Red-Light District
Plan for Adult Area
Sparks a Fight
On Control of Web
Dot-XXX Proposal Focuses
Global Ire on U.S. Role;
Is Regulator Independent?
Pressure From Conservatives
By CHRISTOPHER RHOADS
May 10, 2006; Page A1
JUPITER, Fla. -- Stuart Lawley wants to create a new Internet neighborhood for the adult-entertainment industry: dot-xxx. The 43-year-old British entrepreneur believes the new three-letter ending for Web-site addresses would help protect children from online pornography, by making it easier to filter such material. He also hopes to make a pile of money by collecting fees for registering dot-xxx sites.
The matter, which could be voted on as early as today by the organization that governs domain names, has triggered a rancorous global debate involving freedom-of-speech advocates, child-protection groups, adult-content providers, foreign governments and conservative Christian groups.
Mr. Lawley's proposal also raises thorny issues for the U.S. government, which funded the creation of the Internet and has long played a behind-the-scenes role in running it. As the Internet grows as a place of business and a forum for exchanging ideas, some have argued that it shouldn't be dominated by any one country. That discontent has prompted a few countries and regions to begin breaking away and forming their own Internet-like computer networks -- a threat to the universality that makes the Internet such a powerful tool.
The Commerce Department has expressed reservations about the dot-xxx measure, amid a flood of email from conservative groups, according to internal government documents reviewed by The Wall Street Journal. In one document, the department made clear that it could block the proposal if the domain-name organization, called the Internet Corporation for Assigned Names and Numbers, or Icann, approves it. As a result of the concerns, Icann has postponed several scheduled votes since last August.
The Commerce Department says it wanted to make sure that Icann had received input from all interested parties.
"We expected an objective process," says Mr. Lawley, in the living room of his opulent, Mediterranean-style home on the waterfront here. "So we found it bizarre that the Commerce Department would want to get involved in the minutiae of a single contract."
Commerce established Icann in 1998 as a way to formalize the approval of new domain-name suffixes and other technical procedures that keep the Internet running. The majority of its board members are non-American. The department has usually been careful not to meddle publicly with Icann, a nonprofit group based in Marina del Rey, Calif.
But as Internet use has exploded around the globe in recent years, carrying more than $2 trillion in annual commerce, discontent among other governments over the U.S.'s influence has grown. Now the dot-xxx case is becoming a flashpoint for that criticism.
"Icann exists to make technical decisions about the Internet," says Martin Selmayr, an official in the European Commission office that oversees Internet and telecom matters. "It's unacceptable to make the question of whether to approve a domain address a political decision, based on the government of the day."
Not Giving Up Oversight
Last June, the Commerce Department signaled it had no intention of giving up its oversight of Icann, a statement that angered countries expecting Commerce to sever its ties. That question will come to a head soon, since Commerce's memorandum of understanding that established Icann is up for renewal by the department in September.
Web-address suffixes weren't expected to draw so much controversy. They were created to make navigating the Internet easier. In addition to more than 240 two-letter suffixes for countries, such as dot-de for Germany, there are 18 three-letter names for general uses like dot-com and dot-edu for educational institutions.
The dot-xxx saga started six years ago when Icann set out to create more suffixes. It wanted to spark more competition among domain-name operators. Each operator collects annual fees from users who register a Web-site address with that suffix.
The process attracted 47 applicants, including a 29-year-old Canadian named Jason Hendeles, who proposed dot-xxx. It cost $50,000 to apply, but running a popular domain name can be lucrative. Verisign Inc. makes hundreds of millions of dollars from managing the dot-com and dot-net domains.
A member of a wealthy Canadian real-estate family whose mother is a well-known modern-art collector in Toronto, Mr. Hendeles says he spent around $200,000 on the effort.
Ultimately, Icann opted for less controversial options, approving dot-biz, dot-museum and dot-aero, among others. The board's main criteria boiled down to whether there was a perceived need for each name.
By the time Mr. Lawley arrived on the scene in 2003, Mr. Hendeles's company, ICM Registry Inc., was "in hibernation," says Mr. Lawley.
After graduating from college in the U.K. in 1985, Mr. Lawley started a company that sold fax machines to small and medium-size businesses. He sold the company in 1997 but soon jumped back into business, helping his old fax customers get onto the Web. He took his new company, Oneview.net, public.
As the Internet boom turned to bust, he sold Oneview to Freecom.net Ltd., which subsequently accused Mr. Lawley of inflating the number of his customers. Mr. Lawley and other senior executives resigned from the newly merged company and agreed to pay back stock valued at about $8.5 million. Mr. Lawley says the disagreement over the numbers stemmed from Oneview's having more than one account with a given customer, and counting those as multiple accounts, while Freecom considered them a single account.
Mr. Lawley says he has never had any connection to the porn world. He says he got interested in domain names in 2003 at his son's school in Florida, when he met a parent involved in Icann affairs. Soon he came upon the dot-xxx file at Icann and gave Mr. Hendeles a call. They agreed to revive ICM and give dot-xxx another try.
The timing was good, since Icann was about to launch a new batch of suffixes.
Mr. Lawley says he wanted the ICM proposal to address concerns about online pornography, an industry that generates an estimated $1 billion to $5 billion a year in revenue. ICM has pledged to donate $10 of the proposed annual fee of $60 for a dot-xxx domain name to child-protection groups and to require users of dot-xxx to label their content.
ICM has also proposed establishing a foundation that would engage interested parties in a dialogue about online pornography. ICM now consists of four people, including Messrs. Lawley and Hendeles, who between them made 90% of the investment in the company.
In June of last year, the Icann board agreed to enter contract negotiations with ICM. Mr. Lawley thought the effort, which had cost about $2.4 million, was close to paying off.
Then, conservative groups jumped into the fray. The Family Research Council and Concerned Women for America implored supporters to write to the Commerce Department to oppose dot-xxx. They argue, among other things, that the concept legitimizes online pornography. Because it doesn't require adult-content providers to move their material from their dot-com sites to dot-xxx sites, the step just adds pornography to the Internet, they say.
"The porn industry is constantly preying on the eyes of our children," says Charmaine Yoest, a spokeswoman for the Family Research Council. "This would only double porn holdings on the Internet."
Through mid-June, Commerce Department staffers tracked incoming emails on the subject with increasing alarm, the internal government documents show.
'Who Really Matters'
On June 16, in an internal email, a Commerce official said the administration needed to make it clear to conservative Christian groups that the White House shared their opposition to dot-xxx.
"Who really matters in this mess is Jim Dobson," wrote Fred Schwien, the executive secretary to Commerce Secretary Carlos Gutierrez, according to the documents reviewed by the Journal. Mr. Dobson is an evangelical Christian who hosts a highly influential daily radio show called "Focus on the Family."
"My suggestion is that someone from the White House ought to call him ASAP and explain the situation, including that the White House doesn't support the porn industry in any way, shape, or form, including giving them their own domain name," Mr. Schwien wrote, according to the documents.
Mr. Schwien declined to comment. A Commerce Department spokesman says Mr. Schwien was not involved in policy discussions on this issue within the department.
Mr. Dobson couldn't be reached for comment.
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