A private equity firm wants to buy the internet domain used by nonprofits. A group of online pioneers says it is not the place to maximize profits.
Two months ago, Ethos Capital, a private equity firm, announced that it planned to buy the rights to a tract of internet real estate for more than $1 billion.
But it wasn’t just any piece of digital property. It was dot-org, the cyber neighborhood that is home to big nonprofits and nongovernmental organizations like the United Nations (un.org) and NPR (npr.org), and to little ones like neighborhood clubs.
The deal was met with a fierce backlash. Critics argued that a less commercial corner of the internet should not be controlled by a profit-driven private equity firm, as a matter of both principle and practice. Online petitions and letters of concern came from hundreds of organizations, thousands of individuals and four Democrats in Congress, including Senator Elizabeth Warren of Massachusetts.
Rarely has the acronym-strewn realm of internet addresses — so-called domain names — stirred such passion.
Now, a group of respected internet pioneers and nonprofit leaders is offering an alternative to Ethos Capital’s bid: a nonprofit cooperative corporation. The incorporation papers for the new entity, the Cooperative Corporation of .ORG Registrants, were filed this week in California.
The goal of the group is not only to persuade the Internet Corporation for Assigned Names and Numbers, which oversees internet domain names, to stop the sale. It is also to persuade ICANN to hand it the management of dot-org instead.
“This is a better alternative,” said Esther Dyson, who served as the first chair of ICANN, from 1998 to 2000, and is one of seven directors of the new cooperative. “If you’re owned by private equity, your incentive is to make a profit. Our incentive is to serve and protect nonprofits and the public.”
Since 2003, dot-org has been run by the Public Interest Registry, which is controlled by the Internet Society, a nonprofit that helps develop internet standards, education programs and policy. The registry holds a contract to manage dot-org, which was renewed last year for 10 more years. With a sale to Ethos Capital, the Internet Society would gain an endowment to fund its operations and get out of the business of operating dot-org.
In buying the Public Interest Registry, Ethos Capital would acquire the rights to run dot-org and collect annual fees from the nearly 10.5 million registered dot-org names, held by both nonprofits and domain-name speculators. Those yearly fees are $10 to $20 on average, but can be far higher for big sites that buy several names to protect their brand and get added services like security against online attacks.
Opponents of the private-equity sale said they feared that to make an attractive profit on its pricey deal, Ethos Capital would have to raise prices, cut expenses, skimp on service — and most likely sell users’ data.
Ethos Capital said those concerns were unfounded.
In a blog post in December, Erik Brooks, the firm’s founder, said that “we understand that change brings uncertainty and concern,” which was reflected in “alarmist statements.”
Ethos Capital, Mr. Brooks said, wants to invest in dot-org “for the reputation of the platform and the values it represents in the marketplace.” He said his firm planned to build on that asset.
Big price increases have been a major concern for critics of the deal. When ICANN renewed the 10-year contract with the Public Interest Registry last year, it removed a price cap that limited price increases to 10 percent a year at most. That move was part of a broader ICANN policy to ease price controls across all internet domains.
Ethos Capital has pledged to adhere to the 10 percent cap, though it would have no contractual obligation to do so. In blog posts, the private equity firm said it planned to invest in new services and clamp down on spam, security attacks and other abuse launched from some illicit dot-org domains.
Some nonprofits worry that any cleanup effort could result in censorship, even if inadvertently. As the owner of the registry for dot-org, Ethos Capital would manage the acceptable business practices and conduct for dot-org domains. The same freedoms that open the door to extremist groups on some dot-org sites, nonprofit leaders say, also help protect free speech on public-interest dot-org sites in developing countries with authoritarian governments.Ethos Capital said it would never facilitate censorship. It has also vowed to set up an independent “stewardship council” to monitor its management of the dot-org network.
Since the deal was announced, Mr. Brooks and top executives of the Internet Society and the Public Interest Registry have spoken with skeptics in person, in web sessions and on conference calls, seeking to reassure them that dot-org would be in safe hands. And on Tuesday, they submitted a detailed response to the questions raised by the four members of Congress.
