Key internet body ICANN has re-signed its contract with the US Government to run the worldwide assignment of internet protocol addresses and top-level domains.
In a move widely expected by industry observers, the Government's National Telecommunications and Information Administration (NTIA) re-awarded the contract to ICANN for three years, with potential extension options drawing out the contract to a total seven years.
The contract win comes after several months of deliberation over the contract, after the NTIA suddenly scrapped the entire selection process in March.
At the time, the NTIA said no bidder had met the criteria set out in its tender, including ICANN. The move was widely seen as a thinly veiled warning shot across the bows of the incumbent organisation, which had raised eyebrows in the US Government for alleged profiteering from domain name assignments.
ICANN has begun assessing applications for generic top-level domain names that could ultimately see up to 1,000 new top-level domains join .com and .org in the roster of potential website addresses.
The body's contract with NTIA was extended a further six months while the tender process was renegotiated.
Under the restarted tender process begun in April this year, a total of five interested bidders officially put their lot in for the contract, including ICANN, with at least two more organisations believed to have taken part.
Most of the competitors were US-based for-profit companies.
Internet governance analyst Kieren McCarthy told iTnews from San Francisco that ICANN's contract win "surprises no one”.
“It would have been a bad idea to give it to anyone else at this stage,” he said.
McCarthy said the other contenders were not viable for the contract, which is likely to cost $US2 million a year to run at minimal profit.
He said the initial contract renegotiation had begun last year in a bid to update the terms and requirements from ICANN.
It was also an attempt to pressure ICANN into important reforms, as recommended by an independent review headed by NTIA administrator, Larry Strickling.
Under the new terms, ICANN must prove it has taken clear steps to improve the assignment service through better automation, a clear split between the technical side and policy making, as well as introducing improved customer service.
“If ICANN doesn’t improve [its operations] the contract makes it clear that the NTIA is quite prepared to hand it to someone else," he said.
ICANN recently appointed a new chief executive, Fadi Chehadé, to replace the outgoing Rod Beckstrom whose contract ends in October this year.
Updated: A previous version of the article stated that running the domain names contract costs $2 billion a year. This has been changed to $2 million.