Recent statistics show that nearly fifty per cent of North Americans have accessed the Internet in the past year. With increased Internet usage there has been increased conflict resulting in a number of court cases. Proponents have made a strong case for limited regulation of Internet activities to protect vulnerable groups from predators and hate mongers and to ensure proper business standards are followed during e-commerce transactions. However, efforts to control cyber-activities have been largely unsuccessful since governments and affected parties have relied on traditional rules and jurisdiction.

Further attempts to regulate Internet activities will fail unless global cooperation is achieved. The internet has morphed the traditional constraints of distance, space and time thus making geographical locations and borders largely irrelevant in the cyber-world. On the other hand, the effects of the Internet are felt in most communities. Commerce has been affected and intellectual property infringement is commonplace. On-line pornography, defamatory remarks and the dissemination of hatred raise the ire of people across the world. Regulation will not be successful unless laws specific to the Internet recognizing its nature and reality are formed.

This paper will first reveal the inadequacy of traditional law because of geographical indeterminacy and jurisdictional issues. Proposed solutions are then suggested followed by a proposal to develop a system of cyberspace law.

The nature of cyberspace is global and dynamic while regulatory efforts have thus far been provincial and static. In the real world territorially defined political communities exist to form states. Each national sovereign has its own legal system unique to its history and traditions where judicial power is derived from the willingness of the government to enforce judicial decrees. With the advent of a global computer network, local power has been usurped by the Internet's universal character and the meaningless of physical location.

The rise of the Internet is destroying the link between geographical location and the procedural doctrines of:

Thus, territorially defined rules are inadequate to deal with the legal difficulties that may arise in the cyberspace community.

The geographic indeterminacy of the network destroys any notion that a local government can rightfully exercise jurisdiction. Though Internet machines do have "addresses", these merely locate the machine on the network and not in real space. Even geographical indicators such as ".ca" for Canada, for example, may not be accurate since the operator of the "example.ca" domain may not even reside in Canada. In addition, in nations with one of the many new geographical indicators, the Cayman Islands' ".ci", for example, registration of domain names by people from outside their geographical territory is encouraged.

It is difficult to control the vast amounts of information flowing electronically in and out of any given state. For any country attempting to foster a positive e-commerce presence, any attempts to stifle information are neither feasible nor desirable.

The United States has seen a number of criminal and civil cases where jurisdictional issues had to be decided resulting from online contacts. Many of the outcomes are questionable and may be attributed to judges not fully comprehending the law, to inadequate and antiquated legal systems and to politicians looking to gain favour with the electorate.

In civil cases, for the court to have personal jurisdiction, the defendant does not have to be physically present in the forum state but rather that minimum contact with the state is established. A wide range of activities meets this requirement, as is seen below, including the making available of information within the district. The minimum contacts with the forum are such that "he might anticipate defending that particular claim there...." and so long as the contacts are purposefully directed toward the forum, they may be isolated or occasional. This gives rise to the absurd hypothetical that the laws of every jurisdiction are simultaneously applicable to a person putting a web page on the Internet.

In a case where the operator of a gambling site was from another jurisdiction, the Attorney General of Minnesota has asserted the right to regulate gambling sites accessed within Minnesota even when the web page originates from outside the state. Minnesota's Warning to All Internet Users and Providers states that "[p]ersons outside of Minnesota who transmit information via the Internet knowing that information will be disseminated in Minnesota are subject to jurisdiction in Minnesota courts for violations of state criminal and civil laws".

Similar reasoning was adopted in the non-internet electronic communication case of U.S. v. Thomas where the Californian defendants were convicted of supplying obscene materials to Memphis Tennessee from their computer bulletin-board service despite the materials' legality in California. Since the effects of the defendants' conduct reached Tennessee, it was held that the venue was proper there. The court applied the Miller obscenity test where the "local community standard" is used to determine what is considered obscene. The court used Tennessee community standards rather than Californian. A Cyber-community standard would have been better to apply.

