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FC: A data sanctuary is born

------- Forwarded message follows ------- Date sent: Mon, 05 Jun 2000 08:27:01 -0400 To: politech@vorlon.mit.edu From: Declan McCullagh <declan@well.com> Subject: FC: A data sanctuary is born Send reply to: declan@well.com

http://www.wired.com/news/business/0,1367,36749,00.html

A Data Sanctuary is Born by Declan McCullagh (declan@wired.com)

5:00 p.m. Jun. 4, 2000 PDT WASHINGTON -- A windswept gun tower anchored six miles off the stormy coast of England is about to become the first Internet data haven.

A group of American cypherpunks has transformed the rusting fortress, erected by the British military during World War II to shoot down Nazi aircraft, into a satellite-linked virtual home for anyone looking for a secure place to store sensitive or controversial data.

The founders of HavenCo, which will announce operations on Monday, believe the concept will appeal to individuals and businesses looking for a "safe haven" from governments around that world that are becoming more and more interested in Internet regulation and taxation.

It's for "companies that want to have email servers in a location in which they can consider their email private and not open to scrutiny by anyone capable of filing a lawsuit," says Sean Hastings, the 32-year-old chief executive of HavenCo.

Hastings says that because a 1968 British court decision effectively recognized the basketball court-sized island as a sovereign nation called Sealand, HavenCo can provide more privacy and legal protections then anyone else on the planet.

To create HavenCo -- which will offer Linux servers for $1,500 a month -- the founders signed an agreement with Roy Bates, the quirky "crown prince" of Sealand who landed on the abandoned platform in 1966 and claimed it as an independent nation with its own currency, stamps, and flag.

Bates, a former British Army major, has undertaken a string of failed business ventures in an attempt make use of the world's tiniest country -- a platform just 10 by 25 yards that perches atop two cement caissons in the North Sea.

One plan was to build Sealand into a three-mile-long, man-made island with an airport and banks. Another venture included working with German investors to build a $70 million hotel and gambling complex -- a scheme that fell apart with the Germans taking over the fortress in 1978 and Bates regaining control in a dramatic helicopter raid at dawn.

This time the elder Bates, now about 80 years old, is taking no chances on his business partners: His son and royal heir-apparent, Michael, is HavenCo's chief logistics officer and the royal family has a seat on the board.

But today Sealand's potential adversaries include not merely a few expansion-minded Germans, but nervous government officials who are aggressively trying to pull the plug on unapproved offshore activities.

During a Paris summit in May, for instance, representatives of the Group of Eight (G8) nations met to hammer out an agreement on international Net law. "The idea is to produce a global text so there cannot be 'digital havens' or 'Internet havens' where anyone planning some shady business could find the facilities to do it," French Interior Minister Jean-Pierre Chevenement said at the time.

When Sealand was simply an eccentric's hobby, the British government largely ignored the smallest country in the world. But if HavenCo becomes a popular destination for gambling, money laundering, or other socially disapproved activities, governments could move against it.

The Home Office in London could restrict the microwave links that provide HavenCo with its lifeline to the outside world, and the companies offering satellite connectivity could come under pressure from regulators in their home countries. HavenCo could even find its bank accounts imperiled.

For their part, HavenCo executives say they hope to avoid negative publicity. "We don't intend to make anyone angry at us. We simply want to provide online businesses a place with a sane set of rules that are not constantly changing," Hastings said.

"If larger nations have a problem with unrestricted information flow, then their problem is with the increase in information technology, and not with us. They can't put the genie back in the bottle until every individual on the planet has had their three wishes come true," he said.

Somewhat ironically, bandits recently set up a fake "Principality of Sealand" website to sell citizenship to unsuspecting visitors. Spanish authorities reportedly are investigating a gang involved with drug smuggling and arms trafficking using those passports.

In a bizarre incident, one "Sealand" passport of dubious origin surfaced in connection with the July 1997 murder of fashion designer Gianni Versace in Miami.

The British Embassy in Washington declined to comment on what would prompt London to take action against the legitimate prince of Sealand. "What it comes down to is that this is a hypothetical (situation), and so we cannot speculate on this," said Peter Reed, the embassy's press officer.

In interviews, U.S. government officials indicated they would take a more active approach.

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