Wireless Goes Un-American: Verizon Communications Inc. (VZ), AT&T Inc. (T)

Page 1 of 2

In what may be one of the most under-reported stories in recent memory, a change to federal law has made it illegal to unlock a mobile phone from the constraints of the carrier through which the device was sold. Sounds complicated? In the simplest terms, even though you buy a phone and theoretically “own” it, you are no longer free to unlock it so that it may be used on the wireless carrier of your choice. The news is a significant positive for carriers like Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) , which will gain greater control over client retention, but as far as I am concerned, it is a violation of some of the very principles that once made America great. In an era when innovation is the last frontier of U.S. dominance, this is a step in the wrong direction.

The new law
The $78 Billion Question Affecting Dividend Stocks TodayUnder the Digital Millennium Copyright Act, it is illegal to “circumvent a technological measure that effectively controls access” to protected or copyrighted material. In the case of phone unlocking, this refers to the software embedded in each device that grants specific access to a carrier. Where the Copyright Office once granted an exception to this law for unlocked phones, as of last weekend, the exemption has been rescinded. This means that individuals who unlock their phones are now breaking the law and are subject to civil suit by the carrier from which they bought the phone.

The DMCA is not without merit, as it is widely credited with creating the environment that allowed social media websites, video sharing, and even the DVD to flourish. A provision of the law provides a level of immunity to intermediaries — if copyrighted material is improperly displayed, the copyright holder can issue a “takedown” order and have the content removed. Under this circumstance, no liability is created for the intermediary. Without such a law, it is hard to imagine how many sites could function.

In the context of phone unlocking, individuals have not been the general focus of civil litigation; those who unlocked large numbers of devices for commercial purposes were the target of most lawsuits. Furthermore, the law only applies to phones that are unlocked against the will of the carrier. In last October’s ruling, the Copyright Office said: “While it is true that not every wireless device is available unlocked, and wireless carriers’ unlocking policies are not free from all restrictions, the record clearly demonstrates that there is a wide range of alternatives from which consumers may choose in order to obtain an unlocked wireless phone.”

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!