Unlocking will get you locked up: a recent change to the DMCA makes unlocking cell phones illegal.

Author:Hasenfus, Nicholas
Position::Digital Millennium Copyright Act of 1998
 
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  1. INTRODUCTION

    As of January 2014, 90% of American adults own a cell phone with 58% of those being a smartphone. (1) The cell phone has evolved from a heavy device only capable of making telephone calls to the multi-purpose smartphone; one of the most popular is the Apple iPhone. (2) The June 29, 2007 release of the iPhone was a much-publicized event and the iPhone sold over a million headsets in seventy-four days. (3) Apple and AT&T had signed an exclusivity agreement from the iPhone's release in 2007 until 2010, therefore limiting iPhones to AT&T customers who quickly became displeased with the quality of AT&T's service and were looking for ways to use the iPhone on a more reliable network. (4) Although cell phone unlocking was a common practice before the iPhone, the tremendous excitement of the iPhone and its release on a single network started a race to unlock iPhones for use on different wireless service providers. (5)

    Most cell phones are bought pre-programed with the service provider's software, making it unusable on another provider's network if a person wishes to change service providers. (6) An unlocked cell phone provides users with the choice of using their cell phone on a different network than the network it was purchased from and programmed for. (7) Wireless service providers use software locks, hard ware locks, or a combination of both to lock mobile phones and keep customers on their network. (8) Wireless providers have the ability to unlock cell phones, but generally will not do so for a consumer. (9) While unlocking cell phones was protected under an exemption to the Digital Millennium Copyright Act (DMCA), in January 2013, the Librarian of Congress eliminated the exemption for cell phone firmware or software, making it illegal to unlock a cell phone. (10)

    This Note argues that unlocking of cell phones should be legal. This can be achieved by the Librarian of Congress reinstating the exemption to the DMCA that allows unlocking of cell phones or by passing legislation that will allow for cell phones to be unlocked legally. The Note will begin by explaining how cell phone locking works and offer a brief history of the evolution of the DMCA leading to the prohibition of unlocking cell phones. (11) The Note will then use Congress's and the President's position to argue that the DMCA should have an exemption for cell phones or that legislation should be passed to permanently permit unlocking cell phones instead of a temporary legal status, and demonstrate how it is not copyright infringement to unlock a cell phone. (12)

  2. HISTORY

    1. An Overview of Cell Phone Locking

      There are two distinct technologies used for the operation of mobile phones; Verizon and Sprint use Code Division Multiple Access (CDMA), while AT&T and T-Mobile use Global System for Mobile Communications (GSM). (13) Verizon controls all phones on its network because CDMA uses a serial number that corresponds to the network interface. (14) The other CDMA provider, Sprint, hesitantly allows other mobile phones not purchased from Sprint. (15) GSM network phones, such as AT&T and T-Mobile, use Subscriber Identity Module (SIM) cards to connect to the network. (16) By purchasing a mobile phone from a network that uses SIM cards, users can switch out the SIM card to change networks; this is extremely beneficial for out of country travel as users will not incur roaming charges while still using the mobile phones that they already own. (17) Cell phone locks make this seemingly simple process of changing SIM cards extremely difficult. (18)

      A locked cell phone has been programed for use on the network that user purchased the phone from and may only be used with that network. Wireless providers have continuously attempted to justify conditioned access to their networks on two grounds. (19) Firstly, providers maintain that wireless service is made more affordable to the consumer by subsidizing mobile cell phone handsets, thus lowering the consumers initial cost to obtain wireless service. (20) Wireless providers subsidize the cost of new phones hoping to recoup the subsidy over the term of the contract. (21) If a customer has the ability to unlock a phone after buying it at a discount and then to use it with a competitor's wireless network, the wireless provider that sold the subsidized phone would take a loss. (22) Secondly, wireless providers assert that handsets must meet specific criteria to provide secure and reliable service. (23)

