California Attorney General delays .org sale | Hacker News Reader

California Attorney General delays .org sale

domainnamewire.com

543 pointsbbatsell40 comments

From the AG letter:

> 24. If ICANN approved the removal of the price cap for registration fees for .org domains, provide a detailed explanation how this occurred, including when and who initiated the process to remove the price caps and how it was ultimately approved;

...

> 35. Your conflict of interest policy.

I think it's a good sign they're asking for specific individuals. Really looks like they're not fooling around.

I also like,

> 16. Did ICANN ever conduct or review any analysis of the monetary value of the .org Registry Agreement? If yes, provide all documents regarding such analysis

I'd love it if they required the de-redaction of some of the individuals involved. I think that could prove entirely enlightening to some of the _real_ motivations at play.

> 5. PIR's unredacted response to ICANN's request for additional information regarding the acquisition of PIR by Ethos Capital

> 27. Identify all individuals at ICANN involved in analyzing and/or making recommendations regarding the removal of the price cap for .org domains

Seeing the words "unredacted" and "individuals" makes me hopeful for this. Feels like they're saying "not gonna fly" to "orders were orders."

> 34. Provide the names and contact information of all of ICANN's members of its Board of Directors, including all non-voting members

And at the same time no to "it was a rogue employee "

It’s nice to read some good news for a change.

From the article:

> The current deadline for ICANN to approve or deny the sale is February 20. It is asking Public Interest Registry to extend this to April 20 as a result of the attorney general office’s request.

> This is perhaps the biggest wrinkle so far in Internet Society’s plans to sell the registry for $1.135 billion to a private equity company.

Are the details outside the amount public and is there any clawback amount if the deal does not go through?

Looks like the AG is considering that case seriously, they're asking a very extensive list of information, including information on how the decision to remove price caps was made, the names if individuals involved, and confidential details of the deal with Ethos Capital. They definitely already studied the case to ask the pertinent questions. Hopefully this is treated as seriously as it is for the Internet and any decision where corruption was involved, or that is detrimental to the interests of non-profits, is not allowed to go through.

It looks like this scheme is going to collapse now. The next important thing is to reinstate the price caps.

What i would like to understand is what’s California jurisdiction is

From the letter the AG sent:

> *The Office of the Attorney General has the duty to supervise charitable organizations under [law#]. The [ICANN], as a registered nonprofit in California, is subject to regulation by the California Attorney General.

Sort, IANAL answer: They are incorporated in California, making their corporate conduct subject to California's laws.

Source: This PDF, starting on page 3.

https://www.icann.org/en/system/files/correspondence/jeffrey...

ICANN HQ is in Los Angeles, as a minimum

Here's the audio interview with one of the ISOC trustees attempting to defend his vote for the sell https://www.techdirt.com/articles/20200115/11301343739/techd... His mental gymnastics there are just incredible.

Mike Godwin make several claims that the only way for the .org tld to survive is that it requires capital to improve. Another point that is repeated is that PIR (current owner of .org) is constantly making a surplus of money. The reasoning for this disparity is that a non-profit cannot use money it generates to improve itself. Is this a valid point, and if so why?

What improvement of a utility is required? Insert records, update records, serve records. Fin.

This is Let’s Encrypt non profit operational model territory, $3-4 million/year at most.

Nonprofits in California are allowed to take out loans to acquire capital. They are also allowed to spend money to improve the service they offer in the furtherance of their tax-exempt purpose, so long as the capital expenses don't count as self-dealing (like the .org sale, allegedly). There's no legal basis for either of those claims. The thing they can't do is go out and sell equity for VC money on their core purpose, or exceed the legal threshold for unrelated business income. But neither should be necessary to improve the nonprofit, especially given that it already has a surplus of money.

> Nonprofits in California are allowed to take out loans to acquire capital.

