Verizon wins FCC approval for $9.6-billion Frontier acquisition
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Verizon Communications Inc. won Federal Communications Commission approval for its $9.6-billion acquisition of Frontier Communications Parent Inc. after agreeing to agency demands to pare back diversity initiatives in line with President Donald Trump’s policies.
The deal “will unleash billions of dollars in new infrastructure builds in communities across the country — including rural America,” FCC Chairman Brendan Carr said in a statement Friday. “This investment will accelerate the transition away from old, copper line networks to modern, high-speed ones.”
The transaction values the Dallas-based company at $20 billion when including debt.
The approval marks one of the first deals to get the green light under Carr, who had threatened to block mergers unless companies rolled back what he called “invidious” diversity, equity and inclusion practices.
Carr sent a letter to Verizon in February warning the company that its DEI efforts run afoul of Trump administration directives. Carr told the New York-based telecom carrier to end its promotion of DEI in corporate values and training materials.
Since taking over as chairman of the communications agency, Carr has revived news bias complaints and launched probes into diversity initiatives at Comcast and Disney. This month, he blasted NBC’s coverage of the Kilmar Abrego Garcia controversy.
Trump has been pushing to root out such policies from the federal government, corporate America and beyond, issuing executive orders banning the practices and asking agency heads to identify targets, including listed companies, to investigate for “illegal DEI” efforts.
Verizon committed to ending some practices and has reaffirmed a commitment to equal opportunity and nondiscrimination, the FCC said in its statement. “This will ensure that the combined business will enact policies and practices consistent with the law and the public interest.”
The FCC approval paves the way for the biggest U.S. phone company to expand its high-speed internet business. It will allow Verizon to upgrade and expand Frontier’s existing network in 25 states, according to the FCC.
Telecommunications companies like Verizon have been bulking up on fiber-optic assets to add capacity for customers’ surging data use. The flow of data is expected to increase further as more companies adopt artificial intelligence.
The deal combines Frontier’s fiber network with Verizon’s portfolio of fiber and wireless assets, including its Fios offering. It also brings back some assets that Verizon sold to Frontier in 2015 for $10.54 billion.
Frontier filed for Chapter 11 bankruptcy in 2020 after years of losses in its wire-line telecom business led to ballooning debt. It emerged from bankruptcy the following year and focused on building out its fiber network to better compete against cable and wireless companies.
Over about the last four years, Frontier has invested $4.1 billion upgrading its network and replacing antiquated copper lines. Now, the company derives more than half of its revenue from fiber products.
Following the transaction, Verizon expects to deploy fiber to 1 million or more U.S. homes annually, according to the FCC statement.
Griffis writes for Bloomberg.
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