We, the public, just won a battle. But the war for internet governance that actually represents the public interest is far from over. This could be a turning point or a minor blip that the entrenched interests laugh about years from now.
The big news today is that ICANN withheld consent for a change of control of the Public Interest Registry (PIR). This effectively kills the deal where Ethos Capital, a private equity firm being run by ICANN insiders, tried to buy the rights to run .ORG from The Internet Society (ISOC) for 1.135 billion dollars.
First, let's celebrate. The non profit community and the general public just had a small victory at ICANN. I am not sure the last time the public interest was actually well represented in a major ICANN decision where substantial amounts of money was at stake. This is a historic win for the public good and I couldn't be happier about that. With that said, it's time to look at what happened.
What reasons did ICANN cite for its rejection?
The decision to reject lists a multitude of reasons for why the deal shouldn't go through. It only delayed the decision after a letter from the Attorney General of California, Xavier Becerra which unequivocally stated "Given the concerns stated above, and based on the information provided, the .ORG registry and the global Internet community – of which innumerable Californians are a part – are better served if ICANN withholds approval of the proposed sale and transfer of PIR and the .ORG registry to the private equity firm Ethos Capital." (emphasis added)
The primary reasons ICANN gave consideration to according to their statement can be summarized as follows:
- For profit ownership vs non-profit ownership of PIR.
- PIR being converted from a non profit into a for profit entity.
- $360 million of debt being taken on that will need to be serviced
- Untested Stewardship Council / Why can't non profit PIR pursue new business interests
- ICANN being made responsible for handling disputes
The first three issues are directly addressed in the Becerra letter. I don't think it's a mistake that these are listed first. They are the most easy to understand and see the problem with.
The 4th and 5th issues are a bit trickier to understand. The stewardship council was Ethos Capital's way of trying to placate the non profit community by saying you will have a voice in our decision making. Believing that voice would outweigh the interests of the investors would be a mistake. Let's not mince words, Ethos are here to make money. Trusting a private equity firm to choose between the public good and profit is a trusting a fox to watch the hen house. A terrible mistake, no matter what the fox pleads.
The 5th issue is about dispute handling and public interest commitments. I am not an expert but you can read this very detailed piece by Kathy Kleinman about them. Kathy absolutely rips them apart in a way that only a lawyer, who also used to be the public policy director for PIR and has been involved in ICANN for decades can. Kathy's piece is a masterpiece of critical thinking and evidence showing us why these commitments shouldn't be taken seriously.
In conclusion, ICANN wrote "ICANN's actions are thereby in accordance with ICANN's Articles of Incorporation and Bylaws' public interest mandates, and are also aligned with how the CA-AGO explained his views of the public interest." The California AG saved .org.
What issues did ICANN not address in its rejection?
While it's important to see what the public reasoning for the rejection are, it's also important to take a moment and talk about what wasn't talked about.
The most glaring omission is the event which precipitated this whole saga. "Proposed Renewal of .org Registry Agreement" which sounds innocuous but contained this language, "In alignment with the base registry agreement, the price cap provisions in the current .org agreement, which limited the price of registrations and allowable price increases for registrations, are removed from the .org renewal agreement." That sentence is what got me involved with this entire issue after reading about it on Hacker News. This was one of the largest public comments ICANN ever received as far as I know (only later to be surpassed by the .com renewal public comment which tripled its opposition for the same issue on a different registry). What did the public tell ICANN? No. We are against this. I analyzed the comments and wrote about it in The Case for Regulatory Capture at ICANN. That article was ultimately cited in the Becerra letter because in over 3000 comments, I could only find six (6!) in favor. With many of them having ties to registry operators.
Some might argue that the events are unrelated. Specifically ISOC and Ethos Capital would make those arguments. Whether one could prove they were or were not is another matter, but the removal of price caps opened the door to the opportunity for higher levels of rent seeking. ICANN's latest mantra of 'we are not a price regulator' is inline with the legacy TLD registry operators' interests, which brings us to the second major problem and omission.
The other major issue is ICANN mentions 'supporting the multistakeholder model' but doesn't mention the complete absence of it during this whole process. The registry agreements for .org and now .com were pre-negotiated by ICANN staff, without discussion or input from the stakeholders. They were approved rapidly with no changes despite overwhelming opposition (98%+ in both cases). The .com agreement was passed within a day during a pandemic after being given a staff report which said "The comments about the proposed changes to
the maximum allowable wholesale price for .COM registry services were nearly unanimous in
voicing disagreement or concern though they provided a variety of reasons why they are
against the change." ICANN doesn't care about the multistakeholder model other than as a token way to try to appear like a responsible steward of the DNS. What kind of multistakeholder model can in good faith take nearly unanimous disagreement and go against it. Regulatory capture is still alive and well at ICANN and ICANN doesn't seem interested in addressing it.
