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Back when Apple was settling a lawsuit with the Beatles and agreeing not to switch from the computer industry to music, the idea of Apple Computer being in the same business as Apple Records seemed a bit silly. And yet today, computer technology has advanced so rapidly that today there’s no telling where computers stop and music begins. The result is a potentially cataclysmic clash of special interests, and Apple’s right in the middle of it.

As a technology company, Apple is in the business of creating innovative products and selling them to you and me. But today, a lot of that innovation is happening in the realm of music, movies, and television… a place Apple can’t venture into without the big media companies as partners.

It’s easy to see this conflict in action: just look at iTunes’ music-sharing feature, a cool technological innovation that lets other people listen to your music… but not keep copies. It’s a great idea, but since Apple introduced this feature it’s gradually become much less useful.

Confusingly, you can share MP3s with anyone (Apple says sharing is legal!), but iTunes Music Store files won’t play on unauthorized machines (Apple says sharing isn’t legal!). Which is it?

You used to be able to share your music with anyone on the Internet, but a software “update” crippled that feature. You used to be able to share music with five people at one time, but a recent update limited that to five unique computers in a 24-hour period.

Why would a technology company cripple its own innovations? Because Apple can’t just serve its customers: it’s also got to stay on good terms with the music companies if it wants the iTunes Music Store to survive. And those companies are so terrified of piracy that they’re putting the screws to companies like Apple to clamp down on features that are used by legitimate, law-abiding users. (Do you really think that gutting iTunes’ sharing feature stops music pirates from getting their hands on free music?) And just wait until there’s an Apple set-top box, a handheld Apple video player, or an iTunes Movie Store.

Apple’s hardly the only example. Companies such as Roxio and NTI offer CD- and DVD-burning utilities, but none can actually copy commercial Hollywood DVDs, because that’s illegal under the Digital Millennium Copyright Act (DMCA). (Roxio’s Popcorn is a great DVD backup utility, but it’s essentially useless because it can’t legally back up encrypted DVDs.)

So if you’re worried that your three-year-old is going to scratch her $30 “Finding Nemo” DVD beyond repair and you want to keep a safe copy around, you’re out of luck (unless you use illegal DVD-copying software such as MacTheRipper ). And if you want to buy El Gato’s Mac-based HDTV tuner, the EyeTV 500, you better do it before July 1 — the company can’t sell it after that date due to regulations that require copy-protection on every HDTV device that’s sold.

The end results? Consumers lose freedom, and technology companies end up trying to patch over flaws in their products that don’t exist because of any technical limitations, but rather because of questionable laws, political necessity, or both.

Is the government coming to take away your iPod? Of course not. But your iPod is already less functional than it should be, and if cases such as MGM v. Grokster don’t go the way of the technology companies, you can expect more compromised, crippled hardware and software in the future.

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