I hold .org domains, and I felt somewhat annoyed I wasn't consulted as a decisive stakeholder by ISOC, and I also consider myself an ISOC member and have worked with these people on and off. I know these people from email lists, from f2f at IETF, from other policy meetings. I just didn't expect them to do this.
I found the lack of engagement prior to the transaction truly shocking. I understand some of the reasons, even if I disagree with them: I think the ISOC board did not breach the law. But I do think they broke an implicit social contract.
The thing is: there is a downside. This was going to create a large abiding fund for ISOC. It was going to create something of real world value. Alibeit at the expense of some principle but there is now a consequence, something which might have been good won't happen directly, or as quickly.
I also think its premature to assume some kind of sale or change in PIR/.org will not actually still happen: they just have to do more work. And, probably, for lower $value since its no longer as simple. (I don't think in the current economic climate the price will be as good)
> The thing is: there is a downside. This was going to create a large abiding fund for ISOC. It was going to create something of real world value. Alibeit at the expense of some principle but there is now a consequence, something which might have been good won't happen directly, or as quickly.
This was their argument the whole time, but it seems incredibly weak. The money from the sale was presumably the net present value of the future domain revenue (minus whatever losses from the apparent self-dealing). If they were going to keep it as an endowment and only spend the interest so that it wouldn't run out over time then it wouldn't be anything more than the revenue they already had.
Whereas if they were going to spend it all at once then it seems a lot like mortgaging the future. On top of that, if they really wanted to do that then they didn't need to sell the registry -- just take out a loan. Interest rates are super low right now.
If the thing they wanted to do with the money wasn't so pressing that it could justify borrowing money to do it immediately instead of letting the money come in over time then it couldn't have been so pressing as to justify the sale either.
You're completely correct that it was going to be NPV neutral and an endowment. But the structural independence that ISOC would then have had, and the freedom from constraints of income tied to a service delivery changes how you plan and what kind of long-term plans you can make.
So I sort-of agree and disagree. It wasn't really a huge windfall outcome, viewed as a perpetuating fund. But it was a huge structural change for ISOC, and very possibly the IETF too.
I think you're right to suggest the actual income from PIR was predictable. But it was also unusual. Deriving so much money from a single place imperils tax status as a 501(c) I am told. perhaps this wasn't a problem for them. (I've never been aware of the board and its finance decisions)
I was led to believe moving to a trust with oversight of a fund is different, and more beneficial as a perpetuating entity. And, Org and PIR relates to the status of Verisign and COM and also places ISOC in a relationship with ICANN which I suspect was irksome, because in so many other senses ISOC felt it was not subject to ICANN direction but actually one of the peer-set.
If I had been on the board, and a well structured proposal had been put to me to do this, I truly don't know what I would have said. My instinct is: this should be discussed publicly and we should get community consensus, but I could imagine other pressures/tensions emerged.
IIRC someone in a previous post here about this, someone did the math and found that, based on .org revenues, ISOC would make the intended sale price in something on the order of 10 years. It's remarkably short-sighted to sell a cash cow like that just to get some money in-hand sooner.
I too would have favoured setting up the endowment by investment over the longer term: the kind of approach which could have been discussed in a community-consensus way.
It speaks to me, that ISOC decided not to explore that and then went single-buyer, NDA+Lawyers.
Didn't they bring in a new management team from the for-profit world who talked up expanding into major new roles? If your leaders have a mindset shaped by puffing up stock prices every quarter you tend to be interested in big, sweeping changes even if they don't make much sense long-term.
I found the lack of engagement prior to the transaction truly shocking. I understand some of the reasons, even if I disagree with them: I think the ISOC board did not breach the law. But I do think they broke an implicit social contract.
The thing is: there is a downside. This was going to create a large abiding fund for ISOC. It was going to create something of real world value. Alibeit at the expense of some principle but there is now a consequence, something which might have been good won't happen directly, or as quickly.
I also think its premature to assume some kind of sale or change in PIR/.org will not actually still happen: they just have to do more work. And, probably, for lower $value since its no longer as simple. (I don't think in the current economic climate the price will be as good)