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Trump Pushed for a Sweetheart Tax Deal on His First Hotel. It’s Cost New York City $410,068,399 and Counting.

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Andrea Bernstein reports in ProPublica:

In 1975, New York City was run-down and on the verge of bankruptcy. Twenty-nine-year-old Donald Trump saw an opportunity. He wanted to acquire and redevelop the dilapidated Commodore Hotel in midtown Manhattan next to Grand Central Terminal.

Trump had bragged to the executive controlling the sale that he could use his political connections to get tax breaks for the deal.

The executive was skeptical. But the next day, the executive was invited into Trump’s limousine, which ushered him to City Hall. There, he met with Donald’s father Fred and Mayor Abe Beame, to whom the Trumps had given lavishly.

Beame put his arm around the Trumps. “Anything they want, they get,” Beame said, as recounted by Trump’s first biographer, journalist Wayne Barrett.

Trump got an unprecedented 40-year tax break. According to new figures given to us by the New York City Department of Taxation and Finance, the break has cost the city $410,068,399.55 in forgone revenue to Trump and the hotel’s subsequent owners. The break ends this April.

In “The Art of the Deal,” Trump said there was a reason for the 40-year deal: “Because I didn’t ask for 50.”

Trump got it over the misgivings of some state officials. The former chairman of the state economic development agency, Richard Ravitch, recalled in an interview that Trump approached him in December 1975. Trump, who had ties to Gov. Hugh Carey, “started raising his voice, and threatening me, and said, ‘If you don’t give me a tax abatement, I’m going to have you fired.’ I said, ‘Get the fuck out of here.’”

Ravitch was not fired, but the state agency did approve the break. Trump has said the decision was made on the merits.

“Really the story of Donald Trump, rather than this Horatio Alger figure, this is a guy who managed to learn how to turn politics into money,” said Barrett during a 1992 WNYC interview, the same one in which he told the Beame story. (Barrett died on Jan. 19, 2017, on the eve of Trump’s inauguration.) . . .

Continue reading.

Written by LeisureGuy

22 January 2020 at 12:23 pm

The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher.

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Paul Kiel reports in ProPublica how the US government has become an accomplice if not an errand boy for big business::

Eight years ago, the IRS, tired of seeing the country’s largest corporations fearlessly stash billions in tax havens, decided to take a stand. The agency challenged what it saw as an epic case of tax dodging by one of the largest companies in the world, Microsoft. It was the biggest audit by dollar amount in the history of the agency.

Microsoft had shifted at least $39 billion in U.S. profits to Puerto Rico, where the company’s tax consultants, KPMG, had persuaded the territory’s government to give Microsoft a tax rate of nearly 0%. Microsoft had justified this transfer with a ludicrous-sounding deal: It had sold its most valuable possession — its intellectual property — to an 85-person factory it owned in a small Puerto Rican city.

Over years of work, the IRS uncovered evidence that it believed laid the scheme bare. In one document, a Microsoft senior executive celebrated the company’s “pure tax play.” In another, KPMG plotted how to make the company Microsoft created to own the Puerto Rico factory — and a portion of Microsoft’s profits — seem “real.”

Meanwhile, the numbers Microsoft had used to craft its deal were laughable, the agency concluded. In one instance, Microsoft had told investors its revenues would grow 10% to 12% but told the IRS the figure was 4%. In another, the IRS found Microsoft had understated revenues by $15 billion.

Determined to seize every advantage against a giant foe, the small team at the helm of the audit decided to be aggressive. It used special powers that the agency had shied away from using in the past. It took unprecedented steps like hiring an elite law firm to join the government’s side.

To Microsoft and its corporate allies, the nature of the audit posed a dire threat. This was not the IRS they knew. This was an agency suddenly committed to fighting and winning. If the aggression went unchecked, it would only encourage the IRS to try these tactics on other corporations.

“Most people, the 99%, they’re afraid of the IRS,” said an attorney who works on large corporate audits. “The other 1%, they’re not afraid. They make the IRS afraid of them.”

Microsoft fought back with every tool it could muster. Business organizations, ranging from the U.S. Chamber of Commerce to tech trade groups, rallied, hiring attorneys to jump into the fray on Microsoft’s side in court and making their case to IRS leadership and lawmakers on Capitol Hill. Soon, members of Congress, both Republicans and Democrats, were decrying the IRS’ tactics and introducing legislation to stop the IRS from ever taking similar steps again.

