FCC rule would make carriers unlock all phones after 60 days

https://techcrunch.com/2024/06/27/fcc-rule-would-make-carriers-unlock-all-phones-after-60-days/

by rntn • 2 years ago

176 85 2 years ago

Without provisions for equipment installment plans, this would likely end financing of phones by carriers (potentially pushing consumers to higher cost mechanisms, like credit cards or other traditional credit instruments). When locked, the phone is the collateral.

Free and clear phones should be unlocked immediately.

yyyfb2• 2 years ago

Markets exist where SIM locking has been prohibited for a long time (Wikipedia says Canada, Chile, China, Israel, and Singapore at least). Financing still exists in these countries.

The phone is absolutely not "collateral". The carrier does not take it back if you default (even if they could, they wouldn't be able to get anything of value for it). Unlocking is just an inconvenience that prevents enough people from churning that it lowers the risk of financing.

icepat2• 2 years ago

Yes, because in Canada at least, if you terminate your contract, you have to pay out the phone. That's how it's done. Really, it's not a complicated solution.

lbourdages2• 2 years ago

Yes. In Canada, the phones are not locked, but if you terminate your contract before the term (max 2 years) you have to pay the remaining cost.

dawnerd• 2 years ago

They'd still make you pay off the full amount before you could close off your account. Pretty standard in the US. Locking is just an evil way to add more friction.

yftsui2• 2 years ago

I believe he meant financing will become more expensive, which may actually increase the consumer cost over a fixed period (if the carriers are not willing to decrease the plan prices which are jacked up to compensate the contracts).

Detrytus2• 2 years ago

And in EU, it is technically not prohibited, but haven't really been a thing for a long time.

One caveat: carriers do not really pay for your phones. Your phone bill would list two separate charges: service charge, for calls, internet use, etc., and then the monthly payment for your phone. If you add all those monthly payments over the whole contract period you get maybe 5-10% discount to the regular market price.

Molitor59012• 2 years ago

It's purely anti-competitive and anti-consumer.

Zak2• 2 years ago

Collateral has two functions:

1. Incentivize the borrower to continue paying so as to not lose the collateral.

2. Allow the lender to recover some of the value of the loan.

A locked phone serves the first purpose because the lender can disable its primary function.

ldoughty• 2 years ago

Unlocking phones does not free the individual of contractual obligations...

Yes, there's room for abuse in the system.. and perhaps prepaid phones won't be as well subsidized.. but people getting contracts typically take a credit hit or require a hefty security deposit to offset the risk.

turtlebits2• 2 years ago

Yep, no more carrier locked $20 iPhones.

2OEH8eoCRo02• 2 years ago

It's only $20 because they add installment payments to the monthly bill which is recouped by early cancellation fee.

jrockway• 2 years ago

Is the phone really collateral in these financing agreements? They just want the guaranteed revenue stream from forcing you to stick with them for 2 years. I imagine it would be quite expensive to go retrieve the phone from someone's house after they stop paying, and they could do that even if it wasn't locked to a particular carrier.

I think the threshold for repossession of collateral is somewhere around cars; stop paying your car lease, they'll take the car; stop paying for your house, they'll kick you out of your house. But I don't think it's worth it for phones.

singleshot_• 2 years ago

For me, never again encountering a locked phone would far outweigh the utility of being able to finance a phone. There should be no need to make a basically disposable item like a phone collateral: just buy it.

paxys4• 2 years ago

What does SIM locking have to do with financing? It's not like unlocking the phone means you suddenly don't owe the rest of the payments anymore.

dangus3• 2 years ago

This doesn’t affect equipment installment plans.

The phone is still collateral whether it’s locked or not. In fact, AT&T is the only one of the big 3 carrier that locks their devices that are financed. The other ones don’t bother.

If you terminate your cellular service with an installment plan it’s typical that you immediately owe the balance. Whether the phone is locked or not makes no difference on whether the company can collect on the debt.

2OEH8eoCRo02• 2 years ago

Isn't that what the cancellation fee is for?

mdasen• 2 years ago

All Verizon phones are automatically unlocked after 60 days and Verizon has still been financing phones.

When locked, the phone is the collateral

Not really. If someone cancels service without paying off the phone, the carrier doesn't reclaim the phone. It simply prevents the phone from being used with a different carrier. The person could sell the phone to another customer on the same network. Houses are collateral because it's hard to hide a home from creditors and you can't sell the home without discharging the lien on the home. There's no lien on your financed phone.

