Can Apple + AT&T Shut Down iPhone Unlockers?

aalobode writes "Do Apple and AT&T have the legal right to stop hackers from selling unlocked iPhones? Under their terms, only AT&T may sell iPhones, and Apple gets a commission. When unlocked iPhones are used on other providers' networks, AT&T and hence Apple get nothing beyond what they earned on the initial sale of the hardware. Can they prohibit unlocking? Reselling? The article in Businessweek gives the for and against arguments, but leans toward the view that the hackers may have the law on their side for once."

Comments

Heres what the BBC says:

[BigBadBus]

http://news.bbc.co.uk/1/hi/technology/6966600.stm

Re:Heres what the BBC says:

[Anonymous Coward]

Dropping the apostrophe in the subject helped me get first post you slashbot users!

Re:Heres what the BBC says:

[jpastore]

it is unconstitutional to tell me that I can't use my device that I purchased where I want to. I think several countries in Europe made it illegal to lock phones like that...it's just not fair and contradicts other laws we passed in far more sensitive industries. Like telecom, AT&T has to collect equipment for phone service. I'm not limited to who I can buy gas from for my car. I'm not limited to my local monopoly for phone service...why can't I use my phone? it's not like it's programmed for a different frequency... or designed for a different network...it's intended to work on all GSM networks... screw the iphone anyway...I'm switching from verizon for this phone: http://www.sourcinggate.com/cect-touch-screen-mobi le-phone-triband-with-bluetooth-p-1055.html

Re:Heres what the BBC says:

[Aramgutang]

I find the following line from the article interesting:

Analysts believe Apple may still have time to modify the iPhone to tighten its locks before the phone is launched in Europe.

Since some European countries, such as Finland, do not allow the sale of phones that are locked to a provider, and many of the other countries have regulations that require operators to unlock the phones they sell on request, or after a certain (usually pretty short) amount of time, wouldn't Apple need to use the time they have to loosen rather than tighten their locks?

No $#%!, Sherlock

[conspirator57]

I bought a computer and have the right to modify it and subsequently turn around and sell it? Amazing!

What will I do with this new-found freedom? ...the same thing we do every night, Stimpy: try to take over the world!

Re:No $#%!, Sherlock

[Anonymous Coward]

Its Pinky not Stimpy, but both are great cartoons

Re:No $#%!, Sherlock

[Drakin020]

But do you have the right to buy a computer with Windows installed...Modify Windows to work the way you want it to (Lets say remove DRM features) and re-sell it?

I think not.

Re:No $#%!, Sherlock

[Techogeek]

LOL

Re:No $#%!, Sherlock

[CaptainPatent]

I bought a computer and have the right to modify it and subsequently turn around and sell it? Amazing!

What will I do with this new-found freedom? ...the same thing we do every night, Stimpy: try to take over the world! The issue isn't necessarily as simple as that. While I do think the DMCA is mostly crap to begin with, it's what the country is currently abiding by so it's what we have to look at.
FTA:

Experts believe that AT&T and Apple will point to the DMCA's section 1201, stating that "no person shall circumvent a technological measure that effectively controls access to a work protected under this title." Apple did take technological measures to assure their business agreement with AT&T was fulfilled and they do have technological measures to assure their device is not tampered with so there is actually quite a bit of room on Apple and AT&T's side for debate.

The article does make a good point though that this is similar to car stereo manufacturers purposely producing stereos that would only work with their cars and preventing others from making such stereos. Because the carmaker was the only manufacturer of the stereo, they could charge whatever they wanted because of their forced monopoly in the market.

The case is similar because of the control circumvention, but one point the article did not point out is that case is also very different because there is no forced monopoly.

The car was the initial base cost and the stereo (when it breaks or needs replacement) was an uncompetitive and forced monopoly. In the case of AT&T, the iPhone is the base cost, but you still are given competitive rates. If AT&T began charging much more than usual rates strictly for iPhone customers, then the case would be identical, but because of other offerings it does not produce the same monopoly. If this were any other phone but the iPhone with network circumvention nobody would even care (I know because almost all phones are only made to run on one network.) Some may also argue this to be a bad business decision and plan to "liberate Apple from themselves" by hacking the iPhone, but if they made a bad decision, the best way to let them know is to not invest in their product which is already being done looking at iPhone sales.

Nevertheless, I think this case may be more of a nail-biter than most slashdotters would like to think.

Re:No $#%!, Sherlock

[Anonymous Coward]

You mean Pinky, not Stimpy!

Go watch more Animaniacs because JOO F41L 1T!

Re:No $#%!, Sherlock

[Anonymous Coward]

If you were going for the animaniacs reference, the names are Pinky and The Brain. :P

Re:No $#%!, Sherlock

[HTH NE1]

It's Stimpy and the Brain
It's Stimpy and the Brain
One's an eediot and the other's a rodent!

Re:No $#%!, Sherlock

[phoenixwade]

The article does make a good point though that this is similar to car stereo manufacturers purposely producing stereos that would only work with their cars and preventing others from making such stereos. Because the carmaker was the only manufacturer of the stereo, they could charge whatever they wanted because of their forced monopoly in the market.

The case is similar because of the control circumvention, but one point the article did not point out is that case is also very different because there is no forced monopoly.

The car was the initial base cost and the stereo (when it breaks or needs replacement) was an uncompetitive and forced monopoly. In the case of AT&T, the iPhone is the base cost, but you still are given competitive rates. If AT&T began charging much more than usual rates strictly for iPhone customers, then the case would be identical, but because of other offerings it does not produce the same monopoly. If this were any other phone but the iPhone with network circumvention nobody would even care (I know because almost all phones are only made to run on one network.) Some may also argue this to be a bad business decision and plan to "liberate Apple from themselves" by hacking the iPhone, but if they made a bad decision, the best way to let them know is to not invest in their product which is already being done looking at iPhone sales.

Nevertheless, I think this case may be more of a nail-biter than most slashdotters would like to think. I don't think this case will actually be prosecuted. I think a cease and desist letter or three would be sent, perhaps even a website take down demand but nothing much beyond that. It seems to me that there is a precedent for modification here that would polarize a whole lot more than just locked down cell phones or related technology's. What about GM telling me I can't pimp my ride? What about any other modification that expands or changes a product from the original manufacturers intention.

Re:No $#%!, Sherlock

[mr_mischief]

What copyright is being infringed by making calls on another network? Why does the DMCA have anything to say about soldering an desoldering to achieve network independence?

Re:No $#%!, Sherlock

[Fulcrum of Evil]

Nah, not even a website takedown - this sort of thing is allowed due to the clause about being able to violate the DMCA for interop.

Re:No $#%!, Sherlock

[Anonymous Coward]

I am confused, the whole circumvention thing in the DMCA is to protect a copyrighted work to prevent unauthorized distribution of that copyrighted work. I don't think the agreement between Apple and AT&T is a copyrighted work. Hacking an iPhone to run your own applications is not taking or allowing a copyrighted work from either company and allowing it to be redistibuted. If so, will it public domain in death+75 years and who has to die for the counter to start?

Apple can provide controls to prevent you from redistributing their software and get protection from the DCMA but using that piece of hardware to run something else IMHO has NOTHING to do with copyright and the DMCA. What prevents MS from putting a rule or a software check in place that you can not run any office software except MS Office 2007 on your Windows PC. Getting around that artificial restriction is not violating a copyright agreement and would not involve the DMCA because getting around it is not allowing unrestricted access to a specific copyrighted work, it may be a licence or EULA violation but no DMCA protection there.

Re:No $#%!, Sherlock

[Anonymous Coward]

I bought a computer and have the right to modify it and subsequently turn around and sell it? Amazing! What will I do with this new-found freedom? ...the same thing we do every night, Stimpy: try to take over the world!

I've had Cingular for two years, and had no problem with them at all. My bill has been less than fifty bucks (it went up once last year from 42), and I've never used all my minutes, always had them roll over.

Then AT&T bought them out. My last bill was a hundred dollars, and it wasn't itemised as it had been previously! On top of that it said that since I'd been on the contract for 12 months, they wouldn't roll over my minutes.

So, can anybody point me to a less clueless, less evil cell phone provider? Preferably one that has a phone that I can fit in my pocket (I'm using a razr now)?

-mcgrew

Re:No $#%!, Sherlock

[Experiment 626]

Apple did take technological measures to assure their business agreement with AT&T was fulfilled and they do have technological measures to assure their device is not tampered with so there is actually quite a bit of room on Apple and AT&T's side for debate.

The DMCA prohibits circumventing technological measures that protect a copyrighted work from unauthorized duplication, not measures that protect a business agreement from becoming unprofitable.

Re:No $#%!, Sherlock

[Bassman59]

I've had Cingular for two years, and had no problem with them at all. My bill has been less than fifty bucks (it went up once last year from 42), and I've never used all my minutes, always had them roll over.

Then AT&T bought them out. My last bill was a hundred dollars, and it wasn't itemised as it had been previously! On top of that it said that since I'd been on the contract for 12 months, they wouldn't roll over my minutes.

That's pretty funny, since I've had Cingular for ages (too lazy to switch) and when AT+T took over, the only change was in the URL one uses to log into the account for billing purposes. The plan remained the same, no changes in cost, nothing.

Re:No $#%!, Sherlock

[aldousd666]

I don't think the DCMA applies because no copyright is infringed. The reason this is a big deal is that Apple has some agreement of exclusivity with AT&T and they probably get a pretty penny for it. If Apple doesn't ensure that the agreement is followed then they may be in breach of some contract, so they want to lock it down. That being said, I don't know that Apple can be held liable for what the customers do with the phones any more than smith & wesson can for someone getting shot.

Re:No $#%!, Sherlock

[yamiyasha]

Actually DMCA has a loophole for unlocking Cell Phones

Re:No $#%!, Sherlock

[CaptainPatent]

Yes, but the software that gives access to the network is copyright which is what is being circumvented. That's the point that was outlined in TFA.

Re:No $#%!, Sherlock

[CaptainPatent]

It also prevents tampering with or editing copyrighted software for profit. Their software (in part) is what accesses the networks. My main point wasn't that a business agreement would become unprofitable, but that they embedded protection in copyrighted software in order to fulfill the business agreement.

Don't get me wrong, I would love to see the DMCA changed and for the Apple / AT&T partnership to go down in flames so the iPhone becomes available to all networks, but there are definitely two valid sides to this case.

Re:No $#%!, Sherlock

[PitaBred]

Not just breaking or replacement, but upgrading. What if the manufacturer didn't deem it necessary to sell a stereo that had the features I wanted? Then I'd be out in the cold, period. Same kind of thing here... what if AT&T doesn't give the same network coverage that I want? You're out in the cold if you want the iPhone. It's locking, plain and simple. If AT&T wanted to sell the phone, and tie it to a contract, fine. Good on them. But since APPLE is selling the phones, there's no contract with AT&T signed at the outset, so I figure they can both go fuck themselves.

Re:No $#%!, Sherlock

[FellowConspirator]

The DMCA covers copyrighted works, not thrid party contracts. Does the DMCA control access to a work (in the copyright sense)? No, the mechanism in place enforces a contract term between other parties. It restricts access to a service, not "the work".

Neither copyright nor the DMCA exist to prop-up ill-conceived get-rich-quick schemes (well, the DMCA is, but it's also probably not constitutional).

Re:No $#%!, Sherlock

[CaptainPatent]

The DMCA has a loophole for accessing different wireless networks, yes. It does not have a loophole for modifying copyrighted software that gives access to those networks.

Re:No $#%!, Sherlock

[IndustrialComplex]

I believe the arguement would still apply regardless of the company doing the selling.

My question is this, if AT&T and Apple want this phone tied into AT&T's service, why don't they simply require a 2 year contract? Is this what they are doing already and people are just shelling out for the early termination fee?

Re:No $#%!, Sherlock

[CaptainPatent]

Not just breaking or replacement, but upgrading. What if the manufacturer didn't deem it necessary to sell a stereo that had the features I wanted? Then I'd be out in the cold, period. Same kind of thing here... what if AT&T doesn't give the same network coverage that I want? You're out in the cold if you want the iPhone. It's locking, plain and simple. If AT&T wanted to sell the phone, and tie it to a contract, fine. Good on them. But since APPLE is selling the phones, there's no contract with AT&T signed at the outset, so I figure they can both go fuck themselves. As I said though, the reason car companies strictly limited what stereos were used was so they could charge whatever price they desired from the consumer. Yes it is true that you are left with fewer options, but the stereo law was overturned because of moral bankruptcy because of the monopolies created, not because stereo features were more conveniently gained for one provider.

The point is AT&T is still giving competitive pricing for all service and they are not charging more because they have the specific right to the iPhone. The second that happens, I think Apple/AT&T's case fall apart, but I think many fail to see both sides have very valid arguments.

Re:No $#%!, Sherlock

[CaptainPatent]

I'd like to start by saying I definitely agree with most (perhaps all) of the DMCA not being constitutional, but because that's what we have to follow for now let's get into the meat of the debate. The point of my initial post was not to say that AT&T and Apple have this nifty contract so obviously the terms should be protected, it's that because they have this contract, they put software locks on the iPhone to assure the "proper" network is being used. Essentially what hackers are doing now is circumventing this copyrighted software in order to access other networks and redistributing these devices with the new/circumvented software lock. I do understand that you are saying the lock does not prevent access to copyright material and I do think that is valid, I'm simply proposing that AT&T also has a valid argument in saying that the lock itself is under copyright and hackers are circumventing the lock for redistribution and personal profit.

I am hoping litigation of the above case brings about some change to the DMCA as it stands now. It may not be groundbreaking, but it may help put it further on track.

Re:No $#%!, Sherlock

[Anonymous Coward]

ATT did not buy out Cingular. It was the other way around. They decided to use ATT's name since it was more recognizable/marketable. Of course, this has nothing to do with the topic.

Re:No $#%!, Sherlock

[timbck2]

Actually, a better analogy question would be:

Do you have the right to buy a computer that is designed to get its Internet service from only one ISP, modify it to get its service from any ISP you choose, and re-sell it?

Re:No $#%!, Sherlock

[Anonymous Coward]

People on /. take the DMCA too broadly. It is meant as a protection of copyright, nothing more nothing less. It wasn't designed to prevent people from violating a temporary monopoly agreement between two companies. Printer cartridge companies and garage opener companies tried using the same argument to protect their monopolies behind the DMCA and found out that the DMCA is really narrow and you can't apply it to everything. "Access to work" applies only to things covered by copyright such as movies, music, not things covered by PATENTS.

Also note that creating devices that work with your fictional widget stereos is NOT illegal. Reverse engineering data protocols is NOT illegal. If it were, you could expect a sharp rise in the demand for lawyers and judges...

And one last thing, monopolies are NOT illegal. Using a monopoly to gain an advantage over a competitor though IS illegal.

Re:No $#%!, Sherlock

[adamstew]

The DMCA doesn't apply to circumventing copyrighted software. It applies to circumventing technical measures put in place to prevent the copying of copyrighted works (software, music, movies, etc.).

DVD copy protection is covered under the DMCA, Windows Activation is covered under the DMCA, however unlocking a cell phone isn't...simply because you aren't copying any copyrighted software. You are modifying software that you already have already paid for.

Also, the whole DMCA discussion is pointless anyway: The DMCA has given the copyright office the authority to define exceptions to the DMCA, and they have already listed that unlocking cell phones for use with other carriers is exempt from the DMCA. Therefor, neither Apple nor AT&T can use the DMCA as a basis for a successful lawsuit.

Re:No $#%!, Sherlock

[StikyPad]

It's a stretch to say that this is a form of DRM.. I don't thing a judge would buy it (but you never know). The spirit of the DMCA (if not the letter) was to prevent the circumvention of copy protection, not to prevent third party interaction, support, and/or competing technology, and it says as much at the bottom of pretty much every paragraph.

Re:No $#%!, Sherlock

[conspirator57]

For those complaining about my inappropriate mixture of cartoons, I was trying to stay within the new "fair use" doctrine of half a thought. Otherwise I'd be violating the DMCA by using a technological method (/.) to circumvent copyright holders' rights. :P

Yeah, that's it. I've never mixed up those cartoon characters before. Unh-uh.

Re:No $#%!, Sherlock

[boris111]

I literally had 5 friends switch from AT&T to Verizon in the same month for that same reason. Verizon is evil, but they at least warn you before fucking you up the ass.

Re:No $#%!, Sherlock

[shmlco]

"You are modifying software that you already have already paid for."

Well, as near as I can tell most hacks are modifying the image and copying it (or portions of it) to the phone. So you ARE copying copyrighted software (the unmodified part).

Be that as it may, Apple could simply use iTunes to check for changes to the phone's software and refuse to sync to it, effectively bricking the phone.

Re:No $#%!, Sherlock

[FLEB]

Patch CD. See: Bart's PE.

Re:No $#%!, Sherlock

[DECS]

And so what it depends upon may be whether a crack involves defeating a locking system, or selling a patched version of Apple's OS.

Apple didn't sue the kid who reprogrammed his iPhone. It was AT&T who warned the company announcing it would sell a patched version of the iPhone software.

http://roughlydrafted.com/

Re:No $#%!, Sherlock

[Alsee]

The DMCA prohibits circumventing technological measures that protect a copyrighted work from unauthorized duplication

Actually, no. The DMCA explicitly does not apply to duplication or duplication products.

It is explicitly not a violation of the DMCA to walk into you local video store with a shotgun, steal their entire inventory of DVDs, bring them back to your secret underground lair equipped with 100 industrial DVD presses, run off 1000 bit-for-bit copies of each stolen disk, and set up shop at your local fleemarket selling them for $4 each.

It is also explicitly not a violation for you to sell software and hardware and other products for making bit-for-bit duplicates of Hollywood DVDs or duplicating iPhone software or duplicating anything else.

There is a very specific reason for that. The doctrine of fair use trumps copyright law. Whenever fair use arises, copyright law is nullified... it runs away and hides in the corner... impotent. And fair use protects.... guess what! Copying!

Nope... the DMCA doesn't want to go anywhere NEAR the issue of copying. The DMCA does not prohibit copying, does not restrict copying, doesn't touch copying at all.

The DMCA prohibits "circumvent[ing] a technological measure that effectively controls access... without the authority of the copyright owner". It also prohibits the "manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof" that could enable someone to "circumvent a technological measure that effectively controls access".

