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Take action to save .org and prosecute those who sold out the internet

drewdevault.com

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Re: Take action to save .org and prosecute those who sold out the internet

#21

Post by deogeo »

ben509 wrote: post #5

> The level of corruption on display by the three organizations involved in this scam: ICANN (Internet Corporation for Assigned Names and Numbers), ISOC (The Internet Society), and PIR (Public Interest Registry), is astounding and very illegal. If these organizations are so corrupt, then them selling .org simply demonstrates that they're too corrupt to manage it. We can't simply reverse this, you're just handing it b…

> So... what do we replace them with?

Don't replace the organizations - just prosecute their corrupt members. That will keep in line their replacements.

Re: Take action to save .org and prosecute those who sold out the internet

#22

Post by andrewflnr »

aaomidi wrote: post #18
shantly wrote: post #8

Seems like the most likely route to success would be for a few big internet companies to set up a .org nonprofit and treat it as the authority, ignoring icann. Fork the tld, in other words.

This is essentially impossible though. It sounds good but I don't see most ISPs caring.

The ISPs don't have to. You only need the major OS and maybe browser vendors.

Re: Take action to save .org and prosecute those who sold out the internet

#23

Post by vaporland »

ptest1 wrote: post #20
pge wrote: post #13

While I don't agree with the sale of the .org to a for-profit entity, I believe the premise of this objection is not tenable. From what I can glean, while PIR is a non-profit, it was not a non-stock company (non-profits are often, but not always non-stock companies, meaning they have no shareholders). Were it a non-stock company, it would be impossible for it to be acquired for any material compensation, because ther…

(I also work in the nonprofit space) In this case, ISOC should almost certainly lose their 501(c)3 status, as the transaction is unrelated business income, and may or may not have been sold at fair market value (I don’t believe it was). In either of these cases, the penalty is at minimum the removal of their 501(c)3 status. I believe they may be preempting this by converting themselves to a “B Corp.” The case of ICAN…

And as you likely know, there is a 200% penalty for self-dealing.

If you extract a billion dollars from a non-profit for self-dealing purposes, you owe the IRS $2 billion.

Re: Take action to save .org and prosecute those who sold out the internet

#24

Post by aaomidi »

andrewflnr wrote: post #22
aaomidi wrote: post #18

Earlier quoted context omitted.

This is essentially impossible though. It sounds good but I don't see most ISPs caring.

The ISPs don't have to. You only need the major OS and maybe browser vendors.

Major OSes just use the ISP DNS server - changing that would break a lot of stuff.

For example in countries with limited internet, you need to connect to the ISPs servers (redirect from http sites) to purchase data allowances.

Re: Take action to save .org and prosecute those who sold out the internet

#25

Post by paulryanrogers »

gwright wrote: post #10

It was a mistake to have GLTDs other than the two-letter country codes. That would have ensured that the DNS namespace was partitioned in a way that mapped directly to legal jurisdictions. As it is now, we have the proliferation of GTLDs that with an extremely ambiguous mapping to legal jurisdictions.

Agreed. Still, for large, international companies and institutions I doubt the `.int` TLD would have caught on.

Re: Take action to save .org and prosecute those who sold out the internet

#26

Post by pge »

ptest1 wrote: post #20
pge wrote: post #13

While I don't agree with the sale of the .org to a for-profit entity, I believe the premise of this objection is not tenable. From what I can glean, while PIR is a non-profit, it was not a non-stock company (non-profits are often, but not always non-stock companies, meaning they have no shareholders). Were it a non-stock company, it would be impossible for it to be acquired for any material compensation, because ther…

(I also work in the nonprofit space) In this case, ISOC should almost certainly lose their 501(c)3 status, as the transaction is unrelated business income, and may or may not have been sold at fair market value (I don’t believe it was). In either of these cases, the penalty is at minimum the removal of their 501(c)3 status. I believe they may be preempting this by converting themselves to a “B Corp.” The case of ICAN…

Unrelated business income does not cause a loss of 501(c)3 status, it's just that the unrelated income is not tax exempt (i.e. the org which otherwise does not pay taxes on income has to pay income tax on the unrelated income).

Also, if I understood correctly, it is PIR that is considering becoming a B Corp, which they can do since they cannot remain a 501(c)3 now that they are owned by a for-profit entity.

