 10yr price lock in: only _registrar’s_ need to be notified. It’s up to them to notify registrants. If they were looking at a significant price increase for .org or to lock in existing customers for 10 years, would they notify their registrants? I would think no!

It’s extra sad because they had a commercial vehicle with which to further their mission, which could have been a huge asset to the ecosystem, and instead of finding a way to have it be a source of sustainability, they threw it away for a one time cash infusion.

The rest of the post is just this guy trying to make himself feel better for an awful decision.


> Many of the current concerns about .org are premised on a presumption that prices will rise

No, they are based on the fact that it was clearly a backroom deal with no due process that would've NEVER happened if the seller wasn't closely associated with the buyer.


“ So if we take Ethos at their word, they should be just as good a steward for .org as the Internet Society has been, with robust ties to the community and an explicit public-benefit orientation.”

This man is a fool.


How does he mention LetsEncrypt and not have http redirect to https on his site?


It doesn't seem to be his site.


Its fine because we're good and we get more money and Ethos are just simply good guys so that's good and nice so I voted "Yay" and now things are better because my organisation can keep me in a good job doing basically nothing whilst corporations buy up and exploit the internet.


It seems like a slap across the face that they offer as a defense a 10% increase which compounds annually. That isn’t a defense... it is a stunning illustration of the problem! Even the cable companies would be jealous (while their own customers are cutting the cord left and right).

Worse, 10%/year isn’t a contractual limitation; it is but a statement of “intent”. It is nothing short of malfeasance to have sold a non-profit’s operations without sufficient safeguards. And to a private equity firm? Outrageous incompetence if not criminal in action.

His article doesn’t justify the transaction or allay reasonable concerns. In fact, he seems to be presenting the case for why this transaction is crooked if not criminal!


I'm a .org domain user. My email is a .org, my website is a .org. It's [my name].org. I've registered through 2029 now. Hopefully by then this whole nonsense has passed. Honestly domain names have been handled very poorly over the past 10 years, between this and the ridiculous gTLD system. They are just becoming super-expensive vanity items for corporations to get nice redirects.


Ditto. surname.org here. I'm going to 10-year it, and hope DNS is somehow obsolete in a decade, otherwise I suspect I'll get a nasty surprise.


I did the same. If things go to hell I'll do global 301 redirects starting around 2026-2027, and work to get every link possible updated across the internet, to drain every last possible cent of value from my .org, and then I'll abandon it if the prices have gone up extortionately.


IMO, putting "Ethos" in the name of your private equity firm makes it a little bit too obvious that you don't want people to realize that you care about nothing but money.


"(...) what Ethos themselves have said about their intentions (...)" means nothing. They can change their mind, put new directors in a month that will have different opinions etc. What's important is what they can legally do and how incentives are structured. Giving monopoly to private equity and expecting good things to happen is a joke.


How can you let market economics mix with something as basic as where your organization registers its name?

Perhaps private equity could also take control of oxygen supply? If prices get out of control, perhaps the market will make other respirable gases available?

I’m sure I’ll regret writing something so emotive, but I really resent being backed into what feels like could easily be labeled a loony-left corner on this debate. Is this .org sell off an exercise in driving those who lean even slightly towards moderately left economics into insanity, incapacitating them?


Whatever he thinks of Ethos or the statements they are making isn't relevant anyway. It's a private firm, it can be itself bought and sold, acquired, merged, etc.

What happens if Google or Facebook or whatever suddenly wants to control .org? They just have to shell out a few millions?


Interesting to see how people are bound to their selective perception if they can somehow profit from it.

Ethos will squeeze every last drop out of this opportunity.


Sell to a private equity firm that tries to maximize profit from those assets. Yeah, what couldn’t go wrong with that. At least this individual has admitted liability for his part in this TLD’s forthcoming downfall.


I'm kind of amazed that this website (http://www.circleid.com) is not served via https and even the login is posted to a http endpoint. There's even a redirect from https to http.

You would think that "A World-Renowned Source for Internet Developments" would be on top of that.


Perhaps there is even a place to get a reasonably priced certificates. How about free ones?

Richard, maybe you could suggest such a place? /s

Considering "the lady doth protest too much, methinks" tone of the post, the inner conspiracy theorist in me starts to wonder if "Let's Encrypt" is as benign in the long run as it seems.


