RE: Jail for seller of illegal Xbox chips

["Graham Howe" <graham@xxxxxxx>]

Whilst I don't agree with everything Mark Hetherington says in his post,
I am extremely appreciative of the way in which he put his points
across. This is exactly the sort of discussion I personally welcome in
this group (and I don't care whether it is on topic or not!). Thankyou
Mark.

My personal view on this particular topic is somewhat in the middle (or
on the fence if you like). If I own something out right I expect to be
able to do pretty much anything I like with it, though I don't expect to
have the *right* to copy it. However I also expect companies to make it
difficult for me to use a device for something other than their intended
purpose for it and certainly to try to protect their investment from
copying.

Returning to the original topic of the thread, I wonder if there would
have been any jail for the seller if he had given away the chips or the
instructions on how to make them. After all, we have recently seen the
breaking of DVD encryption allowed by the courts which is not a hugely
different case. On both occasions the result was the defeat of the
hardware/software manufacture's copy protection mechanisms and in both
cases the technology to defeat them was made available to the public.
The significant difference seems to be that one person sold the
technology whilst the other posted it up for free on a website.

The other complexity seems to be that whilst it has never been
acceptable to break copyright, it has always been acceptable to create
technology capable of breaking copyright. Photocopiers, tape records,
VHS, CDR, DVDR etc etc are all legal mechanisms that can be (and
frequently are) used to make illegal copies. The defence of the
manufacturers of these devices seems to be that they should only be used
to copy things the user has the right to copy. The same argument was
used by the guy who defeated DVD encryption.

Now whilst it is a little less believable for the xbox chips, an
argument could be made that they were designed to allow people to use
their xboxes for other HE tasks rather than to allow piracy. We will not
know whether that line of defence would have been successful though as
(from my limited understanding of the case) the defendant plead guilty
to all charges.

Graham

-----Original Message-----
From: Mark Hetherington [mailto:mark.egroups@xxxxxxx]
Sent: 16 April 2003 00:34
To: ukha_d@xxxxxxx
Subject: RE: [ukha_d]Jail for seller of illegal Xbox chips


> From: Ian Lowe [mailto:ian@xxxxxxx]
> I honestly could not care less about the terrible hardships
> of a company with the morals of Microsoft, or Sony for that
> matter.

The question of your perceived morals of large multinationals is an
entirely different issue and is not relevant to the pricing model
discussion. It will however be revisited later in this post.

> Their business model is flawed, and relies on a
> perversion of any sensible concept of property to become valid.

Their business model is well proven by the likes of mobile phones and
set top boxes plus the obvious history of console hardware.

The concept of intellectual property (assuming that is the property
concept you question) is present in many commercial enterprises and has
existed in various forms for many centuries. The origins of IP
protection are traceable to Ancient Greece. Their initial steps coupled
with the Roman Empire's "improvements", form the basis of modern
Western
legal frameworks. As an example, the Colonel's "secret blend of herbs
and spices" used for Kentucky Fried Chicken would have been as
protected
in Ancient Greece as it is today.

> I am firmly of the opinion that if you or I go out and buy an
> item of clothing/food/hardware/stationery, it becomes yours
> to do with as you please, whether that is to crush it, put it
> in a cupboard, never to be seen again, or even (gasp!) to use
> it "as the manufacturer intended".

Maybe you would also desire the right to take it apart, copy the parts,
build your own version then set up in competition based on their
product?

As an aside, I increasingly see in manuals accompanying products
warnings not to crush the product together with a pictorial
representation. Whilst potentially amusing to many at first, I feel it
is a sad reflection on modern society that not only do people need to be
told not to crush something and expect it to work, but require a picture
should they be unable to read the few words that ought to be mere common
sense.

> The fact that these products are being sold at a dramatic
> loss doesn't make me go all fuzzy with goodness and want to
> rush out to buy the games:

My comment was not intended to create any desire to repay the subsidy,
but was merely a comment on why a device exists with such diverse
potential uses, at such a price, while comparing with comparable
products that, at least here on the list, do not appear to attract the
same desire to break the protections of.

> The XBox as it is being used by
> the members of this group would still be great at full
> manufacture cost + profit.

