The Federal Communications Commission on Thursday approved a measure mandating that companies such as AT&T and Verizon let smaller telecommunications carriers use their networks for mobile Internet service, a practice that is now voluntary.

The FCC vote was, however, divided along party lines, with three Democrats voting for the measure and two Republicans voting against it, according to a Bloomberg report.

Major mobile carriers are already required to forge agreements with smaller rivals for voice data, and the addition of Web traffic is essentially an extension of that rule, the report said.

Both AT&T and Verizon, the two largest cellular operators in the U.S., opposed the measure, Bloomberg said.

"Consumers expect mobile data services that will allow them to remain connected wherever they go; a data roaming rule will help ensure that consumers' services are not interrupted and that coverage is available on a competitive basis," the FCC said in a statement on the new rule.

"The widespread availability of data roaming arrangements will allow consumers with mobile data plans to remain connected when they travel outside their own provider's network coverage areas by using another provider's network. This promotes connectivity and nationwide access to mobile data services such as email and wireless broadband Internet access."

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Sprint Nextel is looking to beat AT&T, T-Mobile and Verizon to market with a service coming this year that will enable people to buy goods with their smartphones.

Kevin McGinnis, Sprint's vice president of product platforms, told Bloomberg that the telecom company was working with payment networks and smartphone manufacturers on the near-field communication features.

Customers would use the feature by tapping their phones on or waving their phones in front of scanners in retail stores, McGinnis told Bloomberg.

Sprint, the third-largest mobile carrier in the U.S., is hoping to make its service available before the near-field communications joint venture among AT&T, T-Mobile and Verizon, known as Isis, hits the market. Isis was announced last November and is expected to launch in 2012, Bloomberg said.

"We intend to make this an open solution where consumers can use their phone in a variety of physical locations," Sprint's McGinnis told Bloomberg. "Because we're allowing other brands and other institutions to participate, they can also tell their consumers that this is available on Sprint."

Isis plans to take a percentage of each purchase made through the service, but Sprint isn't looking to do the same, he told Bloomberg.

Rather, Sprint may take a share of purchases made with digital coupons available through its service, or it may take revenue from targeted advertisements that interact with a consumer's phone, McGinnis said. Purchases made through Sprint would show up on credit card statements, not phone bills, Bloomberg said.

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Photo: A Sprint BlackBerry phone at a Sprint store in Woodmere Village, Ohio. Credit: Tony Dejak / Associated Press

AT&T Inc. announced Sunday it would buy T-Mobile USA in a cash and stock deal worth $39 billion, a move that would combine two of the largest U.S. wireless providers and build a telecommunications behemoth that would tower over Verizon Wireless, the other leading cellular network.

The merger would combine AT&T's 95.5 million wireless subscribers with another 33.7 million from T-Mobile, a division of the German communications conglomerate Deutsche Telekom.  With close to 130 million subscribers on a wireless system that would combine the vast national networks of both companies, the resulting union would far outstrip Verizon and its 94.1 million customers.

AT&T suggested that increased competition resulting from the deal could benefit consumers but did not explicitly say the plan would mean lower prices for its customers.

“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” AT&T Chief Executive Randall Stephenson said in a statement.

AT&T highlighted the efficiency savings it would garner from a merger, given that both companies use similar cellular technology -- as opposed to a different model used by Verizon -- and both are planning to take similar steps toward the next generation of faster 4G networks.

Part of AT&T's gambit has to do with the steep rise in the use of data services by consumers with sophisticated smart phones.  With many more users adopting video-ready, Internet-connected phones such as Apple's iPhone and the many Google-powered Android devices, demand for wireless bandwidth among consumers is quickly increasing, and the industry has been struggling to stay ahead of that demand.

AT&T said data traffic on its wireless network had grown 8,000% over the last four years.

"Because AT&T has led the U.S. in smart phones, tablets and e-readers -- and as a result, mobile broadband -- it requires additional spectrum before new spectrum will become available."

Critics quickly warned about the perils of conglomeration, saying federal regulators should scrutinize the deal carefully lest it actually lead to less market flexibility.

"Don’t believe the hype: There is nothing about having less competition that will benefit wireless consumers," said S. Derek Turner, research director at media industry watchdog Free Press, in a statement.

“A market this concentrated -- where the top four companies already control 90% of the business, and two of them want to merge -- means nothing but higher prices and fewer choices, as the newly engorged AT&T and Verizon exert even more control over the wireless Internet."

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Photo: Deutsche Telekom Chairman and CEO Rene Obermann, left, and AT&T Chairman and CEO Randall Stephenson pose for photos in New York on March 21, 2011. AT&T Inc. said Sunday it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion that would make it the largest cellphone company in the U.S. Credit: Mark Dye/Newscast/AP Photo

Google has been hinting for months that it will roll out a mobile payment service so that shoppers can ring up their purchases with their smart phones.

