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Verizon Communications Inc. (VZ), AT&T Inc. (T): The White House and FCC’s Genachowski Say Owners Should Decide on Unlocked Cell Phones

Wireless carriers such as Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) probably won’t be too crazy about FCC Chairman Julius Genachowski’s remarks regarding the recent ban on unlocking cell phones.

At a recent TechCrunch CrunchGov event last week, Genachowski said it “raises competition concerns; it raises innovation concerns.”

The $78 Billion Question Affecting Dividend Stocks TodayThe ban makes it illegal for cell-phone owners to unlock their phones to be used on a wireless network different from which it was originally used. Since carriers need to keep subscriber churn to a minimum, making it difficult (or more expensive) to change providers would be to their advantage.

The carrier-friendly ban became effective on Jan. 26, when the Librarian of Congress removed the unlocked-cell-phone exemption from the Digital Millennium Copyright Act, or DMCA. The legislation, enacted by Congress in 1998, was meant to make illegal any technology designed to bypass copyright protections. However, since the language of the DMCA was so broad, Congress gave the Librarian of Congress the discretion to issue exemptions to the law.

Obviously, this ban on modifying one’s own cell phone to use it on a different carrier’s network has led to some consumer outrage, enough so that a We the People petition was started that has gone over the signature threshold of 100,000 and now warrants an official administration response.

And the White House did respond with this from R. David Edelman, senior advisor for Internet, innovation, and privacy:

“The White House agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without risking criminal or other penalties. … It’s common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers’ needs.”

In addition, the FCC released a statement from Genachowski, which included this statement:

“From a communications policy perspective, this raises serious competition and innovation concerns, and for wireless consumers, it doesn’t pass the common sense test. The FCC is examining this issue, looking into whether the agency, wireless providers, or others should take action to preserve consumers’ ability to unlock their mobile phones. I also encourage Congress to take a close look and consider a legislative solution.”
There will probably soon come a WeTheLobbyists petition pushing the wireless industry’s view. So, we will probably be hearing more on the unlocking question before it’s settled.

The article The White House and FCC’s Genachowski Say Owners Should Decide on Unlocked Cell Phones originally appeared on Fool.com and is written by Dan Radovsky.

Fool contributor Dan Radovsky owns shares of AT&T. The Motley Fool has no position in any of the stocks mentioned.

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