Bloomberg News

Phone Unlocking Deal Reached With Mobile Carriers, FCC Says (1)

December 12, 2013

Phone Unlocking Deal Reached With Wireless Carriers, FCC Says

Unlocking phones alters software so the devices may be used on another carrier’s network. Unlocking was barred last year after the wireless industry said locking phones was part of its business practices. Photographer: David Paul Morris/Bloomberg

U.S. regulators have reached an agreement with mobile carriers to allow unlocking of smartphones, the head of the Federal Communications Commission said today.

The “voluntary agreement” with the mobile industry will be presented to the FCC at its meeting today, Chairman Tom Wheeler said at a congressional hearing. He didn’t supply details.

Unlocking phones alters software so the devices may be used on another carrier’s network. It was declared to be a copyright violation by the Library of Congress in a ruling that took effect last year after the wireless industry said locking phones was part of its business practices.

Amy Storey, a spokeswoman for CTIA-The Wireless Association, a trade group, didn’t immediately reply to an e-mail today.

President Barack Obama’s administration joined critics of the Library of Congress’s decision after more than 114,000 people signed a petition. Consumers shouldn’t be at risk for criminal penalties when unlocking smartphones and tablet computers, if not bound by a service agreement, said R. David Edelman, a White House senior adviser, in a blog posting in March entitled, “It’s Time to Legalize Cell Phone Unlocking.”

Carriers Agreed

Wheeler, the Democratic FCC chairman, in November told carriers they need to agree to unlock phones or face U.S. regulations mandating the change. Wheeler proposed having a policy in place “before the December holiday season.”

Carriers had agreed to unlock phones after service contracts ended and didn’t agree to notify customers when they’d be eligible, Wheeler said in the Nov. 14 letter to Steve Largent, president of CTIA.

“Absent the consumer’s right to be informed about unlocking eligibility, any voluntary program would be a hollow shell,” Wheeler said in the letter.

CTIA includes the four largest U.S. carriers led by Verizon Wireless and AT&T Inc. (T:US)

The Washington-based group argued that “locking cell phones is an essential part of the wireless industry’s predominant business model” involving handset subsidies in exchange for a commitment to use the carrier’s service, Librarian of Congress James Billington said in an October 2012 notice announcing the change.

Copyright Law

In the decision made under U.S. copyright law, consumers aren’t allowed to unlock new mobile phones purchased from wireless providers. The Library of Congress’s Copyright Office, as part of a periodic review, said altering software to let one carrier’s phones work on other networks wasn’t among activities expressly permitted.

CTIA said in a 2012 filing with the Library of Congress that subsidies “depend on ensuring that the handset will be used, as contemplated, with the carrier’s service.”

Circumventing barriers to unauthorized use “will have significant adverse effects on the wireless industry and on the public,” the Washington-based trade group said in the filing.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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