ICANN’s founding CEO and chair accuse biz of abandoning principles in push for billion-dollar .org sale
- Reference: 1586995586
- News link: https://www.theregister.co.uk/2020/04/16/icann_abandon_core_values/
- Source link:
In a [1]furious letter [PDF] from Mike Roberts and Esther Dyson to the attorney generals of California and Pennsylvania, the DNS overseer is also accused of circumventing its own decision-making processes and using the coronavirus pandemic to push through the $1.13bn sale.
The two internet veterans ask the state’s top legal representatives to step in and suspend any sale for another six months “to permit your offices, ICANN and the US Congress, to revisit the questions of ICANN’s process and public-interest regulatory duty at a point when the pandemic is no longer the public’s principal concern.”
ICANN is due to decide at a [2]board meeting on Thursday whether to approve or block the sale of the registry from the Internet Society to private equity firm Ethos Capital.
But despite five months of discussions and repeat efforts by Ethos to [3]tackle concerns , many in the internet community remain extremely skeptical of the deal, particularly its financing and the unusual corporate structure of Ethos, which comprises no less than [4]six different companies , all of which were registered on the same day in 2019.
“We write to express our deep dismay at ICANN’s rejection of its defining public-interest regulatory purpose as demonstrated in the totally inappropriate proposed sale of the .ORG delegation,” the letter begins. “ICANN is failing to deliver on the purpose it was created to serve, and is abandoning its core duty to protect the public interest.”
Accountability fail
Roberts was ICANN’s first CEO and was in charge of the organization for its first three years as it attempted to put a structure around the domain name system (DNS).
Dyson was its chair for the first two years. Back then, ICANN was a semi-autonomous body overseen by the US government. That oversight ended in January 2017 after a number of new accountability measures were introduced to ensure ICANN would remain answerable to the internet community rather than itself.
ICANN suffers split-personality disorder as deadline for .org sale decision draws close [5]READ MORE
The most important of those new measures is called “Empowered Community” and, in theory, allows the internet community to force the organization to hand over documents and pause decisions. It has failed on its first use, Roberts and Dyson note, referencing a letter from ICANN’s general counsel in February that rejected an effort to use the oversight.
The oversight [6]request [PDF] asked for records covering ICANN’s consideration of the .org sale as well as details on the process it would use to gain the internet community’s approval of its decision. ICANN [7]responded [PDF] by claiming the request “exceeded the permissible scope” of the mechanism and refused to hand over any documents.
Meanwhile, ICANN’s staff have been negotiating the addition of “public interest commitments” (PICs) to the .org registry as a way of approving the deal: something that has been repeatedly argued by the internet community falls far short of what is needed.
The PICs are a legal device with limited real-world use that were invented by ICANN itself. Critics note that the organization has been extremely lax in enforcing them and question whether some put forward by Ethos can even been enforced, even if ICANN chose to.
Roberts and Dyson call them “an unenforceable fig-leaf” that has been put in place “in lieu of answers to critical questions about beneficial control, pricing, use of data and service-level guarantees, all of which should be the foremost considerations of any regulatory agency.”
Accountability fail part 2
As well as ICANN’s refusal to accept the Empowered Community oversight request, it has also repeatedly blocked efforts to use another its accountability mechanisms - a “reconsideration request” - by pushing a [8]challenge from registrar NameCheap over a related issue of approving the lifting of price caps on .org domains to its Ombudsman and [9]scheduling Board discussion of the request to April 21 - one day after the sale deadline has passed.
The lifting of price caps added tens of millions of dollars to the value of the .org registry and immediately preceded the effort from Ethos Capital to buy the registry. ICANN approved the price cap lifting despite [10]overwhelming opposition by the internet community and without having carried out any economic analysis of the change.
Roberts and Dyson argue that by going against the clear wishes of the community it is supposed to serve and pushing ahead with the decision, despite the fact that the virus cancelled the most recent in-person ICANN meeting, it is “circumventing ICANN’s clearly defined open, competitive, multistakeholder process.”
It goes on: “This attempt to bypass the discipline of competition, open process, and stakeholder governance ensures the worst possible outcome for the public, as well as creating an egregious precedent.”
As such the former top execs ask the attorneys general to stop the process until there can be a proper accounting of their former organization’s behavior. They offer to “provide declarations or affidavits under oath describing in detail our reason for believing that ISOC, ICANN and all involved in this affair have made decisions that violate the best practices and principles established previously.” ®
Sponsored: [11]Choosing A Low-Code Vendor
[1] https://regmedia.co.uk/2020/04/15/roberts-dyson-org-letter.pdf
[2] https://www.icann.org/resources/board-material/agenda-2020-04-16-en
[3] https://www.theregister.co.uk/2020/02/25/org_purchaser_promises/
[4] https://www.theregister.co.uk/2020/04/13/icann_org_selloff/
[5] https://www.theregister.co.uk/2020/04/13/icann_org_selloff/
[6] https://www.icann.org/en/system/files/correspondence/aso-to-jeffrey-et-al-27dec19-en.pdf
[7] https://www.icann.org/en/system/files/correspondence/jeffrey-to-robles-04feb20-en.pdf
[8] https://www.icann.org/resources/pages/reconsideration-20-1-namecheap-request-2020-01-09-en
[9] https://www.icann.org/resources/board-material/agenda-bamc-2020-04-21-en
[10] https://www.theregister.co.uk/2019/07/29/icann_slammed_org_price/
[11] https://go.theregister.co.uk/tl/1936/-8579/choosing-a-low-code-vendor?td=wptl1936
Damning indeed
But it is the internet community that is damned.. You can dream of somehow reconstituting ICANN but I can't see a way that could ever happen, especially given the political climate in the White House.
The sale is likely to go through with some unenforceable paper promises to make it more palatable in a news release.
The only way out that I can see is a white knight stepping in with a bigger bid. but the only ones I can think of that might be interested are Google or Microsoft which bring their own sets of issues.
503C is your friend
I posted this three months ago, and it still applies, so here goes:
according to IRS regulations, you cannot "turn a non-profit organization into a profit making organization" without first giving (not selling) all assets of the non-profit to another non-profit. not for money, they must be given.
otherwise anyone could start a 'non-profit' and not pay tax and then when you're ready, just say 'ok i am a regular corporation now, just forget about all the tax i never paid before'.
if you begin to operate the non-profit profitably using assets acquired or created during the non-profit period, there is a 200% IRS tax penalty.
self-dealing as a non-profit, where a member of that non-profit makes money off of the non-profit, which benefits the individual at the expense of the non-profit, is a federal tax felony.
and of course there is the IRS snitch reward program, where if you inform on a tax cheat, you get a percentage (typically 40%) of the fine they pay.
$1.2 billion x 200% = $2.4 billion
40% reward = $960 million that the EFF or others could claim if they levy charges of tax fraud (which this most definitely is).
Who owns Ethos?
Given the secrecy surrounding the ownership there are some interesting possibilities.
The board of ICANN
The board of “.org”
The Chinese government.
The North Korean government.
One of the Silicon Valley millionaires
Ernst Blofeld and his cat.
One thing is for sure nobody ethical with the interests of the internet users or the owners of .org websites at heart would go to so much trouble to hide their identity.
*Damning* letter sent to California attorney general asks for six-month delay
"Daming" is not a word. If it was, it would be applied to The Queen dubbing women as 'Dames' of the Empire.
And yes, ICANN is now a victim of Corporatocracy, aka the ruination of any sense of We The People in the world. It's now We The Corporations, IOW Idiocracy. The ICANN leadership system is a blatant failure that must be reinvented into something sane, fair and technologically literate.