FCC asked to probe US carriers locking handsets to networks | Hacker News Reader

FCC asked to probe US carriers locking handsets to networks

theregister.com

106 pointsChrisArchitect82 comments

Isn't the purpose of locking the phone to the network meant to stop customers from signing up for a plan that subsidizes the cost of the phone, canceling the plan 6 months later, and taking that now heavily discounted handset to a competitor? I don't see a problem with this basic model, so I'm curious to know where the problem lies. I seem to be missing something.

That's typically what cancellation fees or early termination fees are for.

But are those actually enforceable? You'd have to take someone to court to get wage garnishment for the value.

That might be the justification, though they given the amount they sink into lobbying, a solution would have long been found if the pushed for it. Much better financial incentive to lock in your clients and blame it on unenforceable laws.

Wage garnishment is a $500 solution for a 50 cent problem.

If you owe money on the phone, it's not your phone. Whoever you got it from should have the ability (technically and legally) to just brick it remotely.

Of course it's your phone. That's how modern finance works. The only purchases you're likely to make that accrue equity in a legal/contractual framework are cars and homes. Once that phone is in your hands, it's yours to do with as you wish.

The last couple years notwithstanding, cars are about the least likely thing to accrue equity.

If you have a loan on something, it's not yours. If you stop paying your car payment, they take it away. If you stop paying your mortgage, they kick you out. (And neither of these absolves your financial responsibility). I don't think it's particularly surprising to suggest that if you haven't paid for your phone yet, whoever gave it to you still owns it.

But I never suggested you can't "do with it as you wish" only that bricking the phone was a perfectly reasonable way to ensure that it was paid for in full in the example of someone getting a subsidized phone but wanting to switch carriers a few months in - which should be allowed, provided you pay back the subsidization.

> If you stop paying your mortgage, they kick you out. (And neither of these absolves your financial responsibility).

12 states have 'non-recourse' mortgages, where if your mortgage is foreclosed on, the lender has no legal avenue to recover the difference if sale does not recover the principal.

More generally, what provides for recourse isn't the vague idea that 'you're still making payments'. It's a signed contract saying they can. No contract, no recourse. Contract terms for things like cars and homes are heavily regulated. Cell phones are getting there.

I believe you, but how does that work? For example the federal government commonly buys mortgages. Since the federal government buys the mortgage, wouldn't it void out any state law around the mortgage?

Foreclosure is a common-law procedure, subject to the laws of the state that the mortgage was taken out in. When the government needs to foreclose, they file it the same way everyone else does.

Isn't it usually the other way around in the US? Can't they just send you a bill and then send it to collections if you don't pay? Seems like usually the onus is on the debtor to prove the debt isn't legit not the other way around.

Collections in the US can't really do anything from my experience. I had some $24 debt that when I offered to settle the debt collector hung up on me.

Sure if you owe someone $150,000 and have a net worth of $500,000 they'll take you to court. But over a cell phone, that probably is not going to happen.

Also when the debt is sent to collections the originator only gets about 1/10 the cost.

The threat to send it to collections does have some power to convince people to pay.

Yeah I didn't really consider that perspective.

They can ruin your credit score and make it difficult or impossible to get any new credit/debt.

Only works for post paid plans.

That’s the theory. But often they’re locked as policy even if you buy the phone outright.

I think Verizon locks all phones purchased from them. They’ll unlock them after 30-60 days if you ask and don’t owe on the phone.

But why should that be the case at all? If someone gets a subsidized phone and runs away, charge them for the phone and send it to collections. Too many people doing that? Don’t give away phones so easily.

No, it’s totally anticompetitive practices. If you buy the phone out right that phone should not be locked at all. The only conceivable reason why it would be locked is so that the carrier is attempting to prevent you from going to another carrier.

I agree completely. My comment was to point out it’s not just subsidized phones.

They lost on number portability. They’ve still got this (for now).

Verizon's new policy is that all phones are unlocked automatically after 60 days. I have yet to test this, but publicly that's their policy now.

