CYBERSPACE – Adult industry attorney Eric M. Bernstein of embalaw.com was a special guest on YNOT Radio on Wednesday afternoon, appearing on the Humpday Lunch Show with hosts YNOTBob and LAJ and speaking to a full house of concerned adult industry professionals.The topic which prompted Bernstein’s guest appearance was the recent publication of changes to Title 18 U.S.C. § 2257, federal record keeping laws aimed at regulating the adult entertainment industry. The regulations set rules and requirements regarding the keeping of age verification records for models who appear in sexually explicit adult content; but the rules are extremely difficult to follow, and create a number of problems for adult entertainment businesses. Since their publication in the Federal Registry on Tuesday morning, the new regulations have caused considerable discussion throughout the adult industry on both resource sites and industry chat boards.

The chat room for the Humpday Lunch Show was packed with more than a hundred people at one point, with many more individuals listening in to the show without joining the chat room. Participants in the show’s chat room were obviously displeased with the many problems created by the DOJ’s new 2257 regulations.

“Sounds like invasion of privacy to me,” remarked “AbulletAway” of the regulations.

“If any surfer can get a model’s [home] address it is wrong, IMHO,” typed someone with the chat handle “Michael.”

Show guest Bernstein spoke at length about the new 2257 regulations, and addressed some of the issues the changes present to the industry.

How worried should adult webmasters be about these new regulations?

“Worried,” admitted Bernstein bluntly, and he ranked the urgency of this development ahead of the industry’s ongoing patent battle with Acacia Research, and ahead of the 2003 changes in Visa USA’s rules that turned third-party billing companies into IPSPs.

“Worried in the sense of what some of us have been telling [webmasters] for a long time,” Bernstein elaborated. “They should be worried that they have the records they need to have, and to be prepared in case the Free Speech Coalition isn’t successful in getting the injunction they’re looking for, or that the feds decide in spite of a potential injunction they’re going to go ahead and try to prosecute a few people.”

The adult entertainment industry’s trade group, the Free Speech Coalition, has pledged to challenge the regulations in court and will seek an injunction against enforcement of the regulations while the matter is being decided at trial. The Free Speech Coalition recently warned the industry that there is no way to know if their request for an injunction will be granted, and urged webmasters and other industry professionals to comply with both the new and existing 2257 regulations.

YNOTBob asked Bernstein if the DOJ might be looking for tools to produce plea bargains in the hope of setting some kind of legal precedence that would help a larger attack on the industry.

“Plea deals in and of themselves create no precedence,” Bernstein explained. “Except for them to put on their website and say to people, ‘we’ve been successful in prosecuting obscenity convictions.’ But short of a published case, the mere fact that they’ve received plea deals does not in and of itself set a precedent … plea deals are not admissible.”

“2257 allows them to go in another direction, and that’s a regulatory issue,” Bernstein added.

Addressing some confusion about the penalty for a violation of 2257, Bernstein rejected claims that there was a mandatory penalty for non-compliance.

“It’s a maximum five years,” Bernstein explained. “The Supreme Court in the last term ruled that the federal sentencing guidelines are still applicable to allow for a movement up or a movement down, but it’s a maximum five years. There is no set amount.”

Another area of confusion is the issue of third-party record services. Can a webmaster keep his or her 2257 records with an attorney or a third party paid service?

“The Department of Justice in its comments … has clearly indicated that offsite records custodians are not allowed,” Bernstein said. “They’re not amending the regulations to allow for such so-called third-party record custodians.”

That doesn’t mean records have to be kept a webmaster’s home, although keeping the records elsewhere would mean traditional work-from-home webmasters would have to obtain legitimate business locations away from their homes, such as commercial offices or other appropriate remote locations.

“Where is the principal place of business? It does not necessarily have to be one’s home. But it has to be a place of business,” Bernstein said. He added that a post office box is not acceptable.

Although the government has claimed 2257 regulations are important in protecting children, there have been no reported 2257 inspections that most industry professionals can recall. Many industry observers have wondered how these regulations could be so important for protecting children if the old regulations haven’t even been enforced.

“One of the reasons why these regulations were changed, among many, [was] there were no enforcement provisions in the old regulations,” Bernstein said. “There was no way to go enforce the provisions of the regulations because there were no standards, no mechanism for doing so. If they went to try to do it and someone challenged them on it they would not have the ability to claim they had been providing due process.”

