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Delay may harm small .org bidders, firm says

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ComputerWire: IT Industry Intelligence

Delay in the process of selecting a new company to run the .org internet top-level domain may count against some of the smaller, less well-funded bidders, one of the bidding companies believes,

Kevin Murphy writes

. Last week, a decision from industry manager ICANN, the Internet Corp for Assigned Names and Numbers, was delayed by about a month until "the end of September".

A company set up to bid to take over .org on a commercial basis believes that any further delay may hinder competing non-profit organizations that also want to take over the domain. Some of these non-profits are believed to be banking on a $5m payout that VeriSign Inc, which relinquishes .org at the end of the year, is set to make to any non-profit successor.

"Some bidders have said they're not dependent on the VeriSign endowment," said Jonathan Wales, president of Register Organization Inc. "But some have been very quiet about it." The company, a subsidiary of Register.com Inc, has committed $10m to fund the startup of the new registry, if it is selected.

A deal inked between ICANN and VeriSign last year to spin off .org calls for the $5m endowment to be made, at the latest, 90 days before the transition is made, which is expected to happen the last day of the year. If further delays push the decision beyond September 30, VeriSign may not be obliged to pay up.

Wales said that as VeriSign will not pass on deferred revenues from existing .org registrations, the winning registry will have "a gap in cash flow" until revenue from new and renewed registrations starts catching up to the cost of operating the registry. That's what the $5m is supposed to subsidize, and its absence could hurt poorly financed bidding registries.

ICANN general counsel Louis Touton said that the issue is not that the latest delay causes problems, but whether "any more delay" could cause problems. The board of directors is to make its decision "late September", he said, after comments on the applications have been received, and a staff report prepared.

It's a fierce contest, especially given that domain name registry contracts are still seen by many as essentially a license to print money. The .org registry is said to generate $15m revenue per year, and clever marketing could increase that amount further. Hardly surprising that 11 companies are bidding.

ICANN staff are working with outside consultants on analyzing the bids, but declined to name the firm, to avoid having it being lobbied by bidders. Applicants have been asked not to approach directors or staff to pitch their bids. One director, Robert Blokzijl, is involved in one of the bids, and has recused himself from the vote.

© ComputerWire

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