Internet Society CEO: Most people don't care about the .org sell-off – and nothing short of a court order will stop it

Interview El Reg has quizzed Andrew Sullivan, the president and CEO of the Internet Society (ISOC), about his organistion's decision to sell the non-profit .org registry to private equity outfit Ethos Capital.

We have previously covered the controversy over the proposed sale, the continued failure of ISOC and DNS overseer ICANN to answer detailed questions, and efforts by both to push the deal forward even while opposition to it grows.

Your correspondant asked Sullivan whether he expected the amount of criticism from the internet community that has erupted in recent days.

"I did expect some people to be unhappy with the decision, I expected some pushback," he told The Register, adding: "But the level of pushback has been very strong."

He was aware, he says, that people would not like two key aspects of the decision: the move from a non-profit model to a for-profit one; and the lack of consultation. He had explanations ready for both: "The registry business is still a business, and this represented a really big opportunity, and one that is good for PIR [Public Interest Registry]."

As for the lack of consultation: "We didn't go looking for this. If we had done that [consulted publicly about the sale .org], the opportunity would have been lost. If we had done it in public, it would have created a lot of uncertainty without any benefit."

Overblown

But when we pressed him on the fact that the concerns seem much deeper and broader than that – one ISOC Chapter has accused the organization of "severely harming" its reputation "by even contemplating this transaction" – he rejected the idea.

"I think claims that there has been an outpouring of support against the sale are overblown. If you look there is a relatively small number of people complaining. We may be overstating the feeling; most people haven't noticed. Most people don't care one way or another."

It's hard to simultaneously argue that there was no need for consultation and then claim that the lack of responses indicates implicit approval, we note. More importantly, though, what about the 10 million registrants of .org, the vast majority of which are unlikely to hear about the sale at all and who likely bought their .org domain precisely because it represented a non-profit ethos?

Sullivan is, again, dismissive. "Well, there's the three million who registered their names prior to the transfer from Verisign [the .org was transferred to ISOC in 2003]. And of the remaining seven million, only a small portion would have taken that [the non-profit side of PIR] into consideration. Most people looking for a domain name get it through a company that is overwhelmingly commercial." He later notes that "a good number" of .org registrants are domain name speculators.

In recent days, Sullivan and ISOC have been pushing back against the assertion that the .org registry is strongly linked to non-profit organisations. It has pointed out that in 2002, when PIR was created, it was not initially a non-profit – that only came the next year in 2003. It has even referenced a document from 1994 – RFC 1591 – in which .org was described as "the miscellaneous TLD for organizations that didn't fit anywhere else".

This effort to rewrite a widely held view that .org is synonymous with non-profits is perhaps the strangest part of ISOC's communications around the sale, akin to gaslighting. It could be argued that literally no one outside the boards of ISOC and PIR are maintaining that .org is not seen as an online home for non-profits.

Responsibility

Doesn't ISOC have some responsibility for those registrants, especially if they face huge price increases as a result of the registry becoming for-profit?

"It's a market," he responds, noting that "PIR has always been a business from the get-go," before questioning the assumption that .org prices will go up much. "We wouldn't do it [raise prices] because it would be bad for us," he says, making the argument that if prices go up too far, people will simply move to a different domain name.

This argument – that the domain name market is highly competitive and fluid – is the same one that ICANN used to justify the decision to remove price caps on .org. It is largely based on observations made in a 10-year-old economic study [PDF] commissioned by ICANN, one that only considered whether price caps should be imposed on new entrants to the market, rather than existing registries.

The average size of the 1,000+ new internet extensions added to the internet in the past six years is 2,500 domains; .org is 4,000 times larger with 10 million names.

While it is true that there is significant churn in the domain name market and that it is highly price-sensitive, the claim that organisations that have established themselves at a specific internet address for a decade or longer would shift to a different address if the price of their domain went up significantly is patently absurd given that the average price of a domain name is $10 and the cost of moving a mid-size organisation to a new internet address would be hundreds of thousands of dollars.

Established internet registries typically benefit from an 80 per cent renewal rate and everyone in the domain name industry accepts that the cost of pulling customers away from those names is so high that it is rarely worth the effort. And yet both ICANN and ISOC continue to repeat the claim of a fluid registry market to defend their actions.

Times we live in

It's important to provide all this context because it has become entirely clear in the 15 minutes spent talking to Sullivan so far that he – and the ISOC board – have made up their mind about selling the .org registry. Any argument against the move is met with counter-argument, even when it is demonstrably incorrect. Its mere stating is sufficient.

I ask him if he thinks Ethos Capital will stick to the previous price cap of a 10 per cent yearly increase on .org prices when the entire reason it is buying the registry is because there are no longer any price caps.

"I don't see any reason to believe that they wouldn't," he responds before noting that Ethos Capital has said it will apply for B-corp status. I feel obliged to point out that we both know this is a largely meaningless distinction with no legal implication or value in the same way as being registered as a non-profit.

The conversation starts to feel like a classic Thanksgiving exchange where exchanges between friends and family turn into arguments with rigid positions. And the truth is that ISOC and the broader internet community are like family – well-meaning, well-intentioned, largely supportive if a little stubborn and occasionally dysfunctional.

I ask Sullivan if there is anything at this point that will persuade him or ISOC to call off or delay the sale. Short of ICANN using its contractual right to halt the transfer or a court order, the answer is no. Not even ISOC members or chapters? He points out that they are represented on the ISOC board, which has unanimously approved the deal (with one recusal).

All about the green

Just why is ISOC approving this deal, going back on nearly two decades of non-profit stewardship and infuriating many of its ardent supporters? Is it just money?

Yes and no.

"The lump sum is definitely a benefit," he admits, before arguing passionately about ISOC's core missions. "The work ISOC does is focused on policies and connecting the unconnected. There is already a community organisation that covers domain names – and that's ICANN."

Nothing about the sale would change or impact ISOC's mission, he argues, but it would provide it with the resources to do a lot more and provide a more stable and diversified source of income. He also agrees that ISOC's limited resources have meant that he hasn't been able to focus on the .org registry or put sufficient effort into its .ngo and .ong extensions aimed at non-governmental organizations.

As we move to the possibilities, Sullivan's defensiveness lifts and his obvious passion for ISOC's mission emerges. Suddenly it becomes clear how, within the confines of the ISOC board, what seems unthinkable to some – that ISOC would sell off its core asset to a set of corporate raiders backed by billionaires – the .org sale made sense.

We still don't know how much Ethos Capital is offering for .org. Sullivan indicates that that information is likely to come out soon due to external pressures – i.e. someone, probably ICANN, threatens to kill the deal unless there is some degree of transparency.

But the sad truth is that it is going to be a big sum: big enough for ISOC to think the unthinkable; big enough that Sullivan thinks it is worth taking the heat for the next year.

And big enough that he – and the rest of the ISOC board – are going to allow themselves to be charmed by Ethos Capital and believe just enough in its transparently hollow promises that they won't feel bad until after they've cashed the check and embarked on new plans that have nothing to do with internet registries. ®