Personal Finance, Politics, Saving Money

President Obama Signs Bill Making It Legal to Unlock Cell Phones

President Obama signs a law allowing consumer to unlock their cell phones and use them on other carriers
Good news for consumers. Last month both the Senate and House of Representatives passed a bill which allows customers to unlock their cellphone so it isn’t tethered to a specific service provider. President Obama has now signed the legislation turning it into law. This can save consumers money in a variety of ways.

When a consumer purchases a phone from a specific service provider, their phone may be locked into that service provider even after the contract has been fulfilled. That meant that if a consumer wanted to switch providers, they would need to purchase a new phone even if they wanted to use the phone they already had. This often meant that even if an alternative provider offered a less expensive plan they wanted, it would cost more to switch since they would need to buy a new phone in the process.

It also made it difficult for consumers to sell a phone they no longer wanted. Since the phone was locked to a specific carrier, it ended up being worth less than if it was free to be used with any service provider. By making it legal to unlock cellphones, it should be easier and more profitable for consumers to sell their old phones, and for consumers to obtain older phones inexpensively to use on a variety of networks. It also has the potential of keeping millions of phone out of landfills, since selling or giving away the phone becomes a more viable option.

For those who travel overseas, it also will mean they can get coverage on their phone from overseas providers. This can be less expensive than renting a phone when traveling, but could be a problem for phones that were locked.

The law is named the Unlocking Consumer Choice and Wireless Competition Act (PDF), and passed in the House and Senate earlier last month. Now that it’s signed, it will repeal a ruling by the Library of Congress allowing strict enforcement of locked phones through copyright laws due to the evolving cellphone marketplace. However, it won’t last forever. The law will be reconsidered in 2015 by the Library of Congress, then every 3 years after that. The Library of Congress also must review whether other devices such as tablets should be allowed to be unlocked like phones.

The White House noted the new law as a win-win for all involved: good for the American consumer, good for wireless competition and a win for Congress with the bipartisan support for making the law a reality.

(Photo courtesy of Rupert Ganzer)

2 thoughts on “President Obama Signs Bill Making It Legal to Unlock Cell Phones

  1. Why didn’t they make it forever? It’s a waste of time and money reviewing it every few years. If they want to change it back, just make another law to change it back.

  2. The reason for the short-time frame reviews is because the carrier lobbyists are in control and want to see if their plans are going to make a good profit. Just recently most carriers have went to BYOP (bring-your-own-phone) pricing. If this doesn’t work out for them (i.e., big profits), they will force the law to be cancelled. Now that most people have cell phones, there is no money in selling phones – the carriers make their money from selling plans. This is a perfect example of a law created by lobbyists, for the lobbyists masters, – not for the people.

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