No to Unlocked Handsets

No to Unlocked Handsets

This week, AFSA wrote to the FCC on a proposed rule that would require handsets to be unlocked even if the installment contract has not been paid off. There are three major concerns with the proposal:

• There are substantial questions as to whether the FCC has the authority or the jurisdiction to mandate the unlocking of handsets. Several courts have held that the FCC cannot interfere or affect contracts between wireless providers and third parties, including their customers, and cannot nullify state-law remedies.
• Mandating device unlocking not only increases wireless providers' financial risks relative to the customer, it reduces the options to offset risk through securitization arrangements.
• The FCC acknowledged in 2019 that mandating handset unlocking too soon increases the potential for fraud, as bad actors can make purchases under false names and resell the unlocked handsets.

While AFSA wants to work with the FCC to improve consumer choice and flexibility, the increased risk of this new rule only increases the price the consumer has to pay and the risk that businesses have to carry.

September 26th, 2024