[ih] the .ORG nonsense machine rises from the dead, patents and public stewardship

[Bill Woodcock]

While I generally hold John Levine in the highest esteem and value his opinions...

> On Feb 4, 2024, at 20:31, John Levine via Internet-history <internet-history at elists.isoc.org> wrote:
> It appears that John Gilmore via Internet-history <gnu at toad.com> said:
>> ISOC tried to sell that monopoly for a billion dollars to a
>> private-equity player (in concert with a couple of high-level people who
>> had bolted from the ICANN monopoly to make a killing for themselves).
>> The only credible plan to make back the billion for the investor was to
>> then jack up the prices of .org domains for every nonprofit in the
>> world. ...
> I was on the ISOC board at the time, and that is malicious bullshit.

This is not malicious bullshit, it is a very conservative and generous summary of the facts, which tactfully refrains from mentioning the other side of the “business plan”: monetizing the DNS queries of people contacting .ORG domain holders.

So, in this instance, John Gilmore is a disinterested party relating facts, and John Levine is an interested party proffering what could most charitably be characterized as revisionist happy-talk.

> ISOC's dependence on an ICANN contracted registry is a huge conflict

Yup.

> The stuff about price increases is self-evidently ridiculous to anyone who knows how gTLD pricing works

Nope.  

https://www.icann.org/en/public-comment/proceeding/proposed-renewal-of-org-registry-agreement-18-03-2019

“The price cap provisions in the current .org agreement, which limited the price of registrations and allowable price increases for registrations, are removed from the .org renewal agreement.”  

That actually happened.  Not by accident, and not without the expectation that it could be exploited.

> ...investors looking for cashflow and diversification. PIRs current pricing would have done that just fine, paying them about 5% in an era where bonds paid 2%.

…and that is absolutely not how private equity works.

https://www.icann.org/en/system/files/correspondence/woodcock-to-icann-board-22jan20-en.pdf

"Ethos has stated that it was able to secure only $360M in debt financing from real banks, and that the remainder of its $1.135B purchase price for PIR had to be met from private equity. Assuming an average bank lending interest rate of 5%, and the current average PE return rate of 22.6%, financing costs from the two sources amount to $18M/year and $175M/year, respectively, a total
of $193M/year. ISOC's current profit margin is $70M/year, but this includes a $29M/year subsidy that would not exist after a transfer to for-profit ownership. So, if .ORG were to be operated sustainably with no other changes, Ethos would be left with a net $152M annual shortfall. 

Ethos is presumably planning to trade a portion of this insolvency for instability (in the form of increased communications downtime for .ORG registrants); a portion for increased rent extraction (in the form of higher prices, less value for more money); and a portion for extraction of value from registrants via other mechanisms. 

The Ethos website lists four other companies it has acquired. All are startups in the data-brokering business, each exploring different methods of monetizing personally identifiable information (PII). Together, they form a pipeline of sorts, which when filled with PlI would produce money. The .ORG registry would fill the head of Ethos's pipeline.”

Unfortunately, two of those three came to pass.

> ISOC is stuck with PIR forever.

Yes, one can only hope that ISOC manages to free itself of its golden shackles, and becomes at last able to prove its value to the IRS and the world.  The mind boggles at the difficulty of ISOC’s predicament.  How could they possibly rid themselves of this burden?  

Actually, John (Gilmore) suggested a few proven mechanisms:

> On Feb 4, 2024, at 18:12, John Gilmore via Internet-history <internet-history at elists.isoc.org> wrote:

> ...a private foundation rather than try to continue as a 501(c)(3) public charity.  Or, ISOC could price .org domains more cheaply, rather than raking off a big premium for its own self-interest, at which point the money flow from PIR would lessen. Once it was less than twice as much as what ISOC collects as general public support, their public-charity status would be secure.  Wouldn’t that be a great outcome?

The happy-talk also avoided John’s conclusion:

> If I had valuable intellectual property to preserve for the freedom and benefit of the Internet community, I would recommend choosing its steward wisely, rather than defaulting to giving it to ISOC.


Indeed.  The Internet Archive springs to mind, among many others.

                                -Bill

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