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Username: ICMRegistry
Date/Time: Wed, November 15, 2000 at 7:14 PM GMT
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Subject: Supplemental Information for ICM Registry's .XXX Submission

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SENT VIA E-MAIL AND POSTED TO THE MESSAGE BOARD
November 14th, 2000

Louis Touton
New TLD Applications Department
Internet Corporation for Assigned Names & Numbers
4676 Admiralty Way, Suite 330
Marina Del Rey, CA 90292-6601

Re: Report on New TLD Applications (November 9, 2000)

Dear Sirs,

Please accept this letter as supplemental information to our original submission dated October 2, 2000. 

Introduction
On October 2, 2000, ICM Registry submitted an application to the Internet Corporation for Assigned Names & Numbers (ICANN) for the creation of a .XXX and .KIDS top-level domain name. ICM Registry’s proposal introduces the concept of a next generation ratings system and a strong non-profit program to protect children on the Internet. This unique combination of solutions will better manage adult-oriented content and offer a wide variety of enhanced ways of protecting children online. 

ICANN’s evaluation team was charged with reviewing ICM Registry’s proposal to become the registry operator for .XXX and .KIDS, and to evaluate the company’s proposals under the following considerations:

· The need to maintain the Internet's stability, particularly in terms of protecting domain-name holders from the effects of registry or registration-system failure.
· The extent to which the proposal would lead to an effective "proof of concept" concerning the introduction of top-level domains in the future. This includes the diversity the proposal would bring to the program, such as fully open top-level domains; restricted and chartered domains with limited scope; non-commercial domains; and personal domains; as well as a variety of business models and geographic locations.
· The enhancement of competition for registration services at the registry and registrar level.
· The enhancement of the utility of the DNS.
· An evaluation of delegating policy-formulation functions for special-purpose TLDs to appropriate organizations.
· The extent to which the proposal would meet previously unmet needs.
· The importance of appropriate rights protection (including intellectual-property rights) in connection with the TLD’s operation, especially during the start-up phases.


Executive Summary
ICM Registry is confident its proposal meets all the criteria set by ICANN, and that ICMR’s unique, non-profit and for-profit business model is an important first step in protecting minors from harmful material online, one of the most significant problems on the Internet today. 

Features of ICM Registry’s proposal include:

A. Next-generation domain-based rating system. The enhancement of the DNS’s utility through the creation of a domain-based rating system for adult-oriented content.

B. The promotion of a code of conduct for the online adult-content industry. With the support and direction of the ICM Registry Policy Advisory Board, ICM Registry proposes to work cooperatively toward the development of a code of conduct for the adult-content industry.

C. A non-profit company to educate, conduct R&D and protect children online. ICM Registry proposes to create a non-profit company to fund an online educational campaign, evaluate the many child-protection technologies and provide reports to the public about the capabilities of these technologies. In addition, it will invest in the research and development of technology solutions to the problem of protecting children online. ICM Registry’s proposed non-profit company has the largest percentage per registration and dollar non-profit contribution of any registry proposal to ICANN.

D. An industry-led policy advisory board (PAB). Formed to develop registration policy and respond to legal and policy-related issues, the PAB will be a broad coalition of the Internet's business, technical, academic and user communities, and will be chaired by leading industry adult-content providers. (See also “An Industry-led Policy Advisory Board” under “Supplementary Information” below.) 

E. An effective "proof of concept.” ICM Registry’s proposal will lead to an effective "proof of concept" concerning the introduction of the next generation ratings system on the Internet. The many benefits of having a .XXX registration will motivate adult-content providers to voluntarily host their content from the .XXX domain.

F. A strong technical and financially complete proposal. ICM Registry’s proposal demonstrates realistic business, financial, technical and operational plans.

G. A strong IP protection and sunrise strategy. ICM Registry has submitted the strongest and most detailed proposal in terms of addressing the question of rights protection, including both common-law and trademark intellectual-property rights, especially during the start-up phases.

H. Enhanced competition for registration services. ICM Registry’s senior management is recognized for its technical and political expertise. As trusted and responsible representatives within the ICANN process, the team members have been actively involved in the consensus-building process since 1997. 

I. Enhanced competition for registration services. ICM Registry’s proposal offers enhanced competition for registration services at the registry and registrar level through the expansion of new, adult-oriented domain registration services.

