ICANN gets funding to stay afloat

Group overseeing transition of domain name registration system to announce loans.

WASHINGTON -- The cash-strapped non-profit group tapped by the U.S. Commerce Department to transition the domain name registration business from a government-sponsored monopoly to a competitive process will announce next week at a meeting in Santiago, Chile, that it has secured enough funds to keep it from going broke, MSNBC has learned.

The group is known as the Internet Corporation for Assigned Names and Numbers, or ICANN.

MSNBC reported Wednesday that Mike Roberts, ICANN's interim president and CEO, wrote in a June 7 e-mail to officials at IBM and MCI Worldcom that unless he received an immediate cash infusion of $500,000 to $1 million, "there won't be a functioning ICANN by the end of August."

Roberts recently testified before Congress that ICANN was some $800,000 in debt. But ICANN has apparently found its financial footing, at least in the short run.

An MCI Worldcom official, in a July 6 e-mail obtained by MSNBC, proposed to ICANN that his company and IBM lend up to $1 million to keep the organization afloat.

"We've actually gotten some loans from people that will be announced shortly," said Joe Sims, ICANN's attorney, "That has solved our short-term problems."

Sims declined to name the companies making loans to ICANN or the total amount of additional funds ICANN has secured. He did confirm that an announcement of new funding would be made by Roberts next week when the group meets in Chile.

It isn't known how much longer ICANN can continue to operate on the new funds.

"Until we run out," is all Sims would say. "Until we get a regularized funding source, we're going to be living on this sort of hand-to-mouth existence, and we'll sort of have constant little problems with whether we have enough money for any given moment," Sims said.

On July 26, ICANN held a closed-door "special meeting" in which it adopted a resolution that allows it to borrow up to $2 million in unsecured loans from "various lenders" selected by Roberts himself. Minutes of that meeting were only made public on ICANN's Web site Tuesday.

Whatever new money ICANN has received, the group still remains in the red, Sims acknowledged. Only part of the $800,000 in unpaid bills that Roberts mentioned to Congress has been paid off.

"I can't tell you what exactly Roberts has done with the money that has come in," Sims said. "Some of it has gone to pay part of the outstanding bills, I don't know whose," Sims said. "Some of it has gone to pay the current expenses, so we don't increase our debts and some of it is obviously being saved for future expenses."

No direct request
ICANN's scramble for funding also has kicked off a controversy that leads to the White House. Sims and Esther Dyson, ICANN's interim chairman, met privately June 15 with Thomas Kalil, the senior director for science and technology issues on the White House's National Economic Council, to ask him for help in finding money for their group.

Sims wrote in e-mail that same day that Kalil "promised to do what he could to encourage private donations."

Such solicitations by a government official on behalf of a private organization would be prohibited by law. Kalil told MSNBC he had "no comment" on the matter.

Drawing Congressional attention
Kalil's involvement in ICANN's funding has drawn the scrutiny of House Commerce Committee Chairman Thomas Bliley, R-Va., who has sent a letter to the White House, questioning the propriety of Kalil's involvement and seeking more information on the matter.

Sims told MSNBC that he has no idea whether Kalil actually made any direct solicitations of funds on behalf of ICANN.

"We talked to him like we talked to everybody else," Sims said, "anybody who could conceivably be helpful to us."

Kalil is "roughly" operating in the same position that previously held by Ira Magaziner, Sims said. Magaziner was the White House official who was handpicked by President Clinton to formulate a broad U.S. policy for electronic commerce and to help transition the domain name process to a competitive environment.

Sims said he and Dyson never made any direct suggestion to Kalil that he solicit the private sector for funds on behalf of ICANN.

"What we told (Kalil) was, 'Any help you can give us, we'd like to have,'" Sims said. "We left it up to him to figure out what it is he can do."

Regardless of ICANN's continued precarious financial situation, Sims said there is "zero chance" that ICANN would fail from lack of funding.

"There's been too much time and energy spent on the ICANN process from too many people for it to fail because of lack of funds," Sims said. "It might blow up for some other reason, but I don't believe the commercial community is going to allow it to fail for a lack of funds."


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