Why Are People Being Sent To Jail For Unlocking A Mobile Phone?

from the bad-news-all-around dept

For a few years, we’ve been covering the various lawsuits over mobile phone unlocking, mostly involving the company TracFone. TracFone focuses on the “prepaid” mobile phone market. That is, rather than selling long term contracts to people with various total minutes, it just sells phones with a certain number of minutes already on them that can then be re-upped at the buyer’s discretion. However, like typical mobile phone service providers, TracFone subsidizes the price of the phone in order to make it seem quite cheap (sometimes as low as $10 or $15). The idea is to hook people and make money on selling the minutes. However, there’s no requirement that people buy more minutes.

What’s happened, of course, is that people figured out a huge arbitrage opportunity. They buy TracFone phones on the cheap, unlock them, and then resell them for a higher price (often outside the country). The problem here is TracFone’s choice of a business model. It decided to subsidize the phones and it set up a business model that doesn’t require people to sign a long term contract or ever agree to buy more minutes. However, if you listen to TracFone tell the story, this is a case of felony interference of a business model, and anyone unlocking those phones must be stopped.

For a while it was abusing the DMCA for this purpose — using it to claim that the unlocking was circumvention of copy protection. Of course, that’s exactly how the DMCA is not supposed to be used — and that was made even more clear when the Library of Congress explicitly carved out an exemption for mobile phone unlocking, making it quite clear that this is perfectly legal. TracFone has whined about this, but it still doesn’t amount to much more than that the company just picked a bad business model.

However, the situation keeps getting more bizarre. Some folks involved in one of these arbitrage opportunities were eventually arrested for terrorism, after US officials assumed that anyone buying so many prepaid phones must be planning some sort of attack (don’t ask). This had companies in the space suddenly claiming that this action of unlocking prepaid phones was a national security threat (seriously). What’s scary is that some officials seem to believe it.

It turns out that TracFone actually is winning a bunch of the lawsuits it’s filing, using both questionable copyright and trademark claims. However, the real kicker is that one man is actually facing jailtime for this. It’s a little unclear from the wording in the article, as the jailtime may actually be as a result of him ignoring a judge’s order to stop the practice of reselling unlocked TracFones — but it’s still not clear why it’s illegal to unlock these phones that were legally purchased. The DMCA exemptions say that unlocking a phone is perfectly legal, and as long as the phone was legally purchased, it’s now the possession of the buyer, who should be allowed to tinker with the software and resell it without having to worry about lawsuits or (worse) jailtime. Yes, TracFone is upset that it wipes out their business model, but the law isn’t designed to protect their own poor choice of business models.

Filed Under: , , , ,
Companies: tracfone

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Why Are People Being Sent To Jail For Unlocking A Mobile Phone?”

Subscribe: RSS Leave a comment
63 Comments
dorpus says:

Re: Re: Not arrested for terrorism

Funny that Techdirt isn’t able to provide such links itself. The Wired article doesn’t answer why the men were arrested in the first place; were they already under investigation for other charges?

We note that in the past, Mike Masnick did plant blinking electronic devices throughout Boston and phoned in a bomb threat to the police, by his own admission. Is there a reason he sides against accusations of terrorism?

http://www.techdirt.com/article.php?sid=20070921/163030&threaded=true

“Re: Do a little more research by Mike on Sep 21st, 2007 @ 8:13pm

uh, I have footage of one going up on a bridge I filmed MYSELF 8 days before the fiasco, and within 45minutes of the police stating they had found “suspicious devices” we called the police and told them what they were, we even tried to send them to the youtube clip we had uploaded the week before. The lady we spoke to took all of the info including the URL, and we called AGAIN 30min later when we heard nothing about it on the news. You my friend are reading the POLICE version of events which is a tad twisted because they look incredibly foolish in the REAL timeline. They actually DETONATED a device AFTER they were found to be nothing more than batteries and LED’s just because the equipment was on scene and the techs wanted to use it.”

