ICANN demands transparency from others over .org deal. As for itself… well, not so much

Do as we say not as we do, DNS overseer sternly tells Internet Society

invisible

Three weeks after the Internet Society announced the controversial sale of the .org internet registry to an unknown private equity firm, the organization that has to sign off on the deal has finally spoken publicly.

In a letter [PDF] titled “Transparency” from the general counsel of domain name system overseer ICANN to the CEOs of the Internet Society (ISOC) and .org registry operator PIR, the organization takes issue with how the proposed sale has been handled and notes that it is “uncomfortable” at the lack of transparency.

The letter, dated Monday and posted today with an accompanying blog post, notes that ICANN will be sending a “detailed request for additional information” and encourages the organizations “to answer these questions fully and as transparently as possible.”

As ICANN’s chairman previously told The Register, the organization received an official request to change ownership of PIR from ISOC to Ethos Capital in mid-November but denied ICANN’s request to make it public.

The letter presses ISOC/PIR to make that request public. “While PIR has previously declined our request to publish the Request, we urge you to reconsider,” the letter states. “We also think there would be great value for us to publish the questions that you are asked and your answers to those questions.”

Somewhat unusually it repeats the same point a second time: “In light of the level of interest in the recently announced acquisition of PIR, both within the ICANN community and more generally, we continue to believe that it is critical that your Request, and the questions and answers in follow up to the Request, and any other related materials, be made Public.”

Third time lucky

And then, stressing the same point a third time, the letter notes that on a recent webinar about the sale organized by concerned non-profits that use .org domains, ISOC CEO Andrew Sullivan said he wasn’t happy about the level of secrecy surrounding the deal.

From the ICANN letter: “As you, Andrew, ISOC's CEO stated publicly during a webcast meeting... you are uncomfortable with the lack of transparency. Many of us watching the communications on this transaction are also uncomfortable.

“In sum, we again reiterate our belief that it is imperative that you commit to completing this process in an open and transparent manner, starting with publishing the Request and related material, and allowing us to publish our questions to you, and your full Responses.”

Here is what Sullivan said on the call [PDF]: “I do appreciate, however, that this creates a level of uncertainty, because people are uncomfortable with things that are done in secret like that. I get it. I can have the same reaction what I'm not included in a decision, but that is the reason we have trustees. That's the reason that we have our trustees selected by our community. And I believe that we made the right decision.”

As ICANN noted, there remain numerous questions over the proposed sale despite both ISOC and Ethos Capital holding meetings with concerned stakeholders, and ISOC’s CEO agreeing to an interview with El Reg.

One concerned .org owner is open-source organization Mozilla, which sent ICANN a letter noting that it “remains concerned that the nature of the modified contractual agreement between ICANN and the registry does not contain sufficient safeguards to ensure that the promises we hear today will be kept.”

It put forward a series of unanswered questions that it asked ICANN to request of PIR. They include [PDF] questions over the proposed “stewardship council” that Ethos Capital has said it will introduce to make sure the rights of .org domain holders are protected, including its degree of independence; what assurances there are that Ethos Capital will actually stick to its implied promise that it won’t increase .org prices by more than 10 per cent per year; and details around its claim that PIR will become a so-called B Corp - a designation that for-profit companies can apply for if they wish to indicate a wider public interest remit.

Connections

While those questions dig into the future running of the .org registry, they do not dig into the unusual connections between the CEOs of ISOC, PIR and Ethos Capital, as well as their advisors.

The CEO of ISOC, Andrew Sullivan worked for a company called Afilias between 2002 and 2008. It was Afilias that persuaded ISOC to apply to run the .org registry in the first place and Sullivan is credited with writing significant parts of its final application. Afilias has run the .org back-end since 2003. Sullivan became ISOC CEO in June 2018.

The CEO of PIR, Jonathon Nevett, took over the job in December 2018. Immediately prior to that, he was Executive VP for a registry company called Donuts, which he also co-founded. Donuts was sold in September 2018 to a private equity company called Abry Partners.

At Abry Partners at the time was Eric Brooks, who left the company after 20 years at some point in 2019 to become the CEO of Ethos Capital - the company purchasing PIR. Also at Abry Partners at the time was Fadi Chehade, a former CEO of ICANN. Chehade is credited as being a “consultant” over the sale of PIR to Ethos Capital but records demonstrate that Chehade registered its domain name - ethoscapital.com - personally.

Chehade is also thought to have personally registered Ethos Capital as a Delaware corporation on May 14 this year: an important date because it was the day after his former organization, ICANN, indicated it was going to approve the lifting of price caps on .org domains, against the strong opposition of the internet community.