Other examples give further proof that existing domestic law does not adequately apply to Cyber-issues. By furthering the idea that information providers could be liable in any jurisdiction, academic, commercial, religious and personal freedoms may be hindered. "By asserting a right to regulate whatever its citizens may access on the net, these local authorities are laying the predicate for an argument that Singapore or Iraq or any other sovereign can regulate the activities of U.S. companies operating in cyberspace from a location physically within the United States." The current situation must change globally to balance freedom of speech and community values and norms.

This paper will first discuss international arbitration as a proposed solution to the problem of applying geographically based jurisdictional and conflict of law rules to cyberspace. Secondly, the paper will discuss the creation of a new set of rules known as cyberlaw. Finally, this paper will propose how this potentially new form of jurisdiction and enforcement can come into existence and the potential problems to be faced.

In the article, Jurisdiction in Cyberspace: the role of intermediaries, Henry Perritt proposes two solutions to resolve the problem of consensus: (1) international arbitration for civil disputes; and (2) an international court for criminal matters. This paper will only discuss the first proposal since the International Criminal Court is thus far limited to matters of an extra-ordinary nature such as war crimes. The main premise of the article is that intermediaries such as network operators are in better position to arrange for dispute resolution than the traditional legal institutions whose powers are limited by physical boundaries.

Arbitration is dispute resolution by an impartial party chosen by the parties to the dispute who agree in advance to abide by the arbitrator's award issued after a hearing. As is the case with many contractual agreements formed in the late 1990s, in the networked environment there may be a need for arbitration provisions between the network operator and its users, between the web page creator and users accessing the page, or between individual network operators. In many online conflicts, where most of the time parties are in different jurisdictions and are subject to different substantive laws, it may be better for both sides to have their dispute arbitrated than litigated. In an Internet-related dispute, there are several advantages in using arbitration rather than litigation. In arbitration, as in the networked environment, the physical location of parties is irrelevant. Arbitration allows the parties to select their judges-arbitrators, attorneys, procedures, choice of law, language, and location, even if it is an "online place." Parties have total control over how they want to resolve their conflicts as long as they do it in advance by signing an arbitration agreement. In addition to providing parties with control over the place and procedures of arbitration, arbitration provides predictability, competence of arbitrators, finality, and enforceability of the arbitration award.

Arbitration also has some drawbacks. If multiple parties are involved in a dispute there may be multiple proceedings adding to the cost and creating inconsistent results. This drawback, however, may be avoided if all the parties to the dispute are subject to the same arbitration clause, which is likely to be the case in the networked environment. Another criticism of arbitration is that arbitrators may be trying more to agree on the compromised result rather than finding one side successful. In addition, most arbitration agreements provide for limited discovery and limited judicial review.

There have been some attempts of non-judicial dispute resolution in cyberspace. One of them is the Virtual Magistrate Project organized by the Cyberspace Law Institute, the National Center for Automated Information Research, the American Arbitration Association, the Villanova Center for Information Law and Policy, and several online service providers. The Virtual Magistrate Project offers arbitration for resolution of disputes involving (1) users of online systems; (2) victims of wrongful messages, postings, or files; and (3) system operators. Complaints can be filed, arbitrators selected, hearings held and decisions announced through electronic messages. Although the Magistrate is a recent development, it has potential to ease many jurisdictional and choice of law issues in cyberspace.

Arbitration, based on the voluntary contractual agreement, can well serve its purpose in the resolution of civil disputes but it will not resolve criminal issues. A better system must encompass both the civil and criminal tenets of the law. A cohesive system that incorporates arbitration into its dispute resolution process and is acceptable across cyberspace is needed.

Global co-operation is necessary to deal with the abundance of jurisdictional issues that have arisen with the advent of the computer age. Since the Internet is global in scope and extra-territorial in nature, the best solution is the advent of the cyberspace as its own jurisdiction responsible for its own creation and enforcement of laws. As such, it would have its own rules and norms.

