New FCC chairman tells wireless carriers to unlock cell phones

Act now or we will regulate, Wheeler tells CTIA.

by Jon Brodkin - Nov 14 2013, 1:50pm PST

In one of his first days on the job, Federal Communications Commission Chairman Tom Wheeler has asked the CTIA Wireless Association to move quickly toward unlocking phones for consumers.

When a phone is unlocked, it can be used with any wireless carrier. It became illegal for consumers to unlock phones on their own earlier this year because of a ruling by the Librarian of Congress, who is responsible for handing out exemptions to the Digital Millennium Copyright Act.

In practice, carriers are often willing to unlock phones, particularly when the customer has finished paying off his or her contract. But the ban potentially creates problems for customers when they want to travel overseas without paying huge roaming fees or if their carrier refuses to unlock their phone. Wheeler said in his confirmation hearing in June that he wants to end the ban.

Wheeler formalized his view today in a letter to Steve Largent, CEO of the trade group that represents cellular carriers. Wheeler wrote, "It is now time for the industry to act voluntarily or for the FCC to regulate. Let's set a goal of including the full unlocking rights policy in the CTIA Consumer Code before the December holiday season."

Under Wheeler's proposal, carriers would have to unlock phones only after the consumer's contract is up.

The rest of the letter reads as follows:
During my first week on the job, I continually emphasized the importance of competition and the FCC's receptiveness to voluntary industry activities to promote competition. For eight months, the FCC staff has been working with CTIA on an amendment to your Consumer Code in which this industry would address consumers' rights to unlock their mobile wireless devices once their contracts are fulfilled.
The Commission has indicated that any such policy must contain five parts: (a) provide a clear, concise, and readily accessible policy on unlocking; (b) unlock mobile wireless devices for customers, former customers, and legitimate owners when the applicable service contract, installment plan, or ETF [early termination fee] has been fulfilled; (c) affirmatively notify customers when their devices are eligible for unlocking and/or automatically unlock devices when eligible, without an additional fee; (d) process unlocking requests or provide an explanation of denial within two business days; and (e) unlock devices for military personnel upon deployment. It appears that CTIA and the FCC are in agreement on all but the third item regarding consumer notification. Absent the consumer's right to be informed about unlocking eligibility, any voluntary program would be a hollow shell.

Wheeler is a former lobbyist and was even head of the CTIA between 1992 and 2004. But in aninterview with AllthingsD today, he said, "My client today is the American people, and I am going to be the most effective advocate they could hope for."

We asked the CTIA for a response to Wheeler's letter, and the group said the following: “We look forward to continuing discussions under Chairman Wheeler’s leadership and to ensuring consumers continue to benefit from the world-leading range of competitive devices and offerings. Today’s US consumers have a wide variety of unlocked devices and liberal carrier unlocking policies available to them. CTIA also continues to advocate for the passage of ‘The Unlocking Consumer Choice and Wireless Competition Act’ (H.R. 1123), which would address consumer confusion about unlocking as a result of the 2012 decision of the Librarian of Congress.

While CTIA supports giving consumers a robust set of options, it is important for consumers to note that an unlocked phone doesn’t necessarily mean an interoperable phone, given the technological and engineering realities of wireless networks.”

http://arstechnica.com/business/2013...k-cell-phones/