The Internet Industry Association will shut down, leaving the Communications Alliance to take responsibility for the collection of industry codes, such as the icode, that were developed and overseen by the industry body.
The board of the IIA has signed an agreement to transfer the organisation's responsibilities to the Comms Alliance.
"It is with some regret that I write on behalf of the board of the IIA to let you know that at the last meeting of the board it was resolved to seek to transfer its operations to Communications Alliance and, in due course cease trading and seek to wind up the company," states a letter sent to IIA members by the organisation's chairperson, Patrick Fair.
The letter said financial troubles were at the root of the decision.
"Unfortunately the significant initiatives undertaken by the IIA last year and the recent very successful annual dinner had not been enough to maintain financial viability of the association," the letter states.
Contributory factors include "a loss of significant fee paying members through industry consolidation", organisations limiting the number of associations they are willing to pay to be part of in the post-GFC environment, and changes in the Internet industry.
The IIA's mission statement positions itself as the "leading body representing Australia's Internet industries". "IIA is dedicated to deliver the ongoing leadership and support needed to collectively drive our Digital Economy forward," its mission statement says.
"At one time we had a new set of Internet focused businesses," the letter to IIA members states.
"Today every business is part of the internet industry."
The IIA had lost its significance so it was inevitable the organisation would close down, IBRS analyst Guy Cranswick said. "It had not had much to offer for a while," the analyst added.
"When other associations did not account for the Internet it had a role. That time is over. It makes sense that consolidating the functions into one organisation will be more efficient. As it was not really missed, it's not very clear what its input will be in the merged entity."
The IIA will hold a general meeting to formally wind up the organisation.
Members will be provided with membership of the Communications Alliance for the duration of their existing IIA membership.
The IIA is responsible for developing a body of industry codes including the anti-botnet icode, which was launched in 2010, the spam code, and the gambling code, and has previously worked to develop filtering schemes aimed at combating online child abuse material.
"The Content codes, the Gambling code, the iCode and the IIA's role in the family friendly filter and ISP programs will be taken forward by Communications Alliance as will be the National Online Security Council," the letter states.
"The IIA has been a strong advocate for the ISP and online security sector and put in place important platforms to help ensure that ISPs are well prepared to deal with cyber threats and that families can be confident about protecting their children from undesirable content,” Comms Alliance CEO John Stanton said in a statement.
"Communications Alliance welcomes all former IIA members who transition to our family and looks forward to working with them to strongly represent their interests and to build on the achievements to date."