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Chile Forbids Carriers From Selling Network-Locked Phones

An anonymous reader writes "As from today, network operators in Chile are no longer allowed to sell carrier-locked phones, and must unlock free of charge all devices already sold to costumers through a simple form on their respective websites. The new regulation came into effect in preparations for the rollout of Mobile Number Portability, set to begin on January 16th. This is one among other restrictions that forbid carriers to lock in the customers through 'abusive clauses' in their contracts, one of which was through selling locked devices. Now if a customer wishes to change carriers he/she needs only to have the bills up to date and the process of porting the number should only take 24 hours."

41 of 291 comments (clear)

  1. An outbreak of common sense by Anonymous Coward · · Score: 5, Insightful

    I applaud it.

    1. Re:An outbreak of common sense by Anonymous Coward · · Score: 5, Funny

      RTFA: Chile != China

      ROTFLMAO

    2. Re:An outbreak of common sense by Anonymous Coward · · Score: 5, Insightful

      You might be able to do this in the U.S, but first you would have to unlock all the paid-for federal politicians.

      Based on the chances of that happening, I guess not.

    3. Re:An outbreak of common sense by GameboyRMH · · Score: 5, Informative

      Chile has a lot of forward-thinking legislation on tech issues. Net neutrality is already legally enforced there.

      --
      "When information is power, privacy is freedom" - Jah-Wren Ryel
    4. Re:An outbreak of common sense by sjames · · Score: 5, Insightful

      Yes. I absolutely applaud it, and so should anyone who wants a healthy market.

      As near as I can tell, the claim is that any kind of regulation, including forbidding businesses to mug people in the park to cover shortfalls is claimed to "discourage investment".

      Sometimes the public interest calls for less muggings even at the cost of less investment.

    5. Re:An outbreak of common sense by nomorecwrd · · Score: 4, Informative

      Almost any phone can be unlocked instantaneusly from the carrier's web form.... except iPhones... only Apple can unlock their phones... you have to fill a form (by pen at the carrier office) and wait for 15 days for the iPhone to be unlocked.

    6. Re:An outbreak of common sense by Grishnakh · · Score: 5, Insightful

      You can't do something like this in the US. All the teabaggers and their Republican allies will say it's Communism and that government regulation is wrong. The Democrats will say a few weasel words that appear to support this, but then will either not bother to do anything at all, or will make a lame attempt at passing a law, but when a few Republicans object they'll change the law so that it looks like it's supporting this at first glance, but in reality is actually making things worse and giving giant advantages to the incumbent carriers, while also throwing in a bunch of other unrelated stuff that Republicans want. When people complain, the Dems will say they were "forced" to "compromise".

    7. Re:An outbreak of common sense by Anonymous Coward · · Score: 5, Interesting

      Never happen in the US.
      Every carrier would claim how this would stifle innovation, reduce competition, prevent them from expanding or upgrading their networks, force telcomm and layoffs of about 100K jobs and a loss to the US economy of about 100billion dollars a year. In addition, it would be unfair to minorities and illegal immigrants, those living in the inner city, cause an increase in child molestation incidents, raise prescription drug costs, and make illegal drugs more readily available to teenagers, further reduce the quality of our public schools and force the federal and local governments to raise taxes.

      Don't push for this in the US unless you want all of the above to happen.

      I live near DC. I hear TV and radio commercials related to some upcoming government policy change or decision all the time and they all follow that exact theme.

      Getting off topic but for those outside the DC area.. It is surprising the number of commercials that are played on local radio and TV for the joint strike fighter, Boeing, health care, telecomm, network neutrality, cleaning up the hudson, etc. I guess if you can't lobby the pentagon and government officials directly, catch them in their commute waiting in traffic listening to the radio.

    8. Re:An outbreak of common sense by Em+Adespoton · · Score: 3, Funny

      It's not that big a deal... it only affects the entertainment industry. Re-read that quote:
      "...and must unlock free of charge all devices already sold to costumers through a simple form on their respective websites."

    9. Re:An outbreak of common sense by dadragon · · Score: 3, Interesting

      Is that in the US? In Canada they either come unlocked (straight from Apple), or you can get the carrier to unlock them over the phone in 15 minutes.

      --
      God save our Queen, and Heaven bless The Maple Leaf Forever!
  2. Great by dintech · · Score: 3, Insightful

    This will increase competition between providers as consumers can move to the best deals a little bit more easily. Hopefully other countries will follow suit, but I doubt it.

    1. Re:Great by Soluzar · · Score: 3, Insightful

      Customers will still be locked into a miminum of a 12 month contract if they are getting a handset at a subsidized price.

