VZW, Sprint Nextel ink settlements in handset unlocking lawsuits

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VZW, Sprint Nextel ink settlements in handset unlocking lawsuits
Customers may now move between major U.S. CDMA carriers




By Jeffrey Silva
Story posted: October 30, 2007 - 2:27 pm EDT

Here’s just one reason the mobile-phone industry wants Congress to approve expanded federal pre-emption: lawsuits galore in a California state court that have ensnarled national carriers and prompted some to settle.

More than a dozen handset locking and early termination fee cases have been consolidated in California Superior Court, county of Alemeda. There is now end in sight for some of those cases.

Sprint Nextel Corp., the No. 3 cellphone operator, entered into a far-reaching settlement.

“We believe the settlement is fair and reasonable,” said Matt Sullivan, a spokesman for Sprint Nextel.

Under the settlement, Sprint Nextel has agreed to disclose the phone lock code to consumers; assist customers with non-Sprint Nextel handsets to activate them on Sprint’s network, where possible, and notify Sprint Nextel direct and indirect retailers of these policies. In addition, Sprint Nextel agreed to provide these benefits not only in California and Florida, but nationwide.

Scott Bursor, lead counsel for the class in the AAA arbitration and co-lead counsel for the class in the California case, said the Sprint Nextel settlement parallels a similar settlement with Verizon Wireless.

“Both of these settlements will make it significantly easier for consumers to use their CDMA phones to subscribe to service on the networks of other CDMA carriers,” said Bursor. “Together, both of these settlements are tremendous victories for consumers and for free competition among cellphone carriers.”

However, Verizon Wireless settled even though the No. 2 cellular carrier says it does not lock cellphones. Indeed, Verizon Wireless declared as much in a Web notice explaining the settlement to subscribers.

“Verizon Wireless denies that it has ever installed software locks on the overwhelming majority of its wireless phones and denies any liability to the class representatives or the settlement class,” the carrier stated. “Verizon Wireless, however, has agreed to settle the actions for the purpose of avoiding the uncertainties and expense of, and diversion of business resources resulting from, further litigation.”

Verizon Wireless added: “No court has determined the merits of the plaintiffs’ claims or Verizon Wireless’s defenses. This notice does not imply that there have been or would be any findings of violation of the law by Verizon Wireless or that recovery could be had in any amount if the actions were not settled.”

A Senate bill would establish a national wireless regulatory framework and eliminate the states’ limited oversight of wireless carriers as provided in a 1993 law, but the measure currently appears to lack sufficient support to move forward. Such legislation would make it harder to bring wireless consumer suits against cellular operators.