Cell carriers' agreement to loosen locks on cell phones is just a baby step

Major cell carriers last week reached a voluntary agreement with the FCC to be more forthcoming with their customers about their right to unlock their phones, a cumbersome step most U.S. users coming off a subsidized phone plan must take if they wish to use their phones with another carrier. The agreement is based on a proposal letter the CTIA, the trade organization representing U.S. mobile carriers, sent to the FCC in December.

That's a step in the right direction, and it's supported by Consumers Union, the policy and advocacy arm of Consumer Reports.

But it's only a microscopic step. While carriers promise to notify consumers of their eligibility and respond in a timely manner to an unlocking request, the agreement does nothing to address code-entering hassles and other network nuisances often required to unlock a phone. Plus, carriers still maintain the right to charge a fee to unlock a device for a consumer without a prior relationship, such as if they acquired the phone second-hand. Finally, network incompatibly may still limit opportunities for your newly freed phone.

Why the locks?

Most people think carriers were given the right to lock phones to protect their investments in device subsidies—for example, to keep you from taking that $600 iPhone AT&T sold you for $200 over to T-Mobile before your two-year contract ended. But that's not the reason—at least, not the legal reason.

U.S. cell carriers were granted the right to lock phones under Digital Millennium Copyright Act (DMCA) of 1998 because of the proprietary apps and other software they put in them. So that FamilyMap app you may have never used is why you have to ask AT&T for permission to unlock a phone even if you've fulfilled your two-year contract or paid full price for the phone.

Not everything went the phone carriers' way. The DMCA did exempt consumers from some of these copyright provisions, so they or their new carriers could unlock the phones without fear of prosecution.

Those protections ended in October 2012, when the Library of Congress let those consumer protections expire. This put Federal Communications Commission and consumer groups, including the advocacy arm of Consumers Union, at loggerheads with the carriers, who began asserting their exclusive right to unlock phones.

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Locks aren't the only barriers

Even if carriers capitulate and make unlocking your phone as easy as pushing a button, there's no guarantee that your phone will work very well on another network—or work at all. The U.S. mobile landscape is blanketed by redundant proprietary networks. For example, older smart phones using CDMA technology (used by Verizon and Sprint) will never work on each other's networks, nor will they work on GSM (AT&T and T-Mobile) networks, and vice versa.

And newer smart phones, which are generally more compatible with multiple U.S. and international mobile networks, still have issues. For example, the Verizon and T-Mobile versions of the iPhone 5s can access each other's 4G LTE networks. But the T-Mobile iPhone 5s lacks the ability to function on Verizon's CDMA network, which would mean frequently dropped calls and data connections for such users.

Bottom line

Let's hope that U.S. carriers will follow through with their promise to make unlocking phones less of a hassle. But cell phone users in this country won't be able to enjoy the same level of service mobility as in other parts of the world until all phones sold here come unlocked out of the box, and U.S. phone makers make carrier cross-compatibility more universal.

—Mike Gikas