Home Future payments US FCC Approves Verizon Acquisition of TracFone Wireless

US FCC Approves Verizon Acquisition of TracFone Wireless

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A man stands next to the Verizon logo at the Mobile World Congress in Barcelona, ​​Spain on February 26, 2019. REUTERS / Sergio Perez

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WASHINGTON, Nov.22 (Reuters) – The United States Federal Communications Commission announced Monday that it has approved Verizon Communications Inc’s (VZ.N) acquisition of more than $ 6 billion of prepaid cellphone provider TracFone Wireless with conditions to protect low-income consumers.

The FCC’s announcement follows approval of the deal by the California Public Utilities Commission last Thursday after Verizon agreed to additional consumer protection terms. Verizon is the largest US wireless operator in terms of subscribers. TracFone, a unit of Mexican telecommunications company America Movil (AMXL.MX), serves more than 20 million customers.

Verizon announced in September 2020 that it would buy TracFone under a $ 6.25 billion cash and stock deal with up to $ 650 million in potential additional future payments.

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FCC approval is expected to close the deal as early as Wednesday.

The FCC said the requisites would protect low-income consumers from price increases and require the company to continue participating in a low-income telecommunications subsidy program called Lifeline. The agency will need an internal, independent compliance officer “authorized to proactively monitor conditions, ensure low-income consumers are not harmed and facilitate consumer complaints about potential violations.”

Verizon praised the FCC’s approval, saying the deal “would give customers the best of both worlds: more choices, better services and new features.”

The deal was approved by the Justice Department last year.

Under the California agreement, TracFone or Verizon must participate in Lifeline for 20 years.

TracFone is one of the largest providers of the Lifeline program, with 1.7 million low-income subscribers in 43 states and the District of Columbia.

Verizon said it has committed to participating in Lifeline for at least seven years and will offer existing TracFone Lifeline pricing plans for at least three years.

In total, Lifeline provides free or discounted broadband and voice services to 9.1 million Americans.

U.S. Democratic Senators Richard Blumenthal, Sheldon Whitehouse, Dianne Feinstein, Ron Wyden and Edward Markey said that “the FCC’s binding terms regarding Verizon’s acquisition of TracFone can have real benefits for consumers – if followed closely. and applied “.

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Reporting by David Shepardson; Editing by Sonya Hepinstall, Will Dunham and Mark Porter

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