Populism or Bad Policy? The fight to unlock cell phones

Few things in modern life are more important than one’s mobile device. Without the ability to immediately communicate or access the Internet, many of us almost feel naked. In this context of an always-on, hyper-connected culture, it is understandable why control over the functionality of one’s cell phone or mobile device is of singular importance.

In recent months, there has been much written about the decision by the Library of Congress that consumers who attempt to “unlock” their cell phones will now be violating copyright law. But what exactly is cellphone “locking” and why does it matter? Cell phones are originally manufactured as unlocked phones, meaning that the cell phone will work with any service provider. However, cell phones are customarily locked when they are sold as part of a package deal where you buy the cell phone and also enter into a service provider contract. The phone is locked to a single service provider, and software within the phone prevents the user from switching the phone over to another service provider that might offer a more enticing deal. This seems like a perfectly reasonable restriction for the duration of the customer’s contract; however, the phone does not necessarily unlock when the service contract ends.

Usually the process is reversible but will require either the service provider or a third party to unlock the phone. This would not be a problem but for the Digital Millennium Copyright Act (DMCA), which provides that it is a violation of copyright law for users to bypass access restrictions on software or hardware (such as those that lock a cellphone to a particular service provider) whether or not the user intends to use it in violation of copyright law. The Library of Congress (which oversees the Copyright Office) ruled in October of 2012, that an exemption to the DMCA that was in effect since 2006, which allowed users to unlock their own phones after the contract with their service provider, would expire. This ruling puts customers at the mercy of their service providers to unlock the phones and gives these companies, such as Verizon, AT&T, and T-Mobile, considerably more power in the consumer-service provider relationship.

The reason that the Library of Congress allowed this exemption to lapse was partly because there was evidence that there are more unlocked phones on the market than ever before; therefore, there is no longer a need for the exemptions. Additionally, its decision was heavily influenced by the 9th Circuit’s 2010 decision in Vernor v. Autodesk, which held that software is licensed rather than sold. The Library of Congress’s ruling makes it illegal to unlock one’s phone without the carrier’s permission if phone was purchased after January 2013.

In response, many legal and technology experts have criticized the ruling as a violation of property rights and outside the intended scope of the DMCA. The ruling has been seen as unnecessary because the terms of private contracts between customers and service providers were working just fine. Additionally, the Obama administration and the Federal Communications Commission have stated that they believe consumers should be able to switch carriers without having to purchase a new phone. In order to remedy the perceived plight that consumers were faced with, in June 2013, Rep. Zoe Lofgren (D-Calif.) introduced the Unlocking Technology Act of 2013 (H. R. 1892), which would make it legal to circumvent the technology locks that restrict users from unlocking their phones and to sell cell phone unlocking software.

The cri de coeur of consumer rights is a difficult one to resist for politicians, but in this case congressional pandering to populism is likely unnecessary and, at worst, creates bad policy. Critics of the Library of Congress’s decision fail to take into account that many service provider contracts already take unlocking into account and either automatically allow the user to unlock her phone or provide a simple procedure for contacting the service provider in order to unlock the cell phone. Further, if the intellectual property protections are stripped from service providers, they may not be able to continue to subsidize the hardware in the phone as much. While certainly well intentioned, the rush to legalize cell phone unlocking may have unintended consequences for consumers and the cell phone industry. Hopefully, Congress will make the right policy decisions, especially considering the importance that cell phones play in modern life.

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* Benjamin Zich is a third year law student at Wake Forest University School of Law. He has a Bachelors of Arts in English Language and Literature from the University of North Carolina at Chapel Hill. Upon graduation in May 2014, Mr. Zich intends to practice international business and transaction law.