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Monday, January 05, 2009, 06:55 pm PT (09:55 pm ET)

Apple inks deals for all DRM-free iTunes, 3G downloads

In what could be a significant victory for its online music store, Apple is believed to have landed agreements not only to remove copy protection from the music of all major labels but to also allow direct music downloads to iPhones over cellular networks.

The deal reported by sources speaking to CNET News.com would see Apple break its longtime insistence on a fixed per-track rate for songs and give in to frequent demands from Sony, Universal and Warner that would change the pricing depending on the popularity and recentness of a given song.

While many songs will supposedly stay at the 99-cent level, hits will now potentially cost "more" than this amount. In exchange, back catalog tracks will drop to as low as 79 cents each to help move older or less popular content.

On making the switch to a variable pricing model, any new additions to iTunes' music roster would immediately be made available without the digital rights management) DRM that prevents easy copying, while existing titles would gradually see their locks removed. How existing tracks will be handled isn't known; in the past, Apple has charged a small fee to upgrade songs to iTunes Plus, which not only removes DRM but doubles the bitrate and potentially improves sound quality as a result.

An announcement could be made as soon as tomorrow's Macworld Expo, according to the report, as Apple reportedly struck its agreement just this past week.

If authentic, such a deal would be considered a watershed for the acceptance of unrestricted online music. Stores such as Amazon MP3, eMusic and Walmart have had completely unprotected music for roughly a year but have failed to dent Apple's virtual control of the market, which is now so strong that it has outperformed Walmart's retail division and other previously dominant physical outlets. Various reports have previously suggested that major labels besides EMI, which until now has been Apple's only major supporter of DRM-free tracks, have been using the offer of unguarded songs as leverage to boost competitors.

Multiple legal hurdles are also possibly cleared by such a move, including a recent antitrust lawsuit and Norway's years-long formal complaint. Both of these accuse Apple of unfairly locking customers to its hardware and software ecosystem by selling music on iTunes with FairPlay protection in place and refusing to license the standard to outsiders.

Separately, other sources claim an apparent breakthrough for over-the-air iTunes downloads. Where wireless purchases on iPhones are currently limited to Wi-Fi — often believed due to carriers' concerns over data traffic — this second plan would let users download songs over the EDGE or more likely 3G networks.

Terms of the deal haven't been illustrated, though network providers have often charged extra for cellular downloads in part to cover the costs of sending the data over their services.