Owners of $600 smartphones can rejoice in last week's ruling by the Library of Congress exempting cell phone unlocking from the anti-circumvention provisions of the Digital Millennium Copyright Act. So can environmentalists and business travelers.

I had asked for this rule on behalf of Robert Pinkerton, an individual who traveled frequently for business, and The Wireless Alliance, an organization that refurbishes, resells and recycles handsets. Pinkerton found that phone locking prevented him from using his handset when traveling. The Wireless Alliance found that the restrictions interfered in its efforts to keep phones in circulation and out of landfills.

But prepaid wireless purveyor TracFone called me this week to explain how the ruling I fought for will hurt poor people's ability to afford cell phone service. Which one of us is right?

TracFone's subsidy of these phones is so large that everyone in this gray-market resale chain can make a couple of dollars a handset, and the end customer still gets a discount. As a result, TracFone is losing millions of dollars, as it fails to reap the intended economic benefit of its subsidy. The company actually tries to reduce the number of handsets on the shelf at major retailers to prevent mass purchases for arbitrage.

The company's lawyers say the new DMCA exemption will rob them of a tool to crack down on the resellers, who they call criminals.

But my view is that TracFone was an unintended beneficiary of the DMCA and is now an unintended victim of the exemption. While prepaid is an interesting and perhaps socially beneficial business model, there are other values at stake, too. Customers should have the right to alter or modify devices that they own. Consumers and the environment generally benefit from competition and innovation enabled by phone unlocking.

Wired News: Cell Phones Freed! Poor Suffer?

Ballmer: "Linux Users Owe Me Money"

Finally Microsoft pulled the expected rabbit called 'FUD' all the way out of the hat. Redmond had been hinting for a few years that the rabbit was hiding in there, but VOILA here it is! Ballmer now boldly claims that Linux "uses our intellectual property". It had been widely suspected in the open-source community that Redmond would pull the "Linux infringes on Microsoft's intellectual property" caper one day, and they were right.

It happened in a Q&A session after Ballmer's keynote at a Seattle SQL Server conference. He said he thought it was a good idea to sign a deal with Novell (which distributes SUSE Linux) because Linux "uses our intellectual property" and he wanted to "get the appropriate economic return for our shareholders from our innovation."

So the deal with Novell makes Windows and SUSE play nice together. Redmond will pay Novell $440 million for coupons that provide one year SUSE support and maintenance, with MS pushing SUSE. But the other bit was Novell paying MS 40 Mil 'protection money', so they will not get sued for infringement. Pretty much everyone using and contributing to SUSE is free from prosecution. Makes Redmond look pretty good in court if they try to sue other Linux distros.

FUD ALERT: "Novell pays us some money for the right to tell customers that anybody who uses SUSE Linux is appropriately covered," Ballmer said. This "is important to us, because [otherwise] we believe every Linux customer basically has an undisclosed balance-sheet liability."

Interesting perspective came from Pamela Jones, editor of the Groklaw site. "My reaction is that so far, what he [Ballmer] said is just more FUD [fear, uncertainty and doubt]," "Let him sue if he thinks he has a valid claim, and we'll see how well his customers like it." Obviously open-source advocates want Redmond to show exactly which lines of Linux kernel code are the culprits and rip them out, or work around them.

Ballmer continued with the following pretty clear message: "Only customers that use SUSE have paid properly for intellectual property from Microsoft," he said. "We are willing to do a deal with Red Hat and other Linux distributors." The deal with SUSE Linux "is not exclusive,"

However, a potential deal between those two companies will have to wait until the end of 2009, as Novell and Microsoft signed an exclusivity agreement barring MS from establishing similar agreements with other Linux vendors for the next three years. Imagine that, all Linux open-source users paying Redmond for using that code. I thought the whole open-source idea was trying to get away from that. Echoes of SCO anyone? I'm sure the last word has not been spoken about this issue.

More can be found in ComputerWorld.

Ballmer: 'Linux Users Owe Me Money'

A hacker known for cracking the copy-protection technology in DVDs claims to have unlocked the playback restrictions of Apple Computer Inc.'s iPod and iTunes music products and plans to license his code to others.

The move by Jon Lech Johansen, also known as "DVD Jon," could pit the 22-year-old against Apple's lawyers, experts say, but if successful could free users from some restrictions Apple and its rivals place on digital music.

Today, songs purchased from Apple's online iTunes Music Store can't be played on portable devices made by other companies. Songs purchased from many other online music stores also won't work on iPods because they similarly use a form of copy-protection that Apple doesn't support.

Johansen said he has developed a way to get around those restrictions. But unlike his previous work, which he usually posts for free, the Norway native plans to capitalize on his efforts through his Redwood Shores-based DoubleTwist Ventures, said the company's only other employee, managing director Monique Farantzos.

"There's a certain amount of trouble that Apple can give us, but not enough to stop this," Farantzos said Tuesday. "We believe we're on good legal ground, and our attorneys have given us the green light on this."

Fred von Lohmann, a staff attorney at the privacy-advocacy group, Electronic Frontier Foundation, said Johansen is treading carefully this time, consulting with lawyers, but isn't necessarily cleared from a legal fight over copy-protection laws.

"There is a lot of untested legal ground surrounding reverse engineering," he said.

I was talking about this with someone after my talk at PhreakNIC... Watching this play out is going to be interesting. Let the fireworks begin.

Hacker claims to have cracked iPod restrictions - CNN.com

It did not take much investigating to follow the data trail to Thelma Arnold, a 62-year-old widow who lives in Lilburn, Ga., frequently researches her friends' medical ailments and loves her three dogs. "Those are my searches," she said, after a reporter read part of the list to her.

