Over 500 organizations and 18,000 individuals have signed a letter urging the Internet Society to stop the private equity takeover of the Public Interest Registry (PIR), the organization that manages the .ORG top-level domain. It’s rare that EFF, Greenpeace, Consumer Reports, Oxfam, the YMCA of the USA, and Human Rights Watch all speak out about a single issue, but the sale of .ORG affects every corner of the NGO sector.
The sale of PIR comes on the heels of a major change to the .ORG Registry Agreement (RA), the contract that outlines how the registry will be managed. The 2019 RA gives the registry owner significant new powers to set policies that would directly harm NGOs, including the power to set new enforcement processes to censor organizations’ speech as well as the ability to raise registration fees without a limit.
While ICANN (the Internet Corporation for Assigned Names and Numbers, the organization that oversees the registry system) was considering those changes, the public didn’t know that the Internet Society was about to sell the registry to a private equity firm. Just weeks after the registry was granted broad authority to prey on nonprofits, the Internet Society announced that it was selling the registry to a for-profit company with no history or trust in the nonprofit sector.
Censorship as a Service
One of the NGO community’s primary concerns is that the new RA lets the registry implement new processes to suspend organizations’ domains, and that a for-profit company is likely to take advantage of those powers if it becomes lucrative to do so.
In today’s global NGO space, fears of governments or other powerful players attempting to censor organizations’ speech are more serious than ever.
The new RA contains language about suspending domain names based on accusations of “activity contrary to applicable law.” We don’t know how Ethos and PIR plan to implement those policies, but we do know that many Internet companies have a poor track record when it comes to standing up to government demands to take speech down.
The new RA also gives the registry owner the ability to implement new enforcement processes to protect “the legal rights of third parties.” We have some evidence of how registry owners have used those powers in the past. In 2016, registry Donuts entered a private deal with the Motion Picture Association of America (MPAA) where it named the MPAA a “trusted notifier.” That means that the MPAA can accuse websites in the Donuts system of copyright infringement with the expectation that Donuts will suspend or block the domain name. That suspension takes place in secret without the opportunity for the website owner to defend herself or for a judge to evaluate whether copyright infringement actually took place.
We don’t know whether a for-profit Public Interest Registry—under the leadership of Donuts co-founder Jonathon Nevett—will enter such a partnership with the MPAA or other large copyright holders, but we do know that under the new Registry Agreement, there’s nothing to stop it.
There’s a long history of powerful entities taking advantage of companies’ content enforcement mechanisms in order to censor speech that’s critical of them. State actors in Vietnam and Syria abuse Facebook’s flagging process to censor political enemies. Saudi Arabia successfully pressures Medium and Snap to block journalists that criticize the government. It’s advantageous to government censors to use these extrajudicial means to silence critics rather than go through the courts: it’s cheaper, faster, and doesn’t leave a paper trail.
In today’s global NGO space, the risk of governments or other powerful players attempting to censor organizations’ speech is more serious than ever. The .ORG TLD deserves a steward who will stand up for NGOs’ rights even when it’s not profitable.
But at the price that Ethos Capital is paying for .ORG, can it afford to stand up for NGOs?
The Money Doesn’t Add Up
The NGO community’s two biggest fears about a for-profit takeover of .ORG have been that PIR will raise prices on .ORG registrations and that it will partner with powerful rightsholders to create a fast-track to censoring nonprofit websites. Both options could be highly lucrative for a private equity firm, especially one that just bought a registry it can’t afford to maintain.
Packet Clearing House (PCH)—the nonprofit that provides technical maintenance for .ORG—wrote a letter to ICANN last week (PDF) warning that the Public Interest Registry can’t afford to keep operating .ORG as a for-profit company. That’s for the simple reason that most of the funding PCH receives to run .ORG comes not from PIR, but from donations to PCH:
Under IRS tax law, tax-deductible donations to non-profits cannot accrue to the benefit of a for-profit. Therefore if .ORG is transferred to a for-profit entity, we cannot ask our donors to continue to subsidize its operation, 96% of .ORG’s current operational funding will disappear, and the reliability of its operation will sink from that of .COM and .NET to the least-common-denominator of commodity domains, which generally suffer several days of outage per year.
Given the registry’s $1.135 billion price tag, PCH calculates how much it would cost Ethos to run PIR without changing the price of .ORG registrations—or only raising it 10% a year, as PIR has claimed—and concludes that it is impossible to make a profit. The only way to make money, PCH claims, is to take the level of services provided far below what the quality of service that .ORG users expect. In PCH’s words, “There simply does not exist a price which simultaneously appeals to ISOC, is commercially viable, and does not sacrifice the stability and functionality of critical core functions of the Internet.”
ICANN Stop It
Fortunately, ICANN is taking action to review the sale. On December 9, ICANN requested additional information from PIR and Ethos Capital about “the continuity of the operations of the .ORG registry, the nature of the proposed transaction, how the proposed new ownership structure would continue to adhere to the terms of our current agreement with PIR, and how they intend to act consistently with their promises to serve the .ORG community with more than 10 million domain name registrations.” (Under the RA, ICANN has the right to review changes in ownership of the registry.) EFF wrote ICANN a letter this week applauding it asking for transparency and urging it to stop the sale. As we wrote in our letter,
The .ORG registry is unique. It is recognized the world over as the home of NGOs and other groups that act for the public good. Many .ORG registrants work to hold governments and corporations to account. They face all of the risks inherent in speaking truth to power, including becoming targets for censorship and repression.
.ORG is unique. It deserves a steward that won’t sell the NGO community out.
Please help us send a message to the Internet Society: if it can no longer steward .ORG, it must work with the NGO community to find a replacement that understands our community’s needs.
If you represent an organization that would be affected by the .ORG sale and your organization wants to be added to our coalition letter, please send us an email at email@example.com.