Friday June 6th: ICM Registry FILES INDEPENDENT REVIEW PETITION AGAINST ICANN

As described in its Articles of Incorporation, because it is a global resource, ICANN is subject to international law, and is required to operate in conformity with the principles of objectivity, transparency, non-discrimination, and accountability that are contained in its Bylaws.

I. Why is ICM Requesting an Independent Review of ICANN’s Actions?

In 2003, ICANN announced that it would solicit proposals for new sponsored TLDs in order to expand the number of domain names available for registration by interested parties. The solicitation process commenced with a Request for Proposals (“RFP”), based on ICANN Board-approved criteria. ICANN set forth the process by which it would select new sTLDs and published an RFP containing the supposedly objective criteria by which each application was to be evaluated.

The RFP selection process was divided into two phases—with completion of the first phase (i.e., evaluation of the application) necessary to begin the second phase (i.e., registry contract negotiations). In the first phase, each application was evaluated to make sure that it satisfied certain business and financial, technical, and sponsorship criteria described in the RFP. If an applicant cleared this first phase, it would then move forward to the second phase: negotiating a registry contract with ICANN to operate the proposed TLD. ICANN repeatedly confirmed that only applicants that satisfied the published criteria would enter into contract negotiations with ICANN staff to serve as the registry operator for the proposed TLD.

On 1 June 2005, the ICANN Board unconditionally resolved that ICM’s application satisfied the RFP criteria and directed ICANN staff to proceed to the second phase of the process, contract negotiations. It was during this second phase, the contract negotiations, that ICANN abandoned its process, and unexpectedly and belatedly revisited the issue of whether ICM met the RFP criteria of the first phase. Ultimately, after persevering through the process for approximately three years and incurring costs well over US$ 4 million in pursuit of a registry contract, ICM’s application was rejected by the ICANN Board in March 2007. The purported basis for ICANN’s decision was that ICM’s application failed to: (1) satisfy the phase one criteria; (2) satisfy amorphous “public policy” concerns; (3) address concerns regarding the proposed domain’s “offensive content;” and (4) resolve “law enforcement compliance issues.”

Each of ICANN’s purported reasons for rejecting ICM’s application are without merit. In short, ICANN completely changed its RFP process, re-examining issues that had long since been decided and developing completely new, previously unannounced criteria that had never been applied to any other applicant in order to manufacture reasons to deny ICM’s application. ICANN—entrusted with technical coordination of the Internet—took these extraordinary steps completely undermining the process that it established and others relied upon because of belated content related concerns.

In addition to ICM, nine other entities submitted applications in response to ICANN’s RFP in 2004.[1] ICM relied upon ICANN’s assurances that it would follow its published procedure when it submitted an application for the .XXX TLD. However, in stark contrast to the treatment of other sTLD applications, ICM’s application was subjected to a drawn out process of approval, negotiations, set-backs, delays, further negotiations, and ultimate rejection. This treatment was clearly based on the nature of the content that will appear on websites in the .XXX domain.

II. How Does the Independent Review Work?

As set forth in ICANN’s Bylaws, an affected party (here, ICM) has the right to file a request for independent review of ICANN’s actions by an independent panel comprised of one or three members. ICM has elected a three-member panel. The independent review is to be administered by the International Centre for Dispute Resolution (“ICDR”) under its Procedural Rules as well as the Supplementary Procedures for ICANN’s Independent Review Process. The Independent Review Panel’s mandate is to: (1) compare those actions of the ICANN Board contested by an affected party (in this case, ICM) to ICANN’s Articles of Incorporation and Bylaws, and (2) to declare whether the ICANN Board has taken a decision, acted, or failed to act, consistently with the provisions of those Articles of Incorporation and Bylaws.

ICM’s Request for Independent Review Process contains a summary of the facts that form the basis of ICM’s dispute with ICANN, describes the applicable standards and law that ICANN’s actions are subject to, provides ICM’s proposed elections for the Independent Review Process, and lists the relief ICM requests because of ICANN’s inconsistencies and violations of its Articles of Incorporation and Bylaws. Specifically, ICM requests, among other things, that the Independent Review Panel declare that: (1) ICANN’s administration of the RFP as it related to ICM’s application was inconsistent with ICANN’s Articles of Incorporation and Bylaws; (2) ICANN’s repudiation of its previous determination that ICM’s application fulfilled the criteria for approval set forth in the RFP was inconsistent with ICANN’s Articles of Incorporation and Bylaws; (3) ICANN’s rejection of ICM’s application was inconsistent with ICANN’s Articles of Incorporation and Bylaws, resulting in substantial, unjustifiable, and unreasonable harm to ICM; (4) ICANN must immediately execute a registry agreement on terms and conditions substantially similar to ICM’s draft registry agreement posted to the ICANN website on 16 February 2007; (5) ICANN must pay compensation for all costs incurred by ICM in connection with both its application and Request for Independent Review; (6) ICM is the prevailing party in this Independent Review Process; and (7) the determination regarding whether any of ICANN’s actions were inconsistent with ICANN’s Articles of Incorporation and Bylaws is binding on ICANN.

III. Where Will the Independent Review Take Place?

The Independent Review Panel will make the final determination as to where the independent review is to take place. ICM has proposed that the proceedings be held in Washington, D.C. The Panel may hold conferences or hear witnesses or inspect property or documents at any place it deems appropriate.

IV. Why Does This Independent Review Matter?

ICANN’s failure to abide by its Articles of Incorporation and Bylaws during the administration of the RFP process and its rejection of ICM’s application calls into question ICANN’s commitment to its core values of objectivity, transparency, non-discrimination, and accountability. This, in turn, undermines the organization’s continued credibility and viability, which makes it difficult for ICANN to obtain the continued buy-in and support it requires from the international community and various stakeholders.

Regarding the specific facts underlying the dispute, ICM has been wrongfully denied the opportunity to operate the proposed .XXX sTLD and gain the significant “first mover” business advantage that would have flowed from its registry contract for what has always been regarded as one of the more sought after and popular expected new TLDs. Further, ICANN’s rejection of ICM’s application has denied the benefits the sTLD would have provided to the sponsored community and other stakeholders, namely, empowering individuals wishing to select or avoid such adult content websites to do so easily and establishing a forum for the online adult entertainment community to communicate and proactively respond to the needs and concerns of the broader Internet community.

Indeed, this case—the first of its kind—strikes at the very heart of Internet governance. The arbitrary and discriminatory manner in which ICANN treated ICM’s sTLD application requires a re-evaluation of such fundamental questions as “who” should govern the Internet and “how” should the Internet be governed. Under these circumstances, nothing less than an independent, impartial, and objective assessment of the facts and the law as they apply to ICANN’s decision to reject ICM’s application is required. Ultimately, the independent review and the resulting declarations from the three member panel will put to the test ICANN’s true commitment to its core values and limited mission.

Documents

• Background
• Request
• Exhibits

Kind Regards,

Stuart Lawley

[1] The other nine TLD proposals were: “.ASIA”; “.CAT”; “.JOBS”; “.MAIL”; “.MOBI”; “.POST”; “.TEL” (Telnic); “.TEL” (Pulver); and “.TRAVEL.”