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CCA asks the Copyright Office to support legal unlocking of mobile devices

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May 27, 2015

The U.S. Competitive Carriers Association (CCA), which represents smaller regional and rural wireless carriers, is petitioning the Copyright Office to support the legal unlocking of mobile devices.

The idea was originally planned in January but it only was finally approved in mid-April.

The issue is near and dear to the hearts of CCA's carrier members, as customers looking to leave the larger mobile carriers often need to have their devices unlocked in order to switch to another provider.

The CCA said it strongly supports an exemption that would allow U.S. consumers to unlock all of their devices that connect to a wireless network.

"Because this proceeding is forward-looking, an exemption should allow consumers the ability to unlock any relevant wireless device, and not be subservient to the will of any single mobile carrier or manufacturer," wrote Michael Lazarus, managing member of Telecommunications Law Professionals PLLC on behalf of the CCA.

"Additionally, and as directed by Congress, the exemption should not limit who may provide assistance to unlock a wireless device, and therefore should allow an agent of the consumer, whether it be another person or a wireless provider, to perform the unlocking procedure, just as a locksmith may unlock an individual’s car or home when they do not have the necessary key.”

In January of 2013, the Copyright Office had made unlocking a cell phone illegal in some circumstances. The decision was taken to help reduce large-scale phone trafficking but left a chance that consumers could still face some penalties for unlocking their devices.

The fines could range from a minimum of $2,500 to $25,000, and up to five years in federal jail.

At the time, more than 100,000 consumers signed a petition imploring President Barack Obama to make unlocking legal again. The FCC agreed to investigate the matter further, and in July of last year Congress unanimously approved a new bill that made it legal to unlock phones.

The Copyright Office is in the process of reviewing its present rules and could move to revise those rules soon.

In a statement, CCA President Steven Berry said that the decision to extend the unlocking exemption should be an easy one for the Copyright Office.

"Congress further demonstrated its support for the unlocking scenario by passing a bill that the President signed last year," Berry wrote.

"There has been near universal support for the exemption, and unlocking clearly benefits U.S. consumers and competitive wireless carriers, especially smaller carriers who still have trouble accessing the latest devices. I encourage the Copyright Office to recommend to the Librarian of Congress adoption of the unlocking exemptions proposed by CCA,” he added.

In other mobile news

AT&T announced today the completion of its Nextel Mexico acquisition, including the company’s wireless spectrum licenses, network assets, retail stores and all of its subscribers in Mexico. Valued at $1.875 billion after about $427 million of various adjustments, the transaction will merge Nextel Mexico with Iusacell, another Mexico wireless carrier that AT&T acquired for $2.5 billion earlier in 2015.

With the combined presence in Mexico, AT&T intends to create a “North American mobile service area” capable of covering more than 400 million customers in the United States and Mexico.

AT&T named Thaddeus Arroyo, CEO of AT&T Mexico, in charge of the combined company.

The North American mobile service segment has already begun to materialize partially as AT&T has added unlimited calls to Mexico to many of its consumer plans.

AT&T’s decision to move into the Mexican wireless market happens today, just as dominant incumbent carrier America Movil has been divesting its wireless assets in accordance with new federal regulations.

Part of those regulations included AT&T selling its stake in the company for $5.57 billion to Carlos Slim.

In other mobile news

T-Mobile CEO John Legere says the company is still open to a merger, and this time it is looking to some of the larger cable U.S. TV players as a possible partner. During an earnings call yesterday, Legere said that consolidation of the wireless industry was inevitable, and that we now need to get used to that reality sooner rather than later.

"It's not a matter of if but when," Legere added. "I still reiterate that in 5 years or less, we will probably think it's funny that we thought about the industry structure as the four major wireless carriers, but basically that's what it is."

On that note, Legere said that T-Mobile and the cable players were complementary to each other.

"You simply need to think about the cable industry and players like us as not competitors but potential industry partners, and alternatives for each other in the future," he added.

Legere made the comments in response to a question about whether the FCC's recent blocking of the Comcast-Time Warner merger had affected how he thinks about the industry's consolidation.

After AT&T's failed attempt to acquire T-Mobile a while back, Softbank and Sprint made an attempt for T-Mobile as well.

Sprint finally abandoned its bid as well, after wireless industry regulators came out firmly against narrowing the field to just three major carriers in the United States.

Legere pointed to Google's recent foray into the wireless service provider market with Project Fi as an indication that the industry is clearly diversifying.

AT&T's CEO said that as the border line between fixed and wireless broadband begins to blur there is broader set of potential partnerships, more integration and more mergers that the U.S. could be looking at, noting that the market "will see consolidation of a much broader set."

In other mobile news

It's now official: after about 18 months of rumors, the Apple Watch finally begins shipping today. Steve Jobs would have been proud.

On this important date, mobile app developers and companies of all sizes are scrambling together to be the first apps popping up on those small 1.32 inch displays.

The app store for the Apple Watch, which opened just yesterday, already has 3,000 apps, and it's increasing rapidly according to some observers.

That pales in comparison to the 1.2 million mobile apps the App Store contained as of last summer, but the volume of Watch apps will quickly expand, it is largely expected.

Some of the first apps for the Watch are from travel companies like PriceLine and Expedia. Analysts believe those types of apps could see a boost in relevance from Apple’s new device.

According to Strategy Analytics, travel apps represent a higher percentage of early Watch applications than more dominant categories like gaming, meaning those apps could benefit from early launches into a less crowded market and from a closer relationship to the 'ideal' primary purpose of a smartwatch.

“As a direct result, lesser utilized and downloaded categories which are focused on lifestyle improvement will be in direct alignment with the Apple Watch's use case and see increased usage and reliance as a result,” according to Strategy Analytics.

It helps that the Apple Watch is off to a roaring start. Carl Howe, principal at Think Big Analytics and former Yankee Group analyst, estimates the Apple Watch will ship more than 3 million units and see more than $2 billion in revenue in the first two weeks.

He sees those sales figures go up on the strength of strong demand for the higher priced Apple Watch edition.

With the Watch just starting to reach some consumers in larger numbers, the device’s app store has yet to generate a top charts section.

But Watch apps to get early preferential placement in the store include Twitter, Instagram, Uber, Shazam and Amazon.

In other mobile news

Funds stored in Google Wallet are now insured by the government. According to a report from Yahoo Finance, money stored in Google's Wallet is FDIC insured up to $250,000.

The news should help appease fraud concerns from consumers and wireless users that are leery in using the service without any form of protection.

While Google's user agreement says that money balances are not FDIC-insured, a Google spokesperson has confirmed for Yahoo that the company's policy was changed today.

Google is apparently holding Wallet funds in multiple FDIC-insured banks. In the event that anything were to happen to one of those financial institutions, the funds would be safe, the FDIC says.

News that Google is insuring Wallet users' funds is significant, as competing services such as PayPal and Venmo do not offer any FDIC insurance, and don't plan any in the foreseeable future.

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Source: The U.S. Competitive Carriers Association.

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