Verizon Asks FCC To Let It Lock New Smartphones For 60 Days (theverge.com)

Verizon is asking the FCC to let it keep new smartphones locked to its network for 60 days, as part of an initiative to prevent identify theft and fraud. "After the 60-day period, the phones would unlock automatically, the telecom says in a note published to its website and authored by Ronan Dunne, Verizon's executive vice president," reports The Verge. "Verizon says it should have the authority to do this under the so-called 'C-block rules' put in place following the FCC's 2008 wireless spectrum auction." From the report: "We believe this temporary lock on new phones will protect our customers by limiting the incentive for identity theft. At the same time, a temporary lock will have virtually no impact on our legitimate customers' ability to use their devices," Dunne writes. "Almost none of our customers switch to another carrier within the first 60 days. Even with this limited fraud safety check, Verizon will still have the most consumer-friendly unlocking policy in the industry. All of our main competitors lock their customers' new devices for a period of time and require that they are fully paid off before unlocking."

Verizon is just putting itself in line with the rest of the industry here. AT&T already requires your phone be activated for 60 days for you to unlock it, and the company even requires you to wait two weeks to unlock your old phone if you're upgrading to a new one. T-Mobile requires you wait 40 days, and also limits users to two unlocks per year per line. Sprint has a 50-day limit, and only unlocks devices from the onset if the phones are prepaid.

Comments

Comcast/Xfinity

[NEDHead]

I believe my phones are unlocked from day 1, no contract, can move anytime and continue to pay only the phone costs on the original amortization schedule.

Pointless

[Anne Thwacks]

I do not see the point of locking phones - leaving aside the fact that the guy in the kiosk will unlock them for £5, I have several phones, and even if I took the SIM out of the phone, I would still be under contact and have to pay, regardless of whether I put another company's SIM in or not. Why should I not put their SIM in my tablet and my tablet's SIM in the new phone?

The main effect of locking is to drive me to buy phones cash down instead of on contract. With the likely side effect that I probably buy cheaper phones.

There is no benefit to the carrier from locking (unless I am stupid enough to pay £13 for unlocking instead of £5). There is, however, a considerable loss of "good will" - something that accountants normally value highly!

Re:Pointless

[Aighearach]

You're supposed to think about what they said to see if it implies an obvious answer.

It says, "as part of an initiative to prevent identify theft and fraud."

So when you say, "even if I took the SIM out of the phone, I would still be under contact and have to pay" you're ignoring the basic premise that has already been provided. If you're not who you say you are, you're not under contract, you placed somebody else under apparent contract, and that is both why you wouldn't be motivated by the contract terms, and also why you're even doing it.

The benefit to the carrier is that they don't actually have a valid contract with the victim of identity theft, and in the end they're likely to take some sort of loss. This reduces that, by adding a fixed 2-month delay to being able to transfer and cash out a fraud-phone. Many of these frauds will be discovered within that window, and so will be mitigated.

Can they be trusted to do it? Well, it doesn't sound like you're going to get that far into the issue. lol

Re: Pointless

[Anonymous Coward]

If fraud is detected, block both the SIM as usual, and block the phone based on its IMEI number. No need to lock all phones, just the fraud phones.

Also, phone locks can be unlocked. But a carrier block against the IMEI is final.

Re: Pointless

[Powercntrl]

If fraud is detected, block both the SIM as usual, and block the phone based on its IMEI number.

The global IMEI blacklist would do the job if Verizon was actually trying to prevent fraud. The real issue is the same situation that America Movil bitched about when people were unlocking and reselling TracFones - Verizon wants to offer carrier locked phones as a loss leader.

What is Verizon's real reason?

[QuietLagoon]

With Verizon, public pronouncements usually have a different meaning, one that is not as customer-focused as the public reasons given.

Criminals aren't that afraid

[MikeRT]

Because in most of the areas where it's a problem, the police either don't care or don't have the resources to care so there's a high probability that even if you're recorded stealing the phone the police won't actually hunt you down.

What we need is reformation of our concept theft laws to divide it into three categories:

1. Theft for reasonable survival.
2. Petty theft for pleasure.
3. Grand theft for pleasure.

All forms of "illicit acquisition of property and cash" should be included in #3 making it so that anyone from a burglar to Bernie Madoff can be found guilty.

It should be punished--always--with hard labor.

In fact, we could use this to solve a lot of our "digital equality" issues by forcing the to provide free labor 10-12 hours a day digging ditches Mon through Sat for utilities and ISPs to lay fiber in poor rural and urban areas.

