A Primer for New ISPs Regarding CyberLaw Issues

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Memo

To: Triad Internet Systems - Lance Arbuckle

From: Michael S. Gottlieb

CC: Ron Wright, Senior Partner

Date: January 14, 1997

Re: Internet Regulations

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Lance,

Thank you for retaining Gottlieb, Wright as counsel for your new company, Triad Internet Systems. In response to your request, here is a brief background of the Internet, as well as some of the legal issues you should be aware of as a new Internet Service Provider and web publisher. As a new entrant into the online world, I particularly want to focus your attention on the status of the Communications Decency Act and to identify some of the other potential problem areas that we may encounter.

Historical Background of the Internet

Before delving into the current status of the online world, a brief discussion of the Net's history will provide you with a basic understanding of how the Internet has evolved over the last 30 years.

The Internet was created in the 1960's by the Defense Department's Advanced Research Projects Agency. The idea and purpose of the Net was as a data network capable of surviving a nuclear attack. There were two major aims: 1. to allow numerous users to simultaneously send data and 2. to ensure that there was never one central computer running the system. The reasons behind these aims were based on the antagonistic relations between the Communist countries and the United States. The Federal Government believed that if the Soviets bombed Washington, the entire system would not be destroyed.

The next phase of development of the Internet came in the 1970's when universities and research centers all over the world were given access. The purpose was to allow for the easy dissemination of information. The system allowed scientists who were across the world from one another to communicate almost immediately via electronic mail. By October 1971, experimenters were logging onto each others' sites, a remarkable feat at this time.

During the mid 1980's, the National Science Foundation took control of the Net. They created a network of supercomputer centers that would interconnect with autonomous networks serving different communities of researchers, government agencies, and university campus networks. Thus, the Net had gone public.

In the late 1980's the only way to operate within the Net was by using the fairly complex grammar of the UNIX operating system. As a system operator, I imagine that you are becoming all but too familiar with UNIX, but the rest of us non-technical people fear it worse than a dentist's drill! Nevertheless, in the last few years, the introduction of the World Wide Web (Web) has dramatically changed the way people interface with the Net. The Web links pages together with hypertext links. A hypertext link allows the user to input what they are looking for and what returns is the document, not the name of the source. This method of operation required that users know the HyperTextMarkupLanguage in order to effectively use the Web. However, from 1993 to the present time major advancements have taken place as programs called Web Browsers have come into existence. A Web Browser allows users to interface with the Net by pointing and clicking on graphics. This innovation has led to the explosion of the Web (which is only a part of the entire Internet system) and has brought millions of people on-line.

While the Web is the currently the most significant part of the Internet, it is just that, only a part of it. There are two other significant areas of the Net: newsgroups and electronic mail. A newsgroup (the most common is Usenet) is essentially a non-graphical user interface that allows people to chat about specific areas of interest from the Dallas Cowboys to Debbie Does Dallas. More specifically a user looks at the Usenet area of interest to them and they will see messages posted from people all around the world. Thus, when an individual posts to Usenet, potentially millions of others will have access to what they've written. Electronic mail (e-mail) allows people to send electronic messages nearly instantaneously to anyone who has an e-mail address. The primary difference between Usenet and e-mail is that e-mail is essentially like a one on one phone call; there is only one recipient of the mail, it is not available for a wide audience, while on Usenet their is a wide audience.

Interesting Facts

In researching Internet regulations, I came up with some optimistic and encouraging statistics regarding the growth of the Net. For example, last year computers outsold television sets for the first time ever. 72% of Internet users surf the web at least once a day, 41% surf 6 - 10 hours a week. There are currently 92,297,890 people on the Internet and there are 1,200,760 World Wide Web sites on the Internet. Finally, 86% of Web surfers are from North America.

Regulating the Internet

Now that you have some background information on how the Net has evolved over the past several years, an examination of the federal governments attempts at regulating the Net will follow. This will provide you with an understanding of what the government is concerned about and where you will need to be careful so as not to run afoul with any of the regulations that they impose.

