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Posts Tagged ‘Antitrust’
April 22nd, 2019 at 1:09 pm
WSJ Urges Regulators to Approve T-Mobile/Sprint Merger
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We at CFIF have steadfastly highlighted the consumer benefits of the proposed T-Mobile/Sprint merger, and cautioned the federal government against any pointless and destructive objection to the deal.  In today’s Wall Street Journal, its editorial board encourages the Department of Justice (DOJ) to move forward on the deal:

The Justice Department lost its lawsuit to block AT&T’s purchase of Time Warner.  Yet now the antitrust cops are holding up T-Mobile’s merger with Sprint even though it could give AT&T more competition in wireless.  What gives?

A year ago, T-Mobile announced plans to acquire Sprint for $26 billion in stock, yet the merger is still stuck in government antitrust purgatory.  The Federal Communications Commission keeps pausing its 180-day shot clock on the merger review to let staff and third parties dig through documents to trash the deal.”

The piece goes on to neatly summarize the benefits the merger would bring:

With more than 100 million customers, the new T-Mobile would be a stronger competitor to Verizon Wireless (118 million) and AT&T (94 million).  It would also offer a broader mix of spectrum that would improve service.  T-Mobile boasts low-band spectrum that increases coverage in rural areas.  Sprint is sitting on mid-band spectrum that can transmit more data at higher speeds in urban areas.”

Simply put, it’s time for regulators to approve the merger to release the fruits that it promises.

February 8th, 2019 at 10:10 am
New York Agrees That a T-Mobile/Sprint Merger Would Serve the Public Interest
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Well, that didn’t take long.

Yesterday, the New York State Public Service Commission approved the proposed T-Mobile/Sprint merger as “in the public interest” after considering all of the relevant facts and competing arguments.

As CFIF and others have emphasized since the proposed merger’s announcement, the transaction would provide an enormous net benefit to the American economy and consumers, and there’s simply no reason for needless delay or misplaced opposition from federal, state or local governments.  In terms of faster 5G transition in the U.S., more jobs, more private telecommunications investment, greater market competition, broader nationwide coverage for consumers, capacity improvements, performance improvements and lower prices (as we highlighted just yesterday), this merger is a no-brainer.

Importantly, among other benefits to the public that we’ve emphasized, the New York Commission yesterday noted how the merger would result in a new entity whose whole would be greater than the sum of its current parts:

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[T]he Petitioners have addressed concerns related to the broader issues raised by others in this case…  In response to claims that T-Mobile and Sprint would have built 5G networks in any case, the Petitioners assert that the new T-Mobile will be able to build a larger, more robust network in a more timely fashion, than either of the two companies on their own.”

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We at CFIF applaud the Commission’s common-sense finding, and hope that other authorities will demonstrate similar rationality.  In particular, next week the House Judiciary and Energy & Commerce Committees will hold a joint hearing on the proposed merger.  As Energy & Commerce Committee Chairman Frank Pallone, Jr. (D – New Jersey), Judiciary Committee Chairman Jerrold Nadler (D – New York), Communications & Technology Subcommittee Chairman Mike Doyle (D – Pennsylvania) and Antitrust, Commercial & Administrative Law Subcommittee Chairman David Cicilline (D – Rhode Island) explicitly stated in their joint announcement, “We look forward to examining this merger from the perspective of what is in the best interest of consumers and hardworking people.”

Well, New York authorities examined that same question yesterday, and the answer was obvious in the affirmative.

 

February 7th, 2019 at 7:20 am
Proposed T-Mobile/Sprint Merger Already Bearing Fruit
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For months since its announcement, CFIF has enthusiastically supported the proposed T-Mobile/Sprint merger, based upon the myriad benefits that it offers the American economy and consumers.

Among those benefits, lower consumer prices stand among the most prominent.  Well, that prospective benefit is already coming to fruition.

