The cracks in DRM’s legal facade are starting to grow, too. On Monday, the Copyright Office and librarian of Congress said, among other things, that it’s OK to A) “jailbreak” your phone, thereby letting you install software not approved by the phone seller; and B) use brief excerpts of DVD videos in other works. Renewing a previously granted exception to federal copyright law, the office also said it was OK to unlock your phone so that you can use it with a different mobile network.

The exceptions are still fairly narrow, to be sure, and how widely they’ll be used remains to be seen given the way our mobile phone and media markets work in the real world. But they’re notable in several ways.

One is the language the Librarian of Congress, James Billington, used in his rulemaking document (1.5MB PDF). For example, he called the act of jailbreaking a phone “innocuous at worst and beneficial at best.”

Industry arguments against these exceptions, for which the Electronic Frontier Foundation had led the fight, had been laugh-out-loud ridiculous. Apple, you’ll be unsurprised to hear, took the hardest-line stance against the concept that customers should have the right to use the devices they’ve purchased as they see fit.

Apple’s objections ultimately came down to its insistence that customer freedoms would “undercut the overall iPhone experience” (emphasis from the original document filed in the case). In other words, you should only be able to use the iPhone, which is nothing more than a handheld computer connected to digital networks — albeit a wonderfully designed device — in precisely the ways Apple determines.

Having lost in the Copyright Office, Apple responded with typical arrogance, telling the Cult of Mac blog that it might now be legal to use your iPhone the way you want to, but you’ll void the warranty if you do. And you can expect Apple to keep up its cat-and-mouse game of using software updates to screw up jailbroken phones, as the iPhone Dev-Team — leaders of the jailbreaking movement — are warning.

The continued ability to unlock your phone and use it on a competing network isn’t much help, because of the insanity of America’s competing mobile standards. Even if you unlock a newer iPhone, you can’t use it to its maximum capabilities on Verizon, Sprint or T-Mobile because of various radio and chip incompatibilites.

But if you travel overseas frequently, unlocking your GSM-based AT&T or T-Mobile phone will be nontrivial (assuming it isn’t already unlocked, as mine is). You can use local SIM cards in many countries and save a huge amount of money.

The other important move by the Copyright Office was to allow people to remix videos in other works. Essentially, the copyright officials observed that it was ridiculous to believe that we’re all but forbidden from quoting from others’ creative work just because it’s in a DRM’d video format.

Unfortunately, this exception is way too narrow in the real world. It allows circumvention of the DRM solely for:

 (i) Educational uses by college and university professors and by college and university film and media studies students;

(ii) Documentary filmmaking;

(iii) Noncommercial videos.

In other words, it’s still not allowed to quote from another video work for commercial use (other than in a documentary). This is nuts. If authors had to get permission from every writer or publisher whose work they intended to quote, scholarship and journalism would grind to a halt.

The copyright office’s exemptions also included the right to bypass computer system dongles that are broken or obsolete; a research exception for studying video game security; and read-aloud functions in e-books if not provided by the publisher.

Again, we shouldn’t overstate the value of Monday’s ruling. The law remains horribly unbalanced in favor of the copyright holders. But any progress is helpful.

(Note: I’ve donated money to the EFF, an organization that is leading the way in preserving and enhancing our digital freedoms. Also, in 2002 the EFF honored me with one of its Pioneer awards.)

“I’m amazed that these people just do things without requesting. I would’ve said yes,” Lesko told The Associated Press. “I’m just shocked at the impoliteness that people do this stuff. There’s no remorse.”

Lesko said he hasn’t ruled out suing McCain for copyright infringement, but said he’s not keen on the idea of involving lawyers. Mostly, he wants politicians to be polite and ask permission before using other people’s faces in their advertisements.

The McCain camp said its use of Lesko was clearly allowed under the “fair use” doctrine of copyright law.

McCain’s campaign has slammed Hayworth for peddling the services of a Florida company that charges thousands of dollars to help people get government grants. The company is accused of taking advantage of its customers.

Lesko said he voted against McCain in the 2008 presidential election, but he likes the Arizona senator more than Hayworth. He called the company Hayworth pitched “immoral” because it charged so much money.

