IIS v10 default website crashes when installed fresh - 'ApplicationPoolIdentity' permissions

I have installed IIS 10 on Win 2016 and have done nothing except tried to access the 'Default Web Site'. So if the server is called 'myserver.doamain.org' in any browser I goto 'http://mysever.domain.org' and I would expect to see the IIS standard page. This does not happen.

What does happen is that the page comes up with:
HTTP Error 503. The service is unavailable.

When I look back at the IIS Manager in the 'Application Pools' section I can see that 'DefaultAppPool' has stopped. It seems as soon as I try to access the site the app pool crashes.

Additionally there are no logs produced and errors in the machine's event log. The errors are multiple copies of:
The worker process failed to initialize correctly and therefore could not be started.  The data is the error.
(Soruce: IIS-W3SVC-WP, EventID: 2276)

After some head-scratching and testing I found the problem but I am still unclear as to the cause.

The problem was that in the 'Advanced settings' of the 'DefaultAppPool' the identity is set to 'ApplicationPoolIdentity' but when I change it to 'LocalSystem' and restart the 'DefaultAppPool' pool everything works as expected:
  • In the browser the IIS page show as expected
  • There are no errors in the machine's event log
  • The pool does not crash
  • The logs are being produced in [C:\inetpub\logs\LogFiles\W3SVC1] (and the 'LogFiles' folder was automatically created - which it wasn't before).

NOTE: If I create a new application pool I have exactly the same issue.

Now I know that the identity should be set to 'ApplicationPoolIdentity' rather than 'LocalSystem' but I am currently at a loss to work out why 'ApplicationPoolIdentity' does not have the correct permissions - or even where to check.

  1. Has anyone come accross this before ?
  2. Where can I check the permissions for 'ApplicationPoolIdentity' and what should they be ?
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Windows Server 2016

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