The Digital Millennium Copyright Act (DMCA) signed into law by President Bill Clinton in 1998 was amended yesterday when the US Copyright office released new rules and exceptions. This is the biggest legal tech news in several years, possibly the biggest news since the DMCA’s passage. The new rules are pretty substantial, they have the potential to change the web and many business models.

The ruling yesterday states six classes of new rules and exceptions. I list them in order of importance (to me):

1. It is ok to unlock your cell phone (i.e. buy a locked iPhone and unlock it to use it in Europe or a different network like T-Mobile)
2. It is ok to run any legal software you want on your phone (i.e., it is now legal to have alternatives to the AppStore)
3. It is ok to crack a DVD’s encryption for fair use purposes in education or criticism
4. It is ok for an eBook (Kindle) to provide text to speech, even if the book has controls to prevent the text to speech
5. It is ok to crack a video game’s DRM for legitimate security testing
6. It is ok to crack computer programs protected by dongles if the dongles is obsolete or are no longer being manufactured

It is now legal in the United States to unlock your cell phone! I never thought I would see the day. Make no mistake, this is Row v Wade for the wireless industry. I have been blogging that the US carriers should do this for a long time. I thought that Google could save us; Google tried with the Nexus One to change the way we buy phones but failed. What Google started, the US Copyright Office continued: this is the first step from decoupling the phone from the carrier, allowing innovation to prevail. Overnight nothing will change, however, in a few years buying a phone in the US may be like buying a phone in Hong Kong: go the electronics store and pick out a super cool phone, then put your chip in it.

The second item is a direct swipe at Apple. Remember last year when Apple blocked Google Voice in the AppStore? Now it is legal for you to bypass the AppStore and download to your iPhone Google Voice via Google.com. Take that Steve Jobs. That said, an era of openness on the iPhone is not upon us. Pundits expect Apple to play cat and mouse with its OS updates. I suspect that they will use the OS to cripple unapproved apps, and possibly get sued for it under the DMCA as well as anti-trust. This new ruling will favor Android, Blackberry, and Windows Phone over Apple unless Apple opens up.

The third item opens the door for mash-ups, you know those short videos of a famous movie with a new soundtrack that is totally funny. YouTube will now take a deep exhale. The fourth item is a swipe against the publishers who are holding Amazon and Apple hostage. The last two make sense and finally legalize something that was rational and done pretty widely anyway.

The web and wireless as well as well as eReader industries are about to change, potentially drastically. Today, copyright law just stepped foot into the 21st century. There is still a long way to go, but this is a great first step.