Here's what's happened: first, ICANN (the legendarily opaque US corporation that runs the internet's Domain Name System) approved a change in pricing for .ORG domains, run by the nonprofit Internet Society (ISOC) through its Public Interest Registry (PIR), allowing the registry to raise prices. The change was done entirely by staff, without board approval.
Next, several of the people involved in that decision migrate from ICANN to ISOC or to a brand-new private equity fund called Ethos Capital, whose major investors are three families of Republican billionaires: the Romneys, the Perots and the Johnsons.
Ethos then buys the Public Interest Registry from ISOC for a little over a billion dollars — about a billion dollars less than it's likely worth — and makes a nonbinding pledge to limit its price increases to 10%, compounded annually (!!) and starts a PR campaign to argue that this is very reasonable (however, none of the defenders of this practice are willing to refinance their mortgages on these "reasonable" terms, nor to offer bonds for sale at that rate). They buy the top Google Adwords for search terms related to the sale, and hire one of the most expensive PR firms in the business to run interference for them.
But despite this charm offensive, the opposition continues to mount. EFF and a bunch of other nonprofits point out that selling .ORG to private equity looters will put these shadowy power-brokers in a position to censor some of the world's leading human rights and nonprofit organizations by taking away their domain names (domain names have become a central nexus of censorship efforts).
The self-dealing and corruption on display are so revolting and undeniable that the news spreads and spreads, and becomes part of the wider critique of the monopolization of the internet and the devastating tactics of private equity firms.
Despite this, ICANN behaves in a way that is completely true to form and refuses to take action, insisting that everything is juuuuuust fine.
Until they didn't: on Dec 9, ICANN announced that it would be hitting pause on its approval of the .ORG sale for 30 days, while it requests "additional information about the proposed transaction including information about the party acquiring control, its ultimate parent entity, and whether they meet the ICANN-adopted registry operator criteria (as well as financial resources, and operational and technical capabilities)." ICANN warns that it can only block the sale on terms that rise to "a standard of reasonableness."
I'm not optimistic about ICANN's institutional willingness to shut this down, but it may not matter. I've heard rumblings of investigations at the state and federal level about this, and the story itself is spreading like wildfire. A 30 day pause on the rush-rush attempt to ram this sale through before an opposition can gather might prove fatal, as lawmakers, regulators, and internet users step up to oppose further action.
ICANN will thoroughly evaluate the responses and then ICANN has 30 additional days to provide or withhold its consent to the request. The Registry Agreement requires a standard of reasonableness for ICANN's determination.
We acknowledge the questions and concerns that are being raised and directed to ISOC, PIR, and ICANN relating to this change. To ease those concerns and maintain trust in the .ORG community, we urge PIR, ISOC, and Ethos Capital to act in an open and transparent manner throughout this process. We have sent a letter to both ISOC and PIR today, asking them to please be clear and open in all of their communications. We have indicated our willingness to publish the request and related materials involved in ICANN's review including the request for approval, the request for additional information, and PIR's responses.
ICANN takes its responsibility in evaluating this proposed transaction very seriously. We will thoughtfully and thoroughly evaluate the proposed acquisition to ensure that the .ORG registry remains secure, reliable, and stable.
.ORG Update [Göran Marby and Maarten Botterman/ICANN]