Anonymous Coward says:

Re: Re: Re: Not arrested for terrorism

Mmmm, didn’t follow the link, but that quote says he filmed the planting, not did it himself. It also says that they called the police after the police had responded, to say what they were — that’s not the same as if he’d “phoned in a bomb threat.” You’re reaching pretty far.

dorpus says:

Re: Re: Re:2 Not arrested for terrorism

If some random person calls police to tell them “the blinking electronic device you found under a highway bridge is not a bomb”, should the police believe the person and not treat it as a bomb threat? Or should police use common sense and suspect that it really is a bomb, and the person is trying to trick police into blowing themselves up?

Alimas says:

Re: Re: Re: Not arrested for terrorism

That’s your response? Are you serious?
You have no capability to derive a capable response or acknowledgment of your misunderstanding of the situation, so instead you stoop to a completely unrelated and very far reaching character jab at Mike?
If you don’t have anything intelligent to say, at least still avoid anything that makes you seem even dumber.

Hulser says:

Re: Re: Re: Not arrested for terrorism

Dorpus, there’s so much wrong with your post, it’s hard to figure out where to start.

We note that in the past, Mike Masnick did plant blinking electronic devices throughout Boston and phoned in a bomb threat to the police, by his own admission.

1) The quote doesn’t say that the author planted “blinking electronic devices throughout Boston”. It says that the author filmed someone else planting one device.

2) The quote doesn’t say that the author “phoned in a bomb threat to the police”. It says that the author called police to say that it was not a bomb. Regardless of how you think the police should handle a “it’s not a bomb” call, this type of call is just flat out not a bomb threat.

3) The author isn’t even Mike Masnick. First off, the writing style of “Mike” isn’t even like Mike Masnick. Secondly, anyone can put any name they want on the Name field when posting a comment on TD. But you might have noticed that when the real Mike posts, the name appears as a hotlink to TD.

Conclusion: epic fail

dorpus says:

Re: Re: Re:2 Not arrested for terrorism

1) The quote doesn’t say that the author planted “blinking electronic devices throughout Boston”. It says that the author filmed someone else planting one device.

The quote does not deny he planted it either. At the least, it does incriminate him as a conspirator.

2) The quote doesn’t say that the author “phoned in a bomb threat to the police”. It says that the author called police to say that it was not a bomb. Regardless of how you think the police should handle a “it’s not a bomb” call, this type of call is just flat out not a bomb threat.

Suppose a hypothetical anti-government extremist regularly posts articles on his blog railing against laws designed to protect children. Suppose he plants bombs designed to look like electronic toys, so that children are attracted to it and he can maximize casualties, to “prove” that laws protecting children are worthless. He phones police to tell them not to worry, it’s just a toy. Should police not treat it as a bomb threat then?

3) The author isn’t even Mike Masnick. First off, the writing style of “Mike” isn’t even like Mike Masnick. Secondly, anyone can put any name they want on the Name field when posting a comment on TD. But you might have noticed that when the real Mike posts, the name appears as a hotlink to TD.

The self-righteous tone sounds exactly like Mike to me. Remember, this is his blog, so he can manipulate the content however he wants.

BTR1701 (profile) says:

Re: Re: Re:3 Not arrested for terrorism

> > The author isn’t even Mike Masnick.

> The self-righteous tone sounds exactly
> like Mike to me.

Yeah, ’cause the name “Mike” is so unique and uncommon that it can only be Masnick whenever it’s used here.

Are you an actual idiot or just pretending to be one as some kind of lame joke on all the rest of us?

dorpus says:

Re: Re: Re:4 Not arrested for terrorism

Yeah, ’cause the name “Mike” is so unique and uncommon that it can only be Masnick whenever it’s used here.

Makes a nice smoke screen when he wants to post incriminating evidence, heh? As the (apparent) real Mike has just changed the comment to make it look fake.

DanC says:

Re: Re: Re:4 Not arrested for terrorism

Dorpus is basically a “Devil’s Advocate” troll. He’ll take the opposite or unpopular side of a discussion and argue his position using ridiculous logic, flawed evidence, and a string of “what if” stipulations. In the end, almost all of his arguments wind up hinging on bizarre and illogical conspiracy theories.

