December 27, 2024

iPhone Unlocking Secret Revealed

The iPhone unlocking story took its next logical turn this week, with the release of a free iPhone unlocking program. Previously, unlocking required buying a commercial program or following a scary sequence of documented hardware and software tweaks.

How this happened is interesting in itself. (Caveat: This is based on the stories I’m hearing; I haven’t confirmed it all myself.) The biggest technical barrier to a software-only unlock procedure was figuring out the unlocking program, once installed on the iPhone, could modify the machine’s innermost configuration information – something that Apple’s iPhone operating system software was trying to prevent. A company called iPhoneSimFree figured out a way to do this, and used it to develop easy-to-use iPhone unlocking software, which they started selling.

Somebody bought a copy of the iPhoneSimFree software and reverse engineered it, to figure out how it could get at the iPhone’s internal configuration. The trick, once discovered, was easy to replicate, which eliminated the last remaining barrier to the development and release of free iPhone unlocking software.

It’s a commonplace in computer security that physical control over a device can almost always be leveraged to control it. (This iceberg has sunk many DRM Titanics.) This principle was the basis for iPhoneSimFree’s business model – helping users control their iPhones – but it boomeranged on them when a reverse engineer applied the same principle to iPhoneSimFree’s own product. Once the secret was out, anyone could make iPhone unlocking software, and the price of that software would inevitably be driven down to its marginal cost of zero.

Intellectual property law had little to offer iPhoneSimFree. The trick turned out to be a fact about how Apple’s software worked – not copyrightable by iPhoneSimFree, and not patentable in practice. Trade secret law didn’t help either, because trade secrets are not shielded against reverse engineering (for good reason). They could have attached a license agreement to their product, making customers promise not to reverse engineer their product, but that would not be effective either. And it might not have been the smartest thing to rely on, given that their own product was surely based on reverse engineering of the iPhone.

Now that the unlocking software is out, the ball is in Apple’s court. Will they try to cram the toothpaste back into the tube? Will they object publicly but accept that the iPhone unlocking battle is essentially over? Will they try to play another round, by modifying the iPhone software? Apple tends to be clever about these things, so their strategy, whatever it is, will have something to teach us.

Intellectual Property and Magicians

Jacob Loshin has an interesting draft paper on intellectual property among magicians. Stage magic is a form of technology, relying on both apparatus and technique to mislead the audience about what is really happening. As in any other technical field, innovations are valuable, and practitioners look for ways to cash in on their inventions. They do this, according to Loshin, without much use of intellectual property law.

This makes magic, like cuisine and clothing design, a thriving field that operates despite a lack of strong legal protection for innovation. Recently legal scholars have started looking harder at such fields, hoping to find mechanisms that can support innovation without the cost and complexity of conventional intellectual property law, and wondering how broadly those alternative mechanisms might be applied.

What makes magic unusual is that practitioners rarely rely on intellectual property law even though magic tricks are protectable by patent and as trade secrets. Patent protection should be obvious: patents cover novel mechanisms and methods, which most magic technologies are. Some classic tricks, such as the saw-a-person-in-half trick, have been patented. Trade secret protection should be obvious too: how to do a particular trick is valuable business information whose secrecy can be protected by the inventor. (The audience sees the trick done, but they don’t really see the secret of the trick.)

Yet Loshin, and apparently most magicians, think that patent and trade secret are a poor fit. There are basically three reasons for this. First, part of the value of a trick is that the audience can’t figure out how it’s done; but a patent must explain the details of the invention. Second, tricks are subject to “reverse engineering” by rival magicians who watch the trick done, repeatedly, from different parts of the audience, then do experiments to try to replicate it; and of course trade secrets are not protected against reverse engineering. Third, there’s a sort of guild mentality among magicians, holding that knowledge can be shared within the profession but must not be shared with the public. This guild mentality can’t easily be implemented within current law – a trade secret must be carefully protected, and so cannot be passed around casually within a loosely defined “community”.

