Carriers’ unlocking proposal de-fangs new FCC chairman

News: The five major US mobile carriers have today announced a voluntary code of practice regarding cellphone unlocking.

Comment, attributable to Jan Dawson, Chief Analyst, Jackdaw Research: The carriers are clearly responding to remarks by Tom Wheeler, the new FCC chairman, on the topic of unlocking. The threat of regulation is always a great way to motivate players to self-regulate, and this is in many ways a better outcome, because it will happen more quickly and more easily than through a protracted regulatory process.

The carriers clearly felt that if they were to change their unlocking policies, they’d rather do it on their terms than someone else’s, and as such they’ve taken important but not world-changing steps here. The biggest change is transparency and clarity about policies, which have been utterly opaque to consumers in the past. Consumers can now know exactly what their carrier’s policy is, and will even be proactively notified when they’re eligible for unlocking.

This move will likely benefit T-Mobile most significantly, as it continues to aggressively target AT&T’s customers, which are the best fit for switching networks. But as more carriers offer preferential rates for customers bringing their own devices, unlocking will become a more significant issue. This may lead to a rise in churn rates, which in turn will force carriers to respond more aggressively to competitive threats.

It’s clearly good news for consumers. They were never going to see carriers unlocking phones still on a two-year contract without early termination fees, but this was about the best they could have hoped for.

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