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Apple's Demand For A State-Sponsored Monopoly Shows That DRM Aims To Stop Competition, Not Piracy

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In This Issue:
1. Editor's Note: Apple's Demand For A State-Sponsored Monopoly Shows That DRM Aims To Stop Competition, Not Piracy
2. Today's Top Story
    - GAO: Sensitive Taxpayer Data At Risk
3. Breaking News
    - Check Point And Sourcefire Scrap Acquisition Amidst Scrutiny
    - Novell's New Products Aim To Rally The Linux Troops
    - FTC Smacks Spammer With $900,000 Fine
    - Strong Earnings Show Palm Is On A Roll
    - Foldera To Launch Hosted Application Suite
    - Alcatel, Lucent In Merger Talks
    - Paper Battery Developer Gets Funding
    - Flash Pet Collar Wins Invention Contest
    - Franco-American Research Center Bows
    - Holographic Firm Claims Data Storage Density Record
    - Google Holds 75% Of U.K. Search Market: Survey
    - Software Not Keeping Up With Multicore Advances: Panelists
4. Grab Bag
    - IBM Researchers Build Molecular Circuit (Sci-Tech Today)
    - Apple Computer Set To Mark 30th Birthday (San Jose Mercury News)
    - Photo Gallery: Pricey PCs (Wired News)
5. In Depth
    - Microsoft Delays Consumer Office To 2007
    - Office 2007 Delay Sets Stage For Massachusetts Open Document Battle
    - Some Microsoft Workers Call For Heads To Roll
    - Microsoft Names New Security Chief
6. Voice Of Authority
    - Use Wi-Fi--Go Straight To Jail
7. White Papers
    - IBM--Bridging The Divide: Integrating PLM And ERP
8. Get More Out Of InformationWeek
9. Manage Your Newsletter Subscription

Quote of the day:
"Competition is a painful thing, but it produces great results." -- Jerry Flint, in Forbes


1. Editor's Note: Apple's Demand For A State-Sponsored Monopoly Shows That DRM Aims To Stop Competition, Not Piracy

Companies touting DRM technology claim it's intended to protect data from unauthorized copying. But Apple's angry response to a French plan for iTunes interoperability has let the truth slip out: DRM is designed to lock in customers, not lock down data.

Apple accuses France of "state-sponsored piracy" because a copyright bill currently going through the French parliament would require DRM vendors to open their technology to competitors. In reality, France is just trying to avoid the situation in the United States, where the lobbyist-written Digital Millennium Copyright Act has made interoperability illegal. That isn't just the opinion of the French or the EFF. Earlier this week, the Cato Institute published a report that describes how the DMCA is anti-competitive and hurts innovation.

Despite some work by Sun Microsystems, all DRM technologies so far are proprietary. If you buy a song from iTunes, it's encrypted using Apple DRM, so you can only copy it to an iPod--not a standard MP3 player. Similarly, Napster and MusicMatch sell songs encrypted using Microsoft DRM, so they can only be copied to players that include Microsoft software. (As in the PC market, Microsoft is content to monopolize only software and services, while Apple wants to monopolize hardware, too.) To interoperate with the Apple or Microsoft formats, other vendors need to license Apple or Microsoft DRM, and neither will license to a competitor.

Even when a vendor does let others license its DRM, it can charge as much as it wants and impose onerous conditions. For example, DVDs are encrypted using DRM from a cartel called the DVD Copy Control Association. To make a DVD player, hardware manufacturers need to license the DRM. And to license the DRM, the manufacturers must agree to restrict what their customers can do. (The agreements have real teeth. Last month, a group of movie studios even sued Samsung for accidentally making a DVD player that gave users too much control.) That's why DVD players sold in the United States can't legally skip through the FBI warning, play DVDs from most other countries, or copy a DVD to a laptop's hard disk.

The traditional route to interoperability is through reverse-engineering. However, the DMCA makes reverse-engineering of DRM a felony punishable by 10 years in prison and a $1 million fine. It's only a U.S. law, so programs to remove DRM from iTunes purchases and DVDs are freely available on Web sites hosted in other countries. (Most of them seem to be written by the same person, Jon Johansen.) I wish I could link to them, but even that is illegal under the DMCA.

This isn't just a consumer concern. Microsoft and others are pushing DRM systems for businesses. They're usually rebranded as something else ("Information Rights Management," "Document Control"), but that's just PR. All are just as proprietary as consumer DRM. Customers who fall for the sales pitch could find themselves unable to access their own data without either agreeing to the DRM vendor's licensing conditions (which can change at any time) or relocating to France.

What do you think? Is Apple seeking to protect its intellectual property, or stifle competition? Leave a message on the InformationWeek Weblog and let us know.

