As of 2003, consumers have had the right to change providers while keeping their wireless number. Since 2007, consumers have also had the right to “unlock” their wireless device. But the Librarian of Congress recently made a bureaucratic ruling eliminating consumers’ right to use their own device after their contract expires.
Unlocking is a simple technique where a patch is installed on the phone. Essentially, it lets a phone be used on a different phone carrier. This technology, while lawful in other countries and acknowledged by market experts as beneficial, is now illegal for Americans. This ruling hurts consumers, hinders competition, and stifles innovation and makes millions of average Americans felons punishable by 5 years in prison and a $500,000 fine.
Overall, it’s a classic example of crony-capitalism, where a few market dominant companies, each with significant lobbying assets (two of which are in top 10 in lobbying dollars in D.C.), succeeded in changing the “law” for their own pecuniary benefit, thereby creating higher barriers to entry for their competitors.
When the Librarian’s ruling made unlocking illegal, the digital generation responded (both young and old alike) and created a White House petition on this issue. Sina Khanifar and I advocated heavily for consumers. Within a month, 114,000 people signed the White House petition (created by Sina) to reverse this incredible ruling. It was the first petition to meet the new 100,000 threshold for a response. As a response, under mass pressure on March 4, 2013, the White House formally reversed their position and endorsed unlocking.
This action cascaded into support across the right from Freedomworks, R Street, Tea Party Nation, Young Americans for Liberty, National College Republicans, Consumers Advocacy, the Competitive Carriers Association, and scholars from Mercatus and the Competitive Enterprise Institute. Today, no group can be found in favor of the ruling, even those that lobbied for it; it has become politically toxic.
But today, after five bills were introduced, Congress has essentially failed to act. One bill, H.R.1123, introduced by Chairman Goodlatte, would kick the can down the road by temporarily reversing the Librarian of Congress’ decision and then allowing the Librarian to rule once again. Entrepreneurs have been clear in expressing that such a policy would create uncertainty on what is legal year-to-year and deter investment.
Merely allowing the Librarian of Congress to rule all over again, as H.R. 1123 does, is better than nothing, but it is not an acceptable permanent solution. As FCC Commissioner Ajit Pai explains:
Let’s fix this problem permanently. We don’t need to have the exact same debate every three years, like an extended version of the movie Groundhog Day. I can assure you that the case for criminalizing cellphone unlocking isn’t going to get any stronger with time.
Today, a number of conservative groups, including Generation Opportunity, R Street, Cascade Policy Institute, Harbour League, and Let Freedom Ring wrote to Speaker Boehner and Majority Leader Reid, insisting that they bring up and vote without delay on H.R. 1123, a stop-gap measure, and then get to work on the permanent solution:
We the undersigned organizations and individuals urge Congress to seriously and substantively address the concerns of millions of Americans on cellphone unlocking.
Our contention is simple: given the enormous benefits that phone unlocking provides to the consumer, phone unlocking should be made permanently lawful for the consumer to use, industry to develop, and marketers to sell.
Signatories of the letter, members of the mass campaign on unlocking, and other groups and companies have all endorsed the Unlocking Technology Act of 2013 (H.R. 1892); whereas, Goodlatte’s legislation to allow the Librarian to rule all over again has received no outside support.
H.R. 1892 is the true conservative solution: it restores the free market, provides legal certainty, and is a small part in dealing with the epidemic of federal over-criminalization. The coalition letter concludes its endorsement of H.R. 1892 with:
This is a basic issue of property rights. If you own your own phone, it is your right to switch carriers, install your own software, and call whomever you choose. If nothing is done, new and innovative technological solutions will increasingly fall under the control of the Librarian of Congress, setting harmful precedence for the future of the wireless market.
This critical issue affects millions of Americans and ultimately the future of the wireless market, hence why many have called fixing this issue “the most important change in mobile policy in nine years.” This legislation will restore competition to the mobile market, leading to more innovation and lower prices for consumers.
It’s imperative that Congress act now because:
- Every day that Congress fails to act, our service members get sent abroad and have to choose between breaking the law to unlock their phone or not being able to use their device.
- Every day that Congress fails to act, millions of Americans commit felonies punishable by 5 years in prison and a $500,000 fines.
- Every day that Congress fails to act, international travelers pay higher prices for using their phones abroad.
- Every day that Congress fails to act, we continue to inhibit the free market and harm competition which ultimately drives up costs for all consumers.
If you see your Member of Congress, ask them: “Why does Congress delegate these decisions to a quasi-regulatory agent? Isn’t it time to put the Librarian of Congress back to his task of managing the nation’s preeminent library rather than deciding what technologies to ban?”
Derek Khanna (@DerekKhanna) previously worked for the House Republican Study Committee and for Senator Scott Brown (R-MA). He spearheaded the national grassroots campaign on cell phone unlocking. He has spoken widely including at the Conservative Political Action Conference and at the International Consumer Electronics Show.
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