The .Org Fire Sale: How it sold for less than half its valuation

(blogs.harvard.edu)

748 points | by metasj 11 days ago

36 comments

  • lancewiggs 11 days ago

    I wrote about this too - linked in the article. https://lancewiggs.com/2019/12/01/did-isoc-leave-1-billion-o...

    The travesty is that ISOC has given up a sure-fire stream of $55+ million/year in tax-free income, along with the ability to easily grow that to over $100m/year with price increases - all for just over $1.1 billion.

    As any r/personalfinance reader can tell you a rule of thumb for endowments is to spend a maximum of 4% of your assets each year. This means $44m from the $1.1bn, which means ISOC is immediately worse off than they were forecasting for this year (~$55m). Alternatively use the Yale method, which in today's low-return market will yield similar or worse results.

    Moreover it's clear that ISOC are not behaving as the sharpest of investors, so we can imagine that the endowment might be be poorly managed or over-spent.

    • cameldrv 11 days ago

      The bigger issue is that org was given to PIR to manage in the public interest. It was not supposed to even be a moneymaker for ISOC, they were just supposed to be the stewards of .org in the public interest. The fact that it’s worth even $1 billion shows that they’re operating it in the interest of the ISOC and not the public interest. ICANN should simply create a new entity that will charge break-even fees for registrations and stop trying to tax .org registrants with mandatory charitable donations to a dubious charity.

      • evross 10 days ago

        It's worth noting that the former ICANN CEO, Fadi Chehadé is highly involved in this sale. This timeline also seems to suggest that current members of ICANN are also biased towards the sale of the .org domain, ICANN may not be interested in the views of the people who currently have .org domains.

        From https://www.privateinternetaccess.com/blog/2019/11/isoc-pir-.... :

        "March 2019:

        ICANN receives 3,300 comments uniformly opposed to the change and 6 in favor of removing price caps, and sides with the 0.2% minority.

        May 2019:

        PIR responded to the comments with an open letter that said,

        “We are a mission-based non-profit, and would never betray the trust that you have put into .ORG and us.”

        On 7 May, Chehadé registered the domain for EthosCapital.com.

        On 13 May, ICANN decided to lift the price caps anyway.

        On 14 May, Ethos Capital was incorporated as a new investment firm founded by Brooks. Ethos Capital has two staff: Brooks and Nora Abusitta-Ouri, a former ICANN SVP who later worked for Chehadé and was also a classmate of Chehadé."

        • Joeri 10 days ago

          So basically ICANN itself is corrupt and must be replaced wholesale with a proper public interest steward?

          Maybe people are protesting the wrong thing. The sale of .org is a symptom, the underlying cause is a bad regulatory framework for internet names.

          • Accujack 9 days ago

            Exactly. Internet naming is a situation where artificial value is assigned to a nearly valueless resource for the purpose of collecting rent.

            There's no technical reason we can't have multiple systems for translating names into addresses. There's no longer any technical reason for having neatly organized dot separated addresses based on TLDs.

            Allowing the translation of any text string into an address is entirely possible with present day computing power, and a truly distributed system similar to the global routing table would work to organize different providers announcing their own name domains.

            Maintaining the old DNS TLD domains is stupid and subject to manipulation by corporations and corrupt politicians.

            Like this sale.

            • stkdump 8 days ago

              I heard this argument a few times now. But are domain names not important for internet security? Https certs prove that the entity you expect communicates with you, given that you know the domain name of that entity.

              • Accujack 8 days ago

                It's one way to do that... but the present format and management of the domain name system isn't important. You can create a security certificate for any form of text string and use it to validate the other end of the connection.

                The certificates are essentially a trusted authority saying cryptographically "we have verified this is really the person you think this name is" and that can be done for any identifier. Also, this system was set up before public key encryption became common, and there are plenty of other ways to accomplish the same function with PK crypto.

                • stkdump 8 days ago

                  Ok, but how is a domain name essentially different from 'any form of text string'? There needs to be some central registry, unless you are ok with such long strings that nobody will effectively double check, that they are correct.

          • evross 10 days ago

            I'd recommend going to https://savedotorg.org and sharing it if possible. There will be a public call through this campaign for people interested in learning more about this sale on December 5th at 12pm pacific time.

          • reitzensteinm 11 days ago

            Further, the sale of the asset to a third party is essentially laundering the extraction of maximum value.

            The buyer pays the NPV when operated as a profit focused enterprise, then insulates the ISOC from blowback when it actually does this.

            The ISOC can then turn around and feign betrayal with the rest of us, its pockets full of money.

            • ohashi 11 days ago

              This is the internet. We don't forget things like this. People's names have been attached to it, like Andrew Sullivan (CEO) and Richard Barnes (board member defending it). We know exactly who fucked over everyone here, they admit it publicly. There's no pretending about it, Andrew was more than happy to sell out the non profit space. Just read the interview: https://www.theregister.co.uk/2019/11/29/isoc_ceo_dot_org_sa...

              • MrEldritch 10 days ago

                This is the Internet. Everyone will have forgotten this besides, like, five people before this time 2020.

                • bryanrasmussen 10 days ago

                  This is Hacker News, pretty much everyone will have forgotten about this relatively soon but whenever anything even remotely related to the event is posted about one of the people who has not forgotten will say about how they are still annoyed with X and that X is immoral, which will then cause someone to say what is wrong with X, and then someone else will go into excruciating detail on what is wrong with X and lots of people will chime in to say they hate X too.

                  Which I think is pretty much things working as intended. And as a result, no they won't exactly be remembered forever but they don't get to go down the memory hole either.

                  • xtiansimon 10 days ago

                    I’ll have a reminder each time the website I created for volunteers helping a non-profit is up for renewal.

                    • jtbayly 10 days ago

                      2020/tomorrow. FTFY

                  • gowld 10 days ago

                    "laundering" is the fundamental purpose of incorporation. The various forms of corporations are various ways to detach responsibilities normally required of natural persons.

                  • wpietri 10 days ago

                    Break-even pricing was my first thought, too. But I think the .org registry has to be priced at least modestly higher than business-y domains (e.g., .com), because otherwise you'll find people using it for all sorts of for-profit stuff, reducing its signalling value.

                    But there's no reason that money can't go right back into basic infrastructure. For example, after the Heartbleed bug we learned that OpenSSL was receiving about $2k/year in donations. Surely there are obvious core open-source projects that could use reliable funding: https://arstechnica.com/information-technology/2014/04/tech-...

                    • gowld 10 days ago

                      Why does "signalling value" matter at all? If a business gets value by masquerading as an "org", then that value is sure worth more than $10 or whatever, and surely the commercial entities are better able to pay than non-profit orgs, so making org cost more only hurts orgs, not businesses.

                      • wpietri 10 days ago

                        Depends on which business. You're correct for businesses who invest heavily in their brand and have just one domain. But you're very wrong for businesses that have a lot of domains and use the domain for credibility. E.g., spammers, typo-squatters, fraudsters, fly-by-night retailers, etc. And it's those that will really bring down the value of the TLD.

                    • cryptonector 11 days ago

                      Operating .org in the public interest in the past doesn't mean that it has zero value today. "The fact that it’s worth even $1 billion shows" not so much that "[ISOC is] operating it in the interest of the ISOC" but that PIR may not be interested in operating .org in the public interest.

                      How is ISOC a dubious charity?

                      • ohashi 11 days ago

                        Someone dug into their expenses, 69% overhead. https://twitter.com/ferdeline/status/1199380702233612288

                        • cryptonector 11 days ago

                          Do you know what ISOC does? It's a non-profit, yes, but it's not a charity. It exists to make things like the IETF and IRTF, and related administrative groups run. That's it. Of course its expenses are going to be mostly overhead -- what else would they be given their mission?

                          • gowld 10 days ago

                            "mission-related" work is a separate category from "staff travel" aka vacations.

                            • cryptonector 10 days ago

                              The staff travels because they host conferences around the world several times a year. Conferences I've attended many times, and which are more than full work days for the attendees and the staff. Typically a day at an IETF meeting starts at 9AM, officially ends at 5PM, but then side meetings, bar BoFs, impromptu hackathons, and so on, will take you to near midnight almost every day -- it's exhausting (the staff probably doesn't work such long days, but ISOC officers probably do). There is no time left for sight-seeing, except maybe on the one night where there is a social event.

                              They host conferences around the world because attendees to the conferences in question are from around the world, and because ISOC wants to attract more of them.

                              I'm prepared to listen to real arguments about why ISOC sucks. But yours are either uninformed or you're not explaining them well enough. My bet is on the former. ISOC is not a charity, just a non-profit, and they've done quite well at keeping the IETF/IRTF and related groups going for decades.