So what does that really mean? It means nothing.... and everything... and anything.... no one the fuck knows. What is access? And what exactly does "without the authority of the copyright owner" mean? No one the fuck knows. Apparently you somehow *do* have the "authority of the copyright owner" when you decrypt a Hollywood DVD on your Sony DVD player, but you apparently *do not* have the authority when you decrypt a DVD to watch it in your bedroom on a Linux machine. Well it much mean something, right? Well what have the court said? Well the courts don't the fuck know either. The issue came up in court, no one was able to come up with any rational functional definition for it, and the judge punted the issue.

Here's what the DMCA REALLY means... it means that if some company gets PISSED at you for something they don't like, they threaten you with a multimillion dollar legal battle and 5 years in prison. And if you *do* actually go to court over it, the DMCA is so vague and ill defined that the judge has to dodge ruling on any of the messy undefined legal issues. Instead he basically rules based on which side he likes better.

So the legal question here boils down to... are the people unlocking these phones naughty NAUGHTY hackers trying to violate a good honest company, or is this a nasty nasty company trying to abuse the DMCA trying to screw over customers and monopolize service for the phones?

Is it nasty hackers or an abusive company? Who do you like and who do you dislike?

An amusing point though... if you ever do get in front of a jury. There has been (if I'm not mistaken) exactly one criminal DMCA case that made it to a jury... the Elcomsoft case. They sold software explicitly to circumvent and unlock the DRM on commercial E-Books. All the legal analysts were saying that under any possible interpretation of the DMCA Elcomsoft was a guity as sin... that their product was PRECISELY what the DMCA was designed to target... that if the DMCA did not cover that product he couldn't imagine what product it ever would cover. And it went to the jury... and the jury unanimously found them not guilty. Interviewed afterwards the jury foreman explained the reason being that under the DRM system and under the DMCA "you have no rights at all, and the jury had trouble with that concept". They basically just sa

Re:No $#%!, Sherlock

[Ath]

I really hope Apple / AT&T would rely on the anti-circumvention restrict in Section 1201 of the DMCA. I doubt they would though based on the fact that the Librarian of Congress ruled in November of 2006 that circumvention for the purpose of unlocking a cell phone was a permitted exception under Section 1201. Apple and AT&T's better argument would be if they were subsidizing the phones because they could argue the financial side of things. But they aren't subsidizing the phones, so that argument won't get made either. The only "legal" argument they really have is the financial burden of a lawsuit, regardless of its merit. The real tool that Apple has is to release over-the-air software updates (which they quietly did awhile back) which break a hack. Of course, international users of the existing workarounds (SuperSIM and TurboSIM) wouldn't be affected because the over-the-air update would never get to them.

Re:No $#%!, Sherlock

[Anonymous Coward]

Also, DMCA is an American law.

Re:No $#%!, Sherlock

[Overzeetop]

I've always read the DMCA to say "you can't break encryption, except for fair use, and nobody can help you do it". Sort of like allowing a builder to put a lock on all the rooms in the house, and the law allowing you to enter any room you like, since it's your house, but then outlawing locksmiths and any books, videos, or lockpicking tools.

Re:No $#%!, Sherlock

[Alsee]

I've always read the DMCA to say "you can't break encryption, except for fair use

Perhaps you're thinking of "(c) Other Rights, Etc., Not Affected.--(1) Nothing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title"?

It says that if you are charged with copyright infringement, that fair use defenses are not affected. However that is an entirely vacuous clause, considering that circumvention-crime and trafficking-crime have nothing to do with copyright infringement.

The DMCA says it is criminal to circumvent a technological measure that effectively controls access to a work protected under this title, period. Never mind fair use... it is prohibited even for directly noninfringing purposes.

And besides, it would be rather redundant to criminalize circumvention only if infringement occurs... they could simply have added those penalties onto the act of copyright infringement itself.

I guess it would be sorta nice to have a judge declare circumvention crimes to be "copyright infringement" and to allow fair use defenses to them, but it would be a pretty hollow useless victory with the trafficking provision still intact. If a judge were to rule the trafficking provision to somehow constitute "copyright infringement".... I can't imagine how.... and he were to somehow allow fair use defenses to apply... I again can't possibly imagine how... then that would be huge. It would almost certainly gut the entire DMCA.

-

Re:No $#%!, Sherlock

[Overzeetop]

Actually, I read it as allowing such circumvention for fair use "rights". To prohibit such circumvention would affect the rights of the enduser by limiting aformentioned rights relative to non-encrypted content. It doesn't change the fact that you, apparently, need to be an expert in DRM, encryption, cracking techniques, and coding, along with having adequate computational resouces to apply such knowledge just to excercise said rights...but they're there for the taking!

Re:No $#%!, Sherlock

[PitaBred]

But AT&T has shit service where a lot of people are, whereas other providers don't. So people are unable to uncouple their desired hardware (the car/iPhone) from their desired options (the radio/network). Just because AT&T charges an industry-standard price doesn't make it any more right for them to get upset at people who want to void their warranties while doing nothing illegal.

Yeah

[Anonymous Coward]

At&t and Apple not getting money for unlocked Iphones? Yeah, that's not going to fly.

Re:Yeah

[megaditto]

Apple is already laughing all the way to the bank, selling phones that cost $200 to produce for triple that price.

Re:Yeah

[rizzo420]

that's not true though. you still have to buy an iphone, unless you steal it. so apple is still getting their money. it's AT&T that's isn't making money.

Re:Yeah

[Selivanow]

Usually when you "buy" a phone (in the US at least) you are getting a discount in exchange for a lengthy contract. If you don't want the contract you buy the phone outright and can do anything you want with it. This is the same issue that the auto industry had at one point. Manufacturers did not want 3-party parts sold and didn't want people to fix their own vehicles. The auto industry was pretty much shot down. Unless you are breaking a law, ie: modifying a phone to output a stronger signal, you can do as you please with any item you own. That is not to say that you can not be held liable if you do something to an item you own and it ends up damaging someone else's property or another person.

Re:Yeah

[catbutt]

They make a much better margin selling OS X. They sell it for over $100, and it costs about $1.50 to make the cd's and packaging. That's like 70 times what it costs to make!

Because, of course, the cost of development shouldn't be considered at all.

Re:Yeah

[nonsequitor]

Apple is already laughing all the way to the bank, selling phones that cost $200 to produce for triple that price.

And just how many do they have to sell before turning a profit? R&D costs for the device were probably in the millions, the only time when you get a company selling something at cost is when other companies pay licensing and royalties for working with the device, like game consoles.

Re:Yeah

[Anonymous Coward]

Or the lack of competition.

But, of course, OpenMoko to the rescue! I'm sure Apple is quaking right now, knowing that next month OpenMoko is due to be released to all 6 people who will actually buy one.

Re:Yeah

[notthe9]

We don't know for sure what Apple and AT&T's agreement is, I don't think. It's not necessarily as simple as Apple gets $500 and AT&T gets $60/month.

Re:Yeah

[Trillan]

Proof?

And I don't mean someone's analysis of the parts. I mean actual proof that there's no cost in the design, and price-per-unit is the only cost, and that Apple's acknowledged that the parts come to $200.

Otherwise, you're speculating.

Re:Yeah

[Shagg]

Unless AT&T is paying Apple in order to be the exclusive carrier for the iphone. I don't know if they are doing that, but it seems reasonable. If unlocking the iphone becomes mainstream enough, AT&T may balk at paying Apple for the exclusive license.

Re:Yeah

[Anonymous Coward]

The OpenMoko is much better than the iPhone. I mean, just look at all the extra plastic you get round the screen! I particularly like the completely fucking useless hole in it. There's nothing I like more than pointless voids taking up extra space in my pockets.

Re:Yeah

[1729]

Usually when you "buy" a phone (in the US at least) you are getting a discount in exchange for a lengthy contract. If you don't want the contract you buy the phone outright and can do anything you want with it.

We're talking about the iPhone, here. The iPhone is not subsidized by AT&T, but the 2-year contract is still mandatory.

Re:Yeah

[Anonymous Coward]

In manufacturing electronics, is a well known ballpark figure that the manufacturing cost of product X is around 30% of the shelf price. It's been that way for decades.

Re:Yeah

[Anonymous Coward]

The proof is there are already many similar devices on the market in the same price range. If Apple spent 2 or 3x more in R&D to make the same almost the same thing, they have other problems. I;ve seen some non Apple mp3 players vary similar in capability (from an electronics standpoint) as the Nano that costs $29, I know a small fraction of those sold compared to the nano and I'm sure that company made the R&D price back. The iPhone is marketed at what the market will pay based on similar products. Apple has the luxury because if its status to also charge a slight premium which also helps the status as well, just like the $9 pair of Nike Air Force Ones that sell for $100/pair. If Nike sold those at $12, no one would buy them and the whole hype and halo around those shoes would die over night and NEVER come back. If anything, the less complex simple design of the iPhone would be easier to produce because there are less buttons and things to put together. Did you ever wonder why the bottom pieces of computer hardware fall of the market instead of being priced accordingly? Think about CD rom drives of days gone by. Every time a new faster CD drive came out, it was the price of the older speed model and the older speed model went down. Using that theory, a 2X drive should cost about $1 but you don't see any because it costs more then that to make them. In reality, a 12x drive cost just as much as a 16x or a 24x and often times only the firmware of the drive determined the actual speed it was capable of. These devices were priced at what the market will bear. Same as comparing a pickup truck to an SUV. Similar in price but the over 1/2 of the pickup is nothing but a steel bed. Look a LCD and plasma TVs right now. Yes there are some advancements but they are happening in steps to keep the price at a decent level and at what the market will bear.

Some people get so tied up in a single company that they loose sight of what is really going on or refuse to believe their pet company can be just like everyone else in the entire world.

Re:Yeah

[Selivanow]

That is funny; I just went to the Apple store and was able to get all the way to the final order confirmation and there was no mention of selecting an AT&T plan nor did it ask you to affirm that you would get a plan. On the Apple store product page http://tinyurl.com/26hmdz it mentions that you need a 2-year contract to use the phone, however, if you unlock your phone I can see no reason to sign up for an AT&T service plan.

Re:Yeah

[Aeron65432]

The iPhone, however, is not subsidized by the AT&T contract.

Re:Yeah

[PitaBred]

The question is: Does it matter? The answer is, no it doesn't. If I buy hardware from someone with no signed contract alongside it, I own that hardware free and clear, and can do whatever I want with it. Including modify it, sell it, eat it, whatever.

Re:Yeah

[realthing02]

It's all about "Mindshare"!

Re:Yeah

[notthe9]

Does it matter to the legal issue of whether selling unlocked iPhones can be stopped? Probably not. Does it matter to GGP's contention that unlocked iPhones taked revenue from AT&T but do not affect Apple's cash flow from iPhones? Yes.

Re:Yeah

[Trillan]

Given the time the product spent in development and the features it has, yes, I'd expect the iPhone's R&D budget was quite a bit higher. It would be completely insane to think otherwise.

Re:Yeah

[Durzel]

The question therefore surely is "do you own the phone" ?

On Pay Monthly contracts with low initial sign-up fee (or none at all in some cases) the phone is heavily subsidised. You certainly haven't paid the market value for the phone initially, the telco argument is that over the course of the contract you will, through rental, eventually have paid off the SIM-free cost of the phone (and then some).

I don't think the car analogy works particularly well here because it's rare that people pay the full "SIM-free unlocked handset" price for phones, whereas someone who has settled the balance when buying a car owns the car outright and has every right to do what they want with it.

Re:Yeah

[frdmfghtr]

Does it matter to the legal issue of whether selling unlocked iPhones can be stopped? Probably not. Does it matter to GGP's contention that unlocked iPhones taked revenue from AT&T but do not affect Apple's cash flow from iPhones? Yes.

I'd bet a donut that AT&T nor Apple will do much about this unlocking. Why? With nothing more than a gut feeling about it, I bet the cost in legal fees would be greater than the lost revenue from an unlocked iPhone being used somewhere other than on an AT&T network.

Even if AT&T won the lawsuit, imagine the public backlash. THAT would worry me more than a few dollars lost in monthly fees.

I'd have a hard time believing anybody would financially benefit (except for the lawyers).

Re:Yeah

[wooferhound]

I say Blend it . . . Oh,That's been done already . . .

Re:Yeah

[Alsee]

I bet the cost in legal fees would be greater than the lost revenue from an unlocked iPhone being used somewhere other than on an AT&T network.

Chuckle. Yeah, like *that* would stop a DMCA suit. I can just hear the suits screaming...."The EVIL HACKERS are BREAKING OUR LOCKS! We spent millions developing those locks! [midget whisper whisper whisper] We spent BEEEELIONS developing those locks! AAAAaaaaAAAAaaaaaAAAAaaaaa! They MUST BE STOPPED!" and the level of logic and rationality of those rants would just go down hill from there.

Even if AT&T won the lawsuit, imagine the public backlash.

Buahahaha. That's even funnier. Sure YOU can imagine it... and sure *I* can imagine it.... but common.... you seriously think THEY can rub together enough neurons to accomplish a creative feat of that magnitude?

I'd have a hard time believing anybody would financially benefit (except for the lawyers).

No argument there. Snicker.

-

Re:Yeah

[Jimithing DMB]

We're talking about the iPhone, here. The iPhone is not subsidized by AT&T, but the 2-year contract is still mandatory.

Not entirely. As others have pointed out, if you have really bad credit or if you enter 999-99-9999 as your social security number when activating you can choose the GoPhone pay-as-you-go plan.

But this does bring up an interesting point. Why is it that AT&T really wants you locked into a 2-year contract when they haven't paid a dime for your phone? And maybe more importantly, assume other carriers didn't subsidize the phones, why would they still want you in a contract?

The underlying reason for contracts is that by putting you into a contract you have signed effectively an IOU to AT&T saying that you will pay them $x/mo for at least the next 24 months. That enables them to book $24x of revenue IMMEDIATELY which looks awfully good on their balance sheet because they have yet to book the expenses of providing you with that service.

It's not purely an accounting trick though. In order to continue to provide better service they are constantly upgrading their network. That takes money. It's a lot easier to get money (e.g. a loan) when you can show you are clearly able to pay it back. Even if you don't wind up taking out an external loan, it still looks better to your own accountants when they already know that you have a 2 year revenue stream coming in to pay for your expenses.

Yeah, it is a rather odd thing that basically they are then wealthy only on paper, but those IOUs are as good as gold as far as accountants are concerned.

Re:Yeah

[Anonymous Coward]

Think about your statement.
The iPhone has no more features then just about every other smart phone that has been released in the last 3 years. Can you name one other then iTMS capability and visual voice mail? Now are both of those something that would double or triple your R&D? I can name many features the iPhone does NOT have that others do and you have to consider the cell phone market outside the US as well where carriers do not have as much control of the features.

Here are some I can think of, I'm sure there are more:
Document support, using it as a modem, wireless sync, over the air downloads, java/flash or any browser plug ins, third party support, MMS, SMS to multiple recipients, copy and paste, video recording, voice dialing/recognition, GPS, IM or chat, games, one button dialing, robust email client (filtering, multiple accounts, BCC), expandable storage, using device as portable storage.
Obviously not all of these are important to everyone, some are useless, some are very important to many and considered deal breakers, some may be working with a software update etc but these are features available on other devices whether YOU want them or not, remember, the topic here is your claim of extensive cutting edge features, not features you do not want and need or Apple determined you want or need.

Now... what was the development time of the iPhone, how does that compare to a Treo or other smart phone? What? You don't know and have no idea? So why are you claiming everyone is insane to think otherwise? What is your basis to assume that Apple takes any more money or longer to develop something electronic then anyone else? What is the basis that the iPhone is some extreme piece of electronic engineering requiring some radical internal design? My comments were based on the electronics industry as a whole. There is nothing that indicates Apple does not fit into that category or that Apple uses some other method of product development that no one else in the world uses. These companies have been around for decades and they all use the same processes. I know it is hard for you to believe but Apple is no different then anyone else in the back end. The outer case and the UI is different but different does not automatically mean 2 or 3x the cost, if you do not agree with that, can you explain why? Don't worry, I do not expect a reply to these questions directly, you can continue your position pulling the line.

Re:Yeah

[Trillan]

I did not say 2-3 times higher. I said higher. I don't expect you to actually say anything relevant or interesting, but not misquoting me would be an excellent step.

(PS: I'm not an iPhone user. Not interested in getting one, ever, unless it's through work for developing software on one. I use my phone to make calls.)

Re:Yeah

[Anonymous Coward]

Well using the term "must be insane" is a very strong word to suggest the obviousness of what then, 1 to 1.25 times higher?
That was the reason for the reply I had because the R&D costs are not obvious.

Re:Yeah

[Trillan]

Even then, feature set is not how you figure out R&D costs. Uniqueness is. It can cost just as much to rule out including a feature as to code and include it.

Re:Yeah

[Anonymous Coward]

You are the one that implied the feature set was a reason for increased R&D, not me

Given the time the product spent in development and the features it has, yes, I'd expect the iPhone's R&D budget was quite a bit higher

Notice the AND you included in there? The argument was Apples R&D costs compared to any other companies. All companies make unique products that they themselves have not engineered before. If Creative makes a portable player and RCA makes a portable player, unless they source from a common pool and share costs, they will be each completely unique from an engineering standpoint. It does not matter that the case is white and has a few less buttons on it and no one else in the world made one like that because no one else in the world made one like the RCA or the Creative model either.

Basically, nothing you have said or from what I can infer from your reasons shows why I would be insane to think Apple spends just as much on R&D as anyone else.

the DMCA finally does something good

[wizardforce]

So will Apple and AT&T's legal action deter hackers? Hardly. Individual users are already allowed to unlock their own phones under an exemption to the Digital Millennium Copyright Act (DMCA) that the U.S. Copyright Office issued last November.

ha ha

Re:the DMCA finally does something good

[Conspiracy_Of_Doves]

It isn't really the DMCA that's doing it. If the DMCA never existed, you would still be allowed to unlock the phone. This is something that someone had to decide that the DMCA didn't cover.

Re:the DMCA finally does something good

[omgamibig]

Ha ha at them indeed, if they sold the iphone at a loss.

Re:the DMCA finally does something good

[misleb]

The DMCA didn't do the good, it is the EXCEPTION to the DMCA that did good. It would be better if the DMCA didn't exist at all and we could go back to good ol' fashioned "fair use" for all devices/software. DMCA is evil, plain and simple.