The outcome of the audit remains to be seen — the Microsoft case grinds on — but the blowback was effective. Last year, the company’s allies succeeded in changing the law, removing or limiting tools the IRS team had used against the company. The IRS, meanwhile, has become notably less bold. Drained of resources by years of punishing budget cuts, the agency has largely retreated from challenging the largest corporations. The IRS declined to comment for this article.

Recent years have been a golden age for corporate tax avoidance, with massive companies awash in profits routinely paying tax rates in the single digits, or even nothing at all. But how corporations manage to do this and keep the IRS at bay is mostly shrouded in secrecy. The audit process is confidential, and the IRS, for all its flaws, simply doesn’t leak. Microsoft’s war with the IRS offers a rare view into how a giant company maneuvers to avoid taxes — and how it responds when the government tries to crack down. ProPublica has reconstructed the fight from thousands of pages of court documents, information obtained through public records requests and accounts from current and former IRS employees.

Microsoft declined to discuss its taxes in any detail. In response to extensive questions provided in writing, the company said it “follows the law and has always fully paid the taxes it owes.”


In 2010, the IRS announced that it was creating a new unit to audit international, intra-company deals. Tech, pharmaceutical and other giants had figured out how to use these dubious deals to avoid taxes on a colossal scale. It was hardly a secret: News articles had detailed how GooglePfizer and others saved billions. Senate hearings ensued.

Despite the publicity, nothing changed. The trend, which had taken off in the 2000s, intensified. The losses to the U.S. Treasury in uncollected taxes ran well into the hundreds of billions of dollars. In 2016 alone, according to an estimate by economists including Gabriel Zucman of the University of California, Berkeley, U.S. corporations avoided $61 billion in taxes by sending profits to tax havens.

The concept was simple. A U.S. company sold its most valuable asset — for a tech company, its intellectual property — to a subsidiary in a place (Ireland, Singapore, Puerto Rico, etc.) where the tax rate was extremely low.

The details of these deals were monstrously complex, making it difficult for the IRS to prove they were done solely to dodge taxes. Essentially, the IRS had to argue that the company had set the wrong price for its intellectual property. And to do that, the agency had to understand the company, its markets and its prospects top to bottom. It was a near-impossible task, and the IRS suffered some key losses in court, which only emboldened companies to stake out even more aggressive positions.

In 2011, the IRS picked Samuel Maruca to lead the new unit. A partner at the prominent law firm Covington & Burling, Maruca had spent decades advising corporations on “transfer pricing,” as this area of tax is called, and facing off against the agency on audits. He came to the job, he said, to help fix a broken system.

Maruca is the picture of a tax lawyer (thinning hair, glasses). But unlike many of his colleagues, he expresses himself clearly, sometimes in moral terms. He told peers at industry conferences that the nation’s corporations had grown excessively bold. “We would all benefit,” he said, “from a resurgence of moderation and heightened regard for principle.”

To restore balance, the IRS “must produce some winners,” he said. “I really want to make a difference.”

Maruca built a team of about 60 — agents, attorneys and economists — with half recruited from outside the agency. For the IRS, this was a notable influx of talent. But it was still modest when compared with the scale of the challenge.

Among the key advisers on the new team was Eli Hoory, an attorney who had worked under Maruca at Covington and followed him over to the IRS a few months later. Hoory, then in his mid-30s, had a shaved head and prominent nose that gave him an angular appearance. Known for being extremely bright, he was also frank and outspoken, sometimes to a fault. A graduate of the U.S. Coast Guard Academy, he’d served as a reservist during law school and studied at the London School of Economics before landing at Covington.

Maruca and his team set about canvassing the IRS’ inventory to find good targets for producing “some winners,” as he’d put it.

Microsoft’s Puerto Rico deal almost slipped by. The week before Maruca started at the IRS in May 2011, the agency, which had already been auditing the transaction for four years, completed its work and sent Microsoft its findings.

That 2011 assessment by the IRS isn’t public, but it’s clear Maruca and Hoory were unimpressed. The IRS, they thought, had been credulous, accepting too many of Microsoft’s numbers. They also thought the IRS was set up for failure. The agency had been able to retain only one outside expert, an economist. If the case went to court, Microsoft would surely summon a cast of varied experts to undermine the IRS’ position.

It seems likely, given the size of Microsoft’s Puerto Rico transaction, that the IRS in May 2011 had hit the company with a tax bill in the billions. But Maruca and Hoory thought the agency was thinking small.