Anonymous Coward says:

Re: Re: Re:3 Not arrested for terrorism

As I noted above, regardless of what police procedure for such a “don’t worry” report is, it’s not a bomb threat. A bomb threat involves making a threat that you have a bomb and will use it to cause harm, usually unless some ultimatum is met or at least with an attached “this is why I’m hurting you,” explanation.

“This is not a bomb” does not equate to “this is a bomb.”

Hulser says:

Re: Re: Re:3 Not arrested for terrorism

The quote does not deny he planted it either. At the least, it does incriminate him as a conspirator.

So, you completely ignore the fact that your wild accusation that Mike Masnick admitted to planting several “blinking devices” was proven false by some tortured logic about how Mike didn’t deny he didn’t do it? Please. Your position is indefensible.

Should police not treat it as a bomb threat then?

As I said in my post, how they treat this kind of call is irrelevent to whether or not it’s a “bomb threat”. Whatever your motivations are, calling the police to say that an object is not a bomb is not a bomb threat.

The self-righteous tone sounds exactly like Mike to me.

The differences between the writing styles of “Mike” and Mike Masnick are obvious. The only conclusion that I can draw from your posts are that are twisting what you read into what you want to believe.

Remember, this is his blog, so he can manipulate the content however he wants.

In theory, yes he can. But are you actually saying this is what happened? So, on top of the fact that you completely misinterpret some quote by a person posting as “Mike” to justify your accusation that Mike Masnick admitted to planting the Boston devices, you’re now accusing him of manipulating the comments sections without noting so? If he accidentally posted his “confession”, don’t you think that Mike would have just deleted the post or changed the name rather than removed the hotlink? I think you’re due to replace the tinfoil in your hat.

Mike (profile) says:

Re: Re: Re: Not arrested for terrorism

We note that in the past, Mike Masnick did plant blinking electronic devices throughout Boston and phoned in a bomb threat to the police, by his own admission. Is there a reason he sides against accusations of terrorism?

Uh. Actually, you should note that comment was not from me. Note that when I comment I link back to Techdirt. That Mike did not.

Nice try, though.

DanC says:

Re: Re: Re: Not arrested for terrorism

Funny that Techdirt isn’t able to provide such links itself.

Techdirt, as you well know, tends to use self-referencing links to stories due to the varying retention periods of news sites. The original article referenced the Baltimore Sun, where the article apparently no longer exists.

The Wired article doesn’t answer why the men were arrested in the first place; were they already under investigation for other charges?

According to USAToday, they were arrested for “collecting or providing materials for terrorist acts and surveillance of a vulnerable target for terrorist purposes.”

We note that in the past, Mike Masnick did plant blinking electronic devices throughout Boston and phoned in a bomb threat to the police, by his own admission. Is there a reason he sides against accusations of terrorism?

So, having been proven wrong, you have to try and find some other way to discredit Techdirt. Never mind the fact that the comment wasn’t actually from Mike…

dorpus says:

Re: Re: Re:2 Not arrested for terrorism

According to USAToday, they were arrested for “collecting or providing materials for terrorist acts and surveillance of a vulnerable target for terrorist purposes.”

Your USA Today article also says “Authorities said they found airplane passenger lists and information on airport security checkpoints along with the cash and cellphones in the car.”

If we are to believe that the men were just re-selling cell phones, why would they have airplane passenger lists and information on airport security checkpoints?

As we know, law enforcement agencies such as the FBI do routinely charge mafiosos with lesser crimes if they do not have sufficient evidence for greater crimes. The FBI could have chosen not to reveal what it really does know about them, and their links to other terrorists.

DanC says:

Re: Re: Re:3 Not arrested for terrorism

Your USA Today article also says “Authorities said they found airplane passenger lists and information on airport security checkpoints along with the cash and cellphones in the car.”

