.xxx domains go live

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

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

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

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

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

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.

Canon’s sexy reason for .canon?

Canon made headlines and gave a small amount of momentum to the idea of “.brand” top-level domains when it announced, a year ago, that it would apply to ICANN to manage .canon.
There are plenty of good reasons why the company would want the TLD.
Beyond the more obvious search-oriented branding opportunities, some say Canon could try to boost customer loyalty and create new revenue streams by offering camera buyers services such as photo hosting at personalized .canon domains.
But here’s another reason that doesn’t seem to have received many column inches: as I recently discovered from a few continental friends, “canon” also means “sexy” in French slang.
I expect this coincidence was the very least of Canon’s concerns when its executives met to discuss their .brand TLD strategy, but it does highlight a major issue that some companies will have to deal with when the ICANN new gTLD program gets underway.
They may think their brand is unique, but unless they’ve done their homework they may find themselves competing with, or blocked by, equally legitimate applicants from other nations.
Companies planning to participate in the program – even only as a challenger – will need to have done a fairly daunting audit of their key brands if they want to avoid nasty surprises.
Ensuring a brand is a unique, registered trademark in one’s home territory is only the beginning.
Companies need to also ask themselves what, if anything, their mark means in other languages, what it looks like in non-Latin scripts such as Arabic and Chinese, and whether it has similarity of “appearance, phonetic sound, or meaning” to any other potential new TLD string.
We already have at least one double entendre in the DNS – the ccTLD for the tiny Pacific island of Niue, .nu, means “.naked” in French, as the registry discovered to its benefit many years ago.
If Canon had not decided to apply for .canon, could a French-speaking pornographer have applied for the TLD instead, on the quite reasonable basis that it is also a “generic” string?
ICANN’s trademark protection policies would make such a delegation highly unlikely, but Canon would have found itself forced into a defensive fight to protect its mark.
Of more immediate concern to the company is of course the question of who gets to register canon.xxx.
It seems likely that ICM Registry’s sunrise policy is strong enough to ensure that this particular .xxx domain is never used for pornography, but only if a) no existing pornographer has a trademark on the string and b) Canon remembers to defensively register.
In the unlikely event that Canon forgets to defend its mark, a pornographer who registered canon.xxx for a legitimate French porn site could well find himself with a UDRP-winning domain.
And don’t get me started on Virgin…

US upset with ICANN over .xxx

The US government has expressed disappointment with ICANN for approving the .xxx top-level domain, surprising nobody.
Fox News is reporting Lawrence Strickling, assistant secretary at the Department of Commerce and one of ICANN’s keynote speakers at the just-concluded San Francisco meeting:

We are disappointed that ICANN ignored the clear advice of governments worldwide, including the US. This decision goes against the global public interest, and it will open the door to more Internet blocking by governments and undermine the stability and security of the Internet.

As I reported Friday, ICANN used a literal interpretation of its Governmental Advisory Committee’s advice in order to make it appear that it was not disagreeing with it at all.
Essentially, because the GAC didn’t explicitly say “don’t delegate .xxx”, the ICANN board of directors was free to do so without technically being insubordinate.
Whether the GAC knew in advance that this was the board’s game plan is another question entirely.
Strickling is of course duty-bound to complain about .xxx – no government wanted to be seen to associate themselves with pornography – but he’s in a unique position to do something about it.
Strickling heads the National Telecommunications and Information Administration, the named “Administrator” of the DNS root and ergo ICANN’s overseer.
It’s within his power to refuse to instruct VeriSign to inject .xxx into the DNS root system, but it’s a power few observers expect him to exercise.
As Milton Mueller of the Internet Governance Project noted yesterday:

If the US goes crazy and interferes with XXX’s entry into the root it will completely kill ICANN and open a Pandora’s box for governmental control of the DNS, a box that will never be closed.

Dire consequences indeed. It’s unlikely that the NTIA would risk killing off the ICANN project after so many years over a bit of T&A.