If you recently purchased a cell phone and were planning on unlocking it, beware — unlocking a phone without the carrier’s permission has recently been declared illegal in the United States.
The U.S. Copyright Office and the Library of Congress are responsible for determining exemptions to the Digital Millennium Copyright Act, which prohibits, among other things, the circumvention of copy protection measures. These exemptions are handed out every few years, and in 2006 and 2010, users were granted permission to unlock their phones. But in October 2012, the Librarian of Congress changed positions and declared unlocking of phones to no longer be a valid exemption, making it illegal for the first time in six years. The ruling, issued on Oct. 26, 2012, was scheduled to become effective in 90 days, and so went into effect on Jan. 26, 2013.
So what is unlocking, exactly? Most cell phones in the U.S. are sold by a particular carrier; you buy a phone from Verizon, for example, or T-Mobile or AT&T. The carriers subsidize the cost of the phone, often selling it for a few hundred dollars less than the regular price, but require buyers to sign a service contract, usually for two years. The phone is then tied to that particular carrier — your iPhone might be tied to AT&T, your Droid to Verizon and so on. You can’t use it with another company’s network, and if you travel to another country, it probably won’t work there either.
Unlocking removes this restriction, and allows a phone to be used with any network with which its hardware is compatible. For example, the GSM (Global System for Mobile Communications) standard is used by both T-Mobile and AT&T in the U.S., as well as many networks and providers in Europe, Asia and all over the world. A phone whose hardware radio is compatible with GSM (including the iPhone and any other phone sold by T-Mobile or AT&T), if unlocked, can be used with any of these networks, making it ideal for travelers — so if you’re planning to study abroad, an unlocked GSM phone might be helpful. (Sprint and Verizon, among others, use a different technology called CDMA, which is not compatible with GSM and is not as common worldwide. No GSM phone will work on a CDMA network or vice versa, regardless of unlocking.) Unlocking is a software process, usually involving a code generated by the carrier based on a phone’s IMEI, a unique identifying number. Some of the algorithms used to generate unlock codes have been reverse-engineered, allowing anyone with the know-how to unlock a phone themselves, and there exist many shops and companies selling such codes for a small fee.
Unlocking a phone is not the same as jailbreaking or rooting it. Unlocking allows a phone to work on multiple carriers, where jailbreaking (for iPhones) or rooting (for Android) is the process of gaining full control over the phone’s software, allowing it to run software not approved by the manufacturer, such as apps not approved by Apple or custom ROMs (basically custom operating systems). Jailbreaking or rooting voids your warranty but under the new law remains legal for phones.
So why is unlocking illegal? According to the official release from the Library of Congress, unlocked phones are readily available and a legal exemption to allow for unlocking was not necessary: “…in light of carriers’ current unlocking policies and the ready availability of new unlocked phones in the marketplace, the record did not support an exemption for newly purchased phones,” according to the report. The Library also considered a 2010 decision by the Ninth Circuit court that in situations where software is licensed, rather than sold, the users of the software do not own it; proponents of the change argued that this applies to mobile phones, so cell phone users don’t actually own the software that their phones run. CITA, a trade association of cell phone providers, also stated that the law would protect consumers by making it harder for businesses to launder and sell stolen cell phones, and because software used to unlock phones might contain viruses or spyware.
Not everyone agreed with this reasoning. The Electronic Frontier Foundation, which seeks to protect consumers’ and users’ rights in the technological world, argued the law is a “misuse” of the DMCA, which was intended to protect creative works and guarantee copyrights for content creators, but is instead being used by businesses — like wireless carriers — to stifle competition. Others have pointed out the vagueness of the law and the potential for increased lawsuits, reminiscent of the RIAA’s well-publicized litigation against small-time downloaders of pirated music.
If you purchased a phone before Jan 26th, it will be considered “grandfathered in” and won’t be illegal to unlock. Also the law only restricts unlocking without a carrier’s permission, so if you get your carrier’s permission to unlock your phone you’ll be entirely okay — AT&T, for example, has been known to unlock iPhones for users whose contracts have expired and who are in good standing. If you do illegally unlock your phone, the penalty could be a fine up to $2,500 in a civil suit, or up to $500,000 and prison time in a criminal case if the unlocking is done for “commercial advantage.” Of course, how the actual enforcement will go remains to be seen, and shops that sell unlock codes are probably more at risk than average individual users. If you want the freedom without any risk, you can always buy a phone that’s unlocked by the manufacturer from the very start — such as the Nexus 4, which is now finally back in stock direct from Google.
Or you could go north of the border — in the same week that the United States made unlocking phones illegal, Canada proposed legislation to make it not only legal, but required. The Canadian Radio and Television Commission is in the process of drafting a new code of laws applying to wireless cell and network providers, and has included in its first drafts a provision requiring providers to unlock their customers’ phones under “reasonable terms,” such as time limits or fees, so long as they aren’t excessive. Other terms include limits on early termination fees and a guarantee of personalized terms and conditions in “clear, easy to understand language” with no fine print. The proposal has been met with approval from both Canadian consumer advocacy groups and telecommunications companies.
A version of this article appeared on page 5 of February 5th, 2013′s print edition of the Nexus.