Can confirm, as an iPhone user. Pre-60 days it says "Carrier locked" in Settings, post-60 days after a profile settings update it flips to "SIM unlocked"

Can also confirm. The lock also prevents a second sim. Stupid.

My experience has been that Verizon phones have not been locked for many years. I've used European carrier sims in my Verizon phones many times.

Yes, though in recent years they've switched that to a 60 day period, to prevent people from signing up and instantly selling on eBay.

It’s definitely anticompetitive. I bought a phone paid-in-full from Best Buy a few years ago and decided a few weeks later to move from Verizon to an MVNO. I learned about the phone-locking when activation failed.

Removing the lock was difficult. My first call to Verizon was long and ended with a T2 lying to me that they’d removed the lock. My second call was shorter because I was insistent that I see the change on my end before hanging up. After about half an hour, the T2 gave up and escalated up to T4 and I saw the unlock confirmation via SMS.

The whole time they kept trying to make me promise I would not move the unlocked phone to new service, as if that were something owed them from my paid-in-full purchase on a no-contract line.

Most people would not have the time and knowledge to solve this, and the carriers know it.

I bought a phone used and refurbed that was locked to Verizon. I know the phone was more than 60 days old so it should at the least be eligible for an unlock per the policies.

Went into a store, they said I was being scammed by the seller and to only trust the store (they just wanted to sell me another phone). Phone support said they'd try a few things on their end but in the end the phone was still locked. I think I only ever got to T2.

They also said they had no record of the phone ever being activated in their system so I kinda suspect the seller was a verizon store doing shady stuff.

Ended up having to return the phone and fight over a "restocking" fee. Paid $40 more at a different seller for a fully unlocked phone even though by Verizon's own policies the first phone should've been unlockable. I wish there was something I could've done to hold Verizon and the seller accountable.

In those cases charge it back. Print out the marketing material you based your decision on and charge the store back. Make it clear that you're returning it over it not being as described not over being unhappy with it. Often you'll win.

If it's not worth the time to document it maybe it's worth just letting go of.

I ended up getting my money back and all that, took a little back-and-forth. Ultimately though I would've liked to hold Verizon to their stated policies and force them to unlock the phone. They state every phone is eligible for an unlock after 60 days and since I was buying a refurbished last-gen phone model it was certainly old enough to qualify.

But over a $40 difference to use a different seller, you're right, it's better to just let it go. I wouldn't even be going after Verizon with a chargeback, I'd be hurting the seller (who may or may not have been in cahoots with Verizon, I'll never know).

What you are probably missing is that the subsidy is not a lump sup at the time of purchase. e.g. If you get a phone subsidized by $720 from the MSRP the carrier provides a subsidy of $30 per month for the next 24 months or $20 per month for the next 36 months. If you leave early the credits stop and the remaining balance is due. The problem here is that even after the phone is paid off it remains locked to the operator.

The user can't "cancel the plan," though. It's a CONTRACT. That's why the entire scam is backward.

Under contract, the user has to pay the original company every month. It's actually GOOD for that company if the user takes his phone elsewhere, because now he has to pay for service he's not using. That's why locking the phone is mind-bogglingly stupid.

My experience, in supporting non-technical friends and family, is that if I mention "lock" or "unlock" they are going to say "no, I don't use my phone to unlock my car". Many users only experience with a smartphone is to buy one from a phone store. The phone store employee is not likely to engage with the customer on the topic of "locked" or "unlocked", and the carriers have no incentive to train their retail agents to have that conversation.

I’m always a bit surprised the FCC doesn’t attack this from the other end: require that phones sold in the US not support carrier locking.

> always a bit surprised the FCC doesn’t attack this from the other end: require that phones sold in the US not support carrier locking

There are fewer carriers than phone makers. And the anticompetitive benefit accrues to carriers.

Because the lock is, effectively, collateral in exchange for getting a new phone on a monthly plan. Just because the carriers abuse that by not unlocking after the phone is paid off doesn't mean locks are inherently evil. It prevents one from paying, say, $300 of the phone off, then jumping ship to a different carrier.

You can’t jump ship without paying for the phone.

They lock phones because carriers are willing to pay off someone’s phone so people jump ship. It’s a pure anticompetitive practice.

