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Unlocked iPhones Could Herald True Mobility

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Friday June 25, 2010

Apple began selling the latest version of its iPhone this week in the United States and while the device will not be sold in Canada until mid-July, Canadians will be among the few that will have the opportunity to purchase it "unlocked" so that it is not tied to any specific wireless carrier.  The unlocked versions will come at a premium price, but in return consumers will be able to avoid the long-term contracts that have typified the Canadian wireless marketplace for many years.

My weekly technology law column (Toronto Star version, homepage version) notes the issue of locked cellphones has long been a source of consumer fear and frustration since some wondered whether unlocking phones that were rendered unusable when switching wireless providers was legal. In certain respects, this was an odd question to even have to ask. No one would ever question whether consumers have the right to tinker with their car or to use the same television if they switch providers from cable to satellite, yet the wireless industry somehow convinced the public that unlocking their phones - consumers' own property - was wrong.

That perception is rapidly changing with several developments paving the way for an unlocked iPhone. 

First, the new joint Bell-Telus network now means that Rogers is no longer the only provider capable of running the device. With each of the big three offering the device, an unlocked version makes consumer and business sense.

Second, Canadian wireless carriers have attempted to lock consumers into contracts for far longer than virtually any other developed country, with three-year contracts considered the norm.  Several years ago Canada instituted wireless number portability that allows consumers to keep their numbers when switching providers, yet long-term contracts have proven a major barrier to full portability. Given consumer frustration with long-term lock-in, offering a full priced device without the contractual burden may resonate with consumers willing to pay more upfront for immediate contractual freedom.

Third, there has been a dramatic shift in power in recent years within the wireless marketplace.  Until recently, wireless carriers occupied the power position since handset makers depended on them for distribution of their devices.  Carriers were able to extract favourable terms and demand carrier-specific restrictions on devices that ran on their networks.  The popularity of smartphones from Apple, Research in Motion, and Google have reversed this dynamic, however, with the device makers now positioned to dictate terms to carriers anxious to offer hot devices that often run in short supply.

Fourth, the government sent signals earlier this month that it wants to avoid erecting new barriers that could render unlocking phones more difficult. Bill C-32, the recently tabled copyright bill, expressly excludes unlocking cellphones from its ambit. The last copyright bill would have made it a violation for Canadians to unlock their cellphones and banned the distribution of software programs that could be used to do so.  This bill permits unlocking (subject to contractual restrictions), though obtaining the technical tools for those consumers with locked phones may prove difficult.

Given all of these developments - marketplace demand for unlocked phones, changing power dynamics, and government policy designed to foster consumer mobility - is there anything more to be done?

There is at least one stumbling block left that needs to be addressed. The availability of an unlocked iPhone may foreshadow a broader shift in the marketplace, yet millions of Canadians are still stuck with phones locked to a single carrier.  Once the consumer contract expires, many believe the carrier should be obligated to unlock the phone upon request.  That obligation lies at the heart of the Cell Phone Freedom Act, a private member's bill introduced last week by NDP MP Bruce Hyer. Whether by legislation or market pressure, it appears that true mobility may ultimately be coming to the Canadian mobile market.
Comments (24)add comment

Darryl Moore said:

better, but not good enough
Professor Geist. This is most certainly a step in the right direction. However, it does not address the locks placed on the phones by manufactures. Neither this NDP Bill, nor the new copyright Bill would allow you to jailbreak your iPhone for the purpose of running unauthorized software, but only of the purpose of switching networks.

When Apple makes no bones about their tight control over iPhone Apps, it should become obvious to anyone what the dangers of giving a manufacture such power over our private property are.

I blogged a bit more about your article and this issue here:

http://www.digital-copyright.ca/node/5163
June 25, 2010

Anarchist Philanthropist said:

...
As much as unlocked phones makes sense. It will never happen with Bell or Telus.

They have told me repeatedly over the years they won't take unlocked phones. At first it was supposed network issues, then it was policy. They really just need to admit it's the simple fact they won't make money on unlocked phones.
June 25, 2010

Mark said:

...
Anarchist - if it becomes law, Bell and Telus will have little choice in the matter... they must either offer the consumer a choice or else cease all operations as a mobile plan operator entirely.

