> claiming that locking phones to a carrier's network makes it possible to provide cheaper handsets to consumers
Weird, because they seem to have the same prices as Verizon.
replies(4):
> T-Mobile estimates that its prepaid customers, for example, would see subsidies reduced by 40% to 70% for both its lower and higher-end devices, such as the Moto G, Samsung A15, and iPhone 12.
This is such a confusing line, you're in control of that. Also if that were true this would be great for you. Don't you want to be making more money? But in practice can you not just enforce this by contract? You must make a 12 month commitment to T-Mobile to qualify for discounted phones.
Even with a network lock, that product would be far more valuable than what is currently sold.
But I dont see how its good for users, locked phones only help the business.
And somehow an iPhone today isn't cheaper than when it first came out and there was no subsidy from Cingular.
It seems in both cases T-Mobile is making a bet that you'll continue to use their service in one form or another. Is there a reason if it was unlocked you would immediately switch?
I mean unless they would keep those discounts without being locked, but I don't ever see that happening.
How about just offering it both ways. Discounts if you are OK being locked to the service for the duration, or no/lesser discount to be able to leave the service early. That way everyone is happy?
I mean, you can already just forgo the rest of the discount and get unlocked whenever you want, so I don't really see the problem I guess.
tsk tsk. I almost feel bad for them.
Basically the carriers are making the standard libertarian argument, which makes sense. If you block locking, you already know what happens: we already know cell phone prices unlocked. The cell carriers are in essence capital providers and they know how to collect money from their customers.
It really doesn't. Libertarian arguments only make sense if you don't think about it too much, or are ignorant about the context and details, or you have a vested interest.
You can compare phone prices with countries where there is healthy competition and there is no or very limited blocking (France is a good example - you can buy phones outright, or get them on a payment plan that locks you on a more expensive monthly payment compared to the classic 20€ everything included including 20-150GB internet depending on the provider plan; after the initial period is over, you can do whatever you want). If you bother to look into the topic a little bit more than surface level, libertarian arguments usually fall apart easily.
As far as why you would immediately switch -- T-Mobile is not losing money on these phone subsidies in the aggregate (they are in some cases, to be sure). They're pricing the subsidies into their carrier rates. If this went through, they'd likely have to cut the subsidies and engage in pure competition on pre-paid mobile rates. I know some HN readers read that last line and go, "good," but the fact of the matter is that people who are buying subsidized phones on pre-paid plans are generally poor credit risks generally and phones lose a huge amount of their value the second you open the shrink-wrap so they're not very worthwhile as security for a secured loan, so by unbundling these two, T-Mobile starts to compete with everybody else on rates for service and somebody else steps in to handle the leases on phones, and if you look at that market segment, the answer in the US as to who is most prepared to take over that business, the answer is _Rent-A-Center_. The total cost to buy a PS5 Slim is $500, the total cost to get a PS5 Slim through my nearest Rent-A-Center is $1,349.50. Again, I am sure that T-Mobile is not advocating for this out of charity, but I'm not as convinced as some around here that this form of unbundling would be an unmitigated good thing.
EDIT: And to your point of, well wouldn't pre-paid operators all switch to a contract model, I don't think "you can't get phone service without a contract" is what people who are advocating for this reform want, and the primary customer for a pre-paid plan is someone who is too large a credit risk to get a 12-month contract through someone else. I said primary customer, if you want to tell me you're a great credit risk but you're on prepaid as an ideological stance, just pretend I already know that about you.
If consumers paid out of pocket for their phones then they would be more picky about upgrading and plan prices. It would also make upselling shitty plan features harder so the carriers would loose a lot of money.
https://osmocom.org/projects/baseband/wiki/ProjectRationale
https://security.stackexchange.com/questions/64337/do-cell-p...
Fast forward to a couple months ago, I happened to notice while browsing my TMobile account that my phone was being reported as "Carrier Locked" with subtext that said "This phone is not eligible to be unlocked". Not my wife's though, hers was listed as "Unlocked". It took over a month of being yanked around by TMobile reps telling me they had to "escalate but the issue will be fixed within a week". It never was.
