Summary
• Service providers may have to start differentiating on service and price, not on locked-in phones. • Digital Millenium Copyright Act may experience some interesting tests. • Software protection is often just a fantasy, when a kid can render useless millions of dollars of development cost.
Analysis
The timing couldn’t be worse, coming just before Apple is to expected release details of a joint venture with European phone companies. Of course the only other cellular telephone company (celco) in the US supporting the iPhone GSM technology is T-Mobile, but that hasn’t stopped the modified phone from hitting a reported $10,000.00+ price tag on eBay.
Celcos, of course, base their business model on agreements with the handset manufacturers - and have historically dictated those terms. The iPhone represents a departure from this in that Apple called the shots and picked their provider. There are some however, who believe that the tide may be turning, and both business models are in jeopardy, as consumers increasingly want device portability and service independence.
Neither AT&T nor Apple has made any public statement so far. However, with the tens of millions they’ve invested in services and products, they’re bound to make a big deal of this. While the government has issued an exemption to the Digital Millennium Copyright Act, the exemption seems to apply to individuals not to companies selling specific unlocking solutions.
Again, the whole issue comes down to copyright. When consumers are sold software, or hardware containing software, they’re often required to execute an end user licensing agreement that specifies that the software is being leased to the consumer and remains the property of the vendor. A similar limitation applies to audio and video content, wherein the consumer is currently allowed to make copies for their own use, yet does not own the material.
Current copyright laws are a maze of technicalities, having been set up predominately to protect the interests of the content owners. However, the growing movement towards DRM-free content ownership may spell the way towards a change in copyright laws, and give the consumer more control over their software. The same may eventually happen with cellphone exclusivity. Cellular service providers are going to have to wake up and provide real benefits - better service and competitive rates - to attract and hold increasingly techno-savvy customers.
