From The Register. The ethics of Ethos emerges.
With opposition to the deal growing within the internet community, and following an abortive attempt by PIR to force ICANN to make a decision this month, it looks increasingly likely that the .org sell-off will fall through.
In the ICANN lawyers’ letter, the organization rejected PIR’s insistence that any decision be limited to technical security and stability considerations, and said all parties “have long recognized the unique public-interest-focused nature of the .ORG domain, and ICANN’s contractual role in evaluating proposed changes.”
ICANN also rejected [PDF] “any artificial restriction on the scope of ICANN’s analysis” and noted “the obvious importance to the public interest of its operation.” It concluded: “ICANN is reviewing PIR’s request for change of control in light of all of the relevant circumstances, and it looks forward to your client’s continued cooperation in this process.”
But this looks dodgy, too. Rushing the deal makes oversight harder. “Buy now! This deal can’t last,” is a barker’s ploy.
Both ISOC and Ethos have been relatively open about the fact that any deal would need to be concluded quickly. As such, the longer discussions persist, the more risky the deal looks. That’s not all, however: anger at ISOC’s board from its members is growing and the furor risks damaging the organization itself.
And then, there’s some evidence of Ethos sidestepping the non-com charity status.
Under US law, for an organization to be tax exempt, at least one third of the organization’s revenue must come from donors who each individually give less than two per cent of overall receipts, something called the “public support test.” ISOC does not meet that test because the vast majority of its income comes from a single source: the sale of .org domains, paid through a separate non-profit organization, PIR, that ISOC controls.
There is an exception, however. An organization can retain public charity status if public support is at least 10 per cent of revenues but an organization must assert it is operating as a charity, rather than a foundation, and is actively working to get its public support percentage up to 33 per cent.
For this reason, every year since its inception, ISOC has included the same explanation in its tax documents for why it should be granted charity status despite not meeting the 33 per cent test: because it is doing great work with its members around the world.
This doesn’t warrant a sarcastic remark.