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AT&T gains latest victory against cell phone traffickers

One issue which deeply affects the prepaid cellular industry is the presence of mobile phone traffickers. While they’re not moving narcotics in and out of the country, they’re certainly undermining a system which has proven — if not beneficial, then at least preferable to consumers. Big box retailers like Wal-Mary have prepaid phone packages, which are normally very cheap. This is because the company subsidizes the cost in hopes that they make back the money as the user buys more minutes. However, when traffickers buy these packages and bulk, unlock them, and resell them for a profit, the carrier takes a hit. Enough hits, and the system goes kaput. We’ve seen a number of carriers take on these traffickers lately, the most recent of which is AT&T, which just won four injunctions against traffickers.

Judy Cavalieri, vice president of marketing and head of AT&T’s prepaid phone products, puts the issue in perspective: “Prepaid handsets provide a viable, affordable option for customers who choose not to purchase a postpaid plan. We’re able to offer these GoPhone handsets at such great discounts only if they’re used as intended on our network.”

The Digital Millennium Copyright Act explicitly allows for phones to be unlocked by users, but only with the intention of connecting it to another cell phone network. While traffickers’ intention is for the phone to eventually connect to another network, it’s not direct. In other words, if they were unlocking them for personal use, that would be one thing. But to buy them in bulk, at or below cost, and resell them at a profit is not kosher, at least in the eyes of the law.

AT&T has so far obtained 15 permanent injunctions. We’ve seen Tracfone especially harsh on traffickers. They’ve even taken out ad space to further the cause.