According to CNET, Verizon Wireless will begin SIM-locking its smartphones out of the box at some point this spring. Essentially no details are provided about how this will be implemented, but it really doesn't matter, because Verizon rather explicitly agreed not to do this ten years ago.
Per the restrictions imposed by the 700MHz Upper Block C spectrum auction it won in 2008, Verizon is expressly barred from locking down handsets on its network that utilize this spectrum. The plain text from the restrictions makes this absolutely clear.
(e)Handset locking prohibited. No licensee may disable features on handsets it provides to customers, to the extent such features are compliant with the licensee's standards pursuant to paragraph (b)of this section, nor configure handsets it provides to prohibit use of such handsets on other providers' networks. (Emphasis added)
So, Verizon's announcement today is complete and utter bullshit. It doesn't matter if you'll be able to unlock your phone 90, 60, or 30 days after you buy it. It doesn't matter if it is or isn't paid off. What matters is that Verizon agreed to the above rules when it won the auction for that spectrum, and it is now deciding that a clear and flagrant violation of those restrictions is worth pursuing because the current FCC leadership has very little interest in protecting consumers. When the restrictions on the spectrum were first added, Verizon actually sued the FCC over them, though later dropped that suit and pledged to honor them... for as long as was politically expedient, apparently.
Verizon has peddled CNET the story that this is about preventing handset theft and fraud. No facts or figures are provided to back up that assertion.
The simple fact is this: Verizon believes it can get away with SIM-locking its handsets again. This creates confusion for consumers. "Can I take my Verizon phone to another network?" Goes from being answered with a simple "Yes" to "Well, probably, but first you need to contact customer service, ask for us to do this, give us your phone's serial number, wait a week, and make sure this software update comes through."
The purpose of these new locking restrictions is, plain and simple, to dissuade ordinary consumers from taking their Verizon smartphones to other networks, and to increase revenue from international roaming plans. Any line about theft and fraud is thinly-veiled marketing spin.
So, thanks for confirming what we knew all along, Verizon: you pretty much suck.