One of the most important changes in mobile policy in nine years: Legalizing cellphone unlocking

“Unlocking” is a simple software patch where a user plugs their phone into a computer and runs a computer program. This process allows their phone to use SIM cards from other carriers – and thereby easily use an older phone on another carrier.

At the end of January, a ruling by the Librarian of Congress went into effect that made it illegal, and potentially a felony, for users to run this program or to input a code into their phone.  This ruling hinders competition in the mobile market, hurts international travelers, impacts our service members deployed abroad, stifles new business models and increases environmental waste.

Ultimately it means higher prices for millions of consumers and millions more who may now be felons punishable by a $500,000 fine and five years in prison.

{mosads}When this ruling went into effect we began a national campaign to fix this issue. Our campaign engaged millions of average Americans: the first article in the Atlantic received over one million hits and our White House petition (created by Sina Khanifar) received 114,322 signatures (the first petition to hit the new 100,000 threshold). The campaign engaged a broad coalition, receiving endorsements from R Street, FreedomWorks, Public Knowledge, CCA, National CR’s, Tea Party Nation, Consumers Union and scholars from CEI and Mercatus.

The White House responded by fully endorsed cellphone unlocking:

“[We] agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without . . . penalties. . . It’s common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market. . .”

FCC Chairman Genachowski also responded:

“[The ruling] raises serious competition and innovation concerns. . .it doesn’t pass the common sense test. . . [I] encourage Congress . . . consider a legislative solution.”

The solution to this problem is self-explanatory.  If unlocking is a beneficial technology, then unlocking must be permanently legalized and businesses must be allowed to develop, traffic and sell it (consumers can’t use a nonexistent technology).

FCC Commissioner Ajit Pai made this argument in his New York Times editorial, Don’t Treat Consumers Like Criminals:

Let’s go back to the free market. . . [allow consumers] to take their mobile devices from one carrier to another without fear [and] those who help consumers unlock their phones [shouldn’t] be prosecuted either. . . These fixes should be permanent, so that consumers [and] developers don’t have to worry about the law shifting on a whim.

And at a TechFreedom/CEI panel:

Let’s fix this problem permanently. . .[and helping] consumers exercise their right to unlock their cellphones shouldn’t be a crime [either]. I’m hopeful that we can end unnecessary government intervention in the wireless marketplace. . .

Congress responded to our campaign by introducing legislation.  Notably Reps. Zoe Lofgren (D-Calif.) and Thomas Massie (R-Ky.) introduced bipartisan legislation that has received widespread endorsements from activists, experts and think-tanks.

House Judiciary Committee Chairman Bob Goodlate (R-Va.) also introduced his own legislation, and a hearing on his legislation, H.R.1123, was held on June 6.  H.R.1123 reverses the decision temporarily, allowing the Librarian to rule on this issue again. This could be problematic given the Librarian’s statement of standing by his decision.  While H.R.1123 is a good step, better than where we are today, in its current form it doesn’t provide regulatory certainty or legalize the technology. As my written testimony explained:

Our contention is that given the enormous benefits that phone unlocking provides to the consumer, phone unlocking should be made permanently lawful for the consumer to use, industry to develop and marketers to sell.

Innovators need legal certainty before they develop new products and consumers will not be able to access technology that is illegal for anyone to create.

We are hopeful that Congress will seriously address this issue.  As Commissioner Pai noted, “We don’t need to have the exact same debate every three years, like an extended version of the movie Groundhog Day.”

Khanna spearheaded the campaign on cellphone unlocking and was a previous staffer for the House Republican Study Committee.  He is currently a Yale Law Fellow and a contributor for The Atlantic and National Review.