Wireless Carriers Agree to Unlocking Rules

The US wireless carriers have ceded to the threats of new FCC Chairman Tom Wheeler, announcing Thursday they've agreed to adopt a voluntary framework for how their customers can unlock their phones for use on other networks.

A month ago, Federal Communications Commission (FCC) Chairman Wheeler warned the CTIA that the carriers must move faster to adopt an amendment to the Digital Millenium Copyright Act (DMCA) that went into effect in January making it illegal to jailbreak cellphones without the wireless operator's permission -- or else face regulation. (See FCC: Unlock or We Regulate.)

On Thursday, AT&T Inc. (NYSE: T), Sprint Corp. (NYSE: S), T-Mobile US Inc. , Verizon Wireless , and U.S. Cellular Corp. (NYSE: USM) all signed a voluntary agreement, which requires them to notify consumers when they become eligible for unlocking at the end of their contract, and to unlock their devices or ask the manufacturer to do so within two days of receiving a consumer's request.

These are the provisions that Wheeler called for, but the carriers did it ahead of being forced to by regulation. The move will likely benefit T-Mobile the most as it's aggressively targeting AT&T's customers to switch to its compatible network. But, according to Jan Dawson, chief analyst at Jackdaw Research, it could have more far-reaching affects as carrier handset policies change.

"As more carriers offer preferential rates for customers bringing their own devices, unlocking will become a more significant issue," he writes in a research note. "This may lead to a rise in churn rates, which in turn will force carriers to respond more aggressively to competitive threats."

— Sarah Reedy, Senior Editor, Light Reading