Dotcom says new site is legal

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dotcom lib AP Indicted Megaupload founder Kim Dotcom appears on a large screen during the launch of a new file-sharing website called "Mega" at his Coatesville mansion in Auckland, New Zealand.

Auckland - Kim Dotcom, founder of outlawed file-sharing website Megaupload, says his new “cyberlocker” is not a way to exact revenge on the US authorities who planned a raid on his home, closed Megaupload, and charged him with online piracy for which he faces years in prison if found guilty.

The flamboyant Dotcom said his new offering, Mega.co.nz, which was due to launch on Sunday even as he and three of his colleagues await extradition from New Zealand to the United States, complied with the law and warned that attempts to take it down would be futile.

“One thing has to be clear: This is not some kind of finger to the US government or to Hollywood,” Dotcom told Reuters at his sprawling estate in the bucolic hills of Coatesville, just outside Auckland.

“Legally, there's just nothing there that could be used to shut us down, this site is just as legitimate and has the right to exist as Dropbox, Boxnet and other the other competitors in this space,” he said, referring to other popular cloud storage services.

His lawyer, Ira Rothken, added that launching the new site was compliant with the terms of Dotcom's bail conditions.

US prosecutors argue that, in a statement related to his bail proceedings last year, Dotcom said he had no intention of starting a new internet business until his extradition was resolved.

Dotcom was to celebrate the launch will a party at his home, a mansion worth roughly NZ$30 million ($25.05 million), which features a servants' wing, hedge maze and life-size statues of giraffes and a rhinoceros in the grounds.

A year ago, New Zealand's elite special tactics forces choppered into Dotcom's home in a dawn raid to arrest him and his colleagues and confiscate evidence related to Megaupload, at the request of the FBI.

Dotcom says Mega is a different beast to Megaupload, as the new site enables users to control exactly which users can access uploaded files, in contrast with its predecessor, which allowed users to search files, some of which contained copyrighted content allegedly used without permission.

A sophisticated encryption system will allow users to encode their files before they upload them on to the site's servers, which Dotcom said were located in New Zealand and overseas. He declined to specify where.

Each file will then be issued a unique, sophisticated decryption key which only the file holder will control, allowing them to share the file as they choose.

As a result, the site's operators would have no access to the files, which they say would strip them from any possible liability for knowingly enabling users to distribute copyright-infringing content, which Washington says is illegal.

“Even if we wanted to, we can't go into your file and snoop and see what you have in there,” the burly Dotcom said.

Dotcom - a German national who also goes by the name Kim Schmitz - and his colleagues face years in prison if they are convicted, although the case is expected to drag on for years.

Known as much for his previous cyber crime-related arrests as his penchant for fast cars and yacht parties, Dotcom promised an extravagant launch for Mega as builders put the finishing to a festival-sized concert stage in the mansion's grounds.

Two helicopters circled overhead as workers erected a massive white replica of Mega's capitalised, block-lettered logo on the hills flanking the approach to the mansion. Dotcom was coy about what guests could expect from the event.

Expecting huge interest in its first month of operation, he said Mega's launch will be a far cry from when Megaupload went live in 2005.

Then, he and his colleagues were glued to their computer screens in a tiny office, cheering each time the counter showing the number of hits on the site ticked up towards 10.

“I would be surprised if we had less than 1 million users,” Dotcom said. - Reuters

FACTBOX-What are cyberlockers?

Cyberlockers, are also known as cloud storage or file storage services, enable users to keep files, or back them up, on the internet.

Users can access files from these virtual storage lockers, which operate on remote servers, from any computer with an internet connection, often more quickly than on personal computers.

Many of these sites offer limited free storage, and users can pay for more capacity through subscriptions.

WHAT ARE THEY USED FOR?

Like cloud storage services, users can use cyberlockers to store photos, documents, music and video files, which are often too large to save on personal computers.

Users can grant access to these files at their discretion, while many sites enable users to search for content.

Many cloud storage services are promoted as a business tool to enable several people to access shared files, while cyberlockers often refer to services for individual use. Both are interchangeable in their uses.

WHY ARE THEY CONTROVERSIAL?

The entertainment industry has been a vocal opponent of cyberlockers containing copyrighted films and music, arguing that it is illegal to distribute such material without their consent.

Site operators say they cannot be held responsible for any illegally obtained content as it is impossible for them to monitor the massive number of files stored on their servers. They say they do not knowingly enable users to store and share illegal material.

Sites offer a “take-down” feature which enables copyright holders to order cyberlocker users? Or the locker operator? to remove unpermissioned content. The understanding is that any delay or refusal to act may make the cyberlocker?? liable for such content.

WHAT ROLE DOES ENCRYPTION PLAY IN CYBERLOCKERS?

Encrypted files feature a code designed to stop the file being hacked. Some cyberlockers offer this feature to guarantee users privacy of their files.

Many in the technology and security industries see considerable merits to file encryption, as it would secure large files, including government documents, stored on offshore servers.

While protecting the privacy of files, encryption also enables users to conceal them.

Mega, Kim Dotcom's cyberlocker to be launched on Jan. 20, features a file encryption system which will enable users to encode their files before storing them on the Mega servers.

Once the file is encrypted and stored, they are accessible only using a decryption key which the fileholder alone will control.

As a result, Dotcom claims that the fileholder will be solely responsible for the content stored on Mega, and that the site operator cannot be held liable for content as it will not have access to any of the files stored in the cyberlocker. - Reuters


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