Wireless Carriers Expected to Take Steps Sought by Wheeler on Unlocking Cellphones
Carriers are expected to accede to FCC Chairman Tom Wheeler’s demand (CD Nov 15 p14) that they work out a voluntary agreement on cellphone unlocking as part of the CTIA Consumer Code, industry observers said Friday. Wheeler in particular emphasized a requirement that they notify subscribers “when their devices are eligible for unlocking and/or automatically unlock devices when eligible, without an additional fee.” Industry observers also said Wheeler’s letter signals that he’s not afraid to get tough with the group he formerly led as longtime president of the CTIA.
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"Enough time has passed, and it is now time for the industry to act voluntarily or for the FCC to regulate,” Wheeler wrote in the letter to CTIA President Steve Largent (http://bit.ly/1bt9qGV).
"My guess is that the carriers will more or less do what Wheeler wants,” said public interest lawyer Andrew Schwartzman. “The letter was an unmistakable warning that he is willing to go to the mat. The prospect of an adverse precedent ought to make CTIA amenable to a fix.”
"They will undoubtedly comply,” said a former FCC aide who doesn’t represent carriers. “They realize there is much more to gain from their former leader than they lose by adopting these voluntary policies. I wouldn’t be surprised if they had already agreed to do it behind the scenes.” A former FCC spectrum official agreed. “At first, I was surprised at the pointed tone of the letter,” the lawyer said. “Very quickly, though, I realized that the new chairman is feeling the need to flex his muscles and show his regulatory cred. So why not start with the group that he formerly led?"
Sherwin Sly, a vice president of Public Knowledge, also expects carriers to do what Wheeler asks. “I would think that the carriers have good reason to move forward, considering that it’s not that heavy an ask for them,” Sly told us. “A voluntary commitment, to things they've already publicly said they're going to do, seems like an easy ask. Given that there’s a clear mechanism or two by which they could be made to comply, and, frankly, in ways that would help consumers more and might be a greater inconvenience to them, this seems like something they can easily take.” PK supports unlocking requirements.
The Wheeler letter “is interesting and telling,” said Jeff Silva of Medley Global Advisors. “Right out of the box, Wheeler is addressing head-on and forcefully an important, though not towering, issue with a major industry trade group he once headed. In one fell swoop, he is using his newfound bully pulpit to attempt to alter industry behavior sooner rather than later and unambiguously signal that, irrespective of his past associations, his mission today is that of chairman of an independent regulatory agency.” Wheeler’s leadership style will be further revealed as other issues come up, Silva said. “This is just one issue,” he said. “There will be lots of others, many of which will be more complicated and not necessarily lend themselves neatly to Wheeler-grams. This one, in tone and tenor, probably got CTIA’s attention, though. I suspect Wheeler will be democratic in his distribution of such missives to industry stakeholders across the board going forward.”
CTIA Vice President-Regulatory Affairs Scott Bergmann looks forward to “continuing discussions” on the requirement, he said in a statement. “Today’s U.S. consumers have a wide variety of unlocked device and liberal carrier unlocking policies available to them,” Bergmann said. “CTIA also continues to advocate for the passage of ‘The Unlocking Consumer Choice and Wireless Competition Act’ (HR-1123), which would address consumer confusion about unlocking. ... While CTIA supports giving consumers a robust set of options, it is important for consumers to note that an unlocked phone doesn’t necessarily mean an interoperable phone, given the technological and engineering realities of wireless networks."
Free Press Policy Counsel Jennifer Yeh questioned whether Wheeler’s ask of the carriers goes far enough. “Addressing this problem through the CTIA Consumer Code isn’t ideal,” Yeh said. “With no real enforcement mechanisms, the code’s provisions too often turn into empty promises. But this letter sends a strong signal that the FCC is prepared to do the right thing. We hope that if the industry fails to act quickly and adopt good policies, the FCC will step in on behalf of wireless customers and the public."