Originally Posted by IndyFX
After re-reading your post I didn't really address this point. The difference is with an unlocked phone is; the only thing that prevents you from taking their phone (remember they are paying the vast majority of the purchase price of the phone) to another network and paying them nothing (simply not paying anything) is your word. That is, in a nutshell, the fundamental difference between signature and secured credit.
And no, most in the US normally don't incur large overages. Most operate within the limits agreed to in the plan.
Actually I'm pretty confident that a service provider would be overjoyed if you didn't use the phone on their network (i.e. took it to another network) but continued to pay the monthly fees (agreed to in the contract) as they would have their money but wouldn't have the additional load on their network. (backhaul limits and network congestion are a serious issues for service providers in most populated areas here in the US )
It's not their phone, it's legally your phone as soon as they hand you the box. It's a sale, not a lease. Their is nothing in law to keep phone carriers from leasing phones, but they don't, they sell them. The carriers know this, AT&T got out of that business a long time ago - or have you forgotten that wired phones used to be rented from the phone company?
And a secured loan simply means that a creditor holds a security interest in a thing. It has nothing to do with a lock that keeps you from doing what you want with the thing. The carriers could structure phone subsidies as secured loans if they wanted to, that would give them the right to recover the phone if you defaulted. They do not do that, because they aren't interested in getting your phone back. They have an early termination fee instead - and that pays off your subsidy.
Now, what this is REALLY about is not your contract with the carrier. This is about people who are off contract (not everyone gets a new phone every two years, some of us aren't interested in that). This allows those people to have an absolute right to unlock their phones. Yes, some carriers will unlock the phone for you. Not all will, and some (Verizon, Sprint) will tell you they've unlocked it, but it's not a real unlock, it's an international use GSM only unlock - it doesn't unlock the phone for T-Mobile in the US, and doesn't unlock the phone for AT&T. It doesn't even unlock the phone to switch a phone from Verizon to Sprint.
An iPhone is the same phone anywhere. The GSM models are fully capable of CDMA, they're identical phones. All current iPhone models could easily be moved between CDMA carriers or from GSM carriers to CDMA carriers, except for the carrier lock.
Unfortunately, this law doesn't go nearly far enough. It allows you, the phone owner to unlock, if you have the technical capability to do so. What it should do is prohibit the sale of locked phones, and prohibit CDMA carriers from refusing to activate any phone capable of using their network (that's unnecessary with GSM carriers, you just pop in a SIM).