One is compelled to wonder, however, why cellphones managed to get an explicit exemption to bypassing locks while other reasonable activities like private use copying and format shifting for personal use did not?
June 25, 2010

Anarchist Philanthropist said:

...
Mark

Thats a very good question when you consider that telus/bell make money off locked phones just like the movie industry makes money off locked dvds.

Personally my guess would be, that there are enough people in the gov't who are just as fed up with the wireless system in this country as we are, to make something change.
June 25, 2010

db said:

unlocked phones
AP- I have an unlocked phone, a nexus one, and it is on the Telus network. You just buy your phone seperatley (make sure it works on the network first) then buy a sim card to put in it.
June 25, 2010

db said:

unlocked phones
forgot to add, you don't get a discount on the monthly rate for supplying your own phone, so you still get screwed.
June 25, 2010

suorpio said:

-and the environmental cost
I feel like Environment Canada should get behind this as well, since unlocked phones would mean fewer consumers being forced to 'upgrade' to an extra handset just for the sake of switching companies. People go through phones like candy and the batteries that power them are one of the more toxic things people buy.
June 25, 2010

R.B said:

...
@Anarchist Philanthropist
not to play the devil's advocate but they -more or less- have a point. Telus/bell phones are not like rogers/fido's for the unlocked phone to work with their network it needs to be registred in some kind of database of their's ( like the cable modems and Set-top-boxes for Tv/internet over cable ) as it is the sole identifier - the phone identifies you -, Rogers/Fido identifies the customer with a SIM card, any phone that can take a sim card - locked or unlocked - will work with their network.
but this is a good initiative and a step in the right direction.
If not mistaken the European Union (france more speciically) has a law like this one, carriers are foced to offer the same phone in both states - locked an unlocked - they are forced to unlock it upon request - whene the contract expires-.
June 25, 2010

Migzy said:

...
@R.B.

Telus/Bell HSPA(aka 3G+) phones are the same as Rogers HSPA phones(both use SIM cards, same frequencies, etc). The older regular 3G/2G networks are/were different but going forward they will continue to be the same(at least for the foreseeable future). Like DB said, Telus will allow you to use any unlocked HSPA phone on their network, provided the phone supports the Telus/Bell/Rogers HSPA frequencies. And no, phones that are locked(aka locked to a _specific_ carrier) do not work with any carrier just by changing the SIM card; that said, unlocked phones do work that way.
June 25, 2010

R.B said:

...
@Migzy,
Ah didn't know that Bell/Tellus had the same Network as rogers. thank's for the info. In this case there is absolutely no reason to refuse access to someone with their owne phone (given that it supports the frequency) other than plain "stupidity" as if a DSL provider forces his client to buy the modem they are selling.

Of cource carriere lokced phones won't just work by swaping SIM cards one has to unlock them first (what I meant is the phone is mean to an end and what ties/identifies the client is the sim card --ie unlocked cool, locked to rogers's network cool it will work with rogers)

again this bill is a step in the right direction.
June 25, 2010

tom said:

Totally incomprehensible
It's funny to see Apple has conned people into paying a premium for an unlocked phone, where obviously a device maker has no business telling people which carrier they must use. If Ford locked people into buying Shell's gas only, people would be up in arms. Somehow, the phone market is different, where they're willing to pay a premium for an utterly useless and detrimental feature!
June 26, 2010

R.B said:

...
@tom
usually the makers make it possible lock the phone (it can be useful for the customer) but the carriers use that to (or ask the maker to) lock the phone to their networks/sim cards. To elaborate on your analogy it is not Ford that is locking but the dealer that is.
the usual argument : it is like that to recoup the cost of the phone. Usually the phones we buy are subsidized (you get for a fraction of the real price) and you promise to stay with that carrier for a certain periode of time --2,3 years--). so locking the phone is one way of enforcing that promise.

(note: I'm neither justifying nor approuving this way of doing things, on the contrary I fail to see the loginc behinde, as one can argue that the existance of a legal binding contract removes the need for such practice)
June 26, 2010

Napalm said:

This is useless
What the carriers have and can enforce in court is a written contract signed by you. The lock is useless and does nothing but inconvenience the customer. They should sit down and THINK about it then give up on this practice.
June 26, 2010

Chris Ratzlaff said:

premium pricing
actually, the unlocked iPhone will only be selling for a premium in a technical sense. forever, we've been purchasing phones at a massive discount in exchange for multi year contracts (usually about $100 / year of servitude). the iPhone won't so much be available unlocked at a premium, rather it simply won't be discounted. this is the same case for the Nexus One which is available unlocked from Google for about $600.
June 27, 2010

