Blumenthal, Colleagues Urge FCC To Take Further Steps To Allow Bulk Unlocking Of Cell Phones By Resellers

(Washington, DC) – In a letter to Federal Communications Commission (FCC) Chairman Tom Wheeler, U.S. Senator Richard Blumenthal (D-Conn.) – joined by U.S. Senators Amy Klobuchar (D-Minn.), Cory Booker (D-N.J.), Mark Warner (D-Va.), and Ed Markey (D-Mass.) – urged the agency to work with wireless carriers to allow bulk unlocking of cell phones by third-party resellers. In the past, third-party resellers have been able to buy old locked phones at rates comparable to that of unlocked phones, and handle the unlocking process – which can be a tedious and multi-day affair for an individual consumer – on behalf of their customers. Recently, however, at least one wireless carrier has stopped accepting bulk unlocking requests by legitimate third-party resellers, possibly reducing the resale value of a used cellular device by as much as $100.

“We are concerned that this decision threatens a formerly vibrant used mobile device market in which consumers received competitive offers for their eligible devices regardless of whether the device was locked,” the senators wrote. “We strongly believe consumers should be able to realize the value in the mobile devices they already own in the same way consumers enjoy most personal and real property.”

Full text of the letter is attached and below.

April 29, 2014

The Honorable Tom Wheeler
Chairman
Federal Communications Commission
445 12th St. SW
Washington, DC 20554

Dear Chairman Wheeler:

We write to request an update on efforts to protect consumer choice in the secondary market for used mobile devices. We appreciate the work the Commission did to conclude the voluntary agreement with the carriers to make the unlocking process easier for individual consumers. Nevertheless, we remain concerned in some cases the bulk unlocking process is needlessly complicated and cumbersome for consumers using third-party resellers to unlock their wireless phones.

As you know, many consumers seeking to upgrade mobile phones will sell their used devices to have funds necessary to purchase a new device or otherwise responsibly reduce clutter. Unfortunately, it is much more difficult for owners of phones which are locked to a carrier to find a second life for their phones. In the past, bulk resellers have been able to buy old locked phones at rates comparable to that of unlocked phones, and handle the unlocking process—which can be a tedious and multi-day affair for an individual consumer—on behalf of their customers. These resellers depend on established relationships with carriers to unlock phones quickly and efficiently, so long as appropriate identifying information is presented and contractual obligations have been met.

However, as reported by the Wall Street Journal, at least one carrier has stopped accepting bulk unlocking requests by resellers, reducing the resale value of a used device by as much as $100. This action can suppress competition in the resale market, making it more difficult for consumers who would like to put old devices to good use and reducing the supply for buyers who might not be able to afford a phone at full price. We are concerned that this decision threatens a formerly vibrant used mobile device market in which consumers received competitive offers for their eligible devices regardless of whether the device was locked.

We strongly believe consumers should be able to realize the value in the mobile devices they already own in the same way consumers enjoy most personal and real property. We are pleased with CTIA’s voluntary mobile wireless device unlocking commitment, announced December 12, 2013, and recognize the commitment as an important step in enabling consumers to freely use the mobile devices they rightfully own. However, the commitment does not address legitimate resellers, and we encourage the Commission to work with the carriers to address our concerns.

We also want to emphasize that we support efforts by carriers and law enforcement agencies to stop the proliferation of devices obtained by theft or fraud. Many of us are at the forefront of the effort in the Senate to eliminate mobile device theft and associated violent crime. We agree that new devices should not be bought and sold under fraudulent circumstances so as to immediately capture the carrier’s subsidy for a mobile device. However, there exist legitimate resellers who have strict checks in place and vet customers using the same comprehensive lost or stolen device database used by wireless carriers. Accordingly, we should work to promote consumers’ ability to engage in business with legitimate resellers.

We appreciate your attention to important issue on behalf of consumers and look forward to hearing what steps are being taken in this important area.

Sincerely,

RICHARD A. BLUMENTHAL 
United States Senate

AMY KLOBUCHAR 
United States Senate

CORY A. BOOKER 
United States Senate

MARK R. WARNER
United States Senate

EDWARD J. MARKEY 
United States Senate