Tracfone: Without The DMCA, We're Nothing

from the lawyers-running-the-company dept

When the Library of Congress and the Copyright office released their latest list of exemptions from the DMCA anti-circumvention rule, the ability to unlock mobile phones was included. This means consumers can remove the software locks on their devices that prevent ones sold by one carrier from working on another's network. Operators use the locks in order to try and protect the subsidies they spend on devices, which lower their cost to consumers. For quite some time, operators have been saying they want to end these subsidies, but they've really done little to actually do so -- since they allow for the use of locked handsets and contracts with high early-termination fees that serve as significant obstacles to customers who want to change providers. Adding handset locks to the DMCA exemptions probably won't have a huge impact, but it could allow some users to change operators at a lower cost (contract fees and ETFs notwithstanding). However, prepaid provider Tracfone says that the ruling will undermine its business because people will simply buy its cheap, no-frills handsets, unlock them, and take them to another provider. Their devices are prepaid, so there's no contract and no ETF, and hence no way for them to guarantee their subsidy. Unsurprisingly, the company is considering suing to get the exemption overturned, nicely following its history of using the DMCA and copyright lawsuits to protect its business model. Once again, this is exactly how the DMCA is not supposed to be used. It sounds more like Tracfone's got a flimsy business model that can't work without special legal protection: after all, most prepaid operators minimize or eliminate their device subsidies because they have no way to guarantee that users will spend enough to recoup the expense. In the end, though, Tracfone and other operators should still be able to try to prevent users from unlocking their phones contractually -- there's no need to rely on the DMCA, so in actuality, this ruling may not carry a lot of meaning.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    a man, Dec 4th, 2006 @ 11:32am

    why should the consumer be forced to remain with a carrier if s/he can get a better deal elsewhere?

     

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  2.  
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    contract, Dec 4th, 2006 @ 12:12pm

    cause you made a deal.

     

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  3.  
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    Aaron, Dec 4th, 2006 @ 12:12pm

    Tracfone isn't forcing users to stay. Quite the oppisite, they are a disposable cell phone company. Tehy are saying we are selling you these chea @$$ phones at an artificially low price, they can just use tracfone minutes.

    It is like Microsoft taking a loss on the XBox console, and then making money because it will only play Xbox games.

     

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  4.  
    identicon
    The infamous Joe, Dec 4th, 2006 @ 12:14pm

    Oops!

    Wait, I wasn't supposed to undo all the crippling effects that Verizon, in Their infinite wisdom, placed on my Motorola v710?

    http://en.wikipedia.org/wiki/Motorola_V710 if you're curious.

    I always forget that in this day and age just because I buy something doesn't mean I own it. Meh.

     

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  5.  
    identicon
    Al Beeman, Dec 4th, 2006 @ 12:28pm

    Great news!!!!

    Crippling known phone models is deceptive and dishonest. When I buy known model phone it should work the way the manufacturer says it does with all the features built into it.

    Vote with your feet, don't use Verizon until the stop the lowlife practice that they stupidly use and thereby give themselves a bad and dishonest name/image!

    THANK GOODNESS FOR THIS RULING!

     

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  6.  
    identicon
    tim, Dec 4th, 2006 @ 12:48pm

    Re: Great news!!!!

    What if Verizon is the only cell phone service that will actually work well in your town?

    They sell Tracfone's in the Walmart here, but they don't actually work in the Walmart, it's a "feature".

     

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  7.  
    identicon
    sysadmn, Dec 4th, 2006 @ 12:52pm

    Contractually?

    Not sure how Tracfone would enforce the limits contractually. When does acceptance of the contract take place? On purchase? On first use? If I never activate the phone, have I accepted a contract? This could be the first real test for "shrink wrap contracts" on hardware. I suspect they'll try all three approaches: overturn the DCMA exemption, set up a legal barrier via a "contract", and simultaneously asking vendors for phones that can't be unlocked.

     

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  8.  
    identicon
    Anonymous Coward, Dec 4th, 2006 @ 12:53pm

    bad verizon? huh? i have verizon, and it works great. then again, i haven't tried all the fancy things you can do with a cell phone (my bill is high enough already)

    but, it's tracfone's fault, right? they sell phones as a loss leader, and make it up with their minutes charging. the xbox thing is close tho. ms, sony, nintendo sell the consoles at a low price, and make up money on the games and accessories they sell. however, this law would be like saying you can hack your old xbox to play 360, ps3, and wii games on it. thus, ms would lose money because you buy ps3 and wii games as well. (but then again, you'd buy 360 games and the company wouldn't lose money on a console)

    humm...my head hursts now.

