ICANN general counsel John Jeffrey told the board it will likely vote to approve .XXX subject to due diligence on ICM Registry's financial and technical capabilities.
The board is looking to approve the application conditional on review of committee advice and sponsorship community.
The .XXX proposal has many in the online adult industry worried that it would amount to the creation of a red light district on the Internet.
Diane Duke, the Free Speech Coalition's executive director, said ICM's initiative could end up setting policies that harm its businesses. Duke is in Brussels to lobby against .XXX.
"ICM still has a long way to go," Duke told XBIZ. "It is not a surprise that ICANN accepted the findings of the independent-review panel. This was ICANN’s first IRP process and to not accept its findings would call the entire process into question.
"From what I heard today, the conditions that ICANN put in place to approve ICM’s application included taking into account GAC’s position — solidly opposed in 2007 — and that the application still meets the sponsorship requirements today," she said.
"These are obstacles that ICM will have a very difficult time overcoming."
But ICM Registry CEO Stuart Lawley, in a letter on his company's website, has remained optimistic over the possibility of .XXX coming into fruition.
"While most Internet extensions are used for just about everything you can imagine, .XXX will be focused on providing an online home for those members of the adult industry who wish to self-identify and responsibly self-regulate," he said in the letter. "We are excited about the idea — and we know you will be too."
Lawley told XBIZ that Jeffrey focused on previous decisions by ICANN over .XXX and "that [ICANN] was going to accept the panels findings that we had met the criteria in June 2005 and the board were wrong to overturn that decision in 2007.
"He proposes they will perform some perfunctary due diligence to make sure ICM is still current and then present a new contract to the board for signing," he said.
In March, ICANN delayed a vote on ICM's proposal to sell .XXX domain names and directed its general counsel and chief executive to seek public comment.
ICANN received thousands of entries from adult companies and other stakeholders, as well as the general public. Most posted items against the implementation of .XXX.
Earlier in the year, dispute-resolution judges, 2-1, ruled in favor of ICM agreeing that ICANN's decision to nix .XXX were arbitrary.
ICM Registry's proposal would make it the gatekeeper for the sTLD, requiring it to monitor registrant compliance with content site-labeling requirements.
.XXX would be dedicated exclusively to adult content and could be used by some states as a means to force all unwanted or illegal content to migrate to that sTLD that could then be easily monitored or filtered.
ICM’s plan also would require a set of “best practices” to protect children online and fund the International Foundation for Online Responsibility, an independent organization ICM has said it would create if approved.
ICM pledges to donate $10 of the proposed annual fee of $60 for a .XXX domain name to child-protection groups and require users of .XXX to label their content.
Lawley said that there's a "detailed rollout procedure" included in the draft contract that would allow the sTLD to begin selling names after 180-210 days if it is approved.
