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Can Apple + AT&T Shut Down iPhone Unlockers? 318

aalobode writes "Do Apple and AT&T have the legal right to stop hackers from selling unlocked iPhones? Under their terms, only AT&T may sell iPhones, and Apple gets a commission. When unlocked iPhones are used on other providers' networks, AT&T and hence Apple get nothing beyond what they earned on the initial sale of the hardware. Can they prohibit unlocking? Reselling? The article in Businessweek gives the for and against arguments, but leans toward the view that the hackers may have the law on their side for once."
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Can Apple + AT&T Shut Down iPhone Unlockers?

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  • by larry bagina ( 561269 ) on Tuesday August 28, 2007 @01:52PM (#20387157) Journal

    only AT&T may sell iPhones

    Wrong. Apple sells iPhones (through their website and retail locations). The phone isn't activated at the time of sale (it's done at home with iTunes). AT&T announced 146k activations when Apple announced 270k iphones sold. You do the math.

  • Re:No $#%!, Sherlock (Score:2, Informative)

    by Anonymous Coward on Tuesday August 28, 2007 @02:00PM (#20387279)
    Its Pinky not Stimpy, but both are great cartoons
  • Simple Echnomics... (Score:3, Informative)

    by jellomizer ( 103300 ) * on Tuesday August 28, 2007 @02:01PM (#20387297)
    It is simple economics. The full-price of the iPhone (The physical cost of the phone+the hidden cost of being stuck to AT&T, in terms of rates, service availability, contracts...) is higher then the economical efficiency point. So what happens is black market activities. Hacking the phone to work on whatever carrier they want, so they get a better value from the phone. Now is it legal, I would think so yes Apple and AT&T are loosing money from the deal but that is the cost of doing business realizing that people are not going to play by your rules all the time.
  • Re:Yeah (Score:4, Informative)

    by Selivanow ( 82869 ) <> on Tuesday August 28, 2007 @02:16PM (#20387551)
    Usually when you "buy" a phone (in the US at least) you are getting a discount in exchange for a lengthy contract. If you don't want the contract you buy the phone outright and can do anything you want with it. This is the same issue that the auto industry had at one point. Manufacturers did not want 3-party parts sold and didn't want people to fix their own vehicles. The auto industry was pretty much shot down. Unless you are breaking a law, ie: modifying a phone to output a stronger signal, you can do as you please with any item you own. That is not to say that you can not be held liable if you do something to an item you own and it ends up damaging someone else's property or another person.
  • Re:Apple + AT&T? (Score:3, Informative)

    by Selfbain ( 624722 ) on Tuesday August 28, 2007 @02:25PM (#20387699)
    They get royalties from AT&T.
  • by Conspiracy_Of_Doves ( 236787 ) on Tuesday August 28, 2007 @02:27PM (#20387733)
    It isn't really the DMCA that's doing it. If the DMCA never existed, you would still be allowed to unlock the phone. This is something that someone had to decide that the DMCA didn't cover.
  • by Techogeek ( 1148745 ) on Tuesday August 28, 2007 @02:29PM (#20387753)
    Mostly because in the US, the Wireless providers want to prohibit (as best they can) the customer from moving to a different service. So in the long run, if they lock the phones, that forces the customer to have to cough up more money if they want to move to a different wireless provider.
  • Re:Subscription fee (Score:3, Informative)

    by jesco ( 598308 ) on Tuesday August 28, 2007 @02:58PM (#20388195)
    You're right. And because of the fact that you pay the subscription fees whether you use the phone or not, the phone doesn't even need to be locked. I can plug in any SIM card I want into my phone and use it, not the just the one from my original provider. (applies to me in germany, at least)

    All parties got their money, both Apple and AT&T. And quite a lot of it.
    So I think they are really overdoing this digital rights thing by additionally locking the iPhone to AT&T cards.
  • by Anonymous Coward on Tuesday August 28, 2007 @03:03PM (#20388257) actually just pulling one of the address lines high so reads are always from a writeable rather than read-only area. If it were true that this 17-year-old were a lone hacker, I'd certainly label him precocious (this is a compliment!), but he admits to having at least three other players, and the hardware technique itself is trivial to a seasoned EE.

    What he has done immensely well is put various people's work together with their agreement, including some of his own, and explain the process, then give away the method as a vehicle to sell his skills. I congratulate his not trying to hoard the method as HK hackers have done (sorry, you weren't the first!), or the iphonesimfree site. He also has fine soldering skills.

