It’s Apple, Virgin Mobile and CTIA versus the Electronic Frontier Foundation (EFF),
Skype, Mozilla, eBay, MetroPCS, Pocket Communications and The Wireless Alliance in a
battle for control, security, choice and freedom. The outcome could revolutionize the
way mobile manufacturers, carriers and content providers do business.
The Digital Millennium Copyright Act (DMCA) was originally designed to deter the use of technology to circumvent copyright-protected works. But the act also allows exemptions where access control technology restricts people from making non-infringing use of the copyright works.
This creates a gray area and fierce debate within the wireless industry, where there are two sharply-contrasting trains of thought. One believes in an open, collective ecosystem where the consumer can 
choose what they like, and the other prefers a system where technology is used to maintain the security of devices and business models.
In November, the Librarian of Congress will make rulings on the existing and proposed exemptions to the DMCA. The battle revolves around an exemption that is currently in place allowing phones to be “unlocked” from a network, and a proposed exemption that would allow the circumvention of access control technologies such as those put in place by Apple to restrict the content allowed on its iPhone. This technique of opening up a handset to unauthorized content has been dubbed “jailbreaking.”
UNLOCKING THE TRUTH
In the red corner representing the pro-unlocking team is MetroPCS, Pocket Communications and The Wireless Alliance. Each of these companies originally submitted separate proposals for an extension, in a slightly-modified form, to the current exemption.
The 2006 exemption is as follows: Computer programs in the form of firmware that enable wireless telephone handsets to connect to a wireless telephone communication network, when circumvention is accomplished for the sole purpose of lawfully connecting to a wireless telephone communication network.
The wording used by each group is similar to the original exemption, but there is one obvious difference. The Wireless Alliance concludes its proposal with the words “regardless of commercial motive,” which would effectively eliminate any chance of a company being sued for engaging in large-scale unlocking.
Since the exemption to allow unlocking was put into place in 2006, the practice has become a commercial venture. Some carriers are providing a flash service that reconfigures a previously locked CDMA handset to a new network. MetroPCS charges $40 for the MetroFlash service, but only after the customer has signed a statement declaring that he or she has not been coerced into changing networks, and that they are not trafficking in unlocked handsets.
To Jim Baldinger, an attorney at Carlton Fields who is representing CTIA, the customer statement used by MetroPCS “is an indication that that they know what they are doing is wrong.”
CTIA weighed in on the debate by opposing the proposals put forward by MetroPCS, Pocket Communications and The Wireless Alliance, but stated that it would support an extension to the unlocking exemption only if it was tailored to “bona fide individual customers.”
Andrea Williams, vice president of law for CTIA, reiterated that the large-scale reflashing of subsidized phones is her main concern. “If someone finishes a contract and moves to another network, that is fine. But for subsidized devices, carriers should be able to recoup the cost.”
The issue of phone trafficking has gained attention over the past four years with companies like Tracfone filing lawsuits against groups that are purchasing large numbers of cheap, subsidized phones, which are then unlocked, repackaged and re-sold all over the world.
Williams admits that these are not the same people who are using MetroFlash, but there is still concern for the carriers. “When some handsets are unlocked, there are multiple layers of locks that are broken, such as the frequency that the handset is locked to. This can affect the operation of the handset. When a carrier’s logo is stamped on a handset that is not functioning correctly, their brand is associated with a bad user experience.”
Joining CTIA in opposition to the proposed unlocking exemptions is Virgin Mobile, who is taking a much stronger stance by opposing all of the proposals and any extension of the 2006 ruling. Citing the terms of use for its handsets, Virgin Mobile claims that unlocking allows “unauthorized use, alteration of and damage to copyrighted computer programs and other works contained on Virgin Mobile handsets.” It also notes the cost of subsidizing handsets, which allows carriers to sell $70 handsets to sell for as little as $15.
Complicating matters is a lawsuit between MetroPCS and Virgin Mobile, where MetroPCS is seeking a judge’s ruling that will clear it of any wrong-doing in the use of MetroFlash.
Skype recently backed all three proposals for a modified extension to the 2006 ruling. Interestingly, its parent company, eBay, and the software company Mozilla have backed only The Wireless Alliance’s version.
THE JAILBREAK
A number of players from the unlocking debate are also involved in the jailbreaking side of the story. Skype and Mozilla have backed the EFF’s application for an exemption to the DMCA that would allow all phones to be loaded with any legally-obtained software.
Leading the opposition to this exemption is Apple, backed by CTIA and Virgin Mobile. In its response, Apple focuses on device security concerns and breaches of copyright that would occur as a result of jailbreaking.
Included in Apple’s response is a description of the iPhone’s validation process, referred to by Apple as the “chain of trust,” which uses digital signatures to check that the bootloader and operating system (OS) have not been altered. There is also a validation performed by the OS to confirm that all applications on the iPhone are approved and have not been altered.
Apple places a clear emphasis on the importance of the iPhone OS, due to its ability to “provide a rich mobile computing platform,” adding that “the significance of the iPhone OS to Apple’s entry and long-term product strategy cannot be overstated.”
It also notes that it is not the only one implementing this type of security and control, citing the T-Mobile G1 smartphone. Even though it runs Google’s Android open source OS, the G1 will only load signed firmware images, preventing any changes to the OS. There are also restrictions on the applications that can be used on the G1 handset.
The EFF’s application argues that the process of jailbreaking does not infringe copyright, and that restricting the applications users can run is “to the detriment of competition, consumer choice and innovation.”
While its case is clearly focused on the iPhone, the EFF uses the G1 to illustrate that jailbreaking is widespread and now affects multiple handsets. It does not give a figure for the amount of jailbroken G1s, but claims that 350,000 iPhones have had their access control overridden.
According to Fred von Lohmann, senior staff attorney with the EFF, the scale at which jailbreaking is already occurring is vital to their case. “To qualify, we need to show that this is something that people want to do, and that there is non-infringing use already occurring. Jailbreaking is not theoretical – it’s a reality.”
So how would Apple be affected if this exemption were passed? “I don’t think that the immediate effect would be very big. Apple will still be able to apply technical means to make it difficult to jailbreak their iPhone,” von Lohmann said.
The scale at which this is occurring is almost certainly understated by the EFF. Jay Freeman, the creator of Cydia, which allows iPhone users to download third-party applications that are not approved by Apple, has also lodged a response supporting the case for jailbreaking. Freeman puts the number of jailbroken iPhones at more than 1.6 million. If passed, the exemption could open the door for app store competitors like Cydia to cash in on the app-savvy iPhone users.
The Copyright Office is not accepting any more responses to the proposed exemptions, and the next step in the process is a hearing in mid-April. The battle lines are drawn, and the winners will be announced in November.
