Obama Administration: Mobile Phone ‘Unlocking’ Should Be Legal

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President Barack Obama speaks during a ceremony in the East Room of the White House on March 4, 2013 in Washington, DC.

The Obama administration will push to reverse a new prohibition on mobile phone unlocking, after an online White House petition protesting the ban drew more than 100,000 signatures. The ban makes it a federal crime for consumers to “unlock” newly purchased mobile phones in order to use a different wireless network without their current carrier’s permission. Despite the Obama administration’s opposition, however, Congress will most likely need to change federal copyright law for the ban to be reversed.

Public interest groups have opposed the unlocking ban because it frequently means that consumers have to buy new phones if they want to switch networks after their contracts have expired. Unlocking also allows consumers to resell their phones for use on another carrier after their contracts are over, and to use second-hand phones on the carrier of their choice, which may not be the network on which the device was originally activated. These actions are now illegal without the permission of the carrier.

Derek Khanna, a former House Republican Study Committee staffer who is a leading advocate against the ban, argues that it violates the property rights of phone owners. “If you bought a phone then you own it,” Khanna wrote in an email to TIME. “Your contractual relationship with your provider is between you and your provider. But by the federal government coming and saying that unlocking your phone is a federal crime, they are removing your property rights to do what you please with your own device.”

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In response to the petition, the Obama administration announced Monday that it believes phone unlocking should be legal. “Neither criminal law nor technological locks should prevent consumers from switching carriers when they are no longer bound by a service agreement or other obligation,” wrote R. David Edelman, White House Senior Advisor for Internet, Innovation, & Privacy. “This is particularly important for secondhand or other mobile devices that you might buy or receive as a gift, and want to activate on the wireless network that meets your needs — even if it isn’t the one on which the device was first activated. All consumers deserve that flexibility.”

“The Obama Administration would support a range of approaches to addressing this issue, including narrow legislative fixes in the telecommunications space,” Edelman added. The most straight-forward solution is for Congress to amend a narrow slice of federal copyright law, but it’s unclear how realistic that is given the current divided state of the legislative branch.

The White House response represents a victory for Internet-based activists who are challenging entrenched tech, telecom and entertainment interests. Consumer groups hailed the Obama administration’s statement. “In today’s phone unlocking response, the White House took a strong stance in favor of consumers, competition, and innovation,” Sherwin Siy, VP of Legal Affairs at Public Knowledge, said in a statement. “We’re very glad that the administration recognizes the significant problems created when copyright laws tread upon the rights of consumers to use the products they have bought and owned.”

The mobile phone unlocking ban stems from Section 1201 of the Digital Millenium Copyright Act, which states that “no person shall circumvent a technological measure that effectively controls access to a work protected.” As part of that law, Congress gave the Library of Congress the power to issue three-year exemptions to the statute, which it has done since 2006 for mobile phone unlocking.

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Last fall, however, Librarian of Congress James H. Billington decided to end the exemption. Billington put in place a 90-day window from the date of the order for consumers to unlock new phones. That window expired on Jan. 26, 2013, meaning that it is now illegal for consumers to unlock new phones without carrier permission. Violation of the rule carries a penalty of up to five years in prison and a $500,000 fine.

Wireless companies argue that locking cell phones is an essential part of the industry’s business model. Typically, the carriers subsidize part of the cost of a new mobile phone in exchange for a long-term commitment from the consumer.

Michael Altschul, senior vice president general counsel for the wireless industry group CTIA, suggested there was no need for the ban to be reversed. “Customers have numerous options when purchasing mobile devices,” he said in a statement. “They may choose to purchase devices at full price with no lock, or at a substantially discounted price—typically hundreds of dollars less than the full price—by signing a contract with a carrier.”

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Sina Khanifar, the San Francisco-based entrepreneur behind the petition, said in an email that he’s “really glad to see the White House taking action on an issue that’s clearly very important to people. As the White House said in the response, keeping unlocking legal is really ‘common sense,’ and I’m excited to see them recognizing this.”

Khanifar, the founder of cellular signal database company OpenSignal, is well-versed on this issue. In 2005, he was sent a cease-and-desist letter by Motorola for selling software to unlock the company’s phones. Working with attorney Jennifer Granick, a well-known civil liberties advocate and educator, Khanifar challenged Motorola’s interpretation of the DMCA, and the company eventually dropped its campaign against him.

“I think the real culprit here is Section 1201 of the DMCA, the controversial ‘anti-circumvention’ provision,” Khanifar said. “I discussed with the White House the potential of pushing to have that provision amended or removed, and they want to continue the discussion.”

15 comments
UnlockBase
UnlockBase

This is simply a great news for our business (www.unlockbase.com) and probably for more than 10,000 other cell phone store, ebay seller, service center all around the world providing this service since more than 10 years. Thanks to everybody who signed the petition to make cell phone unlocking legal again in the US.


NicholasAaronDeBacco
NicholasAaronDeBacco

why make a stupid law to make cell phone unlocking Illegal , I mean look if your trying to fix the economy this is not the way to go , by being able to to unlock a cell phone you can go to another carrier but your paying for the service  so what is the point . if you own the phone  you should be able to do what you want with it , I mean if you buy something isn't it yours right by this stupid law it will just make the economy worse . 

