Why is that a problem?

Because in this case, "money grab" actually means "extortion". The original article mentions that NPR has registered npr.xxx, but they don't plan to do anything with it. They registered it strictly to prevent someone from putting up "adult content" that could be associated with them. NPR is not alone in this. I'd be interesting to see what percentage of .xxx domains actually have pornography on them.

Registrars always pushed their customers to buy multiple domains on different TLDs to "control their brand," but ICM is taking that strategy to a whole new level.

I don't think that's it. If ICANN can ever launch their TLDs-for-everyone plan and let a thousand flowers bloom, you won't have companies buying defensive domain names in every TLD, because there will be thousands. It makes the point moot; with only a few tlds, consumers might expect that airsupply.com leads to a medical services co or the high-tenor ballad king of the 1970s, and they'll each compete to register that name first. When it's airsupply.brakes.railway and airsupply.diving and airsupply.fixaflat, that assumption is broken, and it becomes futile to try to pounce on every domain with your brand in it.

The companies pushing the loudest "Sky is Falling!" messaging are those like MarkMonitor who (a) already protect their customers from fraud, real or exaggerated, and (b) just happen to be a registrar..

I see what you mean. Yeah, I agree with you there. Apologies for me knee-jerking to the wrong conclusion.

And the worst part is that I heard this segment ON NPR last night on my way home.

Wouldn't it be possible to challenge someone else's use of your name in a .xxx domain as a trademark issue?

No. When you have a registered trademark, you do not (contrary to what you might believe if you read most Internet forums) "own" the word; you have only registered your usage of the word in a specific field, which allows you to make it easier to prove in court that someone else is being confusingly similar to you in their conduct of business.

However, for most people, their business is small and focussed, so usages of the same name in other fields would not be defendable against someone using it for adult entertainment production. This would be exceptionally difficult an acronym such as "npr", especially as it has been used for many things in the past (such as Northern Pacific Railroad, although Nevada Public Radio is a more interesting example).

(edit: After posting this I noticed I had had the tab open long enough that some other people responded with similar commentary, but I'm going to leave this up as I think it has a slightly different character, as well as a funny example.)

Probably not. Trademarks are specific to a particular market or kind of product. For example, Apple Computer didn't really conflict with the Apple Records until Apple started selling music. So a porn company probably wouldn't legally conflict with your trademark.

What? There's a whole huge controversial process around trademark disputes for TLDs, spanning all the TLDs, .XXX included. It was all Slashdot could talk about for months and months, because it favors trademark holders.

It's also possible to "tarnish" a brand. So if you register something like Disney.xxx, they might be able to sue you on those grounds. There's also increased protection for famous marks, And finally, there are some marks, like the Olympics & Red Cross that are statutory trademarks. That is, they were created by international treaty and have special rights associated with them due to the legislation that enacted the treaties.

In short, it's more complex than that. IANAL, but I sure wouldn't go tempting lawyers by registering apple.xxx or whatever.

Even if you can, it will take time, waste energy, leave uncertainty, and only the lawyers benefit. The fee people are forced to pay is an insurance policy to prevent all that hassle.

Does that cost more or less than 80 USD/year or whatever it is?

There are TV ads based on exactly that marketing approach.

The problem is that you have some established brand with a .com domain name. Now, people will probably go looking for <your brand>.xxx. That means you have to register that domain name, or your competitor will buy it first.