I was going to elaborate on Cord’s post, but as luck would have it other people have beaten me to it. First, Tom Lee points out that phone unlocking is one of the DMCA exemptions granted by the Library of Congress in its triennial review process. So iPhone hackers are safe from the DMCA. However, there are other potential issues:
Apple may still have some claim against the iPhone hackers. That’s because circumvention devices typically employ code that’s the property of the device designer. Unless I’m mistaken, the DMCA exemption doesn’t grant anyone the right to use or redistribute others’ code. It’s also possible that circumventing the protection may necessitate the violation of patents held by the device designer.
A similar situation exists in the world of Xbox modding. Until recently it was easy to buy a modchip online. Properly installed, this allows you to turn your Xbox into a device that can run Linux, emulate older consoles, or act as a media center (and, yes, you can play pirated games, too).
But you can’t do this with the chip when it first arrives in the mail. Although the device is (or was) legal on its own terms, it couldn’t unlock the full potential of the Xbox without running custom firmware — firmware that was based on code to which Microsoft owns the copyright. Consequently most modchips shipped with a firmware based on Linux called Cromwell. This was built without using copyrighted code and could be legally distributed. But it wasn’t capable of doing much besides booting Linux and replacing itself with new firmware loaded from a burned CD.
If a modchip user wanted to use his or her Xbox for other applications they’d have to hunt through the wilds of IRC to obtain the forbidden firmware. In fact, the chips would ship with detailed instructions about soldering and firmware replacement. But when you got to the part about finding alternate firmware, the manual would adopt a “you didn’t hear it from us” sort of tone and direct the user to various websites and chatrooms that the chip manufacturer insisted weren’t at all affiliated with their operation.
Second, I agree with Ed Felten on the policy question:
It seems to me that regardless of what the law does say, it ought to say that iPhone unlocking is fine. For starters, the law should hesitate to micromanage what people do with the devices they own. If you want to run different software on your phone, or if you want to use one cell provider rather than another, why should the government interfere?
I’ll grant that AT&T would prefer that you buy their service. Exxon would prefer that you be required to buy gasoline from them, but the government (rightly) doesn’t try to stop you from filling up elsewhere. The question is not what benefits AT&T or Exxon, but what benefits society as a whole. And the strong presumption is that letting the free market operate — letting customers decide which product to buy — is the best and most efficient policy. Absent some compelling argument that iPhone lock-in is actually necessary for the market to operate efficiently, government should let customers choose their cell operator. Indeed, government policy already tries to foster choice of carriers, for example by requiring phone number portability.