News

Verizon continues attempts to avoid accountability for TracFone deal

26 May, 2021

Verizon is once again attempting to avoid public accountability by pressuring the FCC to rush the review of its proposed acquisition of TracFone. Just a few days after Verizon and TracFone submitted more than 21,000 pages of documents in response to concerns raised about the transaction, the companies asked the FCC to "move expeditiously to approve" the merger.

TracFone is one of the largest providers of Lifeline services with approximately 1.7 million low-income subscribers in 43 states and the District of Columbia, or 22 percent of total Lifeline subscribers. The FCC needs adequate time to carefully review the new data in order to assess the impact of the transaction on Lifeline customers and to determine appropriate conditions that will protect Lifeline customers and address potential anticompetitive harms to the MVNO market.

The Commission is not the only entity reviewing the Verizon/TracFone filing. CWA and others who have been parties to this proceeding since the beginning also need time to review confidential documents under nondisclosure agreements. Careful review and comments from interested parties to the Commission is a critical part of the public review process.

A transaction this important should not be rushed. The FCC made the right call in November when it denied Verizon's request for an expedited review and in February when it extended its review of the transaction, citing the deal's "extraordinary complexity." Verizon should stop pressuring the FCC to rush through its review and let the Commission continue its important work.

Background

CWA has raised serious concerns about the proposed acquisition of TracFone by Verizon. In February 2021, attorneys general from 16 states and the District of Columbia echoed these concerns and joined CWA in encouraging the FCC to request more information, which the Commission did in April.

CWA has urged the FCC to impose conditions on the deal including:

A commitment by Verizon to participate in the Lifeline program for a minimum of 5 years with at least the same level of geographic and service offerings as TracFone currently provides.
A commitment to make 5G networks and equipment available to Lifeline and pre-paid customers on the same basis as made available to Verizon's post-paid customers.
A commitment to maintain the existing packages available to Lifeline customers for a minimum of 5 years.
A commitment to continue to market to, and provide customer services for, Lifeline and pre-paid customers, including non-English speaking customers, at least at the same level as TracFone provides today.
A commitment by Verizon to assume liability for any forfeitures or restitution that may be imposed by the Commission on TracFone, unless such liability has been resolved by TracFone before the closing of the transaction.
Whatever other conditions the record demonstrates are necessary to protect Lifeline and other low-income pre-paid subscribers.
Require that the Applicants provide additional information and analysis about the impact the merger would have both downstream on consumers as well as upstream in the labor markets, including the effect that reducing the number of independent MVNOs will have on wages in geographic markets where their operations currently overlap.
Require the Applicants to submit their internal analysis of projected employment growth as part of the record in this proceeding so that the Commission and the public can properly evaluate this transaction's impact on jobs and wages.
Require the Applicants to ensure that the transaction does not cause a reduction in U.S. employment and that no employee of Verizon Wireless or TracFone loses a job or that their benefits and wages are reduced as a result of this transaction.