As of late 2006, cell phone unlocking became legal in the US, but don't tell that to AT&T; the company has unleashed the lawhounds on UniquePhones, a Belfast-based company that claims to have developed a software-only method to unlock the iPhone. By trying to sell the software commercially, though, the company may have ensured that it will never see the light of day.

Let's fire up Mr. Peabody's Wayback Machine and jump to late 2006, when the ability to unlock a cell phone became an American right (for three years, at least). The decision was made by the Library of Congress, which oversees a triennial rulemaking to establish exemptions to the DMCA. In its 2006 ruling, the Library noted that phone companies were bundling digital locks with their handsets not in order to protect copyrights, but business models—not what the DMCA was meant to do.

"The underlying activity sought to be performed by the owner of the handset is to allow the handset to do what it was manufactured to do—lawfully connect to any carrier," wrote the Library (PDF). "This is a noninfringing activity by the user."

That decision has recently become even more important with the explosion of iPhone fever. iPhones are only available on AT&T's network, but there's no technical reason why they can't function on any GSM network. In the US, that means T-Mobile, but the options are far more plentiful in Europe and Asia. Some European users have already gotten the iPhone up and running on local networks.

That's why it's not surprising that Belfast-based UniquePhones would have developed iPhone-unlocking software. But selling that software in America could be a dodgy proposition, as AT&T has made its displeasure clear. Could it sue, despite the DMCA exemption that makes unlocking legal? Possibly.

Use, but don't distribute

That's because the DMCA exemption allows for using tools to unlock a phone but does not provide explicit protection for those who distribute such tools. That could put companies like UniquePhones in AT&T's legal crosshairs if they attempt to sell such software in the US.

So long as UniquePhones wants to profit by offering a commercial iPhone unlocking product, AT&T can halt distribution by bringing pressure to bear on the company. Should the company release its tool (in either open- or closed-source versions) into the wild, stopping its spread would be impossible; one need look no further than the recent AACS key fiasco or the DVD industry's attempt to bottle up DeCSS to see why.

Unlike most phones, the iPhone isn't being heavily subsidized by AT&T, so it's not clear why the company should have the right to control what people do with a product they have purchased for hundreds of dollars. Would computer owners pick up an iMac that only worked with AT&T's DSL service?

The situation just shows up the DMCA's convoluted absurdities in unusually stark relief. While the law has done plenty of good—just think of what the "safe harbor" provisions have meant for ISPs and startups like YouTube—reform is still needed. Allowing consumers to unlock their own property (especially when it's not subsidized) but not allowing them to purchase the tools to do so is the sort of situation that belongs only in Kafka, not in modern rulemaking.

And don't forget: the exemption for unlocking cell phones must be granted every three years. That means it must be defended anew at great time and expense. In the last rulemaking, the CTIA (a trade group representing wireless carriers) filed its comments after the deadline, and they were not allowed. You can bet they'll be better prepared in another two years, at which point even this one consumer-friendly exemption could vanish.

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