I don't really have a problem with this -- I think that it's rarely in a consumer's interest to choose a locked phone. Buying a locked phone basically means that you're getting a loan to pay for hardware that you pay back with a higher service price. But I'd point out that:
You can get unlocked phones and service now. I do. There are some privacy benefits to doing so -- my cell provider doesn't know who I am (though they could maybe infer it from usage patterns of their network and statistical analysis). It's not a lack of unlocked service that's at issue. To do this, Congress is basically arguing that the American consumer is just making a bad decision to purchase a plan-combined-with-a-locked-phone and forcing them not to do so.
Consumers will pay more for cell phones up front. That's not necessarily a bad thing -- it maybe makes the carrier market more competitive to not have a large portion of consumers locked to one provider. But there are also some benefits to having the carrier selecting cell phones that they offer in that the provider is probably in a better position to evaluate what phone manufacturers have on offer in terms of things like failure rates than do consumers.