Whenever a significant acquisition takes place, regulatory agencies typically require certain assurances before granting approval. The recent $20 billion purchase of Frontier Communications by Verizon, which was approved, is no exception. However, the concessions secured by Brendan Carr, the Federal Communications Commission (FCC) head appointed by Donald Trump, are quite unusual. Carr gave the green light to the consolidation after Verizon agreed to discontinue its focus on workforce diversity.
In a statement announcing the merger approval, which will result in Verizon acquiring Frontier’s million broadband subscribers and sizable fiber optic network, Carr revealed that his support was contingent upon Verizon’s commitment to “ending DEI-related practices.”
Diversity, Equity, and Inclusion (DEI) programs have been a point of contention for Carr since he took over the agency, a sentiment shared by the Trump administration. One of Carr’s initial actions as head of the regulatory agency was to launch an investigation into Verizon’s diversity, equity, and inclusion policies.
In a letter announcing the investigation, Carr explicitly linked the ordeal to Verizon’s then-ongoing attempt to acquire Frontier. “To facilitate the FCC’s resolution of these matters, please contact the agency personnel working on Verizon’s pending transactions at the FCC,” he wrote. “They are the FCC personnel most familiar with Verizon’s operations due to their merger review activity.”
While Carr did not directly state “agree to terminate your DEI initiatives and we will approve this deal,” that appears to be what transpired. He did make it clear in an interview with Bloomberg that this would be his approach. “Any businesses seeking FCC approval should get busy ending any form of DEI discrimination,” Carr told the publication in March.
Verizon is not the only company to have its deal approved by agreeing to discontinue DEI programs. T-Mobile was able to secure FCC approval for its deal with fiber provider Lumos after it removed a webpage promoting its DEI efforts. Paramount, which is currently attempting to complete a merger with Skydance and requires FCC approval, informed staff that it would end its DEI policies to comply with the Trump administration’s demands.
So, if you have any business pending before the Trump administration, do not worry about whether your deal may result in market consolidation that could ultimately harm consumers. No one is investigating that. Just ensure that you are willing to hire individuals who fit the profile that people like Brendan Carr want to see working in these industries.
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