White House: It’s Time to Legalize Cellphone Unlocking

The White House on Monday came out in support of the rights of consumers to unlock their cellphones once they have fulfilled the terms of the contract.

Responding to a petition on WhiteHouse.gov, the executive branch stated, “The White House agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without risking criminal or other penalties.”

They went further, saying that the same right should also extend to other mobile devices, namely tablets.

“And if you have paid for your mobile device, and aren’t bound by a service agreement or other obligation, you should be able to use it on another network,” wrote R. David Edelman, White House senior adviser for Internet, innovation, and privacy. “It’s common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers’ needs.”

The Librarian of Congress, who has authority over the matter, ruled last October that the Digital Millenium Copyright Act should be interpreted to mean that unauthorized cellphone unlocking was a violation. As of Jan. 26, newly purchased phones can no longer legally be unlocked.

The Library of Congress, in its decision, concluded that there were plenty of unlocked phone options available to consumers. However, others have argued — and the White House appears to agree — that even those who buy a device initially locked to a carrier should be able to unlock it once they have fulfilled the terms of their contract.

Unlocked cellphones help create a secondary market for devices, and also are key to the strategy of several alternative carriers who encourage users to bring their own devices.

More than 114,000 people signed an online petition opposing the decision.

“As of January 26, consumers will no longer be able unlock their phones for use on a different network without carrier permission, even after their contract has expired,” stated the petition on WhiteHouse.gov. “We ask that the White House ask the Librarian of Congress to rescind this decision, and failing that, champion a bill that makes unlocking permanently legal.”

The Library of Congress responded by saying it was just doing its job by following the provisions of the DMCA, and that if its decision helped stimulate debate about the law, all the better.

“As designed by Congress, the rulemaking serves a very important function, but it was not intended to be a substitute for deliberations of broader public policy,” said a statement from the library. “However, as the U.S. Copyright Office has recognized many times, the 1201 rulemaking can often serve as a barometer for broader policy concerns and broader policy action. The most recent rulemaking has served this purpose.”

Federal Communications Commission Chairman Julius Genachowski, who had recently said that the commission should look into the matter, issued a statement on Monday urging various alternatives be explored to reverse the ban on unlocking.

“From a communications policy perspective, this raises serious competition and innovation concerns, and for wireless consumers, it doesn’t pass the common sense test,” Genachowski said. “The FCC is examining this issue, looking into whether the agency, wireless providers, or others should take action to preserve consumers’ ability to unlock their mobile phones. I also encourage Congress to take a close look and consider a legislative solution.”

The CTIA — the wireless trade group representing cellphone carriers — supported the logic behind the original unlocking ban.

“The Librarian of Congress concluded that an exemption was not necessary because the largest nationwide carriers have liberal, publicly available unlocking policies, and because unlocked phones are freely available in the marketplace — many at low prices,” CTIA legal counsel Michael Altschul said in a statement. “Customers have numerous options when purchasing mobile devices. They may choose to purchase devices at full price with no lock, or at a substantially discounted price — typically hundreds of dollars less than the full price — by signing a contract with a carrier. When the contract terms are satisfied, or for a reason that is included in the carrier’s unlocking policy — such as a trip outside the U.S. — carriers will unlock a phone at their customer’s request.”

Here’s the full text of Edelman’s response:

It’s Time to Legalize Cell Phone Unlocking

By R. David Edelman Thank you for sharing your views on cell phone unlocking with us through your petition on our We the People platform. Last week the White House brought together experts from across government who work on telecommunications, technology, and copyright policy, and we’re pleased to offer our response. The White House agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without risking criminal or other penalties. In fact, we believe the same principle should also apply to tablets, which are increasingly similar to smart phones. And if you have paid for your mobile device, and aren’t bound by a service agreement or other obligation, you should be able to use it on another network. It’s common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers’ needs. This is particularly important for secondhand or other mobile devices that you might buy or receive as a gift, and want to activate on the wireless network that meets your needs — even if it isn’t the one on which the device was first activated. All consumers deserve that flexibility. The White House’s position detailed in this response builds on some critical thinking done by the President’s chief advisory Agency on these matters: the Department of Commerce’s National Telecommunications and Information Administration (NTIA). For more context and information on the technical aspects of the issue, you can review the NTIA’s letter to the Library of Congress’ Register of Copyrights (.pdf), voicing strong support for maintaining the previous exception to the Digital Millennium Copyright Act (DMCA) for cell phone carrier unlocking. Contrary to the NTIA’s recommendation, the Librarian of Congress ruled that phones purchased after January of this year would no longer be exempted from the DMCA. The law gives the Librarian the authority to establish or eliminate exceptions — and we respect that process. But it is also worth noting the statement the Library of Congress released today on the broader public policy concerns of the issue. Clearly the White House and Library of Congress agree that the DMCA exception process is a rigid and imperfect fit for this telecommunications issue, and we want to ensure this particular challenge for mobile competition is solved. So where do we go from here? The Obama Administration would support a range of approaches to addressing this issue, including narrow legislative fixes in the telecommunications space that make it clear: neither criminal law nor technological locks should prevent consumers from switching carriers when they are no longer bound by a service agreement or other obligation. We also believe the Federal Communications Commission (FCC), with its responsibility for promoting mobile competition and innovation, has an important role to play here. FCC Chairman Genachowski today voiced his concern about mobile phone unlocking (.pdf), and to complement his efforts, NTIA will be formally engaging with the FCC as it addresses this urgent issue. Finally, we would encourage mobile providers to consider what steps they as businesses can take to ensure that their customers can fully reap the benefits and features they expect when purchasing their devices. We look forward to continuing to work with Congress, the wireless and mobile phone industries, and most importantly you — the everyday consumers who stand to benefit from this greater flexibility — to ensure our laws keep pace with changing technology, protect the economic competitiveness that has led to such innovation in this space, and offer consumers the flexibility and freedoms they deserve.

Update: 10:23 am PT, to include comments from FCC Chairman and full White House statement.

And here’s a spot I did on The Wall Street Journal’s Digits: