FCC rule would make carriers unlock all phones after 60 days
techcrunch.com
techcrunch.com
US carriers have used their government-granted monopolies to influence the market wayy beyond phone calls and data plans, and it's about time it should end.
There's also been a trend (I don't know whether it's legislated or not) for phones to be explicitly $X/mo for 24 months (though that still ends up being far below retail, and is sometimes $0), instead of burying that in the plan costs. We still have plenty of problems with ridiculous plan pricing and data limitations, but those have gotten better, and were still bad before carrier locking went away.
Your "free" iPhone isn't free if it involves (1) giving them your current one which is worth $500+ in a private sale and (2) signing up for a 3 year contract at $100+ a month.
Probably because that's not true.
The US is way behind here.
You can resell the phone and use it with any carrier you wish, but as soon as the original owner stops paying the bill, the phone becomes remote-locked and turns into a brick.
Samsung's Knox can do this, not sure which other brands also have that option.
That's an Android issue. iPhones have no such issue.
What about other carrier modifications to devices, like when a carrier prevents a Pixel phone's bootloader being "OEM unlocked" so that GrapheneOS or other alternative systems software can be installed?
Free and clear phones should be unlocked immediately.
The phone is absolutely not "collateral". The carrier does not take it back if you default (even if they could, they wouldn't be able to get anything of value for it). Unlocking is just an inconvenience that prevents enough people from churning that it lowers the risk of financing.
I ask this out of genuine curiosity - I’m not sure what happens in the US either, I don’t believe they brick carrier-locked phones that a customer stops paying for but I’m not sure. But I’ve enough experiences with enough people to know this is probably actually a fairly common scenario and I wonder what the consequences are. (A surprising amount of the time, there are no real consequences.)
Until you pay off the collateral, it isn’t your ownership, simply permission to use while servicing the debt.
Currently the most used phones in the US are iphones.
If the actual cost is not hidden behind monthly payments anymore, but some users can not afford iphones, people might start to consider cheaper phone options.
You can get a darn decent Android for 200$ unlocked, and if your really struggling a 50$ phone will get the job done.
No one will suffer if they can't get an iPhone.
A lot of folks also can't do math. I pay about $20 a month for my phone plan, and I paid $700 for my phone up front. AT&t isn't giving phones away, you end up on a more expensive plan that's around $80 or so and then they'll tack on 30 bucks for the phone.
If you're lucky the bill credits will cover the entire cost of the phone, but over two years you've still spent an addition 700$.
Carriers will just make people sign two-year contracts at a guaranteed rate, plus an early exit fee. This is how all kinds of predatory scams work; the carriers will do just fine and low-income people will continue to get the newest iPhone.
One caveat: carriers do not really pay for your phones. Your phone bill would list two separate charges: service charge, for calls, internet use, etc., and then the monthly payment for your phone. If you add all those monthly payments over the whole contract period you get maybe 5-10% discount to the regular market price.
Here the phones that you can get from your carrier and pay off on a monthly basis often end up costing more than in retail.
1. Incentivize the borrower to continue paying so as to not lose the collateral.
2. Allow the lender to recover some of the value of the loan.
A locked phone serves the first purpose because the lender can disable its primary function.
Yes, there's room for abuse in the system.. and perhaps prepaid phones won't be as well subsidized.. but people getting contracts typically take a credit hit or require a hefty security deposit to offset the risk.
Recent deal: https://slickdeals.net/f/17036050-walmart-stores-64gb-apple-...
I bought one for $20 several years ago as a glorified iPod touch and never activated it.
I think the threshold for repossession of collateral is somewhere around cars; stop paying your car lease, they'll take the car; stop paying for your house, they'll kick you out of your house. But I don't think it's worth it for phones.
The phone is still collateral whether it’s locked or not. In fact, AT&T is the only one of the big 3 carrier that locks their devices that are financed. The other ones don’t bother.
If you terminate your cellular service with an installment plan it’s typical that you immediately owe the balance. Whether the phone is locked or not makes no difference on whether the company can collect on the debt.
> When locked, the phone is the collateral
Not really. If someone cancels service without paying off the phone, the carrier doesn't reclaim the phone. It simply prevents the phone from being used with a different carrier. The person could sell the phone to another customer on the same network. Houses are collateral because it's hard to hide a home from creditors and you can't sell the home without discharging the lien on the home. There's no lien on your financed phone.
This change probably wouldn't change much for phone financing because phone companies are already running credit checks when handing out devices on payment plans, require higher-risk people to make down-payments on the phones, and once a person has done it once to you, it's easy to never offer it to them again. Once you've burned Verizon by canceling service and not paying off your phone, you've burned that bridge. Plus, Verizon would likely report it to the credit agencies where you'd have burned the bridge with the other carriers too.
