The Circumvention Market Emerges — We’re All Criminals Now

Via Politech: The high-tech black market — a very extensive and informative article!

But how can the federal government outlaw tools? That’s as silly as making Magic Markers illegal because they could be used as circumvention devices. As activists with the Electronic Frontier Foundation (EFF) argued in a recent white paper, “photocopiers, VCRs, and CD-R burners can also be misused, but no one would suggest that the public give them up simply because they might be used by others to break the law.” Most of the circumvention tools the DMCA is designed to prohibit also have legitimate uses.

Perhaps more important, turning circumvention into a crime means that people who have a legal right to make fair-use copies of their media can’t. Say, for example, you’re a music professor who wants to make copies of certain songs available for students to download and listen to for class. These kinds of copies fall under a fair-use exemption to copyright law because they are being used purely for scholarly inquiry. It’s also legal for people to make personal backup copies of media they have purchased. But under the DMCA, the tools to make these perfectly legal copies simply won’t be available outside the black market. While the DMCA does provide exemptions for research and fair use, getting the tools to make good on said exemptions is such a thorny problem that technologists worry the law will stifle innovation and scholarly inquiry.

[…] Somewhere in Silicon Valley, a twentysomething man who goes by the name Bear is making $6,000 profit a month selling copyright circumvention devices. To be more precise, he sells and installs chips for the Xbox and Playstation that allow people to play copied games. I found him on a community Web site, offering his service — known as “modding” — for $70 a game system. After I exchanged a few e-mails with him, he agreed to an interview with me.

[…] He [one of Bear’s customers, and a Microsoft employee] said the main drawback to modding is that if you forget to turn your modchip off and try to play your Xbox over the Internet, Microsoft will figure out what you’ve done and shut down your online gaming account. He added, “I also think that Microsoft knows how popular modding is and that they are keeping a close eye on what people are doing so they can figure out what to add to the next generation of Xboxes.”

[…] The black market in circumvention devices could soon include smart card hacks that would keep your bank account fat and your phone bill low. But as the stakes get higher in crimes of circumvention, the losers are bound to be innocent consumers and white-hat hackers. In their efforts to stop crime, corporations and the government are using DRM and the DMCA to stamp out our ability to make fair use of our media. When we cannot do what we like with our machines in our own homes, we are losing what Princeton professor Felton calls our “freedom to tinker.” Ultimately, we may lose far more: our ability to innovate, to pass on our knowledge, and to understand how the technology that runs our world works.

Happy New Year!

I see that Derek’s back, and he’s commented briefly on a paper I too am only just getting started with — Andrew Odzlyko’s latest discussion of price discrimination: Pricing and Architecture of the Internet: Historical Perspectives from Telecommunications and Transportation

The concluding paragraph should be enough incentive to study the examples:

The general conclusion then is that the historical record of the transportation industry does demonstrate the importance and prevalence of disciminatory policies that are incompatible with the basic architecture of the current Internet. This probably accounts for much of the push to build new networks, or modify the current ones so as to provide more control for service providers over what customers do. However, the Internet is special, in its importance as an enabler for the rest of the economy, in its migration of costs and capabilities to the edges, in its primary value being in connectivity and low transaction latency, and in its pervasiveness and frequency of use. Hence in spite of the strong push from the industry, there are good prospects that the open architecture of the Internet will survice [sic].

Update: Slashdot’s article picks a different paragraph to highlight: Pricing and Internet Architecture