-matthew

Re:the DMCA finally does something good

[darrylo]

Sheesh. Doesn't anyone actually surf the web and actually read web pages anymore? This is old news: http://www.engadget.com/2007/08/24/know-your-right s-is-it-illegal-to-unlock-my-iphone/

Bottom line: this is all in a gray area. Disclaimer: IANAL.

Mangled summary: while the DCMA does have exemptions for this, they appear to assume that the sole purpose is for lawfully connecting to wireless networks. Once you start to sell/produce unlocked phones, lawyers can argue that the sole purpose is profit, and not for connecting to networks, and can possibly sue.

"only AT&T may sell iPhones"

[larry bagina]

only AT&T may sell iPhones

Wrong. Apple sells iPhones (through their website and retail locations). The phone isn't activated at the time of sale (it's done at home with iTunes). AT&T announced 146k activations when Apple announced 270k iphones sold. You do the math.

Re:"only AT&T may sell iPhones"

[conspirator57]

I agree with you, but Apple's figures probably include inventory sold to AT&T and people buying them for use on WLANs, as toys, etc.

Re:"only AT&T may sell iPhones"

[j00r0m4nc3r]

You do the math.

(sqrt(270000) * 146000) / pi = 24148205.619474491768596100626108

Re:"only AT&T may sell iPhones"

[deander2]

haha....omg, who are the morons who moderated this informative? =p

Re:"only AT&T may sell iPhones"

[veganboyjosh]

I did the math.

24148205.619474491768596100626108 / pi = 7686612.58227964

Re:"only AT&T may sell iPhones"

[Anonymous Coward]

The question:

Form a square with every iPhone sold and mark the phones that are in the first row. Make a phone call from every marked iPhone to every activated iPhone. Place the phone bills in a circle, what is the circle's diameter?

Re:"only AT&T may sell iPhones"

[MyLongNickName]

The question:

Form a square with every iPhone sold and mark the phones that are in the first row. Make a phone call from every marked iPhone to every activated iPhone. Place the phone bills in a circle, what is the circle's diameter?

If that is the question, then the answer is wrong. You cannot place a call to your own phone.

Re:"only AT&T may sell iPhones"

[IBBoard]

Yes you can, it just normally ends up dropping straight through to answer phone. Okay, it's not useful, but you can normally do it.

Unless these strange American "cell phones" work differently to British mobile phones and have some additional check in the number as you dial it.

Re:"only AT&T may sell iPhones"

[TubeSteak]

You cannot place a call to your own phone. I dialed my own number and went straight to voicemail.
/It's not a bug, it's a feature.

Re:"only AT&T may sell iPhones"

[Chyeld]

You assume the phones in the front row will be activated and not 'freed'. If they are freed, then they don't count as activated and thus the probelm is still solvable.

Re:"only AT&T may sell iPhones"

[LynnwoodRooster]

You forgot to carry the 1.

Re:"only AT&T may sell iPhones"

[peragrin]

actually on AT&T that is the feature. caller ID combined with voicemail. You dial your own number on an AT&T phone and it connects to the voicemail box to allow one to hear messages. No pins needed unless you call form an outside phone.

downside is that anyone who can spoof the callerID properly can access your voicemail.

Re:"only AT&T may sell iPhones"

[Beat The Odds]

AT&T announced 146k activations when Apple announced 270k iphones sold. You do the math.

That means folks bought 124k PDA'a

Re:"only AT&T may sell iPhones"

[Anonymous Coward]

American "cell phones" are different than British "mobile phones" in that the former cause a lawsuit to occur if you blink too quickly.

Re:"only AT&T may sell iPhones"

[Firehawke]

I doubt they use Caller ID data, since that's so easily spoofed. They probably use the much more secured cousin called ANI. When I worked at AT&T back around the 1999-2000 time frame, we used ANI on pretty much every call. While we were unable to use it as sole verification of who was calling, ANI had a 95% successful ID rate for telephone lines and the remaining 5% was 'no data'-- never did I see an incorrect entry.

If AT&T could do this on lines coming from the Baby Bells, I certainly believe they could easily achieve 100% on calls from their own cells. After all, if they can bill it to the right number, they can certainly pull origin ID off a call to its own number.

Re:"only AT&T may sell iPhones"

[geekoid]

I think you can. I call my own phone and leave me messages as reminders from time to time. Unless this is some iPhone specific limitation?

Re:"only AT&T may sell iPhones"

[f8l_0e]

That's a nice round number.

Re:"only AT&T may sell iPhones"

[complete loony]

"if they can bill it to the right number" I see a flaw in your argument...

Re:"only AT&T may sell iPhones"

[Anonymous Coward]

You've never checked your voicemail? Heh.

Re:"only AT&T may sell iPhones"

[tehcyder]

Apple's figures probably include inventory sold to AT&T and people buying them for use on WLANs, as toys, etc.

That is about the lamest excuse I have ever heard.

Re:"only AT&T may sell iPhones"

[conspirator57]

i'm sorry, *cough* PDAs. *cough*

Re:"only AT&T may sell iPhones"

[Larry Lightbulb]

If you blink the angels will get you.

Re:"only AT&T may sell iPhones"

[KZigurs]

Oh, why not? In the _ooold_ world it is the accepted way for you to reach your voicemail.

Re:"only AT&T may sell iPhones"

[sakasune]

You cannot place a call to your own phone. Yes you can....you'll usually get your own voicemail though

Push comes to shove. . .

[TimmyDee]

If the group that has the real iPhone unlocking software does get hit with a legit lawsuit and has to cease and desist, here's to hoping they release it for free along with the source. What's to say they can't? At that point, they aren't selling something. Maybe they could take donations? IANAL, but I think such a move would be feasible.

Re:Push comes to shove. . .

[Alsee]

here's to hoping they release it for free along with the source. What's to say they can't?

The DMCA. The DMCA prohibits is distribution.
If the DMCA applies, then it is also criminal to give it away for free.
If the DMCA doesn't apply, well obviously they could just sell it.

-

No wonder...

[markov_chain]

...Apple insisted on the $600 price tag!

a thought

[thatskinnyguy]

Collecting bonus money from activations isn't really in Apple's business model. So why should they even bother with trying to hault cracking of the iPhone? The product has already been sold. Apple made their official dollar off of it. Their interests should really die there. It's not like crackers are replacing the Apple components of the software; just defeating the AT&T parts.

Here's an article that better explains my point of view because I'm an ineloquent rambling idiot.

Re:a thought

[Anonymous Coward]

apple is under the false impression that emulating microsoft business tactics will earn them a bigger market share. they are disasterously wrong; it will only dig them a nice grave.

Re:a thought

[CheddarHead]

Well because AT&T presumably payed a boat-load of money to Apple to be the exclusive carrier for the iphone. If they can't recover that investment because the phone are being hacked and used at other carriers, and if they feel that Apple isn't doing enough to prevent this, then they will probably sue Apple to get some or all that money back.

Re:a thought

[UbuntuDupe]

Yes, they will sue Apple over everything they do to promote AT&T-free iPhones ... that can be traced to Apple.

So, Apple is forced to half-heartedly admonishing people not to do it, removing discussion of how to unlock on Apple-run websites, etc.

But I'm sure Steve Jobs would love it if people bought iPhones and unlocked them, if otherwise they wouldn't buy one. He just can't talk about it.

Re:a thought

[Tangent128]

Interesting article... Steve Jobs has apparently mastered the Xanatos Gambit.

Re:a thought

[Enrique1218]

It is the bonus Apple gets for not developing an iPhone for competing US networks. Apple like Motorola or Nokia could develop other iPhones to work with Verizon and Sprint now that the cat is out of the bag. Apple would expand the iPhone base and reach it 10 million faster but AT&T wants exclusive right for now to capitalize on the buzz. So, they cut Apple in on the revenue to make up for Apple's lost sales.

Re:a thought

[Fred Ferrigno]

Yes, they will sue Apple over everything they do to promote AT&T-free iPhones ... that can be traced to Apple. The broken activation scheme can pretty squarely be traced to Apple. All Apple has to do is make customers to sign the contract in the store. AT&T could care less if people unlock the phone after that.

That's why we can't have nice things.

[mcmonkey]

Not for nothing, but when the next gen iPhone comes out and it's store activation only and not home activation, you'll know why.

Re:That's why we can't have nice things.

[Alsee]

I'm a hell of a lot more concerned with all of the nice things we don't and cant have because of the dumbfuck DMCA and AHRA etc. Hell, the only reason we have MP3 players at all is because they slipped through a loophole in the AHRA, and God knows how many products and innovations have been exterminated by the DMCA.

-

Re:That's why we can't have nice things.

[Anonymous Coward]

Actually, this is precisely why I will absolutely refuse to
even consider buying an iPhone from Apple, AT&T or anyone else.

If they INSIST on having these restrictions, then I will
insist on sitting on the sidelines and let one of AT&T's
competitors get my cell phone business, period.

I consider the collustion between Apple and AT&T to be
restraint of trade, and is no less heinous than having to
buy Windows when I buy a computer, even though I want to run Linux.

The current incarnation of AT&T is actually Southwestern Bell,
which purchased the original AT&T because it (AT&T) decided
it really didn't want to be in the long distance telephone
business anymore, to the point that they would not sign up any
new customers in northern New England. When I heard that, I
dropped them as my long distance carrier and haven't looked
back since.

Perhaps increased market pressure will change their minds
about this silly iPhone policy.

Good because it hurts that insufferable Apple

[Anonymous Coward]

They clearly have a loss leader product that they intend to make profit from the kickbacks from AT&T.

A hacked iPhone lets me use their technology while simultaneously hurting their bottom line.

Kudos to the hackers.

Stimpy?

[Anonymous Coward]

The Brain: Are you pondering what I'm pondering?

Pinky: I think so, Brain, but can the Gummi Worms really live in peace with the Marshmallow Chicks?

Re:Stimpy?

[sYkSh0n3]

The Brain: Are you pondering what I'm pondering?

I think so, Brain. But where will we find rubber pants our size?

Re:Stimpy?

[dgatwood]

The Brain: Are you pondering what I'm pondering?

Pinky: I think so, Brain, but how are we going to make the unlocked iPhones play Pong?

Re:Stimpy?

[Clock Nova]

The Brain: Are you pondering what I'm pondering? Pinky: I think so Brain, but isn't Regis Philbin already married?

Re:Stimpy?

[Fengpost]

"Well, I think so, Brain, but if they call people from Poland Poles, why don't they call people from Holland Holes?"
"I think so, Brain, but where are we going to find a duck and a hose at this hour?"
"I think so, but where will we find an open tattoo parlor at this time of night?"
"Wuh, I think so, Brain, but if we didn't have ears, we'd look like weasels."
"Uh... yeah, Brain, but where are we going to find rubber pants our size?"
"Uh, I think so, Brain, but balancing a family and a career ... ooh, it's all too much for me."
"Wuh, I think so, Brain, but isn't Regis Philbin already married?"
"Wuh, I think so, Brain, but burlap chafes me so."
"Sure, Brain, but how are we going to find chaps our size?"
"Uh, I think so, Brain, but we'll never get a monkey to use dental floss."
"Uh, I think so Brain, but this time, you wear the tutu."
"I think so, Brain, but culottes have a tendency to ride up so."
"I think so, Brain, but if we covered the world in salad dressing wouldn't the aspargus feel left out?"
"I think so, Brain, but if they called them 'Sad Meals', kids wouldn't buy them!"
"I think so, Brain, but me and Pippi Longstocking -- I mean, what would the children look like?"
"I think so, Brain, but what would Pippi Longstocking look like with her hair strait?"
"I think so, Brain, but this time you put the trousers on the chimp."
"Well, I think so, Brain, but I can't memorize a whole opera in Yiddish."
"I think so, Brain, but there's still a bug stuck in here from last time."
"Uh, I think so, Brain, but I get all clammy inside the tent."
"I think so, Brain, but I don't think Kaye Ballard's in the union."
"Yes, I am!"
"I think so, Brain, but, the Rockettes? I mean, it's mostly girls, isn't it?"
"I think so, Brain, but pants with horizontal stripes make me look chubby."
"Well, I think so -POIT- but where do you stick the feather and call it macaroni?"
"Well, I think so, Brain, but pantyhose are so uncomfortable in the summertime."
"Well, I think so, Brain, but it's a miracle that this one grew back."
"Well, I think so, Brain, but first you'd have to take that whole bridge apart, wouldn't you?"
"Well, I think so, Brain, but 'apply North Pole' to what?"
"I think so, Brain, but 'Snowball for Windows'?"
"Well, I think so, Brain, but snort no, no, it's too stupid!"
"Umm, I think so, Don Cerebro, but, umm, why would Sophia Loren do a musical?"
"Umm, I think so, Brain, but what if the chicken won't wear the nylons?"
"I think so, Brain, but isn't that why they invented tube socks?"
"Well, I think so Brain, but what if we stick to the seat covers?"
"I think so Brain, but if you replace the 'P' with an 'O', my name would be Oinky, wouldn't it?"
"Oooh, I think so Brain, but I think I'd rather eat the Macarena."
"Well, I think so hiccup, but Kevin Costner with an English accent?"
"I think so, Brain, but don't you need a swimming pool to play Marco Polo?"
"Well, I think so, Brain, but do I really need two tongues?"
"I think so, Brain, but we're already naked."
"We eat the box?"
"Well, I think so, Brain, but if Jimmy cracks corn, and no one cares, why does he keep doing it?"
"I think so, Brain NARF, but don't camels spit a lot?"
"I think so, Brain, but how will we get a pair of Abe Vigoda's pants?"
"I think so, Brain, but Pete Rose? I mean, can we trust him?"
"I think so, Brain, but why would Peter Bogdanovich?"
"I think so, Brain, but isn't a cucumber that small called a gherkin?"
"I think so, Brain, but if we get Sam Spade, we'll never have any puppies."
"I think so, Larry, and um, Brain, but how can we get seven dwarves to shave their legs?"
"I think so, Brain, but calling it pu-pu platter? Huh, what were they thinking?"
"I think so, Brain, but how will we get the Spice Girls into the paella?"
"I think so, Brain, but if we give peas a chance, won't the lima beans feel left out?"
"I think so, Brain, but if we had a snowmobile, wouldn't it melt before summer?"
"I

I guess it comes down to

[JustNiz]

I guess it comes down to who owns the phone.

If when you buy an iPhone you are actually buying the ownership to the phone, you can do what the hell you like to it as its yours.

but...

If Apple are just selling a licence to use the iPhone (kinda like what Microsoft do with Windows) rather than actually selling the ownership of the iPhone itself, then they could legally and justifiably require you not to unlock it as they still own it.

Re:I guess it comes down to

[gfxguy]

I don't think they can do that, though. When you buy software, you are generally paying for the "right to use" the content on the media. You're allowed to microwave the disc, throw it out the window, make artwork out of it... you're just subject to copyright rules about the contents.

What you're looking for is if the end user agreement prohibits modifying or loading new software. I'm sure it prohibits modifying software, but if it's just a matter of a simple hardware hack and ADDITIONAL software, I don't see how there can be a legal standing against.

Probably the reason is because I'm not a lawyer, but it seems to me precedence is on our side.

Re:I guess it comes down to

[Techogeek]

I don't and probably never will own an IPhone but, knowing that Apple is a hardware developer, I would tend to believe that if you buy an IPhone, you are outright buying it and the ownership rights to it as well. If that were not the case, that would mean once the service is terminated, you must hand over your IPhone (that you paid out the rear for) back to either AT&T or Apple. I certainly don't think AT&T nor Apple will want to deal with taking people's used equipment; they don't with their computers, why would they with their IPhones?

Re:I guess it comes down to

[BUL2294]

Except with an iPhone, you are physically buying something. With software, especially software that's bought & delivered over the Internet, there's no physicality, so the law is gray.

Think of it this way... If I buy a book, I have the right to do whatever I want with that book--put Post-It notes in it, write in it, draw a moustache on the guy on the cover, tear pages out of it, burn it--as long as it does not violate the author's copyrights over that book (i.e. make a PDF of it and post it on da Intar-web). I can turn around and sell it as well. College textbook authors would love to prevent me from doing so, but they can't. Pretty simple...

So, I don't understand why Stevie J., Apple and its minions of lawyers, like to believe otherwise with the iPhone. The only way that I could see Apple owning some post-sale control over the iPhone is if this were actually a lease, like a car lease. But I haven't heard the term "lease" thrown around--I've heard "financing", "buying", etc. Sure, if I modify it, Apple could rightfully refuse to provide me with support, updates, and so on--but I don't see how they could not allow me to modify something I bought, given my book analogy.

So, while IANAL, "buying an iPhone for use on AT&T" sounds quite a bit like "buying a textbook for use in a class". As long as I own that item, I can do as I please to it.

Re:I guess it comes down to

[SpaghettiPattern]

I guess it comes down to who owns the phone.

If read the fine print correctly I apparently leased an Alco2Jet® Carbonator. On the other hand, I never signed a contract of any kind and I refuse to acknowledge an EULA for hardware I buy.

I assume Sodaclub wants my money for their hardware, wants still to poses "my" hardware and wants to charge me for refills.

That last point alone is a reason to "illegally" fill my own "Alco2Jet® Carbonator" with cheap and illegal CO2. And when the secret police shows up at my door step I will tell them to piss off, fry on the chair for that and thus die a martyr for the right to own.

Re:I guess it comes down to

[pcjabber]

So check this out...

This Alco2Jet Carbonator together with the User License may be transferred to a third party provided the third party agrees to be obligated by the conditions and ownership rights expressed herein.

Any misuse of the Alco2Jet Carbonator including...its sale, rental, lending, leasing, abandonment, alienating or refilling will automatically entitle the Carbonator Owner...to the immediate right of possession and unconditional return... So, let me get this straight. I can transfer the license to a third-party, but I'm not allowed to sell, rent, lease, or even lend it to someone else. How's that possible?

Re:I guess it comes down to

[elrous0]

When I buy a Xbox, I can do whatever the Hell I want with it too. But that hasn't stopped The U.S. government from raiding companies that make mod chips for the Xbox.

Re:I guess it comes down to

[radish]

You're buying the physical phone. All the metal, glass, plastic and so on is yours, and yes - you can do whatever you like with it.

However - you don't own the software on it. Just as when you buy a copy of Vista you own the box and the plastic disc but not the software, or when buying Linux in a Nutshell you own the paper and ink but not the actual words.

