Unlock all phones within 60 days or bust. That is the new proposal announced by the Federal Communications Commission (FCC) last Thursday. If implemented, this unprecedented rule will ultimately limit the practice of permanently locking certain smartphone deals to specific networks.
The Tradition and its Abolition
To date, cellphones that are purchased from carrier deals contain software that prevents them from being used on different mobile networks, even if they are technologically compatible. There are of course official processes of unlocking these devices. But it varies per model and carrier, and at times even requires certain conditions or instructions, which generally force the consumer to visit a physical store.
The proposed rule would instead standardize this process across all carriers. So long as the user wants to, and there are no hardware compatibility issues, they will be free to switch to any service provided that they choose.
As FCC Chairwoman Jessica Rosenworcel officially stated, “When you buy a phone, you should have the freedom to decide when to change service to the carrier you want and not have the device you own stuck by practices that prevent you from making that choice.” The proposal seeks to establish clear, nationwide mobile phone unlocking rules, potentially revolutionizing how consumers interact with mobile plans and their service providers.
Implementation Uncertainties
While the proposal aims to ultimately benefit consumers, it may face challenges in implementation. Carrier service contracts and mobile plans remain very popular to this day, since you get to pay for the entire unit via installment plans. A 60-day unlocking rule would inevitably complicate the unlocking process altogether. So at the moment, the FCC is seeking input on how the 60-day unlocking requirement would interact with these common pay-over-time arrangements. Key areas for consideration include:
- Application to existing and future wireless contracts
- Potential impact on the secondary phone market
- Effects on carriers' incentives to offer discounted phones for postpaid and prepaid service plans
- Benefits for smaller providers, new entrants, and resellers
Andrew Jay Schwartzman, Senior Counselor for the Benton Institute for Broadband and Society, praised the potential impact of the rule, stating that such development marks the most significant increase in competition within the wireless industry since the introduction of number portability. After all, millions of consumers have indeed been hindered from changing providers due to locked handsets.
What Will the Carriers Do Now?
The reaction of major carriers to this proposal is surprisingly mixed. You have those who may expectedly resist the rule, since locking requirements are often used to ensure customers fulfill their commitments after receiving deals on smartphones or service plans. But then you also have Verizon, which already implemented a similar rule (with the exact 60 days even) with the FCC previously.
Regardless of their opinions, this new rule could have far-reaching implications for the mobile phone market. While its actual approval is still up in the air, this change could incentivize the entire competition by reducing switching costs. In fact, they might even simplify entire unlocking policies, as a sort of show of faith, enticing potential new users to their platform.
Whatever their ultimate moves will be, it is certain that a quick adaptation is necessary, lest their archaic practices of keeping consumers tied to their platforms be left in the dust of increasing government oversight on questionable tech industry practices.
