Agree with Marita that it is better to keep our response owner neutral. Let our recommendations focus on the interest of the current registrants, the public interest aspect and the trust that the end users need. Hadia From: CPWG [mailto:cpwg-bounces@icann.org] On Behalf Of Greg Shatan Sent: Monday, January 13, 2020 8:19 AM To: Marita Moll Cc: CPWG Subject: Re: [CPWG] Fwd: Re: Reuters reports new cooperative formed to take over management of .ORG Based on my experience, this is how all private equity deals are financed. Since this is business as usual, I would not read much into it re: uncertainty. It has nothing to do with “shortfalls,” as Kevin Murphy surmised. In the go-go years, it was not uncommon to see up to 80% financing, but banks are much more conservative now. The thing that concerns me is that they are going to saddle PIR with the $360 million of debt. This is also not uncommon in PE deals, but this concept of “pushing down the debt” is one of the more toxic aspects of PE deals. I assume PIR is debt-free now. Going from debt-free to owing more than 1/3 of a billion dollars is not a step in the right direction for any company. For a company that is allegedly going to embrace a public benefit approach, it is teeth-grindingly dissonant. The more this sounds like a “typical” PE deal, the more suspicious I get that there will be anything special about this PE firm or Post-Acquisition PIR. Instead it sounds like business as usual. That is not what is called for here. Greg On Sun, Jan 12, 2020 at 6:23 PM Marita Moll <mmoll@ca.inter.net<mailto:mmoll@ca.inter.net>> wrote: Well, this information shows that the financing of this deal is not necessarily in the bag -- given that is mostly leveraged. These sorts of things can fall through. So our response has to be owner-neutral -- setting conditions for any new owner - IMHO Marita On 1/12/2020 5:05 PM, Maureen Hilyard wrote: Hi Marita And still lots more rumours and other information to come, no doubt. I think we should keep ourselves focused on what we have set out to do - to produce some constructive and forward thinking advice to the Board, along the lines that Ethos is the new owner and what we might suggest to ICANN (and PIR) about preserving the interests of current and future .org registrants through the contractual processes and other recommendations. Otherwise we will be stuck in the same hole forever, as more information is thrown in. Maureen On Sun, 12 Jan 2020, 9:18 AM Marita Moll, <mmoll@ca.inter.net<mailto:mmoll@ca.inter.net>> wrote: More information on the Ethos PIR takeover revealed in response to ICANN questions. Marita -------- Forwarded Message -------- Subject: Re: Reuters reports new cooperative formed to take over management of .ORG Date: Sun, 12 Jan 2020 16:56:05 +0000 From: Wisdom Donkor <wisdom.dk@GMAIL.COM><mailto:wisdom.dk@GMAIL.COM> Reply-To: Wisdom Donkor <wisdom.dk@GMAIL.COM><mailto:wisdom.dk@GMAIL.COM> To: NCSG-DISCUSS@LISTSERV.SYR.EDU<mailto:NCSG-DISCUSS@LISTSERV.SYR.EDU> DomainIncite has provided a summary of these documents: http://domainincite.com/25176-25176 "here are the headlines: * The deal is being partly funded by an enormous loan. * Technically, Ethos isn’t the direct buyer. There are at least three corporate entities involved in the acquisition that we haven’t heard of before. * Ethos won’t reveal the names of the directors of PIR’s would-be owner. * Another former senior ICANN staffer and long-time Fadi Chehadé collaborator has been revealed as having an interest in the acquisition." Cheers, WISDOM DONKOR President & CEO Africa Open Data and Internet Research Foundation P.O. Box CT 2439, Cantonments, Accra | www.aodirf.org<http://www.aodirf.org> / www.afrigeocon.org<http://www.afrigeocon.org> Tel: +233 20 812 8851 Skype: wisdom_dk | Facebook: kwasi wisdom | Twitter: @wisdom_dk __________________________________________________ Specialization: E-government Network Infrastructure and E-application, Internet Governance, Open Data policies platforms & Community Development, Cyber Security, Domain Name Systems, Software Engineering, Event Planning & Management, On Wed, Jan 8, 2020 at 10:28 AM Wisdom Donkor <wisdom.dk@gmail.com<mailto:wisdom.dk@gmail.com>> wrote: In this 7 January 2020 article<https://www.cnbc.com/2020/01/07/reuters-america-internet-nonprofit-leaders-f...> we learn that, "prominent internet executives told Reuters they have created a nonprofit cooperative they are offering as an alternative owner of .org." This would appear to me to pose an existential threat to ISOC, as this nonprofit cooperative - whose membership appears to me to have more political muscle than ISOC has - is not proposing to buy PIR from ISOC, but to instead have the .ORG Registry Agreement assigned to it by ICANN. The full article is here, and I have extracted some relevant quotes below: https://www.cnbc.com/2020/01/07/reuters-america-internet-nonprofit-leaders-fight-deal-to-sell-control-of-org-domain.html?__source=sharebar|twitter&par=sharebar<https://www.cnbc.com/2020/01/07/reuters-america-internet-nonprofit-leaders-fight-deal-to-sell-control-of-org-domain.html?__source=sharebar%7Ctwitter&par=sharebar> “What offended me about the Ethos Capital deal and the way it unfolded is that it seems to have completely betrayed this concept of stewardship,” said Andrew McLaughlin, who oversaw the transfer of internet governance from the U.S. Commerce Department to ICANN, completed in 2016. Maher and others said the idea of the new cooperative is not to offer a competing financial bid for .org, which brings in roughly $100 million in revenue from domain sales. Instead, they hope that the unusual new entity, formally a California Consumer Cooperative Corporation, can manage the domain for security and stability and make sure it does not become a tool for censorship. ... The initial seven directors of the cooperative include former founding ICANN President Michael Roberts, MacArthur Foundation philanthropist Jeff Ubois and Bill Woodcock, whose Packet Clearing House now runs the technical aspects of the .org system under contract. The new group has briefed members of the U.S. Congress and hopes to prompt the Internet Society to reconsider the sale. But its best shot at stopping the pending sale lies with ICANN, which can veto any change in ownership out of concern for the security, reliability or stability of the .org domain. Best wishes, WISDOM DONKOR President & CEO Africa Open Data and Internet Research Foundation P.O. Box CT 2439, Cantonments, Accra | www.aodirf.org<http://www.aodirf.org> / www.afrigeocon.org<http://www.afrigeocon.org> Tel: +233 20 812 8851 Skype: wisdom_dk | Facebook: kwasi wisdom | Twitter: @wisdom_dk __________________________________________________ Specialization: E-government Network Infrastructure and E-application, Internet Governance, Open Data policies platforms & Community Development, Cyber Security, Domain Name Systems, Software Engineering, Event Planning & Management, _______________________________________________ CPWG mailing list CPWG@icann.org<mailto:CPWG@icann.org> https://mm.icann.org/mailman/listinfo/cpwg _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). You can visit the Mailman link above to change your membership status or configuration, including unsubscribing, setting digest-style delivery or disabling delivery altogether (e.g., for a vacation), and so on. _______________________________________________ CPWG mailing list CPWG@icann.org<mailto:CPWG@icann.org> https://mm.icann.org/mailman/listinfo/cpwg _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). You can visit the Mailman link above to change your membership status or configuration, including unsubscribing, setting digest-style delivery or disabling delivery altogether (e.g., for a vacation), and so on. -- Greg Shatan greg@isoc-ny.org<mailto:greg@isoc-ny.org> President, ISOC-NY "The Internet is for everyone"