This change probably wouldn't change much for phone financing because phone companies are already running credit checks when handing out devices on payment plans, require higher-risk people to make down-payments on the phones, and once a person has done it once to you, it's easy to never offer it to them again. Once you've burned Verizon by canceling service and not paying off your phone, you've burned that bridge. Plus, Verizon would likely report it to the credit agencies where you'd have burned the bridge with the other carriers too.

This is a rule that would help prevent a lot of e-waste and make it easier for folks to switch carriers. There is the chance that someone will finance a phone and leave without paying it off, but there's always been a risk that someone would run up a phone bill and not pay it. Someone could go abroad and run up a large roaming bill and not pay it. Back when data plans were limited, someone could run up a bill into the thousands and just cancel service without paying.

Locked devices do serve a function for carriers. They make switching harder and they protect companies roaming revenues. If I have a locked phone, I have to pay Verizon $10/day to use my phone in Europe. If I have an unlocked phone, I can grab a European SIM for $30 and have cheap service for the month.

Verizon has been financing phones and offering similar discounts that T-Mobile and AT&T have been offering even though their devices will automatically unlock after 60 days. A locked phone is worth marginally less than a carrier-locked phone, but a locked phone can still be sold to other people, even if it isn't paid off. A locked phone can still be used even if the original purchaser has defaulted on the debt. These aren't bricked phones, just carrier locked devices.

If the issue were that they needed a form of collateral, carriers would want the ability to brick the devices rather than merely reduce the resale value of the device by 15%. Yea, if you finance an AT&T iPhone, default on the debt, and sell it to Gazelle, you'll get 86% of the price for your locked phone as you would for an unlocked one. If one could flip unlocked financed phones, it would be just as easy to flip locked financed phones - you'd just make 15% less per device.

So what is the lock preventing? It's not preventing someone who has found a way to defraud carrier financing. They can still sell the phones (which are legally their phones which the carrier has no lien on). They merely get a marginally lower resale price. No, the locks aren't necessary for equipment financing. No, the phones aren't collateral.

m463• 2 years ago

Free and clear phones should be unlocked immediately.

...and automatically

Even if your phone is paid for, removing the lock is confusing and time-consuming friction that shouldn't happen. They make money by doing it.

post_break• 2 years ago

Yes please. Some carrier unlocking rules are ridiculous, even if you pay off the phone. If you pay off the phone it should be unlocked immediately. Financing your phone raises some questions about unlocking, but I guess the carriers can decided to not allow you to finance your phone if you just stop paying on them.

scarface_742• 2 years ago

This only helps the credit card companies. There definitely should be an exception to force unlocking if you are on a payment plan.

And it will make it harder for the poor and those with bad credit to get a phone.

T-Mobile for instance will let you finance a phone regardless of credit once you have been a customer for a year.

I believe that some of the MVNOs will even let you get up to a midrange phone like an older iPhone as long as you stay with them for a few months. They would only do that if it’s locked.

dangus3• 2 years ago

T-Mobile doesn’t even lock their device payment plan phones last I checked.

scarface_742• 2 years ago

They very much do.

pessimizer• 2 years ago

Why 60 days? Why not zero days? If you're going to take away their extrajudicial means of contract enforcement, what's the point of this residue? The only purpose for leaving it would be to confuse the customer about whether they can unlock, and to allow companies to make the process burdensome and confusing.

The reason carriers fight to preserve this isn't for enforcement of the contract at all, it's because of the other revenue streams from unwanted intrusion by the carrier into the use of your phone. Carriers can sue for the cost of the phone. And the FCC, by allowing this 60 day provision, would be making a conscious attempt to protect carrier data harvesting and customer capture.

I get allowing carriers to lock for the length of a contract; I get not allowing carriers to lock at all. This, however, is an attempt to pander to people who think locking is wrong while still preserving the benefits that carriers get from locking. These benefits will now be delivered by jerking customers through a Kafkaesque dance of intentionally confusing bureaucracy. Unlocking becomes cancelling your gym membership or your subscription to the Economist.

yftsui2• 2 years ago

For premium devices, lock for 60 days reduce chances that the devices are stolen during shipment then appear in Shenzhen next day.

As someone received a perfectly packaged empty box this year, I think this is not ideal but reasonable.

howmayiannoyyou• 2 years ago

P L E A S E

The carriers are terrible about this. I have a Samsung sitting on my desk I still cannot use because I can't get it unlocked.

OutOfHere• 2 years ago

If you must use a Samsung, next time buy an unlocked phone directly from Samsung.

