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And extracting money from nonprofits, while an easy point to communicate, is just the tip of the iceberg - there's a horrible conflict of interest between the adoption of .org and the mission of .org now.

As I've written before, what happens if a large country says "we will block .org domains, or .org DNS resolutions, if you don't suspend an activist organization's domain globally?" Beforehand, the Internet Society could say "we don't believe that precedent is in the interest of the global community overall, and your threat is empty to us."

But now, there's both a profit motive AND an obligation to shareholders to take down the domain GLOBALLY, as the value of the company would decrease if .org domains were blocked to a large market. And, while I'm not a lawyer, I believe this decision would be permitted by the new 2019 rules. This gives censors tremendous leverage to spread censorship and chilling effects around the globe. DMCA takedowns will seem like child's play.

In the face of losing a large market opportunity, if even Google, with all its market power and all its public scrutiny, is willing to build things like Dragonfly, how can we take Ethos at its word?

I'm all for the role of private equity in helping companies to grow - while there are certainly firms that operate in bad faith, the PE industry overall doesn't deserve the bad rap it gets in the media. Of all the things that the private market can do to drive innovation, the existence of PE is critical. (Not every company should IPO or be gobbled up by a strategic.)

But IMO this sale should absolutely be disallowed from a humanitarian and international security perspective. The incentives are just too badly aligned.

The ISOC-Ethos deal timeline is a conflict of interest story with executive musical chairs:

https://www.privateinternetaccess.com/blog/2019/11/isoc-pir-...

It stinks.

Sounds like what happens with drugs. The big name pharma companies avoid getting their names dirty by selling drugs to corps willing to bump prices past the absurd.

I sure hope the author got a kickback since his decision was not for the benefit of others. Only worse thing than corrupt board member, is a fool given authority.

Why could the Internet Society not have been the one raising prices by 10% ad infinitum. Need capital? Borrow it and pledge .org as security. There’s basically unlimited funds available in this manner because the .org cashflow stream is as reliable as anything.

How naive indeed. What a shame.

Because it's harder to justify being the person who raises prices that much, while claiming to "enable the internet for all" or whatever their mission statement is. With the right PR, you can sell out and try and keep a straight face.

Seems like they missed the right pr then?

In the short term, sure. But in the long term, they have a pile of cash they're not giving back and somebody else (who doesn't give a shit) takes the blame.

Outsourcing “being the bad guy” is fairly common in the business world.

Because they are a non-profit who can't pay themselves ridiculous salaries. Instead, they can now work at Ethos and draw ridiculous salaries.

I don't think that "nonprofit" = "good".

See

https://newint.org/features/2005/10/01/keynote/

we might be better off if Oxfam's domain name was sold off to somebody else.

People who liked that "phenomenon of bullshit jobs" essay might think that "working for a nonprofit" is "meaningful", but people who work for non-profits frequently suffer from moral injury, get burned out, underpaid, and wind up questioning their values.

Back when I was involved in third-party politics and had many social entrepreneur friends I made my own decision that I don't give money to 501c(3) organizations, since they are a privileged class that doesn't have to pay taxes -- being a 501c(3) organization also means sticking to rules that ensure that you will be working on the symptoms of problems rather than the root causes.

Particularly in the developing world, people would benefit from for-profit organizations that are responsive to their needs as opposed to non-profits who work for rich donors and mindless governments.

>Particularly in the developing world, people would benefit from for-profit organizations that are responsive to their needs as opposed to non-profits who work for rich donors and mindless governments.

If there was profit to be made there would an business filling that need.

A foodbank in Detroit or non profit school in Ethiopia for girls are there because business and the like aren't.

The definition of "undeveloped" is that institutions haven't been developed to meet a need.

People an an "undeveloped" area are going to have a bad year now and then when Oxfam will come and tell everyone what an important thing they are doing.

If an area becomes "developed" then for-profit businesses have been created to fulfill people's needs and they don't need Oxfam.

If the rich tip the scales so that all the money ends up in their pockets, they give a little bit to Oxfam. In a fair system, people would create the institutions that they need and we wouldn't need Oxfam.

Help me understand what you mean by "worse than naive" here. Richard Barnes isn't going to see a dollar of this money and wouldn't need it anyways. I understand people disagreeing with him, but, despite being automatically disinclined to extend good faith to anything published at CircleID, I don't understand where anyone derives bad faith from this piece.

I thought it was tremendously useful, if only to understand what was in the minds of the people who unanimously voted to sell .ORG.

> Help me understand what you mean by "worse than naive" here

"Worse than naive" doesn't necessarily mean "bad faith" but possibly causing losses to other people without deriving a gain can still be "worse than naive". It's a quote rephrased for kindness.

> Help me understand what you mean by "worse than naive" here.

