Verizon struck a partial settlement with California to get its Frontier deal approvedThe state is mandating Verizon offer $20\/month broadband for 10 yearsBut they still haven\u2019t reached a compromise on DEI<\/p>\n
Verizon is one step closer to sealing the deal on its Frontier acquisition in California, but not without a few caveats.<\/p>\n
State regulators, who have been reviewing the merger<\/a> to see if it meets the public interest threshold, struck a partial settlement with Verizon that would require the operator to expand its fiber build plan in California as well as offer $20\/month broadband to low-income consumers.<\/p>\n Assuming the state approves the deal, Verizon will have six months after the transaction closes to start offering at least two affordable broadband options to eligible customers \u2013 one for Fios fiber and another for fixed wireless access (FWA).<\/p>\n Both plans will have minimum speed requirements attached, according to a joint motion<\/a> filed by Verizon and the California Public Utilities Commission (CPUC). The fiber plan must offer speeds of at least 300\/300 Mbps symmetrical, while the FWA product is required to provide \u201capproximately 100\/20 Mbps or greater, with certain exceptions.\u201d<\/p>\n Ernesto Falcon, program manager of CPUC\u2019s Communications and Broadband Policy Branch, said on LinkedIn<\/a> the agency required these options to comply with the state\u2019s Lifeline program, \u201cwhich effectively makes it free for low-income Californians throughout the state.\u201d<\/p>\n With Frontier\u2019s footprint in its arsenal, Verizon expects to build at least 1 million new fiber passings annually. The California settlement requires the operator to construct an additional 75,000 passings along with 250 new fixed wireless towers in the state.<\/p>\n Verizon will have to abide by California\u2019s affordable broadband requirement for 10 years after it closes the Frontier deal, which is expected to happen in early 2026. Furthermore, the operator after three years must make \u201ccommercially reasonable efforts\u201d to increase speeds for its low-income Fios and FWA customers.<\/p>\n The affordable broadband debacle<\/p>\n California through the deal appears to be imposing a form of broadband rate regulation<\/a>, which has been a contentious topic in the telecom industry. Trade groups such as ACA Connects, NTCA\u2013The Rural Broadband Association and USTelecom have opposed legislation<\/a> such as New York\u2019s Affordable Broadband Act, claiming that price regulation would \u201cundermine\u201d broadband investment.<\/p>\n The California ruling also seems to be at odds with the revised rules of the Broadband Equity, Access and Deployment (BEAD) program. NTIA\u2019s June 6 notice<\/a> said providers that received BEAD funds must offer at least one low-cost service option to eligible subscribers, however NTIA \u201chereby prohibits Eligible Entities from explicitly or implicitly setting the LCSO rate a subgrantee must offer.\u201d<\/p>\n Verizon thus far is slated to get about $183 million in BEAD money to cover approximately 26,000 locations across six states, per New Street Research\u2019s analysis. It\u2019s unclear whether Verizon or Frontier will have any BEAD-funded locations in California, as the state has until November 21<\/a> to submit its final proposal to the NTIA.<\/p>\n Separately, Verizon this month received merger approval from Pennsylvania<\/a>, which attached its own terms and conditions. The operator will have to provide low-cost broadband to the Frontier service footprint for at least four years as well conduct a \u201cdetailed audit\u201d of Frontier\u2019s copper and fiber networks within 10 months of closing.<\/p>\n Unlike California, Pennsylvania isn\u2019t requiring a minimum broadband price for the low-income plans.<\/p>\n Verizon\u2019s DEI issues remain<\/p>\n What CPUC\u2019s settlement doesn\u2019t resolve is the state\u2019s issues with Verizon\u2019s diversity, equity and inclusion (DEI) stance.<\/p>\n The operator earlier this year ended its DEI programs<\/a> to get the Frontier deal across the finish line with the Federal Communications Commission\u2019s (FCC). The move came after FCC Chair Brendan Carr said he would block M&A deals that promote \u201cinvidious\u201d forms of discrimination.<\/p>\n \u201cWe still have more work to do to resolve the DEI problems the FCC created that conflict with California laws,\u201d Falcon stated.<\/p>\n CPUC\u2019s main concern is that Verizon told the FCC<\/a> it will no longer have any workforce diversity goals, which conflicts with state law requiring operators and utilities to submit annual reports<\/a> that describe their employment of \u201cwomen, minority, disabled veteran and LGBT individuals at all levels.\u201d<\/p>\n Despite the friction between the state and operator, NSR Policy Analyst Blair Levin has said he doesn\u2019t think CPUC intends to block the deal. Nevertheless, Verizon must tread carefully to comply with both state and federal regulatory agencies.<\/p>\n \u201cWe have a lot of faith in the ability of Verizon\u2019s lawyers to figure out the best way how to address California\u2019s concerns without clearly and directly contradicting the terms of letter to Carr,\u201d Levin wrote to investors in July.<\/p>\n","protected":false},"excerpt":{"rendered":"Verizon struck a partial settlement with California to get its Frontier deal approvedThe state is mandating Verizon offer…\n","protected":false},"author":2,"featured_media":143949,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[4286,776,66555,12165,66554,1638,66553,17863,66552,86,56,54,55,26945],"class_list":{"0":"post-143948","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-internet","8":"tag-broadband","9":"tag-california","10":"tag-california-public-utilities-commission","11":"tag-fierce-network-homepage","12":"tag-frontier-communications","13":"tag-internet","14":"tag-low-cost-internet-service","15":"tag-mergers-and-acquisitions","16":"tag-regulatory-environment","17":"tag-technology","18":"tag-uk","19":"tag-united-kingdom","20":"tag-unitedkingdom","21":"tag-verizon"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/143948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=143948"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/143948\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/143949"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=143948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=143948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=143948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}