After a quick investigation, I discovered that the USAToday article has a typo. The relevant paragraph should have read:

In another case, two men from Michigan were released from jail Tuesday — the same day a prosecutor in Ohio dropped similar charges against them. They were arrested with a dozen cellphones, passenger lists, and $11,000 in cash during a traffic stop Aug. 8.

In other words, a somewhat similar but separate case.

I’m confused as to what point you’re trying to argue now. You originally asserted that they weren’t arrested for being suspected terrorists, when in fact they were. Now you seem to be arguing that they actually were terrorists, which isn’t really relevant to the topic, since they were never prosecuted for it.

dorpus says:

Re: Re: Re:4 Not arrested for terrorism

In other words, a somewhat similar but separate case.

In other words, several Palestinians in Michigan have been seen trafficking cell phones, and one of them had passenger lists and information about airport security checkpoints. Should the FBI have treated them as completely separate cases, and refused to believe there was any terrorist activity going on? If the Mackinaw bridge got blown up, will Techdirt have posted its rants on “intelligence failures”, “government stupidity”, and how “evidence was staring at them in the face”?

I’m confused as to what point you’re trying to argue now. You originally asserted that they weren’t arrested for being suspected terrorists, when in fact they were.

I originally said Techdirt failed to provide a working link, which is still true.

Now you seem to be arguing that they actually were terrorists, which isn’t really relevant to the topic, since they were never prosecuted for it.

If Techdirt failed to mention that other Palestinian men in the area were arrested while having passenger lists and airport security information, then that is lying by omission.

DanC says:

Re: Re: Re:5 Not arrested for terrorism

I originally said Techdirt failed to provide a working link, which is still true.

Techdirt linked to one of it’s own articles from August 2006, which in turn has a now non-working link to the Baltimore Sun. So, yes, the linked article from 2006 had a dead link in it. However, you only raised that point when you were proven to be completely wrong on the reasons the men were arrested.

If Techdirt failed to mention that other Palestinian men in the area were arrested while having passenger lists and airport security information, then that is lying by omission.

Lying about what, exactly? About the conspiracy that the FBI couldn’t provide any evidence to support? Or are you relying on the ultra-secret non-disclosed evidence that nobody knows about? It should be noted that even the men with the passenger lists were not charged with any terrorism related charges either. I’m not saying that those incidents should not have been investigated, but if there’s no evidence to support the charge they were arrested for, then they probably shouldn’t have been arrested in the first place.

dorpus says:

Re: Re: Re:6 Not arrested for terrorism

Techdirt linked to one of it’s own articles from August 2006, which in turn has a now non-working link to the Baltimore Sun. So, yes, the linked article from 2006 had a dead link in it. However, you only raised that point when you were proven to be completely wrong on the reasons the men were arrested.

My original post questioned the authenticity of Techdirt’s claim, to which other bloggers (but not Techdirt itself) responded. Was it completely wrong for police to arrest cell phone traffickers on suspicions of terrorism, when other men in the area had been arrested for doing so along with the passenger lists and airport security information?

Lying about what, exactly?

Failing to mention the context of the suspicion.

About the conspiracy that the FBI couldn’t provide any evidence to support? Or are you relying on the ultra-secret non-disclosed evidence that nobody knows about? It should be noted that even the men with the passenger lists were not charged with any terrorism related charges either. I’m not saying that those incidents should not have been investigated, but if there’s no evidence to support the charge they were arrested for, then they probably shouldn’t have been arrested in the first place.

It is up to the FBI’s discretion to disclose what they know or don’t know. Investigating organized crime is a complex art.

DanC says:

Re: Re: Re:7 Not arrested for terrorism

Was it completely wrong for police to arrest cell phone traffickers on suspicions of terrorism, when other men in the area had been arrested for doing so along with the passenger lists and airport security information?

It should have been an investigation, not an arrest. The real problem was that after it was revealed that there was no evidence linking them to any terrorist groups, they were charged with fraud, despite the fact that what they were doing wasn’t illegal.

