dot-org TLD sale halted by ICANN

Bill Woodcock woody at pch.net
Fri May 1 12:18:21 UTC 2020


> On May 1, 2020, at 1:19 PM, Lee <ler762 at gmail.com> wrote:
> On 5/1/20, Bill Woodcock <woody at pch.net> wrote:
>> 
>>> On May 1, 2020, at 6:19 AM, Andy Ringsmuth <andy at andyring.com> wrote:
>>> https://www.theregister.co.uk/2020/05/01/icann_stops_dot_org_sale/
>>> I know this has been bantered about on the list in the past. Great (IMHO)
>>> to see this happen.
>> 
>> Yeah, this is an excellent result in the first-half of the fight. Now that
>> we know who won’t be acting AGAINST non-profits, we need ICANN to run the
>> competitive process again to find who will act FOR non-profits.
> 
> Wasn't the price cap removal what started this mess in for first place?

Not exactly… The price cap removal was one facet of a more complicated insider/revolving-door deal which was used to set all this up…  The change from a three-year renewal to a ten-year renewal, and the removal of the “non profit” purpose were two of the other dominoes which were set up contemporaneously with the price-cap removal.  So what ultimately started this was an ethical void in the ICANN leadership which led them to think that they could get away with setting up an insider scam, then step outside to enrich themselves.

> Put the price cap back on for .org domains and then start the process
> for finding a new home for .org

That’s picking a second fight, when it can actually be used to our advantage…

The next step is to re-run the established 2002 open competition with a solicitation for proposals.  Last time around, there were eleven different proposals, some of them quite good.  ISOC was in the middle of the pack, but got the nod despite no public-benefit commitment, because its board was largely overlapping with the ICANN board of the time and it was headquartered in the DC beltway.  But the key here is that you want to provide as many opportunities for the proposers to differentiate themselves as possible.

All of the existing problems can be fixed.  Allowing proposers to differentiate themselves by proposing specific solutions to these problems gives us, as the multistakeholder community, more information on which to judge them.  ICANN has become so captured by a small handful of giant commercial registry services providers that the degree to which these problems can be solved in legally-binding ways has been pretty well obscured.  But the law, if used right, is there to protect people, and can be used for good.

If we can keep ICANN from falling back into its regulatory-capture coma long enough to get the second half of this process done, and calls for proposals, there will be lots of folks ready to submit them.  Ethos is so very far from being qualified that I doubt they would try (after all, they just tried to spend $1.1bn to _circumvent_ being measured against any merit-based criteria, which tells you that it would have cost more than $1.1bn to get them to the point where they’d have been competitive), but there are plenty of other organizations that would throw their hat in the ring and come up with a proposal, and each of those proposals is an opportunity to show how the status-quo could be improved.  The law gives us a lot of tools to lock such solutions in place and ensure that .ORG registrants are guaranteed the protections in ways that bribes, insiders, et cetera, can’t corrupt again.

To the best of my knowledge, the strongest framework for that is a consumer utility cooperative.  There’s more than 400 years of legal history in cooperative law, and the protections the law guarantees to members of cooperatives are far stronger than, for instance to the shareholders of stock corporations.  Unlike a stock corporation, the board of directors cannot modify the Articles of a cooperative, only the members can. So if you lock the protections into the Articles of a cooperative whose membership consists of the more than ten million .ORG registrants, it would take a majority vote of those registrants to waive any of their protections. Which would simply never happen. There’s no incentive you could offer to six million .ORG registrants to allow you to take money from their pockets.  Likewise, all of the profits of a cooperative (called “savings” in cooperative law) are guaranteed by law to be redistributed back to the members; they can’t be held on to, or spent for other purposes, or distributed to anyone else.

A few excerpts of note, to illustrate what can be done in a legally-binding framework, using the CCOR’s Articles of Incorporation as an example:

Article IV
Purposes

B.	This Corporation is organized exclusively for the mutual benefit of its members within the meaning of Section 501(c)(12) of the Internal Revenue Code, as amended (the “Code”). This Corporation shall not engage in any activity which is not permitted to be engaged in by a corporation exempt from federal income tax under Section 501(c)(12) of the Code.

