[conservative in nyc]

Remember the story about Muslims buying up Tracfones over the summer? One explanation for why they were doing it was to remove the lock that forced the phones to only use Tracfone's service, and sell them to a middleman for profit. Whether this was legal was questionable back then. It appears that the U.S. Copyright Office has green lighted the practice, at least with respect to the DMCA and your own cell phone. Tracfone feels otherwise, with respect to their phones, even under the new exemption, and is suing. Their business model of selling phones at a loss with the hope that people will pay for their arguably overpriced service might be blown out of the water.

Why would anyone want to unlock a cell phone? Well, for one, if you go overseas, it's often cheaper to roam on a local carrier's network than use a U.S. carrier. Plus, it allows you to use your same cell phone on another compatible network if you become dissatisfied with your current pre-paid service.

See also:
DMCA Exemptions Allow You to Unlock Cell Phones (ABC News/PC Magazine)
Text of Register of Copyright's Recommendations

[Gorzaloon]

Why would anyone want to unlock a cell phone? Well, for one, if you go overseas, it's often cheaper to roam on a local carrier's network than use a U.S. carrier. Plus, it allows you to use your same cell phone on another compatible network if you become dissatisfied with your current pre-paid service.

Here is another reason. I have had a Verizon account for a long time. I picked up a new phone, a Motorola V710. Nice phone, Bluetooth features, USB access, etc.

Then I discovered that Verizon sabotaged many features, essentially crippling the phone, to force their customers to use their expensive messaging, "Get It Now", etc. rather than allow users to enjoy the phones' features.

They did lose a Class Action over it. What this meant is that the users got $25, and no further features, and the lawyers pocketed the gains.

Of COURSE I bought hacking software. When companies pull this kind of bait-and switch they deserve no quarter at all.

[angkor]

Two issues here:

1) TracFone's business model is entirely dependent upon the locking of their GSM phones to their own GSM network. If you unlock the phone, you can use it on any network, and there's no TracFone contract to worry about. If you buy a $20 GSM TracFone at Wal-Mart, unlock it, and ship it anywhere outside the U.S., the phone can probably be retailed for $100 (that's what my unlocked 2001 Motorola WorldPhone was worth in SE Asia last year).

2) U.S. GSM carriers - T-Mobile and Cingular - are double covered by the locking and by a contract. If you unlock the phone you still have a 1 or 2 year contract obligation.

I've been using T-Mobile for years. Their policy is to provide you with the unlock code on your phone after you've been a customer for 90 days. So I can be on a T-Mobile contract in the States, and swap to a Vinaphone pay-per-minute when in Vietnam, simply be swapping the SIM chip (which takes 10 seconds).

[oceanview]

these prepaid phones should be outlawed - they are a huge security risk.

[Moonman62]

Tracfone has great deals on phones. I hope they win.

[relictele]

we are nevertheless concerned that its ambiguous language may be exploited in a way that will be extremely harmful for consumers and the public at large,” said James Baldinger, outside counsel to Miami-based TracFone.

Gosh, Jim, you're really looking out for us. What a helluva guy. I fell like I should send you a Christmas card or something.

[RichardW]

My wife has a regular contract cell phone and I have a Tracfone. When her contract runs out I am getting her a Tracfone. As long as the service is kept active the minutes (units) roll over. Right now I have about 270 minutes and not due for another card until early March. I figure it is costing me about $10 a month. I've already bought her one and just waiting for her contract to expire and then she gets one too.

I don't get this business of unlocking a Tracfone. I really don't. Maybe overseas but not in the U.S. Doesn't make any sense.

[newgeezer]

“This new regulation may force TracFone and other providers to substantially increase their retail prices for wireless phones

I wouldn't doubt that. TracFone's $20 phones would become a thing of the past. Then again, I have to wonder how much revenue TracFone ever sees from its average $20 phone purchase. We have two of them, and we're paying by the year (~$90). But, there's nothing preventing a person from paying $20 for the phone with its 10 minute card and throwing it away after 60 days of service.