In developing our proposal, ICM Registry consulted with: established Internet businesses and service providers; industry-leading adult-content providers; intellectual-property organizations; prominent academic representatives; child protection advocacy groups; many of the COPA commissioners; First Amendment rights organizations; law-enforcement agencies; and a variety of Internet user communities. ICM Registry’s model to become the next-generation system for rating and identifying Internet content was developed by responsively analyzing the concerns and needs expressed by this broad coalition of representatives. ICM Registry continues to cooperatively enhance our proposal and to coordinate the development of policy through private-sector, bottom-up, consensus-based measures.

_____________________________________________________________________

Supplementary Information

A. NEXT-GENERATION DOMAIN-BASED RATING SYSTEM

In light of the proprietary nature of the technology developed, ICM Registry, in Section D13.2.1 of our Registry Operators Proposal, formally proposed to present ICANN with detailed information describing this advanced new service. In light of ICANN’s decision not to allow applicants to present their proposals, please find enclosed a summary providing additional information about our advanced new content-rating service.

ICM Registry proposes to create a next generation rating service. ICM Registry’s rating system will significantly expand the effectiveness of traditional rating services by both expanding their ability to secure use by adult content webmasters and by enhancing the effectiveness of traditional rating and filtering technologies.  ICM Registry’s rating service continues to be a consensus-based, industry-led strategy.

Upon registration of a .XXX domain, registrants will voluntarily select those ratings that best describe the content on their website. Policy for this new system will be led by the ICM Registry Policy Advisory Board, which will represent and the support the recommendations of both prominent adult-content representatives and the broader Internet community. Registrants will have the opportunity to make modifications to their rating simply by making changes to the relevant new fields within their .XXX domain-name record. 

The following is an example of the data fields that ICM Registry proposes be added to .XXX domain-name records at the root level:

Example of Proposed New Domain Record Fields

Field Name    Domain Field Description
Vio_Rating    Violence Rating Identifier
Nud_Rating    Nudity Rating Identifier
Sex_Rating    Sex Rating Identifier
Lan_Rating    Language Rating Identifier
Theme_Rating  Thematic Rating Identifier

Registrants will have the option to select the identifier best representing the content which appears on their website. Descriptions and structure to be further developed by the PAB.

ICM Registry’s proposed rating system will be responsive to other popular rating systems, and will work to enable them to take advantage of ICM Registry’s domain rating system.  ICM Registry will also be responsive to recommendations from individuals, companies and organizations. The Policy Advisory Board, with the leadership of the adult-content community, will work cooperatively to develop the next-generation system for rating and identifying Internet content. (See also “The Development of a Code of Conduct” below.) ICM Registry will audit Websites from time to time to ensure .XXX registrants are properly educated on the ICM Registry rating process.

ICM Registry commits that this service will be free to the end-user. ICM Registry also commits that this service will restrict First Amendment rights.

C. THE PROMOTION OF A CODE OF CONDUCT FOR THE ONLINE ADULT-CONTENT INDUSTRY
In addition to ICM Registry’s goal of developing a next-generation rating system, the company has begun discussions with industry leaders in the adult-content industry to develop an industry-led code of conduct. This code of conduct would discuss:

o Voluntary efforts to provide a standard format for front pages of commercial adult-content sites
o Voluntary efforts to adopt the most effective technologies for verifying age, and to enhance the effectiveness of these technologies.
o Voluntary efforts to comply with federal and state laws applicable to unsolicited commercial email, and not to use mass unsolicited emails likely to include addresses available to children to promote adult content. Efforts should be made to explore ways to direct commercial email to adults with standards of disclosure that the email is promoting explicit sites.
o Voluntary efforts to develop an acceptable-use policy. This will disclose to parents what safeguards and technology are available to protect them and their children.
o Voluntary efforts to avoid the use of metatags that result in adult Websites being selected by search engines in response to searches seeking information of a nonsexual nature, and to avoid the posting of search-engine responses containing sexually explicit text or graphics.
o Voluntary cooperation with Internet service providers to develop “best practices” to protect minors and to ensure First Amendment rights concerns are addressed. ICM Registry will also work to ensure legal adult content is unrestricted.
o Voluntary cooperation with international law-enforcement agencies to support their efforts to prosecute violations.

C. A NON-PROFIT COMPANY TO EDUCATE, PERFORM R&D AND PROTECT CHILDREN ONLINE.

After consulting with the other submissions for a green-space, top-level domain for children, ICM Registry has decided to withdraw its proposal to develop a non-profit .KIDS registry. As per Section E2, Volume – Description of TLD Policies, ICM Registry has decided to donate the money allocated for this initiative toward the creation of the Child Online Protection Organization (COPO), a non-profit organization. 

