FCC approves Verizon-Tracfone acquisition, demanding consumer protections

The Federal Communications Commission voted on Monday to approve Verizon’s $6 billion bid for prepaid mobile company Tracfone, which it announced back in September, pending the regulatory approval that finally came this week.

“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 press release.

The FCC’s announcement includes the demand that Verizon should report semiannually on its compliance for the next seven years, as well as having to “retain both an internal company compliance officer and an independent compliance officer to ensure compliance with these commitments for seven and a half years, according to the FCC’s approval letter.

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. Also, the company must provide “cost-effective” 5G devices and services to Lifeline customers.

However, it is still not clear which commissioners voted to approve the deal, in a time when 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.

Tracfone is the largest reseller of wireless devices in the U.S. 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.

That said, when Verizon first proposed the deal last September, it said that the acquisition would strengthen Tracfone’s networks while making low-income wireless services more competitive.

When the deal was announced, Verizon’s CEO Hans Vestberg tweeted that the company was excited to “put the full support of Verizon behind this business.”

Verizon has already spent a good amount of $53 billion on radio airwaves this March, therefore it is considered another big investment from the wireless carrier.

The company will be expected to report regularly on these conditions and submit to oversight for more than seven years, according to the FCC. “The company will also have to “retain both an internal company compliance officer and an independent compliance officer to ensure compliance with these commitments for seven and a half years,” it added.