Breaking Apple's IPhone App Monopoly

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Suppose you booted up your computer one morning and found that none of your applications worked because you didn't buy them from the Dell app store. Or maybe you tried to start your car and found that the ignition was locked because you didn't buy your new starter from the Toyota parts store. You'd be mad as hell, of course.

So why do we allow Apple, AT&T, Sprint, and the like to tell us whose apps we can run on our iPhones, and whose (overpriced) networks we can access with our devices and software?

[ For a look at the best mobile apps for the iPhone, see "iPhone applications get down to business." ]

Enough already. The great irony is that a quarter of a century after the breakup of the AT&T monopoly and well into age of Web 2.0, the carriers and the equipment makers are acting just like the old analog Ma Bell.

If you're a regular InfoWorld reader or a developer, you're probably savvy enough to know that unlocking or "jailbreaking" an iPhone to get past Apple's restrictions is not hard. So why should you care? Here's one big reason: Apple's stubborn refusal to open the platform and the implied threat of legal action against those who circumvent its rules make it difficult for developers -- who already have problems doing business with the App Store -- to attract the kind of capital they need to build and market better applications.

The current rules also place an unreasonable burden on IT staffs, which have to connect each corporate iPhone to a PC or Mac running iTunes to load proprietary business applications they have developed for internal use. Ridiculous.

Legalizing the iPhone Jailbreak

For the first time in years, the United States is going to have an FCC chairman who isn't in thrall to the special interests and is thus likely to use his position to do more than protect monopolies.

President Obama has nominated Julius Genachowski to the post, and by all accounts, he's likely to at least lend a sympathetic ear to the growing list of organization lining up against exclusive arrangements like the Apple/AT&T partnership and the locking of cell phones.

The anti-monopoly forces include the Electronic Frontier Foundation (EFF), the New America Foundation, Consumers Union, Mozilla, and a few small carriers. The EFF, a group with a long history of standing up for consumers, has already approached the U.S. Copyright Office and asked it to suspend for three years provisions of the Digital Millennium Copyright Act, or DMCA, that Apple and others use to protect their monopolistic practices.

Steve Jobs and company are no dummies, of course, and should the exemption be granted, it's likely that Apple will quickly shift grounds and rely on its license agreements to stop unsanctioned apps from legitimately finding their way onto the iPhone, says Fred von Lohmann, an EFF senior attorney. "The cat-and-mouse game will still continue, but Apple would be forced to rely on its engineers instead of its lawyers," he tells me.

For those of you who haven't followed this issue closely, let me explain the game. The iPhone is locked by code in the operating system. When someone breaks the code ("jailbreaking"), Apple does some reverse engineering and breaks the jailbreak when it updates the iPhone software. Then someone breaks the new code and the game begins again.

If the DMCA rule is suspended, Apple is still free to play the game, and it is still free to brandish its licensing provisions. However, a lawsuit launched under the cover of a licensing agreement, rather than under the DMCA, is much weaker, says von Lohmann, a lawyer with significant experience in intellectual property law.

With the threat of litigation weakened, the chances of raising money for an independent app store or major independent iPhone application development becomes significantly more feasible. In other words, you the developer will be freer to compete on the merits of your applications.

Apple: the New Ma Bell?

For those of you who came of age in the last couple of decades, it's hard to imagine how completely the old AT&T stifled innovation. Ma Bell argued that adding almost anything that anyone produced to its network could damage it. In one famous case, the company was able to ban a simple device that clipped onto a telephone mouthpiece to shield conversations from prying ears.

That ridiculous policy was overturned in 1968 by the Carterphone decision, but the power of the monopoly was largely unchecked until the divestiture took effect in 1984. Until then, there was so little innovation that the debut of the Princess Phone (don't ask) was seen as a big deal.

"We've thrown out what we did [to loosen restriction on wired lines], and as a result, innovation is stagnant compared to what it could be," says Sasha Meinrath, research director for the Wireless Futures Program at the New America Foundation. "The number of open services and applications on the Internet dwarf those in the wireless realm in part because of the locking down of edge devices [such as phones]."

And Meinrath is quick to point out that "this cabal of vendors and network operators functions to limit what developers can work on. And that's a really bad deal for consumers and an incredibly lucrative deal for the carriers."

Yes, it's true that New America is chaired by Google CEO Eric Schmidt, and yes, Google has an economic interest in opposing Apple and pushing its own Android phone platform.

Meinrath made no bones about that in our discussion, saying, "It is an area where the interests of companies like Google and Cisco align with consumers. I'm happy to walk along that path. When we move on to other issues, like privacy, our paths will diverge."

I buy that argument, and I'm glad New America has joined the fight.

What about Verizon, which now allows subscribers to use third-party phones? "Providers learned from the Carterphone decision that they can't block everything, so they [now] claim the word 'open' without really opening up," says Meinrath. In Verizon's case, it's not at all clear that third-party items will always work on their network.

We don't know what Julius Genachowski will do once he wins Senate confirmation. And we don't know how the Copyright Office will treat EFF's petition. But we do know that the stars are coming into alignment for some 21st-century monopoly-busting. Do your part by supporting the groups that are on our side. They deserve it -- and so do we.

I welcome your comments, tips, and suggestions. Reach me at

This story, "Breaking Apple's IPhone App Monopoly" was originally published by InfoWorld.

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