FCC asked to dig deeper into Verizon's deal to buy TracFone

FCC asked to dig deeper into Verizon's deal to buy TracFone
Back in September, Verizon announced that it had reached a deal to acquire TracFone from American Movil for $6.25 billion. This transaction, when completed, would give the nation's largest wireless provider the largest MVNO in the country with more than 21 million subscribers and 90,000 retail locations. An MVNO, or Mobile Virtual Network Operator, is a company that buys wireless service wholesale from a carrier that owns a network and sells it retail to the public. This saves the MVNO from having to shell out billions to build their own network. 13 million of TracFone's customers rely on Verizon's cellular network for service.

Reuters reports that on Friday, the attorneys general of 16 states and the District of Columbia asked the FCC in a letter to perform a thorough investigation of the transaction. In addition, the 17 attorneys general are asking the regulatory agency to place conditions on Verizon if the deal is approved. They also wrote that the FCC "should examine whether the acquisition of TracFone by Verizon could significantly reduce millions of Americans' access to affordable communications services." The letter also stated that "it is imperative that the FCC thoroughly vet the proposed transaction and impose specific conditions that protect and ensure the public interest before considering approval."


The attorneys general taking part in this request to the FCC include those from Virginia, Colorado, Connecticut, Delaware, the District of Columbia, Iowa, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont and Washington. The group is led by Virginia's Mark Herring. Michigan Attorney General Dana Nessel said, "We urge the FCC to put the interest of the American consumer before that of big business and request additional information before allowing this acquisition to happen."

The FCC is in the midst of undergoing a change with the arrival of the Biden administration. Under former FCC Chairman Ajit Pai, picked to be chairman under Donald Trump, the agency often favored the carriers over consumers. With acting chairwoman Jessica Rosenworcel, a Democrat, now at the helm, we could see a reversal including the return of net neutrality.

TracFone offers wireless service to 1.7 million low-income Americans in 43 states and the D.C. under the subsidized Lifeline program. Verizon offer such service in four states and said that it "will continue to offer Lifeline service through TracFone and further develop its core brands, products and distribution channels. Strengthening and growing TracFone will benefit value-conscious consumers."

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