Verizon's ambitious $20 billion acquisition of Frontier Communications has encountered hurdles once again, as regulatory demands from California challenge the feasibility of the deal. The California Public Utilities Commission has set stringent conditions regarding broadband deployment in rural areas, which Verizon argues are both financially burdensome and logistically impractical. In the wake of these challenges, Verizon is advocating for a re-evaluation of the requirements to facilitate smoother progress on the agreement.
Verizon's acquisition effort is now under scrutiny due to conditions imposed by state regulators, who are pushing for commitments tied to diversity, equity, and inclusion (DEI), alongside broadband expansion to underserved areas. These stipulations pose significant difficulties for the company, particularly in rural regions where infrastructure development can be both costly and technically challenging.
The Current Situation
Verizon and Frontier’s fiber networks. | Image by Verizon
Verizon has formally requested that California's Public Utilities Commission modify its demands for broadband service deployment. The stipulation requiring delivery of internet speeds of 100 Mbps download and 20 Mbps upload to all locations served by 88 targeted rural wire centers within five years has been flagged as unfeasible. According to Verizon, many of these rural areas are extremely remote and difficult to access, making the stated requirements prohibitively expensive to fulfill.
The selected wire centers are positioned in some of the most challenging geographical locales within the state. Implementing broadband infrastructure in these zones could drive costs to levels deemed unacceptable, and the logistical hurdles could render deployment practically impossible. Although the Commission’s Order grants Verizon some flexibility in the choice of broadband technologies, many targeted locations remain unreachable, even for Fixed Wireless Access (FWA), let alone traditional fiber connections.
– Verizon, statement before the Public Utilities Commission of California, January 2026
Considerations Moving Forward
Additionally, Verizon is requesting further flexibility regarding the deployment of fiber infrastructure in areas where the costs exceed $10,000 for connecting individual locations. In such circumstances, the company argues it should be permitted to offer lower-speed options or utilize satellite-based internet service as alternatives. The proposal has been discussed with regulatory staff and industry analysts since the initial draft of the decision was made public last month.
Looking Ahead
California's regulator will have the last word.
26.23%
Verizon will succeed and the conditions will be dropped.
19.67%
A compromise by both sides will be made.
54.1%
Votes 61Back to Voting
Conclusion
Verizon and Frontier are striving for approval of their deal before the federal approval deadline on February 13. Missing this date could result in the necessity for an extensive supplementary review process. Although California regulators may vote as soon as January 15, the more likely timeline points toward early February due to outstanding issues that remain unresolved.
