Europe and US to meet on .xxx and new TLDs

Kevin Murphy, May 11, 2011, Domain Policy

European Commissioner Neelie Kroes is to meet with the US Department of Commerce, a month after she asked it to delay the launch of the .xxx top-level domain.

Tomorrow, Kroes will meet with Larry Strickling, assistant secretary of the National Telecommunications and Information Administration, according to a press release:

This follows the controversial decision of the ICANN Board in March to approve the “.XXX” Top Level Domain for adult content. Ms Kroes will make clear European views on ICANN’s capacity to reform. In particular, Ms Kroes will raise ICANN’s responsiveness to governments raising public policy concerns in the ICANN Governmental Advisory Council [Committee] (GAC) , the transparency and accountability of ICANN’s internal corporate governance and the handling of country-code Top Level Domains for its most concerned public authorities.

In April, Kroes asked Strickling’s boss, Commerce Secretary Gary Locke, to put a hold on the addition of .xxx to the domain name system root until the GAC had chance to discuss it further.

Strickling declined, saying that for the US to take unilateral action over the root would provide ammunition to its critics in the international community.

The US and EC are two of the most active and vocal participants in the GAC – at least in public. Whatever conclusions Strickling and Kroes come to tomorrow are likely to form the basis of the GAC’s short-term strategy as negotiations about new TLDs continue.

ICANN’s board is scheduled to meet with the GAC on May 20, for an attempt to come to some final conclusions about the new gTLD program, particularly in relation to trademark protection.

ICANN wants to approve the program’s Applicant Guidebook on June 20, but is likely to face resistance from governments, especially the US.

Strickling has indicated that he may use the upcoming renewal of ICANN’s IANA contract as leverage to get the GAC a stronger voice in ICANN’s decision-making process.

First .xxx domain name prices revealed

New .xxx domain name registrations could retail for as much as $158 a year, a markup of almost $100 over the wholesale registry fee, it has emerged.

Key-Systems, one of the first registrars approved to sell .xxx names, plans to charge €92.44 ($133), or €110.00 ($158) including VAT, per name per year during general availability.

The prices were revealed on the German company’s consumer-facing web site, DomainDiscount24.com.

ICM Registry’s wholesale fee is $60 per year. Excluding VAT, Key-Systems stands to make a whopping $73 margin on .xxx domains.

For comparison, the registrar’s margin on .com domains is less than $10.

Prices for trademark holders that wish to register .xxx names defensively will be even higher.

In the first sunrise period, reserved for porn companies with trademarks, the company will charge a non-refundable application fee of €134.95 ($194), plus €130.90 ($188) per name per year.

In a second sunrise, which “grandfathers” registrants of porn domains in other TLDs, domains will cost €95.20 ($137) in non-refundable application fees, with the same again for the first year’s registration.

If you’re a non-porn trademark holder, and you want to block your brand from the .xxx namespace – say you’re Disney and you want disney.xxx permanently reserved – it will cost €450 ($648).

That’s a “one-time fee”, but it’s not yet clear how many years it covers for 10 years, which works out to €45 per year.

Landrush fees, for non-trademark holders, will be €80 ($115) per application, non-refundable, plus €95 ($137) per domain per year.

Key-Systems is the first registrar to disclose its pricing plans. It’s possible other registrars will offer lower (or, I suppose, higher) prices.

ICANN tries to dodge .jobs legal fees

“Please don’t sue us!”

That’s the message some are taking away from the latest round of published correspondence between lawyers representing ICANN and .jobs registry Employ Media.

Employ Media last week said it will take ICANN to the International Chamber of Commerce, after they failed to resolve their dispute over the company’s controversial Universe.jobs venture.

Now ICANN has asked the registry’s executives to return to the negotiating table, apparently to reduce the risk of having to spend millions of dollars on lawyering.

