The FCC has approved Verizon’s $20 billion merger with Frontier Communications.
“By approving this deal, the FCC ensures that Americans will benefit from a series of good and common-sense wins,” commission chairman Brendan Carr said in a Friday statement. “The transaction will unleash billions of dollars in new infrastructure builds in communities across the country — including rural America. This investment will accelerate the transition away from old, copper line networks to modern, high-speed ones. And it delivers for America’s tower and telecom crews who do the hard, often gritty work needed to build high-speed networks.”
The deal will allow Verizon to upgrade and expand Frontier’s existing network in 25 states, bringing more fiber to more communities. Following the transaction, Verizon expects to deploy fiber to 1 million or more American homes annually.
As part of the approval, Verizon has also committed to ending DEI-related practices as specified in the FCC’s record and has reaffirmed the merged entity’s commitment to equal opportunity and nondiscrimination.
“This will ensure that the combined business will enact policies and practices consistent with the law and the public interest,” Carr said.
Carr, who has threatened to block M&A for any companies that promote “invidious forms of DEI discrimination,” first opened an investigation into Verizon’s DEI policies in February.
In a letter on Thursday responding to that investigation, Verizon said it would change its human resources structure and no longer have a team or individual roles focused on DEI.
It’s also removing references to DEI in all employee training materials and public and internal messaging, updating its corporate policy to require that sponsorships and memberships “centrally focus on advancing core business objectives and increasing shareholder value,” and ceasing participation in recognition surveys focused on “protected characteristics.” Verizon employee resource groups will also remain centrally managed by the company’s human resources division with corporate oversight and preapproval of any social and cultural events and access to internships, mentoring, networking, career development opportunities, and any other employer-sponsored activities will be open to all races, genders and demographics.
Additionally, Verizon has removed its supplier diversity metric, which set quantitative goals for diverse spend, from its management pay plan and eliminated supplier diversity programs that existed in individual
departments. The supplier program and goals will now focus on increasing opportunities for small businesses, including those that are veteran-owned. It also removed a metric that was focused on increasing the representation of women and minorities in the company’s U.S. workforce from the prior year.
“We are committed to creating a culture that leverages and values each person’s unique strengths and talents. These values have been fundamental to our Verizon culture since our founding 25 years ago,” Verizon general counsel Vandana Venkatesh wrote. “However, we recognize that the regulatory and policy landscape surrounding diversity, equity, and inclusion (“DEI”) has changed.”
“While our practices may evolve, we are committed to the core principles that have made us successful – an inclusive culture based on trust, care, and excellence which enables us to provide market leading services to all of our customers,” the letter concluded.
In addition to Verizon, Carr has taken aim at the DEI policies of Disney and Comcast/NBCUniversal with similar investigations. It’s also reportedly seeking DEI concessions from Paramount Global, whose pending $8 billion merger with Skydance Media remains stuck in regulatory limbo.
Shares of Verizon are up 9% in the past year and year to date, while Frontier Communications stock is up 37% in the past year and 5% year to date.
