Democratic Senators Push FCC to Scrutinize Verizon's TracFone Acquisition & Secure Commitments to Prioritize Consumers
“History has shown that positive pledges and good intentions without binding commitments has been insufficient to protect consumers and workers.”
[WASHINGTON, D.C.] – U.S. Senators Richard Blumenthal (D-CT), Sheldon Whitehouse (D-RI), Dianne Feinstein (D-CA), Ron Wyden (D-OR), and Edward J. Markey (D-MA) pressed the Federal Communications Commission (FCC) today to probe Verizon’s proposed acquisition of TracFone and secure specific commitments from the company to ensure that this acquisition will not harm consumers. In the $6.9 billion transaction, Verizon would acquire one of the largest operators of the Lifeline program which provides free or discounted internet and affordable prepaid mobile phone services to low-income Americans. TracFone’s SafeLink Wireless Brand supports 1.7 million Lifeline subscribers in 43 states and approximately 21 million customers overall.
“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,” wrote the senators to FCC Acting Chairwoman Jessica Rosenworcel. “While we note Verizon’s stated goal of maintaining these services, Verizon would have significant incentives and opportunities to push subscribers from Lifeline and inexpensive prepaid services to higher revenue plans.”
The senators expressed the need for Verizon to maintain services and affordability of offerings for current TracFone subscribers, writing: “We urge the Commission to carefully and cautiously consider the impact of the proposed transaction on the tens of millions of TracFone subscribers, who all depend on a competitive wireless market. In particular, we encourage the FCC to consider long-term, binding commitments to protect Lifeline subscribers and ensure affordable services.”
The lawmakers cited concerns from public interest organizations about the transitions between generations of networks being used by operators as opportunities to move consumers off plans and cut Lifeline services, and the insufficient advertising of Lifeline services compared to plans more lucrative for the operators “resulting in consumers not being aware of subsidized or budget-friendly alternatives.”
“During this time of rising inequality and hardship, it is important that the FCC secures long-term and enforceable commitments to ensure that Lifeline and budget plans remain accessible, competitive, and responsive to the needs of consumers,” the senators continued.
The lawmakers pressed the FCC to secure binding commitments from Verizon prior to the acquisition, including requiring participation in the Lifeline program and making 5G offerings available to Lifeline and prepaid consumers at the same rate as other Verizon customers.
The full text of the senators’ letter is available here.
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