By Rachel Konrad and Patricia Jacobus
Staff Writers, CNET News.com
April 19, 2001, 4:00 a.m. PT

Foreign governments are moving to regulate the Internet with growing frequency, raising the potential for the kind of conflict with U.S. law not seen since the beginning of the medium's mainstream popularity.

Although Yahoo's legal dispute with a court in France has drawn the most attention, governments of other countries are passing laws restricting information: Britain's Regulation of Investigatory Powers Act gives police broad access to e-mail and other online communication; South Korea has outlawed access to gambling sites; and an Italian court ruled in January that foreign sites could be shuttered in a case involving a father who said he was defamed by online claims that he kidnapped his two daughters.

Still more frightening to cyberlibertarians are initiatives by governments banding together to create worldwide laws. Of particular concern are such efforts as an international treaty on crime under discussion by the Council of Europe, a group of 41 countries. Another treaty formed at the Hague Convention and due for adoption in the summer could allow for enforcement of foreign judgments in intellectual property disputes, libel and other claims.

"The trend now is the rise in multilateral regulations such as the Council of Europe on cybercrime," said Alan Davidson from the Center for Democracy and Technology. "This is where multiple countries regulate behavior through law and treaty. These are very real and potentially far-reaching."

Yet for all the lawsuits, legislation and technology that seek to control information and e-commerce, academics and Web veterans say governments aren't likely to tame the Internet anytime soon. In fact, they say, the Net's increasingly international stature is precisely what will keep it a relatively lawless place where pirates and pundits alike can continue to thrive.

Andrew Norwood, attorney for intellectual property group Waller Lansden Dortch & Davis of Nashville, Tenn., cited a recent congressional hearing in which politicians were shown graphically obscene online depictions of children. The legislators then learned that in each case, the material was published from an overseas Web site impervious to U.S. regulations on child pornography.

Norwood said that the Internet's international nature is what makes it so difficult for individual countries to police online activity. In addition to pornography, people attempt to sell via the Web everything from weapons to perscriptions that are illegal in the United States.

"It's a whole bunch of gunslingers out there doing whatever they want," Norwood said. "It's not like you can send the U.S. Marshals to Finland and shut things down. Nation states don't do a good job returning terrorists and kidnappers. Why would we think they should do a good job policing bald hair remedies sold online?"

Nevertheless, those hoping to place more constraints on the Internet are making inroads.

Efforts to regulate the Internet on a country-by-country basis have been under way for years, with many nations already imposing strict controls on online access as well as content. To date, the most extreme restrictions have been limited to undeveloped countries with little infrastructure to support online communications. In the West, where Internet use is highest, lawmakers have sought repeatedly to limit online content but have generally been overruled by constitutional guarantees on free speech.

Recently, however, legal experts say Internet regulation has been gathering new momentum for several reasons: the emergence of technology that can be used to find the approximate geographical location of people using the Web; increasing global cooperation; and the growing popularity of the Internet in countries with fewer free-speech safeguards than those of the United States.

"Technology is evolving that allows governments to identify the geographical location of Internet users in a way that was not possible before," said Patricia Bellia, an assistant professor at Notre Dame Law School and a former attorney with the Justice Department.

Such efforts are bolstered further by international cooperation. John H. Murphy, a professor at Villanova University School of Law who specializes in cyberterrorism, said current and proposed treaties could go a long way toward bridging the gap between divergent laws and cultures on the Web.

The World Intellectual Property Organization's 1996 copyright treaty is a good example of international cooperation on Internet regulation, he said. The agreement led to the creation of an international arbitration forum for resolving domain name disputes.

The treaty also gave rise to the passage of the Digital Millennium Copyright Act, a U.S. law that has won plaudits from content companies as a most effective weapon against Internet piracy but drawn barbs from consumer advocates. Last month, the European Union adopted similar legislation.

