Cellular Tethering Data Fees: Are They Legal?
by Christopher K. Provost
Smartphones have become a way of life, and users often dread the day they leave home without them. Smartphones provide instantaneous access to correcting fallacies, up-to-date sports scores, work emails and all other quick Internet browsing needs. Tethering is a mobile feature which allows sharing Internet connections from Internet-capable mobile phones with other devices. This feature, often dubbed a “mobile hotspot” by mobile phone carriers, allows the Internet-connected mobile phone to act as a portable router when providing tethering services to others. A cellular data contract with a mobile provider allows the user access to the company’s data network as a service for a monthly fee.
Three of the four major mobile providers, AT&T, T-Mobile and Verizon Wireless, currently charge a separate service fee to allow tethering of cellular data on a mobile phone. Sprint has completely blocked this feature to date and only offers discrete data plans for each device. AT&T, T-Mobile and Verizon Wireless all have drastically changed their data contracts from unlimited to limited tiers (similar to those of cable and satellite companies). The purposes behind tethering fees are to prevent an increased strain on the mobile phone carriers’ data infrastructure, monetize a service already paid for and prevent third parties from entering into competition.
The home telephone and cable broadcasting industry have a longer history of regulation of service fees than the wireless industry and may provide strong precedent for challenging the legality of tethering data fees. In 1982, courts responded to AT&T’s monopoly over the telephone industry, instituted deregulation and divestiture, and a decade later Congress passed the Telecommunications Act of 1996, all in an attempt to open the market nationally and allow fair competition. The courts found that AT&T was essentially generating excess profits on equipment sales from its vertically integrated subsidiary, Western Electric.
The Cable Television Consumer Protection and Competition Act of 1992 provided the FCC with exclusive jurisdiction to regulate cable service rates. Following the passage of this act, Adelphia Communications Corporation was sued over a “per outlet fee.” Adelphia was overcharging its subscribers for additional cable outlets within the same location, i.e. homes or businesses subscribing for service on more than one television. Both of these cable and phone service excess charges were found to be frivolous as they were charges for a service or equipment already being paid for by the end user.
As amended, the Digital Millennium Copyright Act (DMCA) anti-circumvention provision allows computer programs that enable cellphones to execute various software applications to fall under the list of exemptions to the DMCA. 17 U.S.C. § 1201(a)(1). In short, this provision allows “rooting or jailbreaking” of cellphones to gain access to software features not authorized by the mobile phone provider. For iPhone users, some features available to a “jailbroken” iPhone not available to stock iPhone users include: Facetime chatting over 3G; tweaking your personal assistant, Siri; and tethering data with your Wi-Fi only iPad, all for free.
Though “jailbreaking” and “rooting” of mobile devices is legal, this device liberation leaves users in violation of the end-user license agreement for the device and in violation of the terms and conditions of data usage contracts/Terms of Service (TOS). Punishment for violators varies and can result in being automatically charged for a tethering plan or getting dropped from the mobile phone providers’ service.
Verizon is currently being sued by Free Press for requesting Google to restrict Verizon customers’ access to third party tethering applications. According to the complaint, this restriction violates the FCC’s license to Verizon of the C Block of the Upper 700 MHz spectrum in that the licensee “shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice.”
This conflict between allowing access to unauthorized, but legally obtained, software under the DMCA, restrictions of mobile phone providers TOS clauses, and the FCC’s past restrictions against frivolous charges to cable and home phone services already being paid for raises the question: “Are cellular tethering data fees legal?”
Christopher Provost is an associate attorney at Modjarrad and Abusaad Law firm. He can be reached at CProvost@modjarrad.com.