If the unlock is purely hardware based (i.e. connect pin 2 to pin 3 and you're done) then I don't see how there could be an issue. You're not decompiling or modifying anything, and you're not trying to circumvent copyright or DRM. In the case of a software hack though, you're in a more dangerous area. The DMCA generally forbids modification of binaries, but does have an exception allowing you to modify software for the sole purpose of connecting to a phone network. The analysis I've seen seems to think that this will only hold for personal use - anyone trying to start a business based on unlocking phones would be in trouble as their motivation for the change would be profit rather than actually connecting _their_ phone to a different network - but none of this has been tested to the best of my knowledge.

Oh and BTW - if anyone complains about the illegality of console modchips which are, obviously, hardware based - the issue there is motivation. The purpose of a modchip is typically to defeat the copy protection/region coding mechanisms, and the DMCA forbids anything (hardware or software) which is designed to do that.

Re:I guess it comes down to

[hxnwix]

Console mod chips that enable consumers to bypass disc authenticity checks, thereby defeating a technical copyright enforcement measure, are, because they do so, illegal under the DMCA.

I'm not sure SIM locks are copyright enforcement measures. Yes, perhaps they are a sort of DRM in that they protect AT&T's right to shit all over you and laugh as diarrhea pours down your face faster than the money dumping out of your bank account. However, there is a crack in your logic: AT&T may have trademarked being a huge asshole, but they haven't copyrighted it.

Re:I guess it comes down to

[NMerriam]

I have acctually been looking for a home fountain solution, do you like the Sodaclub stuff? Seems like it will take a couple months of heavy use to break even on the price, but if the drinks are good quality that's fine.

I poked around the site, and it seems that the "license" for their CO2 canisters is specific to each state -- I suspect what's happening is more of an environmental regulation/disposal issue that they have to be responsible for than any specific desire of the company to try and screw you (but of course they're happy to charge you 5 times as much as they should for a refill). I believe propane tanks also have similar requirements attached to them, but of course it's easy to find a place that swaps/refills propane anywhere in the country, even the ones with proprietary connections. I assume you're going to hobby or hardware shops to refill the CO2?

Re:I guess it comes down to

[djtack]

I use this device to make carbonated drinks. It only costs $11 and works great. The target market is homebrewers who already have a draft beer setup. But even if you didn't want the beer setup, you could still buy a CO2 regulator and fittings for about $40. CO2 is quite cheap when purchase from local gas suppliers, and you can usually scrounge a used tank for cheap.

Re:I guess it comes down to

[Sparr0]

Console mod chips that enable consumers to bypass disc authenticity checks, thereby defeating a technical copyright enforcement measure, are, because they do so, illegal under the DMCA. Wrong. Read the law. It is pretty straightforward. To be in violation of the DMCA, the device in question must not only defeat a technological access control measure, but that must be its *PRIMARY* purpose or *ONLY* commercial purpose. Which is not the case at all with mod chips. Most of the people that I know with chipped consoles use them to play imports, or legit backups, or to run homebrew software (including alternate OSes for HTPCs). *ANY* of those three purposes de-classifies the chip as a DMCA-breaking device, let alone all 3 of them.

Re:I guess it comes down to

[Anonymous Coward]

That doesn't say what you think it says.

Re:I guess it comes down to

[hxnwix]

Wrong. Read the law. It is pretty straightforward. To be in violation of the DMCA, the device in question must not only defeat a technological access control measure, but that must be its *PRIMARY* purpose or *ONLY* commercial purpose. Really? From the text of the law:

(2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that--
(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;
(B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or
(C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.

I italicized the salient bit. Modchips don't enable you to play games that you couldn't play unless you stole them (primary use) or you like stuff from Japan without that English language garbage in there taking away from the game designer's one true original vision (I can understand this, but few do) or you like underground games (which are probably underground).

As a judge probably would, I'm going to have to go with my answer unless you can cite case law in your favor. To demonstrate that I'm not being unreasonable, in my favor: ESA/Sony VS Divineo.

Re:I guess it comes down to

[Sparr0]

I agree that Divineo broke the law, but I do not believe that your example is relevant. The HDLoader software was a key part of that decision. That was hardware/software that bypasses copy protection to actually make copies, as opposed to hardware/software that does not make copies (most mod chips). Some mod chips are sold software-less, or with software that only allows playing of imports (explicitly legal in some countries, sadly not USA yet) or homebrew (legal everywhere as far as I know).

Re:I guess it comes down to

[pimpimpim]

I think you have a point. Normally, the case for sim-locks is the fact that the provider gives you a rebate on the phone (so you pay 1 euro for a 400 euro phone). But, if I understood correctly, the iPhone does not come with a rebate from the provider, so in fact the only reason your phone is connected to your provider is because they probably have the infrastructure to cope with the increased traffic caused by the iPhone (haha). I cannot think of any other valid reason, other than just plain consumer-cow-milking.

Re:I guess it comes down to

[hxnwix]

I was wondering if you'd find anything. The issue seems to be up in the air; I think that a decision regarding pure modchip legality could go either way. But we wont have to keep guessing for long.

On 1 August 2007, U.S. Immigration and Customs Enforcement agents from 22 offices raided businesses, storefronts and residents in 16 states and executed 32 search warrants. The raids were conducted in: California, Florida, Hawaii, Idaho, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas and Wisconsin. Arrests were made. (God damn it, can we have these people look for my stolen car instead? Or even just my PSP, maybe?? It's probably technically still Sony's under certain readings of various EULAs... come on, guys, just add my grievance to your todo-list; I know there's nothing on it...)

Re:I guess it comes down to

[tehcyder]

That last point alone is a reason to "illegally" fill my own "Alco2Jet® Carbonator" with cheap and illegal CO2. And when the secret police shows up at my door step I will tell them to piss off, fry on the chair for that and thus die a martyr for the right to own.

I really hope you're joking, as a wish to martyr yourself for the right to fill a soda maker might be considered a trifle, um, excessive by most people.

Re:I guess it comes down to

[elrous0]

You should inform the U.S. Customs service of their mistake.

Re:I guess it comes down to

[Sparr0]

What mistake? [Some Big Company] paid them for the raids, so they did them. No mistake. Never attribute to incompetence what can be explained by corruption.

Re:I guess it comes down to

[SpaghettiPattern]

That last point alone is a reason to "illegally" fill my own "Alco2Jet® Carbonator" with cheap and illegal CO2. And when the secret police shows up at my door step I will tell them to piss off, fry on the chair for that and thus die a martyr for the right to own.

I really hope you're joking, as a wish to martyr yourself for the right to fill a soda maker might be considered a trifle, um, excessive by most people.

My friend, a job well done is a job well done the first time. Idle hands are the devil's tools. I take it you use emacs.

Do I own it or not

[backslashdot]

If it's illegal to unlock the phone, that means I dont own it. Am I leasing it? How the hell else is it possible for me to outright purcahse something and not be able to do whetever the hell i want with it (besides to commit something that is already a crime obviously -like throwing it at someone).

If I buy a t-shirt can they make it illegal for me to use it as a rag?

Is it illegal to color the iphone with a marker? Is it illegal to open up the iphone and melt it down? Is it illegal to take the battery out of the iphone and use the large battery in a hobby RC car project? If it is, it damn well shouldn't be.

Re:Do I own it or not

[MarkovianChained]

"Is it illegal to open up the iphone and melt it down?" Is it illegal to blend it? :)

Re:Do I own it or not

[Anonymous Coward]

You own the phone, but only have a license for the software it contains. Duh.

Re:Do I own it or not

[Techogeek]

Ooohh, you beat me *By That Much* to the Blend It video!

Re:Do I own it or not

[MarkovianChained]

Then it's your fault I got modded 20% redundant :P

Re:Do I own it or not

[MikeBabcock]

Its strange really, if you're an american its illegal to defeat copy protection software or hardware on your own devices under the DMCA, so congress apparently believes it has the right to restrict usage of your own private property already.

Re:Do I own it or not

[xtal]

and most importantly, does it blend?

Re:Do I own it or not

[mr_matticus]

It's not exclusively your own private property. Property at its simplest is simply the legal right to exclude others. A sale and corresponding purchase doesn't make you the owner or holder of all property rights, and in fact it's a specific and narrow set of property rights. The rightsholder (i.e. the author or his agent) reserves all rights not conveyed.

So the question of who "owns" a given product is not as simple as it first would intuitively seem. It's pretty rare that ANY sale of ANY property is done in toto. More to the point, though, it's not your private property that is being restricted; instead the property of others is being protected by law. It's fair to say that your scope of use is limited by law, but that is an inevitable consequence of your not owning all the rights.

If you can demonstrate a situation in which you have lost a property right, it would be easier to see your comment as valid. Slashdot groupthink aside, what is the legal theory of ownership where you've been deprived of anything? How did you achieve that property right in the first place?

Re:Do I own it or not

[trawg]

If it's illegal to unlock the phone, that means I dont own it. Am I leasing it? How the hell else is it possible for me to outright purcahse something and not be able to do whetever the hell i want with it (besides to commit something that is already a crime obviously -like throwing it at someone). This appears to be the critical distinction between a lot of things at the moment, where the words "as-a-service" can be appended on the end of the product and then you have what the seller of the product REALLY means.

There's too much stuff you can buy now that you don't own. CDs, DVDs, software, mobile phones - I don't want to have to read the cover of a DVD to find out whether or not I have the right to watch this with a group of no more than 20 people, or lend it to no more than 4 friends a month, or whatever. Do I own the fucking thing or not? If I do, then what I do with it should be pretty much up to me.

Obviously there's some "within reason" component of this - eg, I should be able to make a complete copy of a DVD, format shift it, and do whatever I want with the contents - but I shouldn't then be able to give that copy to a million people.

Re:Do I own it or not

[JesseMcDonald]

It's not exclusively your own private property.

Regardless of the merit--or, as it more likely, lack thereof--of copyrights and other so-called "intellectual property", the areas affected by the DMCA and not pre-DMCA copyright laws certainly do affect items which are exclusively one's own property. That was the whole purpose of the Act, to curtail individuals' legal ability to communicate and/or use their own property in ways that may threaten technological measures intended to inhibit copyright infringement.

Re:Do I own it or not

[mr_matticus]

That is patently untrue. The Act ensures that the property rights of the owners are preserved. What property right have you lost? Where did you gain such a property right? You have failed to address the issue. The DMCA protects property rights. What in it was a legal property right of the consumer prior to the Act? It's not a good act, and it proscribes plausible enforceability where it has not been customary and in that way is problematic, but it does not change property right assignment.

Further, I'm not sure when "so-called 'intellectual property'" became a thing. It's certainly not within the legal community. Do you say "so-called property"? Property has never been legally confined to tangible goods. Property in law is the legal right to exclusion--it is not coreferential to any item. Just as a license is not the same as a license agreement, property is not the same as the goods or chattel.

Re:Do I own it or not

[MikeBabcock]

I own my DVD player, do I not? If I want to fast forward through the commercials on a DVD with MY DVD player, and I change it to allow me to do so, that's my right, is it not? Its MY DVD PLAYER. The content on the DVD may be Copyright someone else, but the DMCA specifies what I can and cannot do with the player, not the disc.

Re:Do I own it or not

[mr_matticus]

Again, there is no single ownership condition in the law for anything more complex than a piece of fruit (and even there, there can be competing ownership rights). You don't suddenly own everything that touches on or is contained within a product.

So, you own what about the DVD player? Be specific. Do you own the software that runs the player? No. Do you own any service or trade marks associated with the player? No. Do you own rights to the design of the player? No. Are you a party to binding licenses that may be in place regarding components? Of course not. The DMCA prevents your access to the code, which you do not own and have not been granted a license to. It protects the rights of the owner of that property right, and that person is not you (it's a separate issue whether the owner should actually be so picky about enforcing those rights, but there's no question of entitlement).

If you want to write your own code to the hardware that ignores whatever bullshit anti-skip flag the industry has created, have at it. You don't have any rights to their software, though. Buying the player doesn't transfer that right.

The DMCA doesn't specify what you can do with anything that belongs to you. You can still destroy it, modify the hardware, replace the software, sell it, lend it, paint it, take it out for lobster, or name it Susan.

Re:Do I own it or not

[JesseMcDonald]

The DMCA prevents your access to the code

No, regular copyright law legally prevents you from distributing original or modified copies of the code. The DMCA legally prevents you from distributing or describing any of your own tools or methods which have the primary purpose of circumventing technological measures intended to prevent you from accessing the code. Neither copyright law nor the DMCA makes it illegal to access the code. You can still legally do so -- including the creating of any necessary tools -- provided you manage it without external assistance and never distribute those tools or describe how you accessed the code to others. The DMCA's primary influence is thus to curtail people's ability to communicate their own discoveries and to distribute their own property. Discouraging legal and illegal access to both copyrighted and (eventually) public domain works is merely a side effect.

Re:Do I own it or not

[mr_matticus]

That is an entirely correct elucidation up until "The DMCA's primary influence is thus to curtail people's ability to communicate their own discoveries and to distribute their own property."

Indeed, if you created something completely on your own for the product without tampering with the property of others, you would not be barred from distributing it. However, copyright law bars you from the distribution of derivative works. It also bars you from commercial access to property which you are not given property rights--i.e. the code protected by a a technological measure as defined.

If it is your own discovery and your own property, it does not infringe. You are not permitted to profit from or interfere with the owner's right to profit from (which is not strictly limited to money--giving it away does not get you off the hook) their work to which you have no property rights except use. If you need to access the code to figure something out for your personal purposes, you can do that. You can't share that with others, and you have never been able to. The result would be a civil action. The DMCA simply changes the consequences.

Re:Do I own it or not

[JesseMcDonald]

It also bars you from commercial access to property which you are not given property rights...

Could you elaborate on this? I did some searching and was unable to locate any other uses of the term "commercial access" in a related context. Perhaps you could cite the relevant portion of the copyright laws? Also, are there any differences between your use of "commercial access" and your former use of the unqualified term "access"?

Anyway, if the copyright laws are so strict as you claim that merely makes them even more unjust than I had thought. As you are probably already aware I'm strictly anti-"IP" on the basis of natural law, and even if that were not so I would still assert that copyright was intended as a priviledge and not a property right from a Constitutional point-of-view. If the authors had intended copyrights and patents to be property they would've directed Congress to protect that pre-existing right, or more likely omitted it entirely as they did with real property rights, not given them the option of granting exclusivity at their leisure. Congress created copyrights and patents and can repeal them at will, but eliminating real property rights would require at least a Constitutional amendment. It is interesting though, at times, to debate the finer points of legalism, not least because it's one of the more contorted and inconsistent areas of the law.

Re:Do I own it or not

[mr_matticus]

Perhaps you could cite the relevant portion of the copyright laws? You're not following case law from the right perspective. Copyright law is a limitation on the property rights of the owner (in the traditional sense, the author/artist, but in the modern sense more typically an agent thereof). It does not specify the only rights of the owner any more than other property laws specify your only rights.

The owner retains all ownership rights not conveyed willingly (or by force of law). This is inherent and inseparable to the concept of ownership in the law. What you must demonstrate, as the consumer, is where you achieved such a right which is presumed to be held by the creator, as with all things. Any first year law textbook would set you up with the appropriate legal theory.

anti-"IP" on the basis of natural law Property, regardless of kind, is not based in natural law. No property right in any fully-developed legal system is natural. What you are mistakenly following is the idea of ancient Roman law (whose naturalistic foundation was on possession of things not owned). I'd be happy to discuss this framework in greater depth. The other 'natural law' source is Thomas Aquinas, who said that he who labours over a thing has a natural right to that thing. This does not apply in the case of purchases, but only to real property (which is that where restitution can be achieved) and to products of the person. Real property != personal property != intellectual property. You're against the term because you've been well-indoctrinated on the "IP is not property" bandwagon. This exists only outside the legal community. What you should be saying is that "IP is not chattel" and that's true but of course irrelevant. Property is the right to exclude. Tangibility is not a requisite and has never been one.

copyright was intended as a priviledge and not a property right from a Constitutional point-of-view. Again, you're on the wrong side of the coin. Copyright was specifically mentioned by the Framers precisely because they wanted to protect the rights of their class. See Beard. Copyright is and always has been a property right since the days of the letters patent five centuries ago, nearly as old as legal property rights themselves. Philosophy aside, all surviving Western legal systems are post-Renaissance in construction.

Congress created copyrights and patents and can repeal them at will, but eliminating real property rights would require at least a Constitutional amendment. Congress did not create copyrights. They did not create patents. They certainly cannot repeal them at will any more than they can take your real property (though real property has always been distinguished as a special case). Real property != personal property != chattel. This is something you're fundamentally not getting because it's not discussed often. People outside the law think they know and people within the law actually do know, so the lines of communication are narrow. Most lawyers don't even fully enter the field, so I certainly don't mean this as a slight to you. I certainly wouldn't be able to talk about the ins and outs of family law, for example.

Also, are there any differences between your use of "commercial access" and your former use of the unqualified term "access" The only potential difference would be if you wrongfully interpreted the first use of "access" to be a universal. I can't view the context from the reply-page, but it falls back on the owner of the code not giving you any rights to the code with your purchase. You have a license to use of the output of the code, but no license to use the code itself, and certainly no ownership rights of any kind to the code, which would be required to support your conclusion.

Re:Do I own it or not

[MikeBabcock]

The DMCA doesn't specify what you can do with anything that belongs to you. You can still destroy it, modify the hardware, replace the software, sell it, lend it, paint it, take it out for lobster, or name it Susan

that's where you're wrong, sorry. Look at your previous comment and you'll understand:

If you want to write your own code to the hardware that ignores whatever bullshit anti-skip flag the industry has created, have at it. You don't have any rights to their software, though. Buying the player doesn't transfer that right.

Actually no, the DMCA prevents me from writing ANY software that could bypass the security systems on DVDs, it doesn't even begin to deal with touching the existing code or modifying someone else's systems. The DMCA makes it illegal to write my own clean-room software with my own clean-room hardware that would read a DVD disc. If I could assemble a PC from parts I engineer myself and install a self-manufactured disc reader in it that could read the tracks off a DVD movie disc, it would STILL be illegal for me to read the data by interpreting my way through the CSS encryption on said disc like MPlayer, VLC and Xine do every time I use them to watch a DVD.

That is, it WOULD be illegal if I were stuck in the USA where the DMCA applies. I happen to be happily Canadian where we have no such draconian corporate protectionist policies.

Simple Echnomics...

