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Did Europe ask America to block .xxx?

Kevin Murphy, May 5, 2011, Domain Policy

The European Commission may have asked the US Department of Commerce to block or delay the .xxx top-level domain, it has emerged.

I’ve heard rumors for a few weeks that Neelie Kroes, vice president of the Commission responsible for the digital economy, wrote to Commerce in April, asking it to delay the go-live date for .xxx.

Today, a reply from Lawrence Strickling, assistant secretary at Commerce, has emerged, published on the blog of Polish technology consultant Andrzej Bartosiewicz.

It appears to confirm the rumors. Strickling wrote:

While the Obama Administration does not support ICANN’s decision, we respect the multi-stakeholder Internet governance process and do not think it is in the long-term best interest of the United States or the global Internet community for us unilaterally to reverse the decision.

It’s certainly possible to infer from this that Kroes had asked the US to exercise its unique powers over the domain name system’s root database to block or delay .xxx.

The Kroes letter was evidently sent April 6, about 10 days before the National Telecommunications and Information Administration, part of Commerce, instructed VeriSign to add .xxx to the root.

In his April 20 response, Strickling shared Kroes’ “disappointment” with ICANN’s decision, saying the organization “ignored the clear advice of governments worldwide, including the United States”.

He said the decision “goes against the global public interest and will spur more efforts to block the Internet” and agreed that ICANN “needs to make to engage governments more effectively”.

To that end, Strickly offered to fly to Brussels to meet with Kroes to conduct a “senior level exchange” on how to better work with ICANN.

While it’s probably too late for any of this to affect .xxx, operated by ICM Registry, it is a clear sign that governments are taking a renewed interest in ICANN’s work.

ICANN’s Governmental Advisory Committee issued weak advice on .xxx, noting merely that no governments outright supported it, and that “several” were opposed. The was no consensus.

Because the GAC did not explicitly say “do not approve .xxx”, ICANN was able to rationalize its decision by saying it was not explicitly overruling governmental advice.

At least three countries — Saudi Arabia, India and Kenya — have already indicated that they may block .xxx domains within their borders.

UPDATE: Kroes did in fact ask Commerce to delay .xxx.

ICM adds another .xxx registrar

Kevin Murphy, April 28, 2011, Domain Registrars

DomainMonster has become the latest registrar, the first in the UK, to announce support for ICM Registry’s upcoming .xxx porn-only top-level domain.

The company said it has been accredited by ICM, and that it will start taking pre-orders for the domains on its Domainbox reseller platform soon.

Others registrars to have announced that they plan to carry .xxx domains over the last few months include Network Solutions, Blacknight, EnCirca, RRPProxy.net and United Domains.

I’m not sure if any have been officially accredited yet — no .xxx registrars show up on ICANN’s offical list.

DomainMonster CEO Matt Mansell said: “We anticipate the .XXX launch to be the biggest we’ve seen in recent years. The demand our support teams are seeing already far outstrips anything that’s gone before.”

ICM has previously projected somewhere between 300,000 and 500,000 registrations after launch. It took around 600,000 pre-reservations in the few years before it was approved by ICANN.

Getting .xxx accrediation is said to be quite a lengthy process. Registrars have to answer 14 detailed questions, including agreeing to abide by ICM’s policies and detailing how they plan to promote the domains.

.xxx domains go live

Kevin Murphy, April 16, 2011, Domain Registries

Click here: icmregistry.xxx, then come back.

That’s right. After ICM Registry’s almost 11 years of campaigning, and almost $20 million in legal and other expenses, .xxx domain names are actually live in the domain name system.

ICANN, IANA, the US government and VeriSign, in that order, have all agreed to delegate the internet’s newest gTLD, and the first few .xxx domains went live within the last couple hours.

The domains sex.xxx and porn.xxx are now also resolving to placeholder sites. They’re currently “safe for work”, but possibly not for much longer.

IANA has a .xxx page, complete with a lengthy delegation report (in a snazzy new pdf format) that broadly explains the convoluted process ICANN used to ultimately, albeit reluctantly, approve the TLD.

