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White House: Consumers Should Have Right to Unlock Phones

White House Senior Advisor for Internet, Innovation, & Privacy David Edelman recently answered a WeThePeople petition filed in January by Sina Khanifar which asked the Obama administration to reverse a law that makes the act of unlocking a smartphone illegal. The law went into effect on January 26, providing a hefty fine and prison sentence for anyone held liable.

"Consumers will no longer be able unlock their phones for use on a different network without carrier permission, even after their contract has expired," the petition states. "Consumers will be forced to pay exorbitant roaming fees to make calls while traveling abroad. It reduces consumer choice, and decreases the resale value of devices that consumers have paid for in full."

FCC chairman Julius Genachowski stepped up to the soap box last week and said the commission would also investigate the matter, but wasn't sure if the FCC had any jurisdiction. He said the ban raises both competition and innovation concerns, and the commission would exert every ounce of influence it had to reverse the decision. "It’s something that we will [examine] at the FCC to see if we can and should enable consumers to use unlocked phones," he added.

The petition, filed two days before the anti-unlock rule went into effect, has gathered 114,322 signatures thus far, warranting an examination by the White House. Edelman said the Obama administration agrees that consumers should have the right to unlock their devices without risking criminal or other penalties, even more so if consumers have finished paying for their device (aka completed the 2-year contract).

"In fact, we believe the same principle should also apply to tablets, which are increasingly similar to smart phones," Edelman said. "And if you have paid for your mobile device, and aren't bound by a service agreement or other obligation, you should be able to use it on another network. It's common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers' needs."

"This is particularly important for secondhand or other mobile devices that you might buy or receive as a gift, and want to activate on the wireless network that meets your needs -- even if it isn't the one on which the device was first activated," he added. "All consumers deserve that flexibility."

The unlocking issue stems around the Digital Millennium Copyright Act, or DMCA, which was passed by the Clinton administration back in 1998. It was meant to thwart pirates pirating music from CDs and sharing the files on emerging networks like Napster. Somehow unlocking a phone also fell under this law, requiring an exception to be written so that users would not break the law. That exemption came up for renewal in October 2012 and was allowed to lapse by the Library of Congress.

That said, the unlock exemption officially died in January. Consumers accused of unlocking their phone face a $500,000 fine and up to five years in prison… all for wanting to bring their purchased device over to another network. The only good news is that the new rule applies to phones purchased after January 2013.

"The Obama Administration would support a range of approaches to addressing this issue, including narrow legislative fixes in the telecommunications space that make it clear: neither criminal law nor technological locks should prevent consumers from switching carriers when they are no longer bound by a service agreement or other obligation," Edelman said.

He also added that the FCC plays and important role. The entire response can be read here.

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