September 25, 2013

Why an FCC Cell Phone Unlocking Rule Wouldn’t Fix the Problem

Jerry Brito

Former Senior Research Fellow
Summary

A petition asking the Federal Communications Commission to adopt a rule allowing cell phone unlocking has been celebrated by some as a solution to the current restriction on mobile device users. However, Mercatus Center senior research fellow Jerry Brito explains that such a rule would not fix the biggest barrier preventing individuals from having more control over their own device: the Digital Millennium Copyright Act.

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A petition asking the Federal Communications Commission to adopt a rule allowing cell phone unlocking has been celebrated by some as a solution to the current restriction on mobile device users. However, Mercatus Center senior research fellow Jerry Brito explains that such a rule would not fix the biggest barrier preventing individuals from having more control over their own device: the Digital Millennium Copyright Act.

The cell phone unlocking issue is just one symptom of a greater problem; namely that it is illegal for you or any third party you contract to unlock content that you own. This affects not just phones, but also e-readers, music and video players, and even garage door openers and printer cartridges in the view of some.

Cell phone unlocking, despite what the name might lead you to think, is not a telecom issue; it's a DMCA issue. You can see this if you think about all the restrictions thatremain in place even if the FCC were to adopt the NTIA's proposed rule. For example, the rule forces carriers to unlock your phone at your request, but it would still be illegal for you to unlock your own phone, or to have a third party (such as a competing carrier that wants your business) unlock your phone.

The proposal removes a contractual possibility from the market, because under the rule a carrier could no longer contract with a consumer to keep the phone unlocked for the duration of the contract. Consumers should have the right to contract as they see fit, and that includes giving up unlocking their phones while under contract in exchange for a subsidy. The proposed FCC rule would not allow consumers to exercise that option. Any fix to this DMCA-created problem must leave the freedom to contract alone. The better way to address cell phone unlocking is to have the FCC stay out of what is an issue that Congress needs to address.