    2. Re:Great by Anonymous Coward · · Score: 5, Informative

      Europe already has this, and has done since the beginning. You buy your phone and put in a SIM for your chosen network, if you want. You can even use PAYG SIMs that don't expire straight into the latest and greatest devices. Where people come unstuck is believing they're getting a "free" latest version iPhone/Nexus/Whatever when locking into a contract. You want choices? You ain't getting a "free" phone.

    3. Re:Great by daem0n1x · · Score: 5, Informative

      Not in my country, Portugal. Here, locked phones are the norm. Paradoxically, one of the earliest adopters of mobile phones and one of the countries in the world with more mobile phones per person.

      The explosion of mobile phones in Portugal can in part be explained by locking. Being able to sell locked phones, the operators gave the phones almost for free and made money on calls. This made it possible for every cat and dog to buy a locked mobile phone really cheap. If calling between operators is too expensive, no problem. Buy more phones locked to the other operators.

    4. Re:Great by 117 · · Score: 3, Interesting

      Here in the UK, the standard is for all phones to be supplied network-locked (unless you buy a SIM-free handset from a non-mainstream supplier). I believe that retailers are obliged to provide a non-locked handset if you specifically ask for one, but they typically get around that by not having them in stock - they rely on the facts that most people a) don't know they can get an non-locked device if they ask for it, or b) don't want to wait for a non-locked device to come into stock.

    5. Re:Great by taiwanjohn · · Score: 3, Informative

      Where I live (Taiwan) we have "unlocked" phones, so I was surprised when my dad (in the USA) finally got a cell phone, and I discovered that it was possible to have a cell phone without a removable SIM card.

      Me: "Let's try your SIM card in my phone, and see if that fixes the problem..."
      Him: "My what?"
      Me: "Your SIM card... you know, that little chip-thing that they put in your phone when you buy it..."
      Him: "Uuuhhh.... what?"

      I still find it hard to wrap my head around this notion of buying a phone that's tethered to a particular provider.

      [taiwanjohn: posting as AC to preserve mod-points]

      --
      XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
    6. Re:Great by Chaos+Incarnate · · Score: 4, Informative

      That's not really related to having locked phones - that's because he has a CDMA phone. You could have a GSM phone with SIM card and still have it be locked.

      --
      Benford's Corollary to Clarke's Law: "Any technology distinguishable from magic is insufficiently advanced."
    7. Re:Great by mbkennel · · Score: 4, Insightful

      "Then why are privately owned toll roads in such good repair?"

      Generally, it's because they are new and are only in good shape when they have to compete directly against non-toll roads going to the same destination.

      in sum: works well when there is strong competitive substitutability and no technical lock-in.

      "Why does our privately owned worldwide system of trade networks work so well?"

      Because they are in an industry which has strong competitive substitution, there are universal non-proprietary technical standards, and
      foremost, they are beneficiaries of huge government investments in regulated infrastructure like ports, roads, rail and airports. One tanker or container ship is as good as another.

      in sum: strong competitive substitutability and no technical lock-in.

      "Why does the internet work so well?"

      Brutal competition, and the inability to apply proprietary standards, like with shipping carriers. This is a historical artifiact of the initial investment & technology being developed by government.

      in sum: strong competitive substitutability and no technical lock-in.

      "Why does cellphone service work so well?"

      It doesn't, except where there is strong competitive substitutability and no technical lock-in.

      "Why do private urgent package delivery services work so well?"

      Because they aren't providing infrastructure, they are beneficiaries thereof.

      in sum: strong competitive substitutability and no technical lock-in.

      When the infrastructure does not offer competitive substitutability or there is technical lock-in, it is very lucrative and undesirable for private entitites to run it, without intrusive and constant regulation.

  3. Wow by Bert64 · · Score: 5, Interesting

    Legislation which actually benefits consumers instead of large corporations, very good...

    Locked cellphones are abusive and totally unnecessary, you already have existing contract laws to ensure that someone continues paying their bill for the duration of the contract term so there's really no reason to try and lock handsets too.

    --
    http://spamdecoy.net - free throwaway anonymous email - avoid spam!
    1. Re:Wow by Anonymous Coward · · Score: 5, Funny

      Well, I'm glad THIS sort of blatantly anti-job-maker legislation won't ever happen in the good ol' US of A! You won't hear us clamoring for such a violation of corporate* rights and freedom!

      *: Hallowed be their almighty names.

