CTIA, Five Largest Carriers Agree to Let Consumers Unlock Devices

By Michelle Maisto  |  Posted 2013-12-13

CTIA, Five Largest Carriers Agree to Let Consumers Unlock Devices

Unlocking a smartphone, even a paid-off smartphone no longer tied to a carrier contract, became illegal on Jan. 26 of this year, due to phrasing in the 1998 Digital Millennium Copyright Act. It has not been a popular ruling, and on Dec. 12 the wireless industry moved to undo it.

Industry group CTIA said in a Dec. 12 letter to the Federal Communications Commission (FCC) that AT&T, Sprint, T-Mobile, U.S. Cellular and Verizon Wireless—the nation's five largest carriers—have committed to five voluntary industry principles to allow consumers to unlock eligible smartphones and tablets.

"CTIA and these companies share the goal of ensuring that America's wireless consumers continue to benefit from the world-leading range of competitive devices and offerings they currently enjoy, and believe that these voluntary principles will enhance these consumer benefits," Steve Largent, CTIA president and CEO, said in the letter.

The carriers will also recommend that the principles be included in the CTIA Consumer Code for Wireless Service (known as the "Consumer Code"), and upon adoption, the carriers will move quickly to implement them, putting at least three into effect within three months and the remainder within 12 months.

 The five principles are:

1. Disclosure. Each carrier will post on its site, in clear language, its policy on unlocking prepaid and postpaid devices.

2. Postpaid Unlocking Policy. Upon request, carriers will unlock devices or provide necessary information enabling customers to, given that the device is no longer tied to a contract, device financing plan or application of an early termination fee, and the customer's account is in good standing.

3. Prepaid Unlocking Policy. Carriers, upon request, will unlock prepaid devices no later than one year after the initial activation, "consistent with reasonable time, payment or usage requirements."

4. Notice. When a device becomes eligible to be unlocked, carriers will clearly notify customers of this or automatically unlock the devices remotely, without an additional fee. Carriers can, however, charge non-customers (former customers) a "reasonable fee" for unlocking a device. Prepaid customers will be offered notice at the point of sale, at the time the phone becomes eligible to be unlocked or in a clear, concise statement on the carrier's Website.

CTIA, Five Largest Carriers Agree to Let Consumers Unlock Devices

5. Response Time. Within two business days of receiving a request to unlock a phone, the carrier must initiate the request, say why a device doesn't qualify for unlocking or explain why additional time is needed to fulfill the request.

"Today we see the manifestation of what I call the 'see-saw rule'—the more industry acts to meaningfully regulate itself, the less that has to be done by government," said FCC Chairman Thomas Wheeler, in a statement.

Wheeler added that the principles embody the commitment of the Consumer Code, which is an "important expression of the compact between industry and the public."

He continued, "Our goal here was not to find agreement, congratulate all involved and then file this document away never to be seen again. With industry input, the FCC will collect and review feedback through a website that allows consumers to access carrier policies directly, read FAQs, including information that explains technological limitations, and file complaints should there be concerns."

The above, he concluded, allows for execution of the Ronald Reagan adage, "Trust, but verify."

Making Unlocking Illegal

The 1998 DMC Act stated that no person "shall circumvent a technological measure that effectively controls access to a work protected under this title," but went on to say that every three years the Librarian of Congress could consider the matter and "report or comment on his or her views."

In October 2012, the Librarian of Congress took the unpopular position of standing by the DMC Act, saying in so many words that if consumers want an unlocked phone, they shouldn't buy a locked one.

On Whitehouse.gov, a petition was started to ask the powers that be to intervene, and after passing 100,000 votes—the minimum required to guarantee a response—the White House responded, and agreed.

"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," R. David Edelman, senior adviser to the White House for the Internet, innovation and privacy, said in a March 4 blog post on Whitehouse.gov. "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."

T-Mobile released a statement Dec. 12, saying it supports the agreement reached with the FCC.

"Clear, fair and timely unlocking policies that enable consumer choice are good for competition," said Tom Sugrue, senior vice president of Government Affairs at T-Mobile. "There is additional progress to be made on unlocking, such as the support of a robust secondary market in mobile devices, and we will continue working with the FCC to enhance the new policies announced today."


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