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Top US Antitrust Official Uncertain of Need For Four Wireless Carriers (reuters.com)
An anonymous reader shares a report: The head of the U.S. Justice Department's antitrust division, Makan Delrahim, declined on Friday to support the Obama administration's firm backing of the need for four U.S. wireless carriers. Asked about T-Mobile's plan to buy Sprint for $26 billion, Delrahim declined to reiterate the view of President Barack Obama's enforcers, who had said that four wireless carriers were needed. Instead, Delrahim told reporters, "I don't think there's any magical number that I'm smart enough to glean." He also said the department would look at the companies' arguments that the proposed merger was needed for them to build the next generation of wireless, referred to as 5G, but that they had to prove their case.
Ma Bell wants her children back!
I don't think there's any magical number that I'm smart enough to glean.
This is a technically true statement. It's pretty much impossible to know what specific number of carriers would magically create the optimal amount of competition.
Whatever the optimal number or range might be, though, it sure as hell isn't less than four.
Right now in the United States there are two CDMA carriers (VZW, Sprint) and two GSM carriers (AT&T, TMO) and the various MVNOs that resell their services.
Allowing TMO and Sprint to merge would create a new company that has the infrastructure and means to offer both GSM and CDMA. Such an achievement is literally beyond the ability of either VZW or AT&T to fund on their own, and would be in contrast to their goals to fund an eventual 5G (once there is a 5G standard...). So in terms of "creating competition" it would create a super-wireless company that offers all-band services that none of its competitors can match.
Now some might argue that AT&T and VZW could merge, except that not only are the two organizations not suited for that in terms of infrastructure or corporate governance, but it's highly unlikely DoJ/FCC/FTC would approve going from three carriers to two. So that leaves TMO+Sprint as the winner in such a scenario.
I'm not a fan of government regulation, but at times when the government has created the rules (spectrum auctions) allowing only the elite few to rise up and win, it is incumbent on the government to protect us consumers from mega-monopolies and duopolies and market devouring beasts.
E
Next Year's Headline: "Top US Antitrust Official Uncertain of Need For Three Wireless Carriers"
Apples to fucking oranges but we had three serious auto manufacturers in this country (until recently) and if that had been enough competition, Fifth Ave wouldn't be lined with Benz's and the driveways of informed buyers wouldn't be filled with Toyotas.
Four isn't nearly enough.
Fonseca, Miguel A., and Hans-Theo Normann. "Explicit vs. tacit collusion—The impact of communication in oligopoly experiments." European Economic Review 56, no. 8 (2012): 1759-1772.
The money quote from the paper: "...the n=4 oligopolies exhibited the highest frequency of explicit cartels...".
I completely believe that Makan Delrahim isn't smart enough to know how many competitors are required before a functional market emerges, but plenty of other people are smart enough. Funnily enough, the problem has been studied.
would be to seize those leases and rebid them as 5 year leases, so that there's a possibility of competition emerging.
That would be a horrible idea, and speed up the obsolescence of equipment that's already happening at too fast a pace.
You can be unable to state a number yet be assured it must be bounded in some way.
I cannot know the number.
Therefore, how can I presume to know the correct BOUNDS for the number as well?
I am pretty sure the number is bounded at two, without two there is no competition. Any number larger than that is probably better - how much better, you cannot say.
Why the hell does anyone think four is a better number than three, in a field that relies so much on coverage and vast costs of developing and maintaining same? A simple thought experiment yields three as certainly a better number than four - otherwise why not ten million carriers? One for each of us? (See: Portlandia).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
who's very pro-corporate. He then proceeded to pack his cabinet with pro-corporate lobbyists (mostly the same ex Goldman Sachs folks who have been running the show since Clinton). This isn't anything we shouldn't have expected. What I don't get is why anybody thought they were going to drain the swamp or change the status quo. The onion made fun of this, talking about how middle America was putting their hopes in a man who literally sits on golden thrones... Jeez. I don't even... I can't...
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
So, what reason do you have to believe that a market with 3 carriers would have the optimal amount of competition?
We already know four is too many; otherwise they would not be seeking to merge.
We already know four is too many; otherwise the size of Sprint + T-Mobile together would not be smaller than either AT&T or Verizon.
We already know four is too many; just logically considering the costs of maintaining coverage across the entire US for four separate carriers.
Four is obviously too many. I am pretty sure two is too few. So that leaves us three as logically the next option left to us. Why not try it? If four is a better number why would another carrier not simply start up to bring back balance?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Thanks Trump PR team
Three is probably fine, so long as they compete with each other in *all* geographies and on *all* platforms. Need to avoid situations like "If you live in X you can only choose Verizon" or "If you have device Y you can only choose Verizon".
