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Tracfone Wins Against Phone Unlockers

TracfoneTracfone, the largest prepaid carrier in the U.S., has been suing companies left and right that have been buying their subsidized phones en-masse, reflashing the software on the phones, and reselling the phones somewhere else at a profit. That cuts into Tracfone’s bottom line, so they used the courts to sue companies that are doing it. And apparently, they’ve won several of these lawsuits.

Normal phone unlocking is usually fairly straightforward. On most recent Nokia devices, you usually enter a code on your numeric keypad that erases the SIM lock for a device. It’s a well-known enough process that sites have code generators available that you enter in some information and a code pops out that will unlock your phone. Other devices may require special hardware to unlock the device, including Nokia phones where you have entered the unlock code erroneosuly too many times.

Unlocking the phone so it accepts a different SIM is one issue. Like many carrier-branded phones, Tracfone’s phones have specific customizations for their service. Unlike with most carrier-branded phones, which do not generally inhibit you from using the phone on a different network, Tracfone phoners contain special software  to manage the prepaid units you have available. The way the software works makes the phone incompatible to use on any other network. Conversely, you will not be able to use any unlocked handset with Tracfone as that special software is required.

The only way to make Tracfone phones usable on other networks is to use specialized hardware to reflash the phones. Phone flashing hardware is fairly unique to each handset model and it’s not something the manufacturers give to just anyone. My guess is that these companies are either using illictly obtained hardware to do the flashing or are using flashing hardware that was reverse-engineered.

While it’s no secret I am not particularly fond of subsidized handsets, nor am I particularly fond of the way Tracfone locks down their handsets, Tracfone is well within their rights to run their business in this manner. If companies are taking advantage of this illegally, Tracfone should be taking them to court.

I am trying to figure out what exact laws were broken here. My guess is a combination of fraud laws–the “resellers” are unbranding the phones and selling them as “new”–and DMCA violations. The U.S. copyright office did issue an exemption that allows individuals to circumvent these software locks for the purpose of using the phone with any network, but I doubt that exception applies to companies trying to resell the handsets for profit. If anyone knows for sure what law was broken, please post it in the comments.

DisclaimerMy employer may have a different view of this whole situation, so the views herein are mine.

Via IntoMobileHotCellularPhone, StreetInsider


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