What’s in a name? As we all know, in the realm of the Internet your domain name, be it .com, .edu, .org, or .uk, is shorthand for the kind of work your organization does or where it operates. In particular, the .org domain has become synonymous with the nonprofit sector and its charitable endeavors. Thus, it comes as no surprise that the recent sale of the .org domain to a private equity firm has set off alarm bells in the nonprofit community. What’s the reason behind this sale, and how will it affect the millions of organizations registered under this domain?
Although the .org domain dates back to the earliest days of the Internet, since 2003 this domain has been managed by the Public Interest Registry (PIR), a nonprofit organization established by the Internet Society for this very purpose. Since that year, the number of organizations registered under the .org domain has grown from 2.6 million to over 10.3 million. According to the PIR website, “From small, local groups to huge, global foundations, a diverse range of noncommercial organisations use .ORG to advance their missions.”
Now the private equity firm Ethos Capital is set to buy the PIR, a sale under which PIR would cease to retain its nonprofit status, transferring decision-making power over the .org domain to a for-profit entity. In a letter addressed to the President and CEO of the Internet Society, a growing list of over 170 organizations have called for the sale to be stopped, arguing that the .org domain should be overseen by a trusted leader who can ensure that the non-governmental community has input into decisions regarding the domain.
The Save.ORG letter raised concerns that the sale would lead to price increases for .org registration fees, which would “put many cash-strapped NGOs in the difficult position of either paying the increased fees or losing the legitimacy and brand recognition of a .ORG domain.” Such concerns have reverberated across the .org community, as a company with monopoly power over precious Internet real estate such as the .org domain could decide to charge exorbitant rents.
A closer examination of the events leading up to this sale seems to lend credence to such fears. In June of 2019, the Internet Corporation for Assigned Names and Numbers (ICANN), in charge of coordinating the Internet’s naming system, decided to remove price ceilings on .org domains, a move which set the stage for eventual fee hikes. Just the month before, the PIR had responded to concerns in an open letter to the .org community, asserting that it had no intentions of raising prices in the foreseeable future. “Public Interest Registry is the non-profit registry operator behind .ORG. We are different. We are mission based and not every decision is a financial one; we are not just driven by the ‘bottom line.’” Given this, it is no wonder that the announcement six months later of the closed-door deal to sell PIR to a private equity firm has ruffled some feathers in the nonprofit community.
Opening the Doors to Censorship
In addition to raising questions about fee hikes, the Save .ORG letter, signed by organizations ranging from the National Council of Nonprofits to the Girl Scouts, points out that the 2019 .ORG Registry Agreement gives the registry powers that could be used to harm non-governmental organizations.
The letter states that the new agreement allows PIR to craft Rights Protections Mechanisms (RPMs) without first seeking input from the .org community, which may lead to the censorship of perfectly legal nonprofit activities. The letter also notes that under the new agreement, the registry has the authority to suspend domain names based on claims of illegal activity, noting that governments often use such claims to deliberately target civil society organizations.
According to Jacob Malthouse, Co-Founder of the .eco domain and former Vice President at ICANN, “The new RPMs are way more aggressive. There is a presumption of guilt. It is much easier to weaponize them. Why did .ORG unilaterally opt into them? Why didn't they consult with the community first?”
The Electronic Frontier Foundation, which has also spoken out against the sale, explains that the suspension of a domain name disrupts anything associated with that name, whether it is a website, app, or email address. “That power lets registries exert influence over speech on the Internet in much the same way that social networks, search engines, and other well-placed intermediaries can do. And that power can be sold or bartered to other powerful groups, including repressive governments and corporate interests, giving them new powers of censorship.”
In fact, recent reports by Freedom House reveal that global freedom has been on the decline for 13 years straight, with these declines also extending to the realm of cyberspace. According to Freedom on the Net 2018: The Rise of Digital Authoritarianism, “Digital authoritarianism is being promoted as a way for governments to control their citizens through technology, inverting the concept of the Internet as an engine of human liberation.” The report cites examples such as Egypt, which blocked around 500 websites in an effort to curb dissent, including those of well-known human rights organizations.
Questionable Ties in a Closed-Door Sale
Complicating the matter is the fact that there appear to be ties between the newly-established Ethos Capital and the other entities involved in the opaque .org sale.
