FCC moves closer to imposing consumer-friendly unlocking requirements on all carriers

In June, the FCC said it was considering a new rule that would make it mandatory for telecom companies to unlock mobile phones within 60 days of activation. The commission has now decided to move forward with the idea.

When you buy a phone through a carrier, you give it the power to decide when you will be able to unlock your phone. This chains you to the carrier for the duration of the unlocking process, making it impossible to switch to another company during that time even if you are not happy with the service.

Further complicating things is the fact that different carriers have different unlocking policies. For instance, T-Mobile unlocks your phone after it’s paid off, but AT&T also expects you to notify it that you have paid the instalments and want to unlock your phone.

The FCC wants all the carriers to have the same unlocking requirements to reduce customer confusion. The agency believes that a 60-day unlocking period and uniform requirements will increase competition in the market by making it easier for customers to switch carriers.

The rules may not only apply to new contracts but also to existing contracts. 

One of the reasons why carriers require you to stay with them for a predetermined period is that they offer new phones at discounted prices. Not letting you leave before you pay off a your phone is way for them to make back that money.

If the FCC mandates a 60-day unlocking policy, it might work as a disincentive for carriers and stop them from offering discounts on phones. This is the last thing the industry – which is only just now showing signs of recovery from the pandemic-induced slump – needs.

The FCC is aware of that and will be discussing the impact of a shorter unlocking period on discounts for postpaid and prepaid plans before arriving at a decision. Another thing that will weigh on its decision is the impact of a new unlocking requirement on smaller telecom companies and resellers as phones can’t be sold before they are unlocked.

Only the Notice of Proposed Rulemaking has been issued, meaning the FCC has only issued a public notice that it wants to update unlocking rules and no decision has been made at this point. It could be a while before the final rule is issued.