Espionage is an arms race in technology, and the launch of MEGA.co.nz is a significant milestone in that race.

What makes MEGA.co.nz different than anything before it in the world of cloud storage is its promise of ubiquitous "military grade" encryption.

MEGA.co.nz is offering to restore something which looks a lot like privacy to an online world which had largely forgotten the meaning of the word.

MEGA.co.nz takes longer than your average website to load because the page that you load is much cleverer smarter than your average web-page.

When you connect to MEGA.co.nz your browser (running on your own computer) is itself the encryption engine. Via a series of fairly clever tricks - which appear to be still evolving as they are critiqued by cryptographers from around the world - MEGA.co.nz gives the keys of encryption solely to the computer user.

In order for anyone - including MEGA.co.nz - to see what the contents of any mega file are they need either to have (1) access to the computer of the user, or (2) permission from the user.

This differs from many online encryption systems (Google Drive, iCloud, M$oft Cloud, Amazon etc.) where the keys to the encryption are held (safely) by the cloud storage provider.

*******

MEGA's Explosive Growth

In the first part of this story we remarked on the spectacular growth path of the MEGA.co.nz site in becoming the largest NZ site on the web in under a month.

It seems very likely that this pace of growth was also a huge surprise to its creators.

People in the internet business are used to strong and steady starts followed by - if you have a winner - what they call the "hockey stick" trajectory of exponential growth.

It appears that this was not the case with MEGA.

Instead MEGA ignited like a bonfire. From zero to incandescent in a very short space of time indeed.

The fact that the platform has been able to absorb these insane levels of growth and survive is a tribute to the capability of the engineers who have deployed it - and is probably down to the fact that they had already built and deployed the world's most popular distributed cloud-storage network in Megaupload.

However the question begged most loudly by the insane growth of MEGA.co.nz is not how, but why?

Why do millions of people want to trust Kim Dotcom - a person whose business was destroyed when his file systems were seized by the FBI, along with their data?

And the answer to this question is obvious in an Emperor's new clothes like fashion.

There is a simply huge desire for privacy among users of an Internet which appears to have forgotten the meaning of the word.

*******

Because Privacy Demand Is Huge - MEGA's Implications Are Also Huge

On one level (as explained by Dotcom himself) MEGA is a simple response to a desire to put privacy back into his own life and that of his business partners.

However by doing so as easily as he has done (five months from conception to launch), and by effectively striking oil by experiencing such astronomical levels of uptake, MEGA has opened a pandora's box.

MEGA has shown:

1. that this form of encryption technology can be deployed effectively and relatively easily - at scale;

3. that there is massive latent demand for it among internet users.

This creates the conditions for massive investment to follow.

And because the latest wave of multi-threaded multicore processors + HTML 5 have made it possible to build and deploy client-side (i.e. in your phone) browser-based encryption services - which make the data stream invisible to the network - it is now possible for these services to quickly become ubiquitous.

What this means is that it is now possible to build a secure viber like untappable voip network and indeed according to the founders of MEGA, the idea of providing API like tools to serve as the authentication and transport layer for these services has already been identified as an enhancement of their MEGA product offering.

And that is the promise of MEGA.

To restore privacy to the internet.

As Dotcom himself tweeted:

#Mega is the PRIVACY company. Not the PIRACY company. — Kim Dotcom (@KimDotcom) February 1, 2013

*******

The NSA Reaps A Whirlwind

Before the launch of MEGA.co.nz Kim Dotcom was firmly in the gun sights of the Motion Picture Association of America. They wanted him stopped. And on January 20th 2012 they got their way.

After the launch of MEGA.co.nz Dotcom has initiated a game-changing technology step change for the US National Security Administration (NSA), the US Department of Homeland Security, the UK Goverment's GCHQ and indeed every spying and law enforcement operation on the planet.

The full story of how Megaupload was shut down is yet to emerge.What is known already points towards a very heady mixture of political influence, campaign finance and private use of the US law enforcement apparatus.

In this case through bowing to the wishes of corporate lobbyists - and in the case of NZ through some apparently extreme foolishness - the security agencies involved in the shutdown of Megaupload have reaped a whirlwind.

For years (especially post 9/11) it has been widely reported that our technology giants have been providing back-doors to high level security systems to the likes of the NSA - the enormous US National Security Agency which does its best to run an all-seeing global surveillance operation.

The NSA is the lead US agency in an intelligence partnership called UKUSA which includes NZ, Australia, Canada, the UK and the USA. The NZ agency in this partnership being the GCSB (Government Communications Security Bureau).

The so called "Echelon" surveillance network which is operated by the five UKUSA powers is unquestionably the most effective signals intelligence (spying) technology ever built.

