The governments in many other countries actually have laws that prohibit the practice of locked phones by telcos. Anyone can enlighten why the US government is not taking such approach as it is definitely pro consumers. Is such laws perceived by US as bad for the free market, entrepreneurship and competitiveness?
If your phone is not locked then you paid retail for the phone. In the US there has been a long history of the carriers subsidizing phones (e.g. loaning you money to pay for the phone) and keeping the phone locked to that carrier for the duration of the initial contract. This kept phone prices lower and was previously not a major issue for most users since there were really only a couple of options available to them that were all approximately the same price (e.g. choose between GSM or CDMA and then choose one of two major players in each group.)
Laws preventing carrier locks are not perceived as bad, but Americans liked their phones to appear inexpensive and since we had far fewer real options when it came to the carrier it was not a major inconvenience.
That's not true. There are plenty of countries where you receive the phone unlocked, and you're free to use it on any network you chose. You will however still be contractually obligated to your 24 months of payments.
