ICM Registry has pursued the .xxx sponsored Top-Level Domain (sTLD) since 2000. The company’s first application to the Internet Corporation for Assigned Names and Numbers (ICANN) was not approved, and ICM subsequently began a more aggressive campaign in 2003.
In late 2003, founder and then-president Jason Hendeles brought Stuart Lawley, a British businessman, into the managerial mix as president and chairman of ICM Registry. The combined net worth of Lawley and the Hendeles family is reported to be more than $100 million, but Lawley, who previously served as the CEO of Eurofax Plc and Alto Group Ltd and as chairman of Oneview.net Plc, all UK-based companies, brought something more to the company. He brought a plan to win support for the proposed sTLD from the adult entertainment industry and those who observe it and a name and track record redolent of legitimacy. Both were vital to ICM’s hope for success.
Parry Aftab, a U.S. attorney specializing in Internet privacy and security law and the executive director of online child safety group Wired Safety, fought .xxx upon ICM’s initial application, but supported it in 2003. When asked why she changed her stance, she offered a ringing endorsement of Lawley.
“The people behind [ICM changed],” Aftab says. “I think Stuart Lawley is ethical, a good guy, a straight shooter, and when he said he wanted us and others to look at .xxx with fresh eyes, I was willing to do it because I thought he had something going for him.”
AVN Online interviewed Lawley on three separate occasions to compile this special two-part feature. His words speak volumes about his vision for ICM and .xxx, as well as about his own character. In the course of the interviews, Lawley’s intelligence and business acumen were apparent, but at times he also seemed contradictory, less than forthcoming with some information, and even irascible— particularly when asked about who supported the .xxx effort.
What follows is part one of a compilation of the three interviews, sans the fat. The second part will appear tomorrow on AVNOnline.com.
AVNOnline.com: How much has this pursuit of .xxx cost, and where did the funding come from?
Stuart Lawley: Jason Hendeles is the founder of ICM Registry and was its initial investor. I invested in late 2003, took management control, and have essentially provided the funding since then. Stuart Duncan, ICM Registry’s CEO, is also a minority shareholder. The Hendeles family and I have a significant net worth, which was documented to ICANN as part of the approval process.
This is a high-risk venture. We’ve put millions of dollars into this already and by the time we go live, we’ll probably have $5 million into this. You can do the math, it costs us about $3 million a year to run the business.
Funding for ICM Registry is currently approaching $1.5 million, and the roll out will cost several million dollars more. All funding has come, and will come exclusively from these existing shareholders.
Is this solely a for-profit venture?
Clearly, there’s no hiding that. I’m an entrepreneur, and hopefully this is going to be a sound business, running the machinery of the registry under me. But IFFOR makes the policies; ICM doesn’t make the policies. We don’t set the rules. So we cannot change the rules to suit our profit motive.
Why should the industry trust ICM Registry?
We’ve in effect created the structure so all the decisions will be made by IFFOR and the industry. The charter of IFFOR, if people actually read it, says IFFOR must act primarily in the interests of the industry.
For example, the board of directors of IFFOR will be made up of representatives of the adult and mainstream community. These directors will direct the policy and standards of the .xxx TLD. Only one board seat will be allocated to ICM Registry.
Proponents of .xxx attempted to stack last year’s Free Speech Coalition vote in favor of supporting .xxx. Please comment.
You’re talking about Ron Levi. This is before I came onboard with the company actually, but I’ll make it clear off the bat: Ron Levi has no agreement with this company; he has no financial involvement in any shape or form. I think Jason and he did discuss the idea that he may get a short-term consulting contract with us – when we were approved we’d need to reach out to the industry.
I think because he was very vocally supportive that everybody thinks he’s behind this and behind our organization or he’s a secret investor. That absolutely is not the case.
He may be an individual we reach out to to promote the registry, like we will be doing with one or two other people who have been supportive of us. I’ve never spoken to Ron, but I think if anyone in our organization has spoken to him, [it was] maybe once in the last year; that would be it. He rang to congratulate us on the deal, but there is no relationship there.