Marc Light said:

The price of freedom
For a society as advanced as ours, it's sad to say that in the mobility market, freedom has a price. I spent 529$US on a Nexus One for my freedom and it's one of the best buy I've done. Not just because it's a great phone but because no big corporation is holding me hostage on their network.
June 27, 2010

tom said:

Copyrights circumvent phone locks
I made a mistake in my comment. I missed a "not". What I meant was people paid for a locked iPhone for years, and now they can pay a premium just to have one unlocked. Moreover, from what I read, all carriers in Canada do not unlock phones/iPhones after your contract expires, so Canadians might as well pay and pay for a locked iPhone.

> usually the makers make it possible lock the phone (it can be useful for the customer)

R.B, can you provide examples of benefits to customers of locked phones? I obviously don't have an iPhone, not that I want one anyway.

> the carriers use that to (or ask the maker to) lock the phone to their networks/sim cards... the usual argument : it is like that to recoup the cost of the phone. Usually the phones we buy are subsidized...

I don't understand. First, you imply Apple is not locking the phone and the carrier is, but then you imply Apple wants to recoup the full cost of the subsized iPhone. So really, which is locking for a subsized/long-term-contract iPhone, Apple or carriers?

What I'm seeing is Apple and AT&T, or other carriers, colluding to allow Apple to hide the true cost of iPhones, and AT&T to profit from hidden charges, fees, etc. over the length and terms of the contract. Again, Apple is winning at conning people to think iPhones are cheap and conning people into paying the full ("premium") price for unlocked iPhones, when they should have just sold the devices unlocked without conditioning people into thinking unlocked iPhones are worth the full price.

Then again, Apple realizes their cons won't work after seeing C32's exemption for DRM circumvention in phones, or else locked iPhones would be the norm. The DMCA also has an exemption for circumvention of phones, but at the whims of their Copyright Board. These exceptions prove we do not need anti-circumvention protections at all.
June 27, 2010

Anonymous said:

...
In theory, no... at least with respect to the preservation of copyright, we do not need anti-circumvention protections at all. However, some such protections are required on account of Canada's obligations to international treaties, and is may be naive to assume that Canada should just simply not bother to sign such agreements. The extent to which C32 goes in that regard, is far beyond what those agreements actually require, and it is because of how those extents will impact fair dealing that most people I know object to the bill.
June 28, 2010

tom said:

...
Since you put it that way, how do I get my agenda into international treaties, so everyone can conform to me?

The whole point of anti-circumvention protection is to prevent all people from making extra copies, thereby diluting scarcity thus lowering prices, for example. Allowing circumvention for the purpose of fair dealing would defeat the whole purpose of anti-circumvention protection. Nobody seems to acknowledge or want to acknowledge this fact.

Whether you think I'm naive for saying we don't need anti-circumvention at all, it does not diminish the fact that Moore is desperately seeking support and he'll say anything, as we can clearly see. Playing into the Moore's hand does not help. To my knowledge, Moore has not given a good reason and example for DRMs' success (counterfeiters still counterfeiting, sharers still sharing,) except saying we're obligated to jump off a cliff like others in WIPO treaties. I'm questioning Moore's authority on DRM after 12 years of the DMCA, but all he does is deflect attention by calling me a "radical extremists". Bill C32 itself is an extremist's bill.

Moreover, to accredit DRMs' existence will prove, if not already proven, dangerous. DRMs can be spyware/malware; and since one was a root-kit, it only shows sometimes it's too late to know what the malware does before one can disable/remove it, even when the law permists such anti-circumvention. I prefer prevention over the cure.

Anyway, how about an Intellectual Property Tax system, if C32 is passed as is then? Is there some international treaty which says we can't tax intellectual "property" as real property? The cartels want to treat intellectual "property" as real property, but they don't want to pay intellectual "property" taxes. If we have an Intellectual Property Tax system, then maybe we can settle once and for all what it is we're buying (or renting,) a license or a property.
June 29, 2010

Phone guy said:

Np premium
@Tom

re: "It's funny to see Apple has conned people into paying a premium for an unlocked phone"

Maybe this has been addressed, but buying an unlocked phone does not constitute being "conned" into paying a "premium". The cost unlocked is the actualy price of the unit without a provider's insentives.

