Private Equity Is Going to Ruin the .Org Domain System and Screw Nonprofits

A new deal to sell the organization responsible for doling out .org domains to a for-profit private equity firm is scaring internet experts and activists, who say the deal will undermine the intent of the .org system, hurt the internet, and raise prices on nonprofits. Last week, the Public Interest Registry (PIR), the agency that manages the .org domain, announced it would be selling itself to private equity firm Ethos Capital. In a statement, the Internet Society—which acquired the .org registry and created PIR back in 2002—tried to pass off the deal as a wonderful thing for the future of .org.

“This is an important and exciting development for both the Internet Society and Public Interest Registry,” Internet Society CEO Andrew Sullivan said. “This transaction will provide the Internet Society with an endowment of sustainable funding and the resources to advance our mission on a broader scale as we continue our work to make the Internet more open, accessible and secure—for everyone.” But critics say the promised benefits of the deal are little more than fluff and nonsense.

Organizations like the Internet Commerce Association (ICA), whose members include an array of domain managers and registrars, say the sale is part of a trend that’s undermining the entire purpose of the .org domain, making life harder on already struggling nonprofits.

In a public letter to ICANN, the organization that manages all internet domains worldwide, ICA warned that ICANN’s June decision to lift price caps on affordable .org domain registrations and renewals—combined the sale of PIR to Ethos—should be blocked.

“Despite sustained public outcry and compelling arguments to the contrary, you permitted ICANN staff to effectively set the table for the takeover of the cherished home for nonprofits by this private equity firm that will be totally unrestrained in raising prices on the nonprofits and other registrants whose online presence is tied to a .org domain name,” ICA said.

ICANN’s June decision to lift .org fee price caps was met by widespread criticism that it would obviously lead to higher domain costs for nonprofits. The Electronic Frontier Foundation at the time noted the new ICANN contract came with other trademark related issues that also posed a threat to nonprofits.

ICANN’s decision to lift price caps was the most controversial of the changes, and came despite the fact that during a public comment period, just six of the more than 3,000 public comments received by the group actually supported the move.

Shortly after ICANN’s decision was made, PIR issued a “open letter to the .org community” insisting it would “not raise prices unreasonably” and had “no specific plans” to impose rate hikes. Now under private ownership that promises is probably empty, ICA said.

“Surely you can now appreciate the terrible blunder that you have made,” the letter said.

The IRA warned that if the sale proceeds, Ethos Capital’s no-bid contract for perpetual management of the .org system will give the firm the “unchecked ability to grow its profits by extracting greater and greater sums from the nonprofit community—forever.”

“Fortunately the purported sale of the .org registry affords you an opportunity to withhold approval, terminate the Registry Agreement in respect of any consummated transaction, and put the contract out for competitive bid,” the ICA said.