Copyright © by
Henry H. Perritt, Jr
1997
CYBERSPACE SELF-GOVERNMENT: TOWN HALL DEMOCRACY OR REDISCOVERED
ROYALISM? [FNd1]
12 BERKTLJ 413
Henry H. Perritt, Jr. [FNdd1]
INTRODUCTION
Growing interest in the Global Information Infrastructure--the Clinton Administration's Information Superhighway--has given rise to suggestions that some or all of this "cyberspace" should be self-governing--autonomous with respect to the regular law. [FN1] Cyberspace, the set of electronic network communities, may be distinct enough to have its own law and legal institutions--a system of "cybergovernment." This self-governance may be more efficient for cyberspace. However, the rules and/or the adjudicatory techniques for applying the rules may need to be different from those of the surrounding community. In any event, compliance with the basic norms of the community may be higher when members of the cyberspace subcommunity participate in self-governance. Each of these criteria can be evaluated separately with respect to the three basic activities of governance: rulemaking (legislation), rule application (adjudication), and enforcement. More or less autonomy may be appropriate depending on whether one considers rulemaking, adjudication, or enforcement.
*415 The emergence of new social communities in Internet newsgroups and on public electronic bulletin boards has already attracted comment. [FN2] Some markets are currently almost completely electronic in cyberspace, [FN3] and already govern themselves. In general, there are numerous communities that enjoy powers of self-government. Many instances of self-government are so commonplace as to escape notice. Virtually every citizen of a modern state is a member of multiple private organizations: bar associations, national fraternities, and non-profit organizations. All of these organizations exercise some powers of self-governance. Usually, there is little controversy over the application of special bodies of substantive law and the use of specialized institutions to resolve intra-organizational disputes pursuant to charters and bylaws of these organizations. It may seem strange that something can be law without being adopted by a legislature or a court, but it happens all the time and has for centuries. [FN4]
Self-government--legal autonomy--may also be appropriate for some new electronic communities, although it is extremely unlikely that self-governance will result just because some of the communications occur through new electronic channels. But, when all of the functions of a particular market or of other commercial communities are contained within electronic communications systems, the result is something like a community, whereby the participants may qualify for self-governance. [FN5] Nevertheless, while it is possible, and in this author's view desirable, for *416 net participants to make up their own rules and establish their own institutions of government, merely doing this does not necessarily assure them of an immunity or exemption from regular law. [FN6]
This article considers theoretical legal frameworks for autonomy of open networks, based upon models from other relatively autonomous communities. The article evaluates four possible justifications for electronic community self- governance, and considers sovereignty and contractual frameworks for self- government. The article reviews three attempts at self-governance: one in the alt.current-events.net-abuse newsgroup, another proposed by the International Ad Hoc Committee (IAHC), and a third represented by traditional proprietary services. The article evaluates the justification for such autonomy and inventories the major steps to be taken beforecredible exercises in self- government can *417 occur. Then the article briefly explores historical and contemporary models for such arrangements.
Based upon the theoretical frameworks, the justifications, and the models, the article concludes that considerable autonomy can be achieved through contractual arrangements featuring arbitration accompanied by choice of customary substantive law. However, there may be difficulties in defining community boundaries, in implementing effective enforcement mechanisms, and in avoiding antitrust problems in the electronic network context. The article identifies the major points of tangency between regular legal systems and new Internet systems of government. It evinces that an independent legal system for the Internet is most likely to exist if the countries of the world negotiate a kind of "hands-off" treaty, committing themselves to defer to private Internet governing institutions meeting certain criteria, and empoweringexisting multilateral institutions to play certain ministerial roles. The article concludes by observing that the cybergovernment inquiry is but a subset of a broader range of issues presented by the informal, conversational, and frequently transient nature of electronic transactions in a legal context that has traditionally stressed formality and paper records.
At least three recent law review articles have explicitly considered the possibility of self-governance for electronic communities. [FN7] This article has a broader scope than the preceding articles in that it considers self-governance and legal autonomy in cyberspace along with self-governance and legal autonomy for other types of private associations. This article also links the basic idea of cyberspace self-governance to recently-proposed mechanisms for private registration of Internet domain names.
II. EXAMPLES OF CYBERSPACE DISPUTES
There is nothing new about the possibility of disputes arising in digital electronic networks. Nor is there anything new about private *418 governance of such networks, including the resolution of such disputes. Figure 1 shows three common disputes.
Figure 1. [FN8]
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
What is new is that a growing proportion of communications is taking place across the boundaries of proprietary network systems like CompuServe, America Online, and Prodigy, as shown in Figure 2.
Figure 2.
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
*419 A person in Finland can place a file on a computer in the United States, which can then be retrieved by someone in Spain, or in the United States. The file could infringe copyrights, contain child pornography, or be defamatory. The victim might be in the United States, in Finland, or in Spain. This means that any one network-administration entity has lost control over the activities that may give rise to controversy. In the Figure 1 scenarios, the network service provider could expel the wrongdoer. In the new open architectures, however, any one network service provider may not even know who the wrongdoer is, let alone have any control over the resource the wrongdoer wants, and the deprivation of which would represent an effective sanction.
On the one hand, the shift to open networks invites self-government, because the capacity of traditional, nationally based legal institutions to regulate the problems illustrated in Figure 1 is diminished by the transnational character of such networks. On the other hand, the capacity of the service providers--the logical organizers of regimes of self-government--is also lower in such networks because the service providers do not have the same control as they did over their own proprietary networks.
III. IS SELF-GOVERNANCE DESIRABLE?
Merely because it is conceivable that electronic communities might be self- governing, and because models for self-governance exist within recognized theoretical frameworks, does not mean that self-governance is desirable. Subcommunities within larger legal communities exercise powers of self- governance for one or more of four reasons: self-governance is more efficient; the rules and/or the adjudicatory techniques for applying the rules need to be different from those of the surrounding community; it is impracticable to apply the rules of the surrounding community; or compliance with basic norms of the community is higher when members of the subcommunity participate in self- governance. Each of these criteria can be evaluated separately with respect to the three basic activities of governance: rulemaking (legislation), rule application (adjudication), and enforcement. More or less autonomy may be appropriate depending on which of these factors one considers. [FN9] The following analysis of the criteria argues that self-governance is desirable for electronic communities.
*420 A. Self-governance may be more efficient
Self-governance may simply be a more efficient way of making and enforcing specialized rules and of enforcing rules of the larger legal system. The electronic community can enforce a norm that is supported by broad consensus in the larger society about what substantive rules ought to apply to conduct. When this occurs, it is easy for the larger legal system to defer to a self- governing community, because community institutions make exactly the same decisions that the traditional legal institutions would. It makes no real difference whether internal institutions or traditional institutions apply it; the law is the same either way.
Self-governance by electronic communities may be more efficient than governance directly through larger community mechanisms because of the inherent availability of more efficient communication technologies in electronic communities. Proposals for new rules can be published almost instantly to members of the electronic communities, and they or their representatives can debate the desirability of the proposed rules without having to assemble physically. Application of existing rules can also be moreefficient using information technology because of easier detection, prompter notice, and electronic adjudication of rule violations. Indeed, an adjudicatory tribunal to hear arguments and evidence can be convened electronically. Further, the tribunal could deliberate electronically (when multiple decision-makers are involved), and make its decisions known electronically. Electronic communities may also have greater efficiency in imposing sanctions for rule violation because of the ease with which a violator can be denied access to electronic community resources. [FN10] A "judgment" can be executed simply by invalidating a user's password for a closed system and by removing her Internet address from routers in open systems.
B. Networks need different rules and procedures
Self-governance is desirable if different rules or adjudicatory outcomes for electronic communities are important, compared with the surrounding communities. This criterion is met when the matters addressed by self-governance are highly specialized. Specialization militates in favor of deference to the electronic community by the traditional institutions. Traditional institutions are unable, as a practical matter, to take the time to master the complexities of the specialized subject matter.
*421 The second criterion is also met when nobody in the traditional community really cares what the internal community does. For instance, while no one in the larger society or political system really cares about the rules for earning merit badges in the Boy Scouts, or the seniority rules in a collective bargaining agreement, members of the internal communities do. When no one cares, it is easier to defer to self-governance.
1. RULES:
Both the need for, and the indifference to, specialized rules exist with respect to cyberspace. The most obvious example relates to purely technical issues, such as enhancements to basic e-mail, Internet routing, Web protocols, and to netiquette rules of subject matter for newsgroups.
