Consumer Groups: ‘Device Unlocking Boosts Wireless Competition’

WASHINGTON, Oct. 2024 – Federal regulators who want to give consumers greater control over their mobile phones are moving in the right direction, according to a coalition of consumer advocacy organizations.

On Friday, the coalition urged the Federal Communications Commission to adopt new rules requiring mobile wireless service providers to automatically unlock handsets within 60 days of activation.

In a letter to FCC Chairwoman Jessica Rosenworcel, signed by 18 groups including Public Knowledge, Consumer Reports, and New America’s Open Technology Institute, advocates argued that locking mobile devices unfairly traps consumers with their current providers, even when more affordable or better-quality options exist.

"Handset locking practices limit consumer freedom and lessen competition by creating an artificial technological barrier to switching providers," wrote Andrew Schwartzman of the Benton Institute for Broadband & Society and Amy Huffman of the National Digital Inclusion Alliance, along with 20 other signatories. "The 60-day automatic unlocking requirement proposed by the FCC is a simple solution to these issues."

The proposal, they noted, would particularly benefit communities of color, who are disproportionately reliant on mobile-only internet service. One-in-five Black adults in the U.S. rely on smartphones as their primary means of internet access, compared to 20% of Hispanic adults and 12% of White adults.

"It is important that device unlocking is truly automatic—that is, unlocked after the requisite time period without any additional actions of the consumer," the letter continued, adding that this will prevent delays and make it easier for consumers to take advantage of better deals in the marketplace.

Beyond consumer benefits, the proposed rule would also boost the secondary market for refurbished phones, expanding affordable options for low-income consumers and reducing electronic waste, the letter claimed.

The proposal comes at a time when wireless carriers were divided on the issue. 

Verizon, which already offers automatic unlocking after 60 days for its devices, has supported the FCC's rule, seeing it as a way to enhance competition in the wireless marketplace.

AT&T, on the other hand, has voiced concerns about the impact on affordability, arguing that it could complicate device financing models and affect the availability of low-cost phones. 

However, last week, organizations like the National Coalition on Black Civic Participation pushed back on AT&T’s concerns, arguing that mandatory phone unlocking would not, in fact, disrupt providers' participation in subsidy programs. They pointed out that both Verizon and T-Mobile have operated under FCC unlocking requirements for years, and have continued to support initiatives like Lifeline and the former Affordable Connectivity Program.