Verizon has stepped up its commitments regarding its proposed acquisition of TracFone, and the FCC should finally make a decision on the merger. In an ex parte filing dated November 18, Verizon strengthened its pledge to participate in the Lifeline program for several years as a condition for the Commission's approval of the transaction. If approved, the Verizon/TracFone merger likely would make the wireless market more competitive. And there appears to be no drawbacks because the deal would not result in the loss of a facilities-based provider.
Verizon first applied to the FCC for consent to acquire TracFone on September 30, 2020. But the parties have been left hanging during the Commission's slow-motion review process. The proposed merger is not a hard call, and there is no good reason for the Commission to further delay its decision.
My blog post from August 17 of this year called attention to Verizon's pledge to continue providing low-income consumers with service through the Lifeline program after its acquisition of TracFone is approved. Verizon's ex parte from November 18 actually expanded on that pledge by offering to participate in the Lifeline program for at least seven years instead of three years. Among other proposed commitments, Verizon will continue existing TracFone rate plans for at least three years after the close of the deal. And for TracFone subscribers who are required to transition to Verizon's Network, Verizon will offer them devices with comparable functionality or SIM card replacements at no cost.
Verizon is a facilities-based wireless service provider, and TracFone is a popular pre-paid mobile virtual network operator (MVNO) that relies on other providers' facilities. Thus, the merger would not cause any U.S. wireless consumer to lose a choice among facilities-based providers. Instead, by carrying wireless traffic for TracFone's pre-paid service on Verizon's network, the merger likely would save costs and make Verizon a stronger competitor with AT&T, T-Mobile, and other wireless providers that cater to the pre-paid market segment.
In all, the public benefits of Verizon/TracFone clearly appear to outweigh any potential downsides. It is past time for the FCC to conclude its review and vote on the merger.
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