                              Another thing you need to understand is that most SDOs (standards developing organizations) are pay-to-play. ANSI, OASIS, IEEE, Unicode Consortium, ... -- all pay-to-play. IETF? Free to participate. You don't even have to go to the meetings. Sure, participation == time == money, but being so accessible is a wonderful thing, and it takes an ISOC to keep it so.

                        • LegitShady 11 days ago

                          >but that PIR may not be interested in operating .org in the public interest.

                          Oh who did this organization with a duty to steward .org for public interest sell it to? How can you separate that duty from the action of selling it to a third party without that duty?

                          It's an interesting hair to split.

                          • cryptonector 11 days ago

                            That's fair, but it's not proof that ISOC wasn't running .org in the public interest, only that if they had been, they stopped when they sold it to a party that looks set not to. "They were so good right until the point where they stopped being so good."

                            • LegitShady 10 days ago

                              >but it's not proof that ISOC wasn't running .org in the public interest, only that if they had been, they stopped

                              The action selling it to another org without that duty is abdication of that duty and they should not have had authority to sell it.

                              The specific circumstances only make it worse.

                              • cryptonector 10 days ago

                                Talk about not responsive. All you did here is restate your previous point.

                                • LegitShady 10 days ago

                                  All you did was state that their previous actions aren't proof of the future, when we are talking about them having sold .org already.

                                  Their abdicating stewardship to a group that doesn't have a duty to steward is evidence enough and saying "well they used to" is off topic and not interesting. No need for new arguments when you have none.

                                  • cryptonector 9 days ago

                                    Previous to selling it.

                                    • LegitShady 9 days ago

                                      Who cares? The act of selling it to someone without the obligation to steward is an abdication of that obligation.

                                      and talking about precious years is just off topic and unrelated to the issue at hand.

                      • 4ntonius8lock 11 days ago

                        I appreciate your excellent write up. When I read the allegations in the original article I kinda wanted more detail. You break it down very well with great attention to detail.

                        I'd like to place this here for those who only read comments:

                        .org registry rights belong to a non-profit - the rights were sold to a private equity group - somewhere between 50% and 90% below market rate. It was based on self dealing of the people given stewardship of the non-profit that manages .org

                        Basically, this is privatization Russian style. Not good. Even if you like privatization, no-bid stuff is just wrong.

                        Want to help support the democratic institutions which hopefully won't fail us? Look here: https://drewdevault.com/2019/11/29/dotorg.html

                        • mattrp 11 days ago

                          I don’t know if it’s fair to say they could have easily doubled but your point about not acting like investors is fair. In contrast, AAA, USAA, and AARP have chosen to leverage their assets to enter new lines of business while Isoc simply sold their’s off. I am not familiar with what governance issues might be in play here but the simpleton like me would ask, what alternatives did ISOC evaluate before taking a buyout offer from a insider-linked entity that ironically calls itself “ethos”...

                        • LegitShady 11 days ago

                          I feel like you're missing some capital recovery factors and alternatives analysis to be so strong with your statement.

                          • lancewiggs 10 days ago

                            It’s a pretty simple analysis - but there is clearly, to me, enormous value left on the table.

                          • deepaksurti 11 days ago

                            >> is to spend a maximum of 4% of your assets each year.

                            OT. Isn't 4% also the rule of early retirement, that is if you can live of 4% of your savings you can retire?

                            Can anyone clarify if this rule applies for both individual and corporate? If so, how would be even more interesting to know?

                            • logfromblammo 10 days ago

                              4% works out for retirement, with the expectation that you will eventually die and no longer need the income. The assumption there is that if the market underperforms for the next 35 years in a row, you run out of money just after you die.

                              An immortal, such as a corporation, has to use a safer number, such as 3%, or 2.5% for operations and 0.5% in fees for the fiduciary management. So the permanent endowment needs to be 40x annual operating costs, and the fiduciary needs to grow it by 3% better than (price) inflation per year. That's relatively easy to do when most of the principal won't be touched within the next 30 years: buy all the publicly-traded stocks that have historically paid regular dividends, and reinvest whatever isn't paid out. On a long enough time scale, that's probably 7% better than inflation.

                              So the fiduciary could possibly be replaced by a robot that only needs 0.05% annually for maintenance, and then you'd only need to endow 34x annual operating costs to run forever.

                              • throwaheyy 10 days ago

                                Yes. Generally and for the purposes of this discussion, individuals and corporations can both buy investments in the public markets with similar risk/return profiles. Hence the spending ratio works out similar.

                                The 4% spending ratio theoretically varies with market performance but evens out over time. 7-8% typical returns for a total market index/etf, minus a couple % to account for inflation.

                                • gowld 10 days ago

                                  The % is lower for corporations than for humans, because corporations intend to outlive humans.

                                • xwdv 11 days ago

                                  There ain’t nothing “sure-fire” in this world when it comes to income son. A bird in the hand is worth two in the bush. Those armchair investors from reddit don’t know the situation .

                                  • kick 11 days ago

                                    Most of your comments on HN today have been extremely condescending. Is 'xwdv a parody account? (Genuine question.)

                                    • xwdv 11 days ago

                                      It’s a self fulfilling prophecy. I used to get upvotes, but recently I only get downvotes, and now that I feel targeted, the tone of my posts gets more hostile. I wish there was more transparency surrounding downvotes.

                                      • kick 11 days ago

                                        There is [transparency]: if you're being downmodded, you're either deemed as not contributing to the conversation, or people disagree with you enough to do so.

                                        As per Paul Graham:

                                        I think it's ok to use the up and down arrows to express agreement. Obviously the uparrows aren't only for applauding politeness, so it seems reasonable that the downarrows aren't only for booing rudeness.

                                        https://news.ycombinator.com/item?id=117171

                                        Forcing users to publicly display their opinion on a person's comment would be negative for many reasons, especially on a site like HN, where many people choose to be eponymous.

                                        Also, note: most of the comments on the first page of your profile seem to be in the black, which means they weren't controversial enough to receive many (if any) downvotes.

                                        • jorvi 11 days ago

                                          HN downvotes can be rather confounding still. Check here: https://news.ycombinator.com/item?id=21653015

                                          I responded very matter-of-fact, pointing out that the sharp edges of Tesla's cybertruck are something that makes it more dangerous to pedestrians. I didn't add any flourish or snark or whatever and yet it went into the grey. That kind of voting behavior just gives me a giant question mark.. why would anyone be hostile to explanation via fact?

                                          IMO any site with a voting system should attach a heavy cost to downvoting:

                                          1. each downvote you do costs more - with a slow backoff timer

                                          2. the more points you have, the more it costs to downvote

                                          3. the more downvotes a comment has the more points it costs

                                          This mirrors the real life cost in social interaction:

                                          1. you can't constantly be negative to everyone

                                          2. high status people can afford to do that more, but not infinitely

                                          3. you can't pile on one person (or rather, with each person adding it nears the threshold of "wow, maybe that's enough, dude")

                                          (Yes, I know, talking about voting vis-à-vis HN is discouraged, but it apparently does bother a rather large contingent of users)

                                          • kick 11 days ago

                                            Your answer was an answer to a question that wasn't being asked, and one that was obvious, at that. It seems reasonable that it was downmodded.

                                            IMO any site with a voting system should attach a heavy cost to downvoting:

                                            I think 'dang has already elaborated as to why this is a bad idea, but:

                                            Hacker News depends on downmods for community moderation. Discouraging them would lower the quality of the site.

                                            3. the more downvotes a comment has the more points it costs

                                            Not to assume bad-faith, but this was a joke, wasn't it? A bad comment should be downmodded more, and users should not be penalized for that. Flagging, too, should happen if it's extremely bad.

                                            This mirrors the real life cost in social interaction:

                                            1. you can't constantly be negative to everyone

                                            If a person is only posting negative content, it makes sense that they would get downmodded more often: active users of the site will often see these people's comments more than others. Should they get punished for keeping the quality of the site up? I don't think so. That seems unreasonable.

                                            3. you can't pile on one person (or rather, with each person adding it nears the threshold of "wow, maybe that's enough, dude")

                                            That's completely unreasonable: if a comment is bad, it should be downmodded.

                                            • jorvi 10 days ago

                                              > Your answer was an answer to a question that wasn't being asked, and one that was obvious, at that. It seems reasonable that it was downmodded.

                                              > "Are trucks more likely to hit pedestrians? I was not aware of big vehicles being more dangerous."

                                              Its pretty blindingly obvious what I answered.

                                              > Hacker News depends on downmods for community moderation. Discouraging them would lower the quality of the site.

                                              But attacking facts literally lowers the quality of the site

                                              > Not to assume bad-faith, but this was a joke, wasn't it? A bad comment should be downmodded more, and users should not be penalized for that. Flagging, too, should happen if it's extremely bad.

                                              And yet you also want to prevent echo chambers. So many people just blindly ram the downvote button on a grey comment. Or a comment that goes against one of the big names on HN, even if that comment is right.