COPO is proposed as a nonprofit, private-sector, global corporation formed by ICM Registry and a broad coalition of the Internet's business, technical, academic and user communities. COPO is dedicated to protecting children online from harmful content, and to coordinating policy through private-sector, bottom-up, consensus-based measures.

COPO will coordinate a major educational campaign to promote public awareness of technologies and methods currently available to protect children online. It will also independently evaluate child-protection technologies and provide reports to the public, and will work with adult-content providers, filtering, blocking, monitoring companies and search engines to develop technologies that protect children without restricting the First Amendment rights of Internet users.

COPO will receive funding from ICM Registry and the private sector, including industry foundations and public-interest foundations. It will provide international Internet users with:

o An online educational campaign. COPO will fund a Website and an educational campaign to promote public awareness of technologies and methods available to protect children online. Public education will be done in a sustainable manner that effectively reaches families both online and offline. This campaign will include:
     >The importance of caregivers’ involvement in a child’s online activities.
     >The availability of both online and offline resources to assist both caregivers and children.
     >The range of available technologies that can protect children online, and the testing and assessment of these technologies.
     >Access to child-friendly sites and .KIDS domains, subject to ICANN approval.
     >A comprehensive educational site where families can obtain detailed information, report any problems, and find links to technologies and resources.
     >Access to resources, including information about law-enforcement and child-advocacy organizations.

o An independent evaluation of child-protection technologies. COPO will allocate resources for the independent evaluation of child-protection technologies and will report to the public on the capabilities of these technologies. These reports will also provide consumers with objective, well-researched information on the features, effectiveness, prices, search criteria, transparency, flexibility and ease of use of child-protection technologies.

o Research and development of technology solutions. COPO will work with adult-content providers, filtering, blocking, monitoring companies and search engines to develop technology that does not restrict Internet users’ First Amendment rights.

ICM Registry has allocated significant funding to enable COPO to perform these services, as can be seen in the chart below.

Gross contributions to COPO, ICM Registry’s non-profit organization
Time Period (Left to Right)

% (left to right)
@ 10% Confidence
@ 50% Confidence
@ 90% Confidence

Year 1 (2001) $660,000 $1,020,000 $1,530,000
Year 2 (2002) $1,440,000 $1,890,000 $3,150,000
Year 3 (2003) $1,584,000 $2,520,000 $3,780,000
Year 4 (2004) $1,584,000 $3,072,000 $4,302,000

ICM Registry proposes that COPO contributions over the four-year term of accreditation should initially be allocated as follows (subject to change from time to time by the representatives of COPO):

Initial COPO allocations for 2000-2004
Time Period
% (left to right)
@ 10% Confidence
@ 50% Confidence
@ 90% Confidence

Major education campaign
$2,634,000
$4,251,000
$6,381,000 50%

Evaluation of child-protection technologies
$790,200
$1,275,300
$1,914,300 15%

R&D of technology solutions
$1,843,800
$2,975,700
$4,466,700 35%

4-year total:
$5,268,000
$8,502,000
$12,762,000 100%

In its final report, the COPA Commission expressed concern that its lack of funding and short timetable limited its inquiry. The Commission suggested that, with additional resources, it would have provided Congress with a more in-depth and detailed evaluation of individual technologies.

ICM Registry proposes to both fund and perform some of the functions recommended in the COPA Commission’s final report. ICM Registry has developed relationships with industry-leading domain-technology partners to assist with both for-profit and non-profit technology-development initiatives. Some of these relationships include: I-DNS International, Inc.; Neteka; and Verisign Global Registry Services.  No formal arrangements have been made, but subject to ICANN’s accreditation of ICM Registry’s proposal, the company is confident that contracts can be developed and presented to ICANN in short order.

D. AN INDUSTRY-LED POLICY ADVISORY BOARD (PAB)
As per our letter of November 3, 2000, to Lisa Polanski, ICM Registry has proposed to contribute US$4.00 per .XXX domain registration exclusively to supplement legal fees and support costs associated with its Policy Advisory Board. ICM Registry anticipates the following legal and policy contributions over the term of the company’s accreditation:

New .XXX Domain Name Registrations

% (left to right)
@10% Confidence
@50% Confidence
@90% Confidence

Time Period
Year 1 (2001) 110,000 170,000 255,000
Year 2 (2002) 240,000 315,000 525,000
Year 3 (2003) 264,000 420,000 630,000
Year 4 (2004) 264,000 512,000 717,000

