Data Loss
Facts
Amid some reasonable amount of fanfare, Microsoft unveiled their dot-NET vapourware/strategy. Amid almost zero fanfare, Microsoft receives apatent on the file-format ASF, a meagrely-enhanced MPEG 4 implementation. Amid even less fanfare, VirtualDub author Avery Lee is forced to drop support for this format. The DMCA has been passed into law in the US, and the plight of 2600 Magazine in the DeCSS case looks grave.
Background
Throughout this essay, I will refer to Microsoft, simply because they have already patented a file format. I don't intend to imply the problems outlined here are unique to them. Indeed, substituting ``Company'' for ``Microsoft'' would yield almost the same points.
The DMCA (Digital Millenium Copyright Act) [UCLA summary] [fulltext] makes it illegal to reverse engineer a ``copyright protection mechanism'', own anything which does the same or (as the 2600 case is making clear) tell others about the existence of such information. ``Copyright protection mechanism'' can be something like poorly implemented encryption (as in the DeCSS case) or as simple as an obfusicated file format. Currently, 2600 Magazine is being sued for linking to information and software describing and implementing the CSS encryption method used on DVDs to encode movies. Quite apart from the fact that this is intended to be the basis of a free-software DVD player for GNU/Linux, the judge in the case granted a preliminary injuction forcing 2600 to not even link to this information (which happens to originate in a different country).
So?
Richard Stallman's depressingvision of the future does indeed seem to be occurring. If granting patents on file formats becomes in any way common, it will -- more than ever -- lock you into using a single provider and destroy what tenuous control you have over your own data.
Microsoft's dot NET strategy is to sell software based around a subscription model; you pay Microsoft a yearly fee to use services (that is, programs) over the Internet which can be accessed from a number of devices. This will include their office ``productivity'' tools such as Word, Excel and Power-Point. This strategy has a number of advantages for Microsoft, and no advantages for consumers:
Microsoft gets more money. Obviously, paying a yearly fee guarantees annual revenue for Microsoft whether they provide a new version for people to buy or not. In this manner, whether they improve the program (service) or not, everyone effectively must upgrade.
Microsoft gets a captive audience. You may never use a competing product, since Microsoft now effectively owns your data (no matter if it is stored on your hard drive or theirs). By being allowed to patent a file format, Microsoft makes it illegal for anyone else to write software which reads that file format. Hence, a competitor wouldn't be allowed to implement support for reading Word files and writing a translator to a different format would be similarly illegal. Even without patents on file formats, it could conceivably be argued that the DMCA covers this eventually; the file format could be argued to be a ``copyright protection mechanism'' quite easily (even more easily if it included some form of compression or encryption).
Consumers don't own their data. As above, subscribers to the service now no longer own the data that they produced using the service. Your letters, spreadsheets, presentations, databases and the like become garbage as soon as you no longer subscribe to the service.
Microsoft can make free software code proprietary. The current incarnation of the GPL (GNU's General Public License), which is highly used as a free-software license, states that you do not need to make changes to GPL code public if you're using it privately. Since the dot NET services (programs) are all running at Microsoft offices somewhere, they are not technically distributing software. Hence, they can use any free-software code they like and not be required to distribute their code in turn (the essence of free-software). What this means, then, is that Microsoft can take from the free-software community without giving back; if any promising free-software does something better than Microsoft's programs (services), they can just take it and make it part of their service.
Consumers Are Key
Consumers must realize that this is the result of these laws and proposed services; they must not allow themselves to lose ownership of their data. Realizing this, they will hopefully also realize the advantages of free-software over proprietary software (the topic of another essay), and demand companies provide them with the former.