New FCC Chair to Industry: Unlock Customers’ Phones

tom wheeler The back-and-forth over regulation of wireless phones continues this week. New FCC Chairman Tom Wheeler asked the CTIA Wireless Association to recommend that its members, including AT&T, Verizon and other carriers, voluntarily allow consumers to “unlock” their wireless phones “when the applicable service contract, installment plan, or ETF [early termination fee] has been fulfilled” (Note that this would not help in-contract customers who want to unlock their phones for the purposes of using foreign carriers during international travel). He implied that he would push for FCC regulations forcing carriers to allow unlocking if the practice was not adopted voluntarily by the mobile phone industry.

This continues a decade of confusion for customers of U.S. carriers. In 2006, the Librarian of Congress, tasked every three years by the Digital Millennium Copyright Act (DMCA) to consider exemptions to anticircumvention rules, created an exemption allowing mobile phone owners to modify their phones “for the sole purpose of lawfully connecting to a wireless telephone communication network.” In 2007, hacker George Hotz successfully modified his Apple iPhone to connect to networks other than AT&T, which at the time was the only wireless carrier offering the iPhone. Apple, unable to sue Hotz due to the DMCA exemption, attempted to counter Hotz’s modifications by both sending out software updates that removed the exploited security flaws and threatening to void the warranties of modified phones. In 2012, the new Librarian of Congress declined to renew its exemption, making it illegal for consumers to unlock their phones. It is this 2012 prohibition by the Librarian of Congress that Chairman Wheeler opposes.

If the mobile phone industry does not self-regulate, it’s unclear how an FCC ruling in support of unlocking phones would play out, given that the DMCA authorizes the Librarian of Congress, not the FCC, to dictate exemptions to the Act’s anticircumvention rules. The Obama administration, responding to the Librarian’s prohibition, implied that Congress or the FCC should act to make phone unlocking legal again, implying that it would support the FCC in such a decision.


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