In Law and Borders, Johnson and Post have proposed "a simplifying move" of recognizing cyberspace as a distinct place to which distinct laws should be applicable. This would result in a new cyber-forum with the jurisdiction to apply the proper body of cyberlaw to determine the rights and liabilities of cyber-citizens. This new cyberlaw would account for the special characteristics of cyberspace, including different types of online persons, places and things. This new set of rules, applicable only to the online world, would greatly simplify several legal issues, including trademarks, defamation, professional licensing, fraud, obscenity and copyrights. Once a cyber-forum is established and the body of cyberlaw is developed, the jurisdictional and choice of laws issues would be significantly simplified.

The authors suggest that new law-making institutions will have to be developed and "someone" who is a legitimate source of governance will create cyberlaw. The community of online users and service providers itself may become a legitimate source of self-regulating rules. Existing forms of self-governance in cyberspace include engineers developing technological protocols, sysops and access providers creating and imposing terms and conditions of access on their users, as well as a set of rules, commonly referred to as "netiquette," that mainly defines cyber-manners. In addition, cyberspace already possesses some enforcement mechanisms, which include banishment from the server, flaming, shunning, mailbombs, or cancelbots. However, self-governance is inadequate when dealing with more complex legal issues such as copyrights and obscenity.

Two solutions to the dilemma of consensus building among the diversity of users necessary to create and enforce a uniform set of cyberlaws are offered by Johnson and Post: (1) "speciation"; and (2) right to exit. The genetic term "speciation" defines the emergence of multiple distinct sets of genetic information (species) out of a single set that occurs only if there is a barrier to prevent a free exchange of information between subsets. Internal barriers have already emerged within cyberspace resulting in distinct subsets. For example, the University of British Columbia web page is distinct from the Playboy web page as each is accessed via a different address. Moreover, some Internet sites already require passwords, credit card numbers or impose fees before allowing access. Usenet newsgroups are distinct from listserv discussion groups, and each is distinct from the Internet Relay Chat.

These internal borders, however, have no correlation with geographical borders. In cyberspace crossing the border between the newsgroup alt.sports.Canucks and alt.religion.Scientology is more visible than crossing from a server in Canada to a server in Japan. These internal borders will continue creating distinct online "communities" governed by distinct set of rules. Although it may be more feasible to develop a set of rules that governs the participants of a specific discussion group or users of an online chat room than to develop one set of rules governing entire cyberspace, a codification of basic cyberlaws should be in place in case any dispute arises where an individual set of rules may be inadequate.

The idea of distinct online places with distinct sets of rules (or, "speciation") is further discussed by Post in his article Anarchy, State, and the Internet: An Essay on Law-Making in Cyberspace. Post starts the discussion with a question of who, in cyberspace, is in the best position to make and enforce the cyber rules. He refers the Robert Ellickson's framework for behavioral controls that identifies five "controllers" of an individual's behavior: the actor himself, the person acted upon, non-hierarchically organized social forces, hierarchically organized non-governmental organizations, and governments.

The governments whose powers are limited by geographical boundaries are unable to monitor and regulate activities on the Internet. Most of the attempts to regulate the online behavior of their citizens have failed due to the inability of detection and imposition of sanctions. Post convincingly argues that "hierarchically organized non-governmental organizations," such as individual networks comprising the Internet, have the strongest competitive advantage to regulate the Internet. The Internet is a network of interconnected networks where each network has already developed technological standards and protocols that control the entry of messages into the network. Currently, these protocols mainly control the technical specifications unrelated to message content and are unable to detect copyright violations, fraud, or obscenity. However, some technological solutions can analyze the content and meaning of messages somewhat.

For example, there are technological solutions to detect whether a message is anonymous or encrypted. In addition, each network has a network operator(s) that can monitor the activities of that network. In this regard, it is more practical to submit the task of monitoring the activities of each individual network to the network operator(s) rather than allowing a single state to monitor the Internet. Many discussion groups are already being monitored by a discussion group moderator who will assess the appropriateness of each message. However, considering the vast amounts of information posted on popular discussion groups, it is near impossible to always be able to adequately control the flow of information without compromising net speed and freedom of communication which are two hallmarks of Cyberspace.

