YNOT EUROPE – The Is are dotted, the Ts are crossed and the contract making sponsored Top Level Domain dot-xxx a reality has been signed by representatives of the Internet Corporation for Assigned and Numbers and registrar ICM Registry. Now the fun begins in earnest.

ICM and ICANN signed the registry agreement March 30 and 31, respectively. According to the agreement, ICM must make public the identities of an ombudsman and members of both the board of directors for the International Foundation for Online Responsibility and IFFOR’s Policy Council within 30 days. In addition, the board and council must host their first meetings before May 1. Also by May 1, ICM is contractually obligated to formalize the procedure for registering dot-xxx domains, including costs, and relay that information to ICANN-accredited registrars, though the integration of registrars with ICM’s system is not expected to begin until July.

In the meantime, according to the contract, ICM has 60 days to publish the procedures it will use to authenticate and verify domain-registration applications, as well as to implement the system on a pre-launch basis. Additionally, ICM must set in motion a Start Up Trademark Opposition Process (STOP) designed to prevent the abuse of intellectual property.

By July 1, ICM must publish a report about its progress pursuant to satisfying contractual conditions, as well as formalize and publish a policy regarding country names and geographical designators.

If all goes as ICM expects, dot-xxx will be operational as its own internet zone sometime during the third quarter of 2011, but ICM Chief Executive Officer Stuart Lawley told YNOT Europe he expects the first dot-xxx domains to go live on the web in June. The initial domains will be industry portals established by Founders Program participants, he said.

“The longest [potential] delay will be integrating the [domain] registrars and getting their extensible provisioning protocol systems working,” Lawley told YNOT Europe on Monday. “Some have a 90-plus-day development schedule; others have been working for the past 60 days. We want a broad range of registrars available to registrants around the world when the various sunrise periods open. Remember: All the names have to be registered through ICANN-[accredited] registrars, not directly through ICM.

“Founders Program domains don’t have to go through the sunriseprocesses, so literally as soon as the registrars are connected, [registrants] could register their names and get sites up,” he added.

As noted by ICANN General Counsel and Secretary John Jeffrey, the contract to administer dot-xxx contains provisions not found in other registrar agreements. Some of them arose after the most recent publically available draft agreement, posted to ICANN’s website in August 2010.

“There is a new requirement for ICM to provide a compliance certification signed by the ICM CEO twice in the first year and annually after that, along with a summary of IFFOR’s audit of ICM’s compliance procedures…,” Jeffrey wrote on the ICANN blog.

Part of the foundation for dot-xxx ostensibly is a “reliability” rating of sorts. According to supporting documents, dot-xxx domain proprietors will be held to yet-to-be-formalized standards for content and business ethics. By requiring IFFOR to audit ICM’s compliance with IFFOR guidelines and ICANN regulations, ICANN’s board retains a certain amount of authority over how dot-xxx businesses operate while at the same time distancing itself from the sorts of content regulation expressly forbidden by ICANN’s bylaws.

“In the event that ICM was not in compliance additional processes have been added, including a new mediation procedure has been added that would follow cooperative engagement and precede arbitration,” Jeffrey wrote on the blog. “There have been some changes to the basic structure of remedies for ICANN. The requirement that ICANN obtain at least three arbitration awards before requesting punitive or exemplary damages has been removed. In the event that a dispute can’t be resolved through mediation, ICANN may impose monetary or operational sanctions, and ICM may challenge them through arbitration.

“Revised indemnification procedures will allow ICANN to manage any third party dispute proceedings at ICM’s expense,” he continued. “ICM’s consent would be required for ICANN to settle a proceeding in a way that requires ICM to pay monetary damages, and ICANN would be required to work in good faith to mitigate ICM’s expenses.”

In addition, with dot-xxx ICANN took the unprecedented step of selectively increasing its transaction fee on each domain registered. In all other domain spaces, ICANN receives $1 per domain; for dot-xxx, ICANN will receive $2 per domain. The doubled registration fee was instituted “to account for anticipated risks and compliance activities,” Jeffrey noted. A “fee escalator” also is built into the contract to allow increases, apparently at will or to account for inflation.

Two days after the contract was signed, ICM representatives Vaughn Liley and Greg Dumas appeared among the panelists during a dot-xxx discussion at webmaster gathering Phoenix Forum. According to Connor Young, president of YNOTeurope.com’s parent company, the environment was not exactly hospitable.

“I was really pleased to see so many people turn out for the panel,” he said. “It’s no secret I think the whole existence of dot-xxx is a serious danger to the industry, and I’m glad people showed up to learn more about this important topic. Those in the audience who spoke up were almost exclusively opposed to dot-xxx, so it wasn’t a friendly environment for ICM Registry and [paid consultant] Greg Dumas, but they hung in there and took the hits. Chris Miller from Wildline was also on the panel in a pro-ICM capacity, but he didn’t say a whole lot.”

Young and other observers noted Liley, an ICM director, seemed blindsided by some questions from the audience. Although he reportedly fumbled for a few answers, he was able to assure the audience ICM Registry has logged 800,000 domain preregistrations.

Nevertheless, “we did some great business at the Phoenix Forum,” Lawley told YNOT on Monday.

Still, those who oppose dot-xxx as a concept remain unabashedly outspoken.

“The problem that ICM Registry has in trying to market these domains to an unwilling industry is the lack of benefit, perceived or otherwise,” Young said. “Of those who are considering registering domains, almost all cited trademark protection concerns for their leaning. Several people told me [during Phoenix Forum] they thought the whole thing felt like legal blackmail. Although I opened questions by asking ICM if they could point to any benefits to registering .XXX domains that might counter the large list of potential nightmares, I don’t remember any tangible benefits being explained — other than, of course, brand protection, which brings us back to the concerns of legal blackmail.”

Despite some last-minute shifting in panelists for the Phoenix Forum seminar — in addition to those previously mentioned, the final panel included moderator Colin Rowntree (Wasteland.com), Pink Visual President Allison Vivas, MiKandi’s Chris Lewicki, AVN Senior Editor Tom Hymes, and Free Speech Coalition Chairman and attorney Jeffrey Douglas — the rousing discussion was beneficial for attendees and the industry as a whole, Young opined.

“Panels like these are really important now because dot-xxx is a reality, and companies need to get educated about the issues they should consider when deciding whether or not to register a dot-xxx domain name,” he said. “The consequences of participating in this sTLD will be unique.

“I have to signal my deepest respect for Colin Rountree from Wasteland.com, who moderated,” Young added. “He did a remarkable job of keeping the discussion moving forward and was mostly successful at keeping the torches and pitchforks from completely taking over. He was funny at the right time, he knew the topic well and he moved the discussion around.”