Just as point of clarification, California non-profit corporation law wouldn't apply to Public Interest Registry. It is formed and domiciled in Pennsylvania. That said, Pennsylvania law appears to permit non-profit corporations to take on debt in the same way that any other corporation formed under PA law can do (subject to rules found in the organization's bylaws or formation documents, which I've not read for PIR). Title 15 of Pennsylvania's consolidated statutes, section 5502(6) reads that a non-profit corporation has the authority "[t]o borrow money, issue or incur its obligations and secure any of its obligations by mortgage on or pledge of or security interest in all or any part of its property and assets, wherever situated, franchises or income, or any interest therein."

I can't think of a reason why PIR, with a surplus of annual income, would have any trouble receiving a loan from any number of financial institutions. In fact, the vast majority of credit unions would be tripping over themselves to make such a loan, based on what I've seen of PIR's financials. Taking out a loan against surplus income to make cash-intensive improvements to the non-profit in furtherance of its mission is basically the whole point of running a surplus that isn't distributed back to members.

Is that Mike Godwin of "Godwin's Law" fame? Giving some of his past activities at .orgs like eff and Wikipedia, that's kind of a surprise

if they're getting a surplus of money, they should then lower their prices.

AG Letter is page 3 of this pdf: https://www.icann.org/en/system/files/correspondence/jeffrey...

If anyone doesn't think the AG is serious, read the document request / questions at the end. Someone on the tech side is giving advice :)

It really looks like this sale is dead in the water now, and that's a good thing.

I don't know how you can conclude that. To stop it they would need to challenge it in court and they're up against a potential profit here that can afford any number of big-gun law firms. I don't know the law here, but that's what will determine if this scheme succeeds, and hard proof that this sale violates such applicable laws.

I mean, you're in the territory of a non-profit entity being used to generate profit for a few individuals through corruption. The AG has a lot of pull here.

Source?

All that has happened right now is some Bad PR and some suspect dealing that may or may not be grey area legal...

with Billions and Billions of dollars on the table I dont think some Bad PR is going to stop this deal.

Unless there is an actual court order or a official ICANN document blocking the sale it is still moving forward

"35. Your conflict of interest policy."

After the long list of extensively specific requests for details regarding the sale and the price cap removal and communications between each of these organizations, point 35 felt like a punchline to read.

It makes it clear they know exactly what issue they're sussing out with these requests.

Does a conflict of interest actually make something illegal? I was under the impression that while best practice to declare and avoid conflicts of interest, it was not actually illegal as long as the motives for each decision were defensible.

35 isn't a request, but a message from a powerful politician to the people behind the sale. It's hard to guess the exact meaning without full context, but I think it's "I know enough. If you want to proceed with the sale, you have to give me the names and I'll send some of them to prison." They may try to call his bluff, but they'll be sorry if he indeed knows something.

I believe a 501c3 is bound by their charter which would presumably include this conflict of interest policy. Not doing so could cause loss of non-profit status and probably other fines and penalties.

Conflict of interest may not generally be illegal, but it can be illegal under specific circumstances, especially if undisclosed. Especially things that get filed with the SEC. I would assume a lot of decisions made at the board and C-suite level have stricter requirements for this.

Also on The Register: https://www.theregister.co.uk/2020/01/31/icann_dot_org_sale/

This is welcome news. Perhaps there's a slim glimmer of hope here.

The question is what the private equity firm will do with .org that it thinks will earn a good profit on the 1.145 billion it is investing. And would that leave the internet better or worse off. Did ICANN even ask that question?

> If it gets the answers it demands, it will get much more information than ICANN has previously disclosed about the process and thinking behind removing price caps on .org domain names last year.

If?

Can someone help me understand why a domain name still costs $10-$13 a year to own? Even with so many tlds (presumably competition) it’s still expensive. Why?

How does the jurisdiction work on this? Presumably not all regions of all countries involved in ICANN have this power.

ICANN is incorporated in California.

Can anyone give some pros and cons on each side of this?

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

Few dozen hours of reading in there.

Of selling the .org registry?

Pro: ICANN can make a shitload of money.

Con: .org domains get a shitload more expensive.

Con: a private equity firm potentially gets to control who gets .org domains. That probably shouldn't be a private decision at all.

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