Columns

Unlocking the Mysteries of Locked Cellphones

My weekly technology law column (Toronto Star version, Ottawa Citizen version, Ynet Hebrew version, BBC version, homepage version) discusses the legal issues surrounding locked cellphones in light of the recent attention focused on the Apple iPhone. The iPhone, like many cellphones in North America, is "locked" to a single carrier. Consumers who want the iPhone must use AT&T since the device contains technical limitations that render it difficult to use on other networks. These limitations are artificial in the sense that there are otherwise no impediments for an iPhone to run on a competing U.S. network such as T-Mobile, a compatible European or Asian network, or on the Rogers network in Canada.

Locked cellphones have become common in North America as carriers claim that they sell "subsidized" phones in return for an exclusive commitment and long-term contract from consumers. While many consumers may like the opportunity to purchase a phone for a fraction of the full retail price, others would presumably prefer the freedom of an "unlocked" cellphone that would allow them to easily switch between carriers. The freedom provided by unlocked cellphones is particularly useful for people who travel, since they can avoid roaming fees by converting their phone into a local phone in most countries by simply inserting a local SIM card. This approach is standard in Europe and Asia, where consumers would not tolerate a market comprised solely of locked cellphones.

While the iPhone may be locked to AT&T, several consumers, including a New Jersey teenager, have uncovered how to unlock their phones. This has unleashed a legal battle pitting companies anxious to offer unlocked versions of the iPhone against AT&T, which has threatened to sue anyone offering unlocking services.

From a policy perspective, it is readily apparent that locked cellphones undermine efforts to encourage greater competition in the marketplace.

September 3, 2007 — 8 comments — Columns

Verner’s Challenge

The recent decision to shift Bev Oda out of the Canadian Heritage portfolio was one of the cabinet shuffle's worst kept secrets. While the current conventional wisdom is that Oda's replacement – Quebec City MP Josée Verner – will be a stronger voice for culture around the cabinet table, my technology law column this week (Toronto Star version, homepage version) argues that a change in Minister may not be enough. While Oda had her shortcomings, the reality may be that the problem lies less with the identity of the Minister of Canadian Heritage and more with the department itself.

Few doubt the importance of the cultural sector from both an economic and social policy perspective, yet that status is not reflected in the Department of Canadian Heritage, which has gradually morphed primarily into a granting agency for various cultural initiatives. Increased funding for festivals, films, museums, and other culture industry programs may be worthwhile, however, the problem with the grant approach is that it has locked Canadian Heritage into the status quo at a time of dramatic change.

August 27, 2007 — 6 comments — Columns

A Digital Economy Blueprint For the New Industry Minister

Jim Prentice, Canada's new Industry Minister, has been on the job for less than a week, yet his appointment has already sent a buzz through the business community. With a member of Prime Minister Stephen Harper's inner circle now at the helm, promoting Canada's global economic competitiveness promises to become a core priority on the government's fall agenda. While some political commentators maintain that the issue rarely translates into voter support, my weekly Law Bytes column (Ottawa Citizen version, homepage version) argues that the good news for Prentice is that reforms focusing on digital issues represent both good policy and smart politics. By prioritizing three issues – communication, copyright, and consumer confidence – he has the opportunity to establish a forward-looking framework that can serve as a model for other countries and provide a payoff at the ballot box.

On the communication front, analysts are divided on whether recent deregulation will result in reduced prices for consumers; however, there is near-universal agreement that deregulation alone is not enough.

August 21, 2007 — 2 comments — Columns

Ipod Levy May Yet Face The Music

My weekly Law Bytes column (Toronto Star version, Ottawa Citizen version, homepage version) focuses on last month's Copyright Board decision that re-opens the door to placing a levy of up to $75 on iPods as part of the private copying levy. I note that the case may create a sense of déjà vu, since it marks the second time that the Canadian Private Copying Collective, the collective that has pocketed more than $150 million from the levy since 2000, has sought to include iPods within the levy system. It first introduced an iPod levy in 2003, only to have the Federal Court of Appeal strike it down as the court declared that "it is for Parliament to decide whether digital audio recorders such as MP3 players are to be brought within the class of items that can be levied. . .as [the law] now reads, there is no authority for certifying a levy on such devices or the memory embedded therein."

Notwithstanding the Court's unambiguous language, the CPCC reintroduced the iPod levy earlier this year, arguing that the MP3 player comments were "obiter"(a legal reference to a passing remark that does not form a necessary part of the court's decision). Canadian retailers and storage media companies unsurprisingly challenged that interpretation, leading to last month's ruling that sided with the CPCC. The Copyright Board did not mince words, suggesting that the levy could also be applied to cellphones and personal computers, and warning that excluding the iPod from the levy system would "instantly makes the conduct of millions of Canadians illegal, and even possibly criminal."

The decision will presumably be appealed, virtually guaranteeing years of litigation that promises to divert millions of dollars earmarked for artists to lawyers instead. While the legal challenges are important, the political repercussions carry greater significance since they may lead to dramatic changes to both the levy and the Copyright Board.

August 6, 2007 — 4 comments — Columns