Is It About To Be Illegal To Unlock Your Cellphone?

Techmeme Screen Capture

Techmeme Screen Capture

Remember, if it sounds too awful to be true, then 99.9% of the time … it’s not true. Or not completely true.

And that’s the case with this headline, which made its way ’round the net on Thursday. The story popped up in a Facebook conversation on a different subject. Then I wandered over to Techmeme, where I made this screen capture.

But there is a germ of truth in the headline.

Read on. Please.

Back in October, the U.S. Copyright Office filed a new decision on unlocked phones in the Federal Register. The Copyright Office is the branch of the federal government that makes decisions about what can be exempt from provisions of the Digital Millennium Copyright Act (DMCA). In 2006 and 2010 it decided we had the right to unlock our phones. Period.

What does the 2012 ruling say?

If you “own” a cellphone right now, you have the right to unlock it.

If you “buy” a cellphone after January 26, you can unlock it only if you get approval from your carrier. Legal speak coming up (emphasis added):

[This ruling] permits the circumvention of computer programs on mobile phones to enable such mobile phones to connect to alternative networks (often referred to as “unlocking”), but with limited applicability. In order to align the exemption to current market realities, it applies only to mobile phones acquired prior to the effective date of the exemption [Oct 26, 2012] or within 90 days thereafter.

If you are feeling paranoid, call your carrier right now and ask that your phone be unlocked. Or pay a service to do it for you; if your carrier will not unlock your “legacy” phone, you still have the right to legally unlock the phone.

But there are some other issues

I have quite a bit of heartburn with this ruling.

First, even though the Copyright Office rulings to date have favored citizens over telcos, AT&T has been a notable laggard with regards to the iPhone. From April 2012:

In a statement to Phone Scoop, AT&T said that it will [finally] offer customers the option to unlock their iPhone so long as they’re not currently under contract and have an account that’s in good standing.

The fact that AT&T (or Verizon) could have any legal standing NOT to unlock a phone after a two-year contract has expired is troubling. (Class action suit, anyone?) Especially given this argument made by the CTIA (“The Wireless Association”) for keeping the phone locked:

CTIA explained that the practice of locking cell phones is an essential part of the wireless industry’s predominant business model, which involves subsidizing the cost of wireless handsets in exchange for a commitment from the customer that the phone will be used on that carrier’s service so that the subsidy can eventually be recouped by the carrier.

Second, the decision references a 2010 court ruling that we don’t own software, we only license it. As such, we can’t resell it. Or unlock it:

In 2010, the Ninth Circuit issued its decision in Vernor v. Autodesk, Inc., 621 F.3d 1102 (9th Cir. 2010), holding that “a software user is a licensee rather than an owner of a copy where the copyright owner (1) Specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions.”

Hence my use of quotation marks above on the words “own” and “buy.”

Third, the Copyright Office says that carriers are selling unlocked phones these days — there are “ample alternatives” and “a wide array of unlocked phone options available to consumers.”

Really? In the U.S., the majority of cellphones sold by the big carriers are locked. We do not have perfect substitutability – an unlocked Blackberry is not a substitute for a locked iPhone.

And the fact that some carriers will not unlock your phone even after your contract has been fulfilled shows that the industry — or at least AT&T — is not operating in good faith. According to MacRumors, the iPhone5 at Verizon is already unlocked. But even that – iPhone on AT&T versus iPhone on Verizon – is not comparing two perfectly substitutable goods.

Yeah, I know – perfectly competitive markets are a theoretical construct. They don’t exist in reality. That’s why we have public policy – to compensate for market imperfections. (This market is also a oligopoly, further reducing the power of consumer and limiting competition. More reasons for aggressive – not corporate-centric – public policy.)

I also know that fixing the DMCA and mobile market in the U.S. isn’t the job of the Copyright Office.

It’s the job of Congress.

There is a petition

There is a petition (of course there is) on the White House site that is reasonable in language and scope. Have a look: it still needs a lot of signatures but headlines like the ones on TechMeme could help it hit 100,000.

I’d sign it if it included a requirement that telcos unlock a phone automatically once the contract had been fulfilled. Auto-matically. But it doesn’t. Remember, I just said it was reasonable, not radical.

So there you have it: it’s legal to unlock the phone you own now. After January 26, it will be legal only if your carrier says it is.

And because it is a DMCA violation, unlocking a phone purchased after January 26, 2013 would be a criminal act.

And that’s bad public policy.

NOTE: unlocking and jailbreaking are not the same thing. An unlocked phone can be used on a network other than the original carrier. Jailbreak your iPhone if you want to install third party apps.

AND here’s the story that led to the bad headlines.

:: Cross-posted from WiredPen
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7 Comments

  1. I suppose my main comment on this would be – So What?

    Just about everyone breaks any number of laws – in the digital world or otherwise – on a daily basis, and anyone who is into routinely jailbreaking their cell phones couldn’t care less what law is in place against doing so.

    Personally I have no functional use for a jailbroken cell, so my Droid is not. My Kindle, however, is broken… although Amazon practically gives their blessing (or did on older models). If I owned an IPhone I might break it just to piss Apple off… but then I’d never own one, so the point is moot.

  2. They also keep charging for the phone after your contract is up.

    It’d be nice to have an open hardware standard that would be compatible with all carriers, allowing you to choose your phone and carrier independently. Japan sort of accidentally did that when one company started producing phone kits that other companies then customized.

  3. Why is the US government protecting a dumb business model? Yet another example of propping up monopolies with lobbied-for government muscle. If you buy a TV, you can plug any cable or satellite service into it you want. If you buy a car, you can put any brand of gas into it you want or deal with any legitimate insurance company to cover it. If you buy a toaster you can put any type of bread into it you want! And yet if you buy a phone, you’re trapped into a service? How about buying a phone and using whatever service you want?

    Alright, maybe it’s cheaper to buy a phone on a subsidy and have it tied to a plan, and if it is then it should be competitive in a free market that allows you to buy a phone outright and then choose your carrier. If it can’t compete on a free market like that then why are we protecting an inferior business model??

  4. ProfElwood – yes, would love to have a system like Japan or Europe where the infrastructure company and the “sell you a device” company were not vertically integrated. :-/

    clarkma5 – Congress created this mess a long time ago. Possibly with good intentions. But the system is broken. Ditto cable infrastructure not being treated the same way as copper telephone lines.

  5. While most of the phones sold by major carriers are locked aside from a few that have exclusive deals you can by the same phone unlocked from other sources. So while AT&T may not sell a phone unlocked you can indeed by it that way from other dealers.

  6. EEllis — say I buy an unlocked iPhone from AT&T. It’s possible. I don’t get a reduction in the monthly fees if I were to use AT&T for service. Nor do monthly fees drop after your two year contract is up.

    The system is broken and not supported by accounting or economic arguments. Consumers have no power here (imperfect monopoly/oligopoly market). That’s why society – in the form of government – is justified in writing law or regulations that bring balance (remove monopoly rents) to the market.

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