Biden FCC Green Lights Yet More Telecom Consolidation With Verizon Tracfone Merger

from the meet-the-new-boss dept

For literally 30 years telecom regulators have, with the occasional rare exception, rubber stamped a steady parade of mergers, resulting in a consolidated, less competitive overall market. The end result of these decisions are everywhere, from terrible customer service and high prices, to routine apathy to consumer privacy and spotty overall telecom coverage. And while regulators occasionally affix merger conditions designed to limit these harms, these conditions are usually either pathetic (often because they're volunteered by the companies themselves) or they're just not enforced in any meaningful capacity (outside of the rare and laughable fine).

While there's a bit more awareness and opposition to mindless mergermania coming from the left, when it comes to regulators and politicians, this obsession with embracing mergers and consolidation is bipartisan. This week, the Biden FCC announced it would be greenlighting Verizon's $6 billion merger with Tracfone. Tracfone, currently owned by América Móvil, largely caters to low-income Americans. Consumer groups initially balked at the deal, arguing that Verizon's long history of nickel-and-diming made it likely the company would inevitably nickel-and-dime those financially precarious users as well.

But Verizon, a company with a long history of not living up to merger promises, made some promises... and now the Biden FCC says it's approving the deal. Verizon has promised to try and keep prices the same for a while, make 5G devices available to these users, continue participation in the FCC's low-income Lifeline program for a while, and generally not be a predatory ass. All overseen by what the FCC calls "strong, independent, enforcement mechanisms":

"The Commission 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."

I'm sure the FCC thinks they've fixed the deal by extracting conditions. The problem is we've been through this rodeo before, and there are 40 years of history showing that these pinky swears are frequently meaningless. Verizon has a long, rich history of nickel and diming consumers and tap dancing around obligations, usually with minimal to no penalty. They're simply responding to pressure to maximize shareholder value within the framework of limited competition and regulatory capture. Claiming they're not going to nickel and dime consumers this time because you hired compliance officer or extracted a few pinky swears is like claiming water won't flow downhill.

The vast majority of the time the FCC lacks the resources, interest, or attention span to follow up after deals like this to ensure meaningful compliance. And if there is a failure to adhere to conditions, the worst that happens is a few million in fines, which is piddly couch change to a giant like Verizon. And as the FCC shifts leadership during elections and falls under Republican control, there's even less incentive to hold Verizon accountable for failures than there is under the historically inconsistent and feckless Democratic party.

It's extremely rare that regulators just... shoot down mergers like this. In large part because companies like Verizon are trusted, patriotic participants in our domestic surveillance efforts. Between that and their deep campaign contributions and political pull, upsetting them by simply blocking more consolidation is frequently just not even considered. So policymakers approve the deal, convince themselves that they've extracted meaningful conditions, and fool themselves into thinking that this time will surely be different. Until it isn't, and the regulators who approved the deal are nowhere to be found.

The same regulators that approve greater telecom consolidation will, with their very next breath, often complain about things like the "digital divide," as if the former isn't directly causing the latter. It's a big dumb loop, and any time there's an effort to appoint the kind of regulators that might break the cycle, these massive, consolidated telecom giants just throw more cash and influence around to block reform and perpetuate the profitable dysfunction.

Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: broadband, competition, consolidation, fcc, telcos
Companies: tracfone, verizon


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    Anonymous Coward, 24 Nov 2021 @ 7:40am

    Verizon has promised to try and keep prices the same for a while, make 5G devices available to these users, continue participation in the FCC's low-income Lifeline program for a while,

    A while can be any time period, from a few minutes to a few years. Therefore a while may be the time it takes to complete the merger.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 24 Nov 2021 @ 2:15pm

      Re:

      Therefore a while may be the time it takes to complete the merger.

      They've got the approval, so why even wait for that?

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Nov 2021 @ 7:44am

    like they say, once a liar, always a liar, so well done Verizon for screwing people again! the other saying, though, is even more appropriate, once a fucking idiot, always a fucking idiot!! cant think of a more apt example of it than this one!!
    wait until it all goes tits up and low income people are screwed by verizon, as they inevitably will be, and the blame-game starts! i wonder who is gonna be on the biggest receiving end and how long they stay in the job before they get 'repositioned' with Verizon? not long, i'll bet!!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Nov 2021 @ 9:01am

    I have a bad feeling Verizon will shut down Visible after the merger is complete, since they can offer less data at the same price point despite the cost of mobile data shrinking over the years.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Nov 2021 @ 5:54pm

    one telico for all

    welcome to USA/NSA telico where you are guaranteed crappy service, shitty customers service and a guarantee any and all data to be monitored by government! permission not required.....

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Advertisment

Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Loading...
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.