True, Verizon (and its associated MVNO) phones unlock automatically after 60 days but the bill credits and associated subsidy persists for the duration of the contract term.

But Verizon was caught continuing to charge the subsidy payback amount every month AFTER the customer had fully paid off the subsidy.

My phone costs $300.

Frankly, it's absurd to pay laptop prices for a phone.

> Verizon, for example, says in its FAQs that all smartphones the comms giant or any of its retail partners sells are locked for at least 60 days from purchase, even when you've paid full retail price or paid off your device payment agreement early. It claims the policy helps to "prevent theft and protect customers from fraud."

Further, as noted by multiple commenters (and this can be confirmed by a google search turning up numerous accounts): T-Mobile automatically locks an unlocked device when you insert an AT&T sim into it.

> T-Mobile automatically locks an unlocked device when you insert an AT&T sim into it.

Which is bizarre. T-Mobile doesn’t own the device. They don’t even have a SIM in it.

This should read as “T-Mobile has entered into an agreement, which should be against public policy and illegal, such that the device vendor locks the device under certain circumstances.”

Actually that's backward. Monthly plans are for UNlocked phones.

The idiotic thing about locked phones in the USA is that they're given to customers who are ON CONTRACT. Therefore, if the customer takes his phone to another network, he still has to pay the original one! Why on earth would the phone company want to prevent people from paying for service they're not even using?

The sheer stupidity of this behavior is almost worse than the offensiveness of the entire phone-locking concept.

Absolute nonsense.

As others have noted, that's why there is a contract in place - if you don't pay the monthly bills, they can seek to recover the costs from you.

Also, what you're saying would do nothing to stop someone selling the phone to another customer on that carrier.

You could at least require that all phones be automatically unlocked when the phone is paid off or when the contract period expires.

The customer shouldn't have to take any sort of action to remove the lock.

This arrangement is idiotic, though. Under contract, the user still has to pay the original company if he takes his phone to another network. Why PREVENT that?

or you could require that once a sale, contract, payment etc is reached, the phone remains as originally offered, no removal of features, or activation of anti features allowed unless willfully and knowingly initiated by the owner [user,holder,purchaser] of the device.

pushing unstoppable modifications, retroactively altering the device without consent, stuffing features with antifeatures, turning the device into something it wasnt at the time of sale, these actions should be banned for phones, as well as any other product.

I can't think of any other product I can buy today that is set up this way. Yet somehow we accept buying a phone from a carrier and having it difficult or impossible to use elsewhere.

Well, there aren't a lot of examples of products that you get a big discount on in exchange for signing up for a non-cancelable (or only with an early termination fee) service contract which used to be pretty much the standard model for cell phones. So you still the remnants of that practice even though a lot of people don't get carrier subsidies these days.

It’s not really a discount because the plan is typically more expensive than a BYOD plan. In a sense, you’re amortizing the cost of the phone over the terms of the plan.

If you look for examples of that, you’ll find it looks like nearly every loan. So cars, and houses function pretty similarly.

If you buy an AMD server processor, some vendors will lock it to their brand of motherboards on first boot.

It's easy to by unlocked iPhone and Android phones, including the top of the line models. The problem is, you have to pay full price.

Or, you can buy a subsidized phone at a significant discount by agreeing to a contract with a cell provider. It's reasonable that the providers expect to have a way to enforce the contract.

If the second option was the only option, I'd be more sympathetic to government regulatory involvement here. But it's not -- factory-unlocked phones are trivial to obtain. Consumers already have a choice.

What are you talking about? If you try to cancel the contract they either take back the phone or you pay them. I don't see how unlocking a phone screws the provider.

> If you try to cancel the contract they either take back the phone or you pay them. I don't see how unlocking a phone screws the provider.

It's because some people will cancel the contract, but can't or won't pay. A locked phone is effectively collateral.

> It's because some people will cancel the contract

How do you "cancel" a contract? Can I do that with my student loans without the President's help?

It screws them because someone just stops paying them taking the phone to a different network with another sim.