                                              Your responses to 2. and 3. (and 1. too) basically all come down to "downvoting is amazing, we need more of it!"

                                              I don't really know how to respond to that. Are you completely oblivious to echo chamber effects..?

                                              Edit: the fact that you downvoted this immediately only strengthens my point, dude.

                                          • xwdv 11 days ago

                                            If many of my comments are still black, despite having at least -4 down votes, then it can only mean I’m being targeted by select users.

                                            I have some posts where it’s simply not clear why anyone would downvote it, and some of my downvoted comments spawned huge sub threads, so clearly not everyone thought they were downvote worthy.

                                      • formercoder 11 days ago

                                        That's why cash flows are discounted at the cost of capital - it's a quantitative decision.

                                      • forrestthewoods 11 days ago

                                        Exchanging 10 to 20 years of potential revenue for a flat check seems like a pretty good deal.

                                        • Scoundreller 11 days ago

                                          Agreed. A p/e of 20 isn't bad. S̶t̶o̶c̶k̶ ̶m̶a̶r̶k̶e̶t̶ ̶i̶s̶ ̶1̶5̶ ̶r̶i̶g̶h̶t̶ ̶n̶o̶w̶,̶ ̶a̶n̶d̶ ̶t̶h̶a̶t̶'̶s̶ ̶f̶a̶r̶ ̶m̶o̶r̶e̶ ̶d̶i̶v̶e̶r̶s̶i̶f̶i̶e̶d̶.̶ Oops, stock market is 20-25 right now.

                                          There's so many TLDs today, the ability to raise prices isn't what it was.

                                          Though they could 5x prices and even if they lost 60% of their business, they'll come out ahead. I could understand the worries of .org holders.

                                          • lancewiggs 11 days ago

                                            .org is .org, and they have a lot more pricing power than almost all of the gTLDs (generic top level domains).

                                            Their customers, if you think about it, are perhaps more likely to value what the domain stands for. Meanwhile the annual price is currently absolutely trivial versus the expenses of most organisations from higher GDP countries.

                                            • onion2k 11 days ago

                                              Their customers, if you think about it, are perhaps more likely to value what the domain stands for.

                                              Some of their customers perhaps. If you go back and look at what companies were doing with domains 20 years ago most medium and large enterprises bought <company name>.com, .org, .net and some country code tld domain because that's what everyone recommended "in case someone cybersquatted". I think behaviour has stopped now there are hundreds of gTLDs available. Consequently .org is much less likely to sell to businesses, and will find it very difficult to grow.

                                              • darkwater 10 days ago

                                                .org customers are not businesses, it's the non-profit

                                                • onion2k 10 days ago

                                                  20 years ago businesses bought the .org for whatever trademarks they owned to stop someone else grabbing it. Same for .com (which they used) and .net. They usually pointed all three domains to the same place. That activity has stopped. There will be far fewer .org domains sold today because businesses have stopped doing that.

                                                  • woofcat 10 days ago

                                                    As someone who owns .org domain names. That might be what it's for like .com is for commercial and .net is for networks. However that is not at all how they're used.

                                                    Perhaps by some percentage of them are registered non-profits. However not the majority.

                                                    • mobilefriendly 10 days ago

                                                      Ask craigslist.org about that.

                                                • shkkmo 11 days ago

                                                  The same people that are involved in this shady set of dealings are closely financially intermingled with the owners of donuts.com, the largest owner of TLDs by far. Expect to see large price increases across the board.

                                                  Even if they push 60% of domains off of .org that business will mostly go to other TLDs owned by the same people..

                                              • annoyingnoob 11 days ago

                                                There is a chance that the fire sale price will help keep .org prices from skyrocketing. Maybe they did .org domains a favor.

                                                • slantedview 11 days ago

                                                  As always, non-profit services cost less than for-profit services for a reason. ISOC could have implemented any price hikes they wanted without the need to pay out a profit as will be necessary for the new owners.

                                                  This will be a net cost increase, likely a big one (since there are no actual controls), for .org owners.

                                                  • syshum 10 days ago

                                                    In what universe is that the case? Prices are going to raise by at least 10% per year from now until the end of time.

                                                    that is doubling every 7 years thereabouts, far far far higher than inflation or cost bais increases would demand

                                                    • lancewiggs 11 days ago

                                                      Any investment firm wants to maximise returns for their investors. The incentive is to find the (monopoly) price that maximises income from sales numbers x dollars.

                                                  • metasj 11 days ago

                                                    Related past threads:

                                                    "Save .org": https://news.ycombinator.com/item?id=21611677

                                                    "Take action to save .org": https://news.ycombinator.com/item?id=21664582

                                                    "Why I Voted to Sell .org": https://news.ycombinator.com/item?id=21656960

                                                    "ISOC sold the .org registry to Ethos Capital for $1.1B" https://news.ycombinator.com/item?id=21667355

                                                  • shkkmo 11 days ago

                                                    Wow, the level of corruption and self dealing here is remarkable. Chehadé was the CEO of ICANN until a couple of years ago.

                                                    > On May 7th, Chehadé registered the domain for EthosCapital.com.

                                                    > On May 13th, ICANN decided to lift the price caps anyway. The decision was made by ICANN staff, not its board, evading the obligation to publicly carry out due diligence and explain board decisions.

                                                    > On May 14th, Ethos Capital was incorporated as a new Boston-based “investment firm”, founded by Brooks — who stepped down from running the 60-person team at Abry to do so. Ethos Capital has two staff: Brooks and Nora Abusitta-Ouri, a former ICANN SVP who later worked for Chehadé. [0]

                                                    Then a couple of months later, surprise, .org gets sold to Ethos Capital... Almost as if this was the plan the whole time...

                                                    Here's hoping that somehow these crooks actually end up in jail...

                                                    [0] http://blogs.harvard.edu/sj/2019/11/23/a-tale-of-icann-and-r...

                                                    • mortenjorck 11 days ago

                                                      I wonder what the level of awareness of this is in the nonprofit community itself. Something like the National Council of Nonprofits would seem to be in a good position to file a suit or at least raise awareness among its members who might be interested in forming a class.

                                                      While a major charity like the Salvation Army certainly doesn’t care if a single, sub-$100 annual expense doubles or even goes up by a factor of ten, thousands of small organizations across the country might care enough to band together and take action.

                                                      • C1sc0cat 10 days ago

                                                        Former member of the worker coop that bid to run .org when ISOC won here.

                                                        Technically .org is not just for American style "non profits", I it was and should be any thing else that doesn't fit the other big 5 eg jwz.org.

                                                        That was the problem a lot of shady stuff goes on in the Charity world ("but its for charity") notorious for bullying often much worse than the behaviour of wall street or city bankers and traders.

                                                        I feel that a more sensible approach such as ours would have been better served - as coop members tend to be stroppy bastards and would have stood up for the common good - a lot of our ISP side in Manchester where members of alt 2600 .

                                                      • agwa 11 days ago

                                                        > Take a page from the Donuts book: create multiple price tiers for popular domains, up to 100x the base rate.

                                                        > Raise rates for long-time owners of common words. They weren’t using that premium space anyway.

                                                        This is forbidden by the .org registry agreement, 2.10(c): https://www.icann.org/sites/default/files/tlds/org/org-agmt-...

                                                        • cannonedhamster 11 days ago

                                                          And amazingly won't matter under the new owners who get to write their own rules. That's why everyone is upset. There was a vote that allowed .org to set whatever prices they wanted right before the sale.

                                                          • dwild 9 days ago

                                                            His link was to the updated agreement. The sale doesn't allow the owner to write their own rules.

                                                          • metasj 11 days ago

                                                            Ah, thanks -- you're right, the second is prohibited; corrected. The first seems fine per 2.10(c) as long as the registrant agrees on first registration that renewals will be expensive.

                                                            • mlyle 11 days ago

                                                              Registrant can negotiate with ICANN to make their own terms at expiration of the agreement.

                                                              • ohashi 11 days ago

                                                                ICANN has no spine and is captured, so it probably will happen. And now with .ORG doing this, we're going to see .COM next.

                                                          • slantedview 11 days ago

                                                            "Sullivan suggested that their goal is to return roughly the same annual revenue as they have been getting from PIR — around $50M. Of course this time it would come without the possibility of expanding the underlying business year by year."

                                                            This hurts my head. Needless to say, the returns on this fund will be _far_ less assured than the returns on simply maintaining the .org business as it was (especially with Goldman managing the fund).

                                                            Impressively, even ISOC comes out a loser from this deal. Only Ethos wins, but then, that was surely the point.

                                                            • ohashi 11 days ago

                                                              Waiting to hear who are ISOC gets new gigs in the Ethos orbit.

                                                            • leibnitz27 10 days ago

                                                              I bought an org domain back in the 90s, and have been using it as my personal domain (i.e. also primary email address) ever since.

