in the absence of 1201A1, illegal access to wireless networks is already just that, illegal. A 1201A1 exemption affects only illegality or illegality of a particular activity with respect to 1201A1. It does not render an activity that is illegal under some other law or people. So now we've talked at length about why the benefit to carriers of striking down yet locked in the exemption would be minimal at best. Well, probably, Carl decided to speak from just a moment about the enormous adverse effects that consumers would suffer if they unlocked an exemption or not. And with that, I'll conclude my presentation. Thank you. Thank you very much. Mr. Smith? Good morning, and thank you for having me here today. Again, my name is Carl Desai, Communications Policy Council for the Consumers Union, which is a policy advocacy division of Consumer Reports Agency. Laura gave me some great fact about why we think this is important. This is an issue that's important for our organization. Mobile device unlocking, we believe, is a practical and widespread activity performed by countless users of mobile device firmware and software. Without continuing the 1201A1 exemption, covering unlocking, this valuable activity would be chilled under the anti-circumvention provision. If the registered copyrights declines to extend that exemption for another three years, users of mobile device firmware and software are likely to be adversely affected by 1201A1 in their ability to unlock their mobile devices, which is a non-converging use. Thus, Consumer Union strongly urges their registered to continue the exemption. One reason to continue the exemption is because the marketplace is not a friendly marketplace to consumers who wish to switch carriers. There are a number of barriers to switching, but one barrier is that wireless providers use software locks primarily to hamper a customer's ability to switch to a competitor's service network. In the words of the register, in the context of subsidy protection, quote, is apparent that the main function of the software lock is the support of business model. And the purpose of this rulemaking is not to protect such an interest or to maintain the profitability of a particular corporation or industry. So not only would the exemption promote consumer choice, consumers also themselves value portability. Mobile device portability is central to competition in the mobile marketplace. As mobile communications become more integral to consumers' lives, consumers need confidence that their devices will work, regardless of the carrier or network. Without portability, consumers might be locked into a particular carrier for all the wrong reasons. Competition will be undermined with ultimately wrong consumers by reducing consumer choice. As the Federal Communications Commission has noted, quote, if enough consumers have the ability and propensity to switch service providers in response to a change in price or non-price factors, then mobile wireless service providers will have an incentive to compete vigorously to gain customers and retain their current customers. And consumers recognizing the importance of interoperability, and they demand the ability to use their mobile devices across networks. 90% of respondents in the nationwide poll conducted at consumers' union expressed that consumers should be able to keep their existing handsets when changing carriers. While 59% stated that they would actually like to take their existing devices with them to another carrier. A staggering 88% said their handset should work on any cellular network. The ability to unlock a new device for operation on a non-native network is particularly important for low-income consumers who may not be able to afford the hefty price tag on a brand-new mobile device. Or they may not qualify for the credit-based, most paid service plans that offer devices for low or zero subsidized upfront costs which customers then pay off later through monthly fees. Although cheap phones are often offered with pre-paid service plans, these phones sense the very basic devices that lack the innovative features of cutting-edge smart phones. Consequently, low-income consumers who want smartphones comparable to the higher-income counterparts out of one. These consumers could be served by a robust second-hand market for such devices. Not only do consumers value this ability, but they actually use this ability to unlock their devices and take them with them from one provider to another. Take the example that Laura provided just a few minutes ago regarding her own experience. We also pulled additional examples from email messages sent over the Bethesda Chevy Chase Recycle Lister over the past several months. The Recycle is a list served open to anyone in the area who would prefer to recycle typically by giving away to someone else on the list they use item rather than throw it away. Participants give and take furniture, paints, plants, toys, clothing, pretty much anything they can think of. Back in August, someone posted a message looking for a used phone that her sister-in-law would be able to carry, looking for a used phone that her sister-in-law would be able to carry as an emergency contact number for her kids in school. Someone else was looking for a working phone because she had borrowed her mom's phone and accidentally left it in her pocket when she went swimming in the ocean. This poster notified the list three days later as she had received the phone. Thank you to everyone who responded, Jiro. That was on September 5th. By our count, since then, there have been additional 16 messages circulated over the Bethesda Chevy Chase Recycle Lister, Lister of either offering or soliciting working used mobile devices. For example, two posters asked to adopt someone's used iPhone due to budgetary constraints. I'll need one and can't afford it, so I'll take what I can get. So, as you can see, consumers find the ability to unlock and reuse secondhand mobile devices, both valuable and useful. And although some carriers are willing, under some circumstances, to unlock their customers' devices, there are many circumstances under which carriers are not willing to unlock their customers' devices. In connection with this procedure, you expected the publicly available unlocking policies of AT&T, T-Mobile, and Verizon Wireless. Now, identify a number of strict limitations to those policies. For example, AT&T and T-Mobile will help some of their customers unlock their devices to their networks, but only if the unlocking is requested by an individual who is a current or at least a past customer of the company. This means that in the case of a consumer who receives a used