Unlocking Your Cell Phone Could Be Illegal

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It’s a rite of passage to techies the world over: unlocking, or “jailbreaking,” a cell phone to make it usable on networks other than the one to which it was initially attached. But after Saturday, such an act—which can, for instance, make a Verizon iPhone compatible with the T-Mobile network—may be illegal.

In October, the Library of Congress invalidated a copyright exemption for unlocking cell phones, but that exemption expires Saturday, leaving the door open to repercussions for such actions. Beginning today, consumers may receive warnings from carriers if they are found unlocking their device. For tech geeks, the word “jailbreak” just got a little more sinister.

Excerpt from The Daily Beast

A Right to Unlock Cellphones Fades Away

Your right to unlock your cellphone is about to expire. Cellphone carriers say this is for your own good — and theirs.

Carriers say the new restriction will make it harder for “gray market” businesses to launder and sell stolen cellphones

Michelle V. Agins/The New York Times
Carriers say the new restriction will make it harder for “gray market” businesses to launder and sell stolen cellphones

Unlocking a cellphone enables it to work on a wireless carrier other than the one you bought it from. If an AT&T iPhonewere unlocked, for example, it could be used on T-Mobile USA’s network. In October, the Library of Congress decided to invalidate a copyright exemption for unlocking cellphones. This exemption expires Saturday, making the act of unlocking a cellphone potentially illegal, unless it is authorized by a carrier.

What does that mean, exactly? It’s not like police officers will come knocking on your door if you decide to unlock your cellphone. More realistically, consumers might receive warnings from carriers if they are discovered to have unlocked a device. Businesses that resell used cellphones might be threatened, too.

“As with any of these copyright things, it’s a club for threatening people,” said Harold Feld, senior vice president at Public Knowledge, a nonprofit company that focuses on information policy. “The law is very broad, and if you want to go after somebody, it’s one of these where there are a lot of ways in which this could play out.”

For years, technology companies have fought to add terms and regulations to products to protect their businesses. For example, Apple in 2008 fought a small company named Psystar that was selling generic PCs that ran the Mac operating system. In its lawsuit, Apple said Psystar had violated trademark agreements by selling non-Apple hardware that ran modified versions of Mac OS X. Apple had cited the Digital Millennium Copyright Act, an anti-hacking provision.

The copyright act is also at the center of the provision about unlocking cellphones. In 2006 and again in 2010, the Library of Congress approved an exemption to the act that allowed the circumvention of technology that confined wireless handsets to different networks. Carriers fought to remove this exemption, and the Library of Congress chose not to renew it in October.

CTIA, the wireless industry trade group, had also pushed for the exemption to be removed. Michael Altschul, senior vice president of CTIA, said in an interview that prohibiting people from unlocking their cellphones helped protect carriers’ investments in the subsidies that they provide for handsets. If a customer bought an iPhone on contract for a carrier-discounted price of $200, for example, he could use third-party software to unlock the device and sell it at a higher price. Disallowing that helps to prevent this kind of abuse, which makes carrier subsidies a sustainable practice, Mr. Altschul said.

“It’s allowing that business practice to go forward at a time when the price of devices continues to grow,” Mr. Altschul said.

He added that by not allowing people to unlock phones, carriers will also be making it harder for “gray market” businesses to launder and sell stolen cellphones. This protects consumers, he said, because the software used to unlock phones might contain malicious code that steals personal information.

Some consumer advocacy groups have a different point of view. Mitch Stoltz, a lawyer at the Electronic Frontier Foundation, a digital rights nonprofit company, said the copyright act, which was designed to make it illegal to circumvent protections for copyrighted works, had repeatedly been misused by technology companies to protect their businesses. He said the removal of the exemption for unlocking cellphones might discourage people from wanting to sell their own phone to another person after they have bought a new one.

“This probably is going to cause a lot more phones to end up in landfills,” Mr. Stoltz said. “If it’s locked, it’s pretty difficult to even resell a handset.”

Consumers can buy phones unlocked at full price. Or they can get their phones unlocked if their carriers permit it. AT&T, for example, will unlock an iPhone at a customer’s request if his contract is up and his account is in good standing.

Mr. Feld of Public Knowledge compared this to paying someone to unlock a closet.

“It’s like if I took your stuff and locked it in a closet and said you are not allowed to break the lock,” Mr. Feld said. “And breaking the lock — I’ve put your stuff in this closet, but you can’t get it unless you pay me for access to it — that’s what this is the equivalent of.”

By Brian X. Chen/N.Y, Times

This Doesn’t Bode Well For Us – Does it?