Editor's Picks

New cellphone “unlocking law” benefits consumers

A new bill signed into law by President Obama will allow cell phone users to keep their phones if they decide to switch service providers.

Photo by Sam Churchill (Flickr)

President Obama signed the “Unlocking Consumer Choice and Wireless Competition Act” into law on August 1, 2014.  This Act will make it possible for a person to “unlock” their cellphone, allowing them to transfer service from one carrier to another, if they so choose.  It is being lauded as consumer friendly law and is an encouraging sign of bipartisan work from both political parties who worked together to pass the bill.

It was common practice for wireless carriers to place technology in phones that would prevent that device from being used on another carrier’s network.

Previously, the Library of Congress had “decided not to exempt the software locks that carriers put on devices that prevent them from being used on other carrier networks.”  The Library of Congress had the power to decide in 2012 whether or not such an exemption would be allowed under the Digital Millennium Copyright Act of 1998.  Additionally, the Library of Congress has the power to review and re-evaluate any exemption every three years.

It was common practice for wireless carriers to place technology in phones that would prevent that device from being used on another carrier’s network.  The Library of Congress, when justifying its decision not to apply an exemption that would have prevented this practice in 2012, reasoned that there were alternatives in the market, and that these alternatives were sufficient enough to not apply such an exemption.

Since regular consumers had been all but barred from bringing their claims against wireless carriers before the courts, Congress and the President took proactive steps to right what many believed to be a wrong.

Unsurprisingly, consumers were upset over the fact that they had no say in the process.  A 2011 United States Supreme Court decision, AT&T Mobility LLC v. Concepcion, had made it nearly impossible to successfully sue (and win against) a cellphone carrier.  The decision made arbitration clauses and class action waivers in contracts nearly airtight, preventing consumers from bringing a claim against wireless carriers for provisions in a contract that the consumer signed, no matter how unfriendly the provision may be.

The Concepcion decision makes the new law particularly important.  Since regular consumers had been all but barred from bringing their claims against wireless carriers before the courts, Congress and the President took proactive steps to right what many believed to be a wrong.

The Act does not make it so that consumers are free to “unlock” their cellphones at any time, or even in any place.

Still, there may be some restrictions in the Act signed by the President. The Act does not make it so that consumers are free to “unlock” their cellphones at any time, or even in any place.  First, consumers may still have to wait until their contract has run its course with a service provider before being allowed to “unlock” their cellphones.  Although this may be a bit of an inconvenience, for many customers the Act will only take material effect when they have finished their contractual obligations and are switching to a new network provider anyway.  It is yet to be seen how much of a negative impact such a procedure will have on consumers.  A problem could possibly arise if a consumer wished to end their contract early with a provider and was not allowed to unlock their phone when switching to a different service provider.  Such a situation would likely have to go through litigation and be decided by the courts.

Second, customers are still unsure if they will be able to switch providers when traveling abroad, a problem that has caused headaches for many international travelers.  A legal resolution to this problem could be extremely complicated.  First it would need to be determined, and possibly heavily litigated, which country’s laws would govern individual disputes.  From there, the complexities would only grow.

Yet, for all that Congress and the President accomplished, it is possible that the Act could be overturned next year.  The Library of Congress will once again have the authority to decide whether or not consumer “unlocking” will be legal in 2015.  The Library of Congress will likely bow to the decision of Congress and the President and allow the Act to stay in place, despite serious opposition.  Industry leaders are mostly cynical, stating that the Act is not really necessary and is more or less a way for Congress and the President to pass a bi-partisan law that gains them political points at a time when both need it most.

Not all service providers “lock” or “unlock” their phones in the same manner.

The process of “unlocking” a phone is not always as simple as proponents of the Act have made it out to be.  Not all service providers “lock” or “unlock” their phones in the same manner.  Some companies use SIM cards while others do not require a physical SIM card to be present on the cell phone, therefore an easy and painless transition from one carrier to another may not always be possible.

Perhaps the greatest benefit the Act may have is on people who travel internationally.  Before the Act, using your “locked” cell phone outside of the United States would cause you to rack up extreme roaming charges.  However, with the Act in place, a person could unlock their phone, and in cases where a SIM card can be pre-purchased and loaded into the phone, would be able to use the cell phone internationally using any of the local providers for a much cheaper cost.

Consumers will now have “the freedom to switch between service carriers without having to purchase a new cellphone, allowing them to choose the mobile service plan that fits their specific needs and budget.”

This Act, passed by Congress and signed by President Obama, was a welcome sight to many American customers.  Service providers had more or less a stranglehold on many of their customers, forcing the customers to either buy a new cellphone or stay with their current provider.  This choice is wasteful and unfair, and seeing as how customers could not successfully bring a lawsuit with respect to their wireless service contracts, the passage of the Act will directly help many Americans.  FCC Chairman Tom Wheeler applauded the Act in a statement, saying that consumers will now have “the freedom to switch between service carriers without having to purchase a new cellphone, allowing them to choose the mobile service plan that fits their specific needs and budget.”  Hopefully the impact  of the Act will be as practical as it is beneficial, and should the Library of Congress uphold the law, many Americans will receive the protection they deserve.

Brady Ciepcielinski, Former Features Editor
About Brady Ciepcielinski, Former Features Editor (16 Articles)
Brady Ciepcielinski served as the Features Editor of the Campbell Law Observer during the 2014-2014 school year. He received his Bachelor’s Degree in Finance with a minor in History from Virginia Tech in 2012. Brady has previously worked for Chief Bankruptcy Judge Randy D. Doub; Cobin Law, PLLC; the North Carolina Office of the State Auditor; and Rogers Townsend & Thomas, PC of Charlotte. Brady graduated from Campbell Law School in May 2015.
Contact: Email