'2257 and TGPs

Stephen Yagielowicz
Editor's note: since its original publication in the February issue of XBIZ World Magazine, qualified counsel has had an opportunity to review my ideas here and point out not only potential vulnerabilities over '2257 but in regards to other laws as well — remember, seek specific advice from your own attorney — the following is simply food for thought to advance the discussion over this evolving legislation.

Recently, the long-anticipated revisions to the 18 U.S.C. §2257 federal record-keeping requirements statute, commonly known as "2257," were published to the Federal Register.

I've had a chance to read through the 169 page Department of Justice's PDF, the vast bulk of which is commentary on the statute, detailing the new changes over the previous version including commentary on the commentary received during the recent public comment period.

No "mind numbing legal mumbo jumbo," the document to me is a very detailed look into much of the Department's thinking; its thoughtful responses to commentary and the practical experience it gained as a result of the inspections that have already occurred.

One of the interesting tidbits that came out in the Department's commentary is its ongoing estimate that there are approximately 5,000 businesses responsible for 500,000 websites that depict actual sexually explicit conduct — and are thus affected by the rule. Further cited was the Department's belief that 75 percent or around 4,000 of these 5,000 entities are small businesses; operating throughout the film, magazine, Internet, satellite, mail order, magazine, content aggregation and wholesaler industries.

Now at this point, it's important to note that I am not an attorney, nor is this legal advice — but for the smallest of operators, often the ones most in need of good advice, that advice could cost as much as their website — a thumbnail gallery post, for example, might earn in a year — so qualified advice tailored to their needs is virtually unattainable.

In my opinion, there are thousands of such website operators working the online adult market today and grateful if they pull in enough money to put gas in their car and maybe buy a six pack of beer on the weekend. These are folks that can't open a paysite because the $750 they have to pay to Visa is an insurmountable fee. These are folks that look at the Department's comment that "even a small business with revenues considerably less than the smallest category of small business — $6,500,000 — would not find to be overly burdensome compliance costs ranging from (at the low end) $1,500 plus $60 per month to (at the high end) $8,000" — and shake their collective heads in disbelief. The cost estimates, which the Department claims to base on "currently available services," may be more than these sites may ever make in their lifetime — but a relative lack of profitability shouldn't disenfranchise anyone's rights or prevent them from attempting to fully master their chosen craft. But I digress, partly as a matter of background.

A Specific Example
When looking at the law, everything revolves around specifics — and so I'm going to propose a specific scenario covering a specific (and common) type of adult website; and one that is typified by the smallest of operators: The sites are gallery posts — TGPs and MGPs — sites that list links to free thumbnail and movie galleries, respectively. While operators of other types of sites may find some items of interest here, I am going to be very specific in the type of operation I describe, as it bears directly on the interpretation of the law that I wish to propose.

For those unfamiliar with these sites, they come in several flavors — all of which I will generically refer to as TGPs. Their roots are in the old "pic post" sites; one of the earliest forms of adult user-generated content, which allowed visitors to upload and display an image along with a link to another website. Amateurs used these sites to promote their own websites — and traditional site owners and their affiliates followed.

These sites became popular, but as competition for viewers increased and broadband Internet became more widely available, the "if one is good then 10 is great!" mentality took hold and the pic posts were largely replaced by gallery posts. Now, rather than a single, often full-size image, surfers were treated to a "thumbnail" preview (or text link) that would guide them to another webpage typically containing 10 of these preview images; each linked to its full-sized counterpart; plus affiliate links to where the surfer could "see more pics like this!"

The giving away of these sample images soon grew out-of-hand and was further exacerbated by the onslaught of MGPs, as faster broadband access speeds and growing consumer demand for online adult video pushed the traditional TGP to the back burner. Although the gallery posts — and their successors, today's tube sites — are responsible for the market-altering glut of free porn available to consumers, countless numbers of these sites are still launched and operating today, with varying degrees of profitability — and varying degrees of '2257 compliance.

Traditionally, I've opined that thumb-based TGPs are secondary producers and subject to '2257 — and that's still my opinion for many of these sites — but for those operating under a strict set of parameters, TGPs may enjoy a critical new benefit of the revised '2257 statutes, designed to protect social networking sites by clarifying that it is the submitter of an image, rather than the site that posts it "as is" that is responsible for maintaining the proper records and displaying the required notice.

Now, I need to make clear that the primary images in question — the thumbnail preview images submitted by users — will in fact most likely feature sexually explicit material covered by '2257. The questions are "who displays the statement and where?"

