Consumers who want to change cellular providers could soon find it easier to keep using their existing cellphones under a bill that advanced Thursday in the Senate.
Similar to the law that lets consumers keep their phone numbers when switching networks, the Unlocking Consumer Choice and Wireless Competition Act would allow consumers to transfer the cellphones themselves more easily when changing providers.
After a year of negotiations, the Senate Judiciary Committee voted unanimously Thursday in favor of the legislation. The House passed a similar bill this year.
"With today's strong bipartisan vote in the Judiciary Committee, I hope the full Senate can soon take up this important legislation that supports consumer rights," said committee Chairman Patrick J. Leahy (D-Vt.), who sponsored the bill with ranking member Sen. Charles E. Grassley (R-Iowa).
Currently, most contract phones are locked to the cellular provider that sold it. Consumers must obtain the carrier's permission to unlock the device legally and switch to a competitor — even after the phones are paid off and the contracts have expired. As a result, consumers need to buy new phones when switching carriers.
"It just makes sense that cellphone users should be able to do what they want with their phones after satisfying their initial service contracts," Sen. Orrin G. Hatch (R-Utah) said during Thursday's proceeding.
The legislation came in response to a 2012 ruling by the U.S. Copyright Office. Previously the agency, which is part of Library of Congress, had determined that the 1998 Digital Millennium Copyright Act made it illegal for people to unlock their phones without the carrier's permission. The agency argued that the cellphone carrier's software was proprietary and only licensed by the consumer, not purchased.
Nevertheless, for years the Copyright Office granted temporary exemptions from the DCMA provision, making unlocking legal. The last exemption expired in 2012 and was not renewed, meaning mobile devices purchased since 2013 may not be altered without the carrier's permission.
The bill is intended to restore that right to consumers, though it will last only until the next scheduled review by the Copyright Office in 2016.
Most of the major carriers — Verizon, AT&T, Sprint, T-Mobile and U.S. Cellular — support the legislation. After the Copyright Office exemption expired, they voluntarily agreed to allow consumers to unlock their phones.
Consumer groups said the bill increases competition.
"It forces providers to compete on price and service," said Derek Khanna, a former congressional aide and Yale Law School fellow. He had organized a White House petition drive in 2013 that asked President Obama to reverse the Copyright Office's ruling.
Unlocking a phone, Khanna said, is as simple as popping out the SIM card — a tiny disk that holds carrier information — and replacing it with a new one. The phone manufacturer's operating software remains unchanged, and users don't lose the operability they had with a previous provider.
Without the DCMA exemption or legislation, consumers who try to unlock their devices without authorization could be fined $2,500, according to Public Knowledge. Groups that unlock a number of devices, such as mobile resellers, could be fined as much as $500,000 and imprisoned for five years.
The Senate's draft attempts to address what some digital activists saw as a flaw in the House version.
The Senate bill, unlike the House version, doesn't forbid people from unlocking multiple cellphones — a practice called bulk unlocking. Outlawing this practice, activists said, discourages businesses that trade-in and resell used devices.
Under the proposed Senate legislation, third parties also could unlock a cellphone on behalf of its owner, which members say helps less tech-savvy consumers move from carrier to carrier.
The bill does not cover other wireless devices with digital copyrighted chips, such as tablets, iPads or even Keurig coffee makers.Copyright © 2014, Los Angeles Times