Why ICANN Rejected ISOC’s Billion-Dollar Attempt At Feathering Its Own Nest With .org Sale?

As I’ve pointed out in recent articles, the promises and obligations of the Memorandum of Understanding (MOU) are merged by direct reference into the InterNIC licensing agreement between the U.S. Department of Commerce and ICANN. This licensing agreement has been extended twice by mutual consent, most recently until January 2025.

Therefore, the MOU’s promises and obligations remain in effect through the InterNIC licensing agreement despite the fact that the MOU itself terminated in 2009. While this might challenge many preconceived misperceptions caused by willful misleadings, readers are encouraged to use the NTIA website links provided here to see for themselves what these agreements say in black and white.

Even casual scrutiny of these documents quickly reveals the most likely reason why last year’s extremely controversial .org registry sale by the Internet Society to Ethos Capital was rejected by the ICANN board.

Recall that ICANN failed to approve that .org registry sale at the last minute after a closed-door session. Following the board vote to reject the sale, a statement was released that gave a responsible-sounding explanation. But, considering ICANN’s standard operating procedure of ignoring even a pretense of deference to stakeholders, the public reasoning given rings hollow and, in light of the newly rediscovered InterNIC licensing agreement with the merged MOU agreement, actually falls far short of a transparent explanation for this mysteriously surprising decision.

What ICANN knows, or what it’s lawyers most certainly advised the board, is that “Ammendment” (sic) 3 of the MOU is still in force — if amusingly misspelled in both the document itself as well as the reference link — and contains the following critically relevant language:

ICANN shall not enter into any agreement with any successor registry to NSI to operate the .com, .net or .org registries without prior approval of the DOC of such successor registry.

According to this extant obligation, ICANN must obtain prior approval from the Commerce Department to approve the sale of the .org registry. It is probably safe to assume that ICANN did not want to do anything that would publicly reveal its subordinate position to the U.S. government for purposes of the .com, .net, and .org Internet registries. This is made even more so when considering both California Attorney General Xavier Becerra’s strident objections to the planned sale and ICANN General Counsel and Secretary John Jeffrey’s chiding of the Internet Society’s Andrew Sullivan and Public Interest Registry’s Jon Nevett that, “many of us watching the communications on this transaction are also uncomfortable.”

Disturbingly, ICANN may have already violated other provisions of its agreements with the U.S. government when it amended the .org registry agreement to remove pricing consumer safeguards in the weeks prior to the announcement of the failed .org sale.

Meanwhile, rather than enforcing its extant agreements with ICANN and ending ICANN’s injuring of consumers, stakeholders, and Internet users — to say nothing of victims of online sexual exploitation, illegal Internet pharmacies, and content piracy that are being harmed in the rapidly expanding vacuum of accurate, complete, and timely WHOIS registrant data and which also violates ICANN’s obligations to the U.S. government — the Commerce Department instead is obscuring from view these essential agreements.

The Commerce Department should stop the damage being done by enforcing its agreements with ICANN and restoring some semblance of sanity before ICANN drives itself and the Internet irretrievably over a cliff.