AT&T's policy on unlocking phones

AT&T's usual policy for unlocking a phone is to have been a customer in good standing for 90 days. Now this is for phones that were subsidized by AT&T! Phones that were bought with huge discounts, sometimes even free!

I called AT&T on the 91st day and asked for my iPhone that I paid for in full to be unlocked. Not because I want to cancel my contract with them or switch to T-Mobile in the US. I'm actually very happy with their service. But I wanted my phone unlocked for international travel. Roaming is nice to have for emergencies or just a couple must-do calls. But it is prohibitively expensive for a longer stay abroad and there are some countries where AT&T doesn't offer roaming at all.

I was told that they would gladly give me an unlock code, but they don't have one for the iPhone. They told me that it is Apple that prevents them from unlocking phones. They suggested I use another unlocked phone to avoid their roaming charges!

It is very interesting that it is Apple who made this policy. I can imagine that AT&T didn't mind, after all they seem to have to lose the most from an unlock. And this idea, that it is AT&T who demanded this, is being repeated in all these articles about the "illegal" unlock. But it is clear that AT&T does indeed give out this code for all the other phones they sell.

So why is Apple so hellbent on preventing even their network partner from unlocking phones for their customers?

My guess is that it is all about negotiations with foreign providers. Apple is the first manufacturer with a revenue sharing plan and the thought of unlocked iPhones being available via eBay or other means would mean it would be less attractive having to buy it with a two-year contract from the designated provider in each country. It would also be much less attractive for the providers to enter such a revenue sharing agreement, because the iPhone wouldn't be exclusive.

So Apple isn't content with just selling this thing, their calculation is to get steady revenue from each and everyone of the units sold.

There are a number of worrisome aspects about this. Obviously it's anti-consumer and anti-competition. Another point is that this isn't disclosed when purchasing an iPhone. I knew I had to sign up with AT&T for a two-year plan. But couldn't I assume that AT&T usual policies would be in place? What happens when the two years are up? A renewal wasn't a requirement. But no warning was given that the US$600 phone (now US$400) can't be used after those 2 years unless it remains on AT&T. What if I move to Europe? I have to pay AT&T a termination fee. Does this entitle me to an unlock? This has never been a problem before, but Apple just made it one.

There is legislation in some countries that either forbids locking cellphones to a provider or requires them to provide an unlocking code when asked. I could imagine Apple getting into more trouble with the EU for this policy. Unfortunately there is no such legislation in the US (yet?).

I think that unexpected US$200 price drop figures into this, too. Apple needs as many people as possible to not only buy an iPhone but lock into an agreement that insures that revenue stream. I am guessing that they realize that this sale model can't be kept up forever. At the latest two years after launch there will be a problem.

So far everybody is concentrating on the hackers and what's happening to their phones and the "closed system" that prevents third party applications. But the much bigger story is how Apple is curtailing the ability of their "regular," non-hacker, AT&T paying customers to use their phones like those of their competitors. And are they legally doing so or not?

(Contributed by Cyrus Grand)