But whether the trust-building campaign has made progress is uncertain. Amy Sample Ward, the chief executive of NTEN, a nonprofit that assists other nonprofits with technology, is unconvinced.
“The internet was meant to be this democratizing force around the world, and nonprofits do that,” Ms. Sample Ward said. By contrast, she said, Ethos Capital is a creature of the “capitalist-based internet industrial complex.”
For the Ethos Capital deal to succeed, ICANN must give its approval. In December, it sent out a request for more information about the proposed transaction. ICANN has not indicated the timing of a decision, but one is expected early this year.
The newly formed cooperative group is hoping it can keep dot-org out of the for-profit economy. “There is a common good here that is at risk of being undermined,” said William Woodcock, a director of the cooperative, who is the executive director of the Packet Clearing House, a nonprofit that provides internet operational support for domains.
The cooperative corporation, which would run dot-org, collect fees and distribute savings back to the nonprofit users, is an “alternative model with a long-term commitment to the open and noncommercial internet,” said Katherine Maher, a director who is the chief executive of the Wikimedia Foundation, the nonprofit parent of Wikipedia.
“There are some things that operate better noncommercially, and that’s O.K.,” she said.
Romney’s main complaint in the piece is that Donald Trump is a mercurial and divisive leader. That’s true, of course. But beneath the personal slights, Romney has a policy critique of Trump. He seems genuinely angry that Trump might pull American troops out of the Syrian civil war. Romney doesn’t explain how staying in Syria would benefit America. He doesn’t appear to consider that a relevant question. More policing in the Middle East is always better. We know that. Virtually everyone in Washington agrees.
Corporate tax cuts are also popular in Washington, and Romney is strongly on board with those, too. His piece throws a rare compliment to Trump for cutting the corporate rate a year ago.
That’s not surprising. Romney spent the bulk of his business career at a firm called Bain Capital. Bain Capital all but invented what is now a familiar business strategy:
- Take over an existing company for a short period of time,
- cut costs by firing employees,
- run up the debt,
- extract the wealth, and
- move on, sometimes
- leaving retirees without their earned pensions.
Romney became fantastically rich doing this.
Meanwhile, a remarkable number of the companies are now bankrupt or extinct. This is the private equity model. Our ruling class sees nothing wrong with it. It’s how they run the country.
Mitt Romney refers to unwavering support for a finance-based economy and an internationalist foreign policy as the “mainstream Republican” view. And he’s right about that. For generations, Republicans have considered it their duty to make the world safe for banking, while simultaneously prosecuting ever more foreign wars. Modern Democrats generally support those goals enthusiastically.
There are signs, however, that most people do not support this, and not just in America. In countries around the world — France, Brazil, Sweden, the Philippines, Germany, and many others — voters are suddenly backing candidates and ideas that would have been unimaginable just a decade ago. These are not isolated events. What you’re watching is entire populations revolting against leaders who refuse to improve their lives.
Something like this has been in happening in our country for three years. Donald Trump rode a surge of popular discontent all the way to the White House. Does he understand the political revolution that he harnessed? Can he reverse the economic and cultural trends that are destroying America? Those are open questions.
But they’re less relevant than we think. At some point, Donald Trump will be gone. The rest of us will be gone, too. The country will remain. What kind of country will be it be then? How do we want our grandchildren to live? These are the only questions that matter.
The answer used to be obvious. The overriding goal for America is more prosperity, meaning cheaper consumer goods. But is that still true? Does anyone still believe that cheaper iPhones, or more Amazon deliveries of plastic garbage from China are going to make us happy? They haven’t so far. A lot of Americans are drowning in stuff. And yet drug addiction and suicide are depopulating large parts of the country. Anyone who thinks the health of a nation can be summed up in GDP is an idiot.