device, free or at low cost, that is locked to another carrier, as Laura explained she did in 2003, as far as we can tell, it is not possible to get the carrier to which the device is locked to provide the unlocking service. It is particularly difficult to get a carrier to unlock certain kinds of devices, including iPhones. AT&T considers iPhones and other certain devices, which is an undefined category, not eligible to be unlocked. Sprit will unlock the microSIM slot on its iPhone 4S for subscribers who have been in good standing for 90 days or more, but the unlocked device will only accept an international SIM card, not one from a non-sprit U.S. carrier suggesting TNT. Verizon states that the iPhone 4 is configured only with the wireless service of the wired wireless and may not work on another carrier's network, even after completion of the contract term. Northern consumers always purchase an already unlocked device, even from a resell outlet like Best Buy. As an investigative attorney and physical security specialist, Mark Webber Tobias explained a blockbuster forage last December. Even in the iPhone 4S, purchase from Best Buy at the unsubsidized price of $800 for use on the Verizon network can never be fully unlocked to be used on multiple carriers within the U.S. And despite having the hardware capacity to function on any GSM or CDMA network, even a so-called unlocked iPhone 4S purchase directly from Apple, shipped with the ability to connect to GSM networks only. Because many devices cannot be purchased completely unlocked and carriers often will not unlock devices to their networks, consumers who are looking for other options in purchasing devices are often left with no choice but to do the unlocking themselves. Thus, this allows individual consumers to unlock their own devices that have clear adverse effects that would extend beyond the mere hassle of consumers having to ask their carriers to help them do something they could oftentimes accomplish on their own. Finally, as we have argued in our proposal in comments, an unlocking exemption to telephone handsets would be under-inclusive and cause unnecessary consumer confusion. The relatively basic telephone handsets of several years ago have evolved into a variety of dynamic multi-purpose devices. Although the term telephone handset at the time of a point which had a clear meaning, technological advances have rendered it all obsolete. It no longer refers to a distinct and unequal category of devices. It would thus be more in line with the current technology consumer expectations to the private exemption in terms of mobile devices. Thank you for your time this morning. I'll be happy to answer questions you can have. Thank you. Mr. Berry? Good morning, good opportunity. My name is Stephen K. Berry. I'm the president and CEO of RCA, the Competitive Parries Association. RCA is an association representing more than 100 competitive wireless providers, most of whom of which serve fewer than 500,000 customers. RCA has a keen interest in ensuring that all customers not merely those serve AT&T and Verizon can take advantage of cutting edge handsets and wireless devices available today. The current exemption to the circumvention of copyright provision systems which allows customers to unlock their wireless device to use on different networks has proven very popular with consumers and promotes consumer choice. And let me identify a few items. The exemption is a pro-consumer, pro-competition policy decision with the existence of exclusive handset arrangements by the largest wireless carriers. Many RCA members continue to find it difficult to gain access to the newest handsets their customers want. Absent the exemption, consumer costs to unlock devices will increase and consumers are able to unlock their devices at all. Artificial device locking merely protects the business model of certain wireless carriers and doesn't really protect a copyright interest. Two, the benefits to consumers on unlocking exemption far outweigh the potential harm to copyright holders. Without the exemptions, consumers fair use of content will diminish or consumers may even lose a content which they have already paid. Three, the social benefits are untold. The opportunity to donate unlocked devices to cell phones for soldiers battered women shelters, low income, underprivileged or disabled communities are all potential benefits of unlocked wireless devices. These are all positive social benefit opportunities that should not be foreclosed. Four, the environmental impact is positive and undeniable extending the useful life of a wireless device. Five, again, there is a significant pro-competitive benefit to all consumers when there are more wireless choices. So accordingly, RCA strongly supports extending with slight modifications, the current exemption allowing consumers to unlock their wireless devices and associate those devices with the wireless network of their choosing. The modifications RCA proposes to the exemption are intended to ensure that it covers the full range of wireless devices, data and networks used by consumers today in this dynamic wireless communications marketplace and to ensure clarity of the exemption purpose as technology evolves. In July 2010, the Library and Congress acting on the recommendation of the registrar of the Copyrights issued an order adopting several exemptions from section 1201A1A of the Copyright Act, which prohibits the circumvention of technological access controls protecting copyrighted works. One of those exemptions clarified that consumers may actually circumvent the access controls related to the falling class of works. And that class of works is, as probably stated earlier, computer programs in the form of firmware software that enable used wireless telephone handsets to connect to a wireless telecommunications network when circumvention is initiated by the owner of a copy of the program solely in order to connect to a wireless telecommunications network and access to the network is authorized by the operator of the network. In adopting this exemption, which had appeared in a slightly different form in 2006 order, the library and permitted consumers to unlock handsets they purchased from wireless carriers or their authorized dealers in order to use in other carriers networks. The exemption thus allows, for instance, an AT&T can send a customer to switch to another carrier while keeping the handset he or she purchased from AT&T. It would also provide a customer the opportunity to switch to AT&T using a handset they bought from T-Mobile if AT&T had a pro-consumer current unlocking exemption policy. As with other exemptions adopted in the order, this