FCC Will Investigate U.S. Mobile Phone Unlocking Ban

[funkboy]

Perfect example of when too much government regulations can hurt the people they're there to serve.

No, no it's not. Not at all. Please do your homework.

This mobile phone unlocking fiasco is a byproduct of the unconstitutional but largely unchallenged DMCA. Created by corporations & voted in & upheld by crony capitalism. The same brand of crony capitalism that brings us telecom monopolies & crappy broadband access.

It didn't stem from executive branch regulation. This Macrumors article is about an executive branch regulator looking into trying to *undo* some of the effects of crony capitalism.

 

[Frenchjay]

And some said that online petitions do not work!

They don't. You will get an 'investigation' followed by reasons why you're not getting what should be happening. Unless you can fill the pockets of people like lobbyists, you get nothing.

 

[goosnarrggh]

The phone you buy may - arguably - be your property.

The network it needs to connect to is most assuredly not.

The carriers involved in providing service for the types of phone for which unlocking is a viable possibility (ie. SIM-based units operating on a network which uses a technology that evolved from GSM) really don't care if you connect a SIM-unlocked phone to their network.

For the most part, they have policies in place specifically for the purpose of making it easy for customers to do just that.

On the other hand, the part they seem to have a problem with is when you decide to take your phone away from their network.

The problem here has nothing to do with the network itself. The carriers (the owners -- or arguably, lessees -- of the networks) are as happy as can be to accept whatever well-behaved hardware you may want to throw at them, provided the hardware comes along with a paying customer.

The problem is clearly something inside the phone itself -- the part which you have conceded is (arguably) your own property.

 

[tigres]

White house issues statement...

This is actually really good. I am pleasantly surprised

"Thank you for sharing your views on cell phone unlocking with us through your petition on our We the People platform. Last week the White House brought together experts from across government who work on telecommunications, technology, and copyright policy, and we're pleased to offer our response.

The White House agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without risking criminal or other penalties. In fact, we believe the same principle should also apply to tablets, which are increasingly similar to smart phones. And if you have paid for your mobile device, and aren't bound by a service agreement or other obligation, you should be able to use it on another network. It's common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers' needs.

This is particularly important for secondhand or other mobile devices that you might buy or receive as a gift, and want to activate on the wireless network that meets your needs -- even if it isn't the one on which the device was first activated. All consumers deserve that flexibility.

The White House's position detailed in this response builds on some critical thinking done by the President's chief advisory Agency on these matters: the Department of Commerce's National Telecommunications and Information Administration (NTIA). For more context and information on the technical aspects of the issue, you can review the NTIA's letter to the Library of Congress' Register of Copyrights (.pdf), voicing strong support for maintaining the previous exception to the Digital Millennium Copyright Act (DMCA) for cell phone carrier unlocking.

Contrary to the NTIA's recommendation, the Librarian of Congress ruled that phones purchased after January of this year would no longer be exempted from the DMCA. The law gives the Librarian the authority to establish or eliminate exceptions -- and we respect that process. But it is also worth noting the statement the Library of Congress released today on the broader public policy concerns of the issue. Clearly the White House and Library of Congress agree that the DMCA exception process is a rigid and imperfect fit for this telecommunications issue, and we want to ensure this particular challenge for mobile competition is solved.

So where do we go from here?

The Obama Administration would support a range of approaches to addressing this issue, including narrow legislative fixes in the telecommunications space that make it clear: neither criminal law nor technological locks should prevent consumers from switching carriers when they are no longer bound by a service agreement or other obligation.

We also believe the Federal Communications Commission (FCC), with its responsibility for promoting mobile competition and innovation, has an important role to play here. FCC Chairman Genachowski today voiced his concern about mobile phone unlocking (.pdf), and to complement his efforts, NTIA will be formally engaging with the FCC as it addresses this urgent issue.

Finally, we would encourage mobile providers to consider what steps they as businesses can take to ensure that their customers can fully reap the benefits and features they expect when purchasing their devices.

We look forward to continuing to work with Congress, the wireless and mobile phone industries, and most importantly you -- the everyday consumers who stand to benefit from this greater flexibility -- to ensure our laws keep pace with changing technology, protect the economic competitiveness that has led to such innovation in this space, and offer consumers the flexibility and freedoms they deserve."

Source White House

 

[cere]

Well I hate to sound glib since I mostly agree with you, but if you take that logic to the extreme you end up in places you don't want to be. For example, saying you should be able to do anything you want with a gun because it's your property ends up in bad places. Similarly, the argument against letting you do anything you want with a digital VCR is that you will just copy all the movies in HD quality off whatever movie channel and never buy one again (and thus hurt the movie companies bottom line). Now maybe you think you should be able to do that and I cannot argue with opinions, but I've always felt one person's rights end where another person's rights begin and perhaps some things are more shades of grey when it comes to intellectual property (owning "ideas" or digital sequences of ones and zeroes just isn't the same as owning property since it's not material in nature), but ultimately the system breaks down with no legal protections as you end up with an anarchy analogy.