    2. Re:Wow by Kenja · · Score: 3, Insightful

      Unclear as to how forbidding consumers from being able to get a low cost cell phone in exchange for a carrier lock in is bad. Do you really think Chileans are going to pay the 400-600 USD an unlocked/unsubsidized phone costs? Guess what? You can buy an unlocked phone in the US right now. Apple sells them on their web site. The vast majority of people would rather pay less money for a locked phone.

      --

      "Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
    3. Re:Wow by polar+red · · Score: 3, Informative

      The vast majority of people would rather pay less money for a locked phone.

      ... and pay the difference in their phone bill, because they can't count. Locking the phone does not make the phone magically cheaper !

      --
      Yes, I'm left. You have a problem with that?
    4. Re:Wow by frisket · · Score: 5, Informative
      Amazing how the population of the USA has been brainwashed into thinking that the carrier lock is in exchange for a low cost.

      The low cost is in exchange for a term contract. The carrier lock is just US industry's 1950's mentality kicking in. In principle, it's very little different from the proprietary lock-in we see in software.

    5. Re:Wow by petermgreen · · Score: 3, Insightful

      Do you really think Chileans are going to pay the 400-600 USD an unlocked/unsubsidized phone costs?

      Not all phones are that expensive you know and besides customers pay for their phones one way or another, it's just a case of whether they do it explicitly or whether it is hidden in the cost of a cellphone contract.

      I think there are two distinct but intertwined issues here

      1: allowing carriers to offer subsidised phones in exchange for signing up to a 1-3 year contract.
      2: allowing those same carriers to lock the subsidised phone so that even after the contract expires you are still locked in unless you get a new phone

      When theese two factors are both present customers are basically forced into paying for a new phone every 1-3 years whether they actually want one or not since moving carrier would mean getting a new phone and your existing carrier has little motivation to lower prices for a customer who can't move without signing up to another phone contract with hidden phone purchase plan. This is hugely wasteful as huge number of mobile phones are made that people wouldn't buy if they had to pay for them directly.

      If the government allows 1 but not 2 and assuming the phone networks are technically compatible* people can still get a "subsidised" phone but when their contract expires they can take that phone to any provider. This in turn gives the providers and incentive to offer and compete on cheaper "sim only" phone deals for the newly freed up customers. Phones will get used until people actually want/need to buy a replacement rather than being replaced on an arbitary schedule set by the carriers.

      * the US has the additional problem that it's mobile phone networks are a mess of two competing sets of standards (GSM/UMTS verses IS-95/CDMA2000) so unlike most other places even if artificial barriers to taking your phone with you were removed your options for moving would still be limited.

      --
      note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
  4. Luckily Chile isn't in the EU by itsme1234 · · Score: 4, Informative

    .. otherwise the law might have been struck as "unfair": http://en.wikipedia.org/wiki/SIM_lock#Belgium
    Yes, you read this right, forcing your provider not to lock your phone is "unfair" in the EU.

  5. Chile, technology leader of the region. by esquizoide · · Score: 5, Interesting

    Since I was a boy, Chile has always been known for being a leader in telecoms in Southamerica. It seems now that we are also leading in matters of technology rights. We also have Net Neutrality http://www.neutralidad.cl/ by law, ISPs can't block content nor censor it. Traffic shaping is also forbiddin (although it is still in use, since the Net Neutrality law is new). Our Minister of Telecommunications have said that the next goal is more competition and better prices both for Internet en cell phone communications. Also, in topic to this article. We have 3 major cell phone providers, and there are 2 more providers in the way. We also have more cellphones than citizens (20 million cells, in contrast to 17 mill citizens).

  6. Re:Unlock iPhone? by Miamicanes · · Score: 5, Interesting

    > Can someone unlocked a US-based iPhone in Chile?

    You'd be wasting your time, if the intent is to use it in the US.

    A non-Sprint iPhone will never work on Sprint as a customer phone (but can roam on Sprint if your carrier has agreements with them). Sprint just won't allow it, period.

    A non-Verizon iPhone will never do EVDO on Verizon, even if you can get it to limp along with CDMA2000 voice and 1xRTT.

    A non-AT&T iPhone will almost certainly never do HSUPA on AT&T, and would almost certainly cost way more than just buying an AT&T iPhone.

    In theory, an unlocked iPhone could be used with T-Mobile, but (drumroll, please) will never do anything better than EDGE. There's no hard technical reason why an AT&T, Sprint, or Verizon iPhone can't do 1700/2100 HSPA+ on T-Mobile (their MSM6600 chipset is certainly capable of it), but an an end user you'll never, ever get it to work because the radio firmware is separate, with its own heavily-encrypted bootloader, and no iPhone sold anywhere on earth has 1700/2100 HSPA+ enabled in its radio modem firmware.

