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Comment by yzmtf2008 | Hacker News Reader

yzmtf2008

> In return, they were well compensated as they managed .org registrations over all these years, which is more or less a license to print money.

Clearly, there’s more to managing a domain than a “license to print money”. Otherwise, who would want to sell it?

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We don't need to guess on this one. One of ISOC members who helped seal this greasy deal wrote a whole thinkpiece last year justifying it:

http://www.circleid.com/posts/20191127_why_i_voted_to_sell_o...

The short version is that guaranteed annual recurring revenue is great, but a billion dollars all at once is a lot of money, and could be used for all kinds of things.

Not in the article: because it would be Ethos who'd later raise prices on .org (had the plan gone through), the ISOC would have some deniability of not having been the direct infractor. It'd be a win/win: Ethos would still profit despite the high price tag, and ISOC would get a huge windfall while keeping its hands only a little grimy (not dirty, but not clean).

And if the piece's reasoning seemed sound to you, I'd call attention in particular to these sentences:

> Ethos has said that their plan is to "live within the spirit of historic practice," that is, to manage prices roughly as PIR would have under the stewardship of the Internet Society. If they impose the maximum 10% price increase plan for ten years, the price will be around $26 per year — still quite affordable.

Compare them to what the EFF wrote, and you'll see that notably absent from Richard's article is how the 10% increase cap is only active for the first eight years (not even 10 as stated). After that, Ethos was free to raise prices as much as they liked. Somehow, Richard mistakenly forgot to include this rather important detail.

Another impression I got from Richard Barnes' thinkpiece is his apparent opinion that managing the .org registry was turning into a resource-intensive, time-consuming responsibility for the Internet Society and a distraction from its main mission. If that were the case, then how about if the .org registry were turned over to a non-profit that was solely and strictly dedicated to running the registry responsibly and affordably? Is creating such a non-profit feasible? Could it survive over the long term?

For that matter, how much does running a TLD registry with a few million domains actually cost? To me, the whole domain name registration business reeks of rent-seeking and of the exploitation of monopolies, but I'm don't know enough about it yet to confirm these suspicions.

> If that were the case, then how about if the .org registry were turned over to a non-profit that was solely and strictly dedicated to running the registry responsibly and affordably? Is creating such a non-profit feasible? Could it survive over the long term?

.de is run by a non-profit and has been since 1996. Before that it had been run by researchers of the University of Karlsruhe. Until a few years ago, .de was the largest ccTLD and the second largest TLD overall.

https://en.m.wikipedia.org/wiki/DENIC (english, short)

https://de.m.wikipedia.org/wiki/DENIC (german, long and informative)

See also SIDN (https://nl.m.wikipedia.org/wiki/Stichting_Internet_Domeinreg...), the non-profit managing the 6th biggest ccTLD: .nl

It's a license to print a specific amount of money every year. So the party who would want to sell it is the party who wants an enormous pile of money right away instead of a large amount every year indefinitely.

It's inherently suspicious when that party is supposed to be a non-profit, because they should generally want to keep doing their work going forward instead of cashing out like some kind of for-profit corporate raiders.

They could have set aside 5% every year and ended up with an endowment and retain control of a continuous revenue stream. Responsible non-profits would do this as a matter of course.

Selling lets the PE firm be “the bad guys”. ISOC gets to dodge responsibility while retaining nearly all the profits of being culpable.

> Clearly, there’s more to managing a domain than a “license to print money”. Otherwise, who would want to sell it?

I know this is a bit pedantic/not the point, but any "license to print money" -- that is, any claim on an infinite stream of recurring income -- actually has a fixed value at which you _should_ sell it. See https://www.fool.com/investing/2016/06/22/how-to-calculate-t...

It's a game. It would have been purchased with borrowed money that would have ended up eaten up in salaries and bonuses for the people who got the sale done; shortly afterwards it would have been declared a huge loss and the complete sale price written off by everyone against taxes owed by their other ventures for the foreseeable future; then it would be sold on for a token to a company that operates from a Delaware P.O. Box and immediately quadruples the prices.

Someone looking for a quick buck?

Exactly, a non profit making X money per year is harder for insiders to profit from. However, setup a sale to the company of your choice and suddenly you can profit handsomely.

From an investment standpoint it can make sense to convert a slow but reliable income stream into a big chunk of cash that you can invest in riskier assets with higher returns.

The math is different for non profits as they are excluded form income taxes where a for profit company is going to be heavily discounting the value of that income stream.

Thus, it would generally be better for the non profit to simply take a loan out based on the income stream and invest that.

I looks like Ethos Capital would have had to make at least $100 per domain to recover the cost of buying the .org registry, never mind making a profit. I wonder how much of a profit they were aiming for and how quickly they planned on making that profit...

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