First, there are the connections between ICANN and Ethos Capital. One of Ethos Capital’s two listed employees is Nora Abusitta-Ouri, Chief Purpose Officer, who previously served in a number of positions at ICANN, including that of Senior Vice President. In addition, the former CEO of ICANN, Fadi Chehade, who is not listed as an Ethos Capital employee, also seems to have ties to the company. According to an article in The Register, it was Chehade who registered Ethos Capital’s domain name back in May of 2019, the same month of the company’s registration in Delaware. In addition, following his departure from ICANN, Chehade worked at the same private equity firm (Abry Partners) as then managing director Eric Brooks, the current CEO of Ethos Capital.
Questions have also been raised about how far back the Internet Society had been involved in talks on the sale. According to The Register, the Internet Society, which now stands to benefit from the sale of the PIR through the receipt of a hefty endowment, established the Internet Society Foundation in February of 2019. However, the Internet Society told The Register that they were “first approached by Ethos Capital in September.”
The Register article also notes the “long and ongoing relationship between PIR CEO Nevitt and those behind Ethos Capital.”
Expressing his concerns about the sale, Rick Cohen, Chief Communications Officer/Chief Operating Officer at the National Council of Nonprofits, said, “The entire process has not been transparent and it seems that everyone except for the principals here is against it. Multiple chapters of the Internet Society have come out against it. Senator Ron Wyden has indicated concern. Even Tim Berners-Lee, inventor of the World Wide Web, has expressed concerns about this sale."
In a video call which took place on December 5, 2019, representatives of Ethos Capital, the Internet Society, and PIR sought to address the concerns of the .org community, which included representatives from the Nonprofit Technology Network (NTEN), the National Council of Nonprofits, and the Electronic Frontier Foundation, to name a few.
Erik Brooks, Founder and CEO of Ethos Capital, and the only participant not to appear on video, made assurances that the company had no intention of raising prices beyond historic levels, meaning no more than a 10% increase annually. He also asserted that the removal of price caps did not enter into the decision to purchase PIR. However, when pressed repeatedly by members of the .org community as to whether his company would enter into a legally-binding agreement on price caps, Brooks made no promises, stating that they were looking into some “mechanisms.”
Reacting to the call, Mr. Cohen said, “I came in with questions and doubts, and I left with even more. Their answer about looking into mechanisms on things was a non-answer. As we noted a few times, much of what’s been said by Ethos is ‘trust us.’ Well, that doesn’t work when they have only existed for six months. That doesn’t work when they spring up overnight (and) when the mechanisms protecting nonprofits have been torn away, despite 3,200+ comments against the changes and only 6 comments in favor.”
It was reported that the sale of the .org registry to Ethos Capital came at a hefty price tag: $1.135 billion to be exact. Currently, the annual fee per organization is $9.93 per year, which generates about $100 million in annual revenue for .org, excluding expenses. If the former price caps were to be disregarded, Ethos Capital could expand the .org revenue exponentially. Mr. Cohen pointed out, “Even if they stick to their stated plan of raising prices by an average of 10 percent per year, that would mean more than $750 million dollars diverted from the work of nonprofits in communities around the world right into the pockets of investors.”
During the call, Andrew Sullivan, President and CEO of the Internet Society, seemed to downplay the importance of the .org domain to the nonprofit community. He stated, “It’s not true and has never been true that .org was exclusively for nonprofits,” citing the fact that there are no requirements for a .org registration. A recent op-ed in the NY Times entitled “The Meaninglessness of the .Org Domain” argues that the domain has serious shortcomings, as many groups with questionable motives have exploited the trust associated with the .org label.
Responding to Mr. Sullivan’s remarks, Amy Sample Ward, CEO of NTEN, commented, “There are so many reasons why nonprofits around the world rely on the .org domain and the idea that it isn't an exclusive domain and that the lack of exclusivity means it isn't worthwhile to the sector is not only absurd but also directly negates the very worth they have put into the sale.”
Mr. Malthouse emphasized the importance of what the average person on the street thinks: “Apple Computers can trademark ‘Apple’ because enough people know it as a brand, not just a fruit. If you asked 10,000 people ‘what is .org for’ I bet most would say non-profit websites. It has the same iconic status.”
When asked about the ideal outcome of the Save.ORG letter, Mr. Malthouse suggested, “Stop the sale, hit reset. Have a public discussion about what to do with one of the most important trust marks on the internet.”
Given the fact that this sale would give Ethos Capital power to substantially raise .org domain fees and censor the speech of organizations, nonprofits need to remain vigilant about how the Public Interest Registry sale may affect them. Concerned organizations can add their signature to the Save.ORG letter, and encourage their constituents to sign the Electronic Frontier Foundation’s online petition for individuals opposed to the sale.