Bernstein added that he wasn’t completely convinced the government had fixed that problem entirely with the new regulations, even though there has been an attempt to do so.

What about webmasters who get sexually explicit content from affiliate programs? Will these webmasters also need to obtain ID copies and maintain 2257 records?

“If they’re defined as secondary producers then the answer is yes,” Bernstein explained. “You’re going to be seeing more primary producers and less secondary producers.”

Underscoring the throbbing question mark that has been pounding away in the minds of industry professionals for some time now regarding 2257, Bernstein explained that it is difficult to predict what the DOJ will do in terms of any industry-directed offensive.

“It’s difficult to understand exactly who they’re going to target,” Bernstein said, prompting a nervous laugh from one of his hosts. “And I’m being serious in that sense, I don’t know whether for example they’re going to go after some of the bigger studios, whether they’ve got a few people they’ve got in mind … [if they] figure they’ve got a better chance of getting what they want on a record-keeping issue.”

But the question marks don’t stop with the DOJ’s intentions. The regulations themselves are often confusing, leaving webmasters uncertain about what is expected of them to stay on the right side of the law.

“There is strangely enough no statements or no comments as to what happens if an individual is found in non-compliance except for the fact that the investigator will obtain what he needs to obtain, seize evidence that he or she may feel is necessary … and move on. There’s no indication that the knock on the door will in and of itself produce, ‘If I don’t have the records I’m going to take you off to jail.’ I’m not saying they won’t, I have no idea what’s in the mind of the Attorney General’s office or the unknown entity that will be designated with the authority to enforce these rules and regulations,” Bernstein said.

One thing that is clear about the new 2257 regulations: content that was created prior to July 3rd, 1995 will be exempt from the record-keeping requirements. Does that mean, YNOTBob wondered half jokingly, that there will be a resurgence in porn featuring women with feathered hairstyles and excessive blue eyeliner?

“Vintage material may be [on its way back],” Bernstein replied, playing along. “I think you’re going to have a resurgence… from a legal point of view, there’s a potential resurgence of the vintage.”

“Falcon Foto and ZMaster are going to make a lot of money now,” joked audience member Dravyk, showing his veteran industry status.

What will it take for the adult entertainment industry to finally get the government censorship crowd off of its back? YNOTBob had a solution, and that’s to make the government a silent partner in adult entertainment:

“The solution is to tax webmasters in the United States at an extraordinary amount, and that way the government will make more money off us and then they won’t come after us so much,” YNOTBob suggested.

“If they tax you then they acknowledge that you actually exist,” Bernstein replied.

In the show chat room, not everyone was buying it.

“They can’t tax free speech,” typed listener VirtuMike.

“The fact of the matter remains, every other aspect of this business, in spite of attempts to undo it, have survived,” Bernstein continued. “There’s an old line which is those who don’t understand history are doomed to repeat it. They went after this – I’m old enough to remember, as I close in on fifty, the attempts to ban adult magazines from public viewing. That didn’t work. And we went through this with the issue of the adult theaters. That didn’t work. And we went at it with the adult video. That didn’t work.”

According to Bernstein, the adult internet industry is experiencing the same challenges that other adult industry segments experienced when they were the new kid on the block. He told the YNOT Radio audience that the government has the wrong idea about the makeup of the industry’s players, and that they are also taking the wrong approach by targeting the producers of adult entertainment in supposed efforts to protect children.

“I don’t know anybody in this industry, clients, people involved, etcetera, who in any way shape or form condone, believe, or think that child pornography has any, any, any reason to be involved in this industry. That’s not what this industry does,” Bernstein stated. “And if the government is sincere in the fact that this is an attempt to make sure that minors are not participating in such, then there are ways to deal with this. If the issue is they’re concerned that minors are having access to this… that’s parents. If Johnny or Jane doesn’t belong on the computer looking at material of this nature, then … the answer is not to go after the people producing it, but after the people who are letting their children on it.”

That doesn’t mean, however, that Bernstein feels the industry has no responsibilities.

“Now we have an obligation in this industry to not, quote, lure them in, i.e. salacious material on websites in order to entice kids to come in there, and that’s dealing with the whole issue of warning pages and the way in which to show content without showing content, and frankly that’s another aspect I suspect we’re going back to, so-called more tasteful material.”

