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Unlocking your new smartphone is now illegal: What you need to know

As of today, it is illegal to unlock your new smartphone. This rule, issued by the Librarian of Congress in October, is seen by many as a slap in the face of consumers who wish to do what they want, when they want, with the devices they own. But there are a few silver linings in this dark cloud. Here, we’ll answer all the pertinent questions about the new no-unlock rule.

Why is it illegal to unlock a smartphone?

Because unlocking a phone requires making changes to its firmware – software that is copyrighted and owned by your carrier – which would be a violation of the Digital Millennium Copyright Act (DMCA).

Was this always the case?

No.

Every three years, the Librarian reviews the specific rules of the DMCA, and makes exemptions allowed under the law. In 2006, the Librarian decided that phone unlocking should be exempted under DMCA. But that changed in 2012.

Why did the rule change?

Because the Librarian was convinced, for a number of reasons, that allowing unlocking was no longer a necessary exemption.

The primary reason cited by the Librarian is, there are an increasing number of phones you can buy that come unlocked. Apple and its carrier partners sell the iPhone 5 unlocked, for example. Google’s Nexus 4 also comes unlocked. T-Mobile has plans to offer more of its phones unlocked. And retailers like Best Buy offer all sorts of unlocked phones. In short, the Librarian decided that there’s no reason to alter the DMCA to allow people to unlock any phone since people can easily buy an unlocked phone nowadays, if they choose to do so.

Furthermore, new court decisions have changed the interpretation of the law. In 2010, the Ninth Circuit court decided in Vernor v. Autodesk, Inc that we cell phone owners do not actually “own” the software running our phones. Instead, we are only “licensing” this software – a key difference – which means that we don’t have a right to alter that software. This also played a role in the Librarian’s decision.

Is it illegal to unlock all smartphones?

No.

The no-unlocking rule only applies to “newly purchased” phones, meaning any carrier-locked phone purchased on or after October 28, 2012, the date the new rules went into effect. (A 90-day grace period ended today, January 26.)

If you buy a used phone – or even a new phone not locked by a carrier – you are still allowed to unlock it. It’s also perfectly legal to buy a phone that comes unlocked from a carrier or otherwise. You can also, in some circumstances, ask your carrier for permission to unlock your device. (More on this below.)

What are the benefits of an unlocked phone?

Unlocked phones can be freely used on other networks simply by swapping out the SIM card. So if you’re an AT&T customer, and you want to take the phone you have to T-Mobile, you could do so very easily with an unlocked phone.

The most common beneficiaries of unlocked phones are world travelers. Say you have an unlocked iPhone 5; you could take your device to Europe, for example, buy a pre-paid SIM card (which is readily available there) and use your phone on the local network, allowing you to avoid exorbitant roaming fees.

What are the downsides of unlocked phones?

If you’re buying a new unlocked phone, it will cost you far more money up front than a carrier-locked device. A 16GB unlocked iPhone 5, for instance, will cost you $650. Buy the same phone through AT&T, Sprint, or Verizon, and you’ll pay just $200 thanks to carrier subsidies – but you also have to agree to a two-year contract. In the long run, you will likely end up paying more for your locked device than for an unlocked one.

Is jailbreaking the same as unlocking?

No.

Jailbreaking allows you to run apps on your device that you couldn’t with an un-jailbroken phone, such as iOS apps that are not available through the iTunes App Store. But jailbreaking does not let you switch to a different carrier. Also, jailbreaking is still completely legal under the DMCA.

Is there a legal way for me to unlock my new phone?

Yes – but it is a pain.

AT&T will let you unlock your device permanently, provided your contract has already expired. AT&T customers still on contract may unlock their devices up to five times per year (for international travel purposes), as long as they don’t owe any past-due amount on their accounts, and have been a customer for 60 days or more.

Verizon sells all iPhone 5s unlocked, meaning you could take your device over to AT&T or T-Mobile without having to unlock the device. But other devices, like the Samsung Galaxy S3, are locked by Verizon. However, like AT&T, customers in good standing can request to have their devices unlocked for international travel.

Sprint does not offer unlocked devices, but it will allow customers to unlock their devices for travel after three months with the carrier.

What happens if I unlock my device anyway?

We don’t know.

You could potentially have your service cancelled,  you could be sued under the DMCA, a federal agent could bust down your door and confiscate your illegally unlocked device. (Probably not that last one.) But those are guesses, so we’ll have to wait and see. What is clear, however, is that the new DMCA rule gives the carriers better legal backing to take action if you do unlock your device while on contract without permission.

Have other questions about the unlocking rules? Ask in the comments below, and we’ll find the answers.

See the Librarian’s full decision below:

DMCA Rules 2012

Updated with additional contextual information.