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[7 comments]

White House Supports Petition to Unlock Cell Phones/Tablets

March 6, 2013

The Obama Administration has publicly signaled its support to reverse a recent ruling by the Library of Congress that prevents cell phone owners from unlocking the devices so they may be compatible with multiple mobile carriers.

The ban on unlocking phones, which was supported by the wireless carrier industry, became effective on Jan. 26. Almost immediately, it sparked protests and a petition posted on the White House website asking for the Administration to step in to help overturn the ban. The petition was supported by 114,000 signatures.

Before the ban, phone buyers (individuals or organizations) could choose to pay a lower fee for a phone if they purchased a contract with a specific carrier or pay a higher price for an unlocked device without a carrier.

"We believe the same principle should also apply to tablets, which are increasingly similar to smart phones. And if you have paid for your mobile device, and aren't bound by a service agreement or other obligation, you should be able to use it on another network," wrote R. David Edelman, senior advisor for internet innovation & privacy in the Obama administration, in response to the petitioners. "It's common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers' needs."

"From a communications policy perspective, this [ban] raises serious competition and innovation concerns, and for wireless consumers, it doesn't pass the common sense test," said Julius Genachowski, chairman of the Federal Communications Commission, in a statement. "The FCC is examining this issue, looking into whether the agency, wireless providers, or others should take action to preserve consumers' ability to unlock their mobile phones. I also encourage Congress to take a close look and consider a legislative solution."

Discussion Questions:

Do you think the demand for unlocked mobile devices will grow in the future? Will the demand come primarily from individual consumers or enterprises? What are the implications of the ban being overturned for enterprises?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much will demand for unlocked mobile devices change over the next five years?

Comments:

This whole discussion would have a difficult time trying to pass the common sense test. That is if you could find a government lawfully approved common sense test. I suspect that very few consumers understand the technologies in question here. If the issue is delivered to the public for a push in either direction the quality of spokesperson(s) on the two sides will carry more weight than the clarity of the messages. A large majority of consumers want power and speed and are not all that concerned with the carrier, just their price.

'gjarnoldjr'

The consolidation of carriers has given an extraordinary amount of power to those few giant companies that nearly monopolize the telecommunications industry. Unless something is done to put the brakes on their their ability to control Americans' communications access, they'll continue to hike prices and impose costly new restrictions. Their large and well-funded lobbying groups will have to scramble a little, and that's good for America.

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Cathy Hotka, Principal, Cathy Hotka & Associates

Americans like getting something for nothing, or at least thinking they are getting something for nothing. In the wireless industry in the U.S. that is exactly what consumers think. We think we are getting a phone for free.

Well, the phone is not exactly free. There is a string attached in the form of a contract. Whether the phone is locked or unlocked does not matter much when the consumer will be paying for a service plan for the next two years either way. Once the consumer is out of contract the consumer should be able to use their device on any network they want. However, what the consumer is likely to want is a new phone for free.

Kurt Seemar, President, Analytic Marketing Innovations

The vast majority of consumers are not typically pursuing unlocked devices. Perhaps the situation is different for enterprises. However, this is a business that needs to remain profitable, so I do understand the carriers' concerns, while I also get the free competition aspect.

This is an important issue for all concerned. Depending upon what the Federal Government decides, the cost of wireless could be great affected by the outcome... to both consumers and businesses.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

This issue totally baffles me. Here in the UK we do not pay for receiving calls and as far as I know we are not restricted in our access to wireless networks that are not our own carriers. When we buy phones or other wireless devices we generally sign contracts but they are for making calls only (except those of us who still use Pay as You Go and rarely use them).

I certainly understand the concept of capitalism and making as much money from customers as possible (Go, David!) so understand that American consumers don't realise they ought to have any choice in this matter. It's about time someone enlightened—and enabled—them.

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Bernice Hurst, Contributing Editor, RetailWire

Here in Asia, mobile phones are unlocked, providing freedom and flexibility to move between carriers as you move around the globe.

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Jerry Gelsomino, Principal, FutureBest

The issue for the carriers is how much of the discount of the discount they offer is based on their expectation the phone buyer continuing using them after their initial contact terminates. If the discount is based on the initial two years, then they have not financial loss other that which comes with subscriber churn.

If, however, they have built a certain percentage of retention and that diminishes if phones are unlocked I foresee two possible courses of action. One the discount is less or two the length of the initial contract will be longer.

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Steve Montgomery, President, b2b Solutions, LLC

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