Tech, Law, and the DMCA (Part I of II) - Unlocking Your Phone is Now Illegal

I love technology and the explosion of mobile tech in the last decade - it's allowed users in the United States and around the world to completely change and enhance the way we communicate and run our day to day lives.  Availability of information empowering the American consumer.  Activism.  Giving users a voice.  And as much good as it's brought, it's also brought its own set of problems.  With every new service made available to the American public comes an additional way to screw the American public - be it another veiled method of control or a straight up financial jack.  Tech rivals make backroom deals while suing each other to take customer favorites off the market.  Some folks still pay a 7,000% upcharge for something as simple as sending or receiving a text message.  And now, while your mobile bills can top $150 a month based on your device and expanding data usage, the industry is still a cash-devouring beast that cannot be fed.  The end result?  American consumers paying more money for less control over devices they own, which on their own can cost upwards of $600 if not subsidized with a contract renewal or some other pricing scheme.

If you know me on Facebook or Twitter you would have seen me ranting this past Friday about a new law that went into effect this weekend affecting mobile tech, complete with pleas to the big three carriers Verizon Wireless, AT&T and T-Mobile.  The reason was some new legal developments that went into effect this past weekend.  According to the Librarian of Congress and the DMCA (Digital Millenium Copyright Act), unlocking your phone or mobile device is now against the law.

Yes, you read that correctly.  From now forward, if you unlock your phone, you have committed a Federal crime.  And I'll repeat myself, because I feel this bears repeating: If you decide to unlock your phone - the one that you own, which you spent hundreds of dollars and hours of research to purchase, under the DMCA you are a criminal and punishable by the law.

I'm going to try and split this up because I'm throwing a lot of information at you.  For those of you that don't want to read through this entire thing and get right to the brass tacks, skip ahead to the "How this can affect you" section.

The Digital Millennium Copyright Act and Exemptions

The DMCA was established in 1998 to criminalize the creation and distribution of any technology that could bypass digital rights management systems implemented in various forms of media, as well as the people who use or host those technologies.  Stuff like software key generators, hardware hacks and modded game consoles fall under this.  The way it's set up, the power to name exemptions to DMCA enforcement rests with one person, the Librarian of Congress.  These exemptions have a shelf life of three years, at which time the group requesting the exemption must re-lobby and re-convince Congress to keep that exemption in place.  It's that arbitrary system that is causing this headache now.  Back in October, the recent list of exemptions was released, and included an extremely convoluted list of what's exempt and what's not involving your mobile tech.  Now the way it stands for the next three years:

On cell phones purchased in January 2013 or after, jailbreaking is acceptable, but unlocking is not.  That OK for jailbreaking, however, does not extend to your tablet.  So if you want to do the same to your iPad, you're out of luck.  These rules come with some very specific language - saying that the phone has to be "originally acquired from the operator of a wireless telecommunications network or retailer no later than ninety days after the effective date of this exemption."  What this means is that on your current phones, purchased in December 2012 or earlier, can still be unlocked without penalty.  But if you want to unlock something you bought this month or later, you can do no such thing without your carrier's permission.  The Librarian set this up in October, but was nice enough to give people a 90 day grace period until January 2013 so people could buy phones they planned to unlock later.  But that time's over now, kids.

I just don't see the authority here.  What the hell does this have to do with piracy and copyright infringement?  Kind of reaching, Mr. Librarian.

Jailbreaking vs Unlocking

While these two terms may sound like the same thing, they're actually quite different.  Jailbreaking a device means that it has the capability to download 3rd party apps not sold or released by the manufacturer.  This phrase became popular with the iPhone, where users would jailbreak their devices to download apps not purchased from Apple's App Store.  Unlocking a device means that you remove the software that locks a device to a specific carrier.  For example, if I wanted to use an AT&T device on Verizon Wireless, then that device would have to be unlocked to allow me to do so.  So you can see how carriers would love keeping those locks down, so they can keep you right where you are.  Phone carriers offer subsidies on contract renewals so they can make up that difference over a 1 year or two year contract (similar to a loss leader kind of sale).  With data heavy customers, they make that back in about 2-4 months of a contract.  Unlocking your phone and jumping ship, even after paying a huge termination fee, still loses them some profit.  Not really money, but profit.

We've Played by Your Rules

Termination fees.  Yeah.  If the above described action happens, I owe my carrier up to $350 in the form of a termination fee.  I can't refute that, it's in my contract that I agreed to.  So there's already a mechanism in place to protect the carrier from little ol' me.  Without Federal law.  Just throwin' that out there.

