Reply With QuoteHere is the FCC approval document:
https://docs.fcc.gov/public/attachme...C-21-121A1.pdf
Excerpt:
1. In this Memorandum Opinion and Order, we approve, subject to conditions, the
application of Verizon Communications Inc. (Verizon), América Móvil S.A.B. de C.V. (América Móvil),
and TracFone Wireless, Inc. (TracFone) (together, the Applicants) for Commission consent to the transfer
of control of TracFone’s international section 214 authorization from América Móvil to Verizon.
2. As a result of the transaction, TracFone will become a direct subsidiary of Verizon.
TracFone offers prepaid services to more than 20 million customers, including offering prepaid services
to approximately 1.7 million Lifeline customers.1 The Applicants assert that the transaction will benefit
underserved consumers by allowing Verizon and TracFone to better serve customers in the prepaid
segment.2 The Applicants maintain that the transaction will deliver public interest benefits in the form of
more choices, better service, and new features and devices, including 5G, to underserved communities
and TracFone’s generally value-conscious customers
3. Commission staff has conducted an exhaustive review of the record filings in this
proceeding, including reviewing thousands of pages of pleadings, documents, and information request
responses, as well as conducting a thorough economic analysis of the potential harms and benefits. Based
on our extensive review and analysis of the record, we find that the proposed transaction has the potential
to cause some public interest harms. In particular, TracFone is one of the most significant participants in
the Lifeline program, and the evidence points to potential harm to TracFone’s Lifeline-eligible and other
low-income customers, especially in geographic markets outside Verizon’s coverage area. In addition,
Verizon, as a result of the transaction, may have an increased incentive to raise the costs of mobile virtual
network operators (MVNOs) that compete directly against TracFone for Lifeline and other low-cost
prepaid customers and for which Verizon is their wholesale provider.
4. However, we adopt a number of demanding conditions herein to address these public
interest harms and to ensure the realization of certain public interest benefits. These include strong
conditions to protect low-income consumers from price increases and to ensure that TracFone remains a
supportive Lifeline participant. Given the likelihood that any violation of these conditions would harm
low-income consumers, we also require more than seven years of oversight. Finally, we create strong,
independent enforcement mechanisms—including both an internal and an independent compliance officer
who are empowered to proactively monitor conditions, ensure that low-income consumers are not being
harmed, and facilitate consumer complaints about potential violations—particularly from Lifeline
subscribers. We find that these and the other conditions imposed herein adequately address the concerns
and potential harms identified in the record such that, considering that the transaction also will yield some
benefits (in the form of lower marginal costs) for TracFone, on balance, we are able to find that the
proposed transaction serves the public interest.
5. Verizon has made certain commitments to ensure that this transaction will serve the
public interest by addressing the potential public interest harms and helping to realize the asserted public
interest benefits. We make these commitments conditions of our approval of the proposed transaction.
We briefly summarize many of the major commitments here, which address Lifeline and low-income
consumers, customer migration and transition, wholesale services, unlocking devices, compliance and
reporting, and assumption of liability.
6. Lifeline Commitments. Verizon commits to continue to offer TracFone’s Lifeline-
supported services over the same service area where TracFone currently offers Lifeline service for a
minimum of seven years following the close of the transaction. In addition, Verizon will offer a free,
compatible device or SIM in certain circumstances where customers are being required to transition to
Verizon’s network. Subject to certain specific limitations, Verizon will continue to offer and advertise
existing Lifeline plans and will not add new co-pays to TracFone’s existing Lifeline plans offered at no
cost to prepaid customers for at least three years. Within six months after the transaction closes, Verizon
also will make available to existing and new Lifeline prepaid customers a 5G plan and will offer a range
of cost-effective 5G devices to existing and new Lifeline customers. Verizon will also maintain a
specified level of marketing and advertising expenditures for Lifeline and will establish and maintain a
dedicated website with information about the Lifeline program and a dedicated customer service line for Lifeline customers.
7. Customer Migration and Transition Commitments. For at least three years after the close
of the transaction, Verizon will maintain TracFone’s existing MVNO agreements to serve customers
outside Verizon’s network coverage (including Puerto Rico), and it will maintain existing TracFone rate
plans for new and existing customers. During this period, in order to assist customers in the transition,
Verizon will maintain an exclusive, toll-free customer service line; conduct outreach, advertise, and
display all plans on a dedicated website; and separately notify all TracFone customers of the transaction.
In addition, during this period, Verizon will notify customers at least twice before they are transitioned to
Verizon’s network and, in certain circumstances, will provide a free compatible device in order to prevent
interruption or degradation of service.
8. Unlocking Devices Commitment. Subject to certain conditions and limitations, Verizon
commits to extending its 60-day unlocking period to all 700 MHz C Block devices purchased from
TracFone after closing and activated on the Verizon network, subject to a two-year waiver of the
automatic unlocking requirement to allow manual unlocking for those TracFone devices that currently do
not have automatic unlocking capabilities. Verizon will provide notice to affected TracFone customers of
its unlocking policy.
9. Wholesale Service Commitment. Verizon commits to provide MVNOs that have current
contracts with Verizon an option to extend, subject to the limitations specified below, their existing
MVNO wholesale agreements, on the same terms and conditions, on a month-to-month basis until three
years after the transaction closes.
10. Compliance and Reporting Commitments. For seven years and six months following the
close of the transaction, Verizon commits to paying for and retaining both an internal company
compliance officer and an independent compliance officer to ensure compliance with these commitments.
For seven years, Verizon will also submit publicly available semi-annual reports describing its
compliance that includes information regarding Lifeline and non-Lifeline customers.
11. Assumption of Liability Commitments. Without prejudicing contractual indemnification
rights between Verizon and América Móvil, Verizon assumes liability for any forfeitures, restitution, or
other obligations that may be imposed by the Commission or the Universal Service Administrative
Company (USAC) on TracFone and its subsidiaries, and any successors or assigns, unless such liability
has been resolved by TracFone prior to the closing of the transaction. In addition, Verizon will comply
with any agreements with the Commission or USAC, including following any compliance plans, or other
obligations, agreed to by TracFone, its subsidiaries, or any successors or assigns.
See Verizon commitments, starting on page 3 and 29.
Originally Posted by rpz1
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