Subject: [NEXTEL-1] Consumers Union asks FCC to forbid handset locking

From: [email-masked]
Date: Wed, 07 Apr 2004 13:59:33 -0400

Consumers Union asks FCC to forbid handset locking
By Heather Forsgren Weaver
April 07 12:23:00, 2004

WASHINGTON—Consumers Union on Tuesday asked the Federal Communications
Commission to seek ways to stop the industry
practice of handset locking, saying doing so would lead to better
coverage, more competition and less pollution.

“The only reason wireless companies install these locks is to try and
hang onto their customers by effectively holding their phone
hostage. While the locks take different forms with different
technologies, they all have the same effect—putting together another
roadblock to competition in the wireless market,” said Chris Murray,
Consumers Union legislative counsel. “When locking is
prohibited, we can expect to see phones that are compatible on all
networks, which ultimately will lead to better coverage, better 911
service, more competition and less toxic pollution.”

U.S. cellular carriers were given a pass by the FCC and the Department
of Justice to bundle phones and service together during the
infancy of cellular. The practice continued with PCS. Carriers subsidize
the costs of handsets, but some require customers to pay full
price if they wish to upgrade or replace a lost or stolen phone while
they are on contract without renewing the contract.

Some GSM handset manufacturers are beginning to sell phones through
alternative distribution channels, such as the Internet.
Virtually no manufacturer sells CDMA phones outside of a CDMA carrier's
purview. The reason is that CDMA phones don't have
Subscriber Identity Module cards like most GSM phones. GSM subscribers
can easily move their SIM cards from one GSM phone to
another, thus allowing phone manufacturers to sell GSM phones without
carrier approval. CDMA phones on the other hand must be
individually programmed to work on specific CDMA networks, a task beyond
only the most tech-savvy phone technician. However,
GSM carriers are able to “lock” their phones, ensuring that the device
will work only on their networks and not the networks of rival
GSM carriers. Subscribers can move their SIM cards from one locked phone
to another as long as all those devices work over the
same carrier network.

The wireless industry believes that locking handsets protects their
investment, and that it is a consumer benefit to get a new phone
when changing carriers.

“Just as carriers offer various pricing plans and a variety of service
offerings, different carriers have different policies on unlocking
phones. For consumers who feel this is an important issue, the
competitive wireless marketplace already offers a range of choices
among the carriers. But, for many consumers, getting a new handset with
better features is one of the advantages of changing
carriers,” said Travis Larson, spokesman for the Cellular
Telecommunications & Internet Association. “The United States provides
the
least expensive handsets to our consumers worldwide. Phones are locked
so that they are not re-sold in other countries for a profit
and so that carriers who provide handset subsidies are able to recover
their investments over the life of the contract.”

RCR Wireless News Reporter Mike Dano contributed to this report.

http://rcrnews.com/cgi-bin/news.pl?newsId=17604
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