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T-Mobile and AT&T warn that FCC's proposed unlocking rule could increase phone prices

T-Mobile has expressed strong reservations about the FCC's proposed rule that would require carriers to unlock users' phones within 60 days of activation. In a filing with the agency last week, the carrier argued that locking phones to its network enables it to offer cheaper handsets to consumers, and that an unlocking mandate could significantly increase phone prices.

According to T-Mobile's Michele Thomas, the proposed rule could force carriers to abandon their device payment plans, thereby impacting customers. The carrier also questioned the FCC's authority to implement its plan, arguing that the changes would have "profound economic consequences" for service providers and their customers, necessitating "clear statutory authority from Congress."

The letter claims that if the rule is enacted, device subsidies for prepaid customers could decrease by as much as 40 to 70 percent, leading to substantial price hikes for entry-level smartphones like the Moto G and Samsung Galaxy A15. Additionally, it could result in the elimination of free handset schemes by carriers altogether.

T-Mobile's letter follows a statement from AT&T, which also opposed the FCC's plan. AT&T claimed that the proposal would negatively affect its ability to offer affordably priced phones and tablets to consumers. Following a meeting with FCC officials earlier this month, AT&T argued that the proposed rule would harm consumers by "creating upward pressure on handset prices and disincentives to finance handsets on flexible terms."

The carrier warned the FCC that a shorter unlocking period could lead to an increase in fraud and trafficking, arguing that locking handsets is not an anti-consumer practice. Instead, it enables providers to make devices more affordable for consumers, who "overwhelmingly elect to purchase their phones in this way," according to the company.

The only major carrier supporting the unlocking mandate is Verizon, which already unlocks phones after 60 days of activation as part of a legal requirement from its 2007 spectrum purchase agreement.

AT&T and T-Mobile's objections are among the many responses received by the FCC after it invited public comments following the approval of a Notice of Proposed Rulemaking (NPRM) by a unanimous 5-0 vote in June. The proposed new rule would require all mobile wireless service providers to "unlock handsets 60 days after a consumer's handset is activated," unless the device was obtained by the user through theft, fraud, or other illegal means.

T-Mobile allows the unlocking of paid-off phones after 365 days for prepaid users and 40 days for postpaid customers, while AT&T enables unlocking for mobile devices after six months for prepaid users and 60 days for postpaid customers.

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