PALM BEACH, Fla. — ICM Registry’s Stuart Lawley [pictured] is hopeful that his top-level domain .XXX proposal will get a green light through arbitration.

Lawley, who is chairman and president of ICM Registry, told XBIZ Monday night that his company’s chance of winning an appeal using an independent review panel isn’t out of reach.

So far, ICM Registry has filed numerous briefs to back up its case for .XXX, totaling about 1,000 pages.

“Its a long but good read,” said Lawley, who just got back from Mexico City, where ICANN held its 34th meeting amongst 1,200 attendees from 100 different countries.

If the dispute resolution panel rules for ICM Registry, the decision would be certain to cause pandemonium with the online adult industry.

“Whatever the arbitrators decide will be binding on ICANN,” said Lawley, who noted that a decision by the International Centre for Dispute Resolution is due sometime this year. He said that the venue has not been decided, but it could possibly be at The Hague.

ICM Registry saw its application to enable .XXX killed by the Internet policy-making board for a third time in March 2007 after three years and millions of dollars spent.

The scuttled plan would have made ICM Registry required to contract third parties to monitor registrant compliance with content site-labeling requirements.

It also would have been required to create a set of “best practices” to protect children online and fund the International Foundation for Online Responsibility, an independent organization ICM has said it would create if approved. ICM pledged to donate $10 of the proposed annual fee of $60 for a .XXX domain name to child-protection groups and require users of .XXX to label their content.

ICM Registry briefs submitted by Washington, D.C., law firm Crowell & Moring in late January contend that ICANN’s decision to nix .XXX were arbitrary.

ICM Registry is asking for the arbitration panel to rule in favor of its application to serve as .XXX registry operator because it met criteria set forth in a December 2003 request for proposal.

ICM Registry claims that ICANN acted inconsistently with its own articles of incorporation and bylaws.

“This discriminatory treatment was not justified by any substantial reasonable cause,” according to a brief on the merits of the case “There is nothing in the ICANN articles and bylaws that would allow ICANN to treat ICM differently because certain elements asserted that the ICM proposal was controversial.

“Moreover, the reasons that ICANN cited as the basis for its denial of ICM’s application were false and pretextual — a mere cover for ICANN’s bowing to undue political pressure.”

The brief was referring to alleged pressure from the U.S. Commerce Department, which ICM Registry accused of working behind the scenes to kill .XXX. Later, a federal judge ruled against ICM Registry in its bid to gain access to conversations between ICANN and the federal agency through a Freedom of Information Act suit.

ICM Registry also contends that a .XXX proposal has a lot of support among online adult businesses because so many of them sought domain name addresses with the .XXX suffix.

“There is substantial industry support for the .XXX domain, as evidenced by the letters of support submitted with ICM’s application and the large number of providers that have participated in ICM’s pre-reservation program, which allows for applicants to reserve domain names in advance of the approval of the sTLD application for .XXX,” the brief said. “To date, over 100,000 such pre-reservations have been made.”

Online entrepreneur Brandon “Fight The Patent” Shalton, who just last year didn’t see a future in ICM Registry’s .XXX, has reversed his view about whether it will be OKd. But, he said, it was because the sponsored TLD requirement has been eliminated by ICANN.

“So there’s nothing really stopping him,” Shalton told XBIZ. “He has done his job to document his ability to run the TLD and has basically answered all of the requirements.

“The objections that myself and others had was over the ‘sponsored’ part,” he said. “With that requirement, .XXX is no different than .info, .biz, etc. — it’s a TLD. If webmasters want to get it, that’s their choice.”

But Shalton said that if .XXX gets approval, the “ghettoization” that adult webmasters feared could still become a reality.

“The scenarios that we had envisioned about censorship, corralling of the adult space, making .XXX mandatory in the U.S. — proved by previous proposed bills to Congress — can all certainly still come true,” he said. “It will be interesting to see how it all plays out, but all of us who opposed .XXX don’t have much of a stand now to oppose/stop .XXX because of the removal of the sponsorship requirement.”

The briefs forwarded to arbitrators are lengthy and shed light not only on the triumphs and tribulations of the .XXX movement, but in the history of the Internet and Lawley.

They also reveal that so far it has cost ICM Registry more than $5 million to push the proposal through, not including lost revenue, Lawley said.

“At the very least, ICANN should now be required to approve the registry agreement and allow ICM to begin operating the sTLD as soon as possible so that ICM can begin to recoup some of these unnecessary and unjust losses,” Lawley said.

Shalton, who believes ICM will most likely get bumped to the top of the line for the new TLDs to be approved under ICANN’s new directive, is pragmatic about the future of online adult.

“After .XXX gets approved, I wouldn’t be surprised that .sex comes up since XXX refers to hardcore porn,” Shalton said. “And many porn sites may not want to be in that grouping, so some entity will most likely submit their application in for .sex or .gay or .whatever.”