Now people familiar with the project are whispering to Bloomberg News that Google will begin testing the service at stores in San Francisco and New York in the next four months by installing thousands of cash register systems from VeriFone Systems.

The technology -- called near field communication, which transmits signals over short distances -- would let shoppers ditch cash or plastic (or even loyalty and gift cards and coupons) and check out by tapping a smart phone against a register.

Caveat: Bloomberg hasn't always gotten it right when it comes to NFC. It reported earlier this year that Apple's iPad 2 and iPhone 5 would include NFC. There is no evidence of the technology in the iPad 2 and the latest reports indicate that there won't be any NFC in the iPhone 5, which will probably be released this summer.

Google, which has taken a leading role in the mobile phone industry with its Android operating system that it offers for free to handset manufacturers, has been pushing for NFC-equipped phones, although there aren't many such Google devices out there yet.

Google's Eric Schmidt showed off what was presumed to be Samsung's Nexus S phone in November at the Web 2.0 Summit before the phone that allows NFC transactions was released. At the time he predicted that mobile phones would eventually replace credit cards.

"People don't understand how much more powerful these devices are going to be," Schmidt said. But he cautioned not to expect the technology to roll out quickly.

"I expect to be carrying my credit cards around for quite some time," he said.

Mobile payment is already a hotly contested market with a growing number of companies including EBay's PayPal and ISIS, an effort backed by AT&T and Verizon Wireless that will use Discover Financial Services to handle payments.

Google has demonstrated how the latest version of its Android operating system -- code named Gingerbread -- has mobile payment capability. And in Portland, Ore., Google has been experimenting with NFC window decals that, when tapped with a smart phone, give additional information about the business, including special offers and deals.

Not to mention that if Google were to get a significant foothold in mobile payment, its Checkout payment system would get a welcome boost.

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Consumer Reports didn’t like the antenna on the original iPhone 4, and it’s bashing the Verizon version of the phone for the same reason.

Reviewers found that the Verizon Wireless-connected device, released earlier this month, has a similar problem with dropped calls that the AT&T iPhone did.

In areas with a weak signal, users who block the tiny gap in the lower left side of the metal band surrounding the phone can experience connectivity issues, according to a Consumer Reports blog post. Palming the phone, a natural position, can cause the problem, typically within 15 seconds.

As it did with the AT&T version in July, reviewers said they didn’t recommend the Verizon iPhone 4. But they said that using the phone with a case alleviates the problem and that the product “performs superbly in most other respects.”

Consumer Reports engineers ran the same lab tests they use on other smart phones, throwing in a few extra ones that they developed after the initial round of dropped-call complaints.

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Photo: Ramin Talaie/Bloomberg

The Motorola Xoom tablet will hit Best Buy and Verizon shelves on Thursday, selling for either $799.99 for the device free of contract, or for $599.99 with a two-year data plan.

The Xoom, which was unveiled at the Consumer Electronics Show in Las Vegas last month, has been hyped by many as the first serious competitor to Apple's iPad, which has dominated the market for tablet computers since it debuted last April.

But, on Day 1 and for at least a few weeks, the Xoom will be missing a few key features that separate it from the iPad.

Unlike the iPad, the Xoom is compatible with Adobe Flash -- but it won't be Flash ready on the first day.

An Adobe Flash update will be available in the Android Marketplace for the Xoom in the spring, said Ken Muche, a Verizon spokesman.

"All I can say is it's coming soon," Muche said, when asked to be more exact than spring on the Flash update.

The Xoom also has an SD-card slot, so users can save data such as music or business documents to the card and move it over to a computer. But the SD-card slot will be unusable on release day, too, he said.

"That will be activated with the first software update," but as of now, there is no set date for when that software update to the Xoom will arrive, Muche said of the Xoom's SD-card slot.

The first tablet from Motorola Mobility will feature a 10.1-inch screen that can play back high-definition 1080p video, a camera on the front to be used for video chatting via Google Talk, a 5-megapixel camera on the back for photos and 720p HD video, and an HDMI output that allows the device to hook up to an HDTV.

Verizon is currently the only wireless provider currently selling or offering data plans for the Xoom, with a two-year 3G contract starting at 1GB of data for $20 a month.

The nation's largest mobile carrier is offering a free upgrade from 3G to 4G LTE service for Xoom owners sometime in the second quarter of the year, though the data plan will probably cost a bit more for 4G service.

The Xoom will be the first tablet to run Google's Android 3.0 Honeycomb operating system, which is the first version of the popular Android software to be designed specifically for tablets.

