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

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MordyK 12/16/2013 | 2:01:40 PM
Re: Good move Yep! Apple's retail empire's success makes the models resurgence possible. Additionally the phenomenon of untethering devices from plans started by TMo adds additional impetus to the model.
Sarah Thomas 12/16/2013 | 9:25:32 AM
Re: Good move In the US, I believe it's free provided your contract is up and you don't owe anything on the phone, which are both required for you to unlock in the first place.
Sarah Thomas 12/16/2013 | 9:22:39 AM
Re: Good move Good point. That model never took off in the US (one reason NOkia struggled here), but we're starting to see a resurgence of it here. Samsung's Best Buy presence and Google's retail ambitions are two early examples.
sam masud 12/13/2013 | 3:40:12 PM
Re: Good move Is there a cost for unlocking phones--or does the carrier do it for no charge to the sub?


And here's a thought: Unlock the phones, and lock up the carriers--for surreptiously cooperating with the N*A     :-)




MordyK 12/13/2013 | 11:53:23 AM
Re: Good move I wonder what effect this will have in the US on brands creating stores and selling phones directly to customers through stores or channel partners...
Sarah Thomas 12/13/2013 | 10:26:48 AM
Re: Good move Yeah, it's one thing to have a page about it on their web site, but the FCC wanted it to actually proactively tell its customers. I can see why they wouldn't want to do that. It might spark the idea in customers that had never previously thought about it.

That is surprising about Sprint, especially since it has a BYOD policy with its MVNOs.
Sarah Thomas 12/13/2013 | 10:24:17 AM
Re: Good move Agreed, Jim. I wasn't sure if his initial demands to the CTIA was just good rhetoric, but -- either way -- it worked, which is good for consumers and his pro-consumer stance.
Sarah Thomas 12/13/2013 | 10:20:10 AM
Re: Good move Not that I've seen, but I think Dawson makes a good point about changing BYOD policies. Operators, especially T-Mobile, are starting to make it more attractive to bring your own device rather than by one of their subsidized ones. That could bring more attention to unlocking and make it a bigger issue.
Jim Weed 12/13/2013 | 9:27:08 AM
Re: Good move Tom Wheeler is turning out to be a pleasant surprise. Really didn't expect the former head of CTIA to bear down on them. Hope we see more actions like this one promoting greater competition, innovation -- and power for consumers.
KBode 12/13/2013 | 8:14:28 AM
Re: Good move I was trying to understand this, and I assume it's because they didn't want to "advertise" the fact it's possible to customers who didn't already know about it?

I believe most of the carriers already do what the FCC is asking. Sprint may be the exception, their unlocking options for users range from nonexistent to awful (odd for a company that claims to be a consumer-friendly alternative to the big two), so I think they'll be where most of the improvements are made.
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