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- Verizon (VZ +1.5%) has won clearance from the Federal Communications Commission for its $6 billion purchase of TracFone wireless (AMX -0.9%), with conditions.
- That largely clears the way for Verizon to taker over America's leading prepaid/value mobile provider, picking up its more than 20 million customers along the way.
- The FCC found some potential harms in the deal, in particular that TracFone is one of the most significant participants in the Lifeline low-income mobile subsidy program. It also noted Verizon may have increased incentive to raise prices for the MVNOs that buy service from Verizon and compete with TracFone.
- Conditions it's adopting in response include measures to protect low-income consumers from price hikes and to ensure TracFone remains a "supportive" participant in Lifeline. The FCC is calling for seven years of oversight on those matters, and demanding both an internal and independent compliance officer to monitor the conditions.
- Verizon and AT&T have moved higher today in the wake of other M&A in the industry hitting today, including KKR offering $12 billion for Telecom Italia, and Ericsson agreeing to acquire Vonage Holdings for $6.2 billion in enterprise value.