The goal for America is both simpler and more elusive than mere prosperity. It’s happiness. There are a lot of ingredients in being happy:
Above all, deep relationships with other people. Those are the things that you want for your children. They’re what our leaders should want for us, and would want if they cared.
But our leaders don’t care. We are ruled by mercenaries who feel no long-term obligation to the people they rule. They’re day traders. Substitute teachers. They’re just passing through. They have no skin in this game, and it shows. They can’t solve our problems. They don’t even bother to understand our problems.
One of the biggest lies our leaders tell us that you can separate economics from everything else that matters. Economics is a topic for public debate. Family and faith and culture, meanwhile, those are personal matters. Both parties believe this.
Members of our educated upper-middle-classes are now the backbone of the Democratic Party who usually describe themselves as fiscally responsible and socially moderate. In other words, functionally libertarian. They don’t care how you live, as long as the bills are paid and the markets function. Somehow, they don’t see a connection between people’s personal lives and the health of our economy, or for that matter, the country’s ability to pay its bills. As far as they’re concerned, these are two totally separate categories.
Social conservatives, meanwhile, come to the debate from the opposite perspective, and yet reach a strikingly similar conclusion. The real problem, you’ll hear them say, is that the American family is collapsing. Nothing can be fixed before we fix that. Yet, like the libertarians they claim to oppose, many social conservatives also consider markets sacrosanct. The idea that families are being crushed by market forces seems never to occur to them. They refuse to consider it. Questioning markets feels like apostasy.
Both sides miss the obvious point: Culture and economics are inseparably intertwined. Certain economic systems allow families to thrive. Thriving families make market economies possible. You can’t separate the two. It used to be possible to deny this. Not anymore. The evidence is now overwhelming. How do we know? Consider the inner cities.
Thirty years ago, conservatives looked at Detroit or Newark and many other places and were horrified by what they saw. Conventional families had all but disappeared in poor neighborhoods. The majority of children were born out of wedlock. Single mothers were the rule. Crime and drugs and disorder became universal.
What caused this nightmare? Liberals didn’t even want to acknowledge the question. They were benefiting from the disaster, in the form of reliable votes. Conservatives, though, had a ready explanation for inner-city dysfunction and it made sense: big government. Decades of badly-designed social programs had driven fathers from the home and created what conservatives called a “culture of poverty” that trapped people in generational decline.
There was truth in this. But it wasn’t the whole story. How do we know? Because virtually the same thing has happened decades later to an entirely different population. In many ways, rural America now looks a lot like Detroit.
This is striking because rural Americans wouldn’t seem to have much in common with anyone from the inner city. These groups have different cultures, different traditions and political beliefs. Usually they have different skin colors. Rural people are white conservatives, mostly.
Yet, the pathologies of modern rural America are familiar to anyone who visited downtown Baltimore in the 1980s: Stunning out of wedlock birthrates. High male unemployment. A terrifying drug epidemic. Two different worlds. Similar outcomes. How did this happen? You’d think our ruling class would be interested in knowing the answer. But mostly they’re not. They don’t have to be interested. It’s easier to import foreign labor to take the place of native-born Americans who are slipping behind.
But Republicans now represent rural voters. They ought to be interested. Here’s a big part of the answer: male wages declined. Manufacturing, a male-dominated industry, all but disappeared over the course of a generation. All that remained in many places were the schools and the hospitals, both traditional employers of women. In many places, women suddenly made more than men.
Now, before you applaud this as a victory for feminism, consider the effects. Study after study has shown that when men make less than women, women generally don’t want to marry them. Maybe they should want to marry them, but they don’t. Over big populations, this causes a drop in marriage, a spike in out-of-wedlock births, and all the familiar disasters that inevitably follow — more drug and alcohol abuse, higher incarceration rates, fewer families formed in the next generation.
This isn’t speculation. This is not propaganda from the evangelicals. It’s social science. We know it’s true. Rich people know it best of all. That’s why they get married before they have kids. That model works. But increasingly, marriage is a luxury only the affluent in America can afford.
