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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!
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.
Those two statements are in direct contradiction with each other. If it's impossible to know what specific number of carriers are needed, then you cannot possibly know it has to be four or more...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
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"
Your objection is nonsensical. It’s impossible to know how many planets exist in the universe, yet I can unequivocally affirm it is not less than four.
You can be unable to state a number yet be assured it must be bounded in some way.
If he explores all forms and substances Straight homeward to their symbol-essences; He shall not die.
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.
If it's impossible to know what specific number of carriers are needed, then you cannot possibly know it has to be four or more...
Of course you can. There are some number of employees in my office building. I probably couldn't guess the exact number, or even come within 50, but I know that it's a lot more than four.
Because history has shown repeatedly that corporations will screw consumers if let to their own devices?
That will result in one carrier, sky-high prices, terrible service, and barriers-to-entry that prevent any competitors from entering the market.
Have you learned nothing from history?
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
The market has no way to stop mergers that eliminate competition. Government intervention is literally the only way to do it.
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/
History has shown that government repeatedly screws its own citizens if left to its own devices.
The problem isn't Government or Corporations, it is people will screw each other over if left to their own devices. There is plenty of literature that explores this in detail. Making simplistic statements of blame is easy. Finding a solution that isn't "We must do something. This is something. Therefore we must do it" is not easy.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Thanks Trump PR team
How about we let the market decide, and not the government, mmkay?
Because the wireless business requires a lot of infrastructure, has network effects, and has huge barriers to entry. Free of regulation, it will coalesce into a single monopoly provider.
But 4 isn't necessarily better than 3. Currently we have two strong companies (Verizon and AT&T) and two weak (T-Mobile and Sprint). Competition may be better with three strong companies.
Why would they not want to merge? Optimal competition for the consumer is not optimal for the supplier; all suppliers really want to be a monopoly.
Or if the two smaller can't compete, maybe the two bigger ones need to be split up.
If they can't compete because the service is capital intensive, splitting the big ones up and reducing the capital they have to invest will just stagnate the product and make things worse for the consumer. You can't just apply an ideology that's anti big business without understanding the actual market mechanics and cost structure. You need to actually do research and make reasoned, evidence based decisions.
This is the same level of idiocy as the last time You tried to use math and logic. You tried to claim if you can't know something it must be 50/50.
Shows the reasoning ability of mods here as it's currently modded 4 informative...
history and the present has continued to show that ANY GROUP WITH TOO MUCH POWER - acts badly.
applies to government and big business. hell, even applies to religion.
ANY thing that gets too big and powerful should be broken up. ...but we stopped caring about a 'fair world' a long long time ago ;(
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I read at +2. If your post doesn't reach that level I will not see or respond to it.