                                                              While, granted, I was perhaps a little silly to go org (it seemed like a good idea back then!), it's mildly terrifying that my personal footprint on the web of 20+ years can now be held to ransom by a random VC firm, and to keep my own email address I might have to pay an additional $$$ annually.

                                                              Sigh.

                                                              • tqkxzugoaupvwqr 10 days ago

                                                                Extend your domain lease by 10 years at the current yearly fee. Gives you some time to migrate if you choose to.

                                                                • zrm 10 days ago

                                                                  That's a bad deal unless you actually need ten years to migrate, which you probably don't. Better off to take a year or three at the 10% annual increase and then stop paying entirely (~364% of the existing rate for three years, with payments made in the future rather than the present) than to pay 1000% of the existing rate right now.

                                                                  • dropmann 10 days ago

                                                                    10 years is a long time, maybe until than its bought back to non-profit, you never know. Also it allows you the luxury of starting worrying about your migration later. If you could invest that money now with more than 4-5 times US interest rates (which is the price increase I would expect), then I would consider this a bad deal.

                                                                    • zrm 10 days ago

                                                                      If it's reverted back to non-profit then prepaying is still a bad proposition because then you're paying today the same amount you would be able to pay years from now -- and paying it to the for-profit entity now instead of the non-profit entity later.

                                                                      And I don't see any reason to expect the annual probability that it's transitioned back to a non-profit to be a lot different in the future than it is right now, which means that if it makes sense to migrate then it doesn't make sense to wait. Especially when continued use of the domain only increases the migration cost as it gets further distributed as your active contact information.

                                                                      • pythonaut_16 9 days ago

                                                                        Isn't the price like $12 a year? So prepaying 10 years would be $120? That's not an insignificant amount, but it's not like you're going to make a life-changing profit by investing it either.

                                                                        Locking down [your-name].org for 10 years carries its own value proposition beyond the mere calculation of price today vs in the future.

                                                                        • zrm 8 days ago

                                                                          > Isn't the price like $12 a year? So prepaying 10 years would be $120? That's not an insignificant amount, but it's not like you're going to make a life-changing profit by investing it either.

                                                                          For most people there aren't a lot of individual decisions that will cause you to make a life-changing profit on their own, but it's making little decisions again and again that adds up.

                                                                          > Locking down [your-name].org for 10 years carries its own value proposition beyond the mere calculation of price today vs in the future.

                                                                          The premise is that you're going to immediately migrate away from using the domain. Which means that any further use of the old domain just keeps you invested in it, and it's not worth a whole lot if you're not going to use it for anything.

                                                                          There is also something to be said for minimizing the profits of the entity screwing you over, even if it's only by a little, because that adds up too.

                                                                          • If you stop leasing a domain, you should be very sure that you changed your e-mail address at all the services you ever used and informed all the contacts of your new e-mail address. Because the second you let your domain expire, someone else might gobble it up and receive all the e-mail addressed to you. If you keep leasing for multiple years even after migration, you can be sure to catch any services/people still mailing you at the old address.

                                                              • romaaeterna 11 days ago

                                                                If this is really the case, someone(s) very possibly took and gave bribes, and we're going to see Federal scrutiny all over this.

                                                                • TheRealPomax 11 days ago

                                                                  No, we won't. Not unless you help set that in motion. Have you contacted the DA already?

                                                                  • schoen 11 days ago

                                                                    Note that in the U.S., district attorneys are normally the prosecutors at the state court level. At the Federal level, most prosecutors are "U.S. attorneys" or "assistant U.S. attorneys".

                                                                    https://en.wikipedia.org/wiki/District_attorney

                                                                    https://en.wikipedia.org/wiki/United_States_Attorney

                                                                    • TheRealPomax 10 days ago

                                                                      Right, so: the DA. Because as incredible as this is: neither ICANN nor ISOC are controlled or run by the federal government.

                                                                      As much as people think that the organization that oversees internet naming must be federal (because how could it not be, they control stuff for the ENTIRE COUNTRY AND BEYOND), both ICANN and ISOC are literally just private industry non-profit organisations, like any other 501c3. If you want to sue them, or you want them sued by government, you're going to have to contact the DA for the state(s) they are registered in.

                                                                      • schoen 10 days ago

                                                                        The reason that I mentioned the distinction was that you suggested contacting DAs in response to romaaeterna's prediction that "we're going to see Federal scrutiny". Contacting DAs might be the most appropriate way to handle a problem, but in itself it probably won't lead to Federal scrutiny of that problem.

                                                                        • TheRealPomax 10 days ago

                                                                          Unless you found a loophole that allows the federal government to even form an opinion on this matter before it reaches federal courts, a non-profit selling its asset is a matter of state law first, and transgressions or questionable ethics are a matter of state investigation, not federal.

                                                                          As insane as that might seem for something as far-reaching as "the ownership of the .org top level domain".

                                                                  • Traster 10 days ago

                                                                    The US has done a fantastic job of legalizing its bribes. It's not bribery! It's lobbying! It's not corruption, it just happens to be that the guy in charge of the agency for co-ordinating economic policy is also the head of Goldman Sachs. It's not corruption, because we made it legal and so it can't be corruption, because we've redefined corruption. It's great!

                                                                    This is one of the reasons why people around the world are a little sceptical of American exceptionalism.

                                                                    • jpdus 10 days ago

                                                                      This!

                                                                      I can't believe ANY possible explanation (not even incompetency in this case) except direct or indirect bribery.

                                                                      Really sad to see more and more of theses cases where Non-Profits sell out (e.g. OpenAI), I wonder whether this is a byproduct of people sozialized in the age of hyper-capitalism and consumerism...

                                                                    • enjoyyourlife 11 days ago

                                                                      The reason for this is because former Ethos members are involved with ICANN and are probably making money because of the sale

                                                                      • quantified 11 days ago

                                                                        Follow the money.

                                                                        If they invest with GS, see how much is left after 5-7 years.

                                                                      • tinus_hn 11 days ago

                                                                        I don’t know if it is allowed but it sure would be amusing if ICANN decided to grant .org to someone else now, leaving Ethos with a worthless carcass.

                                                                        • C1sc0cat 10 days ago

                                                                          Anyone know anyone with a spine at ICANN I am sure that I could find people who might be interested Ivan Pope for one.

                                                                        • TomMckenny 11 days ago

                                                                          Honest question: since .org is relied on world wide, why are just two US state courts the only ones with the legal power to review the sale?

                                                                          • freddie_mercury 11 days ago

                                                                            You've got the causality backwards. It isn't "the whole word uses this, so we decided to put two US state courts in charge of it".

                                                                            It was "only two US state courts are in charge of it but the whole world decided to start using it anyway".

                                                                            No one forced anyone to use the US DNS system. They all knew what they were signing up for when they joined the public internet in the 80s and 90s and haven't spend any time or money lobbying for a change.

                                                                            • ohashi 11 days ago

                                                                              ICANN was supposed to be a multi stakeholder organization that would balance non US interests. In reality, it's entirely captured by registry interests and the result is former CEO capturing .ORG and turning into a for profit. ICANN is a failure is the core problem.

                                                                              • logifail 11 days ago

                                                                                > They all knew what they were signing up [..]

                                                                                Really? Knew as in "ticked a box" or as in "informed consent"?

                                                                                • dependenttypes 10 days ago

                                                                                  You should not tick boxes if you are not informed as to what they do.

                                                                                  • ganstyles 10 days ago

                                                                                    Not very pragmatic in the general sense, with the length of ToSs and signatures and check marks on forms. There's a difference between having the ability to read and review forms and informed consent before ticking boxes.

                                                                                • dropmann 10 days ago

                                                                                  That is because most people found it appealing to have _one_ internet (read as domain name system). So the only option is to use the existing one. Given that, there was not really a choice.

                                                                                • kick 11 days ago

                                                                                  Why would anywhere else have legal power to? .org doesn't sell domains directly to consumers, and ICANN is intentionally centralized, up until a few years ago being owned by the US government. US-owned US-created top-level domains are hardly an international affair.

                                                                                  You could argue that DNS is broken, and that ICANN is bad, but there's no legal argument for .org being subject to foreign governments.

                                                                                  • beiz 11 days ago

                                                                                    thats a very US-centric view. not everything is monetary, certain things are simply setup with intent of management and responsibility in a global world. DNS is one of those things, GPS another. do note that neither of these are exclusively owned by the US, but rather that the US owns the responsibility to maintain these services that we all use. even the dollar as reserve is a fickle thing that could change if the rest of us choose to. with everything set in place and the technology readily available, we could all just drop the US as our client provider and tank the american economy. we don't, because shit like this isn't supposed to happen, but push hard enough, and it will. you already see russia and china going this route.