This really isn't a case of a 'slippery slope'. I'm not advocating for usage that goes against common good or might violate the rights/copyrights of others. The usage that is being blocked is legal, normal activity. It is using your phone as it was designed. This isn't a case of advocating for anarchy.

If you want to engage in a perfectly legal activity, then I think it is wrong for a company to prevent you from doing so strictly in order to try to force any extra revenues you might generate to flow to them instead of a competitor. That is anti-competitive. There is no legitimate reason to lock a phone. It certainly has no bearing at all on subsidy prices nor on contract status. So, what exactly is the argument for allowing locks?

 

[Diode]

Not if you sign a contract stating that you will not do so. I'm not claiming that it's right or wrong but, people in the US are agreeing to the terms when they sign the two year agreement to get a subsidized (cheap) phone. Buy an unsubsidized phone, don't sign a contract, and you will have an unlocked phone.

AT&T and Verizon require 2 year contracts for LTE. There is no way to go month to month and still have access to their faster networks without first signing a contract.

You also have to remember up until a 1.5~2 years ago the iPhone wasn't offered for sale in the US unlocked at all - including unsubsidized. It wasn't until a year or so ago AT&T began offering to unlock cell phones after customers have fulfilled their contacts.

The locking of cell phones is designed by the carriers to make it harder for consumers to switch carriers - even after they have fulfilled their contracts.

Who cares if I unlock my cell phone and break my contract? I still get charged fees by carriers that more then cover the cost of the phone. If I refuse to pay that - they do legally come after you (and rightfully should) - so it's really only the consumer losing out by not allowing unlocking.

 

[cere]

Not if you sign a contract stating that you will not do so. I'm not claiming that it's right or wrong but, people in the US are agreeing to the terms when they sign the two year agreement to get a subsidized (cheap) phone. Buy an unsubsidized phone, don't sign a contract, and you will have an unlocked phone.

Does your contract say your phone will and must be locked?

 

[XboxMySocks]

You can't unlock a device you own now? Crazy!

I understand the technicality of the law, because you don't own the device. The company owns it. Same reason you can't install a water slide in a house you haven't paid off.

The actual execution of the law, however, is ridiculous.

 

[cere]

I understand the technicality of the law, because you don't own the device. The company owns it. Same reason you can't install a water slide in a house you haven't paid off.

The actual execution of the law, however, is ridiculous.

Actually you do own the device, free and clear. You have an outstanding obligation on your contract, but that is fulfilled by running out the term or paying your termination fee. Neither of which dilutes, in any way, your full and complete ownership of your phone. You can even sell it if you like, which you couldn't if you didn't have full legal property ownership of it.

 

[tigres]

I understand the technicality of the law, because you don't own the device. The company owns it. Same reason you can't install a water slide in a house you haven't paid off.

The actual execution of the law, however, is ridiculous.

As I read this, I see a 0/2 in accurateness of your statements.

 

[All Taken]

I understand the technicality of the law.

Actually, you don't.

 

[hchung]

I may be wrong, but I don't believe AT&T allows unlocking of phones currently under contract.

And, please show me where in an AT&T contract (or Verizon or Sprint contract) it states that the consumer does not own his/her phone.

I don't see how unlocking a phone will result in a financial loss from the carrier. A person signs a contract. They are then on the hook for paying a monthly fee for the life of the contract. Unlocking wouldn't change this. That said, the carriers themselves placed a clause in the very contract they dictate offering a way out of a contract. Therefore, even if a customer choses to remove themselves of said contract, they have a way of doing so well within the confines of the legal contract. They will just have to pay a termination fee. Unlocking a phone doesn't change this contractual stipulation either.

The locking of phones is anticompetitive because it forces the customer to be overly proactive if they want to change carriers after the life of the contract. Most people don't know how to do this. If anything, this should be a passive process. The phone should automatically unlock on the day after a contract expires.

You're right, there is no such statement. In fact, I went back to Verizon to read the whole thing, and it doesn't say anything in the customer agreement about who owns the device sold, but it does refer to it as "My Wireless device."

I guess I assumed it was like financing a car. You don't own it until it's been paid off. So my bad.

The only situation I was able to come up with where the carrier could suffer a financial loss is when the phone is stolen.
The phone isn't paid off for the carrier, but the carrier would probably be inclined to provide a discount to the customer.
Having phones be unlocked while under subsidy could make it more valuable to steal and then export to other countries.