Cynical observers have long suggested that by using this network spy agencies get around the rules against spying on their own citizens by spying on each other’s instead.

And in the Megaupload case this all went spectacularly wrong on the 24th of September last year.

Unlawful GCSB Activities - NZ PM John Key Press Conference 24 Sept 2012

On September 24th 2012 the New Zealand Prime Minister John Key announced that he had initiated an inquiry into how the GCSB had come to illegally spy on Kim Dotcom in the lead-up to the raids on his house in January of that year.

The fact of Kim Dotcom's surveillance by the NZ arm of the global Echelon spy network emerged as a result of the legal process around US attempts to extradite him, and information obtained by the legal team working for Dotcom.

In December 2012 the GCSB was enjoined to a case as a respondent in Judicial Review proceedings around the raid on Dotcom's home. The judge in these proceedings had earlier found that warrants executed against Dotcom were both illegally issued and improperly used. And it appears that the police officer in charge of the New Zealand end of the copyright enforcement action not only used illegal unwarranted surveillance techniques, but that he also lied about this in the High Court Proceedings.

In her December decision the judge in the Judicial Review proceedings Justice Winkleman ordered, among other things, that the GCSB produce a full accounting of all surveillance activity against Dotcom.

This is the first order of that nature ever issued in the New Zealand legal jurisdiction and is extraordinarily unusual. While we do not know what this has revealed yet, Dotcom’s increasingly strident statements on the matter suggest there is more dirty laundry from the New Zealand Government yet to come.

*******

Amnesia Of The Johns - When Irony Attacks

Kim Dotcom's song Amnesia

At this point in the story behind why we have leading up to the MEGA launch we need to go back a few months and examine how Kim Dotcom found his way into the sympathies of the New Zealand public.

In the days after the raid the main line of questioning by the NZ Press Gallery in the developing Kim Dotcom saga was: "Why did this notorious international criminal get residency in New Zealand?"

However this chorus soon changed, mainly as a result of the amnesia of the Johns.

In April the story was kicked off by this remarkable report from New Zealand's leading TV current affairs host John Campbell of Campbell Live: Banks knew about 'anonymous' Dotcom donation - reports

In the report John Banks - a sitting cabinet minister in the newly elected John Key Government and a critically important coalition partner of the government - was recorded claiming that he could not remember being taken by helicopter to Kim Dotcom's mansion and being offered a $50,000 donation towards his campaign for the Auckland Mayoralty. Nor could he remember whether he had received the donation though it was subsequently alleged that he had himself asked that the donation be split into two $25,000 cheques so he could get it processed and declared as anonymous.

In New Zealand politics any hint of a blatant lie is usually fatal for a cabinet minister's employment. Ther are numerous examples of Ministers being stood down for far lesser offences even. However because the Government of John Key so needed John Banks’ vote in order to pass legislation to enable a state asset sell-off, sacking him was not a ready option in early 2012. And so it began.

In May 2012 TV3 followed up the John Banks amnesia story with a fascinating report. Who knew what about Kim Dotcom which begged a very curious question:

How could it be possible, as the Prime Minister claimed, that the first time he had heard of Kim Dotcom was the day before the raids on his house on 19 January 2012?

Dotcom lived in John Key's own electorate. Key's constituents had gone to his office and both complained about and praised their new neighbour. Dotcom was a major political donor to John Banks' whose run for office was of significant interest to John Key's first term government who had even engineered a gerrymander to facilitate a Banks win . In addition Dotcom was a significant high value high-tech economic migrant to New Zealand, and had paid for a $600,000 firework display to celebrate being granted residency.

Several of John Key's fellow cabinet ministers did know about Kim Dotcom. Justice Minister Simon Power and Lands Minister Maurice Williamson had been involved in the overseas investment office deliberations over whether he should be allowed to purchase his house.

Two other ministers - Attorney General Chris Finlayson and Police Minister Judith Collins - were aware of Kim Dotcom due to their being in the loop - alongside Justice Minister Simon Power - over the joint FBI Police operation against Dotcom.

By now the question of his Amnesia was being regularly put to John Key directly. And he consistently stuck to his guns. He had never heard of Kim Dotcom until January 19th 2012.

John Key even asked his staff to do an exhaustive search of documents to see if they could find anything to contradict him. They couldn't do so. Not to his knowledge anyway.

*******

The Constitutional Conundrum of Prime Minister John Key's Dotcom Amnesia

Taken together the Prime Minister's lack of knowledge of anything Dotcom related, and the revelations of illegal spying, moved the Dotcom saga up a notch as a political story.

This is because the Prime Minister is also the Minister solely responsible for oversight of the GCSB.

