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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)

Porno union will try to shaft .xxx

Kevin Murphy, August 11, 2010, Domain Registries

The fight between ICM Registry and the Free Speech Coalition over the proposed .xxx top-level domain is not over yet.

The porn trade group has a plan to block ICM’s passage through the ICANN process, and has already stepped up efforts to rally the adult entertainment industry to its cause.

Last weekend at the AVN Show in Florida, FSC chair Diane Duke reportedly said:

ICM is saying this is a done deal… but it is not a done deal. We [the FSC] have a strategy to block the application. I have spoken with people from ICANN, and they agreed that this is not a done deal.

Asked whether lawsuits would be required, Duke reportedly answered: “There are other avenues to block this.”

These comments and others suggest that the FSC intends to use ICANN processes to, at the very least, delay .xxx’s delegation.

A public comment period will be launched soon on the proposed ICM-ICANN registry contract. This will likely be oversubscribed by FSC supporters.

If the contract ends up being bounced to ICANN’s Governmental Advisory Committee for consideration, there’s another opportunity for FSC lobbying.

Then, crucially, if ICANN votes to approve .xxx, the FSC could attempt to temporarily block the actual delegation to the DNS root by filing a Reconsideration Request.

Under my reading of the Reconsideration procedure, the actual delegation of the TLD could be delayed by anything between 30 and 120 days. Possibly longer.

The FSC would need to show at the very least that it would be harmed by .xxx’s introduction. If successful, the best case scenario for the FSC would see the resolution approving .xxx bounced back to the ICANN board for a second vote.

Beyond that, there’s always an Independent Review Panel. For that, the FSC would need to show that the .xxx approval breached ICANN’s bylaws or articles of incorporation, which seems to me to be a more challenging proposition. Also very expensive.

Another interesting quote from the AVN article – reportedly Allan Gelbard, lawyer to John “Buttman” Stagliano, said that the adult industry may be unduly worrying because:

anti-trust and trademark legal challenges would be brought immediately following the final approval by the ICANN board

Make of that what you will.

There’s also a new anti-.xxx blog, written by Theresa “Dark Lady” Reed, containing a new “satirical” video spoofing ICM.

To be honest, the funniest thing about it for me was the decision to cast a handsome, shiny-toothed American anchorman type as British ICM president Stuart Lawley.