The board of directors of the Internet Corp for Assigned Names and Numbers, which is responsible for deciding which new top-level domains are added to the internet, voted 9 to 5 against a proposal by ICM Registry Inc, which wants to run .xxx.
It did so after complaints from a number of governments, including the US and UK, from far-right-wing religious groups, and from some sections of the adult entertainment industry, including Hustler founder Larry Flynt.
ICANN had received close to 200,000 letters of complaint from people affiliated with US-based groups identifying themselves as Christian, some of which are known to have close ties to the current Bush administration.
"I think that to say that this [ICANN] board, as international as it is, was somehow dancing to political intervention from the US government is ill-founded and ignorant," ICANN president Paul Twomey said in a press conference.
While ICANN is ultimately legally beholden to the US government, its board of directors is made up of people from five continents. Of the two US-based directors, one voted in favor of the .xxx deal, one voted against it.
Stuart Lawley, president of ICM, after spending at least two years and over $2m on campaigning for .xxx to be approved, told us he thought the deal was shot down for political reasons, and said he was weighing a response.
"We've done everything that's been asked of us, we've behaved in a positive way, in a way we felt was acceptable to ICANN," he said. "We're just considering our options at this point."
The reason people suspect that US concerns were key, and the reason that the media keeps harping on about it, is because ICANN's powers are granted under a contract with the US Department of Commerce.
That contract ends in four months, and so far nobody seems to know what happens after it expires - does ICANN continue to govern the domain name system, or does the US take over in a more official capacity?
Lawley was not alone in suspecting that the concerns expressed by the US government, urged on by groups such as the Family Research Council and Focus on the Family, was mainly responsible for ICANN's rejection of .xxx.
"We see here a first clear case of political interference in ICANN," a spokesperson for Viviane Reding, the European commissioner for information society and media, told Reuters.
Twomey, in response, said: "The spokesperson should look at who sent the most recent communication. The most recent communication came from the UK... I find that [EC] statement to be ill-founded."
The UK communication was a letter sent by Martin Boyle, the UK representative to ICANN's Governmental Advisory Committee, dated May 9, the day before the ICANN board convened to vote on the .xxx contract.
"The UK expresses its firm view that if the dot.xxx domain name is to be authorised, it would be important that ICANN ensures that the benefits and safeguards proposed by the registry, ICM, including the monitoring all dot.xxx content and rating of content on all servers pointed to by dot.xxx, are genuinely achieved from day one," he wrote.
According to Twomey, some of ICANN's directors read from this that if ICM could not be relied upon to police the content under .xxx, as its contract would have required, then ICANN would be called upon to police it instead, something the organization is ill-equipped for.
"Was ICANN itself be expected to be the enforcer of every country's or every jurisdiction's view of online content on all the domains under this TLD?" Twomey said. "Some of the board members didn't know how that was going to be achieved."
Despite this, Twomey maintained that "ICANN is very concerned about its independence from political interference", and said that the main governmental input was a consensus communique from the 100-member GAC.
That communique was essentially concerned with enforcing content restrictions on .xxx domains, maintaining accurate registrant data, protecting children, and ensuring no geographic or culturally significant words could be used as porn sites.
While some have interpreted the .xxx rejection as ICANN cowering to pressure from a bunch of right-wing fanatics, it should also be pointed out that there are plenty of folk in the decidedly more liberal porn industry who don't want .xxx either.
The Free Speech Coalition, which represents the interests of pornographers, organized a letter-writing campaign to get .xxx rejected. Hustler's Larry Flynt was among those who wrote ICANN to express concern.
".xxx is an inherently dangerous idea with no real purpose," Flynt wrote to ICANN. "Only if it becomes a tool of censorship will it achieve its goal of preventing access to adult content by minors".
Twomey said: "I think some in the adult entertainment industry were concerned that .xxx would be a mechanism for censorship, the fear was people could be forced into that particular TLD, and that it could be used for censorship."
While ICM has been adamant from the start that .xxx would be purely voluntary, there are plenty of people who would love to force all porn into a single domain, where it could then be optionally filtered or, feasibly, banned outright.
It's not yet clear how much influence lobbying from either faction had on ICANN's decision-makers. What is clear is that at least one influential ICANN director, chairmain Vint Cerf, apparently changed his mind in the last two months.
Cerf, chief internet evangelist at Google, reportedly said in March that he would vote in favor of the domain. He told the New Zealand Herald: "My view is that I don't believe that it harms anything and, if anything, it might help."
ICM's Lawley said he's keen to find out why ICANN's directors voted the way they did. On controversial decisions, the board has started gagging itself for a couple of days, then publishing each director's written decision at the same time.
The only director to publish his thoughts so far has been Bulgarian internet expert Veni Markovski, who voted in favor of the .xxx domain.
"I believe my vote was not on the controversial issue about content (and ICANN should not deal with content), but on the simple issue if the agreement is good to be accepted," he blogged. "ICM at least are trying to prevent harmful content reaching our children."
Once all the facts are in Lawley has a couple of choices for appealing. The most obvious route would be to request a Reconsideration through ICANN's own processes.
The problem with that is that ICANN's Reconsideration Committee, made up of a subset of the ICANN board, has never approved such a request. These requests usually require the appellant to show that a vote was made without access to all the facts.
This is where Lawley may have an ace up his sleeve, in the form of documents obtained from the Department of Commerce under the Freedom of Information Act.
He is currently sitting on a pile of government correspondence that he said sheds light on how Commerce saw its role in the .xxx approval process, and in how much weight was given to the opinions of the Christian Right.
Since he has not released these documents yet, whether they will be enough to reopen the .xxx debate remains to be seen.