Verizon and Tracfone

The Federal Communications Commission has voted to approve the transfer of control of TracFone Wireless from América Móvil to Verizon Communications.

However, the approval is subject to Verizon agreeing to strong consumer protections, many of them focusing on Lifeline service. The FCC recently fined Tracfone $6 million for alleged Lifeline abuses.

Among the binding conditions that Verizon agreed to:

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  • Maintain existing Tracfone subscriber packages;
  • Ensure TracFone continues as a Lifeline participant;
  • Guarantee the affordability and availability of 5G services and devices for underserved consumers;
  • Market and provide customer services for Lifeline and English and non-English speaking prepaid customers
  • Ensure that Tracfone customers suffer no loss of service as a result of the transfer.

Additionally, Verizon must:

  • Provide a free, compatible device or SIM in certain circumstances where Lifeline customers are being required to transition to Verizon’s network;
  • For at least seven years, offer TracFone’s Lifeline-supported services over the same service areas;
  • Continue to advertise and offer existing Lifeline plans, without adding co-pays to TracFone’s existing Lifeline plans for at least three years;
  • Provide to existing and new Lifeline prepaid customers a 5G plan, while also offering a variety of cost-effective 5G devices to existing and new Lifeline customers;
  • Provide a dedicated website with information about the Lifeline program as well as a dedicated customer service line for Lifeline customers;
  • Maintain TracFone’s existing MVNO agreements to serve customers outside Verizon’s network coverage for three years.

In its press release, the FCC said that it also “adopted strong, independent mechanisms for enforcing these conditions and ensuring that the transaction does not harm low-income or other consumers. These enforcement mechanisms include 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. Given the likelihood that any violation of these conditions could harm low-income consumers, today’s Order also requires regular public reporting and more than seven years of oversight.”

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