Cover Image for Operators claim that the new FCC rule will increase the cost of phones.
Sun Oct 27 2024

Operators claim that the new FCC rule will increase the cost of phones.

The U.S. government is evaluating new regulations that service providers must comply with regarding locked phones. This situation has generated discontent among some operators.

The Federal Communications Commission (FCC) of the United States is evaluating a regulation that would require operators to unlock mobile phones within 60 days after purchase. However, two of the major operators, AT&T and T-Mobile, have expressed their concerns, arguing that this measure could harm consumers. T-Mobile, in a recent filing with the FCC, noted that a uniform unlocking policy mandate could lead to consumers themselves suffering the most severe consequences. The company argues that users could lose access to the benefits of free or heavily subsidized phones, as the proposal would force operators to scale back their most attractive offers.

For its part, AT&T mentioned that the obligation to unlock devices before they are fully paid off could result in increased phone prices and discourage flexible financing. The company suggested that if the FCC decides to implement any rule, it should respect existing contracts between providers and customers, allow at least 180 days to detect fraud before unlocking, and establish a minimum period of 24 months to adapt to any new regulations.

From the operators' perspective, locked phones benefit consumers by keeping prices lower. However, consumer rights advocates argue that the new rule could provide greater variety and better prices. Unlocked phones allow users to switch carriers easily, facilitating competition in the market.

The proposal, introduced earlier this year, states that all wireless service providers must unlock devices 60 days after a consumer has activated their phone, unless fraud is detected during that period. The FCC had previously criticized T-Mobile for its policy of locking prepaid phones for a year, while this operator unlocks postpaid phones after 40 days. In comparison, AT&T allows the unlocking of paid phones after 60 days for postpaid and six months for prepaid, while Verizon stands out by complying with FCC policies by automatically unlocking devices after 60 days for both types of users.

Phones are locked for various reasons, such as reducing customer churn, recovering subsidies, or preventing fraud. However, this practice can make it difficult to switch carriers and ultimately cause consumers to incur higher costs. Unlocking a phone often involves a cumbersome process and may even incur additional costs to the user.

Supporters of the new rule include various organizations advocating for consumer protection. Although the FCC has not yet established a timeline for the implementation of the new regulation, it is anticipated that the change in the composition of the board, with the arrival of a new chair in the U.S. in January, could increase the likelihood of a vote occurring before the end of the year.