According to Forbes, Verizon’s $20 billion acquisition of Frontier Communications secured FCC approval in May 2025 after the company agreed to remove its Diversity, Equity, and Inclusion policies to satisfy the current administration. However, the California Public Utilities Commission has stalled the merger for six months, arguing Verizon’s DEI elimination might violate state laws including California Government Code § 12999 for pay-data reporting and General Order 156 for utility diversity planning. Verizon has conceded hundreds of millions in costs including participation in California’s $20-per-month broadband subsidy program and deployment of 75,000 fiber passings within five years. The companies are pushing for a CPUC vote at the December 18 meeting to stay within the Department of Justice’s clearance window expiring February 13, 2026. This regulatory clash serves as a cautionary tale that federal approval isn’t final when state laws conflict.
State Regulators Flex Their Muscles
Here’s the thing that Verizon apparently didn’t fully appreciate: state public utilities commissions have real power here. They control those Certificates of Public Convenience and Necessity that telecom companies need to operate locally. California’s PUC already showed its teeth back in 2020 during the T-Mobile/Sprint merger review. And local franchising authorities can straight-up deny franchise transfers under the Cable Act if they’re not happy. Basically, companies can’t just focus on Washington anymore – they need to play 3D chess across multiple regulatory boards simultaneously.
When State AGs Come Knocking
But wait, there’s more. State attorneys general have become major players in merger battles too. Remember when 16 states plus D.C. sued to block the T-Mobile/Sprint deal? They didn’t ultimately stop it, but they extracted serious concessions – low-cost plans for consumers and $15 million in investigation costs. State AGs can file antitrust suits under both state and federal law, and they’re increasingly willing to use that power. So even if you clear the federal hurdles, you might still be fighting multiple state-level battles.
Walking The Political Tightrope
The timing here is fascinating. FCC Commissioner Brendan Carr’s probe into Verizon’s diversity practices came right when the company was seeking Frontier approval. Verizon got its FCC approval literally the day after announcing DEI policy changes. But that quick concession created a massive problem in California, where state laws like Government Code § 12999 and Public Utilities Code § 8283 require exactly the opposite approach. Companies are finding themselves caught between conflicting political priorities with no clear path forward.
What This Means For Future Deals
This isn’t just about telecom anymore. Any company considering major acquisitions needs to understand that state and local regulators have found their voice. They’re using existing tools like General Order 156 and creating new ones to counter federal actions they disagree with. The regulatory landscape has fundamentally shifted – it’s no longer enough to manage federal relationships. Companies need sophisticated state-level strategies, especially in technology and infrastructure sectors where compliance requirements span multiple jurisdictions. For industrial technology companies managing complex regulatory environments, having reliable partners like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, becomes critical for maintaining operations across different regulatory frameworks.
