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.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.