What the ban on unlocking phones means (worse than you think)

You will have heard that the US Copyright Office has lifted the temporary ruling under which you were allowed to unlock your phone. EFF explains in detail what this ruling means (it's not what you think -- and in some ways, it's worse):

First, the good news. The legal shield for jailbreaking and rooting your phone remains up - it'll protect us at least through 2015. The shield for unlocking your phone is down, but carriers probably aren't going to start suing customers en masse, RIAA-style. And the Copyright Office's decision, contrary to what some sensational headlines have said, doesn't necessarily make unlocking illegal.

Unlocking is in a legal grey area under the DMCA. The law was supposed to protect creative works, but it's often been misused by electronics makers to block competition and kill markets for used goods. The courts have pushed back, ruling that the DMCA doesn't protect digital locks that keep digital devices from talking to each other when creative work isn't involved. And no creative work is involved here: Wireless carriers aren't worried about "piracy" of the software on their phones, they're worried about people reselling subsidized phones at a profit. So if the matter ever reached a court, it might well decide that the DMCA does not forbid unlocking a phone.

Now, the bad news. While we don’t expect mass lawsuits anytime soon, the threat still looms. More likely, wireless carriers, or even federal prosecutors, will be emboldened to sue not individuals, but rather businesses that unlock and resell phones. If a court rules in favor of the carriers, penalties can be stiff - up to $2,500 per unlocked phone in a civil suit, and $500,000 or five years in prison in a criminal case where the unlocking is done for "commercial advantage." And this could happen even for phones that are no longer under contract. So we're really not free to do as we want with devices that we own.

All that said, if you were convicted, the maximum penalty under the law for unlocking your phone is now greater than the maximum penalty for turning it into an IED.

Is It Illegal To Unlock a Phone? The Situation is Better - and Worse - Than You Think


    1. Any phone from a carrier can come locked, and unlike consumers, who  now face criminal penalties for unlocking a phone that is no longer part of a contract, there is no law forcing carriers to unlock phones that are not under contract.

      You could solve the issue of getting an unlocked phone by buying manufacturer direct, but I don’t see that as the biggest problem here.  Government has stepped in and made breaching your cell phone contract a crime instead of the civil matter that it is.  They have stripped power away from the consumer while giving more power to carriers. With the implementation of this law, there is no compelling reason for carriers to unlock phones. In fact, it’s against their best interests as a business. Using DMCA in this way puts unreasonable restrictions on what individuals can do with their private property and is highly anti-competitive. Moreover, it seriously hurts the second hand market.

      Not allowing individuals to unlock their phones is a symptom of the problem.  The real problem is that this is no longer a government by or for the people.

      1. “You could solve the issue of getting an unlocked phone by buying manufacturer direct”

        like i said.

        “The real problem is that this is no longer a government by or for the people. ”

        oh noes! a law exists that some people don’t like! tyranny!

        don’t like a law? call your representative and get the law changed. that’s how it works.

        1. While my comment was a bit hyperbolic, it is abundantly clear to anyone watching that the American government works on behalf of business, not people.

          I actually have called my Representative and Senators, but since I’m not a millionaire campaign donor and since Wikipedia hasn’t shut itself down in protest, this abuse of a law designed to protect copyright will go uncontested by lawmakers.

        2. I’m a bit confused on this process.  Please provide four examples in the past decade where the methods you’ve described have led to the repeal of an unpopular law at the federal level.  Please refrain from voicing your opinion on the internet until you have completed my request.

    2. I live in Manitoba, Canada. Unsubsidized phones are not an option.

      That is, you can buy a phone at the full unsubsidized price. But then your monthly service will cost you considerably MORE, not less, because you’re not on the otherwise mandatory three-year contract. There is no not-subsidizing-a-phone price.

      1. yes, the subsidies do make phones affordable. but there is no right, at least in the US, that phones be affordable.

        if you want a cheap phone, you’re gonna pay the price some other way.

      2. I came here to say the opposite. In the UK at least there seems to be no such thing as a subsidised phone. I’ve done the maths: it was cheaper for me to buy a brand new, unlocked smartphone and a £8/month contract than to spend £35-40 a month to get a ‘free’ phone.

