Robert Lemos

Tracfone, the company that offers a pay-as-you-go service for cell-phone users, loves the Digital Millennium Copyright Act (DMCA), which allowed it to block users from hacking their Tracfone phones to work with another provider. Blocked them, that is, until the provision of the law that allows the U.S. Copyright Office to create exemptions resulted in an exception for just those consumers. Now, the company is suing the U.S. government for granting the exemption.

The problem for Tracfone is that they sell the units at a lower than market price. The company only makes money if it can charge a premium to users locked into their service. To do that, the company used the DMCA to pursue anyone who helped users switch their phone over to a new service.

Yet, with the exemption, which I reported on two weeks ago, consumers are now able to do what they want with their hardware.

According to the Electronic Frontier Foundation, Tracfone is arguing that the exemption is not legal, because it:

1. violates the Administrative Procedures Act (APA) because the Copyright Office refused to accept TracFone’s late submissions;
2. violates due process; and
3. violates separation of powers because “the DMCA’s delegation of rulemaking authority to the Library of Congress and the Copyright Office is an unconstitutional intra-branch delegation of Congress’ legislative responsibilities.”

The EFF also has a copy of Tracfone’s legal filing in the case. Stanford University’s Center for Internet and Society was key in getting the exemption granted.

The case underscores the problems with the Digital Millennium Copyright Act (DMCA). In many cases, such as Tracfone’s use of the provision, companies are wielding the law as a way to keep out competition from a market, not to protect a creative work. The lesson for Tracfone, rather than challenging the power of Congress to create and grant powers to other, non-legislative agencies–the Department of Homeland Security, the Social Security Administration, and our entire executive branch comes to mind–is that perhaps they should be selling their phones for a profit and not try locking them to a particular service.

For that matter, an open service infrastructure for all cell phones would be a great idea.

In the end, this is a rare exception in which a small provision of the bad DMCA has actually done some good.