Does the Unlocking Consumer Choice and Wireless Competition Act confer a right to unlock a phone one owns, or merely limit the scope of the DMCA?

Question

Smart phones come in two different kinds: locked, and unlocked. A locked phone has been modified from its original design, in its software, hardware, or firmware, to only accept cell service from a specific provider. The provider sells these phones at a discount to a consumer, because the provider believes that the provider will make up the difference in price later when the consumer is forced to use the provider's phone plan.

Ordinarily, circumventing the technological restrictions which prevent the user from accessing cellular networks other than the provider's would violate the DMCA. However, the Obama administration signed a law in 2014, creating an exception within the DMCA that permits users to circumvent technological restrictions for the purpose of unlocking their phones. This is called the Unlocking Consumer Choice and Wireless Competition Act.

But, many companies still sell locked phones, and they are not keen on people unlocking them. They put notices on the packaging of locked phones, stating that by buying the product the consumer implicitly agrees to their terms of service. Their terms of service state that the user is not allowed to unlock the phone, and that the user agrees that this action would financially harm the company. This presumably means that the company can sue the user (or, perhaps, a tech repair shop that unlocks the phone for the user) for financial damages if the user unlocks the phone.

My question is: is this really legally enforceable? If the DMCA explicitly says that the DMCA cannot be used to prevent someone from unlocking a phone, can cell phone service providers get around this by placing a notice on the package that says the customer, through the act of purchase and through the use of the phone, is implicitly agreeing to terms of service that restrict and make the user liable for financial damages to the company if he unlocks the phone?

Answer 1

It does not give you a right to breach a contract

First, opening the package doesn’t “implicitly” bind you to the ToS, it explicitly reminds you that you already are. As these phones are exclusively sold as part of a plan, you will have signed the ToS before you get given the phone.

The Act only makes unlocking not a copyright violation. It is explicit that:

Except as expressly provided herein, nothing in this Act shall be construed to alter the scope of any party’s rights under existing law.

So, contractural rights are unaffected. If you break your contract, you can be sued. A person who unlocks the phone at your request can’t be because they are not party to the contract, however, you are still in breach for causing it to happen.

Of course, once your contract with your phone company ends, you can unlock the phone without breaching that contract.