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Chile Forbids Carriers From Selling Network-Locked Phones 291

Posted by timothy
from the as-regulations-go-not-a-bad-idea dept.
An anonymous reader writes "As from today, network operators in Chile are no longer allowed to sell carrier-locked phones, and must unlock free of charge all devices already sold to costumers through a simple form on their respective websites. The new regulation came into effect in preparations for the rollout of Mobile Number Portability, set to begin on January 16th. This is one among other restrictions that forbid carriers to lock in the customers through 'abusive clauses' in their contracts, one of which was through selling locked devices. Now if a customer wishes to change carriers he/she needs only to have the bills up to date and the process of porting the number should only take 24 hours."
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Chile Forbids Carriers From Selling Network-Locked Phones

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  • by Anonymous Coward on Tuesday January 03, 2012 @12:39PM (#38573146)

    I applaud it.

    • by Anonymous Coward on Tuesday January 03, 2012 @01:18PM (#38573680)

      You might be able to do this in the U.S, but first you would have to unlock all the paid-for federal politicians.

      Based on the chances of that happening, I guess not.

      • by Grishnakh (216268) on Tuesday January 03, 2012 @02:09PM (#38574448)

        You can't do something like this in the US. All the teabaggers and their Republican allies will say it's Communism and that government regulation is wrong. The Democrats will say a few weasel words that appear to support this, but then will either not bother to do anything at all, or will make a lame attempt at passing a law, but when a few Republicans object they'll change the law so that it looks like it's supporting this at first glance, but in reality is actually making things worse and giving giant advantages to the incumbent carriers, while also throwing in a bunch of other unrelated stuff that Republicans want. When people complain, the Dems will say they were "forced" to "compromise".

      • by Anonymous Coward on Tuesday January 03, 2012 @02:51PM (#38575038)

        Never happen in the US.
        Every carrier would claim how this would stifle innovation, reduce competition, prevent them from expanding or upgrading their networks, force telcomm and layoffs of about 100K jobs and a loss to the US economy of about 100billion dollars a year. In addition, it would be unfair to minorities and illegal immigrants, those living in the inner city, cause an increase in child molestation incidents, raise prescription drug costs, and make illegal drugs more readily available to teenagers, further reduce the quality of our public schools and force the federal and local governments to raise taxes.

        Don't push for this in the US unless you want all of the above to happen.

        I live near DC. I hear TV and radio commercials related to some upcoming government policy change or decision all the time and they all follow that exact theme.

        Getting off topic but for those outside the DC area.. It is surprising the number of commercials that are played on local radio and TV for the joint strike fighter, Boeing, health care, telecomm, network neutrality, cleaning up the hudson, etc. I guess if you can't lobby the pentagon and government officials directly, catch them in their commute waiting in traffic listening to the radio.

        • I live near DC. I hear TV and radio commercials related to some upcoming government policy change or decision all the time and they all follow that exact theme.

          Getting off topic but for those outside the DC area.. It is surprising the number of commercials that are played on local radio and TV for the joint strike fighter, Boeing, health care, telecomm, network neutrality, cleaning up the hudson, etc. I guess if you can't lobby the pentagon and government officials directly, catch them in their commute wait

    • by GameboyRMH (1153867) <gameboyrmh&gmail,com> on Tuesday January 03, 2012 @01:20PM (#38573706) Journal

      Chile has a lot of forward-thinking legislation on tech issues. Net neutrality is already legally enforced there.

      • by wiedzmin (1269816)
        They must have some sort of law prohibiting lobbyists from being sponsored by evil corporations.
    • Re: (Score:2, Insightful)

      by jadavis (473492)

      "...and must unlock free of charge all devices already sold to costumers through a simple form on their respective websites."

      You applaud retroactively changing private contracts? For extreme cases, it can be justified, but for cell phones?!

      If a country treats private contracts this way, it discourages investment in a major way.

      • by sjames (1099) on Tuesday January 03, 2012 @01:51PM (#38574196) Homepage

        Yes. I absolutely applaud it, and so should anyone who wants a healthy market.

