Why does the government have to meddle with what contract a company wants to put out? You are against government intervention, yet you want government to meddle with specific details of contracts?
I'm not dead-set against government meddling. I think it is limiting, but I think it has its place. I think the current situation here on a number of fronts (ETF scheduling silliness, sim-locking, exclusivity) could have been regulated by simple market pressure, but that requires education and choices. Sadly, in practice this never happened and it is hard for it to have any effect at this point because the industry drove the sheep into a corner paddock and locked the gate behind them.
One of the problems with letting market pressure solve this is that the industry has, almost by design, a limited playing field. Market pressure is great for resolving issues, but only if there are a lot of alternatives and/or if there is a constant threat of a new player coming along if the existing players leave themselves open. I don't think that describes the cell phone industry very well so perhaps a little mandated sanity couldn't hurt.
And, if there is any legislation that would come about, I would hope it would be more along the lines of "you must offer the customers an alternative choice" rather than "you must offer them these terms". For example, "if you lock the phones you sell under subsidy (or even without subsidy) then you must also allow a customer to buy the same phone directly from the distributor unlocked and use it on your network" doesn't prevent them from offering subsidies or locking the phones that go with their contracts. An unlocked phone walking into their store looking for service could hardly be considered a threat to their business model. Most providers would have no trouble at all with this (Verizon is the only company I've seen that ever refused to provide service for a phone they didn't sell with a lock on it, the GSM providers are all happy to provide you with service on your GSM phone bought elsewhere). What it may prevent is providers forcing manufacturers to only distribute a given phone in a locked form through them. It may also, due to the alternative of getting an unlocked version from another source, encourage the providers to sell them unlocked if the customer pays full price and possibly even eventually to just ditch the locks as an unnecessary hassle since they really would have no more purpose.
I would hate to see legislation that dictated "you must sell all phones unlocked and use pro-rated ETF's of a maximum of $X". I'd rather see that encouraged through market pressure in a market where the alternative of getting the unlocked phone caused the consumer to see true value-loss in the one they get that is locked. Right now all phones are locked so the consumer doesn't see it as a feature that provides or removes value.
The providers might play games with "we'll sell the unlocked version for $1M", but if they must allow a customer to buy the phone from the manufacturer directly then they would simply be saying "you can get an unlocked phone, but we don't really want to be your salesman in that case".
Okay, let's play the assumption game. Let's say, based on your proposal, that the government decide to meddle with contracts, with pro-rated ETF and such.
I talked about pro-rated ETFs, but I thought I was being clear that this was just what I thought the industry should do if they really had the customer's interests at heart. In other words, I think that non-pro-rated ETFs are stupid, but I don't think they should be outlawed. Any attempts to justify them on the industry's part are simply evidence that they are trying to swindle us.
Then what? Carriers would still be locking their phones. In the end, contracts are still there, and phones are still locked. Sure, you can leave early, pay pro-rated ETF, but then what? The phone is still locked. You can buy a non-subsidized phone without contract, but it's provider locked (just like today). I don't see change there.
I'd rather see legislation that forced availability of unlocked phones somehow. For example, providers are not allowed to dictate to manufacturers that they can't sell an unlocked version direct to consumers, or dictate the price on that. And, optionally, but not necessarily, if they sell a full price phone (full price defined by the MSRP, not by them) then they would not be allowed to simlock it. In other words, they are not allowed to prevent hardware from getting to a customer's hands in an unlocked form, but they don't necessarily have to be the agent that gets it to them. If they take steps via contract to prevent an alternative source for the hardware then they are engaging in anti-competitive practices.
I do agree about forcing people going into contract with their own phone is not fair. However, there's already an alternative for that today, pre-paid. I see that you think some unfair contract/ETF practices being the problem. Although they are a problem by themselves, to me simlocking is the bigger problem.
Unfortunately I don't think pre-paid can be used with smart phones and the pre-paid prices are way higher than the contract prices. I agree that sim-locking is the primary enemy, though I'd like to see a requirement to provide non-contract service that is on par with the contract service (perhaps with a requirement that it cannot cost more than the subsidy-recouping contract prices).
I have no problems with the current contracts/ETF themselves, as they are well disclosed to consumers. Consumers can choose to sign it or not. However, provider-locked phones are deceptive and not clearly disclosed. AT&T prohibit the use of the device on other networks, even after it's technically mine. It's an obvious anti-competitive practice and deceptions. If the DoJ want to scrutinize the market, that is the obvious sticking thumb.
The only issue I have with "consumers can choose to sign it or not" is that the choices are limited and the limitation is not arbitrary - it's a direct result with the nature of this industry. In other words, all things being equal I think everything should be left to market pressure. But in artificially constrained markets like the cell phone industry I do think that limits on anti-competitive practices are reasonable to a point.
Consumer education? Who's going to do that? The carriers? Sony Ericsson did this a while back, and it didn't do anything. US consumers have been brainwashed that locked phones are the norm, and they have to pay big $$$ for unlocked phones. In a not-so-free market, and where simlocking is the established standard, we need a bigger force to change it.
For one thing, a requirement that they offer the "choice B" that, if chosen by a significant portion of consumers, would lead us out of the mess through ordinary market pressure would be a step in the right "education" direction. Currently, if you want a data plan then there really are no "unshackled" options for service. And, if you want a voice plan with any national coverage for a reasonable airtime price you also don't really have any alternatives. Pre-paid offers an important billing alternative for some customers, but it doesn't offer a competitive "market pressure to change" alternative in its current form.
How does number-porting and ETF have anything to do with how effective simlocking law is? Fact is, the phones are not locked. That means, the law works. If not, then the phones would be locked, which is not the case. You seem to have plenty of knowledge and have valid points, but I think in the end you're always providing irrelevant arguments about what my point originally is.