FCC Proposes 60-Day Unlock Rule After T-Mobile Doubles Prepaid Lock Period to 365 Days

In short: The FCC proposed a 60-day unlocking requirement for all wireless service providers to address consumer frustration over inconsistent unlocking policies among wireless carriers. The rule is intended to standardize the rules and increase choice and competition for consumers.

Federal Communications Commissioner Geoffrey Starks has highlighted the issue, noting that current policies vary significantly, with some consumers facing significant barriers to unlocking their phones while others find it relatively easy. This inconsistency is harmful to both consumers and competitors. The proposed uniform policy would require carriers to unlock phones 60 days after activation, unless the customer acquired the phone fraudulently.

“For too long, consumers have been faced with confusing and divergent unlocking policies across carriers. This lack of consistency across carriers means that some consumers can unlock their phones with relative ease, while others face significant barriers,” Starks said. “A consistent unlocking policy isn’t just good for consumers. It’s good for carriers to better reward those who offer the most innovative, affordable products and services.”

The 22-page proposal, approved by a 5-0 vote, kicks off a public comment period before the FCC finalizes the proposed rule. The Draft Notice of Proposed Rulemaking (NPRM) requires mobile service providers to unlock phones no later than 60 days after activation. Chair Jessica Rosenworcel emphasized in a statement that while the Commission has mandated some unlocking requirements in previous spectrum auctions and mergers, there are still unjustified restrictions on how consumers can unlock their phones.

“Some (carriers) have recently increased the time customers have to wait to unlock their devices by as much as 100 percent. Enough!” exclaimed Chairwoman Rosenworcel. “We can introduce a nationwide standard because it is in the best interests of consumers and competition.”

Rosenworcel noted that some providers, such as T-Mobile, have recently extended lock-in periods, making it harder for customers to switch carriers. T-Mobile’s prepaid brand, Metro by T-Mobile, has more than doubled its unlock period, from 180 days to a full year, in line with T-Mobile’s other policies for prepaid phones. Uncarrier also differentiates between prepaid and postpaid phone unlock policies, with postpaid devices requiring at least 40 days of active service before unlocking. Financed phones are not eligible for unlocking until they are fully paid for, which is the standard policy for most providers.

FCC Notice of Proposed Rulemaking… by FCC

The FCC’s draft NPRM is vague on how it will handle financed phones. Logic suggests that current company unlocking policies would remain in place, since the provider technically owns the device until the customer fulfills the contract. But the proposal questions whether alternative unlocking schedules would be more effective, such as unlocking after activation or after the first payment. That idea seems like an invitation for slackers to abandon their financial obligations.

The proposal also considers the broader impact on the availability of discounted phones and fixed-term contracts. Verizon’s current policy, under previous spectrum license terms, locks phones for 60 days before automatically unlocking. AT&T’s policy similarly requires a 60-day period of active service for postpaid phones, while prepaid phones must be active for at least six months.

CTIA, a lobbying group for wireless carriers, warned the FCC to consider the trade-offs of setting a 60-day unlock period, including the potential impact on digital equity and access to mobile phones. They suggested that strict unlocking requirements could reduce the availability of subsidized phones, especially in prepaid environments.

Consumer advocacy group Public Knowledge welcomed the FCC’s decision, arguing that phone locking imposes unnecessary burdens, particularly on low-income consumers, by tying them to expensive contracts and preventing them from accessing more competitive plans. They noted that phone locking also limits the secondary market for used phones, reducing affordable options for consumers.

There’s still a lot to consider, especially when prepaid devices often come with steep discounts. The FCC’s next step is to gather public comment on the potential impact on service providers’ incentives to offer discounts, extended payment plans, and any other issues of public concern.

Photo source: Billion Photos