        As customers we’re paying for the phone one way or another so should have every right to unlock it. That said I don’t know what the legal situation is in these parts.

    3. The trouble with the DMCA is much more profound than the expiration of this former exception:

      By making circumvention of a DRM system, no matter your purpose(however otherwise legal, there is no requirement that the circumvention be for an illicit activity, mere circumvention is enough) federal-felony-illegal, the DMCA effectively means that anybody can write their own federally-enforced laws into basically any device that uses software just by tacking on a lousy access control mechanism and something copyrighted.

      It’s even more of a blow to the notion of ‘rule of law’ than the mandatory binding arbitration terms that are now effectively standard in most consumer-grade contracts. 

      Within the bounds of traditional contract law, you can accept restrictions that you would not othewise be bound by; but there is also a recognition of unconsciencable contracts, meeting of mind, contracts of adhesion, etc, etc. With the DMCA, you can simply write whatever contract you wish, embedded permanently in anything complex enough to run software(cellphone unlocking isn’t banned because your 3-year contract with AT&T says so, it’d be just as banned for anybody who obtained the hardware through resale without any contracting at all with AT&T, the handset manufacturer, or any of the chipset or firmware vendors), and have it carry federal penalties.

      That’s seriously radical by any historical standard of copyright or contract law, given the extraordinarily broad(and only growing) number of things that are complex enough to have software.

      It might have seemed like a minor detail in the early 70’s or something, when even things we think of as microcontrollers were pretty much business, academic, and government only; but today, rules about software are rules about almost everything.

  1. All that said, if you were convicted, the maximum penalty under the law for unlocking your phone is now greater than the maximum penalty for turning it into an IED.

    It’s proportional to the penalties for Hacking. Why should a cell phone unlocker spend less time in jail than Aaron Swartz? After all, if code is law, then unlicensed coders are tantamount to vagabonds and other dangerous persons..

  2. I still don’t understand this. If a phone leaves a companies network, it has either been paid for, or the subscriber will pay a fine to pay back the subsidy.

    The new carrier immediately gets straight revenue without having to recoup the cost of a subsidy, and the old carrier does not have to subsidize a new phone.

    I wonder if the real advantage of this law is either keeping consumers under contract, or carriers don’t want customers leaving with exclusive phones. .. For example at&t iphones being activated on tmobile before tmobile could sell thier own iphones?

    “they’re worried about people reselling subsidized phones at a profit”-with early termination fees, I don’t see how this game would work. Not to mention, if this game does work, it is still viable for any phone, unlocked or not.

  3. Not that this hypothetical case would help the owner of the phone all that much; but I have to wonder about the case of a phone from carrier A being modified by carrier B to work on their network:

    In order to SIM-lock a phone, carrier A buys/licenses the appropriate firmware features in the cellular modem firmware of the phones they distribute to lock those phones to specific SIMs. Carrier B does the same thing for the phones they distribute. Now, however, what if carrier A and carrier B both carry a given phone model and carrier B obtains permission from Qualcomm or whoever makes the cell chipset for a given model to flash as many instances of their firmware onto handsets as they wish? Would they, now having the copyright holder’s permission(quite possibly the copyright holder to both carrier A and carrier B’s firmware) to entirely overwrite the firmware on a carrier A phone if its owner wished to become a customer of carrier B?

    This would seem especially likely to be legal if carrier B were to figure out a method that allows them to overwrite; but not to dump the firmware. If you crack the DRM and dump the firmware, that is pretty arguably a ‘circumvention device’ that gets around DRM protecting a copyrighted work, the firmware. If, however, carrier B already has working firmware that they licensed from the vendor, they have no need to dump the carrier A firmware, they only need to overwrite it.

    Does anybody know if the DMCA could even be seen as stretching to apply here?(since it ostensibly doesn’t bar reverse engineering for interoperability purposes, and attempts to use it purely for anticompetitive measures failed in Lexmark v. Static Control Components it might not even apply at all); but it would seem, in my naive reading, that an ‘unlocking’ method based purely on overwriting the copyrighted work, while making no effort to access it, wouldn’t involve the DMCA at all.

