ICANN, the '.xxx' debate, and antitrust: the adult Internet industry's next challenge.

• Author: Cambria, Paul J., Jr.
• Position: International Corp. for Assigned Names and Numbers

INTRODUCTION

Our republic has prospered on the principle that the government should not repress a particular subject matter or unduly impede legally compliant commerce. No medium of communication has epitomized this ideal more than the Internet. Therein, a myriad of ideas and businesses have flourished, available to the public at the click of a mouse. This Article will focus not on regulation by traditional governmental authority, but rather from a private organization authorized to administer the vast Internet domain name system (DNS).

This organization, the International Corporation for Assigned Names and Numbers (ICANN), has now used its authority to promulgate new rules for assigning generic top-level domain names (TLDs) in a manner that targets the lucrative adult web industry through the creation of an ".xxx" TLD.

ICANN's conduct could ultimately place tremendous strain on both the adult Internet market and the marketplace of ideas generally. These actions demonstrate a willingness by ICANN and registries authorized to promulgate their terms and conditions to impose content-based restrictions on speech on a particularly vulnerable subject matter.

Accordingly, this Article will discuss the impact that this recent ICANN initiative has had on domain name expression, as well as its overbroad regulation of even implied child pornography. It will posit that the implicitly coercive imposition of an .xxx domain name on the adult online industry will unjustifiably curtail its ability to compete in the relevant product marketplace. In addition, this Article will propose that the contractual provisions offered by ICM Registry LLC (ICM), the registry assigned to carry out ICANN's mandate, impose restrictive policies that have been designed solely to bolster ICM's market power while curtailing a particular segment of protected market activity. Both of these scenarios may constitute a violation of the Sherman Antitrust Act.

1. THE HISTORY OF ICANN

   Every website on the Internet is assigned a specific Internet Protocol Number (IPN) designed to provide "identifying information that ... allows a request for a web page to reach the right computer across the Internet." (1) Since remembering a long string of numbers would be particularly difficult for most consumers, alphanumeric domain names (ADNs) consisting of a TLD (e.g., .com, .net, etc.) and a "second level domain" (SLD) (e.g., the "ACME" in ACME.com) were introduced. (2)

   The most restrictive component of this alphanumeric domain name is the TLD. Making a change to this system requires accessing a host computer and entering a certain combination and IP address in its database that will allow for automatic translation when an Internet user enters a specific domain-name registration. (3) Accordingly, the entity that controls the "host computer" has the power to determine which TLDs are available on the Internet, and which registry's database will be considered the authoritative source of information concerning those TLDs. (4)

   ICANN obtained sole control over this computer through a series of events beginning in 1997. As it became apparent that the Internet was a viable resource for both commerce and expression, mounting pressure from both trademark holders and foreign governments over the degree of control that the United States possessed over this increasingly critical element of global commtmication (5) led our government to consider privatization of the DNS as vital to the continued growth of the Internet. As a result, on July 1, 1997, the Clinton Administration authorized the Secretary of Commerce "to privatize the [DNS] in a manner that increases competition and facilitates international competition in its management." (6)

   ICANN subsequently incorporated as a nonprofit and entered into a Memorandum of Understanding with the Department of Commerce on November 25, 1998, beginning the transfer of Internet governance from federal to ICANN control. (7) This was subject to agreements designed to promote "the stability of the Internet; competition; private, bottom-up coordination; and representation." (8) At the initial stage of development, ICANN acquired significant authority over the technical administration of the DNS, with ultimate oversight and final authority over the changes to the top-level domains remaining with the government. (9)

   Over the years, this understanding saw substantial modification, gradually diminishing the federal government's authoritative role in the governance of the legacy root file. (10) This led to the September 30, 2009 signing of an "affirmation of commitments" that completed the transition of privatizing the Internet DNS. (11) While the United States retains a role as an advisor, the "affirmation" effectively stripped the government of its last vestiges of legal control over the technical administration of the Internet. Simply put, this transformed ICANN into the sole stakeholder over what is the most important technical and communicative medium in the world today.

