Under the DMCA, every three years the Copyright Office has to decide whether to grant exemptions from the anti-circumvention law. University professors that teach film courses sought and received an exemption that allows them to crack the CSS copy protection on DVDs in order to extract portions of motion pictures for their teaching purposes. And an organization called the Internet Archive received an exemption in order to preserve programs and games that require the original media as a condition of access, or require a hardware dongle, but where the format has become obsolete and hardware to read the original media is no longer manufactured or the dongle is no longer manufactured.
Most of the exemptions that were granted were non-controversial. Some controversial requests for exemption were rejected. A request to allow "space-shifting," moving a program or movie or song from one medium or device to another when the access control technology prevents it, was rejected. A request to circumvent the region coding on DVDs was rejected. A request to circumvent the broadcast flag was rejected, because there is no mandate for broadcasters to use or for receiving devices to respect the broadcast flag. But the decision that is sure to be controversial was the exemption granted for circumventing the "locking" of cell phones to a single carrier. If you subscribe to Cingular, you can't use the Cingular cell phone on the T-Mobile network, even though they both use the same GSM technology. If you subscribe to Verizon, you can't use your Verizon CDMA phone on the Sprint CDMA network. The carriers do this because they subsidize the cost of the phone when you first subscribe, and they hope you will keep using that phone for years and years, on their network, so they can recoup the subsidy. You can buy new unlocked phones, at least GSM phones, but they cost hundreds of dollars more than the subsidized phones. I don't suppose there is much interest in buying unlocked CDMA phones, because they only work in the U.S. GSM phones, on the other hand, work almost anywhere in the world.
GSM phones use a "subscriber identity module" card, or SIM card, which contains subscription information and phonebook information. That SIM card, issued by one carrier, won't work in a phone that is locked to a different carrier.
This affects me personally, because I travel to foreign countries several times a year. With a cell phone locked to T-Mobile, calls cost $1.29 a minute or more, depending on the country. But with an unlocked phone, I can (and do) buy a pre-paid SIM from a carrier in that foreign country and I can make calls for much less, sometimes only a few cents per minute.
The last time I changed cellular carriers, I chose a GSM carrier because the phone works throughout the world. And I chose T-Mobile as the carrier because their policy is to unlock your phone after you have been a subscriber for 90 days. Cingular won't do that. T-Mobile is protected because I have a one-year contract. I have to continue paying T-Mobile even if I decide to use another carrier's SIM in my phone. I could terminate, but there are stiff termination penalties. But there is at least one cellular carrier, TracFone, that allows customers to pre-pay for airtime on an as-needed basis, without a contract and without early termination penalties. And TracFone has been suing or threatening to sue companies that sell refurbished TracFone phones, claiming that they are violating the DMCA by unlocking the phones.
So in this Copyright Office proceeding, a company that refurbishes used cell phones asked for an exemption from the DMCA's anti-circumvention ban as it applies to the software in the phone that locks the phone to a single carrier. First, the Copyright Office decided the software locks were "access control" technology under the DMCA. So, absent an exemption, unlocking would be illegal. But then the Copyright Office made the right decision. It decided that locking is a business decision that prevents the subscriber from changing carriers, which is a non-infringing activity, and "has nothing whatsoever to do with the interests protected by copyright." Unlocking a phone does not adversely affect the availability of copyrighted works, such as ringtones or downloaded videos, because they are protected by other access controls.
I suspect we haven't heard the last of this controversy. First, the cellular industry association argued that unlocking the phone does promote illegal copying of ringtones and downloaded video, but its comments came in so late that the Copyright Office refused to accept them. That could be grounds for a court appeal. Also, TracFone claimed that unlocked phones are used by terrorists and organized crime. But that's outside the Copyright Office's area of expertise. Meanwhile, just remember to get your phone unlocked before your next trip to Paris.