What I've been seeing in the lead up to this decision is a public campaign by people affiliated with registries (VeriSign and PIR) and one message (1, 2, 3) they are trying to push is/was giving up control to California AG is dangerous for ICANN in the long run. Let's be clear why it's dangerous: it means real oversight and accountability to ICANN's public charter: "ICANN must operate in a manner consistent with these Bylaws for the benefit of the Internet community as a whole."
ICANN spent years trying to free itself from the US Government and argued it would be a responsible self-governing entity accountable to the multistakeholder process and represent the public interest for the benefit of everyone. It sounds nice, it was an aspirational goal. When you look at the names who lobbied for it in front of Congress - Steve Del Bianco and Jonathan Zuck, they were VeriSign lobbyists. Steve still is. Today, they are the the policy chair of the Commercial and Business Users' constituency and Vice Policy Chair of the At-Large Advisory Committee (ALAC) respectively. Let's pause for a moment and appreciate that two active/former lobbyists for the most profitable registry operator are policy chairs for groups including a group that is supposed to represent the individual internet user. Jonathan Zuck's organization did $363,202 in business with his former organization ACT which is funded by VeriSign in 2018 according to his latest 990 filing.
So let's focus on where this push is coming from and why. A lack of oversight lets corporate interests get pushed without being checked by the public interest. ICANN easily ignores the public interest as we've seen time and time again. It's become a near carte blanche for registry interests.
The California AG asserting authority over ICANN has been the first road block in years. Becerra just announced to the ICANN world that it crossed over a line that has finally brought scrutiny on them. Scrutiny could be very bad for a .com monopoly which is the only reason VeriSign exists and makes up the majority of their value. So expect to see an immense amount of lobbying coming from them. Maybe it looks like a think of the children argument? Maybe it looks like ICANN needs independence? Maybe it will look like something else. But it's coming. VeriSign has billions at stake and I am sure they will make every effort to protect their golden goose.
We're in uncharted territory at this point. The .ORG scandal was definitely the hill to die on for people who want to see a more accountable ICANN which represents the public interest. The cartoon villain plot of a former CEO advising a company into buying the non profit registry to exploit it for private investors at the expense of the world's do-gooders was perfect. It's a symptom of the capture at ICANN that they thought they could even get away with it.
My hope is that knowing that the California AG has oversight of ICANN will force some serious reconsideration of their behavior and decision making. My fear is that this was a one time egregious violation of the public good and that minor trespasses will go unchecked and we gradually build up to where we were yesterday before this decision.
I started this journey a year ago from reading a headline and I've connected with a lot of amazing folks who have helped pushed in the direction that led us to today. So as an acknowledgement to them, I wanted to say thank you.
My lawyers and friends who helped review things and advise me, you know who you are.
Kieran McCarthy and Timothy Lee at The Register and Ars Technica respectively for being the first journalists who listened and continued to cover the issue.
Richard Kirkendall, NameCheap's CEO, who has continually pushed these issues and brings attention to it to his large audience of customers.
Nat Cohen and Zak Muscovich at the ICA who have been involved on the issue and were often the first people dissenting in a thoughtful manner who tirelessly participate in the convoluted ICANN process.
George Kirikos who called the private equity play from the very beginning and was banned from the GNSO working groups and voluntarily left ALAC after calling out it's capture and continues to be a voice of reason and outrage in the ICANN community. (Edited: banned from GNSO and left ALAC)
Mitch Stoltz and the EFF for their active and continued effort to #SaveDotOrg.
Everyone else involved in the #SaveDotOrg campaign who helped make this a reality.
You all made a difference today and I couldn't be prouder to have been on the same team.
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In June, I was the opening speaker for the inaugural HostCamp in Berlin, which was a side event for the larger WordCamp Europe.
My topic presentation and topic was Ethics in WordPress Hosting. It was a topic the event organizer, Jonathan Wold, and I talked about at length. The goal was to start a discussion about ethical issues facing the industry, what sort of behavior and policies people have and how to address them.
The event was by invitation and I cannot discuss what others shared because that was in private. My goal was to convince web hosting company executives that ethics matter, not just for the sake of being ethical. I wanted to show how even perceived unethical behavior could financially harm companies today with social media. So please act properly, it's in your best financial interest. One of the case studies is Digital Ocean which I wrote about and inspired the talk.
