While working on WCF, I came across this error. It occurs due to Http namespace reservations and I believe it only affects Vista and later OS. This article elaborates steps to resolve this issue.

[Update] This issues does affect older versions of windows and not just Vista. The problem occurs when a service with less privileges is trying to start. It tries to register the URL but since it does not have admin privileges, the OS denies the request. This is called namespace reservation and because of it only a particular group of users have rights to HTTP URL namespace.

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