current unlocking exemption would apply for three years. The unlocking exemption was clearly justified and well documented in 2010. And the copyright office should recommend extending the unlocking exemption with some slight modifications for another three years. The renewal of the current exemption in 2010 was a profoundly positive development for competition and consumers aligning wireless users across the country to switch providers while retaining their wireless devices. Those consumer benefits will continue if the exemption is extended. Unlocking is particularly important for rural, regional and smaller carriers that lack the scope and scale to gain access to the latest, most iconic devices directly from the equipment manufacturers. Which in turn prevents millions of consumers from accessing the latest devices. Conversely, a failure to extend the exemption would have a substantial adverse effect on non-infringing uses of wireless devices and their associated firmware, software and data. The copyright office recommendation in the librarian's previous decision to approve and extend the exemption are presidential. The previous detailed, well-reasoned decision to continue the exemption was not only well documented with sound analytical basis, but should be precedent-setting. In fact, absent a significant change in the circumstances, given the harmful effects of allowing an unlocking exemption to expire, the copyright office should atop the presumption that the exemption remains valid. Opponents of the exemption should have to prove otherwise. Such an approach would be consistent with the Copyright Act and would minimize uncertainty for users of the wireless devices for the future. Indeed, the registrar has found that where similar facts are presented as here, the registrar is likely to reach a similar conclusion with respect to the renewal of a particular exemption. Finally, in extending the unlocking exemption, the copyright office should slightly modify the wording to clarify types of works the exemption covers, to ensure that the exemption keeps pace with ongoing technological innovation and clarify the purpose of the exemption. This will ensure consumers will reap the full intended benefits of the exemption and those opposed to the exception could not easily frustrate its implementation. We urge the copyright office to include exemption language of data used in the programs to identify the other networks that it would connect to and also that wireless devices such as smartphones, tablets and other devices are intended to be within the exemption, not just wireless telephone handsets. I also urge the copyright office to modify the wireless telecommunications network provision to wireless communications network in the exemption language to more accurately reflect current and future technologies in the wireless marketplace. I commend you for your previous decisions in this regard. I thank you for the opportunity to speak on behalf of all the competitive carriers in the United States, urging your continued support for pro-consumer pro-competition policies by specifically extending the unlocking provision from section 1201A1A of the Copyright Act. Thank you and I'll be more happy to answer your questions. Thank you very much. It's just, good morning, your stage panelists. My name is Bruce Joseph. I'm here on behalf of CTIA, the Wireless Association, an association that broadly represents all sections of the wireless communications industry. I appreciate the opportunity to appear today to approach the requested exemptions. Our written comments and our reply comments discuss at length why this class and these varied versions of this class should be denied. In my oral statement today, I would like to focus on three points that are central in this procedure. One, the proponents have failed to meet their burden of demonstrating the requisite harm from the prohibition on the circumvention of cell-funded network locks. Two, the proponents have failed to prove the harm that they assert relates to any non-infringing use that they claim is being interfered with. As the register has made clear, for example, in the 2010 recommendation of page 10, this is a distinct question from harm. We must show both significant harm and that it is to a non-infringing use. And three, beyond the fact that there is no justification for the requested class in any form, there certainly is no justification for expanding the class beyond that approved in 2010. The proponents have failed to carry the burden of proving that the expansions that they seek are required to prevent substantial harm. Indeed, the register reviewed and previously rejected many of the same requests in the past and there has been no greater showing of need here. Let's start with harm. The proponents bear the threshold burden of proving that the prohibition on circumvention is causing substantial harm. That's out of the register's recommendation in page 10. Here, proponents have made no show of an adverse effect on any use of the copyrighted work that is properly within the scope of this procedure. Much less a highly specific and strong showing of the distinct verifiable and measurable adverse effects that is the standard that applies here that comes from the register's recommendations in the past and the house managers report. Arguments and unsupported statements and comments or testimony are not evidence and they don't become evidence simply because they are repeated and cited by another commenter. Further, selected anecdotal examples should be viewed with skepticism and should not be seen to constitute evidence of substantial or widespread adverse effect. I note that there was a reference to isolated emails today that are not in the record and that for which there has been no opportunity to review them or respond to them. The existence of the 2010 exemption does not change this burden. Each triennial proceeding is to be conducted de novo. As the register said in 2010, the fact that a class was previously designated and I quote, creates no presumption that redesignation is appropriate but rather the proponent of such a class must make a primal facial case. In the moral, the demonstrated harm must be to a prohibition on circumvention. Again, in the words of the register, adverse impacts that are the results of factors other than the prohibition are not within this rulemaking. I was struck by Ms. Moyes' testimony. Her circumvention occurred in apparently 2002 or 2003 if she dates herself. She was clearly not deterred or harmed by any prohibition on circumvention under section 12.1. So that story shows no harm from the prohibition on circumvention. I was also struck