This one is a bit tricky so I will likely revisit it from time to time. It has to do with how MC would govern itself and how it deals with the outside world. I have a sense of it, but the details I think will prove to be important to the storyline.
Monitor City started as a normal city in the province of Ontario (Canada). The inhabitants were a fairly common bunch of 'love my free health care / shop in the States' border-livers, who saw a bit of cash might be made by opening their little town to high tech.
Once the new hacker-types started moving in, city council tried to pass zoning bylaws to keep the technology sector relegated to the outer regions. That didn't happen, of course, because by this point the townfolk were outnumbered by the technicians who had been hired to manage the new network, let along the programmers who flocked to it. Soon the downtown core was re-imagined and renovated to act as a more efficient transitway for data. The townfolk moved further into the country as the city grew out.
The townfolk complained to the province in 2015 that their way of life was under attack (by this point it was already gone, but hey). The province responded by holding a referendum about the question of zoning bylaws, which the techies handily won. The townies got angry, cited several breach of contract claims to provincial courts against the original infrastructure contractors, but lost on account of the original contracts not having control over what happened once they left.
By this point, however, the federal government was already having problems with MC. New intellectual property and anti-piracy laws passed by Parliament were butting heads with work being done in Monitor City, most notably the cryptography community there. The MC position was that you couldn't patent equations or theories as fundamental as cryptography, and at any rate it was bad policy to try. The Canadian government, under pressure from tech lobbyists, sent RCMP officers into MC, raided a few apartments, and arrested a few dozen programmers for criminal code violations.
The response was uncoordinated, but very effective. The Toronto Stock Exchange was shut down and kept down by MC black hats, wreaking financial havoc on the entire country. New York felt the ripples, too, and Washington started to apply pressure on Canada to whip the Monitor City hackers into shape. Stunned by the attack, and with the world markets watching for a sign that Canada couldn't be held hostage by a small group of its own citizens, the RCMP made another foray into Monitor City.
Much of the eastern seaboard is powered by electricity from Ontario and Quebec, and so it only took the black hats about two hours to find the right boxen to attack before the biggest blackout in North American history got underway. The Canadian military tried to send the army in to crush the black hats, but the military found it hard to coordinate with constant disruptions in their communications gear.
It wasn't until a special envoy arrived at Monitor City's city hall with a peace offering that the power finally came back on. The conditions to peace were that the City elect a set of representatives to negotiate with the federal government, to resolve the outstanding issues (such as the intellectual property laws).
The officials were elected fairly quickly (most were too scared to venture out in person), and made the trip to Ottawa to begin deliberations. The blog they kept, now part of MC folklore, shows the kind of strange unreality they were faced with: they were being dictated terms, although they were obviously the victors so far.
The terms they agreed to were:
- Monitor City citizens would no longer wage cyber-warfare against Canada;
- Monitor City would abide by the laws of Canada;
- the Canadian government would grant Monitor City a special "research area" classification which would allow them to technically circumvent IP laws without being prosecuted;
The representatives returned to Monitor City, were designated the first City Council. and were left the task of enforcing the no-attack clause.
Washington, itself under intense pressure from lobbyists to curb MC's IP violations, was furious at the "research area" designation, and put intense pressure on Ottawa to back away from that part of the deal. When Ottawa refused (fearing reprisals), Washington decided to act alone. The bank accounts of MC-dwellers located in the U.S. were frozen, all shipments from the States to MC were stopped, and American citizens in MC were told to come home and face prosecution, or their citizenships would be revoked. The City Council tried to calm the tempers, and eventually prevailed long enough to begin negotiations with Washington directly.
It was a tricky situation, trying to appease the U.S. while keeping the free-as-in-speech MCers happy, but the Council did an admirable job. For three months, they hammered away at draft after draft, trying to compromise ... and it was the death of an old woman in Germany that took it all apart.
The grandmother of Hans Schmidt, an MC veteran and strong contributor to the FreePGP project, died around the third month of negotiations, and he made special travel arrangements to attend her funeral. He was about to board a flight in Montreal when he was stopped by Customs officials and detained. He was later handed over to the RCMP --- initially for passport fraud, but eventually he was held as a terrorist, a cyber-terrorist.
The sneaky underhandedness of the whole deal infuriated the citizens of MC, and they ordered the Council to cut off talks. Fearing a full-scale war, the Council tried to calm the populace, but the fever was too strong, and the Council was forced out, and replaced with a more militant group. The new Council drafted and posted the Monitor City Independence Decree, which re-defined the area not as a city in the province of Ontario, in the country of Canada ... but as the city and country called Monitor City. It was a sovereign nation, with its own laws, its own political framework, and its own international voice.
Washington initially downplayed the move, but when Ottawa refused to use force to stop the rebellion (they were quite rightly afraid of the consequences), White House sources started implying the military might need to get involved, with or without Canada's cooperation. A period of three tense weeks passed, with the war drums on both sides of the border beating louder and louder, when finally the President ordered a division to position itself in such a way as to "protect the free land of America". He went on the air during prime time to deliver the message to the country that force would be necessary.
His broadcast was cut off one minute in, with the words "U R 0WN3D" splashed across the screen.
With a dozen tank barrels aimed at their homes, and with the tickers at the NYSE flickering on the verge of a major crash, the two sides agreed to a compromise: Monitor City could be its own country, could have its own laws, could exist how it pleased; the world would not invade, threaten, or impose rules upon the City. In exchange, the Council would not order the destruction of the technology infrastructure of the Western world. And in exchange, the Western world would not physically destroy Monitor City.
This is the basis for the existence of MC today. While there have been major hacks initiated from within the City, all have been dealt with harshly by the Council, and none have been of a scope worth starting a war over.
A typical advertisement for a service offered by Monitor City says "beyond your control", a purposeful slap in the face to foreign goverments. But the power comes at a price: anyone less than a celebrity in MC risks their freedom if they travel outside the city, because most foreign governments arrest anyone using a Monitor City passport.
It continues to be an uneasy truce.