Mobile & Telecom

Unlocking Phones Again, With Help From the White House


Unlocking Phones Again, With Help From the White House

Photograph by Sam Armstrong/Gallery Stock

After a brief stint of illegality, it now seems increasingly likely that Americans will regain the right to unlock their phones. The White House sent a petition to the Federal Communications Commission on Tuesday, seeking to rewrite its rules and to force mobile carriers to let consumers take phones to rival networks. A bill working its way through Congress would do more or less the same thing and has drawn support from the wireless industry.

Carriers put locks on phones to keep customers from defecting. A rule change wouldn’t bring absolute freedom because networks such as those of Verizon Wireless and AT&T (T) are technically incompatible. Circumventing a lock on a phone has been illegal since January after a federal copyright office rescinded a cellphone exemption to the Digital Millennium Copyright Act. The White House and Representative Bob Goodlatte (R-Va.), chairman of the House Judiciary Committee, want to reverse that move. “By giving customers greater freedom to choose among alternative mobile service providers and use wireless devices that they lawfully acquire from others, the proposed rule would both increase competition in the mobile services market and enhance consumer welfare,” wrote the National Telecommunications and Information Administration, the president’s principal adviser on this policy.

It will also come as good news for the second-hand phone market, which is gathering increasing steam because of trade-in programs and other moves by phone companies and retailers. A rule requiring carriers to unlock phones would make second-hand devices more valuable because people could take them to any compatible network. While carriers already offer to unlock their customers’ phones under certain conditions, AT&T, for example, will only do it for the person who bought the phone originally. The White House wants to allow anyone who has legally acquired a second-hand phone to have it unlocked, although the new regime wouldn’t keep carriers from setting penalties for customers seeking to unlock before finishing their service contracts.

The CTIA, a trade group for the wireless industry, has warned that lowering restrictions to unlocking phones could also benefit the stolen-phone industry because the same things that make used phones more valuable make stolen phones more valuable. But it has changed tack over the course of the year, and is pushing for Goodlatte’s bill.

“No one seems to be opposed to unlocking. It just seems to be the extent of that unlocking,” said Chris Lewis of the digital rights advocacy group Public Knowledge.

Phones aren’t the only thing you could conceivably unlock, however, and Lewis is among those who want to push further. Unlocking issues have already popped up in other industries. Massachusetts passed a law last year requiring car dealerships to provide independent auto repair shops with the information needed to unlock computerized systems. Lewis also cites consumers ripping DVDs in order to watch movies on their iPads (AAPL) or security researchers breaking software locks to prod for vulnerabilities among additional legal problems that could be solved by loosening the DMCA.

Representative Zoe Lofgren (D-Calif.) introduced a bill earlier this year that would allow people to unlock any technology, so long as they weren’t doing so to infringe a copyright. It hasn’t proven as compelling as the phone-unlocking issue, however, and seems to have faltered.

Brustein is a writer for Businessweek.com in New York.

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