Lockdown on Unlockers
By Carlo Longino, Fri May 20 18:00:00 GMT 2005

Reports out of Italy say one operator is instigating criminal proceedings against people unlocking phones. So do carriers think they're just renting out handsets, not selling them?

Boing Boing reports that Hutchison's Italian unit, Tre, has prompted the arrest of 30 people there for unlocking handsets based on a number of different charges. The legality of unlocking carrier-subsidized handsets may be unclear, but the facts are pretty stark for the average consumer: I bought this handset -- so why can't I do whatever I please with it?

Issues about handset locking pop up from time to time, generally from consumer groups looking to have the practice outlawed. It's not a clearly cut issue; operators argue that handset locks are necessary to protect the subsidies they pay out to reduce the prices consumers pay for handsets -- but this day and age of 1- or 2-year contracts with sky-high early termination fees, the practice seems redundant. Indeed, in some countries carrier subsidies and phone locking are illegal, and handset prices can be significantly higher.

But the issue goes deeper than handset costs. If a user buys a phone, subsidy or no, shouldn't they be able to do what they please with it? Handset locking is an attempt to reduce churn by forcing customers to stay with a carrier to keep their device -- but in a market without such artificial loyalty mechanisms, wouldn't operators be forced to operate on much more valuable metrics, like, say, customer service and pricing? If customers aren't allowed to treat the handsets they purchase as their own property, don't price them and sell them as if they can.

This isn't likely to die anytime soon, either, but rather manifest itself in different ways, like with software locking and "device management". Many operators' continued resistance to openness, whether it be in mobile content or device locking, is unsustainable -- eventually one competitor will catch on, change their strategy, and start stealing customers. Just ask DoCoMo how much it enjoyed being forced to follow KDDI by introducing flat-rate data pricing.

How long can not giving customers what they want, and even having them arrested be a business model?