If you're stuck in a multi-year cell phone contract and considering other options, keep in mind that unlocking cell phones is now illegal.
Most cell phones are subsidized by a wireless carrier with the requirement that you sign a multi-year contract to stay with that carrier until the contract runs out. At that point, they conveniently offer you a new phone at a highly subsidized rate. Of course, you have to sign a new contract in order to get it.
As of Jan. 27, 2013, however, unlocking a cell phone is now illegal. To back that up, there could be some pretty serious penalties.
The decision comes from the Library of Congress, which determined in October that copyright protections allow phone carriers to lock a phone to their service.
Their reasoning is that carriers subsidize phone prices in the hopes of recouping the loss through long-term contracts. Allowing users to break the deal and put the phone on a new carrier's service would be taking that proposed profit from the company, reports the CTIA, a nonprofit wireless-industry trade organization.
But how much does this matter for consumers? After all, only carriers can know if a phone is unlocked and report it to law enforcement. It doesn't appear that these companies are enforcing that law, according to TechCrunch.
Unfortunately for those who want to unlock their cell phones without their carrier's permission, laws don't disappear or lose their power simply because no one is enforcing them.
While some old laws end up being unenforceable because of changes in constitutional analysis and new legislation, that's not what's happening here. This regulation is new and unless there is a legal challenge to it, it will likely remain in place regardless of enforcement.
The potential penalties make it clear this is one law you don't want to cross.
For a civil violation, the person unlocking a phone could get a fine of not less than $200 for their troubles. If that person is found guilty of breaking the criminal statute, willfully unlocking the phone or doing it for personal gain, the punishment is even steeper.
Fines for a first offense can be up to $500,000 and imprisonment for up to five years is a potential as well.
With those kinds of consequences, it seems that finishing out your cell phone contract is the better financial option than unlocking your cell phone.