This also raised my eyebrows -- I don't even see the redirect, I just get broken HTTPS if I try to use it. In 2019 (almost 2020!) no website should be served over plain HTTP let alone have broken and nonfunctional HTTPS.


> limiting price increases to no more than 10% per year

Oh, well. That's okay then.


I.e. expect to see prices increase by 10% a year for the foreseeable future...


well, that's their 'intention'. I don't even know what that means for a business. Very little or simply nothing at all?


Doubling every 7 years.


Out of curiosity, did anyone actually ask expressly Richard how he voted and why he voted this way?

I mean, escusatio non petita, accusatio manifesta:

https://en.wikipedia.org/wiki/List_of_Latin_phrases_(E)

or "he who excuses himself, accuses himself"


I hate this justification of doing bad stuff with ‘for the greater good’ excuse.


>>> the Registry Agreement for .org requires a 6-month notice period during which domain owners can lock in a 10-year registration at pre-increase rates. This should seriously discourage Ethos from doing this

Or the could announce a massive increase to get all the .org owners to register for 10 years to give them a massive influx of capital right away, then divest that capital in to some other venture, then sell PIR to someone else. I am sure Verisign would love to buy it, or Donuts

the Internet Society can not stop them from off loading it in a couple of years after they extract their money from the .org space.


So...how much does it cost to run gTLD these days? Perhaps the time is right to set up a non-profit to run one at actually affordable prices, instead of the current ripoff and the future .org price increases.


You have to pay about $200k to ICANN just to submit a proposal for a new gTLD.


Those are the vanity domains bidding for a proper tld is much more $$$


From what I can tell, generic TLDs like .community or .theatre are enrolled under the same program and fees as brand TLDs.


Because it costs so much to add a new gTLD /sarcasm


It certainly reduces the likelihood of everyone and their uncle putting in requests to bag a few gTLDs for themselves...


Its not cheap you have to commit to very high up times with massive redundancy eg survive continent failure


Does ICANN pay for that infra though or do you? Because if ICANN doesn't pay I don't see how that's relevant.


No the registry does that for real TLD's - this isn't a vanity domain like .sony


Why change something that's working well? For profit, that's why. The author is either dumb or invested.


SaveDotOrg.org is a great place to start following this issue. Lots of nonprofits organizing to defend .org.


I appreciate your concern for this issue, and to judge by https://news.ycombinator.com/item?id=21611677 and the current thread it seems clear that most of HN agrees with your view. But it's against the rules of this site to use it primarily for political advocacy, which is probably why your comments are being flagged.

If you want to use HN in its intended spirit, you're welcome to! That's described at https://news.ycombinator.com/newsguidelines.html is summed up by the phrase intellectual curiosity.


ok got it!

fair is fair, so i vote for selling .MIL and .GOV to a for-profit company.

brb, i'll make one. i promise not to hike prices too much (in the first year).


I really don't like the internet and humanity in general for threads like this. Calling a particular person names like navie, idiot, gaslighter, corrupt, fool, greedy, insane, malicious, patsy, disingenuous, child, disgusting, unethical, etc, the way people in this thread have, is never a good thing.

It's really not cool when the target is a person. Receiving dozens of people angrily accusing you of evil is upsetting, and can lead to fear, anxiety, depression, and suicidal thoughts. I've seen people experience it. You may not care about this person's welfare, but you should, if you want to be an ethical human being.

It also doesn't help any idea you think you have, but it reinforces you emotionally to believe it, even on the really rare chance that you might not have expert information, and are just reacting to your limited understanding of a subject.

And it galvanizes opinions (your own, and of others) because of how the emotion and anger is shared by so many people. It makes you believe all the things people are saying, and you don't even stop to think critically. I know, because I too have decided to agree with the crowd here before when they dog-piled on others, only to find out the opinion everyone had (including my own) was pitifully inaccurate. I later wanted to provide some correction, but good luck fighting a mob when it wants to feel right.


Sorry, but no. He is not just a random guy off the street, he is in a responsible public position, and this is already his defense, so it is reasonable to think that this is the best he could come up with to defend his decision, it's not some misinterpreted tweet that was taken out of context.

