[HN Gopher] FCC rule would make carriers unlock all phones after...
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FCC rule would make carriers unlock all phones after 60 days
Author : rntn
Score : 132 points
Date : 2024-06-27 20:27 UTC (2 hours ago)
(HTM) web link (techcrunch.com)
(TXT) w3m dump (techcrunch.com)
| toomuchtodo wrote:
| Without provisions for equipment installment plans, this would
| likely end financing of phones by carriers (potentially pushing
| consumers to higher cost mechanisms, like credit cards or other
| traditional credit instruments). When locked, the phone is the
| collateral.
|
| Free and clear phones should be unlocked immediately.
| yyyfb wrote:
| Markets exist where SIM locking has been prohibited for a long
| time (Wikipedia says Canada, Chile, China, Israel, and
| Singapore at least). Financing still exists in these countries.
|
| 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.
| icepat wrote:
| Yes, because in Canada at least, if you terminate your
| contract, you have to pay out the phone. That's how it's
| done. Really, it's not a complicated solution.
| WD-42 wrote:
| Sounds like a reasonable thing consumers should be able to
| do.
| lbourdages wrote:
| Yes. In Canada, the phones are not locked, but if you
| terminate your contract before the term (max 2 years) you
| have to pay the remaining cost.
| Amezarak wrote:
| What happens if you don't pay?
|
| 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.)
| dawnerd wrote:
| They'd still make you pay off the full amount before you
| could close off your account. Pretty standard in the US.
| Locking is just an evil way to add more friction.
| toomuchtodo wrote:
| People with nothing don't care if they get sent to
| collections, hence the need to have some control over the
| device while monies are owed for it. Just like vehicle
| interlocks for subprime auto notes.
|
| Until you pay off the collateral, it isn't your ownership,
| simply permission to use while servicing the debt.
| dv_dt wrote:
| Then the companies should not extend that loan/credit
| toomuchtodo wrote:
| Then a lot of folks who finance phones on cheap or free
| installment plans currently won't get phones, simple as
| that. If regulators are fine with that, that's a
| reasonable position I suppose. Carriers aren't a charity
| to take on aggressive credit risk in these financial
| consumer populations. Incentives->outcomes.
| normaler wrote:
| What are free installment plans?
|
| 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.
| 999900000999 wrote:
| Alot of folks won't have iPhones.
|
| 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 $80 or so and then
| they'll tack on 30 bucks for the phone.
|
| If you're lucky the bill credits will cover the entire
| cost of the phone, but over two years you've still spent
| an addition 700$.
| Detrytus wrote:
| Here in Europe they will actually ask you for a proof of
| employment/income before they sell you the cell phone
| plan. If you are unemployed then your only option is pre-
| paid sim, and those usually do not come with phones.
| Anduia wrote:
| In which country?
| sgift wrote:
| Rather typical in Germany (they usually do it via Schufa,
| but the end result is the same). No idea for other
| countries.
| yftsui wrote:
| I believe he meant financing will become more expensive,
| which may actually increase the consumer cost over a fixed
| period (if the carriers are not willing to decrease the plan
| prices which are jacked up to compensate the contracts).
| Detrytus wrote:
| And in EU, it is technically not prohibited, but haven't
| really been a thing for a long time.
|
| 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.
| pipodeclown wrote:
| Yes but what is prohibited in Europe is to hide the cost of
| the phone in the payments of the cell plan. They must make
| clear exactly what part of your monthly payment is to pay
| off the phone and what part is the cell plan. That has
| basically blown up subsidised phones in Europe..
| kirenida wrote:
| It seems that Croatian operators didn't get the memo about
| the discount.
|
| 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.
| Molitor5901 wrote:
| It's purely anti-competitive and anti-consumer.
| Zak wrote:
| Collateral has two functions:
|
| 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.
| ldoughty wrote:
| Unlocking phones does not free the individual of contractual
| obligations...
|
| 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.
| turtlebits wrote:
| Yep, no more carrier locked $20 iPhones.
| 2OEH8eoCRo0 wrote:
| It's only $20 because they add installment payments to the
| monthly bill which is recouped by early cancellation fee.
| turtlebits wrote:
| No, these are prepaid phones. They're just betting on you
| staying with the prepaid carrier since they're locked.
|
| 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.
| jrockway wrote:
| Is the phone really collateral in these financing agreements?