The second argument for the proposition that cyberlaw may exist without obtaining the consensus of all Internet users is the right to exit. The "right to exit" simply means that any Internet user is free to withdraw from a "jurisdiction" of a network If an individual is offended by the low threshold of obscenity standard on any individual network, s/he has a right to exit and to never return. The same may apply to the network controllers when the government is imposing geographically limited rules. They can relocate their online behavior to another network located in different jurisdiction.

A free market for social control laws has been created through the multitude of online "communities" with distinct online rule-sets coupled with the right to "exit" have created a free market for social control laws. Most virtual communities have a minimum standard that governs civil infractions such as defamation or obscenity. Some infractions may only affect the community itself and thus the community’s laws may apply but where the wider cyber-community is affected, a standard code of cyberlaws should apply. This is analogous to real world situations where a nation’s laws may be superceded if they go against international norms recognized as jus cogens or recognized by covenant or treaty.

Formation Difficulties

A method of creating a system of laws for the jurisdiction has been alluded to in this paper and in others but no framework has been outlined. This paper proposes that governments negotiate a treaty in a manner similar to the 1994 creation of the World Trade Organization. A federal "Cyberlaw" system that will oversee the whole of the Internet to deal with problems not adequately handled in individual cyber-communities. Potential issues will be mentioned but deserve further in-depth analysis in another paper.

A major difficulty will be persuading "netizens" to recognize the jurisdiction of Cyberlaw and to abide by the its laws. No system is successful if the governed do not agree to be supervised. Netizens will be more apt to abide by set rules if they are given the opportunity to help develop them. Their participation in the formation of such a system is critical since they know the nature of the environment best and can highlight situations that need to be addressed. In creating a Cyberlaw system, the developers must ensure that some corners of the cyber-universe will be allowed greater freedoms than other areas with more commercial and/or family activity.

In other words, individual cyber-community laws will apply unless a dispute arises where a party believes that the "community" has not adequately resolved the problem and thus asks for Cyberlaw jurisdiction. Thus, like-minded people may establish communities allowing greater liberties than in the mainstream of the Internet. Such communities could possibly be found in a new domain (such as ".fre") which could be off-limits to all elementary school computers, for example, by adopting filtering and blocking software. This would ensure a balance between net freedom of expression and regulation. Under such a scenario, netizens may be more willing to accept the jurisdiction where they help develop the laws.

Another major problem will be getting states to agree to the process of carving out jurisdiction. Sub-issues will include economically and technologically rich versus poor nations and religious versus secular interests.

Governments with an interest in the further development of the internet have the ability to negotiate a treaty so as to develop rules recognizing the uniqueness of the Cyberspace while ensuring that international norms are respected and domestic issues are addressed. Assuming the United States supports the formation of Cyberlaw, it has the power to lead negotiations and can ensure that most countries adhere to the agreement by using its economic influence as it has in the past. Advanced states could also offer technical assistance to poorer nations. As well, states can be encouraged to participate in the formation of Cyberlaws to allow cultural and religious considerations.

Both rich and poor nations may feel there is nothing to gain and everything to lose by shifting jurisdiction to a new entity. Supporters must be able to show a nation that its valuable resources of time, money and manpower will no longer need to be wasted in a futile attempt to control an entity beyond its national control. State membership to a Cyberlaw treaty will be encouraged if member states are allowed to nominate a list of suitable panelists eligible to act as mediators, judges or arbitrators of disputes in cyberspace. This would ensure that states would have continued input on the development of cyberspace law.

If enough states consider signing a Cyberspace treaty, another major consideration must be addressed: how Cyberlaw is to be financed. Anything less than self-sufficiency will not be acceptable for many states already unable to handle the burden of supporting their international obligations. On the other hand, netizens will balk on paying some sort of user fee to finance an entity that may never benefit them personally.

