Set the phones free

The Foundation for Taxpayer and Consumer Rights filed a lawsuit against AT&T Wireless, T-Mobile USA and Cingular Wireless claiming that selling cell phones unnecessarily “locked” to a particular service violates California’s unfair competition laws, (Bus. & Prof. Code §§17200 et seq. and §§17500 et. seq.).
GSM phones use SIM cards to store the phone’s identity– its phone number, association with a cell network, and contacts. The SIM card may be swapped out, so that a mobile phone owner can swap back and forth between different devices and still receive calls at the same number and use the same service. One can also swap a different SIM card into one’s phone when traveling to a different country and using a different network or when switching carriers.
GSM carriers in the US all sell subsidized phones “locked” to that particular service– so that subscribers can not use their phones on different services. Verizon and Sprint use CDMA technology, which does not offer the same kind of flexibility as the GSM standard– CDMA phones do not use SIM chips.
In Europe, the EC ruled that handset locking would be hamrful to competition and warned manufacturers and network operators not to produce and/or sell locked phones in the EU.
The California law prohibits the use of lawful, unfair or fraudulent business acts or practices and unfair, deceptive, untrue or misleading advertising.
The complaint alleges that this is an unfair and anticompetitive way to tie consumers to a particular service in addition to multi-year contracts. Carriers argue that this is necessary in order to recover the subsidy of the phone. Locked phones encourage wasteful practices by not allowing consumers to continue using perfectly good phones on other services.
A blanket refusal to unlock phones is anti-competitive and, since the advent of number portability, merely another way to create friction to prevent customers from switching to other services. I have a cell phone locked to Cingular. When I called up Cingular customer service to cancel my service, after porting my number to another carrier, I asked to have my phone unlocked, and the representative said that she could not, because it was against the company’s policy to do so.
(via Mobile Tracker)