8 ms·

It sucks, but that's the price of doing business. They chose their customer, and now are (unfortunately) tied to consequences. Same thing happens to building o

by anon808 15y ago

It sucks, but that's the price of doing business. They chose their customer, and now are (unfortunately) tied to consequences. Same thing happens to building owners who have a crime committed by a tenant, the leased space becomes a crime scene until the police/govt are done with their investigation.

xymostech 15y ago
But instead of just losing use of those servers, they have to actively maintain them. It looks like they just want someone to pay for the $9000 per day that it costs to keep the servers running, they aren't looking for money that they lost from not being able to use the servers. To go with your analogy, sure building owners aren't allowed to rent the space back out, but they most certainly not asked to pay for usual water, gas, or electricity bills (because they aren't/shouldn't be being used).
- ma2rten 15y ago
  I don't understand why this is the case, why can't they exchange the HDDs in the servers, tell the FBI to come with a big van and store the HDDs with the evidence on it themselves in some evidence room?
  - DanBC 15y ago
    25 petabytes of hard disc is a considerable cost. Some people have mentioned insurance. Would any policy cover you for a customer being investigated for possibly criminal activity?
    - ma2rten 15y ago
      Still less than the cost of keeping all those servers up and running. I would think that from a legal point of view, like other people have pointed out, MegaUpload needs to cover the costs. They are essentially insolvent, so that is what you'd need to insure against. That it is related to a legal investigation, should not matter for the insurance coverage, imo.
    - samstave 15y ago
      Assuming 2TB internal HDD's at $120.00 per piece, you would need $1.5MM worth of drives to transfer this to. Not including the man-hours associated with doing so. The $3.2MM per year is actually sounding a lot more reasonable to keep it up and running.
      - ma2rten 15y ago
        Wow, I bother to calculate it. However, - if you buy HDDs in these quantities you will get a big discount (50%+) - they most likely get the HDDs back after the case is finished, but not the electricity bill. - you have to factor in opportunity costs from not being able to rent out that rackspace. - I don't even understand how this can be proper evidence if it just hangs around at a private company.
        samstave 15y ago
        Agreed, I was doing budgetary napkin math here... there are a lot of factors, though it does seem that the 9000/day while MAYBE 20% higher than reality is fairly realistic.
        yardie 15y ago
        * HDDs have some of the lowest margins in the components business. If you're buying from Newegg you're basically getting it at cost (unless there is some conspiracy by all warehouse retailers to keep the price at >$100). * It's the chain of custody that is important not who keeps it. Most LEOs outsource to various contractors for all types of investigations.
      - gvb 15y ago
        I would pull out the existing drives, put them in boxes for the FBI, and power down the servers. As customers sign up for machines and storage, buy replacement drives and power up the servers with the new drives. It sounds to me like they are looking for a way to keep their income flowing with servers that they will have a hard time renting out in the near future. In other words, they just got hit with a huge excess of server capacity that they are going to have a hard time renting out short term (and probably longer term as well).
    - tedunangst 15y ago
      You can get insurance for "my client shafted me but I've still got bills to pay" but more typically I think you ask the client to post bond. It's called knowing your client. An ISP doing this much business with one client but not considering the possibility of MU going under is irresponsible.
- rmc 15y ago
  Why are the servers still running? Surely it's easier and cheaper to just turn off the servers, power down the racks and lock the cages?
  - deadmike 15y ago
    I'm wondering this, too. The data would still be there, and they wouldn't have to worry about maintenance costs at least, right?
    - Retric 15y ago
      Shutting them down could easily destroy evidence depending on how it's done. EX: Many redundant systems try replicating data from machines that are taken off line. What happens when the full network is taken off line quickly has probably not been tested.
      - deadmike 15y ago
        I see, so even just shutting down the servers hosting MU's data could be damaging to the whole network?
  - Duff 15y ago
    The running cost is just part of the equation... those servers are depreciating away and generating no revenue!
- grecy 15y ago
  The building owners have to continue to pay property tax, condo fees and maintenance costs like security, gardeners and window cleaners.
- AJ007 15y ago
  The owner still has grounds, building maintenance, carrying costs from a mortgage, etc. Obviously the loss would differ from a strip mall with 10 tenants vs a giant commercial building with 2. Third parties get f'd in criminal cases all the time. One of the asset seizure stories the WSJ recently covered involved a guy whose cash happened to be in transit with an armored car company. That was, until the companies assets were seized by the feds along with his cash. Lucky for Kim Dotcom, New Zealand let him get a hold of some of his cash for living expenses. I'm not sure he'd be so lucky in the US. Carpathia probably should have had an insurance policy for this.
ajross 15y ago
I hate to say it, because I'm as sympathetic to this ISP as anyone else. But this is what insurance is for. Big single customers are risks. Surely someone out there would have been willing to write a policy to cover unforseeable things like this.
- secretcurse 15y ago
  If the insurance writer did their due diligence and realized the big single customer was MegaUpload (and what a large portion of MU's users were doing with the service), they would've been insane to write an insurance policy. I really don't think MU going down in an investigation falls under the category of "unforseeable." It was always a question of when, not if IMHO.
jellicle 15y ago
But investigations take hours, while this case will take years.

