Editor’s Note: For most of us, the wide world of technology is a wormhole of dubious trends with a side of jargon soup. If it’s not a bombardment of startups and tech trends (minimum viable product, Big Data, billion dollar IPO!) then it’s unrelenting feature mongering (Smart Everything! Siri!). What’s a level-headed guy with a few bucks in his pocket supposed to do? We’ve got an answer, and it’s not a ⌘+Option+Esc. Welcome to Decrypted, a new weekly commentary about tech’s place in the real world. Writer Darren Murph, the former Managing Editor of Engadget and a Guinness World Record holder for number of blog posts published, will spend some weeks demystifying and others criticizing, but it’ll all be in plain english. So take off your headphones, settle in for something longer than 140 characters and prepare to wise up.
In the United States, high-end flagship smartphones are advertised for anywhere between free and $299. But it’s a lie. The same iPhone 5s that’ll set you back $199 at any major carrier would cost $649 elsewhere. That’s a $450 difference that largely goes unexplained. In almost every other market, phones are not sold in such a subsidized manner. You buy the phone that you can afford, and then you shop for the plan that you can afford. In America, the major carriers offer to decrease the price on the phone front in exchange for your loyalty — the price you pay for that $450 upfront discount is two years of steadfast payments for service to a sole carrier.
Most Americans are okay with this — hence, the reason such an offer still exists in our marketplace. But being chained to a carrier is less than ideal for many, even if they don’t realize it. When your contract expires, wouldn’t it be great if you could take the phone that you paid for and select another carrier if you so wished? It would, and that’s why President Obama just signed the Unlocking Consumer Choice and Wireless Competition Act into law. It involves a relatively simple premise for that computer in your pocket, and you can use its implications to your benefit.
Once you’re free and clear of a cellphone contract, you’re now legally allowed to “unlock” your phone so that it can be used with other carriers. If you’re wondering why you’d want to do such a thing, let’s talk about choice and competition. If you’re keen on taking advantage of T-Mobile’s monthly plans, this bill makes it legal to unlock an out-of-contract AT&T phone and use it on a rival network. There’s no need to buy a new phone. You just buy a T-Mobile SIM card, pop it in your existing phone, and call everyone you know to rejoice.
The bill makes it legal to unlock an out-of-contract AT&T phone and use it on a rival network. There’s no need to buy a new phone. You just buy a T-Mobile SIM card and pop it in your existing phone.
Unlocking isn’t just useful for choosing the best prepaid or postpaid carrier for you in America; it’s absolutely essential when traveling overseas. Americans flying into London’s Heathrow airport, for example, will find handy vending machines where you can purchase a SIM card that’s native to the United Kingdom. These cards generally cost between $15 and $45, including talk, text, and data. By having an unlocked phone that’ll support a foreign SIM, you’re able to save yourself hundreds of dollars per visit. The international roaming rates from major U.S. carriers are so astronomically high that it’s almost comical; just refreshing your inbox once upon landing, while roaming, could cost upwards of $20.
If your phone is outside of contract, you simply need to phone up your carrier. Once you get a representative on the line, explain that you’d like assistance in unlocking your phone now that your contractual obligations are fulfilled. If they verify that, it’s a pretty painless process that can be done remotely and in a matter of minutes.
Speaking of “unlocking” — it doesn’t involve a key. Well, at least not a physical one. Phone carriers hold virtual key codes that can be programmed on their end to enable SIM cards from rival carriers to work correctly. If you were to call AT&T today, for example, and ask them to unlock a phone that still has one month remaining on its contract, you’d be rejected. If you ask a month after your contractual obligations are completed, they’ll grant it within a few days at worst.
What the new law doesn’t do is give you free reign to unlock your phone before you exit your contract. Those who willfully agree to a phone discount in exchange for a multi-year service agreement still have to fulfill that before they’ll be granted an unlock code. However, most carriers will allow you to pay an early termination fee if you want to get out and unlock immediately. The niggle here is that you should be allowed to unlock early so long as you continue to make your monthly service payments. This would allow those on a carrier such as AT&T to grab a SIM card in Samoa for a weeklong holiday, while still paying their AT&T bill back home. The reason this isn’t allowed is that AT&T would rather you pay hundreds of dollars in roaming rates when you travel outside of its native network area.
The reason that this wasn’t legal before is due to typical politics. An obscure reading of the Digital Millennium Copyright Act made it possible to charge those caught unlocking their phones with criminal and civil liability. It’s just as senseless as it seems, but this new law takes care of that…for now. The Library of Congress actually has the ability to override this and reinstate the illegality with a vote next year, but now that Obama is onboard, it’s less likely they’ll go out of their way to reverse his inclination.
The reason this new law exists is due to people like us banding together to complain online. Over 100,000 citizens signed a “We the People” petition around a year ago, which forced government officials to at least consider action. Sure enough, even those coddled on Capitol Hill realized that it was completely ludicrous that one could be charged for unlocking a free-of-contract phone and taking it elsewhere.
Unfortunately, unlocking won’t work for every phone and every carrier. Older Sprint and Verizon Wireless phones, for instance, don’t even have SIM cards. They use CDMA technology to transmit (instead of GSM, which relies on SIM cards), so even if unlocked, it’s impossible to use them on T-Mobile, Cricket, MetroPCS, AT&T or any other carrier. Older T-Mobile phones don’t have the internal radios to play nice on AT&T’s highest-speed data networks, and vice-versa.
What the new law doesn’t do is give you free reign to unlock your phone before you exit your contract.
Still, the high number of phones that can be unlocked should result in an extra benefit to the new law: far less electronic waste. Every phone that would likely be tossed after its contract expired can now be unlocked and repurposed for use on another carrier. That not only spurns a secondhand market, getting smartphones into the hands of more people, but it also creates a sustainable recycling effort.
Perhaps America will one day embrace the unsubsidized approach, whereby all phones sold everywhere are sold unlocked from the get-go. Google, for example, has been selling contract-free, unlocked versions of popular Android phones on its Play Store for a few years. Enthusiasts have been embracing these phones, but the mainstream public is still unaware that such a storefront exists — and moreover, what the benefits are to owning an unlocked phone.
So check out your options. For now, you can rest easy knowing that you won’t be nailed with a fine or thrown in jail for rightfully unlocking your phone once your existing contract expires. A small victory, yes — but one you shouldn’t take for granted.