WASHINGTON-The Consumers Union is asking the Federal Communications Commission to force wireless carriers to stop locking handsets, saying the move would lead to better coverage, more competition and less pollution.
“The only reason wireless companies install these locks is to try to hang onto their customers by effectively holding their phone hostage. While the locks take different forms with different technologies, they all have the same effect-putting together another roadblock to competition in the wireless market,” said Chris Murray, Consumers Union legislative counsel. “When locking is prohibited, we can expect to see phones that are compatible on all networks, which ultimately will lead to better coverage, better 911 service, more competition and less toxic pollution.”
U.S. cellular carriers were given a pass by the FCC and the Department of Justice to bundle phones and service together during the infancy of the wireless industry. Today carriers generally continue the practice, subsidizing the cost of handsets while aiming to get subscribers to sign annual service contracts.
While some GSM handset manufacturers are beginning to sell phones through alternative distribution channels such as the Internet, most phones sales remain tied to service contracts. Virtually no manufacturer sells CDMA phones outside of a CDMA carrier’s purview because the handsets must be individually programmed to work on specific CDMA networks, a task beyond all but the most tech-savvy phone technician. GSM subscribers can easily move their SIM cards from one GSM phone to another, thus allowing phone manufacturers to sell GSM phones without carrier approval. However, a GSM carrier can “lock” a phone, ensuring that the device only will work on its network and not the network of a rival GSM carrier.
The wireless industry believes that locking handsets protects carriers’ investments. “Just as carriers offer various pricing plans and a variety of service offerings, different carriers have different policies on unlocking phones. For consumers who feel this is an important issue, the competitive wireless marketplace already offers a range of choices among the carriers. But, for many consumers, getting a new handset with better features is one of the advantages of changing carriers,” said Travis Larson, spokesman for the Cellular Telecommunications & Internet Association. “The United States provides the least expensive handsets to our consumers, worldwide. Phones are locked so that they are not re-sold in other countries for a profit and so that carriers who provide handset subsidies are able to recover their investments over the life of the contract.”
RCR Wireless News Reporter Mike Dano contributed to this report.
