FCC Will Review Unlocking Ban on Cell Phones

To lock or not to lock: That is the cell phone question that has gotten the keen interest of the FCC and made many U.S. consumers very angry.

The FCC says it’s going to investigate the legality of the ban on cell phone unlocking – after over 114,000 Americans signed a petition opposed to the ban. It’s not clear what the FCC can do about the ban – it may require a court ruling – but the agency will at least review the issue.

The ban “means that customers of one carrier can't switch to a different network, even after their contracts have expired,” explained a recent report from TG Daily. Those found guilty could end up in prison for five years and pay up to $500,000 in fines.

As of January 26, consumers can’t unlock cell phones for use on a different network without carrier permission, even after their contract expired, the petition said.

The lifting of the exemption was prompted by a request from the CTIA, a wireless industry lobbying group, which said “phones that come pre-unlocked are much more widely available than they once were,” according to a report. 

Also, the ban stems from the 1998 Digital Millennium Copyright Act (DMCA), which says in part, "No person shall circumvent a technological measure that effectively controls access to a work protected under this title." An exemption for cell phone locking was eliminated last October and become effective in recent weeks, according to news reports.

The move prompted an outcry that it was unfair to consumers and may hurt competition. "Consumers will be forced to pay exorbitant roaming fees to make calls while traveling abroad. It reduces consumer choice, and decreases the resale value of devices that consumers have paid for in full," the petition states. As of Monday, 114,271 people signed the online petition.

When asked for a response on the issue, Electronic Frontier Foundation attorney Mitch Stoltz told TG Daily that "unlocking is in a legal grey area under the DMCA.”

“The law was supposed to protect creative works, but it's often been misused by electronics makers to block competition and kill markets for used goods,” he added. “The courts have pushed back, ruling that the DMCA doesn't protect digital locks that keep digital devices from talking to each other when creative work isn't involved. … And no creative work is involved here: Wireless carriers aren't worried about ‘piracy’ of the software on their phones; they're worried about people reselling subsidized phones at a profit. So if the matter ever reached a court, it might well decide that the DMCA does not forbid unlocking a phone."

Meanwhile, the FCC Chairman Julius Genachowski told TechCrunch that the “ban raises competition concerns; it raises innovation concerns.”

“It’s something that we will look at with the FCC to see if we can and should enable consumers to use unlocked phones,” he added.