that none of the commenters have done anything to distinguish the effects of any prohibition on circumvention or indeed network locks from the effects that the FCC identified in reports that I believe consumer unions, consumers unions cited that prevents using the phones on different networks in many cases including the use of different technologies CEMA versus GSM, the use of different bands even among GSM carriers, the optimization of the phone for different purposes. No evidence in the record differentiates the effect of a lock from all of these other effects. And again, the burden. Now the harm asserted but not proven by performance is that a user is prevented from using a cell phone's operating system and less the phone on a network other than the network to which the phone is locked. But again, as I've said, performance presented no evidence that consumers are suffering significant harm as a result of a network lock or prohibition. At most proponents have cited some information to the effect that some people want to unlock phones and in some cases are doing so. I note this regard by the way, consumers union poll that's cited is not in the record and there's no ability to test the validity of its conclusions or whether the questions were asked to be reasonable or to matter. But more importantly, the desire to circumvent a technological protection measure that's protected by section 12.1 is not evidence of harm. If that were the case, the widespread prevalence of DCSS and the widespread use of DCSS would support broad exemptions for unlocking DVDs which the register has consistently rejected and indeed thinking logically it would be absurd if the prohibition on circumvention was protected only locks that nobody wanted to circumvent. It's a difficult point. Moreover, even the asserted harm is not properly cognizable for two reasons. First, we hear a lot about consumer choices from the other side. But the decision to purchase a locked cell phone is entirely the choice of a consumer. It's a choice that is made because a locked phone comes with certain benefits most commonly at a substantially reduced price. In this record, even more than in the past, CTIA has demonstrated that there is an enormous selection of unlocked phones that are freely available both from wireless service providers and from retail sellers. And they cite our exhibits A and B. That selection is broken in late April and this was publicly announced. Google announced that it was selling unlocked Android phones through its online store. Again, increasing the availability of lawful unlocked phones. Fundamentally, when a consumer freely chooses to purchase a locked phone, it is unreasonable to claim that that lock is hurting the consumer. A lock is part and parcel of the deal the consumer made. That is not harm. There's no right in the law to have it both ways. Any allegedly adverse effect is the direct result of the consumer's own choice. And as the register has repeatedly held, adverse impacts that are the result of factors other than the prohibition are not within the scope of this rule made. Second, the asserted harm is not substantial. It is easily cured and it's merely an issue of convenience or small incremental costs. Two types of alleged harm that the register has consistently and explicitly rejected as justifying a section 12.01 exemption. As the record demonstrates, unlocked phones are widely available wholly independent of the existing exemption and carriers regularly unlock phones. Contrary to the size testimony, AT&T announced in early April that it would unlock its iPhones for bona fide customers following the term period. And for those who bought phones without AT&T commitment. Indeed, the register's treatment with the harm issue in connection with the 2010 cell phone unlocking exemption stands in dramatic and unsustainable contrast to the register's treatment of asserted harms in rejecting previously proposed exemptions for the circumvention of CSS on DVDs and certain streaming DRMs. The register described as a recurring theme. Recurring theme, the desire on the part of some participants to be able to gain access to protected digital works on platforms of rare choosing rather than on platforms offered by content providers. In the register's words, which should apply here, section 12.01a1c was not intended to provide relief to consumers who are unhappy with the commercial terms on which copyright owners make the works available or the platforms on which they choose to distribute their works. The register found there was not cognizable harm where the user could access the content in readily available alternative ways where it could purchase the works in alternative formats. In that case, the need for an exemption simply becomes a matter of convenience or preference. Here, the network is analogous to a platform. And in great many cases, the same phone operating system is available for use on different networks. Moreover, the same works are typically available in unlocked form. As the register found, also, it is not the purpose of this rulemaking to provide consumers with the most cost-effective means to obtain access to copyrighted works when there are reasonable price alternatives. Indeed, the alternatives identified by the register in the DVD context, buying a separate DVD player, buying a new operating system for their computer, or indeed, even buying a new computer. And those are the register's recommendations of pages 222 and 224. Those options are often substantially more costly than the cost of obtaining a new cell phone that is compatible with the new network of choice. Applying these criteria consistently as you, as an agency, are obligated to do. There is no meaningful difference in the cell phone owner who wants to use a phone's operating system on a different network platform that's not authorized and one who wants to do video content on a video platform that is not authorized. Indeed, I've heard complaints that the cell phone logs are to protect business models, that I challenge the proponents to distinguish the region coding, for example, on DVDs as existing to protect anything other than a particular business model. Moreover, I've been struck by the fact that the other side has consistently said that cell phone logs are only to protect business models, not copyright interest. But I haven't heard copyright interest identify on the proponents side. And remember, proponents are the burden of demonstrating harm to a non-conforming use of copyrighted work in this procedure. So let's turn to that second point I was going to address, non-conforming use. Proponents have presented no evidence that the circumvention they