Andy Dornan
adornan@cmp.com
www.informationweek.com


2. Today's Top Story

GAO: Sensitive Taxpayer Data At Risk
Despite some improvements, the IRS needs to do much more to secure its IT systems, congressional auditors say.


3. Breaking News

Check Point And Sourcefire Scrap Acquisition Amidst Scrutiny
Israel-based Check Point will have to seek other business partners to add intrusion detection to its product lineup.

Novell's New Products Aim To Rally The Linux Troops
Despite the product bonanza at BrainShare, the most applause came for the company chairman's announcement that Novell will support NetWare through 2015.

FTC Smacks Spammer With $900,000 Fine
According to the FTC, JumpStart Technologies has spammed consumers since 2002, sending millions of messages disguised as personal E-mails in an attempt to hype its FreeFlixTix Web site.

Strong Earnings Show Palm Is On A Roll
Quarterly profits jumped from $4.4 million a year ago to $29.9 million, while revenues increased 36% to $388.5 million.

Foldera To Launch Hosted Application Suite
Along with E-mail and instant messages, the Web-based software will organize all types of content. For instance, it's designed to route E-mails into folders as they arrive.

Alcatel, Lucent In Merger Talks
The deal would create a communications powerhouse, with combined sales of more than $25 billion.

Paper Battery Developer Gets Funding
The SoftBattery is intended for use as a power source in disposable gear, including cosmetics, greeting cards, sensors, smart cards, and electronic paper.

Flash Pet Collar Wins Invention Contest
The MicroID Collar, for cats and dogs, incorporates a flash memory card and a USB controller into the pet's collar. The device has an electronic journal for storing all pet and owner information.

Franco-American Research Center Bows
The center is an extension of a former photonics research unit opened in 1998 to focus on network security via fiber optics.

Holographic Firm Claims Data Storage Density Record
The first-generation holographic drive, to be delivered later this year, has a capacity of 300 gigabytes on a single disk, with a 20 megabyte per second transfer rate.

Google Holds 75% Of U.K. Search Market: Survey
The search firm does better there than it does in the U.S., where it typically garners a 50% share.

Software Not Keeping Up With Multicore Advances: Panelists
Challenges facing multicore processors include programming difficulties and a lack of development environments.

All Our Latest News

Watch The News Show

In the current episode:

John Soat With 'Damn Data!'
Fidelity loses track of a laptop and mucho personal data for HP employees in the bargain, New York AG Eliot Spitzer clamps down on the sale of personal data garnered over the Internet, and E-mail archiving is expected to grow into a big-bucks market.

Paul Kapustka With 'VoIP Line'
Yahoo! for VoIP over IM.

Stephanie Stahl With 'Boss Button'
CBS Sportsline offers an onscreen disguise for watching March Madness at work.


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4. Grab Bag: News You Need From Around The Web

IBM Researchers Build Molecular Circuit (Sci-Tech Today)
IBM researchers have created the first complete integrated circuit built around a single carbon nanotube molecule, a new material that promises significant benefits compared to traditional silicon.

Apple Computer Set To Mark 30th Birthday (San Jose Mercury News)
Silicon Valley's historic orchards have virtually disappeared, but one notable fruit still stands: Apple.

Photo Gallery: Pricey PCs (Wired News)
If cost didn't matter, what PC would you buy? Would you go for features or class? Check out our picks (and pics) for the most expensive PCs out there.


5. In Depth

Microsoft Delays Consumer Office To 2007
Following the same track as Vista, the next version of Office will be available to businesses by year-end, but the consumer package will be released in January, Microsoft says.

Office 2007 Delay Sets Stage For Massachusetts Open Document Battle
The delay gives Microsoft time to challenge the Open Document Format in Massachusetts. By January, Microsoft is expected to have received approval from the ECMA standards body for Office 2007.

Some Microsoft Workers Call For Heads To Roll
Writing on an anonymous blog, some employees are venting frustration over the latest delays with Vista and Office.

Microsoft Names New Security Chief
Ben Fathi, who most recently served as general manager for storage and high availability in Microsoft's Windows division, replaces security technology unit chief Mike Nash, effective immediately.


6. Voice Of Authority

Use Wi-Fi--Go Straight To Jail
Preston Gralla says: Next time you think about hopping onto your neighbor's unsecured wireless network, think twice--you could face jail time. That's the conundrum being faced by a Rockford, Ill., man who had to pay a $250 fine and must endure a year of court supervision for using the signal from someone else's Wi-Fi network.


7. White Papers

IBM--Bridging The Divide: Integrating PLM And ERP
The benefits of IBM WebSphere are available to companies of all sizes. This brochure provides an overview of the value of using SMARTEAM and WebSphere Business Integration Server to integrate a company's PLM and ERP systems.


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