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March 1, 2013

FCC to Probe Cellphone Unlocking Ban

Chairman Says Ban 'Raises Competition Concerns'

The Federal Communications Commission (FCC) plans to investigate if the law forbidding U.S. residents from unlocking their mobile phones hurts economic competitiveness.

The “ban raises competition concerns; it raises innovation concerns,” FCC chairman Julius Genachowski told Tech Crunch, although he added it is uncertain if the FCC has the authority to enact change.

“It’s something that we will look at at the FCC to see if we can and should enable consumers to use unlocked phones.”

It is officially illegal in the U.S. to unlock any Smartphone purchased from a carrier without that carrier’s permission.

Under the new law, first-time offenders could face fines of up to $500,000, be imprisoned for five years, or both. Repeat offenders face a fine of $1 million, imprisonment for up to 10 years, or both.

The Library of Congress, which handles the rulemaking for the Digital Millennium Copyright Act, enacted the law in October with a 90-day transition period. That transition period ran out Jan. 26.

Phones purchased before the law was enacted can still be unlocked without consequences.

Genachowski’s comments will, no doubt, be welcome news to the 112,484 people to sign the ‘Make Unlocking Cellphones Legal’ petition.

Because the petition, located on the White House’s We The People petition site, surpassed the 100,000-signature mark before the Feb. 23 deadline, the Obama administration is obligated to issue an official response.

The document, created Jan. 24, reads:

The Librarian of Congress decided in October 2012 that unlocking of cell phones would be removed from the exceptions to the DMCA.

As of Jan. 26, consumers will no longer be able unlock their phones for use on a different network without carrier permission, even after their contract has expired.

Consumers will be forced to pay exorbitant roaming fees to make calls while traveling abroad. It reduces consumer choice, and decreases the resale value of devices that consumers have paid for in full.

The Librarian noted that carriers are offering more unlocked phones at present, but the great majority of phones sold are still locked.

We ask that the White House ask the Librarian of Congress to rescind this decision, and failing that, champion a bill that makes unlocking permanently legal.

While the White House is required to respond to the petition, there is no deadline in place, so those opposed to the law may have to put their hopes in the FCC, for now.