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Is SunnComm a sham or the next, big DRM success?

From hell to hell and maybe heaven

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Feature You might expect one of the world's leading digital rights management (DRM) technology makers to have a rich history in either the computing or music fields or both. This is not the case for SunnComm International Inc. Instead, the firm's experience revolves around a troubled oil and gas business, an Elvis and Madonna impersonator operation and even a Christmas tree farm.

SunnComm rose to national prominence in the Fall of 2003 when a Princeton University graduate student managed to undermine the company's CD copy protection technology simply by holding down the Shift key on his computer when inserting an album. Countless news organizations, including this one, mocked SunnComm and music label BMG for distributing such thin CD protection, even though the average consumer would be unlikely to employ the Shift key block. The incident created a tight link between SunnComm and the word incompetence, prompting the company to issue legal threats against the Princeton student.

SunnComm's suggestion of a lawsuit garnered even more negative press, as researchers rushed to point out that the student had every right to examine the DRM technology as part of his computer science studies. This prompted SunnComm to pull back on the lawsuit threat and focus instead on doing business as usual and improving its technology.

A less publicized but more complex battle has been taking place between SunnComm and what seems to be a small group of disgruntled shareholders. These apparent SunnComm investors have filled Internet message boards with detailed information that basically claims the company is at worst a sham and at best a deceptive business. The postings describe a string of odd acquisitions, somewhat misleading financial press releases and dubious product announcements that should have the US SEC (Securities and Exchange Commission) kicking off an Enron-like crackdown, according to the SunnComm haters.

Picture of keyboard with missing shift keysAfter reading hundreds of pages of SEC filings and other SunnComm documents, we were quite shocked when an actual human answered the company's main number. The case made by the shareholders - one of whom has spent four weeks e-mailing us information about SunnComm - made it seem like a stuttering voicemail message would be all the company could afford in the way of a receptionist. Instead, a lass fielded our call with total competence, saying CEO Peter Jacobs was out of town but would return in a couple days.

After significant effort on our part, The Register eventually managed to secure Jacobs on the horn - about a week after the first call. The fact that he even took the call was impressive given our punishing treatment of the Shift key debacle.

"Everyone told me not to talk to you," Jacobs began. "They're afraid you'll do a real hatchet job."

This wasn't the most pleasant way to begin a grueling, accusatory interview, but Jacobs' unease made sense for the obvious reasons. He was well aware of the skewering SunnComm was taking on the investor message boards and beyond that knew that The Register tends to dismiss DRM technology as a type of pointless CD cancer that will stop people from enjoying the free exchange of culture they've come to expect.

With all this in mind, it seemed only natural that Jacobs would try to steer clear of any damaging issues and, like any good CEO, begin rattling off the merits of SunnComm's DRM software. The typical dance of probing journalist and dodging CEO would begin and then end in an hour with little progress made.

Almost disturbingly, Jacobs didn't dodge but immediately confessed to a long string of SunnComm cock-ups - many of which began before he took charge of the company.

"I came into the company like Harvey Keitel came into Pulp Fiction - to fix the deal," Jacobs said.

To be sure, this isn't clean up the two dead bodies in the car type of material, but it is the story of a company - stretched between Arizona and Nevada - with a twisted history. It's the story of a company searching for its identity in the most bizarre of places.

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