NeuLevel was chosen by the internet's technical co-ordination body, the Internet Corporation for Assigned Names and Numbers (ICANN), to deal with the registration of the .biz domains in 2001.
The allocation process adopted by NeuLevel was based on parties paying an application fee of about $2 to reserve a particular domain name during a specified period. However, applicants were not given any domain name rights until the end that period and if more than one request was made for the same domain, then the rights to that domain were determined by a lottery.
In a class-action lawsuit filed in 2001, Arizona radio DJ Dave Smiley and Skyscraper Productions, a Los Angeles-based company, accused NeuLevel of running an illegal lottery, because the company was accepting payment from prospective domain name holders without granting them rights to specific domains.
They argued that the process encouraged applicants to make several applications and payments for each domain name in an attempt to increase their chances of success in the event of the right to a name being determined randomly.
In October 2001, a Californian court issued a temporary order barring NeuLevel from allocating 53,000 .biz domain names. Although the order was later lifted, the company paid $1.7 million to those who had applied for the disputed names, and made the names available again without application fees, on a first-come, first-served basis.
The settlement of the class action suit will cover approximately 25,000 applicants who have not yet received refunds.