I propose that a nominal charge, such as .01%, on the value of all commercial transactions taking place in cyberspace. With the imminent advent of cyber-credits or another on-line monetary system, this task is not too daunting. Since most potential problems will arise as a result of commercial contracts, paying a small fee to cover the cost of cyber-court proceedings may appear attractive to netizens. What kind of system being financed must be made clear in order to gain the support of the wider cyber-community.

Suppose that X and Y are members of the same chat room where Y makes what X considers defamatory remarks about her. If X does not feel that she can let the remarks pass yet does not feel empowered enough to defend herself, the first step for X would be to get the issue addressed within her local "community". Solutions may include allowing X adequate space to refute the remarks made by Y or two suspend Y’s community privileges for a certain amount of time. These solutions are already in use at present but sometimes the solution may not be adequate. In this example, X would then seek dispute settlement within the Cyberlaw system.

Within the Cyberlaw system, the parties would first have to enter into a mediation process in an attempt to settle their dispute. If X and Y can not reach a settlement, then they would have to mutually agree on a panel between 1 to 5 arbitrators; the number depending on the type of offence and the amount of people affected by the offence. In our example of X and Y, this is probably as far as they would go. If arbitration is not successful or if it is inadequate in the circumstances, such as in serious criminal cases, then 3 to 9 judges would be used to settle the dispute. In only rare circumstances would a situation get this far since the system is devised to reach settlement early. With so many levels to reach an agreeable settlement, an appeal process may not be necessary and in recognizing the nature of cyberspace, decisions would need to be made precisely yet quickly.

This structure is not complete and thus many problems will arise when considering criminal procedures. For example, enforcement and monitoring agencies such as the Federal Bureau of Investigation in the U.S. and the RCMP in Canada are vital to the success of the Cyberlaw system. It is unlikely that investigators of individual states would be willing to hand over information to another agency unless certain that the laws are adequate and will be enforced. Thus, Cyberlaws can not be too lenient in criminal matters because the support of such agencies is necessary to gather information and to find culprits. Another problem will be the incarceration issue that may arise. Cyberlaw will need to include a treaty whereby those convicted of a crime may be incarcerated in an institution of the state. This may cause even more problems and could lead to the necessity of transporting criminals to third party nations to serve time.

One final problem to be dealt with in another paper is how to bring cyber-criminals to justice if they are operating out of a non-signatory state. By simply turning on the computer and surfing the Internet, a person would be under Cyberlaw jurisdiction. States will need to be persuaded to sign a Cyberlaw treaty or else risk disruptions to internet access because the Cyberlaw system will not be successful without the cooperation of all states.

The justifications for and the feasibility of the traditional geographically-based jurisdictional and choice of law rules has been undermined by cyberspace. Such rules are not feasible to Internet users because cyberspace does not have clear delineated boundaries. Accordingly, any jurisdictional and choice of law rules must recognize cyberspace as a distinct spatial, rather than geographical, jurisdiction. In this regard, a possible solution involves creating Cyberlaw. However, the creation of this distinct body of law poses two identifiable problems: (1) certain laws will necessarily involve gaining the approval of the governed, and thus gaining the necessary consensus may be difficult; (2) the Internet's global and decentralized nature will prevent any single law-making authority from applying cyberlaws across cyberspace. Thus, negotiations must begin amongst nations to create one coherent system in Cyberspace.

Until the negotiation of a Cyberlaw treaty, a medium-term solution involves the creation of network-specific jurisdictions, similar to individual country/state jurisdictions. These jurisdictions should be self-governing with respect to laws that will affect only the "residents" of that jurisdiction. With respect to the laws that affect other jurisdictions, the additional problem of the consensus can be overcome by the following: (1) the application of already existing, but modified, international treaties and conventions; and (2) the creation of an international arbitration agreement specifically designed for the online environment. These jurisdictions would then be absorbed onto the Cyberlaw system upon its inception. The arbitration process would also be incorporated into the Cyberlaw dispute settlement procedure.

With global cooperation, jurisdictional and conflicts of law issues would be solved in matters regarding Cyberspace.