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CWA secures commitments to protect Lifeline customers in proposed Verizon-TracFone deal, withdraws objections with FCC

CWA celebrated a victory today for customers of the Lifeline program, whose access to affordable phone service was left in doubt following Verizon’s proposed acquisition of TracFone. In new filings to the FCC, Verizon made critical commitments to continue offering TracFone’s current Lifeline-supported services for a minimum of 3 years following the close of the transaction, preserve quality services, maintain robust marketing, and more. These concessions, recommended by CWA and its public interest allies through multiple FCC filings, will ensure Verizon is held accountable to providing the same coverage and quality service for Lifeline customers for the same price they had as TracFone customers. Given these new commitments from Verizon, CWA, Public Knowledge, Benton Institute for Broadband & Society, Access Humboldt, and the California Center for Rural Policy have withdrawn their objections to the deal with the FCC.

“Verizon’s attempts to shirk public accountability threatened 1.7 million TracFone customers who depend on Lifeline, but these attempts were unsuccessful,” said Brian Thorn, Senior Researcher, CWA. “These commitments ensure TracFone customers will continue to have access to Lifeline, an essential program for millions of families. Today’s success would not have been possible without the support of our allies and an FCC interested in protecting the interests of customers over corporations.”

Verizon’s proposed acquisition of TracFone raised significant concerns regarding the 1.7 million TracFone customers in 43 states who subscribe to Lifeline, the wireless subsidy program offered by the FCC to low-income Americans. At the time of the deal’s announcement, Verizon offered Lifeline to parts of only 4 states, and a large merger opened the real possibility of deteriorating service or price hikes.

CWA has been pushing for more information on how the proposed Verizon-TracFone merger would affect Lifeline subscribers since Verizon’s initial filing with the FCC in December 2020. The advocacy campaign that followed resulted in two rounds of public comments, a letter from 17 state attorneys general urging the FCC to further investigate the impacts of the deal on Lifeline customers, and a letter from five Democratic senators pushing the FCC to scrutinize the deal and secure commitments to prioritize consumers.

In April 2021, the FCC heeded CWA’s and others’ recommendations, requesting additional information from Verizon, including whether the company planned to continue to offer all current TracFone Lifeline plans to new and existing customers, whether it planned to change any terms and conditions of those plans, and Verizon’s intentions for its plan pricing compared with current TracFone plans. The FCC also sought a more detailed proposal on how Verizon intends to migrate current Lifeline customers to its network and its timeline for doing so.

The commitments will benefit Lifeline customers by requiring Verizon to:

  • Continue offering TracFone's current Lifeline-supported services for a minimum of 3 years following the close of the transaction.

  • Not add new co-pays to TracFone’s existing Lifeline plans offered at no cost to prepaid customers for at least 3 years after the transaction closes.

  • Maintain at least the same budget as TracFone did in 2020 for Lifeline Marketing throughout TracFone’s entire service area for at least 3 years following the close of the transaction.

  • Honor the rates, terms, and conditions of the agreements that Verizon is assuming from TracFone for at least 2 years after the transaction closes.

  • Make available a TracFone service plan to Lifeline prepaid customers that includes 5G service within 6 months after the transaction closes.

  • Submit a quarterly report to the FCC detailing the impact of its acquisition of TracFone on Lifeline subscribers for a period of 3 years after the close of the transaction.

Links:

CWA secures commitments to protect Lifeline customers in proposed Verizon-TracFone deal, withdraws objections with FCC (CWA, June 12, 2021)