ICM Registry

Type:	Private
Industry:	Internet, Registry
Founded:	Delware, USA, 2000
Founder(s):	Jason Hendeles
Headquarters:	Suite 2500 130, Adelaide Street West, Toronto, Ontario M5H 2M2
Country:	Canada
Website:	ICMRegistry.com
Twitter:	@ICMRegistry
Key People
Stuart Lawley, Chairman and CEO Jason Hendeles, VP, Strategic Business Development Len Bayles, Chief Technical Officer

ICM Registry is the registry operator behind the .xxx registry. The International Foundation For Online Responsibility (IFFOR) is the sponsoring organization, though it is seen by some as not being sufficiently independent, and essentially an extension of ICM. .xxx is the Internet's 22nd gTLD. As of April 2012, an estimated 250,000 .xxx domain names were already registered after five months of operations according to Stuart Lawley, CEO of the company.

History up to Approval of .xxx at ICANN 40

• 2000 - ICM Registry was founded by Jason Hendeles in Delaware, USA.

• 2000 - ICM Registry, a private company, submitted a proposal at ICANN’s 2000 Proof of Concept Round, proposing two unsponsored gTLD strings - .kids and .xxx. The evaluators in the Proof of Concept Round recommended against the inclusion of either the .kids or the .xxx strings.

• 2004, June - ICM submitted a request for .xxx as an sTLD, or Sponsored Top Level Domain, with its sponsoring organization as the International Foundation for Online Responsibility. They passed the Financial and Technical Review Panels, but failed to pass the Sponsorship panel. That panel found that they did not represent a cohesive community, that they did not have sufficient international participation, that they had not sufficiently involved child safety and law enforcement advocates, and that they would not add value to the Internet. The ICANN Board gave ICM, along with 5 other applicants that failed passing the Sponsorship panel, a chance to supplement their application and justify their legitimacy.

• 2005, June - The ICANN Board resolved that the ICANN President and General Counsel could begin discussing the commercial and technical aspects of a potential registry agreement with ICM, despite the fact that the organization still had outstanding issues with the application.

• 2006, March - In the Wellington Communiqué by ICANN's GAC, the committee came out against the proposed .xxx. Also at that time, the ICANN Board voted down the revised registry agreement, but still did not throw out the application.

• 2007 - In January, ICM posted another iteration of the registry agreement for public comments. In March, the GAC noted that it did not believe that the ICANN Board had sufficiently answered GAC questions regarding ICM and the sponsorship criteria. Subsequently, at ICANN 28 in Lisbon, the Board voted down the ICM's application for .xxx. They noted that their decision was made based on the following findings: ICM did not meet the sponsorship requirements; the GAC believed that this lack of clear sponsorship would create public policy issues; the application raised significant law enforcement issues that it did not seek to rectify; the Board and GAC agreed that the implementation would involve ICANN overseeing a significant amount of Internet content, which would overstep the organization's technical mandate.

• 2008, June - ICM notified ICANN of its request for Independent Review Panel proceedings, which is the ultimate appeal under ICANN Bylaws for any individual or entity that feels they have received a inconsistent, or wrong ICANN ruling. They were the first entity to ever utilize ICANN's IRP option, which was put into place around 2004. ICM noted that ICANN followed procedure improperly, claiming that the Board had approved its sponsorship requirements, proceeded to the next phase of contract negotiations, and then unjustly backtracked to sponsorship issues. ICM alleged that the Board did not apply the same sponsorship criteria to other sTLD applicants as they did to ICM. They alleged that negotiations were not held in good faith, and that ICANN was overstepping its technical mandate by considering public policy issues. ICANN responded that they always held the right to reject ICM's proposal, despite its stage in the process, and that ICM knew this; further, ICANN altered procedure to the benefit of ICM, giving them more time and delaying votes in order to accommodate addendum's to ICM's application; additionally, they noted that the ICANN Board is required to consider the public policy positions of its GAC. Documents related to the ICM IRP process can be found here.