Why ICANN’s CEO did not vote on .xxx

Kevin Murphy, April 11, 2011, Domain Policy

President and CEO Rod Beckstrom has explained his decision to abstain from voting on ICM Registry’s .xxx top-level domain when it came before the ICANN board last month.

As expected, Beckstrom provided substantially the same explanation for his abstention as he did at the Brussels meeting last June – not on the merits of .xxx, but because he had legal concerns.

Specifically, he abstained because he objected to one of the majority findings of an Independent Review Panel, which forced .xxx back to the table last year after ICANN had tried to reject it.

Beckstrom wrote, in a recently published statement (pdf):

while I accept the contribution to ICANN’s accountability and transparency provided by the existence and the use of the independent panel review process, I nonetheless remain concerned about the determination by two of the three panelists that the ICANN board should not use business judgment in the conduct of its affairs.

This refers to the “business judgment rule”, a piece of California law under which courts give deference to the judgment of company directors, unless their decisions were made in bad faith.

If an IRP panel – the last port of appeal for companies upset with ICANN’s decisions – were required to use this rule, it would substantially raise the bar for a successful complaint.

But the panel in the case of ICM Registry versus ICANN (the only such panel to date) decided, by a 2-1 vote, that ICANN’s actions should be “appraised not deferentially but objectively.”

This allowed ICM to win its case by merely showing ICANN had acted outside its bylaws, and not necessarily in bad faith.

The dissenting IRP panelist, Dickran Tevrizian, wrote: “The rejection of the business judgment rule will open the floodgates to increased collateral attacks on the decisions of the ICANN Board of Directors”.

However, the IRP did not specifically rule that ICANN “should not use business judgment” as Beckstrom’s statement suggests, just that the IRP was not obliged to defer to it.

Beckstrom’s statement also gives a shout-out to the Governmental Advisory Committee:

In addition, I note the concerns of the GAC, which while not expressed as a clear decision, was nonetheless directional.

As I previously blogged, ICANN approved the .xxx contract over the objections of some members of the GAC, using the fact that the GAC’s official advice was vague enough to be worked around without explicitly rejecting it.

Beckstrom, incidentally, did not even sign the .xxx contract with ICM, which I believe is a first for an ICANN registry contract. It was instead signed by general counsel John Jeffrey.

(via InternetNews.me)

ICM faces porn anger over .xxx

ICM Registry executives took the brunt of angry opposition to the .xxx top-level domain from pornographers at an adult industry trade show this week.

A two-hour session on .xxx, which took place at The Phoenix Forum in Arizona the day after ICM and ICANN signed their registry contract, saw the new TLD attacked on multiple fronts.

Defending, ICM’s Vaughn Liley tried to explain why .xxx isn’t as bad as many in the US adult industry believe but, on the back foot from a misjudged opening gambit (asking the openly hostile audience of pornographers if any of them supported child porn), often found himself adding to the confusion.

Now that .xxx has been approved and the contract signed, the discussion focused largely on how ICM and its policy body, the International Foundation For Online Responsibility, will actually function.

Pornographers wanted to know, for example, why anybody would want to invest in marketing a .xxx domain if IFFOR could one day make a policy that excluded their business from the TLD.

I get the impression that the pro-ICM speakers, which included Greg Dumas of GEC Media, could have benefited from having copies of the company’s policy documents in front of them.

At one point, Liley flatly denied that ICM plans to “spider” .xxx domains to enforce compliance with IFFOR policies, such as the prohibition on meta tags that suggest the presence of child pornography.

Minutes later, a .xxx opponent read aloud from the IFFOR policy (pdf) that says all registrants must consent to “automated monitoring”.

A semantic misunderstanding? Possibly. But it left Liley facing calls of “liar” from the audience.

The question of whether this monitoring will extend to, say, .com domains, if the registrant chooses to redirect their .xxx names, was left unanswered.

IFFOR policies will be created by a Policy Council of nine members, five of which will be drawn from the adult entertainment industry.

Earlier in the discussion, Liley denied that IFFOR’s board of directors or ICM will have “veto” power over these Policy Council policies, calling it “factually incorrect”.