[jellomizer]

It is simple economics. The full-price of the iPhone (The physical cost of the phone+the hidden cost of being stuck to AT&T, in terms of rates, service availability, contracts...) is higher then the economical efficiency point. So what happens is black market activities. Hacking the phone to work on whatever carrier they want, so they get a better value from the phone. Now is it legal, I would think so yes Apple and AT&T are loosing money from the deal but that is the cost of doing business realizing that people are not going to play by your rules all the time.

Re:Simple Echnomics...

[cowscows]

I think it's less about economics and more about technically inclined people enjoying one of their hobbies, messing around with technology. There's just a lot more news bits about this because of the hype that Apple and the iPhone have been through.

Just about every mobile phone ever made has probably had at least a few geeks pull it apart to tinker on the insides, you just didn't hear about it unless you went looking for the information. But in the case of the iPhone, Apple (and others) have already done the advertising for the iphone hacks, it tagged along with the advertising for the iphone itself.

While I have no doubt that you can find anecdotal evidence of people who would not have purchased an iPhone under AT&T now considering one, I would be very surprised if those people constitute a number that would make up a noticeable percentage of the iPhones out on the street.

Re:Simple Echnomics...

[king-manic]

Now is it legal, I would think so yes Apple and AT&T are loosing money from the deal but that is the cost of doing business realizing that people are not going to play by your rules all the time.

If you bought it without a 3yr AT&T deal then At&T lost a potential customer but Apple lost nothing. If you bought it with a 3yr deal then AT&T and apple have lost nothing. AT&T may attempt to extort Apple to lock them down better or differently or per sue unlockers individually but Apple is in a win - win situation.

Re:Simple Echnomics...

[shawnap]

The full-price of the iPhone (The physical cost of the phone+the hidden cost of being stuck to AT&T, in terms of rates, service availability, contracts...) is higher then the economical efficiency point.

I think you mean the point of price equilibrium.
AT&T certainly has limited resources (of bandwidth or capacity; I'm in no way familiar with this industry, so consider these simplifying assumptions) for providing accounts to cell phone owners. Since AT&T must provide an activated account for each iphone purchased, you could consider the number of iphones sold, 270k (from an earlier post; may be incorrect), to be the minimum number of activated accounts "produced" by AT&T. If only 140k (from the same earlier post) are "purchased", the remaining 130k can be considered to be a surplus of activated accounts. A surplus would indicate that the price that the activated account is offered at exceeds its equilibrium price.

I would venture to predict the following:
The company (I don't remember their name) that will charge for unlocking the iphone, will not charge more than the difference in price between AT&T's service and the service of the next lower priced, equally featured (minutes, coverage, customer service, etc...), competitor's service; if the company is to unlock 130k iphones.
Or, if AT&T's price is the same as their competitors:
The price that the company charges to unlock the iphone will characterize the value of the difference in the features between AT&T's service and its equally priced competitor, again, if the company is to unlock 130k iphones.

Looking forward to an easy unlocker

[Ritz_Just_Ritz]

I was going to buy an iPhone so I'd be able to eliminate one of the devices I tote around with me (an ipod). Unfortunately, I do a lot of traveling to China and not having the ability to pop in a local SIMcard was a deal breaker for me. Paying ATT's outrageous international roaming charges wasn't an option. So, if the unlocker becomes available, I'll purchase one of these phones. If not, I'll just wait for one of the Chinese knockoffs to appear at my local shopping mall in Beijing. I'm sure they're already available, but I haven't gotten around to looking for one yet.

Cheers,

Re:Looking forward to an easy unlocker

[mzs]

They are already available:

http://gizmodo.com/gadgets/like-the-iphone/meizu-m inione-specs-revealed-its-actually-got-some-juice- 261388.php

Re:Looking forward to an easy unlocker

[Dogtanian]

If not, I'll just wait for one of the Chinese knockoffs to appear at my local shopping mall in Beijing. What constitutes a "proper" knock-off?

They've done blatant ripoffs of the Nintendo DS and the PSP. I'd assume you're looking for a higher quality "clone" than those things :-)

Re:Looking forward to an easy unlocker

[Anonymous Coward]

That is, at most, a one off prototype. At worst it is a guess at what kind of specs an iPhone clone might have in theory if someone might be able to make one, alongside an artists rendition of such a thing.

Show me where I can actually buy one.

Re:Looking forward to an easy unlocker

[Anonymous Coward]

Why bother with the iPhone? It is just hype. As a cell phone it is old tech and not particularly feature rich. Also Apple is violating the GSM standard by completely locking the phone. In my opinion they are committing fraud by selling the iPhone a GSM phone, then not allowing it to be unlocked. There are many better cell phones out there with better features. Take a look at the Nokia N series such as the N95 - a far superior device.

Warranty

[sgauss]

Since unlocking involves some soldering and such, at least according to the account I've heard, clearly it violates the warranty. And don't forget, the iPhone has a soldered in battery; you're supposed to send the phone in after a year to take care of the battery. So, if it breaks or the battery dies, your unlocked iPhone is a very expensive paper-weight.

Re:Warranty

[pscottdv]

I would like to meet these "solder savants" who are able to make delicate connections to traces on a circuit board but are somehow unable to solder in a battery.

Re:Warranty

[Anonymous Coward]

You are confused. There are at least 4 alternative methods to unlock the jesus-phone. The one getting all the press in the US is the kid with his soldering iron. The one getting the legal news is the Irish company that was about to start selling a software only solution.

Re:Warranty

[Anonymous Coward]

comon, if you can afford a $600 phone, you can afford one to go on you after a year.

Re:Warranty

[frdmfghtr]

Skill with a soldering iron is not required.

Re:Warranty

[Choad Namath]

The hardware unlocking doesn't even require a soldering iron. It could be done a lot more easily with something like this. Much lower probability of bricking your $600 phone, and much less effort required as well.

Re:Warranty

[babyrat]

I'm guessing if you've soldered the phone to unlock it, soldering to change the battery won't be a big deal to you...

Re:Warranty

[petermgreen]

Last I checked SMT test kit was damn expensive.

however a bigger problem is that afaict the chip in question had it's pins on the bottom so they had to connect to a track. Clipping to a tiny pin is possible with the right clips but I don't see how clipping to a track is.

Apple + AT&T?

[Nastard]

AT&T, sure, but why the hell would Apple want to stop people from unlocking these?

Re:Apple + AT&T?

[Anonymous Coward]

knowing lawyers there's a clause that covers denies, for a time, the ability for Apple to sell, license, or otherwise profit by using another network.

Damn. I wish I was a lawyer.

Re:Apple + AT&T?

[Selfbain]

They get royalties from AT&T.

Re:Apple + AT&T?

[Mr. Underbridge]

knowing lawyers there's a clause that covers denies, for a time, the ability for Apple to sell, license, or otherwise profit by using another network.

Yeah...but what if they 'accidentally' make the thing easy to hack, which results in a quadupling of their sales? ;)

Re:Apple + AT&T?

[PitaBred]

Apple is getting a lot of money from AT&T for them to be the sole service provider? Apple at least has to make a show of not liking it. It'd be like you finding out your "exclusive" girlfriend was sleeping with other people... wait, this is slashdot. Bad analogy, sorry :)

Re:Apple + AT&T?

[Nullav]

I wouldn't call going at the board with a soldering iron an 'easy hack'. It takes a lot to just go poking around on a $600 phone like that.

Re:Do I own it or not - analogy

[backslashdot]

Can I sell you shirt that let's you get into a club, and then make legally prevent you from walking into other clubs with that same shirt? Furthermore, can I legally prevent you from coloring stuff on the phone (the club owner can prevent u coming in with a funny colored shirt though)?

What was one of Apple's old ad campaigns?

[r_jensen11]

"Think Different," wasn't it?

Re:What was one of Apple's old ad campaigns?

[ConceptJunkie]

Actually, it's "Think Slightly Differently From The Market Leader, But All In Lockstep With Each Other".

For all of Apples faux non-conformity, they are really not very different from companies like Microsoft, except perhaps the fact that they actually make stuff people want. At least Apple continues to earn its single-digit market-share. Microsoft hasn't earned anything in about a decade.

On the other hand, they can litigate and stomp all over users with the best of them.

Re:What was one of Apple's old ad campaigns?

[imroy]

Microsoft hasn't earned anything in about a decade.

Oh, come on. Toolbars have got to be worth something.

Re:What was one of Apple's old ad campaigns?

[ConceptJunkie]

Perhaps, but toolbars are quite a bit older than 10 years.

Tabbed dialogs are worth something too, probably something medieval and grisly.

I spent several hours on Saturday helping a blind fellow become more familiar with Windows Explorer and a few other apps and tabbed dialogs are kinda hairy in that context. In fact, from a UI-design point of view, they are hairy, period. My buddy uses the JAWS system on Windows XP and he's quite proficient, but there are tons of shortcuts and minutiae that he is still learning. And, no, JAWS doesn't support Vista, which is good because I recommended he stay from Vista anyway.

Just... don't... mention... Flash...

Re:What was one of Apple's old ad campaigns?

[tehcyder]

For all of Apples faux non-conformity, they are really not very different from companies like Microsoft, except perhaps the fact that they actually make stuff people want. At least Apple continues to earn its single-digit market-share. Microsoft hasn't earned anything in about a decade.

I think you're confusing "earn" in the moral sense, with actual "earnings" in the world of business. If Microsoft has x% market share, that is the case and it doesn't matter whether or not you or I think their products are crap or not.

If Microsoft really didn't make stuff that people wanted, they would go out of business.

I don't even have to RTFA

[s31523]

The answer is yes. If the answer is no, see the first answer. Seriously, does anyone really think Apple and AT&T are gonna be like, "It's cool, go ahead and resell your hacked iPhone." They will find some way to shut it down, even if it means adding a hardware change to the iPhone.

Re:I don't even have to RTFA

[arodland]

... so they're going to send ninjas with screwdrivers into the streets to steal people's iPhones, make hardware modifications, and then quietly return them?

Re:I don't even have to RTFA

[Alsee]

Until I clicked the "Parent" link to read the post you replied to, I thought you were talking about good fairy Ninjas unlocking phones and returning them, not evil demon Ninjas sabotaging phones and returning them.

Why would an evil demon Ninja give it back anyway? That's just silly! An evil demon Ninja just steal the phone, sabotage it, and put it back on the store shelves for you to buy again. And they wouldn't just sell you any old stolen phone... they'd use their evil demon Ninja powers to slip you back the exact same one you had before... it's an evil demon Ninja humor thing. They're kinda OCD about that.

-

Re:I don't even have to RTFA

[arodland]

because they're not evil demon ninjas, they're Apple ninjas, which is subtly different. Besides
1) they have some honor -- they were hired to implement the Secret Hardware Changes, not steal phones.
2) Locking your phone and returning it undetected requires skill, and everyone knows that if a ninja has one weakness it's his desire to prove how skilled he is.
3) If the job is done properly, you'll have no clue what happened to your phone besides weird internet rumors... thus assuring the safety of the Apple ninja.

Hacking iPhone vs Hacking XBox

[Applekid]

So the law may allow hackers to unlock iPhones they purchased and use them anywhere in the world. Wow, cool, there are laws that protect the consumer after all!

Hackers also unlock video game consoles with mod chips to play backups of the games they purchased* and play games from anywhere in the world, yet they get raided by the FBI and their international equivalents.

I guess TFS was right to say "for once." Because evidently one law is all we get to protect ourselves from companies happily selling us things that we can't use the way we see fit.

* if you steal, you're a thief and that's another completely different crime, btw.

Here's an interesting thought....

[Spy der Mann]

Oh look, someone has dropped his iPhone in this box! And they left a note with a name and phone number!

(Some time later)...

"Do you have the info?"
"The info is right here in this envelope, it will cost you $150."

On the envelope:

(There's a key for a locker, and a paper.

On the paper:

"Your unlocked iPhone is in locker #4335 on building XYZ, the combination for the lock is 45-34-27-2."

(Later, on the building:

"Hey, look, the iPhone i had accidentally lost! How kind of them!"

(Is this actually legal, or is there a law against it?)

Re:Here's an interesting thought....

[Longtime_Lurker_Aces]

Probably illegal but IANAL.

You can't sell a (tax-free) $3,000 banana that comes with a "free" plasma tv to avoid paying taxes on the tv sale, I assume similar rules would apply here as you're just wink-wink nudge-nudging to get around what is really a payment for the service.

Matter of owernership

[kdougherty]

Logically speaking... wouldn't this just be similar to Microsoft, for example, building a computer and saying you can only use Windows Vista on this machine?

If I purchase a piece of equipment, it becomes mine. If I were to throw my iPhone in the trash, would anyone care? No. If I were to modify my purchased piece of equipment would anyone care? Apparently so... Just as when I purchase a computer I can load any operating system and use any internet service I choose, the same should go for an iPhone, which is another piece of equipment that I can purchase. If one were to hack to the phone, I can see where that would void any warranty, however, how can someone distinguish with laws what you can and cannot do with something you purchased and own? Similar to hacking an Xbox to run emulated software, I paid for it. I can hack it, or I can set it on fire, either way it's mine and I can do what I want with it.

Re:Matter of owernership

[Boomer_Zz]

it becomes mine "Well it becomes ours." "How is that not stealing?" A great quote.

Unlocking is legal

[MortenMW]

In Norway (and, I belive all of Europe) unlocking mobile phones is both legal and common. I have done it once on at Nokia to get an almost free phone from one company and then use it in another companies network. Since you own the actual hardware, I don't see why you should not be able to do what you want with it.....

the question really is

[botkiller]

The question really is not can they, it's _should_ they? They're liable to alienate a lot of potential customers if they start cracking down on everyone. I understand that it's a losing money situation, but they might stand to lose a lot more if they start crying foul left and right about this. Either way, it seems like it'll be hard for someone to immediately get T-mobile service on their hacked iPhone, but I could be wrong - I'm looking forward to the first story of someone who goes into a T-mobile store or thereabouts and requests service for their unlocked iPhone.

Re:the question really is

[Rexdude]

You mean you have to show them the phone you plan to use with their network? O__O!
In India, you can buy a prepaid SIM card from literally anywhere. Small streetside kiosks stocking newspapers and cigarettes also have these. For about 200 to 300 Rs. (40 Rs. to the dollar) as well as some proof of ID, you can purchase a SIM card. Whether you get the shopkeeper to put it in the phone for you or do it yourself is upto you.

People who come to visit India from overseas love this. You needn't pay exorbitant roaming charges to your operator back home; just come here, buy a cheap basic phone for $50 (if you don't have a GSM phone already), get a prepaid SIM card as above and you can have a local number for the duration of your stay in India.Call charges are extremely competitive- as low as 2.5 cents a minute for local calls (incoming calls are free everywhere except when roaming), and around 25 cents/minute for international calls to the US/UK.

Re:the question really is

[Bikini Kill]

Either way, it seems like it'll be hard for someone to immediately get T-mobile service on their hacked iPhone, but I could be wrong - I'm looking forward to the first story of someone who goes into a T-mobile store or thereabouts and requests service for their unlocked iPhone. If that person is already a T-Mobile customer, there would be no need to request service at all - just swap SIMs.

As T-Mo customer, I can tell you from firsthand experience that they really don't care what phone you use (with the obvious caveat that if they didn't sell it, they won't support it). I'm kind of a cell phone geek, and I tend to buy nonlocked, nonbranded Euro phones that aren't available here through any carrier. I switched to T-Mo from Cingular a couple years back when Cingular bought out AT&T and converted everything around here from 1900 MHz to 850 MHz. This change made my tri-band 900/1800/1900 MHz Nokia 9500 Communicator about as useful as a brick, which it already resembled in other ways. When I went in to the local T-mobile store, I showed them the phone and told them I wanted to verify that it would work as expected on their network before even bothering to talk about plans. The SA removed the SIM from her phone, put it in mine, and everything was golden so we hashed out the plan details. It seemed to me that having a non-T-Mobile phone was actually advantageous: if you buy one of their phones, they only allow you to choose from the certain subset of their data plans that they have deemed appropriate for your phone model. Since my phone wasn't pigeonholed, they let me make my choice from the whole list.

If you're asking whether T-Mobile will give a new customer just a SIM (without a contract), as opposed to a SIM + phone (with contract), I really don't know because I've never tried it. I kind of doubt it though; US phone providers are really locked into the idea of "contracts". If you sign a contract, you can just choose one of their free phones and have a backup ready if you ever need one. After you've been a customer for a short time (90 days IIRC), they'll even give you the unlock code for the phone that you got from them so that you can use it on someone else's network.

Doctrine of First Sale-Nobody Knows The Rules

[Nom du Keyboard]

I would say that under Doctrine of First Sale, you can do what you want with it once you own it.

However, manufacturers have managed to prevent you from modding your game console after you own it, or at least prevent other people from selling you mod chips and modding services, so now it's murky.

Wouldn't Ford love to only have you put Genuine Ford Advantage replacement parts in your car? They can't. Nor can they force you to only buy Ford approved gasoline from licensed dealers.

Yet Apple can't prevent you from putting non-iTMS purchased music into your iPod -- although that's probably because you'd never have bought the iPod if you couldn't rip your own albums and play them in it.

So what can, and cannot, Apple and AT&T do here? Besides scaring off potential unlockers, whatever the courts are willing to allow them to get away with. Clearly these days, there is no bright shining line of what's allowed, and what isn't.

Loan your new CD to your friend to listen to and the RIAA probably won't come knocking. Let him get the tracks through KaZaA and you may have an ugly time of it. Nobody knows the real rules any longer!

Re:Doctrine of First Sale-Nobody Knows The Rules

[bakamaki]

I'm not really too sure about this "prevent other people from selling you mod chips and modding services", that seems to legal and prevalent.

Re:Doctrine of First Sale-Nobody Knows The Rules

[discord5]

Genuine Ford Advantage

Dear driver, you might be using a counterfeit engine. Contact Ford immediately to verify that your engine is indeed a real one, and not some piece of cardboard with "VROOM" written on it. Keep your credit card handy. You will have to wait at least 5 seconds every time you want to start your car, and every now and then your windshield wipers will pop up into view to remind you that your honestly purchased car may not contain a true Ford engine.

Re:Doctrine of First Sale-Nobody Knows The Rules

[radish]

I would say that under Doctrine of First Sale, you can do what you want with it once you own it.