        As near as I can tell, the claim is that any kind of regulation, including forbidding businesses to mug people in the park to cover shortfalls is claimed to "discourage investment".

        Sometimes the public interest calls for less muggings even at the cost of less investment.

        • by Shivetya (243324) on Tuesday January 03, 2012 @02:05PM (#38574382) Homepage Journal

          how does the law handle those?

          Because if carrier lock down is not permitted for subsidized phones then that market will end very quickly. As such it would not be something I would want to come to the US. One of the reasons for the explosion in smart phone popularity other than marketing is that buyers never had to pay for the phone up front.

          How is this handled in Chile? Was there ever a subsidized market? If so, what happens to it?

          Never applaud a regulation quickly as side effects are not always known or improperly dismissed.

          • by glodime (1015179) <eric@glodime.com> on Tuesday January 03, 2012 @02:24PM (#38574716) Homepage

            Dell seemed to figure out how to charge people over time for large tech purchases (and make more money in the process). Why wouldn't Verizon be able to do this?

            (Replace Dell and Verizon with any large producer of consumer goods and cell carrier, respectively, to further illustrate my point)

          • Because if carrier lock down is not permitted for subsidized phones then that market will end very quickly. As such it would not be something I would want to come to the US. One of the reasons for the explosion in smart phone popularity other than marketing is that buyers never had to pay for the phone up front.
            Gee, you handle subsidized phones the way you did before, you charge the appropriate fee if the person terminates their contract. This isn't rocket science. Oh, you meant how do I keep people jumpin
          • by shadowrat (1069614) on Tuesday January 03, 2012 @02:35PM (#38574836)
            sometimes fortunes are lost when markets are simply ended by decree. There was a point in US history where President Lincoln said (and i paraphrase), "i don't care how much you invested in your farming equipment. it's not yours anymore and you don't get to recoup anything."

            Obviously locking people into a cellphone contract is not comparable to slavery (despite what some here might claim), but i suspect the economic impact of simply declaring those contracts null is also less significant.

            I'm sure there are other examples of laws being passed to end a previously lucrative but legal way of business that incorporate less hyperbole.
          • by timmy.cl (1102617) on Tuesday January 03, 2012 @02:36PM (#38574838)

            From now on carriers are allowed to sell both locked and unlocked phones, but they have to clearly state which is the case, and what are the conditions of the lockdown (e.g. monthly discount, preferential prices). Also, the phone lease contract must be independent from the line contract. And the phone lease contract must provide a way to get the phone unlocked. The typical case will be something like "I give you this phone if you pay $X upfront and $Y monthly for Z months. If you have a voice plan with us, we'll discount you $Y for the first Z months".

            I agree that changing previous contracts is somehow abusive against carriers, but IMHO it's the only way to encourage the first big wave of people switching. The market appears to be OK with this so far, and carriers already started aggressive marketing campaigns to steal each others' customers.

            (Yes, I live in Chile. Sorry for suboptimal english ;) )

            • by s73v3r (963317)

              I agree that changing previous contracts is somehow abusive against carriers

              Given the abuse that most carriers like to inflict on their customers, I'm not going to be shedding any tears for them.

          • by slinches (1540051) on Tuesday January 03, 2012 @02:55PM (#38575088)

            I think they'd likely handle subsidized phones the same way the carriers do now, early termination fees. The reason they put the lock on the phone has nothing to do with the subsidy. It's to prevent switching to a more competitively priced plan once the contract expires.

          • by Solandri (704621) on Tuesday January 03, 2012 @03:33PM (#38575534)

            Because if carrier lock down is not permitted for subsidized phones then that market will end very quickly. As such it would not be something I would want to come to the US. One of the reasons for the explosion in smart phone popularity other than marketing is that buyers never had to pay for the phone up front.

            This is a big peeve of mine. The carriers are ripping you off here too. The ETF (early termination fee) handles the loss they would take on the subsidized phone if you jumped ship before your contract expired. But once your contract expires, there is no more subsidy. They've recouped the subsidy cost through your monthly payments over 2-3 years. So once you are off-contract, they should drop your monthly fee an appropriate amount.

