On Monday, the Federal Communications Commission voted to approve Verizon Wireless’ purchase of Tracfone in a deal worth more than $6 billion, positioning Verizon to become one of the largest prepaid service providers in the US.
Tracfone is the largest reseller of wireless devices in the US and maintains over 20 million subscribers with more than 90,000 retail locations. Verizon’s Tracfone acquisition combines the largest mobile virtual network operator (MVNO) with the largest wireless provider in the country. When Verizon first proposed the deal last September, the company said that the acquisition would bolster Tracfone’s networks while making low-income wireless services more competitive.
“After rigorous review, the Commission found that the transaction, as modified by Verizon’s enforceable commitments, will make Verizon and Tracfone stronger providers of prepaid and Lifeline services,” the FCC said in a Monday press release.
It’s unclear which commissioners voted to approve the deal. Currently, there are only two Democrats and two Republicans serving at the agency, meaning at least one Democrat would have been required to approve the purchase.
As part of its decision to approve the deal, the FCC said that it would be requiring Verizon to make several consumer protection agreements with the agency. First, Verizon promised to continue its participation in the Lifeline subsidy program for at least seven years. The company must also provide “cost-effective” 5G devices and services to Lifeline customers. Verizon must also submit semi-annual reports describing how its compliance meets these restrictions.
Last Thursday, the California Public Utility Commission approved the deal, mandating similar restrictions to those imposed by the FCC. However, the California regulators required Verizon’s Tracfone to participate in the Lifeline program for at least 20 years. Customers will also receive free 5G-compatible devices and should not see wireless plan price increases over the next five years.