Last, it would be very difficult to prove this wasn't a fair market value transaction. There was an investment banker involved (Goldman), so I assume they shopped to a number of different parties, in which case it's hard to argue that the price paid (assuming it was one of the highest bids) is not the FMV.

As I said in my original comment, I don't like the transaction, so don't take this as a defense of the appropriateness of selling it to a for-profit. But I think it is difficult to challenge on the basis that the transaction itself was illegal.

Re: Take action to save .org and prosecute those who sold out the internet

#27

Post by ptest1 »

pge wrote: post #26
ptest1 wrote: post #20

Earlier quoted context omitted.

(I also work in the nonprofit space) In this case, ISOC should almost certainly lose their 501(c)3 status, as the transaction is unrelated business income, and may or may not have been sold at fair market value (I don’t believe it was). In either of these cases, the penalty is at minimum the removal of their 501(c)3 status. I believe they may be preempting this by converting themselves to a “B Corp.” The case of ICAN…

Unrelated business income does not cause a loss of 501(c)3 status, it's just that the unrelated income is not tax exempt (i.e. the org which otherwise does not pay taxes on income has to pay income tax on the unrelated income). Also, if I understood correctly, it is PIR that is considering becoming a B Corp, which they can do since they cannot remain a 501(c)3 now that they are owned by a for-profit entity. Last, it…

Excessive unrelated business income causes a loss of public charity status due to failing the public support test. In this case it’s moot because ISOC is giving up on their status regardless. I was wrong saying 501(c)3 status is lost- instead, the organization becomes a private foundation with accompanying restrictions and regulations (e.g. disbursement requirements).

In the case of ICANN, I can see the IRS dropping 501(c)3 status. While the final purchase price of the .org asset may or may not have been at fair market value (as you note, having GS involved gives credibility), it’s undeniable that ICANN made it possible by lifting price hikes. I don’t see how it isn’t self-dealing, unless ICANN truly had absolutely no idea their former CEO was going to acquire .org. I think it’s more likely that they were convinced to lift the price hikes by their former CEO.

Re: Take action to save .org and prosecute those who sold out the internet

#28

Post by noobermin »

pge wrote: post #26
ptest1 wrote: post #20

Earlier quoted context omitted.

(I also work in the nonprofit space) In this case, ISOC should almost certainly lose their 501(c)3 status, as the transaction is unrelated business income, and may or may not have been sold at fair market value (I don’t believe it was). In either of these cases, the penalty is at minimum the removal of their 501(c)3 status. I believe they may be preempting this by converting themselves to a “B Corp.” The case of ICAN…

Unrelated business income does not cause a loss of 501(c)3 status, it's just that the unrelated income is not tax exempt (i.e. the org which otherwise does not pay taxes on income has to pay income tax on the unrelated income). Also, if I understood correctly, it is PIR that is considering becoming a B Corp, which they can do since they cannot remain a 501(c)3 now that they are owned by a for-profit entity. Last, it…

Since you seem like an expert, can you comment on the self-dealing aspect of this?

Re: Take action to save .org and prosecute those who sold out the internet

#29

Post by toyg »

ghjyui wrote: post #14
toyg wrote: post #3

Looks like Russian-style "privatization" has finally come to America!

It's the opposite. Iirc, icann was a semi gov entity and everybody complained that the internet is effectively controlled by the US gov via ICANN. So the gov decided to yield and give ICANN freedom. Sure enough, icann was quickly captured by pirates.

I was referring to the original sellout of USSR institutions during the '90s: as the world pushed the Soviets to renounce public ownership, they sold off massive assets at fire-sale prices to well-connected profiteers.

Here, .org had certain restrictions that made its governance somewhat "public". Those restrictions were removed and the asset was hurriedly sold, at a debatable price, to well-connected profiteers. Looks very similar to me.

Re: Take action to save .org and prosecute those who sold out the internet

#30

Post by fanf2 »

paulryanrogers wrote: post #25
gwright wrote: post #10

It was a mistake to have GLTDs other than the two-letter country codes. That would have ensured that the DNS namespace was partitioned in a way that mapped directly to legal jurisdictions. As it is now, we have the proliferation of GTLDs that with an extremely ambiguous mapping to legal jurisdictions.

Agreed. Still, for large, international companies and institutions I doubt the `.int` TLD would have caught on.

.int is for international treaty organisations. It is highly restricted, it is not available to companies.
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