“It can flag suspicious purchases, deny unlocking to devices that show signs of trafficking, and pursue legal or contractual remedies against fraudulent actors,” the groups said. “The Commission has previously found that 60 days is a reasonable and sufficient period to allow providers to identify and act upon fraudulent behavior. Verizon has not shown that these prior determinations were in error or that its current loss mitigation measures are being overwhelmed solely because of the unlocking rule.”
The FCC rejected these arguments, saying it found that the 60-day period has been insufficient to deter fraud. “Verizon explains that the globalization of 4G LTE and 5G technologies in recent years has created a ready overseas market for fraudulently obtained handsets, and stolen handsets are frequently sold or distributed to a secondary black market in countries that do not participate in GSMA blocking,” the FCC said.
The agency said the waiver will address concerns of law enforcement associations that supported Verizon’s petition. “Law enforcement commenters have convincingly linked our handset unlocking policies and public safety matters on the basis that the current 60-day policy has impacted law enforcement lives and requires that law enforcement entities dedicate significant resources to investigating stolen handsets rather than focus on other public safety matters,” the FCC said.
Verizon issued a statement thanking the FCC for the waiver. “The FCC’s action will end bad actors’ ability to exploit the FCC’s unlocking rules to profit from easier access to expensive, heavily subsidized devices in the US that they traffic and sell to other parts of the world,” Verizon said. “Before today’s decision, the FCC’s rules have benefitted these international criminal gangs at the expense of legitimate American consumers.”
Cable lobby group NCTA was not pleased by the FCC decision. Cable companies have increasingly been competing against large mobile carriers by offering wireless service in recent years.
“Mobile phone unlocking delivers clear pro-consumer benefits, saving billions of dollars across the mobile marketplace by expanding choice, competition, and affordability,” the NCTA said. “Today’s decision delays these benefits, underscoring the need for a clear, uniform framework so all wireless providers operate under the same rules.” The NCTA has urged the FCC to implement a 180-day unlocking requirement.
