Clark Howard

The FCC Proposes a 60-Day Cell Phone Unlocking Policy

By Dallas Cox
By Dallas Cox

close up of smartphone and dollar money business, finance, technology and e-commerce concept - close up of smartphone with black blank screen and dollar money (lev dolgachov)

On July 18, the Federal Communications Commission (FCC) proposed a new policy that will require cell phone service providers to unlock devices after 60 days of activation.

Money expert Clark Howard says this has been a common problem among consumers. After paying for a phone, some carriers make it especially difficult for consumers to unlock their phone. With an unlocked phone, you can switch to a new provider and activate service.

“There are so many complaints that people have filed with the Federal Communications Commission that the FCC voted unanimously to require cell phone carriers to unlock phones after 60 days to prevent this problem of the cell phone carriers trying to hold your phone hostage and prevent you from going to another carrier,” says Clark. “This is going into effect —barring lawsuits — later this year.”

In this article, I’ll take a closer look at the FCC’s newest proposed policy including how it will affect consumers and cell phone service providers moving forward.

How The FCC’s New Policy Will Benefit Consumers

When you have an unlocked phone, you’re able to switch between cell phone carriers without any commitments. This is an excellent way to save money by not having to upgrade your device and by being able to switch to a cheaper phone plan at any time.

Unfortunately, many carriers try to keep your phone locked to their network even after it’s paid off.

"You bought your phone, you should be able to take it to any provider you want," said Chairwoman Jessica Rosenworcel in a statement. "Some providers already operate this way. Others do not. In fact, some have recently increased the time their customers must wait until they can unlock their device by as much as 100 percent. Enough. We can put in place a nationwide standard because it is in the best interest of consumers and competition. So today we propose that all mobile wireless service providers unlock phones 60 days after the device is activated and we seek public comment on doing so."

Not only will consumers have more freedom of choice with this policy, but providers will be more motivated to deliver the best cell phone service for more competitive prices.

“By proposing a uniform 60-day unlocking policy, we’re leveling the playing field for competition and empowering consumers. With an unlocked handset, consumers can choose the carrier that offers them the best value. But, a consistent unlocking policy isn’t just good for consumers. For carriers, it’ll better reward those offering the most innovative, affordable products and services.” 

Statement of Commissioner Geoffrey Starks

Many cell phone service providers currently offer deals and discounts for new customers. If the FCC's 60-day phone unlocking policy takes effect, we can expect to see even more incentives for new customers as the competition increases. 

In the next section, I’ll take a closer look at practical ways that you can reduce your cell phone bill with an unlocked phone.

How To Save On Your Cell Phone Bill With an Unlocked Phone

Currently, all three of the major cell phone service providers (AT&T, T-Mobile and Verizon Wireless) offer incentives for new customers to bring their own unlocked phones and activate a plan on their network. Additionally, prepaid service providers like Metro by T-Mobile (review) offer special plans and rates for customers who bring an unlocked phone when they switch.

If your phone is unlocked, you’ll also be eligible to take advantage of new customer deals from a variety of affordable cell phone service providers. 

Here are a few of our favorite new customer deals available now:

  • Mint Mobile (Review) uses T-Mobile's network. New customers can get any plan for $15/month for the first three months. This includes Mint's unlimited plan with 40GB of high-speed data. Check out the details here.
  • Twigby (Review) uses Verizon's network. New customers can get 2GB of high-speed data for $5/month the first three months. Additional three-month new customer deals include 5GB for $10/month, 10GB for $15/month or 20GB for $25/month.
  • Visible (Review) also uses Verizon's network. Now through August 21, new customers can get unlimited high-speed data for as low as $20/month with a promo code. Check out the details here.

For more new customer deals, check out our list of the best cell phone plan deals this month. You can also see all of our top picks for cheap phone plans here.

How The FCC’s New Policy May Impact Device Payment Plans

If you're still paying off your phone through a program like AT&T's Installment Plan, T-Mobile's Equipment Installment Plan or Verizon's Device Payment Agreement, you'll likely still have to pay off your phone before the service provider will be required to unlock the device.

These installment programs make the latest smartphones more affordable and accessible, though they can often lock consumers into high-rate cell phone plans for multiple years.

“While the device discounts offered in exchange for a required service plan commitment can sometimes lock consumers in place, they can also provide access to cutting-edge technology to those who might otherwise be unable to afford it.”

Statement of Commissioner Geoffrey Starks

The FCC is considering the impacts that the phone unlocking policy proposal may have on these device deals. Currently, once your device is paid off, the policy varies from one carrier to the next regarding phone unlocking procedures. Some carriers even require additional unlocking fees.

"Individuals that have to finance their phone through contractual agreements might not be able to afford the additional unlocking fees. Even after fully paying for the phone, their ability to switch to another provider is limited by the locked phone," says Commissioner Anna M. Gomez in a statement. "Additionally, locked phones, particularly those tied to pre-paid plans, can disadvantage low-income consumers, as they often lack the resources to switch carriers or buy new phones."

It's hoped that the new 60-day unlocking policy will level the playing field for all consumers. However, it's unclear at the moment whether the unlocking requirement will be applied to existing service contracts or future contracts. According to the FCC's news release, these impacts are among the concerns for which the FCC is currently seeking public comment.

Final Thoughts

The FCC’s proposal to pass a policy requiring carriers to unlock phones 60 days after activation will make it easier for consumers to get the lowest rates on cell phone service. Additionally, the policy will hopefully motivate cell phone service providers to offer more competitive rates and plans as consumers will have more freedom of choice.

Before the policy is passed, the FCC is seeking public comment on the following topics:

  • Requiring all mobile service providers to unlock mobile phones 60 days after the device is activated with the provider
  • Whether an unlocked requirement should be applied to existing service contracts or future contracts
  • The impact of a 60-day unlocking requirement in connection with service providers' incentives to offer discounted phones for postpaid and prepaid service plans
  • Whether an unlocking requirement would benefit small providers, new entrants, and resellers by increasing the number of phones available on the secondary market

If all goes according to plan, the policy should take effect later this year. You can read the full Notice of Proposed Rulemaking here.

Have you had problems in the past trying to unlock a paid-off phone? Tell us about your experience in our Clark.com Community.

This article was originally published on Clark.com

The post The FCC Proposes a 60-Day Cell Phone Unlocking Policy appeared first on Clark Howard.

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