Cell phone unlocking bill appears set to become law

The House on Friday passed legislation that makes it legal for consumers to unlock their cell phone and take it to another carrier, and President Obama indicated he will sign the bill into law.

The Senate has already passed its own version of the bill, which would reinstate an exemption given to mobile phone unlocking in copyright law. The Obama administration had urged legislative fixes to remedy a government ruling on the topic that removed protections for people who do unlock their phones. The White House was prompted into action last year by a petition on the issue that received more than 114,000 signatures.

The issue bloomed from a 2012 ruling from the Library of Congress that said there is no copyright exemption for unlocking cellphones, making unauthorized unlocking potentially illegal. Consumers who did so without the consent of their carriers potentially faced fines of up to $500,000 and five years in jail.

"The bill Congress passed today is another step toward giving ordinary Americans more flexibility and choice, so that they can find a cell phone carrier that meets their needs and their budget," Obama said in a statement. He said he looked forward to signing the bill into law.

Specifically, the legislation directs the Library of Congress to let consumers and third parties legally unlock phones that were received through a carrier. Additionally, as Reuters notes, the bill calls on the officials at the Library of Congress to reconsider the issue when it reviews the rules again in 2015, potentially expanding the exemption to tablets and other devices.

Carriers often use software to lock phones to their networks, but can unlock them for customers if subscribers request an "unlock code" from carriers. An unlocked phone can be moved to another network, though that does not mean that it will work exactly the same way on another network due to differences in the spectrum bands used by carriers and the corresponding radios and chipsets in devices.

AT&T, along with Verizon Wireless (NYSE: VZ), Sprint (NYSE: S), T-Mobile and U.S. Cellular (NYSE:USM), agreed in December 2013 to simplify and standardize their policies on unlocking cell phones and tablets. The CTIA and the carriers recommended six principles on unlocking devices be added into the CTIA's consumer code for wireless service. According to the CTIA, the six "principles" around cell phone unlocking are:

1. Disclosure: Carriers will clearly explain their policies on unlocking.

2. Postpaid Unlocking Policy: Once customers finish their service contracts on postpaid plans, carriers will--upon request--unlock customers' phones.

3. Prepaid Unlocking Policy: Carriers, upon request, will unlock prepaid phones no later than one year after activation.

4. Notice: Carriers agree to notify customers when their phones are eligible for unlocking. Carriers can also charge non-customers a fee to unlock phones.

5. Response Time: Carriers will unlock phones within two business days.

6. Deployed Personnel Unlocking Policy: Carriers will unlock the phones of military who are deployed.

Under the CTIA's guidelines, carriers have until December 2014 to implement all of the principles as part of their service.

For more:
- see this Reuters article
- see this The Verge article
- see this NYT article

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