The Digital Millenium Copyright Act is better known as the DMCA.
Passed in 1998, this bill governs the often vague overlapping of intellectual property and physical property. Initially sought out to protect digital piracy of DVDs and music, Congress built in an “anti-circumvention” provision in the DMCA, making it illegal by copyright law to break any sort of technological protection measure over content.
In other words, this provision makes breaking a lock a direct violation, whether or not the locked content is actually pirated.
The reason for such a seemingly ironclad provision? Before the 21st century, lawmakers couldn’t have guessed that content would find its way into almost every device we own; nor would they have had any idea OEMs would instill built-in locks to prevent people from access and modification. From WiFi routers to microwaves, everything with a chip contains some sort of copyrighted content.
The most recent victor in cell phone unlocking, however, goes to the public for upending the Librarian of Congress’ 2012 decision, but, according to the three-year rule, unlocking could be deemed illegal again in 2015.
While the U.S. Congress passed legislation making unlocking legal, the Librarian of Congress has the opportunity in 2015 to either reaffirm the prior ruling or reverse course based on an interpretation of Section 1201 of the DMCA. Seeing as only every three years the public can petition the Librarian of Congress to issue exemptions, that 2015 ruling will likely last until 2018.
The fact of the matter is, once every three years, businesses that utilize bulk unlocking could suddenly become illegal at the whim of a librarian.
The final version of the Unlocking Consumer Choice and Wireless Competition Act allows bulk unlocking for refurbishment and resale — a key provision that was left out of the Senate version of the bill passed July 15.
Kyle Wiens of Wired spoke with HOBI President, Craig Boswell, who said that during the two years of the cellphone unlocking ban, prices for phones that could not be unlocked dropped by about $20 per unit. However, due to HOBI’s close relationship with top carriers, our experts were able to adapt and adjust our business model, “but it hurt the top line number,” Boswell said. For companies that unlock in bulk, the blow is much more profound.
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