FCC: Unlock or We RegulateFCC: Unlock or We Regulate

The FCC's new chairman, Tom Wheeler, is taking the wireless operators to task over their cellphone unlocking policies in his first month on the job. He has told them to get moving on addressing consumers' rights to unlock their phones once their contracts are fulfilled -- or they will face regulation.

In a letter to CTIA president Steve Largent, Wheeler wrote that the Federal Communications Commission (FCC) and the CTIA have been working for eight months to craft an amendment to the Consumer Code on device unlocking. However, "enough time has passed, and it is now time for the industry to act voluntarily or for the FCC to regulate." (See: Nimble? The FCC? )

An update to the Digital Millenium Copyright Act (DMCA) that went into effect in January made it illegal to jailbreak cellphones without the wireless operator's permission. Violators face fines of up to $500,000 and five years in prison. Wheeler's goal is to have the act amended and to work out the full unlocking rights policy in the CTIA Consumer Code before the December holiday season.

The FCC boss -- who has promised to serve the needs of the American people, rather than the technology industry -- says he wants operators to:

The FCC and the CTIA are getting hung up on the provision for notifying customers about unlocking eligibility. Without this, Wheeler wrote, "any voluntary program would be a hollow shell."

After the DMCA update, most of the US operators updated their terms of service to allow for unlocking if the customer is in good standing and out of a contract. Wheeler is aiming to make the process easier and more transparent for everyone, including wholesalers that unlock many devices at once.

Scott Bergmann, vice president of regulatory affairs for the CTIA, said in a written response that it continues to work with the FCC on the process, but he made no promise of meeting the holiday deadline. He also reiterated that consumers can already choose from a number of unlocked devices, and that unlocking doesn't necessarily mean the freedom to network hop.

"While CTIA supports giving consumers a robust set of options, it is important for consumers to note that an unlocked phone doesn’t necessarily mean an interoperable phone, given the technological and engineering realities of wireless networks," Bergmann wrote.

— Sarah Reedy, Senior Editor, Light Reading