Worried About Tracfone Merger Approval, Verizon Pretends It Didn't Exploit COVID Emergency Program

from the with-friends-like-these dept

Prodded by Congress, a few months back the FCC launched the Emergency Broadband Benefit, a $3.2 billion program designed to provide folks struggling economically during COVID a little extra help affording broadband. Under the program, users get a $50 discount off their broadband bill, a total that jumps to $75 for those living on tribal areas. As we’ve well covered, regional telecom monopolization and corruption results in Americans paying some of the highest prices in the world for broadband, a problem that hits low income consumers and marginalized communities the hardest.

While the program does little to fix US broadband’s bigger competition issue, it’s certainly helping folks; roughly a million folks signed up the first week. And while the majority of the 825 participating ISPs are engaging in the program in good faith, it’s not particularly surprising that some ISPs decided to try and game the system to make an additional buck. Charter, for example rejected users from signing up if they didn’t agree to pay for a more expensive broadband tier once the program ends, which appears to violate the program rules.

More problematic is Verizon, which got caught forcing users to sign up for even more expensive tiers if they wanted to apply to the program, resulting in some users being forced to pay more for broadband than if they’d never signed up for government help in the first place:

“Annie Styles from Arlington, Va., who pays $79 per month for her Internet, says Verizon told her she would have to switch to a plan that would cost her closer to $95. ?I stopped pursuing it with them after the math didn?t work out,? she says.”

Not too surprising coming from a company criticized in 2018 for capping California firefighters’ “unlimited” wireless plan during an historic wildfire, then trying to upsell them to more expensive plans as they tried to battle the blaze. Only once the press highlighted Verizon’s latest COVID relief gamesmanship did they back away from it, issuing an odd press release pretending that none of this had ever happened, and any changes to their approach were entirely of their own making. The company has also been trying to do damage control at the FCC, claiming people didn’t experience the thing they clearly experienced:

“Verizon is defending its practice of forcing customers to switch plans to get a government-funded $50-per-month discount, telling the Federal Communications Commission that this is not the same thing as “upselling.” Verizon has partially backtracked from this restrictive policy but told the FCC it will take “about a month” to deploy a billing-software update that will let more home-Internet customers get the discounts without changing plans.”

Again, not too surprising for a company that spent millions of dollars trying to neuter the FCC and net neutrality, then used a fake journalist to pretend it wasn’t actually doing that.

Verizon’s particularly sensitive because the company is currently trying to gain regulatory approval for its acquisition of Tracfone, a prepaid wireless carrier predominately used by low income Americans. Consumer groups like Public Knowledge have been warning the FCC (pdf) that a company that thinks nothing of exploiting a program designed for low income Americans might just not be the best steward of a company catering to low income consumers. But I’d wager the Biden FCC approves the deal anyway, given America’s obsession with the illusory benefits of near-mindless telecom consolidation.

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Companies: tracfone, verizon

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Comments on “Worried About Tracfone Merger Approval, Verizon Pretends It Didn't Exploit COVID Emergency Program”

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15 Comments
David says:

Re: This is exactly what we need

Mega-mergers always lead to higher bills and fewer jobs. That’s their principal attraction. There is nothing particularly surprising about that: for very large corporations dominating markets, by far most costs scale with capacity, namely the number of customers served. There just aren’t any "synergy effects" worth noting that are served by a mega-merger.

The main effect is that you can reduce value and service and increase prices without the customers having recourse to other offers. Reducing value and service facilitates firing people and/or exploiting the existing staff recklessly until it quits on their own.

That One Guy (profile) says:

When statement two shoots statement one in the back...

"Verizon is defending its practice of forcing customers to switch plans to get a government-funded $50-per-month discount, telling the Federal Communications Commission that this is not the same thing as "upselling." Verizon has partially backtracked from this restrictive policy but told the FCC it will take "about a month" to deploy a billing-software update that will let more home-Internet customers get the discounts without changing plans."

‘We’re not forcing customers to swap to more expensive plans if they want to make use of the government subsidy, also it will take a month or so to change our billing system to let people make use of the government subsidy without having to swap to more expensive plans.’

It’s a good thing for Verizon that they own most if not all of the people in charge of approving mergers and applying penalties to the industry, otherwise getting caught running a scam this blatant would seem to be great grounds to refuse the pending merger along with handing out a hefty financial penalty.

Flakbait (profile) says:

Hell's bells and dinky toys!

My wife and I have been loyal TracFone customers for over 15 years. It is inexpensive, reliable and has very good customer service (how many telcos can say that?). We are nowhere near what would be classified as "low income", we just like to keep our money to spend it on things that aren’t giant telecoms, and like paying only for what we need (insert Limu Emu picture here).

Time to start searching for alternatives…

Lostinlodos (profile) says:

Things are getting worrisome.
The sprint/T-Mobile merger did little to disrupt anything. Sprint is a company hated by most people and with minimal base.
All it’ll the merger did was tarnish the reputation of the most liked cellular company.

Right now there’s 4 major companies. Att, Verizon, T-Mobile, and Comcast.
For those not interested in the big companies there’s dozens of independents. Companies who buy out bully use rates from the big 4 and resell it to smaller companies, mostly.

This however is dangerous. Sprint had a fraction of the subscribers of the much younger Xfinity mobile. The only people who complained beyond their tiny user base (and T-Mobile subscribers), were motivated by politics or ignorance.

Now we have a major disposable phone company as a target. This MUST be stopped. Putting a PAYG prepay service under another company that already has a more expensive prepay service is only going to hurt consumers!

Godfather says:

Re: Re:lostinlodos

There’s only 3 major carriers Verizon at&t and t-mobile comcast/xfinity charter/spectrum piggy back on verizon they dont have their own network boos mobile was sprints and was sold to dish network with a deal that lets them use tmobiles network untill 2025 or till dish network builds their own network wich at that point brings us back to 4 major network

nasch (profile) says:

Re: Re: Re:3 Re:

If I’m not mistaken, there are no other actual networks besides Verizon, AT&T, and T-Mobile. Everything else is reselling those services as a mobile virtual network operator. So while it is great to have those other options, there’s only so much extent they’ll be allowed to compete with the big guys, as seen here by Verizon attempting to buy one of its MVNOs.

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