seek to support is to avoid harm to a non-conforming use of a phone's operating system. First, their focus on whether the act of circumvention itself is infringing the business place. The primary issue here relates to the non-conforming use is whether the unauthorized use of the unlocked work, the unlocked software, is non-incringing. Now, to be sure, it is true that if unlocking requires infringing, such as modifying iPhone software, which is typically how iPhones are unlocked, or modifying the tracking of a private phone engine, there can't be an exception because it's not not infringing. But the converse isn't true. The use of the unlocked software must also be infringing. Now, it's consumer union that admits no proponent has demonstrated that that kind of even argued that the use of the protected software is fair use. So fair use is not an issue here. To quote CU, consumers union. CTIA correctly observes that not one of the proponents even attempted to justify their proposed unlocking activities as a fair use under the apathy of that. So let's take fair use of the table. Third, proponents are second. Proponents of non-carriage burden showing that section 117 authorizes the use of the software that they see. Because among other reasons, they have not shown consumers own the copy of the software that they seek to use. The proponents, we will cite no evidence to prove ownership. The register and the privacy, they recognize that the issue of ownership versus license of software is a nuanced question that depends on more than the question of whether somebody owns the material object in which the terms of the applicable agreement must be considered. That same thought was reinforced by the recent decision in Apple versus Sidestark out of the nice circuit which observed that software licensing agreements rather than sales have become ubiquitous. Because they enable the license or the control to use of the copyright of the material. But despite the recognized importance of the underlying agreements pursuant to which the software is distributed, not one proponent is cited to any agreement by any carrier that sells copies of the software. For that reason alone proponents have failed to carry the burden of proof. That failure is particularly acute here where CTIA has demonstrated that the agreements of record, including the agreements of all four large wireless carriers, all expressly license rather than sell the software. And at least three of the four expressly limit is used to authorize uses and prohibit a wide array of unauthorized uses and prohibit transfer of redistribution of the software. In the at least three AT&T, Verizon, Marliss, and T-Mobile expressly retain the right to change the software on the device. Another clear indication that the fabric is not the user. Virgin mobiles licenses are to the same effect. Retaining ownership, licensing it, whether it's use-provided or distribution, and retaining the right to modify the software remotely and without notice. And providing that unauthorized use terminates the license and your continued use for AT&T and T-Mobile or Virgin Mobile and sprint all limit authorized use of the software. All limit use to authorized use in connection with. Now with respect, the register in 2010 incrementally eviscerated the regulatory burden of proof when she shifted that burden to opponents because she presumed that absent other evidence because the user owns the phone, he or she owns the software. That shifting is inconsistent with the facts of record and it is inconsistent with the register's own recognition of how software typically is licensed and distributed. And with the court's recognition and now the versus Seistor, which is the intervening decision, that licensing rather than sales are ubiquitous. Now briefly addressing the copyright misuse argument that I believe consumers union makes, they also come from Metro VCS. The nice circuit in Seistor made clear that that doctrine is to be applied sparingly. And the main point to these little dispatches with that argument is that limitations on the use of the copyrighted work itself is not misused. Rather in the words of the court, such limitations are firmly rooted in the history of copyright law. And that is all we're talking about here. Now, with respect to my third point, there has been no showing supporting any expansion of the class. As weak as the supporting evidence is for the classes adopted in 2010, opponents have reduced no evidence supporting that expansion. Certainly nothing highly specific and strong, showing distinct verifiable and measurable adverse effect on any of the limitations. In addition, regarding the request to extend the exemption to use cell phones, two of the four components are wholly silent on that. They just assert that it should be. RCA offers only argument, no evidence. And the only state of justification from consumers union is so that subscribers can get a new subsidized phone when it's offered by a carrier, unlock it, and sell it. That is starkly different from the asserted desire to foster the use of a phone on the network of the consumer's choice. By the way, that limitation was not included in 2010 by the register to ensure that the 1201 exemption did not foster in any way elicit both reselling, which the register found to be a serious matter of adverse effects to the marketplace, and to consumers. And I have been informed that the register's clear statements against both reselling have been very helpful in efforts to stop that practice. We would urge their inclusion again if the register recommends an exemption, which, of course, would hope that the register would not. With regard to extend the exemption to devices other than cell phones and to networks other than telecommunications networks, there is no evidence presented that consumers are harmed by any locks that may exist that haven't been shown to exist on data-oriented devices such as tablets that the harm is substantial, or that they are tied to any non-infringing use. In addition, the effort to expand the exemption to persons other than the owner of a copy and for the purpose other than the connection to a network would eliminate any possible reliance on section 117 to the extent that's valid, and we argue, as you know, and believe it's not. And further would foster bulk reselling and commercial prevention services, both of which should not be encouraged by the register in this procedure. In conclusion, I think I've said it too many times, the proponents have not carried their burden and no exemption has been justified on the record in this proceeding. However, the proponents' primary arguments are based on the alleged interests