Indeed you can, in general. But it's also important to remember what you own and what you do not. In the case of the iPhone you own the device, but not the software it contains. You can do what you want with the phone, you can't do what you want with the software.

However, manufacturers have managed to prevent you from modding your game console after you own it, or at least prevent other people from selling you mod chips and modding services, so now it's murky.

Not at all. The DMCA makes modchips illegal because they are designed to disable copy protection mechanisms built into the console. You can modify your console all you want (paint it pink, add a window, hardwire the memory card) - but you can't legally own a chip designed as a circumvention device - regardless of whether you actually install it in a console or not. So again, the chips are illegal, the act of physically modifying your console is not.

Wouldn't Ford love to only have you put Genuine Ford Advantage replacement parts in your car? They can't. Nor can they force you to only buy Ford approved gasoline from licensed dealers.

Indeed they cannot. Likewise Nintendo cannot control who you buy electricity from and Microsoft can't stop me plugging an Apple product into my Xbox 360. They can refuse to honour the warranty if I tinker and break something, but then so can Ford.

Loan your new CD to your friend to listen to and the RIAA probably won't come knocking. Let him get the tracks through KaZaA and you may have an ugly time of it.

Loaning a CD to someone to listen to is entirely legal, as is lending them a book to read or a game to play. If they choose to make a copy of it they're breaking the law. If you knew they were going to copy it, you could be in trouble too. The fact is, of course, that it's unlikely anyone would know it even happened and hence you'd get away with it. Putting the ripped tracks online is like taking out a full page ad in the paper saying you're about to break the law - it doesn't make the crime any worse it just makes you easier to catch.

Nobody knows the real rules any longer!

Well, some people do :)

Re:Doctrine of First Sale-Nobody Knows The Rules

[Catbeller]

eBay will not list for sale a used Scientology E-meter. The Scienos claim "copyright" over the object. eBay knows that that is nonsense, but you see, it's about the terror of consequences. Laws exist, but then there's anti-law, the underworld of lawyers and harassment.

Isn't it a good thing for Apple?

[microbee]

Once iPhone is unlocked, there will be much more customers worldwide to buy it, not just AT&T.

TO boost the initial entrance into the market, Apple chose an exclusive carrier, but I don't think it's a long-term strategy. Isn't unlocked iPhone going to give Apple more revenue and market share? Of course right now it's bound by its contract with AT&T so it could not do so yet, but if someone else does it for Apple, why wouldn't Apple secretly love it?

And so does AT&T have the right to sue?

That's why we can't have nice thoughts.

[Anonymous Coward]

It's worse than that. Not only do we not have nice things. We don't even know what we're missing to begin with.

Think about it carefully. Imagine a world were the "gimme,gimme,gimme" mentality doesn't exist. Took a bit of work didn't it? Sacrificing future gain for instant-gratification almost makes one proud to be human.

Mod Chips

[thomas.galvin]

So why is this legal and mod chips illegal? What's so special about computer hardware when it's got an MS or Sony logo on it, as opposed to an Apple or AT&T logo?

Re:Mod Chips

[king-manic]

So why is this legal and mod chips illegal? What's so special about computer hardware when it's got an MS or Sony logo on it, as opposed to an Apple or AT&T logo?

Precedent. We know both situations are technologically the same but in court cases concerning these technologies haven't. Also the difference may be how vigorously they are defended. Apple makes money both ways but MS/Sony/Nintendo loses money if piracy is too easy. AT&T may lose potential revenue as well but since it's not their technology they likely have far less say in it except to pressure Appl for a hardware revision.

Re:Mod Chips

[radish]

Intent.

The purpose of a modchip is to disable or circumvent a copy protection mechanism built into the console. The DMCA makes anything designed to do this expressly illegal.

Unlocking a phone has nothing to do with circumventing copyright and hence an iPhone modchip (if such a thing existed) would be legal. However, a software based unlock is more interesting as the DMCA also generally forbids modification of binary software (e.g. reverse engineering) except in certain circumstances. Luckily I believe one of those allowed circumstances is unlocking a phone for the specific purpose of switching network.

Re:Mod Chips

[ross.w]

In Australia, mod chips are legal, but copyright infringement is not. It is OK to mod your console so it will run Linux for example, but it is not legal to pirate games.

Unlocking your phone so you can use it on another network is also perfectly legal. that's probably why the iPhone isn't available here yet.

Re:Mod Chips

[Alsee]

Unlocking a phone has nothing to do with circumventing copyright

The DMCA prohibits circumventing to get access to a copyrighted work. And "access" is legally undefined. It has been argued, and presumably will be argued, that running the software constitutes "access"ing it, and that in circumventing the protections and accessing that software via an unauthorized service provider, you are doing so "without the authority of the copyright holder".

Will the argument fly in court? I have no idea. As I said "access" is legally undefined, as is "authority of the copyright holder". Judges have generally been punting on the issue.

DMCA also generally forbids modification of binary software (e.g. reverse engineering) except in certain circumstances. Luckily I believe one of those allowed circumstances is unlocking a phone for the specific purpose of switching network.

Yep. However the way the law is written it only appears to decriminalize your personal act of doing so. Those exemptions do not appear to decriminalize any product, service, or technology that would enable or aid you to actually do so.

If you, alone in your bedroom, somehow manage to unlock your phone with no instructions, product, service, technology, or anything from anyone or anywhere, then that is protected by the exemption. I suggest sitting in the Lotus position with your eyes closed and hands resting gently on your iPhone and chanting "Ohmmmmmm Ohmmmmm Ohmmmmm" while concentrating real hard. May the Force be with you(*).

(*) Offer does not apply if "The Force" constitutes a product, service, or technology.

-

If it's legal

[JamesRose]

How long before I can walk into a T-Mobile shop, and buy an iPhone with a T-Mobile sim and only pay $10 more, and considerably less on the contract.

Re:If it's legal

[Anonymous Coward]

about 5 years . . .

just because it can be unlocked does not mean other carriers can sell it and activate it.
You still have to buy it from ATT or Apple. Then you may swap an already activated TMO SIM card.

If you're able to unlock it with a soldering iron

[Anonymous Coward]

Then replacing the battery is easy.

And you probably don't give a rat's ass about an otherwise useless "warranty" anyway.

Can AT&T prevent activation...

[Techogeek]

I don't think it is the question whether or not AT&T can stop hackers from unlocking their IPhones because once the IPhone is purchased, that should give them legal rights to do with it what they want. I think the question should be rather if AT&T can prevent activation of the IPhone on another carrier's service or not.

Why are Phones in US Locked Anyways?

[nku]

TFA says,

For one, a case could pave the way to making all wireless networks more open to unlocked phones. In the next five years, 10% to 15% of U.S. wireless users could move to unlocked phones, figures Andrei Jezierski, founder of venture consultancy i2 Partners in New York

Maybe I am too lazy to search this in the past forums, but does anyone know why wireless networks in US offer locked phones by default? I used to use my old Nokia 8210 back in India on both Hutch and Airtel networks just by replacing SIM.

Re:Why are Phones in US Locked Anyways?

[Techogeek]

Mostly because in the US, the Wireless providers want to prohibit (as best they can) the customer from moving to a different service. So in the long run, if they lock the phones, that forces the customer to have to cough up more money if they want to move to a different wireless provider.

Re:Why are Phones in US Locked Anyways?

[IBBoard]

Strangely it's normally the reverse in the UK. Pay as you go (PAYG) phones (the ones where you top them up with credit when you need it rather than getting a monthly bill) are normally locked to a single network. Contract phones are normally cheaper but unlocked, so you can use it with any network.

I guess the difference in the UK is that contract phones still have to have the contract paid on them, so you're making up the difference in cost through your monthly base charge, where as PAYG phones don't guarantee the network any money they they try to dissuade you with minor impediments like locking to a network (that can normally be removed in a minute or so by anyone with a data cable and the right program).

Re:Why are Phones in US Locked Anyways?

[BUL2294]

I love it when Europeans say, "no our phones are unlocked." Bullshit! There's a huge gray-market industry in Europe to unlock phones. My gf bought a cool Meteor Nokia phone in Ireland to get it unlocked to use on T-Mobile in the US. Bad idea... After the guy who sells phone accessories in the cart in the middle of the mall screwed up the unlock code 3x, the phone was dead. She then had to mail it to the UK to some guy who reflashes them. Vodafone-IRL phones are just as locked...

It's not true that vendor-branded phones sold in Europe are unlocked. Throw in a Orange, Vodafone, T-Mobile, AT&T, BT, Meteor, etc. SIM into a locked phone from a different vendor and see how far you get...

Re:Why are Phones in US Locked Anyways?

[IBBoard]

I've never personally owned a contract phone, but my dad has had one through the company for years. A couple of times we wanted to try something out on his phone using a different sim and it took my Orange sim in his O2 or T-Mobile phone without a problem. Call bullshit all you want, but that's my most direct experience and I know some friends had the same.

Yes, there's a grey market for unlocking phones (you can't go into a market without finding one, and I've seen several independent shops on the high street with signs in their windows), but this company contract phone wasn't one of them.

Re:Why are Phones in US Locked Anyways?

[geekoid]

Because of the way the industry started. The disadvantage of being z country that creates and drives new technology is that the '1st run' issue usually become a headache later.

Re:Why are Phones in US Locked Anyways?

[timthorn]

That's true - but there's a legal obligation on the telco to unlock phones on request, though they may charge an admin fee (with Orange it's £20). The iPhone must be unlocked on demand in the UK (and I believe the rest of Europe).

Re:Why are Phones in US Locked Anyways?

[dami99]

Generally when you buy a phone on a contract, the phone is subsidized by the phone company so you get it at a reasonable rate.

The "subsidy provider code" (lock code) is what blocks it from being setup on a different network.

This is the "official" reason AFAIK. Most of the other reasons people have mentioned likely apply to some degree as well.

Re:Why are Phones in US Locked Anyways?

[Builder]

That's not strictly speaking true...

Contract phones from O2 and Vodafone are unlocked and can be used on any network anywhere in the world. Contract phones from Orange and T-mobile are normally locked to that network.

I have a definite need for unlocked phones only as I spend a lot of time running around places like Niger, CAR, Togo, etc. and I need to be able to slot a local sim card into my handset for various testing work I am doing. This is why I stay with O2 and Vodafone :D

Re:Why are Phones in US Locked Anyways?

[petermgreen]

I love it when Europeans say, "no our phones are unlocked." Bullshit!
He didn't say that, he said that contract phones were generally supplied unlocked while pay as you go ones were normally locked. That has generally been my experiance too though I have seen exceptions both ways (both phones sold as pay as you go that weren't locked and phones sold on contract that were).

My gf bought a cool Meteor Nokia phone in Ireland to get it unlocked to use on T-Mobile in the US. Bad idea... After the guy who sells phone accessories in the cart in the middle of the mall screwed up the unlock code 3x, the phone was dead. She then had to mail it to the UK to some guy who reflashes them. Vodafone-IRL phones are just as locked...
I presume the phone your girlfriend bought in ireland was a pay as you go one and it's sad that she ran into a vendor who wasn't very competant but thats what you get for using shady market stalls. Out of interest how much did it cost her to post it to the UK and get it reflashed?

Unlocking is huge over here in the uk and not all the places that do it are short lived market stalls. There is a shop near me that does it which is in a very visible location and has been arround for years. They sell new and secondhand phones too. For new phones they sell contracts, pay as you go and sim free with no network lock. Secondhand phones they seem to always sell sim free and unlocked (the one I bought from them was orange branded but unlocked). While I don't know what method they use for sure I stronly suspect they have the flashing equipment at least as a backup method.

Re:Why are Phones in US Locked Anyways?

[IBBoard]

Not that anyone is likely to read back this far, but the BBC have a relevant updated.

Locked cellphones have become common in North America as carriers claim that they sell "subsidised" phones in return for an exclusive commitment and long-term contract from consumers.

This approach is standard in Europe and Asia, where consumers would not tolerate a market comprised solely of locked cellphones.

So, according to the BBC (who are generally more reliable than ITV or any other news service I can think of in the UK) then Europe does have unlocked phones where as the Americans are stuck with restricted freedoms of locked phones.

Warranty?

[s31523]

I am all for hacking the iPhone, but if the hackers sell these unlocked phones, are they going to give any sort of warranty on them? I mean, the idea of a kid with a soldering iron making and breaking circuit board connections sounds like the phone might break sometime in the near future. Then what?

considering...

[GregPK]

Considering the kind of money that apple profits from the Iphone I don't really see them losing much money either way. But long term reasons state that they do need to do everything they can do maintain maximum profit for this.

Re:Simple Echnomics... not

[Anonymous Coward]

I don't think it's about economics, but supply and demand. People want a supply of iPhones, but demand it work in their network of choice. There's no assurance that their network is costlier or cheaper than AT&T, but they don't want switch providers for the privilege of having an iPhone.

Copyright Violation != Theft

[Anonymous Coward]

I agree with you on the stealing, and on the implied copyright violation. Both are illegal, but please don't continue the myth that they are one and the same thing, as it actually _weakens_ the argument against copyright violation.

They are _not_ the same crime, anymore than murder and theft are the same thing. It sounds like you've been watching the outright lies they broadcast on the TV, eg. "Piracy is theft". It's just not that simple. Read Title 17.

practical non-issue

[bcrowell]

To me, this seems like an issue that could be an important legal precedent, but that, in practice, should be a non-issue for individual users. Realistically, why should Apple care, considering that this is unlikely ever to get popular? The percentage of people modding their iphones like this is likely to be about as big as the percentage of people buying a mac so they can run Yellow Dog Linux. To make that percentage even smaller, Apple can announce that they refuse to give you support if you modify the phone. I can't imagine that it would be in Apple's or AT&T's best financial interests to spend a lot of money hiring lawyers to sue people under a clearly bogus legal theory, when the number of users involved is going to be infinitesimally small.

There are broader issues that are really important, but they're issues like the fact that the DMCA is a bad law that should be fixed, by removing the anti-circumvention provisions. Another issue is that in the computer, communication, and network industries we have a lot of unhealthy monopolies (MS in operating systems, broadband in some areas), duopolies (broadband in my area), etc. Consumers are always going to get screwed by monopolies and duopolies, and the solution isn't to regulate industries that don't have competition, it's to get rid of the monopolies and duopolies.

Subscription fee

[Per Abrahamsen]

When you sell a mobile phone below cost, you are supposed to make up for the difference in the subscription fees. Which are mandatory to pay in the binding period even if you unlock the phone and use it on another net.

At least that is how it works with GSM phones in Denmark. You can unlock them and switch to another provider legally, but you have to continue to pay the subscription fee for the binding period. This is common, and accepted by all the service providers.

Also: The maximum binding period is six month, providers are obliged to tell the unlock key after that, and all advertisement must include the minimum total cost in the binding period (initial price plus subscription fee for six month) in order to make it easy to compare prices.

Good regulation does wonders to improve the efficiency of a market.

Re:Subscription fee

[king-manic]

When you sell a mobile phone below cost, you are supposed to make up for the difference in the subscription fees. Which are mandatory to pay in the binding period even if you unlock the phone and use it on another net.

The phones being unlocked were likely bought at full retail. Honestly even if Apple sold at the subsidized price they'd still likely make money. Apple generally sells high margin products. Do you really think an iPod costs $399 in raw materials and labor?

I doubt anybody bought the 3yr contract version to unlock unless they knew for certain an unlocked phone = subsidized phone cost + exit fee on AT&T contract + profit.

Re:Subscription fee

[jesco]

You're right. And because of the fact that you pay the subscription fees whether you use the phone or not, the phone doesn't even need to be locked. I can plug in any SIM card I want into my phone and use it, not the just the one from my original provider. (applies to me in germany, at least)

All parties got their money, both Apple and AT&T. And quite a lot of it.
So I think they are really overdoing this digital rights thing by additionally locking the iPhone to AT&T cards.

Re:Subscription fee

[the eric conspiracy]

The old methods of calculating margin really don't work when applied to a technology company because so much of the cost is R&D.

Competition Solves "Problems"

[BoRegardless]

Future new phones certainly have to compete with iPhone's good features, and one of the ways they can do that is to start selling all their new phones unlocked and advertise them as such.

Cell phone companies may not like it, but what it the fear? People pick a cell phone "provider" (I hate the word) because they get the coverage they need & quality of connections or they pick another one. It is always up to the "provider" to be able to compete, so they have to continually improve.

For the user who wants "commodity phones" then pick the all-in-one plan with a free phone from your favorite "provider".

For a user who owns a phone, he can just then do a prepaid plan if he wants to avoid a "provider 2 year plan".

What would happen if the home phone companies started signing every new customer up to a "2 year plan" with a steep bailout clause and penalty? Why should cell phone providers be any different than land lines in this day and age. Well it is obvious that the WDC lobbyists worked hard to get it the way it is now.

property and the information age

[drDugan]

property is a convention. we all agree there is some mapping between resources and people (entities) that "own" them. well, most of us agree, except the thieves. in the old way, resources were all physical things, mostly. people traded items for money, and the item went from one owner to another.

increasingly, many companies have found that the common understanding of property does not work very well any more. informaion is more easily copied than transferred - and the recipient has a lesser right usually to use the information purchased than the original owner. hence the world is fighting a lot about copyright.

now the convention of physical item property is getting re-evaluated, for 2 reasons: first, the rules are changing in the information world - so we re-look at the rules for everythign else. and, more importantly, the most interesting physical things are bundled with information to make them work. Since the rules are different in the two worlds - people are confused.

the long term end for humanity will be to scrap the idea of property as we have it now entirely. no one gets exclusive rights to anything. not having a governement own everything (socialism) - but the elimination of the idea of property altogether. by definition, there is enough, and people will be taught and required to conserve. everyone's resource usage will be tracked - and if they do not conserve, they will be ostracized by the all-knowing social nets that "out" them for their bad behavior.

Re:property and the information age

[Anonymous Coward]

Sounds like a socialist hell to me. Fuck you, my property is MINE.

Re:property and the information age

[Philotechnia]

At this risk of begging for a -1 Troll mod, I really, REALLY hope this doesn't happen. The rich and powerful enjoy their property, and if you think you're going to give that up because the "rabble" beneath them has de facto lost faith in the concept of property, you're sadly mistaken.

Rather, this sounds like an argument for pushing people into conformity, while they are robbed behind your backs. Convince people that property doesn't exist, and it becomes easy to take it away from them. While the masses will be content with a minimum level of existence - but don't you dare strive for more! - the few will still enjoy the excesses in life. The abolition of property will occur only at the level of appearance, but to sate the greed of those with power, will continue to exist behind the scenes. (Think Al Gore and his power-hungry estates...)