I wrote The Case for Regulatory Capture at ICANN last week and published it because I worried ICANN would approve the proposed .ORG contract at their ICANN65 Meeting in Marrakesh which started the same day I published the article. It wasn't passed during the meeting, but last night ICANN announced it signed a new agreement on the .ORG contract.
ICANN, which oversees the domain name system, was in talks with Public Interest Registry (PIR), a non profit owned by The Internet Society (ISOC), about renewing PIR's contract to manage the .ORG domain name registry. The majority of non profit's use the .ORG space to represent themselves online and PIR was given this monopoly by ICANN. PIR doesn't even manage the registry themselves, but outsources (via bid) to Afilias, a registry services provider. PIR's profits all directly go to ISOC. It's a monopoly designed to tax non profits for the benefit of ISOC. ICANN's proposed contract wanted to remove the provision that allowed PIR to increase their prices 10% per year and make it unlimited or uncapped, giving PIR the freedom to charge as much as they want. Non profits, charities, internet users as a whole were nearly universally against this change.
Back to ICANN's Mission
"ICANN's scope is to coordinate the development and implementation of policies: That are developed through a bottom-up consensus-based multistakeholder process and designed to ensure the stable and secure operation of the Internet's unique names systems."
Except, that's not what happened. Here's a timeline of what actually happened.
March 18, 2019
ICANN and PIR negotiated a contract behind closed doors and called for comments on a proposed renewal contract.
The public submitted its comments.
June 3, 2019
ICANN staff created a report summarizing the comments and said "ICANN org will consider the public comments received and, in consultation with the ICANN Board of Directors, make a decision regarding the proposed registry agreement."
June 30, 2019
ICANN approves proposed contract with no changes. Only a date was added, Cyrus Namazi got a promotion and someone spelled Jonathon's name wrong (compare).
The 96 page contract is identical from when it was proposed to signed. The multi stakeholders and bottom up process that is supposed to govern ICANN policy? Ignored.
The public outcry was nearly universally against this change. They weren't listened to at all.
Did ICANN's board vote on the proposed contract after being briefed about the public outcry? As of writing, I couldn't find any evidence in ICANN's board activity page. No agenda, no minutes, no resolutions, no briefing material, no preliminary report. Did ICANN staff simply push through this contract without a board vote? Either outcome is deeply disturbing and potentially violates the ICANN bylaws/mission.
ICANN Needs Oversight
ICANN as an organization has failed to live up to its mission. Greg Thomas wrote a response to my original article and while we may differ on some beliefs, his conclusion was,
"By all appearances, it hasn't taken long, in the absence of U.S. Government oversight, for rot to set in at the root. If the community is going to acquiesce to its own dismissal — if corruption is to become normalized at ICANN and in DNS governance — then, perhaps it's time to start looking towards the heavens."
It's hard to say ICANN doesn't appear to be a captured organization. It's abdicated its responsibility to govern, "ICANN must operate in a manner consistent with these Bylaws for the benefit of the Internet community as a whole."
Yesterday, ICANN failed the internet community as a whole. It sold them out and the best reassurance is 'trust us' from the organization they just gave the freedom to tax non profits using .ORG domains as much as they desire.
The foxes are watching the hen house now and ICANN willfully ignored the internet community and made this happen.
ICANN, which regulates the domain name system, is reviewing the renewal of the .ORG registry contract with Public Interest Registry (PIR). It's also running an identical process for .BIZ/INFO/ASIA, but they are of less concern to most people and don't have the long history of existing pre-ICANN that .org does. The proposal was already discussed between PIR and ICANN staff before being put out for comment from stakeholders. This alone is worrisome that the contract is negotiated behind closed doors and without input beforehand.
ICANN's stated goal is bringing the .ORG contract in alignment with the new gTLD base contract; the contract which is used for the hundreds of new extensions released over the past few years. The justification for this is that it's simply easier to manage administratively ("better conform with the base registry agreement") and to treat registry operators equitably between new and legacy gTLDs.
For review, they stated there are 6 material differences from the original contract. The ones that caused the most concern were
- Removing the price cap provisions
- Adding Uniform Rapid Suspension (URS) system, the Trademark Post-Delegation Dispute Resolution Procedure (PDDRP), and the Registration Restrictions Dispute Resolution Procedure (RRDRP).