Molitor59012• 2 years ago

This seems like the fair and just thing to do. Being locked into a carrier is just wrong, but I would accept that if you purchased a discounted phone through the carrier that there would be divorce penalties.

nritchie• 2 years ago

I wonder what this would do to the prices of phones? In particular, I wonder if iPhones would be as popular (or as expensive) if people paid the full price up front? I suspect if people paid up front for phones, people wouldn't gravitate to the latest and greatest.

neilv• 2 years ago

This is only for the normal sense of "unlocked" as not being restricted to use with a single carrier, correct?

What about other carrier modifications to devices, like when a carrier prevents a Pixel phone's bootloader being "OEM unlocked" so that GrapheneOS or other alternative systems software can be installed?

reboot812• 2 years ago

Here in Sweden carrier locks ended a decade ago. And what are we offered now? 24/36 months plans of subscription and a okay payment plan for a +1000 euro device. iPhone 15 Pro Max is €1330 from the major resellers. With a 2-year with 40GB/ month plan it gives you a ~€200 discount on the phone. If you're a student or senior you get much cheaper plans, and if you got the cash, it might even be better to buy the phone with cash.

RulerOf• 2 years ago

My device shouldn't be carrier locked at all. I took out a loan to pay for this thing. They got their money for it immediately.

During the February AT&T outage[1], my wife's phone was affected, and she had to go somewhere. I should've been able to spend $20 on a throwaway e-sim and had it working before she left the house. Instead, I had to shrug my shoulders and suggest she find WiFi wherever she was headed.

Carrier locks in today's age are leftover garbage from a dated, consumer-hostile business model that's no longer practiced. And if I default on my loan repayments, the creditor can garnish my wages.

1: https://www.cnn.com/2024/02/22/tech/att-cell-service-outage/...

jstummbillig• 2 years ago

TIL locked phones are still a thing, somewhere. Not gonna lie: That feels fairly wild at this point.

blitzar• 2 years ago

Its always the US ...

the comments are always full of "the system will break down if they scrap it / wont somebody think of the children"

lotsofpulp• 2 years ago

You can easily get an unlocked phone in the USA, so it is more like "If you want an unlocked phone, buy an unlocked phone, and if want a mobile network to subsidize your phone, then you might have to deal with the terms of the agreement, including being locked to a mobile network".

miohtama• 2 years ago

The US is also using paper cheques for payments

dv_dt3• 2 years ago

And for some forms of US electronic check payments, typing an account number wrong will take 4-5 days to return a "bounced check" result, often with a fee from the entity you're trying to pay.

paxys4• 2 years ago

I don't think people realize that the US is the only market in the world where phones are carrier locked, and in fact the only market where carriers have so much power over the features and overall experience of your phone. Mobile carriers dictate that a phone has to be sold with a locked bootloader. They decide if/when the phone should get OS updates. They are the ones who fill the phone with bloatware. Up until a few years ago the phone had a more prominent logo of the cell carrier than the company that actually made it.

US carriers have used their government-granted monopolies to influence the market wayy beyond phone calls and data plans, and it's about time it should end.

ThrowawayTestr• 2 years ago

Do other countries get subsidised phones with a phone plan?

Loughla• 2 years ago

Yeah I'll take a big ass logo on the start screen for a free phone.

V__• 2 years ago

Yes

0xTJ• 2 years ago

In Canada, phone locking has been banned since 2017, with free unlocking being available to phones purchased before that. You can still get cheaper/free phones with your plan, but it won't be locked to that carrier, that would be silly. It's over a contract of some defined length, and you're bound by the contract to pay for whatever value's left of the phone if you cancel. If you paid for that phone by being subscribed to your carrier for that length of time (say, 2 years), why wouldn't you be able to take that phone elsewhere? You've already paid for it, it's yours.

There's also been a trend (I don't know whether it's legislated or not) for phones to be explicitly $X/mo for 24 months (though that still ends up being far below retail, and is sometimes $0), instead of burying that in the plan costs. We still have plenty of problems with ridiculous plan pricing and data limitations, but those have gotten better, and were still bad before carrier locking went away.

paxys4• 2 years ago

If you run the numbers the subsidy offered by US carriers always ends up costing you more than just buying a new phone for full price with a cheaper plan.

Your "free" iPhone isn't free if it involves (1) giving them your current one which is worth $500+ in a private sale and (2) signing up for a 3 year contract at $100+ a month.

bogantech• 2 years ago

I don't think people realize that the US is the only market in the world where phones are carrier locked

Probably because that's not true.

https://en.m.wikipedia.org/wiki/SIM_lock

Mo3• 2 years ago

They used to be SIM and/or carrier locked here in west Europe, until if I remember correctly 10-15 years ago

0x5f3759df-i2• 2 years ago

Phones only started being unlocked in Canada starting in 2017, so the US isn’t so unique. Though Canada carriers are probably not the standard to hold yourself to.

