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Towards a Permission-Based Web
On his blog over at RedMonk, analyst James Governor looks at the walled garden we seem to be moving into, and possible cracks in the wall. "As we rush to purchase Apple products and services on Cupertino’s monochrome treadmill of shiny shiny, I can’t help thinking the open web community is losing something vital — a commitment to net neutrality and platform openness. If a single company can decide what plays on the network and what does not, in arbitrary fashion, how can that be net neutrality? ... Is the AppStore a neutral network? Should it be? Is Comcast, the company net neutrality proponents love to hate, really the only company we should be wary of? Pipe level neutrality is surely only one layer of a stack. The wider market always chooses proprietary wrappers — every technology wave is co-opted by a master packager. Success in the IT industry has always been about packaging — doing the best job of packaging technologies as they emerge. Twas ever thus." Governor ends his essay with an optimistic look at Android, which he says "potentially fragments The Permission Based Web, and associated data ownership-based business models."
While it is true Apple should be able to choose what to sell and what not to sell on their own store..
The actual complaint with the iTunes store is that Apple tries to prevent you from shopping at any other store to get software for the hardware you own (iPod touch/iPhone specific there really)
That is the neutrality issue in that specific case.
The music side of the store is fine. You can get MP3s anywhere. You can put your MP3s from anywhere on your Apple devices, No issue.
Without jailbreaking (Something Apple hasn't stated is OK to do, and has at least implied it is NOT OK to do) you can't load software of your choosing on your own hardware, only software Apple deems worthy to sell on their store.
That is the issue.