English Channel web haven sunk?

A project to transform a man-made platform in the English Channel into a "safe haven" for controversial websites has failed due to political, technical and management problems, according to one of its founders.

Ryan Lackey, former chief technology officer of HavenCo, said 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.

He said: "The key lesson on this is if you're going to put a 'co-lo' facility somewhere, political and contract stability in that jurisdiction is very important. Customers want stability. They don't want the network to be down for two months.

Lackey was speaking to an audience of about 600 at the DefCon hacker convention in Las Vegas.

A HavenCo representative disputed Lackey's characterisation of the company's problems and said he was no longer in a position to know details about its workings.

The company said: "We have a moderate-sized installation which is growing monthly, very many more than the alleged six customers and their servers in operation, and in the last eight months or so have been able completely to reengineer our network and its international connectivity arrangements."

When HavenCo launched in June 2000 to widespread press acclaim - including a cover story in Wired magazine - its founders promised to transform a windswept gun tower anchored six miles off the stormy coast of the UK 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: "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."

But 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 adviser, coupled with the family's increasing nervousness about their customers' activities after the 11 September terrorist attacks in the US.

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 website, 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 website 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. But he said the Sealand royal family balked over the possibility of bad publicity. "I decided as soon as I got out of the meeting that I was going to quit."

HavenCo said on Monday that its acceptable use policy "stands as originally written. However it is the case that principality law forbids any act...which is against international law, linked with terrorism, or contrary to international custom and practice. These restrictions are in keeping with those found in any country."

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

Declan McCullagh writes for CNET News.com<.i>