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T-Mobile and AT&T say US regulators should drop a plan to require unlocking of phones within 60 days of activation, claiming that locking phones to a carrier's network makes it possible to provide cheaper handsets to consumers. "If the Commission mandates a uniform unlocking policy, it is consumers—not providers—who stand to lose the most," T-Mobile alleged in an October 17 filing with the Federal Communications Commission.
[...] T-Mobile claims that with a 60-day unlocking rule, "consumers risk losing access to the benefits of free or heavily subsidized handsets because the proposal would force providers to reduce the line-up of their most compelling handset offers."
[...] T-Mobile and other carriers are responding to a call for public comments that began after the FCC approved a Notice of Proposed Rulemaking (NPRM) in a 5–0 vote. The FCC is proposing "to require all mobile wireless service providers to unlock handsets 60 days after a consumer's handset is activated with the provider, unless within the 60-day period the service provider determines the handset was purchased through fraud."
[...] T-Mobile's policy says the carrier will only unlock mobile devices on prepaid plans if "at least 365 days... have passed since the device was activated on the T-Mobile network."
"You bought your phone, you should be able to take it to any provider you want," FCC Chairwoman Jessica Rosenworcel said when the FCC proposed the rule. "Some providers already operate this way. Others do not. In fact, some have recently increased the time their customers must wait until they can unlock their device by as much as 100 percent."
[...] AT&T enables unlocking of paid-off phones after 60 days for postpaid users and after six months for prepaid users. AT&T lodged similar complaints as T-Mobile [...] In an October 2 filing, Verizon said it supports "a uniform approach to handset unlocking that allows all wireless providers to lock wireless handsets for a reasonable period of time to limit fraud and to enable device subsidies, followed by automatic unlocking absent evidence of fraud."
The public interest groups also note that unlocked handsets "facilitate a robust secondary market for used devices, providing consumers with more affordable options," the NPRM said.
[...] The Supreme Court recently overturned the 40-year-old Chevron precedent that gave agencies like the FCC judicial deference when interpreting ambiguous laws. The end of Chevron makes it harder for agencies to issue regulations without explicit authorization from Congress. This is a potential problem for the FCC in its fight to revive net neutrality rules, which are currently blocked by a court order pending the outcome of litigation.
(Score: 5, Funny) by Barenflimski on Tuesday October 29, @04:03AM (3 children)
I feel so relieved that these two big companies are looking out for us small guys.
They have all of the data and know exactly what is best for us.
Its so delightful to see them put aside profits and fight the government for all of us.
(Score: 0, Interesting) by Anonymous Coward on Tuesday October 29, @06:08AM (2 children)
I take "..." paragraphs as not important, so skip them, but..
I assume this applies to contract-paid phones. You get the phone for "free" and pay for it for the length of the contract. (I thought they illegalized this years ago.) Then, if someone skips out on the contract two months in, they get a phone for $cheap. The provider foots the bill.
Or do they? Since when have you heard the phrase, "Bank error in your favor, collect $100"?
What will really be achieved by making contract-bound phones unlockable is socialized reimbursement (insurance). The cost to the providers for lost phones (people skipping out after two months..) is going to be averaged across all the other subscribers. That $1000 phone is now $1052, because so-many people didn't actually pay for theirs (but got it anyway). You really get any say in this, that's just the only way that's left for the providers to do it.
The long-run is: people see that they can get a phone for 1-2 months of contract payments, so they pay one or two months, and skip out. The providers bump the first 2-3 months contract price, and then lower it, as an "incentive" -- no phone service at all unless you pay $400/mo, but hey we'll knock it down to $125 after the first three months! -- because otherwise they lose money on phones.
The intelligent types will go, "This phone costs me $1200 if I get it under contract? Fine then, I'll buy it outright for $1000 and then sign up!" -- until the phone providers, needing to recoup their contract losses, engage in the first-three-months contract terms for recovery.
It's really just a question of how many honest people are able and willing to cover for the dishonest people. If the provider's can't "repo" the phones, then they're going to have to find some other way to cover the losses. Perhaps that means higher first N months cost, perhaps that means higher contract-phone payments, or maybe it means they keep unpaid phones locked to their network. I'd say "take your pick," but someone else is going to decide for you.