I also need to make clear that I'm not talking about sites that list sponsor-provided free hosted galleries or any other owner-posted content (either instead of or in addition to user-submitted galleries). In my opinion, adding a sponsor's FHGs to your own TGP and including an explicit thumbnail image taken from that FHG — makes you a secondary producer of that material and thus obligated under '2257's record-keeping provisions.

But let's stay focused on our user-submitted galleries. Under my reading of the new law, a TGP that posts — unaltered — thumbnail images submitted by its users is not required to collect, maintain or display the appropriate records: "Unaltered" being the key concept, being inclusive of cropping, resizing, color correction; enhancing sharpness, etc.

According to the Department, '2257 will "... require users who chose to display actual sexually explicit conduct on adult social networking sites to keep records," but goes on to say that "the rule is inapplicable to social network site operators." This is an important foundation of my argument, since it shows an understanding that a website's owners can not be held responsible for the content that its viewers post — content that may be very transient to its system, such as gallery listings that rotate out or otherwise expire after a few days or weeks — but that a viewer who posts an image to these sites becomes a "producer" and thus liable for proving the age of those persons depicted in the image.

That's the big picture and it seems reasonable and workable, especially in its practical, common-sense applications. While it seems that most TGP operators didn't feel that '2257 applied to them, I believe it did — but within the specific circumstances that I've outlined here, I believe it no longer applies.

To look at it another way, suppose you run a corner market serving your community with the goods and services it demands. As part of your community outreach, you put up a "bulletin board" where your customers could post messages for other customers to read and to advertise their own goods and services. Now, when "Joe the Plumber" comes in and posts his business card, he's not hoping to sell his services to the store owner, but to the store's other customers — a communication between visitors. If the authorities want to know if Joe is a licensed plumber, the best the store owner could likely say is "you'll have to ask Joe" — not knowing whether Joe is licensed shouldn't make the store owner legally liable if Joe is plumbing without a license...

And so, in defining the term "producers" — the category of operator required to maintain '2257 records — the Department states that "... most social networking sites would appear not to be covered by the statute and the rule under the definition of produces," with the statutory definition excluding "... the transmission, storage, retrieval, hosting, formatting or translation (or any combination thereof) of a communication, without selection or alteration of the content of the communication."

"Therefore, the Department does not accept that such sites ... must maintain information concerning their users, much less that the Department must be able to inspect such data."

My interpretation of this is that the Department has better things to do than chasing after MySpace posters; but if someone is posting material that needs a closer look, they can trace the source of that material with a high level of confidence. It does warn, however, that "... one who posts sexually explicit activity on 'adult' networking sites may well be a primary or secondary producer," and that "users of social networking sites may therefore be subject to the proposed rule, depending on their conduct."

So, gallery posters beware: If you submit a sexually explicit thumbnail image, even for a sponsor's FHG, then you need to have at least seen (and perhaps have) the required documents for that image — although the TGP owner won't need to see or link to them (unless he monkeys with it).

And there's a big issue: Because many TGPs accept a fixed-sized thumbnail image with user submissions, many TGPs (and tubes) can and do look alike; leaving their owners to custom crop, resize, color correct and sharpen their own thumbs — a move done to seek a competitive advantage via a much more unique and attractive display of what could be the same offering at tens of thousands of competing websites.

Back to the example of our corner grocer, having a nicer, cleaner, more brightly lit store would result in more customers — despite the store across the street carrying much the same stock at very similar prices. In this case, however, the TGP owner that "cleans" his store's wares is considered a secondary producer — and liable for record-keeping.

A specific example arose in the discussion of "pixilated" or otherwise modified images, the intent of which is to obfuscate sexually explicit or "offensive" portions of an image, presumably to make them more acceptable for nonmember area display.

According to the Department, this modification "... would appear to constitute 'creating a digitally- or computer-manipulated image of an actual human being,' and thus would fall under the definition of 'produces' in section 2257(h)(2)(A)(i); [and] to the extent images are posted on [websites], alteration (and subsequent posting on a [website]) of an image would appear to constitute 'inserting . . . [such image] on a computer site . . . or otherwise managing the sexually explicit content' of such a site."

The creation of a thumbnail image or the cropping or other modification of an image and its successive posting on a website thus constitutes "production" — perhaps despite any protestations by those that claim their use of an online control panel to "format" pending thumbs isn't a covered action — which among other things could be deemed "selection."

Related and perhaps more interesting is the role in which automated systems play in this: for example, webmasters that seek a competitive advantage by displaying better thumbs will often use a custom "ImageMagick" or similar server command called from within their TGP software that "tweaks" the server program's standard settings.

