(Bloomberg) – Verizon Communications Inc. won approval from the Federal Communications Commission for its $9.6 billion acquisition of Frontier Communications Pards Inc., after agreeing to cut diversity plans under President Donald Trump’s policies.
FCC Chairman Brendan Carr said in a statement Friday that the agreement “will build billions of dollars in new infrastructure in communities across the country, including rural America.” “This investment will accelerate the transition from old, copper wire networks to modern high-speed.”
The deal is worth $20 billion to the Dallas-based company, including debt.
The approval marks one of the earliest deals to get a green light under Chairman Carr, who threatens to stop the merger unless the company goes bankrupt what he calls “incredible” of diversity, equity and inclusive practices. Carr sent Verizon a letter in February warning the company that its DEI efforts were related to Trump administration directives. Carl told the New York-based telecom operator to end its promotion of DEI in company values and training materials.
Trump has been pushing for such policies from the federal government, U.S. companies and elsewhere to issue executive orders that prohibit behavior and requires agency leaders to identify targets including public companies to investigate efforts to “illegal DEI”.
In a statement, the FCC said Verizon was committed to ending some practices and reiterated its commitment to equal opportunity and non-discrimination. “This will ensure that the merged businesses will develop policies and practices that are consistent with the law and the public interest.”
Verizon said in a May 15 letter to Carr that it is closing its DEI team and reassigning its employees and removing references to it from the company manual. The company will no longer set diversity goals or participate in surveys that track these characteristics.
FCC approval paves the way for the largest U.S. telephone company to expand its high-speed internet business. According to the FCC, it will allow Verizon to upgrade and expand Frontier’s existing network in 25 states.
Telecom companies such as Verizon have been increasing their fiber assets to increase their customers’ soaring data usage capabilities. Data flow will increase further as more companies adopt AI.
The deal combines Frontier’s fiber network with Verizon’s fiber and wireless asset portfolio, including its FIOS products. It also brings back some of the assets that Verizon sold to Frontier in 2015 for $10.54 billion.
After years of losses in cable telecommunications business, Frontier filed for Chapter 11 bankruptcy in 2020. The following year, it stood out from bankruptcy and focused on building its fiber network to better compete with wired and wireless companies.
For the past four years, Frontier has invested $4.1 billion to upgrade its network and replace outdated copper wire. Now, the company makes more than half of its revenue from fiber products.
Verizon hopes to deploy fiber to 1 million or more U.S. homes each year after the transaction, according to the FCC statement.
(Update using Verizon Dei letter in paragraph 7.)
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