                                                                                    • filleokus 11 days ago

                                                                                      Other commenters have pointed out the flaw in your argument about DNS, but GPS, how can't you consider that as being exclusively owned by the US?

                                                                                      It's not like with domain names where some bytes are floating around in networks and it's easiest if we all use the US addressing system.

                                                                                      There are ≈ 40 hunks of metals up in space with extremely precise clocks, _completely_ essential to the functioning of the GPS system, owned by the US, sent into space by the US.

                                                                                      Just because we leech on their satellites doesn't lower the "exclusivity" of the ownership by the US. Which is also probably why all the other big players (Russia/China/EU) are doing their own GNSS.

                                                                                      • beiz 10 days ago

                                                                                        because as you say, everyone has the ability to switch away from US control if the US abuse it; which is happening - or rather, corporations abuse it and politicians aren't doing their job by stepping in to stop them. politics is like any other relationship; you have to give, receive, and compromise. if you don't, you risk alienating your allies and lose your relationship.

                                                                                      • kick 11 days ago

                                                                                        DNS is one of those things,

                                                                                        False.

                                                                                        do note that neither of these are exclusively owned by the US,

                                                                                        False.

                                                                                        but rather that the US owns the responsibility to maintain these services that we all use.

                                                                                        False. The US has no responsibility, they own it.

                                                                                        even the dollar as reserve is a fickle thing that could change if the rest of us choose to.

                                                                                        And until other countries choose to, they get to deal with the consequences of their shortsighted reaches for centralization.

                                                                                        we could all just drop the US as our client provider and tank the american economy.

                                                                                        Good luck, there's plenty of software in Europe with hardcoded URLs, and there's no chance of getting operating systems in Europe, which are contributed to almost exclusively by US companies, to switch their DNS over to something that isn't ICANN-controlled.

                                                                                        we don't, because shit like this isn't supposed to happen, but push hard enough, and it will

                                                                                        The US has performed coups on foreign countries at least a dozen times. Other countries won't do a thing, as is shown by historical precedent.

                                                                                        you already see russia and china going this route.

                                                                                        Neither of those run their own DNS, they leech off of ICANN, and occasionally block things or modify records. Were ICANN to disappear, both would be in disarray.

                                                                                        • beiz 10 days ago

                                                                                          > False. False. False. The US has no responsibility, they own it.

                                                                                          They own it and share it, they get control and everyone else gets a service, the moment they abuse their control, everyone else will stop their dependence on it. that means they have a responsibility to keep this balance or lose control of it.

                                                                                          > Good luck, there's plenty of software in Europe with hardcoded URLs, and there's no chance of getting operating systems in Europe, which are contributed to almost exclusively by US companies, to switch their DNS over to something that isn't ICANN-controlled.

                                                                                          legacy systems are mainly an issues for hospitals, and if necessary, the governments (who pays for these hospitals anyway) would afford a switch. the US is more vulnerable for something like this since their hospitals are private.

                                                                                          > The US has performed coups on foreign countries at least a dozen times. Other countries won't do a thing, as is shown by historical precedent.

                                                                                          the US performs coups in third-world countries struggling with stability. they have never attempted a coup in a well organized country with strong ties.

                                                                                          > Neither of those run their own DNS, they leech off of ICANN, and occasionally block things or modify records. Were ICANN to disappear, both would be in disarray.

                                                                                          both of these are building their own as we speak. for the very reason we're having this argument.

                                                                                          • kick 10 days ago

                                                                                            the moment they abuse their control, everyone else will stop their dependence on it. that means they have a responsibility to keep this balance or lose control of it.

                                                                                            They're already abusing their control, all other countries are helpless.

                                                                                            legacy systems are mainly an issues for hospitals, and if necessary, the governments (who pays for these hospitals anyway) would afford a switch. the US is more vulnerable for something like this since their hospitals are private.

                                                                                            I guarantee you it'd take more than a decade to switch from ICANN.

                                                                                            the US performs coups in third-world countries struggling with stability. they have never attempted a coup in a well organized country with strong ties.

                                                                                            This is ahistorical.

                                                                                            both of these are building their own as we speak. for the very reason we're having this argument.

                                                                                            Russia isn't building a genuine alternative, and China, while they already have a genuine alternative, would be committing suicide to deprecate any service controlled by ICANN.

                                                                                          • anoncake 10 days ago

                                                                                            > False. The US has no responsibility, they own it.

                                                                                            The USA is responsible because they own it, as every owner is.

                                                                                          • toyg 10 days ago

                                                                                            You were doing well until you dragged GPS and the dollar into the argument. Those are US assets and the US are free to dispose of them as they see fit, no ifs or buts. The rest of the world chooses to piggyback on them because why not, but everybody knows US military and economic requirements will always come first on those platforms.

                                                                                            What you should have brought up, really, is the UN. The US pays for most of what is effectively a common good, because it derives prestige, influence, and material advantages (indirect control of a huge chunk of diplomatic communications, tons of money from workers and diplomats stationed there, etc etc) from hosting it.

                                                                                            And sure enough, the UN has a specialized agency that would have been the natural destination for a global communication service: the ITU. Sadly, the ITU is (in)famed for being a political clusterf#ck, so a choice was made by the Clinton/Gingrich generation of US politicians to keep the internet well away from it. That might have been a wise choice at the time, but we've since seen the drawbacks of that choice: instead of getting captured by known evils with some (small) degree of accountability, dns was captured by a bunch of new evils that answer to no one. That way lies oligarchy, as Russia showed in the last 30 years.

                                                                                            • beiz 10 days ago

                                                                                              > Those are US assets and the US are free to...

                                                                                              GPS is a derivative of Håkan Lans AIS. The US military built the satellite network yes, but had they not shared it, another network would have been constructed to take its place as the technology itself is not American.

                                                                                              I fully agree with you though, the UN exist to host these projects as a non-partial entity. The fact that they don't is cause for some frustration and a risk to the world.

                                                                                            • JumpCrisscross 11 days ago

                                                                                              > neither of these are exclusively owned by the US, but rather that the US owns the responsibility to maintain these services that we all use

                                                                                              For all practical purposes, these systems are owned by the U.S. because America maintains them. That lets the U.S. government cut it off to unfriendly users, the definition of control.

                                                                                              • beiz 10 days ago

                                                                                                They are allowed to own and maintain and control these systems. No one is forced to use them, and if the US abuse it, they lose the control they currently are allowed to possess.

                                                                                              • syshum 10 days ago

                                                                                                GPS is a US Military Asset, 100% owned and operated by the US Military. They allow civilian use of a part of the GPS system during peacetime

                                                                                                If another World War breaks out, or major conflict that the military deemed necessary they can and will cut off all Cilivian access to the GPS Network

                                                                                                This is why Russia has its own, and China is in the process of Deploying its own, and the EU has considered deploying their own as well.

                                                                                                • detaro 10 days ago

                                                                                                  EU is also in the process of deploying its own: Galileo.

                                                                                                  • Accujack 9 days ago

                                                                                                    And there are chipsets now capable of simultaneously using GPS, Galileo, and BeiDou (Chinese system) for greater accuracy. Any ability of the US government or military to "cut off" GPS has been nullified.

                                                                                                • rsj_hn 10 days ago

                                                                                                  > even the dollar as reserve is a fickle thing that could change if the rest of us choose to.

                                                                                                  No, you have this all backwards. Let's take a hypothetical country -- Fredonia with it's Fredonian Franc. The government of Fredonia decides "I want to be a global reserve currency!". How would they go about accomplishing that?

                                                                                                  First, let's define what it means to be a global reserve currency. What it means is that other reserve banks use your currency as their reserve. That means other reserve banks need to accumulate Fredonian Francs, and in large amounts.

                                                                                                  Of course banks don't warehouse currencies, they would be holding Fredonian Government Bonds (FGB), which must be bought with Fredonian Francs. So how would they get their hands on large numbers of FGBs? By running trade surpluses against Fredonia.

                                                                                                  In other words, to be a reserve currency means you have to allow the rest of the world to run large trade surpluses against you, which means you have to allow your currency to be permanently overvalued relative to the rest of the world -- relative to what it would be valued if there was no global investment demand for Fredonian Francs.

                                                                                                  Now, all of a sudden, it's not looking like such a great proposition for the Fredonians, as this means that their own production is disadvantaged in global markets more or less permanently and their financial system has to be huge and swollen. It distorts the Fredonian economy and hurts workers. That would require a very resilient economy and a population willing to tolerate the employment hit to running persistent trade deficits vis-a-vis the rest of the world.

                                                                                                  Next, Fredonia would need to develop deep and liquid capital markets, so that the rest of the world would be confident in storing their wealth there. That means a long tradition of rule of law, large turnover at low prices, and huge bond markets. Big enough to absorb the surplus of the entire world. It also means that your interest rates are going to be permanently lower than they would be if there was no excess global demand for FGBs. This means your economy is going to be subject to asset bubbles and financialization -- we're talking huge bond markets that risk dominating the country.