• 2009, September - ICM and ICANN submitted briefing papers and a written testimony, then participated in a 5 day hearing with a 3 member IRP panel. The IRP panel was under the discretion of International Centre For Dispute Resolution of the American Arbitration Association.

• 2010, February 19th - The IRP (Independent Review Panel) issued a declaration in its review of ICM Registry's appeal. The Panel found that the application for .xxx met the required sponsorship criteria, and that "the Board’s reconsideration of that finding was not consistent with the application of neutral, objective and fair documented policy." The panel's findings were non-binding, and of the 3 panelists, one dissented with the majority opinion; the dissenter noted that ICM never satisfied sponsorship requirements and the criteria for an sTLD, and that the ICANN Board conducted itself in a transparent manner.

• 2010, March 26th - A 45 day public comment was opened to address ICANN's options. They drew up a simple outline to show their options, which can be seen here. Their options were laid out as: 1.) Accept majority finding in full; 2.) Accept majority finding in part; 3.) Adopt dissenting finding. Accepting the majority in part would entail going back to consider whether the 2005 Board decision that .xxx met sponsorship criteria and the 2007 reconsideration of that decision. Adopting the dissent, and thus continuing to deny .xxx's application, would also involve continued consideration of the evaluation uncertainty. The public comment forum addressing ICANN's options received more than 13,000 posts, the highest level of feedback ever received in an ICANN comment period. It was noted, however, that many of the comments did not actually fall within the scope of the options map.

• 2010, June - At ICANN Brussels, the Board resolved that it would accept the majority opinion of the IRP, and thus set the stage to approve .xxx. They then instructed staff to ensure that ICM's application was still current with no changes made or necessitated. In August, a proposed registry agreement was posted for public comment.

• 2010, October - ICANN began trying to rectify outstanding concerns from the GAC with the proposed registry agreement with ICM. This proved impossible, and in March, 2011, ahead of the official approval of the .xxx extension, the GAC issued a statement that it did not support the introduction of the .xxx namespace into the root zone, that some of its members emphatically opposed the measure and would likely block the extension in their country, and that ICANN was risking technical and political fallout by ignoring their outstanding concerns. ICANN's reasons for not following GAC advice, throughout the entire ICM .xxx application, can be found at the latter half of this document.

• 2011- June, 25th - The ICANN Board approved the proposal at ICANN 40 in San Francisco, USA, thereby authorizing the implementation of .xxx in the root zone.

Registration Statistics

In January, 2012, Afilias, the technical back-end provider for .xxx, announced that the 3-month old .xxx extension had over 200,000 registrations. However, more than half of these were not signed into the root zone, meaning that many of the registrations were defensive acquisitions by trademark owners, reserved names, or pre-blocked domains by ICM Registry that will never be resolving domains.

Marketing

ICM Registry announced in September, 2011, that it would be sponsoring world champion Mike Seebold's powerboat. The boat was unveiled at the 2011 T.R.A.F.F.I.C. conference in Fort Lauderdale, a week before its racing debut at the World Championship in Key West. ICM Registry was a top sponsor for T.R.A.F.F.I.C 2011. In November, 2011, Mike Seebold and the .XXX boat won for place in their class at the World Champions Final, despite the boat having trouble on two prior qualifying races. Unfortunately, the week of racing was marred by numerous deaths. Michael Berkens notes via his blog that as a result of the championships, there was a great deal of public interest and acceptance regarding .xxx.

ICM Registry was reported to have spent $1 million USD on specifically advertising to eligible trademark owners to defensively register their .xxx domains.

Other parts of ICM Registry's marketing plan include video ads featuring a character, Gavin, who flashes between living his normal life with his .com address and his possible new life as a rich porn dealer, made possible by .xxx. The videos were noted as viral hits, and reached international audiences thanks to the variety of subtitles available for them. Some of the more controversial Gavin videos, such as one in which two porn-star types suggestively play with a hotdog, were pulled from YouTube as "deceptive." Apparently, 4 or 5 videos had been yanked by YouTube.

