Thursday, September 29, 2005

How cellular companies rip you off

For years we've been told that, for example, a Sprint mobile phone won't work on the Verizon system. For the most part, this has been a lie.

Jennifer Granick writes on Wired News of recent activities by U.S. cellular providers using the Digital Millenium Copyright Act to stop software companies from unlocking mobile phones for use on a variety of cellular providers.

"Last week, I was contacted by a small company that I'll call Unlocko. Unlocko sells software that 'unlocks' mobile phones so owners can select different cellular providers on the same handset. The company had received a cease-and-desist letter from a large mobile phone provider, which I'll call CellPhoneCo. Like most U.S. cellular providers, CellPhoneCo electronically locks the handsets it sells so the phones can only be used with CellPhoneCo's service. CellPhoneCo claims that the sale of unlocking software is illegal. The financial motive behind this claim is obvious. Companies have been using the razor blade business model to guarantee a steady stream of revenue ever since, well, the razor blade. Cell phone companies sell you a phone at a discount, and then make up the difference by requiring you to sign a multi-year contract promising to pay monthly fees for mobile phone service or to fork over a hefty termination penalty if you break the deal ... As a result, a burgeoning market has developed for unlocking software that allows customers to modify their phones to accept signals from the service provider of their choice. Here, CellPhoneCo is making a novel argument: that it can stop a business with which it has no contractual relationship from selling software that customers might use for these purposes. Does CellPhoneCo have a legal right to squelch unlocking software? To lock out the unlockers, CellPhoneCo is turning to a provision of the Digital Millennium Copyright Act intended to prevent people from disabling technology that protects games, songs and movies from illegal duplication. The DMCA says that you can't distribute tools that break -- or circumvent -- technological measures that control access to copyright works."

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