| They just want the guaranteed revenue stream from forcing you
| to stick with them for 2 years. I imagine it would be quite
| expensive to go retrieve the phone from someone's house after
| they stop paying, and they could do that even if it wasn't
| locked to a particular carrier.
|
| 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.
| singleshot_ wrote:
| For me, never again encountering a locked phone would far
| outweigh the utility of being able to finance a phone. There
| should be no need to make a basically disposable item like a
| phone collateral: just buy it.
| paxys wrote:
| What does SIM locking have to do with financing? It's not like
| unlocking the phone means you suddenly don't owe the rest of
| the payments anymore.
| dangus wrote:
| This doesn't affect equipment installment plans.
|
| 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.
| 2OEH8eoCRo0 wrote:
| Isn't that what the cancellation fee is for?
| mdasen wrote:
| All Verizon phones are automatically unlocked after 60 days and
| Verizon has still been financing phones.
|
| > 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.
| post_break wrote:
| Yes please. Some carrier unlocking rules are ridiculous, even if
| you pay off the phone. If you pay off the phone it should be
| unlocked immediately. Financing your phone raises some questions
| about unlocking, but I guess the carriers can decided to not
| allow you to finance your phone if you just stop paying on them.
| scarface_74 wrote:
| This only helps the credit card companies. There definitely
| should be an exception to force unlocking if you are on a payment
| plan.
|
| 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.
| dangus wrote:
| T-Mobile doesn't even lock their device payment plan phones
| last I checked.
| pessimizer wrote:
| Why 60 days? Why not zero days? If you're going to take away
| their extrajudicial means of contract enforcement, what's the
| point of this residue? The only purpose for leaving it would be
| to confuse the customer about whether they can unlock, and to
| allow companies to make the process burdensome and confusing.
|
| 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.
| yftsui wrote:
| For premium devices, lock for 60 days reduce chances that the
| devices are stolen during shipment then appear in Shenzhen next
| day.
|
| As someone received a perfectly packaged empty box this year, I
| think this is not ideal but reasonable.
| howmayiannoyyou wrote:
| P L E A S E
|
| 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.
| Molitor5901 wrote:
| This seems like the fair and just thing to do. Being locked into
| a carrier is just wrong, but I would accept that if you purchased
| a discounted phone through the carrier that there would be
| divorce penalties.
| nritchie wrote:
| I wonder what this would do to the prices of phones? In
| particular, I wonder if iPhones would be as popular (or as
| expensive) if people paid the full price up front? I suspect if
| people paid up front for phones, people wouldn't gravitate to the
| latest and greatest.
| neilv wrote:
| This is only for the normal sense of "unlocked" as not being
| restricted to use with a single carrier, correct?
|
| 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?
| reboot81 wrote:
| Here in Sweden carrier locks ended a decade ago. And what are we
| offered now? 24/36 months plans of subscription and a okay
| payment plan for a +1000 euro device. iPhone 15 Pro Max is
| EUR1330 from the major resellers. With a 2-year with 40GB/ month
| plan it gives you a ~EUR200 discount on the phone. If you're a
| student or senior you get much cheaper plans, and if you got the
| cash, it might even be better to buy the phone with cash.
| RulerOf wrote:
| My device shouldn't be carrier locked at all. I took out a loan
| to pay for this thing. They got their money for it _immediately_.
|
| 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/...
| jstummbillig wrote:
| TIL locked phones are still a thing, somewhere. Not gonna lie:
| That feels fairly wild at this point.
| blitzar wrote:
| Its always the US ...
|
| the comments are always full of "the system will break down if
| they scrap it / wont somebody think of the children"
| lotsofpulp wrote:
| You can easily get an unlocked phone in the USA, so it is
| more like "If you want an unlocked phone, buy an unlocked
| phone, and if want a mobile network to subsidize your phone,
| then you might have to deal with the terms of the agreement,
| including being locked to a mobile network".
| the_snooze wrote:
| Enough people seem to love artificially low up-front
| prices, even if it costs them more (in money and headaches)
| in the long-run. See: Spirit Airlines, Ticketmaster, and
| restaurant fees and tipping.
| OptionOfT wrote:
| In general in the USA a lot of things are pushed to you
| as monthly payments, and not the total cost of ownership.
|
| 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.
| miohtama wrote:
| The US is also using paper cheques for payments
| dv_dt wrote:
| And for some forms of US electronic check payments, typing an
| account number wrong will take 4-5 days to return a "bounced
| check" result, often with a fee from the entity you're trying
| to pay.
