Unlock a Smartphone and You May End Up in Jail

When you buy a smartphone it’s your phone, right? Well, maybe not. In an act of industry-inspired overregulation that’s so over the top it’s laughable, the feds have decided that unlocking your own iPhone or Android is now illegal and can net you a fine of $2,500. And as they say on late-night infomercials, wait there’s more. Anyone who is paid to unlock a smartphone is liable for a fine of up to $500,000 and actual time in prison.

Unlocking allows you to use a phone purchased from one carrier on the network of another carrier as long as the technology is compatible. You could, for instance, unlock an iPhone and use it on T-Mobile’s network, since both carriers use GSM technology, but not on Verizon’s or Sprint’s CDMA networks. Or you could use your unlocked phone on a foreign carrier’s network by swapping SIM cards when you leave the country, and don’t want to pay sky high international roaming fees.

Of course, you can buy an unlocked smartphone, but you’ll pay hundreds of dollars for the privilege. An unlocked 16GB iPhone 5 costs $649, compared to the subsidized price of $199. AT&T will let you temporarily unlock your iPhone, but you have to ask Ma Bell’s permission and then wait six or seven days to get the OK, and you can only do that five times a year. Here’s a page with all the details.

Until the end of last week, unlocking was legal. Weirdly, the change was made by the Library of Congress, an agency you probably thought was in charge of books and holding onto precious documents like the Constitution. As it turns out, the Library of Congress also interprets copyrights, and in its wisdom has decided that unlocking violates the copyrights held by the carriers under the Digital Millenium Copyright Act.

Do I think the cell phone police will be at your door if you unlock your phone? I don’t, though the individuals and small businesses that offer unlocking services could be in for trouble. This is an issue of principle — if you buy a phone, you should be able modify it any way you want.

Obviously carriers want customers to be tied to their networks and they pushed for this change. Also lobbying was the CTIA, the wireless industry trade group. In an interview with the New York Times, a senior vice president for the group said the prohibition helped protect carriers’ investments in the subsidies that they provide for handsets. If a customer bought an iPhone on contract for a carrier-discounted price of $200, for example, he could use third-party software to unlock the device and sell it at a higher price.

So? Anyone who buys a phone at the subsidized price is locked into a two-year contract and will pay plenty in early termination fees if he or she decides to bail early. If someone wants to do that, say to upgrade to a newer phone, why not sell the phone to defray some of the cost?

The reason, of course, is that the carriers figure they’d lose some sales if unlocked phones enter the market. So they and their allies in the CTIA sprinkled their magic lobbyist dust around and — Poof! — unlocking is against the law.

There’s a petition on the White House Web site to get this travesty reversed. I don’t think it will have much effect, but hey you never know, so why not invest a couple of minutes and sign it here.

Main image courtesy of Lifehacker.com; teaser image from cr4.globalspec.com