About six days ago I started started a petition to the White House to make unlocking cell phones legal. If you haven’t signed it yet, please do.
In September 2005, I received a cease and desist letter from Motorola for selling software to unlock their cell phones.
The letter indicated that I was in breach of the Digital Millenium Copyright Act (DMCA) by circumventing protection measures in their phones, a crime that’s punishable by up to 5 years in prison and half a million dollars in fines per incident. At the time, I was an undergraduate student studying Physics. The prospect of 5 years or more in prison was devastating.
A bit of backstory
I started unlocking phones after a typical entrepreneurial experience: I had a problem and was forced to find a solution. I’d brought a cell phone from California to use while at college in the UK, but quickly discovered that it wouldn’t work with any British cell networks. The phone was locked. Strapped for cash and unable to pay for a new phone, I figured out how to change the Motorola firmware to unlock the device.
Realizing that others were likely having the same problem, I worked with a programmer to create an application that allowed people to quickly and easily unlock their Motorola phones and use them with any carrier. After my first year of college ended in summer of 2004, I launched Cell-Unlock.com to sell the software. It was a make-or-break moment for me personally, since I was in a major financial crunch.
At first sales were slow, but during my second year at college Motorola released the extremely popular RAZR V3, and business quickly picked up.
It was then that I received Motorola’s cease and desist letter. It claimed that I was in violation of the DMCA, a crime punishable by up to $500,000 in fines and five years in jail per offense. I was 20 years old and terrified; my immediate reaction was to shut down the business. I was preparing to do just that when I was introduced to Jennifer Granick, founder of Stanford’s Cyberlaw Clinic. She offered pro bono help, and worked with me to respond to Motorola’s demands.
The DMCA and unlocking
Motorola’s cease and desist letter didn’t claim that I was illegally distributing their copyrighted software. Instead, it claimed that I was “distributing software … for the purpose of circumventing the protection measures” associated with their copyrighted software. There is a subtle but meaningful difference.
The DMCA includes anti-circumvention provisions that are intended to protect music and movie owners who want to distribute their work digitally, but are afraid of piracy. The provisions prohibit anyone from circumventing the locks that control access to copyrighted works. For example, DVDs are protected by a Digital Rights Management (DRM) system that prevents buyers from easily making copies of movies. The DMCA prohibits circumventing that type of protection system.
But unlocking a phone has nothing to do with copyright infringement, and using the DMCA to prosecute unlocking isn’t what the law was intended for. But the way the DMCA is written means that it can be interpreted as prohibiting any sort of circumvention, and this is exactly what Motorola was doing. If that interpretation of the DMCA were valid, companies would be able to create simple software security mechanisms that legally prevent a customer from using a device in any way except that in which the manufacturer intended.
Let’s take an example: it’s conceivable that a car manufacturer might put simple chips on each component of a car that are recognized by the car’s electronic system. In and of itself, that’s nothing special. But Motorola’s interpretation of the DMCA would make it illegal for any other company to manufacture third-party replacement parts for that vehicle. The act of selling, or even simply installing, a third party component would be illegal.
Intuitively we understand that once we’ve purchased a product it’s up to us how we use or modify it. Replacing the hard drive on a Macbook may invalidate our warranty, but it isn’t, and shouldn’t be, illegal. Courts have struck down similar interpretations of the DMCA in the past (for example in 2004 in the case of Lexmark v. SCC). But a 2010 ruling (Vernor v. Autodesk) means that by including a restrictive, shrinkwrapped end-user licensing agreement with a product, manufacturers can prohibit even simple modifications to the products consumers purchase.
Jennifer helped me respond to Motorola by disputing their interpretation of the DMCA; thanks to her efforts, eventually Motorola decided that a college student wasn’t worth pursuing and stopped responding to my letters. I was very lucky that they didn’t decide to take the case to court.
Why it matters
In the year after helping me with my case, Jennifer Granick fought for an exemption from the DMCA for unlocking phones, and in November 2006 it was granted. That exemption was in place for 6 years, until the Library of Congress and the Copyright Office decided to remove it this past November. As of January 26th, anyone unlocking a new cell phone or providing unlocking services unlocking phones once again risks up to five years in jail for each offense.
For consumers, the consequences of this are fewer choices and increased restrictions to freedoms we currently take for granted. If you’re traveling abroad and want to use your current cell phone, you’ll need to pay exorbitant roaming charges. As an example, AT&T charges customers $1.50 per minute for calls and $19.50 per megabyte consumed while traveling in Europe. Compare that with the $0.30 per minute and $0.20 per megabyte that you’d be charged in the UK with a prepaid SIM card and an unlocked phone, and it amounts to extortion.
Locking cell phones also prevents consumers from freely choosing their cell carrier. If you decide to change your network, say from AT&T to T-Mobile, the DMCA regulations mean that unless your carrier agrees to unlock your phone, you’ll need to buy a new device. As a result, manufacturers like Motorola and Apple are keen to keep devices locked so that they can sell more phones. The CTIA, the trade association that represents the wireless industry, claims that the illegality of phone unlocking prevents “large scale phone trafficking operations” that involve unlocking carrier-subsidized phones and selling them abroad. But consumers who buy subsidized phones commit to two-year contracts with hefty early-termination fees (up to $350 for most carriers). The carrier’s subsidies are already contractually protected.
The decision to remove the exemption for unlocking phones is bad for consumers, and it’s up to our elected officials to help defend consumer rights. Unfortunately, the Library of Congress and the Copyright Office are staffed by unelected officials who aren’t directly beholden to voters. I was fortunate that Motorola weren’t more motivated and didn’t take my case further. The company I started still exists, now run by my brother. The money I made then helped me and my college friends bootstrap my next startups, RepeaterStore and OpenSignal.
With the unlocking exemption removed, it’s only a matter of time before entrepreneurs and consumers are once again bullied by carriers and manufacturers seeking to protect their profits by constraining consumer choice. Next time around, a Verizon, AT&T, or Apple will likely take the case to court, and it’s possible that someone will end up in jail.
Upon reading the Library of Congress’ decision to remove the exemption for unlocking phones, I created the petition asking the White House to review and fix the problem by working to make unlocking permanently legal.
To date the petition has over 60,000 signatures, but we need 100,000 to get a response from the White House. You can sign the petition here.
It only takes a few moments to sign the petition, but it could help make unlocking permanently legal.