Verizon Wireless recently learned firsthand how to balance the competing demands of federal and state regulators to secure final approval for its $20 billion acquisition of Frontier Communications, an Internet, television, and phone service provider in 25 states. Verizon first shuttered its diversity, equity, and inclusion (DEI) program to obtain Federal Communications Commission (FCC) approval of the acquisition. The mammoth wireless company then abruptly switched gears, pledging millions of dollars in diversity investments to comply with state law and secure approval from the California Public Utilities Commission. That entity recently unanimously approved the acquisition, giving Verizon the green light to move forward and finalize the deal.
Verizon’s DEI juggling began when FCC Chair Brendan Carr conditioned FCC approval of the merger on the company’s elimination of its DEI programs. Verizon obliged in May 2025 by closing its DEI department and abolishing all DEI-related policies.
However, the deal also required approval from California state regulators. The California Public Utilities Commission accused Verizon and Frontier of providing insufficient answers regarding the misalignment of DEI-related requirements between the state and federal governments. More specifically, state regulators could not reconcile Verizon’s decision to eliminate all DEI programs to meet federal standards with California law requiring utilities operating in the state to maintain certain diversity requirements.
Ultimately, California regulators allowed Verizon to meet state law requirements by dedicating millions to workforce development and community investment, furthering DEI policy goals. While entities traditionally met this requirement by maintaining DEI programs, the compromise allowed Verizon to satisfy it through an alternative investment approach.
The agreement provides that Verizon will partner with California State University to develop workforce development programs. Verizon will also establish recruiting pipelines through educational institutions that serve underrepresented California communities.
Furthermore, Verizon must invest an additional $500 million in California small businesses over five years and meet regularly with state officials about their efforts to recruit, hire, and retain employees from underrepresented populations. Finally, Verizon must expand its network infrastructure to expand broadband access and offer discounted voice and Internet services to eligible California residents.
Verizon’s commitment to infrastructure expansion is significant. The initiative will expand fiber broadband to 75,000 new locations throughout California over five years, including 250 new wireless transmission sites. The company will also prioritize expansion locations for households with incomes at or below 90% of the county’s median income.
Additional commitments from Verizon include:
- Providing broadband services at specified speeds to 88 wire centers serving rural and lower-income customers within seven years;
- Offering broadband services to low-income customers for $20 per month for a decade;
- Maintaining 72-hour battery backup at no cost to customers in high-fire threat areas and 24-hour backup at all other locations within the state;
- Investing $40 million in digital inclusion efforts over five years;
- Hiring at least 600 new union-represented employees over six years;
- Maintaining at least 48 months of layoff protection for existing unionized workers; and
- Establishing comprehensive tribal engagement requirements designed to preserve Native American communities and tribal territories.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
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