Obama supports your right to unlock the iPhone

The revocation of consumers' ability to unlock Apple's iPhone has been ironically turned around and is now backed by President Obama.

By Benzinga Mar 5, 2013 6:36PM
By Louis Bedigian

Few consumers are aware that it is technically illegal to unlock an Apple (AAPL) iPhone, a Samsung Galaxy S III or any other cellular device. The problem started last year when the Copyright Office of the Library of Congress failed to provide a key exemption to cellular devices (which it had done for the past several years), creating a ban on the unlocking process.

According to The New York Times, this could soon change now that the Obama administration and the Federal Communications Commission are urging Congress to change the law.

Ironically, the Library of Congress -- which revoked consumers' freedom to unlock their smartphones last year -- now supports the view of the White House and the FCC. If the Library of Congress had simply renewed the exemption last year, the problem would have already been solved (for a few more years, at least).

If Congress votes to permanently allow consumers to unlock their smartphones, The New York Times speculates it could lead to more competitive prices. Consumers would be free to leave their carriers -- and take their phones with them -- as soon as their current contract comes to an end.

This sounds like a win-win for consumers, but Sprint (S), Verizon (VZ) and AT&T (T) should not be underestimated. They know how to navigate legislation and competition, in order to maximize profits.

While Sprint is the only carrier that offers a truly unlimited (and un-throttled) data plan, the company tacks on a $10 monthly fee to everyone who signs up. Thus, the $79.99 advertised price quickly turns into $89.99.

AT&T, which offers the most expensive data plan available for the iPhone ($230 for 20GB of data), attempted to block subscribers from using FaceTime over cellular unless they switched to a shared data plan. The carrier backed down and reversed its stance after three consumer rights groups filed a complaint with the FCC.

Verizon has its own way of nickel-and-diming consumers. For example, those who choose the cheapest iPhone plan ($80 a month) will receive a mere 300MB of data. When subscribers go over the limit, they will be charged an additional $15 for every 300MB they use. If they switch to the $90 plan, however, the $15 fee will buy another 1GB of data. This is the company's way of encouraging consumers to avoid the cheapest data plan.

More from Benzinga
Mar 6, 2013 10:14AM
I see where Nobammy is cancelling tours of the White House to save money!  What a great leader!!!  This at the same time giving millions to Arabs that would love to see all America on fire.  Hey Barry, how about you staying in Washington saving on the cost of all of the travel?  IDIOTS
Mar 6, 2013 9:44AM
Phones should be able to remain 'locked' until the contract period expires.  I any carrier sells you a discounted phone in return for a service contract of specified duration, when the contract is up, the phone should be unlocked.   This is reasonable for the carrier and the customer.

I know AT&T would unlock the phone if requested after the term was up.  Now that this idiotic law has been passed, it is time to undo it.
Mar 5, 2013 11:02PM
What really needs to happen is the carriers should be required to unbundle smart phone hardware subsidies from your subscriber service plans. 
Mar 6, 2013 10:17AM
Cell phones need to be unlocked if you are not under contract period! I will not buy a cell phone from a carrier but one already unlocked just so I do not have to have a contract and I have been with AT&T for 25 years. I bought my last smart phone directly from Nokia and it was already unlocked when I got it.
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