- The Registry Operator has adopted the public interest commitments and applicability of the Public Interest Commitment Dispute Resolution Process (PICDRP)
I will focus on the biggest issue, removing price caps. The other two issues are well addressed in a statement from the Electronic Frontier Foundation (EFF) and Domain Name Rights Coalition (DNRC) here. To summarize the EFF/DNRC position, URS was designed for new gTLDs and it's not conclusive that it has even been effective. It shouldn't be applied to legacy TLDs like .org for no apparent reason beyond contract standardization. The public interest commitments are turning registries into censorship organizations which goes against ICANN's mission.
ICANN's Russ Weinstein released their own summary report. It picks out some influential and known groups' comments. The EFF/DNRC, along with multiple ICANN groups (Business Constituency, At-Large Advisory Committee, Non-Commercial Stakeholders Group, Intellectual Property Constituency, Registrar Stakeholder Group), National Council of Non Profits, Internet Commerce Association, and a few others.
One of the biggest comments missing is the joint comment against removing price caps from NPR, YMCA, C-SPAN, National Geographic Society, AARP, The Conversation Fund, Oceana and National Trust for Historic Preservation.
What is also missing is a deeper look into the comments made. They say over 3,200 comments were received. They picked two comments in favor of removing price caps. There were ten comments mentioned that were in against it for various reasons. It appears clear that more people were against it for a variety of reasons.
But is the ratio really 2:10 in favor:against?
I collected all the comments and analyzed them for discussion about the price caps/protection. I used Mechanical Turk to categorize the vast majority, investigating when the multiple readers couldn't make sense. Full details about how I collected this data will be available in a separate article soon. Long story short, each comment was read by two different individual users in either US/UK/Australia/Canada with over 100 jobs completed and 95% accuracy on the Mechanical Turk platform to make sure they were experienced and based in countries with a native understanding of English.
The outcome was 3252 (98.1%) of people were against removing price caps or giving .ORG the ability to increase pricing. 57 (1.72%) Comments weren't processed for one reason or another (empty emails, foreign languages, unclear what position was being taken, no position on price, comments were attached PDFs, etc). I could only find six (0.02%) comments in favor of the proposed changes out of thousands.
It's overwhelming that nearly everyone is against these changes.
Who is in favor of removing price caps?
Since there are so few comments in favor, I can look at each of them.
"Increased competition and choice has been a major benefit for consumers in
the TLD market. Moving the .org legacy TLD to a new TLD contractual
agreement is also an opportunity to move to more market-based pricing in the domain name space and away from arbitrary price caps. As Makan
Delrahim, head of the Department of Justice’s Antitrust Division, recently
stated, antitrust is there to “support reducing regulation, by encouraging
competitive markets that, as a result, require less government
intervention.” While ICANN is not a regulator, it has had its contracts
reviewed by the DOJ’s antitrust division, which concluded that only .com
had market power in the domain space.
Allowing .org and future domain names to move to market-based pricing makes
sense with today’s healthy TLD market, which is populated with many choices
for consumers to choose from. The .org domain name is well known as one of
the first TLDs in the market available for public registration, but it
still only holds 5.5 percent market share, with just over 10 million names
in the .org space compared to almost 140 million domain names and 75
percent market share for .com."
- Shane Tews / Logan Circle Strategies / American Enterprise Institute
Who is Shane Tews? According to her LinkedIn. Shane was formerly Vice President of Global Public Policy and Government Relations for Verisign, Inc. Her job was to: "Represent Verisign’s interest before United States and International government officials in the Information Communications and Technology Sector. Responsible for the strategic planning and daily management of the Policy and Government Relations efforts for VeriSign globally. Participate in the development of e-commerce policies with International governing bodies, National and State Legislators, International, National and Regional trade associations and Information Technology coalitions. Manage Internet infrastructure, e-commerce, tax, telecommunications, privacy, content, and domain name, and Information Technology regulatory issues. Coordinate Relationship building efforts using third-party coalitions to target audiences to inform and direct interests in Verisign’s issue areas. Disseminate legislative and regulatory and international directive information to Corporate Executives and business unit managers. Direct all political activity. Oversee the daily operation of the VeriSign Political Action Committee and all political fundraising." So she used to represent VeriSign's interests and direct their political and lobby activities. She's in favor of removing price caps for a registry and allowing free market policies that VeriSign has the strongest financial incentive to push for of any registry in existence with it's .com monopoly. Shane also worked at Vrge (just a note for later).
"Given the BC’s established position that ICANN should not be a price regulator, and considering that .ORG and .INFO are adopting RPMs and other registrant provisions we favor, the BC supports broader implementation of the Base Registry Agreement, including removal of price controls.