"Naive" in this context generally means they were overly trusting when there was no evidence to suggest trust was warranted. I'd interpret "worse than naive" as saying that they are actually evidence to the contrary.

The logic presented is, "We need more money, so we sold it to this private equity firm. But don't worry, they're not going to try to squeeze lots of money from it."

The starting point for any for-profit company -- no matter how ethically run -- is that they buy things because the expected value to them will be higher than the cash they paid for it. We must assume that the expected value of PIR to the equity company is higher than the amount they paid IS for it. Which means, either IS is actually getting less (or at best the same) money than they would have for keeping PIR, or it means that Ethos is going to charge significantly more than IS is. The fact that Ethos bought PIR is prima facae evidence that it's a bad deal for either IS or for the internet as a whole.

I mean, there are other possibilities, but none is really good. It's possible that someone at Ethos capital actually did want to do IS a favor, and way over-paid for PIR. But that's just a form of embezzlement; I certainly wouldn't feel any better to know that .org was bought by someone who was either incompetent or a criminal.

If you want to set up a long-term self-funding organization to do good rather than making money, you don't do private equity; you set up a foundation. Ethos, or whoever wants to make the world a better place, could provide a loan to such an organization.

And even if you do decide to buy something, you put your promises in writing in the form of a contract.

And even supposing Ethos really does mean all the things they say. Suppose something happens and they go bust and have to liquidate their assets. What happens then?

There are just so many red flags here, that "too trusting" doesn't even begin to describe it.

Your scenarios are not mutually exclusive. To maximize their expected value, you say that they could:

1. Earn less than IS would

2. Charge more than IS would

It's actually:

1. They could earn less than IS would, because they're generous, incompetent, or some other reason

2. They could earn more than IS would, because they increase the prices, run PIR more efficiently than IS would, increase the number of registrations more than IS would, or some other reason

In scenario two, which is the most interesting, they could jack up prices, but they could also run the business better, such as running the business more efficiently or driving more business through advertising. I agree with you that the former is likelier, but not necessarily the only reason why the deal would have a positive expected value for Ethos. It could be that the deal is a win-win one, where IS gets more money than they'd be able to make out of PIR, and yet, Ethos comes ahead too by running it better than IS could.

If you have some evidence that this is the case, feel free to give it. But they've already outsourced the running of the registry to somebody else, so any obvious efficiency gains have presumably already been taken. And if they haven't, there's no reason to think a fresh-minted PE company would do any better than hiring a competent manager.

I think Richard's piece leaves out everything of substance. I don't understand how this helps the ISOC mission, users of .org, the public interest of the Internet at large, or anyone at all except of course Ethos Capital.

PIR, the registrar in question generated $48 Million in support grants for ISOC in 2018 tax return. He's trying to make the case that selling this $50million revenue from grants is worth it. He think the governance of .org and the maximum possible cost increase will be fine.

What possible reasons has he given for any of that?

He vaguely indicates that it'll be fine, and instead asserts that $28/yr could be affordable? It is, but why not just jack up the price in the first place, if its a money thing? They could be getting $100-Million in ten years, why sell it off to a private capital investment firm with no track record of "Governance" and a mandate only to private shareholders and investors?

If you happen to check https://ethoscapital.mu/investments/ to read all about their clear mandate for Governance (whatever that means the the context of "Exposure to a Diversified Pool of Unlisted Assets") hopefully the irony[0][1] of their using the .mu (Mauritius) tld is not lost on you. Sorry if this last bit seems petty, but just wow. What about any of this makes anyone think this doesn't look like a gift to private equity? I would like to see the sale price.

[0] https://business.mega.mu/2013/07/29/internet-210-government-...

[1] https://web.archive.org/web/20141110042124/http://news.islan...

>I thought it was tremendously useful, if only to understand what was in the minds of the people who unanimously voted to sell .ORG.

That felt more like a smokescreen than a true insight into the process. It's a lot of fluff and empty grandstanding while not really justifying the sale in any coherent way. The way I read it he's basically saying "being a registrar for .org is our biggest activity and one that gives us a steady and stable income but we also want to do other things, so we decided to get rid of that for some short-term gains".

If that's truly what was in the mind of the people who voted to sell they need to test the water supply in that building, there was clearly something messing with their reasoning skills.

If there's truly a grand master plan that makes sense behind all of that then they should share it. For now the only plan that makes any sense to me involves several thick layers of corruption.

I mean what I say: I don't think he can possibly be as naive as this piece suggests, and I don't think any of the plausible alternatives interpretations (e.g., incredibly negligent, corrupt, a fool) is better than this babe-in-the-woods confection.

If you'd like to assert that he's really this naive, feel free to make a case for it. Or if you have some interpretation that's better, I'd be glad to read that as well.