On November 22, 2021, the FCC released an Order granting Verizon Communications Inc. (“Verizon”), América Móvil S.A.B. de C.V. (“América Móvil”), and TracFone Wireless, Inc.’s (“TracFone”) Application for Consent to Transfer of Control of TracFone’s international section 214 authorization from América Móvil to Verizon (“Application”). The FCC concluded that the transaction had the potential to cause public interest harms, particularly toward TracFone’s Lifeline-eligible and other low-income customers, especially in geographic areas outside of Verizon’s coverage areas and with regard to the increased incentive Verizon may have to raise the cost of mobile virtual network operators that compete directly against TracFone for these customers and for which Verizon is their wholesale provider.
In order to address these public interest concerns, the FCC adopted several conditions, including:
- requiring Verizon to maintain its commitment to continue to provide lifeline service to new and existing customers for at least seven years that matches or exceeds TracFone’s current lifeline offerings and speeds, as well as requiring related marketing and advertising expenditure commitments;
- requiring Verizon and its successors to assume liability for any forfeitures, restitutions, or other obligations that may be imposed or agreed to by TracFone;
- requiring that Verizon follows through – for at least three years – on its commitments to (1) mitigate transition difficulties and concerns with regard to compatible devices by maintaining existing MVNO agreements to serve customers outside its network, (2) notify TracFone customers prior to transitioning them to Verizon’s network, (3) maintain a toll-free service line for TracFone customers, (4) conduct outreach, advertising, and displaying of all TracFone plans on a dedicated website; (5) offer comparable devices at no cost to transitioning customers with existing non-compatible devices; and (6) maintain existing TracFone rate plans for existing and new customers;
- requiring Verizon to extend its 60-day unlocking policy to all 700 MHz C Block devices purchased from TracFone within 30 days of closing;
- requiring Verizon to offer contract extensions to MVNOs that have current contracts; and
- requiring Verizon to hire an internal company compliance officer and an independent compliance officer to monitor these commitments.
With these requirements in place, the FCC concluded that the transaction was in the public interest, and accordingly granted the Application.
Commissioner Carr issued a separate statement concurring with the decision, citing prior raised concerns with the standards and frameworks the agency applies in such transaction reviews.
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