I really do not think that many (if any) members would pay the
unsubsidised price. I forget the actual figures, but a PC from PC World
would likely be a cheaper option. All said and done, the XBox is a PC
with standardised components allowing the flaws of the PC to be
minimised and certain optimisations made for it's intended purpose.
There is nothing to stop UKHA members creating a standard PC system for
Home Entertainment.

> What other Divx Capable, Network
> enabled media player with an onboard hard drive can you get?

Without investigation I cannot say that such a product does or does not
exist other than the PC which has the added advantages of simple
upgrading and no locks on the system software. The price point of the
Xbox appears to be the current attraction rather than the capabilities
and my original comments were related to that.

> if Microsoft or other manufacturers can't see what has been
> done with these platforms, and develop products to fit that
> niche with a sustainable business model, more fool them.

There is no sustainable income from such devices at present and it would
be more foolish for a commercial enterprise to invest in a product that
did not offer returns.

The games industry has often looked at integrating a console with an
STB. Had it not been for the unfortunate demise of Sega's hardware
division, the planned STB licence granted to Pace may well have taken
off. This would have been basically your average STB with a built in
Dreamcast and hard drive. It might have kick-started the very devices
you desire to see but we will never know. The launch window of the DC
meant it was not DVD compatible but while heavily discounted a community
sprang up to support additional uses of the now defunct console along
similar lines to the way that the Xbox is currently being used in this
discussion.

Sony with the PS2 wanted to create a Home Entertainment device rather
than a mere console. This is of course the reason that the PS2 is
launched in black when all AV components are returning to a silver
colour and a different size to all AV components you own. Microsoft
wanted to achieve their aim of a PC in every home and break into another
potentially lucrative market so their console was based upon the PC. Had
it not been for the failure of previous relationships, it could well be
a Sega based console inside the Xbox.

Despite their obvious failings, both the PS2 and Xbox are steps towards
a device that can be part, if not the heart, of a home entertainment
system, but this is the first generation of such devices. However, they
are currently games consoles with extra features and both were affected
by the more capable dedicated DVD player falling in price to mass market
levels. IMO, this is not a bad thing since the PS2 at least is an awful
replacement for a DVD player.

PS3 and XBox2 should launch within the next year or two and may address
the flaws in their original designs and may meet the criteria of a pure
Home Entertainment device as well as a games console assuming a suitable
revenue stream has been discovered. MS also have other inroads to the
Home Entertainment market under consideration while Sony have many
components in many homes already. The battle for the elusive central
device has begun.

The current increase in protection through the banning of copyright
circumvention devices may be here to stay, but may become redundant. All
content industries are looking at alternate provision systems which
would alleviate the need for such protection. The games industry is best
poised to suffer least from the change since it is a relatively young
industry but short term benefits from the protections required by the
more mature and larger content industries of movies and music.

Unfortunately, the lack of the likes of broadband rollout throughout
many Western countries inhibits this change since investigations into a
pure networked system are inhibited by the lack of installed users able
to take advantage of such a system. The failure of DivX in it's original
form has made all industries cautious about changing the retail channels
and revenue stream so drastically. Of course the traditional retail
channels will protest about any move towards networked systems since it
will affect them greatly. They could move to content providers. The
current limbo state allows all players time to investigate possibilities
for the future but has sufficient protection that they can remain
viable.

> As for the political side of things, you may wish to take a
> "can't change anything, so won't try" approach,

My comment was purely a generalisation on the apparent common attitude
today and at no point attributed to myself personally. The fact that MPs
were (possibly still are) considering legislation which would make it an
offence not to vote, is indicative that my comments are not merely a
personal interpretation of the current state of affairs.

> both my MP and MSP seem open to being convinced on a range of
> issues, and make my voice heard.

Are you sure that is the case? Maybe they merely had the same views as
yourself anyway and those that oppose those views are ignored.

> introduced. I am sure with enough people badgering their MPs,
> our implementation would have been much more limp.

Unless the badgered MP is a party whip or a party leader, unlikely. How
often do MPs get a "free" vote on anything that is of particular
relevance?