    It's sad. Apple basically has one hardware design for all of its iPhones, but the three US models are intentionally as non-interoperable with each others' networks as their firmware can make them be.

  7. Re:A good law, except by oddjob1244 · · Score: 4, Informative

    When the phones were sold, the carriers would have used the future earnings from these phones to offset the initial discount. Now they cannot make that money Somewhat unfair isnt it?

    You're still in a contract with the carrier so they get their subsidized money back. This just means when you're done with your contract you can take your phone with you to another carrier.

  8. Re:Unlock iPhone? by Miamicanes · · Score: 4, Informative

    Just to add, even if a US judge were to block carrier SIM-locking, it would be almost meaningless in the US due to the way Sprint, Verizon, T-Mobile, and AT&T run.

    Sprint's network will literally refuse to talk to a phone that attempts to identify itself as a subscriber phone with a MEID that isn't in Sprint's official database of Sprint-branded phones.

    Verizon authenticates EVDO via firmware extensions that don't exist in Sprint phones, so Verizon's network will refuse to negotiate EVDO connections with a theoretically-unlocked Sprint phone.

    T-Mobile's frequency bands aren't supported by default in most GSM phones (most new chipsets can do them, but few phones have support for 1700MHz uplinks enabled, the Samsung Galaxy S i9000 sold internationally is one of the very, very few exceptions).

    Most European phones can roam on AT&T, but AFAIK, HSUPA is a semi-proprietary extension to UMTS that's mostly unique to AT&T and not used in Europe(?), so even European phones capable of doing 3G on AT&T will be limping along at less than the max data rate (not 100% sure about this one, but I've seen it widely reported that only AT&T-branded phones can achieve the maximum HSUPA data rates)

  9. More government interference! by cvtan · · Score: 4, Funny

    If you people would just leave cell phone companies alone, they would naturally all do the right thing by their customers!!!

    --
    Sorry, but gray text on gray background is making my eyes bleed.
  10. Re:Carrier Subsidy by geek · · Score: 3, Insightful

    Exactly. An Unlocked iPhone 4S costs more than an iPad 2. There is no reason for the unlocked phone to cost what it does. The price is artificially inflated to make it look like you are getting a huge amount off in subsidy.

  11. What about subsidized phones by Shivetya · · Score: 3, Interesting

    how does the law handle those?

    Because if carrier lock down is not permitted for subsidized phones then that market will end very quickly. As such it would not be something I would want to come to the US. One of the reasons for the explosion in smart phone popularity other than marketing is that buyers never had to pay for the phone up front.

    How is this handled in Chile? Was there ever a subsidized market? If so, what happens to it?

    Never applaud a regulation quickly as side effects are not always known or improperly dismissed.

    --
    * Winners compare their achievements to their goals, losers compare theirs to that of others.
    1. Re:What about subsidized phones by glodime · · Score: 3, Interesting

      Dell seemed to figure out how to charge people over time for large tech purchases (and make more money in the process). Why wouldn't Verizon be able to do this?

      (Replace Dell and Verizon with any large producer of consumer goods and cell carrier, respectively, to further illustrate my point)

    2. Re:What about subsidized phones by shadowrat · · Score: 4, Interesting

      sometimes fortunes are lost when markets are simply ended by decree. There was a point in US history where President Lincoln said (and i paraphrase), "i don't care how much you invested in your farming equipment. it's not yours anymore and you don't get to recoup anything."

      Obviously locking people into a cellphone contract is not comparable to slavery (despite what some here might claim), but i suspect the economic impact of simply declaring those contracts null is also less significant.

      I'm sure there are other examples of laws being passed to end a previously lucrative but legal way of business that incorporate less hyperbole.

    3. Re:What about subsidized phones by timmy.cl · · Score: 5, Informative

      From now on carriers are allowed to sell both locked and unlocked phones, but they have to clearly state which is the case, and what are the conditions of the lockdown (e.g. monthly discount, preferential prices). Also, the phone lease contract must be independent from the line contract. And the phone lease contract must provide a way to get the phone unlocked. The typical case will be something like "I give you this phone if you pay $X upfront and $Y monthly for Z months. If you have a voice plan with us, we'll discount you $Y for the first Z months".

      I agree that changing previous contracts is somehow abusive against carriers, but IMHO it's the only way to encourage the first big wave of people switching. The market appears to be OK with this so far, and carriers already started aggressive marketing campaigns to steal each others' customers.

      (Yes, I live in Chile. Sorry for suboptimal english ;) )

    4. Re:What about subsidized phones by slinches · · Score: 4, Insightful

      I think they'd likely handle subsidized phones the same way the carriers do now, early termination fees. The reason they put the lock on the phone has nothing to do with the subsidy. It's to prevent switching to a more competitively priced plan once the contract expires.

