March 20, 2020

Lawmakers Again Urge Internet Governing Body to Block Private Equity Firm Ethos Capital from Taking Over the .ORG Internet Domain Name Registry

“Ethos, PIR, and ISOC have…provided answers on pricing, business plans, and transparency that continue to indicate that the sale would not benefit the public or .ORG registrants”; Lawmakers' letter comes as the Internet community awaits ICANN's impending decision on whether to approve the transfer of the registry

Text of Letter (PDF)

Washington, D.C. – United States Senators Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), Richard Blumenthal (D-Conn.), Edward J. Markey (D-Mass.), and Representative Anna G. Eshoo (D-Calif.) sent a follow-up letter to the leadership of global Internet governance body the Internet Corporation for Assigned Names and Numbers (ICANN), urging them to block the Internet Society's (ISOC) proposed sale of the Public Interest Registry (PIR) and its contract to operate the .ORG internet domain name registry to the private equity firm Ethos Capital. The sale would convert the internet operator from a non-profit to a for-profit, private-equity firm.

The lawmakers are concerned that the approval of this transfer could result in increased costs, cuts in service and reliability problems, monetization of .ORG registry data, and censorship of .ORG websites. The lawmakers cited new information obtained in the last month, and raised new concerns about Ethos and PIR’s lack of transparency, failure to describe a plausible business plan that doesn’t depend on jacking up fees on nonprofits, and failure to address the .ORG community’s concerns. Since the announcement of the proposed sale, over 800 organizations and 25,000 people have signed a petition urging ICANN to block the proposed change of control.

“Because the proposed sale of .ORG is against the public interest and would violate ICANN’s commitment to ‘preserve and enhance…the operational stability, reliability, security…and openness of the DNS and the Internet,’ we again urge you to reject this private equity takeover of the .ORG registry,” the lawmakers wrote.

ICANN manages the operation of the Internet's domain name system (DNS) via contracts with registries, or companies that administer domain names under a top-level domain such as .ORG, .COM, and .NET, and has the power to provide or withhold consent in response to a request for a change of registry control such as this one.

In December 2019, Senators Warren, Blumenthal, and Wyden, and Congresswoman Eshoo previously sent a letter to PIR, ISOC, and Ethos Capital asking a series of questions about whether nonprofit groups free speech and internet users would be harmed by the sale of .ORG domains to a private equity firm. In January 2020, the lawmakers urged ICANN to block the deal, highlighting concerns that Ethos Capital would raise costs and cut service for .ORG registrants. They also noted that approval of the sale would violate ICANN’s own bylaws, which commit it to acting in the public interest.

Since then, the parties to the sale have repeatedly stonewalled or given evasive answers in response to the questions asked by the lawmakers and by ICANN, and the deal has attracted the attention of the California Attorney General, who has some legal authority over ICANN and this case. Ethos has continued to keep secret the identities of the investors behind the sale and the identities of the directors of the company that would own PIR. In recent weeks, Ethos has released weak and loophole-ridden “commitments” related to pricing and oversight; however, these have not given the lawmakers or the .ORG community confidence that Ethos would be a good steward of .ORG.

 “Ethos, PIR, and ISOC have fielded questions from us, from the community, and from ICANN, and they have provided answers on pricing, business plans, and transparency that continue to indicate that the sale would not benefit the public or .ORG registrants,” the lawmakers wrote.

Senator Warren has been a vocal critic of private equity abuses throughout her time in the Senate and is fighting for reforms that protect consumerscommunitiesstudentsworkersinvestors, and elections. In July, Senator Warren, along with a number of Democratic colleagues, introduced the Stop Wall Street Looting Act, a comprehensive bill to bring greater responsibility to the private equity industry by holding private equity firms responsible for the liabilities of companies under their control and requiring greater transparency in private equity firms' practices.