In October, the US Copyright Office and Library of Congress passed down a new ruling on exemptions allowed in the Digital Millenium Copyright Act and decided that unlocking cellular phones would no longer make the list. In other words, unlocking a phone for use on multiple carriers is now a no-go (side note: jailbreaking is still A-OK). The ruling allowed a 90 day window for unlockers to go hog wild. That window ends this weekend.
Starting this weekend, it is no longer legal to unlock a cellular phone and use it on another carrier. Sort of. Turns out there are some major exceptions to that blanket statement. One: All phones sold before end of January can still be unlocked. Two: Unlocked phones themselves aren't illegal, which means carriers will continue to sell some phones (like Verizon's model of the iPhone 5) that are unlocked right out of the gate. Three: You can still unlock phones purchased after this weekend, you just have to ask the carrier for permission.
Here's part of the exemption in legalese:
"This exemption is a modification of the proponents' proposal. It permits the circumvention of computer programs on mobile phones to enable such mobile phones to connect to alternative networks (often referred to as “unlocking”), but with limited applicability. In order to align the exemption to current market realities, it applies only to mobile phones acquired prior to the effective date of the exemption or within 90 days thereafter."
The policy goes on to list why certain companies have come forward to support unlocking, then counters with arguments from the CTIA. This part of the ruling is actually easy to understand:
"CTIA maintained that an exemption for unlocking is not necessary because “the largest nationwide carriers have liberal, publicly available unlocking policies,” and because unlocked phones are “freely available from third party providers—many at low prices.” ... CTIA explained that the practice of locking cell phones is an essential part of the wireless industry's predominant business model, which involves subsidizing the cost of wireless handsets in exchange for a commitment from the customer that the phone will be used on that carrier's service... On the question of noninfringing use, CTIA asserted that the Section 117 privileges do not apply because owners of wireless devices do not necessarily own the software on those devices.
After reviewing mobile phone agreements introduced in the 2010 proceeding, based on the state of the law at that time, the Register concluded that “[t]he record leads to the conclusion that a substantial portion of mobile phone owners also own the copies of the software on their phones.” ... Since the Register rendered her 2010 Recommendation, the case law has evolved. In 2010, the Ninth Circuit issued its decision in Vernor v.Autodesk, Inc., 621 F.3d 1102 (9th Cir. 2010), holding that “a software user is a licensee rather than an owner of a copy where the copyright owner (1) Specifies that the user is granted a license; (2) significantly restricts the user's ability to transfer the software; and (3) imposes notable use restrictions.”
So we can't unlock phones because we don't own the software on them? Actually, the ruling shows this as more of a gray area:
"The Register was forced to conclude that the state of the law—and its applicability to mobile phone software—remains indeterminate. Although Vernor and Krause are useful guideposts in considering the status of software ownership, they are controlling precedent in only two circuits and are inconsistent in their approach; whether and how those standards would be applied in other circuits is unknown. Moreover, while CTIA contended that the agreements it offered unequivocally supported a finding that users do not own the software, in reviewing those agreements, the Register believed the question to be a closer call. The Register therefore determined that some subset of wireless customers—i.e., anyone considered to own the software on their phones under applicable precedent—would be entitled to exercise the Section 117 privilege."
All phones sold before end of January can still be legally unlocked.
And the finale:
"The Register concluded after a review of the statutory factors that an exemption to the prohibition on circumvention of mobile phonecomputer programs to permit users to unlock “legacy” phones is both warranted and unlikely to harm the market for such programs. At the same time, in light of carriers' current unlocking policies and the ready availability of new unlocked phones in the marketplace, the record did not support an exemption for newly purchased phones."
Long story short: If you buy a new phone with intent of unlocking, read your contract. Do some searching to see if your carrier will help you out. AT&T has a page on its website all about unlocking the iPhone, for example. Verizon doesn't have the same information on display, so remember to always read the fine print.
This is worse news for unlocking websites than it is for consumers, though it's hard to say if a little thing like the law will actually slow them down.