Opinion ID: 683208
Heading Depth: 2
Heading Rank: 3

Heading: Free Riding

Text: 20 The defendant nevertheless attempts to analogize his devices to those in McNutt by claiming that he is merely piggybacking onto an an existing system and getting a free ride without actually imposing any costs on anyone. The Tenth Circuit accepted that characterization in extending the holding of McNutt to tumbling the ESN. Brady, 13 F.3d at 340 (holding that Sec. 1029 does not apply to free riding on the cellular system in part because the use did not result in direct accounting losses). The district court also seems to have been swayed by that argument. We will leave for another day the question about whether or not free riding is a defense to prosecution under section 1029, because we conclude that Defendant's activities imposed a real and legally significant cost. In McNutt the receipt of the scrambled signal in no way diminished the usefulness of the signal to other customers. In this case, however, it is apparent that the use of the tumbling phones does impose a cost upon the suppliers, and ultimately the consumers, of cellular phone service. Beyond possible direct costs such as fees to long distance carriers and local exchanges, the calls placed by phones such as those modified by defendant impose an additional burden on the cellular system. Even if a particular call could be placed without any additional hardware or labor, the fraudulent call imposes an opportunity cost. Fewer additional paying calls may be carried on the existing system before enhancement becomes necessary. It is not necessary to show that the local carrier actually paid out dollars to establish that it has suffered a cost beyond the loss of the opportunity to sell the service for that call. We therefore reject defendant's and the Tenth Circuit's characterization of the use of tumbling phones as free riding and find misplaced the attempted analogy to unauthorized descrambling of broadcast signals.