Maruca told Microsoft the IRS needed more time, and in early 2012, the IRS withdrew its findings. By then, Hoory had taken leadership of the audit. He began sending new document requests to Microsoft, asking for more interviews and considering what other experts the IRS needed to round out its case. Over the next three years, he and his team amassed tens of thousands of pages and conducted dozens of interviews with Microsoft personnel. (Hoory, who still works at the IRS, declined to comment.)

The evidence they assembled told a story. It revealed how Microsoft had . . .

Continue reading. There’s much more.

Written by LeisureGuy

22 January 2020 at 12:17 pm

Dark Clouds Over Facebook: The $5 Billion Settlement Isn’t Finalized

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“It’s a long road that has no turning.” “The bigger they are, the harder they fall.” “Pride goeth before a fall.” And so on. Facebook is riding high now, but drawing ire and making enemies. (Much the same is true of Amazon, Apple, Twitter, Google, and the US.) Matt Stoller writes in Big:

Today I’m going to discuss some quiet but potentially significant problems hanging over Facebook and the big tech ecosystem in general. The big tech story has cooled a bit as reporters increasingly focus on the Presidential race, but it will come back. I’m going to stay on it. I also have a short blurb on the cheerleading story at the end of this newsletter, I’m going to stay on that too.

Goliath-Slaying Congressman David Cicilline

Yesterday Nancy Scola at Politico wrote a piece profiling Antitrust Subcommittee Chairman David Cicilline, who is conducting an investigation into big tech corporations. It is, as Institute for Local Self-Reliance director Stacy Mitchell notes, one of the important Congressional investigations in the last forty years. Last Friday, his subcommittee held a hearing in Colorado about how Google, Amazon, Facebook, and Apple bully entrepreneurs, with witnesses from PopSockets, Sonos, Tile, and Basecamp. All of us will recognize in their stories the basic bullying at the heart of the economy right now, and the courage these entrepreneurs showed in speaking out.

This bullying is pervasive. Yesterday, I spoke before the American Booksellers Association, book store owners who have been in Amazon’s crosshairs for two decades. Book sellers are exhausted keeping their stores going in the face of Amazon’s power, but also see the political argument shifting. Cicilline is one of the key reasons why.

I talked to these small business owners about the historical analogue to today, the anti-chain store fight in the 1920s and 1930s against the A&P, which was the Amazon of its day. A&P, like Amazon, was able to use its access to capital to sell popular products below cost, and thus kill its competitors. Today, a small book store has to make a profit and sell books at the list price, whereas Amazon doesn’t have to make money and can sell that book below cost. So Amazon wins, not because its technology is good, but because it can get access to cheap money to drive its competitors out of business.

Our local stores are dying, and so are our communities. One quote, from Supreme Court Justice Louis Brandeis, captures the political problem this caused, and it has eery resonance today. Corporate monopolies, in particular chain stores, he argued, were “converting independent tradesmen into clerks” and “sapping the resources, the vigor and the hope of the smaller cities and towns.”

Cicilline is bringing back this understanding of the moral power of free commerce, and the threat concentrated finance poses. Scola’s profile of Cicilline is worth reading, but what I found fascinating (if a bit self-serving) was Cicilline’s view of the importance of history. Here here is discussing my book, Goliath: The Hundred Year War Between Monopoly and Democracy.

Giving speeches alongside Cicilline at the event were Faiz Shakir, Bernie Sanders’ presidential campaign manager; and Rohit Chopra, a Democratic Federal Trade Commission commissioner who has strongly criticized his own agency for what he sees as its inadequate approach to Silicon Valley. Cicilline called Stoller, a staunch proponent of more stringent antitrust enforcement, “an inspiration,” and thanked him for telling such an “important story.”

The fight Cicilline is helping to lead is a political struggle over what commerce means in America. In his nomination speech for the 1936 Democratic convention, Franklin Delano Roosevelt framed the politics of commerce clearly, “If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the marketplace.”

The debate is raging, and some of it is happening over the historical narrative I wrote about in Goliath. Institutional Investor magazine had a very positive review of Goliath, basically making the argument that Republicans and Democrats are beginning to see the problem of monopoly. Meanwhile, a Marxist historian writing in the pages of the left-wing magazine The Nation said I got the history all wrong, and that we need a socialist revolution.

And there we go. The history is echoing today, as it always does.

