“Gosh, I’ll gladly pay for a phone that can’t be moved out of my draconian cell phone network,” said no one ever. But that appears to be the sentiment echoed by US networks AT&T and T-Mobile in response to the Federal Communications Commission (FCC).
The companies object to the FCC’s proposed rule that all phones could be unlocked within 60 days of purchase.
The FCC advanced the proposal in a rare bipartisan move, with all five commissioners (both Republicans and Democrats) in favor. The rule could go into effect 45 days after publication in the Federal Register, which would put the new regulatory action into effect later this year or early 2025.
Both T-Mobile and AT&T have expressed objections, Ars Technica reports. T-Mobile claims that eliminating rules that prevent unlocking prepaid phones for an entire year would reduce subsidies “by 40% to 70% for both lower-end and higher-end devices.” T-Mobile recently extended the unlock period on prepaid phones from 160 to 365 days for its subsidiary Metro by T-Mobile (formerly MetroPCS), something the FCC noted in its original July proposal.
AT&T’s official response was similar. “Requiring carriers to unlock handsets before paying them out would ultimately harm consumers by creating upward pressure on handset prices and creating disincentives to finance handsets on flexible terms,” the AT&T representative said. “Further, AT&T reiterated its concerns that the FCC may exceed its authority by imposing such rules.”
In my editorial opinion, this is all legal because “if the FCC puts these rules into practice, we will sue to get rid of them.” Given the business-friendly nature of many U.S. courts, which have severely hampered the ability of federal agencies to regulate various industries, there is a good chance that airlines would gain the upper hand if it came to that.
As a long-time observer of the US wireless industry and a loyal customer of the Big Three carriers by proxy, their complaints about higher prices and lack of impact on competition ring hollow to me. Carriers are going to discount phones to try to attract new customers no matter what – they’ve been doing it for decades.
And the competition has already crossed this hurdle. Verizon, generally one of the most restrictive carriers, will unlock paid phones 60 days after purchase, giving customers the freedom to purchase cell service from whichever company they choose.
This isn’t exactly an altruistic move, as agreed upon when Verizon licensed the 700MHz spectrum. But if Verizon can offer these types of policies for the past five years without any apparent downsides, AT&T and T-Mobile really have nothing to complain about.