1. The Ultimate Colocation Site: HavenCo Avi Freedman Avi Freedman Ryan Lackey Ryan Lackey H2K2 14 July 2002 http://www.havenco.com/

2. Sealand

3. Present Status Profitable.com Profitable.com Cost-conscious Cost-conscious No negative legal challenges; working on bigger tests No negative legal challenges; working on bigger tests Connectivity redundant and has sufficed but working on fiber Connectivity redundant and has sufficed but working on fiber Mainly gaming and payment systems customers Mainly gaming and payment systems customers Need businesses to do: Need businesses to do: –Shared hosting; email; data haven? Out of the startup phase with steady growth Out of the startup phase with steady growth

4. Why? Continued trend toward regulation around the world Continued trend toward regulation around the world Specifically, CDA, RIP, DMCA, CALEA, BXA crypto regs Specifically, CDA, RIP, DMCA, CALEA, BXA crypto regs Provide an example to other countries of how minimal regulation can work; hope for imitators Provide an example to other countries of how minimal regulation can work; hope for imitators

5. Acceptable Use Policy No Spam No Spam No Hacking No Hacking No Child Pornography No Child Pornography

6. Background - Sealand Originally constructed 1944 as anti-aircraft fortress Originally constructed 1944 as anti-aircraft fortress Abandoned by UK in 1945, left unoccupied in international waters Abandoned by UK in 1945, left unoccupied in international waters Occupied by Roy Bates, pirate radio broadcaster, in 1966 Occupied by Roy Bates, pirate radio broadcaster, in 1966 Repeatedly challenged and always positively resolved for statehood Repeatedly challenged and always positively resolved for statehood

7. Micronation Projects Some have been successful – Vatican, East Timor, various ex-colonial territories Some have been successful – Vatican, East Timor, various ex-colonial territories Many others have been unsuccessful Many others have been unsuccessful Sealand is in a unique position; can’t be replicated in today’s international legal environment due to treaties Sealand is in a unique position; can’t be replicated in today’s international legal environment due to treaties

8. Sealand’s Statehood Initial challenges by UK Customs, virtual blockade Initial challenges by UK Customs, virtual blockade Weapons incidents Weapons incidents Social security tax ruling Social security tax ruling “German Incident” “German Incident” De facto recognition by continued existence for decades De facto recognition by continued existence for decades

9. Jurisdictional Arbitrage Countries can compete based on regulation Countries can compete based on regulation “Race to the bottom”; good or bad? “Race to the bottom”; good or bad? Most countries form cartels to avoid competition; specifically for taxes Most countries form cartels to avoid competition; specifically for taxes Precedent with flags of convenience, offshore companies, banking, reinsurance Precedent with flags of convenience, offshore companies, banking, reinsurance Not yet widely applied with net, but initially in mid-1990s in Anguilla and elsewhere Not yet widely applied with net, but initially in mid-1990s in Anguilla and elsewhere

10. Background – Founders Founders had a common interest in jurisdictionally-advantaged colo, and background in IP networking, hosting, crypto, payment, international startup companies Founders had a common interest in jurisdictionally-advantaged colo, and background in IP networking, hosting, crypto, payment, international startup companies Initial discussions considered barges offshore from US; artificial structures in Cortez bank in CA; small islands in the Pacific; indian reservations Initial discussions considered barges offshore from US; artificial structures in Cortez bank in CA; small islands in the Pacific; indian reservations Discussions took place early 1999-early 2000 Discussions took place early 1999-early 2000

11. Sealand Royal Family & HavenCo We contacted Michael of Sealand 7/99 We contacted Michael of Sealand 7/99 We first visited in 8/99 We first visited in 8/99 Contract signed 2/00 Contract signed 2/00 HavenCo concept was very similar in spirit to early pirate radio HavenCo concept was very similar in spirit to early pirate radio Royal Family of Sealand has been very supportive Royal Family of Sealand has been very supportive Michael is now actively involved at the executive level Michael is now actively involved at the executive level

12. Founding Havenco funding 2/00-6/00 Havenco funding 2/00-6/00 Plans modified Plans modified Established: Established: –redundant connectivity –24x7xN security + tech –supplies –international network infrastructure Press coverage was excellent but a bit early (~ 3 months before actual launch) Press coverage was excellent but a bit early (~ 3 months before actual launch)

13. Business Have a reasonable but not extremely diverse set of customers currently Have a reasonable but not extremely diverse set of customers currently Hosting prices are $750/mo for minimal Netra, 128k of bandwidth. Not more than the con artists “secure vault” charged for “secure colo” during the peak of the bubble Hosting prices are $750/mo for minimal Netra, 128k of bandwidth. Not more than the con artists “secure vault” charged for “secure colo” during the peak of the bubble Continued moderate growth Continued moderate growth Focused on current site Focused on current site Open to partners for bandwidth, distribution, product partnership, legal challenges Open to partners for bandwidth, distribution, product partnership, legal challenges

14. Why haven’t you been shut down? UK doesn’t want direct legal challenge which might enhance Sealand’s sovereignty UK doesn’t want direct legal challenge which might enhance Sealand’s sovereignty No one willing to pay to host really controversial content No one willing to pay to host really controversial content “We’re just a colo provider” “We’re just a colo provider” Free speech ultimately a good PR move in western world Free speech ultimately a good PR move in western world Really bad customers just use stolen CC’s in US virtual hosting, or in-house Really bad customers just use stolen CC’s in US virtual hosting, or in-house

15. Network Equipment Room

16. Current Technology Commodity gear Commodity gear –Standard 100bt layer 2 infrastructure –BGP/OSPF routing –Crypto tunnels Servers: PC, Sun Servers: PC, Sun OS: Prefer Unix, many customers on windows OS: Prefer Unix, many customers on windows Towards auto-provisioning Towards auto-provisioning Hot-spares online and on-site Hot-spares online and on-site Currently, remote console + power cycle Currently, remote console + power cycle Full low-bandwidth remote OOB management Full low-bandwidth remote OOB management

17. Living on Sealand Spartan Spartan Small on-site staff Small on-site staff Fast net connection, no personal expenses Fast net connection, no personal expenses Nice views Nice views Not much money has been spent on accomodations; trailer-park level of furnishing Not much money has been spent on accomodations; trailer-park level of furnishing Most staff spend 1 week on, 1 week off Most staff spend 1 week on, 1 week off

18. NOC

19. 22.5’ Rigid Inflatable Boat

20. Difficulties Remote location means on-site spares key Remote location means on-site spares key General market conditions; customers ok, we’re ok, vendors go bankrupt General market conditions; customers ok, we’re ok, vendors go bankrupt Not many people have management experience with this kind of venture Not many people have management experience with this kind of venture Dealing with press is time-intensive Dealing with press is time-intensive

21. Future Plans Current plans are to grow current site, generating profit with growth Current plans are to grow current site, generating profit with growth Potential exists in the future for additional sites and/or services, but reality suggests that radical new projects will be separate ventures or partnerships Potential exists in the future for additional sites and/or services, but reality suggests that radical new projects will be separate ventures or partnerships

22. How the community can help Keep fighting legal battles elsewhere for information freedom Keep fighting legal battles elsewhere for information freedom Better open-source security software and operating systems; improve technical security Better open-source security software and operating systems; improve technical security Anonymity and privacy protection for communications, payments, and system management Anonymity and privacy protection for communications, payments, and system management Referrals of customers Referrals of customers

23. Q &A