We recommend that whenever price caps are removed, it is important for contracted parties to responsibly keep prices at reasonable levels, to maintain consumer trust and to ensure price predictability for their existing and prospective registrants. It would negatively affect business registrants if contracted parties were to take undue advantage of this greater flexibility by substantially increasing renewal prices for an existing registrant who has significantly committed to its domain name. We therefore urge ICANN and contract parties to ensure domain prices are predictable and within the parameters of the renewal agreement, in order to demonstrate that the removal of price caps was aprudent policy approach. "
- Steve DelBianco / ICANN Business Constituency Drafted with Mark Datysgeld, and Andrew Mack
"The Business Constituency (BC) is the voice of commercial Internet users within ICANN." according to their website. So who is Steve DelBianco? Steve represents NetChoice, a lobbying organization that counts VeriSign as a member. Digging through their 990 they work with Vrge (a strategy/lobbying group) where our friend Shane worked where they spent $255,000 in 2015 (overlapping Shane's tenure) and $150,000 in 2017. The organization lists Jonathan Zuck as a board member (remember his name). Steve DelBianco has been lobbying for VeriSign since as far back as 2007 that I found via NetChoice which pays him $400,000/year according to 2017 filings to do so.
I didn't find much about Mark Datysgeld.
Andrew Mack runs a company called AM Global which lists Public Interest Registry (PIR) as a client.
So representing all business interests at ICANN on this issue are two guys who lobby and represent for the registry operators VeriSign/PIR. If Business Constituency means Registry Businesses, they are doing a good job. It appears that constituency is captured by registry interests.
"I think this is a good idea. Something needs to be done to stop Domain name squatters siting on good names for years and demanding outrageous sums for their release and sale. vastly increasing the prices of domains would go a long way to stopping this practice."
Martin appears to be a web developer in England and his a gripe about speculation and thinks raising prices may solve the issue.
"Proposed price hike for .org
Stop trying to regulate everything under the sun. Leave the free market of
product and services alone."
It seems to be a deregulation argument but the subject 'Proposed price hike for .org' phrasing hints at not appreciating increasing prices. Could very well be against removing price caps.
"I wholeheartedly agree with you, this should be taken in place."
Not really clear which parts of things he is agreeing with, but it was an agreement, so it was categorized in favor.
"Raise prices on .ORG!!!
Based on my research, you should raise prices on dotORG domains to $1000/yr and only allow emoji."
- Jon Roig
I think it's pretty apparent this is sarcasm.
Who is for removing price caps?
VeriSign. PIR. And one guy who thinks removing price caps will reduce speculation.
Not only is there virtually no support for this policy, the only people making any argument in favor of removing price caps have captured an ICANN constituency to do it, one that is supposed to represent business interests broadly (not registry interests).
Who Represents Us?
"The At-Large Advisory Committee (ALAC) is the primary organizational home for the voice and concerns of the individual Internet user."
So the average internet user is being represented at ICANN and they issued a statement.
It's at best a wishy-washy here are the two sides argument. The argument in favor of price caps they present:
"Price caps were deliberately instituted in recognition of such first-to-market advantage as the means to prevent foreseeable abuse in pricing of domain name registration renewals on existing registrants. It could be said that once a registrant has registered a domain name and invested resources to build a web presence around the same, the cost of switching that presence onto another domain name could well be significant. Further, in the case of the .org TLD, many registrants rely on their example.org domain names to signify their not-for-profit status, in very much the same way entities in many jurisdictions are obliged to carry suffixes in their names as the means of whether they are publicly-traded companies or privately-held ones.8 (It is also not inconceivable that newly-established not-for-profit organizations would want a .ORG domain name upon which to build their web presence, so the proposition of availability of choice to switch falters with these entities.)
Thus without price caps in place, certain registrants of domain names under these 3 TLDs may foreseeably have no reasonable recourse against their respective registrars/Registry Operators’ action in instituting immediate unrestrained price increases in domain name registrations and/or renewals (as the case may be). "
The argument against price caps:
"On the other hand, while seemly counterintuitive, price increases could be a positive development in the DNS space from the broader end-user perspective. It has been suggested that price caps suppress prices to a point that makes it difficult for new entrants to compete in the TLD space and thus removal of price caps is likely to be good for competition. Price caps also obscure the true value of a domain name and allows the perpetuation of their treatment as commodities, where artificially low prices of domain names keeps the door open to “abuse” – such as confusingly similar strings, typo squatting, phishing and fraud – in detriment to Internet end-users. Hence the removal of price caps is seen by some as a strategic move to boost prices as one way to deter bad actors, even portfolio domain investors, which in turn would increase choices in the primary market for potential registrants. So, while complex economic analysis is well beyond the scope of this comment, an increase in the median price of gTLDs could be good for competition, security and trust in the domain name space.