The result is that the guild protects its secrets through social norms. You’re accepted into the guild by demonstrating technical prowess and following the guild’s norms over time; and you’ll be excommunicated if you violate the norms, for example by making a tell-all TV special about how popular tricks are done. (There’s an exception for casual magic tricks of the sort kids do.) The system operates informally but effectively.

As a policy guy, I have to ask whether this system is good for society as a whole. I can understand why those inside the profession would want to limit access to information – why help potential competitors? But does it really benefit society as a whole to have some unelected group deciding who gets access to certain kinds of information, and doing this outside the normal channels that (at least in principle) balance the interests of society against those of inventors? It’s not an easy question.

(To be clear, asking whether something is good or bad for society is not the same as asking whether government should regulate it. A case for regulation would require, at least, that the regulated behavior be bad for society and that there be a practically beneficial way for government to intervene.)

The best argument that magicians’ guild secrecy benefits the public is that tricks are more valuable to the public if the public doesn’t know how they are done. This is almost never the case for other technologies – knowing how your iPod works doesn’t make it less valuable to you – but it just might be true for magic, given that it exists for entertainment and you might enjoy it more if you don’t know how it’s done.

But I have my doubts that publishing information about tricks actually makes them less entertaining. Goldin’s patent on the saw-a-person-in-half trick – which explains pretty clearly how to do the trick – was issued in 1923, but the trick is still a staple today. In theory, anybody can read Goldin’s patent whenever they want; but in practice hardly anybody has read it, and we all enjoy the trick despite suspecting how it’s probably done. And do we really need to read Gaughan’s patent to know how a “levitating” magician stays up in the air? Gaughan’s cleverness is all about how to keep the audience from seeing the evidence of how it’s done.

One effect of the guild’s secrecy is that the public rarely learns who the great innovators are. We know who puts on a good show, but we rarely know who invented the tricks. The great innovators may be venerated within the profession, but they’re unknown to the public. One has to wonder whether the field would move faster, and be more innovative and entertaining, if it were more open.

Does Apple Object to iPhone Unlocking?

I wrote Monday about efforts to “unlock” the iPhone so it worked on non-AT&T cell networks, and the associated legal and policy issues. AT&T lawyers have aggressively tried to stop unlocking; but Apple has been pretty silent. What position will Apple take?

It might seem that Apple has nothing to lose from unlocking, but that’s not true. AT&T can exploit customer lock-in by charging higher prices, so it has an obvious incentive to stop unlocking. But AT&T also (reportedly) give Apple a cut of iPhone users’ fees, reportedly $3/month for existing AT&T users and $11/month for new users. This isn’t surprising – in exchange for creating the lock-in, Apple gets to keep a (presumably) hefty share of the resulting revenue.

Apple’s incentive is much like AT&T’s. Apple makes more money from iPhone customers who use AT&T than from those who use other cell providers, so Apple gains by driving customers to AT&T. And it’s not pocket change – Apple gets roughly $150 per user – so even though Apple gets money for selling iPhones to non-AT&T users, they get considerably more if they can drive those users to AT&T.

Thus far, Apple seems happy to let AT&T take the blame for intimidating the unlockers. This mirrors Apple’s game plan regarding music copy-protection, where it gestures toward openness and blames the record companies for requiring restrictive technology. If this works, Apple gets the benefit of lock-in but AT&T gets the blame.

From Apple’s standpoint, an even better result might be to have iPhone unlocking be fairly painful and expensive, but not impossible. Then customers who are allergic to AT&T would still buy iPhones, but almost everybody else would stick with AT&T. So Apple would win both ways, selling iPhones to everybody while preserving its AT&T payments.

What a clever Jobsian trick – using a business model based on restriction, while planting the blame on somebody else.

iPhone Unlocked; Legal Battle Looming?

In the past few days several groups declared victory in the battle to unlock the iPhone – to make the iPhone work on cellular networks other than AT&T’s. New Jersey teenager George Hotz published instructions (starting here) for a geeks-only unlock procedure involving hardware and software tweaks. An anonymous group called iPhoneSimFree reportedly has an easy all-software unlock procedure which they plan to sell. And a company called UniquePhones was set to sell a remote unlocking service.

