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Cell Phone Unlocking

Last Updated:2014-Mar-25
Principal Writer:Barry Shatzman

Issue Sections

Understanding The Issue
Issue Status
Analysis and Perspectives
What You Can Do
More Information
The Rumor Mill

Reported News

Consumer Issues: Company Practices

Related Bills

Unlocking Technology Act

2013 (HR-1892)

Unlocking Consumer Choice

2013 (S-517)

Unlocking Consumer Choice

2013 (HR-1123)


1998 (HR-2281)

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What is this about?

You buy something. You own it. As long as you aren't hurting anyone else, you can do whatever you want with it. Right?

It might sound strange, but you can't necessarily do that with your cell phone.

When you buy a cell phone, it typically will work with only the carrier you chose, such as Sprint or Verizon. If you want to change carriers, you might need to buy a new phone.

But this is where it gets interesting. It's likely that your current phone actually is capable of connecting with other carriers. It's just that the phone is locked to the provider who sold you the phone. Allowing it to work on another carrier's network merely requires a simple programming procedure to unlock it.

One problem - it was illegal until just recently. And your provider might not let you do it anyway.

History and the DMCA

Unlocking cell phones was made illegal by the 1998 Digital Millennium Copyright Act (DMCA). It's the same law that makes it illegal to circumvent the digital locks on copyrighted music, movies, books, and software.

The law also made it illegal to jailbreak or root your phone. These are different than unlocking. They allow a phone to run software that has been blocked by the manufacturer.

It's a broad law, so it allows the U.S. Copyright Office and the Library of Congress to grant exemptions. Unlocking, jailbreaking, and rooting cell phones all were exempted from the law. The exemptions for jailbreaking and rooting are in effect until 2015.

The Library of Congress decided to allow the exemption for unlocking to expire on January 26, 2014. From that date until the law legalizing it was signed by President Obama, customers could only unlock their phones with permission from their carrier - even after their contract had expired.

Though the stated purpose of the DMCA is to protect creative works, wireless carriers want the protection to prevent people from reselling their phones, according to both the Electronic Frontier Foundation, which represents consumer rights and CTIA - The Wireless Association, which lobbies for the wireless industry.

What has Congress done to fix this?

In August 2014 President Obama signed the Unlocking Consumer Choice and Wireless Competition Act - making it legal again for you to unlock your cell phone. It also allows the Library of Congress to determine whether to extend the unlocking exemption to other wireless devices such as tablets.

However, it prohibits the bulk unlocking of cell phones for the purpose of reselling them.

A competing bill, the Unlocking Technology Act (HR-1892) would have allowed anyone to unlock any mobile device for their own use or to resell it, as long as the intent was not to circumvent technology designed to protect copyrighted work. That bill was not voted on.

What's the practical difference between the two bills

Allowing the bulk unlocking of phones could have saved you money when buying a phone.

Right now, you can buy a discounted phone from a carrier in exchange for agreeing to stay with the carrier for some length of time - typically two years. The phone you buy will be locked to that carrier. Or, you can pay the full retail price for an unlocked phone.

However, if it were legal for a company to purchase used phones and unlock them for resale, you would have had another option - to buy an unlocked phone for a much cheaper price.

Why would they give you a phone? Because they don't really.

Carriers will sell you a phone at reduced prices (or even give them away) in exchange for you agreeing to maintain your service with them. You pay a penalty if you cancel the contract early.

You still effectively end up paying the full price for the phone. Though it doesn't show up on your bill, the price you pay includes the service cost and a payment toward the cost of the phone.

Once your contract expires, your options include...

o Buy a new phone at a reduced price with either the same or another carrier, and commit to another 2-year service contract

o Keep your phone and continue with the same carrier, paying the same amount as before but with no commitment - so you can leave any time.

In other words, if you pick the second option, you effectively will be paying for a new phone that you didn't get.

Things are beginning to change in favor of the consumer, however. By the end of 2014, most carriers had begun offering lower service rates for customers who bring their own phone (which needs to be compatible with the carrier's network).

The impact of making and of disposing phones

The ability to buy a used phone - or keep your existing one if you're changing carriers - helps the environment on both ends of a phone's lifecycle.

Though phones are full of toxic materials, the disposal of cell phones has yet to become as much of a problem as other electronic devices that have been replaced, according to a 2008 New York Times report. Many are refurbished and sold cheaply in foreign markets - especially where the infrastructure doesn't exist for landline phones. Those that can't be refurbished are broken down chemically into virtually pure components to be recycled. Many simply end up in a drawer.

This is expected to become a greater problem, however, as people continue to replace their phones every two years and the market for second-hand phones becomes saturated.

A much bigger problem right now is on the manufacturing side. Manufacturing a cell phone requires raw materials including metals, fossil fuels, and water. It also requires the resources to transport it to the store you buy it from.

Many people still will replace their phone whenever they can, simply because they want the newest features. Legalizing bulk unlocking, however, would make it easier for someone to upgrade to a phone that is not quite the latest model. Others simply would keep their phone if they could use it with another carrier.

Either situation would mean one less phone that needs to be manufactured.

This report by the GRACE Communications Foundation discusses how much water it takes to manufacture a cell phone.

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