FCC proposes new rule to make unlocking phones and switching carriers easier — here's how it would work

The Federal Communications Commission has proposed a new rule that could make it easier for customers to unlock their smartphones and switch carriers. The chair of the FCC made the announcement on Thursday (June 27), as spotted by The Verge.

The proposed regulation would require mobile providers to unlock phones 60 days after activation. 

“Real competition benefits from transparency and consistency,” said FCC Chairwoman Jessica Rosenworcel in the announcement. “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.”

The big three wireless carriers already have unlock policies in place. Both AT&T and Verizon currently have 60-day unlock policies in place. T-Mobile's policy is even shorter, at 40 days after activation.

However, both T-Mobile and AT&T require that the phone be paid off before the device is unlocked, even during the wait period.

It's unclear if the FCC's rule would alter the paid-off requirement. Generally, those costs get shoved into the monthly phone bill if a smartphone isn't paid for all at once. It might change how carriers structure contracts or require customers to purchase the phones upfront instead of over the life of a contract. 

Unlocked phones are a growing segment of the smartphone sector in the United States. A study by NPD Group in 2020 revealed that there were an estimated 50.1 million active unlocked phones in the US.  A Statista study from last year found that there were over 311 million smartphone users in the US. 

With some extrapolation, despite the year gap, 16% of smartphone users have an unlocked device. However, the NPD press release hints at this as well: the number of unlocked devices in 2020 was on the rise, probably because of COVID, with stores and carrier branches closed for much of that year.

The unlocked numbers may have decreased or stayed steady in the intervening years, but that is the most recent study we could find.

Beyond the announcement, there isn't much other information more information. The press release noted that the regulatory branch seeks comments on the proposal. The FCC will have an open meeting on July 18, when it will vote on the notice of rulemaking. 

The ability to comment on the rule will open up after the meeting. It seems like the rule is already in the works, as the FCC is looking to see if the new requirement should be applied to current or future contracts. 

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