ICANN Blocks .org Domain Sale: Why This Matters, in Ten Points

The controversial sale would have left non-profits at risk to price gouging and censorship.

By Jamshed Avari | Updated: 1 May 2020 16:36 IST

Photo Credit: Twitter/ICANN

Highlights

Multiple protests erupted when the proposed sale was first announced
ICANN expressed an interest in protecting the non-profit community
However, ICANN had killed a price cap on .org domain names last year

ICANN, the Internet Corporation for Assigned Names and Numbers, on Friday decided to block the sale of the organisation that oversees the .org top-level domain to a private equity investment company, saying it would “create unacceptable uncertainty” in the future. ICANN is a non-profit American organisation that regulates standards for how website addresses work, so that the Internet can function as a global platform used by anyone in the world across billions of devices.

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The core functions of the organisation include overseeing the Domain Name System (DNS), which allows us to use names such as www.google.com, rather than numerical IP addresses. Computers need IP addresses to identify and retrieve information from specific servers, but people can't be expected to remember random strings of numbers. ICANN determines and enforces the standards that translate IP addresses into website names. It also manages top-level domains (TLDs), such as .com, .org, .net, etc, and appoints third parties to administer them, to maintain its own focus and independence.

On Friday, ICANN blocked the proposed sale of Public Internet Registry (PIR), a non-profit organisation that currently administers the .org domain, to a private equity investment company called Ethos Capital. The sale was valued at $1.133 billion and would have turned PIR into a for-profit company with debt obligations.
ICANN stated that it made its decision because the proposed sale would have changed PIR's fundamental nature and purpose, from protecting the interests of the .org community to serving a for-profit corporation.
This is important because many stakeholders had feared that that .org website name registrations and renewals could become much more expensive. This might have forced non-profits to spend more or risk losing their established Internet presence and voices, leaving them vulnerable to corporate censorship.
The Electronic Frontier Foundation, amongst many other groups including Wikimedia, Consumer Reports, OpenMedia, Access Now and Greenpeace, urged ICANN to block the sale. One petition gathered over 26,000 responses, and the Attorney General of California also voiced similar concerns.
.org (short for “organisation”) is one of the original seven TLDs and was intended for use by non-commercial entities such as non-profit organisations. That restriction has been somewhat loosely enforced, with .org domains generally available for purchase by anyone who wants one.
Since 2013, the .org TLD has been administered by Public Internet Registry, a non-profit organisation formed specifically for this purpose by an Internet standards advocacy group called the Internet Society (ISOC). PIR has since been the ISOC's primary source of funding.
ISOC announced its plan to sell PIR to Ethos Capital for $1.133 billion in late 2019. The money would have been used to form an endowment fund which ISOC said would be a more stable long-term source of income to support its mission of advocacy for global Internet standards and infrastructure.
Prior to February 2019, ICANN enforced a price cap of $8.25 (approximately Rs. 625) on .org domain names with a 10 percent limit on price increases for renewals. ICANN had solicited public comments on a proposal to scrap this cap, and over 98 percent of the feedback was negative, according to reports, but it went ahead anyway. PIR had said at the time that it was not planning any price changes, but Ethos Capital might not have the same priorities, despite claiming to.
Several former ICANN members currently serve as executives of Ethos Capital and one of its subsidiaries, a domain name registrar called Donuts. According to the EFF, Ethos Capital refused to disclose details of how it would manage PIR's debt and profits, and has called its management structure “Byzantine” and “suspicious”.
The EFF has termed ICANN's decision as “a stunning victory” for non-profit Internet users, but has cautioned that ICANN still needs to find a new home for the .org TLD since ISOC and PIR have demonstrated a lack of commitment to it.

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