      Although cell phone unlocking has been around for a while, the release of the iPhone exclusively on AT&T ushered in a new era of widespread unlocking attempts. (24) The first person to unlock an iPhone was seventeen-year old George Hotz, which he completed with 500 hours of labor, a soldering gun, and software tools. (25) Hotz then put the cell phone he had unlocked up for auction on eBay, which had bids well over the $499 retail price at the Apple Store. (26) With the money Hotz made selling on the unlocked iPhone on eBay he was able to buy a car and three new iPhones. (27) Soon after this, software developers began crafting programs to recreate Hotz's process that was more user friendly. (28) Apple CEO Steve Jobs was then asked if iPhone unlocking concerned him and he said, "[i]t's a constant cat and mouse game. We try to stay ahead. People will try to break in, and it's our job to stop them from breaking in." (29) The unlocked iPhone threatened Apple's and AT&T's business model--the Apple-AT&T agreement involved unprecedented revenue sharing, which came with an obligation that Apple must prevent consumers from using the iPhone on networks other than the AT&T network that iPhones were designed to be used on. (30)

      Both Apple and AT&T responded to the iPhone unlocking, AT&T with lawyers and Apple with software. (31) Before making version 1.1.1 firmware available for iPhone users to update their software, Apple released the following statement: "Apple has discovered that many of the unauthorized iPhone locking programs available on the internet cause irreplaceable damage to the iPhone's software, which will likely result in the modified iPhone becoming permanently inoperable when a future Apple-supplied iPhone software update is installed." Apple continued by stating that "unauthorized modifications" voided the warranty as well as violating the iPhone software-license agreement stating "the permanent inability to use an iPhone due to installing unlocking software is not covered under the iPhone's warranty." (33)

      When the version 1.1.1 update for the iPhone was released the warnings given by Apple came true. Unlocked iPhones had been completely disabled, or "bricked." (34) Users with "iBricks" began going to Apple for help but their attempts were unsuccessful because the warranty had been voided. (35) Initially, there were reports that some Apple Stores were able to fix bricked iPhones, but Jennifer Bowcock, a spokesperson for Apple, stated "the inability to use your phone after making unauthorized modifications isn't covered under the iPhone warranty ... [i]f the damage was due to use of an unauthorized software application, voiding their warranty, they should purchase a new iPhone." (36) Some hackers were able to create a process that restored bricked iPhones, but this was a complex process that did not always work. (37) This led users, who had been bricked to file a legitimate legal complaint, which included two class-action lawsuits in state and federal court alleging antitrust violations, unfair competition, and breach of express and implied warranties.

    2. The Digital Millennium Copyright Act (DMCA)

      The DMCA was passed by Congress to restrict copyright piracy that new technologies made possible in the 1990s. (39) To implement guidelines recommended by the World Trade Organization (WTO), Congress passed the DMCA in 1998. (40) As stated in the House Report:

      The treaties do not require any change in the substance of copyright rights or exceptions in U.S. law. They do, however, require two technological adjuncts to the copyright law, intended to ensure a thriving electronic marketplace for copyrighted works on the Internet. The treaties address the problems posed by the possible circumvention of technologies, such as encryption, which will be used to protect copyrighted works in the digital environment and to secure on-line licensing systems. To comply with the treaties, the U.S. must make it unlawful to defeat technological protections used by copyright owners to protect their works. This would include preventing unauthorized access as well as the manufacture and sale of devices primarily designed to decode encrypted copyrighted material. (41) Subsections 1201(a)(1)(C) and (D) of the DMCA allow the Librarian of Congress to hear submissions from interested parties every three years and declare certain uses of copyrighted works legal for the following three years. (42) As stated by Haubenreich, "for cell phones, the 'copyrighted work' at issue is the software that runs the phone, known as 'firmware'. The 'technological measure' that the act makes illegal to circumvent is the locking software or hardware that the manufacturer or wireless provider installs." (43) The largest prepaid service provider, TracFone, argues that they have actively taken protective measures to protect against copyright infringement by locking their cell phones. (44)

      Over 100 comments or replies were submitted regarding proposed exemptions to the Librarian for the 2006 exemption decision. (45) Those who argued against the 2006 exemption to the DMCA argued that use of anticircumvention technology--phone locking--leads to greater consumer choice because greater control will lead to higher profits which will in turn raise incentives to firms to create better products. (46) Groups against the use of anticircumvention technology argued that the use of software locks decreases competition leading to higher costs and...

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