Carriers are allowed to sell cell phones which are locked so that they can only be used with services sold by that carrier. On the other hand since November 27, 2006 consumers in the US have the explicit right to unlock those cell phones to make them work with other services. This three-year exemption to the Digital Millennium Copyright Act (DMCA) was recommended by the Register of Copyrights on November 17 and published in the Federal Register ten days later by the Library of Congress. That makes it official.
Until October 27, 2009 you can (in the US at least) legally use one of the many services that unlock cell phones so that you can use some SIM other than that provided by the carrier who sold you the phone. I recommended doing that to save money while roaming abroad and have offered a small inducement to anyone who can hack the iPhone to work over WiFi.
Prior to this rulemaking and in arguing against this exemption, cellular operators claimed that such hacking violated their copyrights. Quoth the Register of Copyrights:
“There is no evidence in the record of this rulemaking that demonstrates or even suggests
that obtaining access to the mobile firmware in a mobile handset that is owned by a consumer is an infringing act. Similarly, there has been no argument or suggestion that a consumer desiring to switch a lawfully purchased mobile handset from one network carrier to another is engaging in copyright infringement or in activity that in any way implicates copyright infringement or the interests of the copyright owner. The underlying activity sought to be performed by the owner of the handset is to allow the handset to do what it was manufactured to do – lawfully connect to any carrier. This is a noninfringing activity by the user. … Indeed, there does not appear to be any concern about protecting access to the copyrighted work itself. The purpose of the software lock appears to be limited to restricting the owner’s use of the mobile handset to support a business model, rather than to protect access to a copyrighted work itself.”
This regulation is astonishingly good common sense. Using the copyright law to restrict what you do with a device you purchased (even if you purchased it by signing a service contract) was a stretch but it seemed to fit the letter of the law because it sounds like getting around the key which keeps you from making lots of copies of music and video that you purchase (that is still illegal). The law wisely had an out for things that sound like but aren’t; the agencies applied the out well. The wishes of carriers who’d like to lock you into their service and their business model are no longer law.
Note that you still may be bound by whatever contract you signed with your provider, especially as far as cancellation fees are concerned. You may invalidate your warranty by hacking your phone. You may be in violation of your carrier’s terms of service (but you may not care if you aren’t going to use said carrier’s overpriced service). You MAY have consented to a shrinkwrap contract saying you wouldn’t hack when you opened the box your phone came in (this blog doesn’t give legal advice). But you won’t be violating copyright law – to my knowledge (limited) that’s the only law that’s been asserted against such hacking. Obviously, you still have to pay for the service of whatever provider(s) you do use your phone with.