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Dotcom expects Hollywood to hit back, lays out his legal arguments for Mega

During an interview with NBR ONLINE Friday, Dotcom was frank about the challenges facing his Mega re-boot.

Surely many people will balk at the prospect of using as service backed by the accused pirate, even if they supported him, and fear there was a clear and present danger of losing their files all over again as legal action against Megaupload continues? 

“It’s going to be an issue. There will be users who chose not to work with us because of that. And that is unfortunate.

“But I think that will also be a lot of users who just want to try this new service and see how good it is. And once they realise there is really no alternative to this service right now in terms of safety and privacy, I think there will be a lot of users who will use this.

“And over time, you know, when the service is live for a few months, and people see these guys are still here, I think the trust will grow.”

The new service will have a distributed hosting setup, and any file will be stored in at least two locations (and once things get rolling, at least two different countries outside the US). By Dotcom’s account, this setup will guarantee seamless service if a technical glitch hits, or authorities is a particular country target a Mega host.

Mega will launch with one host, but Dotcom said there had been more than 1000 applications from companies big and small wanting to be hosts, and more would be added after launch (successful candidates will get paid E500 per month per server; each server needing to supply 24 hard drives with 72 terabytes of storage, and one gigabit of bandwidth, among other requirements).

Further Mega’s one-click encryption was user-friendly, and guaranteed no one but an uploader could control who viewed a file.

Encryption asking for trouble?
But wouldn’t the feature draw heat from prosecutors, and copyright holders? After all, encryption means Mega will be like the Swiss bank of online storage services; users could easily use the technology to hide, say, pirated movies or child porn.

Dotcom’s US attorney, Ira Rothken, who is in Auckland for the launch and who sat in on the interview, responded that many technologies were dual use, but on balance provided more public good. He cited technologies from the VCR to cloud computing as a whole to back his case.

Further, Rothken also notes that Bush-era Deputy Homeland Security Advisor Richard Falkenrath  wrote that encryption was a desirable feature for cloud computing services for security and user confidence, and even when as far as chastising those who did not use client-side encryption.

And Dotcom weighed in that although they don't have a one-click encryption option built into their interface, the likes of Google Drive allow you to upload encrypted, password-protected files.

Lawyering up
Dotcom added that Mega was what he called "the most legally scrutinised business plan in start-up history." 

More than 20 lawyers were now on his legal team, the entrepreneur said (and as if to underline the point, a newcomer to the team, Lowndes Jordan partner Rick Shera, arrived at Dotcom Mansion part-way through NBR's interview. The legal crew also includes the San Francisco-based Ira Rothken, various Simpson Grierson partners, Paul Davison QC and criminal barrister Guyon Foley). 

Rothken said he had submitted a document describing the Mega business to the Crown last month. No counter submission had been made.

Dotcom said he was certain record labels and Hollywood would "heckle" Mega going by their "past aggression ... they can't help themselves" (and there was certainly a foretaste of possible trouble to come this week as Mediaworks pulled ads for Mega from its stations; an insider said the move followed pressure from music and movie advertisers).

But he considers the business fully vetted, and Rothken and co. are locked and loaded to spring into action.

Assuming it survives through its launch, Mega will add new features, from mobile support to user-to-user messaging to integrated calendaring, word processing and spreadsheet applications.

A Megabox/Megakey content service will follow in around six months.

Megabox will offer music artists (or artists plus their label) a cut of profits. The companion Megakey service will sell songs in the manner of iTunes, plus offer people the option to get free content if they accept a browser plug-in, then earn points by viewing ads. Dotcom said while Megakey would replace ads, it would only replace ads served by the largest sites.

FLASHBACK: Kim Dotcom in the dock with (L-R) co-accused Bram van der Kolk, Finn Batato, Mathias Ortmannn after their January 20, 2012 arrest on copyright infringement, money laundering, racketeering and other charges associated with Megaupload and its alleged $US175 million in illegal profits and divereted $500 million revenue from content providers. In part because of procedural and legal blunders by the DOJ, FBI, GCSB and NZ Police, the case to extradite the four to the US has seen a series of delays; the latest has pushed it back to August this year at the earliest.

More by Chris Keall

Comments and questions

Thanks for this article. Good to hear what is happening on this front, and get a bit of analysis and commentary.

Congrats, Kim. I'm ashamed at the NZ police acting as Hollywood's lapdogs. Yay, lets act all Rambo and send in multiple armed offenders squads and a helicopter. After all, it was Hollywood that told us to do it.

This is one of the front lines in the fight between big corporations and individual rights. Looks like we might win this one because the guys at the top are overly arrogant.

Ooops. Looks like it's overloaded by many people interested or, it's going to be Mega attacked.
I so want to share my flies ... I mean files. LOL.

We hope that Mega is a success.
This would be a suitable reward for the craven actions of our govt and their officials who bowed to the wishes of the US and Hollywood without hesitation.
All good luck to Kim Dotcom and his associates!

Is there any way to allow a team of outside advisers who are disinterested in one side or the other to have a look at this and come up with what is really going on?

Go Mega!
Glad to see that what I consider to be racketeering cartels have failed in their fight to destroy this challenge to their ongoing exploitation of artists and consumers.
What I want to know is why public officials who have committed crimes of a far more serious nature than Kim Dotcom - crimes against the Tuhoe people and against Kim Dotcom, and many others you have never even heard of, have not been arrested and charged, why the assets of crime-committing public officials have not been seized, and why these people have been left in place?
Please explain John Key and the NZ Department of Prosecutions.
Is NZ's reputation for being non corrupt as bogus as its clean, green reputation?
Is it only because crimes by public officials are not prosecuted but covered up or whitewashed?

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