            T-Mobile is the only carrier which does this. All the other carriers continue charging you the same monthly fee as if you have a subsidized phone. In effect, they are stealing from you by charging you the subsidized monthly fee even though your phone is no longer subsidized. I am generally against regulation, but anti-regulation is just a means to an end. The end is the free market, and hiding charges like this is not conducive to a free market. So regulation which prohibits these hidden charges which can be abused in this manner is a good thing.

            At this point, we need legislation to force carriers to break out phone subsidies into a separate charge. If you don't want to pay full-price for your phone, you can get it at a discount. But rather than characterize it as being subsidized via your monthly fee, it should be structured for what it really is - a loan. The carrier loans you the purchase price of your "$0 down" phone. The monthly loan payments get added onto your monthly service bill. When your loan is paid off, you have only service charges left to pay. If you jump ship before repaying the loan, the full amount of the loan becomes due. No ETFs. The way they currently do it is so obfuscated it's rife with abuse and cheating.

          • by tgeek (941867) on Tuesday January 03, 2012 @03:40PM (#38575638)
            IMHO, subsidized phones ought to go away. Hiding the true price of the phones behind carrier subsidies frees the phone manufacturers from having to price their phones openly and competitively.

            Imagine if there were no subsidized phones. Would we still have iPhones, Samsung Galaxies, HTC whatchamacallits and whatever else? I think so. Would they cost $500 or more? I doubt it - I think market competition would drive the prices down. Plus we might actually have some reasonably priced contract terms for service.

            Instead we have manufacturers who set whatever exorbitant price they like and conspire with the carriers to hide that price into locked-in contracts. PT Barnum, wherever he is, must be smiling!
          • by gl4ss (559668) on Tuesday January 03, 2012 @03:52PM (#38575780) Homepage Journal

            why the fuck you want subsidized phones?

            really? if you're poor and short on cash - then buy a fucking 40 bucks phone - they do exist, they work as phones really well. or spend 120 bucks and buy something that can run angry birds. if you can afford an expensive smartphone buy it upfront.

            OR do a proper partial payment plan for it. doing long contracts with carriers is stupidity, doing long contracts that you don't even know the terms for is greater stupidity and that's what carrier locked subbed phones are.

          • by goose-incarnated (1145029) <lelanthranNO@SPAMgmail.com> on Tuesday January 03, 2012 @04:48PM (#38576554) Homepage Journal
            We have the same law, and have unlocked phones, and have number portability, and yet ... surprise, surprise, the most popular plans and phones are those subsidised phones on contract plans. We also have cheaper plans and mobile internet that you can only dream of (on contract, I get 10G for about 25 USD. Off contract it's 3G for about 18 USD)

            It really is sad when people buy into the propaganda and actively work against their own interests, such as when they oppose regulations that protect them from big corps. A moments thought on your part would have made you realise that most countries have regulations to prevent the cell providers from locking phones to networks, and they have a healthier cell ecosystem than the US.
      • Re: (Score:3, Funny)

        by Em Adespoton (792954)

        It's not that big a deal... it only affects the entertainment industry. Re-read that quote:
        "...and must unlock free of charge all devices already sold to costumers through a simple form on their respective websites."

    • by mapkinase (958129)

      It's "outbreak" only in for United States. Many other developed countries normally use it.

    • by nomorecwrd (1193329) on Tuesday January 03, 2012 @01:53PM (#38574216)
      Almost any phone can be unlocked instantaneusly from the carrier's web form.... except iPhones... only Apple can unlock their phones... you have to fill a form (by pen at the carrier office) and wait for 15 days for the iPhone to be unlocked.
  • Great (Score:4, Insightful)

    by dintech (998802) on Tuesday January 03, 2012 @12:39PM (#38573150)

    This will increase competition between providers as consumers can move to the best deals a little bit more easily. Hopefully other countries will follow suit, but I doubt it.

    • Re: (Score:3, Insightful)

      by Soluzar (1957050)
      Customers will still be locked into a miminum of a 12 month contract if they are getting a handset at a subsidized price.
      • by gl4ss (559668)

        if someone insists on buying with partial payment, that's their problem. but buying on partial payment you can't measure is much worse than that - and that's what carrier locking and discounting is all about.

