Testimony starts at 'CDA II' trial

Law could harm advertising-supported Web sites, an expert testifies.

PHILADELPHIA -- You know it's not business as usual when the American Civil Liberties Union is pushing for a legal hearing to take place behind closed doors.

That was what happened here Wednesday, as the federal hearing over whether to again delay implementation of the Child Online Protection Act was itself delayed amid wrangling over how to handle sensitive testimony from some plaintiffs.

The hearing, which had been scheduled to wrap up Friday, now seems likely to extend into next week, as the ACLU-led coalition supporting the continued ban on the law's enforcement tries to convince Judge Lowell Reed Jr. to agree to a secret hearing. That hearing would consist of testimony on the business plans of plaintiffs including the technology news Web site CNet Inc. (Nasdaq:CNET). (ZDNet, as a member of the Internet Content Coalition trade group, is also a plaintiff in the case.)

ACLU officials said that the government, to prove its case that the COPA law won't put commercial Web sites out of business, will call on the plaintiffs to present financial information that would otherwise not be available to the public, even though many of the sites are run by publicly-traded companies.

To protect these potential "trade secrets," attorneys for both sides spent much of Wednesday afternoon drawing up a tentative agreement saying that in the event they come up in the public portion of the hearing, they will be viewed as "hypotheticals."

More delays ahead
But even so, Reed and ACLU attorneys Ann Beeson and Chris Hansen said another hearing on the trade secrets issue may have to take place Thursday, which could delay scheduled testimony from CNet Vice President Chris Barr, Sexualhealth.com site producer Mitch Tepper, and Internet service provider EarthLink Inc.'s head of computer security, Dan Farmer.

Reed is to decide by Feb. 1 whether to continue the temporary injunction against the enforcement of the COPA law that he approved in November. The law would require commercial Web sites to fence off content that meets a "harmful to minors" standard, defined as sexual material that lacks "serious literary, artistic, political or scientific value."

COPA was passed in October, more than a year after the Supreme Court overturned the original CDA on First Amendment grounds. Violators of the law would face up to six months in jail and up to $100,000 in fines.

Action in court
While the legal wrangling over the proposed closed hearing stole much of the show on Wednesday, the first two witnesses to testify did attempt to poke holes in the government's defense of the law.

Donna L. Hoffman, an associate professor of management at Vanderbilt University and a researcher on consumers' online behavior, said sites have painstakingly built up traffic by offering compelling, free content and services. Their business plans would be in serious jeopardy if they had to keep certain content behind age-verification "walls," Hoffman said.

Traffic equals success
"Investors now are valuing Internet businesses by asking how many customers they will attract and maintain over time," she said, adding, "Success comes through traffic."

With research proving that most consumers don't want to pay for online content or even register for Web sites by providing personal information, it's safe to assume that COPA, which would require commercial Web sites to fence off content that fits the "harmful to minors" legal standard, would cause traffic on those sites to decline, she said.

Under questioning by Beeson, the ACLU attorney who helped lead the case against the original CDA, Hoffman painted a picture of a bleak post-COPA online business landscape. She cited the example of HotWired, which in 1994 abandoned an attempt to make users register when it proved wildly unpopular, as proof of the harm the COPA law might wreak.

A narrower law
Los Angeles Times technology columnist Lawrence Magid, under questioning from government attorney Jonathan Foot, testified that while computer filtering programs can identify sexually-explicit materials, it isn't realistic to expect them to make distinctions between materials that are protected under the First Amendment and those that are not.

But the ACLU-led coalition fighting the COPA law faces a tougher battle this time around, many experts agree, since the law was written more narrowly than the CDA, which would have subjected all Web sites, online bulletin boards and even e-mail to its strictures.

COPA, passed in response, utilizes a "harmful to minors" standard that has a solid footing in existing case law. Attorneys for the government are hoping to prove that that standard doesn't necessarily threaten Web sites' business models, and that it would simply extend offline anti-pornography protections to users of money-making Web sites.

Impact not clear
Under cross-examination by government lawyer Foot, Hoffman admitted that in an industry that moves as fast as the Internet industry, making solid predictions is hard.

She admitted she did not know how much of the content on the Internet would meet the "harmful to minors" standard, and that she also did not know how much of the content on the plaintiffs' Web sites would meet that standard.

"So you're saying Web businesses would grind to a halt if there were regulation of some sexual content, right?" Foot asked.

"That is not exactly my position, no," Hoffman replied.

The hearing resumes Thursday.


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