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Username: asjunk
Date/Time: Wed, July 24, 2002 at 9:29 PM GMT
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Subject: Concerns for Applicants re: Finances


I am greatly concerned about the financial ability of the applicants to start up and run the .org registry during the transition. The new registry has an obligation to serve more than 2.5 million current registrations without service disruptions; once ICANN selects a bidder, there will be several months of transition until the registry is formally transferred. There will be significant costs associated with this start up, which some bidders seem to underestimate. Furthermore, even after the transfer of the registry, there will be little or no revenue from registrations for another several months. In all, there may be a period of six months from the award to the first new revenue. 

In light of this financial reality, I'd like the bidders to respond to several questions about the financial obligations of the transition.

a. I'd like each bidder to identify the funds that they are relying on for the transition. Do you have money in the bank set aside or are you relying on the third party partners or money from capital markets for the transition?

b. To what extent does your financing for the transition depend on timely receipt of all or part of the Verisign endowment? What are your plans for alternative financing if a dispute or a delay arises in the transfer of those funds?

c. Are you financially prepared to deal with unforeseen costs that might arise in the transition, particularly those related to the technical operation of the registry?

d. Are you financially prepared to deal with lower than expected numbers of new names being purchased/registrants renewing. What tolerances do you have in your cash projections before being forced to seek further funding

I'm also concerned about the stability of the .org registry if it goes to a bidder that is relying in substantial part on the Verisign endowment for funding. How solid is the commitment from Verisign to turn over the money? I understand that there is a signed agreement between Verisign and ICANN with respect to the endowment, but what are the remedies if Verisign delays or receives a waiver on the agreement?  And most important, do the bidders relying on the endowment have the resources to function in the meantime as well as to engage in a legal dispute and perhaps protracted litigation?


Shelton Johnson
Virginia, USA


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