Also in Fall 2011, ICM Registry became a main sponsor of the "Porn Star Road Trip," in which porn stars travel for two week stints in a large bus to various nightclubs and industry events. The initial stint sponsored by ICM will see the bus, plastered all over with the .xxx logo, traveling Florida and eventually a conference in New Jersey, though there appear to be plans to use the bus and actresses at other future events as well.

At the end of November, 2011, a few weeks before the general availability of .xxx domains, ICM began a media blitz on prominent German and British cable T.V. channels. The media blitz was scheduled to last at least 5 weeks. They also put up billboards around the U.S., including in Times Square.

Negative Reaction

At least one critic has labelled ICM Registry's business model, from the domain itself to its advertising, as an "intimidation TLD."

In November, 2011, Manwin Licensing International filed a lawsuit in response to ICM Registry advertisements that used pressure tactics, such as running ads with wording like: ".XXX LANDRUSH IS NOW OPEN. PROTECT YOUR BRAND" or "SECURE YOUR DOMAIN. PROTECT YOUR REPUTATION."

Reserved Names

Hundreds, even thousands, of celebrity names were placed on permanent reserve lists by ICM Registry, for example Beyonce.xxx and BritneySpears.xxx. This was done in order to avoid the need for individual defensive registrations, and the possibility of exceptional legal action. The total reserve list is rumored to be about 15,000 names; this list includes the world's capitals, culturally sensitive affiliations such as various spellings of "Mohamed," and premium names that they intend to auction. ICM Registry received some flack for protecting celebrity brands and intellectual property of only certain individuals, and not including other possible trademark and IP holders, who will instead be forced to defensively register $200 domains to protect their brands from being manipulated under a .xxx string.

Vatican.xxx

On December 21, 2011, the Vatican claimed that a "mysterious buyer" had acquired vatican.xxx. It quickly came to light, however, that vatican.xxx had been placed on the reserved names list by ICM Registry, which was revealed via Whois data. Possible reasons for its reservation are the Vatican City's status as a country, as all country names were reserved, as well as its religious significance.

Defensive Registration

Some of the criticism leveled against ICM, starting during their application process and going forward, was the necessary defensive registration for many brand owners. ICM did make a block list for celebrities and certain other entities. It was reported that many universities were buying .xxx domains related to their schools, to avoid someone taking advantage of the name of their school, their sports teams, or their mascots and associating it with sexual material.

CEO Stuart Lawley stated in an interview that ICM does not encourage defensive registration of .xxx domains. However, as of December, 2011, of the 95,000 names in root zone ending in .xxx, 84,000 were defensive registrations.

Adult Performer Program

In anticipation of the launch of .xxx, ICM Registry reserved some 3,500 names of prominent adult entertainers and pornography stars to later be allocated via the "Adult Performer Program". The program was launched in February, 2012, in conjunction with Name.com, and saw ICM giving those stars their personalized .xxx domain registered through Name.com for one full year. The performers would be free to transfer the domain, and it would be there responsibility to renew and maintain the domain after the first year.

Launch

Following the opening of the general availability of .xxx domains on December 8th, 2011, ICM Registry declared the launch of the name space a victory, and described it as "the most successful launch of any new sponsored top level domain." Their international, high-profile advertising campaign and the nature of the domain itself attracted a great deal of media coverage.

Sunrise and Landrush

ICM Registry reported that it received 80,000 sunrise period applications, though this figure comes from before the trademark verification process. Half of the applications were received during the last week of sunrise, causing the registry to delay the sunrise auction period as it validated each application's trademark claims. Given that the wholesale price for a .xxx domainw was $162, the sunrise alone, before related auctions, brought ICM an estimated $13 million USD. Sunrise auctions are set to begin in January 2012. ICM Registry split its sunrise into two phases: the first was for trademark owners within the adult industry to register names; the second, Sunrise B, was for trademark owners outside of the adult entertainment industry to register .xxx names put their trademarks on a reserved list, so that no one could register it, for a one time fee.