A Long Lit Fuse Under Facebook

Last July, the Federal Trade Commission and Facebook agreed on a high-profile $5 billion for various privacy violations. While that amount of money seems like a lot, the actual settlement was underwhelming. $5 billion is a parking ticket for Facebook, and the corporation got a lot in return. First, Facebook made sure that in return for the money, the FTC wouldn’t investigate Mark Zuckerberg’s emails or do an interview with him. Second, Facebook got a total release from pretty much all potential violations of the FTC’s consumer protection law, a kind of retroactive get out of jail free card.

It’s a sweet deal, and Facebook’s stock price skyrocketed when the corporation told Wall Street about it. It was a thorough embarrassment for the FTC; not a single Senator or House member praised the commission in the days after the settlement, which is a bit unusual for such a high profile case.

Now normally this would be old news, a judge usually rubber stamps these kinds of agreements and lets them go through. It’s true that a nonprofit protested; the nonprofit Electronic Privacy Information Center (EPIC) sued to stop the settlement. EPIC’s argument was that the settlement didn’t fix the problem with Facebook, and that liability release was so vague as to be against the public interest and procedurally unfair. Judges however often ignore such pleadings. But in an unusual legal scenario, the Judge who is supposed to approve the settlement hasn’t done so, and asked the government to respond by this Friday to EPIC’s arguments.

And here’s where it gets interesting. This settlement seems like it . . .

Continue reading.

Written by LeisureGuy

22 January 2020 at 11:35 am

Facebook allows pro-Trump Super PAC to lie in ads

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Facebook is becoming a serious problem. Judd Legum reports at Popular Information:

Facebook has taken a lot of criticism, including from its employees, for its policy to allow politicians and political parties to lie in ads. It’s a policy that puts Facebook in a position to directly profit from political misinformation. And it gives the green light to the Trump campaign to mislead the public.

But the policy only applies to political candidates and political parties. By the terms of the policy, therefore, most accounts that run political ads still cannot include claims debunked by Facebook’s third-party fact checkers.

Facebook’s policies specifically state that “organizations like Super PACs or advocacy organizations that are unaffiliated with candidates” are subject to fact-checking.

But Facebook is allowing a major pro-Trump Super PAC, the Committee to Defend the President, to run ads with lies. The Committee to Defend the President, according to the Center for Responsive Politics, is one of the “two biggest non-party outside spenders of this cycle.”

Since Saturday, the Committee to Defend the President is running multiple ads that claim former Vice President Joe Biden is “a criminal who used his power as Vice President to make him and his son RICH.”

This claim is false, according to Facebook’s own fact-checking partners. PolitiFact, which is part of Facebook’s fact-checking program, wrote in September that “Hunter Biden did do work in Ukraine, but we found nothing to suggest Vice President Biden acted to help him.” Another Facebook fact-checking partner, FactCheck.org, named Trump’s suggestion that Biden did anything improper with respect to Ukraine one of its “Whoppers of the Year.”

In response to an inquiry about the Biden ads by the Committee to Defend the President, a Facebook spokesperson said it was entirely up to its fact-checking partners whether to evaluate the ad. And, thus far, none of them have chosen to do so. The fact that the ads contain a claim already debunked by its fact-checking partners does not matter. Facebook will only remove these ads if one of its fact-checking partners independently reviews them.

Popular Information is very much worth reading.

Written by LeisureGuy

22 January 2020 at 9:11 am

How Boeing’s Responsibility in a Deadly Crash ‘Got Buried’

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American-style capitalism, with its focus on shareholder value to the exclusion of all other considerations, has some drawbacks. Chris Hamby reports in the NY Times:

After a Boeing 737 crashed near Amsterdam more than a decade ago, the Dutch investigators focused blame on the pilots for failing to react properly when an automated system malfunctioned and caused the plane to plummet into a field, killing nine people.

The fault was hardly the crew’s alone, however. Decisions by Boeing, including risky design choices and faulty safety assessments, also contributed to the accident on the Turkish Airlines flight. But the Dutch Safety Board either excluded or played down criticisms of the manufacturer in its final report after pushback from a team of Americans that included Boeing and federal safety officials, documents and interviews show.

The crash, in February 2009, involved a predecessor to Boeing’s 737 Max, the plane that was grounded last year after accidents in Indonesia and Ethiopia killed 346 people and hurled the company into the worst crisis in its history.

A review by The New York Times of evidence from the 2009 accident, some of it previously confidential, reveals striking parallels with the recent crashes — and resistance by the team of Americans to a full airing of findings that later proved relevant to the Max.

