Linus Torvalds has given linux kernel license to GNU General Public License (GPL) version 2. GNU make sure that any software source code licensed under it have to make originating source code open and freely availble to all its users. Here, freely doesn't mean by cost but it means that it is freely available to users to distribute and modify the code.
There is the third version of GNU, GNU Lesser General Public License (LGPL) version 3. But it imposes some more permissions on the license. Torvalds doesn't like some provisions in version 3 and have announced that linux kernel will not come under version 3.
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