    • by TyFoN (12980)

      This is already the status in Norway where I live. That is, it's not illegal to sell locked phones but all of the carriers are using gsm and you can port your phone number to any provider you want free of charge. There are three national networks and about 50 providers that are piggybanking on the large ones as they can by law only charge the smaller providers for the actual cost of running the network. The result is a lot of cheep plans that do not involve buying a phone.
      I don't think I have ever bought a

    • Competition is usually good.
      However Private Industry is usually bad at managing Infrastructure.
      Now this could (I am not saying it will... Just a possibility) hurt the customer, as the big names in the area loose a lot of their business and cannot afford to maintain their infrastructure. This will close a good portion of the backbone and with more competition but with smaller competitors none of them will have the resources to make a complete network. So while we can choose carriers based on price or perfor
      • First it's 'lose' and not 'loose'.

        Second other countries have solved this problem. Have one company take over and be responsible for the network infrastructure. BT do this in the UK with broadband and wireline. It's not a stretch for this to happen with wireless as well without a detrimental affect on the customer.

      • by Dog-Cow (21281)

        Have you driven in most of the US (that gets varying weather)? Government is no better at infrastructure. The commonality to both is that they have priorities that do not include maintenance and upgrades.

      • Re: (Score:3, Insightful)

        by tmosley (996283)
        Private industry is bad at managing infrastructure?

        Then why are privately owned toll roads in such good repair? Why does our privately owned worldwide system of trade networks work so well? Why does the internet work so well? Why does cellphone service work so well? Why do private urgent package delivery services work so well?

        Why are cable monopolies such shitty services? Why do electricity prices keep rising? Why does electricity flicker in a big city like Houston? Why did sewage used to bac
        • Re:Great (Score:5, Insightful)

          by mbkennel (97636) on Tuesday January 03, 2012 @02:55PM (#38575102)

          "Then why are privately owned toll roads in such good repair?"

          Generally, it's because they are new and are only in good shape when they have to compete directly against non-toll roads going to the same destination.

          in sum: works well when there is strong competitive substitutability and no technical lock-in.

          "Why does our privately owned worldwide system of trade networks work so well?"

          Because they are in an industry which has strong competitive substitution, there are universal non-proprietary technical standards, and
          foremost, they are beneficiaries of huge government investments in regulated infrastructure like ports, roads, rail and airports. One tanker or container ship is as good as another.

          in sum: strong competitive substitutability and no technical lock-in.

          "Why does the internet work so well?"

          Brutal competition, and the inability to apply proprietary standards, like with shipping carriers. This is a historical artifiact of the initial investment & technology being developed by government.

          in sum: strong competitive substitutability and no technical lock-in.

          "Why does cellphone service work so well?"

          It doesn't, except where there is strong competitive substitutability and no technical lock-in.

          "Why do private urgent package delivery services work so well?"

          Because they aren't providing infrastructure, they are beneficiaries thereof.

          in sum: strong competitive substitutability and no technical lock-in.

          When the infrastructure does not offer competitive substitutability or there is technical lock-in, it is very lucrative and undesirable for private entitites to run it, without intrusive and constant regulation.

      • by Luckyo (1726890)

        Absolutely not necessary, this is total fear mongering at its finest (I suspect you have been successfully brainwashed on the issue by your local providers who want to keep their monopoly). We have a great example of this in almost all if not all Nordic countries. You can change providers while keeping your number, unlocked phones available essentially everywhere (and even contracted phones are often unlocked, because you're still bound by contract if you want a subsidy).

        This works because infrastructure co

    • by Artraze (600366)

      Actually, it rather decreases it*. Whereas a carrier (like T-Mobile in the US) could compete with the ability to unlock phones, now all carriers are required to offer it thus eliminating that option as a difference between carriers. And while that isn't itself a bad thing (as either way the customer can get their phone unlocked), quite often these days carriers will add hidden costs as "compliance fees". So even though you can unlock your phone, instead of it being a feature, it's now a cost burden on yo

  • Wow (Score:5, Interesting)

    by Bert64 (520050) <bert@@@slashdot...firenzee...com> on Tuesday January 03, 2012 @12:39PM (#38573158) Homepage

    Legislation which actually benefits consumers instead of large corporations, very good...

