ICANN is a Bitch

After a thinly veiled threat of legal action from the California Attorney General, ICANN has delayed the sale of the .org domain registry.

This is a good thing. It is clear that this deal smells to high heaven:

ICANN, the nonprofit that oversees the Internet's domain name system, has given itself another two weeks to decide whether to allow control of the .org domain to be sold to private equity firm Ethos Capital. The decision comes after ICANN received a blizzard of letters from people opposed to the transaction, including California Attorney General Xavier Becerra.

Becerra's letter was significant because ICANN is incorporated in California. That means it's Becerra's job to make sure that ICANN is living up to the commitments in its articles of incorporation, which promise that ICANN will operate "for the benefit of the Internet community as a whole."

Becerra questioned whether ICANN was really doing that. "There is mounting concern that ICANN is no longer responsive to the needs of its stakeholders," he wrote.

………

California's attorney general pointed to several specific concerns about the transaction. One was the shadowy nature of the proposed buyer, Ethos Capital. "Little is known about Ethos Capital and its multiple proposed subsidiaries," Becerra writes. Ethos Capital, he said, has "refused to produce responses to many critical questions posted by the public and Internet community."

Ethos Capital's plan is to buy the Public Interest Registry (PIR) from its current parent organization, the nonprofit Internet Society. To help finance the sale, Ethos will saddle PIR with $300 million in debt—a common tactic in the world of leveraged buyouts. Becerra warns that this tactic could endanger the financial viability of the PIR—especially in light of the economic uncertainty created by the coronavirus.

………

Becerra ends his letter with a warning: "This office will continue to evaluate this matter, and will take whatever action necessary to protect Californians and the nonprofit community."

This whole thing smells of self-dealing, which is contrary to US non-profit law, California non-profit law, and ICANN's own rules.

Shut it down.