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FCC approves $ 6 billion acquisition of Verizon-Tracfone

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 world’s largest service providers prepaid in the United States.

Tracfone is the largest reseller of wireless devices in the United States and has more than 20 million subscribers with more than 90,000 points of sale. Verizon’s acquisition of Tracfone pairs the country’s largest mobile virtual network operator (MVNO) with the country’s largest wireless service provider. When Verizon first proposed the deal last September, the company said the acquisition would strengthen Tracfone’s networks while making low-income wireless services more competitive.

“After careful consideration, the Commission found that the transaction, as modified by Verizon’s binding covenants, will make Verizon and Tracfone stronger providers of prepaid and lifeline services,” the FCC said in a press release Monday. .

It is unclear which commissioners voted to approve the deal. Currently, there are only two Democrats and two Republicans serving with 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 it would ask Verizon to enter into several consumer protection agreements with the agency. First, Verizon has pledged to continue participating in the Lifeline grant program for at least seven years. The company also needs to deliver “cost-effective” 5G devices and services to Lifeline customers. Verizon is also required to submit semi-annual reports describing how its compliance meets these restrictions.

Last Thursday, the California Public Utility Commission approved the deal, imposing restrictions similar to those imposed by the FCC. However, California regulators have required Verizon’s Tracfone to participate in the Lifeline program for at least 20 years. Customers will also receive free 5G-enabled devices and are not expected to see the price of wireless plans increase over the next five years.

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