(Score: 4, Touché) by deimtee on Tuesday October 29, @08:14AM (1 child)
Most likely option is they will rewrite their contracts as Lease-to-Own. You sign a contract to "lease" the phone for 12/24/36 months at so much per month, separate payment for service. You don't own the phone, and it remains locked to their network until the "lease" is up, at which point they "gift" you the phone.
If you cough while drinking cheap red wine it really cleans out your sinuses.
(Score: 2, Interesting) by Anonymous Coward on Tuesday October 29, @05:49PM
The way it works right now, at least with Verizon, is that they charge you separately for the phone and the service. You are welcome to pay off the phone anytime you want and then, without penalty, move to another provider.
I never do that. Rather, I purchase an unlocked phone and add it to my service. No muss, no fuss, no need to be beholden to anyone.
tl;dr: Don't buy phones from telecom vendors and don't buy "locked" phones.
(Score: 5, Insightful) by Rosco P. Coltrane on Tuesday October 29, @06:56AM (3 children)
if you have the attention span of a goldfish and you just look at the initial purchase price.
If you look at what end up paying at the end of the carrier contract, suddenly your handset looks pretty damn expensive.
(Score: 5, Insightful) by stormwyrm on Tuesday October 29, @08:19AM (1 child)
I've done some calculations and noticed that if you buy an open-line handset which is not locked to any mobile provider and add up the monthly bills for a no-device phone plan over two years it indeed comes up much cheaper. In my country it seems that the mobile providers effectively charge you an interest rate that amounts to something like 15% to 20% for the two-year subscription plan. They will give you a generous plan so it looks like you're getting a lot but for a monthly fee that is so high that most of it is free money for them given how you're probably not going to be able to use that much. Here there's a plan for a Samsung Galaxy Fold Z 6 (retail, open line price of US$1800 equivalent), and you pay $60 a month for the phone for two years. So far so good. But you also have to also get a $30/month plan. However, you'll never be able to use all the call minutes and data bandwidth the contract gives you within the month so most of that $30 is effectively interest payment. Instead I opted for a $15/month plan that is sufficient for my needs and bought the phone on the open market on an installment plan with my credit card. The banks would never get away with charging such usurious interest rates.
Numquam ponenda est pluralitas sine necessitate.
(Score: 3, Interesting) by sjames on Tuesday October 29, @02:58PM
The real gotcha is the "penalties" for wanting to end the service contract early. Rather than just offering to let you buy out the phone for the remaining balance or allow you to move the phone to a different plan and keep paying the contracted monthly amount on the phone, they want a penalty amount that amounts to the total cost of the phone as if no payments had ever been made.
They tie it up like that so they don't lose their customers when someone comes along offering a better deal on the service.
(Score: 2) by Sourcery42 on Tuesday October 29, @06:01PM
Exactly. I can't speak for T-Mo, but AT&T is completely full of shit.
I'm an AT&T customer because I get a pretty steep discount, otherwise I'd probably use some MVNO. I always buy my phones unlocked because AT&T quit subsidizing them about a decade ago. The first smartphone I got, I paid $100 out of pocket with a 2-year contract. I checked my upgrade options just now. For example, I could have a Galaxy S24 Ultra for $1300 paid over 3 years, or an iphone 16 pro max for $1200 over 3 years. I looked up the purchase prices for those phones on Samsung and Apple's websites. Surprise! The Samsung is $1300 and the Apple is $1200. There is no subsidy. You just get a locked down device with some added carrier bloatware on it and a payment plan for the full purchase price tacked onto your monthly bill.
The only argument they could possibly make is they're saving me the time value of money not paying that whole ridiculous price up front, but I'm gonna go with they're just full of shit.
(Score: 0) by Anonymous Coward on Tuesday October 29, @08:18AM
.. to be lied to!
(Score: 3, Insightful) by TheReaperD on Tuesday October 29, @10:02AM
The companies claim this is good for consumers.
It is... in the same way that paying protection money to the mob is good for your business. It's a racket. A solution to solve a problem they caused. The premium you pay for these 'generous' offers would be illegal if they just made the cost of the phone a loan. Which is precisely why they do it the way they do.
So, the mobile companies saying this is good for the consumers is the same as the mob saying their 'protection' is good for the community.
Ad eundum quo nemo ante iit
(Score: 2, Interesting) by pTamok on Tuesday October 29, @11:26AM (2 children)
One can argue that locking handsets (indirectly) provides a social service.
