Why It's Suddenly Illegal to "Unlock" Your New Cell Phone

White House, FCC gang up on Librarian of Congress, seek reversal of recent rule.

If you buy something, it’s yours, to do with as you want. Right?

Don’t be silly.

We first encountered the concept of limited ownership with purchases that lacked any physical existence, like e-books and online music. If I buy an online movie from Amazon, I can watch it on my Kindle Fire forever – but I can’t donate it to my local library. I can buy a book for my Kindle reader, but having read it, cannot pass it on to my wife. We don’t fully own these things because they’re not really things. They are made of bits, not atoms. What we buy is only a license for particular uses.

But when we buy an actual thing, made of atoms, then it’s ours, and we can use it in any way that we want.

Not any more. Not if the thing is a cell phone.

Most people buy a phone at much less than the real price. I paid Verizon $200 for mine, which actually costs more like $700. Over the next two years Verizon will recoup the difference out of my monthly payments. If I leave Verizon before the two years are up, they will charge me an “early termination fee” to make up the shortfall. That’s part of the deal that got me a $700 phone for $200.

But now let’s say my two years are up. The phone is paid for. My contractual obligations to Verizon are satisfied. Now I can walk away from Verizon and use the phone with Sprint-Nextel’s service instead. Right?

Until a few days ago, the answer would have been yes. Not any more. Worse, disconnecting the phone from Verizon is not just a breach of my contract with Verizon. It’s a violation of federal law. Specifically, a violation of the Digital Millennium Copyright Act (DCMA) – the same statute that allows draconian limits on electronic books, movies, and music. In principle, at least, moving the phone to a Verizon competitor could bring jail time.

A phone configured for a particular carrier is said to be “locked.” Before it can be used with a different carrier, it must be “unlocked.” It is possible to buy an unlocked phone and take it to the carrier of your choice. But that has a downside: you will pay full price for the phone ($700, in my case) and probably pay the same monthly carrier rate as someone who bought the same phone at a steep discount. It is also possible to unlock the phone you already have, just by downloading and running software from the Internet. Not hard to do – but it might get you hauled up before a federal district judge.

(Unlocking is different from “jailbreaking” an iPhone – what Android users call “rooting”. Jailbreaking and rooting are software changes giving access to internal software files which, if mishandled, can render the phone an inert brick. They void the warranty, for obvious reasons, and they block automatic updates. But they also make it possible to use certain sophisticated apps that won’t run on an unmodified phone.)

The unlocking problem starts with this one sentence in the DCMA:

“No person shall circumvent a technological measure that effectively controls access to a work protected under this title.” 17 U.S.C. § 1201(a)(1)(a).

The term “work” here covers the software in the phone. Unlocking the phone “circumvents a technological measure” that limits access to a particular carrier. So the DCMA prohibits unlocking.

But the DCMA also authorizes the Librarian of Congress to make exceptions to the law. One such exception authorizes jailbreaking (or rooting). It allows “[c]omputer programs that enable wireless telephone handsets to execute lawfully obtained software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications with computer programs on the telephone handset.” 37 C.F.R. § 201.40(b)(3). Oddly, however, this exception does not apply to tablets. In the Librarian’s view, “the record did not support” extending it to tablets. So jailbreaking your tablet remains a federal offense.

There used to be a parallel exception that allowed unlocking phones. It permitted “[c]omputer programs, in the form of firmware or software, that enable used wireless telephone handsets to connect to a wireless telecommunications network, when circumvention is initiated by the owner of the copy of the computer program solely in order to connect to a wireless telecommunications network and access to the network is authorized by the operator of the network.” 37 C.F.R. § 201.40(b)(3) (2012).

But in an order dated October 22, 2012, which took effect on January 27, the Librarian limited this exemption to handsets bought before January 27. Unlocking a phone acquired after that date is illegal.

How did the Librarian explain the sudden change? Unlocking a phone entails modifying its software. Until 2010, most people would agree that when you bought a phone, you also bought the software inside it, so the software was yours to modify. But a decision by the U.S. Court of Appeals for the Ninth Circuit that year suggested otherwise. As the Ninth Circuit saw it, the phone buyer acquires only a license to use the software, not ownership. The wireless phone industry, which opposes unlocking, used this case to argue that the carrier still controls the software after the sale. It also insisted that many unlocked phones are available on the market, so there is no need (it said) for consumers to unlock the ones they buy from carriers. (This does not make much sense to us, either.) The rationale for letting people unlock “legacy” phones is hard to make out, but may simply reflect a reluctance to disturb the rights people thought they had when they made the purchase.

The tech blogs were outraged at the new anti-unlocking rule, and particularly at the fact of somebody with the word “librarian” in his title making decisions about advanced technology. A petition on the White House web site to reverse the decision has drawn over 114,000 signatures. The White House itself agrees the decision is wrong.  Now the FCC Chairman has stepped in as well, asking if the Librarian of Congress is the right person to be making these kinds of decisions

The Library of Congress long having been central to the U.S. copyright scheme, its Librarian has the job of interpreting the copyright statute and writing the rules. This arrangement made some sense in the days of paper and ink. Now, though, when copyright increasingly concerns the quantum-mechanical behavior of electrons in silicon, maybe some of the copyright rules should come under an agency having the needed technical expertise – such as, for example, the FCC.

In the meanwhile, if Congress can find time in its busy schedule of naming post offices, it may overcome partisan gridlock long enough to overrule the Librarian. We’ll let you know.

[Copyright © CommLawBlog 2013. All rights reserved. Any attempt to modify this post is a violation of federal law.]

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Comments (2) Read through and enter the discussion with the form at the end
Andrew Kreig - March 6, 2013 8:14 AM

Nice column, Mitchell!
Andrew Kreig

Fred Goodwin - March 6, 2013 12:53 PM

IANAL but the following article strikes me as a much better and balanced explanation of what actually happened:

http://www.telecomlawmonitor.com/2013/03/articles/enforcement/no-more-selfhelp-mobile-phone-unlocking/

E.g., Mr. Lazarus exaggerates when he claims "disconnecting" from VZ is illegal -- as Mr. Madison explains, it's perfectly legal if you ask VZ to do it. A point which Mr. Lazarus conveniently ignores.

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