Mega boss appears before select committee
Kim Dotcom's new Mega online storage service has complied with New Zealand-issued warrants issued to gather evidence against some of its customers, chief executive Vikram Kumar implied today.
He was giving evidence to Parliament's law and order select committee.
Kumar said the service might also be obliged to comply with warrants in Germany and Luxembourg where Mega had computer servers.
However, it had "never received a request from anyone other than New Zealand authorities".
The select committee is hearing submissions on the Telecommunications Interception Capability and Security Bill which would oblige traditional network operators, such as the major telcos, to provide technical assistance to the Government Communications Security Bureau in its intelligence-gathering and to follow the spy agency's directions on network security.
The bill also contains unactivated, discretionary powers that would let the Government extend the interception co-operation requirement to "over-the-top" communications services such as Mega, Google and Skype, in respect of services they provided in New Zealand, without ministers having to seek approval in Parliament.
Neither traditional telcos nor over-the-top providers such as Mega are satisfied with that compromise, the select committee heard.
Kumar said over-the-top providers had not previously been subject to such requirements, and questioned why they were necessary as such businesses already had to comply with the Search and Surveillance Act.
It was in this context he indicated the company had already been served with warrants.
Mega is concerned it might face a requirement to decrypt customers' files even though it is customers' passwords - which it does not have access to - that are the key to unlocking files on its servers and it would not have the means to comply.
Kumar said Mega would look at the final wording of the law and "do whatever we think is in the best interests of New Zealand and our customers" but would not change its business model.
He would not clarify whether that was a threat to move Mega overseas, saying that was something the company had not discussed.
Vodafone New Zealand public policy head Chris Abbott told MPs that forcing network operators to provide technical assistance to the GCSB without imposing the same requirements on over-the-top providers such as Skype and Facebook would be like repeating the folly of France's Maginot Line.
The line was a series of fortifications German forces largely circumvented World War II by invading through the Ardennes forests at the start of World War II.
Telecom regulatory affairs manager John Wesley-Smith said over-the-top internet services that were not tied to specific networks were "the future of telecommunications".
"The rapid growth of these services is the most fundamental shift in our industry today."
Traditional network operators were already at a disadvantage, being singled out for compliance costs, he said.
Wesley-Smith compared the approach taken by the bill with the idea that the Government might introduce money-laundering regulations that applied to cash and cheques, but not online money transfers.
Abbott said the time for Parliament to consider the implications of the growth of cloud-based over-the-top services on surveillance laws was now.
Despite the challenges, "if you want to achieve an effective policy outcome, you have got to crack the the nut now", he told the committee.