[Infowarrior] - Prepaid Providers Seek to Put Locks On Your Phone

[Richard Forno]

Prepaid Providers Seek to Put Locks On Your Phone and Their Hands In  
Your Pocket Legislative Analysis
by Jennifer Granick
http://www.eff.org/deeplinks/2009/10/prepaid-providers-locks-your-phone-hands-pockets

As the deadline nears for a decision from the Copyright Office on  
EFF's request for a renewal of the 2006 exemption from DMCA liability  
for handset unlocking, prepaid phone companies have opened a new front  
in the war on consumer choice with a bill called the Wireless Prepaid  
Access Device Enforcement Act of 2009. If passed, this legislation  
would make it a crime to purchase or "handle" a prepaid handset for  
the purpose of modifying the software that ties it to the network, or  
to sell the handset outside the U.S.

EFF represents three phone recyclers in the DMCA rulemaking. These  
businesses take used handsets and, if possible, refurbish and resell  
them. The used handsets allow people around the globe to afford the  
benefits of mobile phones, while keeping functional technology out of  
landfills and the heavy metals they contain out of our water supply.  
But our clients are thwarted in finding homes for these perfectly good  
phones if the devices are locked to networks that purchasers do not  
want or cannot access, or if they cannot sell unfashionably old  
handsets in other countries.

Moreover, the average mobile phone user wants to know that if she buys  
a handset and doesn't like her provider, she can switch to a company  
that gives better service. Customer choice drives quality and  
innovation. Over 8000 people signed EFF's petition in support of phone  
exemptions for exactly this reason.

So, who would support a bill to prohibit unlocking? Prepaid providers  
like TracFone and Virgin Mobile subsidize the cost of the handsets  
they sell, and hope to make up the difference through monthly service  
fees. But some "bulk unlockers" buy up all the subsidized handsets  
they can find, unlock them, and sell them at market rates, pocketing  
the difference. Both prepaid companies have successfully brought a  
variety of unfair competition claims against bulk unlockers --  
demonstrating that neither this bill nor the DMCA prohibitions that  
threaten phone recyclers and consumers are required to protect prepaid  
providers' interests.

With this legislation, the prepaid wireless service companies would  
push the expense of protecting their business model onto the shoulders  
of the American taxpayer by making the FBI and the Justice Department  
investigate and prosecute handset unlocking for them. Moreover, the  
bill does nothing to distinguish bulk unlocking arbitragers from phone  
recyclers or from customers who simply want to switch providers or  
sell their phones. Here's the choice this bill presents: Congress can  
force taxpayers to pay the cops to help TracFone and Virgin collect  
their month-to-month contract fees, or Congress can reject the bill  
and allow the public to keep the right to unlock their mobile phones,  
switch their providers, and recycle their handsets. In our opinion,  
this should be an easy decision.

EFF will be watching this bill closely to make sure that we keep  
prepaid providers' handsets out of landfill, and their hands out of  
your pocket.