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Summary:

Getting your out-of-contract or fully paid smartphone unlocked should be less of a hassle if the FCC has any say. And it does. It’s working with carriers to ease the process and actively telling consumers when their contract is up.

As carriers begin looking to abandon the phone subsidy model, simple phone unlocking for consumers is an issue gaining exposure. Reuters says the FCC is expected on Thursday to discuss changes to carrier policies on handset unlocking once consumers have reached the end of their contracts; something that sounds like it should be simple in theory, but can be a hassle in reality.

Just last month, my colleague Jeff Roberts found this out the hard way:

“I lost phone service 4 days ago because AT&T decided to vandalize my property — my iPhone — and, despite earlier assurances, it looks like the White House has no intention of doing anything about the policies that let the company get away with it.”

Roberts owns his iPhone 4, free and clear, he says, and lost service when moving his handset to T-Mobile’s network because the phone was still locked to AT&T’s network. Various conversations with AT&T customer service led him to see the difficulties that customers face when trying to properly unlock their phones in the U.S.

No Service iPhone

So what’s hopefully going to change so that consumers won’t have to jump through hoops to unlock a cell phone?

Carriers may start notifying consumers by text or email when their phone is eligible to be unlocked; handy since not everyone knows when they’ve met their contractual obligations with a carrier. The FCC is also looking to have network operators review and rule on all unlock requests within two days.

Whatever the FCC works out with the network providers could take some time to implement, so don’t expect changes overnight. But this policy review itself is timely as there’s a shift in the U.S. handset business. Starting first with T-Mobile, operators are finally starting to unbundle the cost of a phone from the cost of services. That should have happened long ago in my opinion, but the reason it’s changing now is because of smartphone saturation in the U.S.

Before nearly everyone had a smartphone, carriers needed to provide incentives on the purchase of such devices to get customers on their mobile broadband networks. That’s part of the reason why a carrier may subsidize two-thirds or more of the actual phone cost: That $199 iPhone 5s, for example, actually costs $649 if you buy it yourself. Carriers pay money to handset makers to make up the difference.

With the bulk of U.S. consumers on networks using their smartphones, however, carriers don’t need to pay such subsidies so over time, consumers are more likely to be charged the full price for smartphones. And if you pay that full price, you should be able to use the device on the network of your choice, meaning the phone should be easily unlocked if not be default.

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  1. I don’t see how this will stop carriers from doing things like Republic Wireless is doing — having a device that will only work on their network, locked or unlocked. All they have to do is add some proprietary junk and say the device simply will NOT work on other networks even if it is unlocked.

    Until the FCC actually does what they are supposed to do, look out for the citizens, and make a standard for all carriers and OEMs to follow there will always be a way to lock customers in.

    Furthermore, carriers pay much less than the MSRP or unlocked price of a device — carriers buy flagship Android devices for ~$250. . . but make the customers pay back much more than their cost.

  2. ATT is making me jump through numerous hoops and wait 14 days to unlock a phone that is off contract, even though we replaced it with a new phone from ATT and re-upped for another 2 years. This change from the FCC can’t happen soon enough.

    1. AT&T has been crazy with this. I’ve been told that your phone needs to be out of contract AND on their network for an additional 6 months to get a unlock code. It’s gotten to the point it makes sense to pay the ETF and just buy a new phone.

      Moto G and Nexus 5 have made this easier than ever. Take a look at the cost savings analysis
      http://35orless.com/blogs/news/10781113-moto-g-this-changes-everything

      Live Plan- take that AT&T!

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