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XXX Saga Continues

Sex and the internet. Put the two together and you are bound to find an interesting story. While the saga surrounding sex.com took a new twist in the last couple of days, with the current owners going dotbomb, the .xxx story also took an interesting turn.

ICM Registry LLC applied to ICANN to run the .xxx TLD. You don’t need to be a genius to work out which sector .xxx was aimed at - adult entertainment / mature content.

For several years ICM and ICANN tangoed.

In the end the ICANN board voted during the Lisbon meeting (March 30th 2007) against .xxx and focus shifted to other events. The Lisbon meeting was the first ICANN meeting that I attended and I remember the tension in the hotel bar on the night before the board meeting. You could have cut the air with a knife. ICM and their supporters were literally in one camp, while those in opposition were in another. Westerdal’s article (linked above) covers most of the salient points in the history of the .xxx bid to that date.

However the story of .xxx did not end in Lisbon.

But ICM weren’t going to simply “roll over”. They’d already had one application for the .xxx TLD rejected and so they then asked for an independent review. That was back in September of last year, with parts of the process taking place earlier in the year.

The independent review involved testimony from not only ICM executives, but also former ICANN CEO Dr Paul Twomey, Dr Vint Cerf and many many others.

For those involved with the new TLD process the outcome of any review of ICM’s .xxx application will be examined very closely. The new TLD application guidebook, which is still being drafted, will obviously be influenced by any previous TLD applications. Any review process that takes place outside the “normal” ICANN process could be a source of concern not only for ICANN, as an organisation, but also for organisations wishing to launch a new domain extension. If the ICANN procedures and processes can be shown to be flawed then there may be a whole range of issues for both ICANN and the applicants to deal with prior to any forward movement in the new TLDs.

So earlier this evening ICANN CEO, Rod Beckstrom, tweeted that the independent review had found in ICM’s favour—with a vote of 2 - 1.

Shortly afterwards the actual decision was published on the ICANN website.

If you have the time you can plough through the entire document (about 80 pages), but the key “takeaway” from this is that ICANN has lost.

The ICANN board’s decision has been shown to be flawed.

The panel states:

...the Panel finds ground for questioning the neutral and objective performance of the Board, and the consistency of its so doing with its obligation not to single out ICM Registry for disparate treatment

Not good. That strongly suggests that ICANN’s board may have been influenced by external forces - in all likelihood the US government.

The rest of their findings are worth quoting, as they are very important and shine a spotlight on the inconsistencies:

The Panel concludes, for the reasons stated above, that:
First, the holdings of the Independent Review Panel are advisory in
nature; they do not constitute a binding arbitral award.
Second, the actions and decisions of the ICANN Board are not entitled
to deference whether by application of the “business judgment” rule or
otherwise; they are to be appraised not deferentially but objectively.
Third, the provision of Article 4 of ICANN’s Articles of Incorporation
prescribing that ICANN “shall operate for the benefit of the Internet
community as a whole, carrying out its activities in conformity with relevant
principles of international law and applicable international conventions and
local law,” requires ICANN to operate in conformity with relevant general
principles of law (such as good faith) as well as relevant principles of
international law, applicable international conventions, and the law of the
State of California.
Fourth, the Board of ICANN in adopting its resolutions of June 1, 2005,
found that the application of ICM Registry for the .XXX sTLD met the required
sponsorship criteria.
Fifth, the Board’s reconsideration of that finding was not consistent
with the application of neutral, objective and fair documented policy.
Sixth, in respect of the first foregoing holding, ICANN prevails; in
respect of the second foregoing holding, ICM Registry prevails; in respect of
the third foregoing holding, ICM Registry prevails; in respect of the fourth
foregoing holding, ICM Registry prevails; and in respect of the fifth foregoing
holding, ICM Registry prevails. Accordingly, the prevailing party is ICM
Registry. It follows that, in pursuance of Article IV, Section 3(12) of the
Bylaws, ICANN shall be responsible for bearing all costs of the IRP Provider.
Each party shall bear its own attorneys’ fees. Therefore, the administrative
fees and expenses of the International Centre for Dispute Resolution, totaling
$4,500.00, shall be borne entirely by ICANN, and the compensation and
expenses of the Independent Review Panel, totaling $473,744.91, shall be
borne entirely by ICANN. ICANN shall accordingly reimburse ICM Registry
with the sum of $241,372.46, representing that portion of said fees and
expenses in excess of the apportioned costs previously incurred by ICM

Note the financial portion of the judgement. ICANN, which has already had a budget overrun, gets hit again, this time for nearly half a million dollars.