C. 	The Cooperative Corporation of .ORG Registrants, or CCOR, is the cooperative organization which embodies and collectively represents the community of .ORG domain name registrants, who are its members. Notwithstanding IV(A) above, this Corporation exists for the following specific purposes:

1) To ensure the technical stability and continuity of operation of the .ORG domain at or surpassing the level that has prevailed since 2004, for the benefit of the Internet community as a whole.
3) To manage the .ORG domain for the benefit of its registrants, consistent and compliant with policies developed through multistakeholder processes such as the public policy development processes of the Internet Corporation for Assigned Names and Numbers (ICANN) and the technical standards of the Internet Engineering Task Force (IETF).
11) To maintain a wholesale .ORG domain registration price which will never exceed the current ratio relative to the actual cost of operations, and which will always be uniform for each domain registered.
13) To return the lesser of one-fourth of gross revenue or the maximum allowable under law to the community in the form of support for not-for-profit organizations critical to the operation and governance of the Internet, specifically including, but not limited to, the Internet Engineering Task Force and such of the Root DNS Operators as may also be tax-exempt not-for-profit public-benefit organizations, as well as, optionally, the Internet Governance Forum, chapters of the Internet Society, and other such deserving organizations and projects as may be serving the Internet’s users and infrastructure in a public-benefit manner. The specific mechanisms of this distribution shall be governed by the Bylaws of the organization.
14) To distribute the remaining savings to its member-patron registrants, proportional with the number of .ORG domains held by each.

Maximizing revenue is explicitly not a goal of the CCOR. Maximizing the security and stability of the Internet are explicit goals.

Article V
Prohibited Activities

Notwithstanding any other provision of these articles, this Corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the specific purposes of this Corporation.

Article VI
Membership

The CCOR has a single class of members, consisting of all current registrants of .ORG domains, from the date of delegation of the .ORG domain to the CCOR onward.

No fees shall be due from members to the CCOR beyond whatever costs the member may have already incurred in registering .ORG domains.

The voting rights of each member of the Corporation are equal, and each member is entitled to one vote. The annual regular meeting of the CCOR may be conducted electronically, and voting for the Board of Directors and any other outstanding issues before the membership shall be conducted by electronic ballot, pursuant to California §12460(f) and the Bylaws of the CCOR. Votes shall not be cast by proxy.

The proprietary interests of each member of the Corporation are proportional to the number of .ORG domains registered per member, and savings shall be accrued and distributed in relation to the proprietary interests of the members. The mechanisms by which savings are distributed to the members shall be specifically defined in the Bylaws.

Membership rights and benefits are not transferrable and are governed by California §12410, without modification.

Article IX
Financial Management

The Board of Directors shall engage an independent auditor and shall publish a comprehensive independent audit of the CCOR’s finances each year.

The CCOR may receive loans and pay commercially reasonable interest on such loans, but it may not sell stock, shares, or equity; or issue bonds or other instruments of indebtedness, nor may it pay dividends or otherwise distribute or transfer its resources or income, other than as specifically defined in its purposes. The cooperative may receive grants and donations. No debt or contribution of capital shall confer any voting rights or governance control.

Article X
Savings

Excess revenue, after operating expenses, net contributions to reserves, and community grant disbursement, constitutes savings which belong to the members. Savings are distributed to members upon the close of each fiscal year, in proportion to the number of domains registered by each member-patron. Savings shall be accrued by each member in a prorated fashion, such that if a .ORG registrant ceases to be a member partway through a year, their savings accrued in the portion of the year which they were a member shall be distributed to them at the time of distribution.


While those articles are a work-in-progress (they can still be modified by the board up until the membership come onboard) and we’re trying to make them as good as possible (and thus soliciting your suggested improvements right now), they’re just an example of what can be done…  When ICANN calls for proposals, many other innovative approaches may come forward; they can inform each other, competition can improve them, and then the community can pick the one that best defends our interests.

                                -Bill

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