Megatrouble

Only the most wilfully ignorant will believe that sites like Megaupload are not there primarily for the illegal exchange of copyrighted material. The protestations of the hacker group Anonymous and legions of other 'netizens' may have some merit in terms of the 'freedom of speech/freedom of information' arguments, but deep down inside, we know what these sites do. They facilitate the exchange of intellectual property that we really should be paying for.

That's not to say there aren't legitimate users of such sites; however, arguably the vast majority of users are not software developers, graphic artists or other 'power users' who could justifiably require 40GB, 60GB, 80GB or 100GB of Internet traffic in any given month.

One theory holds that arresting Megaupload founder Kim Schmitz (aka Kim Dotcom) because the service he provides was used to commit crimes is akin to arresting Pieter Uys because drug dealers use the Vodacom network. Nevertheless, a quick scan of the indictment against the portly criminal is telling.

It reveals that the 'Mega Conspiracy' is in the dock for:

Count 1: Conspiracy to commit racketeering.
Count 2: Conspiracy to commit infringement (of copyright).
Count 3: Conspiracy to commit money laundering.
Count 4: Criminal copyright infringement by distributing a work being prepared for commercial distribution on a computer network, and aiding and abetting of criminal copyright infringement.
Count 5: Criminal copyright infringement by electronic means, and aiding and abetting of criminal copyright infringement.

The two things that every avid Internet user wants: ease of access to content and speed of access to content.

Donovan Jackson, contributor, ITWeb

The crux of the matter and the pivot on which the case will turn is that Megaupload knowingly encouraged the upload and sharing of copyrighted materials. And why wouldn't it? If one breaks down the business model of a service like that provided by Megaupload, it directly addresses the two things that every avid Internet user wants: ease of access to content and speed of access to content.

For all his odiousness, that's something that Schmitz recognised early and capitalised on massively - because serious Internet users are prepared to pay for it.

It is also this that generates the vast majority of Internet traffic to Megaupload and attracts the multitude of users. It is these two components that are the very foundation of any serious Internet business: traffic and millions of people. Just ask Google, Facebook, YouTube, LinkedIn and Twitter. With 180 million registered users, Schmitz and his cohorts needed to make just less than one dollar from each of them to generate the estimated $175 million in proceeds.

The evidence that can be expected when the matter reaches court will be quite simple. It will demonstrate that Schmitz and company didn't just know about the fact that copyrighted materials were being hosted on the Megaupload site. It will show that the business model explicitly encouraged the upload and sharing of such files. That's how you get 180 million users; the old expression 'content is king' still holds true for the Internet after all these years. And the content that gets people online and downloading big files is new music, new movies and new TV shows.

To pick up on my earlier metaphor, the arrest of Schmitz is no longer for merely providing a service which was used outside of his knowledge to commit crimes; would the CE of Vodacom encourage dealers to use his phones because it brings the company money? Rather unlikely.

We all like to take the free Internet and free information as our God-given right. We like to point to the fabulously wealthy movie stars, execs and studios as if that somehow justifies our crime of theft; we like to opine that their business models should change in the face of the power of the Internet. However, while the latter may be true to some extent or another, this cannot give us the right to appropriate their products because of a sense of entitlement.

Principle says we cannot ignore those laws that we find inconvenient, or anarchy will quickly result. The 'intellectual property' industry, if we can call it that, has every right to follow the business models it chooses; what it produces is for it to sell, disseminate and share as it sees fit, not as we see fit.

However, the reality of the Internet - and the fact that it is indeed anonymous - means the multitude of humanity, which clearly sees great value in the products of the intellectual property industry, will force change. While locking up criminals like Schmitz might be a battle won for that industry, the nature of the Internet means the war is far from won.