If society moves in the direction you sense, it will imply a step back towards the Dark Ages, and a return to a feudalistic society. Of course, if the great mass simply desires serfdom...

Socialism, FYI, is a poor, poor application of Marxism. My take on Marx is that he believes in and advances the idea that individuals to be the direct owners of their creative forces, i.e. labor. Marxism, in a sense, is a fundamental SUPPORTER of property rights - you own your work, and no one else can or should exploit that! Every management salary that gets paid is, in a sense, benefiting in part from the productive labor beneath them. To simplify, a worker may give $100,000 of annual value to a company, but they actually receive $50,000 in pay, while his manager gains some benefit, as does the owner/stockholders.

In order for such a structure to exist, it does become apparent that the idea of a company most be rethought, that private ownership is in some sense anathema to Marx, because the idea of an owner that takes no benefit for himself makes no sense. Ownership at the level of the worker would imply some sort of management by election, a sort of executiveless entity that makes decisions through the majority will of the collective. Again, though, in a sense this is the same spirit that gave birth to America, and this concept simply means the democratization of the corporate world. However, the concept of property remains intact in that people own their labor, and the results of that labor. In fact, the concept of property might be brought into further clarity and focus if thought of this way. The change is a move from the idea of property as the apprehension of an external physical object, to the idea of property as an externality with its source found within the forces of the productive individual. Property as external object would still exist, but would be intrinsically tied to the individual. I would argue this is as relevant to physical things as it is to information.

That's the problem with American consumerism, really. It's not that we consume too much. It's that we've created this schism between property and self, instead of having an integrated view where property extends from my personal productivity and is an extension of myself. But then, I come back full circle, because I think the richest and most successful do have this viewpoint. Information does pose a problem, in that information is incredibly difficult to exploit when information can be transfered as easily as it can today. But consider - I have a piece of information on nuclear engineering because I found it on Google OR I have a piece of information because I studied nuclear physics for many years, became intimately familiar with the rules and laws that govern the field, and understand that information in an almost epiphanal quasi-enlightenment. The value of information is determined by the holder. And THAT moves towards what is for some a very uncomfortable alliance between knowledge and a Marxist view of labor/property...

Re:property and the information age

[drDugan]

I'd be fascinated to chat/im with you on this.

The current state of affairs has as much or more wealth disparity (depending on how you measure it) as any time in human history. It's just that now the ones at the very top of the heap are legal entities (trusts, funds, companies) but the control of those very top entities is still only about 10K people of the 6B on the planet.

Your observations are correct - but to counter, no one is an island, especially the rich and powerful. Take away the people who wash the car, cook their food, guard their door - and what power would they have? What good is all their money when no one uses money any more? No, in a world without property - reputation is king and it leads to resources. Getting there would feel like a step backwards at first - many of the "rich and powerful" don't want to lose what they have. But really, there are lots more people in the other camp, and you just can't make enough guns and troops to suppress the whole population of the world.

email me: jmd21211@woodyland.org

This time, boo hackers!

[Anonymous Coward]

If Steve doesn't want you to unlock the phone, then, by God, don't unlock the phone!

Good, so I can delete the software

[backslashdot]

I am under no legal obligation to use the software, no did I sign any contract forcing me to (pre-activation). So I oughta be able to install my own on there. Furthermore it's possible to modify the hardware to skip over running the software, duh.

Re:Good, so I can delete the software

[SamP2]

Of course you can, but the problem is that that's not what happened.

If you only took the hardware, completely erased all the software (up to OS, bootloader, whatever), and then installed something else from scratch, that'd be fine (at least I think so).

But the guy who hacked it used the existing iPhone OS built in on the device in order to operate the phone. Even if all his modifications were hardware-based, he still uses the OS (which now gets signals from a separate piece of hardware) to make calls, use iPhone features, etc. And I'm pretty damn sure that getting a singal from anyone but AT&T (or, more generally, getting any signal to the OS other than those provided by Apple hardware) violates the software license agreement, so you infringe copyright.

Now, you may have a very good case for an ANTITRUST suit (hardware and software are different domains, so Apple shouldn't be allowed to force people to use one only if they use the other), but that's something that has to be decided in court, and you can't "preemptively" violate copyright just because you think the license agreement violates antitrust law. Besides, OSX being forced upon Macs was around for a while, and nobody could do anything about it.

Re:Good, so I can delete the software

[IthnkImParanoid]

violates the software license agreement, so you infringe copyright.

Game over, Phoenix Wright.

Can't Use DMCA...

[maz2331]

They certainly can't use the DMCA to block the unlocking. This is almost identical to the Lexmark International, Inc. v. Static Control Components, Inc. case a couple years ago. Basic upshot of that ruling is that DMCA doesn't cover hacking to unlock a device for interoperability and third-party components.

If they try to sue using DMCA, they will almost certainly lose.

Re:Can't Use DMCA...

[MacDork]

If they try to sue using DMCA, they will almost certainly lose.

Who says they have to sue? They could brick the phone remotely with the IMEI number. Of course, they'd have to figure out which phones were modded, but I'll bet that would be pretty easy to do with a firmware update via iTunes. It wouldn't surprise me a bit. They've already told developers to go to hell, do you think they'll be any less hostile to modders?

Re:Simple Echnomics... not

[jellomizer]

Umm.... Supply and Demand are the key elements in economics. The bulk of economic theory is Supply and Demand.

Where is the lega retaliation?

[prxp]

One thing TFA isn't accurate about is how ATT and Apple are using their legal powers to retaliate.
Actually I haven't seen any real stories where lwayers were used to intimidate unlockers. George Holtz (GeoHot) even said he wasn't contacted by neither ATT nor Apple.

For all I know, the only case that was mentioned in the media was the one with iphoneunlocking.com that allegedly received a 3am call from some Silicon Valley Law firm in behalf of ATT (A fact that was promptly denied by ATT). What I believe is that iphoneunlocking.com has no unlocking software whatsoever and pulled out that lame excuse to cover up their "free publicity" stunt. Has anyone heard of any real legal actions with regards to these cases from ATT or Apple?

Doesn't make sense

[Orig_Club_Soda]

Apple has already made their money selling the phones to the hacker.

Re:Why are Phones in US Locked Anyway?

[squiggleslash]

History and a lack of regulatory oversight.

It's actually worse than just that some phones are locked. You can, at least, buy your own unlocked phones and use them with the GSM operators here, both networks and MVNOs. However, more carriers are IS-95/CDMA2000 than GSM, and have a whole bunch of somewhat bizarre policies along the lines of "You can't activate your Sprint PCS phone with Virgin Mobile due to mutual agreements not to do this" (despite both using the same physical network.) So if you're unlucky enough to only have IS-95/CDMA2000 in your area, you're essentially stuck with having to buy and use different phones whenever you switch network.

Apple can't have it both ways

[linefeed0]

That's exactly the point. Apple, if they wanted to, could wait until the ink dries on your AT&T contract before they let you get your grubby little hands on an iPhone. But they don't; they want to sell the device as an upscale impulse buy. Walk into a store, walk out with a shiny little box, and worry about having to pick a plan and sign a contract later, even though that's the only way you can use the phone.

They can't have it both ways. Either the phone is yours to hack (under the DMCA exception for interoperability), or you don't have it at all until you've signed a contract, like most other subsidized phones on the market.

Apple is getting a slice of the monthly sub fees..

[Anonymous Coward]

from AT&T, that's part of the deal, it's something like 10-20% of the sub fees go to Apple from AT&T for each of the iPhone customers.

So if people are unlocking iPhones to use on other carriers, both AT&T and Apple are revenue, since the things are supposed to be activated with a 2 yr AT&T Contract.

the "complex" hardware unlock touted in media...

[Anonymous Coward]

...is actually just pulling one of the address lines high so reads are always from a writeable rather than read-only area. If it were true that this 17-year-old were a lone hacker, I'd certainly label him precocious (this is a compliment!), but he admits to having at least three other players, and the hardware technique itself is trivial to a seasoned EE.

What he has done immensely well is put various people's work together with their agreement, including some of his own, and explain the process, then give away the method as a vehicle to sell his skills. I congratulate his not trying to hoard the method as HK hackers have done (sorry, you weren't the first!), or the iphonesimfree site. He also has fine soldering skills.

Last weekend I managed to get full control of some other piece of ARM-based consumer electronics [which I own and was not connected to any third party service, thank you lawyers]: at some stage the zero page (interrupt vectors) and interrupt handlers were mapped to ROM, but the PMTs were in an unprotected page of RAM(!), so it was fundamentally a matter of remapping the zero page and changing the SWI vector to my own code, giving me Supervisor mode. This has almost whet my appetite for a real challenge, but Apple are insulting developers by denying official support via SDKs etc, so I can't bring myself to love the iPhone enough to try to give it freedom ;-).

Law, schmaw -- this time, the tech is your problem

[Sloppy]

This product is not "merely" a phone, and the success of conventional unlocking techniques can't be relied upon indefinitely. Just look at the multitude of copy-protection (i.e. anti-interoperability) techniques that various industries are legally allowed to implement (even legitimized by laws like DMCA) and you will get some whiff of the disgusting things that Apple could put into a software update.

Sure, workarounds for these things will happen, but it won't exactly be easy, and it'll keep the users who take advantage of them at a disadvantage for purposes of (legitimate) software maintenance.

There's considerable precedent for the law allowing phone owners to use their phones however they wish, so I don't think that is worth worrying about.

If you want to worry about phones, the real issue is that you don't know what they're doing. I think that phones are going to become THE poster-child for the risks of proprietary software, in a way that makes concerns about desktop operating systems, printer drivers, etc, seem trivial and superficial. The need for open and trustworthy phones is extreme, even if Joe Schmoe doesn't get it yet -- and the government is helping us quite a bit these days, in revealing that urgency.

BBC is usually wrong about US law

[Anonymous Coward]

The British BC is usually wrong about the US legal system and even more off about Constitutional matters.

Re:BBC is usually wrong about US law

[Anonymous Coward]

The British BC is usually wrong about the US legal system and even more off about Constitutional matters.

It's a bit unfair to blame it on them being Brits, though... the same criticism applies to most mainstream US media outlets, not to mention several recent Presidents.

Re:BBC is usually wrong about US law

[McFadden]

The British BC is usually wrong about the US legal system and even more off about Constitutional matters.

And your evidence is... Oh wait, you don't have any, because you just made that up.

IMO the legal right of Apple or AT&T to stop someone selling unlocking software will probably become a moot point, simply because if a company can do it, eventually some cracker somewhere will create a freely distributable version and release it onto p2p. Once that happens the only thing can Apple can do is update the firmware, which I would guess they have every right to do if they choose to.

In a nutshell, I think that allowing it to be unlocked would be beneficial to Apple's sales, but perhaps may cause (possible legal) problems in their relationship with AT&T.

Re:BBC is usually wrong about US law

[The Great Pretender]

"I think that allowing it to be unlocked would be beneficial to Apple's sales, but perhaps may cause (possible legal) problems in their relationship with AT&T". I agree that it would be beneficial to Apples sales, but it does all depend on how well AT&T has locked Apple into 'defending' the exclusivity, I don't think Apple really cares who sells the phone for them. I have to imagine that AT&T predicted hacker efforts and has Apple legally bound to 'do all in it's power' to foil the hackers. The question is how much 'power' does Apple want to claim to have in this situation. If I was Apple, I'd be "damn those guys are really good, we tried a couple of things, but I just don't see how to foil them!' and start producing more phones.

Re:BBC is usually wrong about US law

[mstone]

If the history of iTunes is any guide, Apple will continue to roll out new measures that are strong enough to keep unlocking a niche issue, but won't waste time, money, and consumer goodwill by trying to lock the thing down completely. The geohot hack doesn't bother Apple or AT&T at all. Most people won't open their phone and start tinkering with the hardware. If somebody comes out with a pure-software hack that can be loaded and run with only a couple mouse clicks, Apple will probably take steps to make that harder. But in the long run, fighting to prevent hacks is a losing proposition, and Apple knows it.

The best way for Apple and AT&T to stop people from unlocking their phones is to develop software-as-a-service products that are only supported by the AT&T network. Maybe that means seamless integration between the AT&T network and the iTunes store, maybe it means streaming music & video that automagically syncs to your desktop computer's iTunes library, or maybe it means things none of us have even considered yet. Apple's whole business strategy revolves around the idea that people will pay for better quality, though.

If 'unlocking the iPhone' means 'keeping all the really good features of the iPhone and ditching the expensive suck factor of AT&T service', then unlocking will rule no matter what Apple and AT&T do. If 'unlocking the iPhone' means 'I ditched AT&T, but lost a bunch of cool features in the process', then only a handful of people will bother.

There are two main reasons Apple won't try to play the lock-in card.

First, Apple doesn't own enough of the cellphone market to have a 'lock' on anything. Their stated goal is to own 1% of the smartphone market by the end of 2008. Meanwhile, Nokia's goal is to own 40% of that same market. Apple isn't in a position to get pushy about anything right now. All that will do is alienate customers, and alienating customers doesn't help them increase their market share.

Second, Apple doesn't compete by locking out alternatives. It competes by offering the best package it can, and trusting consumers to think the package is worth the price.

Re:BBC is usually wrong about US law

[Anonymous Coward]

"The best way for Apple and AT&T to stop people from unlocking their phones is to develop software-as-a-service products that are only supported by the AT&T network. "

Which is exactly what visual voice mail is. People unlocking a phone lose this really cool feature if they choose to use a different cell provider such as T-Mobile.

Personally... I agree let the people choose. I for one am perfectly happy with ATT and the iPhone. Though I will admit there are times I wish it was more open for use on other carriers. This will come in due time.

Re:BBC is usually wrong about US law

[Anonymous Coward]

possible legal problems with AT&T? Apple makes the iPhone available for AT&T to sell, if they choose to unlock it and let other providers sell the phone it would be extremely beneficial to their sales, and it wouldn't create legal problems at all. AT&T would just piss and moan about their contract with Apple in which case Apple would give them the finger and say UP WITH SALES DOWN WITH DUMBASSES. Enough said.

Re:BBC is usually wrong about US law

[unborracho]

They are already basically doing this with Visual VoiceMail - You can't get this with an unlocked phone on T-mobile's network, until someone writes some software that acts as a proxy between TMO voicemail and the iphone.

Re:BBC is usually wrong about US law

[scolbert]

I think this is a very thoughful response. I wonder with the geohot hack, how does the voicemail feature work or not on T-Mobile? It seems to me that voicemail is downloaded on Edge and place on the phone flash, awaiting the customer's random access. That would mean that AT&T did a bunch of work to make their voicemail system output and respond to a 2nd channel for requests for voicemail messages. That is the kind of software-as-a-service model that mstone is talking about.

I for one love my iPhone but would rather be on Verizon (let's see that hack!!... here we just open the box and pull out "radio", replacing it with this one I made over the summer, hehe).

Sammy with my Apple iPhone

They'll "fix" the problem one way or anothermounti

[Anonymous Coward]

They'll just increase the price of the phone, and give you a rebate when you activate it through AT&T, if they can't legally "fix" the problem. Maybe this is good. Maybe t-mobile will also offer a rebate to sign up, for instance, increasing competition.

Sort of...

[mark-t]

It's certainly technologically possible for Apple to produce a cell phone that uses a communication protocol that is hard-wired as being different from normal cell phones, and then licensing the technology to AT&T that will handle this protocol. Trying to crack the protocol won't do any good, even if successful because how many people have access to their own private phone network that they can reconfigure as they see fit?

Re:Sort of...

[petermgreen]

that is possible but the thing is while apple doesn't want the iphone to be able to be used with anyone other than AT&T as it's home network they do want it to be able to roam. From what I have heared on /. roaming seems particularlly important in the USA where afaict people travel a lot between different companies areas.

Also I suspect this exclusive deal with AT&T is not a permanent thing and sooner or later they will want to sell unlocked iphones arround the world.

Re:Sort of...

[mark-t]

....they do want it to be able to roam.

Well then... only have the ability to roam within areas that are serviced by AT&T. If they want people to be able to roam in areas where AT&T doesn't service, well then.... what the heck do they expect?

Some clarity...

[lazylion]

Here is the problem:

The iPhone is THREE things:

1. A physical device that you own because you bought it AND
2. A set of software whose license you have agreed to abide by (during setup) AND
3. A 'handset' or device which is attached to an international wireless carrier's network, for which you clicked an ADDITIONAL license agreement.

While it is true that if you bought it, you own it, that speaks nothing about whether AT&T (or anybody else) will allow it to work on their network, hacked or otherwise.

While it is true that you could argue that the merchandiseability laws make the software EULA provisions preventing you from hacking for use with alternate carriers null and void (DMCA exemption), that does not imply that those carriers will accept on their service a device which does not conform to some specific specifications required for public wireless connections, as must exist in some countries. This, of course, will also be null and void if the device has been modified from its original configuration.

So, no - it is still murky.

Re:Some clarity...

[stix213]

...that does not imply that those carriers will accept on their service a device which does not conform to some specific specifications required for public wireless connections...

You are talking here about another potential wireless carrier, in the US T-mobile would be the alternative. I see little reason why T-mobile would go through the trouble of banning hacked iPhones from their network. To say that it is somehow likely that T-mobile would purposely hand potential customers back to AT&T seems a bit ridiculous.

From AT&T's prospective (T-mobile's primary competition) the contract with Apple is to guarantee iPhone users become AT&T subscribers, and NOT become T-mobile customers. AT&T is paying for this privilege by giving a cut of their cash back to Apple. Why the hell would T-mobile help AT&T achieve this end? And if for some strange reason T-mobile wanted to hand AT&T these customers, what would even be the point of AT&T making the contract with Apple if T-mobile was going to just give AT&T the customers anyway? I mean, if you actually think T-mobile is going to not take on these customers, there is no point in AT&T giving Apple a cut!

2 year blan... bah!