You don't get to just stop paying people, unless you want them to come after you. And I don't know how easy it is to get an account with another service provider if you owe your last one $800.

> If the second option was the only option, I'd be more sympathetic to government regulatory involvement here.

Like at Verizon? Who systematically locks all phones bought from them whatsoever, even at third party stores, if purchased outright at full price?[0]

> [0]: In order to mitigate theft and other fraudulent activity, newly purchased devices are “locked” to work exclusively on the Verizon network. We have separate device unlocking policies that cover postpay and prepaid devices, as well as special rules for deployed military personnel.

Yes, you can get them unlocked, but it's cumbersome at best in my experience.[1]

> [1]: Devices that you purchase from Verizon are locked for 60 days after purchase. Devices that you purchase from our retail partners are locked for 60 days after activation. After 60 days, we will automatically remove the lock. Following the 60 day lock period, we do not lock our phones at any time.

And anecdata (admittedly from the past), but I've never had them automatically unlock the devices. It's always been a nightmare with CS to get them unlocked, stuck in repeated loops of "I don't know what you're talking about" to "this requires a different team, let me transfer you."

> But it's not -- factory-unlocked phones are trivial to obtain. Consumers already have a choice.

How often do people not know the device they are paying full price for is locked to the network?

=====

Or how about T-Mobile, who automatically locks phones to their network when a sim card is inserted? [2][3][4][5]

Good quote from [5] as well.

> Best Buy phones lock to the carrier of the first sim you insert.

=====

[0]/[1]: https://www.verizon.com/about/consumer-safety/device-unlocki...

[2]: https://www.reddit.com/r/tmobile/comments/px8w16/tmobile_loc...

[3]: https://www.reddit.com/r/tmobile/comments/umv2bu/unlocking_i...

[4]: https://www.reddit.com/r/tmobile/comments/wnpype/tmobile_wil...

[5]: https://www.reddit.com/r/tmobile/comments/vir8tc/tmobile_can...

This is pathetic behavior from Verizon/ATT/T-Mobile. I follow tech news and even I had no idea even Apple lets carriers lock phones to the first network they connect to. I always knew to avoid Verizon/T-Mobile/ATT stores, but I guess even Best Buy is not safe.

They're locking unlocked phones. That's the problem. Happened to me. I purchased a pixel from google. Inserted my at&t sim, and it was locked to at&t when I tried to use my tmobile sim.

How does this work? Is Apple doing something that Google is not so that phones bought from Apple cannot be locked?

Why would Google allow ATT to lock a phone sold Google them via a SIM?

Apple phones can definitely be locked.

I have an iPhone that is fully paid off. My company was paying for the monthly fee on AT&T for the last year and a half. When I left the company a month ago I switched the phone to a new personal account with AT&T because it apparently wasn't possible to get the phone on a personal account and switch carriers at the same time.

I then tried to unlock the phone to move to a better carrier. After spending hours on support calls with AT&T thy finally told me that they can't unlock it for two months after a new account is created. I asked why and they said, "it's just our policy." May AT&T rot in hell.

I know they can be locked, but not if purchased from Apple. Which is why I have always bought phones from Apple since 2008, since I always hated the locking game.

But I assume Google or any other manufacturer would similarly not want their customer to end up with a locked phone, hence my surprise that a phone purchased from google also can end up locked.

> but not if purchased from Apple

That's actually wrong. Apple has what's called a Flex Activation policy. Some networks can lock your device based on just the sim card installed, even if it was paid for outright.

I'm actually curious if yours is locked and you just don't know it. Mine purchased from BestBuy is locked (thanks T-Mobile) even though it was purchased as "unlocked."

Settings > General > About > Carrier Lock

My carrier lock says “No Restrictions”. I have been an ATT customer since 2008.

It would be disappointing to find out that unlocked phones purchased from Apple.com are lockable after the fact. It is already disappointing that any unlocked phone, much less Apple which heralded unlocked phones, are lockable after purchase at Best Buy or other retailers.

Apple’s website does not say that unlocked phones purchased from Apple are lockable after purchase:

https://www.apple.com/iphone/buy/

> Will my new iPhone be unlocked?

