Why Is AT&T Thumbing Its Nose At The Copyright Office?

Tech news sources report that AT&T is about to settle a class action suit regarding unlocking cellphones, with Apple iPhones exempted. Engadget writes that AT&T would be required “to provide an unlock code for just about any phone it has sold since March 12, 1999.”

What I don’t understand is why a law suit was necessary. In 2006 the Copyright Office ruled that cell phone companies had to allow customers to unlock their phones when it authorized an exemption to the DCMA regarding “cell phone firmware that ties a phone to a specific wireless network.” PC World reported at the time that cell phone companies had been arguing that their software should be considered a copyrighted work. The Copyright Office disagreed:

Thus, in many cases, the software locks preclude use of a handset owned by a consumer even though that handset is intrinsically capable of use on alternative networks. The evidence demonstrated that if consumers wish to switch providers, they are forced to purchase a new handset and spend the time to personalize that new phone. […]

[T]here has been no argument or suggestion that a consumer desiring to switch a lawfully purchased mobile handset from one network carrier to another is engaging in copyright infringement or in activity that in any way implicates copyright infringement or the interests of the copyright owner. The underlying activity sought to be performed by the owner of the handset is to allow the handset to do what it was manufactured to do – lawfully connect to any carrier… The purpose of the software lock appears to be limited to restricting the owner’s use of the mobile handset to support a business model… [pdf]

The rule had a three-year life, but in the fall of 2009 the Copyright Office extended its provisions while it undertakes its triennial review of DCMA exemptions. [EFF is proposing to liberate iPhones from the stigma of “jailbroken” software as well as to extend the unlock provision.]

So why, in the face of this 3.5 year-old ruling, has AT&T refused to allow customers to unlock their phones? And how can it legally insist that iPhones (not mentioned by name but by description, according to news reports) be exempt from its settlement? [Yes, I know that they can’t run on Verizon’s network because they aren’t compatible.]

I don’t understand why the “lock” is needed if there is a one- or two-year contract. Breaking a contract is breaking a contract, whether or not the phone is unlocked. [The outlandish fees charged for early termination – that’s a separate story.]

And I don’t understand the fine line between saying breaking the lock is acceptable and requiring that carriers help customers unlock their phones on request. The former isn’t very straightforward if the latter doesn’t happen.

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