ShahidaAlmani
ShahidaAlmani

the cell phone companies are charging high amount of bill to longrerm contract cosumers then their own prepaid consumers. So their plea of subsidising cost is a cheat while they charge extra in monthly bills compare to their own prepaid plans of same services. The law should be reverces and network  locking should be banned   

AngiePhillips
AngiePhillips

I believe that anyone who purchases a cellphone should have the freedom of speech to decide which company they would like to use  and not have it dictated by the location or carrier that is available.  

drudown
drudown

While the President takes interest in greater Federal oversight to this issue, he should direct the DOJ to likewise carefully review the illegal penalties that cell phone providers charge their consumers for canceling their plans, e.g., a $175 fee is NOT lawful liquidated damages under any commercially reasonable construction of common law precepts. It is an unlawful and unenforceable penalty without adequate consideration.

AnthonyMcMillan
AnthonyMcMillan

The very nature of this law should be a clear indicatiuon of how deeply ingrained corporations are in the running of the govt. This will never come to pass and the ban will stay in place. When politicians can be bought by big business, your concerns will always be secondary, unfortunately.

mickey66049
mickey66049

This will never pass Congress. Verizon and AT&T have very deep pockets, out of which they pull hundreds of thousands of dollars to support Republicans. When I tried to switch my service to Credo, a service which supports the same party as I do, Verizon would not release my number to be used with the new service, I didn't know they could do that, but Credo said they could. I've complained to my congresswoman and my two senators, but they are all Republicans, eager to keep Verizon happy so the campaign cash will keep coming, helped by the $160 a month my wife and I pay for the privilege of cell phone service.

sixtymile
sixtymile

Eliminating laws that create this category of Federal civil crimes to enforce corporate business models would be an excellent way to reduce the budget deficit.

joukot
joukot

What is most embarrassing is the penalty. How on earth anything you do with your $100 phone could bring 5 years in prison or $500,000 fine? It seems different laws are not in line with each other at all.

SmoothEdward1
SmoothEdward1

Gee, corporations are people after all - greedy people. Congress is so corrupt they made this unlocking prohibition Federal Law. If you complete the contract with your carrier the phone should be yours to do with as you wish. This is like paying off your car then having to ask Toyota for permission to sell it.

antonmarq
antonmarq

Mobile unlocking won''t even come close to the real insidious activities being created by Cloud technologies. One Cloud goes full scale, you'll be renting, what used to be your fully purchased software. Moreover, you'll be opening a major can of worms having all your CREATIVE information stored in some outsiders drive. presently, the aim is to rent out the software, then phase out your hard drive from your hardware, then guess what, open season begins. It's only a matter of time...

elcidharth
elcidharth

The White House (Logo)

 


It's Time to Legalize Cell Phone Unlocking

By R. David Edelman, Senior Advisor for Internet, Innovation, & Privacy

Thank you for sharing your views on cell phone unlocking with us through your petition on our We the People platform. Last week the White House brought together experts from across government who work on telecommunications, technology, and copyright policy, and we're pleased to offer our response.

The White House agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without risking criminal or other penalties. In fact, we believe the same principle should also apply to tablets, which are increasingly similar to smart phones. And if you have paid for your mobile device, and aren't bound by a service agreement or other obligation, you should be able to use it on another network. It's common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers' needs.

This is particularly important for secondhand or other mobile devices that you might buy or receive as a gift, and want to activate on the wireless network that meets your needs -- even if it isn't the one on which the device was first activated. All consumers deserve that flexibility.

The White House's position detailed in this response builds on some critical thinking done by the President's chief advisory Agency on these matters: the Department of Commerce's National Telecommunications and Information Administration (NTIA). For more context and information on the technical aspects of the issue, you can review the NTIA's letter to the Library of Congress' Register of Copyrights (.pdf), voicing strong support for maintaining the previous exception to the Digital Millennium Copyright Act (DMCA) for cell phone carrier unlocking.

Contrary to the NTIA's recommendation, the Librarian of Congress ruled that phones purchased after January of this year would no longer be exempted from the DMCA. The law gives the Librarian the authority to establish or eliminate exceptions -- and we respect that process. But it is also worth noting the statement the Library of Congress released today on the broader public policy concerns of the issue. Clearly the White House and Library of Congress agree that the DMCA exception process is a rigid and imperfect fit for this telecommunications issue, and we want to ensure this particular challenge for mobile competition is solved.

So where do we go from here?

The Obama Administration would support a range of approaches to addressing this issue, including narrow legislative fixes in the telecommunications space that make it clear: neither criminal law nor technological locks should prevent consumers from switching carriers when they are no longer bound by a service agreement or other obligation.

We also believe the Federal Communications Commission (FCC), with its responsibility for promoting mobile competition and innovation, has an important role to play here. FCC Chairman Genachowski today voiced his concern about mobile phone unlocking (.pdf), and to complement his efforts, NTIA will be formally engaging with the FCC as it addresses this urgent issue.

Finally, we would encourage mobile providers to consider what steps they as businesses can take to ensure that their customers can fully reap the benefits and features they expect when purchasing their devices.

We look forward to continuing to work with Congress, the wireless and mobile phone industries, and most importantly you -- the everyday consumers who stand to benefit from this greater flexibility -- to ensure our laws keep pace with changing technology, protect the economic competitiveness that has led to such innovation in this space, and offer consumers the flexibility and freedoms they deserve.


 Hi Barack, Go for it. "Break a leg, Oops, neck, Oops, your iPhone, worthless piece of ****."

...and I am Sid Harth@elcidharth.com

CliffCabbage
CliffCabbage

Why doesn't Obama just pass an executive order?

AlyssaGraves
AlyssaGraves

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