YNOT – ICM Registry LLC President Stuart Lawley is a patient man. He has waited seven years for ICANN to breathe life into the dot-xxx sponsored Top-Level Domain ICM wants to manage.And seven years is long enough, he said Thursday in a letter to the chairman of the board of directors for the International Corporation for Assigned Names and Numbers. In essence, the firm-but-polite missive warned ICANN further stalling by the internet’s governing body may lead to unpleasant legal repercussions.

“…[I]t is now incumbent on ICANN to move expeditiously to execute a registry agreement with ICM for operation of the [dot-xxx] Top-Level Domain…,” Lawley wrote to ICANN Chairman Peter Dengate-Thrush. “ICM Registry stands ready to execute the registry agreement that was the product of extensive negotiation between ICM Registry and ICANN staff in early 2007…. [W]ith respect, I hope you will understand that we must protect our rights if it appears that our efforts to work in partnership with ICANN are failing, once again, to bear fruit.”

Lawley’s letter followed by one week an independent arbitration panel’s decision saying ICANN violated its own bylaws when the board withdrew approval for dot-xxx and declared ICM’s registrar application dead in March 2007. In the arbiters’ view, ICANN erred when it allowed reconsideration of the so-called “sponsoring community” to derail contract negotiations that began after the board granted preliminary approval in June 2005. Because ICM met or exceeded all of ICANN’s established criteria for sTLDs at the time, the arbiters directed ICANN to complete the contract negotiation process and make the domain live.

On Friday, Lawley said he expects ICANN to do exactly that — now, not at some nebulous point in the future. Lawley anticipates ICANN and ICM signing the fifth version of the domain-registrar contract — for all intents and purposes complete for three years, save for the signatures — when the organization meets March 7-12 in Nairobi, Kenya.

After that, Lawley said he expects dot-xxx to be live within 180-210 days … by the end of the year, for certain. The project’s history to date has convinced him ICANN would be unwise to put up too energetic a fight.

“As infuriating as all of this has been, we have really played by ICANN’s rules to the letter,” he said.

Earlier this week, ICANN President Rod Beckstrom avowed the board will “consider” dot-xxx, “despite the previous considerable stakeholder and public opposition to its approval.” Some have taken that as an indication ICANN may drag its feet out of reluctance to provoke another uproar like the one that derailed dot-xxx in the first place. After the board’s 2005 approval, not only did the adult entertainment industry begin to question the potential for censorship and “ghettoization” of adult content under dot-xxx, but ICANN’s own Governmental Advisory Committee and the governments of several nations spoke against the proliferation of “obscenity” they expected would result following the creation of a “porn channel” on the internet.

No one wants to see that happen again, least of all Lawley, who said 102,000 dot-xxx domains have been pre-registered at no cost. It is unclear how many of those domains’ owner-hopefuls will go on to complete registration, but even if every one of them brings in the projected $60 annual registration fee, the total of $6.12 million in revenue would not match the more than $7 million Lawley said he spent in moving ICM’s case through arbitration at the International Centre for Dispute Resolution. In all, he said he has spent about $9.5 million in pursuit of approval for dot-xxx. Much of the money came from the personal fortune he invested in ICM Registry after selling several mainstream dot-com-era startups.

And, he noted wryly, the economic climate in 2010 is much less vibrant than it was in 2006, when ICM’s business plan projected dot-xxx would launch.

However, as indefatigable as ever, Lawley said he believes eventually even dot-xxx’s detractors will understand sTLD is not some modern-day digital incarnation of the bogey man. There are benefits to be gained for the adult entertainment industry and the internet at large, he said.

“The potential benefits are even more attractive today than they were in 2006,” he said. “For those willing to step forward and self-identify and self-regulate, collective bargaining [with financial institutions and search engines, for example] will be quite powerful.”

As he has from the beginning, Lawley continues to maintain ICM Registry will not allow dot-xxx to become mandatory. In addition, the registry will be obligated by its contract with ICANN to be “run for the benefit of the sponsoring community.” Consequently, Lawley said, potential domain registrants will be required to prove they are members of the adult entertainment community—not, for example, virtual real estate speculators. Dot-xxx domains will be required to adhere to a code of conduct established by the community of dot-xxx domain owners, who also must adhere to laws governing the jurisdictions in which they operate. Sites in the dot-xxx space must be labeled for their own protection and the protection of folks who would rather not stumble upon online porn, no matter how carelessly they surf.

In exchange, Lawley said, dot-xxx domain owners reasonably can expect to “get more eyeballs on their sites and get more surfers to spend money, because consumers will feel more secure about the people with whom they are doing business.” With a unified voice, dot-xxx domain owners will be able to demand fairer treatment from search engines and financial processors. In fact, Lawley said, he envisions a scenario in which dot-xxx domains will be able to deal with a bank established specifically to meet their needs, perhaps via a PayPal-like system that would provide an additional layer of anonymity and security for both consumers and adult businesses. Such an entity would be able to do away with chargebacks and offer processing fees that are much lower than the “ridiculously high credit card rates under which the industry labors currently.”

In the final analysis, Lawley said, “[ICM and I] are committed to reliability, predictability, openness, transparency and accountability—just like ICANN’s charter says it is. Being in the adult industry, we will be subject to far greater scrutiny by everyone.

“Dot-xxx will only succeed if I deliver for the [sponsoring] community tangible benefits,” he added.” I have a window of two or three years to deliver on the community’s hopes and expectations. If I fail, the whole thing goes away.”