New FCC Chairman: Revamp Unlocking Policy Or We’ll Regulate It For You
November 15, 2013

New FCC Chairman: Revamp Unlocking Policy Or We’ll Regulate It For You

Bryan Carpender for – Your Universe Online

There’s a new sheriff in town and he’s showing wireless carriers some tough love. Newly minted chairman of the US Federal Communications Commission (FCC) Tom Wheeler is wasting no time getting to work.

His first order of business was to urge mobile operators to agree to several reforms around policies pertaining to the hot-button issue of unlocking devices.

The simple act of unlocking a cellphone became illegal last year after the Librarian of Congress removed it from a list of exemptions to the Digital Millennium Copyright Act (DMCA), with the intention of mitigating copyright infringement and piracy.

In an open letter from Wheeler to Steve Largent, president and CEO of the mobile industry group CTIA, the FCC chairman proactively affirmed his hope to resolve the matter “expeditiously,” encouraging wireless carriers to voluntarily choose to revisit and revise their policies on the issue, or run the risk of being forced to do so under FCC regulation.

Wheeler emphasized the importance of competition and reiterated the need to address consumers’ rights to unlock their mobile devices; an issue that is gaining momentum, as evidenced by a groundswell of support, including a petition signed by 114,000 people that was backed by the White House.

“The White House agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without risking criminal or other penalties,” wrote R. David Edelman, Senior White House Advisor for Internet, Innovation & Privacy. “If you have paid for your mobile device, and aren't bound by a service agreement or other obligation, you should be able to use it on another network. It's common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers' needs.”

Unlocking a device allows the user to switch carriers without having to purchase a new phone and committing to another contract. The FCC believes consumers have the right to get their phones unlocked once their service contract with a given carrier has been fulfilled, and over the past eight months has been engaged in ongoing talks with CTIA over the proposed amendment.

The carriers aren’t exactly excited about the idea; one of the major points causing friction is whether or not carriers should notify their subscribers when their devices become eligible for unlocking, thereby freeing them to explore other options and perhaps move over to a competitor.

This excerpt from the letter outlines that an amendment to CTIA’s Consumer Code must contain certain elements:

“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 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.”

“Absent the consumer’s right to be informed about unlocking eligibility, any voluntary program would be a hollow shell,” writes Wheeler in his letter. “Enough time has passed, and 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.”

This can be viewed as a proposed partnership, working together to get to a better place. It can be viewed as a firm-but-friendly attempt to set the goal or revamping the unlocking rights policy. Or it can be interpreted as a challenge to the mobile carriers: decide amongst yourselves, or we’ll take steps to regulate it for you.

The CTIA was quick to respond, providing this statement from its Vice President, Regulatory Affairs, Scot Bergmann:

“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.”

Either way, Wheeler’s letter is a step toward change that would allow users to more freely use the wireless devices they purchased. Whether or not changes will come in time for for the holiday shopping season remains to be seen.