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Investors circle ICM as .xxx enters home straight

ICM Registry’s board of directors has approved a $5 million funding round, following the recent decision by ICANN to put the .xxx top-level domain onto the path to approval.

ICM president Stuart Lawley tells me he’s underwritten the whole round himself, already injecting another $500,000 of his own money into the company.

Venture capital investors have already approached the company, following the Brussels decision two weeks ago, according to Lawley.

In Brussels, ICANN’s board resolved to re-enter contract negotiations with ICM, following years of wrangling with ICANN’s appeals and independent review processes.

While .xxx’s approval and entry to the DNS root is not a slam-dunk, the only major hurdle appears to be ICANN’s Governmental Advisory Committee, and many believe the GAC is unlikely to stick its neck out on such a controversial issue.

While demand for .xxx domains is yet to be proven, there are already 162,000 pre-registrations, which would work out to a $10 million business, not including premium sunrise and landrush fees.

A report in Business Week last week said ICM could bring in $200 million per year in revenue on registrations alone.

I think that’s a pretty ambitious prediction, to be honest, and I can’t help but wonder in Business Week got ICM’s ten-year and one-year projections mixed up.

Even at $60 a pop, that’s still 3.3 million registered domains. The stars will have to align in unexpected ways for .xxx to reach that kind of penetration (pun intended).

ICM has previously projected near-term registrations in the low-mid hundreds of thousands.

ICM is currently owned by a close-knit group of investors, mainly Lawley’s circle and ICM’s management, with Lawley himself owning roughly 70% of the business.

Lego launches attack on new TLDs

Could little yellow plastic men be the death of the new top-level domain process?

Toymaker Lego has filed a scathing criticism of ICANN’s latest Draft Applicant Guidebook for prospective new TLD registries, saying it ignores trademark holders.

Lego, one of the most prolific enforcers of trademarks via the UDRP, said that the latest DAG “has not yet resolved the overarching trademark issue”.

DAG v4 contains new protections designed to make it easier for trademark holders to defend their rights in new TLD namespaces. But Lego reckons these protections are useless.

The Trademark Clearinghouse is NOT a rights protection mechanism but just a database. Such a database does not solve the overarching trademark issues that were intended to be addressed.

Lego also says that the Uniform Rapid Suspension service outlined in DAG v4 is much weaker than it wanted.

“It doesn’t seem to be more rapid or cheaper than the ordinary UDRP,” Lego’s deputy general counsel Peter Kjaer wrote.

Lego thinks that a Globally Protected Marks List, which was at one time under consideration for inclusion in the DAG, would be the best mechanism to protect trademarks.

ICANN still seems to ignore that cybersquatting and all kinds of fraud on the internet is increasing in number and DAG 4 contains nothing that shows trademark owners that ICANN has taken our concerns seriously.

The comment, which is repeated verbatim in a letter from Arla Foods also filed today, is the strongest language yet from the IP lobby in the DAG v4 comment period.

Rumblings at the ICANN meeting Brussels two weeks ago, and earlier, suggest that some companies may consider filing lawsuits to delay the new TLD process, if they don’t get what they want in the final Applicant Guidebook.

ICANN’s top brass, meanwhile, are hopeful of resolving the trademark issues soon, and getting the guidebook close to completion, if not complete, by the Cartagena meeting in December.

Registrar linked to .xxx loses ICANN accreditation

A Technology Company Inc, a registrar previously linked to the .xxx top-level domain application, has lost its ICANN accreditation for non-payment of fees.

The company, which is also known as NameSystem.com or ATECH, was founded by Jason Hendeles, who is also the founder of ICM Registry, the company behind .xxx.

ICANN has informed ATECH (pdf) that its accreditation will expire and not be renewed on July 12 because it has failed to pay $5,639 in ICANN fees.

ATECH was one of the second wave of competitive registrars to go live, applying for its ICANN accreditation all the way back in 1999. It currently has just a few thousand domains under management.

Hendeles, currently ICM’s vice president of strategic business development, was behind ICM’s original .xxx bid, filed in ICANN’s 2000 round of new TLD applications.

ICM was subsequently taken over by British businessman Stuart Lawley, its current chief executive.

I’m told ATECH was sold to Alok Prakash of Oregon a few years ago.

UPDATE 2010-07-14: ATECH has evidently coughed up, and has regained its accreditation.

ICANN registrar’s domain listed for sale on Sedo

When selecting a domain name registrar there are often clues you can use to determine broadly whether a firm is entirely reliable, but this one is new to me.

Vivid Domains, a small-time, seven-year-old ICANN-accredited registrar, currently has its primary domain, vividdomains.com, listed for sale on Sedo.

It’s listed as a “domain without content” too, which looks even more peculiar.

According to DotAndCo, the company recently relocated from Florida to Grand Cayman.

WebHosting.info notes that, having chugged along for some time with only a few hundred domains under management, Vivid’s registration base has leapt from about 400 to over 1,900 in the last two weeks.

KnujOn’s registrar audit report (pdf), released at ICANN Brussels last week, notes that the anti-spam company was unable to locate a business registration for Vivid.

I’m not suggesting Vivid is dodgy, but these are the kind of clues I would use when deciding whether to give a registrar a wide berth.

ICANN chair says new TLD guidebook could be final by December

Kevin Murphy, June 28, 2010, Domain Policy

Peter Dengate Thrush, chairman of the ICANN board, thinks there’s a chance that the Applicant Guidebook for new top-level domains could be ready by ICANN’s next meeting, set for Cartagena in early December.

The board resolved in Brussels on Friday to turn its September two-day retreat into a special meeting focussed on knocking the DAG into shape.

Shortly after the vote, Peter Dengate Thrush spoke at a press conference (emphasis mine).

Soon after the closing of the [DAG v4] public comment period was a regularly scheduled retreat for the board to go and do what boards do at retreats, and what we’ve decided today to do is to use that two-day retreat to see if we can’t make decisions on all the outstanding issues in relation to the new TLD program.

That’s probably reasonably ambitious, there may still be a couple left, but we want to get as many of them out of the way as we can. That means that when we come to the next ICANN meeting in Cartagena in December we hope to be very close if not actually able to hand out the Applicant Guidebook for that new process.

I asked him what outstanding issues needed to be resolved before the DAG can be finalized. Instead of a comprehensive list, he named two: IP protection and the Governmental Advisory Committee’s “morality and public order” concerns.

The IP issue is “close” to being resolved, he said, but “there may still be issues”.

On MOPO, he said there is “a potential conflict emerging” between GAC members who value free speech and those who are more concerned with their own religious and cultural sensitivities.

When I followed up to ask whether it was possible to reconcile these two positions, this is what he said:

What we’ve done is ask the GAC is how they would reconcile it… now they are saying that they can’t see how it can be done. We see that very much as a problem either for the GAC to change its advice, or to provide us with a mechanism whereby that can be reconciled.

The Brussels GAC Communique (pdf), has little to say on MOPO, delaying its advice until its official DAG v4 public comment filing.

MOPO has already created tensions between the GAC and the board. The conversation at their joint meeting on Tuesday went a little like this:

GAC: We don’t like this MOPO stuff. Please get rid of it.

BOARD: Okay. What shall we replace it with?

GAC: Erm…

BOARD: Well?

GAC: It’s not our problem. You think of something.

BOARD: Can you give us a hint?

GAC: No.

BOARD: Please? A little one?

GAC: We’ll think about it.

So can we expect the GAC to get its act together in time for Cartagena? That, too, seems ambitious.