They would ask me why I wanted it unlocked. I would just respond something respectful but firm along the lines of "Because it's my phone. I paid for it. You have no business locking my device"
The way I see it, it was either theft or false advertising, plain and simple. Either they stole the phone from me after I bought it. Or, they sold me a device as unlocked but never realized that promise. It should have NEVER been locked. It makes me mad just thinking about it. I don't understand why a carrier even has the power to remotely lock a phone that was never theirs to lock in the first place.
This is all to say: I agree with your observation. They deserve heavy handed regulation because they have proven they will abuse any inch you give them.
I like unlocked phones, and I buy my phones unlocked. But I agree with the sentiment here that we already know what the prices are for unlocked phones: manufacturers will sell them to you at that price, and telecom operators in the U.S. will universally allow you to bring your own, unlocked device free of charge. What the companies offering locked phones offer is an optional subsidy in exchange for a locked phone; while I'm sure there are reasonable arguments around e-waste that result in wanting some limits to locking, there is an obvious tradeoff in that the value of the subsidy diminishes as the allowed lock time diminishes. Mandating short limits to phone locks raises prices for poor people who can't afford unlocked phones. It's not always bad to do that — sometimes companies are taking advantage of poor people — but it's pretty true that will happen.
I don't have to pay for 'activation' when I move the sim from my phone into a new phone either, even though I hear about that happening still.
I don't have to try to get all my family lines on the same carrier either, so if the three of us are in a car stuck on the side of the road, we have a better chance of one of our phones working to get assistance.
I thought all the major carrier did away with phone subsidies years ago so they could advertise lower monthly service fees, when those prices were becoming too high.
My phone is still subsidized, but it's through work, so I'm not the one paying the monthly bill. I didn't even think that was still an option for the average user buying on their own. Before switching my phone over to work, I had been buying unlocked phones at full price for a few years.
The messaging of companies in regulatory cases has become rote and predictable as the sectors they occupy have grown more concentrated. There is no reason to heed it at all in the present environment
How does it do that? Its a lock to force people to stick with a provider, and pay through the nose in other ways. Phone plan rates in the US are terrible, restricting peoples ability to change provider through artificial means doesn't provide better rates.
The potential regulation is about the government making phones unlock automatically after two months of purchase. The regulation isn't about banning discounts or sales.
Instant money. Meanwhile the telecom company has to sell the debt at a massive discount to a collections agency or spend a ton of money collecting on it. That's assuming it can be collected on at all from someone that might just be running a scam.
With a locked phone, the phone just stops working and loses most of its value.
A rule forcing carriers to unlock phones after the term is up is fine. Forcing them to do it before is illogical. How many people are going to pay for two plans on one phone because they didn't like the first plan? I doubt it's more than those who will immediately abuse this rule and stop paying for the phone. I don't see the benefit to society here.
No, after over a month of them saying "it'll take a week for it after I escalate" and then me calling a week later and starting the whole conversation over, one day it finally was unlocked. And I moved to a new carrier.
Then I tell them they'd be better served by switching to an MVNO offering significantly better rates and they come back and tell me they're locked in for a while because they just financed new devices.
I'm souring on the ways we create systems where you have to be super savvy and walk on eggshells with how you use the service and utter the right incantations or else you get hosed.
Companies aren't going to repossess your phone the way it's worth it to repossess your car or house if you stop repaying your loan.
So it raises the overall price because the companies charge more in order to offset the losses of people who effectively steal the phones they never finished paying for.
Cheaper phones by definition have slimmer margins.
I find that markets that are financialized where the price of the good is obfuscated are less efficient. This is because efficient markets rely on price discovery. Healthcare is an excellent example of this.
If the major telcos only offer exorbitant interest rates, some other player will step in and offer the credit at better rates that fairly price the risk.
It's not your finances, and it's not your place to tell someone else how to spend their money.
A better distinction is not small vs. large, but appreciating assets vs. depreciating. Houses tend to increase in value, so it's usually okay to finance (pandemics and market crashes are the exceptions) because you often make a profit when it's time to sell. Phones tend to decrease in value after purchase, so financing it just means you're losing even more money at the end. Phones are also fragile so it's common to break one and still have to make payments.
