House passes bill providing way out of lock-in periods in cellphone plans

The House of Representatives has approved on third and final reading a measure allowing consumers the option to unlock their devices even prior to the expiration of the lock-in period under the service contract.

House Bill 5790, or the proposed “Consumer Protection on Mobile Communication Service Contract,” provides a way out of a lock-in period in a mobile service contract.

Under the measure, a telco that provides a locked mobile phone to the consumer at a subsidized rate as part of a subscription contract shall unlock the device or give consumers the means to unlock it for a certain fee upon the subscriber's request.

The device may be unlocked prior to the expiration of the lock-in period of the device.

After the lock-in period, unlocking of the device shall be free and automatic.

The bill further provides that for unsubsidized devices, the device shall be unlocked upon purchase.

HB 5790 refers to lock-in period as the term of a contract between the service provider and the consumer wherein the latter must maintain a monthly subscription at an agreed period to the exclusion of other service providers.

The bill's principal author, Cavite Rep. Francis Gerald Abaya said the telcos' practice of subjecting subscribers to a lock-in period as part of the service contract is one of the significant sources of consumer frustration with wireless services.

He said that while there are independent devices or services from third parties that can unlock locked phones, this process would normally void the warranty of the mobile device.

"Device locking makes it difficult for consumers to take advantage of the competitive offers available in the market. Furthermore, it limits the ability of the consumers to avoid roaming charges while travelling abroad, because it prevents them from using another service provider’s service,” said Abaya, vice chair of the House Committee on Information and Communications Technology.

Should the bill be passed into law, violators will face a fine of anywhere between P5,000 to P500,000, upon the discretion of the court. The measure also provides for the suspension of the operation of erring dealers, retailers or sellers. -NB, GMA News