I’ve already talked about the film and music industry doing this, but now it seems that phone companies want to jump on the bandwagon too. TracPhone has claimed that by unlocking your cell phone for use on any compatible carrier you are a criminal who is hurting the poor and subsidizing terrorism. They claim that under the DCMA (Digital Millennium Copyright Act) such actions should be considered reverse engineering and therefore be illegal. What they failed to recognize is that the software sold with phones is never licensed, so they technically do not own it, and have no control over its use once the phone is sold. Fortunately, the US Copyright office viewed this problem similarly and recently exempted it from the DCMA. Now TracPhone is suing again, to get this order reversed. (Jennifer Granick talks about this in more detail)
Many companies are now seeing the protections they previously had fall as technology advances. At their own peril they view these protections as their fundamental rights or something special to which they are entitled. By using the law as a crutch to set prices that a fair market will not bear, they are ultimately setting themselves up for failure. Instead of reacting to these changing market pressures we constantly see companies trying to legislate themselves back to success (Cough…RIAA & MPAA!) This is not the solution. If your business model involves spending lots of money to hold back progress, because in the future there are too many unknowns and not enough barriers to entry, you are bound to fail.
You can spend lots of money on expensive lawyers and lobbyists and try to delay the inevitable, but the companies that win in the end are the ones that innovate and that is money much better spent.
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