AT&T’s prepaid plans start at is 25$/month for unlimited calls & text, “Unlimited” data (After 16GB it degrades to 1.5mbps) + 10Gb tethering. Meanwhile their cheapest regular plan is 50$/month for worse service (4GB data).
Sure they don’t offer the best plans prepaid, but that’s basic price discrimination.
Though I'm seriously considering going back to a $50 flip phone and enjoying the 2 weeks of battery life and general indestructibility. My current phone spends most of its time sitting on my desk doing nothing. It's hard to get excited about a newer and much BIGGER phone for $500 that will also spend most of its time sitting on my desk, doing nothing.
And in store there's clearly the price tag right beside the demo model.
So hard to see how its obsfucated like healthcare.
But I know linking to a PDF will put some people off. It's a fairly short response this time as well.
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>handsets that are free or heavily discounted off the manufacturer's suggested retail price.
You do it by increasing contract prices and being able to collect a phone if you don't stay with the often 2-year contract for stuff like this. The final price is also much more expensive than buying outright.
This is a bit silly in am age where phone tech has plateaued and you can often get last year flagships for half the price at launch. Consumers don't need the newest phone at all.
>T-Mobile’s current unlocking policies also help T- Mobile combat handset theft and fraud by sophisticated, international criminal organizations.
All androids and iphones have built in find - my - phone features these days, as well as the ability to wipe remotely. Phones are one of the least useful things to try and steal these days as a result, up there with a credit card. You can still get info and pawn off a wiped phone, but I don't see what T-Mobile does to prevent that further.
>because the proposal would force providers to reduce the line-up of their most compelling handset offers. T
Sprint already was reducing lineups, even before the acquisition. And they don't really subsidize anymore. That's why I started buying my own phones. The T-Mobile store was just the Galaxy/IPhone store, featuring overly expensive otter cases.
>T-Mobile maintains that the Commission lacks authority to adopt the proposed rule
They really pulling off the Chevron defense (assumedly, it's in another document) with no hesitation, huh? I guess we'll see how that goes. I'm not going to pretend I know the full ramifications of how it will affect the FCC.
>however, a provider subject to FCC-imposed asymmetric regulation on handset unlocking seeks to modify its commitments
Sounds like a horrible loophole to extend the policy as long as possible. So, no. They don't even provide much of an argument for when and where and what should be modified.
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Clickbait or not, I'm not really liking the arguments either way.
Sure, let’s just ignore the disastrous adware, bloatware etc that also “subsidize” these cheaper phones, to say nothing of the actual capabilities or user experience of said devices.
All this amounts to is an additional layer of securing a loan. And pre-emptively so. "You cannot unlock this device because others may abuse this."
Assess identity and credit risk better.
I have little sympathy for the carriers, after having to fight Verizon over the claim that I, living in Seattle, and being an AT&T customer for a decade with 4-6 lines and devices, somehow decided to go to El Paso and buy a phone at a Walmart on Verizon, run it up making international calls and let it go to collections.
After supplying their (onerous, tbh) info around identity, police report, current utility billing and such, VZW said "We are still satisfied that the debt is valid and belongs to you, after reviewing your documentation with documentation that was supplied when the account was opened". When I said "well, given that you have verified my identity, and given that you state that the documentation you have from the account says that it was I who opened the account, I'd like to see that documentation". Verizon: "We cannot provide that data to you as it may violate customer privacy". Schrodingers account holder. It's me when they want to collect money, it's not me when they're concerned about sharing "someone's" info or billing records...
I even paid straight up for my current Laptop, some $2700. The only things in my life I threw a down payment on are furniture: my bed, my kitchen chair setup, and my patio furniture.
With a prepaid plan, you credit the operator, because you pay upfront, and the service is rendered after it, and ceases if your balance goes below zero.
With regular plans, the operator credits you, and you can be late with your payment for many days before the operator ceases servicing you.
So it's a month worth if credit, plus a different risk profile.
