It will initially unlock phones as soon as a customer signs up and activates one of its services. However, in the spring it will keep the phone locked for an unspecified period after purchase.
Although this practice is common with carriers, Verizon agreed to sell its phones unlocked under open-access rules set by the Federal Communications Commission (FCC) for the winner of the C Block of 700MHz spectrum auction. Verizon won the auction in 2008 and runs its LTE network on this spectrum.
"(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."
Come spring, customers with locked devices will need to contact Verizon support to have the phone unlocked, which could make it more difficult for them to use other US carriers on Verizon phones. It will also be harder to avoid international roaming fees by using a SIM local to the foreign destination.
Verizon told CNET the new locking policy is to prevent thieves from stealing phones from stores and delivery routes since unlocked phones can be resold more easily.
"We're taking steps to combat this theft and reduce fraud. These steps will make our phones exponentially less desirable to criminals," Tami Erwin, executive vice president of wireless operations for Verizon, said in a statement to CNET.
A Verizon spokesman also said the new phone locking policy "is not inconsistent with our obligations under the C Block" because the move is designed to deter theft, identity fraud and fraud.
The carrier says it will continue to unlock phones even if they're not paid off and will accept unlocked phones from other carriers. It plans to reveal more precise details about the policy before rolling it out.