Verizon Makes Public-Safety Argument for Handset-Unlocking Waiver

FCC commissioners unanimously approved an NPRM on a broad, industry-wide handset-unlocking requirement a year ago (see 2407180037). In June 2024, Verizon urged the FCC to consider a broader mandate (see 2406250049).

The National Sheriffs’ Association said the FCC should eliminate unlocking mandates as part of the Trump administration’s campaign against regulation. “The results of the handset unlocking rule are not surprising: crime rings and fraudsters are eager to take advantage of the accelerated unlocking regime mandated by the rule, and law enforcement is seeing massive device fraud and international trafficking.”

Verizon also got support in a filing Wednesday from the Republican attorneys general of Kansas, Montana, Georgia, West Virginia, Idaho, Arkansas and Utah. The AGs questioned whether the FCC could impose an unlocking mandate. The rule is "particularly problematic because a mobile wireless provider typically needs more than 60 days to accurately determine whether a handset is subject to fraud or trafficking,” they said. “Device locking is essential to fight international crime rings that obtain subsidized devices in the U.S. and sell them abroad.”

Public interest groups, led by Public Knowledge, opposed the waiver. “Fraud is not unique to carriers that unlock after 60 days,” the filing said. “Carriers with much longer locking periods, such as AT&T and T-Mobile, also report high rates of device fraud and trafficking. This suggests that the issue is endemic to the business model, not the unlocking period.”

The groups -- which included the Benton Foundation, Consumer Reports, the Electronic Frontier Foundation, the Open Technology Institute at New America, the Software Freedom Conservancy and others -- also questioned Verizon’s more general arguments for regulatory parity. Rather than proposing a rule for all providers, “Verizon seeks an exemption from rules that apply to it specifically because of its market position, its choice to bid for spectrum that carried with it public interest obligations, and its license and merger history.” The public interest isn’t served “by granting individualized waivers that further entrench the power of incumbent providers.”

Public safety implications seem to be Verizon’s major argument, Public Knowledge Legal Director John Bergmayer said. Some of the arguments on unlocking rules and handset thefts “are a bit light on nuance,” he said. In particular, different forms of handset locking “are often talked about as if they are one thing.”

NCTA called for a “uniform, automatic handset unlocking requirement” for all carriers. “Addressing the Verizon Petition in a separate proceeding would exacerbate the current confusion by adding another decision that would not be applicable to all mobile providers across the board.” EchoStar said “the proper remedy for an uneven playing field is to level it for all participants.”

The Rural Wireless Association opposed the waiver as well. “Verizon argues that unlocking obligations are anticompetitive based upon the fact that Verizon and only a few other providers are subject to these obligations, creating a patchwork regulatory framework in the wireless marketplace,” the group said. Verizon’s concerns “can be easily addressed through consistent, industry-wide rules rather than through the piecemeal waivers that will result if the Commission grants this Petition.”

Joe Kane, the Information Technology and Innovation Foundation's director of broadband and spectrum policy, said he wouldn’t be surprised if the FCC grants the waiver. The mandates are “a bad policy idea for consumers, and even worse to come through a merger condition because they then embody mission creep by the commission and create an unlevel competitive environment,” he said in an email.