Few consumers are aware that it is technically illegal to
unlock an Apple (NASDAQ:
) iPhone, a Samsung Galaxy S III or any other cellular device.
The problem started last year when the Copyright Office of the
Library of Congress failed to provide a key exemption to cellular
devices (which it had done for the past several years), creating
a ban on the unlocking process. According to
The New York Times
, this could soon change now that the Obama administration and
the Federal Communications Commission are urging Congress to
change the law.
Ironically, the Library of Congress -- which revoked
consumers' freedom to unlock their smartphones last year -- now
supports the view of the White House and the FCC. If the Library
of Congress had simply renewed the exemption last year, the
problem would have already been solved (for a few more years, at
If Congress votes to permanently allow consumers to unlock
their smartphones, The New York Times speculates that it could
lead to more competitive prices. Consumers would be free to leave
their carriers -- and take their phones with them -- as soon as
their current contract comes to an end.
This sounds like a win-win for consumers, but Sprint (NYSE:
), Verizon (NYSE:
) and AT&T (NYSE:
) should not be underestimated. They know how to navigate
legislation and competition to maximize profits.
While Sprint is the only carrier that offers a truly unlimited
(and un-throttled) data plan, the company tacks on a $10 monthly
fee to everyone who signs up. Thus, the $79.99 advertised price
quickly turns into $89.99.
AT&T, which offers the
data plan available for the iPhone ($230 for 20GB of data),
attempted to block subscribers from using FaceTime over cellular
switched to a shared data plan
. The carrier
and reversed its stance after three consumer rights groups filed
a complaint with the FCC.
Verizon has its own way of nickel-and-diming consumers. For
example, those who choose the cheapest iPhone plan ($80 a month)
will receive a mere 300MB of data. When subscribers go over the
limit, they will be charged an additional $15 for every 300MB
they use. If they switch to the $90 plan, however, the $15 fee
will buy another 1GB of data. This is the company's way of
encouraging consumers to avoid the cheapest data plan.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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