The Free Speech Coalition has since come out against .xxx. What is your reaction?
Back in 2004, our interpretation was they didn’t endorse and they didn’t condemn. They’ve obviously now made a statement under pressure or for whatever reason, but we never made any representations to anyone, particularly ICANN, that they were behind us. We struck them as a potential supporter and moved on.
Have any free speech organizations supported .xxx? If not, how do you plan to represent free speech on your board?
While we have engaged in comprehensive discussions with many free speech organizations and representatives, perhaps understandably, they were reluctant to publicly endorse our proposal.
However, they largely indicated their willingness to participate in the IFFOR structure and direct us on free speech issues, once we have been approved.
Even though the FSC has announced their opposition to .xxx, we would still welcome their involvement in the IFFOR environment.
What will it cost to register a .xxx domain?
The wholesale price for each .xxx registration will be $60 per year. Only accredited ICANN registrars will have the right to offer .xxx registrations. We anticipate that they will mark it up or down according to their individual business models.
You’ve stated that $10 of each sale goes to your nonprofit, IFFOR—how is the remainder of each sale split?
The remaining $50 per domain name will not be split up. It will go towards covering both the capital costs incurred to date and towards supporting the annual costs of operating the registry. No other profit or nonprofit company, entity, or individual has any commission or per-domain-name arrangements of any kind with us.
Who is handling the financials for IFFOR?
I don’t think we’ve appointed an accountant yet. ICM is paying IFFOR’s bills until they start getting their $10 per domain.
We are also actively pursuing an executive director that doesn’t have a vote on the board. Whoever is on the board, whenever it comes to be decided, will choose the executive director. If the board is only half populated by then, it will be those people.
I think the executive director is going to be a Washington, D.C., lobbyist type. It probably won’t be somebody from the adult industry.
We had an offer from an executive firm to run that [executive director] position for us while IFFOR ramps up, and then select somebody at that time. That’s an option we’re considering too.
What qualifications are you looking for in an executive director?
It will be somebody familiar with the issues. They need to understand the political process in the United States. It will be a U.S. resident, that’s for certain.
What is the process for trademarked and branded names, i.e., the migration from .com to .xxx?
Additional TLDs provide the opportunity for more than one party to legitimately use a name. It is a simple fact that not every domain name in .com is owned by the same party in .net, .org, etc. However, we certainly want to avoid abusive registrations and cybersquatting on established brand names.
We intend to implement a trademark protection policy at start-up and on an ongoing basis, which incorporates lessons learned from prior TLD launches.
During the launch of .info there were a number of parties who attempted to game the system on the basis of questionable and sometimes false claims to own trademarks in generic words. In the .biz start-up, there was a claim process that did not prevent legitimate domain registrations, but these claims were later evaluated by a neutral party.
Trademark disputes can be very fact intensive, and are not things that can be resolved on an automated basis. We believe a neutral evaluation of trademark claims, similar to what was done during the .biz launch, is an appropriate method for protecting legitimate trademark owners and domain registrants.
Will there be a domain dispute process in place?
There will be a comprehensive domain dispute process, and the ICANN-approved Uniform Dispute Resolution Policy (UDRP) will also be applicable in the event of disputes.
Will this be a free-for-all for squatters?
Firstly, registrations will only be open to bona fide members of the community. This authentication will deter most attempts at bad faith registrations.
There is a range of opinion on what constitutes a squatter. Legally, cybersquatters are those who abusively register domain names that are similar or identical to others’ trademarks out of a bad faith intent to exploit the trademark or to extort the trademark owner. We certainly do not intend to provide a free-for-all to cybersquatters, and in addition to a start-up trademark claim policy, we believe that a rapid adjudication or takedown mechanism would also be appropriate in the clearest cybersquatting situations.
Tomorrow, Lawley discusses the rumors swirling about .xxx’s supporters and beneficiaries.
