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February 2, 2009

Reaping What They’ve Sown [9:17 am]

Hard to believe that the record companies are going to get much sympathy, despite the tone of this article: Despite Accord With Apple, Music Labels Still Fret (pdf)

The announcement on Jan. 6 seemed to signal a rapprochement between the music industry and its biggest distributor: record companies gave up their demand for copyright protection (called digital rights management) and Apple allowed flexible pricing, so the labels could charge more for new or popular tracks.

But according to one music industry executive involved in the negotiations, Apple’s primary goal was securing distribution of music over its iPhone, as mobile phones are expected to become an increasingly important outlet for music.

[...] Apple, according to a music industry official involved in the negotiations, offered to negotiate variable pricing about a year ago. Most songs cost 99 cents, of which the label receives about 70 cents and Apple receives the remainder, although the breakdown varies slightly among the labels.

Apple indicated it was willing to make the switch to variable pricing provided that the music companies — which negotiate individually with Apple to avoid colluding — would agree to license songs for wireless downloads on the iPhone, as well as drop copyright protections using digital rights management, or D.R.M., software.

All the labels agreed except Sony Music. Its chairman, Mr. Schmidt-Holtz, wanted the pricing to go into effect right after the announcement, while Mr. Jobs wanted a longer time horizon. According to a person briefed on the telephone call, Mr. Schmidt-Holtz and Mr. Jobs had a heated exchange by phone on Christmas Eve. Eventually, Sony gave in and agreed to a longer waiting period.

Even if Mr. Jobs does not get personally involved in future negotiations, music executives still fear dealing with Apple. One chit the company holds is the power of the iTunes home page, where it promotes music. They also say that the entire Apple staff, including Eddie Cue, the vice president in charge of iTunes who handles the relationships with the record labels, do their best to follow Mr. Jobs’s style in their own negotiating.

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Coping With Multistability [9:10 am]

Or not: Local Police Want Right to Jam Wireless Signals (pdf)

It is an increasingly common technology, with federal agencies expanding its use as state and local agencies are pushing for permission to do the same. Police and others say it could stop terrorists from coordinating during an attack, prevent suspects from erasing evidence on wireless devices, simplify arrests and keep inmates from using contraband phones.

But jamming remains strictly illegal for state and local agencies. Federal officials barely acknowledge that they use it inside the United States, and the few federal agencies that can jam signals usually must seek a legal waiver first.

The quest to expand the technology has invigorated a debate about how widely jamming should be allowed and whether its value as a common crime-fighting strategy outweighs its downsides, including restricting the constant access to the airwaves that Americans have come to expect.

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