“It’s remarkable that even Congressman Hayworth’s fellow infomercial pitchmen are appalled at the ‘free money’ scam he helped perpetrate,” McCain spokesman Brian Rogers said.

This isn’t the first time McCain has been in hot water for using copyrighted material without permission.

Last year, McCain and two Republican Party organizations settled a lawsuit filed by singer-songwriter Jackson Browne, who accused them of using his copyrighted song “Running on Empty” in an Internet video.

As part of the settlement announced in July 2009, McCain, the Republican National Committee and the Ohio Republican Party apologized for using a portion of Browne’s song without permission.

McCain didn’t know about the ad, according to a statement released at the time.

You’ll recall that a federal judge slapped down Viacom’s claim that Google’s YouTube video service, by allowing its copyrighted videos to be posted on the site, was contributing to copyright infringement. The judge said YouTube was following provisions of the current copyright law that say, among other things, that a site owner is not immediately responsible for what others post there. However, once notified by a copyright holder that it’s hosting infringing work, the site is obliged to take it down.

On Tuesday, the Los Angeles Times, which has often pitched Hollywood’s angle on a variety of issues, published a surprisingly perceptive editorial, very much not taking the film studios’ side. The piece observed that the judge’s ruling was a needed rebuff to yet “another effort to shift copyright holders’ responsibilities onto the middlemen who have opened new distribution pathways online.” It went on:

Those efforts are understandable, given how quickly works can spread around the world, and how many sites can become unauthorized sources. But speedy, low-cost distribution is one of the great advantages of the Internet, not a flaw.

There was more than a little sympathy for the Hollywood dilemma — way more than the Copyright Cartel deserves, in my view — but the Times editorial page showed worthy independence of immensely powerful local interests in its analysis. Two cheers for the Times.

But it’s just one cheer for the San Francisco Chronicle’s editorial board after reading its day-earlier take on the ruling — and that’s solely because the Chronicle didn’t genuflect to the Bay Area’s dominant local businesses in Silicon Valley’s technology community. They overwhelmingly sided with Google in the matter, for sound reasons that go beyond money. (My view on the case, as posted here last week, is that the ruling meant progress for free speech and collaboration much more than a milestone in a corporate war.)

The Chronicle’s editorial grudgingly accepts that the judge knew what he was talking about regarding the law, but that seems to be the problem. For the editorial writer, this is really about who’s going to control content on the Internet — and for the Chronicle, control appears to be binary:  If the creator of media content can’t have absolute control, he or she will be forced to give it away.

The final line is the tip-off to what’s ultimately on the minds of the editorial board: payment for creating media. Calling for new copyright laws — though what they should contain never makes its way into the piece — the newspaper says, “We can’t expect people to create things for free — unless we believe that the only people in our society who can be creative are those who are already rich.”

Actually, we can expect people to create lots of things for free, even people who aren’t rich. They always have, and always will. And we can expect the creative destruction of technological and economic competition to bring us adapted or new business models that will accept technology’s realities and not try to push the proverbial toothpaste back into the tube.

At issue, in its most basic form, was whether the “safe harbor” provision of the Digital Millennium Copyright Act (DMCA) meant what it said. Boiled down and oversimplified, safe harbor means this: If you host other people’s work, you are not immediately responsible for what they post on your site. Once notified by a copyright holder that you’re hosting infringing work, you’re obliged to take it down.

This part of the DMCA — a law that has many otherwise terrible elements — has been a boon to speech in the Digital Age. Online, we live in collaborative spaces much more than the top-down, centralized media world of the past. If site hosts had to investigate and approve everything their users wanted to post, they’d be unable to exist as we know them today. That’s what the Copyright Cartel, of which Viacom is a charter member, would prefer. But it’s not what Congress voted to do.

Judge Stanton said the DMCA’s notification system worked fine in the case at hand. Even Viacom agreed that “when YouTube was given the (takedown) notices, it removed the material.” (Do read the ruling in full; there’s enough plain English that you can learn a lot even if you don’t understand lawyer-speak.)

