Smartphone News

Congress Wants to Let Consumers “Unlock” Their Mobile Phones

mobilephone-jailbreakingThe concept of “jailbreaking” phones and using them on different mobile networks than the ones the were purchased to work with has been common ever since Apple launched the first iPhone with an AT&T exclusivity deal. Mobile customers with other carriers, from Sprint to Verizon, wanted to see what Apple’s brand-new smartphone had to offer, and since they wanted to do so without having to change carriers to AT&T, they instead figured how to unlock the devices and use them on any network they wanted.

Now, a piece of legislation is brewing that would make the practice of “unlocking” or “jailbreaking” phones officially legal for the first time. In fact, according to a recent article from CBS MoneyWatch, the bill is currently “sitting on President Obama’s desk” and awaiting its final approval.

Carriers vs. Customers

If passed, the new unlocking law would likely be greatly appreciated by customers, but strongly disliked by mobile carriers. There are strong arguments on both sides of the table. On one hand, consumers believe that, when they purchase a smartphone from a mobile carrier, it becomes their property. As such, they should be able to use that property however they choose, whether it is on one network or another.

On the other hand, carriers mostly oppose the new bill because they feel it undercuts their bottom line. After all, mobile carriers tend to sell expensive handsets like the iPhone 5S or the Samsung Galaxy S5 at a loss, offering the phones for $100 or $200 along with a two-year contract. This arrangement gives consumers the phones they want at affordable prices and helps the mobile carriers lock customers into two-year service agreements. The thought is that, by having a customer on their mobile network for two years, carriers will make up the initial cost of the phone in phone bills, data charges, and other network fees.

Given that modern smartphones are starting to last longer, carriers might even be able to keep customers on their mobile plans after their two-year contracts have run out. In other words, the action of subsidizing cellphone costs for customers is starting to pay higher and higher dividends for mobile carriers.

What the Bill Means for the Masses

That could change if the “Unlocking Consumer Choice and Wireless Competition Act” gets Obama’s signature in the next few days. Customers could feasibly buy a phone at AT&T, unlock it after two years, and continue to use the device elsewhere. More daring customers could purchase a new iPhone from AT&T for $199 and a two-year contract, unlock the phone, and then try to figure out some way out of the contract. The latter scenario, while unlikely, would be a major concern for carriers, as it would leave them without a network client after having paid for the majority of that customer’s phone (for reference, an unlocked iPhone 5S currently goes for $650 on Amazon).

Ultimately though, while the battle over unlocked phones has grown heated in recent years, it is likely that the worries on both sides will prove to be unfounded. Most customers will not try to ditch a two-contract or take advantage of a carrier, and it is likely that the majority of phone unlockings will take place after the initial two years is up. By that point, customers will have paid for their phones multiple times over in network usage, and carriers will have brand new devices to lure their users into new two-year contracts.

Obama has said before that he would support a bill in favor of unlocking smartphones, so expect to see the “Unlocking Consumer Choice and Wireless Competition Act” becoming law sooner rather than later.