The landrush period began November 8th, 2011. The price for domains is comparatively high, which could dissuade some domainers. Prominent domainers such as Frank Schilling and Mike Berkens have already become involved through the Founders Program, however.

It was later reported, in March, 2012, that those domains blocked by trademark holders during Sunrise B produced 1.3 million DNS queries per day, which were directed to non-monetized placeholder pages.

Founders Program

The Founders Program allowed ICM to sell and allocate about 1,500 .xxx names to 35 companies ahead of its official launch of September, 2011. The program raised over $4m. The first to go live was casting.xxx, in August, 2011. 9 addresses sold for over $100,000; the most expensive domain was gay.xxx, which sold for $500,000 to Liberty Media Holdings.

The program was developed specifically for adult webmasters who were interested in developing a .xxx address ahead of general availability. It was targeted at those individuals moving their current brands and websites into the new space and also at those who were interested in starting completely new sites on previously unavailable names, such as videos.xxx. It was ICM's hope to see the .xxx become a more content-rich namespace, given that many of the most premium .com addresses are in the hands of professional domainers who keep the pages parked and undeveloped. ICM touted the fact that one of the world's wealthiest domainers, Frank Schilling, got involved with his first TLD launch by negotiating a 7 figure deal to acquire premium names that he would then develop with prominent companies in the adult industry. Names acquired include free.xxx, hot.xxx, and live.xxx. The founders program involved a strict agreement that required the domain to be developed.

General Availability

General Availability for .xxx domains was opened on December 6, 2011. It created quite a buzz in the industry, and was picked up by non-industry news sources as well; CNN, for example, highlighted the story as a top feature on its website. The availability was set to open at 16:00 UTC, but was delayed by one hour. The site pushing general availability, buy.xxx, received near 1 million visitors per day surrounding the time of the general availability launch.

ICM revealed through a tweet that the first domain purchased during .xxx general availability was IOwn.xxx.

In the first 24 hours of general availability, ICM sold 55,367 domains. Counting the landrush and sunrise periods, the first day of general availability brought the total of domains sold to about 160,000. It was estimated that on its first day, ICM brought in $3.3 million in revenue, with over half a million of that to be given to International Fund For Online Responsibility (IFFOR). On December 16, it was brought to light that only approximately 95,000 domain names existed in the .xxx root zone. Roughly 84,000 of the domains were defensive registrations, and 14,400 were registered by the adult entertainment community. Of this, 3,200 were parked at Domain Control, and approximately 4,000 were parked at various other parking services. Thus, half of the community registrations were parked or for sale.

Notable Deals

In October, 2011, gay.xxx was sold for $500,000. It is the highest priced domain yet for .xxx.

In December, 2011, it was announced that a prominent English pornographer, Paul Raymond, was transferring much of his adult portfolio to .xxx; this involved both of his previous websites, and destinations related to his printed materials. These sites will include paulraymond.xxx, prpvod.xxx, razzledating.xxx, mensworlddating.xxx, menonlydating.xxx, escortdating.xxx, adultsportdating.xxx, clubdating.xxx, fantasydating.xxx, mayfairdating.xxx, and paulraymonddating.xxx. It was not announced whether or not some of his best-known titles, the magazines Mayfair and Razzle, would also be given .xxx sites. This represents the single largest portfolio migration to date for ICM. The move was expected to take effect by February, 2011. As a result, ICM had been sponsoring numerous Paul Raymond events.

It was also announced in December, 2011 that $700,000 worth of domains had been sold to Clips4Sale, which operates a number of clip-oriented porn sites. The sale was made up of a total of 30 domains, with the single most expensive being a $300,000 domain name; two others were sold for over $80,000.