Also, uncapped pricing may or may not automatically translate to significant price increases, unreasonable increases, pricing beyond the current cap or for that matter any price increases across the board or in any particular TLD.
The ALAC and At-Large have a particular interest in .ORG, due to its connection to the Internet Society. As noted in ALAC’s .NET comment, a significant portion of .ORG registration fees “are returned to serve the Internet community [through] redistribution of .org funds into the community by the Internet Society, to support Internet development.” Notably, this includes support for the IETF, an “organized activity” of the Internet Society (ISOC). The IETF is a critical organization in the development, safety, security, and resiliency of the Internet and the DNS. Furthermore, ISOC’s goals and priorities, while far broader than At-Large (and even ICANN), parallel those of At-Large and the interests of end-users. Many At-Large Structures are also ISOC Chapters, further demonstrating the commonality of interests.
When considering this issue in the context of the .ORG renewal, it is important to note that Public Interest Registry (PIR) has not increased rates at all over the last three years, even though it had the right to increase prices cumulatively by more than 30% during that time period. It is our understanding that when PIR has contemplated an increase in .ORG pricing, the matter has been discussed thoroughly by the Board, which analyzed the pros and cons, taking into account the potential benefits, the impact on the market, and the impact on the image of PIR. "
The argument to get rid of price caps, opens with saying the logic is seemingly counter intuitive; this is because it doesn't make sense or hold up to any real scrutiny. .ORG operates as a monopoly for non profit organizations, there aren't new entrants. The 'competition' from new gTLDs isn't real, millions of non profits are already locked into their brands and websites. .ORG is a utility, price capped and running as a monopoly, with no reason to uncap it beyond greed. There is no evidence showing that legacy TLD prices are in any way related to abuse. In fact, there is evidence quite to the contrary that the new gTLDs are causing the most abuse (source). This is scaremongering and a meritless argument. The argument that increased prices reduce bad actors only to be followed by arguing that PIR isn't interested in raising prices is nonsensical and conflicting. Furthermore, instead of acknowledging the blatant conflict of internet that many Internet Society chapters are involved with ALAC and that the PIR's profits go to the Internet Society, they argue that this is in the best interest of everyone. This is the fox watching the hen house saying foxes watching hen houses is a good idea. Finally, they argue that PIR is a good faith actor because they haven't raised prices at every opportunity in the past three years. What this ignores is the fact they've raised prices above .com already which VeriSign charges $7.85.
Here is a table of registry prices since 2003:
|.ORG Price (% Increase)||.COM Price (% Increase)|
|10/15/07||$6.15 (2.5%)||$6.42 (7%)|
" there is no particular reason to believe that PIR will engage in excessive price increases; rather, there are substantial reasons to believe that PIR will consider the public interest and act in a measured and prudent fashion when it considers possible price increases."
PIR has raised prices on non profits higher than VeriSign has on .COM because it was allowed to. VeriSign has had price caps built into the contract and raised them the maximum 7% at every opportunity. PIR raised prices more than VeriSign because their price cap constraints allowed them to. Just because they haven't raised them in the past couple years doesn't change history and facts. Based on the pricing above .COM, it says PIR see's an opportunity to make more profit by raising prices on non profits who are locked in and won't switch to .COM or other gTLDs. They did this before the rush of new gTLDs, which means they understand their monopoly power over non profits and have continued to grow despite .com being cheaper.
If we read further down the statement we reach this:
"Contrastingly, the .BIZ and .INFO TLDs are operated by for-profit registries (i.e. Registry Services, LLC and Afilias Limited, respectively). It is not entirely clear how often and how much the Registry Operators for the .BIZ and .INFO TLDs have raised their prices in the past, and it is unknown how often or how much they will do so in the future. (If the price caps were to be removed for .ORG, .BIZ and .INFO under the call for “standardization”, then it is foreseeable that the .com and .net TLDs (both run by Verisign as registry operator) would also lose their price caps at some point, and there is no way to tell whether Verisign would then increase prices significantly or how often it would do so, even with the knowledge of them having instituted the full 10% annual price increase each year for .NET since at least 2005)."
First off, the people representing ALAC cannot figure out how often prices have been increased before making a statement on price caps? That alone is an embarrassing lack of knowledge when writing about the impact of price caps and talking about actions of registry operators.
The end game is written here though, price cap removal on com/net for VeriSign. Let's be clear, this is the ultimate goal.
