According to Fierce Wireless (link below), the Attorneys General from 16 states and Washington, DC have sent a letter to the FCC urging the agency to request additional information from Verizon about its planned TracFone* acquisition.
TracFone is one of the largest providers of Lifeline, while Verizon curently only offers its services to Lifeline customers in parts of four states.
“The potential for Verizon to pursue additional profits by reducing the access and/or quality of Lifeline services could shut out millions of low-income Americans from adequate communications services,” they wrote. “Considering the fundamental role that cellular telephones play in accessing modern society and the modern economy, it is imperative that Lifeline services be protected and maintained if this transaction is approved.”
The AGs want the FCC to adopt conditions that protect Lifeline customers, such as a commitment by Verizon to provide Lifeline services at an affordable rate and at a quality commensurate with modern standards.
They also point out that a merger of the leading mobile network operator and the leading MVNO in an “already concentrated mobile wireless market” would see the last significant MVNO integrated into a national facilities-based provider.
Their concerns are similar to what the CWA union has raised previously. In December, CWA filed comments demanding a commitment from Verizon to participate in the Lifeline program for a minimum of five years – and a to continue to market to, and provide customer services for Lifeline and prepaid customers, including non-English-speaking customers.
The AGs include Virginia, DC, Colorado, Connecticut, Delaware, Iowa, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont and Washington.
Verizon has argued that a combined Verizon/Tracfone will need to earn customers’ business given the fierce competition in the prepaid segment. The vertically-integrated “flanker brands” of Verizon’s rivals – Metro and Cricket – enjoy integrated advantages, including lower costs and access to better equipment offerings, according to Verizon.
“As a result, these flanker brands have substantially increased their subscriber base in the last several years while standalone TracFone’s subscriber count has declined. The proposed transaction will make a combined Verizon/TracFone a stronger competitor for prepaid customers against AT&T and T-Mobile, as well as DISH,” Verizon told regulators.
*Tracfone is a NWIDA member
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