Re:Criminals aren't that afraid

[LostMyAccount]

I'm not sure I like any of those ideas, but it did make me wonder...

Most theft laws increase the penalty/severity depending on the value of what was stolen.

I wonder if there should be a more sophisticated formula that depended on the value of what was stolen relative to the income of the individual it was stolen from, and the difference in income between the thief and their victim.

A poor persons stealing $100 from Bill Gates would get the equivalent of a parking ticket, but the same amount stolen from a $15/hr worker would be a serious felony.

An inverse theft (when a rich person steals from a poor person), would be extremely severe.

Re:Criminals aren't that afraid

[drinkypoo]

What we need is reformation of our concept theft laws to divide it into three categories:
1. Theft for reasonable survival.

The administration costs on UBI would probably be a lot less.

Re:Cricket is AT&T - locked for 6 months

[Z00L00K]

What about just buying the subscription and phone separately - is there a lock imposed then too?

I think I know why

[bob8766]

If a person buys an unlocked phone on day 1, they are a lot more likely to find a new carrier that they want to use and switch right away.

If you make them wait 60 days then people are more likely to forget about it or just not bother with finding and switching to a new network at that point..

Re:I think I know why

[mark-t]

If a person buys an unlocked phone on day 1, they are a lot more likely to find a new carrier that they want to use and switch right away.

So why should that be a customer's problem? How does locking the phone for 60 days protect customers from identity theft or fraud? It's obvious how it might help to protect a revenue stream for the provider, but it's not obvious at all how it supposedly protects the customer.

Someone else has already pointed out that in Canada, although it's a fairly recent law, locking cell phones to a provider is expressly disallowed. It's sad that apparently there is no similar law south of the 49th parallel.

Re:I think I know why

[dryeo]

They're pushing for similar same thing in Canada, the excuse is phones that fall off the back of the truck are too easy to sell. Seems occasionally a pallet falls off, or at least that's the story.

Re:I think I know why

[mark-t]

They won't be able to do that here... there are express laws forbidding it now.

Re:I think I know why

[dryeo]

Well there's a chance of a change of government in the fall and lately, that seems to mean getting rid of whatever laws the other side brought in and any laws that are bad for business, in the opinion of the business.
In Canada, if a party has a majority, they can basically pass whatever laws they want though the courts may strike the worse down.

Re:I think I know why

[mark-t]

The CRTC, not the federal government, is actually responsible for banning cell phone locking in Canada. Which federal party has a majority at any given time is irrelevant.

The current or a future federal government could, hypothetically, try to restrict the CRTC's ability to govern in this area, but that might be an uphill climb for any party, even the most staunch pro-corporate ones.

They could appeal to the CRTC, but they would have to make a case for how the notion actually protects consumers (hint: it doesn't... it only protects the provider from fraud, not the legitimate consumer). At best, they might allow phones to be distributed locked from the manufacturer, but since the provider still has to provide unlocking on request free of charge as soon as the phone is provided to the customer, I'm not sure if having it locked between the manufacturer and provider would make any difference. A would-be criminal can request that their new phone be unlocked just as readily as an honest consumer. Providers that don't unlock phones they provide can be fined.

Re:I think I know why

[dryeo]

Do you not think that when the Minister of Innovation, Science and Economic Development asks the CRTC to do something or not do something, the CRTC doesn't take it into heavy consideration? Or that Navdeep Bains isn't heavily influenced by what Bell lobbies for?
In the case of phone unlocking, you're probably correct, as Bell has succeeded in stopping the reason for pushing for cell locking, namely MVNO cell service in Canada, like in other countries.

Re:Cricket is AT&T - locked for 6 months

[ZorinLynx]

The pre-paid carriers have really weird policies when it comes to SIM cards.

For example, MetroPCS locks the SIM card to the IMEI of the device, so if your phone dies you can't just take your SIM out and put it in another phone; you have to call them to give them the new IMEI and I think they charge a fee too.

It's frustrating; the entire point of SIM cards was to make it easy to keep the subscriber identity (hence the name SIM) from the device, making it easy to upgrade and swap devices. Of course the carriers in their infinite greed added artificial restrictions.

Re:Why is this a thing? The user agreed to this

[ZorinLynx]

Because Verizon made an agreement with the FCC that if they got to use a specific band, devices would never be locked to Verizon.

It's as simple as that; Verizon made a deal with the FCC so they have to make a new deal with them to change it.

I think the FCC should tell Verizon where they can shove their carrier lock, but we all know it's run by big-business-friendly interests now so good luck with that.