    Locked cellphones are abusive and totally unnecessary, you already have existing contract laws to ensure that someone continues paying their bill for the duration of the contract term so there's really no reason to try and lock handsets too.

    • Re:Wow (Score:5, Funny)

      by Anonymous Coward on Tuesday January 03, 2012 @12:50PM (#38573312)

      Well, I'm glad THIS sort of blatantly anti-job-maker legislation won't ever happen in the good ol' US of A! You won't hear us clamoring for such a violation of corporate* rights and freedom!

      *: Hallowed be their almighty names.

    • Re:Wow (Score:4, Insightful)

      by Kenja (541830) on Tuesday January 03, 2012 @01:03PM (#38573472)
      Unclear as to how forbidding consumers from being able to get a low cost cell phone in exchange for a carrier lock in is bad. Do you really think Chileans are going to pay the 400-600 USD an unlocked/unsubsidized phone costs? Guess what? You can buy an unlocked phone in the US right now. Apple sells them on their web site. The vast majority of people would rather pay less money for a locked phone.
      • Re:Wow (Score:4, Informative)

        by polar red (215081) on Tuesday January 03, 2012 @01:08PM (#38573544)

        The vast majority of people would rather pay less money for a locked phone.

        ... and pay the difference in their phone bill, because they can't count. Locking the phone does not make the phone magically cheaper !

      • How does the lockin stop a phone costing that much? It simply shifts the method of payment from an upfront cost to one spread over the length of a phone contract or more.

        I assume you don't think we should still have to use a landline phone rented from the phone company rather than bought, do you?

      • Re:Wow (Score:5, Informative)

        by frisket (149522) <peter AT silmaril DOT ie> on Tuesday January 03, 2012 @01:11PM (#38573582) Homepage
        Amazing how the population of the USA has been brainwashed into thinking that the carrier lock is in exchange for a low cost.

        The low cost is in exchange for a term contract. The carrier lock is just US industry's 1950's mentality kicking in. In principle, it's very little different from the proprietary lock-in we see in software.

      • by geek (5680)

        I can buy an unlocked phone but it does not reduce the cost I pay monthly by one cent. If I buy a locked phone I get 400-500 off the price of the device and my monthly bill stays the same.

        It doesn't take a genius to figure out which road to take here.

        • The costs are subsidized by a contract, not the phone being locked in If the phone isn't locked to a certain carrier, once that contract is over, the phone is useful on other carriers, so there's competition on your phone bill, which tends to bring it down lower.
        • Yes it does. But you need to change to a prepaid plan and provider. In the USA you also need to worry about frequencies and compatibility.

          $40/month unlimited talk/text/data.

        • by jeffmeden (135043)

          I can buy an unlocked phone but it does not reduce the cost I pay monthly by one cent. If I buy a locked phone I get 400-500 off the price of the device and my monthly bill stays the same.

          It doesn't take a genius to figure out which road to take here.

          This is exactly where the problem is in the US. Everyone is eager to extoll the virtues (or lack thereof) of subsidized handsets, but few people really know what is on the table. You could, with your unlocked phone, go to a MVNO (mobile virtual network operator) and pay roughly half as much as you do on the "big three" for voice minutes, txts, and data. But how many people even know that? Most just assume that their only option is to keep paying the big network operators and see no benefit in owning a p

      • Re:Wow (Score:4, Insightful)

        by petermgreen (876956) <plugwashNO@SPAMp10link.net> on Tuesday January 03, 2012 @01:45PM (#38574110) Homepage

        Do you really think Chileans are going to pay the 400-600 USD an unlocked/unsubsidized phone costs?

        Not all phones are that expensive you know and besides customers pay for their phones one way or another, it's just a case of whether they do it explicitly or whether it is hidden in the cost of a cellphone contract.

