California PUC Green-Lights Verizon/Frontier
The California Public Utilities Commission (CPUC) voted unanimously Thursday to approve Verizon's purchase of Frontier Communications. The deal represents “a major shift” in the communications competitive landscape in California, CPUC President Alice Reynolds said. A lot of Frontier's network in the state needs investment, particularly in rural and tribal areas, and Verizon will bring that, she said. She and other commissioners repeatedly cited what they called significant commitments that Verizon made for broadband deployment, digital equity, service quality, discounted service for low-income households and labor protections.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
The FCC signed off on the $20 billion deal in May (see 2505160050).
The California approval was the last needed, with the transaction set to close Tuesday, Verizon and Frontier said. Closing on Frontier "marks a significant milestone in Verizon's evolution and is a bold step forward in Verizon's transformation to regain market leadership," CEO Dan Schulman said. “We will be uniquely positioned to offer our customers the best combined mobility and fiber experience for mobile, home internet, and other essential services across a significantly expanded footprint. Our greatly expanded footprint will enable us to provide more value to more households and businesses in more regions, driving our growth and benefitting our customers and our shareholders.”
Commissioner John Reynolds said Verizon's commitments include deploying fiber at up to 75,000 new locations over five years; prioritizing census blocks that are at or below the county median for income; establishing 250 new 5G-capable cellsites; spending $500 million with small businesses in the state over the next five years; and hiring 600 new union-represented employees, as well as offering 48 months of layoff protections for existing union workers.
FCC Chairman Brendan Carr's pressure on Verizon to drop its diversity, equity and inclusion practices to obtain agency approval of the Frontier deal (see 2502270072) "created a real problem" for CPUC, because the company ending its DEI programs conflicts with state law and policy, John Reynolds said, adding that CPUC "refused to let this FCC chairman's coercion pass without scrutiny." CPUC couldn't mandate that Verizon restore its former programs, so instead, it required investments that would benefit diverse communities, he said, citing Verizon's commitments to spend $10 million to support a workforce development program in partnership with the California State University system and to create a recruitment pipeline with higher education institutions that will focus on underrepresented populations. “We will improve employment prospects for Californians."
While Verizon assured the state regulator that it remains committed to inclusion and equal opportunity, "California will measure your commitment by your results" in the form of workforce data and supplier spending, John Reynolds said. There will be a compliance monitor, hired by CPUC but paid for by Verizon, to oversee the company's adherence to the terms. Verizon also has strict reporting requirements, he added.
Commissioner Darcie Houck said that with Verizon combining its low-income plans with the California LifeLine broadband pilot program and making its broadband services free for many low-income Californians for at least 10 years, she hopes other providers will follow suit.
Before the commissioners' vote, multiple business interests voiced approval of the transaction. Jazmine Advincula, public policy director for the California Asian Pacific Chamber of Commerce, said approval “means stability and reliability” and positions the state to close the digital divide with expanded high-speed internet deployment.
Julian Lake of the Bay Area Council, a business advocacy group, said broadband is "essential to the Bay Area’s innovation economy." Approval will reinforce state leadership in technology and innovation and show that California welcomes infrastructure investment, Lake added. Valerie Berkley, the Los Angeles Area Chamber of Commerce's senior public policy manager, said Frontier assets will let Verizon deliver a faster, more reliable network.
The CPUC on Thursday also approved $28 million in California High Cost Fund-A funding for 2026. The money will subsidize service provision for 10 small incumbent local exchange carriers typically serving particularly rural territories.