Also, I have not seen anyone advocating for hurting him, which would obviously be out of place, but you can not take on the responsibility for a public good worth billions and then expect exceedingly friendly treatment when you completely fuck it up because you didn't care to exercise even a minimal amount of diligence, in the best case.

And while "idiot" or "fool" might not be neutral terms, they are still terms that at their core describe his actions in this case (assuming it wasn't corruption), it's not just random name calling to degrade a person.

Now, if there really is an explanation how all of this is in the public interest, sure, bring it forward, and push it to the front page of HN, I certainly would want to know. But the mere fact that even the best-founded judgement could always turn out to be completely wrong after all based on new evidence is not a reason to hold back criticism when there is solid evidence supporting that criticism, because the theoretical possibility does not mean it is actually likely or common.


Unfortunately gaslighting evil intentioned people take advantage of sentiments like these.


I agree that in general name calling and personal attacks are no good. BUT, the word used in this thread aren't that harsh, come on. We're not made of glass. If you make a really idiotic choise don't cry when someone calls you an idiot.


ISOC CEO does not consider the public reaction or petition significant. He stated that a mere 10,000 signatures when there are millions of .orgs indicates lack of public concern or any serious opposition to the deal.

Ethos Capital paid $1.135 billion for total, unconditional, purchase of the PIR from ISOC.

ISOC just "grabbed the opportunity when Ethos presented it,"

ISOC have reviewed Ethos’s governance plans and approved them, but will have no means to enforce compliance with those plans.

The deal must be approved by the end of the 1st Quarter 2021 or it fails. The exact date is still confidential.

It must be approved by two bodies – ICANN and the Pennsylvania Orphans Court, which is a specialist court for estates and trusts.

The PIR is incorporated in Pennsylvania and this court must approve changes in the PIR charter in order for Ethos Capital to take ownership.

This is because “the Orphans’ Court judge is the ultimate defender and protector of the fund in question, and the Orphans’ Court will protect that fund and ensure that the fund is distributed to the correct beneficiary”

There is a good introduction to this court at https://www.skhlaw.com/pennsylvania-orphans-court-101-all-th...

This means that if the Pennsylvania Orphans Court has not reached a determination by 1st April next year, or if that decision is being challenged in a manner which delays implementation, the deal fails.


I'm surprised no one mentioned that Barnes works for Cisco:

> Richard Barnes is Chief Security Architect for Collaboration at Cisco

Cisco has had backdoored equipment and far too many security vulnerabilities. They supply equipment to suppressive regimes like China, allowing these countries to block, filter, and monitor internet traffic in an effort to suppress human rights.

Someone who works for a company like that should not be trusted with important decisions related to fundamental parts of the internet.


Up next "We are excited to announce Cisco acquisition of Let's Encrypt".


Privatizing previously public services have always turned out badly. This will be no different.


This is nothing but the author attempting to justify his unethical decision to himself. I hope he lives long enough to recognise, and potentially correct, his mistake.


The only thing I got out of that was "we want money." There's no real justification for what they did. What's worse, and also condescending, is the crap about taking Ethos at their word.

So let me get this straight; you typed out all these words to hide your real intentions (you want money) and we're now supposed to trust you vouching for a private equity firm? Please. Get the hell out of here. Put some more effort into your schemes.


I come away from reading that completely convinced that the decision to sell .org will be a terrible one for internet users and .org name holders.


If the management of .org customers was as distracting as he claims (I believe it), it would have been better to, instead of selling it, open up the administration to bids where the private companies have to reach certain goals and ensure certain provisions. If the management company can't do it or they start breaking their contact, control reverts back to the Internet Society.


PIR already outsourced the .org registry operations to Afilias years ago


It is not only naive, there is the classic "appeal to authority" fallacy in the mix too! Someone wanted to badly do some damage control, which does not seem to have achieved it purpose.

And yes, as someone stated, privaty equity companies want to make money from their investments, believing anything else as their "goal" is utter foolish.


It's obvious the author and apparently their entire board didn't believe their role was an important one.

In the end it sounds like whoever was doing the voting ended up putting the wrong people in charge.

Would be useful to have a public reference listing the names of those who made this vote so future non-profits don't make the same mistake.