> At any rate, In most cases, I firmly believe that MEPs are
> only making these draconian laws in the first place because
> the slick voice of the content industry is the only voice
> they are even hearing!

You appear to suggest that MEPs will be driven by the content industries
but MPs would be immune from the same and are merely "fighting your
corner".

You appear to be blaming the manufacturers from preventing you from
turning their current hardware into something it is not, but also
slating them for not making what you think they should make. Meanwhile,
you suggest people petition their MPs to fix it when surely by your own
reasoning it is manufacturers that need petitioning. MPs get 4-5 years
during which they can do everything you ask or nothing you ask depending
on the party opinion and control. Commercial enterprises have to compete
with other commercial enterprises. They have to find new markets. They
have to diversify to changes in the market. They have no guaranteed
term. I think you might be targeting the wrong people with your desires.
MPs will not give you the device you want. Manufacturers might.

You tout the limited success of certain groups, but there are far more
successes of groups against commercial enterprise than any against
politicians. Politicians often merely want to keep their job and in a
way some form of peace. Commercial enterprise wants to make money and
threatening their income or suggesting a lucrative path seems to have a
much higher success rate. An MD with the prospect of profit is a much
more useful ally than an MP with a sympathetic smile and several other
conflicting electorate representatives to choose from along with the
"slick" commercial members of their constituency.

The Fox DVD issue springs to mind when there was a complete boycott of
Fox DVD purchases during the early days of DVD due to the inferior PAL
productions compared to the NTSC equivalents. Within a few weeks, Fox
made a complete u-turn on their PAL productions. I have yet to see any
such change effected so quickly through petitioning government.

Even electoral promises in manifestos appear to be forgotten once the
currently elected parliament are comfortable. After promising a hunting
ban in their original manifesto, years later some watered down licensing
scheme is about to be introduced (upsetting every animal welfare
organisation in the country that went to great efforts around the
election promise). Promised reform of child poverty has yet to be
realised and is well short of the 2003 target levels. The fiasco that is
the regeneration of the House of Lords. The list goes on. If they cannot
keep the promises they made to get into power, assuming they will be
able to make any change based on petitioning is somewhat naive. It is
not of course without worth, but you require a huge level of petitioning
and you also need to target the party leaders (including the PM) in
order to effect change. Democracy is a facade restricted to elections.
Elected members do not have the free vote that the electorate enjoys and
changes take a long time to filter through.

Which comes back full circle to your opening remarks. While not relevant
to the argument over business strategy, it does explain why petitioning
of a commercial enterprise is much more effective and in a much shorter
timescale. You have an instant common denominator of money. Consumers do
not want to waste it and can easily withhold it for non-essentials.
Companies do not want to lose it. The Fox campaign threatened to kill
all commercial DVD sales in the UK for Fox. At the time it was a
minority market, but the potential market was huge and fast emerging.
Fox could not afford to face off the campaign. It was little effort for
the guy in the street to not buy Fox.

Petitioning government is a much harder task since despite their
reliance on your money in the form of taxation you cannot deprive them
of it. You can also not get rid of them for 4-5 years except through a
coup or similar major uprising of the general population. In any event
it is more work for the guy on the street. People don't like having to
work for things so you need to make it easy.

The group is about Home Automation which is a reflection on this facet
of modern society. We want to make even simple tasks like turning on
lights easier to give us more time to do the things that we want. Maybe
it is to campaign against government policy of changes to legislative
process, or maybe it is merely to be with our friends and family or have
more leisure time.

Ranting here about the apathy of people in writing to MPs will not
change the way people are. Follow the ethos of the group and automate
the process and you will likely get the numbers you want to commence the
changes you desire. The DOG campaign group have automated their
complaints process to both commerce and government and seen a huge
increase in their members taking action. Clicking a button on a web page
is something more people are prepared to do than writing letters or
emails to individuals. The DOG campaign has yet to have a governmental
success AFAIK, but has had several commercial ones.

If you assume commerce has more effect on MEPs than individuals, there
is no reason that MPs should be any less venerable. Petitioning commerce
may well filter through to influential pressure on government through
the same system.



Mark.



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