Deal comes just ahead of a threatened FCC rulemaking.

This week the FCC had planned to consider a rule that would require cell companies to allow “unlocking” of their phones for transfer to a competing carrier. Unlocking phones used to be legal, until a 2012 ruling by the Librarian of Congress – at the cell companies’ request – made it a criminal offense. The public backlash reached the White House, on whose behalf, reportedly,  the National Telecommunications and Information Administration petitioned the FCC to take the issue away from the Librarian and make unlocking legal again.

On the very day the FCC was to address the matter, the cell companies’ trade association, CTIA-The Wireless Association, sent a letter to the FCC essentially capitulating. Five major carriers – AT&T, Sprint, T-Mobile, U.S. Cellular, and Verizon Wireless – have now agreed to unlock a phone on request after fulfillment of the (usually) two-year contract required when buying a subsidized phone through the carrier, or within one year of buying a prepaid phone. Matter closed.

Or maybe not.

While a definite improvement, CTIA’s action solves only part of the problem. If I buy a subsidized phone from Carrier A, I certainly owe them two years of payments on the phone. But I should be able to keep up just the phone payments, and stop paying Carrier A for service as well, if I want to take the phone to Carrier B for service. CTIA’s position does not allow this. T-Mobile is the only major company so far that properly separates the phone and service payments. We hope the others follow its lead.

Two additional caveats:  First, CTIA’s newly announced policy is not yet in effect. According to CTIA, the policy must first be formally adopted into the “CTIA Consumer Code for Wireless Service”. The letter does not indicate how long such adoption might take, but once it’s happened, part of the policy will be implemented within three months and the rest within 12 months. The letter does not indicate which parts are on the three-month fast track and which aren’t.

Second, CTIA’s letter points out the technical limitations on “unlocking”:

“[U]locking” a device will not necessarily make a device interoperable with other networks – a device designed for one network is not made technologically compatible with another network merely by “unlocking” it.  Additionally, unlocking a device may enable some functionality of the device but not all (e.g., an unlocked device may support voice services but not data services when activated on a different network).”

Most modern smartphones will not be subject to these limitations, as the same hardware will support nearly every carrier almost anywhere in the world. But the possibility remains that an unlocked phone may not work properly on some other carrier’s network. The only way to know is by checking with the destination carrier.

(To those curious about the initials “CTIA,” we defer to this footnote by Justice Scalia of the U.S. Supreme Court in City of Arlington, Texas, v. FCC: “CTIA is presumably an (unpronounce­able) acronym, but even the organization’s website does not say what it stands for. That secret, known only to wireless-service-provider insid­ers, we will not disclose here.”)