Controversial HostingOnshore, Offshore, or Online?

Ryan Lackey

HavenCo, Ltd.

<ryan@havenco.com>

HAL 2001 10 August 2001

General Hosting Background

Hosting in-house vs. colocationPrimary factors: bandwidth, computation (either shared or rent space and hardware), supportBig market – by definition, anything available on the Internet is hosted somewhere, even if without conscious thoughtVarious concerns: convenience, maintenance, upfront and continuing cost…legal issues and security are often low

Introduction: What Characterizes

Controversial Data?Potentially unpopular: with governments, corporations, or influential groups

Often on legally uncertain ground; new media applied to older laws

Must have a critical mass of interest before people really bother; either really objectionable (kiddie porn) or really widely publicized (napster)

Examples of Controversial Data

What is essential to hosting in general

Technical Taxonomy

Static sites with low bandwidth requirements

High-bandwidth media objects, static

Interactive low bandwidth (transactional)

Interactive high bandwidth (multimedia)

What kinds of hosting are possible?

Onshore: Hosting in home jurisdiction, or a jurisdiction closely allied; most major nations are a unified regime

Offshore: Hosting in specialized offshore jurisdictions

Online: Using cryptography, replication, distribution, and other techniques to obfuscate where data is hosted, or make it technically infeasible to censor

Onshore

Exemplified by traditional colocation and managed hosting – exodus, rackspace.com, etc.Has high-quality technical infrastructure, support staffLow cost/high efficiency; very developed marketsVery substantial regulatory overhead; existing regulations, and constantly-added new regulations (DMCA, CALEA, etc.)

Offshore

Specialized providers which are based in smaller markets/jurisdictions, offering jurisdictional/regulatory advantages

Examples: Offshore Information Services (AI), HavenCo (SX, etc.), and for some people, CA, US or NL carriers are “offshore” (pornography, cryptography mainly)

Physical security and trust are important issues, as legal remedies are virtually nil

Works best with actual support from local regulatory authorities; otherwise laws can be changed on a whim or election

Often used in conjunction with offshore corporate structure, payment processing, etc.

Online

“p2p” systems, like napster, gnutella, etc.Generally, only capable of static hosting; incapable of secure computationHighly unreliable in in microstructure, but in the aggregate, theoretically highly robust; able to withstand damage without being destroyedIn practice, most systems have some central avenues of attack, even if mostly distributed

Threats

Governments

Corporations

Semi-governmental organizations

Hackers

Private individuals

Threat model

Legal or extralegal action against principals

Complete shutdown of site

Compromise of data integrity

Degradation of user experience

Attacks on profitability and public relations

What fits best?Onshore Offshore Online

Protection None High Depends on skill

Cost Inexpensive Moderate High development, low operations

Legal Mandatory Innovative Irrelevant

Payments Yes Yes No

Ideal for Major media sites, general hosting

High-value transactions, novel applications, sophisticated jurisdictions

Low-value multimedia content, non-commercial, free speech

Success Stories

Onshore – most sites on the Internet

Offshore – PublicData.ai, offshore gaming all over, payment systems with HavenCo

Online – music trading

Horror Stories

Onshore: publicdata got forced out of the US, napster was effectively emasculated, casinos have been prosecuredOffshore: lots of casinos have had low security and reliabilityOnline: software development debacles with no real user-useful applications

Open Questions

Will onshore laws continue to get worse?How far can offshore hosting go without either getting shut down or causing onshore laws to change?Will online systems get better? Can they do secure transactions and add payment?

Summary

The next 5-10 years will be very interesting

A few major cases will definitely be able to change the course of history; important to choose the right battles