> Every iPhone you buy from us online or in an Apple Store is unlocked, with the exception of a few carrier financing options. With an unlocked iPhone, you’re free to go with the carrier of your choice.

> It's reasonable that the providers expect to have a way to enforce the contract.

No, no it is not. Contracts are legally binding and therefore enforcement should be done via legal means. This type of behavior is nothing short of vigilantism.

Beyond that, this type of behavior is anti-competitive. Carriers should compete on service and customer satisfaction, not how much of a margin they can eat to entice customers into contracts. This type of scheme naturally favors larger companies and acts as a way for industry incumbents to retain market market share.

> The problem is, you have to pay full price.

Keep in mind that the "free" phones can be factored into your monthly payments, so you may eventually pay for the phone anyway. If anyone is currently using a provider-issued phone then start saving up and get yourself out of this trap (you can also usually trade-in your old phone when purchasing one yourself).

That was the case years ago. Right now major providers will not discount service price if you bring your own phone. They might give you a one time signup bonus when you join them.

I.e. right now your option with the big three is to pay ~$50/month for the service with the fully paid off unlocked phone, or pay same ~$50/month with a free phone locked for 2-3 years.

The other problem however is that a lot of the time the unlocked model (if it does work or if they even allow you to activate it) will be missing a few big features like WiFi calling.

> It's easy to by unlocked iPhone and Android phones, including the top of the line models.

Not really. If you want an unlocked phone, there are less options. Some models aren't even available unlocked. And often you have to search through some small text to find if a phone is unlocked or not. If you know what you are doing, it isn't too difficult, but the average consumer doesn't know what to look for and can very easily end up with a phone locked to the wrong network. Not to mention that in brick and mortar stores, most phone available are locked.

If I look at where the wireless industry is going with e-sim + MVNO, it seems like wireless access starts to look like payment network access. Carriers like Verizon and AT&T are basically like Mastercard and Visa. Other brands and loyalty will provide value that can retain users.

In this regard it seems insane that locking/unlocking is even a thing. Imagine that adding a particular Visa or Mastercard to your Apple Wallet locked you out of using other/competitor cards?

Phones are such garbage. Imagine if your PC let you lock it to your ISP.

Lenovo pulls some pretty underhanded shit, so I wouldn't put it past them. Just one example of at least a couple I remember: https://news.ycombinator.com/item?id=29958247

Simple solution here: don't buy locked phones anymore. My last locked phone purchase was in 2011. In the US, you don't need to buy a locked phone anymore to get service.

Unlocked phone + Mint Sim FTW.

To do so, you have to pay the full price of the phone upfront. Some people can't afford that.

Most plans cost about ~50-60 dollars/month. A good entry level phone runs about 80-120 dollars. No reason to not be able to save up.

If you can't afford to save up 20 bucks a month to eventually buy a cheap phone, maybe having a phone should not be a priority.

> maybe having a phone should not be a priority

I just wanted to highlight the ridiculousness of this statement.

Two months ago I bought Samsung A03 to sit 24/7 on the charger and WiFi. I would have bought even something cheapear, but it was the cheapest one (without bothering with delivey) and it had everything need for a modern smsrtphone

yes 1000$; 900$; 750$ these are not realistic prices i suspect thats by design, creating an incentive to take out a payment plan contract

I also like WiFi calling and some carriers wont even activate some unlocked phones

It only took 30 years, but better late than never I guess.

If we research this, I'm sure that they've made this announcement half a dozen times over the past 20 years. Probing is at best a preliminary to actually doing something, and I'm not sure what aspect of the practice in question is mysterious enough to necessitate a probing.

Yet again, this is the same old dynamic of law being only for the little guys. When it comes time to prosecute the institutional criminals, the focus shifts to crafting policies and making reports and perhaps enacting some regulations down the line, instead of simply enforcing the already-written laws on the already-occurred violations, and making the bad actor liable for civil and/or criminal damages. Specifically for this topic, locking a phone, especially one that has not been financed, is at least a straightforward case of tortuous interference, and likely fraud or a CFAA violation.

Reply on news.ycombinator.com