of consumers, individual consumers, who want to use their phones on the network of choice, on their network of choice. And CTIA members do not foresee a situation in which they would sue a bona fide individual customer who circumvented a phone lock solely in order to use his or her phone on another service. For that reason, although CTIA does not believe that a case has been made for an exemption, they would not object to or oppose the targeted class identified at the end of the procedure. I think we're much here in celebration. Thank you. Any of the three of you people proponents have anything to say that is in correct response to anything that Mr. Joseph said? I'll give you two minutes each, but let's confine it to that. I don't want you to start elaborating. I just want you to respond directly if there is anything he said that you have to respond to. Anyone? Oh, sure. Yeah, I can hold it down. I just wanted to take a moment to respond to the discussion of the story that called out and that what happened 10 years ago. It is true that at the time, there was not yet an exemption for cell phone unlocking. As a college kid, I was ignorant of the anti-certainmention provision and I understand that ignorance is no excuse under the law. Thankfully, the stash of limitations is 10 years, I'm pretty sure. And I also just wanted to respond briefly to the points about the Fair Use and 117 arguments. I just wanted to say that it's our position that in this context, Section 117 and Fair Use are both just red herrings. We think that this is a non-affringing use, not because it's Fair Use, but because it is not infringing to begin with. And that Section 117 is not necessary because this is a non-affringing use regardless of whether or not the person conducting the mobile device unlocking is in fact an owner of a copy. Talk about, we've discussed that at length in our proposal and comments, but I'd be happy to talk. Yes, and we did, in fact, cite to the poll providing the figures, the poll that consumers union conducted where national respondents stated a strong preference of the ability to take their phones with them for one carrier to another. If we did not include it as an appendix to our comments, however, if the panel would like to submit questions about that post hearing, we would be happy to respond in writing with a copy of the report. When you cited to it, did you give us a link or anything or did you just refer to it and ask him without telling us how to find it? Sorry, there is no link. There is a footnote stating the title of the survey or out of the poll and that it was a consumer union poll. So there is a name and a page number. You may get a question. Yes, I think I would like to respond to it all the way. It struck me as how do you measure this collective harm? There's millions of consumers that have unlocked their phones and other competitive carriers and to fully utilize the device that they paid for, they purchased, they have a fair use of its content that could be truncated or would not be fully usable without the unlocking capability. And it sort of struck me that Mr. Joseph didn't assert any evidentiary material to support his contention that it's non-consequential. I mean, how do you measure the consequences of an individual, of a low income individual or handicapped or some disabled individual who now has access to a handset for nothing other than life saving purposes? How do you measure that as consequential? I don't know that you measure it in terms of dollars. I think you measure it in terms of social benefit to an entire class of people. And if you multiply that by the millions of consumers that have had the opportunity to get full use of the products that they've bought, the copyright products that they have on their cell phones that they downloaded and or paid for separately and distinct from the phone itself, then I think you come into the hundreds of billions of dollars of harm to consumers if this exemption were not extended. So I think that in that regard, the non-infringing act is clearly impaired, i.e. the user non-infringing act. It'd be clearly impaired by the lack of having the ability to unlock the phones. That is clearly stated in the record. It was stated in page 154 of the registrar's proceedings in 2010. And I think that may have been overlooked by Mr. Joseph Paulson. If you want the last word, Bruce, look before we get to questions to respond directly to anything that was just said. Can you do that now? Well, we love your questions. I would love to be able to say and not need the last word, but I was struck by Mr. Burry's comments that we haven't proven anything that we've said and I would emphasize, as the registrar has emphasized, that the burden of proof is on proponents. I hear references and arguments about low income and the un-disabled individuals. I challenge Mr. Burry, any evidence in the record that a prohibition on unlocking wireless devices has in any way shape or form harmed low income or disabled individuals. You know, it's nice to make the argument that the burden is on the components to produce evidence and there is no evidence. All right, let's go on to questions and I'll start. I get the sense, certainly from CTIA's comments and from what you said today, that it's at least your position that as compared to the last time we conducted a rulemaking, the availability of unlocked phones is greater than it was at the time of the last rulemaking. If that's wrong, just say it's wrong and I'll stop right there. Yes, that is our position and more to the point that it is our position that there's even greater evidence in the record which of course is what you all are working with that the availability of unlocked phones including Burry Low Price points for the unlocked phones are available. Okay, can you elaborate a little bit about the record shows you can? If you look at our exhibits, A and B, we have examples of hundreds, I believe, of unlocked phones and I have just testified or I wish I would believe is a fact that Apple and Google is now making the unlock and that's a matter of public record. We didn't submit the articles to that effect if that's of interest and that Apple is now unlocking, for example, iPhones, again, about the best record we could do. Okay, and you've already talked about this and maybe just want to arrest what you've already said but before I turn to the components I'd just like to give you an opportunity to explain to us what conclusions we should draw from that in terms of where we end up on this particular proposal and then after you've done that I'll ask you folks to respond and tell us what, hey, feel free to accept or attack factual