Pro-DEI Update #2: California’s Response to Verizon-Frontier Deal

Published: February 6, 2026

This is the second in our series of pro-DEI updates with this explainer focused on pushback happening outside the courts. California's response to Verizon's DEI rollback highlights a growing challenge for companies: what happens when federal anti-DEI demands clash with state pro-DEI requirements?

WHAT HAPPENED WITH VERIZON AND THE FCC

The Trump administration has been using the Federal Communications Commission (FCC) to push an anti-DEI agenda, and the Verizon-Frontier merger became another example of this strategy. The FCC is a federal agency that regulates communications like TV, radio, the internet, and phones, and approves major telecom mergers.

Verizon was pursuing a $20 billion deal to buy Frontier Communications, a fiber-optic provider operating in 25 states, including rural areas. In February 2025, FCC Chairman Carr warned that Verizon's DEI practices could block the deal. Three months later, on May 15, 2025, Verizon sent a letter to the FCC promising to end its DEI content on websites and in training materials, diversity hiring goals, supplier diversity requirements, and participation in diversity surveys.

The very next day, the FCC approved the merger, citing Verizon's commitment to ending what it called "discriminatory DEI policies." This wasn't an isolated incident. The FCC has used similar pressure tactics with other major companies including T-Mobile, Disney, and Comcast.

HOW CALIFORNIA GOT INVOLVED

Although the deal was approved by the FCC, approval was also required from the California Public Utilities Commission (CPUC) to move forward with the merger in that state. The CPUC had concerns that Verizon's DEI rollback conflicted with state law pro-DEI requirements for workforce and supplier diversity, so they launched hearings in June 2025 to investigate whether the rollbacks Verizon promised in its FCC letter were consistent with California state law, and whether those commitments should impact the Commission's review of the deal. 

In July 2025, the CPUC’s Assigned Commissioner John Reynolds signaled that this was more than just an academic issue when he called out Verizon officials for being evasive during the investigation. In a memo, Reynolds directly stated that “this Commission does not tolerate false statements” and reminded Verizon of its obligations to “never to mislead the Commission..by false statement of fact or law.” He further warned that “if [Verizon] provides testimony that is inconsistent with their obligations…the Commission will consider appropriate sanctions.” The Commissioner’s language made it clear that regulatory compliance could not be sidestepped by downplaying policy changes.

WHERE THINGS STAND NOW

In January 2026, eight months after the deal was approved by the FCC, the CPUC approved the merger after Verizon agreed to several DEI-related commitments in the state:

• $10 million partnership with the California State University system to support workforce and supplier diversity from underrepresented communities

• Commitment to further California's public policy goals of diverse supply chains beyond the California State University system

• $500 million in spending with California small businesses as part of broader supplier diversity goals

• Continued compliance with state reporting requirements on employment demographics and DEI policies

WHAT THIS MEANS FOR ORGANIZATIONS

This case has lessons for both state governments and private-sector organizations:

• States that care about promoting the values of diversity, equity, and inclusion can use their own laws and regulatory authority to counter federal anti-DEI pressure. 

• Organizations can't simply comply with federal anti-DEI demands without considering all their legal and regulatory risks, including potential pro-DEI risks at the state level. For more discussion of the need to conduct a balanced risk assessment, see our report with Catalyst on “Risks of Retreat.”