Low-cost mobile virtual network operator (MVNO) TracFone is not happy with the recent Library Congress official approval of phone unlocking. TracFone is a pre-paid carrier and prices its locked handsets at a loss. Since those handsets are locked to TracFone the company makes up the loss on selling airtime. The new unlocking rules don't affect post-paid carriers much since consumers still sign long-term contracts no matter if their phones are portable to another carrier.
“Although TracFone believes that the exemption to the Digital Millennium Copyright Act … was not intended to apply to prepaid wireless service, we are nevertheless concerned that its ambiguous language may be exploited in a way that will be extremely harmful for consumers and the public at large,” said James Baldinger, outside counsel to Miami-based TracFone.
Mr. Baldinger went on to say that TracFone may have to substantially increase the retail cost of its phones. TracFone has been combatting people who unlock and then resell their phones overseas for years. This behavior recently triggered an investigation by the DHS. Though the method is currently legal thanks to the Library Of Congress' exemption, Baldinger called the behavior criminal.
TracFone's website currently has brand new phones on sale for as little as $19.99.