Introduction to the CDA and why it passed

The CDA came into being as Section 507 of the sweeping telecommunications reform legislation now known as the Telecommunications Act of 1996, which was signed by President Clinton on February 8. Introduced by Senator James Exon (D-Nebraska), the CDA was a response to tremendous concern about pornographic and otherwise questionable content accessible to virtually anyone with a computer, including minors, on the Net. The primary concern was to protect minors from having access to material that may be inappropriate. Additional concerns were that indecent and obscene material provides a negative image of society and makes women appear as sex objects. An additional concern that was raised was to prevent the dissemination of information on how to commit crimes.

What Does it Regulate?

Specifically the CDA is intended to prohibit: obscene, indecent or harassing use of telecommunications devices and the use of interactive computer services to send or to display indecent material to minors, and the use of interactive computer services to traffic in obscenity. The CDA prohibits users from creating any comment or image, using an interactive computer service, that could be available to somebody under 18 that "describes, in terms patently offensive as measured by contemporary community standards, sexual or excretory activities or organs, regardless of whether the user of such service placed the call or initiated the communication." It also criminalizes the international transmission of: any comment, request, suggest, proposal, image or other communication which is obscene or indecent, knowing the recipient of the communication is under 18 years of age. If convicted, you could face up to a $250,000 fine and/or 2 years in prison (so let's make sure we don't need to find you a criminal lawyer).

Opposition to the CDA

Since the CDA was signed into law in February of this year, the Act has never been enforced against anyone. The opponents (and there are many) feel that the CDA is a restriction on indecency that amounts to a total ban on all indecent information in public area (the Internet) and that "indecency" as the word is used in the Act is unconstitutionally vague. Further, opponents argue that it is impossible to follow the community standards for every community in the country.

Case 1: ACLU v. Reno

The ACLU filed suit February 8, 1996 against the government. Less than one week later a Philadelphia Court issued a temporary restraining order enjoining enforcement of the act. The Department of Justice agreed not to enforce the CDA during the course of the trial. In June, the three-judge panel in Philadelphia ruled that the Act is unconstitutional, saying that the law "will have a chilling effect on free expression." "Subjecting speakers to criminal penalties for speech that is constitutionally protected in itself raises the specter of irreparable harm," wrote Chief Judge Dolores Sloviter. The "bottom line is that the First Amendment should not be interpreted to require us to entrust the protection it affords to the judgment of prosecutors." The judges held that the Internet deserves protection under the First Amendment similar to newspapers and other print media, as opposed to television, which is much more tightly regulated by the government. In his opinion, District Judge Stewart Dalzell said the Internet "may fairly be regarded as a never-ending worldwide conversation. The government may not, through the Communications Decency Act, interrupt that conversation." "The Internet is a far more speech-enhancing medium than print, the village green or the mails," Judge Dalzell continued, "and as the most participatory form of mass speech yet developed, the Internet deserves the highest protection from government intrusion." The Department of Justice filed an appeal to the Supreme Court.

Case 2: Shea v. Reno

Joseph Shea is the editor and publisher of the American Reporter and as the editor he published an editorial that was arguably within the scope of the Act. He filed suit seeking a declaration that the Act is unconstitutionally overbroad and vague. The New York Court held that the Act is overbroad because adults lack means of engaging in constitutionally protected indecent communications over the Internet without fear of liability. The DOJ asked the court to shelve the Shea case and dispose of it later in light of the Supreme Court's ultimate decision in the ACLU case.

Where is it today?

That brings us to what is happening today and things are changing day by day.

The ACLU Case

The plaintiffs in the case asked the United States Supreme Court to forgo hearings on challenges to the law and immediately affirm the finding of the PA court. However, the Court (just this past week) granted certiorari to determine the constitutionality of the Communications Decency Act. During a conference meeting, the Court agreed to hear a government appeal of a ruling handed down in June by the Philadelphia federal court, which found that the CDA violates First Amendment rights of free speech. The Supreme Court's eventual ruling will decide the fate of freedom of expression on the Net. The preliminary injunction against enforcement of the CDA imposed by the Philadelphia court will remain in place until then.

The Shea Case

Shea asked the United States Supreme Court to incorporate his suit against the CDA into the ACLU case. "I think it is very important for the high court to say that online publications enjoy the same free press protections that print publications do in the United States," … "It is very important that that be said, because other nations are looking at this decision to try to determine how well they can sell censorship to their publics." ----Joseph P. Shea. The Supreme Court has not ruled on this matter.

What happens if it falls?

