March 11, 2013 at 10:32 PM ET
Appearing like a retro-futuristic apparition, digitally transmitted through pneumatic tubes from a future that was but will never be, the disembodied head of Kim Dotcom, the Osama bin Laden of file sharing, bobbed and hovered amiably from his lair in the Antipodes.
Given his, er, legal troubles, Dotcom's public appearances are rare, and always virtual. If his name rings a bell, you may recall an incident that occurred in New Zealand in January 2012: Two helicopters, attack dogs and 76 New Zealand SWAT police descended on Dotcom's home.
Dispatched by the New Zealand Security Intelligence, acting on a request for extradition by the American FBI, the team was to shut down Dotcom's Web operation, Megaupload, and seize its assets. The charges, which span 72 pages of a federal indictment personally signed by then-Secretary of State Hillary Rodham Clinton, boil down to this: Dotcom created the Napster of video.
He's now under house arrest, awaiting a prolonged extradition process, but his mind is as always on the future. Will the Internet be transparent, like Facebook, where data is freely available to everyone who wants to see it, and then some? Or will it be encrypted and protected — safe from the prying eyes of government spooks and other spies?
"The problem that we are facing today is that more and more of your data is being unsafely stored," the Megaupload founder said Monday via Skype, hovering above a South by Southwest panel in Austin.
"Part of it is kept by commercial companies like Google and Facebook that slice and sell your data. And the government has access to all your data as well. That's part of what Megaupload was trying to change. We want to give you access to your data in real time, on the fly. The government doesn't want you to have that. They want to have that. They want to collect everything, control everything you know and produce."
The legally beleaguered German-Finn is defensive about the now-shuttered Megaupload, once valued at around $2.6 billion.
"All I sold was storage space and bandwidth," he told the audience at SXSW, and partly blames the fact that he's "a flamboyant character" for his predicament. "I had cars with 'Mafia' and 'Guilty' [vanity] license plates," he ruefully recalled. "Maybe they took that stuff a little too seriously." (When Dotcom and four associates were arrested, $17 million in assets, including 18 cars, were seized at his home. The government also froze $175 million in 64 bank accounts.)
Dotcom faces up to 55 years in an American federal prison because of it, accused of online piracy, racketeering and two acts of conspiracy: to commit copyright infringement and launder money. He called this a "political case," and vowed to look forward to his upcoming extradition hearing, where he promised startling new revelations about sleazy dealings between the American movie industry and the highest levels of the American and New Zealand governments.
The feds say Dotcom purposefully built a platform that he knew would be used for pirating movies and other intellectual property on an epic scale so that he could profit lavishly from the labors of others — mainly in Hollywood. At one point Megaupload was estimated to carry four percent of all traffic on the Internet.
"The Internet is about now," Dotcom said in Austin, blaming Hollywood for encouraging piracy by, for example, not releasing U.S. movies overseas for months after their stateside openings. Whether Dotcom will remain free and part of that "now" remains to be seen.
Certainly, piracy and illegal file trading were part of Megaupload's culture, but when it was shut down, many legitimate users, including 15,000 U.S. soldiers who used it to send personal video to their families, lost access to their files. Dotcom also said that thousands of government agencies around the world that used the service to store documents. Pointing to the fact that 50 percent of all files on Megaupload were never downloaded even once, he says the service had a lot of customers who used it legally, the way most people use Dropbox and Google Drive today.
However history labels Megaupload and its possibly piratical activities, Dotcom is working on tools that can be put to good as well as no-good. Encryption is the name of the game: Keeping private data private, and away from prying eyes of governments, marketers, hackers and exes.
Dotcom is busy working on Mega, his recently launched encrypted file storage site. He also hopes to roll out MegaBox, an iTunes-like music service on which musicians would receive 90 percent of revenues and could sell their songs directly to fans, within six months.
And though he didn't mention it at the conference, he's also working on an email service that — he's quoted by The Guardian UK as saying— is"fully encrypted so that you won't have to worry that a government or Internet service provider will be looking at your email."