Before the GCSB revelations the Dotcom story had been an embarrassment which was playing out mainly in the courts.

With the introduction of alleged GCSB misconduct to the frame the Prime Minister was personally and directly brought into the line of fire in the New Zealand Parliament The story then set a course towards becoming a constitutional crisis.

When announcing the GCSB screw-up on the 24th of September the Prime Minister was asked when he became aware of the GCSB involvement in the Dotcom inquiry? The PM replied saying he had found this out on the September 17th a week earlier.

(NOTE: News of the GCSB involvement in the case prompted John Campbell to broadcast another from-the-hip marvellous editorial : http://www.3news.co.nz/The-New-Zealand-institutions-that-broke-our-trust/tabid/367/articleID/272227/Default.aspx The New Zealand institutions that broke our trust

Sensing blood the opposition turned up the heat in Parliament questioning the Prime Minister's recollection and probing the issue of who knew what when.

In the midst of this drama a leak from inside the GCSB revealed that Dotcom had been mentioned in a briefing at the GCSB at which Key had been present - thereby contradicting his earlier statements to the media and to the house.Key was forced to apologise to the house. But before he could do so there was a significant breakdown in Parliamentary decorum leading to the sending from the house of two senior MPs

(Related Links: The Scoop.co.nz team reported this period in these reports:

27 September Shearer: Chain of Command, Control, and Conflicting Interests

1 October Key, Dotcom and Hollywood

1 October PM Going to Hollywood | Peters in 'Fantasy Land'

12 October PM Must Confirm Or Deny Dotcom Comment

15 October Security Train Wrecks for Govt: Dotcom | MSD | Huawei

16 October Key corrects his story on Dotcom knowledge

17 October Gordon Campbell on secrecy about charter schools, and Dotcom

18 October GCSB in the House on Wednesday )

Also on 18 October the writer sought the opinion of one of the most senior members of the New Zealand Parliament, New Zealand First Party Leader Winston Peters, on the fast developing constitutional crisis.

Winston Peters expressed a view that there was no adequate procedure available for Parliament to hold the Prime Minister to account over these matters and that this gave rise to questions around the efficacy of the constitutional arrangements when it came to matters such as these.

*******

We Have Only Just Begun

All of which is to say (and congratulations if you have read this far) that this is a story that reaches across a very broad array of touch points within the New Zealand security, political and legal apparatus.

And it is a story which is very arguably still in its early phases.

As the court process continues to roll on, further revelations will almost certainly continue to emerge.

There are several distinct legal actions underway - all of which will continue to provide fuel to the fires of controversy.

According to informed sources the extradition case against Dotcom now looks likely to be pushed back into 2014. A futures contract on this on the ipredict website is currently indicating just a 3% chance of extradition this year and only a 9% chance in 2014.

2014 also happens to be a general election year to decide the next New Zealand Government.

Thankfully the Judicial Review proceedings in NZ and legal moves to strike out the charges in the United States are moving considerably faster and these will potentially have a bearing on whether the extradition proceedings get dropped altogether.

In the political realm the story is also far from over.

Near the end of last year we also learned it was revealed via an Official Information Act release made to Radio New Zealand that New Zealand's domestic spy agency the SIS had been asked to assist with the Dotcom case by the FBI in October 2010, 14 months before the raid on the Dotcom mansion.

They had declined to do so and had instead referred the FBI to the New Zealand Police's new organised and financial crimes taskforce.

This is a significant new fact as it begs the question: When did the SIS Director Warren Tucker - a person who had previously served as GCSB director - first learn that his sister agency was illegally spying on a New Zealand resident? As a former director of the GCSB he would of course be very clearly aware of what limitations there are on GCSB surveillance operations inside New Zealand.

And once he became aware of GCSB illegality did he inform the minister that he also reports to, Prime Minister John Key?

And then we have the question of the future of MEGA itself.

In the circumstances it does seem possible even probable - notwithstanding Dotcom's assertion that he is on very sound legal ground - that legal proceedings will be brought against MEGA to try to shut it down.

These would most likely take the form of an application for an injunction to block the use of the mega.co.nz domain for operations as this would probably be the most effective way to try to prevent the website from operating.

However any such action would almost certainly simply see a new escalation of all of the issues covered aboveadd still further fuel to the fire, and run the risk of making MEGA even stronger if it failed.

Aside from the substantive issues related to whether we are entitled to store our own files in privacy Dotcom's lawyers would be able to assert that the New Zealand Government is acting in bad faith having previously exercised illegal warrants which were used to destroy his substantial global business.

It’s a long-held truism in journalism that some stories will just run and run. And there’s definitely no hiding from this story – to be continued.

ENDS



© Scoop Media