Re: [dvd-discuss] Re: TurboTax for free?

["John Zulauf" <johnzu(at)ia.nsc.com>]

There seem to be a few differences, though I'm not sure they are
entirely compelling.  First a disclaimer.  

There is clearly a difference between that which is ethical and that
which is legal.  Ethically, one should respect the intent of the company
and not attempt to bypass the key.  If one objects to the p-spam of
being sent CD's and wishes to protest, then civil disobedience options
are open.  Bypassing the key, and then sending a open letter to the
software company stating that this is a truly bad idea given the ease of
the "crack".  The more daring might post details or write a paper on the
"security hole" in the TurboTax key mechanism.  Those living abroad (and
never planning to visiting the US) might even write a key-crack tool (ah
to be in Russia in winter -- brrrrr.). Certainly someone was employed to
create the authorization system, and those trusting it (and/or paying
for it) it's security should be informed of it's weakness.  Certainly
Adobe gave up on the ill-fated "fonts on demand" CD's which were cracked
wholesale (See **0) after the public disclosure of how to unlock every
font on that doomed disk.  Surprisingly, most folk still paid for fonts
until MS starting packing so many into Windows free that the average DTP
user had more than they needed. 


Cracking the software and using it to do your taxes doesn't qualify as
"civil disobedience" regardless.  To those who think "free stuff ==
civil disobedience" let me say, 
   "pppphhhhhhhhttttttt!!!!"

Onto the legal distinctions:

(1) You have not been sent a functioning copy of TurboTax, you have been
sent a functioning copy of their installer.  You are free to use that
installer as much as you want.  You can order a key and the installer
will then create (from the data it has on disk) a functioning copy of
TurboTax.  You can type in a bogus key and (with all the pleasure of
watching the microwave oven) enjoy the pleasure of it's "error" and "did
not install" message, you can do this to your heart's content -- they
sent you the disk, it's free.

If you were mailed a DVD, it would work on any DVD player other DVD's
work on (region coding aside).

(2) You probably cannot install TurboTax (even if someone sent you a
valid key) without agreeing to the EULA.  I would be quite shocked if
the EULA doesn't include some language requiring you to assert that you
are in possession of a legal acquire right-to-use.  Given that  the
software you were sent does require an additional transaction, the
recent EULA voiding case probably doesn't apply.  The free polycarbonate
disk doesn't look or feel like a sale, as clearly it is noted that you
need an additional transaction to use the product.

DVD's don't have a EULA, except to say "private home use" (See **1) 

(3) The TPM protecting TurboTax on the disk is clearly pre-first-sale,
CSS is clearly post-sale.  (What they have in common is that they both
show that access and copy controls are orthogonal, the TurboTax is key
protected, but infinitely copiable, as is the DVD)

(4) There is no "reasonable person" expectation that a free CD with
"instructions say that to access it I need to have internet access and a
credit card".  You yourself stated: "Obviously this is a protected
program, with the intention that I pay them before it is unlocked."

The "reasonable person" assumption for a DVD is that if you stick it
into a DVD player it will play, without having to spend $29.99 for a
key.  This is of course why Judge Kaplan is just flat wrong about CSS,
but that's an old argument.  CSS isn't DivX, and never was -- it doesn't
protect any *valid* right of a copyright holder. The Paramount case got
rid of the notion of the right of a copyright holder to control the
choice of the projector (player).

Finally (and not related to the DVD vs. TurboTax difference.  This is
comparable to those hideous "1,500 credit advance" checks.  The are
perfectly cashable, but entail certain contractual obligations if you
do.  This disk is a functional equivalent, use of it is bound up in
contract language that you can't just read and pretend doesn't exist. 
Now if they screwed up the contract (i.e. EULA doesn't require you to
only use the software with your valid key) then that's different.  To
bad the lawyers for those $1,500 credit advance check never screw up.

.002

"I'm shocked, shocked to find warez crackers read this website." 
 -- any of a list of web admins we could name

Footnotes:

**0 The irony of Adobe not learning that lesson (listen to the ranting
of their CEO sometime) and trying again with the equally ill-fated eBook
DRM's... ah well.  Without making individually keyed copies( see **10),
this will never work.  Even with individually key content, the content
once accessed cannot be assumed to be controlled.

**1 The "private home use" message is utterly redundant since owning a
copy of a work (book, play, or recording) has never granted a
performance right.

**10 Note these "piracy machines" ... (cool and only $1,575 US)

http://www.mediasolutionse.com/Merchant2/merchant.mv?Screen=PROD&Store_Code=MS&Product_Code=62701&Category_Code=CDD

http://makeashorterlink.com/?O2EF32FF2

are also the perfect factory for individualized encrypted content
delivery (note I said delivery, not post delivery control).

The CD-R robots are what the RIAA should worry about, both from an
infringing copies and disintermediation standpoint.  A mere 1600USD
closes the publishers out of the loop entirely. This at a cost well
within the budget of a studio, music store, or locally successful band
(as long as they still have their day jobs).  Imagine what mandatory
licensing and kiosks with these devices would do to the average RIAA
member's business model.

So what does it cost a DIY publisher to make a CD?

Blank media   	$.29
CD ink        	$.10
Jewel case    	$.09
1 page insert	$.30	photo paper and ink
labor printer	$.04	2min/25 disk batch at $30/hour
labor stuffing  $.025   1min/4disks at $6/hour
depreciation    $.015   see below
===================================
total		$.82


Depreciation assumptions: purchase price $1600, $400 3yr extended
warranty, fully utilized 10hour/day, 200disk/day, 210day/year 42000
disk/year, 3years 126000 total)  To be fair, a hobbyist who produces a
1,000 disks sees a depreciation cost many times higher ($1.60/disk).  A
more typical number for a studio, music store, or coop would be 1/10
utilization $.15/disk over 3 years (1/2 day/week) changing the cost
total to $.975/disk

None of this includes the economies of scale (wholesale pricing on
supplies, automated stuffing/wrapping machines) that "real publishers"
face. Assuming the $1.50/album royalty -- $2.72 cost, 17.99 retail, 30%
to the channel, we have 3630% gross margin for the record companies(at
least, given that most of the royalties are paid back to the record
company for profit center services like studios etc.).  No wonder they
can afford so many legislators.