New Cell Phone Unlocking Rules Don’t Do Much for Consumers Posted by Bob at 12/08/06 01:44 PM

Last week we brought you what we thought was some good news for consumers – a new ruling by the U.S. Copyright Office to allow wireless phone users to break software locks inserted into their handsets by carriers such as Verizon and Cingular.

We’ve since done some additional reporting, however, and it appears this ruling really won’t do much for the average wireless phone user.

Carriers typically use the software locks to keep consumers from using their handsets on competing wireless networks. As long as they own their phones, consumers now appear to have the clear right to break the software locks and use that equipment on any wireless network they choose.

But having the right to break the locks is far different from having the ability to actually do it, points out Fred von Lohmann, a senior staff attorney for the Electronic Frontier Foundation in San Francisco.

“It is still going to be a pretty daunting task,” says von Lohmann. “Most folks can’t just sit down and write some software to do something like that.”

Even before the ruling last week, a thriving cottage industry had developed to unlock cell phones for consumers for a fee.

Even with the ruling, von Lohmann says it remains unclear if it is legal for consumers to buy such third-party unlocking services.

“There really isn’t anything in the ruling that speaks to that sort of thing,” he says. “It may be legal or it may not. It’s very murky.”

Certain consumers will see some clear benefits from the new rules, however.

Overseas travelers will be able tap into local wireless networks with unlocked phones, likely saving a good deal of money over what they would pay to use their home network.

Consumers who have invested in expensive wireless handsets could potentially unlock them and take them with them if they change providers. But it’s still unclear if their handsets would actually work on the new network. It is also possible that providers could ban or limit the use of unlocked phones on their networks in service contracts.

One group that is very unhappy with the new rules are prepaid wireless companies, such as TracFone and Virgin Mobile. TracFone is so unhappy that it is challenging the new rules in court.

Such companies typically sell handsets at a loss through major retailers such as Wal-Mart, making up the difference by selling service at higher rates than the wireless giants such as Verizon.

Since there are no contracts or termination fees, consumers can go to a store and buy a $60 phone for $20 from a prepaid company, unlock it and then use it on the service of their choice.

The prepaid companies say their livelihood is threatened by individuals and groups that buy up large numbers of their phones, unlock them, and then resell them in overseas markets such as Latin America and Asia.

USA Today has a pretty good article on the Tracfone lawsuit, which you can read here.

The executive director of the Stanford Law School’s Center for Internet and Society, Jennifer Grannick, has a pretty good analysis of the situation on Wired News, which you can read here.

comments (4)

1 Posted by EdC at 12/09/06 12:31 AM

Poor Babies, Tracfone has flodded the market for the past 7+ years with phones that only work on the TF plan. You pay rates that are a little higher than some of the competition and what do you get out of it? A phone that you can throw away when you are done with it because it won't work anywhere else. Their customer Service is in need of only one thing, customer service. When you activate one of the phones, its like putting the national debt into the keypad, and you hope you got every one of the 15 digits right because if you didn't you are going to have to do it again. If someone can get a phone for a cheap price and use it on a decent network, why not?

2 Posted by Jim Warren at 12/22/06 03:54 PM

On the related topic of CU's recent excellent review/rant about the numerous abuses of the Big Players in the Cell Cartel:

I couldn't agree more, with the frustration about the excesses, abuses and [near-?] scams that the Cell Cartel's members inflict on the hapless public.

However, for the last year and a half, I have found a GREAT way around all those long-term contracts and their abuses: I get my cell service from a small bulk-buyer/discount-reseller named Consumer Cellular, out of Portland.

They sell service on Cingular's not-perfect-but-better'n-some GSM network; have NO contracts; SIGNIFICANTLY better rates; all minutes are for the lower 48 states; NO weasel extra charges other'n those weaseled by the guv'ment; and, we customers can change our monthly minutes at ANY time, even on the last day of the month!

They're consumercellular.com . (And no; I have absolutely NO relationship to 'em other'n as a VERY happy, contract-FREE customer!)

--jim

3 Posted by Steve Litchfield at 01/27/07 07:35 AM

It's very much the same in the UK. But again, any back street market has several stalls or shops where traders will use somewhat dodgy equipment to unlock any phone from a network lock, for £5 or less.

4 Posted by Christine at 03/05/07 09:26 PM

I am fed up with the absurdity of the increased volume level of TV commericals that interrupt programming. It is getting absolutely ridiculous; the increased volume levels during commercials is not only annoying, it is intrusive and makes me MUCH less likely to purchase the products advertised. PLEASE let's do somthing to pass a law or pressure the TV channels to stop this practice. I don't have sleeping babies, but when I sometimes fall asleep during a TV show, I am more often than not rudely awakened by an insanely loud commercial. I AM VERY TIRED OF IT!!!!!!