The case is hard to make, however, that members of electronic communities should be subject to different rules with respect to conduct that causes harm outside their own communities. It is implausible to assume that no one in the surrounding community will care when members of the electronic community cause harm beyond the electronic community boundaries. The larger community will certainly insist that its rules, intended to address harm to its members, be enforced within electronic communities as well as elsewhere. Clear examples are copyright infringement and use of domain names that conflict with trademarks.
A second possibility for independent rules involves contract formation. The members of an electronic community could agree that contracts for the sale of goods or services could be formed in a particular way. [FN11] For example, members could agree that exchange of electronic data interchange (EDI) transaction sets, or of tokens satisfying a predefined standard (for authentication using public key encryption) [FN12] forms a contract.
*422 A third possibility would be to have specialized rules for potentially offensive communications including obscene and pornographic communications. The rules could require that such communications be directed to particular parts of the electronic community, access to which is limited so as to admit only those over a certain age. [FN13]
Fourth, rules for payments could prescribe how offers, acceptances, and payment orders are to be authenticated, and how the risk of forgery and insolvency are to be borne. The result would be like bank clearinghouse rules.
2. PROCEDURES:
Electronic communities need specialized adjudicators to produce better results at a lower cost. Different adjudicatory results could arise from the use of specialized decision-makers in electronic communities. Specialized adjudicators could understand specialized rules for electronic communities better than adjudicators in larger communities who have less contact with the specialized rules. Specialized adjudicators could also understand particular factual contexts within which disputes arise over rule application. For example, a dispute might arise over loss-allocation under an electronic community payments rule. In such a case, an adjudicator who understands public key encryption would be in a better position to appreciate fault in the handling of public and private keys resulting in a forgery. Or, a specialized adjudicator could appreciate the failure of the manager of a reserved area to give notice of potentially offensive contents in the manner prescribed by the community rule. In such a specialized "zoning" case, knowledge of the workings of the boundaries of newsgroups and Web spaces would improve decision-making.
C. Open networks escape enforcement of conventional rules
Self-governance may be desirable because it is impractical to apply rules of larger communities. [FN14] One situation in which the impracticability *423 criterion is satisfied is when the boundaries of electronic communities cross the geographic boundaries of traditional sovereigns. This occurs with rapidly increasing frequency as the Internet becomes the model for computer networks, handling a wide variety of commercial and personal communications and delivering commercially valuable information and services. In such network communities, harm occurring in one geographically defined jurisdiction frequently results from conduct occurring in a different geographically defined jurisdiction.
Internet transactions regularly cross national boundaries. [FN15] Such cross-border communications raise questions of the enforceability of export restrictions, the limitations on public access to public information, intellectual property protection, and the liability for injurious content.
The international nature of these transactions create problems that cannot be dealt with by traditional legal systems. Even if a jurisdiction in which the injury occurs asserts jurisdiction and chooses a plausible body of substantive law, it may lack the means of enforcing its decision, because the actor is somewhere beyond its reach. When conduct traditionally considered criminal is involved, the problem is more acute because of the absence of transitory crimes in traditional jurisprudence. [FN16] It is unusual for geographically defined legal systems to prosecute for crimes committed in other places, except by artificially redefining the place of commission to be the place of injury.
*424 Electronic network communities, on the other hand, may find it much easier to enforce rules. For electronic networks in which the attachment is primarily social, threat of exclusion from the network may be a powerful enough incentive to induce compliance with the rules. For electronic networks in which the attachment is primarily economic, the growing availability of low transaction cost methods of making payment potentially facilitate enforcement. A large producer may be required to post a bond, as for certification authorities used in digital authentication systems. Smaller participants, like consumers, are likely to have credit on the network, either through having paid for cybermoney or having arranged for secured electronic credit card transactions. A condition of network participation could be that the consumer must place some of this credit at risk in order to enable fines or civil penalties to be imposed through appropriate adjudicatory procedures.
Self-governing electronic communities can use these methods to deal with conduct occurring in their communities regardless of the place at which it occurs. Also, electronic communities can impose punishments and effectuate compensatory remedies regardless of the geographic place where the community member engaging in the conduct violating the rule is found.
D. Self-governance promotes voluntary compliance
An important advantage of democratic or other representative political systems from autilitarian perspective, is that they are more likely than authoritarian systems to induce voluntary rule-compliance by citizens. This is so not only because of greater participation by those bound by the rules, but also because specialized rules are less likely to produce bizarre results than general rules drawn from traditional communities. Compliance with the rules imposed by surrounding legal systems may be low in certain electronic communities because the rules are not perceived as fitting the realities of the communities, or because enforcement of the rules by the regular legal institutions is impractical. In either or both of these situations, compliance may improve with standards of behavior that are acceptable to (while not identical to the rules of) the surrounding community, if a measure of self- governance is allowed to participants in the electronic communities. For instance, electronic community participants who wish to exchange messages containing potentially offensive content, might be willing to comply with rules requiring clear notice, the exclusion of minors, and other restrictions on access, while they would be unwilling to comply with prohibitions on exchanging such messages.
*425 E. Conclusion
The likelihood of autonomy for electronic communities is greatest when specialized rules and adjudicators are needed, and traditional communities are indifferent to their content. In such situations, the inherent likelihood that a specialized legal system will be more efficient, that it will induce greater voluntary compliance, and that it will regulate behavior that otherwise would escape regulation, tilt the political balance in favor of autonomy.
IV. IS SELF-GOVERNMENT LEGALLY FEASIBLE?
All modern legal systems proceed from the foundational premise that only entities possessing sovereignty can make, apply, and enforce law. Despite the association of sovereignty with national governments, the reality is that governance is dispersed among a rich variety of public and private institutions.Most people in industrialized society work for employers who administer private systems of workplace governance. Most money moves in complex clearinghouse systems set up and administered by private banks. Most industrial production and commerce takes place in private contractual webs. Much social and religious life transpires in private associations. The increased importance of international human rights, trade, and environmental law has drawn upon the energy and expertise of thousands of non-governmental organizations (NGOs), such as Amnesty International and Greenpeace, to provide information and analysis to treaty based institutions.
In theory, however, these private governments derive their power from the traditional sovereigns and are always subject to the sovereign imposing new regulations and enforcing them. The relationship between private governments and traditional sovereigns is determined by traditional laws or regulations enacted by traditional sovereigns, by constitutions defining the power of traditional sovereigns, or by international treaty.
Self-governance can be realized in at least three forms: (1) immunity from the application of surrounding legal standards, (2) immunity from the enforcement power of traditional legal institutions, and (3) recognition of the prescriptive and adjudicatory acts of the autonomous community.
The feasibility of self-government depends on the traditional community's respect for, and deference to, community law. Traditional communities generally respect party autonomy exercised through contractual agreements. Thus, respect for community law can be earned by having a contractual framework for electronic communities. Although the enforcement of contractual autonomy may depend on traditional institutions, such dependence can be mitigated by internalizing *426 enforcement. The crucial elements of a self-governing community are completeness, the availability ofcoercive power to enforce community decisions, and a contractual framework expressing the norms, procedures, and institutional competencies.
A. Basic legal frameworks
Assessing the feasibility of autonomy for private electronic communities requires an understanding of the points of tangency between these communities and traditional sovereigns--the scenarios in which someone challenges the autonomy of the private community in the courts of traditional sovereigns. Ultimately, autonomy for private communities depends on comity being afforded them by traditional sovereigns, [FN17] which in turn is more likely if the private communities are "complete," in the sense that they offer the entire spectrum of rulemaking, adjudication, and enforcement.
Political autonomy originates in physical power. Nation-states are politically autonomous because they have the military power to keep themselves that way. The geographic scope of political units has historically depended on the reach of military technology, and the social cohesion necessary to use it. Sovereignty is formally associated with nation-states that have the practical ability to assert physical power to coerce compliance with their law within defined borders and with respect to a defined class of persons. [FN18] New nations, such as Bosnia-Herzegovina, *427 are created, and old nations such as the Soviet Union, disappear, but the birth of a sovereign state is a momentous occasion in diplomacy and international law.
Network communities quite clearly are not entitled to status as traditional sovereigns because they lack a defined territory, a permanent population, and mechanisms for exerting physical coercive power. [FN19] But new sovereigns can be created by delegationof power from traditional sovereigns. The European Union and the United States came into existence as sovereign entities through delegation of powers from nation-states through treaties and constitutions. Such delegation for network communities is, however, unlikely to occur within the foreseeable future.
