Verizon's Request for Relief from Migration Requirements in California

Strategic Insights -

As the California Public Utilities Commission reviews Verizon's application to modify Decision 21-11-030, concerns about customer migration and public interest are paramount. The decision was made in response to Verizon's acquisition of TracFone Wireless in 2020, with conditions including the migration of TracFone customers to Verizon's network within two years. Verizon now seeks relief from these requirements, citing concerns about customer disruption and additional costs.

Key Takeaways:

  • The California Public Utilities Commission's Decision 21-11-030, issued in response to Verizon's acquisition of TracFone Wireless, includes conditions for the migration of TracFone customers to Verizon's network within two years.
  • The decision also establishes a penalty mechanism for failing to migrate customers and provide eligible customers with free handsets or SIM cards.
  • Verizon has requested relief from these requirements, citing concerns about customer disruption and additional costs, but Joint Respondents, including Center for Accessible Technology and The Utility Reform Network, oppose the petition as untimely, unjustified, and against the public interest.
  • Joint Respondents argue that Verizon's lack of details about its SIM-swapping and device upgrade campaigns makes it impossible to evaluate whether the campaigns will adequately reach TracFone customers and prevent service disruptions.
  • The petition conflates the requirements of Ordering Paragraph 8 and the Conditions Migration Enforcement Program, and Joint Respondents argue that the Commission should reject these arguments.
  • The Commission should send a clear signal that merging companies may not relitigate mitigation measures after a transaction absent extraordinary circumstances.

Statistics:

  • Over 100,000 TracFone customers may need to incur out-of-pocket costs to remain TracFone customers after the acquisition.
  • Perhaps 200,000 customers may need to upgrade their devices to use the Verizon network.
  • Verizon has committed to migrating all Tracfone Wireless, Inc. customers currently not using the Verizon network within two years of the close of the proposed transaction.
  • The penalty mechanism for failing to migrate customers and provide eligible customers with free handsets or SIM cards goes into effect if Verizon fails to migrate all of TracFone Wireless, Inc.'s customers to the Verizon network by November 23, 2023.

Sources:

  • Response to Petition of Verizon Communications, Inc. and Tracfone Wireless, Inc. for Modification of Decision 21-11-030
  • Commission Rule 16.4 of the Commission's Rules of Practice and Procedure
  • Decision 21-11-030
  • TURN, CforAT, Public Knowledge, and Communications Workers of America Opening Brief at p. 60
  • Decision 21-11-030 at p. 34
  • Decision 21-11-030 at p. 35
  • Decision 21-11-030 at p. 59, Ordering Paragraph 8
  • D.21-11-030 at fn.13 (p. 13)