Now comes the ICA

As well as Mozilla’s questions, there is another series of questions [PDF] over the sale from the Internet Commerce Association (ICA) that are pointed at ICANN itself.

Those questions focus on the timeline of information: what ICANN knew about the proposed sale and when; and whether it was aware of the intention to sell PIR when it approved lifting price caps on the .org registry.

It also asked various governance questions about ICANN including why the renewed .org contract was not approved by the ICANN board, the involvement of former ICANN executives, including Chehade and former senior vice president Nora Abusitta-Ouri who is “chief purpose officer” of Ethos Capital, and what policies ICANN has in place over “cooling off periods” for former execs.

While going out of its way to criticize ISOC and PIR for their lack of transparency and while claiming in the letter to ISOC that “transparency is a cornerstone of ICANN and how ICANN acts to protect the public interest while performing its role,” ICANN has yet to answer questions over its own role.

Equally, ICANN has yet to respond to a series of questions provided by The Register over a week ago, including how it interprets the language in the .org contract over approval of changing the operator i.e. whether ICANN has to grant permission for the sale to Ethos Capital to go ahead and on what grounds it can refuse, and whether a challenge to its contract renewal through its accountability processes (by Namecheap and the EFF) will delay that decision until it is resolved.

And more questions

There are a wide range of other questions that Ethos Capital, ISOC, PIR and ICANN are either refusing to answer or are ignoring.

While it eventually emerged that Ethos Capital had offered $1.14bn for the rights to .org and that most of that money came from the investment vehicles of American billionaires, we still have no idea who sits on the company’s board and neither do we have any details of the financial arrangement it has with PIR/ISOC.

ISOC claims it carried out an in-depth financial review of the offer but it has yet to provide any details of that review, or explain how it was able to make such an enormous strategic decision in just two months: ISOC derives 90-95 per cent of its entire income from the .org registry but according to the timeline offered by its board, it decided to sell off its only asset and stake the entire future of the organization on a single transaction. It also decided to make that decision entirely in secret.

ISOC claims it was first approached by Ethos Capital in September (it hasn’t said when precisely) and it announced the sale on November 13. ISOC’s Board typically meets for one or two days but on its website it claims to have held a Board meeting for 14 straight days (October 28 - November 10).

That not only seems extremely unlikely given the fact that almost all those on the ISOC board are uncompensated and work just five hours per week for the organization (according to tax documents), but the details on ISOC’s website over this monster meeting are almost non-existent.

Long-standing problem

As for ICANN, for more than 20 years it has been accused of lacking in sufficient transparency or accountability to the extent that the US government imposed a specific committee called the Accountability and Transparency Review Team (ATRT) to review the organization on those two topics as a condition for its remaining in charge of the internet’s root zone.

The ATRT is written into ICANN’s bylaws and a third version of the committee is expected to post its draft report for public comment later this month.

In this case, ICANN has still yet to explain why it decided to ignore 98 per cent of the 3,600 comments that argued against lifting .org price caps. Or why that decision was made by staff and not the board, despite it being of significant interest to the community.

Or if ICANN views PIR’s non-profit status as integral to the .org registry. Or if it will carry out an investigation in what happened in this case. Or why it has not carried out any economic analyses of its contract renewals despite it being clear that the .org decision was literally worth over a billion dollars.

Andrew Sullivan

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

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ICANN has also not answered questions over why it has still not created a standing committee for its Independent Review Process (IRP), despite being told to do so several years ago. It has yet to explain why it has not implemented revolving-door protections that would prevent its executives from walking straight into industry jobs (something that the US government first warned about 2011 and reiterated in October 2018).

It has not explained why it dropped a second review request over the .org contract renewal from a meeting last month and rescheduled it for a meeting on December 12. It has not explained why it continues to allow its executives and board members to hold shares in companies whose value is highly dependent on decisions they make, or why it doesn't even require them to disclose those holdings.

And if you want to review a long list of all the times ICANN has refused to divulge information there is an entire webpage that shows the community’s efforts to use its Documentary Information Disclosure Policy (DIDP) to request basic documentation.

In short, while ICANN should be applauded for making it clear that it expects ISOC and PIR to disclose more information about the sale of .org, and to answer questions made over the sale in public, when it comes to transparency, both organizations could be forgiven for following ICANN’s lead and providing little or no information beyond what they wish to.

ICANN has not published the list of questions it has asked PIR to answer. ®

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