Verizon's $20B acquisition of Frontier closes. What the deal means for digital equity in California

Verizon’s $20 billion acquisition of Frontier Communications is a done deal after the agreement closed Tuesday, kicking in a slew of digital equity requirements and infrastructure investments for California.

The California Public Utilities Commission’s recent approval included a slew of digital equity requirements, such as expanding affordable internet and new fiber optic projects.

The merger comes as the federal government pulled back $2.75 billion in funding by slashing the Digital Equity Act.

CPUC Commissioner John Reynolds said requirements from the deal will benefit Californians and align with the state’s mission to expand affordable connectivity.

“California isn’t just approving a merger, we’re securing real commitments that will connect communities, lower costs for families who need it most, and strengthen workforce and supplier diversity protections,” Reynolds said in a statement.

Verizon CEO Dan Schulman, in a statement, celebrated the approval.

“Our greatly expanded footprint will enable us to provide more value to more households and businesses in more regions, driving our growth and benefitting our customers and our shareholders,” Schulman said.

What is required of Verizon in this deal? 

The closed merger means Verizon must expand affordable voice and broadband plans. That includes providing free broadband service to qualifying low-income families for at least 10 years. And for at least the next five years, Verizon can’t raise rates on its affordable plans.

The state also reported that Verizon must invest in 75,000 new fiber locations and build 25 new wireless towers that will reach rural areas.

The decision also adopts multiple settlement agreements that include additional commitments related to affordability, service quality, labor protections, infrastructure deployment and $500 million in spending with small businesses.

Verizon must fulfill its commitments or face fines and other penalties from the California Public Utilities Commission, according to the agreement.

Are there concerns? 

Some concerns remain about what these mergers could mean for customers, according to Lindsey Skolnik, manager at the California Alliance for Digital Equity.

“Recognizing that declining competition in the marketplace ultimately leads to increased concentration of power over broadband pricing and service offerings, this potential outcome is deeply worrisome, especially in the midst of California's affordability crisis,” Skolnik said in a statement.

Much of California’s broadband prices are driven by the Big 5 providers that include Comcast, Charter, AT&T, Cox and Verizon-Frontier. They service around 97% of the state’s 10.7 million broadband subscribers, Skolnick said.

In the coming years, the Big 5 could shrink to the Big 4 if the merger between Charter Communications and Cox Communications closes. Charter announced in May 2025 that it had offered to acquire Cox for around $34.5 billion, consolidating two of the largest cable companies in the country.

No details yet on when the agreement may close.