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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.
The market has no way to stop mergers that eliminate competition. Government intervention is literally the only way to do it.