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Lawmakers take on legalization of cellphone "unlocking"

Models look at a phone before the start of the Theyskens' Theory Autumn/Winter 2013 collection during New York Fashion Week, February 11, 20
Models look at a phone before the start of the Theyskens' Theory Autumn/Winter 2013 collection during New York Fashion Week, February 11, 20

WASHINGTON (Reuters) - Lawmakers have picked up the baton from the White House in the effort to make it legal for cellphone users to switch their devices to any mobile carrier.

At issue is whether cellphone buyers, who often get new devices at a heavily subsidized price in return for committing to long-term contracts, should then be able to take their gadgets with them when they change carriers.

Opponents argue that the phones should be "locked," or prevented from moving freely across networks, because of the subsidies that carriers provide to buy the phones. The subsidies help get the devices into the hands of more people.

Senators introduced a bipartisan bill on Thursday, the second in that chamber, adding to a similar effort in the House of Representatives that hopes to overturn the ban on switching imposed by the Library of Congress and took effect in January.

The White House on Monday responded to an online petition, signed by more than 100,000 people, protesting the ban. The Obama administration sided with the petitioners and said it would support "narrow legislative fixes.

Federal Communications Commission Chairman Julius Genachowski has also encouraged a legislative solution, saying the ban raised "serious competition and innovation concerns." The FCC is also weighing regulatory or industry fixes, he said.

Democratic Senators Amy Klobuchar of Minnesota and Richard Blumenthal of Connecticut together with Republican Senator Mike Lee of Utah introduced a bill that would direct the FCC to ensure the consumers could legally unlock their phones.

Democratic Rep. Anna Eschoo of California is expected to introduce a companion bill in the House.

Thursday's bill follows a proposal from another Democrat, Oregon Senator Ron Wyden, whose bill unveiled on Tuesday would update the copyright law to allow unlocking of devices.

Senate Judiciary Chairman Patrick Leahy, a Democrat from Vermont, and other lawmakers have pledged to back similar legislation, welcomed by consumer advocacy groups.

The wireless industry group CTIA has said that U.S. carriers already have "liberal, publicly available unlocking policies" and customers have easy access to full-priced unlocked devices in the marketplace.

But the online petition to the White House, signed by 114,322 people, argued that preventing "unlocking" reduces consumer choice and the resale value of phones, which can cost hundreds of dollars without subsidies from carriers such as AT&T Inc, Verizon Wireless and Sprint.

"Consumers should have flexibility and choice when it comes to their wireless service and they deserve to keep and use cell phones they have already purchased," Klobuchar said in a statement on Thursday.

The Library of Congress, which among other things is responsible for setting rules and deciding on exemptions related to the Digital Millennium Copyright Act, said on Monday the issue would benefit from further debate and that its intention was not to supplant public policy discussion.

(Reporting by Alina Selyukh; Editing by Ros Krasny and Bob Burgdorfer)

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