Fuck off, slaver.
You come over here and say that to my face. Only travel on privately owned roads.
Have gnu, will travel.
Nah, SEPARATE the towers from the carriers.
GM/Ford/Chrysler do not own the roads. Why should cell companies?
Obama's legacy: (N)othing (S)ecure (A)nywhere and (T)error (S)imulation (A)dministration
that's even remotely true. Give me a good gut feeling backed by faith and solid anecdotal evidence any day of the week. They just plain have more truthiness. Heck, "truthiness" is in Firefox's dictionary, so it must be true.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
since 5G deplyment needs sprint and t mobile to merge
I for one can't wait for 6G , where sprint would then be divided and merged with att / verizon
and then 7G when att and verizon would merge
all hail the Ma Bell
Already done.
The carriers, by and large, already don't own many towers. There might be a few legacy locations where they still do, but companies like American Tower and Crown Castle own the vast majority of them at this point, and the carriers just lease space on them for their antennas. Anyone with a spectrum license and money for the antennas/base stations can rent some position on most any tower.
https://www.fool.com/investing...
Now, if you mean that cell carriers shouldn't own spectrum licenses, that's an entirely different animal.
I'd love to go back to the days where I drive a county over and have to pay $0.89 a minute to roam (or in todays terms, $0.89/MB), wouldn't you?
It's pretty much impossible to know what specific number of carriers would magically create the optimal amount of competition.
It's possible if you have the appropriate data. Canada only has three big carriers: Bell, Rogers and Telus and it also has some of the highest mobile phone charges in the western world. While they will happily claim that this is due to the low population density if you look at a coverage map you can see that vast swathes of the country have no service which somewhat undermines this along with the fact that rates in Australia are also much lower than Canada despite a similar population density.
So the data clearly show that 3 big companies is definitely worse than 4. Given that the US rates are also not exactly cheap either compared to other countries it's probable that the optimal number is bigger than 4 but, regardless, 4 is definitely better than 3.
he literally said he wasn't smart enough to figure out if there is a number of carriers needed for competition to exists (there is, as has been pointed out on another thread it's >4). Thing is, it's his _job_ to know what that number is. If he's not smart enough to know it he's not smart enough to do the job he was hired for. He should be fired immediately.
Basically, He's not a leader, that's Trump. He's a bureaucrat. His job is to implement what the leadership tells him to do, and he just admitted he can't do that.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
The term "Natural Monopoly" refers to a business with very high natural barriers to entry. A condition which lends itself to monopoly or even oligopoly. And the resultant monopolistic or oligopolistic pricing.
Industries like utilities, airlines, communications, railways are natural monopolies.
"Hormesis" is a medical term. It means something that in low doses is beneficial and high doses is harmful. Regulation may be the same way, as it is for beneficial drugs.
Some folks need the world to be digital - all one way or all the other. It's really an analog world.
It's pretty much impossible to know what specific number of carriers would magically create the optimal amount of competition.
But as I understand it:
* 1: is obviously a problem. He gets to set his price to extract maximum profit from the customer base - and usually does.
* 2: Market forces encourage the two players to split the customer base evenly and keep the prices high. No collusion required.
* 3: Though the most profitable would be (as always) to split things about evenly and keep the prices up, things are starting to get unstable. Without collusion the equilibrium may hold. or the smallest guy may get too squeezed and have to try to gain market share by cutting costs or improving service.
* 4: By this point keeping things balanced without collusion becomes very difficult. Without organized cooperation the smallest player tends to get squeezed to the point that he must try to buy customers, starting the price-war breakdown that drives the prices toward cost-of-service-plus-modest-profit.
and it becomes more unstable from there. Three is iffy, four is where things USUALLY flip into real competition.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
You only need one controlled by the government - and you will have a three year waiting period for a subscription.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
Simple, there's been relatively little competition with only 4 carriers, so we know that it's unlikely that there will be more competition with fewer competitors.
Two competitors combining into one means they have much better ability to yield actual competition. For too long it has sure looked like there was kind of an unspoken working between Verizon and AT&T to keep rates up...
Thank you for not being a pedantic asshole who thinks because there is some case somewhere where the no bounds but not limits it applies in this case. Who have thought it, an AC that's 1000x more intelligent than named posters 9myself excluded of course, but at least you are on equal with my intellect - I salute you).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
so... business as usual.
What makes you think you live there for free? There is value out of having you around. I might not have stumbled across this all by myself for example.
You can always manage to bring a smile to my face, that in itself is all the rent I need. Plus there's plenty of space, well maybe a tiny bit less now, but still plenty.