FCC Chairman Calls for Overturning Cell Phone Unlocking Ban

ImageBy Megan Fensterman

During his recent nomination hearing in front of the Senate Commerce Committee, the newly appointed FCC chairman Tom Wheeler stated that he supports ending the unpopular ban on consumers unlocking their cell phones in order to switch wireless carriers. Responding to questions from the committee, Wheeler stated, “I am a strong supporter of intellectual property rights. At the same point in time, I believe that when I as a consumer or you as a consumer, or anyone have fulfilled our commitment and we’ve paid off our contract, that we ought to have the right to use that device and move it across carriers as we see fit.”

The Chairman’s comments further fueled debate over the controversial ban issued last October by the Library of Congress as part of their triennial process of issuing exceptions to the Digital Millennium Copyright Act (DMCA). The ban, effective as of January, bars consumers from personally unlocking any cell phone or tablet purchased after January 26, 2013. Prior to this rule, consumers were free to unlock phones they had purchased from one wireless carrier in order to use them when switching to a new carrier. Without an unlocked phone, a consumer cannot use a cell phone plan she already owns on a new carrier’s service provision plan; instead, the consumer must purchase a new phone from the new carrier. However, wireless companies remain free to unlock phones for customers if they choose to do so. That being the case, in addition to the fact that consumers can now purchase many phones that are unlocked, including the Google Android Nexus 4 and some iPhones, the Library of Congress found that the DMCA exception allowing unlocking personal cell phones was no longer needed.

Even though wireless companies remain free to unlock phones, many carriers (such as AT&T) who are willing to do so will only unlock after customers first satisfy multiple conditions, making unlocking difficult for many. For example, AT&T requires that customers must have an account for 60 days and that the account must be in good standing (with no past due or current balance owed) before they will provide an unlock code for a phone. They will also only unlock five phones per year per account, causing potential issues for customers with family plans.

Consumer rights advocates have heavily criticized the current Library of Congress rule, calling for Congress to act to overturn the ban. Wheeler’s comments indicate that his views are in line with these consumer advocates, the White House, and several members of Congress. While the FCC is bound by the Library of Congress’s ruling, congressional action could lift the ban. In an effort to do so and “promot[e] consumer rights,” Senator Patrick Leahy, backed by a bipartisan group of senators, proposed legislation in March that would restore the DMCA exemption for consumers unlocking cell phones. That bill is currently awaiting review by the Committee on the Judiciary. In addition, earlier this month Rep. Bob Goodlatte (R-VA) introduced a bill in the House of Representatives that is virtually identical to Sen. Leahy’s bill in the Senate. Congress also held subcommittee meetings to discuss potential legal protections for those wishing to unlock cell phones.

If consumers are allowed to unlock phones once again, it will allow them more freedom in their wireless device purchases. Under the current ban, when switching wireless carriers, customers not meeting a carrier’s requirements for unlocking their current phone must either purchase a new phone from the new carrier or a phone that is already unlocked. Reinstating the DMCA exemption for unlocking cell phones would thus lead to lower costs associated with switching wireless carriers. Many proponents of overturning the ban also believe it will lead to lower electronic waste, as well as lower phone costs for consumers due to the increase in available phones for each carrier.

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