Article source: http://news.com.com/2100-1028-5059676.html?tag=nl
or http://www.businessweek.com/technology/cnet/stories/5059676.htm

Ryan's blog: http://www.livejournal.com/users/octal

One of HavenCo's major customers: http://www.thegoldcasino.com


Has 'haven' for questionable sites sunk?

An effort to convert a platform in the English Channel into a "safe haven" for
controversial Web ventures has failed due to political and other problems, one
of the company's founders says.

LAS VEGAS--A widely publicized project to transform a man-made platform in the
English Channel into a "safe haven" for controversial Web businesses has failed
due to political, technical and management problems, one of the company's
founders said.

Ryan Lackey, former chief technology officer of HavenCo, said on Sunday
afternoon that he left the project because his business partners had become
nervous about hosting objectionable material and were leading the company toward
financial ruin, with only about six customers remaining.  "The key lesson on
this is if you're going to put a colo facility somewhere, political and contract
stability in that jurisdiction is very important," Lackey said, referring to
co-location setups, or virtual site-hosting facilities. "Customers want
stability. They don't want the network to be down for two months." The
24-year-old Lackey spoke to an audience of about 600 at the DefCon hacker
convention here.

HavenCo did not immediately respond to inquiries. The company's Web site says
HavenCo is "fully operational, offering the world's most secure managed servers
in the world's only true free-market environment."

When HavenCo launched in June 2000 to widespread press acclaim--including a
coverstory in Wired magazine--its founders promised to transform a windswept gun
tower anchored six miles off the stormy coast of England into a co-location
facility that would be a virtual home for businesses that were too controversial
to place their servers elsewhere. The name of the company was derived from the
concept of a safe haven from governments around the world that have become
increasingly interested in Internet regulation and taxation.

HavenCo is located on a rusting, basketball court-size fortress erected by the
British military during World War II to shoot down Nazi aircraft. Roy Bates, the
quirky "crown prince" of "Sealand" landed on the abandoned platform in 1966 and
claimed it as an independent nation with its own currency, stamps, and flag.
Although its legal status is unclear, Sealand lies within the territorial
boundary of 10 miles claimed by England.

A Sealand representative said in an e-mail interview on Monday that "HavenCo is
a viable operation. It is moving from strength to strength."
The representative said that "for our part, we would simply ask you to note that
Mr. Lackey is no longer an employee of HavenCo.He does not at this time have a
valid visa for return. We hope the confusion generated by his remarks can be
cleared up in due course."

Lackey said, "Financial stability was getting questionable because we were
spending more money and reducing demand. Then they started talking about taxing
Sealand-hosted companies, and that was very interesting."
Lackey, who said HavenCo owes him $220,000 in cash and additional money in
stock, said another problem was the Sealand family's tinkering with the network
connection, which caused extended outages and occasionally left it dependent
solely on a slow satellite link.

Lackey blamed what he described as HavenCo's impending demise on increasingly
sour relations with Bates, Bates' son and royal heir-apparent Michael and the
family's legal advisor, coupled with the family's increasing nervousness about
their customers' activities after the Sept. 11, 2001 terrorist attacks on the
United States. During an interview with the BBC, the family said they'd readily
"turn customer information over to the authorities if there was any serious
problem with our stuff," Lackey said.

Bates, a former British Army major, has undertaken a string of failed business
ventures in an attempt to profit from what he asserts is the world's smallest
country. One Bates plan was to extend Sealand into a three-mile-long, man-made
island with banks and its own airport. Another scheme included working with
German investors to build a $70 million hotel and gambling complex--a scheme
that fell apart after the Germans took over the fortress in 1978 and Bates
regained control in a dramatic helicopter raid at dawn.

In an interview after his speech, Lackey said that the turning point of his
relationship with the Sealand royal family was a meeting in London last year
with Alex Tan, a Malaysian entrepreneur who ran the Film88.com Web site, which
had been the target of legal action including a July 2002 suit filed by the
Motion Picture Association of America.

Tan was prepared to pay HavenCo millions of dollars to host a Web site that
would let customers stream movies from legally purchased DVDs, something that
was not clearly illegal because only one customer at a time could view each
stream, Lackey said. The Sealand royal family balked over the possibility of bad
publicity, Lackey said. "I decided as soon as I got out of the meeting that I
was going to quit," Lackey said.

Lackey is still listed as the "whois" administrative and technical contact for
the havenco.com domain.

By Declan McCullagh, Staff Writer, CNET News.com




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