House Judiciary Sends Cellphone Unlocking Bill to House Floor with Chaffetz-Lofgren Amendment

The bill, by House Judiciary Committee Chairman Bob Goodlatte, R-Va., offers a legislative fix that would restore an exemption to the Digital Millennium Copyright Act (DMCA) for cellphone firmware unlocking that permits consumers to use their phones with other carriers once their contracts have expired. Under the DMCA, those who unlock their phones without permission from their carriers may be subject to civil lawsuits, criminal fines or imprisonment. FCC and White House officials advocated for legislative fixes to give consumers more control over their devices, after the Copyright Office last year removed an exemption for cellphone firmware unlocking granted in previous triennial reviews of the 1998 law. HR-1123 would also direct the Copyright Office to determine whether similar treatment should be given to other wireless devices, like tablets.

"Americans who have completed their phone contracts or have purchased a used phone want to be able to use their device on their network of choice,” Goodlatte said at the markup. “They have made that preference loud and clear and Congress has listened.” The bill was co-sponsored by Committee Ranking Member John Conyers, D-Mich.; Reps. Howard Coble, R-N.C.; Ted Poe, R-Texas; Suzan DelBene, D-Wash; and Watt.

Goodlatte’s manager’s amendment to the legislation clarified that the purchaser of a wireless telephone handset can direct other parties to circumvent the technology that restricts cellphone unlocking. The amendment also would require the Librarian of Congress, in consultation with the Register of Copyrights and Commerce officials, to determine whether to extend the DMCA exemption for cellphone unlocking. The amendment also would require a GAO study to asses the authority of the Librarian of Congress related to cellphone unlocking rules. “Members had raised the concern that not every consumer, and perhaps not every member of this committee, would know how to unlock their own cellphone if they wanted to do so,” Goodlatte said. “The manager’s amendment allows assistance to occur so long as it is done for an individual’s personal phone. The language does not authorize bulk cellphone unlocking."

Chaffetz and Lofgren offered a last-minute bipartisan amendment to the bill that would let family members of cellphone users unlock that cellphone as well. It would also make the DMCA exemption for cellphone unlocking permanent and eliminate the renewal requirement under Section 1201. Lofgren introduced her own bill in May that would also have made cellphone unlocking permanently legal.

Watt took issue with the timing of the introduction of the Chaffetz-Lofgren amendment, as well as the scope of its provisions, he said at the markup. Submitting the amendment late, and without the knowledge of the committee’s ranking member or the relevant subcommittee ranking member, Conyers and Watt respectively, is the “antithesis of consensus building,” Watt said. Chaffetz and Goodlatte, in turn, emphasized that the amendment was bipartisan, with the full support of Lofgren. “We have found that a number of members on your side of the aisle, in both the House and the Senate, and the president of the United States support the direction [in which] we're moving,” Goodlatte said. Chaffetz said “the spirit in which this whole thing has moved forward is consistent with how we have done things in regular order. To suggest that there has been done anything in a nefarious or inconsistent manner with how this committee is used to operating, in an open and transparent way, would be in my opinion, totally inaccurate.”

Watt said he was also concerned with the substance of the Chaffetz-Lofgren amendment, since it provided inroads for third parties to offer unlocking assistance to consumers, and could “facilitate a theft market” Congress had not yet anticipated. He offered his own amendment, which failed Wednesday 17-8, to the Chaffetz-Lofgren amendment that would narrow the unlocking provisions to only authorized agents of wireless carriers or their licensed vendors. A consumer wishing to switch their service from carrier A to carrier B could ask carrier B to unlock their phone at the same time they purchased service from that carrier, he said, adding efficiency to the process. But under the Chaffetz-Lofgren amendment, thieves could take stolen, locked cellphones to a “fly-by-night” person or other third party, rather than an authorized dealer, he said. It would be better to keep third parties out of the unlocking business, to discourage would-be thieves from stealing phones and unlocking them easily, he said.

Chaffetz said Watt’s amendment would “unnecessarily limit the number of people who could unlock phones.” He took offense to Watt’s suggestion that his and Lofgren’s amendment would encourage an industry of theft, saying it was offensive to all those who understood the technology. “It is offensive to a lot of people to say that this bill and particularly my amendment would be an instrument or a tool for an industry of theft,” he bellowed. “You're talking about your mobile phone. Could I, should I be allowed to have my wife unlock my phone if she knows how to? Of course.” Goodlatte joined Chaffetz in opposing Watt’s proposal. “Since the unlocking provision expired, how do you think people are buying cellphones and transferring data from one to another?” Goodlatte asked. “They're going to their carriers, they're going to kiosks in the mall, they're going to family members, including their 13-year-old sons and daughters. All this amendment does is to make that reality lawful.”

Watt’s amendment also clarified that the bill should apply only to the unlocking of cellphones, not to tablets and other devices, because the Librarian of Congress has never issued an exemption for tablets, he said. Tablets weren’t brought up in the hearing on the original bill, Watt said, except in the language that the Copyright Office should determine whether to extend the provisions to other cellular devices. But others pointed out the Chaffetz amendment would not change that requirement in the underlying bill, nor extend any provisions to tablets that were not in the original bill. Lofgren said the committee was making “too much of the difference” between cellphones and tablets. “The idea is you can unlock your device to choose your network, that’s all it is. There’s a network on my iPad, there’s a network on my iPhone,” she said. “What we're asking to do is to allow consumers who've purchased an item to be able to choose their network. That’s it, it’s the same in both cases. I think it’s simple."

Senate Judiciary Committee Chairman Pat Leahy, D-Vt., author of the companion bill in the Senate, had no immediate comment on the bill’s passage in the House committee. Leahy’s bill differs from legislation introduced by Sen. Ron Wyden, D-Ore., (S-467) which would amend the DMCA, rather than simply restoring the exemption to permit individuals who legally bought cellphones from carriers and wish to connect to a different carrier. The legislation also differs from the Wireless Consumer Choice Act introduced by Senate Antitrust Subcommittee Chairman Amy Klobuchar, D-Minn., Ranking Member Mike Lee of Utah, and member Richard Blumenthal, D-Conn. That bill would direct the FCC to begin a rulemaking that ensures consumers can circumvent the technological protection measures that prevent their handsets from being used with other networks.

CTIA, which has supported narrow legislation to allow cellphone unlocking, said HR-1123 achieves much of what the association has worked to support. CTIA wants legislation that prevents the bulk unlocking of handsets, and that doesn’t upset the existing handset distribution model, said Jot Carpenter, vice president-government affairs. It also wants to alleviate consumer confusion following the Librarian of Congress’s 2012 decision on the subject. “While there remain some issues we want to work with the Committee on as the bill moves to the House floor, CTIA is pleased that the bill approved today moves toward addressing each of our objectives,” said Carpenter in an email statement. The Competitive Carriers Association offered stronger support for the bill. “H.R. 1123 is particularly important for rural, regional and smaller competitive carriers that lack the scale to gain access to the newest, oftentimes most desired, devices,” CCA said in a statement. “Consumers deserve competitive choices and unlocking allows smaller carriers the opportunity to provide their innovative services to consumers who wish to keep their originally purchased devices.”