The Internet Society is pleased to respond
to your questions about the financial implications of its bid to manage the .ORG
Question 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?
A: ISOC has entered into a letter of intent with Afilias to be the back-end service
provider, and ISOC's designee, PIR will contract with Afilias as described in our
response to item C.14, which also details the financial capacity of Afilias.
(For our bid, please see http://www.icann.org/tlds/org/applications/isoc/ )
The agreement between Afilias and PIR ensures that adequate funds are available to
support the transition. Under the terms of our agreement, Afilias will cover
the transition costs and will be compensated by PIR for these expenses over the course
of our agreement. Audited financial statements for Afilias are shown in Appendix
Question 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?
Answer B: ISOC's bid is not conditioned on receipt of the VeriSign endowment to
ensure the functionality and stability of the transition and operation of the .ORG
TLD. Section 9 of the bid (item C.41) addresses this question and states, in
part: "In summary, the endowment is not required to effect a successful transition
to PIR management. However, it will enable PIR to more quickly make the kind
of impact we all expect of the next .ORG operator."
Question 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?
Answer C: Yes.
Please see the response to item C.14 of the bid.
Question 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?
Answer D: Yes. PIR has developed a very conservative
set of forecasts, making allowances for a reduced number of registrations as well
as changes to other key variables and we have no plans to seek outside funding.
Also, Afilias has significant standing capacity available. As shown in the
Appendix A2 financial statements of Afilias, there is sufficient capital for start-up
expenses with adequate tolerances for variations in the number of registrations,
upward or downward.
Question E: 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
Answer: As stated above in answer to question B., ISOC's bid is not conditioned
on receipt of the VeriSign endowment.
Question F: 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?
F: ISOC believes that ICANN and VeriSign will honor their commitments.
G: 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
Answer G: In the unlikely event that there is litigation over a clear
and unambiguous commitment, it still would not affect the ISOC bid because our bid
is not dependent on the endowment.
I hope that you find this information helpful.
I appreciate your questions, as these are critically important questions for all
bidders to have considered.