| paxys wrote:
| I don't think people realize that the US is the only market in
| the world where phones are carrier locked, and in fact the only
| market where carriers have so much power over the features and
| overall experience of your phone. Mobile carriers dictate that a
| phone has to be sold with a locked bootloader. They decide
| if/when the phone should get OS updates. They are the ones who
| fill the phone with bloatware. Up until a few years ago the phone
| had a more prominent logo of the cell carrier than the company
| that actually made it.
|
| 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.
| ThrowawayTestr wrote:
| Do other countries get subsidised phones with a phone plan?
| Loughla wrote:
| Yeah I'll take a big ass logo on the start screen for a free
| phone.
| V__ wrote:
| Yes
| 0xTJ wrote:
| In Canada, phone locking has been banned since 2017, with
| free unlocking being available to phones purchased before
| that. You can still get cheaper/free phones with your plan,
| but it won't be locked to that carrier, that would be silly.
| It's over a contract of some defined length, and you're bound
| by the contract to pay for whatever value's left of the phone
| if you cancel. If you paid for that phone by being subscribed
| to your carrier for that length of time (say, 2 years), why
| wouldn't you be able to take that phone elsewhere? You've
| already paid for it, it's yours.
|
| 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.
| paxys wrote:
| If you run the numbers the subsidy offered by US carriers
| always ends up costing you more than just buying a new phone
| for full price with a cheaper plan.
|
| 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.
| bogantech wrote:
| > I don't think people realize that the US is the only market
| in the world where phones are carrier locked
|
| Probably because that's not true.
|
| https://en.m.wikipedia.org/wiki/SIM_lock
| Mo3 wrote:
| They used to be SIM and/or carrier locked here in West Europe,
| until if I remember correctly 10-15 years ago
| 0x5f3759df-i wrote:
| Phones only started being unlocked in Canada starting in 2017,
| so the US isn't so unique. Though Canada carriers are probably
| not the standard to hold yourself to.
| miki123211 wrote:
| Keep in mind that in Europe, some phones are still under
| carrier control, despite not technically being locked.
|
| 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.
| paxys wrote:
| Which is still significantly better than the system in the
| US. Most people make all their payments in time like they are
| supposed to, but are still affected by carrier locks. For
| example if I want to travel abroad and buy a local SIM for
| cheaper data, I'm out of luck, because AT&T won't let me use
| my phone. So I have to use their ultra expensive roaming plan
| or buy a secondary phone just for those few days.
| CursedUrn wrote:
| There are lots of subtle ways carriers can punish unlocked
| phones. I tried using an unlocked Samsung flagship with a Verizon
| MVNO and it never worked properly. They even told me that various
| features wouldn't work such as Wi-Fi calling. Had to go with the
| main carrier anyway, so I might as had a locked phone. If the FCC
| pursues this rule they need to cover all the loopholes and even
| then it will probably be years of malicious compliance like we're
| seeing from Apple in the EU app store ruling.
| 999900000999 wrote:
| I would love this. However I imagine what most people won't
| really think about is that if you buy a phone on say AT&t, and
| then you just decide to stop making payments they can just
| remotely brick it.
|
| 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.
| enceladus06 wrote:
| For a $200 discount I had to deal with the RedPocket 1yr lock.
| Sort of worth it, but the "are you sure you really want to
| unlock" and "why do you want to unlock?" questions from the
| customer service were really annoying. If you pay the $, the
| phone should be yours.
| reboot81 wrote:
| In the end we the customers will foot the bill, no matter how the
| game is rigged. I see no reason for 60 days, the financial
| agreement between the carrier and subscriber persist no matter
| what.
| jobs_throwaway wrote:
| Curious we don't see the same dickriding for carriers like AT&T
| that we do for Apple on HN. All of the same tired arguments of
| 'you can choose a different carrier if you don't like it' and 'I
| only feel safe giving grandma a phone that doesn't allow her to
| do anything outside of the warm teat of Apple' apply perfectly
| here.
| Zak wrote:
| It seems to me that a carrier should be able to lock a
| subsidized/financed device until it's paid off. That makes it
| possible for people who would otherwise not qualify for financing
| to have relatively up-to-date devices.
|
| A carrier should not be able to lock a device that's paid off for
| any length of time.
| orwin wrote:
| So, i'm obviously not from the US, and while i'm not a liberal
| anymore (For USians: here, liberal=pro-market/what you call
| capitalist), i do understand what free markets (in a frictionless
| vacuum...) bring for the consummers.
|
| 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?
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