How this Affects Users

For a lot of people this probably isn't going to be a big deal as far as how they use their devices because they don't jailbreak or unlock them.  But there's an increasing number of people that do.  Even if you don't do anything like this with your devices though, it's still something to pay attention to because this new set of exemptions affects us all in a number of ways.  On a fundamental level, this move is a strike against digital freedom and sets exactly what degree we actually own the tech we think we do.  If I buy a house I can paint the walls any color I want to.  When I buy a car I'm not restricted to what kind of gasoline I can use.  And when I buy a PC, there's no rule that says that I can't replace my OS.  But now if I buy a cell phone, my actions with it are now somehow up to the Librarian of Congress.

And part of that is thanks to the 2010 court case Vernor v. Autodesk, where  it was decided that we own our phones, just not the software that sits on it.

Financially is where the impact will be felt a little more heavily.  With the legal inability to unlock your own phone, if you want an unlocked phone you'll have to buy one unsubsidized at full price.  For example last year when I bought my Droid Razr MAXX, I got it at a significantly discounted cost (i think it was $299) because I was renewing my Verizon Wireless contract at the time and reaped the benefit of VZW subsidizing my purchase.  Now if I want to buy a phone of the same grade but have it unlocked, I would have to shell out somewhere in the neighborhood of $650 and up for that device.  For those that were unaware, yes, that's how much good smartphones cost on their own these days.

Travelers can also face some issues.  Someone with an unlocked phone can take it global, and just switch SIM cards at each destination to be able to use their own device.  This kind of convenience just became a lot more expensive.

Users can still buy phones that are already unlocked from their carriers, but it might cost them a pretty penny.  Some devices, like the iPhone 5 and Google's Nexus 4, come unlocked out of the box, which is OK under the new law, and under certain situations the carrier will unlock a device for you, but don't expect them to just go along with it.  Either way, the bottom line is that carriers win, and users lose.

So what are these consequences one would face should they choose to unlock their phone?  The CTIA has been kind enough to outline them for us on their official blog.  They, and subsequently the carriers, are the biggest beneficiaries of this whole mess:

"The penalties for unlocking a subsidized wireless phone without carrier consent can be severe. Civil penalties are based on the carrier’s actual damages and any additional profits of the violator, or a court can award statutory damages of not less than $200 or more than $2,500 per individual act. Criminal penalties are even more severe: any person convicted of violating section 1201 willfully and for purposes of commercial advantage or private financial gain (1) shall be fined not more than $500,000 or imprisoned for not more than 5 years, or both, for the first offense; and (2) shall be fined not more than $1,000,000 or imprisoned for not more than 10 years, or both, for any subsequent offense."

This is of course by no means an exhaustive analysis of the situation - there's a number of factors involved.  There's another part of this exemption list that involves DVD/blu-ray media and your mobile devices, and I'll cover that in part II.

Atari Files for Chapter 11 Bankruptcy - Insert Pitfall Reference Here

You know those friends that you used to hang out with all the time when you were kids, now just see every once in a while during the holidays?  For some gamers  on the console front that was Atari.  Even though I still consider Fairchild’s Channel F as the “OG” of console gaming, in the late 70′s and early 80′s Atari was where it was at.  And it’s a little rough to say that this old friend of ours, whose 2600 system gave us games like Asteroids and Space Invaders on, filed for chapter 11 bankruptcy this past Monday in New York.

Atari SA is filing to separate from their French masters Infogrames after what can only be described as a troubled history over the last couple of decades.  Through a lot of crazy mergers and acquisitions over that time, they were property of Time Warner, then Tramel, then to what could be considered their comeback under Hasbro’s flag before being picked up by Infogrames.  Infogrames tried to turn the brand into mobile entertainment, casual games and digital downloads, which just didn’t seem to work out to well.  Since their 2600 console, they’ve been almost a jinx for anyone who had them at the time.  At this point they’re so far removed from their original bread and butter of console and old-school arcade games that they just can’t keep up with the big studio games dominating the market.

Now this doesn’t mean the Atari brand is going away.  This is a strategic move to sell off some of their properties because they’re sorely strapped for cash, and owe a lot of creditors a lot of money.   In a statement from Atari, “The Chapter 11 process constitutes the most strategic option for Atari’s U.S. operations, as they look to preserve their inherent value and unlock revenue potential unrealized while under the control of Atari SA (ATA). During this period, the company expects to conduct its normal business operations.”

OK. We’ll see how this works out.

Remember when a couple of guys named Steve worked at Atari before starting a little company called Apple?  We sure are a far ways away from then.  Oh and on another note, I’ve been hearing tell of an Asteroids movie, and now it’s even listed on IMDB for 2014.  Maybe this was all part of the deal?

I’ll keep an eye on that rumor mill for you, kids.