     

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  9.  
    identicon
    gdwntx, Dec 4th, 2006 @ 1:06pm

    Re:

    !!! CONTRACT!!! YOU BIG DUMMY!! HIGH TERMINATION FEES!! IF YOU DON'T PAY IT YOU GET BAD CREDIT!!

     

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  10.  
    identicon
    Coward, Dec 4th, 2006 @ 1:11pm

    Yes, bad Verizon

    the V710 should have been usable for many of the fancy things you should be able to use cell phones for, without paying the carrier.

    The idea was to transfer ringtones, photos, other media, and such over bluetooth instead of the carrier network. Verizon obviously didn't think your cell phone bill was high enough, so they locked the bluetooth down to drive network revenue.

    I came out ahead. I moved into an office building where Verizon didn't have coverage and used the class action lawsuit to get the money back on my 1 year old phone. This is after having hacked it to enable the missing features.

     

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  11.  
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    spoon?!?!, Dec 4th, 2006 @ 1:17pm

    And...

    Dudes (and dudettes):

    Unlocked Japanese 4G cellie + MetroPCS = ^^

     

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  12.  
    identicon
    brian renn, Dec 4th, 2006 @ 1:23pm

    it is about time

    First of all, who in there right mind would go buy a crappy tracfone and unlock it to use it with another service? i have a tracfone that i use when i am offshore...and it sucks. there is not a single feature i like about it. tracfone provides a wireless service first and phones second. having a nice tracfone is like having a nice piece of poop.

    I have always hated how companies try to get you to go to their wireless service by offering a special phone that only works with their service and a lot of times all of the features of the phone are not enabled, like the treo 650 deal.

    I want to pick my phone and my service not have to choose which company has less checks in there no column.

    Cheers for the consumer...screw the corporations!

     

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  13.  
    identicon
    William, Dec 4th, 2006 @ 1:30pm

    Phones

    So we should start seeing the phones cost more with no ETF and you can go to any carrier. The added competition should also drive down the cost of service which is a good thing. Even though you will have to shell out more for the phone.
    And why the heck does it cost 10 cent to send a TXT MSG biggest rip off in the history of the world those should be free.

     

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  14.  
    identicon
    gdwntx, Dec 4th, 2006 @ 1:33pm

    Re: it is about time

    I use my phone as a phone so i don't care about all the other crap anyway.

     

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  15.  
    icon
    chris (profile), Dec 4th, 2006 @ 1:51pm

    i wonder if you can unlock a jitterbug

    http://www.jitterbug.com/promotions/101106_landing.asp

    it's a mobile for retards that looks like it's made by fisher-price. the TV commercials feature old people using their phones and smiling. it's hillarious.

     

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  16.  
    identicon
    krum, Dec 4th, 2006 @ 1:53pm

    MVNO

    Tracfone doesn't even own their own network, they're resellers of Cingular and T-Mobile so I'm sure they're upset since they only make money off of they're crappy service. Other than that, this ruling doesn't change much. Cingular and T-Mobile have always given you the unlock code for your handset after you've used it with them for 90 days. Unless you pay full price for the phone, then they'll give it to you in 24 hours. And, neither of them disable any of the Bluetooth features on their handsets.

     

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  17.  
    identicon
    Anonymous Coward, Dec 4th, 2006 @ 2:16pm

    Re: i wonder if you can unlock a jitterbug

    Yikes! those rates are crazy expensive. If that sort of thing looks like it might work for you (that is, if you don't use very minutes) then take a peek at VirginMobile. Virgin's rates are - at worst - half of what this jitterbug ripoff charges. Virgin has a lot of faults inlcuding annoyingly locked devices, but it is much closer to a true pay as you go service - no monthly fees and minutes never expire.

     

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  18.  
    identicon
    Stu, Dec 4th, 2006 @ 3:28pm

    I wanted to buy a tracphone - for emergency use only, since I have no other use for a cell phone.

    When I saw the bit about expiring minutes, I said . . . no thanks. My minutes would always expire, unless I had an emergency.

    It's not enough for them to have your prepay? Screw any company that has expiring minutes!

    It's just a baseless money-grab. There's no other reason for it.

     

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  19.  
    identicon
    Alan Saxon, Dec 6th, 2006 @ 8:04am

    Mobiles to networks and vice versa

    When will all these quick-time millionaires running and fleecing the public finally realise the boom for tying their hands and feet to a particular supplier/network is FINALLY OVER.

    It won't work any longer

    Get used to the new found freedom that the public want.

     

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  20.  
    identicon
    E B, Dec 16th, 2006 @ 9:11pm

    Re: expiring Tracfone minutes? not mine.....

