After passing easily through the Senate earlier this month, the U.S. House of Representatives today passed the Unlocking Consumer Choice and Wireless Competition Act.
In the fall of 2012, the Librarian of Congress bowed to pressure from the wireless industry and used his authority to reinterpret the controversial Digital Millennium Copyright Act to declare that because of proprietary software on cellphones, consumers never actually own their devices. Instead, the consumers have a license to use the software on their phones. And if a consumer wants to take that phone — even if he owns it outright — he needs to get permission from the carrier that licenses the software or be in violation of the law.
This isn’t just a pain in the butt for consumers who found that wireless companies were less than eager to assist them in taking their devices to different providers. It also put the entire industry of wholesale phone reselling at risk, as buyers of used phones would have to somehow get permission from each individual carrier to unlock each device they resold, or only resell phones if they remained on the old carrier.
Regardless of whether it’s an individual looking to switch carriers without having to invest in a new phone, or a phone reseller looking to unlock used phones to resell for use on a network of the buyer’s choosing, the LOC’s decision meant that consumers had fewer choices for carriers and devices.
This legislation would have passed through Congress earlier this year, except the version initially accepted by the House in February included a last-minute addition of language that appears to limit the unlocking of phones to individuals and leaves open the door to future DMCA restrictions on bulk unlocking.
This new language caused some advocacy groups to pull their support for the bill who were concerned that a company could use copyright as an excuse to inhibit certain business models, even if the business isn’t actually infringing anyone’s copyright.
The version of the bill passed today does not include this language.
“This legislation is about giving consumers more choices and options for their phones,” says our colleague George Slover, senior policy counsel for Consumers Union, about the passing of this bill. “Restoring the option to unlock a phone gives consumers the ability to pick another wireless service without having to give up a perfectly good, working phone for a new one. This legislation can help consumers save some money, and it can help drive competition in both mobile phone technology and wireless service.”
In late 2013, under pressure from regulators, the wireless industry announced a voluntary set of unlocking standards intended to make it easier for consumers to get their devices unlocked. However, these rules were merely industry guidelines and not a binding law. Additionally, they still required that the consumer go through their current provider to unlock their devices.