Smaller, more or less autonomous communities, have long existed within power-maintained sovereign political units. Their establishment and continued existence has always depended on the sufferance of the sovereign. For example, fairs, cities, universities, and guilds existed under English law because of the grant of patents from the King. The patent defined the powers of the community it authorized. [FN20] This type of *428 delegation exists in modern legal systems in the form of corporate and municipal charters. More generally, other types of private communities exercise a form of sovereignty under contracts mutually delegating attributes of sovereignty retained by the community members. The traditional sovereign allows this kind of private sovereignty by allowing freedom of contract. However, such community autonomy is dependent on the traditional sovereign for its very existence. It exists only if traditional sovereign institutions recognize the community's autonomy.
Let us examine what would happen if there were to be a clash between an autonomous electronic community and the traditional community in which it sits. Assume a deputy sheriff shows up at the door to seize a computer, to demand copies of certain files, or to arrest a natural person for certain conduct. Members of a network community are unlikely to prevail in physical resistance to the deputy sheriff. The law enforcement agent almost always can call upon superior force. The community enjoys autonomy only because it can claim privileges or immunities recognized by the traditional sovereign. For instance, if the deputy sheriff intrudes, the autonomous community prevails in a subsequent legal proceeding for trespass, conversion, or violation of civil rights.
But community autonomy is rarely a bilateral test between the traditional sovereign and the private community. It usually involves a three-way contest between private interests in which the traditional sovereign is the arbiter. The deputy sheriff in the hypothetical was sent by a court and acted pursuant to a writ or warrant. The warrantor writ was issued by a traditional sovereign's court on the request of a private plaintiff or public prosecutor acting on a private complaint. The prosecutor acted pursuant to authority granted by the traditional sovereign. The private plaintiff may be from within the community or from outside it. The community-autonomy question may have been tested long before the sheriff showed up at the door of the electronic community. In such cases, one party seeks to deny community autonomy. For example, an electronic association sued by a present member asserting a violation of its constitution, would defend on the grounds that the court in which the suit is filed must defer to internal *429 tribunals on constitutional issues. [FN21] In other words, it asserts adjudicatory autonomy, while the private plaintiff asks the traditional court to deny autonomy of the private tribunals by deciding the case on the merits. A member of the electronic community accused of intellectual property infringement would defend on the grounds that the court in which the lawsuit is brought must defer to community rules which grant her a privilege with respect to the intellectual property, while the plaintiff claims that any contractual privilege is voided by traditional sovereign law on intellectual property. A criminal defendant would defend on the grounds that the traditional criminal statute should be interpreted with deference to electronic community rules, while the prosecutor on behalf of the victim would argue that no such deference is appropriate. [FN22] Less conventionally, the defendants may assert that theyare immune from suit or from prosecution because of their community membership and the nature of the claim, while the plaintiffs appeal to traditional sovereign authority and deny the existence of immunity. [FN23]
*430 Such trilateral contests arise in several relevant contexts:
. conduct by community members that harm the legally recognizedinterests of nonmembers (e.g. defamation or intellectual property infringement); [FN24]
. intra-community conduct that offends non-waivable traditional community standards (e.g. racial, gender, or disability-motivated adverse decisions, or life- or personal-injury-threatening conduct within the community); [FN25]
. denials of membership under circumstances that would constitute a legal wrong under traditional law,
. expulsions from membership and post-expulsion efforts to collect fines or penalties from past members that would either offend traditional legal standards or would necessitate resort to traditional legal institutions for enforcement. [FN26]
In several of these examples, it is a member of the autonomous community who seeks to avoid self-governance. A community member may go "outside" because she thinks that traditional institutions, procedures, or substantive law will give her a better result on an access, authorship, or authentication issue. [FN27] For example:
. a present member of the association files a lawsuit in a traditional court asserting breach of contract based on an alleged violation of the association's constitution;
*431 . a member of the association files a lawsuit in a traditional court alleging that the association's conduct violates a statute newly-enacted by a traditional legislature which explicitly applies to association conduct.
Outsiders also have grievances against communities and their members. What happens when an outsider wants access but is denied? What happens when an outsider infringes intellectual property generated within the electronic community? What happens when an outsider masquerades as a member and gets involved in an authentication controversy? Some examples of this are:
. a nonmember brings a lawsuit against a member of the association for intellectual property infringement;
. a prosecutor from a traditional jurisdiction commences a criminal prosecution against an association member for intra-association conduct that prima facie violates a traditional criminal statute.
The need to define boundaries between traditional sovereigns and autonomous private communities is analogous to the need to resolve inter-sovereign conflicts ininternational law. [FN28] The question of community autonomy in cyberspace depends upon whether the court to which the claim is presented defers to community law, either by recognizing an immunity for a particular defendant (unlikely) or by recognizing community substantive or procedural law. Often the question of autonomy is a choice of law question. Should the non-community court apply its own law (or the law of another conventional sovereign), or should it apply community law?
It is useful to consider how such situations are dealt with in the international realm. Boundaries of autonomy in international law are defined by the jurisdiction to prescribe, [FN29] the jurisdiction to adjudicate, [FN30] and the jurisdiction to enforce. [FN31] These three types of jurisdiction are useful benchmarks for private communities as well.
*432 Respect for electronic community law depends upon the electronic community having a contractual framework sufficient in scope to bind those wishing to avoid the effect of community decisions. Communities stand a better chance of being recognized either as sovereigns or as contractual communities if they offer relatively complete legal systems of their own. Incomplete systems must rely on traditional legal systems to perform the missing functions. To the extent that such external dependence exists, the community is less autonomous. Completeness, and thus autonomy, depends upon the capacity to perform functions essential to any legal system. As Joseph Raz has observed, "[t]he three most general and important features of the law are that it is normative, institutionalized, and coercive." [FN32] Cyberlaw-- the legal system of electronic communities--is eligible for recognition as a separate legal system to the extent that it contains these three features. Electronic communities must offer normative rules for conduct; they must institutionalize rulemaking and rule application; they must sanction rule violators. [FN33]
Professor Hart observed that legal rules fall into one of two classes: primary rules, which impose duties; and secondary rules, which define powers to make and apply primary rules. [FN34] Primary rules pertain to the normative dimension. Secondary rules institutionalize and channel coercive forces. Cyberlaw is a complete legal system to the extent that it has both types of rules. Any claim for self-regulation in cyberspace must be tested according to these criteria--the existence of rulemaking, adjudication, and coercive enforcement means.
*433 B. Contract: the framework for autonomy
Private contract is the most appropriate source of autonomy for electronic communities. Indeed, treaties and constitutions, the traditional sources of sovereignty, can be understood as contracts among sovereign states and sovereign people respectively. Most of the examples of private legal communities reviewed in Part IV involve private contractual webs to define the community and to allocate legal power within it.
Much can be done through conventional contracts to set up communities to which sovereigns will defer. Bank clearing house systems, WESTLAW licensing agreements, and collective bargaining agreements are good examples of contractual arrangements that establish internal governance mechanisms for the parties to the contract. Assuming a valid contract can be formed among the members of an electronic community, as discussed in this section, such a contract can achieve the criteria identified by Raz: norms, institutionalization, and coercion. A community contract can set specialized standards for conduct within the community. By providing for arbitration, such a contract can arrange for application of these rules through specialized community institutions. Indeed, it can arrange for on-line, cyberspace-based common law courts through appropriate arbitration clauses. Such a contract can also provide directly for coercive enforcement, by specifying liquidated damages, by requiring posting of a bond against which penalties may be imposed, or by providing for expulsion from the community (with or without forfeiture of property left within the community, e.g., intellectual property). In other words, contracts can provide the framework for a complete legal system.
Most of the models of self-governance [FN35] (all except the military one) depend upon private contracts as the normative, institutionalizing, and (to a lesser extent) coercive source of law. Even constitutional and international arrangements use documents similar to contracts in some ways to express the delegated powers. Parties to purely private contracts can achieve some immunity from outside legal institutions bywaiving application of traditional law and recourse to traditional legal institutions. Thus, contract principles are a natural starting point for the establishment of an independent electronic community.
