Localized Story - To Unlock or Not to Unlock? That is the question

Imagine the horror when after bringing home a new Apple iPhone, changing it to T-Mobile or adding different software, finding that your several hundred dollar toy, had been reduced to nothing more than an expensive brick.

That was the experience of hundreds of Utah consumers of the iPhone last month after Apple sent out an update that made all unlocked iPhones and with third-party applications unusable, restricting access solely to AT&T. This is just the latest incident in the continuing war with consumers between locked and unlocked cellular phones.

“A locked phone is a phone whose software is designed to work on a certain carrier. It won’t accept other SIM cards and is network specific,” said Jake King, employee of AT&T in Riverdale.

An unlocked phone is when a consumer has changed that software so that it will work with any carrier. Most phones sold in the United States are locked to a particular carrier, but are sold at a discount in exchange for its extended contract with that carrier. Unlocked phones can be purchased but are considerably more expensive.

Many are unlocking their phones with or without permission of their carrier. Apple has said that nearly a quarter of a million iPhones have been unlocked. Apple has tried to change this practice by updating the software, rendering those iPhones useless. But soon after the update, hackers were finding ways to unlock the phone. Different phone carriers have varying policies ranging from unlocking the phone after 90 days of service to refusal to unlock phones.

Techniques for locking and unlocking phones are dependent on the type of mobile phone and type of network that it uses. In the United States there are two different standards: Global System for Mobile communication system or GSM network, which is used by AT&T and T-Mobile; and Code Division Multiple Access or CDMA network, which is used by Verizon and Sprint. “GSM is the standard,” said Zeb Nava, another employee of AT&T in Riverdale. “GSM is global. Everyone uses that,” King said. It is used around the globe and is the most easily unlocked. “CDMA is only an American standard for the most part,” King said. “CDMA is impractical or impossible to unlock.”

The advantages of having an unlocked GSM phone goes beyond being able to switch between networks. The unlocked phones can be used in other countries for a fraction of cost by using a local prepaid SIM card. SIM stands for Subscriber Identity Module and is the key to the GSM technology. It is microchip that contains the telephone number and other data. If a local prepaid SIM card is used, Utah consumers can avoid paying huge international roaming fees on their bills.

“The phone will work in almost every country, but my company gets the bill. I can take the iPhone to Batswana and it will work but it may cost $5 a minute,” said King.

There are other reasons for a getting an unlocked phone. “In Europe or Japan you can get a lot of really cool phones that never get to Americas,” King said. “You can bring it here. You get a lot of people Denmark coming over to buy the iPhone, though usually it is the other way around.” The iPhone has only a limited release in Europe.

But as with the recent experience of unlocked iPhone users, unlocking the phone does not come without its risks.

“It’s not difficult to unlock a phone but it is too much of a hassle to unlock them for the average consumer. If you unlock a phone to run on a different network, then messaging and other things may not work correctly,” said Nava. “If you do do it, you have to make sure that you do it right. A lot of people will lock themselves out of the network. Or it may not accept different updates that the network will send over the air.”

Also in the United States, some carriers say that unlocking the phone may violate the company warranty, leaving the consumer out of luck if anything goes wrong with the device.

Some arguments say that it even illegal to unlock phones, though the Digital Millennium Copyright Act of 1998 exempts the unlocking of mobile phones. Others argue that is not a matter of copyright but more to do with limiting competition. Currently a class-action lawsuit against Apple for $1.2 billion has been because the iPhone is locked to the AT&T network and that efforts to unlock the phone were thwarted by the recent update from Apple.

“If I were on the jury, I would not find anyone guilty for making after-market product or altering products (such as unlocking a phone), because that’s capitalism,” said King. “It’s a technology difference because not all phones are universal. They are like the difference between a Mac and a PC. They are both are computers and they both do Word but that’s about it.”