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MegaUpload-type shutdowns could kill the Cloud Storage model

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More on the implications of the MegaUpload shutdown from writer George Washington at Naked Capitalism (my emphasis everywhere):

The government’s takedown of the 800 pound gorilla online storage site Megaupload may have killed the cloud storage model.

Many innocent users have had their data taken away from them.
Keep in mind that MegaUpload had at least two capabilities — file-hosting and video-hosting (Megavideo). I suspect that the biggest problem for the money-soaked MPAA was the videos, though you can also share HD video files at a file-sharing site.

The author then quotes PC World:
The MegaUpload seizure shows how personal files hosted on remote servers operated by a third party can easily be caught up in a government raid targeted at digital pirates. ... Before its closure MegaUpload had 180 million registered users and an average of 50 million daily visits, claimed a total visitor history of more than one billion, and accounted for about four percent of all global Internet traffic[.] ...
And there are lots of MegaUpload-type sites. Back to PC World:
Take, for example,, a site that appears to be similar to Megavideo. Videobb bills itself as an ideal place to share videos without ever having to worry about “disk space or bandwidth again.” Videobb is “safe, secure and easy” the company says, and that’s probably true; at least unless the FBI and the Department of Justice decide that videobb is ripe for a takedown. Behind the scenes, videobb is rife with pirated content just as Megavideo was.

A quick check of sites that index pirated content shows you can find recent episodes of The Big Bang Theory, Modern Family, and the recent movie Contagion available for free streaming on Videobb.
And that doesn't begin to consider the wealth of file-sharing sites like RapidShare, Hotfile, and all the others. Back to the author:
In other words, the government is exercising the power to seize all of the legal property held in a storage facility because a handful of crooks have illegal property in theirs.

And if that’s not enough to kill your enthusiasm for cloud storage, CIO points out:
Worries have been steadily growing among European IT leaders that the USA Patriot Act would give the U.S. government unfettered access to their data if stored on the cloud servers of American providers—so much so that Obama administration officials this week held a press conference to quell international concern over the protection of data stored on U.S. soil.
So there are a couple of issues here. One is drug-enforcement–style property seizure. What if your company used that site (or a site like Dropbox) to store rapidly changing files (for example, within an active work-team), but backed them up only once daily (or, gasp, never)?

Another is death of businesses that sell such services. As the articles above make plain, who would trust their files to the U.S. Security State? No I, said the little red hen.

But the worst of the issues? Death of the gifts of the digital gods by "property rights" freaks who want the last dollar on the table to be theirs. They're willing to kill the market to keep the 10% theft (for example) at bay.

Look, the nature of digital "property" implies easy theft. Get over it. If the MPAA had their way, VCRs would have been banned in the U.S. Think I'm kidding? The Google (heh) is your friend — for now.

Which brings us to ... Senator Al Franken. Is he really Stuart Smalley on this one issue only, or is that just a clever disguise? You could ask him: 202-224-5641 or 651-221-1016.


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