(Technical background: The iPhone as initially sold worked only on the AT&T cell network – the device was pretty much useless until you activated AT&T wireless service on it. People figured out quickly that you could immediately cancel the wireless service to get an iPhone that worked only via WiFi; but you couldn’t use it on any other mobile phone/data network. This was not a fundamental technical limitation of the device, but was instead a technological tie designed by Apple to drive business to AT&T.)

Unlocking the iPhone helps everybody, except AT&T, which would prefer not to face competition in selling wireless services to iPhone users. So AT&T, predictably, seem to be sending its lawyers after the unlockers. UniquePhone, via their iphoneunlocking.com site, reports incoming lawyergrams from AT&T regarding “issues such as copyright infringement and illegal software dissemination”; UniquePhones has delayed its product release to consider its options. The iPhoneSimFree members are reportedly keeping anonymous because of legal concerns.

Can AT&T cook up a legal theory justifying a ban on iPhone unlocking? I’ll leave that question to the lawyers. It seems to me, though, that regardless of what the law does say, it ought to say that iPhone unlocking is fine. For starters, the law should hesitate to micromanage what people do with the devices they own. If you want to run different software on your phone, or if you want to use one cell provider rather than another, why should the government interfere?

I’ll grant that AT&T would prefer that you buy their service. Exxon would prefer that you be required to buy gasoline from them, but the government (rightly) doesn’t try to stop you from filling up elsewhere. The question is not what benefits AT&T or Exxon, but what benefits society as a whole. And the strong presumption is that letting the free market operate – letting customers decide which product to buy – is the best and most efficient policy. Absent some compelling argument that iPhone lock-in is actually necessary for the market to operate efficiently, government should let customers choose their cell operator. Indeed, government policy already tries to foster choice of carriers, for example by requiring phone number portability.

Regardless of what AT&T does, its effort to stop iPhone unlocking is likely doomed. Unlocking software is small and easily transmitted. AT&T’s lawyers can stick a few fingers in the dike, but they won’t be able to stop the unlocking software from getting to people who want it. This is yet another illustration that you can’t lock people out of their own digital devices.

Why Did Universal Threaten to Pull Out of iTunes?

Last week brought news that Universal Music, the world’s largest record company, was threatening to pull its music from Apple’s iTunes Music Store. Why would Universal do this?

The obvious answer is that the companies are renegotiating their contract and Universal wants to get the best deal they can. Threatening to walk is one way to pressure Apple.

But where digital music is concerned, there is no such thing as a simple negotiation anymore. For one thing, negotiations like this have political ramifications. The major record companies have managed, remarkably, to convince policymakers that protecting their profits should be a goal of public policy; so now any deal that affects the majors’ bottom lines must affect the policy process.

(As I’ve written before, copyright policy should be trying to foster the creation and distribution of varied, high-quality music – which is not the same as trying to ensure anyone’s profits.)

The political implications of Universal’s threat are pretty interesting. For years the major record companies have been arguing that the Internet is hurting them and that policymakers should therefore intervene to protect the majors’ business. iTunes’ success has supplied the major counterargument, suggesting that it’s possible to sell lots of music online.

Walking away from iTunes would cause a big political problem for Universal. How could Universal keep asking government to prop up its online business, when it was walking away from the biggest and most lucrative distribution channel for digital music?

And it’s not just Universal whose political pull would diminish. The other majors would suffer as well; so to the extent that the majors act as a cartel, there would have to be pressure on Universal not to pull out of iTunes.

Most likely, Universal was just bluffing and had no real plan to cut its iTunes ties. If this was a bluff, then it was most likely Apple who leaked the story, as a way of raising the stakes. Its bluff having failed, Universal is stuck doing business on Apple’s terms.

One can’t help wondering what the world would be like had the majors moved early and aggressively to build an online business that customers liked. Having failed to do so, they seem doomed to be followers rather than leaders.