      --
      Knowledge Brings Fear
    5. Re:What about subsidized phones by Solandri · · Score: 4, Interesting

      Because if carrier lock down is not permitted for subsidized phones then that market will end very quickly. As such it would not be something I would want to come to the US. One of the reasons for the explosion in smart phone popularity other than marketing is that buyers never had to pay for the phone up front.

      This is a big peeve of mine. The carriers are ripping you off here too. The ETF (early termination fee) handles the loss they would take on the subsidized phone if you jumped ship before your contract expired. But once your contract expires, there is no more subsidy. They've recouped the subsidy cost through your monthly payments over 2-3 years. So once you are off-contract, they should drop your monthly fee an appropriate amount.

      T-Mobile is the only carrier which does this. All the other carriers continue charging you the same monthly fee as if you have a subsidized phone. In effect, they are stealing from you by charging you the subsidized monthly fee even though your phone is no longer subsidized. I am generally against regulation, but anti-regulation is just a means to an end. The end is the free market, and hiding charges like this is not conducive to a free market. So regulation which prohibits these hidden charges which can be abused in this manner is a good thing.

      At this point, we need legislation to force carriers to break out phone subsidies into a separate charge. If you don't want to pay full-price for your phone, you can get it at a discount. But rather than characterize it as being subsidized via your monthly fee, it should be structured for what it really is - a loan. The carrier loans you the purchase price of your "$0 down" phone. The monthly loan payments get added onto your monthly service bill. When your loan is paid off, you have only service charges left to pay. If you jump ship before repaying the loan, the full amount of the loan becomes due. No ETFs. The way they currently do it is so obfuscated it's rife with abuse and cheating.

    6. Re:What about subsidized phones by tgeek · · Score: 5, Insightful

      IMHO, subsidized phones ought to go away. Hiding the true price of the phones behind carrier subsidies frees the phone manufacturers from having to price their phones openly and competitively.

      Imagine if there were no subsidized phones. Would we still have iPhones, Samsung Galaxies, HTC whatchamacallits and whatever else? I think so. Would they cost $500 or more? I doubt it - I think market competition would drive the prices down. Plus we might actually have some reasonably priced contract terms for service.

      Instead we have manufacturers who set whatever exorbitant price they like and conspire with the carriers to hide that price into locked-in contracts. PT Barnum, wherever he is, must be smiling!

    7. Re:What about subsidized phones by goose-incarnated · · Score: 4, Interesting

      We have the same law, and have unlocked phones, and have number portability, and yet ... surprise, surprise, the most popular plans and phones are those subsidised phones on contract plans. We also have cheaper plans and mobile internet that you can only dream of (on contract, I get 10G for about 25 USD. Off contract it's 3G for about 18 USD)

      It really is sad when people buy into the propaganda and actively work against their own interests, such as when they oppose regulations that protect them from big corps. A moments thought on your part would have made you realise that most countries have regulations to prevent the cell providers from locking phones to networks, and they have a healthier cell ecosystem than the US.

      --
      I'm a minority race. Save your vitriol for white people.
  12. Wouldn't help in North America by Maow · · Score: 3, Insightful

    Well, by North America, I cannot speak to the situation in Mexico.

    But in Canada & USA, one can take their unlocked phone to another carrier after a contract is over, but there is a price disincentive against doing so.

    If the new carrier offers either 1, 2, or 3 year plans, all with a new phone, or PAYG, then the incentive is to take the "free" new phone, not bring the unlocked one along. PAYG being a rip-off for anything but the most casual usage, of course.

    Until carriers in NA are forced to have plans with different prices for "free" phones vs bring-your-own phones, there will not be much incentive to switch carriers and continue using the previous phone.

    BTW, Wind Mobile in Canada will give you - for free - your network unlock code after 3 months of service. I've unlocked 2 Android phones that way. Now we can travel internationally and just plug in any cheap SIM, or switch to competition and simply get a SIM.

  13. why the fuck you want subsidized phones? by gl4ss · · Score: 4, Insightful

    why the fuck you want subsidized phones?

    really? if you're poor and short on cash - then buy a fucking 40 bucks phone - they do exist, they work as phones really well. or spend 120 bucks and buy something that can run angry birds. if you can afford an expensive smartphone buy it upfront.

    OR do a proper partial payment plan for it. doing long contracts with carriers is stupidity, doing long contracts that you don't even know the terms for is greater stupidity and that's what carrier locked subbed phones are.

    --
    world was created 5 seconds before this post as it is.