proposition we just heard from Mr. Joseph and then secondly, assuming that that factual proposition is correct, I'd like to know what conclusions do you think we should draw from that? First Chris, come on. With respect to the conclusions, as I said, and I think I did say this already, burdens on performance to show substantial harm and that harm goes beyond inconvenience or some cost as the registrar has repeatedly said, for example, given the availability of unlocked phones. But also by the way, goes to the question of whether any claimed harm is the result of a network block or whether it's the result of a conscious decision made by the consumer to acquire a locked phone as opposed to an unlocked phone. And under those circumstances, we submit that there is no showing and that the register cannot find that there has been a showing of substantial harm that is due to the prohibition of the certain invention of network blocks. Okay, now, any of you talk to the point? I'll just briefly talk a little bit about the idea that consumers can just easily take and consumer choice is so great with respect to unlock phones and they can just switch carriers based on purchasing an unlocked phone. I think Mr. Joseph fails to point out that there are other restrictions that consumers face such as early termination fees, long term contracts. And so this is just another way to lock consumers into a particular carrier. We've seen that consumers do purchase their devices based on the carrier that it's tied to. And so sometimes you have exclusive contracts. Previously, the iPhone wasn't exclusive contract. And so the ability to take a phone with a consumer, we believe is an important choice that we may not be able to quantify how many consumers are doing it, but we don't know whether or not the unlocked phones are available or phones that people actually want. They may not be smart phones, they may be feature phones. So I think the idea that giving consumers some lock phones, some unlock phones is enough, I don't think, for us is really giving consumers a choice. We think consumers should have a choice regardless of who carries the phone. And they may actually want one of the locked phones and take it with them to a cheaper carrier. I think what I might have heard you saying, I just want to make sure I get clarification here. Are you suggesting that even with respect to some of the unlocked phones, you're still stuck with early termination fees and term commitments? Bruce, do you know if that's the case? It is true that if you acquire a phone, a pursuant to a long term commitment, pursuant to a contract, and as a result, the phone, there are some carriers, for example, that will subsidize phones that aren't locked. Okay. The rights of Carlos, they use other means to protect the subsidy interest, but that doesn't mean that the lock isn't also a valid means of protecting the interest that was related to the development of that phone in the first instance. And this brings us back to perhaps the business model versus other questions, which I think is different than what the focus of your question is, which helps to harm. But in some cases, the consumer opts to enter into a contract. In other cases, the consumer doesn't opt to enter into a contract. In the case of free-date phones, which, by the way, also extend beyond basic telephones, the consumer doesn't have a contract. There isn't any actual provision. There isn't a world in which the phone is subsidized only in the network block. Ensure that the carrier, that the phone isn't purchased and the subsidy isn't installed for other cases. But coming back to the question of harm, these other, again, it's the opponent that demonstrated the harm that is due to the network block. And it's the opponent's testimony now that the harm is actually due to these other factors than they actually undermine the network block. That sounds like the point. Can you explain why the termination fees and the commitments make any difference whatsoever in the case of the phone that is not locked? Why is that pertinent to what we're here about? I'm sorry. I just have a slightly different thing that I wanted to respond to there, which is that, sure, there is information available to consumers with respect to long-term contracts. And they know what they're getting into when they sign up. They're long-term contract with a locked phone in early termination fees. However, the lock extends beyond the term of the contract. Typically, a contract is one year or two years. And often, consumers sign into that deal. They might pay a couple hundred dollars for a phone. And then when the contract expires, the fact that the phone is locked often keeps a consumer coming back to the same service provider. So the lock does serve a slightly different purpose than the early termination fees and the long-term contracts. And the information that is readily available to consumers in the marketplace with respect to the early termination and the long-term contract does not extend to the mobile device lock, which operates beyond the junior contract. Well, actually, with respect to the information about the locks, it's also widely available in the marketplace. And the consumer purchases a locked phone note to their provider. And moreover, I would encourage you to point to any evidence in the record supporting the statements that you just made concerning what consumers know and what consumers don't know. Let me see if I can get some clarification on what's in the record on the following point, which relates to this. I heard some assertions, but I'm not quite sure how categorical they are, whether they're exceptions. But an impression that I get from what I've read and heard from CTIA, and I'm not necessarily saying that's what you're saying. I'm saying this impression I get is that once the contractual commitment is up, as a general proposition, the carriers will unlock the phone. But maybe that's not always, I don't know, but any of you that helped me on that, that's pertinent to the point you just made. Well, I think your question is directed to your impression. You get from our comments, I believe that is a correct impression, but once the contract is up, as a general matter, but not as a ubiquitous university. In all cases, the carrier will unlock the phone. As our comments made clear that there were certain cases where the carriers have invested in the development of the phone and the software. And as part of the inducement to do that, they have an exclusive distribution agreement. And there are, at least, it was my understanding that there were at least some carriers, there was at least one carrier, that up to a point, did