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Consumer group blasts cell phone lockdown

A lawsuit filed by the Foundation for Taxpayer and Consumer Rights challenges the practice of "cell phone locking," when service providers force new customers to buy phones.

A consumer advocacy foundation on Tuesday said it wants three U.S. cellular providers immediately barred from requiring new customers to buy cell phones with their service.

The group, the Foundation for Taxpayer and Consumer Rights, recently filed a 14-page lawsuit in Los Angeles County Superior Court claiming that the practice of "cell phone locking" is an unfair business practice. The foundation has asked the court to order AT&T Wireless, Cingular Wireless and T-Mobile USA to unlock all existing phones for free and sell only unlocked phones in the future.

"They use handset locking to lock customers into their networks," the group states in its suit.

Carriers typically place network restrictions, along with long-term service contracts, on phones they give away free or with substantial discounts. Those incentives have long helped carriers fend off customer turnover, and analysts said they have become even more important in the wake of local number portability rules, which let subscribers keep their old numbers when switching carriers..

U.S. cell phone service providers say there is a laundry list of technical "why nots" that justify the practice of locking phones so they can only be used on one network. But some have loosened their policies over the years.

T-Mobile USA, which did not comment for this story, unlocks phones for subscribers who are leaving for new carriers and those defecting to T-Mobile from rivals.

AT&T Wireless does not allow cell phone porting, though a company representative said, "We are confident that the way in which we sell handsets is...legal."

Cingular Wireless provides the necessary "unlocking codes" if the phone's owner switches to another carrier after his or her Cingular contract has expired. A representative for the company did not respond to telephone calls for comment.

Verizon Wireless, which is not named in the lawsuit, also allows cell phone porting on request.