During the gallery submission process, some TGP software will automatically process the incoming sample thumbnail images for a more uniform appearance and technical size and format stability. Skin tones and image sharpness, for example, can be enhanced by simply altering a few command values — but does this processing constitute "production?" And is it "production" even if the site owner doesn't consciously know it is happening or influence its process? I suspect that a pretty fair percentage of TGP owners are unaware that their software has this capability or how to modify the default settings even if they did know of its existence. Still, to me, thumb manipulation appears to be an "alteration" of content that could trigger "producer" status.

Taking submitted thumbs, "as is" however, may put a TGP owner in the position of being "an entity whose activities are limited to the dissemination of a depiction of sexually explicit conduct without having created it or altered its content [and thus] excluded from the definition of 'producer.'"

One spin-off worth mentioning is the use of feeds or remotely hosted content and thumbnail services — actions which could make the website owner liable under '2257. For example, the Department addressed a comment about § 75.1(c)(4)(v), wherein the question arose that since a website such as Youtube can post depictions without having to keep records, does that allow someone to display a Youtube video on their own website and still fall within the exemption? Because Youtube would not have the records and the person downloading from Youtube would not have access to the records, "it would appear that the individual who downloads a depiction of actual sexually explicit material from another site onto a site that he or she controls is a producer because he or she has 'reproduc[ed]' or 'insert[ed] on a computer site or service a digital image of, or otherwise manage[ed] the sexually explicit content of a computer site or service that contains a visual depiction of an actual human being engaged in actual sexually explicit conduct' within the meaning of the definition of 'secondary producer' in § 75.1(c)(2)."

Keep this in mind when selecting the sponsor banners and other content you run...

"Whether or not the source for the person is a site such as Youtube, which may not be required to maintain records as a secondary producer, since the original individual producer who posts a depiction on that site is required to affix a disclosure notice to each page of the sexually explicit depiction, a secondary producer who downloads that depiction onto another site should be able to obtain the requisite information for compliance with its own record-keeping and disclosure requirements." Read that again.

"Although the rule would require users who chose to display actual sexually explicit conduct on adult social networking sites to keep records, the rule is inapplicable to social network site operators."

A Careful Conclusion
While some might call a TGP a "distribution mechanism" and as such already exempt from record-keeping obligations, I specifically noted that excluded from producer status are various terms describing the operation of a TGP within the confines of our example.

According to the Department, "Producer does not include persons whose activities relating to the visual depiction of actual or simulated sexually explicit conduct are limited to ... provision of [an] Internet information location tool" — of which a gallery post is, and the status of which, in my opinion, may be enhanced by its deployment methodology.

I also noted that excluded were operations limited to "The transmission, storage, retrieval, hosting, formatting, or translation (or any combination thereof) of a communication, without selection or alteration of the content of the communication..."

This description pretty much covers the step-by-step process by which a gallery post operates: The basic premise being that the post is a communication between users, with the site being the venue for that communication. As in our bulletin board example and the cited social network examples, it is the poster that is responsible for the communication.

Also noted was that the "...deletion of a particular communication or material made by another person in a manner consistent with section 230(c) of the Communications Act of 1934 (47 U.S.C. 230(c)) shall not constitute such selection or alteration of the content of the communication" — which to me means that in the real world, you can delete reported or otherwise discovered images that are obviously illegal without "selecting" the content that appears within the gallery listings.

'2257 allows for "... the dissemination of a depiction without having created it or altered its content" — and to this observer that includes those TGPs and tubes that are operated within a narrowly defined set of circumstances.

If the statute doesn't apply to social networking sites featuring user-uploaded content, to this observer that would include certain gallery posts displaying user-uploaded thumbs.

While there are many other elements of these sites that may be under the control of the site owner, such as the advertisements on the site, including a sponsor's banners or the site owner's own galleries and sponsor FHGs; the display of a '2257 notice stating that displayed thumbs were provided by the gallery submitter should tell inspectors all they need to know — and is a workable solution with the least impact on these sites — and in the larger picture, their mainstream brethren.

As stated at the beginning of this article, this is a case that deals in specifics and those specifics change from operator to operator — you must consult an attorney to learn what is most appropriate for your own particular set of circumstances.

For my part, I'm soliciting qualified opinions on what I've laid out here. Remember, unless you've read the NEW '2257 regulations, you aren't up to speed on all the changes that are impacting your business today. I hope for a thoughtful discussion.