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Agreement with ICM on .XXX Registry

ICANN signed an agreement yesterday with ICM for the introduction of the .XXX top-level domain.

ICANN’s Board of Directors approved entering into the agreement during our recent Silicon Valley-San Francisco Public Meeting. We have now finalized negotiations and executed an agreement that’s posted at http://www.icann.org/en/tlds/agreements/xxx/. It includes some new and revised provisions that follow on from the agreement that we last posted for public comment in August 2010.

Additional terms relate to some concerns that are unique to this registry, addressing heightened compliance measures, pricing and indemnification.

There is a new requirement for ICM to provide a compliance certification signed by the ICM CEO twice in the first year and annually after that, along with a summary of IFFOR’s audit of ICM’s compliance procedures. IFFOR is the sponsoring organization obligated to oversee the sponsored community’s policy development.

In the event that ICM was not in compliance additional processes have been added, including a new mediation procedure has been added that would follow cooperative engagement and precede arbitration. There have been some changes to the basic structure of remedies for ICANN. The requirement that ICANN obtain at least three arbitration awards before requesting punitive or exemplary damages has been removed. In the event that a dispute can’t be resolved through mediation, ICANN may impose monetary or operational sanctions, and ICM may challenge them through arbitration.

ICANN’s fee per transaction registration fee has increased from $1 to $2 to account for anticipated risks and compliance activities and a fee escalator that will allow for increases to the fees and to account for inflation.

Revised indemnification procedures will allow ICANN to manage any third party dispute proceedings at ICM’s expense. ICM’s consent would be required for ICANN to settle a proceeding in a way that requires ICM to pay monetary damages, and ICANN would be required to work in good faith to mitigate ICM’s expenses.

Monthly reports must include a line item for “attempted adds” (success and failure) and there are updated references to RFC’s on internationalized domain names. ICANN also has a right to consent to any proposed change to the definition of “Sponsored Community” by the registry.

Yesterday’s signing follows extensive consideration and review, including an Independent Review Process. ICANN has also entered into an “Agreement and General Release” [PDF, 1.31 MB] with ICM to resolve all outstanding dispute/possible litigation matters between them. The rationale for the Board’s decision was published along with the Preliminary Report of ICANN’s Board Meeting. You can see that at http://www.icann.org/en/minutes/prelim-report-18mar11-en.htm.

You can learn more at Chronological History of ICM’s Involvement with ICANN as of 31 March 2011 [PDF, 84 KB].

John Jeffrey
General Counsel & Secretary
ICANN

April 2nd, 2011 by | Posted in ICANN | Tags: , , | No Comments

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