Sunday, July 13, 2008

The battle over unlocking cell phones - carrier vs. carrier

Apparently this is a big phenomenon. I wasn't aware of this going on until I caught this story on Quamnet.com, and it held my attention. Unlocking mobile phones from one carrier to be used on any network is technically not illegal - or not illegal in any documents that I've been able to find - but TracFone is winning law suits against people who buy hundreds or maybe even thousands of its phones, unlock them, then send them overseas to be used elsewhere.

The problem TracFone has is that it sells the phones cheap... below cost often times, only to turn a profit when people buy minutes at rediculously expensive premiums. This is how cell phone companies get you - we all know that already, so when someone unlocks a TracFone phone and doesn't buy minutes from them it's "taking money out of TracFone's pocket" their attorneys argue.

What I found interesting is that there could be a huge clash coming in the courts - as MetroPCS (another cell phone company similar to TracFone) is offering to unlock competitor's phones as long as they're the same technology (CDMA) and give them a month's worth of calling for $30. From a July 8th article in RedOrbit.com:
Under the offer's terms, MetroPCS will tinker with phones originally sold by Verizon Wireless, Sprint Nextel (S), Alltel, or any other carrier whose network is based on CDMA [code division multiple access], the technology MetroPCS uses. MetroPCS will unlock the phone and provide a month's worth of calling -- all for $30.
Whoa. So here's TracFone suing companies that unlock their phones and send them overseas to be used, when MetroPCS is doing it as part of a legal commercial promotion! I can't wait for these two forces to collide. I can see it now, TracFone filing suit against San Antonio-based Houdinisoft and MetroPCS. MetroPCS filing suit back... this could make it all the way up to the Supreme Court!

This should be fun. I feel like in the end, the customer should be the winner, but we'll still end up getting screwed (early termination fees, anyone?). Either way, I want ring-side seats for this one and a big tub of popcorn so I can watch the fur fly.

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