In the US, you will be locked to your own carrier, with the exception if you are using a foreign SIM card and are roaming with this SIM card in the US. Using your Verizon SIM in the US, though would be more cost effective than using a foreign SIM to "roam" on another carrier.
You will be able to use a foreign SIM card throughout Europe in "GSM-land" more cost effective than using your Verizon SIM card in Europe as you would be paying local rates rather than Verizon's internation roaming rates.
This is super helpful and good news. If I understand your advice correctly, I could use my Verizon US SIM card in GSM-land, but pay the Verizon Global Roaming rates, or buy a European SIM card for a trip a lot cheaper. Please let me know if this is correct
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With the iPhone 4S, you had to call Verizon to have your phone "unlocked" to be able to use a foreign SIM card. I BELIEVE this step has been eliminated for the iPhone 5, but you MAY want to confirm this information with Verizon prior to leaving for Europe, though.