Re: Cricket is AT&T - locked for 6 months

[longbot]

Ever since Sprint switched to SIM cards, they managed to fuck that up too. "Oh, this SIM won't work in that device, we need to give you a new one... But wait, we don't have one that will work in that... Oh, yes we do." And then, even switching from a Pixel to a Pixel 2 took a visit to a Sprint store and them doing some voodoo for half an hour. Switching devices is a huge pain in the ass these days.

In other words...

[xlsior]

...You won't be able to travel to Europe with your new phone and plonk in a local SIM to get 30 days of unlimited data for $30 or less, but instead you'll have to sign up for Verizon's international calling plan and get to pay them $10/day for limited data instead.

Good thing they are so invested in looking out for their customer's best interests, eh?

why?

[fred6666]

It doesn't protect from identity thief at all.
Just ban cell phone locking like Canada has done. It has no reason to exist.

Re:why?

[swillden]

It doesn't protect from identity thief at all.

Identity theft is a rather weird thing to complain about.

My guess is that what this is really about is preventing supply chain phone theft. What happens is that phones are stolen while in transit to customers, or out of stores (often by employees), etc., and then shipped to other parts of the world and activated there. There's actually an international clearinghouse for stolen IMEIs, so that theoretically other networks can refuse to allow stolen devices onto their networks. But the destination networks, especially in Africa and Southeast Asia, have little reason to cooperate. Allowing phones to be locked to Verizon's network for 60 days would help with this, because it would ensure that phones stolen before they get activated on a customer account can't be used anywhere (as long as the implementation of the network lock is secure enough).

If my guess is correct, then I kind of understand what they're trying to do... but I think they should just figure out how to secure their supply chain. The inability to network lock was part of the deal when they bought their spectrum so they should deal with it (if you recall; Google was considering becoming a carrier and negotiated a deal with the FCC to buy it, and included a provision in that deal that the spectrum had to be kept open in a couple of ways -- no limitation on tethering and no network locking. Verizon eventually outbid Google and got the 4G spectrum, but the openness requirements attached by Google stayed.)

Re:why?

[Solandri]

The only explanation I can think of (since TFA doesn't explain it) is that they're trying to stem the theft of phones bought on contract with a stolen identity. The carrier lock is typically only used on phones which you buy via an installment plan. If you pay for the entire phone up-front, you're entitled to having it unlocked right there at the store when you buy it. But on an installment plan, you usually only pay x% down, with a promise to pay $y each month for the next z months. If the phone is unlocked, a legit customer could in theory pay the x%, then fail to make any of the monthly payments. Switch the phone over to a different carrier, and they've got a shiny new phone for only the x% down they paid. The thing which discourages legit customers from doing this is the hit to their credit report for failing to make the monthly payments.

But if the phone is bought using a stolen identity, then the buyer doesn't care about the hit to the credit report - it's not their credit report. So they'll sign up for the phone and plan using the stolen identity, pay the x% down, and skip out on the payments. They can then sell the phone for close to full price and make nearly (100-x)% profit.

The carrier locking phones bought on installment plans would help prevent this. The thief has to wait the 60 days before he can unlock the phone and sell it, during which time he's in possession of a "hot" item and could be nabbed if the person whose identity he stole catches the unauthorized credit activity and notifies everyone (Verizon and the police).

But the real beneficiary here is Verizon - they're no longer losing $800 phones for a $200 down payment. The person whose identity was stolen ultimately isn't responsible for paying Verizon for the remainder of the contract payments. And they probably had a lot of other fake accounts opened up in their name. It'll cost them about the same to clean up the mess regardless of whether or not there's also a fake Verizon account in the mix. So it's rather disingenuous for Verizon to try to spin this as helping prevent identity theft, when the primary beneficiary is themselves.

Re: why?

[nbvb]

That is EXACTLY what this is about. This is about supply chain theft, and theft of phones activated with a fake bank account/credit card/etc.

If someone orders a phone on an installment payment plan, with an attached line of service - it ships right out. Now let's say that was done using a stolen credit card. It might take a few weeks before it's discovered, and the charges reversed. Now Verizon is out a cell phone, some poor schlub has his identity stolen, and some guy overseas has a brand new iPhone that Verizon paid for.

So I totally get it - funny that the 60 days they are asking is also the limit of a bank's liability on fraud, isn't it?

That's what this is about - preventing either supply chain theft (which is very much real) and account identity fraud. It's actually sensible with no real customer impact.

Re:why?