Again, an audience member reading aloud from the IFFOR Policy Development Process document (pdf) showed that the IFFOR board has the ability to block a policy under certain circumstances.

Not only that, but ICM gets to object to policies that emerge from IFFOR, under certain circumstances. If this happens, ICM will work with IFFOR “to modify the Proposed Policy to address any concerns identified by ICM”.

There may be enough limitations on ICM’s powers to mean it’s not technically a “veto”, but it’s close.

It makes perfect sense for ICM to have this safeguard, of course. If IFFOR were to be captured by the haters, they could easily make mischief that could ruin its business.

Many of the other questions raised at the forum related to issues that will effect all new TLD launches and concern all new TLD opponents, such as brand protection.

My conclusion after watching the two-hour session: ICM needs to work on its messaging.

The company actually has several ideas for how it could help the porn industry make money, but you wouldn’t know it from any of its public statements to date.

If you have a free couple of hours, the video can be watched here.

ICANN doubles .xxx fees

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.

Porn affiliate network to shun .xxx

Kevin Murphy, March 31, 2011, Domain Registries

The Free Speech Coalition has announced support for its .xxx boycott from what looks to be a significant player in the porn affiliate network market.

Gamma Entertainment, which runs programs such as LiveBucks.com, said it plans to defensively register some of its brands in .xxx.

But for every dollar the company spends with ICM Registry, it also plans to make a matching donation to the top-level domain’s opponents, such as the FSC.

Xbiz quotes Gamma president Karl Bernard: “Gamma is committed to using our resources to lead by example – by pledging our support in the efforts to combat ICM’s .xxx.”

The company will continue to focus development on its .com web sites, according to the article.

The FSC announced its boycott earlier this week, to signal its objection to ICANN’s approval of the TLD.

.xxx introduces the 48-hour UDRP

Kevin Murphy, March 30, 2011, Domain Registries

The forthcoming .xxx top-level domain will have some of the strictest abuse policies yet, including a super-fast alternative to the UDRP for cybersquatting cases.

With ICM Registry likely to sign its registry contract with ICANN soon, I thought I’d take another look at some of its planned policies.

I’d almost forgotten how tight they were.

Don’t expect much privacy

ICM plans to verify your identity before you register a .xxx domain.

While the details of how this will be carried out have not yet been revealed, I expect the company to turn to third-party sources to verify that the details entered into the Whois match a real person.

Registrants will also have to verify their email addresses and have their IP addresses recorded.

Whois privacy/proxy services offered by registrars will have to be pre-approved by ICM, “limited to services that have demonstrated responsible and responsive business practices”.

Registrants using such services will still have their full verified details stored by the registry, in contrast to TLDs such as .com, where the true identity of a registrant is only known to the proxy service.

None of these measures are foolproof, of course, but they would raise barriers to cybersquatting not found in other TLDs.

Really rapid suspension

The .xxx domain will of course abide by the UDRP when it comes to cybersquatting complaints, but it is planning another, far more Draconian suspension policy called Rapid Takedown.

Noting that “the majority of UDRP cases involve obvious variants of well-known trademarks”, ICM says it “does not believe that the clearest cases of abusive domain registration require the expense and time involved in traditional UDRP filings.”

The Rapid Takedown policy is modeled on the Digital Millennium Copyright Act. Trademark holders will be able to make a cybersquatting complaint and have it heard within 48 hours.

Complaints will comprise a “simple statement of a claim involving a well-known or otherwise inherently distinctive mark and a domain name for which no conceivable good faith basis exists”.

A “response team” of UDRP panelists will decide on that basis whether to suspend the domain, although it does not appear that ownership will be transferred as a result.

X strikes and you’re out

ICM plans to disqualify repeat cybersquatters from holding any .xxx domains, whether all their domains infringe trademarks or not.

The policy is not fully fleshed out, so it’s not yet clear how many infringing domains you’d have to own before you lose your .xxx privileges.

High-volume domain investors would therefore be advised to make sure they have clean portfolios, or risk losing their whole investment.