But the contractual nature of some electronic communities may be problematic. [FN36] Some electronic communities are anonymous, have *434 rapidly shifting membership, and may exist for any particular member only for as long as it takes her to send a request to a World Wide Web or news server and receive an item of information as a response. In these communities, there is no negotiation and no ongoing social relationship. There may be a contract, but it may be so brief in duration that it may bean intellectual stretch to say that the consumer of these services joins a community and agrees to participate in self-government. In this type of electronic community, contractual models associated with standard form contracts unilaterally issued by one party are most relevant. [FN37] This is because one party in these anonymous electronic communities will almost certainly publish the electronic equivalent of a standard form contract to which the participants will become parties to some extent. Standard form contracts have become inevitable as managerial direction has replaced market forces for a vast range of commercial transactions. [FN38] Professor Rakoff describes the reality that consumers almost never read the terms of standard form contracts, and that it would be eccentric to insist on changes. The drafting organizations would almost certainly not agree to changes, [FN39] and neither the drafting organization nor the consumer really expects the lawyer-crafted terms of the standard form to be followed. [FN40] In these settings, it may be unclear whether someone involved with community resources really is a "member" of the community, subject to its normative rules, institutions, and enforcement mechanisms, and within any shield of immunity and deference. [FN41]
In these circumstances, Professor Rakoff and others have suggested new rules of contract enforcement. Professor Slawson suggested that the standard terms in a form contract be enforced only when they are consistent with the reasonable expectations of the parties. [FN42] Slawson would determine the reasonable expectations according to the nature of the transaction. Both Slawson and Rakoff reviewed leading cases *435 explaining how their suggestions are not revolutionary departures from what courts actually do when confronted with standard form contracts. [FN43]
Making standard contracts unenforceable, however, engenders uncertainty. A better approach may be to construct a different contract regime, in which contract terms posted in some formal way and subject to review or challenge might be presumptively valid, but not otherwise. This approach borrows the concept from insurance regulation that the standard contract is generally subject to review by the insurance commissioner before it can be used with purchasers of insurance. It also borrows from ERISA, [FN44] which requires that employee benefits plans be published and filed with the Department of Labor. Whenever someone offers a contract defining a self- governing electronic community, that person can specify the way in which the offer is to be accepted and can also indicate what sort of an exchange is sought by the offeror (by the content of the offer and the circumstances under which it is made). [FN45] The offer canspecify that it may be accepted by conduct (for example, hitting the enter key on one's computer), or by making a promise (such as giving a credit card numberrepresenting an implied promise to pay a stated subscription fee).
When the party to whom the offer is addressed (the offeree) engages in the specified conduct or makes the promise, she accepts the offer. [FN46] Typically, this conduct or promise also constitutes the offeree's half of the desired exchange, frequently called consideration. [FN47]
C. The limits of contract
Notwithstanding the power of contract, the contract theory has important limitations as a source of community autonomy. One limitation is political and another is legal. Politically, contractual communities are porous and may be impermanent, as compared to *436 sovereign communities. Private disputes tend to drift into public forums. For instance, the private character of collective bargaining has been significantly eroded by an expansion of legislatively defined individual employee rights, enforced by public institutions. [FN48] Injured persons seek relief in whatever forums seem most likely to produce the relief they desire. When an injured person is outside an electronic community, that person will probably press for relief from traditional institutions.
This limitation of contract can be mitigated to some extent by internalizing the enforcement function. Then enforcement of private community norms does not depend on the willingness of a traditional court to enforce a contract; the private community enforces it directly. Internalization of the enforcement function reduces the dependence of the self-governing community on traditional legal institutions to enforce its decisions, although it may increase the possibility of legal liability in traditional forums for the injury resulting from internalized enforcement. [FN49] The possibilities for internalized enforcement are greatly enlarged by the possibility of the privatization of Internet domain registration, under the International Ad Hoc Committee (IAHC) recommendations. [FN50] Someone who does not obey the rules or who flouts a decision can be denied an Internet domain name, effectively excluding him from the Internet (or at least from the part of the Internet within the scope of that domain registry).
The legal limitations on contracts concern the extent of comity; limits on the prescriptive jurisdiction of the private community. As Judge Posner once wrote, "If a consent decree provided that a violator could be punished by having his ears cut off, the judge could not sign it." [FN51] Despite the strong tendency for courts to enforce private arbitration agreements and arbitration awards, they are not enforceable when they contravene public policy. [FN52] Moreover, it is not clear that private arbitrators may be given authority to award punitive damages. [FN53] Further, *437 contracts "in restraint oftrade" are unenforceable, [FN54] and conduct undertaken pursuant to private contractual arrangements may produce tort liability. [FN55] The boundaries of self-government are determined by the scope of such liability, and by the limits of contract enforceability. Many of the limitations discussed above can be addressed by carefully designing a contractual system with all of the features necessary for a completely legal system, as per the Raz formulation. Hence, despite these limitations, contracting is the best way to achieve autonomy for electronic communities.
V. THREE EXAMPLES OF CYBERSPACE SELF-GOVERNMENT
Several forms of self-government already exist in cyberspace. Others have been proposed. The existing forms range from the (mostly) benevolent dictatorships exercised centrally by the proprietors of America Online (AOL) and Compuserve, to the much more loosely organized "netiquette" of Internet newsgroups. The newsgroup, alt.current-events.net-abuse (a.c.e.n.a.), is one of the most highly developed examples of the latter type of self-government. Proposals for a private, international mechanism for domain name registration by the International Ad Hoc Committee (IAHC) provide a comprehensive framework for self-government on a larger scope than has heretofore been experienced or proposed. Examination of both a.c.e.n.a. and IAHC's frameworks, and their comparison with the "royalist" frameworks operated by proprietary services, reveals some of the issues that must be confronted in any system of private self-government for cyberspace.
The legal frameworks for all three examples are contractual, explicitly in the case of America Online and the IAHC recommendations, and implicitly in the case of a.c.e.n.a. The contractual frameworks in all three cases are complete, in that they authorize rulemaking, adjudication, and enforcement. They contemplate coercive measures: termination of service by AOL, expulsion from the Internet by revoking domain names *438 in the IAHC recommendations, and direct "killing" of messages in the case of a.c.e.n.a.
A. A.c.e.n.a.: an example of self-government [FN56]
A.c.e.n.a. is a democratic mechanism for enforcing certain netiquette rules against undesired postings popularly called "spam." The a.c.e.n.a newsgroup and several other conversation "forums" exist on a world wide conference and exchange system called USENET. Although often mentioned in conjunction with the Internet, USENET is a distinct system of cooperating Internet nodes; not all Internet nodes participate inUSENET. [FN57] Each newsgroup addresses a particular subject. USENET developed a body of rules or conventions accepted by most traditional users, often referred to as "netiquette." [FN58] Commercial advertising violates netiquette, and frustrates the intent of USENET to channel communications into subject-specific groups.
Despite this netiquette convention, on April 12, 1994, the Phoenix- based law firm of Cantor & Seigel (C&S) sent a message (often called a "post") advertising its legal services to thousands of newsgroups. The response was virtually instantaneous, as thousands of users voiced their disgust in discussions on newsgroups such as news.admin.misc. and news.admin.policy. USENET subscribers were outraged by the *439 commercialization of the system. C&S were "flamed" [FN59] by thousands who alleged, inter alia, violations of USENET conventions, and disregard for netiquette. Unaffected by these protests, [FN60] and realizing the vast, low cost advertising potential of the USENET, [FN61] C&S announced their intentions to form an advertising company, Cybersell. [FN62] Because flaming failed to end the practice, a search for other, more coercive, means was initiated.
A.c.e.n.a. was established on April 25, 1994 to channel concerns about such USENET abuses. [FN63] The most prominent assailant of identified "spam" is Cancelmoose(TM), an anonymous member of the newsgroup. [FN64] Operating from a European site,Cancelmoose effectively rids the network of bothersome postings by means of "cancelbots," [FN65] or cancel messages. A response is posted soon thereafter, notifying the newsgroup of the cancellation. Furthermore, a message is sent to the "spammer," the individual or group who posted the message, notifying him of the action, *440 the reasons for the action, and what steps to take in the future to avoid a similar occurrence.
The readership of a.c.e.n.a consists predominantly of news administrators who can set filters that control the flow of messages to and from the site. Cancelmoose's cancel messages contain a readily detectable signature which enables site administrators to screen the cancels if desired. There is widespread approval of the actions of Cancelmoose by those active in the newsgroup. Furthermore, those disapproving a particular cancel maintain the ability to disregard the cancel messages by reconfiguring the receiving site. [FN66]
A.c.e.n.a. is interesting because it exhibits attributes of rulemaking (deciding what the norms of acceptable use are), adjudication (deciding whether a particular message violates the norms), and enforcement (Cancelmoose's cancellation of messages determined to violate the norms).