Lying about what, exactly?

Failing to mention the context of the suspicion.

However, since the actual charge was for fraud, which was what the linked article was actually concentrating on, the actual impetus for the arrest was a minor fact and irrelevant to the point the article was making, i.e. unlocking and reselling phones isn’t fraud.

It is up to the FBI’s discretion to disclose what they know or don’t know. Investigating organized crime is a complex art.

So, yes, you’re basing your assumption that the men in fact were terrorists on hypothetical evidence that the FBI has stated doesn’t exist.

DanC says:

Re: Re: Re:3 Not arrested for terrorism

If this blog wants to side with criminals and terrorists who say they aren’t criminals or terrorists, then they will receive a harsh lesson in reality.

Except that nobody has said anything even remotely close to what you’re alleging.

The terrorism charges were dropped due to the nonexistence of any evidence linking the men to terrorist groups or activities. You seem to be saying that amassing a quantity of cell phones should be considered a terrorist activity, despite the fact that there’s nothing illegal about it.

Do you have anything other than wild speculation and conspiracy theories to base your opinion on?

PaulT (profile) says:

Stupid...

I bought a mobile phone in Spain a few weeks ago for €49 – not the cheapest by a long shot but almost disposable at that price even so. However, I also had it unlocked so I could use a UK sim card when I’m in the UK. My flatmate had his phone unlocked so he could use 2 sim cards – one that had better deals for local calls, the other had better deals on international texting.

Nobody here would claim it’s to do with “terrorism”, it’s just taking advantage of a way to save money. The phone companies could stop this by offering better deals (in my case, better roaming costs. In my flatmate’s case, better international rates). So, a business model issue all around.

It’s a shame that greedy companies like TracFone are not only incapable of admitting a serious flaw in the way they do business, but are also intent on cheapening both the few good aspects of the DMCA and the threat of terrorism in order to protect profits. Especially when it results in unnecessary costs for the taxpayer and loss of liberty for innocents in the name of “security” so they don’t have to rethink their own strategy.

Paul says:

It's Stealing

TracFone’s T’s & C’s mention that it is verboten to activate one of their phones with another carrier, but I can’t find language forbidding unlocking them.

So it may be technically legal for people to unlock them (they should not be prosecuted if it is).

But unlocking them is still stealing from an ethical standpoint, and thereby still wrong.

GeneralEmergency (profile) says:

Re: It's Stealing

…TracFone’s T’s & C’s mention that it is verboten to activate one of their phones with another carrier…

What do you mean -their phones-?? The purchase reciept documents this phone the purchaser’s sole and complete property, not TracPhone’s.

They can write T&C’s till they’re blue in damn face. The T&Cs aren’t worth the paper they are written on in respect to the hardware. The T&Cs can ONLY effectively apply to the carrier’s service.

Anonymous does not Forgive says:

Re: It's Stealing

Buying their phones and unlocking them is by far NOT stealing. the phone is paid for with the price they ask for, whether or not they get fair return is not our concern as consumers, they offer the item, we buy it, we OWN it. When you own something like that you are free to do as you wish with it, its your property. Thats almost like telling someone who purchases a new computer that they cant install or remove things from it that they don’t like. Tracphone just screwed themselves with a crappy business model, plain and simple, no STEALING involved.

Anonymous Coward says:

WOW, Mike, come on

“Muhammed Mubashir, 27, pleaded guilty in May to criminal contempt charges for disobeying a federal judge’s order in Houston that he stop trafficking in Virgin Mobile phones. “

There is a difference here…he should have fought the order, won, then started again.

Did anyone read the actual article, not just Techdirt’s glamourized headline…We expect better of Techdirt.

Anonymous Coward says:

Re: Petition to stop the Dorpus

Ok, I confess, I’ve been feeding him, but it’s been entertaining on an otherwise dull Monday morning.

