The Closing of the American iPhone


There’s been a lot of controversy recently over Apple’s tight-fisted control over the market for iPhone applications. Apple reviews every application submitted for sale via the iPhone App Store and regularly rejects applications that don’t meet its standards. More galling to iPhone developers, Apple is sometimes vague about why an application gets rejected, leaving a developer who’s poured months of effort into an application stranded.

The latest round of debate was sparked by Apple’s decision to reject the Google Voice application. That got the attention of the FCC, which sent letters to Apple, Google, and AT&T demanding an explanation for the decision. My former blogging colleagues Adam Thierer and Jerry Brito weren’t too happy about this, pointing out that it’s not clear the FCC has any authority in this area. And my friend Peter Suderman chimed in in support of Apple, noting that Apple has done more to enhance the dynamism of the wireless industry than the FCC ever will.

This is an especially worrisome trend because we’re rapidly approaching a world in which every digital device has a wireless card. So if the FCC has the authority to regulate the software on the iPhone because it happens to have wireless capabilities, the same reasoning would seem to give the FCC authority over almost any digital device. And that seems like a bad idea. There’s no reason to think the software industry—wireless or otherwise—needs more government oversight. And if there is going to be government oversight, there’s no reason to think the FCC is especially qualified to provide it.

I was, therefore, a little disappointed to see the Electronic Frontier Foundation’s Fred Von Lohmann jump on this particular bandwagon. I’ve been an EFF donor for years, and I think they do incredibly important work defending civil liberties. One of the things I’ve always admired about them is that they’ve always stayed tightly focused on their core mission of defending the freedom of the Internet from encroachment by the legal system. For example, they wisely stayed out of the network neutrality debate, recognizing that there were strong civil liberties arguments on both sides. Cheerleading for greater FCC regulation of the cell phone industry seems to me rather far afield from their traditional focus on defending digital freedom.

With that said, I think it’s important that critics of regulation not over-state their case. In particular, I don’t think there’s any reason to think that (as Peter puts it) “closed networks have spurred technological developments.” The iPhone is a hit because it’s a brilliant product, with excellent software and brilliant industrial design. Its popularity has little or nothing to do with the fact that it’s a closed platform operating on a closed network.

1032116553_330fe49fd9An analogy might help make this point clear: many movie theaters sell relatively cheap tickets and make their profits selling expensive refreshments. To make this business model work, movie theaters spend resources to prevent their customers from bringing their own food into the theater. Now, I certainly think it’s reasonable to say that movie theaters should be free to pursue this business model. And obviously many consumers believe they’re getting a good deal. But I don’t think any of them would cite their inability to bring food into the theater as one of the theater’s selling points. The policy is clearly designed to benefit the theater, not its patrons.

The same point applies to closed technology platforms. I certainly don’t think it should be illegal for companies to build closed networks or platforms. But it’s a little silly to pretend that companies’ efforts to lock down their products somehow improve the products or promote competition. The iPhone would be an even better (although possibly less profitable) product if customers had the freedom to install unauthorized applications. And the cellular market would be even more competitive if consumers had greater freedom to combine any device with any network. The iPhone is a great product in spite of, not because of, the restrictions Apple and AT&T place on it.

Finally, libertarians in particular should bear in mind the point Ryan Radia makes here. Apple’s stranglehold over the iPhone software market only exists thanks to the Digital Millennium Copyright Act:

The DMCA hasn’t stopped millions of iPhone owners from jailbreaking their phones and installing Cydia, an unofficial alternative to the official iPhone App Store. Cydia, which lets users download banned iPhone apps like Google Voice, has been installed on a whopping one in ten iPhones, according to its developers.

But jailbreaking programs and applications like Cydia are in risky legal territory. Developers who circumvent the iPhone’s copy protection systems are at risk of being sued by Apple, as are users who run jailbreaking software. Apple maintains that jailbreaking software is illegal under federal law, though it has not taken legal action against any unauthorized iPhone developers to date.

In a free market, consumers would have a choice between using Apple-approved software or switching to competing software offered by a variety of third-party vendors. Unfortunately, the DMCA has pushed the “jailbreaking” community underground, resulting in a world in which only the most technically-savvy users have a choice. I’m not convinced this is such a serious problem that we need to give the FCC the power to regulate the mobile software industry. But it is a problem, and I think it’s important to say so.

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8 Responses to The Closing of the American iPhone

  1. As more Google Android phones (with better and better industrial design) come on the market, a good case study contrasting the Android and iPhone business models may emerge.

    About a month ago, I went in to an Apple Store to purchase an iPhone. There were out of stock (after they told me on the phone that they had several in stock) and treated me condescendingly, so I decided to see what was in the pipeline for Android. The combination of bad customer service, the recent rejection of the Google Voice app, and a new T-Mobile Android phone have pretty much convinced me to not buy an iPhone.

  2. Alan Jacobs says:

    “The iPhone would be an even better (although possibly less profitable) product if customers had the freedom to install unauthorized applications.”

    Would it? I don’t think that’s clear. We already see that people with jailbroken iPhones install unauthorized apps — apps that monopolize system resources, or in other ways gum up the phone’s works — and what do those people do? They complain about sucky the iPhone itself is, as though Apple itself is to blame for their decisions and other people’s programming. It’s understandable that Apple doesn’t want to have to deal with any more of that kind of crap than they have to.

    (That said, the App Store process is a farce and is turning into a PR disaster for Apple.)

