Handset crime is one of the most intractable challenges faced by comms providers. A new high-end smartphone is both extremely valuable and extremely portable, making these gadgets an unusually attractive target for criminals who will steal them any way they can, then resell them, possibly after transporting them to another country. But as much as comms regulators say they want to tackle crime, there are other things they also need to do in order to please both the public and politicians. So a section of the US telecoms industry may be upset by the news that the Federal Communications Commission (FCC), the US comms regulator, would like to force all telcos to unlock every handset within 60 days of them being activated by customers. Per a press release issued on behalf of FCC Chairwoman Jessica Rosenworcel:
New unlocking rules would allow consumers the freedom to take their existing phones and switch from one mobile wireless service provider to another more easily, as long as the consumer’s phone is compatible with the new provider’s wireless network.
At its July 18 Open Meeting, the Commission will vote on a proposed Notice of Proposed Rulemaking on expanding unlocking requirements to establish a clear and uniform set of requirements for all mobile service providers.
Real competition benefits from transparency and consistency,” said Chairwoman Rosenworcel. “That is why we are proposing clear, nationwide mobile phone unlocking rules. When you buy a phone, you should have the freedom to decide when to change service to the carrier you want and not have the device you own stuck by practices that prevent you from making that choice.”
Mobile phone unlocking can increase consumer choice and competition in the wireless service provider marketplace. Updated unlocking rules would give consumers more flexibility when switching service providers, increase competition by reducing consumer’s switching costs, and reduce customer confusion by applying the same unlocking rules to all mobile service providers.
Many countries have been far less willing to allow telcos to lock handsets to networks. For example, the UK regulator dismissed arguments that locking handsets was an effective way of reducing crime all the way back in 2019. Earlier that year Verizon had pushed for a change in the opposite direction within the USA. Verizon had been prevented from locking 4G phones because of rules tied to the radio spectrum they had obtained. They consequently asked for permission to lock 4G phones for the first 60 days after sale in order to reduce handset fraud.
In 2022, a T‑Mobile store owner in California was found guilty of making USD25mn by stealing system credentials so he could unlock and unblock several hundred thousand mobile phones. It can be argued that he would not have made as much money if networks had already unlocked devices belonging to legitimate users. On the other hand, the unblocking of phones suggests many of his clients were using his services so they could resell stolen property.
Sometimes it can be difficult to tell when criminals change their priorities, or if the media is just latching on to a fashion for reporting certain kinds of crimes. The most recent buzz has been about phones being stolen by criminals after they ‘shoulder surf’ the PIN that disables the screen lock. This means crooks can use the phone to raid the victim’s bank accounts before access to those accounts is frozen. So simply stealing a $1,000 gadget in order to resell it may no longer be as attractive a proposition as it once was, thanks to anti-crime measures like handset blacklists. But it will still be interesting to see if any US telcos claim there is a risk of increased crime when they respond to the FCC’s proposals.