All previous Android tablets, such as the Samsung Galaxy Tab, have run builds of the OS designed for smart phones.

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Photo: A Motorola Xoom tablet device is held up for a photo at the Mobile World Congress in Barcelona, Spain, on Feb. 16. Credit: Denis Doyle/Bloomberg

Verizon accounted for 28% of Motorola Mobility's revenue last year, largely on the success of its Droid phone line.

The Motorola Droid, Droid 2, Droid X and upcoming Droid Bionic are only offered though Verizon -- an increasingly important mobile carrier for the electronics manufacturer.

The relationship between Motorola and Verizon has grown over the last few years, as Motorola noted in a filing with the Securities and Exchange Commission on Friday.

In 2009, Verizon sales made up 17% of Motorola's revenue, up from 13% in 2008.

Verizon's selling of Apple's iPhone 4 -- which began Feb. 10 -- and any subsequent iPhones could be the largest threat so far to derailing Motorola's growth with Verizon, something Motorola alluded to in an assessment of its risks in the SEC filing.

"We have several large customers and the loss of, or a significant reduction in revenue from, one or more of these customers could have a negative impact on our business," Motorola said in the filing. "During 2010, approximately 28% of our net revenues were from Verizon Communications Inc. ... It may be difficult to replace or find new large customers, especially with increasing concentration in the U.S. where there are a limited number of carriers.

"If any significant customer, particularly Verizon or Sprint Nextel or other large customers, such as Comcast, stopped doing business with us, or significantly reduced the level of business they do with us, it could impact our ability to service other customers using similar technology and our financial results could be negatively impacted."

Motorola is looking to replicate the success it's had with the Droids on Verizon with other carriers -- namely AT&T, where Motorola is set to launch its first 4G phone, the Atrix, on Jan. 22. Both the Atrix and the Droid line of phones run on Google's Android operating system.

Google is another important relationship for Motorola. The upcoming Motorola Xoom will be the first tablet to ship with Android's Honeycomb OS, a version of Android built specifically for tablet computers.

The Xoom has been hyped as possibly the first real threat to the dominance of the Apple iPad, though Motorola has yet to reveal an official release date or price for the device. Rumors have floated saying it will sell for as little as $700 or as much as $1,200, while the iPad starts at about $500.

Whenever the Xoom drops, it will (at least initially) only be available with wireless plans through Verizon.

Motorola reported a profit of $11.5 billion in 2010, up from $11.1 billion in 2009. Profit rose 9% in the company's Mobile Devices segment and dropped 7% in the home segment, Motorola said.

Shares of Motorola rose 20 cents on Friday to $30.03.

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Photo: Motorola Mobility CEO Sanjay Jha shows off the Motorola Xoom tablet at the 2011 International Consumer Electronics Show in Las Vegas on Jan. 6. Credit: Robyn Beck / AFP/Getty Images

It's 7:15 a.m. at the Verizon store in Burbank, and tears are welling in Chelsea Northrop's eyes.

Chelsea, 24, and her husband Daniel, 26, had been waiting in line in the cold since 3:45 a.m., two of about 20 people who arrived early to the store,  hoping to be among the first in the Los Angeles area to get a Verizon iPhone.

But when it was her turn, Chelsea was turned away.

Now in the parking lot, lip quivering in anger, she is watching other new iPhone owners walk out with their purchases.  Instead of an iPhone, she is holding a box with her old phone, an LG Fathom.  It's the smartphone she purchased exactly 31 days ago -- one day longer than the 30-day grace period during which Verizon customers can exchange newly purchased phones. She doesn't like the Fathom -- it's been crashing a lot, and it's not so great to use, she says, which is why she's been waiting to return it and get an iPhone.

"Three different Verizon people told me I could exchange it today," she said.  "They said today was our last day."

Funny that just 45 minutes earlier, before Verizon opened its doors, the Northrops were all smiles, chatting with the press and ready to rush into the store to upgrade the phone they'd been waiting almost a month to give back.  Chelsea had bought the LG phone exactly one day before Verizon announced it would carry Apple's blockbuster phone last month -- and it didn't take her long to decide she was going to switch.

So the Northrops, both teachers in Sunland, had come early to wait in line (maybe a little too early, they said, considering there were only a few people lined up even hours later: "But it's better than having to wait two or three hours after work," Chelsea said).

But when they got into the store and up to the register, a Verizon manager reluctantly informed them that they were out of luck.  Because  it was one day past the exchange period, they'd have to pay the full $650 retail price if they wanted the iPhone, rather than the $199 everyone else had to pay for the upgrade.  After a month of waiting for the new phone, plus three hours shivering in line, the news came as a blow. Chelsea rushed out of the store, obviously upset.  Daniel followed behind.

