FCC Proposes 60-Day Phone Unlocking Rule for Telcos

The US Federal Communications Commission (FCC) Chair proposed a new rule last week requiring cellular providers to unlock customers’ phones within 60 days of activation. This proposed rule aims to simplify the process for consumers to switch between wireless providers nationwide.
According to existing rules, consumers, particularly postpaid users, must meet specific conditions set by their carrier to unlock a phone. These conditions often include making full payment for the device or paying an early termination fee if the contract is ended early.

The 60-day unlocking rule by the FCC aims to offer consumers greater flexibility, enhance competition in the mobile wireless marketplace, and establish similar unlocking rules for all mobile service providers.

“Real competition benefits from transparency and consistency,” said Chairwoman Rosenworcel in a statement. “That is why we are proposing clear, nationwide mobile phone unlocking rules. When you buy a phone, you should have the freedom to decide when to change service to the carrier you want and not have the device you own stuck by practices that prevent you from making that choice.”

However, the regulator emphasized that the consumer’s device must be compatible with the new operator’s wireless network to switch services between operators. Additionally, carriers could impose device locking if they suspected the phone was purchased fraudulently within the 60-day period.

The FCC’s press release provides limited information about the proposed rules. The Commission is scheduled to hold an Open Meeting on July 18 to vote on the proposal and its applicability to all cellular providers.

After the meeting, FCC will also seek comment on the proposed rule and its effect on carrier incentive plans and impact on smaller providers, resellers, and new entrants.

“The proceeding would also seek comment on whether an unlocking requirement should be applied to existing contracts or future contacts,” FCC said in a statement. “It also seeks comment on the impact of a 60-day unlocking requirement in connection with service providers’ incentives to offer discounted phones for postpaid and prepaid service plans, as well as whether an unlocking requirement would benefit smaller providers, new entrants, and resellers by increasing the number of phones available on the secondary market.”