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ICA asks ICANN to block .Org private equity deal in damning letter

Group calls out ICANN’s “terrible blunder”.

Logo for .org domain, featuring a blue circle with white letters spelling ORG

Internet Commerce Association is asking domain overseer ICANN to block the sale of the .Org registry to Ethos Capital.

It sent a damning letter (pdf) to ICANN today that states what many observers are thinking. In part:

Surely you can now appreciate the terrible blunder that you have made. Crucial policy decisions that have billion-dollar ramifications and which affect the stability of the Internet must be the subject of robust Board involvement and not left to ICANN staff.

If you were led to believe that removing price caps on .Org domain names was a sound approach because the registry would remain in the hands of a nonprofit foundation, you have clearly been misled. If you were led to believe that despite being the effective owner of the .org registry, you were somehow forced to let your service providers tell you how much they can charge, instead of the other way around, you have been led astray. If you have been told that .Org does not have market power within the nonprofit sector, you have been led astray. If you have been told that competition from other gTLDs will constrain .org prices, you have been led astray.

Section 7.5 of the registry agreement between Public Interest Registry and ICANN states:

Except as set forth in this Section 7.5, neither party may assign any of its rights and obligations under this Agreement without the prior written approval of the other party, which approval will not be unreasonably withheld.

The question now is: would it be reasonable for ICANN to withold approval of the transfer of the .org registry agreement?

ICANN has a history of wimping out in fights. But given the blowback it is getting and will get for many years from this deal, it might be one of those times it steps up.

The letter concludes:

If your miscalculation of awarding a perpetual, no-bid agreement – lacking any price caps whatsoever – was premised on the registry remaining in the hands of an organization serving the public interest, the pending sale to a private equity firm should cause you to reconsider your approach. Fortunately the purported sale of the .Org registry affords you an opportunity to withhold approval, terminate the Registry Agreement in respect of any consummated transaction, and put the contract out for competitive bid.

Where is the ICANN Board when it comes to safeguarding the interests of nonprofit registrants?

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Author: Andrew Allemann

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