A game of cat and mouse: The iPhone, Steve Jobs and an army of blind hackers

[David Farber <dave () farber net>]

Begin forwarded message:

From: dewayne () warpspeed com (Dewayne Hendricks)
Date: September 20, 2007 12:19:25 AM EDT
To: Dewayne-Net Technology List <xyzzy () warpspeed com>
Subject: [Dewayne-Net] A game of cat and mouse: The iPhone, Steve  
Jobs and an army of blind hackers

September 19, 2007 5:04 AM PDT
A game of cat and mouse: The iPhone, Steve Jobs and an army of blind  
hackers

Posted by Chris Soghoian
<ttp://www.news.com/8301-10784_3-9781162-7.html? 
part=rss&subj=news&tag=2547-1_3-0-20>
With Steve Jobs' recent announcement of his intention to fight off  
the independent iPhone developers, the question that must be asked is  
how will Apple try to defeat the hackers: Frequent and disruptive  
software updates, or lawsuits? Will Apple risk losing its most  
frequently (ab)used legal tool, the Digital Millennium Copyright Act,  
to try to punish the developers of the iPhone unlocking tools?

The wait is over. After being teased over the past few weeks with  
rumors that Apple would turn a blind eye to iPhone hacking or *gasp*  
even encourage it, the news is in and it ain't good for the hackers.

At the official U.K. launch of the iPhone Tuesday, CEO Steve Jobs  
made it clear that Apple will fight attempts to use the popular  
device on unauthorized networks. "It's a cat-and-mouse game," said  
Jobs. "We try to stay ahead. People will try to break in, and it's  
our job to stop them breaking in."

For the loose-knit community of iPhone developers, the last few  
months have been an around-the-clock hacking session. As a result,  
programmers have released a plethora of applications. Some, including  
an instant-messaging tool, a general purpose application installer  
and even a Nintendo game emulator, can be seen simply as developers  
releasing applications that Apple just didn't get around to writing  
itself. Other hacks, such as the much hyped iPhone Dev Team's anySIM  
unlocking tool, or the numerous free-ringtone tutorials that have  
been floating around the Net, can be more accurately described as a  
developer-lead attack upon Apple's revenue streams.

Apple has sunk a significant amount of developer time and marketing  
dollars into creating a product so drool-worthy that fans spent days  
queuing outside stores around the nation. Because of the significant  
hype surrounding the device, and the millions of customers who would  
flock to whichever wireless carrier with whom Apple signed an  
exclusive distribution deal, Jobs and his negotiation team were able  
to extract highly favorable, if not downright obscene amounts of  
money from the wireless carriers. While AT&T agreed to give Apple up  
to $11 per month for new customers who came to the carrier due to an  
iPhone purchase, some media reports are suggesting that Jobs was able  
to extract 40 percent of the monthly subscription fees that U.K.  
network O2 is charging its customers.

O2 is charging customers between $70 and $110 for its different  
monthly iPhone plans. With an 18-month contract, Apple is looking at  
between $500 to $800 in revenue share per customer. While the  
approximately $250 that AT&T will give Apple for a new customer over  
the lifetime of a 2-year contract is rather paltry in comparison, it  
still provides enough of a financial incentive for Apple to do all  
that it possibly can to lock the devices down, and keep hackers from  
unlocking the platform. Furthermore, if keeping open-source tinkerers  
away from the guts of the iPhone can also protect Apple's new, but  
potentially hugely profitable venture into the mobile phone ringtone  
market (99 cents per ringtone for each song already purchased), even  
better for Mr. Jobs and his stockholders.

Now that Jobs has declared war on the iPhone hackers, the only  
question that remains is the approach that Apple will take: software  
updates that'll break the iPhone hacks, or lawsuits against the  
trouble-making developers. To answer this question, we to look to the  
law and, most importantly, the Digital Millennium Copyright Act.

The most powerful weapon in Apple's legal arsenal is the Digital  
Millennium Copyright Act (DMCA). This law, much hated by open-source  
developers and much loved by copyright holders and mega corporations,  
was passed by a unanimous vote in the U.S. Senate before being signed  
into law by President Bill Clinton in 1998.

The DMCA is fairly complicated, but there are two main parts that  
seriously threaten researchers, hackers and hobbyists. First, the law  
makes it a crime to circumvent the technological locks that control  
access to copyrighted works. Second, the law makes it a crime for  
anyone to "traffic" or share such circumvention tools. That is, it's  
a crime to break the encryption protecting a copyrighted work, and  
it's an additional crime to share the software that breaks the  
encryption with anyone else.

While the law was originally intended to protect music and movie  
owners who were scared of infringement in the Digital Age, it has  
been used to try to block the sale of third-party printer cartridges,  
universal garage door openers, and even Web sites that publish leaked  
copies of scanned fliers for post-Thanksgiving "black Friday" sales.  
A few years ago, a number of prepaid mobile phone companies started  
using the DMCA to go after people who were buying their subsidized  
phones, stripping off the software and re-selling them to others.

When it passed the DMCA, Congress empowered the Librarian of Congress  
to issue exemptions to the anti-circumvention provision of the law.  
This power is intended to protect the public from access-control  
technologies that substantially interfere with their right to make  
non-infringing uses of copyrighted works. Current exemptions include  
the right for users to hack restrictive e-book digital rights  
management technology to allow for inter-operation with screen- 
readers and other helpful technologies used by blind and disabled  
people.

[snip]



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