Verizon will sell three tiers of internet speeds under its new pricing plans. A company store in Chicago. Photo: Taylor Glascock/Bloomberg News

Verizon Communications Inc. is eliminating traditional cable bundles and the handcuffs that often came with them, making it easier for households to switch video packages in the hopes they won’t cut the cord entirely.

The telecommunications company will allow Fios customers to select their home internet speeds and television packages separately, at preset rates. Rather than locking customers into one- or two-year contracts, customers will be able to change either service monthly, if they wish.

“Some customers just want internet with us. We are not trying to force them into a bundle,” said Frank Boulben, a Verizon senior vice president.

The changes do away with traditional bundle promotions that expire after a year or two, often leaving customers with much heftier bills. “We wanted to eliminate that pain point altogether,” Mr. Boulben said.

Other major pay-TV providers have tried to discourage cord-cutting by adding cellular services to their offerings. Comcast Corp., Charter Communications Inc. and Altice USA Inc. have rolled out lower-cost wireless plans for customers who pay for home internet or television.

Under the new pricing plans, Verizon will sell three tiers of internet speeds, ranging from $55 to $80 a month, including router costs. Customers can also bring their own router and save $15 on the two lower-speed plans.

There are several packages of cable-TV channels, starting at $50 a month, plus $12 per set-top box. The company will also sell the YouTube TV streaming service, which costs $50 a month.

The streaming wars might mean you have way more options when it comes to platforms and content for entertainment. But ultimately, paying for all those options is going to look a lot like the high prices you used to pay for your old-school cable package. Photo: Alexandra Cardinale

The new structure offers Verizon an opportunity to gain incremental revenue from a pay-TV business that has suffered customer defections as more consumers have embraced streaming services, such as Netflix and HBO, or live-TV streaming services such as Sling TV and Hulu + Live TV.

Those services plus new entrants such as Disney+ and Amazon Prime Video have chipped away at cable TV’s appeal, reshaping competition among cable companies and even Hollywood studios.

The crowded market and rising content costs have prompted some changes. Sling TV and AT&T Inc. recently raised prices for their live-TV streaming services, while Sony Corp. is shutting its PlayStation Vue service.

Verizon’s moves also highlight how lower-cost streaming services that were once scrappy upstarts are becoming enmeshed in offers from traditional cable providers. YouTube TV, which started out charging $35 for 40 channels, now carries about 70 channels, including ESPN and HGTV.

Verizon’s new lowest-cost TV plan will offer consumers an average of 125 channels, including five they identify as their favorites. The rest of the channels they receive will be based on those preferences and they can adjust their favorites each month.

Verizon in 2015 began offering Fios TV packages that allowed customers to only buy clusters of channels they wanted to watch. That move at the time drew criticism from ESPN, which said the move wasn’t authorized by its existing agreements.

Mr. Boulben said the new cable-TV offerings were compliant with existing agreements Verizon has with cable networks.

In addition to doing away with one- and two-year commitments, many fees that previously popped up on consumer bills will be included in the advertised prices. For example, Fios customers typically pay as much as $8.89 a month in regional-sports-network fees, as well as a $6.49-a-month broadcast fee.

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New and existing customers can switch to the contract-free plans.

Ronan Dunne, head of Verizon’s consumer group, told investors earlier this week that allowing customers to mix and match wireless unlimited plans had generated incremental revenue as some subscribers opt to buy more costly streaming quality, hot-spot usage and amounts of data. He said the company had the same opportunity within its traditional home internet and video business.

Verizon has reported net losses of Fios video customers in each quarter since the start of 2017. It lost 174,000 such customers in the first nine months of 2019, ending September with 4.2 million connections.

Meanwhile, the company has added Fios internet customers in each quarter since mid-2016. It had 5.9 million Fios internet connections at the end of September, about 3% more than a year earlier.

Write to Sarah Krouse at sarah.krouse@wsj.com

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