New DMCA exemptions (plus iPhone rumors)

by Jerry Brito on November 27, 2006 · Comments

I can’t believe Tim Lee hasn’t posted about this already, but the Copyright Office has released its list of new exemptions to the DMCA. All around they’re pretty good considering how stingy the Copyright Office has been with exemptions in the past. Missing, of course, is an exemption that would allow folks to format-shift their DRMd DVDs or CDs onto other devices like PCs or iPods. Derek Slater has a round-up of reaction from around the web.

Notable among the exemptions is one for locked cell phones. Wireless carriers will subsidize your phone purchase, but the phone you get is locked so you can only use it on one network. This exemption will now allow consumers to take their locked phones to a competing network who I’m sure will be happy to unlock it for them. On the surface this is great for consumers, but I also wonder what impact it will have on carriers’ willingness to subsidize phones. On the margin, at least, their incentive has shrunk. If that’s the case (and allow me to be a geek for a moment) then it might help Apple’s assuredly forthcoming iPhone better compete since many believe that it will be sold unlocked and without attachment to any carrier.

Comments Posted in: DMCA, DRM & Piracy

  • Lewis, my fault for not being clearer. As to your questions, I'm just pointing it out. I share the same distaste for the DMCA that Brother Tim Lee does and for largely the same reasons.
  • Lewis Baumstark
    Doh. Heh. Is it obvious IANAL? :)


    So, with respect to the DMCA making these contracts unnecessary are you just pointing out the facts or are you advocating this as good policy?

  • Lewis, "Unconscionable consumer contract" is a legal term of art. Unconscionability is a legal doctrine under which a court can invalidate a contract. See http://en.wikipedia.org/wiki/Unconscionable. That is how I meant the term. My point is that the DMCA makes a contract unnecessary. Now that there is a DMCA exemption, a contract will be necessary. However, one that locks you in for good would be unconscionable and therefore unenforceable. I agree with you, though, after a year or two of contract service, we should be free to take our phones elsewhere.
  • Lewis Baumstark
    Lewis, by your logic carriers wouldn't need the DMCA, they could just lock the phones and make it part of the contract that you can't unlock it.


    Exactly. With the DMCA in place the normal contract process is by-passed. I don't see that as a good thing. You even hint at why it would be bad: "Theoretically, I guess, a carrier could put a term into the contract that makes it breach to ever unlock the phone. However this a) sounds like an unconscionable consumer contract," (emphasis mine). By the same logic if the DMCA creates a default infinite-term contract it is similarly unconscionable.


    We sign contracts to get subsidized phones in exchange for being customers of a certain provider for a couple of years. Why should we assume the provider has the right to render those phones obsolete if we switch to a competitor once the contract has ended? Particularly in light of the spirit of the DMCA, which was intended to protect media such as music and video and not to create a platform lock-in mechanism.

  • Lewis, by your logic carriers wouldn't need the DMCA, they could just lock the phones and make it part of the contract that you can't unlock it.

    As the Copyright Office's report points out, this is intended to be used by consumers after all their contractual obligations have expired. That is, if I buy a subsidized phone from Verizon and sign a one-year contract, the new rule would allow me to legally unlock the phone and take it to Sprint after one year.

    Theoretically, I guess, a carrier could put a term into the contract that makes it breach to ever unlock the phone. However this a) sounds like an unconscionable consumer contract, and b) probably wouldn't happen as long as there's still a competitive market--they would have to offer a very hefty discount before you accepted such a heavy-handed term. With the DMCA they didn't have to worry about this at all. Circumventing the lock was an illegal (and possibly criminal) act, contract or no contract.

    Even if such a term made it into a contract, I wonder how practical it would be for carriers to enforce it. They would have to go after thousands, if not millions of customers who unlocked their phones. In contrast, with the DMCA, they could go after the one actor that unlocked phones or built tools to unlock (perhaps a competing carrier in my scenario).
  • dimitris

    The interesting thing to watch will be what happens when, a few years from now, operators start requiring Treacherous Computing devices for access to non-emergency network features.


    How do you then take your Cingular-tethered mobile to T-Mobile, if Cingular won't unlock the master key in the TPM for you?


    Ha, little subscriber, you thought you actually owned your equipment?

  • Lewis Baumstark
    Actually, as I understand it, unlocking phones (as well as distributing the information to do so) was always a protected activity under the DMCA (via the reverse engineering for interoperability clause). This rulemaking simply clarifies it as such (meaning distributors of locked phones cannot use the vagueness of the law to sue those who unlock the phones).
  • Additionally, Lewis, I believe the exemption is only for people who would use software to unlock the phones- actually creating tools to unlock the phones is still prohibited under the reverse engineering clause.

    That said, I'm very excited about the iPhone rumor- I have a strict no-Apple rule, but might break it if that means I can give an even bigger finger to the cell companies.
  • Lewis Baumstark
    I assume the copyright office's ruling does not affect the contractual limits (between carrier and customer) on unlocking phones, yes? Surely this would help keep the phone subsidies in place.
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