FCC ruling gives Verizon approval to lock new phones for 60 days

FCC ruling gives Verizon approval to lock new phones for 60 days
Back in February, Verizon asked the FCC to allow it to SIM lock for 60 days all new phones that it sells. At the time, the nation's largest carrier said that it requested this to protect its customers from fraud and identity theft. Because the company is the only one of the four major wireless operators in the states to unlock handsets as soon as they are sold, Verizon says it was concerned that criminals were focusing on taking advantage of its subscribers.

Verizon made the request to the FCC because criminals were stealing customers' identities and ordering phones that they had no intention to pay for. Once the bad guys received these handsets, they could use SIM cards to connect to a compatible wireless provider. And today, the FCC announced that it is giving Verizon the approval to lock down its phones for a period of 60 days so that it can conduct a fraud safety check on each handset it sells. After 60 days, a phone will unlock automatically. Verizon executive vice-president Ronan Dunne said today in a statement that the new policy will go into effect soon. Dunne says that the new policy will have little impact on legitimate Verizon subscribers.


Repeating the comment that it made back in February at the time it made the original request to the FCC, Verizon says that it still has "the most consumer-friendly unlocking policy in the industry."

Verizon was forced to unlock its phones immediately after their sale because of an FCC auction it won back in 2008. The carrier picked up 700MHz spectrum in the C Block for $4.74 billion. Under the FCC's rules covering the auction, the winners of the C Block spectrum could not "deny, limit, or restrict the ability of their customers to use the devices and applications of their choice on the licensee's C Block network." Even though Verizon submitted court documents trying to prevent the FCC from forcing it to follow the open-platform rules, Google was able to get the carrier to agree to abide by them.

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7 Comments

1. cncrim

Posts: 1588; Member since: Aug 15, 2011

I think it is a good ruling, I will just have to see in the future Verizon will getting greed and push longer unlock once got this to her favor.

2. lyndon420

Posts: 6817; Member since: Jul 11, 2012

What??

3. tuminatr

Posts: 1141; Member since: Feb 23, 2009

Maybe, but why should the carriers all play by different rules. My take on this has stayed the same all the phones sold in the USA should work with all the carriers in the USA and once paid for should be unlocked to work with whoever you want to use.

4. Rockbottom97

Posts: 27; Member since: Jan 08, 2013

Locking phones to carriers is just another hoop for customers to jump through if they want to leave. It's a tale as old as time.

5. tuminatr

Posts: 1141; Member since: Feb 23, 2009

Yes, and we all have a choice don't want a locked device then don't buy it from your carrier or pay it off so they aren't your creditor. I think device payments are worse than 2 year contracts. But it's a choice people make

6. superguy

Posts: 463; Member since: Jul 15, 2011

I think it's the same beast wearing a different costume. In both ways you're locked into something for a period of time - either by ETF or phone payment. In the latter, the ETF is just built into phone payment. I also think the subsidized pricing did 2 things. First, it made people think that the actual prices for the phone were lower than they really were. And 2, people took a more measured approach to upgrading. Think about it - you have a family of 4 that wants new phones - or wants to switch carriers. With the old system, you walk into a carrier store, and you'd have to cough up $200-300 a piece for a subsidized phone and sign a contract. So you're looking at anywhere from $800-1200 plus any activation charges or fees the carrier wants you to pay up front. That's quite a chunk of change up front. People are going to be more hesitant to do that. If you want to leave, you got the ETF to deal with. Add up the subsidized price and the max ETF and you're going to come up with the cost of the phone - or close to it. Now go to the payment plan. Same family walks in. Picks out new phones and signs up for service. They pay only the tax on the new phones - say about $200 for all 4. They then pay $25 per phone for the next 30 months. Only adds $100 to their bill per month - which most people are cool with. So out the door, they're paying $200-300 and they're happy they didn't have to come with $800-1200 for service. The carrier likes it as instead of getting a 2 year contract - they have a family hooked for the next 30 months - 25% longer. Their profits go up 25% from that family. If they want to leave, they can. They just have to pay off the phone - or get someone else to. People will see that as more reasonable than having to pay a "bogus" ETF even though the end result is the same. I think the carriers prefer the latter as they make more in the long run, and it appears more consumer friendly - even if it isn't.

7. tuminatr

Posts: 1141; Member since: Feb 23, 2009

I mostly agree with you. When it comes to contract VS device payments I believe contracts to be better for the consumer in almost all circumstances but they are gone so it's a moot point. If you recall T-mobile started device payments in this country. You can find articles on how they were losing money on subsidizing phone contracts. Their plan to make equipment purchases more profitable was to subsidize the phones less or not at all and let consumers make payments. It worked its a policy that seems customer focused but is worse and consumers these days care more about optics than reality. I think the industry changed because they saw what t-mobile did they changed equipment from a loss for the company to another source of profit and smartly they changed because its in the companies best interest. One other perspective is device payments are more of a lock than contracts. The last contract I did was a Moto Z_force for $10 one time with a 2 year. The ETF on that device was $360 so even if I canceled after 30 days the worst I would have been out was $370, That same device on payment was $29 per month for 2 years if I canceled after 30 days my remaining payments were $696. The device payment ETF is almost double. To your point about switching carriers, I worked in the cellular industry from 1995 to 2011. Worked for ATT, Aerial, Voicestream, T-Mobile & Verizon. With the old contract system, we always had a free or very cheap phone. Usually what I would see is a family get the free one for the kids and a nicer phone for mom and dad.

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