                                                                                                  So the economy of Fredonia has to be big, be investor friendly, have strong property protections and rule of law, a grotesquely bloated and powerful bond market, and be willing to run permanent trade deficits vis-a-vis the rest of the world.

                                                                                                  Not many nations qualify on all of these accounts, right? China is big enough, but no rule of law, and since their entire economy is based on running trade surpluses instead of trade deficits, they are suited to be the accumulator of global reserves rather than the issuer of global reserves. Saudi Arabia? Nope. The EU? Nope. Simply no one else is both able and willing to pay the price to be a global reserve currency, and that's why it's going to remain the USD. Not only is this not a "fickle" thing, the rest of the world should be grateful that the US is willing to sacrifice the interests of its own workers and production base in order to make sure the rest of the world has a steady supply of USG bonds.

                                                                                                  Rather, the real question is how long will the US be willing to bear this burden? When the US was 40% of global GDP, and global trade was tiny relative to global GDP, it didn't seem like a very big burden. But today, when the US economy doesn't dominate the rest of the world and trade is huge, the price of being a global reserve currency is devastating. It means de-industrialization, collapsing cities in the rust belt, rising death rates and a shrinking US middle class, as well as rising Federal deficits.

                                                                                                  I can very easily see a future in which the US starts imposing more and more capital controls that prevent foreigners from purchasing dollar assets similar to protections that other nations have, at which point guess what -- there will be no global reserve currency. The free ride, for the rest of the world's producers, will be over.

                                                                                                  Trade agreements will need to go back to being settled either bilaterally, or with some kind of specie (gold? silver? bitcoin?). This would be a great thing in some respects, because it would force each nation to not overproduce, but it would cause a huge contraction in international trade, corresponding to a contraction in global GDP and well being, and especially to those economies that rely on running persistent trade surpluses in order to employ their workers -- nations such as Germany, China, Japan will take big hits should they lose the ability to persistently run surpluses.

                                                                                                  • cgiles 10 days ago

                                                                                                    Absolutely fascinating. I never thought about it this way.

                                                                                                    This would also imply that the Fredonian government would be highly incentivized to run at a constant deficit, more so than other governments, because its cost of capital would be lower.

                                                                                                    Your argument is so convincing that I am having a hard time seeing what the US gets out of all this. Cheaper capital and cheaper imports, I suppose. But surely there is a reason for this besides American altruism.

                                                                                                    But if the US ever gets tired of this, why would it start capital controls? Why not just inflate the currency?

                                                                                                    • beiz 10 days ago

                                                                                                      they already inflate it. all currency is currently regulated by the banks and value is purely artificial. you can thank the UK housing bubble. the banks realized digital currency is great because its not regulated, and created money out of thin air and lent it couples buying houses and any money they got back they counted as profits. this is why the economy crashed in 2008 - the globe realized there was nothing carrying value but the banks artificially maintaining value of currency.

                                                                                                      • rsj_hn 10 days ago

                                                                                                        Yes, the Fredonian government is going to end up running a deficit not just because interest rates will be lower, but also to make up for the loss of income as a result of the current account balance. Importing decreases income and exporting increases income, which is why GDP includes a trade term of exports-imports. In the US, these are all the people who drop out of the labor market or go on disability as a result of being displaced by foreign imports, creating a loss of the taxpayer base and an increase in benefit payments. Thus imports are a drag on the fiscal balance as well.

                                                                                                        This is the same reason why a policy of "inflating the currency" is not going to work for the US, and instead capital controls are the policy option of choice. I don't want to get the goldbugs in this thread, but the quantity of money is demand determined by the private sector, and the policy variable that the government has is the overnight interest rate. This means that "inflating the currency", or trying to create inflation, is done by lowering the policy rate. Fighting inflation consists of raising this rate. So when you say "inflate the currency", what you mean is lower the rate of interest. But that rate can only be lowered to zero, and more importantly other nations will respond by lowering their interest rates. This process is called "competitive devaluation", because what matters for the trade balance is the relative value of the dollar with other currencies, not the absolute value. The US cannot unilaterally set the relative value, and devaluation by US will be met with devaluation by our trading partners.

                                                                                                        Moreover devaluation is very risky and might substantially increase the trade deficit, because when the rest of the world devalues their currency to match, it is much more likely that they are the ones who will suffer a currency crisis than the US. So this policy would risk destabilizing the currencies of our trading partners, leading to financial crisis and another flight to the USD as a safe haven as investors flee the currencies of our trading partners and rush to the US.

                                                                                                        On the other hand capital controls is something that can be done unilaterally and cannot be countered in the same way as competitive devaluation. If we impose a tax, of say, 2% on foreign holders of US assets, and the rest of the world retaliates with their own tax, then this is unlikely to cause a global currency crisis, it will cause cross border capital flows to suddenly reverse in which US investors pull their money out of foreign nations while foreign investors pull their money out of the US and bring it back home. Because foreigners invested more in the US than the other way around, this should result in more capital flowing into the rest of the world rather than the kind of capital flight that creates a currency crisis.

                                                                                                        In terms of how we got to this point, that's a tough question because you are asking me to assert motives and plans, when all I can reliably do is describe the current situation we are in. If I were to guess, I think it was not intentional. When the UK was the dominant economic power and the pound was the reserve currency the UK also suffered from chronic trade deficits, but the size of the imbalances were so much smaller before WW1 than today. What is happening now is truly unprecedented in the economic history of the world -- the depth of global supply chains, and the size of global trade imbalances is not something anyone would have predicted. So my guess is that the US maintained open capital markets for political and historical reasons -- because England did, and because market liberalism was a dominant economic philosophy. The US maintained rule of law for similar cultural and historical reasons. Then, after WW2, ours was by far the dominant economy, and everyone wanted to invest their assets in the US, particularly when the rest of the world was in shambles after WW2. It's said that the Marshall plan -- that transfer of dollars to Europe -- only partially offset the flight of money from Europe to the US as people wanted to invest in our bonds because we were a safe haven. So I would say that's how we became a reserve currency.

                                                                                                        But in the beginning, the amounts were so small relative to the size of our economy that it didn't disrupt anything.

                                                                                                        Over time, it did begin to disrupt things, but perhaps the benefits outweighed the costs to the people who mattered. Those working in US capital markets benefit from this system, since they get a cut of the transactions. And there is still a contingent of die hard market liberals who insist that we must maintain open capital markets, even as the rest of the world takes advantage of this.

                                                                                                        Then businesses benefit, in the short term, from outsourcing. Consumers benefit, to some degree, from cheaper imports. The lower interest rates cause asset prices to be higher, so houses are more expensive as are stocks. This benefits the generation that bought the assets when they were cheaper.

                                                                                                        So it's not the case that the entire nation is a loser. There are constituencies that benefit from this system and they have power. However the costs are mounting, and the benefits are fading. It's great to have a huge increase in house prices, but that's a one time hit -- a transfer to one or two generations. For the generations that come after, housing is just more expensive. It's great to have boosted stock prices from outsourcing, but now US firms are discovering that they have foreign competitors who are climbing the value the chain.

                                                                                                        And of course the social costs for working class Americans are devastating, leading to political instability. I think we are well past the point where the benefits outweigh the costs.

                                                                                                        By the way, I am not predicting that we adopt capital controls -- such a thing would be unheard of for us, since we are so indoctrinated in believing that free flow of capital is a type of virtue. However I am a believer in the principle that unsustainable things at some point must end. We cannot continue to bear this burden indefinitely.

                                                                                                      • beiz 10 days ago

                                                                                                        the whole war in the middle east has been because the euro was about to become the new reserve currency, everyone, including china, was on board of this move - everyone, except the US. this is after the fact that nixon burned all of europe's gold in the vietnam war, the gold, which was supposed to balance the dollar. so yes, the current fallback is the US bonds but it isn't stable and the only reason the US maintains this system is because they fucked up.

                                                                                                        so yeah, i don't buy it. the US isn't 'saving the world' by holding the dollar as a reserve. the entire US economy is hanging on by a thread and would collapse if they lose the global trade commission on dollar.

                                                                                                        • rsj_hn 10 days ago

                                                                                                          This is pure nonsense. You might as well that the person who is the biggest creditor is the same as the biggest debtor via some horseshoe theory of finance. The Euro can't be a reserve currency because the Eurozone cannot support large capital inflows, which is because Germany is dependent on having an export based economy. Seriously, you are confusing plus with minus, addition with subtraction. To be an issuer of reserves requires that you allow foreigners to run surpluses against you. Thus no currency zone that requires running surpluses is going to be a reserve currency as long as plus is not the same as minus.