not unlock phones for which they were the exclusive distributor. They had, because of the investment that they had made in bringing that phone and its functioning software, which is a copyright-interested market. Now, I say that with a major caveat, and that is, I have some reason to believe, and I'd like to check on this for the record. I just don't know, as I sit here, that the policy of that carrier with respect to unlocking the iPhone now actually extends beyond the iPhone to other phones. I just don't know that for sure, as I sit here, so I don't want to misrepresent anything. OK, then, please do follow up on that for us. If I may, first, on the harm, I go back to that the record is replete with the harm. The terminating a right of consumer on a non-impringing act is, in fact, harm. And that will, in fact, be truncated or terminated. Access to the consumer, to the content which they pay for, and is housed on that device, is, in fact, a right that's being truncated in many instances. I think most people would say, if they don't have access to the information on the phone, that their phone, personal phone, it is, in fact, a severe impairment of their expectations for that device. Going to the question you've asked originally is, are there other carriers, excuse me, are there devices that are being unlocked? Yes, there are more devices down than there were three years ago. But I would say that without your acts, without the act of the red shark providing this unlocking provision, there is a high probability that there would not be any unlocked phones by the largest carriers that dominate the manufacturers with the handsets. I think your policy of allowing unlocked phones has actually changed the marketplace and changed the wireless carriers' expectations. My carriers distinguish themselves on the ability for personal service to customers. That's why they're willing to take the time, the effort, energy to allow other devices from other carriers to come on the network and they service that customer. Without the unlocking provision, I think you would, less in competition, we would have fewer opportunities for our smaller carriers to distinguish themselves in the market and customers and consumers, especially consumers, have fewer choices and they would have less benefits. I don't know that you would have unlocked devices from the larger carriers. Has you not made the decision originally to say this is in fact a right that consumers should in fact have? Now, whether you want to measure harm by a empirical study, and I understand the ship to the burden here, but what I suggested to Mr. Joseph is he suggested that there were no consequential evidence of harm. You can't just make a statement without also being able to support it. And just like he's expecting of us, I can say that there's millions of consumers right now on my carrier's networks that have devices that they have unlocked and brought to our network that they have benefited economically from that because they have not had to purchase another device and they have enjoyed full use of content and they did in fact be, were able to act on a non-infringing act, i.e. take the front of another carrier. Those are all well documented in the record of 2010 and I think the record that's currently before you. So I take issue with that, but I really believe that you've had a greater impact than you may think on the issue of other unlocked devices on the market today. I think your actions in fact have contributed greatly to that industry policy or practice of unlocking funds. And I disagree that there are carriers that unlock funds, but there are carriers, large carriers that do not unlock all the funds and will not unlock all the funds that you're requested by consumers unlocked. If I can just add a couple of points. We did detail the publicly available unlocking policies, the few carriers that are unlocked by comments. However, we were completely unable to find a publicly available unlocking policy for Sprint. So I don't know, maybe there is one, but I was unable to find it. And there are a number of terrible limitations on these unlocking policies. For example, T-Mobile will only unlock one phone for a customer every 90 days or more. So if I have two unused old T-Mobile phones sitting in a drawer and I'd like to give them to friends, I have to wait 90 days between unlocking them if I want to go to T-Mobile to do it for them. And another thing is that I can't give my phone to a friend who's not a T-Mobile subscriber and have that person go to T-Mobile to get it unlocked. I have to do it myself as a T-Mobile customer and someone who's not a customer certainly can't go to the carrier and ask them to unlock the phone and it's already locked to the carrier if that happens. Any other questions? Do you want to make some questions? Well, let's see. As far as waiting 90 days or get a phone unlocked and not be a source of multiple unlocked phones and with 90 days, it's hard for me to understand how that is characterized as a terrible restriction. The goal is to be sure that you're unlocking the phones. Actually, they haven't even filled the T-Mobile, it doesn't even require that there's T-Mobile as policy says it will unlock even if you're still under it. With respect to the speculation and it is only that the exemption that the register has started granting in 2006 has fostered the carriers or has promoted the carriers actions in unlocking. That strikes me and again, there's no evidence to support causation of a coincidence in hiding that many other factors at play. And I think the fact that there's no instance of a carrier ever selling a customer for unlocking their phone for connection on network or for the scope of the exemption shows that the fact of the exemption used narrowly has not been what has caused the carriers to unlock. Okay, one final question on this topic and we'll move on. So, excuse me. The record shows that there are certainly a wide number of devices that are available in unlock form. Can anyone identify any particular devices that are not available in an unlock form and that have features or that for some reason a consumer would want to have that device in particular unlocked as opposed to some other device that is out there in an unlock form? I don't know if that's clear, but the point basically being there are all sorts of alternatives apparently for unlocked devices. Why, if a particular model isn't available in unlock form, does that make a difference? I would, in the Metro PCS final under is a statement. I don't think any of the exclusive devices that AT&T has in its portfolio are unlocked. There are other ways to restrict access to the phone.