Sony's VP of Awesome Settles Lawsuit Over Bridgestone and Mario Kart

Everyone loves a funny television commercial.  Regardless of what it's advertising, humor holds people's attention.  This is doubly true when the subject matter is of your interest.  So a few years ago when Sony presented Kevin Butler as their "Vice President of Awesome" and "Director of Rumor Confirmation" among other made up titles, you were amused and enjoyed the show.  It's cool, we all were.  He was  the character for Sony serving as the humorous mascot for the PlayStation 3, aimed squarely at pulling in that crucial 18-35 demographic with what seems to work today - pure ridiculousness.  Exchanging "booms" with gamers and even speaking at E3 2010, he blew stuff up, stole cars, and through a series of other crazy antics at least got your attention for Sony.

The thing is that Sony ad campaign was pretty high profile, and the character of Kevin Butler (actually played by an actor by the name of Jerry Lamber) became an instantly recognizable figure on TV.  I'm sure you've all seen Lamber lately in Bridgestone's ad campaign for their tires, donning a lab coat alongside Troy Aikman, telling a frustrated Deion Sanders to "Giddy up now, D."  On its own that's really not that big of a deal - it's just another actor doing a gig.  But another commercial in that Bridgestone campaign featured Lamber playing Mario Kart on a Nintendo Wii, which seemed to upset Sony a little bit.  Playing a competing product (especially since he was drilling Xbox and Nintendo earlier on Sony's behalf) made Sony / SCEA do what any red-blooded American company would do in October of last year.

They sued his ass.

Not only did they sue Jerry Lamber himself, but his company - advertising film Wildcat Creek for breach of contract, as well as Bridgestone for facilitating the whole thing.  You see a pretty basic clause in these sorts of agreements called a non-compete - think "thou shalt not shill for a competitor" for some pre-agreed-to period of time.  So when they saw what they considered a Kevin Butler type character using the products of a direct competitor, which he could have worked on while still under that timeframe, they saw a problem. And even though Bridgestone said they weren't breaking any rules because Lamber didn't have a speaking part, they pulled his section of the commercial from air (I couldn't find a video version online with him still in it, but that screengrab is still out there).

Sony's words from the lawsuit back in October talk about how the Kevin Butler character is an iconic personality, some stuff about misappropriation of their intellectual property and even went far enough to say it would cause market confusion.  Personally I don't know about that last part but really once a lawyer gets rolling it's tough to stop them.

Well, EuroGamer reported today that Jerry Lamber had finally settled with Sony on the lawsuit.  He surrendered, admitting that his appearance playing the Wii did in fact cause market confusion with video game consumers, and that he did in fact violate his non-compete clause.  The settlement?  I'm not sure about any kind of dollar figure, but Lamber has agreed not to appear in any video game related commercials for a period of 2 years, unless Sony approves of it.  So if you enjoyed his Kevin Butler-esque performances in the video game ad space, you're going to have to go without until 2015.  Kevin Butler is Sony property.  Sony's battle with Bridgestone on the other hand rages on in the courtroom.

Might I suggest settling this with a nice game of Mario Kart?

Australia Classifies their Very First R18+ Game with Ninja Gaiden: Razor's Edge

In the United States, we have a video and computer games rating system that makes sense.  It’s managed by the ESRB, and from eC (early childhood) to AO (adults only) the range of ratings make it pretty easy to know what to expect.  Thanks to this system, a majority of the time we can make an accurate pre-purchase assessment about whether or not the game is appropriate for the audience we’re buying for.  As much as your 8 year old kid would love to play God of War, the M rating on it may make you think twice about letting him or her get their Greek godly gore on.  Something rated E may be more the speed you’re looking for.  And there’s a rating band for everything, broken down even further than MPAA ratings for movies: between eC and AO are E (everyone), E10 (everyone 10+), T (teen), and M (mature).  Similar ratings systems exist in other parts of the world too.  In Europe for example that’s PEGI (Pan European Game Association).  And for the most part they work – just ask the FTC.  But there’s some parts of the world where these systems are (well, were) kind of broken and in need of some repair.  And the place in question today is Australia.

In Australia, game ratings are determined by the Australian Government’s Classification Board, but their ratings differed a little bit until recently from ESRB and PEGI style classifications.  While ESRB and PEGI have ratings for games meant for adult audiences, Australia didn’t, only going up to an MA15+ at the maximum.  So some games targeting adults that were released to the rest of the world never made it to the land down under.  Mortal Kombat titles for example were banned there.  Other games, like Silent Hill: Homecoming were modified by publishers so the Australian editions of the game conformed to MA15+.  It became a real problem down there - as systems become more advanced thy're more capable of showing realistic scenes including violence, which meant that Australian gamers had even that much less of a choice going to pick up some games.

Over the last couple of years there has been a lot of debate in the Australian government about whether or not the Classification Board should create new ratings to allow for adult-themed games, or as they call them, games with “high-impact” themes.  And after a lot of back and forth they finally decided that it would be a good idea.  Starting this year, two new classifications were effective: R18+ and X18+, both illegal to sell to persons under 18 years of age.