The main questions with respect to rulemaking are not procedural; they concern representation. How does one know that an electronic group like a.c.e.n.a has legitimate rulemaking power? What is the likelihood that the views represented in that discussion group adequately reflect the views of those to be bound by the rules? One answer, of course, is that the a.c.e.n.a. newsgroup is accessible to anyone using the Internet, and only persons using the Internet will be bound by the rules. In other words, anyone who is bound had an opportunity to participate, and failure to participate is not a persuasive argument for not being bound.
The adjudicatory function is somewhat trickier. Needed flexibility could be lost if lawyers (and others) insist on imposing the details of a modern civil procedural system on the adjudicatory process in cyberspace. The usual question in evaluating adjudication is compliance with due process. To avoid the risk of violating due process, it is appropriate to consider the evolution of adjudication in the Anglo-American tradition. Such an evolutionary perspective reveals the flexibility of the due process concept. Initially, the adjudicatory decision-makers were persons with actual knowledge of the facts. [FN67] The earliest juries had virtually plenary power to decide the case, without the constraints of modern notions of the fact-law distinction, and they also *441 were witnesses to the conduct giving rise to the dispute. So the basic idea was that the legal system gathered together a group of people from the community who had personal knowledge of what went on and then permitted them to decide whether the conduct should be punished. That is not too far removed from the situations in a.c.e.n.a when most of the participants of the discussion of a particular incident have seen the offending message for themselves.
It was not always feasible, however, to assemble a jury that already knew what went on. Thus, it was necessary to develop methods for the disputants to tell their stories to the adjudicatory decision-makers. There are, of course, a variety of ways of telling stories, some effective and some not, some faithful to the real facts and some not. The notion of story telling to the adjudicatory decision-makers gradually evolved into formal mechanisms for determining who is entitled to tell a story (usually a professional lawyer) and rules for deciding how the story could be told--rules ofevidence. The core idea of the modern jury trial, however, is not to be found in the definitions of the legal profession or in the current versions of the rules of evidence or civil procedure. The core ideas are to be found in the concept of giving each side an opportunity to tell its story, so that the people with the greatest interest in developing the story fully from the two opposing perspectives can do so. With that as a guide, a.c.e.n.a can be evaluated more fully. Arguably, its openness permits both accusers and defenders of a message to tell their stories to the decision-makers--the net-administrator participants on a.c.e.n.a. Viewed thus, a.c.e.n.a. satisfies the test for fair adjudication.
The enforcement function is perhaps trickiest of all, because it is here that the risk of an unaccountable invasion of private rights is greatest. A private adjudicatory decision does little harm if there is no coercive enforcement. It is important that due process have occurred before the deprivation represented by enforcement. In this regard, it is useful to look to traditional approaches to private individuals' authority to arrest (seizure of the person) or to seize property pursuant to judicial decree. The Statutes of Winchester identified private individuals as significant actors in the criminal justice process. [FN68] The role of the private citizen extended beyond simply protection of his own possessions; individuals owed a duty to society to join in the attempts to apprehend *442 criminals. [FN69] Private citizen arrests, searches, and seizures have traditionally been upheld under statutory or common law principles of citizens' arrests. [FN70]
Cancelmoose acts pursuant to the consensus of the participants in a.c.e.n.a. The consensus formed in a.c.e.n.a. can be viewed as the equivalent of a combination of a jury verdict and a warrant or a judgment. Viewed thus, Cancelmoose is equivalent to a deputy sheriff executing an arrest warrant after a criminal conviction, or a private party actually under color of a judgment. Using such analogies, we can see that the enforcement mode of a.c.e.n.a. is legitimate and "fair."
The other side of the coin, however, is that Cancelmoose does not enjoy a status equivalent to that of a public officer such as a sheriff (a sheriff is not self-appointed). And the a.c.e.n.a. process "authorizing" Cancelmoose to act is much more fluid and informal than the highly formal process of receiving a jury verdict and entering judgment on it. These differences animate arguments that a.c.e.n.a. is not "fair."
C. Self-government institutions proposed by IAHC
In 1997, the International Ad Hoc Committee (IAHC) proposed a comprehensive plan for self-government in a limited subject-matter--Internet domain names. This plan, based on an international web of private contracts and backed up by arbitration, is the most comprehensive yet proposed for a private, international system of Internet governance.
The IAHC was formed at the initiative of the Internet Society (ISOC) [FN71] and at the request of the Internet Assigned Numbers Authority *443 (IANA). [FN72] In addition, the IAHC was supported by the Internet Architecture Board, [FN73] the International Telecommunications Union, [FN74] the International Trademark Association, [FN75] and the World Intellectual Property Organization (WIPO). [FN76] Beginning work in November 1996, the IAHC was to "define, investigate, and resolve issues resulting from international debate over a proposal to establish global registries and additional generic Top-Level Domains." [FN77] IAHC sought comments from a wide variety of people and organizations and issued a final report with associated draft legal documents in February 1997. This report recommended changes in top-level domains for the Internet and a complete reorganization of the mechanisms for administering Internet domain names. The constitutional document, the generic Top-Level Domain-Memorandum of Understanding (gTLD-MoU), was signed in Geneva on May 1, 1997 and deposited with the Secretary General of the International Telecommunications Union. [FN78] With the signing of the *444 gTLD-MoU, the IAHC was dissolved and replaced by the Interim Policy Oversight Committee (IPOC). As of May 15, 1997, 110 entities had signed or indicated their intent to sign the gTLD-MoU, although there is much controversy over the inclusion of some entities on that list. [FN79]
A Domain Name System (DNS) is an essential component in the Internet's operation. It permits use of human-friendly addresses for nodes connected to the Internet such as "kentlaw.edu," "law.vill.edu," "cilp.org," "fcc.gov," and "ibm.com." [FN80] The DNS functions through domain name servers that translate the human-friendly names into IP addresses (such as 153.104.15.250) through a series of interconnected domain name tables maintained on DNS servers. Tens of thousands of DNS servers are linked in a kind of hierarchical distributed look-up service. [FN81]
The IAHC was formed because of a growing set of controversies over the DNS as it now exists. The popularity and commercialization of the Internet has meant that multiple entities sometimes want to use the same domain name. Sometimes this occurs because the same few letters can signify more than one well known company, product, or service, or because some persons have registered domain names for the primary purpose of selling them to enterprises with which they appear to be associated. Many of the controversies relate to trademarks and service marks, as when enterprise A uses a domain name that is the same as a trademark registered to enterprise B. At the same time, Internet users outside the United States increasingly are restless with U.S. dominance of the DNS, a result of the Internet's origins in the U.S. Department of Defense.
The IAHC recommendations reflected the IAHC mandate to ameliorate conflicts over top level domains. They proposed a non-governmental solution to provide for competition among registries, and *445 to develop an open process. [FN82] The recommendations addressed the administration of domain name assignments and the behavior of the distributed look-up service that maps human-friendly names into IP addresses. In addition to recommending the definition of seven new top-level domains, the IAHC report declared that "the Internet top-level domain space is a public resource." The administration of this public resource presents public policy issues, and should be carried out in an open and public manner "in the interest and service of the public." [FN83]
Of particular significance for this article, the IAHC recommended a new governance structure based on several memoranda of understanding, which both public and private sector entities were invited to sign. The gTLD-MoU--the constitutional document--became effective when it was signed by the IANA and ISOC. "Stewardship of the gTLD space was assigned to the gTLD DNS Policy Oversight Committee ("POC") comprising members named by the ISOC, IANA, [[Internet Architecture Board], [International Telecommunications Union], InternationalTrademark Association, WIPO and [the Council of Registrars]." [FN84]
Other memoranda created several regulatory bodies to carry out domain name policy. The Council of Registrars (CORE) was established by a Memorandum of Understanding (CORE-MoU), signed by multiple competing globally-dispersed registrars. CORE operates as a Swiss non-profit association. A gTLD DNS Policy Advisory Body (PAB) was formed from public and private sector consultation and oversees POC and CORE activities. [FN85] "Changes to policy can be initiated by POC and enabled upon the agreement of ISOC and IANA, with the review of PAB and CORE." One could regard the legislative initiative function as residing with POC, subject to revision and possible veto by PAB and CORE.
