As of 2003, consumers have had the right to change providers while keeping their wireless number. Since 2007, consumers have also had the right to “unlock” their wireless device. But the Librarian of Congress recently eliminated consumers’ right to use their own device after their contract expires.
It is now up to Congress to protect our right to use our phones as we choose.
Unlocking is a simple technique by which a software patch allows a phone to use SIM cards from a different carrier. This technology, while acknowledged by market experts as beneficial and lawful in other countries, is now illegal for Americans. This agency’s ruling hurts consumers, stifles innovation and makes millions of average Americans guilty of a felony punishable by 5 years in prison and a $500,000 fine.
Overall, it’s a classic example of crony capitalism, where a few dominant companies with significant lobbying assets change the law for their own benefit, thereby creating higher barriers to entry for their competitors.
At the time, even the Commerce Department had recommended allowing unlocking because the technology benefits businesses and the consumer. But the regulator, the Librarian of Congress, decided in favor of the mobile carriers, and decided to ban this widely used technology.
When the Librarian’s ruling made unlocking illegal, the digital generation responded with a White House petition. Within a month, 114,000 people signed the White House petition, created by Sina Khanifar, to reverse this incredible ruling.
Within days there was swift action. On February 28, 2013, the FCC announced an investigation and on March 4 the White House formally reversed their position and endorsed unlocking. FCC Commissioner Ajit Pai became an outspoken advocate of restoring the free market to the mobile industry, calling for a simple solution: permanently legalizing cellphone unlocking for businesses to sell and consumers to use – exactly the premise of our mass campaign:
“It’s not complicated,” as Commissioner Pai said. Let’s go back to the free market. “Let’s allow contract law — not copyright or criminal law — to govern the relationship between consumers and wireless carriers. In a free market, once a consumer’s contract expires, she should be able to take her device to another carrier. The government shouldn’t tilt the scales with legal penalties; it should leave the mobile marketplace alone.”
As Commissioner Pai has mentioned, “it’s absurd that we’re even discussing this issue. How did we get to the point where a consumer could be criminally prosecuted for unlocking his cellphone?”
The White House and FCC’s endorsement cascaded into support from outside groups on the left and right including Freedomworks, R Street, Tea Party Nation, Young Americans for Liberty, National College Republicans, Public Knowledge, Electronic Freedom Foundation, Consumers Advocacy, the Competitive Carriers Association, Free Press, and scholars from the Mercatus Center and the Competitive Enterprise Institute.
And, eventually, Congress acted.