Last week, the FCC released a Notice announcing that the Enforcement Bureau has reached a settlement with TracFone Wireless, Inc. to transition its phones to be unlockable. The FCC has also released the Order and Consent Decree. The agreement follows an investigation into whether TracFone violated Sections 54.202(a)(3) and 54.422(b)(3) of the Commission’s rules by certifying its compliance with industry consumer protection and service quality standards even though it had failed to comply with the handset unlocking provisions of the CTIA Code. The Bureau found that almost all handsets currently offered by TracFone to its customers, whether through its Lifeline program or to its general customer base, are not capable of being unlocked as defined by the CTIA Code.
The decision could benefit as many as 8 million TracFone customers.
Under the agreement, TracFone must:
- provide a $400,000 per month offset to the Lifeline Program until TracFone provides unlocked handsets to Lifeline customers;
- establish and implement, by May 1, 2016, a program to provide eligible Lifeline customers who request handset unlocking a comparable unlocked handset;
- establish and implement, by September 1, 2015, a program to provide eligible non-Lifeline customers who request handset unlocking a refund or upgrade credit for the Trade-in Value of their handset;
- exclusively provide Lifeline handsets capable of being unlocked by May 1, 2016 and exclusively launch new non-Lifeline handsets capable of being unlocked by December 31, 2016;
- continue to operate under this Consent Decree and offer the benefits to consumers described herein until 18 months after it ceases all sales of locked handsets; and
- provide clear, concise and readily available notifications to its customers about its handset unlocking policy.
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