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Subsidy Password & Motorola Phones
The term Subsidy Password is used by Motorola to refer to the 8-digit unlock code necessary to remove the operator lock (also known as subsidy lock) from Motorola cell phones. This code is randomly assigned to individual cell phones by the OEM (Motorola) on request of the mobile service operator, and prevents use of a particular phone on a cellular network other than that to which the phone was originally sold.
The term "subsidy" refers to the subsidization of cell phones sold to customers that purchase mobile phones as part of a contract with the mobile service operator. Many network operators provide these subsidies as an incentive for users to sign extended contracts, and use the subsidy lock as a means of protecting their investment. The installation of such locks means that users often are forced to purchase a different phone if they decide to switch their network (of advantage to both the OEM manufacturer and cellular service provider).
Motorola maintains a central database of Subsidy Password and IMEI (Unique Manufacturer Identification) numbers. They make the Subsidy Passwords for a particular cellular network available to that network, so that a particular operator is able to release phones from their networks once the contractual obligations of the customer have been made. However, most network operators are reluctant to release these codes, since doing so is of no benefit to them. A few networks make these codes available, but only at high prices meant to deter customers.
As a result of the lack of open access to the Subsidy Password database, a number of online services have grown around providing alternative unlocking software. The methods used to unlock cell phones may vary, and most involve reading the lock code from the phone, some times resetting the lock code. Current U.S. law does not prohibit the act of cell phone unlocking. Network carriers some times unlock their customer's phones. The practice is not different from that when a user unlocks his own phone. While one could consider that the DMCA brings the legality of such applications under question, recent legal cases such as Lexmark v. Static Control have confirmed that the use of software to reprogram such phones is not illegal. This is particularly true since unlocking applications increase compatibility with alternative networks, promote positive competition and allow customers greater freedom to use the phones that they own.