Green light for an internet red light district?

BY MATTHIAS KETTEMANN

xxx

It is not as if there weren’t enough pornography on the web. Exact figures are difficult to come by, but estimates of the number of websites dedicated to pornographic material range from 1 to 25 percent. And soon there will be more. In fact, a whole Top Level Domain or TLD (the letters after the last dot in an address, such as .com or .biz) will soon be dedicated to “adult entertainment”: the new TLD dot triple x, or “.xxx”.

In a decision published on February 19, a top-notch three judge panel ruled in favor of an association of adult entertainment companies, represented by ICM Registry, and declared that the private corporation responsible for assigning new Top-Level Domains, the Internet Corporation for Assigned Names and Numbers, or ICANN, was wrong to deny ICM Registry their application for the new “voluntary adult TLD” .xxx.

The history of the conflict, which has serious legal implications for the development of the international domain name systems, started when ICANN opened the address space to allow new industry-sponsored, generic (that is, not-country related) Top Level Domains. The sex industry soon saw the potential to generate more revenue by adding websites ending with .xxx. On its website, ICM Registry prides itself with providing, with the new .xxx TLD, a “greater degree of confidence and certainty to [the] online experience” of “willing adult consumers of adult entertainment”. The creation of .xxx would lead to a “credible, self-regulated forum for all stakeholders to discuss and actively respond to concerns about online adult entertainment.” Discussing and actively responding to such concerns was probably not chiefly on the mind of ICM Registry when it applied for the TLD. Rather, as domain names such as sex.xxx could be sold for a lot of money, considerable financial interests were at stake.

As Lisa LaMotta of Forbes.com reported, the first two most valuable domain names are related to pornography. Sex.com was the first domain to break eight-figured barriers in 2005 by changing owners for $12 million. Porn.com was sold in 2007 for $9.5 million. But financial concerns were not chiefly among those with which regulator ICANN had to grapple.

Having presented itself as a technical regulator and not as guarantor of the Internet morals, ICANN had always insisted that it would only apply technical standards in assessing applications for new Top Level Domains. But after having first decided, in 2005, that the application by ICM Registry for the new Top Level Domain met all required criteria, the Governmental Advisory Committee uniting a number of states and advising the ICANN Board in its decision intervened. The Board reconsidered its decision and ultimately denied ICM Registry the new address space. 

The Independent Review Panel now found that this “reconsideration … was not consistent with the application of neutral, objective and fair documented policy.” Harvard Law School Professor Jack Goldsmith, who provided an expert report on which ICM Registry relied, used even stronger words, saying that “the clearly fictitious basis ICANN gave for denying ICM’s application” is “most obvious”.

As the Panel pointed out, the change in opinion of ICANN could be traced back to an outcry of governments that started with an August 11, 2005, letter by Michael D. Gallagher, Assistant Secretary for Communications and Information of the U.S. Department of Commerce, evidencing a “volte face in the position of the United States Government”. This development was caused, according to the Panel, by “a cascade of protests by American domestic organizations such as the Family Research Council and Focus on the Family.”
While DOC officials seemed to first approve the new TLD, they were galvanized into opposition by critique by the Religious Right, including figures such as Jim Dobson, who had, as the Panel writes, “influential access to high level officials of the U.S. Administration.”

ICANN thus faced a dilemma: If it accepted the .xxx domain it would show that it was immune to interference by the US government. This was an important issue at that time, as the so-called World Summit on the Information Society process was ongoing at the time. The process explicitly aimed at creating a more international (read: less US-influenced) Internet Governance. But if ICANN did not reconsider the introduction of .xxx, there might have been a serious backlash from the Bush Administration, which was under pressure from Christian Conservatives. “We’re damned if we do”, ICANN Chairman Vint Cerf is quoted as saying in 2005, “and damned if we don’t.” In the end, ICANN refused to allow .xxx. Now, five years later, they were again “damned” for this decision. 

No deference necessary

The three judge panel consisted of a former President of the International Court of Justice, Stephen M. Schwebel, as Chair, the former president of both the London Court of International Arbitration and the World Bank Administrative Tribunal, Jan Paulsson, and Dickran M. Tevrizian, a U.S. federal judge for the Central District of California. The majority first underlined that “the judgments of the ICANN Board are to be reviewed and appraised by the Panel objectively, not deferentially by application of the ‘business judgement’ rule”.

Judge Tevrizian, who had been nominated by ICANN, dissented on this point saying that a de novo consideration of evidence should not have taken place. Also, he disagreed with the role of international law in the case. Though not decisive in this case, the majority ruled that ICANN was “charged with acting consistently with relevant principles of international law, including the general principles of law recognized as a source of international law”, and specifically the principle of good faith. ICANN had denied the import of international legal principles for its work. 