Two international treaty-based organizations also play a role in implementing the IAHC recommendations. The International *446 Telecommunication Union agreed to act as the depository for the gTLD-MoU and to publish the list of signatories. [FN86] WIPO supports a dispute resolution mechanism for challenges of any domain name applicant's right to hold and use a second level domain name under the rules of the WIPO (Geneva) Arbitration and Mediation Center. WIPO would administer a new system of Administrative Domain Name Challenge Panels (ACPs). "These panels do not substitute for national or regional sovereign courts; they have authority over the domain names only, not the parties. Unlike courts, however, the challenge panels would have the ability to exclude certain names, such as world-wide famous trademarks, from all of the CORE gTLDs." [FN87]
Article 7 of the CORE-MoU reinforces WIPO's function. Registration agreements and application forms for assignment of secondary level domain names must include clauses that bind the registrars to follow ACP decisions and that bind applicants to submit to WIPO mediation, decision by an ACP and arbitration. [FN88] The WIPO Center must notify CORE of any results and decisions of ACP, mediation or arbitration proceedings that require action. [FN89]
Appendix D of the gTLD-MoU provides substantive guidelines for administrative domain name challenge panels. Under the gTLD-MoU, ACPs and the associated mediation and arbitration mechanism only have jurisdiction over claims regarding use of a second level domain name that is identical or closely similar to an alphanumeric string that is deemed to be internationally known and for which demonstrable intellectual property rights exist. [FN90]
*447 ACP procedures would allow for two types of exclusion. First, the second level domain name which was challenged could be excluded (that is, from the particular gTLD in which it was registered without the authorization of the owner of the intellectual property right). Second, a broader exclusion from some or all of the CORE gTLDs could be applied for, in 'exceptional cases.' Such cases would include at least trademarks which are globally known. [FN91]
Procedurally, any person can file a challenge requesting either exclusion or transfer of the requested second level domain name to the challenger. [FN92] Appendix D provides criteria for ACPs to determine if a challenge has been established successfully. [FN93] The ACP determinations, however, are of limited effect. "A determination of an ACP shall carry no precedential weight in any later national or regional court proceeding." [FN94] Appeals are permitted, although Appendix D is unclear as to what body has jurisdiction over the appeal. Presumably it is the same or another ACP. [FN95] Clearly, a de novo hearing by national or regional courts is contemplated. [FN96]
Unfortunately, the dispute resolution machinery proposed by the IAHC is limited to disputes over domain name assignment, especially those disputes that raise trademark or unfair competition issues. Moreover, it is an optional procedure, with a resort to national courts remaining available. As explained above, agreement on even this limited arrangement has been elusive. No doubt, agreement would be even harder to obtain with respect to a broader dispute resolution procedure and more ambitious use of domain names as leverage to enforce a broader set of international norms.
Notwithstanding these practical difficulties, it is useful to consider the possibility of using Internet domain names as a means of enforcing international norms in general. The growing importance of domain names in the Internet may provide the basis for a broader enforcement mechanism based on the IAHC recommendations, and may ultimately obviate the need for reliance on traditional legal institutions.
*448 Would such a system work? Domain names as the centerpiece of a new private governance mechanism can serve some of the traditional purposes of legal remedies [FN97] reasonably well, but not others. On the one hand, revoking a domain name is a poor way of compensating a victim. Even if a domain name is awarded to a complaining party, that provides no compensation for past infringement of the trademark. There is nothing in the proposed IAHC machinery, no matter how far it is extended, that would serve the compensation purpose well. On the other hand, revocation will exclude the target from the Internet, and that possibility may have economic consequences serious enough to represent a major deterrent. If an entity believes it will be put out of business if it violates rules, it will avoid violating those rules. Finally, revocation of domain names is a very effective means of preventing further misconduct by the target; without a domain name, the target cannot repeat any further misconduct through the Internet.
A complete system for using domain name revocation as a remedy for enforcing international adjudicatory decisions requires at least three elements: rules for prescriptive jurisdiction, rules for adjudicatory jurisdiction, and rules for assuring compliance with the final order requiring that a domain name be revoked. The rules for prescriptive and adjudicatory jurisdiction have already been worked out. [FN98] Such rules are necessary to determine which substantive norms and which adjudicatory decisions would be entitled to enforcement through the domain name system. When the substantive norms and the adjudicatory decisions emanate from international institutions, their jurisdiction would be determined according to the documentary sources of their power. Currently, those sources are treaties.
That leaves the need to assure that the "sheriff" in this new legal domain obeys the "writ of execution." The obligation to obey the writ of execution would be expressed much as the obligation to obey decisions of ACPs and IAHC arbitration is expressed in the existing Memorandum of Understanding: once a decision to revoke a domain name is reached by the designated body, any registrar in the system must revoke the domain name. A registrar who declines to fulfill that obligation would lose its status as registrar. The integrity of this system depends upon the continued willingness of everyone within the hierarchical chain of *449 registrars to live up to their contractual commitments. As the scope of rules and decisions to be enforced by this means increases, however, the degree of compliance by registrars who intend to comply may diminish.
D. Economic royalism: proprietary power
Proprietary forms of private governance prevail in many parts of cyberspace. For example, a service provider such as America Online or CompuServe enforces unilaterally adopted rules by withdrawing the service of users who violate the rules. Most proprietary providers publish relatively complete sets of rules for use of the service. [FN99] Violation of the rules constitutes a trespass [FN100] and may justify termination of the service under contract. [FN101] Some proprietary providers use software tools that enforce the rules. [FN102] Use of a proprietary service over the objections of the proprietor is a trespass and is enjoinable. [FN103] Federal courts have deflected arguments that proprietary providers must provide access under the First Amendment of theUnited States Constitution or under the antitrust laws. [FN104] Thus, governmental authority in these situations is based on the power over private property.
Despite performance of these governance functions, proprietary services are not subject to constitutional constraints applicable to *450 traditional governmental entities. [FN105] Nevertheless, to the extent it limits its power by contract, a proprietor must follow its own rules. [FN106]
If one has a purely contractual framework within which rules are made and enforced, as in the three cases cited in the notes to this section, the likelihood of state action is de minimis. The only remedy of someone disadvantaged by the private dispute resolver would be for breach of contract, as in Apex, or a related tort claim such as fraudulent misrepresentation or intentional interference with contractual relations. On the other hand, when the dispute resolution mechanism is sanctioned by statute, as in the Fair Credit Reporting Act, the situation looks more like Flagg Brothers v. Brooks, [FN107] where the self help repossession was sanctioned by Article 9 of the Uniform Commercial Code, as adopted by the New York legislature. But in Flagg Brothers, the Supreme Court held that private conduct within a framework established by statute insufficiently engages the power of the state to represent state action. State action occurs only when enforcement powers of the state are used by private entities. One of the strongest examples of private enforcement is the landlord's common law right of distress: the power and privilege of seizing personal property on leased premises as a remedy for tenant nonpayment of rent. Exercise of the distress remedy generally has not been viewed as constituting state action, unless officers of the state such as deputy sheriffs assist the landlord. [FN108] Thus, designers of private electronic governmental mechanisms have greater autonomy when their arrangements are purely contractual, and correspondingly less when the last step in the private process is resort to public judicial machinery.
E. Conclusion
Among the three patterns of Cyberspace self-governance that have begun to emerge, the a.c.e.n.a. approach is the most democratic, but tends toward anarchy because of low institutionalization and diffusion of coercive power. The proprietary approach avoids those vices but concentrates power in the hands of one party and provides few channels *451 for involvement by service users. It represents a kind of economic royalism, that may invite resort to traditional institutions to limit the power of proprietors. [FN109] The best of the three is the contractual web proposed by the IAHC because it is complete, democratic, and provides an appropriate degree of institutionalization.
VI. COMPARISON WITH OTHER SELF-GOVERNING COMMUNITIES
A. Introduction
Many autonomous self-governing communities exist within or separate from national states. As noted above, most autonomous communities owe their existence to grants of power from the national sovereign. Sometimes the grant is explicit, as in royal patents for the City of London, the East India Company, or the American provinces of Pennsylvania and Maryland. Sometimes it is implicit, having evolved through the common law. For example, the common law has worked out a kind of prescriptive and adjudicatory autonomy [FN110] for religious orders and certain internal matters of corporate governance. The following sections examine several models of self-governing communities. Mechanisms of self-governance for the Internet are likely to draw on these models, including their mostly contractual frameworks and the bases for limiting their scope.