Also, it's market segmentation: the prepaid plan is the gateway drug %)
These systems rely on intentionally leaving people in the dark to manufacture legitimacy under the guise that well-educated consumers can avoid the hidden fees and restrictions. It's the expected end state when these shady schemes are allowed to exist.
Same as what stops you breaking a contract and not paying any other debt: They'll start the collections process on you.
Never again.
I guess the carriers still make money because once habituated, especially if they've never done the port-number-to-new-carrier thing, people stay in the high priced plan longer than necessary. Like the three years until they've truly paid the above-market price for the phone, and are now eligible for another "free" phone which they may not even take advantage of.
For what it's worth, carrier locking phones has been illegal here for some years (and any phone from the locked era had to be unlocked for free for the asking after the law was changed) and it hasn't changed anything in terms of these rent-to-buy type carrier plans. So I don't know what the fuss is about. A contract is a contract.
Well life isn't fair and it's about time the not-rich benefitted from that sentiment.
And I wonder if part of the US deficit comes from this horrible model of non-bankruptable loans given in the tune of 6 figures per individual that can never reasonably be paid off by most jobs. It's sure not like the public sector (you could at one point also provide 10 years of labor to pardon a loan) didn't fall into the same crap shoot of today's job market. So even that's not guaranteed way to stimulate labor.
I paid my loans off in 3 years. I'm all for a reset to this model and forgiveness to those stuck in it.
This is just like any thing you get a loan for. It goes to collections and your credit gets hurt. Why would normal consumers have restrictions because of bad actors?
AT&T operating income for 2023 was $23.5B and T-Mobile was $8.3B. Carriers are doing just fine.
Or is there some carrier that sells the expensive $1000+ phones on prepaid plans?
It’s the same difference as a home mortgage vs unsecured credit card debt: When the threat exists that the lender can repossess your home if you don’t pay… they don’t have to worry as much about you not paying your mortgage, so they can offer a much lower rate.
Also, I don't think this response is really the same as an appeal. It's just another legal footnote to keep in mind if/when other parts of the court comes in to block this (as they are so likely to do this year. Can't let the working class have good things).
There may be a really good reason for a not well-off family to get a new and advanced phone from the phone company, for a small monthly payment. They can't afford the upfront cost, and will pay more for a depreciating asset. On the other hand, they now may have a phone with a great camera to record their kid's school graduation, or other such event that only occurs once. Or they may finally use a smartphone with 4G / 5G to have good-quality video calls with some faraway friends or kin, which were a pain with their old phone. Etc.
This still beats buying a new phone with a credit card, at 29.95% APR.
If, 3 months in, you find yourself unhappy with your carrier, you can still pay the remainder of your phone cost ($875) to own your phone outright and walk away. In that time, you’ve saved $75 off the full price of the phone.
Arguing that US carrier prices are exorbitant is not relevant to whether carrier locks and phone discount credits are worthwhile or cost effective.
It wasn't cheaper than all alternatives. There were a bunch of virtual operators offering better monthly rates than the big networks but I've personally had bad experiences with network deprioritization on them. Depends very much on your individual circumstance, I'm in NYC and the network is clearly pretty saturated.
Otherwise, folks in this position should just buy the phone outright and unlocked so they don’t have any issues like you’re describing.
The locked phones are usually sub $250 and have some kind of finacial gimmick to get the sticker price lower. Often it will be some carrier specific model name. Just sort by price low to high and you'll find them.
I'm not all sure this is a good thing, but I can see the argument for why it might result in lower interest rates on phones.
None of this is going to matter to people with good credit.
* The phone needs to unlock the instant the agreement/deal ends. Automatically, without the need to phone home to the carrier to get it done.
* If the phone is on a payment plan, that shouldn't have anything to do with this; it should be unlocked from day one, and if the customer decides to switch carriers, they're still on the hook for paying out the rest of the payment plan, just like any other credit arrangement.
* Carriers must be agnostic to the devices on their network. They should not be permitted to refuse to allow you to bring your own phone, as long as that phone has been certified by whatever relevant regulatory body as being compliant with the various mobile radio standards.
I don't really get why there's so much consternation around this. If people want free or reduced-price things, sometimes they have to give something else in return.