In addition, a proposed treaty aimed at cracking down on cybercrime could help transform the Internet into a more regulated environment. Begun in 1997 under the auspices of the Council of Europe, the treaty is still in the draft stage. Since it was made public last year, it has come under severe criticism because of numerous provisions, including a requirement that Internet service providers comply with subpoenas for customer information from any treaty nation.

Bellia said the cybercrime treaty would be unlikely to help governments impose cross-border regulations. But she said it could make it easier to investigate and enforce legislation against hacking, viruses and other online attacks by developing common laws and expediting shared information.

Murphy agreed. "I've always been skeptical of the idea that nation states are helpless in the face of (the Internet). It's ridiculous," he said. "The creeping of borders onto the Net will continue."

As Internet usage continues to rise overseas, international cybercrime is proliferating in places not often associated with the Internet. In Russia, for example, St. Petersburg is increasingly becoming a center for criminal activity online as the home base for the United Crackers League, an international group that orchestrates attacks on specific Web sites.

Russia's legions of young, male, unemployed and self-taught computer gurus have even created a name for themselves: khakker, the Russified version of hacker. So many khakkers cracked into America Online and CompuServe with stolen passwords that the companies left the country. Shortly after their departure in 1997, a new police department opened to deal with high-tech crime.

Known as Directorate R, the police unit says stolen passwords remain the most widespread form of cybercrime in Russia. Directorate R estimates that up to 95 percent of computer-related crimes in Russia go undetected.

European nations are taking the lead on law enforcement efforts against such illicit activities, but online crime is by no means restricted to the continent. Nor does cybercrime always involve enormous industries or governments.

Jim Hedgepath, for example, is primarily concerned with criminal activity by individuals in South Korea. And his concerns are centered on a commodity not often associated with the Internet at all, let alone with online crime: copyrighted needlepoint patterns.

The soft-spoken Hedgepath, president of Pegasus Originals, is in the center of an increasingly raucous debate to wrest control of the Web from pirates who download his copyrighted patterns for needlepoint, stencil designs, paint-by-number art and even entire instruction manuals with impunity. Hedgepath estimates that unfettered online distribution of his intellectual property has dented sales by at least $200,000 a year since 1997.

"We've found that most people, when we confront them, are very apologetic and say they didn't realize they were cutting the designer out of a way to make a living," Hedgepath said from his prize-winning cross-stitch and needlepoint design studio in Lexington, S.C. "But we have about six individuals out there who are hard-core pirates. They'll even rip off patterns from Disney and Precious Moments and Barney and 'Sesame Street'--they don't stop because it's a big name. They don't listen to anybody."

Overseas theft is one of the main complaints of the Hobby Industry Association (HIA), an Elmwood Park, N.J.-based trade group representing more than 4,000 member businesses. But the group fears that there's little it can do to stem the violations.

"Realistically, we're not going to be able to do anything about Korea," said Susan Brandt, HIA spokeswoman, assistant executive director and director of communications. "There's no such thing as a worldwide patent or copyright. A small company simply cannot afford tens of thousands of dollars for worldwide copyright protection. Maybe they can go after a violation in Canada, or even Germany. But Korea? Forget it."

Alan Weintraub, a research director at technology research firm Gartner, compared the state of Internet law enforcement to the days of U.S. Prohibition from 1919 to 1933.

"Just as we emerged out of Prohibition with legalized drinking, we'll emerge out of content distribution with people understanding that if they break the rules, there will be some level of legal reaction," he said. "We're always going to have the bootleggers. But we're going to be able to set up a set of acceptable policies that people will live by."

But when that will happen--if ever--remains an open question.

"It's maturing, but it certainly is still a new technology. And from a legal point of view, whenever you have a new technology, you're going to have an introductory period when the law can't figure out how to adapt," said Michael Epstein of New York-based law firm Weil Gotshal & Manges. "Right now it's the wild, wild West because there's limited guidance in terms of cases and legislation. We evolve to something more manageable and traditional, but it's going to take a long time." 

News.com's Evan Hansen contributed to this report.