How is this legal?
For example, let's say that you're an AT&T customer and AT&T has 700MHz, 850MHz, 1900MHz, 1700MHz, and 2300MHz spectrum. You buy some foreign phone that supports 1900MHz. Great, now you're running a device that won't have coverage everywhere that AT&T has coverage. You're running a device that won't be using the full AT&T network and your speeds will be really slow compared to devices that fully support the network. You go somewhere with friends and you're like, "AT&T never works when I leave <city-name>!" Except that AT&T isn't the problem - you're the problem. You complain that your device is always slow and how AT&T is crap - but it's your device that's the problem.
Semi-compatible devices are just terrible for network operators. Let's say that AT&T wants to move that 1900MHz spectrum to 5G - but now you have a device that will stop working. Do they need to reach out to you? Do they need to offer you an upgrade? Sure, you and 90% of people would be like, "I knew what I was getting in for and it's my problem." But omg the 10% of people that will yell and scream and the meetings you'll need to have with regulators and the delays in your plans and the free devices you'll offer them as part of a settlement and all the mailings and admin.
Offering tech support isn't cheap and it's more expensive when you're dealing with random crap from users. Now you have some rep on the phone who doesn't totally know what they're talking about trying to figure out why they're getting bad coverage on their kid's device while their device has good coverage. They don't want to hear, "well, you shouldn't have bought some POS off Amazon that isn't even meant for the US market." They're going to say that it's a compatible phone - compatible being a black/white issue, not something that's only partly compatible and will technically get coverage 80% of the time, but even then won't be able to use most of the network.
Part of it is a cultural thing. Americans are willing to accept that companies are evil and don't allow something. You'll go online and say, "how is this legal" and then go back to your life and the company has spent no money on you. But once something is allowed, there's no concept of "we'll allow this, but you're on your own if anything goes wrong and we'll charge your account $100 if you call us for support." Once you've been accepted as a paying customer, you (and by you, I mean at least 10% of the people who will do that) will demand the same premium service for your dollar.
"AT&T only allows certain phones." Ok, companies are crap, but we're all used to that. If they allow you to put a crappy device on their network, there's so much bad word of mouth, regulator crap, support complaints, etc. I'm not saying the world should be this way, but it certainly is.
So many restrictions that exist are there because the company loses almost nothing from the restriction while the pain in the ass they receive from not having that restriction simply isn't worth it. Keep that in mind when thinking about why companies do things that seem to have no benefit. A bunch of people were likely a complete pain in the ass over something that was the customer's fault, but that the company ultimately had to deal with.
And I think the big area is foreign phones. Phones made for the US that have the right network support for the carrier are good to have. Someone grabs a Galaxy A32 meant for non-US markets (rather than the A32 5G) and it doesn't support bands 12/13/17 which are the main coverage bands for T-Mobile/Verizon/AT&T. It does support bands 2 and 5 and AT&T and Verizon probably have ok coverage in cities with band 2, but in-building coverage will be worse and speeds will be slow. I think they have some band 5 LTE, but they weren't necessarily anticipating that being one of the bands customers would really be relying on. And now there's an angry customer, spreading their anger to their friends, tying up support resources and costing you money, using your network inefficiently, and demanding that the carrier fix the situation and the only way you can fix the situation is basically by giving them a free phone.
In terms of how it's legal, spectrum licenses didn't come with open access requirements. The one exception was Verizon's 700MHz licenses. Except that Verizon kinda redefined open-access to mean that they wouldn't lock their phones - not that you could use any phone you wanted on their network. Google had pushed for the open access requirements, but a decade later Google didn't care and regulators didn't care.
"Hi, this is a free SMS from AT&T. We noticed you're trying to use a Galaxy A32 phone on our network. Unfortunately this phone doesn't support some of our bands (12/13/17), so you might experience poor or no coverage in some situations. We recommend you upgrade your phone, otherwise you might run into issues. If you have any questions, please call our representatives at 1-800-288-2020."
You'd think they could automatically annotate these accounts with a little note for the next customer service rep so they're aware of this possible issue if the customer calls. Then users won't be confused as to why their coverage is poor, but they can still use their devices if they really want to.
Why is it so hard for companies to communicate honestly and openly? Why do they prefer to let others stay in the dark and make problems 10x harder for everyone instead? Isn't it kind of unreasonable to expect customers to be "understanding" of problems when they don't put in an honest effort into helping them understand the problems?
Now you have to have a database of a million phones from Shenzhen that you need to keep track of whether it has your bands. Who's gonna pay for their QA and know what phone manufacturers are doing what with their phones?
This caused endless headaches for users and tech support alike because the market was flooded with phones that might have 850MHz support. There is no way to tell from the model or serial number - even Samsung and Nokia often failed to properly indicate that in their specs. And because both networks were also on 2100MHz, a phone may appear to work fine for months, but you will find out the hard way when reception completely disappears in a slightly remote area. There was also no GSM to fall back to since they built it from the ground up with no 2G layer.
Legend has it that one intrepid phone reseller would routinely take his stock on a boat to a spot 15km away from the nearest shore where no 2100MHz signal could reach, and only there could one be sure that the reception you are getting is on the 850MHz band.
I literally have no idea if I’ve ever been this customer and have no way of finding out from anyone who’s ever sold me a phone. They didn’t tell me information like this when I bought a random handset from Cingular at their store, or when I bought an iPhone directly from Apple.