Gaming restrictions

ICM plans to allow IP rights holders to buy long-term, deep-discount registrations for non-resolving .xxx domains. As I’ve written before, Disney doesn’t necessarily want disney.xxx to point anywhere.

That would obviously appeal to volume speculators who don’t fancy the $60-a-year registry fee, so the company plans to create a policy stating that non-resolving domains will not be able to convert to normal domains.

There’s also going to be something called the Charter Eligibility Dispute Resolution Process, which which “will be available to challenge any resolving registration to an entity that is not qualified to register a resolving name in the .xxx TLD”.

This seems to suggest that somebody (think: a well-funded church) who does not identify as a member of the porn industry would be at risk of losing their .xxx domains.

The CEDRP, like most of the abuse policies the registry is planning, has not yet been fully fleshed out.

I’m told ICM is working on that at the moment. In the meantime, its policy plans are outlined in this PDF.

Porn group launches .xxx boycott

Kevin Murphy, March 28, 2011, Domain Registries

The Free Speech Coalition has made good on its promise to start a boycott of .xxx domain names.

The California-based porn industry association has just launched a “Just Say NO” campaign, in an attempt to persuade pornographers that .xxx domains are bad for business.

Do the math – it doesn’t add up. Even if ICM’s claims of new consumers who “trust” .XXX ring true, for a company like Kink.com, which has approximately 10,000 domain names, it would have to bring in three-quarters of a million dollars in new revenues annually JUST TO BREAK EVEN!

As well as the retail price of the domains, which currently estimated to be north of $70 per year, the FSC has laid out a bunch of other reasons why it believes .xxx is a bad investment.

These include the fact that some countries (I’m aware of Saudi Arabia and India) have said they intend to block .xxx domains, and that this may make some high-traffic web sites wary of linking to them.

It’s also critical of how .xxx sites will have to comply with policies created by the International Foundation For Online Responsibility, which ICM is setting up to “sponsor” .xxx.

But perhaps the most telling quote in the FSC’s press release comes from its executive director, Diane Duke. She said:

FSC acknowledges and respects that, when push comes to shove, businesses need to do what they think is best for their company. That is why adult companies need to know the implications of purchasing .XXX domain names and why buying .XXX could be the worst investment they’ll ever make.

While FSC makes good points, I agree with Mike Berkens of TheDomains. I just can’t see a boycott working, and the end result may just be to just make FSC look naïve.

If you’re a pornographer, and you think there’s even an outside chance of .xxx taking off, would you risk declining to defensively register your brands on a matter of principle?

The cost of enforcing trademarks — if you have one — via the UDRP post-sunrise would be larger than simply registering them up-front, and there would be no guarantee of success.

It’s a big risk, one that I can’t see many potential registrants taking.

Some in the porn business even believe that some webmasters publicly decrying .xxx are doing so primarily to reduce competition for the premium real estate. Writing in Xbiz, Stephen Yagielowicz said:

some of your “friends” that are telling you to avoid the new adult domain extension, are speculators hoping to lessen the competition for premium .XXX names; while others are mere hucksters, seeking to profit by offering “an alternative TLD” — such as .adult, .porn, .sex or “dot-whatever-does-not-involve-Stuart-Lawley”

.xxx reservations pass half a million

Kevin Murphy, March 24, 2011, Domain Registries

ICM Registry has now taken over 500,000 reservations for .xxx domain names.

The counter on its web site ticked up by about 150,000 overnight. This was apparently due to the bulk uploading of large requests from several dozen enthusiastic potential registrants.

ICM tells me that these are all requests for unique domains, not counting duplicates, and that over 100,000 requests were not added because they did not appear to come from legit sources.

The counter was around the 200,000 mark last Friday, before ICANN approved ICM’s .xxx registry contract. The deal generated substantial media interest.

Again, it’s worth noting that none of these reservations are guaranteed to convert into sales, they’re basically just requests to be notified when the domains become available.

The price of a .xxx domain is expected to be at least $70 a year, which could scare off some buyers.

Still, coupled with landrush and Founders Program sales, I’m fairly confident that ICM, which spent about $12 million fighting ICANN for .xxx, will recoup its investment before the end of the year.