Have you ever heard of people jail breaking their phone? Some people jail break the phone so that they can “unlock” it and then switch the phone to different phone carriers. I have and love my iphone, but I am not a cell phone guru, so the first time that I really heard about unlocking of phones was when AT&T held the market on the iphone and people wanted to have the iphone but also use a different carrier than AT&T. Well the law gods (a.k.a U.S. Copyright Office/Library of Congress) have determined that is not cool, in fact they have determined you could be fined or go to jail for this act.
You can’t unlock a carrier-subsidized smartphone on your own before the contract associated with it runs out without the carrier’s permission because it is now considered a violation of the Digital Millennium Copyright Act. Originally effective on October 26, 2012, the 90-day grace period ran out on January 26, 2013. (Link to Decision) If you’re caught and found guilty, you could face civil penalties up to $2,500. For businesses or individuals looking to make money off unlocking, the fine could be up to $500,000 plus jail time. Going to jail for unlocking a phone seems extreme, but I would not risk challenging the U.S. Copyright Office on this one.