- Phone unlocking policies are inconsistent across U.S. carriers
- The agency is proposing uniform phone unlocking rules that would require operators to unlock mobile phones 60 days after activation
- The proposal will be subject to public comment before it’s finalized
Consumer advocates cheered the Federal Communications Commission's (FCC) unanimous decision Thursday to pursue a rulemaking that would require mobile phone service providers to unlock customers’ cell phones within 60 days of activation.
The policy doesn’t go into effect immediately, but the five members of the commission agreed that pursuing a consistent unlocking policy for all carriers is a step in the right direction. The move means consumers will more easily keep their handset when switching carriers.
“You bought your phone, you should be able to take it to any provider you want,” said FCC Chairwoman Jessica Rosenworcel in a statement.
Currently, phone unlocking policies differ among service providers, in part due to rules attached to various spectrum licenses or merger conditions.
For example, as a result of separate FCC-imposed conditions related to the 700 MHz band and the TracFone acquisition, Verizon must automatically unlock a customer’s handset after 60 days regardless of whether the customer asks for it.
Under conditions in the Sprint merger, T-Mobile is required to unlock prepaid handsets within a year of activation on its wireless network. Similarly, as part of the Mint Mobile acquisition, T-Mobile committed to a 60-day handset unlocking period for all Mint Mobile and Ultra Mobile handsets activated on the T-Mobile network both before and after the closing of that transaction, although that’s subject to exceptions.
To address some of these patchwork policies, the FCC decided it’s in the public interest to formulate a set of handset unlocking requirements that will apply across the board to all U.S. mobile wireless service providers.
PK gives the OK
The consumer advocacy group Public Knowledge (PK) called the FCC’s move a critical step toward fostering competition in the wireless market.
For years, Public Knowledge has talked about how phone locking imposes unnecessary burdens on consumers, particularly those from low-income communities, by locking them into service contracts and preventing them from switching to more competitive plans, said John Bergmayer, legal director at the organization.
“Phone locking also keeps used phones off the secondary market, which removes affordable options from the market while limiting how much consumers can get for their older phones by trading them in or selling them directly,” Bergmayer said in a statement.
“As we’ve seen in other countries like the U.K. and Canada, where similar policies have led to more competitive markets and better consumer outcomes, we are confident that the FCC’s approach will yield significant benefits for American consumers,” he added.
MobileX is all in
Peter Adderton, founder and CEO of MobileX, an MVNO that uses Verizon’s network, welcomed the handset unlocking proposal. His company launched last year using a BYOD model and was immediately surprised at how many times consumers were trying to join the MobileX network but couldn’t because their devices were locked to another carrier.
“At MobileX, we regularly hear from consumers who want to sign up for our wireless service but find out during activation that their device is restricted,” Adderton told the FCC ahead of Thursday’s vote.
Some 85% of these prospective customers aren’t able to successfully get a carrier to unlock their device and are blocked from moving forward with the activation on MobileX, he said.
“These customers often express confusion and frustration over not being able to use a device they own and paid for with the carrier of their choice,” he said. “This rule will address these frustrations, allowing more consumers to take advantage of the flexible and affordable services we offer.”
NTIA: It’s a win
The National Telecommunications and Information Administration (NTIA) is on board as well. In fact, the agency said it’s been advocating for an unlocking policy for over a decade.
“Consumers should not be locked into a wireless network simply because of how they bought their phones. The ability of consumers to easily take their existing phone to a new network provider will result in greater competition in the wireless marketplace,” said NTIA Administrator Alan Davidson in a statement. “That’s a win for everyone.”
The main push-back to the new rules is likely to come from the wireless carriers themselves, but they appear resigned to the order.
In an ex parte filing last week, CTIA, the lobbying organization representing wireless carriers, urged the agency to incorporate additional questions into the order, such as whether an exception to the 60-day unlocking requirement should be made for lost or stolen phones.
Wireless carriers and other stakeholders will have another chance to give their 2 cents on a wide range of topics before the policy is finalized. Other topics out for comment include how a general unlocking requirement will affect wireless resellers and small and rural wireless providers compared to the national service providers and how to handle handsets that are acquired through fraud.