Brananarchy• 2 years ago

2017 is quite a long time ago, especially in terms of how long smartphones have been around (and arguably even in terms of how long cell phones have been mainstream).

The US is way behind here.

miki123211• 2 years ago

Keep in mind that in Europe, some phones are still under carrier control, despite not technically being locked.

You can resell the phone and use it with any carrier you wish, but as soon as the original owner stops paying the bill, the phone becomes remote-locked and turns into a brick.

Samsung's Knox can do this, not sure which other brands also have that option.

paxys4• 2 years ago

Which is still significantly better than the system in the US. Most people make all their payments in time like they are supposed to, but are still affected by carrier locks. For example if I want to travel abroad and buy a local SIM for cheaper data, I'm out of luck, because AT&T won't let me use my phone. So I have to use their ultra expensive roaming plan or buy a secondary phone just for those few days.

SkyPuncher• 2 years ago

This sounds like the prior owner is financing the phone, not purchasing it outright.

entropyie• 2 years ago

I've never seen this in practice in the EU, so it can't be common at least.

LocalH• 2 years ago

They decide if/when the phone should get OS updates.

That's an Android issue. iPhones have no such issue.

CursedUrn• 2 years ago

There are lots of subtle ways carriers can punish unlocked phones. I tried using an unlocked Samsung flagship with a Verizon MVNO and it never worked properly. They even told me that various features wouldn't work such as Wi-Fi calling. Had to go with the main carrier anyway, so I might as had a locked phone. If the FCC pursues this rule they need to cover all the loopholes and even then it will probably be years of malicious compliance like we're seeing from Apple in the EU app store ruling.

9999000009992• 2 years ago

I would love this. However I imagine what most people won't really think about is that if you buy a phone on say AT&t, and then you just decide to stop making payments they can just remotely brick it.

It's going to be really interesting to see how prepaid carriers cope with this. For example you can buy a fully . For example you can buy a fully . For example you can buy a phone much cheaper if it's locked to MetroPCS or another prepaid provider. Since technically you've bought the phone, them bricking it becomes a lot harder to justify.

enceladus06• 2 years ago

For a $200 discount I had to deal with the RedPocket 1yr lock. Sort of worth it, but the "are you sure you really want to unlock" and "why do you want to unlock?" questions from the customer service were really annoying. If you pay the $, the phone should be yours.

reboot812• 2 years ago

In the end we the customers will foot the bill, no matter how the game is rigged. I see no reason for 60 days, the financial agreement between the carrier and subscriber persist no matter what.

jobs_throwaway• 2 years ago

Curious we don't see the same dickriding for carriers like AT&T that we do for Apple on HN. All of the same tired arguments of 'you can choose a different carrier if you don't like it' and 'I only feel safe giving grandma a phone that doesn't allow her to do anything outside of the warm teat of Apple' apply perfectly here.

Zak2• 2 years ago

It seems to me that a carrier should be able to lock a subsidized/financed device until it's paid off. That makes it possible for people who would otherwise not qualify for financing to have relatively up-to-date devices.

A carrier should not be able to lock a device that's paid off for any length of time.

orwin• 2 years ago

So, i'm obviously not from the US, and while i'm not a liberal anymore (For USians: here, liberal=pro-market/what you call capitalist), i do understand what free markets (in a frictionless vacuum...) bring for the consummers.

It seems to me that in the last two years, the FCC and the FTC are kinda waking up and start annoying corporation into making the markets they compete in freer.

I only get my US news from hackernews, so maybe i only have the good, and not the ugly, but even in cases those agencies lost, they made good points and seems to be pushing the US to be less corporatists and more liberalist (in the economic sense, free market and stuff you USian call capitalism)

So how those agencies fall accross party lines? Are those independant?

In my opinion a change of president/government shouldn't change the culture in those agencies, but you are a weird country (the fact that you _still_ have carrier lock proves it), is this a "risk" in your case?

salvagedcircuit• 2 years ago

This would be a warm welcome to the frigid waters of the phone industry. Now force the OEMs to release all radio related firmware for each phone too, and we can finally own our phones again. I'm not too old to remember completely unlocked, feature complete CyanogenMod android phones. LineageOS is completely useless without VoLTE support.

FCC rule would make carriers unlock all phones after 60 days

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