You can download the full text of the review panel’s decision from the ICANN website, although some sections have been redacted by ICM for reasons of confidentiality.

Since this was released on a Friday night it’s unlikely that there will be much public reaction from either ICANN, ICM or any others until next week, but I suspect that there will be some very interesting discussions surrounding this decision.

Amazing how a single document can rock the boat, isn’t it?

Update 02/26/2010: ICMs sends response to ICANN (PDF)

By Michele Neylon, MD of Blacknight Solutions

Filed Under


ICANN Must Observe New Standard Michael Roberts  –  Feb 20, 2010 8:59 PM

The issue with dot xxx is not whether there will be sex on the Internet, but whether capitalist exploitation of it within the DNS is to be tolerated by the community.  Since the last round of contention over dot xxx, the standard for ICANN has changed.  The MOU is history, and the Board must now act specifically in the overall public interest.  The last time, the Dept of Commerce basically said, “If you don’t kill this, the US Congress will.”  As a non-state actor with a flimsy legal underpinning based in California, this was a threat ICANN could not ignore.  This time, the Board must observe its commitment to the public interest as articulated in the Affirmation of Commitments document signed with Commerce last summer.  So how will the Board measure the public interest in the revived case of dot xxx?  Certainly not by the bottom of the barrel interests of Wall St capitalists.  Nor the uniquely American views of the ACLU.  What about a web site vote a la CNN?  What about the “community standard” test for obscenity used by the U.S. Supreme Court?  Do the planet’s religions get a say?

The First Amendment states that "Congress shall Constantine Roussos  –  Feb 21, 2010 8:45 PM

The First Amendment states that “Congress shall make no law ... abridging the freedom of speech, or of the press.”

In Hustler Magazine, Inc. v. Falwell, 485 U.S. 46 (1988), the United States Supreme Court was clear: “At the heart of the First Amendment is the recognition of the fundamental importance of the free flow of ideas and opinions on matters of public interest and concern. The freedom to speak one’s mind is not only an aspect of individual liberty – and thus a good unto itself – but also is essential to the common quest for truth and the vitality of society as a whole. We have therefore been particularly vigilant to ensure that individual expressions of ideas remain free from governmentally imposed sanctions.”

What does this mean for ICANN though? Is there a test for obscenity that ICANN must follow? Does the U.S constitution, brilliant as it is, matter at all since the Internet is a global phenomenon?

I think ICANN is treading on dangerous water. First we have the trademark concerns. Why should ICANN be responsible for upholding global trademarks and waste so much time trying to figure out how to please big corporate attorneys? I do not think it is ICANN’s job to do this. I read the typosquatting article that Ben Edelman wrote and it is quite amazing. Most of it is in the .com space. Why not address the legalities at the root of where the violations are made, which is at the Verisign “.com” level? We talk about new TLDs but seriously, all the typosquatting occurs in .com. Cybersquatting is mostly .com as well. ICANN has a contract with Verisign right? If you want to solve issues with IP Clearing Houses and setting up Rapid Suspensions why isn’t Verisign accountable? Address the real issues. Blaming new TLDs for failures in the .com/.net space and making new TLDs pay for it is quite interesting. Consistency is where it is at. The issue is that most of the trademark mechanisms for new TLDs are a waste of resources. These mechanisms exists in the marketplace of IP. It is not ICANN’s responsibility to be IP watchdog.

ICANN’s job is to increase competition on the Internet via the DNS and uphold the security and stability of the Internet. If ICANN continues to tread the waters of becoming the authoritative force for determining what is morality, ethics and solving issues regarding Intellectual Property, then it will lose sight of why the organization was set up to do.

We talk about transparency, openness, bottom-up and doing things that are in the public interest. Once you start involving big brands, religion and other subsets of controlling parties, then you will encounter problems.