Gross new contributions to legal fees and the PAB
Time Period (left to right)
%
@ 10% Confidence
@ 50% Confidence
@ 90% Confidence

Year 1 (2001) $440,000 $680,000 $1,020,000
Year 2 (2002) $960,000 $1,260,000 $2,100,000
Year 3 (2003) $1,056,000 $1,680,000 $2,520,000
Year 4 (2004) $1,056,000 $2,048,000 $2,868,000

ICM Registry proposes that contributions to legal fees over the four-year term of accreditation should be allocated as follows:

Initial legal fee and PAB allocations for 2000-2004
%
@ 10% Confidence
@ 50% Confidence
@ 90% Confidence

PAB general & administrative
$351,200
$566,800
$850,800 10%
Indemnification and mark-protection related legal fees
$2,107,20
$3,400,800
$5,104,800 60%
First Amendment rights-protection related fees
$1,053,600
$1,700,400
$2,552,400 30%
4-year total:
$3,512,000
$5,668,000
$8,508,000 100%

E. AN EFFECTIVE "PROOF OF CONCEPT”

ICM Registry’s .XXX will become an effective proof of concept because the company will continue to work to develop consensus between the diverse representatives involved in this process.

ICM Registry is also exploring ways to provide not only additional legal protection but also additional advantages to becoming a .XXX registrant. These advantages include:

· The availability of new domain names. New names offer new opportunities to generate traffic and revenue.
· Enhanced search-engine capabilities. It is likely that search engines will modify existing search algorithms, allowing priority placement in connection with adult-content-related searches.
· Potential for litigation and disputes is minimized. ICM Registry will actively lobby for affirmative defenses on behalf of all .XXX registrants. This affirmative-defense strategy is intended to give .XXX registrants added protection from legal action for the distribution of adult-oriented content. By securing a .XXX registration and abiding by a mutually agreed-upon code of conduct, adult-content Webmasters can argue that they have taken reasonable steps to inform and protect minors from accessing adult content online.
· Brand promotion & development. .XXX domains are easier to brand and remember, since there is universal recognition of the goods and services associated with this letter string.
· Adult content will be categorized, not segregated. .XXX will be a voluntary registration service.
· Consensus policy-development. Registrants will have an opportunity to participate in the development of registration policy and procedures to best represent their needs. 
· Recognition for their non-profit contribution. A significant portion of registration fees will go to fund COPO.

F. A STRONG TECHNICAL AND FINANCIALLY COMPLETE PROPOSAL
ICM Registry’s senior management is recognized for its technical and political expertise. As trusted and responsible representatives within the ICANN process, the team members have been actively involved in the consensus-building process since 1997.  ICM Registry has secured industry-leading registry-service providers, supporting-application service-provider and a variety of value-added sub-contractors which include industry-leading domain-name research and development partners. These companies include: .TV Corporation International; Exodus; Verisign Gobal Registry Services; DMR Consulting; i-dns Corporation; and Neteka.
G. A STRONG IP PROTECTION AND SUNRISE STRATEGY
According to ICANN’s Intellectual Property Constituency (IPC) report on proposed TLDs, ICM Registry’s .XXX proposal tied with three other proposals as having the strongest strategy to protect the rights of others, including both common-law and trademark intellectual-property rights, especially during the start-up phases.
H. ENHANCED COMPETITION FOR REGISTRATION SERVICES
ICM Registry’s proposal will enhance competition for registration services at the registry and registrar levels through the expansion of our new adult-oriented domain-registration services.

ICM Registry continues to cooperatively enhance our proposal and to coordinate the development of policy through private-sector, bottom-up, consensus-based measures.
Our proposal was the only proposal that seriously addresses one of the most serious problems on the Internet today-the protection of children from adult-oriented content. 
ICM Registry continues to work with the broader Internet community to generate consensus.  

Sincerely,


Jason Hendeles
ICM Registry, Inc.


cc:
Louis Touton, Esq., ICANN
Lisa Polanski, ICANN
Charles J. Neuhauser, Ph.D.
Dr. Peter Reiher
Robert Olson
David Nolte, Arthur Andersen LLP
J.D. Tengberg, Arthur Andersen LLP
Tom MacKinney, Arthur Andersen LLP
John Funk, Jones, Day, Reavis & Pogue
Paul Goldean, Jones, Day, Reavis & Pogue
Michael D. Palage, Vice President Policy, ICM Registry, Inc.
Jose I. Rojas, Holland & Knight LLP
Derek A. Newman, Newman & Newman, LLP     

 

Link: The Internet Content Management Registry


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