If You Can't Open It, You Don't Own It -- Unlocking Your Cellphone

Who owns your cellphone? Or, not to put too fine a point on it: who controls what you can do with your cellphone after you’ve paid for it?

You probably saw a number of headlines this week in the vein of “White House: cell phone unlocking should be legal”, but the opinion released by the Obama Administration on March 4 is not the beginning of the story, nor is it the end – not by a long shot. Although the White House announced it agrees with thousands of We The People petitioners that smartphone and tablet users should be allowed to unlock their phones and use the devices on the network of their choosing, there's a long way to go to make that a reality.

Mitchell Lazarus writing for CommLawBlog posted an excellent analysis “Why It's Suddenly Illegal to ‘Unlock’ Your New Cell Phone”. The unlocking problem starts with one sentence in the Digital Millennium Copyright Act (DCMA):

“No person shall circumvent a technological measure that effectively controls access to a work protected under this title.”

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 (hey, this is a legal discussion, there’s always a but) the DCMA also allows the Librarian of Congress to make exceptions to the law. Previously, there was an exception that allowed unlocking phones. The exception 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.” But (sorry), in an October 2012 order that just became effective this year, the Librarian of Congress limited this exemption to handsets bought before January 27. Unlocking a phone acquired after that date is illegal.

Enter We the People. Not all of us, but over 114,000 people signed a We the People White House petition asking the Obama Administration to “ask the Librarian of Congress to rescind this decision, and failing that, champion a bill that makes unlocking permanently legal.” And, after the petition passed the threshold to require a response from the White House, as noted above, the Administration this week said, in part:

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.

The White House also outlined next steps. The Administration:

I. Looked for the Federal Communications Commission (FCC) and the Department of Commerce's National Telecommunications and Information Administration (NTIA) to addresses this issue. When the White House released its opinion, FCC Chairman Julius Genachowski released a statement saying, “From a communications policy perspective, this raises serious competition and innovation concerns, and for wireless consumers, it doesn't pass the common sense test. The FCC is examining this issue, looking into whether the agency, wireless providers, or others should take action to preserve consumers' ability to unlock their mobile phones. I also encourage Congress to take a close look and consider a legislative solution.” Back in September, the NTIA voiced strong support for maintaining the previous DMCA exemption for cell phone carrier unlocking.

II. Encouraged 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. The mobile providers are represented in Washington by CTIA – The Wireless Association. The lobbying group this week reiterated its stance that “The Librarian of Congress concluded that an exemption was not necessary because the largest nationwide carriers have liberal, publicly available unlocking policies, and because unlocked phones are freely available in the marketplace — many at low prices. Customers have numerous options when purchasing mobile devices. 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. When the contract terms are satisfied, or for a reason that is included in the carrier’s unlocking policy – such as a trip outside the U.S. – carriers will unlock a phone at their customer’s request.”

Back in January, CTIA’s Michael Altschul explained it this way:

The business practice behind the decision to protect the software used to “lock” a wireless phone to a carrier’s network is really no different than in selling a car.

If the car is fully paid for, the owner simply transfers the car’s title to the purchaser as soon as payment is received; however, if there is an outstanding loan on the car, the finance company has to be paid before the owner can transfer the title to the purchaser. In other words, until the loan is paid, the finance company has a “lock” on the transfer of the car to a new owner.

That’s all that is happening here: consumers who pay the full price for a phone can take that phone to the carrier (or carriers) of their choice. However, if a carrier subsidized the price of the phone in exchange for the consumer’s agreement to use the phone on that carrier’s network, the consumer can only transfer the phone to a new carrier once the terms of the contract (or the carrier’s unlocking policy) have been satisfied.

III. Voiced support for 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. Members of Congress are moving on the issue. Sens. Amy Klobuchar (D-MN), Mike Lee (R-UT) and Richard Blumenthal (D-CT) introduced the Wireless Consumer Choice Act to legalize cellphone unlocking and allow owners to switch their devices to other networks. The bill would instruct the Federal Communications Commission to order carriers to allow their customers to unlock their phones and switch providers after they have completed their contracts. Rep. Anna Eshoo (D-CA) plans to introduce companion legislation in the House. Support for phone unlocking in the Senate includes Senate Judiciary Committee Chairman Patrick Leahy (D-VT) and Sen. Ron Wyden (D-OR) who the Wireless Device Independence Act.

Can the legislation pass? That’s the $500,000 question as consumers now face a prison term of up to five years and a fine of up to $500,000 for unlocking their phones illegally. The answer depends on how much opposition Congress gets from the phone and entertainment companies that argued against renewing the unlocking exemption last year. As the debate over the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA) illustrated, Congress won't necessarily rush to strengthen the law's protections against copyright infringement. But members have also been loath to weaken the protections that already exist.

Sina Khanifar, the entrepreneur behind the We The People petition said that the "real culprit" was the section of the DMCA which he said "needs to be either repealed or amended, as it's very broadly written and generally unnecessary." [Public Knowledge voiced the same concern this week.] Among other things, Khanifar said, the section in question "prevents making backups of DVDs for personal use (with no copyright infringement), prevents screen reading technology for e-books for the blind, and prevents unlocking and jailbreaking phones, game consoles and tablets." But that same language in the law makes it illegal to:

• circumvent the access controls on DVDs, e-books and video games to make bootlegged copies for sale on the street or swapping online and
• manufacture or sell devices whose main purpose is to circumvent the digital locks on copyrighted material.

So, any effort to remove or significantly weaken the DMCA language would run into a buzz saw of opposition from companies that rely on technical protections for their intellectual property.

Derek Khanna, a former Republican congressional staffer active on copyright issues, said he was launching a website to keep the pressure on Congress to lift the ban on cellphone unlocking. "A free society should not require its citizens to petition their government every three years to allow access to technologies that are ordinary and commonplace," Khanna said in a statement. "Innovation cannot depend upon a permission-based rule-makings requiring approval every three years from an unelected bureaucrat. A free society should not ban technologies unless there is a truly overwhelming and compelling governmental interest."

Josh Levy, Internet Campaign Director for Free Press, has started a petition, "Free Our Phones," asking Congress to write a bill that would protect cell phone unlocking. "We need open devices and networks to communicate and innovate -- and that means we should have the right to modify our own hardware and truly own our cellphones," Levy wrote.

A new coalition called FixTheDMCA.org has launched an effort to repeal the DMCA language that forbids breaking "digital locks." The group’s website lays out the problem and provides tools for people to contact their Congressional representatives. Supporters include YCombinator, Reddit, Mozilla, O'Reilly Media, the Electronic Frontier Foundation, Fight for the Future, the Internet Archive, IFixit, and a few dozen small software companies.

"At Make magazine, we long have had a slogan—if you can't open it, you don't own it," said Tim O'Reilly, announcing his support of the new project in a press release. "When you can't take something apart, you can't understand it. When it breaks, you can't fix it. When you want it to do something more, you can't modify it. Section 1201 of the DMCA not only takes away critical rights from owners of consumer electronics, it flies in the face of our national priority to improve STEM education and engineering literacy."

As we noted above, this story is far from over. We’ll continue to track it and continue to see you in the Headlines.