Lawley quits as .xxx sponsor chairman

ICM Registry president Stuart Lawley has stepped down as chairman of IFFOR, the sponsoring organization for .xxx, after ongoing criticism over potential conflicts of interest.
He will be replaced by Clyde Beattie, a former chair of .ca manager CIRA, who was already on IFFOR’s governing board of directors.
IFFOR, the International Foundation For Online Responsibility, was set up by ICM to act as the “sponsoring organization” required by ICANN’s 2004 new gTLD process.
The organization is supposed to be independent, consisting of a policy-creation committee overseen by a three-person board of directors.
However, it has come in for frequent criticism from the porn industry, notably the Free Speech Coalition, over the perception that it is basically an ICM puppet.
While the Policy Council has five out of nine members drawn from the porn industry, the FSC has often accused Lawley of having a “veto” on IFFOR’s decisions, which he has denied.
“Even though the bylaws ensured separation, the optics weren’t ideal,” said Lawley.
However, while Beattie takes over his role, Lawley’s empty seat on the IFFOR board will be filled by ICM general counsel Sheri Falco.
ICM still has a vote, in other words, but not the chair.
The third board member is Sebastien Bachollet, CEO of BBS Consulting. Bachollet also sits on ICANN’s board of directors as a representative of At-Large community.

Porn group tries to delay .xxx bid

The Free Speech Coalition has asked ICANN to prove that the .xxx top-level domain application has the level of support that ICM Registry claims it has.
The FSC, which represents thousands of porn webmasters, has filed a request under ICANN’s Documentary Information Disclosure Policy for a list of the people who have already pre-registered .xxx domains, among other items.
The organization wants to prove that .xxx has no support among the adult community, and that most of ICM’s 179,000 pre-registrations are made by domainers or are defensive, made by pornographers who really don’t want .xxx.
FSC president Diane Duke wrote to ICANN general counsel John Jeffrey (pdf):

The adult entertainment community – the community which would be most impacted by the introduction of a .xxx sTLD – requires more information about the application in order to provide the appropriate level of feedback to the ICANN Board for it to make an informed decision.

The FSC also wants ICANN to add another 30 days to the current public comment period after the disclosure is made, to give it a chance to respond properly to the new data.
This would, of course, add further delay to the .xxx application.
The FSC also wants to know more about IFFOR, the International Foundation For Online Responsibility, the policy body that would oversee .xxx.
Specifically, the DIDP request covers the names of IFFOR’s board of directors, policy council members, business plans and financial projections.
ICM is opposed to the request and will be officially responding shortly. Its president, Stuart Lawley, told me the information the FSC has requested is known to ICANN, but that it’s confidential.
He also said that the issue of community support is already closed; ICANN made that decision five years ago, a decision that was reinforced earlier this year by an Independent Review Panel.

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.

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.

ICM says ICANN’s options for .xxx are ‘unacceptable’

ICM Registry has issued a speedy response to ICANN’s .xxx approval options paper, calling it “unacceptable” and urging the ICANN board to put the issue to bed ASAP.
Late Friday, ICANN published a flowchart outlining the possible ways the board could handle .xxx in the light of February’s Independent Review Panel decision, which found ICANN acted unfairly when it rejected the TLD in 2007.
ICM president Stuart Lawley said in a letter to ICANN today that most of the paths through the flowcharts “are in many respects substantively and procedurally inconsistent with the IRP declaration”.
The company believes the IRP decision resets the approval process to prior to the 2007 decision, when the two parties were in contract talks for an already-approved TLD.
The letter claims that “it would be inappropriate, illegal and inconsistent with ICANN’s core values and model of self governance for ICANN to set up an evaluative process that is lacking in objectivity and that does not affirmatively give effect to the underlying IRP declaration”.
There are presumably few people involved with ICANN in any doubt that ICM intends to take its case to the ‘proper’ courts if needs be, which is probably why its powers-that-be have been unwilling to meet with the company.
As I reported Friday, the options paper creates the possibility of re-evaluating the .xxx application under the Draft Applicant Guidebook v4 for new gTLDs, which is not yet completed.
It also suggests that ICANN will have to ask its Governmental Advisory Committee for its current opinion on the application, a move likely to stretch out a decision for months.
It also has an option to expedite the approval based on the “sponsored” TLD process under which ICM, and others such as .post and .asia, originally applied.
ICM’s latest letter is here. ICANN’s options paper can be found here. The public comment period is open here. Unlike many ICANN comments periods, it has comments.

Dot-XXX lights fire under ICANN’s feet

ICM Registry has urged ICANN to stop messing around and finalise the contract that would add .xxx to the domain name system.
“There is no legitimate obstacle to the approval of ICM’s registry agreement,” ICM chair Stuart Lawley said in a letter to ICANN yesterday. “We can see no reason for further delay in the process of approving ICM’s registry agreement”.
At its Nairobi meeting earlier this month, ICANN’s board decided to hand the problem of how to handle .xxx to its staff, saying it “wishes to create a transparent set of process options which can be published for public comment.”
ICM now claims that no such process options are necessary. The .post application, Lawley said, was approved last December, six years after it was made, without the need for any new processes.
There are some differences between .post and .xxx, of course. While the .xxx application has previously been approved, it has also previously been rejected.
It is back on the table following an Independent Review Panel decision that ICANN broke its fairness rules by singling out ICM for special treatment.
Lawley reminds ICANN of as much several times in his latest letter, which can be found here.
ICANN’s staff is expected to deliver its process options next week. There will be a period of public comment, and the board will have to make a call by its June meeting in Brussels.