Why else would federal agents raid video game console modders in 16 states if this were not the case? Don’t they, in this case ICE, have anything better to do than come down heavy on people selling $10 mod chips under DMCA warrants?

The modification chips and circumvention devices allow users to play illegally obtained, pirated and/or counterfeit software on video game consoles including Sony’s Playstation 2, Microsoft’s XBOX and XBOX 360, and Nintendo’s Wii. Modification chips and swap discs for gaming consoles violate laws under the Digital Millennium Copyright Act of 1998 (DMCA). According to the Entertainment Software Association (ESA), the makers of the gaming consoles, game developers, and others in the industry have incurred billions of dollars in losses worldwide due to sales lost to those selling counterfeit and pirated video games.

Counterfeiting and piracy is estimated to cost the U.S. economy between $200 billion and $250 billion annually and results in the loss of up to 750,000 jobs according to the U.S. Chamber of Commerce.

From the August 1st press release on the ICE website.

A response, characteristic of the hacker mentality outlined many places and occasionally in published works such as

“A Hacker Manifesto” (McKenzie Wark)

and possibly

“The Hacker Ethic” (Pekka Himanen, Linus Torvalds)

was presented in response to the raids:

Much like the media slant against hackers in general the act of modding is criminalized in the US. I look at modding as an act of expression and something someone does to expand their own knowledge and use of a system. It can be an exploratory learning experience, and yes it can also be used to do illegal things. Compare a modchip to a knife: In the hands of a sculptor a knife could create beautiful wood carvings, in the hands of a chef it could help create culinary masterpieces, it can keep you alive in the woods, and it can protect you in dangerous situations, but in the hands of a criminal it can also be used to destroy property or cause bodily damage. Much like a knife, a modchip’s usage is very much determined by the intentions of it’s user. In the hands of a pirate it will be used to pirate games but in the hands of programmer it will be used to learn new technologies and create new and interesting applications. Other hobbyists simply like to explore the fruits of other developers. The example of Xbox Media Center (XBMC) is often used, this application transforms a humble Xbox console into a full fledged Media Box capable of upscaling and playing back DVDs, streaming web content like YouTube or Google video, as well as storing and streaming audio, video and picture files. XBMC is not only similar to devices such as AppleTV and Media Center PCs but in many ways it is superior to those products in terms of it’s capabilities. Of course XBMC can only be used on a modified Xbox and while it would be possible to build and run such an application on a normal PC the novelty is in the utilization of cheap hardware (the Xbox costs less than $100 these days) and in many cases it’s not only hardware you already own but hardware that already fits properly within a TV room environment making it quite ideal, if it weren’t for the fact that it is illegal to use the free XBMC software with the Xbox hardware you own under the DMCA.

Twistedsymphony who then goes on for another few pages about the unproven legality and general unfairness of these seizures.

It is well known that the statistics put forward by groups such as the RIAA, MPAA, ESA, and BSA (to name a few) are on shaky factual ground. They also employ questionable legal practices tactics to protect their profitability. The question of their numbers being legitimate for use in stating losses is that they count every theoretical transfer or copy downloaded, or sometimes based on the number of estimated individuals who could have accessed the media, multiplied by the retail price.

Now, RIAA and NARAS, as well as most of the entrenched music industry, are arguing that free downloads hurt sales. (More than hurt – they’re saying it’s destroying the industry.) Alas, the music industry needs no outside help to destroy itself. We’re doing a very adequate job of that on our own, thank you.

Realistically, why do most people download music? To hear new music, or records that have been deleted and are no longer available for purchase. Not to avoid paying $5 at the local used CD store, or taping it off the radio, but to hear music they can’t find anywhere else. Face it – most people can’t afford to spend $15.99 to experiment. That’s why listening booths (which labels fought against, too) are such a success.

Janis Ian, songwriter, speaking out about “The Internet Debacle” on their website.

Where does this leave consumers, copyright holders, and internet using citizens in general? I leave these conclusions up to you, but I would suggest that you be involved in knowing what your representatives are doing in Washington, DC.

Some further reading for those who wish to know more:
EFF DMCA – information and cases.
Bruce Schneier writing about a perennial (and related) issue of Trusted Computing and previously in his Crypto-gram newsletter.
Comments in the Hack A Day blog regarding the raid of the modders.