28 August 2007

iPhone and unlocking

The unlocking of Apple's popular iPhone has been widely reported. As this article points out, the legal basis for their concerns (and threats) is murky at best. On the one hand, carriers argue that locking GSM phones is necessary for them to recover their investments in both the network and the phone subsidy. Consumers, often bound by multi-year contracts, often prefer the freedom that an unlocked phone provides, especially when roaming.

If you have most any brand of GSM phone, getting it unlocked is a relatively easy matter and can be achieved through an Internet search. While this is increasingly popular, its legal basis is unclear. The Register of Copyrights is working to clarify this (see p. 68476 in this Federal Register notice).

Some researchers have gone further, suggesting that we need a "wireless Carterfone", which would decouple handsets sales (and choice) from the network provider, much as consumers were free to choose customer premise equipment (CPE) independently of network provider under the FCC's Carterfone proceeding. There are clearly technological issues with this, at least in the US, where carriers have different air interfaces.

Should consumers be legally able to unlock their phones? Should carriers be required to attach to third party telephones? How do you think the market dynamics of the mobile telephone industry would change if handsets were no longer bundled with services?

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