16 States Ask The FCC What The Hell Is The Point Of The Verizon Tracfone Merger
from the do-not-pass-go,-do-not-collect-$200 dept
Late last year, Verizon announced it would be acquiring Tracfone for around $6.2 billion. As we noted when the deal was first announced, it was yet another example of the "growth for growth's sake" mindset that has long infected US industry, particularly the telecom sector. There are really no real benefits to be gleaned from further consolidation in the space (especially in the wake of a T-Mobile Sprint merger that immediately resulted in layoffs and reduced US wireless competition by around 25%). Yet we really adore pretending otherwise as the government rubber stamps deal after deal.
In a letter (pdf) to the FCC, attorneys general from 16 states and the District of Columbia urged the agency to actually, you know, do its job and ask more questions about the deal. TracFone is among the biggest providers of Lifeline, the FCC program that provides services for about 1.7 million low-income subscribers in 43 states. Verizon is a lumbering media and telecom monopoly that views such programs (and the regulators that oversee them) as largely an irritant. Putting the TracFone contributions at risk during an historic economic and health crisis isn't particularly bright.
As such, the states are wondering if the FCC might be able to take a few moments to make sure the deal doesn't harm those relying on the program:
"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 states also are quick to point out that maybe more consolidation in a telecom sector filled with problems caused by mindless consolidation might not be a great idea:
"Furthermore, a vertical merger of the leading Mobile Network Operator (MNO), and the leading Mobile Virtual Network Operator in an already concentrated mobile wireless market would see the last significant MVNO integrated into a national facilities-based provider. If this resulted in a decrease in the number or quality of Lifeline offerings, that could be contrary to the public interest and could have an adverse impact on consumers and the communications industry."
Notice, however, how even the minority of US states that could be bothered to care about these problems can't be bothered to recommend simply blocking a deal that will benefit nobody other than Verizon executives and shareholders. It's not even something that enters their minds.
Instead such mergers are eagerly rubber stamped, conditions are affixed that are usually largely feckless (or volunteered by the companies themselves), then regulators fail to meaningfully enforce them. Monopolies like Verizon then just double down on the same behavior they've engaged in for the better part of the last forty years. We then stand around with a dumb look on our collective faces wondering why Americans pay some of the highest prices in the world for some of the most mediocre telecom speeds and services in the developed world. Wash, rinse, repeat.
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Filed Under: broadband, competition, fcc, mvno, wireless
Companies: tracfone, verizon
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The worst part is that it’s not even good for the company (tears down sign). Look at the amount of debt AT&T is now in. I think the only people who benefit are the executives and the banks.
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Re:
The illusion of growth will keep the stock price climbing, the pockets of board members and investors will grow fuller and when the fake growth slows, they can fire a bunch of people to keep the number going up. When it all goes pear-shaped, the people behind it will flee on golden parachutes, knowing nothing they did was illegal so they will suffer no repercussions.
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Re: Re:
T,FTFY
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I'm starting to suspect some groups want "standing around with a dumb look on their face" to be the default state for most Americans.
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for the dough
water always flows to the lowest point
kids always find a way to have fun
greedy men always find a way to make a buck
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Re: for the dough
Another fix. All in a day's work, I assure you.
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'TracFone is among the biggest providers of Lifeline, the FCC program that provides services for about 1.7 million low-income subscribers in 43 states'
surely that's why Verizon wants it then? they can see that there's money to be made in some form or other,(fleecing more from the govt, getting rid of jobs, making any/all repairs/installations take forever and a day, if done at all. there is no way that this would be a wanted deal unless Verizon is gonna make (or thinks it's gonna make) a massive financial killing out of it! it smacks to me of another crock of crap that was expected to go through without hindrance as they also expected Trump to be back in office (thank fuck he's NOT!)
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simply removing a competitor, and who buys network service at bulk rates, is a thing in itself.
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Remember when Verizon opposed Pai's move to push the 70% of Lifeline customers that use virtual resellers like Tracfine onto physical carriers like Verizon? (likely because the latter would prefer that the former be one one that has to worry about those poor people not being able to pay phone bills.)
Does anyone believe Verizon has really changed?
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I can't be the only one...
Me, a TracFone customer: I know the major telecom players like AT&T and Verizon are notorious for simply being bad to their own customers, but I have TracFone. I'm glad I don't have to deal with those issues directly. (Takes a sip of water)
Techdirt: Let's report on several state's concerns they shared with the FCC over the proposed merger between Verizon and TracFone.
Me, spitting out water: Verizon's doing what now? How did I not know about this? I really should have seen this coming!
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How far?
I'm left wondering where this will end up. When there are only two mobile phone carriers left, and they're contemplating a merger, will the FCC or DOJ say anything then?
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lot of opinions in here based on little actual information. deal is good for VZ who has little prepaid market share and doesnt affect customers really at all as most of them are on VZ's network. if the fcc or AGS actually wanted to do something for customers they should have blocked sprint/tmobile
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Re:
Here's a little "actual information" for you:
I am enrolled in the Lifeline program serviced by Safelink/Tracfone.
I received a text message on Friday (Feb 18th - start of the 3 day President's Day weekend) informing me that "due to underlying system changes", I would no longer be able to place or receive phone calls, including 911 and Emergency calls as of Tuesday, Feb 22nd. They gave a number to call for a free 'compatible' phone. These are "out of stock", but they do have phones for purchase, which isn't an option for the majority in the program nor should they have to - the program is supposed to provide them.
It appears that Verizon has determined that it is cheaper to pay the fine than honor the contract, thereby leaving thousands of the most vulnerable without service.
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