Consumers hoping to transfer a new smartphone from one mobile carrier to another could face up to five years in jail and a $500,000 fine because of a ruling from the Librarian of Congress that went into effect Saturday.
The Library of Congress recently ruled under the Digital Millenium Copyright Act of 1998 (DMCA) that smartphone users own just a software license — not the software itself — on their phones.
While the DMCA prohibits consumers from illegally accessing copyrighted content and breaking digital rights management (DRM) technologies, prior to Saturday the Library of Congress granted exemptions to consumers who wanted to switch phone carriers and keep their handsets. Rules about unlocking phones also varied from carrier to carrier.
Saturday, however, was the end of a 90-day grace period for a ruling that says smartphone software does not fall under fair-use rules.
First time offenders face a $500,000 fine, five years in prison, or both. Repeat offenders face double those penalties.
Consumers can still purchase unlocked phones at full price that are not under any carrier’s contract. The price is more expensive because locked phones are heavily subsidized by carriers and unlocked phones are not.
The DMCA has been viewed as problematic for tech companies and consumers in the era of smartphones and high-speed wireless Internet connections. CNN reported that groups lobbying to keep the exemption viewed the ruling as “anti-competitive” and said it would hurt consumers.
Derek Khanna, a technology activist and former Hill staffer for the Republican Study Committee, said the ruling serves “to protect the interests of a few companies and create and maintain barriers to entry.”
“If conservatives are concerned [about] unelected bureaucrats deciding upon regulations which could have financial consequences for businesses, then they should be more worried about unelected bureaucrats deciding upon what is or isn’t a felony punishable by large fines and jail time for our citizens,” said Khanna in an essay published by The Atlantic.
Mitch Stoltz, an attorney with the Electronic Frontier Foundation, told Engadget that “a law that was supposed to stop the breaking of digital locks on copyrighted materials has led to the Librarian of Congress trying to regulate the used cellphone market.”
The DMCA itself, he said, is “absurd.”
This story has been updated.