Jailbreaking The iPhone, Legally

The Library of Congress gave iPhone users a get-out-of-jail-free card yesterday.

As part of a periodic review, the agency determined that “jailbreaking” the iPhone is allowed under American copyright law. Owners of iPhones (and other smartphones) have the right to unlock their devices and use applications not approved by the manufacturer or seller.

The decision is important in a variety of ways, not all of which are directly related to phones, or even to the wider goals of the Electronic Frontier Foundation, which sought a smartphone exemption to the Digital Millennium Copyright Act.

Basically, the Library of Congress reinforced the idea that when you buy a device, you own that device. This concept should apply to all sorts of technologies.

Automobiles are one example. Between built-in DVD navigational systems and the impenetrable engine service codes, drivers have to rely on the manufacturer for updates and service more completely than ever before. The days of teenagers in garages tinkering with their cars are all but over. Any owner, however, should be able to buy a third-party DVD database for the navigation system, or a program that can interrogate a car’s onboard computers to learn which malfunctioning gewgaw is making the “check engine” light flash ominously.

The world of e-books is another arena where the rules of ownership are fuzzier than they ought to be. A year ago, Amazon incensed its customer base when it wirelessly deleted certain previously purchased books from Kindle users’ libraries. Though the customers owned their Kindles, the files were apparently not so clear cut. And, while Amazon has since acknowledged that it was wrong to handle the matter the way it did, the company still has recall-enforcement mechanisms that are not available to merchants who sell more traditional merchandise.

Technology changes quickly, but some concepts ought to be enduring. One is that you own what you buy. Yesterday’s ruling means that, if you wish, you can install unauthorized applications on your own device, or make changes to the firmware.

Be careful. These modifications can have consequences much worse than a copyright violation notice. Jailbreaking your phone will almost always void its warranty. The practice can also open the door to spyware and viruses. But those choices are now firmly in the hands of the individual user, as they should be.

Apple claimed that permitting iPhone owners to jailbreak their phones would destroy the company’s technological protection for software on the device. But the Copyright Office noted that jailbreaking involves changing fewer than 50 bytes out of 8 million. It’s a small change that yields a lot of flexibility.

Vendors are usually eager to invoke the digital copyright law to the maximum extent. Apple (AAPL) understandably wants to keep its iPhone customers tied as closely as possible to its own iTunes and App stores, and to the wireless carriers (in this country, AT&T) with which it makes exclusive marketing arrangements. But hardware customers are not serfs. A car company cannot tie its customers to a certain brand of gasoline. Television makers cannot select only certain channels that will appear on their screens. (I am old enough to remember when the Federal Communications Commission mandated that all TVs must be able to receive UHF signals.) Even my shaving razor accepts third-party blades.

Our mothers taught us that we can’t “eat our cake and have it, too.” The Library of Congress now has delivered the same message to smartphone makers: You can’t sell a device and still behave as though you own it.

About Larry M. Elkin 525 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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