  3. Alan, again I’m not disputing that Apple benefits from having the iPhone locked down. And it may even be the case that consumers benefit from Apple not making it too easy to experiment with third-party applications–certainly it makes sense that the App Store would only show authorized apps by default. But Apple goes a lot further than that, taking active steps to prevent users from jailbreaking. They’re not doing that for the benefit of consumers.

  4. “Unfortunately, the DMCA has pushed the “jailbreaking” community underground, resulting in a world in which only the most technically-savvy users have a choice.”

    Are you sure this is something you can blame the law for? I think if you replaced “DMCA” with “Apple” in that sentence it would definitely be true: Apple has bent over backwards to make jailbreaking difficult and possibly dangerous.

    But I find it hard to believe the DMCA has had a hand in pushing the jailbreaking community underground and more than it has pushed the illegal filesharing community underground. In this case, I’d guess that majority of people who have unlocked their iPhone don’t even know that it is illegal.

    So, although I do believe that getting the DMCA exception for iPhone jailbreaking is an important legal right to establish, I doubt it would actually impact the openness of the platform in any practical sense.

  5. Sajid,

    I think jailbreaking tools aren’t very user-friendly or well-advertised in part because there isn’t a lot of money behind them. And I think that’s because the DMCA keeps established firms out of the market. In a no-DMCA world, Cydia might be an Internet startup or a project of a major software firm. Instead it appears to be developed by one guy in his spare time.

    This is not, incidentally, a problem that a DMCA exception can fix. The Copyright Office has the power to excuse users who jailbreak (which is a violation of 1201(a)(1)) but it lacks the power to excuse vendors who “traffic” in jailbreaking tools (which is a violation of 1201(a)(2). So an exemption would be a nice symbolic victory, but the actual increase in users’ freedom would be very small.

  6. True, good point. I guess we’ll get a bit more insight into how jailbreaking would have played out sans DMCA from the impending arms race between Apple and Palm over Pre-iTunes syncing.

    Thanks for the clarification on the DMCA exemption. One of these days I’ll get around to reading the entirety of your DMCA paper 🙂


  7. Tom says:

    We already see that people with jailbroken iPhones install unauthorized apps — apps that monopolize system resources, or in other ways gum up the phone’s works — and what do those people do? They complain about sucky the iPhone itself is, as though Apple itself is to blame for their decisions and other people’s programming.

    Do we really see this? Battery issues affected a small number of redsn0w releases. But by and large, users who jailbreak are technically sophisticated and thoroughly aware of the system impacts that background processing and other unauthorized techniques can have. Read some comment threads at the iphone dev blog and you’ll see.

    It’s also worth noting that Apple actually isn’t making it very difficult to jailbreak. The software may not be perfect — though with its animations, wizard interface and active support community, I’m not sure what the complaint is — but Apple could be doing MUCH more to make jailbreaking difficult. The hardware platform could enforce signed code, for one thing. They could randomize the default system password, rather than leaving it as “Alpine”. They could release system updates that close known vulnerabilities (3.0.1 did not). They could check for rogue software every time you connect to iTunes. They could take steps to protect the ipsw’s that need to be patched rather than allowing them to be freely downloaded, without authentication, over HTTP from Akamai.

    But they don’t! Instead, they seem primarily interested in maintaining a level of plausible deniability about apps that are in violation of the law or their agreement with AT&T; a threshold of difficulty that discourages nontechnical users from jailbreaking; and an ambiguous legal position that discourages serious commercial activity. This isn’t exactly inspiring (and I agree that their recent app store dictats are inexcusable), but it’s a lot better than it could be.

    As for the FCC: I agree in principle that the FCC shouldn’t stick its nose into private business agreements. But I have a hard time getting too worked up about them sending a signal. Between this letter and the open spectrum auction, I think they’re indicating pretty clearly that the industry can’t count on holding their customers hostage forever. This is ultimately healthy for everyone: technological change will make the transition inevitable, and if AT&T and their ilk can be convinced to figure out how to adjust a little ahead of their natural schedule it’ll be to everyone’s benefit. I really doubt that the FCC will force Apple or AT&T to do anything other than stay on their toes.

  8. It’s true that Apple’s lockdown of the iPhone can be obnoxious. However, I think it’s important to put it in context. The game console business has operated on this model for nearly 25 years.

    I think it’s interesting that there’s been “controversy” over the iPhone lockdown; would there have been such if Apple had just released the iPod touch? What if Apple had released an “iGame” – i.e. a renamed iPod touch? Does the iPhone lockdown particularly rankle because it’s a phone, because the underlying hardware is so obviously a general-purpose computer, because so many early adopters were hackers, or because of Apple’s particular userbase?

    I don’t know, but I do know no one complains about lockdowns of the PSP, or the Nintendo DS.

    Found this interesting quote about the (c. 1985) Nintendo Entertainment System:

    Nintendo’s near monopoly over the video game market during the NES’s heyday meant that they had a lot of leverage with third-party developers. Learning a lesson from the collapse of Atari, Nintendo added a lockout chip to the NES. The chip prevented games from loading unless there was a corresponding chip in the cartridge.

    Third-party developers were forced to pay licensing fees, submit their games to Nintendo’s Quality Assurance department, buy developer kits from Nintendo, and manufacture their games through Nintendo. Nintendo was allowed to dictate the games pricing, censor any material they thought unacceptable, decide how many of a game would be manufactured, and limit the number of games a company could produce over a certain length of time.

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