The iPhone Jailbreaking Showdown...
Prepare yourself. Over the next few months you are going to be bombarded with conversations about the iPhone.
Specifically, there are two gigantic stories looming on the horizon... 1) Will Apple re-up its deal with AT&T, or will it start allowing other companies to offer phone service for the iPhone as well? 2) If the Apple-AT&T agreement remains in place, is jailbreaking the iPhone going to be an accepted form of behavior, or one with criminal penalties?
In answer to the first question, rumors have been circulating all over the place lately that Apple is going to drop AT&T and start allowing other phone companies to start offering service for the iPhone. Don't believe them. AT&T's cellular business has become completely dependent on iPhone sales, as demonstrated by a whopping 73 percent of its new subscribers being directly attributed to sales of the iPhone.
What's actually happening is that the rumors are being circulated intentionally because they give Apple more leverage in their negotiations with AT&T. Expect AT&T to throw ridiculous gobs of money in Apple's direction in order to extend the exclusivity deal.
As to the second question, the U.S. Copyright Office is currently reviewing whether or not it ought to be illegal for people to "jailbreak" their iPhones (meaning, hacking their iPhones in order to use other cell phone service providers, and also to install applications that were not necessarily authorized by Apple).
As this Wired article explains, the Electronic Frontier Foundation has vigorously urged the Copyright Office to authorize jailbreaking, which in this case is hacking the phone’s OS, and hence allowing consumers to run any app on the phone they want. The EFF argues that it's the same as owning a car. Once you've bought it, it's then your right as a consumer to change what's under the hood.
On the other side of the debate, however, is the familiar alliance of the big record labels, movie studios, and Apple. They argue that when a person jailbreaks their iPhone, they are "creating a venue for [copyright] infringing activity". Apple, specifically, has argued that allowing any app on the iPhone could be detrimental to the phone’s functionality and that Apple "will be overrun by service calls from angry customers".
The real issue in this matter is an old one - at least in internet terms... To what extent can copyright owners protect their works without violating established consumer rights? Also, in business terms, does an open or a closed business model have a better chance of prevailing in the Digital Age?
Such questions have been fought over and debated ever since the original Napster rolled out ten years ago, and, since the U.S. Copyright Office is not set to reveal its decision until later this year, we can safely assume that they won't make a final determination on these digital copyright issues at that time either. If history is any guide, you can expect the legal system to keep muddling through while, ultimately, people with an enterprising spirit inevitably rise up to meet an obvious market demand.