Canada considers banning some phone lock-ins

A Canadian lawmaker proposed a new law on Thursday that would require mobile operators to unlock phones when customers buy them for full price or when users complete their contracts. 

The proposal comes the same week that Apple announced it would sell the iPhone 4 and iPhone 3GS in Canada and some European countries unlocked for people who buy the phones without a contract. The events highlight the difference between the North American market, where most people buy phones at a discount that are tied exclusively to one operator, and most other countries where people commonly buy a phone and then choose an operator, easily switching operators any time. 

Bruce Hyer, Canadian member of Parliament from Thunder Bay-Superior North, introduced the Cell Phone Freedom Act in an attempt to promote consumer choice, he said in a statement. 

The bill would require operators to inform consumers that their phones are locked to a specific network when they buy them. It would also require operators to unlock phones that customers buy at full price without a contract. And when a customer is finished with their contract, the operator would have to unlock the phone for free. 

“Once the contract is over, the consumer’s old service provider shouldn’t be able to dictate which service provider is used next. The handset belongs to the consumer as does the choice of service network,” said Glenn Thibeault, Canadian member of Parliament for Sudbury, who supports the proposal, in a statement. 

Operators in North America typically offer customers phones at a discount in exchange for signing a multiyear contract. Operators argue that the contract allows them to recoup the phone discount. However, they don’t unlock the phones for customers after the two-year period.

T-Mobile is one of the few North American operators that will unlock phones for customers for free. Otherwise, phone users can get their phones unlocked by third-party companies. 

The “Don’t Lock My Freedom” Web site that promotes the proposal warns people that such companies often charge CDN$40 to $150 to unlock the phones. It also says that people who download unlocking instructions off the Internet risk rendering their phones unusable. 

In the U.S., the newest version of the popular iPhone will come tied to AT&T’s network. In addition to most phones in the U.S. being locked, the situation is complicated by the fact that operators in the U.S. use different frequencies and technologies. That means that even if a phone is unlocked, it may not be capable of working on another operator’s network.

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