The majority also found that ICM Registry had met all the necessary conditions, including “sponsorship criteria” (which relate to the proposal being representative of the industry it purports to represent) and that the decision by the ICANN Board to reconsider their application was a violation of “neutral, objective and fair documented policy.”

Forced migration? 

This decision which ends a year-long battle that had pitted Internet scholars against each other does not even satisfy all representatives of the adult entertainment industry. A Top Level Domain dedicated exclusively to adult content could be used by some states as a means to force all unwanted or supposedly immoral content to migrate to this TLD which could then be easily monitored or blocked. Professor Goldsmith confirmed this in his expert report: A “website on the .XXX domain is easier for nations to regulate and exclude from computers in their countries because they can block all sites on the .XXX domain with relative ease but have to look at the content, or make guesses based on domain names, to block unwanted pornography on .COM and other top level domains.”

Will states use the .xxx domain to create a red light district on the Internet? Milton Mueller, Professor at Syracuse University School of Information Studies and Director of its Telecommunications Network Management Program and another expert witness for ICM Registry alongside Professor Goldsmith, does not think so. In a statement to the Harvard Law Record, he writes that “countries that possess both the political power and the hostility to freedom of expression required to do that are the ones that systematically block online porn anyway (China, the Arab states, Iran, etc). If it meant that the sites were merely segregated in .xxx rather than blocked altogether, it would be a step forward for adult sites. There might be some countries that try to use .xxx as a compulsory red light district, but if that just means that they are blocked the obvious response is for the online adult sites to locate in the U.S. and other more liberal countries”.

Similarly, on the “Online Adult Indust
ry News” blog, Stuart Lawley, Chairman of ICM Registry, was quoted as saying that he is “eager to work with ICANN to make dot-xxx a reality, and the time for stalling is long past.” (I would have wanted to read on, but accessing the site produced a stream of strange pop-ups of scantily-clad women and my neighbors in the library had started to frown.)

Is there anything to Judge Tevrizian’s warning in his dissent that “any disgruntled person” will now be able to “second guess” ICANN. “This is sheer nonsense”, Professor Mueller told the Record. “One has to be a lot more than ‘disgruntled’ to take on the risks, costs and time burdens required by the [process] as it now stands.” First, this is a question of money.

According to Mueller ICM Registry spent $ 4-5 million on legal representation. More fundamentally, Mueller believes Judge Tevrizian’s warning to be plain wrong: “Couldn’t you say the same thing about judicial review of Congress or the Executive Orders of the President? Or lawsuits against corporations by their shareholders? Does Tevrizian think that no corporate board can ever do wrong?” As the financial crisis has demonstrated beyond doubt, corporate boards can do wrong and courts are often right to second-guess them.

Snatching victory from the jaws of ICANN’s defeat?

In the end, ICANN’s defeat might actually be a win. Professor Mueller wrote in his blog that “the “defeat” for ICANN’s past President and Board Chair (and the Bush Administration) is actually a great victory for ICANN as an institution”. To the Record, he explained that “ICANN is a new global governance institution. Up to now, people have been deeply worried about its lack of a foundation in law, a problem caused by its global nature and its unilateral creation by the US. The feeling that ICANN has inadequate external accountability mechanisms prevails almost everywhere outside of those on the payroll of ICANN.” The new review process, however, will provide ICANN’s stakeholders with a greater sense of security and ICANN itself with some guidance. Overruling ICANN was important. “The panel proved beyond a doubt”, Mueller said, “that the independent review really is ‘independent’, and this in turn builds confidence that ICANN’s own institutional solutions can develop into the robust accountability mechanisms it needs.”  

This backbone against future government interference might come in rather handy, as only on February 24, Lawrence E. Strickling ’76, Assistant Secretary of Commerce for Communications and Information, announced that the US would end its decades-old “hands-off” policy towards the Internet: Without “government involvement”, he said in a speech at the The Media Institute, “we will lose the one thing that the Internet must have—not just to thrive, but to survive—the trust of all actors on the Internet.” 

The panel confirmed ICANN’s view on one essential point: The decision is not binding on the ICANN Board. But ICANN is likely to allow .xxx anyhow. After all, the last years saw an internationalization and a liberalization of the Top Level Domain market. These days, ICANN is accepting new propositions for Top Level Domains from cities (think .berlin), regions, and private actors. Apart from meeting certain policy conditions, it’s just the small matter of paying around US$100,000 to become the owner of your very own Top Level Domain. 

Matthias C. Kettemann, a Fulbright and Boas scholar, is an LL.M. student from Austria.

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