Canada - Locking handsets reduced competition, an issue brought to a head by new operators

[cbc] Competition in the wireless industry is heating up with the recent launch of several new carriers, but critics say Canadians are still facing at least one big barrier to choice — locked phones.

A copyright expected to be introduced this week could make matters worse.

Mobile phones are typically sold by wireless providers in Canada with a digital lock programmed into them that prevents the owner from using the device on a different carrier's network. This hasn't been much of an issue for years since the networks of Canada's big three cellphone companies — Bell, Rogers and Telus — were generally incompatible anyway.

But in November, Bell and Telus jointly launched a new 3G High-Speed Packet Access network that is compatible with the one Rogers runs, while a pair of new carriers that have started up since December — Wind Mobile and Mobilicity — use the same technology as the other.

Coupled with the ability to take a phone number along when changing providers, which Canadians have been able to do since 2007, consumers now have more ability to switch for a better deal than ever before.

However, Canadian carriers are still ordering their suppliers to lock phones.

"It's a standard industry practice and when we bought the handset, the manufacturer asked if we wanted it, and we said, 'Sure,'" said Mobilicity president Dave Dobbin at the carrier's launch earlier this month.

Canadians can still unlock their phone through several methods, such as independent phone dealers found in many malls, but it often incurs an additional charge and voids the warranty on the device. Doing so is currently legal under Canadian law and most carriers will happily provide service to customers who bring in their own unlocked devices.

Locked cellphones hurt consumers: critics