I believe ICANN should take a step back, re-evaluate its core mission and values, its culture and needs to be done next to fulfill its obligations. ICANN is not a watchdog for trademark law and what is morality in the case of .xxx. What about .gay or .catholic or .muslim? Should they be banned since “some” do not approve of them?

I hope ICANN can follow its bylaws without being influenced by powerful external forces such as governments, religious organizations and big corporations in policy making. The rule of thumb is doing what makes sense, what is pragmatic and work towards opening up the Internet. It will happen at some point. What better time than now?

ICANN needs to start implementing policies that make a “difference that matters.” I see the .xxx result as a precursor to what will ensue if ICANN does not quickly reassess their existence, their core responsibilities and providing Internet consumers with what they want. The Internet is moving but it seems ICANN is not in alignment with the Internet and technological innovation.

I am confident that ICANN will begin to move towards the right direction.

Constantine Roussos

Accountability at stake Steve Goldstein  –  Feb 23, 2010 4:01 PM

ICANN set up an independent external review process as a linchpin of its accountability framework.  So, this first big case comes along, and the independent review panel consists of world class jurists with impeccable credentials, and the majority holds against ICANN.  Sure, the findings are not binding upon ICANN.  But, if ICANN does not abide by the findings in this first case, what does it say for ICANN’s accountability, and to whom would ICANN accountable?  To me, that is a very important consideration, perhaps the MOST important consideration.

More in-depth story with comments Kieren McCarthy  –  Feb 23, 2010 8:19 PM

I’ve dug into the panel declaration a little more with a story published today.


Have comments from Rod Beckstrom, Stuart Lawley (also above), Vint Cerf and Wolfgang Kleinwachter re: the decision and next steps.


ICANN Can't Escape Govt Oversight Michael Roberts  –  Feb 23, 2010 9:13 PM

Since it is unprotected by treaty or election, accountability for ICANN, when push comes to shove,  is the good will of the Internet community. Most of the time, this suffices.  But when contentious decisions involving moral judgments arrive, the artifacts of accountability established in the Bylaws, reconsideration and IRP fail.  They are, legally, self-referential and thus viewed by many governments as self-serving.  Which is not to say that the judgments of governments are not self-serving, but in enough cases to carry the day, governments are freely elected, and claim legitimacy by consent of the governed.  This ultimately trumps ICANN’s efforts to find accountability mechanisms within its current legal structure, and sets up the perilous prospect that approval of dot xxx at this juncture will trigger actions by governments to overturn the approval and further damage ICANN’s effort to serve the public interest.

Commandment: "Thou shalt not be captured..." Steve Goldstein  –  Feb 23, 2010 9:36 PM

Mike, you write, "But when contentious decisions involving moral judgments arrive, the artifacts of accountability established in the Bylaws, reconsideration and IRP fail. They are, legally, self-referential and thus viewed by many governments as self-serving." My gosh, do we see the world through different colored lenses! If ICANN truly allows itself to be captured by "many governments;" if it feels obliged to dance to the governmental two-step, it will have abdicated its role as an independent coordinator. And, how can the IRP be viewed as a self-serving artifact when, in its first case it holds against ICANN, and in all but one of the points unanimously?

Correction -- Commandment: "Thou shalt not be captured..." Steve Goldstein  –  Feb 24, 2010 2:31 PM

The last sentence, above: "And, how can the IRP be viewed as a self-serving artifact when, in its first case it holds against ICANN, and in all but one of the points unanimously?" should have read: "And, how can the IRP be viewed as a self-serving artifact when, in its first case it held against ICANN on five of six conclusions (findings)?"

ICANN needs to hold itself accountable Thomas Barrett  –  Feb 24, 2010 3:12 PM

Mike, you say that “the artifacts of accountability established in the Bylaws, reconsideration and IRP fail.  They are, legally, self-referential and thus viewed by many governments as self-serving.”

I agree if ICANN is viewed by the others as believing that its own accountability is optional.  Their position is strengthened if they take a hard line that all arbitration decisions are binding to ICANN.  ICANN needs to hold itself accountable.

Tom Barrett

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