This is a rule that would help prevent a lot of e-waste and make it easier for folks to switch carriers. There is the chance that someone will finance a phone and leave without paying it off, but there's always been a risk that someone would run up a phone bill and not pay it. Someone could go abroad and run up a large roaming bill and not pay it. Back when data plans were limited, someone could run up a bill into the thousands and just cancel service without paying.
Locked devices do serve a function for carriers. They make switching harder and they protect companies roaming revenues. If I have a locked phone, I have to pay Verizon $10/day to use my phone in Europe. If I have an unlocked phone, I can grab a European SIM for $30 and have cheap service for the month.
Verizon has been financing phones and offering similar discounts that T-Mobile and AT&T have been offering even though their devices will automatically unlock after 60 days. A locked phone is worth marginally less than a carrier-locked phone, but a locked phone can still be sold to other people, even if it isn't paid off. A locked phone can still be used even if the original purchaser has defaulted on the debt. These aren't bricked phones, just carrier locked devices.
If the issue were that they needed a form of collateral, carriers would want the ability to brick the devices rather than merely reduce the resale value of the device by 15%. Yea, if you finance an AT&T iPhone, default on the debt, and sell it to Gazelle, you'll get 86% of the price for your locked phone as you would for an unlocked one. If one could flip unlocked financed phones, it would be just as easy to flip locked financed phones - you'd just make 15% less per device.
So what is the lock preventing? It's not preventing someone who has found a way to defraud carrier financing. They can still sell the phones (which are legally their phones which the carrier has no lien on). They merely get a marginally lower resale price. No, the locks aren't necessary for equipment financing. No, the phones aren't collateral.
...and automatically
Even if your phone is paid for, removing the lock is confusing and time-consuming friction that shouldn't happen. They make money by doing it.
the comments are always full of "the system will break down if they scrap it / wont somebody think of the children"
Yes, you can afford a $900 / month car note. But that doesn't mean that it actually makes sense to pay it for 72 months at some ridiculous interest rate.
Restaurant surcharges are a mixed bag because so long as they're advertised at the door I think they're great, they make take-out cheaper. But Ticketmaster is just garbage and their practices should be strongly illegal because it's just fuck you pay more.
During the February AT&T outage[1], my wife's phone was affected, and she had to go somewhere. I should've been able to spend $20 on a throwaway e-sim and had it working before she left the house. Instead, I had to shrug my shoulders and suggest she find WiFi wherever she was headed.
Carrier locks in today's age are leftover garbage from a dated, consumer-hostile business model that's no longer practiced. And if I default on my loan repayments, the creditor can garnish my wages.
1: https://www.cnn.com/2024/02/22/tech/att-cell-service-outage/...
A carrier should not be able to lock a device that's paid off for any length of time.
It's going to be really interesting to see how prepaid carriers cope with this. For example you can buy a fully . For example you can buy a fully . For example you can buy a phone much cheaper if it's locked to MetroPCS or another prepaid provider. Since technically you've bought the phone, them bricking it becomes a lot harder to justify.
The carriers are terrible about this. I have a Samsung sitting on my desk I still cannot use because I can't get it unlocked.
The reason carriers fight to preserve this isn't for enforcement of the contract at all, it's because of the other revenue streams from unwanted intrusion by the carrier into the use of your phone. Carriers can sue for the cost of the phone. And the FCC, by allowing this 60 day provision, would be making a conscious attempt to protect carrier data harvesting and customer capture.
I get allowing carriers to lock for the length of a contract; I get not allowing carriers to lock at all. This, however, is an attempt to pander to people who think locking is wrong while still preserving the benefits that carriers get from locking. These benefits will now be delivered by jerking customers through a Kafkaesque dance of intentionally confusing bureaucracy. Unlocking becomes cancelling your gym membership or your subscription to the Economist.
As someone received a perfectly packaged empty box this year, I think this is not ideal but reasonable.
It seems to me that in the last two years, the FCC and the FTC are kinda waking up and start annoying corporation into making the markets they compete in freer.
I only get my US news from hackernews, so maybe i only have the good, and not the ugly, but even in cases those agencies lost, they made good points and seems to be pushing the US to be less corporatists and more liberalist (in the economic sense, free market and stuff you USian call capitalism)
So how those agencies fall accross party lines? Are those independant?
In my opinion a change of president/government shouldn't change the culture in those agencies, but you are a weird country (the fact that you _still_ have carrier lock proves it), is this a "risk" in your case?
And it will make it harder for the poor and those with bad credit to get a phone.
T-Mobile for instance will let you finance a phone regardless of credit once you have been a customer for a year.
I believe that some of the MVNOs will even let you get up to a midrange phone like an older iPhone as long as you stay with them for a few months. They would only do that if it’s locked.