Assuming that the Supreme Court overturns the CDA (I feel optimistic that it will) there are a multitude of other potential regulations, as well as existing laws that you will need to comply with.

The federal government may try again

The Federal government may try to pass through another variation of the CDA. In fact, many variations have been bounced around Congress, but nothing currently pending seems likely to come to fruition anytime in the immediate future.

State's will enact similar laws

20 states have passed or have pending legislation regulating speech over the Internet. These bills affect a wide range of online speech and content, including:

materials deemed "indecent" or "harmful to minors"

information related to "terrorist acts" or "explosive materials"

sexual solicitation of a minor by computer

online transmission of child pornography

At one point, the Georgia legislature even tried to outlaw online pictures of marijuana. The provision would have made it illegal to post a picture of a joint on the Net! The state bills, like the federal Communications Decency Act, raise serious free speech and privacy concerns. Many of the bills ban the distribution of material which is clearly constitutionally protected for adults.

Some of the laws address serious law enforcement concerns. Soliciting sex from a minor, and transmitting child porn, are just as criminal if done online as when done through any other medium. As Net users know, minors could potentially gain access to any of the public areas on the Net - including the chat groups that have brought together so many people around the world. In addition, the definition of material that is "harmful to minors" under some of these bills could be interpreted to include online posting of sex education materials or abuse recovery discussion groups.

Existing obscenity laws still control

"Judicial attempts to create a clear test by which obscenity determinations may be based have produced an evolving standard." Almost 40 years ago, the Supreme Court, based on a presumption that obscenity is utterly without social importance, held that the proper test of obscenity to be: "whether . . . the average person, applying contemporary community standards, the dominant theme of the material taken as a whole appeals to a prurient interest." The Supreme Court faced this issue again in another case and here they held that there is not a presumption that obscenity lacks social importance. The Court created a test based on three factors: "(1) the dominant theme of the material taken as a whole appeals to a prurient interest in sex; (2) the material is patently offensive because it affronts contemporary community standards relating to the description or representation of sexual matters; and (3) the material is utterly without redeeming social value." Instead of presuming obscenity to be without social value, the Court made the question of its value an element of the test. In 1967, the Court once again changed how the legality of obscenity should be looked upon in famous Miller v. California case. In Miller, the Court established a three part test that permitted regulation without evaluating the social value of the material. The criteria that the Court laid out is:

(a) whether "the average person applying contemporary community standards" would find the work taken as a whole, appeals to the prurient interest...; (b) whether the work depicts or describes in a patently offensive manner sexual conduct specifically defined by applicable state law; and (c) whether the work taken as a whole lacks serious literary, artistic, political or scientific value.

Additionally, in the Miller case, the Court implied that lower courts must use local community standards to determine whether material is obscene. In 1987, the Court changed that test somewhat by holding that lower courts should apply local community standards to the first and second element of the test, but a "reasonable person" standard to the third element.

There are a set of factors that can be used to determine if an individual's speech is obscene, but there remains a question of what specifically constitutes a speech. An additional question remains as to whether the local community standards test should apply to the individual(s) disseminating the speech or the individual(s) receiving the speech.

Regarding what constitutes speech, the Courts have consistently held that the freedom of speech is afforded a great deal of latitude in the written form (print medium), but it is given less protection when the speech is made via television (broadcast medium). This is best explained by the FCC:

broadcasting requires special treatment because of four important considerations: (1) children have access to radios and in many cases are unsupervised by parents; (2) radio receivers are in the home, a place where people's privacy interest is entitled to extra deference . . . ; (3) unconsenting adults may tune in a station without any warning that offensive language is being or will be broadcast; and (4) there is a scarcity of spectrum space, the use of which the government must therefore license in the public interest.

The Supreme Court has broadened this FCC interpretation to include television, in that radio and television programming can potentially invade the sanctity of the home of the unsuspecting listener. "The Court interpreted the First Amendment to provide only limited protection for indecent broadcast speech, making regulation permissible when the government can show a compelling interest."

The Supreme Court distinguished speech made via telephone lines in a more recent case. The Court found that the service that the plaintiff offered its audience was different than that of broadcast radio or television where the audience is comprised of unsuspecting listeners. The plaintiff's customers dial into Sable's telephone system and had to take