Five Senate Democrats urged the FCC to scrutinize Verizon’s planned acquisition of mobile virtual network operator (MVNO)TracFone to ensure low-income customers are protected. It’s been 10 months since Verizon announced its plans to buy TracFone, a unit of Mexican telecom company America Movil, in a cash and stock deal.
Verizon awaits FCC approval of the nearly $7 billion transaction. Observers say the extra pressure may not help close the acquisition more quickly.
Sens. Dianne Feinstein (D-CA), Richard Blumenthal (D-CT), Sheldon Whitehouse (D-RI), Ron Wyden (D-OR) and Edward J. Markey (D-MA) apprised FCC Acting Chairwoman Jessica Rosenworcel of their unease. Characterizing TracFone as “the largest independent MVNO,” they want to raise concerns about what the deal could mean for TracFone’s customers participating in the FCC Lifeline program, which subsidizes service for low-income households.
Lifeline provides 9.1 million Americans with essential connections by providing free or discounted broadband and voice services, according to the FCC. TracFone supports 1.7 million Lifeline subscribers in 43 states and approximately 21 million customers overall, according to the lawmakers. “As the largest Lifeline operator, TracFone’s importance to the program cannot be overstated: when larger carriers scaled back their Lifeline offerings, TracFone became all the more essential as a reliable Lifeline partner,” the senators stressed.
The senators noted that TracFone has built a successful business catering to subscribers who are particularly focused on their budget, unable to register for postpaid plans, or face other hurdles to getting a phone. “Verizon’s proposed acquisition could impact whether those households continue to have the opportunity and security provided by telephone and internet access,” they emphasized.
“We are concerned that Verizon does not have a sufficient record on supporting Lifeline for its current wireless services and has provided few enforceable commitments to the FCC within the proposed TracFone transaction,” the senators wrote.
They’re not asking the FCC to reject the deal, but they are asking for Rosenworcel to, as part of the approval process, safeguard Lifeline customers and make sure 5G is available to them. That aligns with what advocacy groups and the Communications Workers of America have pressed for.
Verizon spokesperson Rich Young defended the acquisition as providing all TracFone customers with more choices and lower pricing. “Lifeline is foundational to the acquisition, and in response to calls for time commitments, Verizon has committed to the Lifeline program for at least three years,” he told Reuters.
During Wednesday’s earnings call, Verizon officials said they expect to close the deal in the second half of the year.
The Department of Justice signed off on the transaction late last year.