The battle over a virtual red-light district is entering another round.

Although the Internet's key oversight agency rejected a proposal to create a ".xxx" domain for porn sites, the domain's chief sponsor, ICM Registry Inc., is appealing the decision and began taking reservations from adult sites this week.

Stuart Lawley, ICM's chairman, said the company already has hired the staff and built the system, and taking reservations now would mean a quicker rollout should the appeal succeed.

ICM isn't charging sites to lay claims to a ".xxx" name based on what they already have under ".com" or another suffix. The company plans to eventually charge $60 to register each name if its bid is approved.

The Internet Corporation for Assigned Names and Numbers, faced with opposition from conservative groups and some pornography Web sites, rejected on May 10 ICM's proposal to create ".xxx" for voluntary use by the adult entertainment industry.

In reversing ICANN's preliminary approval of ".xxx" last summer, some board members expressed concerns that the domain might put ICANN in a difficult position of having to enforce all of the world's laws governing pornography.

Nine days later, ICM appealed to an ICANN review panel, saying the enforcement concerns were unfounded and accusing the U.S. government of pressuring ICANN to reject ".xxx." ICM filed a separate, Freedom of Information Act lawsuit in the U.S. District Court in Washington, D.C., seeking the release of information about the government's role.

The U.S. government, which funded the Internet's early development and delegated authority over domain names to ICANN, retains veto power over ICANN decisions. ICANN had postponed making a final decision on ".xxx" in August after the Commerce Department stepped in to underscore objections it had received.

Lawley acknowledged the ICANN appeal could be tough because the review panel is dominated by board members who had voted against the proposal.

But "we've got deep pockets," he said. "We're very determined."