I don’t mean to suggest that the DMCA’s notification system is perfect; media companies are famous for abusing the process, too often telling sites that all sorts of perfectly legitimate content is infringing on their copyrights. Check out the great Chilling Effects site for voluminous examples. If anything, the DMCA still gives copyright holders too many weapons to prevent legitimate expression. But the safe-harbor provision has been a big help in general.

It’s not the only time Congress has acted to encourage robust activity online. A related provision in a different law (Section 230 of the CDA, or Communications Decency Act) protects site hosts when people posting comments, for example, say things that others find defamatory. It’s the commenter, not the site host, who’s responsible for the speech.

Needless to say, the battles are not over. Viacom said it’ll appeal Stanton’s ruling, and Section 230 is constantly being picked at by those who want to shut down speech they don’t like.

Still, yesterday’s decision is a gratifying milestone. Congratulations to Google, but especially to the rest of us who believe in the widest possible online expression.

UPDATE: My friend Miguel Helft, who reported the decision for the New York Times, writes:

The NYT indeed said it was a major victory for G. But in the second graph we made the other point, which is that the ruling could have a favorable impact on the entire UGC world, which is in line with your argument. We later expanded on that with commentary from various analysts/legal minds.

Fair enough. But the story lede (for arcane reasons journalists call the first, or lead, paragraph in a story the lede) and headline were about Google. I looked long and hard for a lede in any news outlet, but didn’t find one, that focused on the victory for free expression along with the immediate Google win or Viacom loss.

Some comments here suggest it’s time for a remedial column or two on copyright. Whether copyright holders like it or not, they don’t have the absolute right to decide how their published work may be used, and by whom, through eternity. And those who believe we should ban tools that can be used for illicit purposes, not just beneficial ones, should ask themselves what would happen if we applied that standard widely.

A longtime participant in the tech and media worlds, Dan Gillmor is director of the Knight Center for Digital Media Entrepreneurship at Arizona State University’s Walter Cronkite School of Journalism & Mass Communication. Follow Dan on Twitter. More about Dan here.

That safe harbor had helped persuade Google to buy YouTube for $1.76 billion in 2006, even though some of its own executives had earlier branded the video-sharing service as “a ‘rogue enabler’ of content theft,” according to internal documents unearthed in the case.

Although it’s a major victory for Google and other Internet service providers, Wednesday’s decision won’t end a legal brawl that has already dragged on for more than three years. Viacom vowed to keep the case alive in appeals court, a process likely to last another year or two.

The bitter dispute revolves around Viacom’s allegations that YouTube built itself into the Internet’s most popular video site by milking unlicensed use of copyright-protected clips stolen from Viacom cable channels such as MTV, Comedy Central and Nickelodeon.

YouTube’s whirlwind success led to the Google sale that generated huge windfalls for the video channel’s founders, Chad Hurley, Steve Chen and Jawed Karim.

Citing e-mail exchanges among those founders, Viacom depicted the founders and other YouTube employees as video pirates who were more interested in getting rich quick than adhering to copyright laws.

But Stanton concluded YouTube’s actions outweighed the words of the YouTube founders.

“The judge has blessed the current state of play on the Internet,” said Eric Goldman, a Santa Clara University associate professor who specializes in high-tech law.

In dismissing the lawsuit before a trial, Stanton noted that Viacom had spent several months accumulating about 100,000 videos violating its copyright and then sent a mass takedown notice on Feb. 2, 2007. By the next business day, Stanton said, YouTube had removed virtually all of them.

Stanton said there’s no dispute that “when YouTube was given the (takedown) notices, it removed the material.”

Calling Stanton’s reasoning “fundamentally flawed,” Viacom said it was looking forward to challenging the decision in appeals court.

Kent Walker, Google’s general counsel, said the company is confident Stanton’s decision will hold up. The 30-page ruling is “thoughtful, thorough and well-considered,” Walker said in an interview.

Google maintains that more than just its own money is at stake in the case. If Viacom were to prevail, Google and other Internet service providers argue it would create unreasonable burdens that would stifle free expression on the Web.

Wednesday’s decision “is a victory for a new generation of creators and artists eager to showcase their work online,” Walker said.

Facebook, eBay Inc. and Yahoo Inc. were among the Internet companies that had backed Google in its dispute with Viacom.