Legislators choosing populism over good policy on mobile phone unlocking

The point greatly overlooked in this debate is that many cell service carriers substantially subsidize the expense of new phones for their customers. When consumers buy a phone and sign a service agreement they agree to the terms and conditions of the carrier. If consumers don’t like the terms and conditions of a contract, the vast majority of carriers will allow them to purchase an unlocked phone for full price. The up-front sticker price, however, often causes consumers to settle on the subsidized option.

The practice of unlocking cell phones only recently became a larger issue when smaller service providers started to attract customers from larger carriers by offering less expensive service on unlocked phones. T-Mobile in particular went to great lengths with a dedicated advertising campaign, encouraging customers to bring in their unlocked iPhones from
other carriers.

{mosads}The administration also noted that a change in the policy was “crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers’ needs.”

Unfortunately, the recent push for copyright reform in the digital realm rewards modification over innovation. Though the White House and some legislators claim they want to protect consumer choice, they would actually trample it. The technological advancements that flourished in the cell phone industry came about precisely because of strong intellectual property laws that reward developers for creating cutting-edge, exclusive products. Now that cell phone manufacturers and carriers have more protection for their intellectual property, they can recover their investments in research and development more quickly, and spend that capital developing new technological advances.

Michael Moroney is director of Communications at The Franklin Center for Government & Public Integrity.


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