In the 2009 and Max accidents, for example, the failure of a single sensor caused systems to misfire, with catastrophic results, and Boeing had not provided pilots with information that could have helped them react to the malfunction. The earlier accident “represents such a sentinel event that was never taken seriously,” said Sidney Dekker, an aviation safety expert who was commissioned by the Dutch Safety Board to analyze the crash.

Dr. Dekker’s study accused Boeing of trying to deflect attention from its own “design shortcomings” and other mistakes with “hardly credible” statements that admonished pilots to be more vigilant, according to a copy reviewed by The Times.

The study was never made public. The Dutch board backed away from plans to publish it, according to Dr. Dekker and another person with knowledge of its handling. A spokeswoman for the Dutch board said it was not common to publish expert studies and the decision on Dr. Dekker’s was made solely by the board.

At the same time, the Dutch board deleted or amended findings in its own accident report about issues with the plane when the same American team weighed in. The board also inserted statements, some nearly verbatim and without attribution, written by the Americans, who said that certain pilot errors had not been “properly emphasized.”

The muted criticism of Boeing after the 2009 accident fits within a broader pattern, brought to light since the Max tragedies, of the company benefiting from a light-touch approach by safety officials.

References to Dr. Dekker’s findings in the final report were brief, not clearly written and not sufficiently highlighted, according to multiple aviation safety experts with experience in crash investigations who read both documents.

One of them, David Woods, a professor at the Ohio State University who has served as a technical adviser to the Federal Aviation Administration, said the Turkish Airlines crash “should have woken everybody up.”

Some of the parallels between that accident and the more recent ones are particularly noteworthy. Boeing’s design decisions on both the Max and the plane involved in the 2009 crash — the 737 NG, or Next Generation — allowed a powerful computer command to be triggered by a single faulty sensor, even though each plane was equipped with two sensors, as Bloomberg reported last year. In the two Max accidents, a sensor measuring the plane’s angle to the wind prompted a flight control computer to push its nose down after takeoff; on the Turkish Airlines flight, an altitude sensor caused a different computer to cut the plane’s speed just before landing.

Boeing had determined before 2009 that if the sensor malfunctioned, the crew would quickly recognize the problem and prevent the plane from stalling — much the same assumption about pilot behavior made with the Max.

And as with the more recent crashes, Boeing had not included information in the NG operations manual that could have helped the pilots respond when the sensor failed.

Even a fix now proposed for the Max has similarities with the past: After the crash near Amsterdam, the F.A.A. required airlines to install a software update for the NG that compared data from the plane’s two sensors, rather than relying on just one. The software change Boeing has developed for the Max also compares data from two sensors.

Critically, in the case of the NG, Boeing had already developed the software fix well before the Turkish Airlines crash, including it on new planes starting in 2006 and offering it as an optional update on hundreds of other aircraft. But for some older jets, including the one that crashed near Amsterdam, the update wouldn’t work, and Boeing did not develop a compatible version until after the accident.

The Dutch investigators deemed it “remarkable” that Boeing left airlines without an option to obtain the safeguard for some older planes. But in reviewing the draft accident report, the Americans objected to the statement, according to the final version’s appendix, writing that a software modification had been unnecessary because “no unacceptable risk had been identified.” GE Aviation, which had bought the company that made the computers for the older jets, also suggested deleting or changing the sentence.

The Dutch board removed the statement, but did criticize Boeing for not doing more to alert pilots about the sensor problem.

Dr. Woods, who was Dr. Dekker’s Ph.D. adviser, said the decision to exclude or underplay the study’s principal findings enabled Boeing and its American regulators to carry out “the narrowest possible changes.”

The problem with the single sensor, he said, should have dissuaded Boeing from using a similar design in the Max. Instead, “the issue got buried.”

Boeing declined to address detailed questions from The Times. . .

Continue reading. There’s much more. For example, later in the report:

At the request of the American team led by the N.T.S.B., the Dutch added comments that further emphasized the pilots’ culpability. The final report, for example, included a new statement that scolded the captain, saying he could have used the situation to teach the first officer a “lesson” on following protocol.

In their comments, reflected largely in an appendix, the Americans addressed criticism of Boeing in the draft report. A description of the company’s procedures for monitoring and correcting potential safety problems was “technically incorrect, incomplete and overly” simplistic, they wrote. In response, the board inserted a description of Boeing’s safety program written by the Americans and a statement that Boeing’s approach was more rigorous than F.A.A. requirements.

The draft had also referred to studies that found it was common for complex automation to confuse pilots and suggested design and training improvements. The studies, the draft said, included research by “Boeing itself.”