The interesting thing about the following models is that, unlike traditional sovereigns, their boundaries are rarely marked by geography. Rather, other techniques are used for defining community membership. Voluntary membership models rely on consent to represent acceptance of a contractual framework for self-governance. By contrast, involuntary membership models must rely on some other legal justification for binding members to community norms and decisions, even when the remainder of their structure is contractual.
In the following sections, each model is assessed against Raz's three criteria for legal systems: the existence of normative rules, the existence of institutions, and the existence of coercive mechanisms. These criteria map roughly into the prescriptive, adjudicatory, and enforcement modes *452 of jurisdiction. [FN111] As the section on legal frameworks explained, complete legal systems--those possessing all there criteria--are more likely to achieve autonomy. In addition, the sections also illustrate the ways in which traditional sovereigns limit the boundaries of community power, while affording immunities to activities at the core of the communities.
B. Involuntary membership models
1. COLLECTIVE BARGAINING MODEL
Collective bargaining refers to the process of making and enforcing terms and conditions of employment and other workplace rules through institutions established by a contract (a collective bargaining agreement) negotiated between an employer or group of employers and one or more trade unions representing their employees. After a majority of the employees within a "bargaining unit" have selected a union representative, a collective bargaining agreement binds all the employees within the"bargaining unit" regardless of whether they would prefer to negotiate individual contracts of employment with different terms. [FN112] Thus, membership can be involuntary.
An employment relationship covered by collective bargaining is a strong example of a self-governing community under American law. Even though specialized agencies have been set up at the federal level to establish the boundaries of collective bargaining communities and may, in limited circumstances, designate the representatives of employees, [FN113] *453 these agencies neither define the rules governing the employment relationship [FN114] nor resolve individual disputes over terms and conditions of employment. [FN115] The Supreme Court has characterized a community covered by collective bargaining as a specialized community unto itself. [FN116]
Collective bargaining communities have a considerable immunity from state tort law. [FN117] The immunity is not absolute, and state law may be applied when it involves deeply rooted state interests. [FN118] The federal antitrust laws also give way to collective bargaining community decisions, as long as they are made within the traditional scope of workplace governance. [FN119]
Collective bargaining has normative rules expressed in collective bargaining agreements. Most collective bargaining agreements are comprehensive in this regard, including rules on every major subject of workplace governance, although they typically have "management rights clauses" allowing the employer considerablediscretion to make specified entrepreneurial decisions. Collective bargaining has its own set of institutions--periodic negotiation for making rules and grievance arbitration for resolving disputes over rule application and enforcement. Collective bargaining has coercive mechanisms. It channels the *454 employer's power to discipline employees and terminate employment, and it organizes and channels the union's ability to put economic pressure on employers by striking. The union's strike weapon is less directly related to rule violation, although some collective agreements have exceptions to no- strike clauses that are triggered when employers violate rules set forth in the collective agreement.
Collective bargaining has all three Raz factors. The collective agreement institutionalizes workplace governance, it articulates norms, and it provides for coercive enforcement through strikes and termination of employment. As a model for network self-governance, collective bargaining is interesting because of its completeness and because of the limited immunities from antitrust and tort law enjoyed by its participants.
2. MILITARY MODELS
Military law governs military communities. [FN120] It is unique among the examples considered in this article because it goes the farthest in establishing immunities from the civil law of the traditional national community. Under United States military law, for example, a member of the armed forces is not subject to criminal or civil process for conduct associated with the performance of his duty. Military and naval communities historically have enjoyed such substantial immunity from the application of civilian law. [FN121] The immunity extends to military forces of both de facto and de jure governments. [FN122]
Nevertheless, members of military and naval forces are not completely immunized from civilian law. They may be charged with, *455 arrested for, and tried for crimes committed within their forces. [FN123] Under some circumstances, writs of habeas corpus may issue to military authorities to show why a member of the military or naval force is detained. [FN124] Although damage actions are not allowed, [FN125] injunctions may issue for violations of civil rights. [FN126] Most of these cases involve internal military and naval disputes where the arguments against civil court intrusion are substantial. A fortiorari, members of otherwise autonomous military communities should be subjected to the surrounding legal system when the civil courts seek to adjudicate conduct in which a military authority injures a civilian. [FN127]
Military societies have normative rules for the conduct of individual members in the form of regulations and standing orders. They institutionalize rulemaking and enforcement through the chain of command and through rules defining the scope of the powers in each level of the chain of command, and they have courts marshal for dealing with rule violations. Military societies have coercive mechanisms that are employed directly against rule violators, including loss of pay, incarceration, and expulsion (discharge) from the service. They thus satisfy all three Raz criteria.
*456 C. Voluntary membership models
1. RELIGIOUS COMMUNITIES
Religious communities long have enjoyed autonomy from secular sovereigns. In the United States, religious community autonomy is guaranteed by the free exercise clause of the First Amendment. [FN128] However, deference and immunity are limited to certain levels of subject matter. The deference relates only to matters of religious doctrine or policy, and to rulemaking and adjudication over internal discipline and government which has been interpreted to include "matters of discipline, faith, internal organization or ecclesiastical rule, custom, or law." [FN129] Other matters may be addressed with more or less autonomy pursuant to the contract rules applicable to other private associations.
Despite large measures of autonomy, traditional sovereigns impose boundaries on religious communities. Religious organizations may be liable for fraud for statements made outside the religious context [FN130] and for intentional infliction of emotional distress when they act coercively far beyond the bounds of customary religious practices. [FN131]
Religious communities can be complete Raz systems because they institutionalize, they articulate norms, and they coerce compliance by the prospect of expulsion from membership and from religious grace.
2. PRIVATE ASSOCIATION MODELS
Private associations like fraternities, churches, athletic leagues, country clubs, the Boy Scouts of America, and trade associations are largely self- governing, both with respect to rulemaking and adjudication. [FN132] One of the justifications for limited self-governance by private associations is freedom of association--a type of privacy interest. *457 The courts get involved only to enforce compliance with association rules. [FN133]
Private associations vary in the degree to which they have the three Raz attributes. Most private associations have normative rules, although their scope may be relatively narrow, limited to matters directly concerning the association rather than a broader range of human conduct. They have mechanisms for making rules to be recognized as such and usually have institutional arrangements for applying and enforcing rules. Coercive mechanisms in private associations usually are limited to expulsion, but some religious associations also subject rule violators to spiritual penalties or social penalties like shunning. Some non-religious associations like country clubs may subject rule violators to forfeiture of membership fees, which resemble a kind of security bond in this respect.
3. CLEARINGHOUSE FUNCTIONS
Clearinghouses handle the successive negotiation of checks and other financial instruments from the payee's bank to the drawee's bank, resulting in the eventual debiting of the drawer's account and crediting of the payee's account. Clearinghouses exist for electronic funds transfers and credit card transactions, as well as personal checks. The communication is mostly electronic, with paper instruments following later, if at all.
Bank clearinghouse functions are performed pursuant to clearinghouse bylaws and rules, which are contracts among participating banks. Although Article 4 of the Uniform Commercial Code supplies default rules for clearinghouse functions, these statutory rules routinely are altered by the clearinghouse rules.
Bank clearinghouses thus are examples of self-governing electronic communities. This example of self-governance is likely to be extended as electronic payment systems become more popular with buyers and sellers *458 of goods and services in cyberspace. [FN134] Nevertheless, there is nothing about the bank clearinghouse experience that suggests the extension of self-governance to persons or entities not actually signatories to theclearinghouse contract. Nor is there any indication that these communities are immune from rules developed by the surrounding legal system to address concerns of members of that larger community.
Financial clearinghouses have normative rules on the limited subject matter of allocating the risk of dishonor and setting time limits for the settlement functions in their financial communities. They have institutional mechanisms for applying the rules, although it is hard to find examples of clearinghouse agreements that provide for actual adjudicatory mechanisms for rule violations. Instead, the sanction for rule violation is to bear the loss. Enforcement takes the form of expulsion or bearing the loss.
4. CORPORATION MODELS
The corporation is an example of a private association that enjoys powers of self-governance, which may be enforced by traditional law, subject to certain limitations. In this respect, corporations are like the other private associations discussed above. [FN135] However, the corporate structure does offer advantages over other forms of business enterprises.