People who have little means, and are unable to get a loan other than by using loan sharks or other forms of usuary, can get one of the near-essentials of modern life: a (smart)phone because they commit to paying over the odds for a contract that includes a handset. It is a form of enabler.
That said, what it is doing is covering up and exploiting the problems that some people have with managing their finances. My family, going back several generations, did not have much money - but it was drummed into me that you didn't take out loans or buy on credit or hire purchase because you ended up paying more. You did without and saved up, until you could buy what you needed/wanted. Not everyone behaves in this manner, and loans/credit/HP is a way of life for some.
When people cannot manage their finances, they are open to being exploited. When people are poor, they are open to being exploited via the 'Sam Vimes Boots [wikipedia.org]' effect*. The locking of the handset is a way of the phone service provider gaining some security on the 'loan' of the cost of the handset to the customer, which is repaid, as people point out, at very high effective interest rates.
For some people, making cheap micro-loans available to buy handsets would be sensible. For others, who either cannot, or will not, manage their finances, there is little that can be done - locked handsets might be the only way they can reasonably get phone service. How do you provide a near-essential service to people with the worst problems?
*Another example, from India, is that some people cannot afford to buy a whole box of washing powder to clean their clothes (and might not have or even own any) space to store it). As a result, they buy single wash sachets at a large mark-up in price per kilo compared to buying in the 'bulk' of a whole box. They end up paying more to wash their clothes than richer people.
(Score: 4, Touché) by VLM on Tuesday October 29, @12:20PM
The actually poor people buy the $50 android phone. The folks buying the $1000 phone at the equivalent of loan shark interest rates are relatively wealthier.
(Score: 1, Informative) by Anonymous Coward on Tuesday October 29, @11:25PM
People who can't get a loan can't get normal monthly cell phone service [livewell.com] either. Did you think that the big telecoms don't do credit checks or something?
Those folks need to use pre-paid plans, usually from MVNOs and wouldn't be on any contract, let alone one that gives them an expensive smart phone to pay off over time.
Not sure where you are, but in the US, you're way off. Elsewhere? I have no idea.
(Score: 5, Funny) by MrGuy on Tuesday October 29, @12:25PM
Instead of debating whether locked or unlocked are better for consumers, simply offer both and let people choose. The locked phones will be less expensive and come with strings attached.
Oh wait? We do that already because you can buy direct from manufacturers unlocked today? And a lot of consumers prefer the cheaper locked ones?
This seems like a solution to a problem we don’t actually have.
And the presentation on it is misleading. Would you prefer your phone to be unlocked so you can switch carriers? Yes, of course! Would you prefer your phone to cost more? No, of course not. People seem to think these are different choices.
Rather than mandate carriers only offer unlocked phones, mandate they offer an unlocked OPTION. And let people choose.
(Score: 3, Touché) by VLM on Tuesday October 29, @12:29PM (1 child)
Why is the ogliopoly afraid of unlocked phones? Just forbid providing service to them without a loan-shark interest rate loan for a phone. Does it matter if unlocked phones exist if they collude as a group to refuse service to them?
I'm sure to avoid various legal entanglements it'll be marketed as "for your safety we can't verify old phones can dial 911 properly" or some vague nonsense about technical compatibility "Well, as an unlocked phone it can't legally have the corporate app installed, being locked is part of the app ToS, and you can't pay your bill without the app installed on your phone, so indirectly we can't provide service to an unlocked phone"
(Score: 2) by Joe Desertrat on Tuesday October 29, @11:59PM
I would go further and ban the sale of phones with an O/S preinstalled. Let consumers pick and choose an O/S, and let phone manufacturers make their product functional with as a wide a range of O/S as possible to gain as wide a consumer base as possible. Ditto for PC's while we're at it.
(Score: 4, Insightful) by DannyB on Tuesday October 29, @03:02PM
I buy an unlocked phone, let's say a Trixel, from Froogle. I take it to my network provider's store for a SIM (subscriber identity module).
I have no contract. I can cancel my service on 30 days notice. It's the only way to go.
Santa maintains a database and does double verification of it.
(Score: 2) by https on Tuesday October 29, @07:45PM
It's not like they're the best at it, but phone companies have been doing it longer than anyone and it shows in how relaxed they are about it.
Offended and laughing about it.