Growing Pains: Cell Phone Manufacturers and Service Providers Face Battles On All Fronts

The Electronic Frontier Foundation calls a victory that will give cell phone users greater control over their phone "critical." (image/EFF)

by Matthew L. Schafer

The last few months have been one giant headache for cell phone manufacturers and service providers and one giant victory for consumers.  On June 15, San Francisco passed a city ordinance requiring all cell phone retailers to display in the store the rate (SAR) at which their phones’ radiation is absorbed into the body.   A month later, the Federal Communications Commission and the Wireless Assocation, a coalitition of service providers, began a blog war over the FCC’s May “bill shock” research.  Finally, Monday marked an equally unpleasant rule making decision by the Library of Congress, which enables cell phone users to “unlock” their phones for use on other networks.

In an effort to fight the San Francisco decision, the Wireless Association (CTIA) filed a lawsuit against the city of San Francisco.  CTIA argued that San Francisco’s ordinance was preempted by federal law and that the ordinance disregards the fact that SAR levels filed with the FCC are measured when a phone is at the maximum power and not normal power levels.  If the CTIA does not win the lawsuit, after February 1, 2011 all cell phone retailers in San Francisco will be required to post SAR levels at the point of sale in size 11 font.

In response to the lawsuit, San Fancisco Mayor Gavin Newsom said, “I am disappointed that the association representing the wireless communication industry has decided to challenge our landmark consumer information law in court.  This law is not an attack on the wireless industry or their products.”

The CTIA also found itself in a fight with the FCC earlier this month over a survey the FCC released, which revealed that an estimated 30 million Americans had been victims of arbitrary increases to their monthly cell phone bills.  In a July 14 post to the CTIA website titled, “Peeling the Onion on the FCC’s “Bill Shock” Survey: Part I,” Christopher Guttman-McCabe of CTIA argued that the survey was poorly designed and executed. Guttman-McCabe also argued that the “survey completely disregards the evolution of the wireless marketplace.” The FCC responded the next day saying that CTIA’s critique distorted and ignored facts. Despite the “Part I” title in the CTIA post, no “Part II” response was ever released.

“This trade association apparently believes there’s nothing to worry about if 30 million Americans have gotten sudden increases on their cell-phone bills,” the FCC argued.

Cell phone manufacturers have also been taking their fair share of blows. Apple has been hit especially hard in the policy arena-not to mention the iPhone 4 antenna problems, which recently cost Apple $175 million in bumper cases. In a Monday decision, the Copyright Office at the Library of Congress order that “jailbreaking” or the modifying a phone’s software to run on different networks or to run unapproved applications was not a violation of copyright.

"Not only is this a win for consumers, but it’s also a win for innovators and developers whose products and applications now have a fighting chance in a market plagued by exclusive device arrangements dictated by the largest wireless carriers,” the media reform organization Free Press said in a statement.

Apple, which is notoriously particular about apps they allow to be sold in the iTunes app store, argued that laws against “jailbreaking” were necessary to protect the integrity of the network.  The Electronic Frontier Foundation argued in part, however, that “jailbreaking” was a fair use and not subject to copyright laws, because it is used for non-commercial purposes.  In their decision, the Copyright Office concluded that the amount of original software programming code used to “jailbreak” the phone was so little (1/160,000 of the total work) that it was not protected under copyright law.

“On balance, the Register concludes that when one jailbreaks a smartphone in order to make the operating system on that phone interoperable with an independently created application…, the modifications that are made purely for the purpose of such interoperability are fair uses,” the Copyright Office concluded.

While Apple has not responded to the change in rules, the CTIA did release a statement cautioning cell phone users, which said that although consumers may approve of the rule change, “they still need to review the terms of service… since altering the underlying source code may… adversely affect how the device operates on a wireless network.”

Free Press, a media reform organization, said that “The decision by the U.S. Copyright Office is an important step toward promoting open wireless networks.”

While it is unclear exactly how the situation in San Francisco will resolve it itself in the future, whether the bill shock issue will be readdressed by the CTIA, or the future scope of the Copyright Office’s final rule, one thing is clear.  Consumers are ending up on the winning side of these decisions, and judging from industry press releases, it is not happy about it.

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About Matthew L. Schafer

Matthew L. Schafer graduated from the University of Illinois in 2009 with a Bachelor of Science in Media Studies. He later attended Louisiana State University’s Manship School of Mass Communication where he earned a Masters of Mass Communication and Georgetown University Law Center where he earned his J.D.
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