by anon808 15y ago

xymostech 15y ago

But instead of just losing use of those servers, they have to actively maintain them. It looks like they just want someone to pay for the $9000 per day that it costs to keep the servers running, they aren't looking for money that they lost from not being able to use the servers. To go with your analogy, sure building owners aren't allowed to rent the space back out, but they most certainly not asked to pay for usual water, gas, or electricity bills (because they aren't/shouldn't be being used).

ma2rten 15y ago
I don't understand why this is the case, why can't they exchange the HDDs in the servers, tell the FBI to come with a big van and store the HDDs with the evidence on it themselves in some evidence room?
- DanBC 15y ago
  25 petabytes of hard disc is a considerable cost. Some people have mentioned insurance. Would any policy cover you for a customer being investigated for possibly criminal activity?
  - ma2rten 15y ago
    Still less than the cost of keeping all those servers up and running. I would think that from a legal point of view, like other people have pointed out, MegaUpload needs to cover the costs. They are essentially insolvent, so that is what you'd need to insure against. That it is related to a legal investigation, should not matter for the insurance coverage, imo.
  - samstave 15y ago
    Assuming 2TB internal HDD's at $120.00 per piece, you would need $1.5MM worth of drives to transfer this to. Not including the man-hours associated with doing so. The $3.2MM per year is actually sounding a lot more reasonable to keep it up and running.
    - ma2rten 15y ago
      Wow, I bother to calculate it. However, - if you buy HDDs in these quantities you will get a big discount (50%+) - they most likely get the HDDs back after the case is finished, but not the electricity bill. - you have to factor in opportunity costs from not being able to rent out that rackspace. - I don't even understand how this can be proper evidence if it just hangs around at a private company.
      - samstave 15y ago
        Agreed, I was doing budgetary napkin math here... there are a lot of factors, though it does seem that the 9000/day while MAYBE 20% higher than reality is fairly realistic.
      - yardie 15y ago
        * HDDs have some of the lowest margins in the components business. If you're buying from Newegg you're basically getting it at cost (unless there is some conspiracy by all warehouse retailers to keep the price at >$100). * It's the chain of custody that is important not who keeps it. Most LEOs outsource to various contractors for all types of investigations.
    - gvb 15y ago
      I would pull out the existing drives, put them in boxes for the FBI, and power down the servers. As customers sign up for machines and storage, buy replacement drives and power up the servers with the new drives. It sounds to me like they are looking for a way to keep their income flowing with servers that they will have a hard time renting out in the near future. In other words, they just got hit with a huge excess of server capacity that they are going to have a hard time renting out short term (and probably longer term as well).
  - tedunangst 15y ago
    You can get insurance for "my client shafted me but I've still got bills to pay" but more typically I think you ask the client to post bond. It's called knowing your client. An ISP doing this much business with one client but not considering the possibility of MU going under is irresponsible.
rmc 15y ago
Why are the servers still running? Surely it's easier and cheaper to just turn off the servers, power down the racks and lock the cages?
- deadmike 15y ago
  I'm wondering this, too. The data would still be there, and they wouldn't have to worry about maintenance costs at least, right?
  - Retric 15y ago
    Shutting them down could easily destroy evidence depending on how it's done. EX: Many redundant systems try replicating data from machines that are taken off line. What happens when the full network is taken off line quickly has probably not been tested.
    - deadmike 15y ago
      I see, so even just shutting down the servers hosting MU's data could be damaging to the whole network?
- Duff 15y ago
  The running cost is just part of the equation... those servers are depreciating away and generating no revenue!
grecy 15y ago
The building owners have to continue to pay property tax, condo fees and maintenance costs like security, gardeners and window cleaners.
AJ007 15y ago
The owner still has grounds, building maintenance, carrying costs from a mortgage, etc. Obviously the loss would differ from a strip mall with 10 tenants vs a giant commercial building with 2. Third parties get f'd in criminal cases all the time. One of the asset seizure stories the WSJ recently covered involved a guy whose cash happened to be in transit with an armored car company. That was, until the companies assets were seized by the feds along with his cash. Lucky for Kim Dotcom, New Zealand let him get a hold of some of his cash for living expenses. I'm not sure he'd be so lucky in the US. Carpathia probably should have had an insurance policy for this.

ajross 15y ago

I hate to say it, because I'm as sympathetic to this ISP as anyone else. But this is what insurance is for. Big single customers are risks. Surely someone out there would have been willing to write a policy to cover unforseeable things like this.

secretcurse 15y ago
If the insurance writer did their due diligence and realized the big single customer was MegaUpload (and what a large portion of MU's users were doing with the service), they would've been insane to write an insurance policy. I really don't think MU going down in an investigation falls under the category of "unforseeable." It was always a question of when, not if IMHO.

jellicle 15y ago

But investigations take hours, while this case will take years.