If they don't want to, they can buy a full-price, unlocked phone. As long as that option remains, I don't see the problem with carriers offering alternate terms.
But I still don't get why the carriers are upset. They can still pair a free/subsidized phone with a 1- or 2-year service contract, with early termination fees that recoup their loss on the phone. Sure, having the phone locked is an incentive to either stay or pay the termination fees, but do enough people to matter actually manage to avoid paying the termination fees? Seems unlikely.
If the carriers are not allowed to subsidize devices, there will be easily thousands of financial institutions who would provide these services.
The infographic also seems pretty wrong, FWIW, especially considering that many US plans are uncapped and thus price/GB depends on usage. (There are sometimes, but not always, throttles past large amounts of usage eg 50GB/month, but since most of these plans cost less than $50/month, it seems extremely unlikely that most people are paying $6/GB as the website is claiming.) Verizon's "Visible" brand, for example, offers plans for $25/month with "unlimited" (soft cap at 60GB) data, for an effective $0.41/GB assuming you use up to the throttle limit. Even non-unlimited plans can be quite cheap; T-Mobile, for example, offers prepaid data plans for as little as $1/GB.
I had three free phones, service for 3 lines was 120$/mo. Phones were paid for up front and got ~60$ off each that in bill credits for 24 months.
The math came out exactly right
If you were going to buy a plan from AT&T anyways at $60/month, they are willing to give you a $800 phone for “free” if they can lock you into a 2 year contract.
Buying your own phone for $800 and paying $60/month isn’t a better deal but it does give you flexibility to drop the carrier whenever you want.
Consumers can decide.
Banning a consumer option sounds anti-consumer, not pro.
Of course, that implies a system that places the interests of citizens at least on par with the interests of capital (and can conceive of those as distinct concepts in the first place), which is clearly communist crazy-talk.
A similar psychological thing is going on in both cases I feel - some minority will manage to emerge winners due to a mixture of persistence, intelligence, luck, greed, etc. And the majority will get squeezed, or else how would such large percentages of marketing budgets continue to be pumped into club card and subscription schemes.
The rule is about unlocking, not deals.
The carriers say this is bad for consumers.
Both those can be true and the current headline captures that.
ATT, Verizon, and Tmobile are selling many many expensive phones, locked, on 24 momth payment plans, literally hundreds of possible configurations of dozens of models.
Google wrote to the FCC and made a binding commitment to bid at least $4.3 billion if the final rules included certain open access rules. The FCC then included those rules, thus guaranteeing they would get at least $4.3 billion.
Verizon outbid Google and so got that spectrum along with those open access requirements, which included no SIM locking.
In 2018 Verizon, citing fraud concerns, asked the FCC to relax the no locking rule. The FCC agreed, allowing a 60 day lock.
This is generally strictly true, but most people don't move on to the next deal once they've paid off their device, and end up paying more than they would have had they bought the device outright, device+plan cost considered.
I thought the US had made a similar change banning that kind of co-mingling of charges.
How would a financial institution subsidize a phone without losing money on the deal?
A. Pay money upfront and get a discount every month.
B. Pay nothing upfront but the service is full price. (This is what I see on the T-Mobile site.)
My point is that many people prefer B even if the total cost is higher.
It’ll vary per manufacturer exactly where to find the info on the phone, but it’ll be reliable. You can also use an IMEI checker website, although some of those are ridden with ads and upsells.
Miraculously, carriers simply started offering "tabs" or other language where you pay the subsidized phone cost as an addition to your plan bill for the contract period, with a clause that if you cancel early you still have to pay up the difference.
Arguments in favour of locking are nothing but corporate apologia and business crying wolf.
I’m switching over to Lucky when I have the mindspace to do it.
That's the problem with small debts, and why phone locking was a clever solution -- if the phone becomes useless when you stop paying, people will actually pay it off when they wouldn't have before.
What happens is the overall price goes up to offset those losses, even when it's not explicitly labeled as such. That's just basic economics. Empirically.
A carrier just eats the loss on a phone they provide but don't get paid for. The kinds of people who skip paying their cell phone bill generally have bad credit to begin with and couldn't care less if it goes to collections. The recovery rate for collections is pennies on the dollar.