Of primary interest is the limited liability that the corporate form provides to its members. [FN136] Limited liability is premised upon the basic principles of agency. [FN137] In many instances, the principle will shield its agents from liability. For example, in certain circumstances, only the corporation, and not its agents, are liable on contracts made in the *459 corporation's name. [FN138] However, there are other complex situations where the agent may be held personally liable. For example, the corporation and the agent, or both, may be liable for torts and crimes depending on the status of each party and the context in which such tort or crime occurred. [FN139] This may also affect "foreign" corporations (corporations incorporated in one state but doing business in another state), and thus must comply with certain formalities as defined by the otherstate's domestic law. [FN140] Absent compliance with these requirements, corporate actors may be found individually liable not only for torts and crimes, but also for contractual obligations into which they enter on the corporation's behalf. The same basic concepts for the treatment of foreign corporations apply internationally. [FN141]
The nature of limited liability for members of corporate communities is expressed by the legal fiction that a corporation is person. The corporation is treated as a separate legal entity, [FN142] which results in a *460 tiered structure whereby management powers and limited liability may co-exist in a single individual in a corporation. [FN143] This legal fiction permits--at least in many instances--a third-party victim to be made whole through a legal claim against the corporation as an entity. The entity theory has received virtually universal legal acceptance, and the fictitious person so created has been given many of the constitutional protections available to individuals. [FN144]
The entity approach, however, has been subject to some criticism, especially in the context of the multinational enterprise. While in a strictly legal sense, a multinational enterprise can most simply be characterized as "an aggregate of corporate entities, each having its own juridical identity and national origin, but each in some way interconnected by a system of centralized management normally exercising its control from the seat of primary ownership," a multinational enterprise "has no coherent existence as a legal entity." [FN145] There is, however, a body of law emerging which isapplicable to multinational corporations. [FN146] One such area consists of the rules of international law dealing with expropriation. [FN147] Nevertheless, efforts at establishing international codes and guidelines are relatively weak in their influence thus far, primarily because they are not legally binding. [FN148]
*461 In the future, one area in which truly international corporations may emerge is in Europe. The European Union encourages member states to adopt domestic corporation laws that conform to standards set by a European Union directive. Thus, the company incorporating in one member state can do business in other member states without discrimination. It will be interesting to evaluate European Union mechanisms for incorporation to determine if a European Union corporation can achieve corporate status vis-a-vis member states without being separately incorporated in each member state.
5. THE LAW MERCHANT
The law merchant was a transnational private law based not on any single national law but on mercantile customs generally accepted by trading nations. [FN149] The law merchant (lex mercatoria) [FN150] originated in the pre-Christian era in the Mediterranean, spread through Europe in the Middle Ages, and was reinforced through Admiralty and Maritime law and through Roman and Canon law. Despite the influences of several bodies of law, business dealings "rested on mutual confidence and good faith to an extent unknown to civil life." [FN151] By the end of the eleventh century, the law merchant began to be formalized and incorporated into the codes of certain conventional governments. [FN152] Eventually, the law merchant was applied by the Admiral's Court in England and published in Italian, French, Latin, Dutch, and German as the "Consulato del Mare." [FN153]
More or less independently, a body of commercial law developed in so- called "fair courts." Annual fairs took place in various places on the continent of Europe, attracting traders from Africa, Russia, and the Middle East as well as Europe. Each fair had a dispute resolution body that heard commercial disputes among the participating merchants. *462 While the crown might appoint a judge to guide the proceedings, the juries consisted of merchants participating in that particular fair. [FN154]
By the late sixteenth and early seventeenth centuries, when national sovereigns began to encroach on the traditional law merchant, the law merchant governed a special class of people (merchants) in special places (fairs, markets, and seaports). It was distinct from local, feudal, royal, and ecclesiastical law. Its special characteristics were that(1) it was transnational; (2) its principal source was mercantile customs; (3) it was administered not by professional judges but by merchants themselves; (4) its procedure was speedy and informal; and (5) it stressed equity, in the medieval sense of fairness, as an overriding principle. [FN155]
Thereafter, certain factors led to the diminished importance of the law merchant as a separate legal system. These factors included the rise of nationalism, competition between different kinds of courts for legal business, the tendency of traders to settle down and conduct their affairs from a particular place rather than traveling from fair to fair, and the incorporation of certain substantive principles of the law merchant into municipal law. [FN156] Nevertheless, as Mark Garavaglia has explained, the law merchant survives in modern commercial law under the guidance of international arbitration, commercial arbitration, and the Uniform Commercial Code. [FN157]
Thus, until the seventeenth century, the law merchant was an independent legal system with its own normative rules, its own institutions, and its own coercive measures. After that time, it lost the latter two features but retained its own normative rules. [FN158] Nevertheless, Professor Philip De Ly has cautioned that modern international business *463 law is not really an autonomous legal system in the sense that it "exists outside national legal systems; rather within national systems, it has some features of its own," derived from international origins and leading to a uniformity of international business law. [FN159] Lex mercatoria does not have a monopoly on resolving transnational business disputes and may need national law to enforce decisions applying its rules. Yet, lex mercatoria is an independent body of law that can be applied by national courts under choice-of-law rules of contract provisions. Because of the tendency of national courts to apply their own law, international arbitration represents the best forum within which to apply and enhance the status of lex mercatoria as a complete legal system. [FN160] Of course, the content of lex mercatoria must be known in order for it to play an enhanced role. One way to achieve this is through the publication of arbitral awards. [FN161] One author described lex mercatoria as consisting of "self regulatory rules of professional organizations, usages, customs, general conditions, usual contractual clauses and techniques, arbitration rules, arbitral case law, general principles of private law and general principles of conflict of laws." [FN162] The distinction between reliance on these sources of law and proof ofcustoms and usages is subtle. [FN163]
Lex mercatoria is significant not only as a model of community autonomy, but also as a legal doctrine that may legitimate recognition of electronic community "law," as explained in Part III of this article. This is so because it is the clearest example of satisfaction of the four criteria that justify self-governance for electronic communities. [FN164] Lex mercatoria, however is not a complete Razian system because it lacks its own institutions and coercive measures.
D. Conclusion
All of the models exhibit some degree of autonomy because traditional sovereigns defer to them. All of the models, except lex mercatoria, are relatively complete Razian systems because all institutionalize their internal law, develop their own norms, and employ coercive enforcement power through expulsion from membership. Collective bargaining and military models have stronger coercive *464 enforcement tools like the strike and direct physical action against military members. Corporations are less complete Razian systems because they employ coercive measures only against some constituents.
The frameworks for self-governance in all but the military communities are contractual. Antitrust and tort immunities are recognized by traditional sovereigns for many of the communities. Autonomy has its limits, however, in every model. Certain means and purposes justify application of traditional law, overriding the autonomy otherwise enjoyed by the community.
Aspects of all of these examples provide exemplars for electronic communities. Their utility depends, however, on working out institutional details for electronic counterparts and on developing appropriate immunities to define the boundary between electronic communities and traditional legal systems.
VII. WHAT REMAINS TO BE DONE?
Self-governance for electronic network communities is desirable: it is legally feasible within a contractual framework; examples already exist in parts of cyberspace; and rich models exist in the form of other types of private associations and communities. Establishment of comprehensive systems of self-governance for the Internet requires fleshing out contractual webs, defining antitrust and tort immunities according to established doctrine and newly articulated criteria for autonomy, and eventual development of a treaty framework.
A. Completing the contractual web
1. DEVELOPING NORMS FOR ELECTRONIC COMMUNITIES
The section on the legal feasibility of self-governance observed that completeness enhances deference by traditional legal institutions. Complete legal systems include rulemaking, adjudication, and enforcement. Earlier sections explained how adjudication can be provided through arbitration, and how denial of access to net resources--through the domain registry--can provide enforcement. That leaves rulemaking as the most significant challenge for developers of a comprehensive contractual web for self-governance.
Self-governing communities must have institutions to serve as sources of law. Institutions in cyberspace for rulemaking would exist on top of and in parallel with geographic-based institutions like state and federal courts and international rulemaking and adjudicatory institutions.
*465 One possibility is to establish an electronic structure for a continuing plebiscite, such as that represented by a.c.e.n.a. [FN165] Alternatively, and more formally, electronic communities could identify a dozen or fewer experts in the norms and values of conduct in cyberspace to be rule- makers. [FN166] The IAHC recommendation includes such a mechanism in its policy committee. [FN167] In other contexts, the lawmakers need not be members of the community.
These "wise men and women" might function like the American Law Institute, publishing a restatement of appropriate principles to guide conduct in cyberspace. They also might function as arbitrators. [FN168] They also might play ancillary roles like being called as expert witnesses by the regular courts presented with cyberspace disputes. There is no reason that a singl