Verizon Wireless Nixes Monthly Fee for Music Store

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Verizon Wireless is eliminating the monthly $15 fee for its music download service in conjunction with the launch of a cell phone featuring an iPod-like click wheel and a memory card that can hold up to 1,000 songs.

The new "Chocolate" handset, made by LG Electronics Inc. of Korea, features software that will let users play their own MP3-format music on the device in addition to songs purchased from Verizon Wireless's music store — avoiding the mini-controversy that accompanied the launch of that service early this year.

The company is charging $150 for the phone with a new two-year contract, and an additional $100 to buy an insertable mini-storage card that can hold 2-gigabits of music or other files such as photos.

Songs purchased from the V Cast Music store, priced at $1.99 each, can be downloaded twice: once over the cellular network to the phone, and once over the Internet to a computer.

Wireless music downloads are seen as a robust new source of revenue for cellular operators now that they are investing billions of dollars to upgrade their networks for speedier data connections. So far, carriers have been more inclined to create their own stores to capture more of the profits.

Sprint Nextel Corp. (S) also sells music through its own store, charging $2.50 per song for downloads to one phone and one computer.

Songs purchased from V Cast will be formatted to run with Windows Media Player from Microsoft Corp. (MSFT)

But the Chocolate phone also can play songs that users copy from their own music collections in the generic MP3 format.

Verizon drew some howls of protest in January when the software upgrade required to use the new V Cast music store disabled the MP3 player capability on the two compatible phones. Users could still convert their songs to the Windows format and play them on the phones.

At the time, Verizon asserted that the handicap was purely temporary — merely the reflection of software integration challenges, rather than any ploy to force users to buy its songs or to weigh in on larger battles over digital copyright restrictions.

The company is still working on a software upgrade to restore the MP3 capability to the two phones, one an LG and one from Samsung Electronics Co. Ltd., a spokesman said.

Verizon Wireless is jointly owned by Verizon Communications Inc. (VZ) and Vodafone Group PLC. (VOD)