With all due respect, might be a good idea to read up on how cell phone companies, plans providers and networks all work.

Cheers.
July 01, 2010

R.B said:

...
@tom
> usually the makers make it possible lock the phone (it can be useful for the customer)
it can if the owner has control over it.

For the subsidy, I'm assuming the carrier here, Customers have no business relationship with the manufacturer whatsoever. As the manufacturer sold the phone to someone (the carrier or some distributor) other than the the end user.

So the carrier is letting the phone go for a lower price (or so it seems) with one condition a contract for X years with them, Locking the phone is a way to make sure that the customer will stay -b/c if they left the phone would be useless-, and this is the usual argument.
I say it is ridiculous, b/c the customer has signed a contract and if they cancel it they have to pay fees.
More over nothing forces the carrier to unlock the phone at the end of the contract. Also if one buys a phone for let's say 300/400$ (full price for most pay as you go phones --check out fido, rogers, telus --) it is locked. Worse telus and bell are selling a locked iphone for 600/700 if you don't take the 3 years contract

In Europe it's an other story, carrier must unlock if the customer asks (when the contract expires). And they are forced to offer the phone unlocked (for the full price) if they offer the phone locked (for the subsidized price).


Yes an exception in a copyright bill for phone unlocking should not be needed as it has nothing to do with copyright. It need to be addressed elsewhere.

July 02, 2010

tom said:

...
> buying an unlocked phone does not constitute being "conned" into paying a "premium". The cost unlocked is the actualy price of the unit without a provider's insentives.

Oh, but it is a con. If Apple sold iPhones unlocked from the beginning, carriers like AT&T would have to compete and prices would fall, and there would be no con in my context. Now, Apple says buy our phones unlocked at full price because carriers' service fees will be cheaper due to more competition. The deceit is Apple conditioned people into paying the hidden cost of the iPhone and the hidden costs of AT&T's uncompeting service fees - but now they're no longer able to collude with AT&T, they're selling iPhones unlocked as if they're benevolent and supporting freedom. The DMCA and bill C32 prevents the Apple+AT&T collusion by allowing phone circumvention, not Apple's love for their consumers.

Apple created an uncompetitive carrier market for AT&T allowing both to enjoy high fees hidden in long-term contracts signed by iPhone consumers. iPhone consumers will think Apple loves them for selling unlocked iPhones, but phone-circumvention exemptions prove otherewise.

The topic is iPhone, so I'm sticking to iPhone, although other phone makers and other carriers were/are colluding still receive the same sentiments. For some weird reason, Apple receives praise without much scrutiny.

> For the subsidy, I'm assuming the carrier here, Customers have no business relationship with the manufacturer whatsoever. As the manufacturer sold the phone to someone (the carrier or some distributor) other than the the end user.

The Apple online store sells the iPhone and ships within 1-3 business days. This may be recently, I don't know.

In the Apple and AT&T/Cingular case, Apple has some secret deals with AT&T stifling competition as mentioned above.

p.s. If iPhone consumers don't understand being conned, from what I said, then don't worry about it. I don't. Cheers indeed!
July 03, 2010

pat said:

unlocked 'stupd' phone
I bought an unlocked phone..I mean device. I use the apps, browser, twitter, google maps, camera, recorder, music, ... everything BUT phone service. Until Canada fixes this mess I refuse to buy what t telcos offer. If skype worked as it does on my pc I would thumb my nose ar the telcos forever.
July 12, 2010

sarva said:

...
Nice article about unlocked phones
June 18, 2013

roshan said:

unlocked phone
There are a plenty of shops and online services available to get an unlocked phone. But, the cost is too expensive. Sometimes, unlocked phones are not gets unlocked in a proper manner. I have also experienced with an unlocked phone. I have purchased it via online and i inserted my T-mobile sim card with it. But, my phone asked SIM unlock code. I'm surprised ! and called them (where i have bought my unlocked phone) but, they won't give response to my call. After that, I have searched in net and unlock my mobile by using unlock code and i got it from one of the online service provider Wickedunlock.com to unlock my phone properly. Better, you can buy a locked phone and unlock it from the locked network provider of get unlocking service from any of the 3rd party service providers to unlock your mobile. Because, locked phone's price and the unlocking cost is low when compared with unlocked phones.Once, you have unlocked your phone, you can easily switch over from one provider to another without any interruption.



June 18, 2013

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