Verizon receives approval to proceed with Frontier Communications merger

Verizon announced on Jan. 15 that it had agreed to pursue targeted workforce programming and digital inclusion in order to receive approval from the California Public Utilities Commission (CPUC) to proceed with its Frontier Communications merger, a deal valued at nearly $20 billion.

Catch up. Last May, Verizon said in a letter to the Federal Communications Commission (FCC) Chair Brendan Carr that it would sunset all DEI programming and instead maintain an “inclusive” work culture, HR Brew reported previously. The company was hoping to garner favor with the federal government ahead of its Frontier Communications merger.

The FCC approved the merger one day later.

Then came a hiccup: State regulations in California, where Verizon and Frontier planned to invest in new infrastructure, requires companies to protect against discrimination with the California Fair Employment and Housing Act. The CPUC was concerned that Verizon’s statements about DEI could run afoul to California utility orders on diversity in the workforce and supply chain.

An administrative judge in December encouraged Verizon to establish a talent pipeline for hiring “underrepresented populations” and regular check-ins with state officials, Fierce Network reported.

In the Jan. 15 deal, Verizon and the CPUC agreed to several terms, including a $40 million investment in broadband for low-income California households and $500 million in financing for the state’s small businesses.

Additionally, Verizon will establish a $10 million workforce development and procurement partnership with California State Universities, and conduct quarterly employee surveys that include questions about belonging and inclusion. The company must also submit annual transparency reports that show the effect of these efforts on its workforce and supplier diversity, though Verizon assured CPUC that it is still committed to inclusion and equal opportunity.

Big picture. “It’s significant that Verizon may have realized that it went too far in response to federal government initially, and backing away from equal opportunity, and may have recognized, in consultation with the California state regulators, that there were still much that they could do to promote equal opportunity without running afoul of the federal government,” Jason Solomon, director of the National Institute of Workers’ Rights, told HR Brew. “Both the federal and state regulators need to recognize that companies can calibrate in such a way that they’re, you know, not discriminating against anyone, while still promoting equal opportunity.”

As the DEI battle between the federal and state governments continues, Solomon anticipates more agreements like that which Verizon announced.

“It may depend on where the company is located, or where they have their operations, but I do think that these conflicts are going to continue,” Solomon said. “There’s going to continue to be dilemmas, faced by companies, that they have to worry not just about the risk from the federal government and not just from the risk from the state regulator, but they all have to be worried about the risk that if, they back too far from back away from commitments to equal opportunity, under pressure from the federal government, that they will be sued.”

He noted that without proactive DEI efforts, companies could be more susceptible to discrimination.

“There are many states in the country that remain committed to equal opportunity, either as a matter of existing law or as a matter of policy and priorities from the current elected and appointed officials.”

The deal between Verizon and Frontier Communications is expected to close on Tuesday, Jan. 20, according to Reuters.