The ALAC statement concludes,
"So, we are essentially grappling with competing considerations and uncertainties. After balancing the same, we do not find support for a particular position regarding the removal of price caps."
Given that the statement was written primarily by Internet Society members whose organization would stand to benefit most from removed price caps, it's suspect at best that they cannot pick a side.
Who is behind the statement?
Written originally by Greg Shatan, later with help from Justine Chew and Judith Hellerstein. Some sort of involvement from the Chair of the ALAC Committee, Maureen Hilyard.
Greg Shatan is the President of the Internet Society NY Chapter. Judith Hellerstein is the Director of the Washington DC chapter of the Internet Society. Maureen Hilyard is a board member and used to Chair the board of the Pacific Islands Chapter of the Internet Society.
Here is what Greg Shatan wrote about the thousands of email comments submitted,
"I would not place much weight on the slew of comments sent in on .ORG (and
others). Many of these are “cut-and-paste” comments with identical text.
Others are one-liners. Some are quite ill-informed (one commenter thought
they would have to pay the RO quarterly fee, others have thought that PIR
is a for-profit organization, etc., etc.).
I assume that some commenters sincerely felt threatened. But was this a
credible, well-founded or well-informed fear, or just a trip through a
fun-house designed to get a rise out of the commenters? A great number of
these comments are the direct result of a well-orchestrated campaign, rife
with overblown statements and catastrophic worst-case scenarios. In the
absence of other information, such campaigns can be quite effective in
fomenting fear and then harnessing that fear in order to flood a comments
period. We’ve seen this before. If you wind people up, you can get a lot
of them to go in the direction you want.
It might be too generous to say that “some lobby groups” are behind this.
It appears to be one. A Google search revealed the “engine” used to
generate all of those identical comments, complete with four pre-loaded
variations, and cleverly engineered so that the comment will come from the
sender’s own email account and not from the “engine.” The page is here:
https://www.internetcommerce.org/comment-org/. There are multiple links
from other pages, blogs, social media accounts, etc., to this resource.
These campaigns can reach out in many directions, in different places and
in different guises. It can take a great deal of discernment to recognize
them for what they are and to resist them. I hope that the CPWG
collectively can be discerning." - Greg Shatan
Greg Shatan disregards at a minimum 98% of all the opinions expressed and thinks it's best to represent the PIR and VeriSign connected lobbyists and organizations. Discerning means ignoring the public internet and serving the interests of the registries and those who profit from them (Internet Society, of which he is a member).
This person represented ALAC on the matter as pen holder, which is supposed to represent the concerns and voices of the individual internet user. He has openly said he doesn't believe what internet users are saying and wants to resist them.
What happened when you claim an organization is captured?
Apparently it's insulting and a violation of ICANN code of conduct. The person who found this most offensive was Jonathan Zuck, a (former?) board member at NetChoice, the same organization Steve DelBianco operates which is a VeriSign lobby group. Jonathan was heavily involved in the discussion about the ALAC statement. Jonathan has a long history of lobbying and was described in Wikileaks for,
"This file is an edited version of the EU OSS Strategy draft with the input of Jonathan Zuck, President of the Association for Competitive Technology, an organisation that has strong ties with Microsoft.
The file is a draft for an expert panel formed by the European Commission. This panel is divided into workgroup (IPR, Open Source, digital life, etc.) ACT and Comptia have been infiltrating every workgroup, even the one on Open Source (WG 7). They are doing the best they can to drown any initiative that would not only promote OSS in Europe but also that could help Europe create a sucessful European software sector." (source)
Does this sound familiar? Infiltrating every working group to push the interests of an organization. Jonathan is Co-chair, At-large Consolidated Policy Working Group, so he worked closely in writing the ALAC statement. He has strong ties to VeriSign which are disclosed.
The public interest is at best being represented, in majority, by people tied up in potential conflicts of interest in the given matter. At worst, it looks like special interest groups for VeriSign and The Internet Society(ISOC)/Public Interest Registry have captured multiple groups at ICANN and are trying to use it to line their organizations' pockets.
This appears to be a case study in regulatory capture. Beyond public outcry, there appears to be very little stopping ICANN from simply pushing through these contracts despite overwhelming evidence that the average internet user isn't in favor of these changes. There is virtually no meaningful argument in favor of removing price caps, unless you accept that it would be administratively easier for an organization with hundreds of millions of dollars in the bank. There is a bizarre free market argument that falls apart when you realize the cost of lock-ins for using a domain name and creating a web presence on any domain. .ORG is a thirty million dollar subsidy to the Internet Society (via PIR) which outsources, via competitive bid, the actual registry services. And they want the ability to charge more, at the expense of every other non profit. Their interests strongly align with VeriSign, who most likely see .ORG as the last hurdle before getting .COM and .NET to have price caps removed and increase their bottom line even more in their non competitive monopoly contract.