In a letter (pdf) to Employ Media’s attorneys, ICANN outside counsel Eric Enson of Jones Day said that ICANN wishes to avoid “costly legal fees associated with arbitration or litigation”:

I again request a meeting among the business persons involved in this matter to discuss potential resolutions before spending more of ICANN’s funding on unnecessary litigation.

The latest round of published correspondence, like the last one, and the one before that, seems to contain a fair bit of legal posturing, with both sides accusing the other of conducting negotiations in “bad faith” for various reasons.

Filing the arbitration notice with the ICC might turn out to be a smart move by Employ Media, knowing how risk-averse and cash-conscious ICANN is.

ICANN is still smarting from the last time it headed to arbitration, for its Independent Review Panel over ICM Registry’s .xxx top-level domain.

ICANN lost that case in February 2010, and had to cover the panel’s almost $500,000 in costs, as well as its own legal fees. The overall price tag is believed to have comfortably made it into seven figures.

But that may well turn out to be small beer compared to the price of losing arbitration against the .jobs registry.

Unlike the IRP, in which both parties pay their own lawyers no matter who wins, Employ Media’s contract states that the losing party in arbitration must pay the legal fees of the winner.

To go up against .jobs at the ICC and lose could hit ICANN’s coffers harder than the .xxx dispute, in other words. That’s not to say it would lose, but with matters as complex as this there is that risk.

It’s worth noting that Employ Media’s lead attorney has form when it comes to reaching into ICANN’s pockets – Crowell & Moring’s Arif Ali also represented ICM Registry in the .xxx IRP case.

Europe asked the US to delay .xxx

Kevin Murphy, May 5, 2011, Domain Policy

European Commissioner for the Digital Agenda Neelie Kroes asked the US Department of Commerce to delay the introduction of the .xxx top-level domain after ICANN approved it, I can reveal.

In an April 6 letter to Secretary of Commerce Gary Locke, a copy of which I have obtained, Kroes expressed dismay with ICANN’s decision, and wrote (my emphasis):

I would therefore consider it necessary for the [ICANN Governmental Advisory Committee] to reflect, at a senior level, on the broader implications of the Board’s decision on .XXX, and to do so before the TLD is introduced into the global Internet. I assume that the United States government would appreciate the opportunity to hear the views of other countries on this important issue, and I very much hope therefore that I can count on your support for such an initiative.

The letter was sent after ICANN had approved .xxx, but nine days before the National Telecommunications and Information Administration instructed VeriSign to add it to the DNS root.

It seems to be an implicit request for the NTIA to delay .xxx’s go-live date to give the Governmental Advisory Committee of ICANN time to regroup and consider how best to continue to oppose the domain.

As I reported this morning, assistant secretary Lawrence Strickling replied to Kroes later in April, agreeing with her in principle but saying that to intervene could do more harm than good.

Kroes objected on the grounds that GAC had “no active support” for .xxx, that national-level blocking of the TLD could threaten internet stability, and that parents will be given a “false sense of security” if they choose to filter .xxx domain names.

She also didn’t buy ICANN’s rationale for its decision, saying it contained “mostly procedural arguments that do not adequately reflect the significant political and cultural sensitivities” created by .xxx.

She additionally noted that:

Most importantly, perhaps, are the wider consequences that we have all have to deal with as a result of this decision. We are both aware of the broader geo-political Internet governance debate that continues regarding the legitimacy of the ICANN model. I am concerned therefore that ICANN’s decision to reject substantive GAC advice – of which there is also an apparent risk in relation to the new generic TLD process – may be detrimental to the multi-stakeholder, private sector-led model which many of us in the international community have been stoutly defending for years.

This seems to be a reference to the longstanding debate over whether the International Telecommunications Union, or another intergovernmental body, may be better suited to overseeing domain name system policy.

In his reply to Kroes, Strickling offered to meet her by teleconference or in person in Brussels, in order to discuss how to proceed.

The fallout from .xxx’s approval may not be over by a long shot.

UPDATE: Read the Kroes letter: Page One, Page Two.

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.