Verizon Wireless on Monday began offering its service without contracts as it continues its push to make its network more open.
The carrier will allow customers who pay the full price for their cellphone or bring in their own compatible device to sign up for a monthly plan that they can get out of at any time. Customer must pay an activation fee, but there are no early termination fees for canceling the service.
Verizon, once the considered the most guarded and controlling of the US wireless carriers, has changed its tune about opening itself up. In the last few months, it has vowed to make its network available to any device that meets basic requirements, and over the past few years made its early termination fee more flexible.
The new month-to-month option means a person can change service or upgrade their phone at any time, but there are trade-offs. Carriers provide subsidies for the phone in exchange for the one or two-year commitments, so a contract-less phone is much more expensive. For example, a Blackberry Curve from Verizon costs $100 with a contract, but $430 by itself. The contract option still remains for users who don't want to pay too much for their phones.
Verizon Wireless was one of several major carriers that got in legal hot water over its former early termination fee practices. In July the carrier agreed to settle all of its outstanding lawsuits for $21 million.
AT&T also offers a month-to-month option for customers who pay more for their phone, although it isn't available for people who want to use the Apple iPhone. Customers can bring in their own devices and get a SIM card from ATT that requires no contract. (info from The Wall Street Journal)