Everyone knows he’s full of carp, so there’s no harm letting him spew his nonsense. Blocking him would be bad prescedent to set, though: if we tried to block all the idiots out there…

barrenwaste says:

Dear Porpise...um dorpus

In this case, where starting a new tab and searching TracFone is so difficult, you are absolutely correct, not including a link was criminally remisce. I also agree that since a group of guys were arrested, but convicted of nothing, for having a bum load of phones, PASSANGER LISTS, AND AIRPORT SECURITY INFORMATION, that anybody with a bum load of phones should be automatically arrested. I mean, it’s obvious that since crimes can be comitted with cell phones that anybody who has multiple cell phones is suspicious.

Wait….this isn’t a communist state, not till Obama takes over anyway, so what the heck am I saying? Porpise, please use common sense and try to at least fake having an understanding of our legal system before spouting your blowhole.

Reason (user link) says:

Re: Dear Porpise...um dorpus

A few quick hypotheticals:

If I have a scrap of paper which has the flight numbers and names of people I am picking up from the airport, does that constitute a “PASSENGER LIST”?

If I have a pamphlet stating the restrictions to fly, for example, one that outlines the amount of liquids permissible, does that constitute “AIRPORT SECURITY INFORMATION”?

It is not hard to see how such ‘evidence’ can easily be created now, is it…

Tony says:

Forget about Dorpus. Someone explain to me how TracFone got away with this.

An innocent man went to jail and no one is even talking about that.

Techdirt is an awesome blog that shares shocking events like these with the world. However, I would like to see Techdirt/Mike do more than talk by taking some sort of appropriate action. It would be even better if the community took this story to heart and organized a protest against an injustice thats becoming more and more common. I would even settle for a follow up post on how that man was actually proven innocent (should that happen.)

The point is: It would be nice to see true justice served in legal issues like this.

barrenwaste says:

RE: Tony

I agree, Tony, it would be nice to see the innocent vindicated. That said, Mike is doing his part. His stories are his way of taking action. You can’t protest, lobby, discuss, and/or debate topics that you have no knowledge of. Mike makes sure that said information reaches enough people to make a difference. Whether you are for or against Mike’s latest crusade, it can’t be said that his service is inefectual.

Omar S. says:

Isn't TracPhone a MVNO?

I am pretty sure that with the devise of several MVNOs over the last few years, that it’s been proven that the reseller/MVNO business model doesn’t work.

Give it up TracPhone. Trying to make quarterly earnings by suing customers back to using your service isn’t a way to increase customer revenue. Unfortunately, your reliant upon customers by virtue of your business model. You can only increase subs organically. Not good!

m0 says:

bah, more of the same from Corp. Amerika

“Yes, TracFone is upset that it wipes out their business model, but the law isn’t designed to protect their own poor choice of business models.”

Lol, tell that to Bear/Stearns, FreddieMac, FannieMae, and IndyMac…..it’s only individuals that make bad decisions apparently, business gets all kinds of protections/bailouts, especially the more ILLEGAL their activity, IE: AT&T

jogi says:

It is outright stealing

The company is thinking of its customers. Taking on the cost of a cell phone so that we can buy it for cheap. Even their minute plans aren’t that bad. A whole lot better than a monthly $50.00 bill from a $29.99 T-mobile plan.

But like with everything else there is always somebody out to make easy money on somebody elses back. What entitles you to buy tracfones, which are clearly subsidized for normal users, tinker with a few things, sell and keep profit? This is plain and simply a loophole abuse that will end up having us normal tracfone customers having to pay for it one way or another.

Anonymous Coward says:

“Give it up TracPhone. Trying to make quarterly earnings by suing customers back to using your service isn’t a way to increase customer revenue. Unfortunately, your reliant upon customers by virtue of your business model. You can only increase subs organically. Not good!”

Obviously they are suing blatant abusers. Which I am sure have no interest in buying minutes for 20something phones they buy. These people are not customers.

Leave a Reply to dorpus Cancel reply

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Ctrl-Alt-Speech

A weekly news podcast from
Mike Masnick & Ben Whitelaw

Subscribe now to Ctrl-Alt-Speech »
Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...