[musicscene]

[regurgitation]
As mentioned on Infinite Loop, however, it is possible to activate an iPhone without committing to AT&T's "required" 2-year service plan. By entering "999-99-9999" into the Social Security field, you will get booted into GoPhone (AT&T's prepaid phone plan that does not require a contract) mode. An equivalent voice plus data plan under GoPhone comes out to about $10 more per month than a similar plan under contract, and so this may be a very attractive option to those who aren't interested in committing to AT&T for long periods of time. Seeing as AT&T isn't subsidizing the iPhone's cost when you sign a contract (as most carriers do in order to entice customers with steep phone discounts), it doesn't seem as if there is much reason not to go this route unless you are interested in saving $10 per month and don't mind being in a contract for two years. This is the simplest way to activate the iPhone without a contract without getting into some hackery, which we will discuss in a later section. It will cost $175 to break an iPhone contract with AT&T if you choose to leave before the two years is up (although if you cancel the contract within 30-days of activation, you will not get charged an early termination fee. If you return an open-box iPhone within 14 days of purchase, Apple will charge you a 10 percent restocking fee).
[/regurgitation]

[ found here -> http://arstechnica.com/reviews/hardware/iphone-rev iew.ars/2 ]

In Finland

[blind biker]

..we own our phones.

Re:In Finland

[Anonymous Coward]

I hope so since they are frozen to your lips.

Look at the writing on the wall, Apple!

[Rexdude]

I've bashed Apple a LOT, on nearly every iPhone related story that came out, and my main peeve has been the locking up with AT&T. The iPhone was very well received, not just by fanboys but probably everyone else in the US. Hacking a phone is no joke-and usually such tampering voids your warranty. (Much the same with overclocking your PC or graphics card). Of course, there are those who would figure out a way to get Linux running on a new model of toaster if it were there-but the iPhone hack was probably eagerly awaited by many.
Is Apple blind to the fact that there's probably lots of people out there who want the iPhone, but are keeping away because they don't want to be tied into an operator?? Or, for that matter, people in other countries? (In India, there's already rumors that Apple will launch it tied up with Airtel, India's largest mobile operator-for around 26k rupees (it's 40 Rs/dollar at current rates). Some people have indicated (here) that they don't mind an operator contract if the phone is offered cheap.
Now if this is 26k with an operator contract, what on earth would it cost without? That budget is easily super high end smartphone land-you can get the N95 and other competing smartphones from O2 and others WITHOUT any contracts for the same amount!!

If only they would sell the iPhone directly through retail outlets, and allow you to use the operator of your choice. But no-they want a piece of the usage charges as well.

Set the iPhone free. And I'm pretty sure lots more people will scramble to get it.

Or...

[Greyfox]

You could get a phone you own and a provider that won't get their panties in a bunch when you do what you want with it. I got a Nokia E70 and dropped in a SIM from T-Mobile. It can connect to my Asterisk server and make and receive SIP calls when I'm at home. It can sync with my laptop via bluetooth. If T-Mobile's data service sucked slightly less (It was OK in the past) I could connect to the phone from my laptop via bluetooth and browse the net from my laptop. It can also play quite a few media types, will accept any MP3 as a standard ring tone and can run third party java apps and python code quite happily. Sure it's not shiny, but no one is telling me I can't do something with the phone that it's capable of doing.

Sure you could give Apple your money and bend over backwards not to play on their terms (And legal precedence does indicate that you have the right) but... why?

Apple's viewpoint

[PureCreditor]

Apple actually wants people to unlock the phone. If we assume that customers who unlock the phone for T-Mobile would not subscribe to AT&T ever, then Apple should consider it an extra phone sale (close to 50% profit margin on the hardware) instead of a lost revenue stream (shared with AT&T).

Also, unlocking the phone might void the warranty, saving Apple even more costs down the road.

While Apple might not have the legal grounds to prevent unlocking the phones, they can make the unlockers' lives a living hell. Most phones never require a firmware upgrade once they're released (and thus are feature-fixed). But the iPhone prides itself on bug-fixes and new features available via firmware upgrade. Apple probably have the rights to refuse to firmware-upgrade any unlocked phones.

Or perhaps Apple can force iTunes to refuse even syncing with unlocked phones, thus making loading music/pictures/videos a huge pain. But why would Apple want that? Any device that can access iTunes Music Store is like free money for Apple.

My bets will be if anyone is upset over the locked phones, it should be AT&T and not Apple.

Re:Apple's viewpoint

[InakaBoyJoe]

Apple probably have the rights to refuse to firmware-upgrade any unlocked phones.

That's how the game is played in the Windows world, but, consider this:

In the auto world, under the Magnuson-Moss Act, an auto maker can't deny you service on your car just because you modified it. They can deny you service only if it can be proven that the modification was the cause. In other words they can't refuse to service your engine just because you changed your wheels, unless you tried to drive on square wheels or something.

Shouldn't the same principle apply to computers? A SIM-unlock mod won't (normally) affect Safari, so any attempt by Apple to deny Safari updates to unlocked phones should be prohibited.

Granted, the computer industry has been smart enough not to use the word "warranty" when it comes to software updates, but the principle smells the same to me. Some smart lawyer really ought to take this up....

Re:Apple's viewpoint

[PureCreditor]

but isn't it also true that gadget manufacturers can claim that you've void the warranty if you open the case? if the unlocking of the iPhone requires soldering the chips and the board, then Apple can easily deny warranty on those grounds ?

HP even prevents third-party ink by patenting the chip that's attached to the ink cartridges.

i guess if apple really wants it, it *can* be done, but since apple care most about its consumer image, it might not go so far. after all, only SCO doesn't care what others think (and look what that got them into)

Advantage of buying

[kerberos]

If you buy (i.e., pay money to actually own) a phone, you can do whatever you want with it in terms of modifying and reselling it. If you sign a contract in order to get a cheaper phone, there can of course be limitations in what you're allowed to do with it. It's all in the contract one signs.

I prefer to own my things, so I've always paid for my phones. A bit more expensive initially, but on the other hand I've never had a locked phone, and I've always been able to switch to whichever plan I've found best.

If it isn't possible to buy an iPhone, and if owning your phone is important, well then get another phone.

While not a force monopoly in one sense...

[IndustrialComplex]

However, there is a parallel to the car analogy still.

While it is not a forced monopoly in that you can always select a different phone, or phone carrier, it does limit you to who you can do business with.

In a car analogy, it would be as if GM held the patent on emission testers for GM vehicles, and refused to sell those testers to non-GM repair shops. Effectively you would be forced to go to GM if you ever wanted your car to pass inspection.

Re:While not a force monopoly in one sense...

[cayenne8]

"In a car analogy, it would be as if GM held the patent on emission testers for GM vehicles, and refused to sell those testers to non-GM repair shops. Effectively you would be forced to go to GM if you ever wanted your car to pass inspection."

Or...you just live in a state that doesn't require emissions testing.

:-)

Some things never change

[dave562]

When I was a 17 year old kid I had an unlocked Oki 900 that I used on AT&T's network. I'm pretty sure they weren't too happy that the phone could switch between five different sets of ESN/MIN pairs.

Engineers=Lawyers

[Enrique1218]

I always wonder why the Engineering majors in college choose law as their career. I now understand. Innovation is out and lawsuits are in! AT&T will rather spend money on a lawyer enforcing stupid lock-ins than pay an engineer to develop a better network. A person with a new iPhone can't choose AT&T because it has the good network and compliments the iPhone well. He must either be contractually obligated to it or have no alternative from a competing carrier. Wow, you have to love America just to stand the stench of living here.

DMCA never applied

[Anonymous Coward]

DMCA can't be used to protect against simple access. It can, however, be used to protect against access to media protected by copyright law. The issue is that the DMCA didn't apply to the situation at all. The fact that an exemption was created is to save the courts the headaches NOT, I repeat, NOT to change the law. Only Congress can change the law!! So lets review: unlocking your iTunes music on your phone--illegal; unlocking your phone so you can use it--NOT illegal.

This also falls within the basic property rights and first sale doctrine. Sigh...what are they teaching kids these days...

Re:If you're able to unlock it with a soldering ir

[danomac]

The question is: Will they sell the battery at the retail level.

In Capitalist America

[Garabito]

The cell phone carrier owns you!

ninjas

[commodoresloat]

Do you disbelieve Steve Jobs' ability to accomplish this task?

Never underestimate the power of the Reality Distortion Field.

DMCA exemption for wireless phone "unlocking"

[Devistater]

Everyone is forgetting that there is an exemption in the DMCA for wireless phone "unlocking"
http://www.eff.org/deeplinks/archives/005021.php

The question is, are people doing it for the "sole purpose of lawfully connecting to a wireless telephone communication network" ?
However, if they are selling the unlocking solution, then an argument could be made that its not the sole purpose of the sellers.

Re:DMCA exemption for wireless phone "unlocking"

[Pliep]

Other things that everyone is forgetting:

-- The DMCA is only applicable in the USA, not in Europe or Asia or indeed any other part of the world.

-- In most European countries, locking mobile phones to providers is either illegal (Belgium) or limited to one or two years, after which it must be unlocked upon the user's request.

So, if you're an American and need a legal, unlocked phone with full Apple warranty, simply wait until it is released in Europe. (Nice chance to visit London, Amsterdam or Paris as well.)

WAY off topic: Slashdot's "Law" icon

[feijai]

The "Law" icon -- or DOJ, or whatever it is -- is being displayed for this article. Every time I see it, I think "please lady, don't hurt that starfish with your sword!" Perhaps this is not what Slashdot intended. The icon's a bit crappy.

Re:Do I own it or not - analogy

[Anonymous Coward]

how did u get a karma bonus when talkng like this?

oblig. but relevant?

[Anonymous Coward]

In Soviet Russia, you own phone!

It's silly

[tkrotchko]

Your comments are silly, but even if there's a grain of truth, you aren't any worse off than you are today.

can't view tfa

[silverkniveshotmail.]

the site it's on doesn't think my phone can handle html.

Because Apple also gets a cut of every contract?

[MacDork]

So why should they even bother with trying to hault cracking of the iPhone? The product has already been sold. Apple made their official dollar off of it. Their interests should really die there.

No... It doesn't. Apple gets part of the contract revenue too.

Israeli Team Unblocks iPhone

[LongLiv3Pearl3]

Since an Israeli team unblocked the iPhone, obstructing this hack would be an act of anti-Semitism.

Re:Israeli Team Unblocks iPhone

[Anonymous Coward]

Since an Israeli team unblocked the iPhone, obstructing this hack would be an act of anti-Semitism.

Serious Question,Would it be Anti-Semitism or Anti-Zionism?

the buyer can unlock

[majortom1981]

What other sites have stated is that the person who buys the phone can unlock the phone. The people selling that solution cant sell it becuase thats illegal. But if you have to hack the phone to unlock it isnt that illegal?

Don't be fooled

[woolio]

I guess it comes down to who owns the phone.

If when you buy an iPhone you are actually buying the ownership to the phone, you can do what the hell you like to it as its yours.

but...

If Apple are just selling a licence to use the iPhone (kinda like what Microsoft do with Windows) rather than actually selling the ownership of the iPhone itself, then they could legally and justifiably require you not to unlock it as they still own it.


I believe in the US, it's called "First Sale".

Manufacturers cannot restrict the consumer's use of a product.

Unfortunately software somehow is not a product and is not sold, it is licensed... Then again, the licenses are SOLD...

But the phone, I can't see how this isn't a product sold to the consumer... What a wireless carrier can do is restrict your usage of their NETWORK (services). I have a feeling they know each and every phone on their network. (After all, some phones can be re-programmed over the air).

But since other carriers (besides AT&T) can't sell the iPhone and they probably aren't under contract with Apple, I can't see why they would mind iPhones on their network. It is generally a bad business model to turn customers away and/or punish them needlessly.

Indeed

[woolio]

Wouldn't Ford love to only have you put Genuine Ford Advantage replacement parts in your car? They can't. Nor can they force you to only buy Ford approved gasoline from licensed dealers.

Well, I think most judges in the US are aware of the crappy way most American cars (*cough*GM*cough) are built. Otherwise, we probably would be talking to a salesman at the gas pump...

Unfortunately, the general public (and legal community) doesn't really understand software or hardware. After all, I own the medium which contains the binaries of Windows, but I can't disassemble them under the EULA? WTF!?!. Even Visual Studio disassembles executables at runtime during debugging... I guess this isn't really permitted...

Believe-you-me... if terrorism could be linked to cheap imported automobile parts, things would change for the worse!

unlocked

[scolbert]

Apple can stop this if they rev their software. Imagine what would happen if the next iPhone update undoes your unlock!

Its not like T-Mobile will complain if they suddenly get a new iPhone subscriber!

Sammy loves his iPhone

This wil become a non- Issue

[Scannerman]

iPhones will be on sale elsewhere in the world within a few months at most

since most markets won't accept hard-locked phones, and some countries legally prohibit selling them, There will be no shortage of unlocked iPhones on the world market by Christmas. If there is a demand they will certainly get imported into the USA.

Right to modify your own property

[WNight]

Of course you have the right. Except in a few moralistic hold-overs (sex) you have the right to do anything for money that you would do for free or for yourself.

You can buy a book and scribble in the margins. Even resell it with these notes. So why not with software?

The limitation in this area is trademark and misrepresentation. If you're selling something that looks like X(tm), it had better be X(tm) or your customers are being mislead unless you carefully explain the differences.

AT&T'S BEST STRATEGY TO STOP UNLOCKING

[Edoko]

AT&T's best strategy to stop unlocking is to attempt to re-negotiate its deals with overseas carriers so that it can lower international roaming rates to keep them competitive. If AT&T would continually focus on increasing efficiencies and driving down rates for its users, then it would never need to worry about turnover or customers frantically attempting to jigger and unlock their phones to use cheap SIM cards. If's AT&T can't re-negotiate these rates, then why doesn't it acquire its own SIM card dealers overseas so that it can better service its customers. Finally, consumer rates are many times higher than what corporations are given - but why? Another alternative would be for consumers to band together into purchasing consortia to mass-purchase large contracts. For example, if 35,000 iPhone users formed a cooperative and negotiated as a single contract, then they could screw down the rates to what corporations are getting. I am unaware of any law that would prevent consumers from forming these large purchasing cooperatives.

Irony here

[modemboy]

Am I the only one that thinks it is terribly ironic that Steve Jobs and Wozniak were famous for designing and selling phone phreaking blue boxes before they started Apple?

Here is a guy who got his start selling illegal devices designed to rip off the phone company, now years later running a huge company with their own phones, getting hacked by a kid just like him 30 years ago. I sure hope Jobs still has a little phone phreaker left in him and Apple turns a blind eye to all of the iphone hacking, I can't wait for someone to release a good VOIP app for it...

Answers for Questions in summary

[Dretep]

Can they prohibit unlocking? No.

Reselling? No. It won't take long for Apple to realize their mistake and open the Iphone to any service provider. While they might make some easy cash partnering with AT&T, in the long run they'll make much more by opening things up for potential customers. I mean, come on Apple, get into the 21st century. Nobody wants to be tied down to one service provider when there are so many different options available that might suit certain users better.

The unlock is different now

[StarKruzr]

There's already been a software unlock produced from the fruits of the hardware one. It's not at all difficult to unlock an iPhone now.

Why Would Anyone Buy A Locked Cell Phone?

[Anonymous Coward]

Perhaps I'm missing something here, but I don't understand why anyone would buy a locked cell phone in the first place. I guess enough idiots have been doing this that the cell phone manufacturers don't feel sufficient pressure to simply not lock the phones they sell.

Not at all!

[Jane Q. Public]

Nonsense, on several fronts:

* "If somebody comes out with a pure-software hack that can be loaded and run with only a couple mouse clicks, Apple will probably take steps to make that harder. But in the long run, fighting to prevent hacks is a losing proposition, and Apple knows it."

Already done! The hack part anyway. I predict that Apple will not try (most certainly will not try very hard) to "fix" that.

* "The best way for Apple and AT&T to stop people from unlocking their phones is to develop software-as-a-service products that are only supported by the AT&T network."

Rubbish. The best way for Apple to keep people from unlocking their phone is to offer the services and software that people want at a good price. If they already offered service on T-Mobile (or other GSM carrier), then people would not bother to hack the service area of the phone. As a concept, this does not get much simpler! Give the people what they want, and they won't hack your product.

* "If 'unlocking the iPhone' means 'keeping all the really good features of the iPhone and ditching the expensive suck factor of AT&T service', then unlocking will rule no matter what Apple and AT&T do. If 'unlocking the iPhone' means 'I ditched AT&T, but lost a bunch of cool features in the process', then only a handful of people will bother."

Definitely false. If people want the service but Apple or AT&T do not provide it, or do not provide it at a good price, then people will hack. It is as simple as that. This is a lesson still being learned by the RIAA and MPAA. One of these days, they will get it through their heads, because it is TRUE. Trying to force customers to accept a defunct business model WILL NOT WORK.
Third parties have already hacked the software installers and so on, so one can run third-party software on the iPhone. Couple that with unlocked service, and you have a truly improved machine.

* "There are two main reasons Apple won't try to play the lock-in card. First, Apple doesn't own enough of the cellphone market to have a 'lock' on anything. Their stated goal is to own 1% of the smartphone market by the end of 2008. Meanwhile, Nokia's goal is to own 40% of that same market. Apple isn't in a position to get pushy about anything right now. All that will do is alienate customers, and alienating customers doesn't help them increase their market share."

False. This is simple economics. If their product is perceived to be clearly superior, then they DO have enough leverage to attempt a "lock", even if it is only a small part of the market. Niche markets can be VERY lucrative. It is not necessary to try to sell to everybody.

* "Second, Apple doesn't compete by locking out alternatives. It competes by offering the best package it can, and trusting consumers to think the package is worth the price."

Only partially correct, as your own first comment stated! Apple does play the "lock-in" game (Mac hardware for one example), but only to a certain extent. They know that their systems will be hacked, and have chosen to live with that reality rather than fight it overly hard. That is simple practicality, and it shows that they understand their options in a more mature way that certain other companies. I could name them, but I think you probably know who some of them are.

iPhone Hacked, Apple and the Marketplace

[timothyh]

I read the BusinessWeek article and blogged [1] about it, before seeing this on Slashdot. I'll just put the main points here and leave the link for anyone who would like to read more

1. Exclusivity pushes Demand.
2. Apple has positioned itself so that it appears the hero in every situation.
3. Cell Phones are BIG, and Apple needs to be a major player in that market
4. Then I gave a few recommendations for Apple

[1] http://ithinkiknowitall.com/2007/09/apple/iphone-h acked/

Openmoko - hack-free solution

[Anonymous Coward]

Forget hacking some phone and blowing away the warranty. A little more elegant solution here