Well today Australian gamers can rejoice, as Lesley O’Brien, Director of the Classification Board put out a media release announcing that the R18+ classification would finally be in effect, and that the first game to carry the rating is going to be Ninja Gaiden 3: Razor’s Edge on Nintendo’s Wii U.  Prior to 2013, Nintendo would have been refused classification for the game, prohibiting sale of the game in the country.

According to the release, “The Classification Board classified the game R18+ (Restricted) with consumer advice of ‘High impact bloody violence’.”   Further, “Ninja Gaiden 3: Razor’s Edge contains violence that is high in impact because of its frequency, high definition graphics, and emphasis on blood effects.”  Now the game will have an official R18+ rating, matching the ESRB’s M and PEGI’s 18+ ratings in the United States and Europe, and Ryu Hyabusa’s ninja antics can be executed across the outback.

I’m a firm proponent of video game ratings and do think that they provide folks (especially parents) with guidance as to what kind of content is inside.  Everybody should familiarize themselves so they know the score a little better, and I will more than happily guide you to those resources: sites for the ESRB, PEGI, and the Australian Classification Board

Thanks GamePolitics for the heads up!

Does Sony's PS4 Sound the Death Knell for the Used Games Market?

When I was younger, maybe back in college or so, video games were sometimes a little cost prohibitive to buy.  $50-$60 bucks a pop for games for our favorite consoles was a little steep for us that had an income of roughly nil accompanied with tens of thousands of dollars in debt to repay when we were done our fancy book learnin'.  Doubly so for a house of nerds that decided that they could run a game review site without time and without money.  So sometimes we would rent, sometimes we would borrow, and sometimes we would buy used to save money whenever stuff went on sale.  Granted for PC games we couldn't really do that (those had, well, different methods of acquisition) but for consoles it was no issue - we grabbed the disc, popped it in our Xbox or PS2 and when we turned it on it worked.  Scratched media excluded, there were never really any issues.

But selling those copies back for store credit and having someone else pick it up used doesn't make publishers happy.  It's money they could have had with a new sale that they've lost, and at the same time it creates a big market that they can't get their hands in at all.  So now it was time for them to get creative.  These days in our digital age,  with the popularity of DLC for content delivery and online play, publishers are more than ready and able to do a lot of things digitally to pick up additional revenue streams.  Let me give you an example - I own a copy of Dead Or Alive 5.  If I get bored of it and sell it to a shop or to a friend of mine (let's call him Sven), that money goes to me, and not Tecmo.  So they added a little hook in the pricing model.  My new copy came with a key that allows me to play online.  But that code links itself to my Xbox Live ID.  So having bought my copy, Sven now has to pay for an online pass to play DOA5 to link to his Xbox Live ID.  See what Tecmo did there?  They put a method in place so that someone buying the game used still had to pay for certain elements of the game.  And in this case it's the online pass.  And Sven might even go on to buy some of the DLC character costumes, so look at that!  Money Tecmo made on a used game where they would have made none before.

original comic here from Penny Arcade

So what's the next step in how publishers can monetize used games?  There could be other methods like the one above that could help publishers extract money from the used games market.  But then there are also more extreme options... like trying to kill used games outright.  Recently on the NeoGAF forums, we found that the legal eagles at Sony filed a very interesting patent (which you can see here) regarding console games and rights.  When it broke, the news of this patent application was received so poorly that GameStop's stock price actually dropped on the day, with GameStop shareholders selling like mad out of fear of losing one of their core businesses.  Funny thing, the internet.

Don't worry kids, you don't have to read through that ridiculous amount of text.  I'm here to do that for you - and strangely actually kind of like reading patents.

The patent more or less states that this technology would lock a disc to a specific player ID, the same way my DOA5 online pass has a lock to my Xbox Live ID.  If this goes through and is implemented in the PlayStation 4, then a disc, once authorized to a single player, wouldn't be able to be played by another player, nullifying any value it potentially had in a used games market or sale.  How would they do it?  The console would write info to a designated blank part of the game disc, putting that link on there.  It may sound pretty Spartan in its method, but it's not really a stretch, seeing as that's how most digitally delivered games work these days.  Just take a look at Steam's model.

But does this mean that they're actually going to use it?  It's true, applying this technology to the PS4 would indeed lock out a used games market, but there were also rumors that Microsoft was talking about doing something similar a while ago with Project Durango (or Infinity, or 720, or whatever).  A lot of companies file for patents that they don't actually implement.  And I have to believe that they know implementing this would shoot themselves in the foot, and they would be giving up more benefits than they would be getting gains, including but not limited to a ridiculous fan backlash.

The whole thing adds a bit more murk to the waters of DRM and used games, especially when an increasing percentage of software doesn't actually exist on physical media.  But one thing I will admit, Sony's come a long way on their protection technology from being able to be beaten by scotch tape and Sharpie markers.