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Last Updated: Tuesday, 4 September 2007, 13:42 GMT 14:42 UK
Unlocking the locked phone debate
Person using the iPhone
Currently the iPhone is locked into AT&T
Internet law professor Michael Geist gets to grips with the legal implications of unlocking the iPhone.

From the moment of its debut, the Apple iPhone has attracted enormous attention. Its biggest impact may go beyond the consumer electronics market, however, as the iPhone has forced politicians and regulators to confront some uncomfortable policy challenges.

When the iPhone hit the US market in late June, consumers in other countries could not help but notice that it was unavailable outside of the US.

Apple has indicated that some European countries will get the iPhone in late 2007 but wireless carriers in many countries do not provide consumers with data plans that are remotely comparable to AT&T's offer of unlimited data for the iPhone for $20 (9.90) per month.

These concerns remain unresolved, yet a new policy issue has burst onto the scene in recent weeks. The iPhone, like many mobile phones in North America, is "locked" to a single carrier.

Consumers who want the iPhone must use AT&T since the device contains technical limitations that render it difficult to use on other networks. These limitations are artificial in the sense that there are otherwise no impediments for an iPhone to run on a competing US network such as T-Mobile or on a compatible European or Asian network.

Locked cellphones have become common in North America as carriers claim that they sell "subsidised" phones in return for an exclusive commitment and long-term contract from consumers.

While many consumers may like the opportunity to purchase a phone for a fraction of the full retail price, others would presumably prefer the freedom of an "unlocked" cellphone that would allow them to easily switch between carriers.

Legal battle

Prof Michael Geist (Michael Geist)
From a policy perspective, it is readily apparent that locked cellphones undermine efforts to encourage greater competition in the marketplace.
Michael Geist
The freedom provided by unlocked cellphones is particularly useful for people who travel, since they can avoid roaming fees by converting their mobile into a local phone in most countries by simply inserting a local SIM card.

This approach is standard in Europe and Asia, where consumers would not tolerate a market comprised solely of locked cellphones.

While the iPhone may be locked to AT&T, several entities, including UniquePhones.com, which is based in Northern Ireland, have discovered how to unlock the phone.

This has unleashed a legal battle pitting companies anxious to offer unlocked versions of the iPhone against AT&T, which has threatened to sue anyone offering unlocking services. From a policy perspective, it is readily apparent that locked cellphones undermine efforts to encourage greater competition in the marketplace.

A growing number of countries have mandated wireless number portability, which is designed to allow consumers to switch carriers without being forced to change their phone number.

However, locked mobile phones run counter to that policy by requiring consumers to fork out hundreds of dollars on a new phone to make the change.

Unlocking cellphones also raises some interesting legal issues as consumers ask whether the practice of unlocking mobile phones is legal.

In certain respects, this is an odd question to even have to ask - no one would ever question whether consumers have the right to tinker with their car or to use the same television if they switch cable or satellite providers, yet the telecom industry has somehow convinced the public that unlocking their phones - consumers' own property - is wrong.

Reserved spectrum

Indeed, earlier this year Chris Langdon, a Canadian executive from telecommunications firm Telus, boldly claimed that "unlocking a cellphone is copyright infringement. When you buy a handset from a carrier, it has programming on the phone. It's a copyright of the manufacturer."

That position is almost certainly incorrect under most laws, though that could change as the United States pressures countries to mirror its approach on copyright law.

The US situation is far more complicated since they have laws that prohibit picking a digital lock such as a cellphone lock.

Last year, the US created an exemption to allow consumers to legally unlock their cellphones, yet the provision seemingly does not allow a company to offer the service of unlocking cellphones.

In other words, consumers can do it, but they're on their own.

While the US may face renewed pressure to remove this impediment, leaders in other countries will confront the issue as they address telecom policy reform.

If consumers are to enjoy the full benefit of competition and the products they purchase, policy makers should reserve some wireless spectrum for space that welcomes only "open and interoperable" devices that are not locked to any single carrier and ensure that the law clearly reflect consumers' right to unlock phones without legal risk.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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