The Americans objected, saying the statements “misrepresent and oversimplify the research results.” In its final report, the board deleted the Boeing reference.

And:

The Dekker study found that another decision by Boeing — to leave important information out of the operations manual — had also hampered the Turkish Airlines pilots.

The 737 NG has two parallel sets of computers and sensors, one on the left side of the plane and one on the right. Most of the time, only one set is in control.

On the Turkish Airlines flight, the system on the right was in control. The pilots recognized the inaccurate altitude readings and noted that they were coming from the sensor on the left. This would have led them to conclude that the bad data coming from the left didn’t matter because the autothrottle was getting the correct data from the right, Dr. Dekker found.

What the pilots couldn’t have known was that the computer controlling the engine thrust always relied on the left sensor, even when the controls on the right were flying the plane. That critical information was nowhere to be found in the Boeing pilots’ manual, Dr. Dekker learned.

Erik van der Lely, a 737 NG pilot and instructor for a European airline who studied under Dr. Dekker, told The Times that he had not known about this design peculiarity until he read a copy of the study. “I’m pretty sure none or almost none of the 737 pilots knew that,” he said.

Written by LeisureGuy

20 January 2020 at 4:06 pm

What will it take to get action?

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Well, start by watching this:

Written by LeisureGuy

19 January 2020 at 2:07 pm

The potential degradation of .org

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Esther Dyson, the founding chair of the Internet Corporation for Assigned Names and Numbers from 1998 to 2000, writes in the Washington Post:

One of the Internet’s most trusted assets — the dot-org domain used by nonprofits from UNICEF to your local food bank — is being hijacked. Dot-org, which was built to support nonprofits globally, is being sold to the highest bidder with almost no public discussion or consideration of alternatives. Organizations and their supporters who rely on dot-org for website and email access deserve an open process. The institutions that govern the Internet should be transparent. It is up to those of us who believe in a free and open Internet to demand this deal be reconsidered.

Twenty-two years ago, I was the founding chair of an organization called the Internet Corporation for Assigned Names and Numbers. ICANN was designed to fill a vacuum that was enticing to all kinds of power, and thus to keep the Internet decentralized and free from any overbearing power center. Our mission was to keep outside interests, whether financial or political, from taking over a global public service.

ICANN holds the assets underpinning the Internet on behalf of the world. It also runs a system of checks and balances for Internet policymaking. While we succeeded in keeping any government from exerting outsize influence over the organization, ICANN’s policy decisions are largely influenced by the businesses that make money off the Internet, including online advertisers, lawyers and those who sell and manage domain names.

Dot-org, though, is special. Under the stewardship of the Public Interest Registry (PIR), the organization to which ICANN delegates control and operation of the dot-org domain, dot-org serves the nonprofit community as a trusted partner. Nonprofits provide websites and use email with confidence and peace of mind. Even while business interests captured most of the Internet’s policymaking, dot-org remained protected from profit-driven rulemaking.

Today, though, that independence is under threat. The Internet Society, a nonprofit to which ICANN delegated the duty to host PIR, announced a deal in November to sell PIR and its license to sell dot-org names for more than $1 billion. The buyer is Ethos Capital, a private-equity firm with investments in digital advertising, data brokering and other Internet services that has several former ICANN executives on its staff. If ICANN does not scuttle the deal, dot-org’s public-interest mission will inevitably be compromised by the buyer’s need to make a profit off its billion-dollar investment. The provision of dot-org domain names is a natural monopoly, regulated by ICANN, and it should not be sold into the hands of a profit-oriented owner.

Such an owner would need to earn more by, for example, selling data on dot-org registrants or perhaps upselling registrants to buy special security services, trademark protection or other versions of their dot-orgs — just as other providers encourage for-profit registrants to buy “protection” for their brands. Such profit-making is not inherently evil, but it’s not the purpose for which dot-org or its registrants were created. In the end, the profits should go back to dot-org members, not to some corporation.

I have joined a group of peers in philanthropic and Internet leadership to offer an alternative: a cooperative organization (the Cooperative Corporation for .ORG Registrants, or CCOR) with membership and voting power in the hands of the Internet’s 10 million-plus dot-org users. This new organization is designed to keep dot-org in the hands of its rightful owners: the user community. The co-op is committed to keeping dot-org safe, secure and free of any motivation to profit off its users’ data or to upsell them pricy add-ons. . .

Continue reading.

Written by LeisureGuy

19 January 2020 at 5:12 am

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