    Consider an analogy: If you bought some music from a ‘Playsforsure’ WMDRM store for your Zune, I can’t legally crack that DRM in order to help convince you to buy an Android device or an iDevice by transcoding your music for you. However, if I have a license from the label, the DMCA doesn’t even touch me accessing your hard drive for you and overwriting a WMDRM track with an unencumbered MP3, AAC, or ‘fairplay’-encumbered track that decodes to the equivalent song. I’m not even touching a DRM system, just a mass storage controller.

  4. yeah – the thing i don’t get about this is that if you terminate your contract, you have to pay an early termination fee. that fee is (i suppose) meant to pay back the subsidy that you received at “purchase” of the phone.

    how was AT&T or any other carrier harmed financially if you terminate your contract?

    adding insult to injury, the ETF does not prorate with time, so the carrier is always at an advantage here.

  5. I’ve always thought that the copyright battles over things like inkjet cartridge refills were really about setting precedents that could be used in other industries, especially the automotive industry. The same goes for phone locking.

    Think of cars that only accept only their own brand of chipped air, fuel and oil filters. Or only their own brand of chip-embedded windshields “for safety reasons.”

    It may be hard to get courts to accept this with existing cars, but with the advent of electric cars, you have new major components like batteries, motors, power regulators and whatnot that can be “protected.” Not to mention cars that only charge from one company’s (IP law protected) recharging stations.

    When someone tries to take automotive component chipping to court, they may be turned down because “that was already settled in lawsuits by Lenovo and HP.” Locking your car into one company’s charging stations “was already settled by lawsuits by Apple and AT&T.”

  6. I use an  ATT $0.10/min prepay, and just had an ATT rep tell me that I couldn’t buy the $19 refurb prepay phone on their website because “it would only work with the SIM card it was sold with, and I had to go to an ATT store to upgrade”. I told her I thought she was full of shit, and ordered it anyway, I’ll return it in the unlikely case somehow she’s right, but I think it was just more overreaching to get more cash from consumers, even someone willing to stay a customer.

    1.  It’s my experience that you can put any AT&T SIM card in to any AT&T phone (assuming they use the same size card).  We keep a prepaid phone in the office for when people drop or lose their iPhones (yes, really), and it has always worked.

    1. It’ll be a while, if ever: the cellular modem side of things(which is where SIM locking happens) is an absolute thicket of patents. A lot of them are RAND licensed, which is the only thing keeping the entire handset industry from grinding to a litigious halt; but they still need to be licensed. Maybe the original GSM standard is now old enough that you could implement a totally open GSM-handset-circa 1991 or so; but anything newer would be wacky patent fun.

      The application processor side would be a lot more hopeful; but also isn’t where the majority of the carrier lockdown lives.

      1. Software-defined radio to the rescue, perhaps? Sell a generic RF front-end board, let people “commit a crime” by flashing in the GSM/CDMA firmware on their own?

        I can imagine such phone, able to “morph” into any network standard or even be connected to several at once (with the appropriate SIM cards or other authentication modules), and even work in a carrier-less mesh network with other such phones.

  7. I’m far from an expert on these matters, so I may be wrong, but practically speaking, wouldn’t this affect only the shops modifying new and used handsets sold (and locked) by carriers?

    My understanding is that all EU GSM mobiles are unlocked.  I think I’ve read that as a EU resident, it’s your right to use your phone with any carrier.  Something about competition – y’know, competition, what the right’s windbags always say is so insanely great about the US economy.

    So, be patriotic and encourage competition – don’t buy a mobile from a carrier that locks their phones.  Get a grey-market phone meant for the EU market instead.  Then you can drop in a generic prepaid SIM card such as T-mobile, Net 10, H2O, or whatever carrier you’d like to try this time.  (At least until they make it illegal to import grey-market mobiles.)

    I just checked, and whatever the source, there are still plenty of unlocked mobiles offered on Amazon. and all over the web.  Meanwhile, “Unlocked cell phone” on Ebay returns over 31,000 matches, though an awful lot of them are listed as “from China.”

    So if you choose a locked phone, that’s your look-out, no?  Open options exist.

    But this is just treatment for the symptom, not the disease – which is the DMCA.

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