    I previously used Tracfone just for emergency, and basic device hardware. (the Nokia small blue 'candybar' model--I don't need ringtones or color screen, or other junk not related to phone calls. ) See below how minutes DON'T easily expire--only service units do......2 different concepts, the service units are the underlying per-purchase promise of service over a time frame you select via card purchases.
    Phone & coverage works GREAT. Free Voicemail. Good battery life. So now I use it as my regular cell phone. Good coverage, better than Virgin in the western states; CA, CO, UT, WY, AZ, etc. I drive long distances through these areas--very rarely have service drop out except canyons in remote areas. Also better than fellow traveler's Cingular service--I can call, they can't get signal?
    THE KEY: Get the SINGLE RATE MODELS(s)!! Not obvious: Not always printed on package in stores. Search Tracfone site to see which ones. (only about 3 have "Single Rate status".) All others models charge roaming rate of 1-minute-equals you pay-for TWO mins.!. Single rate phone, however, always same low rate even when phone is roaming outside your home area. Remember actual Rate is a function of how you select your refill cards: BUY at the start, the Double minute/1Yr card. Purchased minutes never expire: but your 'service units' DO--and if you don't get more service units within 60 days of expiry, THEN, only then, you could lose banked minutes. So be sure to purchase cards wisely; can load up to just over 700 days of service IF you combine the right cards (don't buy high end-cost 20 & 40 dollar cards that have puny accompanying SERVICE units on them......only 60 serv. units on these...) The proper purchase of cards means 10-12 cents per minute calls. Since the screen ALWAYS tells you your due date for SERVICE days/units, you have no excuse to risk losing your minutes, just get more units on time. (grace period is nice.) Read the fine print.....save money. Don't fall for the 'pretty' models w/ low battery life--go for Single rate. T'fone counts on most buyers falling for the slightly cooler models, and these roaming-rate ones subsidize the few single-rate no-bells-no-whistles ones. Only Con is that Tracfone so widely used (and to good effect if you pay attention)-the website is sometimes slow, but not always. Anyway you can input refill cards direct on phone now. A happy (wise) user.

     

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  21.  
    identicon
    Fritz K, Jan 1st, 2007 @ 5:12pm

    Re: expiring minutes?

    I have never heard of expiring minutes & have had a Tracfone for 4 years now (for emerg. use). I keep accumulating minutes over time because I have to renew service once a year AND must accept 250 more minutes. Where can I learn more of "expiring minutes"? Thank You Fritz

     

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  22.  
    identicon
    Steve L, Mar 11th, 2007 @ 10:32am

    Re: Re: expiring minutes?

    Your minutes only "expire" if you do not add additional "airtime", in your case your 1 year service cards. As long as you keep "airtime" active on your phone, your minutes will not expire. If you don't keep your "airtime" up to date on the phone, well, it defeats the purpose of an emergency cell phone anyways and all the unused minutes go poof as well. $99 bucks a year for an emergency cell phone that you can occasionally talk for 2 to 3 minutes on when needed isn't that bad of a deal. My wifes phone is up to over 700 minutes now, and tracfone had a deal to get a reconditioned motorola v170 free with the purchase of the yearly card, so she got a newer phone out of the deal as well this year.

     

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  23.  
    identicon
    Suzie Kal, Jul 29th, 2007 @ 5:25pm

    Re: i wonder if you can unlock a jitterbug

    It may seen rather rediculous however I'm 40 years old and have extreme vision problems. Do you know of any one who can unlock a Jitterbug?

     

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  24.  
    identicon
    danetta cordova, Nov 24th, 2007 @ 11:50pm

    tracfone Sucks

    I used my cheap phone for its purpose-just for emergencies and such. for more than 2 yrs in WA just fine. But when I moved to CA and changed the phone #, I hit a wall of problems. Their customer service SUCKS. I have wasted 20+ hours going over the same info. with these morons. Basically they keep giving me new #s that do not work, then they have promise to fix it, which has happened maybe 6 times in the 5 months I have lived here! I finally found out they buy a block of phone #s from a local provider here, and they just have to email that # in to them so I can have my phone work. They still have not done it. If anyone is suing them let me know!

     

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  25.  
    identicon
    Rick, Jul 10th, 2008 @ 9:09am

    Ten Million Subscribers

    Tracfone now has around 10 million subscribers. Over the last few years they have been the fastest growing major cell phone company in the US. Their customer service is terrible but what do you expect when you buy a $15 phone and $20 worth of minutes? If you are haveing a major problem with the phone buy another one and sell the one you have on FleeBay. I will put up with terrible customer service when I do not have a $200 fee to break my contract.

     

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