The U.S. Federal Communications Commission (FCC) is reviewing a proposal to require mobile carriers to automatically unlock phones within 60 days of activation. This move could significantly alter the competitive landscape, particularly benefiting US based Mobile Virtual Network Operators (MVNOs) and the global secondary market. More used phones will be available to be traded outside the US.
MVNOs stand to gain
Unlocked phones would make switching carriers more accessible, lowering barriers for customers to join MVNOs. Currently, Verizon is the only carrier required to unlock devices after 60 days, as part of a spectrum purchase agreement. If the FCC's proposal becomes mandatory for all carriers, it would encourage churn at major networks, leveling the playing field for smaller operators.
Secondary market impact
If all new smartphones sold in the U.S. are automatically unlocked 60 days after activation, it raises the question: why not eliminate SIM locks entirely from the start? Locked phones pose significant challenges for the global secondary market, as they cannot be easily used outside the U.S. This restriction limits the availability of devices in international markets, contributing to a constrained supply and keeping prices relatively high.
Implementing a mandatory automatic unlock policy would help alleviate these issues, making more devices accessible globally and potentially driving down prices. However, the overall impact is likely to be moderate. Only a portion of traded-in phones carry a lock when entering the secondary market, meaning the policy would address just part of the problem.
Big carriers push back
AT&T and T-Mobile have resisted the FCC's proposal, citing concerns over fraud and loss of promotional pricing capabilities. They argue that unlocking phones prematurely could make devices more vulnerable to theft and international trafficking. Conversely, Verizon supports a uniform unlocking rule for postpaid phones but suggests a 180-day lock period for prepaid devices to offset subsidies.
Policy outlook
Though the proposal was unanimously approved for consideration by FCC commissioners in July, it has not been included in the December agenda. With leadership transitions underway at the FCC, the future of the unlocking rule remains uncertain. Advocates hope that bipartisan support will push the proposal forward, empowering consumers and fostering fair competition.
Via: Fierce-network.com
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