Tech Freedom and the Competitive Enterprise Institute recently held a panel entitled “What Should Congress Do About Cell Phone Unlocking?” The panel included opening remarks by FCC Commissioner Ajit Pai and a discussion featuring panelists Jerry Brito, Senior Research Fellow at the Mercatus Center; Chris Lewis, Director of Government Relations at Public Knowledge; Ryan Radia, Associate Director of Technology Studies at CEI; and Larry Spiwak, President of Phoenix Center. Watch a full video of the forum here.
Commissioner Pai set a solid foundation for the panel and his remarks were reemphasized throughout the entire discussion from both sides of the debate. The overwhelming bipartisan support for reinstating at least another exemption for cell phone unlocking from DMCA copyright provisions must be addressed by Congress. However, Pai stressed that we must stop kicking the can down the road and make a permanent fix for what he considers a solution in search of a problem. He pointed out that unlocking was only included under the DCMA provisions due to a technicality. Notably, Pai demanded that the FCC must not be given any additional power in this matter, since ultimately this issue remains Congress’s to solve. As was repeated across the panel, freedom of contract should not be restricted, and the solution must remain narrow in order to keep the issue from becoming unnecessarily complex.
For the most part, the panelists echoed these statements. However, Larry Spiwak started off by pointing out that banning cell phone unlocking helps keep cell phone prices low as a result of companies such as AT&T subsidizing the price alongside a binding contract. He expressed concern over the problems of making unlocked phones available at a subsidized price, and that anti-circumvention provisions are needed in order to keep people from illegally buying locked phones at a subsidized rate, unlocking them, and then reselling them at full price for a profit.
Radia responded to this by mentioning that although most carriers will allow a customer to unlock their phone if their contract has come to an end, in the middle of their contract period, a consumer should be able to simply pay a contract termination fee and then unlock their phone if they wished to switch carriers. Current anti-circumvention policies restrict a consumer’s right to do so with their property, especially if they find their wireless service to be particularly disappointing.
While Radia’a point is well taken, we should not undermine contract law, and as Spiwak said, the contract term helps pay for the phone. It’s a business model. Consumers can decide to purchase an unlocked phone so that they don’t have to worry about the “what if I want to change providers” question, or if they want the newest smart phone at a cheaper price they should respect the contract that was signed.
This is where the important distinction between contract law and copyright law comes in: when it comes to unlocking, the panelists emphasized that most people wishing to unlock their phones do not do so with the intent to infringe upon copyrights and copy software. Instead, it is to change carriers or allow a customer to switch phones overseas. Harmless actions such as these should not be brought under criminal and copyright law, but rather remain within the terms of contract law. However, there are criminals that do steal phones and resell them for a profit, or unlock phones with the intent to copy software, and this is when it is acceptable to place unlocking-related actions under criminal and copyright law.
This circumvention of digital locks can also be applied to other devices, such as a tablet or the digital display in a car. Jerry Brito gave the example of sight-impaired drivers needing to increase the size of their font in order to see the monitor, which has been a complex process under current DMCA restrictions on digital lock circumvention. However, many of the issues similar to the point Brito raised have been solved in the past through court proceedings or the DMCA exception review that occurs every three years.
Panelists pointed to a ground swell of support, which lead to a number of bills. Although, this ground swell of 114,000 people signing a petition within three months versus the 10 million people who signed contracts with Verizon during the same time period seems to say that the problem is not quite as vast as some would claim. However, the appropriate venue for dealing with cell phone unlocking is contract law.
Digital Liberty believes that cell phone unlocking should be left to contract law. We believe that Goodlatte’s approach to solve the particular issue of cell phone unlocking is the correct approach. However, using cell phone unlocking as a guise to begin picking at the DMCA piece-meal is not a good policy. Any reform of the DMCA should come from a place of respect for intellectual property overall.