        I think there are two distinct but intertwined issues here

        1: allowing carriers to offer subsidised phones in exchange for signing up to a 1-3 year contract.
        2: allowing those same carriers to lock the subsidised phone so that even after the contract expires you are still locked in unless you get a new phone

        When theese two factors are both present customers are basically forced into paying for a new phone every 1-3 years whether they actually want one or not since moving carrier would mean getting a new phone and your existing carrier has little motivation to lower prices for a customer who can't move without signing up to another phone contract with hidden phone purchase plan. This is hugely wasteful as huge number of mobile phones are made that people wouldn't buy if they had to pay for them directly.

        If the government allows 1 but not 2 and assuming the phone networks are technically compatible* people can still get a "subsidised" phone but when their contract expires they can take that phone to any provider. This in turn gives the providers and incentive to offer and compete on cheaper "sim only" phone deals for the newly freed up customers. Phones will get used until people actually want/need to buy a replacement rather than being replaced on an arbitary schedule set by the carriers.

        * the US has the additional problem that it's mobile phone networks are a mess of two competing sets of standards (GSM/UMTS verses IS-95/CDMA2000) so unlike most other places even if artificial barriers to taking your phone with you were removed your options for moving would still be limited.

  • Nice to see a positive South American headline.

    It must be nice having a small(er) country where you can pass progressive pro-consumer legislation.

    • Chile some time ago surpassed New Zealand on my "potential nice place to live" list. Too bad about their Internet censorship, NZ's techie/gearhead culture is really appealing.

  • by itsme1234 (199680) on Tuesday January 03, 2012 @12:45PM (#38573216)

    .. otherwise the law might have been struck as "unfair": http://en.wikipedia.org/wiki/SIM_lock#Belgium [wikipedia.org]
    Yes, you read this right, forcing your provider not to lock your phone is "unfair" in the EU.

  • must unlock free of charge all devices already sold to costumers through a simple form on their respective websites

    When the phones were sold, the carriers would have used the future earnings from these phones to offset the initial discount.
    Now they cannot make that money
    Somewhat unfair isnt it?

    • Re: (Score:3, Insightful)

      by itsme1234 (199680)

      Any unexpected (and everything is unexpected at some point) regulation is "somewhat unfair"; the provider might bet on you staying with them after you finished your contract because you don't want to lose your number but then number portability comes and then they can't keep you.
      Fact is the provider is intentionally crippling a perfectly good phone betting there will be enough people paying for their "official" unlocking service to offset all the costs associated with these procedures and even get them some

    • Re: (Score:3, Interesting)

      by TheCarp (96830)

      Unfair? No. Unfair is selling someone a device, telling them that they own it, it belongs to them, and if it breaks, they must pay to replace it.... and while it can technically connect to any network, its restricted to only use one. If they own it...its theirs, its unfair to make them own it AND tell them they can't use it as they see fit. Period.

      So yes, it makes this particular business model untenable. Thats not unfair, it was the model that was based on an unfair practice.

    • by oddjob1244 (1179491) on Tuesday January 03, 2012 @01:00PM (#38573444)

      When the phones were sold, the carriers would have used the future earnings from these phones to offset the initial discount. Now they cannot make that money Somewhat unfair isnt it?

      You're still in a contract with the carrier so they get their subsidized money back. This just means when you're done with your contract you can take your phone with you to another carrier.

    • There is nothing to stop them from putting a cluase in the contract that forces you to pay some ammount for the phone if you cancel the contract early. It just prevents them form denying you the use of the phone you purchased on another provider.

    • by Duhavid (677874)

      They still have a contract, dont they?

    • by Bert64 (520050)

      You don't need locked handsets to do this, existing contract law requires that the consumer uphold their end of the contract, which usually involves paying for mobile service for a minimum period of 12 or 24 months at an inflated cost to cover the subsidy on the handset, or to pay an "early termination fee" which basically amounts to paying for the cost of the handset up in one go anyway.

