Read the full letter here.
Reasons include:
"...the GAC would like to inform the ICANN Board that an introduction of a .XXX TLD into the root might lead to steps taken by some governments to prohibit access to this TLD. The GAC therefore calls the Board's attention to concerns expressed by experts that such steps bear a potential risk/threat to the universal resolvability and stability of the DNS.
Moreover:
* The GAC does not consider the information provided by the Board to have answered the GAC concerns as to whether the ICM application meets the sponsorship criteria.
* The GAC further shares concerns expressed by others that with the revised proposed ICANN-ICM Registry agreement, the Corporation could be moving towards assuming an ongoing management and oversight role regarding internet content, which could be incinsistent with its technical mandate."
Comment