T-Mobile recently doubled the unlocking period of its prepaid Metro unit from 180 days to 360 days.
The FCC is not happy with this decision, even though T-Mobile is not breaking any rules right now.
The timing of T-Mobile’s decision coincides with the FCC’s decision to mandate a 60-day locking period for every mobile carrier.
The FCC is not happy about T-Mobile increasing its unlocking period from 180 days to 360 days for its prepaid Metro unit. Its postpaid users still have a 40-day unlocking period provided they have had their EIP (Equipment Installment Plan) or any leases paid off.
Although FCC chairwoman Jessica Rosenworcel didn’t make a specific comment about T-Mobile’s move, her response indicated that she would have preferred if the mobile carrier brought down the unlocking period to 180 days.
Unlocking period means the amount of time a user has to wait to switch to a different mobile carrier. For example, now that T-Mobile’s prepaid plan has a 365-day unlocking period, you will have to wait a year after activation to switch to a different provider.
It’s important to note that although T-Mobile increasing the unlocking period is inconvenient for the customers, it is not exactly unlawful. When it was trying to acquire Sprint, the company had made a deal with the FCC under which it had to allow its users to unlock their phones within 365 days.
T-Mobile has recently signed a deal to buy the operations and assets of U.S. Cellular for a whopping $4.4 billion. This includes:
30% of the spectrum assets
a new master license on 2,000 U.S. Cellular towers
an extension of the license on 600 towers
T-Mobile is currently the second-largest player in the industry. However, such an aggressive acquisition followed by an increase in the lock-in period suggests that it is aiming for the top spot.
FCC’s New Consumer-friendly Unlocking Rules
The agency is also working on a rule that will make it mandatory for mobile carriers to unlock phones within 60 days. The idea was first introduced in June this year, and now they have decided to move forward with it.
A rough draft labeled the FCC’s Notice of Proposed Rulemaking (NPRM) has already been introduced.
The reason behind the FCC’s decision is quite simple— customer convenience. Right now, different mobile carriers have different unlocking periods.
Making them uniform will encourage more competition in the market and give customers the freedom to switch carriers whenever they want.
If the new rules go through, they will apply to both existing contracts and new contracts.
However, there is a major hurdle for this initiative. Mobile carriers often lure in new customers with discounted prices and then they make you stay for a certain time to make up for that discount.
Now, if mobile carriers can’t lock you in anymore, they will also not offer discounts which can be devastating for the industry. The industry has only recently started to show signs of recovery from the pandemic-induced slump.
The FCC is obviously aware of this situation and will evaluate the impact of introducing this rule before anything is finalized. The implication on smaller telecom companies and resellers will also be considered.
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