Following a petition back in March that asked the Obama administration to legalize unlocking cell phones without carrier permission and the administration's response endorsing it, the National Telecommunications & Information Administration filed a formal request today asking the FCC to legalize the process.
Unlocking cell phones, which allows customers to migrate their devices between carriers, has been a contentious subject between cell phone carriers, for whom locked phones help customer retention, and consumer advocates, who argue that the restriction unfairly limits consumer choice.
The push to formally legalize cell phone unlocking comes following a Library of Congress ruling. Every three years, the Library revisits exemptions to copyright law but on their last go-around, chose not to renew the exemption for cell phones. In effect, even after fulfilling a contract and paying off a subsidized phone, it is still technically licensed rather than owned by the consumer, and they must get carrier permission to unlock their phone.
The NTIA argues in the petition that carriers have numerous mechanisms to retain customers besides locked devices, arguing, "Operators can protect that business model, however, without refusing to unlock wireless devices upon request. Operators can – as they currently do – effectively prevent consumers from subverting that model through long-term service contracts, enforced by penalties or fees for early termination."
The petition calling for the FCC to formally allow unlocking was praised by numerous House members. “This is an issue of consumer choice and flexibility, plain and simple. We are appreciative of the support of groups like NTIA and we will all continue working to see that this issue of significant importance to most Americans is addressed,” said Reps. Bob Goodlatte, John Conyers, Howard Coble, Mel Watt, and Jason Chaffetz.
CTIA, speaking on behalf of the wireless telecom industry, issued its own response, arguing that unlocking a phone could make further copyright violation even easier. It endorsed a current bill aiming "to prevent the bulk unlocking of handsets and arbitrage of the handset subsidy system, which can harm consumers and facilitate the sale of stolen smartphones."