Cybersquatting

In December, 2011, it was announced that the National Arbitration Forum (NAB) would handle the Rapid Evaluation Service; they would also be running a second, similar service for ICM, the Charter Eligibility Dispute Resolution Policy. The NAB has been a UDRP evaluator since the late 1990s, and has evaluated over 17,000 domain disputes. The system will be paperless, and the Rapid Evaluation Service allows trademark owners to quickly and efficiently challenge any infringement, while the Charter Eligibility Dispute Resolution Policy allows users to challenge the eligibility of a .xxx domain owner. Those owners are expected to be companies or individuals professionally involved in the adult entertainment industry.

Rapid Evaluation Service

One of ICM's moves to calm worried trademark holders is its aggressive anti-cybersquatting policy. The Rapid Evaluation Service hopes to shut off any obvious, registered infringements within a period of days.

Between December 6, 2011, and February 8, 2012, the National Arbitration Forum announced that it had taken down a dozen .xxx domains through the use of the Rapid Evaluation Service. 15 complaints had been filed in that time frame. In every instance the complainant won, and in 11 of 12 instances the complainant was a trademark holder. It costs $1,300 to file a complaint, and while the service can suspend a site within 2 days, it has been taking up to 12 days in many of the cases to render a final decision.

Unilateral Domain Seizure

On December 13th, just a week after general availability for .xxx began, ICM Registry seized around 70 domains that they deemed as flagrant trademark infringements; these domains included huffingtonpost.xxx, businessweek.xxx, verizonwireless.xxx, and washingtonpost.xxx. This is notable given the fact that ICANN has an involved arbitration process, the Uniform Domain Name Dispute Resolution Policy, that acts as the means for all domain-name trademark disputes. This was an unprecedented event in the domaining industry, and ICM acted on its own after considering third-party allegations not related to any legal filing or arbitration process. ICM had not immediately decided whether to only seize the domains, or also suspend the domains and thereby remove them permanently from the pool of available names.

ICM Registry's registration agreement also gives them the right to suspend or seize all .xxx domains from any registrant that is found to have infringed on trademarks. ICM is able to do this where other registries are not because it verifies the identity of its registrants and requires an registrar-registry agreement. This clause had previously been suspected as being a played-down safety net for trademark owners, and given the December seizure it could prove to many companies that there defensive registration of .xxx domains were a waste. Still, it is unclear whether ICM will continue to be vigilant in unilaterally and immediately seizing infringing domains.

UDRP

Through December, 2011 & into January, 2012, five UDRP cases were filed against .xxx domains. These include foxstudios.xxx, richardbranson.xxx, valero.xxx, heb.xxx and markafoni.xxx.

Opposition, Controversy, and Legal Action

Prior to the approval to the .xxx TLD, there was a good deal of opposition to the proposed namespace. Certain governments threatened to block the TLD wholesale, which some saw as one step closer to disrupting the global Internet; there were moral oppositions; but perhaps the most sustained opposition was led by the Free Speech Coalition, an adult industry lobbying and advocacy group, and their Executive Director, Diane Duke. Much of the debate centered around the fact that ICM was applying for a Sponsored Top Level Domain, which meant that there must be a cohesive, supportive community backing the bid. The Free Speech Coalition is the adult industry's largest trade organization, and was vehemently opposed to the creation of .xxx, which rose the question of whether or not ICM actually represented the community that it purported to. Multiple prominent adult industry members, such as Larry Flynt of Hustler, created a documentary together to expose their feelings of misrepresentation by ICM. Concerns included: increased expenses to business owners without additional revenue; the need to defensively register a .xxx address for an existing website; the effect of "ghettoizing" the industry, thereby pushing porn to the periphery of the Internet where it can be easily blocked, censored, and manipulated; and ICM causing outside influence on a community and misrepresenting the adult industry and their desires. These issues very much came to a head at ICANN 40 in San Francisco: despite The Free Speech Coalitions staging protests and vocally participating at the event, ICM Registry went on to win approval from the ICANN Board to run a .xxx sTLD registry.