      There are many reasons someone may want unlocked phones, for instance:
      To use a local simcard when travelling
      To buy a phon

  • by esquizoide (834082) on Tuesday January 03, 2012 @12:47PM (#38573242)
    Since I was a boy, Chile has always been known for being a leader in telecoms in Southamerica. It seems now that we are also leading in matters of technology rights. We also have Net Neutrality http://www.neutralidad.cl/ [neutralidad.cl] by law, ISPs can't block content nor censor it. Traffic shaping is also forbiddin (although it is still in use, since the Net Neutrality law is new). Our Minister of Telecommunications have said that the next goal is more competition and better prices both for Internet en cell phone communications. Also, in topic to this article. We have 3 major cell phone providers, and there are 2 more providers in the way. We also have more cellphones than citizens (20 million cells, in contrast to 17 mill citizens).
    • by toolo (142169)

      I've traveled there on business and agree. Very impressive low-cost for access infrastructure. It is good they are being heavy handed with the cellular carriers though - the prices for international roaming are robbery there and forces people onto VOIP if they are working temporarily in the country.

  • ...by Chile having a successful history of doing away with dictators....
  • cheap phones, cheaper calls, cheaper data and operators have to compete with quality too.

    I really, really wish they hadn't allowed operator locking for 3g phones in Finland. it had shit to nothing impact on 3g adaptation.

  • I agree with this 100% but I hope everyone realizes that with no ability to force customers to stick around, there will be a dramatically reduced incentive for carriers to offer subsidies on fancy phones. I think this is fine but I wonder if there will be an uproar when $600 iPhones cost $600 instead of $200 + contract and/or lock.

    • by ZorinLynx (31751)

      This is what ETFs are for. If the customer doesn't stick around, they have to pay $200+ to cover the subsidy that was given to them on their phone. There is no reason to lock phones at all because of this.

      No matter what happens, the carrier will get paid back for the subsidy.

    • by fuzznutz (789413)
      And when demand drops for those $600 phones as customers have to pay the upfront cost, maybe the prices will drop accordingly. I would personally love to see a system where cell companies could not sell/profit on the handsets themselves. Service and handset costs might hit a "normal" equilibrium where tightwads can buy a cheap phone and get inexpensive service, while gadget freaks can buy their latest iPhone and pay for monthly service, not a mortgage on the phone.
    • Re: (Score:2, Insightful)

      by erroneus (253617)

      Phones don't cost $600 and Windows doesn't cost $300. Just because party X "charges" Y for something in 'retail' things doesn't mean it's worth it or that anyone actually pays that much let alone "costs" that much to make.

    • by Bert64 (520050)

      The contract already locks you in for the duration of its terms, and the carrier is protected here by contract law.
      There is no reason to add the additional lock-in of a locked handset, and no reason that carriers could not offer unlocked handsets with subsidies.

  • by cvtan (752695) on Tuesday January 03, 2012 @01:17PM (#38573660)
    If you people would just leave cell phone companies alone, they would naturally all do the right thing by their customers!!!
    • by erroneus (253617)

      You forgot the "sarcasm" tag didn't you...

      The race to the bottom seems to pay off quicker and better than the race to the top.

  • I wonder if I can get phones that work with TMobile-USA's network from Chile. Seems like the best way to buy a new phone.

  • "Con carne" communications laws.

    Yum! Make mine with cheddar and onions, please!

  • by Maow (620678) on Tuesday January 03, 2012 @03:08PM (#38575236) Journal

    Well, by North America, I cannot speak to the situation in Mexico.

    But in Canada & USA, one can take their unlocked phone to another carrier after a contract is over, but there is a price disincentive against doing so.

    If the new carrier offers either 1, 2, or 3 year plans, all with a new phone, or PAYG, then the incentive is to take the "free" new phone, not bring the unlocked one along. PAYG being a rip-off for anything but the most casual usage, of course.

    Until carriers in NA are forced to have plans with different prices for "free" phones vs bring-your-own phones, there will not be much incentive to switch carriers and continue using the previous phone.

    BTW, Wind Mobile in Canada will give you - for free - your network unlock code after 3 months of service. I've unlocked 2 Android phones that way. Now we can travel internationally and just plug in any cheap SIM, or switch to competition and simply get a SIM.

You have a tendency to feel you are superior to most computers.

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