Verizon no longer needs to unlock phones after 60 days, thanks to FCC

The FCC lifted a restriction that required Verizon to automatically unlock devices after 60 days, allowing the company to keep devices locked within the network for the entirety of the user’s payment plan.

Unlocking a device addresses a couple of things. On the user’s side, it allows one to switch to a different network as they please, within the device’s own hardware-imposed restrictions. In the grand scheme of things, certain device rights advocates, such as iFixit, Public Knowledge, and the Benton Foundation, claim that “Automatic unlocking reduces switching costs, enhances competition, and promotes a more efficient and sustainable device marketplace.”

Today, the FCC lifted Verizon’s previously self-imposed restriction, which required the company to automatically unlock devices after 60 days (via ArsTechnica). This applies to any device, whether fully paid for or under a payment plan. That same report notes that restriction arose when Verizon acquired licenses to utilize the then-new 700MHz spectrum in 2008, and again in 2021 when it acquired TracPhone.

The FCC’s action allows Verizon to follow the CTIA code, which is far more lenient. That code specifies that a company only needs to unlock a device “upon request,” and seemingly following one year after activation on devices that have been paid for. For financed devices, it appears that the consumer’s unlock request only needs to be fulfilled after the contract is satisfied or an early termination fee has been paid.

One request to have that period limited to 180 days was rejected by the FCC, which noted that competitive options will not be “impede[d]” by the CTIA standard.

According to the FCC and Verizon, the waiver was lifted to deter fraud and “other illegal acts.” The FCC’s reasoning states that Verizon’s devices were targeted by criminals since unlocking those devices was easier than for any other carrier.

Sophisticated criminal networks have exploited the FCC’s handset unlocking policies to carry out criminal acts—including transnational handset trafficking schemes and facilitating broader criminal enterprises like drug running and human smuggling. By waiving a regulation that incentivized bad actors to target one particular carrier’s handsets for theft, we now have a uniform industry standard that can help stem the flow of handsets into the black market.

The previously mentioned device rights advocates make the argument that Verizon’s 60-day rule provides plenty of time to flag suspicious activity.

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.

In response, the FCC notes that it found 60 days to be an insufficient period to detect and prevent malicious actors.

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.

For devices activated prior to today on Verizon’s network, the 60-day automatic unlocking rule remains in effect. Devices from today on will be subject to the CTIA rule, limiting the consumers’ options between carriers.

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