FCC Has Authority to Undo Library of Congress Cell Phone Unlocking Ban

By Wayne Rash  |  Posted 2013-03-03

FCC Has Authority to Undo Library of Congress Cell Phone Unlocking Ban

Earlier this year the Librarian of Congress, which is the office that administers exceptions to the Digital Millennium Copyright Act, decided not to renew the exception allowing the unlocking of cell phones, reasoning that allowing the owner of a cell phone to use it with their carrier of their choice somehow violated copyrights.

Over the course of less than a month, 118,000 people signed a petition asking President Obama to rescind the rule that banned unlocking. With that many signatures, the White House is bound by its own rules to take action of some kind.

Speaking at an event in San Francisco on Feb. 27, FCC Chairman Julius Genachowski announced that the FCC would investigate the ban, noting that the rule was anti-competitive. However, he also said that he wasn’t sure exactly what his authority was on this issue.

While the law puts the regulation of cell phones squarely in the FCC’s authority, The Digital Millennium Copyright Act is such a hugely flawed piece of legislation that it effectively scrambled the lines of authority in this area, among many others. Because of the way the law is written, the Librarian of Congress can issue exemptions only every three years, even if it’s immediately clear that the LOC made a really stupid move.

It is possible for Congress to pass legislation that would order the exemption, but the chances of that happening are essentially zero. First, both houses of Congress are so deadlocked over the issue of budget cuts that they will take no action on anything else. In addition, members of Congress are loath to do anything that might dry up the donations that get them re-elected, and the big winners in this case are AT&T and Verizon Wireless, the same companies that lobbied for the ban on cell phone unlocking in the first place.

Since the first and perhaps only motivation for members of Congress is to get re-elected at any cost, you can be certain that they won’t touch the cell phone issue. That could change if the opponents to the LOC decision are able to raise a couple of billion dollars, and get enough people involved to make Congress fear for its election chances. But realistically, that won’t happen. No matter what they’ll tell you, those representatives don’t care about you at all, and they don’t care what’s right or what makes sense, unless a big donation helps them see the light.

FCC Has Authority to Undo Library of Congress Cell Phone Unlocking Ban

But that doesn’t mean that Genachowski and the FCC are powerless. The Librarian of Congress did say that cell phone unlocking is allowed with the permission of the carrier. And of course, it’s also allowed if the cell phone is sold as an unlocked device. So if you bought an unlocked iPhone, you’re in the clear.

But FCC can do a couple of things. The first is to follow the lead of the Canadians, where all cell phones must be unlocked. In Canada, the cell company can’t sell you a phone that’s locked to their network. Yet Canadians still have cell phones, and in many cases are able to buy them before U.S. customers get to buy the exact same phone. This is why the BlackBerry Z10 is readily available in Canada.

The second method is to simply require the carriers to allow unlocking on request. This wouldn’t be the same as overturning the LOC rule, but it would make it irrelevant. The next question is how to compel the wireless carriers to do this. The answer there is licenses and spectrum.

The detail here is that the FCC can put conditions on the issuance of licenses that allow carriers to operate. The agency’s legal ability to do this has been unquestioned for decades. If the FCC chooses, one of those conditions can be that the carrier must immediately allow its phones to be unlocked if it’s to get the licenses it needs to operate. This isn’t significantly different from requiring broadcasting stations to protect the public interest through news programming or running public service announcements.

In addition to licenses, the carriers want spectrum. No matter how much spectrum AT&T acquires it is always crying for more so that it can expand its LTE service across the U.S. The FCC is completely within its authority to tie a requirement to allow cell phone unlocking to any agreement to buy or sell spectrum or to approve the transfer of spectrum.

In other words, the FCC has a charter that’s different from that of the Library of Congress. And when it comes to things that use the radio spectrum, it’s a lot more direct. If the FCC wants to require cell phone unlocking as a condition, it can. More important, as a part of the Executive Branch, the Librarian of Congress can’t overrule it.

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