In 2010, ICM CEO, Stuart Lawley, registered on the most popular adult industry forum, xbiz.net, and sustained a conversation with concerned community members for some time. While many points were discussed civilly, some members attacked Mr. Lawley personally, while others merely side-tracked the conversation. A screen-grab of the entire forum thread can be seen here. Diane Duke and Stuart Lawley partook in a live debate on the merits and drawbacks of .xxx at the inaugural XBiz EU Summit, held in London in September, 2010. A video of the interaction can be seen here.

Manwin Lawsuit

Manwin, one of the most prominent adult content producers on the Internet, filed an Anti-Trust suit against both ICM and ICANN over the creation and implementation of the .xxx TLD. This legal action took place in November, 2011, well after the TLD's approval and just before its general availability. It also filed an Independent Review Panel (IRP) Request with ICANN, making it only the second company ever to do so (the first being ICM Registry itself). Manwin felt that ICANN's decision to allow .xxx into the root did not “adequately address issues including competition, consumer protection, malicious abuse and rights protection prior to approving the .xxx TLD."

In January 2012, ICANN and ICM both filed motions to dismiss the case. ICANN argued that, as it was an organization not engaged in "trade or commerce," the US anti-trust laws did not apply to it; additionally, both ICM and ICANN argued that Manwin's filing was essentially complaining about the possible increase in competition for them. ICM cited that Manwin had earlier attempt to approach them with a supposed mutually-beneficial agreement, in which Manwin would acquire various premium .xxx domains for free, in exchange sharing the profits of these domains with ICM. When ICM turned down the agreement, Manwin Managing Partner Fabian Thylmann said that he would do whatever he could to stop .xxx. ICANN's and ICM's motions to dismiss can be found here and here respectively. On February 17, the company amended its anti-trust lawsuit against ICANN and ICM Registy. According to Kevin E. Gaut, legal counsel of Manwin, two related state law claims were dropped to avoid potential risks of trial delays. The plaintiff and defendants also announced that they were in talks and hoping to resolve some to all of the outstanding complaints.

Countries Banning .xxx

It was of great concern to ICANN, its GAC, and the Internet community, that .xxx would be a wholly blockable domain extension in the root zone. This was unprecedented. While many restrictive governments block and censor certain sites, it was a new concept to block an entire extension. This fact failed to stop the passage of .xxx, but many countries have stuck to their word and have blocked the name space, including:

• India, the first to block .xxx
• Kenya
• China
• Egypt

Applications for .adult, .porn, and .sex TLDs

On April 12, 2012, ICM Registry confirmed its application for three additional adult TLDs with ICANN's New gTLD expansion program. The new gTLD string proposals intended for the use of the adult entertainment community include .adult, .porn and .sex. According to Lawley, all registered domain names under the .xxx gTLD will be grandfathered under these domain names if approved by the internet governing body. Matching names will be automatically reserved under the proposed .adult, .porn and .sex TLDs without any cost to the domain names owner. In case a registrant decides to activate and use the any of the reserved counterpart domain names, a minimal fee will be charged. Lawley said that his company invested less than $2 million to support its applications for the TLDs submitted by the newly created subsidiary companies; ICM Registry SX LLC, ICM Registry PN LLC, and ICM Registry AD LLC.

External links

• ICANN.org ICM Registry Business Plan
• Official website of ICM Registry

Governmental Advisory Committee. Considers and provides advice on the activities of ICANN as they relate to concerns of governments, particularly matters where there may be an interaction between ICANN's policies and various laws and international agreements or where they may affect public policy issues (ICANN Bylaws).

Independent Review Process

Top-Level Domain

Uniform Domain Name Dispute Resolution Policy