This is the first time in many years on HN I see HN commenters commented unequivocally 100% against the author.



What a fucking moron!

1. No, 26$ is obviously not a sane, let alone a reasonable price for a domain registration. For comparison, you can register .de for < 4 EUR/year, so at a price of 26$ this is redirecting 220 million dollars of funds that were donated for charitable work to definitely not charitable profit for these investors--or 160 million more than right now.

2. The price increase is capped at only 10% per year? Are you fucking kidding me? Do you seriously not have a clue how exponential growth works? .org has existed for 34 years, if you add another 34 years of increases of "only" 10%, you are at 255$ per year. Or, as he himself calculated, it's more than doubling the price in ten years, which would be just crazy.

3. "They promised they'd be good!" ... seriously? You seriously can not see the problem with a transaction where a profit-seeking entity obviously explicitly avoids actually promising anything (that is: making any of those "promises" legally binding)? After all, it is possible to actually promise all those things in a meaningful way, that's what the legal system is for.

4. "Give back to the .org community through a Community Enablement Fund" ... or in other words: Appropriate charitable donations where the donors have already decided what causes they should go to and redistribute them to their liking. Can anyone really be too stupid to see through this and be in a position to make such a decision?

5. "While it's true that running .org provided a relatively steady income stream, it effectively staked most of our revenue on a single business, and required a certain amount of our resources to be spent managing that business, distracting from the broader mission." ... WTF? And running it in the future will not require any resources? Does this guy not understand basic financial math either? Like, if you buy a business, you pay for expected profits, i.e., after you you have subtracted expected expenses, i.e., if you sell a business, you still "pay" for all the future expenses? Selling a business does not magically create money, it only shifts the cash flow to the present day. The only way selling a business can increase your cash flow is if the buyer increases prices or reduces costs.

It's all so obviously from the bullshitting playbook you can hardly believe anyone would actually believe any of these "arguments" to be of any value, when the path to actually guaranteeing all of these things that we are supposed to just believe is so obvious.


Limit price increases to 10% a year!!?!??! Tone deaf AF.

I cannot believe someone actually wrote that down.


Always remember that theese are the people in charge of running the internet.

I really hope he didn't have too much say in the important things at Let's Encrypt. Because statements like this really damage the little trust I have left in companys.


So basically his two reasons are: “they gave us money, and I think they’re worthy”


Please, Barnes' "reasoning" is not naiveté. Barnes and his colleagues understand exactly what they are doing. The Barnes article is evidence of nothing but contempt for its intended audience.


I wonder what Network Solutions thinks of this? If you register a .org through them, they offer 100 year registration for $999.

The registries do not allow a domain to be registered for more than 10 years in the future, so the way NS implements this is by initially registering it for 10 years for you, and then automatically registering an additional year each year.

That only works out for NS if prices don't rise too much over the next 100 years.

I haven't read their terms to see if they have some sort of escape clause to get out of the 100 year deal if prices rise too much.


Some thoughts on Network Solutions' 100 year offer:

The 100 year domain: legal or not? https://www.tnl.net/blog/2004/03/23/the-100-year-domain-lega...

100-Year Domain Renewals? https://yro.slashdot.org/story/04/03/23/0235244/100-year-dom...


Looks like OP is based in Washington D.C.

Guess he was feeling left out when it came to all the lobbying money and croney corruption.

Strange he never addressed the fact that a new non-profit wasn't set up to control the domain.


You can never take a corporation at its word. If you relied on promises that you obtained (limits on price increases, etc) you should have gotten all of that language into a legally binding contract. Even if current management of Ethos is committed to what you say they promised, management changes, companies run into trouble, and future management may come under pressure to extract more revenue.

Also, what's the justification for 10% annual increases? Their costs aren't going up faster than inflation.


There is a reason the author is on the board that gets to decide this. I wish the relevant people would just pocket the money and book a plane ticket to an offshore location, rather than bragging about it on social media. That way at least some people other than the hedge fund would get something out of this deal. I can understand simple corruption. I too need a fast-ish sportscar and a decently sized mansion to fuel my habits. But this, I cannot understand at all.


Judging by the numbers, you can guess they sold for somewhere in the $100m-$1B range. Hard to resist. And also known as corruption, when it comes to public services.


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