Letter to FCC: Why are US carriers locking handsets to networks?

'If someone else puts a lock on a thing that you own, and doesn't give you the key, it's not for your benefit'

A public interest group has asked the Federal Communications Commission (FCC) to look at whether the wireless industry's voluntary phone unlocking commitments are even effective, claiming the practice harms competition.

The advocacy group, Public Knowledge, met with FCC staffers last week and filed the comment [PDF] shortly afterwards, arguing the practice of locking phones to a network makes it "more difficult for consumers to change carriers," reduces the number of devices available on the secondary market, and hurts smaller players on the scene.

The nonprofit filed the request as part of an ongoing investigation by the FCC into the State of Competition in the Communications Marketplace, conducted biennially [PDF] by the agency.

The group is hoping the agency will throw its weight behind policy efforts to change this.

Americans can unlock their handsets from the services of the carrier that sold it to them, but the procedure can be a headache. The fact that consumers can unlock them free of charge came about in 2015, when carriers were told to give customers a "penalty-free" way to unlock them under the Unlocking Consumer Choice and Wireless Competition Act. The Act allows "circumvention (unlocking) to be initiated by the owner" but only "when such connection is authorized by the operator of such network" – after their service contracts expire.

Public Knowledge added that the practice of locking phones disadvantages low-income customers and places a "burden on smaller carriers, new entrants, and MVNOs in particular... due to a lack of handset availability," compounded "by the competitive disadvantages caused by agreements between the handset manufacturers and the larger service provides like AT&T, Verizon and T-Mobile, which smaller carriers may not be able to negotiate."

Verizon, for example, says in its FAQs that all smartphones the comms giant or any of its retail partners sells are locked for at least 60 days from purchase, even when you've paid full retail price or paid off your device payment agreement early. It claims the policy helps to "prevent theft and protect customers from fraud."

That "protection" stays in place if you plan to travel abroad and considered buying a local SIM. It helpfully states: "If you are travelling internationally and your device is locked, you can sign up for one of Verizon's international services" – and no Wi-Fi calling if it's not to the US. Under its TravelPass package, "Wi-Fi calling to a country other than the US is charged [at] international long distance rates, regardless of whether or not you have an international travel plan." Good to know.

T-Mobile has an exception for deployed military personnel, though they have to show their deployment papers.

As America's second biggest carrier (110 million subscribers in Q2 2022 to Verizon's 142.8 million), T-Mobile holds that it'll only unlock a "postpaid" device if it's been "active on the T‑Mobile network for at least 40 days on the requesting line" and they can't have asked for "more than two mobile device unlocks ... per line of service in the last 12 months."

AT&T Wireless, meanwhile, allows customers to unlock their devices immediately if they were paid in full when you bought it. Those on an installment plan or contract have to wait 60 days to unlock it.

In Canada, as of 2013, consumers can "have their cellphones unlocked after 90 days, or immediately if they paid for the device in full."

The policy across Europe is mixed, but the UK's mobile networks have been forbidden by the country's comms regulator Ofcom from selling phones locked to their services from last year. The last day you could sell a locked phone was December 16, 2021, with the regulator saying that "almost half of customers who try to unlock their phone have difficulties doing so – including long delays or loss of service." Brits who want to change mobile provider can use a "text-to-switch process" where they get the code they need after sending a free SMS.

Speaking about the so-called "locked-access policy of US wireless carriers" as long ago as 2007, then-Google CEO Eric Schmidt noted while talking at a Google Analyst Day that lockup "really slowed down innovation."

Right to repair and sustainable electronics guru Kyle Wiens of iFixit said of the situation: "How in the world is locking phones good for consumers?

"Allow me to quote Cory Doctorow, If someone else puts a lock on a thing that you own, and doesn't give you the key, it's not for your benefit.

"Consumers should be able to move their phones between networks without restriction. Period." ®

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