Bernstein believes that there’s plenty of ways to sell adult entertainment products without plastering hardcore images over unprotected areas of websites.

“There are webmasters who we all know who show pictures that are clearly not of a run-of-the-mill nature on the belief that the more lascivious pictures I show on my opening page the better chance I have of enticing people to buy my content. There are ways to get people into a website without showing all of the goods, so to speak,” Bernstein argued. “For years and years and years people have sold materials in this business without necessarily showing everything you’ve got. And this should be no different.”

A former government prosecutor himself, Bernstein had a message for the DOJ: the government is fighting a losing battle if it seeks to eliminate adult entertainment from the internet, and pushing either 2257 rules or obscenity laws will be an uphill battle for government censors.

“The Department of Justice needs to understand to some extent that they haven’t exactly had the greatest success with previous laws trying to deal with this industry,” Bernstein noted. “They haven’t exactly been successful with the Supreme Court, and they haven’t exactly been successful with the lower courts.”

“That’s got to be pissing them off,” remarked YNOTBob, prompting a quick reminder from Bernstein about the still-pending Extreme Associates case.

“Extreme Associates is a clear example of be careful what you wish for,” Bernstein said. “They picked the place, they picked the situation, and I don’t think in their wildest imagination did they ever think that Judge Lancaster was going to throw out the indictment before the matter was ever heard.”

Will there be similar hurdles for the government in the upcoming battle between the DOJ and the Free Speech Coalition?

“There are some significantly overbroad issues here that have been pointed out by a number of people in the business, colleagues of ours, who I don’t think the government has particularly addressed,” Bernstein said of the new 2257 rules.

And how about attorneys having to deal with worried webmasters who want answers on how they can stay on the right side of the law? According to Bernstein, many clients fail to understand that legal matters are seldom clear-cut, and there’s usually room for opposing interpretations of laws and regulations like 2257.

“Everybody wants a black and white answer to a gray question,” Bernstein explained. “And what I mean by that is, ‘Well if I do this will I be safe? If I do that will I be safe? If I do this will I not be safe?’ And the fact of the matter is unfortunately there’s no pat answer to a non pat question. We don’t know. We can give you interpretation. We can give you our best legal advice. We can give you what we think. There’s no guarantee in this. You have some very good minds, Paul Cambria, Lou Sirkin, Larry Walters, Clyde DeWitt, Greg Piccionelli, and myself, among others, who have been giving advice all along. But folks, no one knows until the feds do something, and no one even knows when the feds do something whether or not it’s enforceable.”

“It really seems like one of our best lines of defense right now is supporting an organization like the Free Speech Coalition,” LAJ remarked,

“Absolutely,” Bernstein replied. “Everybody and anybody who can obviously afford the membership should belong to the Free Speech Coalition. What also makes sense is people need to understand … that this is a business, and there are inherent costs in having a business. And if you’re not comfortable in the inherent costs of having a business, and you’re going to be in the commercial aspect of this business, then you can’t have it both ways.”

Regarding the issue of non-American companies working with American companies, Bernstein explained that 2257 complicates things.

“It appears that foreign content providers are outside of the regulations,” Bernstein said. “However it appears that foreigners working in this country without the necessary material, i.e. without some kind of US government-issued document, are going to be in violation from participating because foreign passports won’t do it.”

YNOTBob asked Bernstein to sum up what webmasters should be thinking about right now, aside from finding a good attorney.

“To the extent they can obtain the necessary documents now they need to obtain them now, and they should have been obtaining them for at least the last year, if not before,” Bernstein said. “Any primary producer who tells an existing secondary producer they can’t produce the [required documents], then you don’t do business with them and you don’t have their material on your site.”

What were the chances, YNOTBob wondered, that the DOJ was monitoring the Humpday Lunch radio show?

“I would assume that they’re listening to everything one way or the other,” Bernstein guessed. “We obviously have to walk a very fine line in terms of what we tell people.”

Eric Bernstein will appear at the adult internet convention Cybernet Expo in San Diego next month, and will speak one-on-one with the adult industry professionals who attend that show. He will have a booth, and will also be a featured speaker on a seminar panel discussion about industry legal topics. For more information about Cybernet Expo, visit cybernetexpo.com.

For more information about Eric Bernstein, see his firm’s website located at embalaw.com.