I saw recently that Paypal would start blocking VPN and SmartDNS services. Their rationale is that VPN services can be used for copyright infringement.
They are correct in that VPN services can be used for copyright infringement — they can be used to shield your IP address from others and to make it appear that your traffic is coming from some other location. However, this isn’t the only use of a VPN service. I use a VPN service to shield my traffic from being intercepted and modified by my local Internet providers.
As an example, several years back, I stayed in the Fairmont SFO for a work trip. The Fairmont is a beautiful hotel with very nice service. Unfortunately their WiFi service insists on injecting advertising frames into all of the non-SSL secured websites that you visit. I immediately signed up for a VPN service to protect against this.
Other providers have a history of similar behavior — see the VZW PermaCookie scandal from a few years back. I’ve also heard that AT&T’s broadband service is rolling out similar programs. From what I can tell, it seems that your local ISP should be treated as a potentially hostile actor.
Moreover if you’re using an open wireless access point, all your traffic is being transmitted in the clear. Everyone can see what you’re transmitting and what sites you are visiting. A VPN can also be used to protect against this.
My use of a VPN is to secure my Internet traffic from my local internet provider — either at my home or using the open WiFi at coffeeshops and hotels, not for copyright infringement.
I believe that PayPal is mistaken in this case — VPNs have substantial non-infringing uses and should not be shut down because some users use them to pirate TV shows.