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.ORG Decision – A Win for Consumers

Last month, the organization that oversees the domain name system decided to block the sale of the non-profit that operates the .ORG domain name to a private equity company.

This was a big win for consumers. But Internet users face an ongoing fight to reign in the activities of the Internet Corporation for Assigned Names and Numbers (ICANN). Over the past two decades, ICANN has moved from an organization that worked for the public interest into one beholden to the registries that operate domain names.

The .ORG Registry

Each domain name you register has a top level domain (TLD). It’s the part to the right of the dot, such as .COM, .NET, and .ORG. These TLDs are managed by companies called registries.

When you register or renew a domain at Namecheap, we reserve the domain with the registry and pay an annual fee. 

The TLD .ORG has been managed by Public Interest Registry (PIR) since 2003. This non-profit benefits another non-profit called Internet Society.

ICANN Removes Price Controls

For a long time, ICANN restricted the price PIR could charge for .ORG domain names. It allowed PIR to increase prices by no more than 10% a year.

PIR was a good steward of the .ORG domain despite these generous caps. It rarely increased prices and, when it did, it was usually by less than 10%. PIR is, after all, a nonprofit that serves a lot of other nonprofits.

ICANN decided in 2019 that it wanted to remove restrictions on the price PIR could charge every time someone registers or renews a .ORG domain name. It’s not entirely clear why ICANN wanted to remove this consumer protection.

ICANN proposed the change and gave the Internet community a chance to provide feedback, as it is required to do. Namecheap encouraged its customers to tell ICANN not to remove the price caps. 

Thousands of people and organizations, many of them small nonprofits, asked ICANN to keep the price caps in place. ICANN decided to remove the restrictions anyway.

After the decision, PIR told the Internet community that it had no plans to raise prices despite its ability to do so.

website with gold coins behind it

Selling the Internet

But shortly thereafter, Internet Society got greedy. It makes tens of millions of dollars a year from .ORG that it uses to fund its activities. That wasn’t enough. A new private equity company called Ethos Capital offered to buy Public Interest Registry from Internet Society for $1.135 billion.

Internet Society jumped at the opportunity to get such a big endowment. Nevermind that it would mean turning over a big part of the web’s infrastructure—which is depended on by the organizations and people it serves—to a private equity company more concerned with shareholder profits. 

A former CEO of ICANN worked with Ethos Capital to create the deal. It’s unclear exactly when talks to acquire .ORG began, but it appears to have been shortly after ICANN removed price caps on .ORG domains.

PIR’s contract to run .ORG requires ICANN to consent to any transfer of control. You can imagine the uproar when PIR notified ICANN of its intent to be acquired by a private equity company!

Widespread Opposition

Much like with removing price caps, the Internet community was outraged at the plan to convert the .ORG registry from a nonprofit to a for-profit business.

Groups like Electronic Frontier Foundation aligned with nonprofit organizations to oppose the deal. They organized online protests using the #SaveDotOrg hashtag and even organized a real-world protest in front of ICANN’s headquarters in California.

U.S. lawmakers, including Elizabeth Warren, wrote to ICANN to voice their displeasure. Domain name registrars like Namecheap also opposed the deal.

The pressure on ICANN increased when the California Attorney General got involved. He sent a letter to ICANN in January, reminding the California nonprofit of its articles of incorporation and need to serve the public interest.

This letter got ICANN’s attention. It delayed the deal and forced Ethos Capital to put more consumer protections in place.

For example, Ethos agreed to contractually restrict the price it would charge for .ORG domains. It would restrict its increases to 10% a year on average for the first eight years. If Ethos raised prices every year, the price would more than double over eight years.

judge's gavel

The Decision

ICANN’s board planned to vote on the transaction on April 17. On April 15, California’s Attorney General sent another letter to the organization. This one had a stern message: ICANN must reject the deal or expect there to be consequences.

ICANN abruptly canceled the April 17 vote and reconvened two weeks later. On April 30, ICANN’s board formally voted to block the transaction. 

It was a huge relief for many people who fought against the deal. It was also a startling turn of events. 

It’s the first time in a long time that ICANN has held itself accountable to the community it is supposed to serve. 

What this means for the future of ICANN is unclear. Hopefully, the organization will give more consideration to how its decisions impact the public interest, not just the bottom lines of companies it serves. 

It’s more important than ever for Internet users to hold ICANN accountable. Namecheap will continue to push for transparency and sound decision making at ICANN.

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