Free the Cell Phones
By Eric Lin, Mon Jun 07 21:45:00 GMT 2004

A Consumers Group in California is suing Cingular, T-Mobile and AT&T Wireless to get them to unlock their phones. It sounds very democratic, but it may actually hurt the consumers it's designed to help.

While the Consumers Union petitions the FCC to prevent carriers from locking their handsets, a California group is taking a more direct approach. The Foundation for Taxpayer and Consumer Rights is suing the three national GSM carriers in California courts for locking their handsets. The suit claims phone locking restricts competition by illegally tying equipment to a service. It also charges the carriers with false advertising, since they do not warn subscribers the phone will not work on other GSM networks.

Other suits against carriers are already pending in California, and the Public Utility Commission there has already levied a huge fine against Cingular as well as introducing the first Cellular Bill of Rights. Between class action lawsuits and regulatory agencies, California is shaping up to be the most aggressive State in the US against the carriers. This must put operators between a rock and hard place, because they can't exactly threaten to pull out or even restrict service in one of the most cellular-rich states in the country.

The Foundation for Taxpayer and Consumer Rights deserves a tiny bit of credit for restricting their suit to GSM carriers, recognizing that Sprint and Verizon handsets can't really work on each other's networks, let alone with GSM ones. The Consumers Union does not seem to make this distinction in their petition. Either way, it's not clear that an unlocked handset will benefit the majority of consumers, at least in the US.

While a consumer may want to keep his phone to transfer phone numbers from one SIM to another, most actually use changing carriers as an opportunity to upgrade their phones. Since there operators subsidized their locked handsets, they would certainly charge more for unlocked ones (even though the carriers would still have the subscriber locked into a contract). And since most Americans opt for cheap or free phones, higher prices would actually hurt these stingy buyers, and eventually the carriers since they would no doubt opt for the cheapest handsets with the fewest features. Nor does it seem that unlocked handsets are a big concern for most Americans. Subscribers who buy a locked tri-band handset, but wish to take it abroad and use another SIM, can usually call their carrier and get the phone unlocked for a small fee, or even for free. However very few people do this or take advantage of the many unlocking services available on the internet. It's a luxury for the technological elite, not a necessity for the average user.