Verizon’s $6.25 billion acquisition of MVNO TracFone Wireless has been cleared back-to-back by California Public Utilities Commission (CPUC) and the US Federal Communications Commission (FCC), along with a number of conditions to ensure the tie-up is in the public interest and protects low-income consumers.
Kathy Grillo, Verizon SVP & DGC, public policy and government affairs, stated, “The deal will provide customers with the best of both worlds: more choices, better services, and new features, thanks to Verizon’s investment and innovation. Customers will benefit with enhancements in devices, network performance, and innovative products and services — as well as a continued commitment to Lifeline.
She expressed gratitude to Chairwoman Rosenworcel, the commissioners, and the FCC staff as well as the administrative law judge (ALJ) and staff of the CPUC for their leadership and commitment to the public interest and support for this transaction.
“Our Decision imposes several important consumer protection conditions, beyond what the companies proposed in their application, to ensure that low-income customers in particular benefit from the merger,” said CPUC commissioner Clifford Rechtschaffen. The enhancements and protections for both TracFone and Verizon include participating in California LifeLine for 20 years after the close of the transaction; enrolling at least 200,000 California LifeLine subscribers by December 31, 2025; and offering LifeLine customers a phone at no cost, including 5G phones after the first year of the merger.
In addition, FCC has voted to approve after rigorous review as the transaction is found to make Verizon and TracFone stronger providers of prepaid and Lifeline services. Given the communities that TracFone primarily serves within the US, FCC adopted a number of binding conditions to address potential harms. These include protecting low-income consumers from price increases; ensuring that TracFone remains a supportive Lifeline participant; guaranteeing the availability of affordable 5G devices and service offerings to underserved consumers; and making sure that no customers are left behind during the Verizon network transition.
In order to facilitate a smooth transition for customers, Verizon and TracFone must migrate all TracFone customers to Verizon’s network within two years following the close of the acquisition.
As set by FCC, Verizon is also responsible to offer TracFone’s Lifeline-supported services over the same service areas for at least seven years; offer a free, compatible device or SIM in certain circumstances; maintain an exclusive, toll-free customer service line for customer transition; notify customers at least twice before they are transitioned to Verizon’s network; and extend the 60-day unlocking period to all 700 MHz C Block devices purchased from TracFone after closing and activated on the Verizon network.
“We will work hard to serve TracFone’s current customers and look forward to serving new ones in this dynamic and fast-growing marketplace,” concluded Kathy.
