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Thoughts on Our NPR Interview About Ethos Capital's Acquisition of .ORG

Nora Abusitta-Ouri

I was glad to join Meghna Chakrabarti on NPR this week for an engaging discussion about Ethos Capital's acquisition of Public Interest Registry (PIR) from the Internet Society, which you can listen to here. I always appreciate an opportunity to answer questions about .ORG, and was pleased to be joined by Andrew Sullivan, President and Chief Executive Officer of the Internet Society, and Esther Dyson, founding chairwoman of ICANN from 1998 to 2000.

I have always respected Esther as an expert in domain name space, so I was surprised and disappointed to hear her compare for-profit ownership of .ORG to "slavery," saying, "I think it offends our sense of justice and rightness. ... You don't take a person and sell them. ... It's not the same as slavery, but it is in that same direction." [timestamp 10:39]

As with any healthy debate, reasonable minds can differ on the best path forward for .ORG, but this language was inappropriate and unnecessary.

I would also like to address what went unsaid by Esther — namely, that she is part of a group called the Cooperative Organization of ORG Registrants (CCOR) that has said it wants to take over operation of .ORG from PIR. While we respect the right of people to express a point of view on Ethos' investment in PIR, this group has no financial backing or experience running a registry business. No evidence has been presented as to how it could run .ORG better than PIR — or what it would invest in PIR to run a world-class registry and offer new services. This is in sharp contrast to what has been laid out as part of Ethos' commitments.

Investment Thesis

During our discussion on NPR (and many others), we have heard questions such as, "Why did Ethos pay so much for PIR?" and "What's in it for your investors?" I understand that this is where a lot of the fear about price increases comes from — at the heart of this, people are wondering why we would invest over $1 billion in PIR if we don't plan to profit by raising prices? As Erik Brooks, the Founder and CEO of Ethos, has stated previously, our investment thesis in buying PIR was very much driven by the stability and predictability of the company's current and historical performance. Like any business with stable revenues over time, the investment amount is one we're very comfortable with based on the current profitability of the business. When we first heard concerns on price constraints, it was easy to address them because we never had any plans for dramatic price increases.

Price Restrictions

Andrew made it clear that the removal of the price restrictions was not connected to the decision to sell PIR. As Andrew stated, various parties had expressed interest in acquiring PIR from the Internet Society before the price restrictions were removed. We have addressed these concerns directly: Ethos has committed to limiting any potential increase in the price of a .ORG domain registration to no more than 10% per year on average, even though today there are no regulatory pricing constraints on PIR or virtually any other domain name registry. At less than $10 today, .ORG is one of the most affordable domains in the world, and a 10% increase would equate to about $1. As such, .ORG will continue to be one of the most affordable domain names to use. As noted, without the transaction, PIR today could raise prices as much as it wished.

Ethos Investors

I was also asked about Ethos investors. First, I want to make it clear that as the majority stakeholder, Ethos Capital will control the board of PIR. As we previously stated on multiple occasions, we are committed to investing in PIR for the long haul. Our other investors include families and nonprofit organizations with long-term investment horizons. While we have been more transparent than any other registry transaction in the history of ICANN, this is a US-based private transaction in which investors and corporate directors have a right to privacy. The .ORG domain is indeed special — that is why we are committed not only to keeping it that way, but also making it even stronger for the future. Today its proceeds power the Internet Society; tomorrow they can empower .ORG users.

History of For-Profit Ownership

One of the points that Esther made during our discussion is that a for-profit entity cannot and should not own .ORG. Contrary to the view that only a nonprofit can support another nonprofit, .ORG was formerly operated by a for-profit company (VeriSign). And nonprofits rely on for-profit businesses every day to achieve their online goals — from registrars to web designers, to Internet providers, to hosting services, and beyond. The Internet was built by for-profit companies with the resources and capabilities to innovate, and we want to make sure that the registrants of .ORG, like every other domain in the world, have the benefit of being served by a company with the ability, desire and resources to innovate and compete on a global scale.

As I hope I have made clear in my statements about this transaction, Ethos is a different kind of for-profit entity, one that believes doing "well" and doing "good" go hand in hand. Ethos was founded on the belief that prosperity should be built and shared, and that innovation has the power to fuel growth and success for all. The identity of .ORG as a domain "for good" is critically important to both PIR and Ethos, and we intend to do everything we can to protect and enhance this reputation.

* * *

Ethos has agreed to every offer for an open discussion on this transaction, and I look forward to more of these conversations in the coming weeks.

By Nora Abusitta-Ouri, Chief Purpose Officer at Ethos Capital
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Podcast invitation Andrew Allemann  –  Jan 22, 2020 11:14 AM PST

Nora, I'd like to have you or Erik on my podcast. Please contact me: andrew (at) domain name wire .com

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