LUXEMBOURG — Adult entertainment conglomerate Manwin posted today comments on ICANN's new generic top-level domains forum objecting to ICM Registry's applications for the proposed .porn, .sex, and .adult TLDs.
Manwin, currently in ligation with ICM and ICANN over the .XXX TLD, said that if ICM Registry were to be granted the gTLDs, it would hold a monopolize the online adult biz and create "deadweight" costs. ICM Registry started selling .XXX domain names last December.
Manwin's comments, first reported on TheDomains.com, mirror the Free Speech Coalition's comments made on Monday.
The FSC's Diane Duke rallied against ICM Registry's applications, saying that the adult entertainment trade group has "profound concerns" about freedom of expression on the Internet.
Here are Manwin's comments on ICM Registry's .Porn, .Sex and .Adult applications:
Manwin objects to the application for the proposed .porn, .sex, and .adult TLDs.
The adult entertainment community overwhelmingly opposes new TLDs connoting or intended for adult content. There is already plenty of opportunity for creating, and robust competition among, adult websites in existing TLDs; no one can argue that there is a lack of adult internet content or that new adult sites are not readily established. While there is thus no benefit to the proposed TLDs, they pose a serious risk of censorship. The availability of exclusively adult-content TLDs encourages legislative measures (of the kind promoted in the past) requiring that adult content reside only on such TLDs, making blocking/censoring adult content much easier.
Also, the new TLDs would impose large and unnecessary “deadweight” costs on adult and non-adult businesses alike.”
Businesses would be forced to purchase “defensive” or “blocking” registrations to prevent cybersquatting and other misuses of their trademarks, domain names and other intellectual property in these TLDs. The need for such defensive registrations is particularly acute in adult content TLDs. Non-adult businesses want to avoid association with such TLDs. Adult businesses face serious risks that their brands will be diluted by others using their names in TLDs intended for precisely the kind of adult content these businesses already distribute.
The deadweight defensive registration costs such TLDs would impose will be exacerbated by the lack of competition for the registry contracts at issue. Whoever is awarded these TLDs will, if permitted, charge supra-competitive prices for defensive and other registrations. ICANN’s Bylaws require ICANN to “depend on market mechanisms to promote and sustain a competitive environment.” Only competition among potential registries, or appropriate price caps, will prevent price gouging by these new TLDs.
All but one of the applicants for these adult TLDs are subsidiaries of ICM Registry, LLC, the operator of the .XXX registry. It has been widely reported that ICM has sought approval of adult TLDs particularly to exploit the need (and to charge unreasonable monopoly prices) for defensive registrations in such TLDs. See, e.g., Terry Baynes, Businesses in U.S. complain of .xxx shakedown, Reuters, August 15, 2011. ICM should not be permitted to do so again.
New adult TLDs will increase the likelihood that ICM and its subsidiaries will monopolize adult-content websites. This could occur not only through legislative efforts but through “network” effects. (Under this well-known economic phenomenon, users expecting to find adult content on sites with adult TLDs will migrate to those TLDs, attracting more adult providers, drawing more users, and so on — eventually resulting in monopoly.)
Based on ICM’s conduct to date, ICANN should not trust ICM to operate such a monopoly. The potential for such a monopoly makes competition and/or price caps particularly important for any adult TLDs.
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