And yet, and here’s the bewildering and infuriating part, those very same affluent married people, the ones making virtually all the decisions in our society, are doing pretty much nothing to help the people below them get and stay married. Rich people are happy to fight malaria in Congo. But working to raise men’s wages in Dayton or Detroit? That’s crazy.
This is negligence on a massive scale. Both parties ignore the crisis in marriage. Our mindless cultural leaders act like it’s still 1961, and the biggest problem American families face is that sexism is preventing millions of housewives from becoming investment bankers or Facebook executives.
For our ruling class, more investment banking is always the answer. They teach us it’s more virtuous to devote your life to some soulless corporation than it is to raise your own kids.
Sheryl Sandberg of Facebook wrote an entire book about this. Sandberg explained that our first duty is to shareholders, above our own children. No surprise there. Sandberg herself is one of America’s biggest shareholders. Propaganda like this has made her rich.
What’s remarkable is how the rest of us responded to it. We didn’t question why Sandberg was saying this. We didn’t laugh in her face at the pure absurdity of it. Our corporate media celebrated Sandberg as the leader of a liberation movement. Her book became a bestseller: “Lean In.” As if putting a corporation first is empowerment. It is not. It is bondage. Republicans should say so.
They should also speak out against the ugliest parts of our financial system. Not all commerce is good. Why is it defensible to loan people money they can’t possibly repay? Or charge them interest that impoverishes them? Payday loan outlets in poor neighborhoods collect 400 percent annual interest.
We’re OK with that? We shouldn’t be. Libertarians tell us that’s how markets work — consenting adults making voluntary decisions about how to live their lives. OK. But it’s also disgusting. If you care about America, you ought to oppose the exploitation of Americans, whether it’s happening in the inner city or on Wall Street.
And by the way, if you really loved your fellow Americans, as our leaders should, if it would break your heart to see them high all the time. Which they are. A huge number of our kids, especially our boys, are smoking weed constantly. You may not realize that, because new technology has made it odorless. But it’s everywhere.
And that’s not an accident. Once our leaders understood they could get rich from marijuana, marijuana became ubiquitous. In many places, tax-hungry politicians have legalized or decriminalized it. Former Speaker of the House John Boehner now lobbies for the marijuana industry. His fellow Republicans seem fine with that. “Oh, but it’s better for you than alcohol,” they tell us.
Maybe. Who cares? Talk about missing the point. Try having dinner with a 19-year-old who’s been smoking weed. The life is gone. Passive, flat, trapped in their own heads. Do you want that for your kids? Of course not. Then why are our leaders pushing it on us? You know the reason. Because they don’t care about us.
When you care about people, you do your best to treat them fairly. Our leaders don’t even try. They hand out jobs and contracts and scholarships and slots at prestigious universities based purely on how we look. There’s nothing less fair than that, though our tax code comes close.
Under our current system, an American who works for a salary pays about twice the tax rate as someone who’s living off inherited money and doesn’t work at all. We tax capital at half of what we tax labor. It’s a sweet deal if you work in finance, as many of our rich people do.
In 2010, for example, Mitt Romney made about $22 million dollars in investment income. He paid an effective federal tax rate of 14 percent. For normal upper-middle-class wage earners, the federal tax rate is nearly 40 percent. No wonder Mitt Romney supports the status quo. But for everyone else, it’s infuriating.
Our leaders rarely mention any of this. They tell us our multi-tiered tax code is based on the principles of the free market. Please. It’s based on laws that the Congress passed, laws that companies lobbied for in order to increase their economic advantage. It worked well for those people. They did increase their economic advantage. But for everyone else, it came at a big cost. Unfairness is profoundly divisive. When you favor one child over another, your kids don’t hate you. They hate each other.
That happens in countries, too. It’s happening in ours, probably by design. Divided countries are easier to rule. And nothing divides us like the perception that some people are getting special treatment. In our country, some people definitely are getting special treatment. Republicans should oppose that with everything they have.
