1. Controversial Hosting Onshore, Offshore, or Online?
Ryan Lackey
HavenCo, Ltd.
HAL August 2001

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

3. 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)

4. Examples of Controversial Data

5. What is essential to hosting in general

6. Technical Taxonomy Static sites with low bandwidth requirements
High-bandwidth media objects, static
Interactive low bandwidth (transactional)
Interactive high bandwidth (multimedia)

7. 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

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

9. 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.

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

11. Threats Governments Corporations Semi-governmental organizations
Hackers
Private individuals

12. 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

13. 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 No
Ideal for
Major media sites, general hosting
High-value transactions, novel applications, sophisticated jurisdictions
Low-value multimedia content, non-commercial, free speech

14. Success Stories Onshore – most sites on the Internet
Offshore – PublicData.ai, offshore gaming all over, payment systems with HavenCo
Online – music trading

15. Horror Stories
Onshore: publicdata got forced out of the US, napster was effectively emasculated, casinos have been prosecured
Offshore: lots of casinos have had low security and reliability
Online: software development debacles with no real user-useful applications

16. 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?

17. 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