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ICANN doubles .xxx fees

Kevin Murphy, April 2, 2011, 08:29:05 (UTC), Domain Registries

ICANN has doubled the amount it will charge ICM Registry to register .xxx domain names, adding potentially hundreds of thousands of dollars to its top line.

The two parties yesterday signed a registry agreement (pdf), but it has been revised in quite significant ways since the last published version.

In short: ICANN has substantially increased its revenue whilst substantially reducing its risk.

Notably, ICANN will now charge the registry $2 per .xxx domain per year, compared to the $1 anticipated by the version of the contract published in August 2010 (pdf).

With ICM hoping for 300,000 to 500,000 registrations in its first year, that’s a nice chunk of change. Porn domains could be a $1 million business for ICANN quite soon.

For comparison, successful applicants under the new generic top-level domains program will only have to pay $0.25 per domain per year, and that fee only kicks in after 50,000 domains.

If there’s a .sex or a .porn, they’ll pay an ICANN fee an eighth of ICM’s.

Text from the new gTLD Applicant Guidebook that allows ICANN to raise fees in line with US inflation has also been added to ICM’s contract.

ICANN said in a blog post that the increases “account for anticipated risks and compliance activities”. It appears to be expecting trouble.

A number of other changes address the legal risks and compliance problems ICANN seems to be anticipating.

The contract now allows ICANN to more easily impose monetary fines on ICM for non-compliance, for example.

A new mediation procedure has been added to resolve disputes, to come between face-to-face talks and formal arbitration.

The contract would also would oblige ICM to pay for ICANN’s legal costs in the event of a third-party dispute, such as an Independent Review Panel hearing, being filed.

While the original contract required ICM to indemnify ICANN against third-party lawsuits, the revised version also includes a broad waiver (pdf) “to resolve all outstanding dispute/possible litigation matters” between ICM and ICANN.

I am not a lawyer, but it appears that ICM has signed away a fairly comprehensive chunks of its rights, and has agreed to shoulder most of the risk, in order to get its hands on the potentially lucrative deal.

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Comments (4)

  1. I don’t think ICM would have to pay the costs of an Independent Review Panel since that would not (as far as I can tell) include a third party. I think it’s more for the porn industry or some religious group suing ICANN.

  2. Alan says:

    You have to wonder how successful the .xxx extension is going to become with a lengthy application and background check of its “applicants”.

    I wonder how many of it’s “reservations”are dropped when registration starts in June.

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