What kind of country do you want to live in? A fair country. A decent country. A cohesive country. A country whose leaders don’t accelerate the forces of change purely for their own profit and amusement. A country you might recognize when you’re old.
A country that listens to young people who don’t live in Brooklyn. A country where you can make a solid living outside of the big cities. A country where Lewiston, Maine seems almost as important as the west side of Los Angeles. A country where environmentalism means getting outside and picking up the trash. A clean, orderly, stable country that respects itself. And above all, a country where normal people with an average education who grew up in no place special can get married, and have happy kids, and repeat unto the generations. A country that actually cares about families, the building block of everything.
Jim Yong Kim, the World Bank’s president, is
trying to revitalize a hidebound institution.
But his embrace of Wall Street is controversial... provides cash to companies in exchange for equity stakes, the World Bank currently drums up more than $7 billion a year from the private sector to invest in ventures in the developing world. Mr. Kim wants that figure to increase eventually to $30 billion... The World Bank promised to protect investors against some losses... those benefiting from the World Bank’s lending practices were “the people who fly in on a first-class ticket to give advice to governments.”.. The argument was that growing investment flows into developing countries rendered World Bank lending mostly superfluous.
.. Last year, the World Bank dispensed $61 billion in loans and investments. By contrast, investors now inject more than $1 trillion a year into emerging markets
.. In effect, he was pitching the bank’s services as a middleman, ready to back projects with guarantees and other incentives. No longer could the World Bank be the sole provider of loans, which, he said, are “crowding out” the private sector.
.. the World Bank economists whose pay is tied to how many loans they churn out
.. “One of the most difficult things to do in a large bureaucracy is to change incentives,
.. “And if you have a large bureaucracy full of economists it is especially hard, because it turns out that economists really hate it when you change the incentives.”
.. On Wednesday, the bank’s top economist, Paul Romer, abruptly resigned.
.. His end came after he claimed, in an interview with The Wall Street Journal, that the World Bank’s closely-watched report on business conditions in different countries had been altered for political reasons.
.. the bank tends to see private sector solutions — those involving the profit motive — as morally questionable.
.. World Bank staffers are used to talking to governments, and now they have to leverage the private sector? It is a different skill set, and flexibility is not the hallmark of development institutions.”
.. “He had to work against his own incentives,” Mr. Kim said, referring to the bank’s practice of rewarding staff for loans. “And that is part of the institutional problem here.”
.. “He has pursued a strategy of making himself popular in Davos by attacking the organization and its staff,” said Lant Pritchett, a retired World Bank executive. “It is this idea that his hand has been hampered by bureaucratic machinations. That may be accepted in Davos — but it’s completely false.”
.. His biggest coup was working with Ivanka Trump
.. They eventually settled in Muscatine, Iowa, where Mr. Kim was a high school quarterback before going on to Brown and securing advanced medical and anthropology degrees from Harvard.
Trump’s lawyers have begged him not to tweet about Russia or the investigation, but the president said repeatedly Friday that he wanted to respond to the Flynn news, associates said.
Cobb has told others that he has been more successful than others at limiting Trump’s tweets because he talks to him frequently and reassures him
Meanwhile, an email written by a Flynn deputy that came to light Saturday suggests that many of Trump’s closest aides were informed that Flynn planned to discuss sanctions with the Russian ambassador before Flynn made a December phone call to Kislyak.
.. Burck said that Priebus “confronted General Flynn several times, including in front of others, on whether he had talked to Kislyak about sanctions and was consistently told he had not.”
.. Trump was in a buoyant mood as he crossed Manhattan on Saturday, bragging about his election win in Rust Belt states and the improving economy.
At several stops, he touted the Senate’s passage of the GOP tax bill and predicted that Democrats who voted against it would lose their next elections.
Trump’s stops included the palatial Upper East Side apartment of Steve Schwarzman, chairman of a global private-equity firm.
.. Trump also told the wealthy donors at the event that the legislation was for the middle class