And you know who will suffer if more people are able to basically keep phones for free? Not the carriers. They'll just jack up prices for everyone to offset the additional losses. You think they're just going to eat the cost themselves?
Let’s call it what it is, it’s a carrier financed credit with a lien on the phone. It’s practically a secured credit line and they don’t want to let it go.
The funny thing is none of this would happen if they removed the lien (lock) right after the loan was paid off.
Did you add this time you spent into those totals? I think if you did, your math would come out differently. Personally, if I even feel the need to do any math like this, the answer is already "no, I can't afford this".
With a financial institution that subsidizes your phone what other service will they charge you for to make up for the cost of the subsidy?
If they already have a bad credit score, then the carrier giving them an expensive phone without upfront payment is kinda on the carrier.
I think there's probably a significant net benefit to society from forcing carriers to unlock phones by default. If you're overseas, or need to temporarily use another carrier - you can.
If a carrier is not willing to carry the risk that someone who has bad credit might break the contract for an expensive phone - then I think perhaps that's not such a bad thing.
I don't see why its different than a car really. While some dealerships are adding GPS trackers nowadays, there is nothing stopping you from buying a car on credit and driving it to Mexico and hiding it in a locked garage. It's going to be very difficult to buy another car if you do that though, and that's enough of a deterrence for most people as they have to continue living their lives and eventually buy a new car.
I worked in customer support for Rogers(A Canadian phone carrier) for a very short period before it was mandated to have unlocked phones and people still stopped paying their bill even if the phone was locked. The vast majority of people want to pay their bills on time especially for something as critical as phone service. The people who don't, are going to not pay their bill no matter what sort of rules in place because they either simply don't have the money or they don't care.
Not trying to move goal posts though. You’re right about that one and it’s pretty shitty.
Because carriers are abusing this. Isn't that obvious? People pay for their phone in its entirety and it's still not unlocked. They paid for their phone. They own it. But it's locked.
You make up some great standards to live by but they're nonsensical, unenforceable, and simply unrealistic.
Between Reno and Las Vegas it's pretty stark, huge holes in Verizon's coverage and a few 3G CDMA only towers, while AT&T has strong band 14 coverage, and T-Mobile has slightly better coverage than Verizon but also lets you roam onto AT&T.
Meanwhile in the San Juans the situation is dire on Verizon, with only one tower just on Orcas Island. AT&T has a handful of towerd, two on Orcas and then they force roam everyone onto T-Mobile who has dozens of local towers.
So long as you are on AT&T or T-Mobile with roaming you'll have the best coverage possible, but if your stuck on Verizon it seems your in for a rough ride these days.
It's possible there are some obscure features that may not work properly but for general usage as far as phone calls, texting, data usage, I've never heard of anyone having any issues with their Canadian phone internationally, besides maybe the cost of roaming.If you have a source from recent times that says this, I'd like to see it.
As far as minimal competition goes, there is not an infinite amount of cellphone carriers in the US either that will give you a phone on credit, especially if you have bad credit. I'm sure there are existing ways you can scam phones out of carriers too if you are fine with being banned from the carrier and/or torching your credit.
The only thing I'd get excited about in a new phone is a faster CPU.
Some companies do better in this regard. For example, Samsung provides four major updates, whereas the last mid-range Motorola I owned only gave me one. By the time I receive the fourth update on my current phone, I'll probably be dealing with bigger issues, like the battery not holding a charge—or worse. I wish phones were more serviceable, but that’s just not the case. Still, at mid-range prices, I’m fine with replacing it when it’s on its last legs.
If you're inclined, though, most Android phones allow you to unlock the bootloader and tinker with the software as much as you want.
If this isn't obviously the case, the "normal" plans are subsidizing phone sales. This means that you're almost certain to be better off with a vendor that doesn't offer this or at least offers it in a way that isn't dishonest.
At the end of the day, even if what you say is true making use of this deal makes things worse for everyone because it is part of a larger strategy. Inevitably you will be squeezed for more money than you otherwise would, sometimes it just takes a while.