                                                                                                    • logifail 11 days ago

                                                                                                      > US-owned US-created top-level domains are hardly an international affair

                                                                                                      We'll see your "US-owned, US-created" and raise you Margrethe Vestager.

                                                                                                      • kick 10 days ago

                                                                                                        Vestager has zero power over this. ICANN's European employees are negligible, and ICANN discontinuing services to Europe immediately brings Europe's infrastructure down. Europeans legislators should really accept that they fucked themselves on this, because they could start taking preventative measures. They won't, though.

                                                                                                  • scarejunba 10 days ago

                                                                                                    My favourite part is that they didn't own it really. We told them to run it for us. It's like if my property management guy sold my house and took the money.

                                                                                                    • LegitGandalf 11 days ago

                                                                                                      It's almost like someone figured out how to cash out. Just about any percentage kickback on a billion discount is life changing money.

                                                                                                      • philipn 11 days ago

                                                                                                        Are registries allowed to charge different prices for different domain names?

                                                                                                        E.g. can they ask google.com for $1B to renew and mygrandmascookiecompany.com for $20 to renew?

                                                                                                        • agwa 11 days ago

                                                                                                          In the case of .org, non-uniform renewal pricing is only allowed if "the applicable registrant expressly agreed in its registration agreement with registrar to higher Renewal Pricing at the time of the initial registration of the domain name following clear and conspicuous disclosure of such Renewal Pricing to such registrant"

                                                                                                          So Ethos wouldn't be able to screw over existing registrants with non-uniform renewal pricing.

                                                                                                          Source: Section 2.10(c) of https://www.icann.org/sites/default/files/tlds/org/org-agmt-...

                                                                                                          • joedavison 11 days ago

                                                                                                            This depends on the TLD (top level domain) in question.

                                                                                                            For .com, .net, .org it has historically not been possible to price discriminate like this.

                                                                                                            For the "new TLDs" (the explosion of new extensions we have seen in recent years), the registry contract is different and they are indeed allowed to do this. They call it "premium pricing".

                                                                                                            Part of the big outcry about the recent changes to .org is that it brings it closer to the "new TLD" model, which disfavors the registrant.

                                                                                                          • jijji 11 days ago

                                                                                                            it looks like an inside job when the CEO of ICANN sells the .Org TLD to himself...

                                                                                                            • glitcher 10 days ago

                                                                                                              I find it very curious that NPR has not covered this story, _and_ that they are notably missing from the list of organizations that signed at savedotorg.org. Especially because they are a .org!

                                                                                                              I mean, I'm not trying to imply it should be attributed to malice, but are they asleep at the wheel or what?

                                                                                                              • syshum 10 days ago

                                                                                                                This is one of the most blanetly and openly corrupt transactions in modern history. It saddens me that it looks like they are going to get away with it as well..

                                                                                                                • dependenttypes 10 days ago

                                                                                                                  This is a good chance to stop our dependence on DNS and move to things such as .onion domains instead (which by the way help avoid the whole certificate CA mess).

                                                                                                                  • kingludite 10 days ago

                                                                                                                    I believe the problem is the lack of protocols implemented in browsers. It's needlessly fragile to have a single route to the data.

                                                                                                                    "Web pages only last about 100 days on average"[1]

                                                                                                                    http was nice, we gave it a good spin, it was certainly close enough for the cigar but in all honesty... where you have 100 days to find the content you want to consume it is not even a reasonable approach. I bet a lot of it is still available some place but whoever archived it legally may not distribute it without permission.

                                                                                                                    I really don't care if TOR, IPFS, freenet or zeronet work out of the box. If it means access to more content its great. I don't even know how to use gopher atm.

                                                                                                                    Good stuff is happening[2] but where they apparently chose to make it an extension is pretty lame.

                                                                                                                    also..

                                                                                                                    If the user types "salvation army" into the browser we know what they want. Selling the rights to deny access is not what we need.

                                                                                                                    [1] - http://blog.archive.org/2015/02/11/locking-the-web-open-a-ca...

                                                                                                                    [2] - https://blog.ipfs.io/2019-10-08-ipfs-browsers-update/

                                                                                                                    • matheusmoreira 10 days ago

                                                                                                                      Absolutely agree. Every site should also available on the onion network. This would put some pressure on DNS operators. This would also help dissociate the onion network from criminal activity. The more sites become available as hidden services, the more legitimate the network becomes.

                                                                                                                      • cyphar 10 days ago

                                                                                                                        I agree, but I would say that .onion addresses should already be seen as being entirely legitimate. Let's not forget that Facebook's onion address (facebookcorewwwi.onion) is the main target of "darknet" traffic by a very wide margin.

                                                                                                                      • zrm 10 days ago

                                                                                                                        > This is a good chance to stop our dependence on DNS and move to things such as .onion domains instead (which by the way help avoid the whole certificate CA mess).

                                                                                                                        .onion isn't a direct competitor for DNS. It does some of the things DNS does (e.g. a consistent identifier that sticks even if your IP address changes), and even does some things DNS doesn't (e.g. encrypted transport), but the names aren't human-readable. And it compromises the security if you try to pretend that they are by generating pretty keys, because the random junk on the end there is important.

                                                                                                                        Namecoin, on the other hand, is a direct competitor for DNS.

                                                                                                                        However, DNS itself is pretty well federated. You're at the mercy of the TLD operator, but that only means you need to be careful to choose a trustworthy one. On the other hand, if you had asked last year which of the TLD operators would be the least likely to screw you over, a lot of people would have said .org, so... maybe there is something to this whole cryptographic trust thing.

                                                                                                                        • hollerith 10 days ago

                                                                                                                          >but the names aren't human-readable

                                                                                                                          For many decades (before smartphones) the phone system lacked human-readable names and yet was extremely popular with non-technical users. Similarly, most web sites probably do not benefit much or at all from a human-readable name.

                                                                                                                          A bigger problem with .onion is probably the fact it is accessible only via a system (Tor) that has significantly longer response time than a standard web site tends to have.

                                                                                                                          • RcouF1uZ4gsC 10 days ago

                                                                                                                            > he phone system lacked human-readable names and yet was extremely popular with non-technical users.

                                                                                                                            First of all, phone numbers were pretty short, and were chunked and thus pretty easy for humans to memorize. Do you think the average human will be able to memorize a bunch of onion addresses?

                                                                                                                            Second, even with phone numbers, companies used the corresponding characters to the digits to create human readable names, for example 1-800-FLOWERS

                                                                                                                      • jacquesm 10 days ago

                                                                                                                        Isn't there a technical resolution possible here where outsiders set up a new root for .org and people can change their allegiance and leave them to rot? That way Ethos capital (what a disingenuous name) paid $1B for nothing at all.

                                                                                                                        • Accujack 9 days ago

                                                                                                                          Yes, you just have to get everyone who might want to access a .org address or their DNS provider to recognize the new root.

                                                                                                                          That's the problem - you have to get organizations - some of whom are deeply invested in making money off of DNS - to agree to not do so.

                                                                                                                          Or you just ignore the existing system and build a new one... once enough desirable sites are in the new one, then the old one will fade away.

                                                                                                                        • zapita 11 days ago

                                                                                                                          The article says that a national bond fund may have fronted the endowment without turning .org into a for-profit. What does this mean?

                                                                                                                          • lalaland1125 11 days ago

                                                                                                                            They could have sold bonds (raised money via debt) as an alternative to selling .org. They probably would have gotten a good yield considering the stability of the .org revenue stream.

                                                                                                                            • slantedview 11 days ago

                                                                                                                              Even the selling of bonds would have been unnecessary. They had a rock solid revenue stream. This deal wasn't about ISOC raising money, it was about looting a public asset for private profit.

                                                                                                                              • zapita 11 days ago

                                                                                                                                But would buyers of national bonds consider buying debt from a non-government entity? Would they be willing and able to model the investment without a good understanding of the Internet industry?

                                                                                                                                • lancewiggs 11 days ago

                                                                                                                                  It's a steady and safe stream of income, and the bonds themselves would be rated as safe enough. After that it's all about the interest rate, and in today's market those are really low.

                                                                                                                                  • freddie_mercury 11 days ago

                                                                                                                                    They buy trillions of bonds from GSEs every day. This wouldn't be any different. Agency debt is a well understood thing.

                                                                                                                            • Darvon 10 days ago

                                                                                                                              It's so hard to stay angry and not just default to sad.

                                                                                                                              • xivzgrev 10 days ago

                                                                                                                                Ok honest question fellow comment reader - what are you going to do about it? This is the 5th or 6th article I’ve seen on this transaction, with hundreds of comments each.

                                                                                                                                Ethos Capital does not give 2 shits about your comments here.

                                                                                                                                Are you writing to the DA like this article suggested? What else can you do?

