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Rackspace, MacTel snipe in the cloud

Patriot Act does/does not apply, take your pick

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Rackspace’s arrival in Australia last week – complete with a swipe at local player Macquarie Telecom – has brought a response back from MacTel.

Rackspace announced that it will take a hall in a Digital Realty facility in the Sydney suburb of Erskine Park.

As noted by The Register at the time of launch, Rackespace’s decision was partly driven by a desire to reassure customers that local storage would keep customer data out of the hands of America’s Patriot Act.

(Even so, with the passage last week of the Cybercrime Amendment Bill, Australian data is no longer entirely out of reach of international spooks law enforcement, since part of the Act’s effect is to permit offshore agencies to request data interception.)

Referring to its ability to spread its costs around the world, the company chose Macquarie Telecom as its case study: while the new entrant will suffer the same bandwidth penalty as anyone in Australia, with costs “orders of magnitude” above the USA, it said its staff costs are lower than Macquarie’s, which it told the Australian Financial Review has “every single person and role here”.

That’s drawn a response from Macquarie during its annual results announcement (key items: a profit of $AU19.6 million and an interest in new acquisitions) last Thursday. Head of regulatory affairs Matt Healey described Rackspace’s statements about the Patriot Act as “mischievous” since it remains a US company and in his opinion still subject to the American law in spite of its “small investment” here.

The AFR flicked the ball back to Rackspace which says it won’t transfer data to America without permission “unless required to by Australian law”. ®

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