Now, out in the parking lot speaking to a reporter, the Northrops stand iPhone-less. Chelsea still has her unwanted LG in the box she was going to return it in -- but it looks like she won't be returning it.

"The hitch is we're on day 31," Daniel says glumly.

But the sun is now shining, and the air is warming up, and perhaps the morning won't end badly after all. As if on cue, Verizon store manager Steve Wang dashes out into the parking lot with news.

"I just talked to my district manager about your situation," Wang says. "We're going to make an exception for you guys.  I know you guys have been waiting a long time, and I felt bad.  So we'll take care of you."

"That's wonderful!" Chelsea exclaims.

Not long after, she is equipped with a brand-new iPhone 4.  And though she has endured the ups and downs of modern consumerdom, Chelsea is relieved.  School is starting in a half-hour, and it looks like the Northrops will both make it to class in time.

"I was going to have to tell my preschoolers that I didn't get it," she said.  "Not that they really would've cared, but still...."

Updated 11:05 a.m.:

When asked about the clemency granted to the Northrops, Verizon spokesman Ken Muche said, "We're human beings."

Does that mean Verizon will be making exceptions for other customers who are outside the return period but still want an iPhone?

"That's up to the individual discretion of the store managers," Muche said.

-- David Sarno

Photo: Top, Chelsea Northrop is informed that she won't be able to get the iPhone she's been waiting in line for three hours to buy.  Husband Daniel, right, looks on.  Lower photo, the Northrops wait in line before the 7 a.m. opening of the Burbank Verizon store.  Credit: David Sarno / Los Angeles Times

The months of Verizon iPhone hype have, so far, turned into record sales.

"At 8:10 p.m. EST [Thursday], Verizon Wireless ceased online orders of iPhone 4 to existing customers and ended the most successful first-day sales in the history of the company," said‬ Dan Mead, Verizon's president and CEO in a statement.

"In just our first two hours, we had already sold more phones than any first-day launch in our history."

Mead and other Verizon officials declined to give specific sales numbers for its version of the iPhone 4 so far. A company spokesman said Verizon had no other comment on the iPhone sales than Mead's statement.

Those who missed out on the pre-orders for the Verizon version of the Apple iPhone 4 will simply have to wait for the handsets to arrive on the shelves of Verizon stores, Apple stores, Best Buy locations and a few Wal-Marts, too, next Thursday.

Verizon is planning to open its company stores -- more than 2,000 in the U.S. -- at 7 a.m. Thursday.

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Photo: An iPhone sign hangs in the window of a Verizon store Thursday in Orem, Utah. Credit: George Frey / Getty Images

Verizon Wireless posted a notice online Thursday morning warning its customers that it will cut down download speeds for data hogs on its network.

The move comes as Verizon prepares for its release of the Apple iPhone 4. Verizon is working to avoid the network problems that AT&T experienced when it launched the first Apple iPhone about four years ago.

Verizon is the first U.S. carrier outside of AT&T to offer the blockbuster Apple smart phone. Pre-orders for the Verizon version of the iPhone 4 began Thursday and the device will be available in stores in one week, on Feb. 10.

The nation's largest mobile provider also detailed other ways it plans to manage data usage on its network, including further compressing large images and videos on websites and in smart phone apps.

The company said the changes would go into effect for those who sign up for Verizon service on Thursday or later.

Calling its wireless network "a shared resource among tens of millions of customers," Verizon said it was making the moves to protect its users.

"To help achieve this, if you use an extraordinary amount of data and fall within the top 5% of Verizon Wireless data users we may reduce your data throughput speeds periodically for the remainder of your then current and immediately following billing cycle to ensure high quality network performance for other users at locations and times of peak demand," Verizon said in a statement.

"Our proactive management of the Verizon Wireless network is designed to ensure that the remaining 95% of data customers aren't negatively affected by the inordinate data consumption of just a few users."

Verizon may also get rid of some colors and decrease resolution of videos, photos and text in a way that it says won't be noticed by most users.

The data policy changes will allow Verizon to store and transmit "less data, using less capacity, and sizing the video more appropriately for the device," Verizon said.

"The optimization process is agnostic to the content itself and to the website that provides it. While we invest much effort to avoid changing text, image, and video files in the compression process and while any change to the file is likely to be indiscernible, the optimization process may minimally impact the appearance of the file as displayed on your device."

Ken Muche, a Verizon spokesman, said the company had nothing else to add about the policy changes aside from its statements posted online.

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Photo: Salesman Antione Haynes opens the door of a Verizon Wireless store in Mountain View, Calif., where the Apple iPhone's arrival is heralded. Credit: Paul Sakuma / Associated Press