In our own recovery, we are to create healthy boundaries. This is not to control the SA, but rather to help us create a better value system for ourselves as well as keep our home safe from prn, etc. that is associated with this disease. If this is a boundary for you that you think needs to be imposed, then don't question your gut..it never lies! Do what is in your highest regard, impose the boundary and let it go.
As recovery trauma survivors, we must learn to regain control over our lives, refocus on ourselves, feel the pain, grieve the losses and move forward. Hugs!

Is he in recovery and for how long? Sobriety does not equal recovery. Do or have you seen major changes in him? Unless there has been some solid recovery and major changes in him, I can totally relate to your fear. Online sex is definitely a tool many SA's use. I think Wach makes a good point. From your post your gut is telling you this doesn't make sense when one daughter lives in town and the other he talks to infrequently. Decide what the appropriate consequence is for you if you set this boundary and he ignores it. That is of utmost importance before you discuss it with him so everything is clear up front. (Just my opinion)

One thing I am learning is how truly powerless I am. All I can do is set the boundary and ask that it be respected, but I can in no way force or control. So, when you ask for the boundary, say it knowing that you have no power behind him to do it and then allow yourself to feel the heartache if he decides not to respect the boundary. It is just one of the many challenges of being the spouse of an SA.

Rb: You asked if you're being to harsh or hurtful by suggesting he not use that type of internet avenue. No. There is no reason for a person with his history to feel hurt because you don't trust him in those arenas. He hasn't been trustworthy. He may feel hurt for a long time do to the results of his own behavior. That is what taking responsibility for personal behavior is. His behavior...and the results. He should be quite understanding of the results. And accept the results.

How do you know he is using the Skype for porn? I mean it can be another way to "date" and meet strangers which is bad. You should find out his skype name and google it and see if he's been posting it or giving it out. But then what? It's a slippery slope.

Hi Rb, No! You are not being harsh or hurtful!! And so what if you were??? There is nothing wrong with protecting yourself from any more potential pain that your H could cause you. You have every right to protect YOU.
It is not as if you are preventing him from communicating with his daughter. As you said, she lives in the same town, he sees her often and can phone her any time.
Skype is like MSN messenger only it has webcam as well which I would be very wary of if my partner wanted to subscribe to it!
Talk to him and tell him how you feel. Hopefully you will both be able to come up with an alternative to Skype.
If he doesn't listen and still insists on having his own way, then install a site blocker which will not allow certain websites of your choice to be accessed without a password which you can set. Alternatively, allow him to subscribe and install a keylogger so that you can see exactly what he is doing, however I am not trying to encourage you to become a detective but these are options available to you should you need them.
I hope you can sort this out together! Good luck! x