BY: CHRIS BUNDY
Lately, my gears have been grinding, and it’s not because of something that is in motion; it is because of something that has been stopped.
A new law that no longer allows individuals from unlocking their own hardware, and by extension, other peoples’ hardware went into effect on January 26.
But what is unlocking, and why should I care? Well, let’s say you want that pretty new iPhone, but you can only afford to pay for T-Mobile, StraightTalk, Cricket or other services. Before the 26, you could obtain an iPhone from eBay, Craigslist, AT&T or just a friend and unlock the device for use outside of AT&T’s network. This global standard has allowed for lower cost of hardware and open competition.
I’m singling out AT&T because it is the nation’s largest Global System for Mobile Communications (GSM) carrier. GSM hardware is interoperable, meaning you can use the device on a variety of networks because of the radio installed in the device. This is different than the technology used by Sprint and Verizon, which essentially locks customer to its network, or in Sprint’s case, licensees of its network.
Thanks to the new revision to the Digital Millennium Copyright Act, if you unlock your device, you could be subject to a $200-$2500 fine. If you have an eBay or Craigslist business based around unlocking devices, your risk is much higher.
A first-time business offender could be subject to up to a $500,000 fine and/or five years imprisonment. After the first offense, the potential fine goes up to $1 million and/or 10 years imprisonment.
How will the government know that you have unlocked your device? Well, this part is still a bit murky. Potentially, when you take that precious new iPhone to T-Mobile for a new service, the company will run a check of the IMEI number, which is essentially the phones social security number.
If it turns up as a locked device from another carrier, T-Mobile could then alert AT&T, and you would be prosecuted.
The only issue I see with this scenario is T-Mobile is the entity that has everything to gain from your switch; whistle blowing would be crippling to business. In recent years, T-Mobile has been very open to customers bringing iPhones over to its network from AT&T.
The aspect really bothering me about the new law is cell phone companies already had protection against customers leaving for other networks before their contract was up. The carriers call them Early-Termination Fees (ETFs).
Depending on the carrier, the price differs. Generally, an ETF costs $350 and lowers over time. If an individual were to buy a $200-$300 phone and wanted to leave the carrier, the customer would have to eat an ETF and pay $550-$650.
Normally, the cost covers the price of the subsidized hardware. If the customer doesn’t leave within the first couple months of service, the carrier profits from the sale. However, the reason the carriers say they need this protection is because of the way the market has been setup. Carriers bank on the fact people will be paying subscription fees for two-year periods at a time.
Thus, insuring them a couple grand in the bank per subscriber.
If there were a fluctuation in which people started opting for the more affordable carriers because of long-term financial gain, it would destroy the current model. Instead of adapting to the environment and allowing the market to play out, the carriers went to the government and asked for protection from their subscribers.
Give me a break.