[jabuzz]

The easy way to get third party countries to block stolen IMEI's would be for the USA/EU and a few others to get together and simply announce they will stop accepting inbound calls from such networks from say six months from now. Watch them scramble to start the blocking.

Re:why?

[fred6666]

You really think 60 days is going to stop thief? It's not going to make any difference.

Re:why?

[fred6666]

again, if you are going through all the trouble of stealing someone's identity, is a 60 days lock going to discourage you from stealing a phone? And this is supposing the lock is not crackable like the current SIM locks.

Re:why?

[swillden]

You really think 60 days is going to stop thief? It's not going to make any difference.

It changes what the thief has to do pretty dramatically. The thief can't just take a pallet of phones off a truck and ship them to Africa, he has to get the phones activated on real user accounts for two months first. That basically means he has to steal them from individual users -- and there are additional obstacles created by user passwords, factory reset protections, etc. All very difficult and risky.

I don't think it's the right solution... but it would basically eliminate supply chain phone theft.

Re:why?

[swillden]

The easy way to get third party countries to block stolen IMEI's would be for the USA/EU and a few others to get together and simply announce they will stop accepting inbound calls from such networks from say six months from now. Watch them scramble to start the blocking.

I think that would violate several international agreements / treaties. Plus it's like killing butterflies with a sledgehammer.

Re:why?

[swillden]

First, just to reiterate... I'm not supporting Verizon in this, in fact I said the opposite. I'm just speculating as to their rationale.

Is supply chain phone theft anymore a problem than say, laptop or TV theft?

Well, it's more of a problem for Verizon, since Verizon doesn't sell laptops or TVs. But, no, not really.

And you can be 100% sure that this locking mechanism will be cracked, just like regular SIM-locking.

This is exactly SIM locking. And it's not so easy to crack in most cases.

Also why 60 days? Why not 60 seconds? What if I want to travel during that 60 days and use a foreign SIM?

I have no idea why they say 60 days.

Re:why?

[fred6666]

Unlock codes can be purchased for $5-10 online, probably less in bulk. I fail to see how this we prevent a thief from stealing $1000 phones.

Re:why?

[swillden]

Unlock codes can be purchased for $5-10 online, probably less in bulk.

No, this is not true in most cases. And "bulk" doesn't even make sense, since unlock codes are generally device-specific.

Re:why?

[fred6666]

What I mean is that those selling these unlock codes to me for $5-10 (I even paid $3 once) would probably be willing to give a substantial discount if I were purchasing 1000 of them at the same time.

The Samsung Galaxy S could be unlocked by software (no need to purchase a code). My understanding is that the fee goes 100% towards labor/profit, there is no "cost" in getting an unlock code.

Re:Why is this a thing? The user agreed to this

[ThomasD3]

If left to their own devices, all companies would come up with abusive clauses. The gov is here to prevent them from doing so; while it may do a poor job at times, the only reason you're not working 16 hours a day in a factory is because government made rules to decide what companies can and can't do, for people's good.

Re:Cricket is AT&T - locked for 6 months

[ArhcAngel]

With the sudden burst of MVNO carriers the pre-paid carriers suddenly found their budget phones being bought and used on these MVNO. So they started locking things down. Most of the pre-paid carriers are subsidiaries of the big four carriers so they kind of shot themselves in the foot by sub-licensing their network to so many smaller companies.

Re:Why is this a thing? The user agreed to this

[Powercntrl]

Verizon made a deal with the FCC so they have to make a new deal with them to change it.

Screw that. If Verizon no longer likes the terms they agreed to, the spectrum should go back up for auction. If the FCC wasn't so damn corrupt under the current administration, they'd tell Verizon to get bent.

Re: Cricket is AT&T - locked for 6 months

[OneOfMany07]

Thanks for that thought.

Yeah, I mean why offer valid, sustainable prices when you can change other rules to make that price invalid? Have your cake and sell it too.

Re:Cricket is AT&T - locked for 6 months

[crypticedge]

Carriers started doing that ages ago when sim theft was rampant. Sim theft cut down as it became harder to steal sims due to where and how they're installed now, but some like MetroPCS still hold on to some of the sim theft related policies. It's time for them to move forward too

Honestly, .... I am okay with this..

[PortHaven]

I am fine with a 90-day network lock of cell phones. Mainly to prevent scamming, basically buying a bunch of phones under plan discounts just prior to leaving the country and saying sayonara.

Re:Why is this a thing? The user agreed to this

[sconeu]

Yeah, right. Pai will never argue with VZW. He needs his stock options to get even higher.