    Last weekend I managed to get full control of some other piece of ARM-based consumer electronics [which I own and was not connected to any third party service, thank you lawyers]: at some stage the zero page (interrupt vectors) and interrupt handlers were mapped to ROM, but the PMTs were in an unprotected page of RAM(!), so it was fundamentally a matter of remapping the zero page and changing the SWI vector to my own code, giving me Supervisor mode. This has almost whet my appetite for a real challenge, but Apple are insulting developers by denying official support via SDKs etc, so I can't bring myself to love the iPhone enough to try to give it freedom ;-).
  • Re:Warranty (Score:4, Informative)

    by frdmfghtr ( 603968 ) on Tuesday August 28, 2007 @03:03PM (#20388267)
    Skill with a soldering iron is not required [].
  • Re:Warranty (Score:2, Informative)

    by Choad Namath ( 907723 ) on Tuesday August 28, 2007 @03:29PM (#20388569)
    The hardware unlocking doesn't even require a soldering iron. It could be done a lot more easily with something like this []. Much lower probability of bricking your $600 phone, and much less effort required as well.
  • Re:If it's legal (Score:1, Informative)

    by Anonymous Coward on Tuesday August 28, 2007 @03:39PM (#20388757)
    about 5 years . . .

    just because it can be unlocked does not mean other carriers can sell it and activate it.
    You still have to buy it from ATT or Apple. Then you may swap an already activated TMO SIM card.
  • 2 year blan... bah! (Score:2, Informative)

    by musicscene ( 453302 ) <(gro.enecscisum) (ta) (oznog)> on Tuesday August 28, 2007 @03:43PM (#20388825) Homepage Journal
    As mentioned on Infinite Loop, however, it is possible to activate an iPhone without committing to AT&T's "required" 2-year service plan. By entering "999-99-9999" into the Social Security field, you will get booted into GoPhone (AT&T's prepaid phone plan that does not require a contract) mode. An equivalent voice plus data plan under GoPhone comes out to about $10 more per month than a similar plan under contract, and so this may be a very attractive option to those who aren't interested in committing to AT&T for long periods of time. Seeing as AT&T isn't subsidizing the iPhone's cost when you sign a contract (as most carriers do in order to entice customers with steep phone discounts), it doesn't seem as if there is much reason not to go this route unless you are interested in saving $10 per month and don't mind being in a contract for two years. This is the simplest way to activate the iPhone without a contract without getting into some hackery, which we will discuss in a later section. It will cost $175 to break an iPhone contract with AT&T if you choose to leave before the two years is up (although if you cancel the contract within 30-days of activation, you will not get charged an early termination fee. If you return an open-box iPhone within 14 days of purchase, Apple will charge you a 10 percent restocking fee).

    [ found here -> iew.ars/2 [] ]
  • by Firehawke ( 50498 ) on Tuesday August 28, 2007 @04:21PM (#20389445) Journal
    I doubt they use Caller ID data, since that's so easily spoofed. They probably use the much more secured cousin called ANI. When I worked at AT&T back around the 1999-2000 time frame, we used ANI on pretty much every call. While we were unable to use it as sole verification of who was calling, ANI had a 95% successful ID rate for telephone lines and the remaining 5% was 'no data'-- never did I see an incorrect entry.

    If AT&T could do this on lines coming from the Baby Bells, I certainly believe they could easily achieve 100% on calls from their own cells. After all, if they can bill it to the right number, they can certainly pull origin ID off a call to its own number.
  • Re:Mod Chips (Score:3, Informative)

    by radish ( 98371 ) on Tuesday August 28, 2007 @04:55PM (#20389973) Homepage

    The purpose of a modchip is to disable or circumvent a copy protection mechanism built into the console. The DMCA makes anything designed to do this expressly illegal.

    Unlocking a phone has nothing to do with circumventing copyright and hence an iPhone modchip (if such a thing existed) would be legal. However, a software based unlock is more interesting as the DMCA also generally forbids modification of binary software (e.g. reverse engineering) except in certain circumstances. Luckily I believe one of those allowed circumstances is unlocking a phone for the specific purpose of switching network.
  • by StarKruzr ( 74642 ) on Wednesday August 29, 2007 @03:32PM (#20402929) Journal
    There's already been a software unlock produced from the fruits of the hardware one. It's not at all difficult to unlock an iPhone now.

Exceptions prove the rule, and wreck the budget. -- Miller