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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!
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.
Carrying this to it's obvious and inevitable conclusion:
2020's headline: Top US Antitrust Official Uncertain of Need for Two Wireless Carriers
2021's headline: Top US Antitrust official uncertain of need for more than one telecom company
2021's headline: Top US Antitrust official uncertain of need for antitrust oversight
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?
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...
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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.
I cannot know the number.
Therefore, how can I presume to know the correct BOUNDS for the number as well?
That is not logical.
There are many, many examples from both science and math where we know the bounds without knowing the specific number.
Graham's Number is an obvious example, but there are many others.
Or if the two smaller can't compete, maybe the two bigger ones need to be split up.