Private equity firm Ethos Capital acquires .Org Public Interest Registry from ISOC, questions linger

Amidst hushed and public questions, reports are rife that Private equity firm Ethos Capital has acquired the Public Interest Registry (PIR), which runs the .org domain used for non-profit organisations’ websites from the Internet Society ISOC.

PIR was created in 2002 and The Internet Society acquired the .org registry. While announcing the acquisition, Internet Society CEO Andrew Sullivan said that since the creation of PIR, the company has grown .org into the “largest purpose-driven domain” and claimed the organisation’s purchase by Ethos will provide the group with resources so it can “work to make the internet more open, accessible, and secure.”

ICANN, the organisation in charge of domain names, eliminated price restrictions for .org domains on 30 June the Verge points out. The decision followed a public comment period during which only six of 3,252 submitted comments favoured the removal of the price gap, according to Review Signal. This popular move however it seems made PIR more appealing to a for-profit firm. This is because just a day after ICANN killed the price cap, PIR wrote an “Open letter to the .org community” in which it said that it didn’t have any “specific plans” to increase prices for .org domains. But that commitment could change under a new ownership.

The acquisision move has been denounced by Internet freedom groups as well as ICANN’s decision to remove the price cap. Marc Rotenberg, president of the Electronic Privacy Information Center, and founding board member and former chair of the PIR, said he was “very disappointed” by the news.

Ethos Capital is a relatively new, obscure and unknown. In a public statement, Ethos CEO Erik Brooks said his company is “committed to ensuring complete continuity of PIR’s operations and enhancing the relationships PIR has established over the years,” adding that the company will continue “PIR’s longstanding partnerships and vendor affiliations to ensure domain operations run smoothly and without interruption.” Brooks was at Abry Partners until earlier this year. Abry Partners acquired Donuts and installed former ICANN President of Global Domains Akram Atallah in the top spot there. The firm might be tied to former ICANN CEO Fadi Chehadé as well who abruptly resigned from ICANN, to be its Senior Advisor on Digital Strategy.

Internet Commerce Association (ICA). has called for ICANN to withhold any approvals of the purported .Org Registry sale saying;

The original justification for awarding the .Org registry contract to ISOC was its public interest focus and commitments. If ISOC is no longer associated with the .Org registry, that justification for awarding the Registry Agreement no longer exists. Therefore, it would be reasonable for you to withhold your approval of the assignment to a private equity company.

ICANN has the contractual right to reasonably withhold approval of the purported sale pursuant to Section 7.5 of the .Org Registry Agreement and to terminate the Registry Agreement pursuant to Section 7.5(f) in the event of a consummated transaction.

The ICA urges the ICANN Board of Directors to properly fulfill its obligations to protect nonprofit registrants from the harm that will likely come from a private equity firm owning the cherished .Org registry, home of nonprofits.

Others industry leaders are also agaisnt the move,

“We built the .org domain with the specific goal of promoting the noncommercial use of the Internet,” Rotenberg told Gizmodo. “There are many models, including ICANN itself, that could allow for effective management of the domain by a non-profit corporation. There are critical elements of transparency and accountability that will be lost when the Public Interest Registry is acquired by a private equity firm.”

Rotengberg suggested that, “at the very least, the terms of the transaction should be made public and org registrants should be made aware of this transaction.”

Elliot Harmon, Activism Director of the Electronic Frontier Foundation, told Gizmodo the organisation has been critical of ICANN’s decision to update its agreement with the PIR and remove price caps for .org domains.

“The .org ecosystem is essential to the nonprofit community, and decisions affecting how .org domains are managed must be made with appropriate input from the entire nonprofit community,” Harmon told Gizmodo.

“None of us knew at the time that the Internet Society would soon sell PIR to a private equity firm,” Harmon added. “That only magnifies our concerns about the new registry agreement.”

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