In their comments, Obenberger and Walters drew attention to ambiguities in the statute, the burden that complying with the regulations would impose on producers, concerns over the definitions of key terms in the statute and other problematic aspects of the record-keeping regulations.
Obenberger took aim at several “fundamental ambiguities” in the statute, arguing that these uncertainties must be resolved before the proposed revisions to the regulations are finalized.
With respect to how disclosure statements are to be displayed on or affixed to websites, Obenberger noted that the current “practice of the industry has been to attach a link — or more commonly a link to a notice — on the index page, that is the title page of websites containing covered depictions — whether or not that page actually contains covered depictions.”
Obenberger argued that the index or home page of a website is “where law enforcement agents and the general public have always looked to find contact information concerning the operators of a website, and it seems to me unimaginable that, assuming the validity of Section 2257, a disclosure statement on the home page, through a loophole of ambiguity and because that page itself contains to covered depiction, should not be required on the home page.”
Equally unclear, Obengerger observed, is the question of what is the “matter” to which a disclosure statement relates.
“What is a website’s status under Section 2257 (a)?” Obenberger asked in his commentary. “If a web site is a regulable matter, do each of its elements under your view remain individually regulable matters?”
At times, Obenberger’s commentary adopts a chastising tone, nearly taunting the Justice Department for its apparent lack of understanding concerning both the technologies related to the Internet, and the realities of online adult content distribution.
“Have you any idea that these galleries are composed of sets of images that are purchased in bulk and uploaded to servers via automation which then recomposes the pages and the indexes to a site?,” Obenberger wrote. “What purpose exists in requiring such a statement with regard to each image? These sets often contain twenty to 150 images. What purpose is served by multiplying the obligation from a statement concerning one photographic event into 150 notices?”
In his comments, Walters began by focusing on the difficulties that would be faced by secondary producers if the proposed regulations were to be adopted as-is.
“Imposing the requirements of full 2257 document maintenance and inspection on so-called ‘secondary producers’ having no involvement in the actual hiring, contracting for, managing, or otherwise arranging for the participation of the depicted performers, imposes an undue and excessive burden on those secondary producers,” Walters wrote.
Making matters worse for secondary producers, Walters asserted, is the fact that there remains substantial question as to what the effective date of the regulations is, and what content will be subject to the proposed regulations.
“The [Justice] Department contends that while it could require compliance for images produced after July 3, 1995; the effective date of 2257; it chooses not to do so to avoid any ‘conceivable ex post facto concern,’” Walters wrote. “However, significant ex post facto concerns remain with respect to requiring compliance for all images produced after July 27, 2006.”
Walters noted that until recently, many secondary producers had “relied on the protections of the preliminary injunction issued in Free Speech Coalition vs. Gonzalez…. which prevented records inspections and enforcement actions against secondary producers/[FSC] members.”
“As a result of these unique circumstances, many secondary producers have been unable to acquire age verification documents mandated by 2257, in connection with images displayed on secondary producers’ websites,” Walters wrote.
“Primary producers of such material have been hesitant to circulate personal information relating to performers depicted in such content, citing privacy concerns and the potential for stalking and/or identity theft resulting from widespread circulation of this information to all secondary producer/webmasters displaying the images on the Internet ... if the regulations are adopted with an effective date for compliance by secondary producers of July 27, a host of depictions, otherwise protected by the 1st Amendment to the [U.S.] Constitution, will be suddenly criminalized, and their continued display subject to federal felony prosecution.”
Walters also cited cost of compliance concerns, asserting that “astronomical costs will be borne by industry producers in the attempt to ensure compliance with the new regulations.”
“These costs take the form of additional staffing, software development, updating and maintenance, and institution of new compliance procedures,” Walters said. “These costs will be excessive for large businesses, and insurmountable for smaller operations.”
Ultimately, Walters said, the aggregate cost of compliance for the industry will exceed $100 million dollars, in contrast to Justice Department claims.
Noting that the Justice Department itself estimated that there are currently 500,000 websites containing visual depictions of actual sexually explicit conduct, Walters said that based on his own “considerable exposure to the industry” the actual numbers are far larger. Walters further argued that even if one accepts the Justice Department estimates, the total cost of compliance would exceed $100 million.
“A poll of this firm’s web-based clients requesting a cost estimate to comply with the new disclosure requirements indicates an average cost of annual compliance at $210,092 per business,” Walters wrote. “This, multiplied by the minimum 5,000 affected businesses, well exceeds the $100 million threshold requirement. Accordingly, this rule should be reviewed and promulgated in accordance with the requirements pertaining to rules which will have a greater than $100 million annual impact on the economy.”
For the complete text of Walter's comments, click here, and for the full text of Obenberger's comments, click the "View attached document" link below.