The only step left before these changes go into effect, that I am aware of, is board approval. I think it probably will go through unless there is a tremendous amount of attention brought to the issue. I'm not only concerned about price caps on .ORG, but structurally the only people who can invest so much time and money participating in ICANN are the organizations which stand to financially gain the most. Who is representing the public interest? Registry groups appear to have a strong voice within the ICANN community. Finally, I also worry about potential conflicts of interest at the board level, which has twenty members. Five ICANN board members were or are connected to ISOC (1,2,3,4,5). One is a former board member of PIR as well. I hope they recognize their responsibility to do what is right for everyone and not the select few registry operators in this instance.
I am speaking at HostCamp (side event to WordCamp Europe) in a couple weeks on the topic of Ethics in WordPress Hosting. I'm not really sure WordPress hosting has any specific differences from web hosting in general when talking about ethics. But ethical behavior in the web hosting space is something I talk about a lot. I also aggressively call out people/companies behaving unethically on this blog in the web hosting space.    
As I was writing a response to a short interview to introduce the topic, I tried to think about a relevant example of why ethics matter in web hosting. A very recent event jumped to mind, someone tweeting that Digital Ocean [Reviews] shut down their company.
This tweet was sent by @w3Nicolas.
The stats are staggering:
- 2,581 Reweets
- 4,574 Likes
- 1,333 Upvotes / 598 Comments on HackerNews
- 77 Upvotes / 78 Comments on Reddit r/webhosting
- 125 Upvotes / 93 Comments on Reddit r/webdev.
- Coverage on The Register.
That's only in the communities I participate in, I was sent the link by multiple people in other groups as well. I'm sure tens of thousands of people, if not more, read about this incident.
This is a view into what that tweet did to Digital Ocean's data here on Review Signal (I track Twitter data and sentiment about web hosting companies for the unfamiliar). I pulled the past 30 days of Digital Ocean information.
The tweet was sent on May 31, the 4th data point. We see an enormous jump in tweet volume. The preceding days had an average of 248 tweets per day. May 31 had 2000 and June 1 had 2489 tweets, nearly 10X the normal volume for two days. By June 4, we're down to 274 tweets, a normal volume. The internet outrage machine was out in force and spreading the word.
Digital Ocean responded on Twitter with Moisey Uretsky, a cofounder, intervening to escalate and resolve the issue. Digital Ocean also released a post-mortem on June 4 about what happened as promised (Nice to see a company keep their word and admit mistakes).
What does this have to do with Ethics?
Why did I even write this story and what does it have to do with ethics? The question I was trying to answer when I started thinking about this incident and digging into the data is "Why should hosting companies and those who do business with them care about ethics?"
A lot of developers and entrepreneurs read a story about a guy who was shutdown without warning, and then locked out seemingly permanently without being treated fairly. It strikes a chord with people when someone is being treated wrongly/badly with no explanation, especially when it's their livelihood that is impacted. It violates a fundamental moral code of fairness and trust.
The impact for a perceived ethical violation in this case was tens of thousands of people reading a negative story. It generated heated discussions and some very negative comments.
My data showed a tremendous increase in negative messages with the ratio dropping to 34% (Digital Ocean has historically over 70% positive messages).
They were quick to jump into some of the communities and address the issue. The post-mortem on Twitter received 225 Likes and 62 Retweets. That's 2.4% the amount of retweets and 4.9% the Likes. The impact of addressing the issue and trying to improve made a tiny fraction of the impact.
I will be clear here, I don't think Digital Ocean acted maliciously or unethically (intentionally). It sounds like a combination of automated system and a couple human mistakes lead to a very bad outcome for a customer that attracted a lot of attention. The way it was portrayed evoked feelings of an ethical violation of fairness and trust.
Digital Ocean's post-mortem's conclusion:
We wanted to share the specific details around this incident as accurately and quickly as possible to give the community insight into what happened and how we handled it. We recognize the impact this had on a customer, and how this represented a breach of trust for the community, and for that we are deeply sorry. We have a number of takeaways to improve the technical, process, and people missteps that led to this failure. The entire team at DigitalOcean values and remains committed to the global community of developers.
So when companies think about how they should behave, I want to use this example as an argument that people do care about companies behaving ethically and awareness of their behavior can quickly be amplified when a person's story resonates.
The benchmarks are available here