Thread by @doctorow

ISOC -- the nonprofit set up to oversee the .ORG registry -- decided to sell off this asset (which they were given for free, along with $5M to cover setup expenses) to a mysterious private equity fund called Ethos Capital.

1/

Some of Ethos's backers are known (Republican billionaire families like the Romneys and the Perots) but much of its financing remains in the shadows. We do know that ICANN employees who help tee up the sale now work for Ethos, in a corrupt bit of self-dealing.

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The deal was quietly announced and looked like a lock, but then public interest rose up to demand an explanation. Not only could Ethos expose nonprofits to unlimited rate-hikes (thanks to ICANN's changes to its rules), they could do much, much worse.

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For example, Ethos would know the IP address of every person who visited a .ORG, and could sell, say, the IPs of dissidents to the Kingdom of Saudi Arabia or the dictator of Cambodia.

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If a .ORG registrant dropped its domain, Ethos could sell access to misdirected emails and domain lookups - so if you watchdog private equity funds and get destroyed by vexation litigation, Ethos could sell your bouncing email to the billionaires who crushed you.

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More simply, Ethos could sell the kind of censorship-as-a-service it currently sells through its other registry, Donuts, which charges "processing fees" to corrupt governments and bullying corporations who want to censor the web by claiming libel or copyright infringement.

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Ethos offered ISOC $1.135b for the sale, but $360m of that will come from a loan that .ORG will have to pay back, a millstone around its neck, dragging it down.

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Debt-loading healthy business as a means of bleeding them dry is a tried-and-true PE tactic - it's what did in Toys R Us, Sears, and many other firms. The PE barons get a fortune, everyone else gets screwed.

8/b

The interest on .ORG's loan will suck up $24m/year -- TWO THIRDS of the free money that .ORG generates. .ORG is a crazily profitable nonprofit - it charges dollars to provide a service that costs fractional pennies, after all.

9/

In response to getting slapped around by some Members of Congress, the Pennsylvania AG, and millions of netizens, Ethos has made a promise to limit prices increases...for a while.

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And they say that they'll be kept honest by the nonbinding recommendations of an "advisory council" whose members Ethos will appoint and who will serve at Ethos's pleasure.

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In a letter to ICANN, @EFF and Americans for Financial Reform have called for transparency on the financing behind the sale: "hidden costs, loan servicing fees, and inducements to insiders."

eff.org/press/releases…

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Honestly, that's the very bare minimum that ICANN should be plumping for here. There's no conceivable universe in which a nonprofit that exists solely to oversee .ORG and disperse its vast profits should, instead, flog off .ORG to a shadowy cabal of billionaire looters.

/end