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.ORG: Non-Profits Fight Billion Dollar Legal Case Over Domain Sale

.ORG: Non-Profits Fight Billion Dollar Legal Case Over Domain Sale

It should be self-explanatory why a private company owning the domain rights over all non-profits across the globe would be quite a contradiction. Nevertheless, the Ethos Capital private equity firm is currently fighting a staggering $1 billion-dollar legal case against these charitable institutions, all the while claiming the opposite.

In a recent report from The New York Times, it was revealed that a group of prominent internet defenders would contest the billion-dollar sale of .org, the online domain used by significant non-profits and non-governmental organizations such the United Nations (un.org) and NPR (npr.org), which would turn the non-commercial sector of the internet into an ironic for-profit empire with a single ruler. But the irony doesn’t stop kicking, as .org registrations are generally overseen by the Internet Society (ISOC), another non-profit which oversees other non-profit domain names, who originally announced the for-profit sale in November.

Although the firm is being advised by a former executive for the Internet Corporation for Assigned Names and Numbers (ICANN), which oversees domains across the board, internet activists told Reuters the firm is an inherently inappropriate owner, revealing their solution would be to create a non-profit cooperative alternative as the rightful owner of .org which would keep the domain within the sector of origin. 

The group seeking this cooperative ownership is aptly named the Cooperative Corporation of .ORG Registrants (CCOR), which was filed in California earlier this month. “This is a better alternative,” argues Esther Dyson, the former chair of ICANN and one of seven directors of CCOR. “If you’re owned by private equity, your incentive is to make a profit. Our incentive is to serve and protect nonprofits and the public.”

The original deal has since garnered grassroots backlash, in the form of thousands of signatures in online petitions, congressional letters to lawmakers, and even high-level support from current Democratic presidential candidates such as Sen. Elizabeth Warren (D-MA). 

“There needs to be a place on the internet that represents the public interest, where educational sites, humanitarian sites, and organizations like Wikipedia can provide a broader public benefit,” said Katherine Maher, the CEO of Wikipedia parent Wikimedia Foundation. 

Erik Brooks, the founder of Ethos Capital, has tried to argue “we understand that change brings uncertainty and concern,” which was reflected in “alarmist statements” on the matter. But what does Brooks offer as calming words? Simple platitudes about how Ethos wants to “invest in dot-org for the reputation of the platform” and “the values it represents in the marketplace”, offering a pledge to remain at a 10 percent cap without any contractual obligation to do so. The non-profits, unconvinced by empty words, want these promises in writing. 

“The internet was meant to be this democratizing force around the world, and nonprofits do that,” argues Amy Sample Ward, the chief executive of NTEN. “By contrast, Ethos Capital is a creature of the capitalist-based internet industrial complex.”

To change this control would fundamentally deviate from established internet standards since .org was taken over by non-profits in 2003. The very idea of a for-profit owner to non-profit addresses should be disqualifying enough, but CCOR will have to make the counter-case to these online masters of the universe, whether for merit or monetary reasons. Given Ethos Capital’s detractors have understandable concerns over the raising of prices, service skimping and the potential sale of user data, there’s a solid anti-trust case to be made. It just has to be made within the proper context of a court, not appealing to the goodwill of corporations and firms.

As noted by The Verge, it remains unclear if ICANN can actually stop the sale, given the fact ICANN isn’t actually a regulatory agency. The company only gives “official status” to domain registrars and ensures they comply with domain ownership policies, whereas violations and sales are handled through appropriate agencies. The current goal of CCOR is to convince ICANN to switch the sale over to them before heading to court. ICANN might give the appearance of “trying to learn more” about the transaction, evidenced in a December letter to ISOC and PIR, but don’t hold your breath for this admirable all-of-the-above approach to work without either some big money or bigger government to do the persuasion.

“There is a common good here that is at risk of being undermined,” said William Woodcock, a director of the cooperative. Under CCOR’s control, it’d be expected to collect fees and distribute savings back to the nonprofit users, offering what Maher describes as an “alternative model with a long-term commitment to the open and noncommercial internet” across the globe. “There are some things that operate better noncommercially,” she concluded, “and that’s O.K.” Whether those with the necessary money and power will see it that way remains unanswered.