The detailed records of searches conducted by Ms. Arnold and 657,000 other Americans, copies of which continue to circulate online, underscore how much people unintentionally reveal about themselves when they use search engines -- and how risky it can be for companies like AOL, Google and Yahoo to compile such data.

I sense a class-action lawsuit coming on. Is there a case to be made here? Could Ms. Arnold recover damages from AOL Time Warner?

A Face Is Exposed for AOL Searcher No. 4417749

Lamar Smith has a nack for writing bills that I hate, but this rule change is baddly needed and I support it.

Chairman Lamar Smith (TX-21) today introduced the “Orphan Works Act of 2006” (H.R. 5439), which creates new guidelines for use of copyrighted material when the original owner cannot be located.

©opyBites: Copyright Law Blog: Orphan Works Legislation

Reports filtering back to the Tokyo headquarters of the Japanese electronics giant NEC in mid-2004 alerted managers that pirated keyboards and recordable CD and DVD discs bearing the company's brand were on sale in retail outlets in Beijing and Hong Kong.

After two years and thousands of hours of investigation in conjunction with law enforcement agencies in China, Taiwan and Japan, the company said it had uncovered something far more ambitious than clandestine workshops turning out inferior copies of NEC products. The pirates were faking the entire company.

In the name of NEC, the pirates copied NEC products, and went as far as developing their own range of consumer electronic products - everything from home entertainment centers to MP3 players. They also coordinated manufacturing and distribution, collecting all the proceeds.

"On the surface, it looked like a series of intellectual property infringements, but in reality a highly organized group has attempted to hijack the entire brand," he said. "It is not a simple case of a factory knocking off a branded product. Many of them have been given bogus paperwork that they say gives them the right to do it."

Next step in pirating: Faking a company

New technology is "encouraging large-scale criminal enterprises to get involved in intellectual-property theft," Gonzales said, adding that proceeds from the illicit businesses are used, "quite frankly, to fund terrorism activities."

Willful attempts at piracy, even if they fail, could be punished by up to 10 years in prison.

But one of the more controversial sections may be the changes to the DMCA. Under current law, Section 1201 of the law generally prohibits distributing or trafficking in any software or hardware that can be used to bypass copy-protection devices. (That section already has been used against a Princeton computer science professor, Russian programmer Dmitry Sklyarov and a toner cartridge remanufacturer.)

Smith's measure would expand those civil and criminal restrictions. Instead of merely targeting distribution, the new language says nobody may "make, import, export, obtain control of, or possess" such anticircumvention tools if they may be redistributed to someone else.

When the Attorney General raises the specter of terrorism in the context of laws which primarily related to p2p file trading networks, its time to stop taking the Attorney General seriously. He is obviously not a serious person.

As for Lamar Smith, he is responsible for 2004's round of rock stupid DNS WHOIS legislation.

Congress readies DMCA ][

From the EFF:

We've just updated our Unintended Consequences report (also available as a print-friendly PDF), which collects reported cases of the anti-circumvention provisions of the DMCA being used not against pirates, but against consumers, scientists, and legitimate competitors. In the seven years since the DMCA was enacted, this has grown into quite a list:

* Blackboard Threatens Security Researchers

Billy and Virgil are both noted in the report thanks to Blackboard:

In April 2003, educational software company Blackboard Inc. used a DMCA threat to stop the presentation of research on security vulnerabilities in its products at the InterzOne II conference in Atlanta. Students Billy Hoffman and Virgil Griffith were scheduled to present their research on security flaws in the Blackboard ID card system used by university campus security systems but were blocked shortly before the talk by a cease-and-desist letter invoking the DMCA.

Blackboard obtained a temporary restraining order against the students and the conference organizers at a secret "ex parte" hearing the day before the conference began, giving the students and conference organizer no opportunity to appear in court or challenge the order before the scheduled presentation. Despite the rhetoric in its initial cease and desist letter, Blackboard's lawsuit did not mention the DMCA. The invocation in the original cease-and-desist letter, however, underscores the way the statute has been used to chill security research.

Unintended Consequences: Seven Years Under the DMCA

Given that there are approximately 50 million .COM domains registered, it is indeed true that the low-hanging fruit domain names are overwhelming taken, and your chances of lucking upon an unnoticed available three-letter acronym (TLA) are close to zero, and your only recourse would be to haggle with domain speculators.

Some interesting data about the state of available domains.

Dennis Forbes - DNS is full. Go home.

The French bill, the implementation of a European Union
directive, calls for digital songs to be playable on all
devices. As part of the law proposal, companies that use
copyright protection measures would have to supply "the
information essential to interoperability" to those interested
at no other charge than the cost of delivering the data.

"IPod sales will likely increase as users freely load
their iPods with 'interoperable' music, which cannot be
adequately protected", Apple said. "Free movies for iPods
should not be far behind in what will rapidly become a state-
sponsored culture of piracy."

Microsoft wouldn't comment on the bill.

"The recording industry fully supports interoperability because it is important to consumers to have the ability to move songs between their various listening devices," John Kennedy, Chairman of the International Federation of the Phonographic Industry, said in an e-mailed statement late yesterday.

"Interoperability is crucial to attracting consumers to buy music online, but it should not be at the cost of endangering the technology used to enable legitimate offerings of music and services online," Kennedy said.

This should be ironic, but its not..

Bloomberg.com | Apple Says France's Copyright Bill Promotes Piracy