                                                                                                                                Myself, I don’t personally care that much. But I see a lot of people here obviously do, and I don’t really see that energy translating into action. I would like to see it move forward in a positive direction, so I’m asking the question of you - you don’t like it, what are you going to do about it besides complain here?

                                                                                                                                • matthewdgreen 10 days ago

                                                                                                                                  The DA (and others) are a lot more likely to care about this if it gains press attention — preferably national and preferably well beyond the HN audience. Keep sending those emails to the DA, by all means. But if anything happens to this deal, it’s going to be 100% driven by press attention.

                                                                                                                                • WalterSobchak 10 days ago

                                                                                                                                  Can the URL be updated to use HTTPS, which is fully supported on blogs.harvward.edu?

                                                                                                                                  https://blogs.harvard.edu/sj/2019/12/02/the-dot-org-fire-sal...

                                                                                                                                  • timwaagh 10 days ago

                                                                                                                                    Maybe they can use the money to buy some shares in Ethos. They seem to be going places.

                                                                                                                                    • kerkeslager 10 days ago

                                                                                                                                      For all the people who keep saying there's no application for blockchain: here's one. Namecoin was a bad implementation, but the concept is sound.

                                                                                                                                      Letting companies control domain names serves no purpose. They don't prevent domain squatters, they've censored on behalf of governments in the past, and now they're allowed to gouge nonprofits on .org domains.

                                                                                                                                      A decentralized domain name system wouldn't solve all these problems, but at least we wouldn't be paying rent-seeking middle-men to provide terrible service.

                                                                                                                                      • apexalpha 10 days ago

                                                                                                                                        I still can't really believe someone can sell a building block of the world wide web like .org tld. Who runs .net? .com? .edu? .info? Can they be sold, too?

                                                                                                                                        • f4ewagy34aew 10 days ago

                                                                                                                                          Yes all of those are private now. .com is still with ICANN (which is now an NGO), .net is now VeriSign, .edu is Educause NGO, .info is Afilias (coop formed by several independent domain registrars)

                                                                                                                                          • icedchai 10 days ago

                                                                                                                                            .COM's registry is Verisign, just like .NET.

                                                                                                                                        • edgefield0 11 days ago

                                                                                                                                          Is there a benefit to locking in pricing today for say 10 years? I assume the major registries, such as namecheap and godaddy, will allow a longer term buy in?

                                                                                                                                          • patrickdavey 11 days ago

                                                                                                                                            Another way to look at it - is there a downside to locking in the current price for 10 years? It doesn't _seem_ if Ethos do end up with it that the prices will go anywhere but up.

                                                                                                                                            I renewed my .org for 10 years.

                                                                                                                                            • scarejunba 10 days ago

                                                                                                                                              After 10 more years of using it you're going to be even more locked in.

                                                                                                                                              • rhengles 10 days ago

                                                                                                                                                That's assuming they don't use the time to transition to another domain gradually.

                                                                                                                                              • Tepix 11 days ago

                                                                                                                                                You are supporting a broken system. Chances are it won't get fixed. The better option may be to support a new, decentralized name system instead.

                                                                                                                                                I'm hoping this incident will provide new energy to these efforts.

                                                                                                                                                • soraminazuki 10 days ago

                                                                                                                                                  The whole reason people are upset about this deal is because it's not possible to just "switch" to an alternative name system without breaking the whole internet. What you're suggesting is unrealistic.

                                                                                                                                                  • Tepix 10 days ago

                                                                                                                                                    Is it? All it takes initially is support by the browser makers.

                                                                                                                                                    • soraminazuki 10 days ago

                                                                                                                                                      Endorsement by browser makers is not enough, because browsers are far from the only software that uses the internet. We would need to rewrite every single one of these software to successfully make the transition. In an ideal world where legacy software don't exist and people would rewrite their software to adjust to new standards overnight, yes it might work but that's just not the way things are. Worse, things would break badly when we have different software using conflicting naming systems. I'm pretty sure nobody would want to spend time debugging that kind of mess.

                                                                                                                                                      Now, even if browser support is all we need (it's not), how can we possibly explain this to users? Many, many links, bookmarks, and URLs would break along the way, causing confusion and harm.

                                                                                                                                                  • bad_user 10 days ago

                                                                                                                                                    The option you're talking about isn't available.

                                                                                                                                                    In the meantime those of us with an .org domain have to look after ourselves. I have an .org domain since 2008 and my whole online identity is tied to it. In other words I'm a stakeholder.

                                                                                                                                                    Are you suggesting that I should give it up and support ... what exactly?

                                                                                                                                                    So yes, I'll be renewing for the maximum limit as well.

                                                                                                                                              • markman 10 days ago

                                                                                                                                                I'm probably going to regret asking this and I apologize for my ignorance but I thought .org's were all government and nonprofit. I didn't think anybody owned it nor that the entire domain could be sold?!

                                                                                                                                                • dropmann 10 days ago

                                                                                                                                                  Wait, if you can no longer trust ICANN, does not that mean you cannot trust the whole internet (domain name system) anymore?

                                                                                                                                                  • metasj 9 days ago

                                                                                                                                                    I would assume that ICANN itself may give up its non-profit status in time. That doesn't make them untrustworthy in general -- they will only exist so long as the system they administer is reasonably useful -- just trustworthy for fewer things (don't expect them to implement any sanity check on prices, for instance)

                                                                                                                                                  • kome 11 days ago

                                                                                                                                                    I love the smell of some rent extracting capitalism in the morning...

                                                                                                                                                    • stevespang 10 days ago

                                                                                                                                                      " . . .to invest it with guidance from Goldman Sachs, who financially brokered the acquisition."

                                                                                                                                                      Oh, Goldman was involved ? Well, once the AG's file lawsuits with motions to stop the sale, a motion for discovery will likely be filed to determine how much money was passed around, how much Goldman made off this crooked deal, and we will be counting on our friends in the press to publish far and wide to embarrass and humiliate the Goldman douchebags . . .

                                                                                                                                                      and BTW, this lawsuit provides the perfect opportunity to also craft the motion for discovery to blow wide open these internet organizations finances and show the world how much they squander their money on bogus salaries, self dealing, etc.

                                                                                                                                                      • Proven 11 days ago

                                                                                                                                                        Now everyone is so smart.

                                                                                                                                                        When there was a chance to manage these things in a completely free market manner, no one was for it.

                                                                                                                                                        The same goes for all the dot org registrants. They complain about being hostages and whatnot but when they had a chance to pick a TLD they either didn’t think about this possibility or they did and despite the risks they still chose dog org.

                                                                                                                                                        Another point that was made but should be reiterated: even if the new owner doubled the price it’s still be negligible. Socialists are more upset about the “unfair” sale price of TLD than the price they pay to use it. If something is so important don’t leave it to the state and inter-governmental organizations to manage.

                                                                                                                                                        • vmchale 11 days ago

                                                                                                                                                          black friday

                                                                                                                                                          • deadmik3 10 days ago

                                                                                                                                                            I still think it's a shame that they are extorting the .org domain from so many beneficial non profits such as the Lemon Party

                                                                                                                                                            • lazyguy2 11 days ago

                                                                                                                                                              The reason it sold at half it's valuation is because the valuation was bullshit.

                                                                                                                                                              It's like some guy claiming his classic car is worth 25,000 dollars. If nobody is offering 25k for it then it's not worth 25k. Period, end of story.

                                                                                                                                                              • akiselev 11 days ago

                                                                                                                                                                The entire deal was put together in secret within the last 2 months. We don't know what anyone else would have offered because no one else was given the chance.

                                                                                                                                                                • asdff 11 days ago

                                                                                                                                                                  It would be like you valuing the car at 25k then selling it to your buddy for 15k without even listing the car on ebay first to feel the price.

                                                                                                                                                                  • lancewiggs 11 days ago

                                                                                                                                                                    They didn't appear to shop the offer.

                                                                                                                                                                    It's like that 'some guy' selling his classic car to a classic car dealer who was walking by, without first testing the price with experts or posting an advertisement.

                                                                                                                                                                    • yborg 11 days ago

                                                                                                                                                                      Except in this case the "some guy" is selling the classic car without actually owning it since it actually belonged to a public museum, and the dealership was just set up last week by the former director of the museum who just happened to retire the week before that.

                                                                                                                                                                      There seems to be some kind of breach of fiduciary trust here somewhere, heads should roll at ICANN even if all of this was somehow not in violation of any laws.

                                                                                                                                                                    • goatinaboat 10 days ago

                                                                                                                                                                      the valuation was bullshit

                                                                                                                                                                      Valuation of a cashflow is a very well understood thing. There is literally a button on my calculator that just does it. And a built-in function in Excel.

                                                                                                                                                                      https://support.office.com/en-us/article/NPV-function-8672CB...

                                                                                                                                                                      • tinus_hn 11 days ago

                                                                                                                                                                        The deal was closed in two days with no other offers allowed.