2. CREATION OF ".XXX"

   ICANN has the authority to enter into contractual arrangements with independent entities to operate and maintain domain name registries (12) for a particular TLD. (13) As early as 2000, bids were submitted from registries to implement a TLD specifically tailored for use by the adult web industry. (14) One of the more active solicitors was ICM Registry.

   ICANN, at first reluctant to implement the new TLD, voted down an initial proposal from ICM on March 30, 2007 because of logistical issues. (15) However, in June 2010, ICANN's Board voted to restart the process, and began to analyze the ramifications of implementing the proposed .xxx TLD. (16)

   Notably, in reviewing ICM's application, ICANN had sought guidance through both public comment and the Governmental Advisory Committee ("GAC"). (17) The public comment period produced close to seven hundred comments, with most comments being in opposition to the new TLD. (18) A majority of those in opposition voiced concerns that certain entities, both public and private, would block the new TLD. (19) While not rejecting it outright, the GAC declined to fully endorse the new TLD. (20)

   Despite not having full GAC support, and despite the GAC's concerns that "[ICANN] could be moving towards assuming an ongoing management and oversight role regarding Internet content," (21) in March 2011 ICANN's Board, maintaining that its procedures and protocols would mitigate any content-based regulation of the Internet, (22) authorized an agreement with ICM for the operation of the .xxx TLD. Under the current arrangement, adult content providers who fail to register with ICM will lose their trademarks, which will then be free for the taking by the highest bidder. This has the effect of coercing trademark holders to "pay ICM to defensively protect their marks," which has created substantial concern for adult-oriented trademark holders. (23)

   Notwithstanding its public comments, ICANN has strayed from its mandate of being a technical administrator and, as more fully explained below, has indeed become a content-based regulator. Moreover, while utilization of an .xxx TLD is, at least in theory, voluntary, ICANN and ICM continue in an aggressive campaign to encourage adult web providers to switch over to .xxx., (24) selling it as a safer alternative to a generic TLD. (25) In fact, a closer examination reveals the .xxx project to be replete with procedural pitfalls that will likely have damaging effects on the adult website market, which in turn will likely impede other channels of the adult entertainment industry.

3. DOMAIN NAME EXPRESSION AND THE MARKETPLACE

   1. Introduction

      At first blush, a domain name address may appear to fall outside the realm of protected expression, its primary function being to act as an index for reaching an Internet destination. Indeed, some have likened a domain name address to a phone number or mailing address. The comparison is a fair one, as initially the final three letters of an Internet address (i.e., the TLD [e.g., .com, .net, etc.]) were rather generic, appearing to express nothing at all. Yet even the later-introduced, more "descriptive" TLDs do not express much. For example, .gov conveys nothing more than a vague representation of governmental affiliation, .org some ambiguous not-for-profit use, and .biz use by a business.

      In years past courts have held that TLDs (such as .com, .net, etc.) do not constitute protected speech under the First Amendment. (26) However, the possibility that new TLDs could indeed amount to protected speech was never expressly rejected. In fact, as the Second Circuit noted, the time may come when new TLDs could be used for "an expressive purpose such as commentary, parody, news reporting or criticism, comprising communicative messages by the author and/or operator of the website in order to influence the public's decision to visit that website, or even to disseminate a particular point of view." (27)

      The advent of the .xxx TLD means the time when top level domains serve an expressive purpose has arrived. The reign of the benign suffixes ends with .xxx. Indeed, the letters "XXX" express one thing, and one thing only, to the public: pornography. (28) This is a critical distinction because the way in which an adult web site is presented to the consuming public is an important business decision, as web site consumers may be less likely to visit an .xxx site if they believe that the government is apt to monitor it. (29) Thus, it is reasonable to conclude that a rule strong-arming content providers into using a .xxx label improperly constrains their ability to conduct perfectly legitimate business as they see fit, business regarding a crucial forum for the adult entertainment industry: the Internet.

   2. Functionality v. Expression

      While "[a] significant purpose of a domain name is to identify the entity that owns the web site," (30) domain names are more than mere addresses...