It was widely believed that Verizon allowed Prepaid LTE phones on MVNOs without the usual six month aging period in order to comply with the open access conditions of its Block C (band 13) LTE license which states "Licensees offering service on spectrum subject to this section shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice on the licensee's C Block network".
Verizon LTE Prepaid devices became the best source of inexpensive, modern LTE phones that could be used on Verizon MVNOs. The phones were cheap because Verizon subsidizes them to lure customers to it's relatively pricey prepaid service. For example, an unlocked GSM Moto E LTE costs $149.99, the Verizon Prepaid version of the same phone lists for $99.99, but is widely discounted to $40 and was available from BestBuy for $9.99 for an several weeks around Black Friday.
But last month something changed, HowardForums users started reporting that TracFone and other Verizon MVNOs were unable to activate brand new $9.99 BestBuy Moto E LTEs. At the time I thought it was probably just a fluke related to that batch of Best Buy Moto Es.
Then last week a HowardForums user reported that two Verizon Prepaid LG G Vistas failed to activate on TracFone. This week a Kitty Forums user who had activated a Verizon Prepaid LG Transpyre on Puppy Wireless in December tried activating two more Transpyres and they failed to activate.
Around the time these started happening, Verizon Prepaid phones began appearing in stores with this new message on the packaging; "Phone must be activated on Verizon Wireless Prepaid service and first monthly payment must be made before it can be used with any other service.".
It turns out that Verizon made a policy change effective 1/17/16 that requires Verizon Prepaid Phones to be activated on Verizon Prepaid and have at least $30 in airtime applied to them before they cam be used on Verizon postpaid. A Reddit user posted a copy of an internal Verizon document detailing the new rule:
Effective 1/17/2016, customers who purchase a Prepaid 4G device must activate on a $30, $45, or $60 Prepaid plan and make at least 1 monthly service payment before they are eligible to move the device to a new or active Postpay account .
If account is hotlined:
- Device remains locked until first month’s payment is made on their Prepaid plan.
- Device is unlocked automatically upon successful first month’s payment and can be used on Postpaid plan (new SIM or SIM swap).
- Attempting to use an active Postpay SIM Card with a new 4G LTE Prepaid PIB smartphone prior to making the required monthly payment, hotlines the Postpay MDN (SFO 83643) . The hotline remains until first month’s payment is made.
- Customers who activate on the $45 or $60 Prepaid plans and enroll in Auto Pay, receive bonus 1GB data per month.
- Data access, outgoing calls, and text messaging do not work.
- Text message is sent to smartphone.
- *VZW FREE MSG: Phone must be activated on Verizon Wireless Prepaid service and first monthly payment must be made before it can be used with any other service. *
- Auto-remark is placed on the customer's account.
- *SIM Swap attempted: MDN Hotlined. Phone must be activated on VZW Prepaid service and first month paid before it can be activated as postpaid. *
At the moment there's a workaround. HoFo'ers discovered that if you ask BestBuy to activate one the failing phones on Verizon Prepaid using the Verizon SIM that comes in the phone, but not add any money to the account, the phone can then be activated on an MVNO with an MVNO SIM. It may also be possible to get around the MVNO activation roadblock without involving BestBuy by activating a Verizon Prepaid phone online and not adding funds.
Verizon's new policy does seem to violate the LTE block C open access rules that Verizon agreed to as a condition of their being able to use that band. A Redditor has filed an FCC complaint against Verizon over the issue. Unfortunately, I fear that if Verizon is forced to live up to its agreement and allow prepaid phones on post paid and MVNOs they will start charging full un-subsidized prices for those prepaid phones.
Please leave a comment if you have had problems activating a Verizon Prepaid phone on a Verizon MVNO and if you were able to resolve the problem.
Sources: HowardForums, Reddit, Kitty Forums