I very much agree that the unlock should happen the moment the contract expires.
Although I guess I'm lucky that the unlock happened the moment my contract started.

----------

Actually, yes, you missed quite a bit. Even with the subsidy it is 100%, free and clear, completely your phone.

You have an obligation to meet the terms of your contract which means having a plan and paying your bills. But the phone is yours absolutely. So why should it be locked?

As I mentioned to kas23, yup, I missed some details.

To answer your question, no reason I can think of aside from those involving a 3rd party (theft).

 

[C DM]

I understand the technicality of the law, because you don't own the device. The company owns it. Same reason you can't install a water slide in a house you haven't paid off.

The actual execution of the law, however, is ridiculous.

First, you do own the device--you might be signed up for a certain period of time with a carrier for getting the device for a lower price (even though you can still leave by paying the early termination fee), but you own the device.

You can also install a water slide in your house (assuming any required and related permitting and other considerations are taken care of) as you do own it, even if you have a mortgage on it and owe money to the bank for it. This is all rather basic.

----------

AT&T and Verizon require 2 year contracts for LTE. There is no way to go month to month and still have access to their faster networks without first signing a contract.

You also have to remember up until a 1.5~2 years ago the iPhone wasn't offered for sale in the US unlocked at all - including unsubsidized. It wasn't until a year or so ago AT&T began offering to unlock cell phones after customers have fulfilled their contacts.

The locking of cell phones is designed by the carriers to make it harder for consumers to switch carriers - even after they have fulfilled their contracts.

Who cares if I unlock my cell phone and break my contract? I still get charged fees by carriers that more then cover the cost of the phone. If I refuse to pay that - they do legally come after you (and rightfully should) - so it's really only the consumer losing out by not allowing unlocking.

You can buy an LTE phone for full retail price, or from someone else, and simply be on a month-to-month service with a carrier--pretty much the same as you could with any other (non-LTE) phone for a while now.

 

[damir00]

The only situation I was able to come up with where the carrier could suffer a financial loss is when the phone is stolen.

Phone/plan pricing is premised on the user staying with the provider, and locking phones is a method to encourage that. If all phones were sold unlocked, with contract, the on-contract pricing would be higher than it is today.

The right approach to levelling the playing field is to not allow locked phones in the first place.

 

[cere]

Phone/plan pricing is premised on the user staying with the provider, and locking phones is a method to encourage that. If all phones were sold unlocked, with contract, the on-contract pricing would be higher than it is today.

The right approach to levelling the playing field is to not allow locked phones in the first place.

Saying prices would be higher is simply untrue. Repeating it doesn't make it more true.

A lock does nothing to keep you in contract. Phone and plan pricing is premised on getting you to sign a contract. Guess what? That works exactly the same whether the phone is lock or not. Want a subsidy? Sign a contract. Nothing do to with locks.

And I agree with you completely about not allowing unlocks.

 

[damir00]

Saying prices would be higher is simply untrue.

Well, you are certainly free to disagree.

Repeating it doesn't make it more true.

Ditto.

 

[cere]

Well, you are certainly free to disagree.



Ditto.

The difference is that I am not making assumptions and then stating them as fact. I am using facts to arrive at a conclusion or at least to rule out certain fallacies.

I understand that it is a common [mis]conception that barring locking of phones would mean higher prices, but I've never understood the reasoning. Could you explain it? Honest question.

I am going with these givens:
1) Discounts/subsidies on phones are given in exchange for signing a contract. This is simply a fact.
2) Whether a phone is sold locked or unlock you are still under any obligations you entered into for a subsidy.
3) If a phone is unlocked during a contract, the customer is still obligated to fulfill their contract and payments
4) Regardless of what a customer does with a phone (sell it, break it, use it in China, flush it down the toilet), they still are obligated to fulfill their contract and payments.
5) Carrier pricing is calculated based on their infrastructure costs and desired margins and include a planned return on investment per customer (that being the subsidy).

What other givens or facts would lead you believe that if all phones were unlocked then contract prices would rise? The only thing the carriers would lose out on is usage by the customer, with their own phone, that would result in charged that are completely unrelated to any contractual obligations the customer has with their carrier (i.e. roaming or intermittent usage on another network). None of these extra fees are included in your contractual obligations, so the carrier has no right to expect revenues from these must flow to them. This doesn't mean they can never flow to the carrier, if the customer chooses to use their extra services, but the choice is removed when a lock is imposed. In one of the reasons that carriers are able to charge the obscene roaming rates they do charge is because of the locks they are allowed to impose, which again, has nothing to do with the contract you signed.