Specifically, in a letter this week to the Federal Communications Commission (FCC), T-Mobile Chief Executive Officer John Legere committed to maintaining “the same or better rate plans” for the next three years as the merger occurs:

Critics of our merger … have principally argued that we are going to raise rates right after the merger closes.  I want to reiterate, unequivocally, that New T-Mobile rates are NOT going to go up.  Rather, our merger will ensure that American consumers will pay less and get more…                   

If we broke faith by raising rates and cutting back benefits, we would lose our loyal customers and destroy the future of our brand.  I want to assure you that we would never do this.  My management team and I can make this personal commitment because we believe in delivering on our promises, and we k now if we do not, we will lose credibility and the trust of our customers.  Our business plan and our future success are centered around building a world class 5G network for everyone and delivering more to consumers for less.                     

To remove any remaining doubt or concerns about New T-Mobile’s prices while we are combining our networks over the next three years, T-Mobile today is submitting to the Commission a commitment that I stand behind – a commitment that New T-Mobile will make available the same or better rate plans for our services as those offered today by T-Mobile or Sprint.  We believe this merger makes consumers better off, and we’re willing to put our money where our mouth is.  Period.

Of course, that’s not the only benefit to the American economy and consumer marketplace, as we’ve detailed.

Among other important improvements, the T-Mobile/Sprint merger would add another major competitor to the existing marketplace, and combine their current differing but complimentary assets.  The result will be more jobs, faster wireless, quicker transition to 5G technology in America, more choices for consumers, greater private telecommunications investment and all of the consequent innovation that market competition entails.

Nevertheless, the fact that the benefits to American consumers in terms of pricing are already arriving confirms the soundness of this proposed merger.

It’s certainly something for the House Judiciary and Energy & Commerce Committees must acknowledge at their joint hearing next week.  The alternative to a T-Mobile/Sprint merger is less investment, fewer jobs, less market competition, more harmful government intervention into the economy, slower 5G deployment and one fewer competitive market participant.

That’s simply an unacceptable and indefensible alternative.

February 1st, 2019 at 3:21 pm
Proposed T-Mobile/Sprint Merger Would Be a Win for American Consumers
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On February 13, the House Judiciary and Energy & Commerce Committees will hold an important joint hearing on the proposed T-Mobile/Sprint merger that promises greater innovation, more jobs, more private telecommunications investment, increased market competition, faster wireless and greater choice for consumers as America proceeds toward our much-anticipated 5G technological rollout.

Energy & Commerce Committee Chairman Frank Pallone, Jr. (D – New Jersey), Judiciary Committee Chairman Jerrold Nadler (D – New York), Communications & Technology Subcommittee Chairman Mike Doyle (D – Pennsylvania) and Antitrust, Commercial & Administrative Law Subcommittee Chairman David Cicilline (D – Rhode Island) state in their joint announcement that, “We look forward to examining this merger from the perspective of what is in the best interest of consumers and hardworking people.”

Well, the answer to that question is clear.

Compared to the current telecommunications marketplace, the T-Mobile/Sprint merger will mean an enhanced array of consumer services.  Sprint and T-Mobile currently possess differing but symbiotic assets, rather than overlapping ones that might otherwise simply mean a bigger company instead of two smaller (and less competitive) ones.  As a result, the new entity would create a new network with broader nationwide coverage, capacity improvements and improved wireless performance for customers compared to what American consumers currently enjoy.  As has been exhaustively demonstrated by CFIF and others, the proposed merger also promises lower costs for consumers, new jobs and necessary network upgrades.

In particular, the proposed merger offers significant potential benefits through deployment of the first 5G wireless network in the U.S., as CFIF has noted:

With an anticipated $40 billion investment in 5G, consumers will enjoy data delivery at a lower cost, and the incentive for competitors to similarly lower prices to consumers.  That will also prompt market competition to expand spectrum in rural areas in addition to urban centers, as well as capacity improvements for consumers.           

That’s how market competition works.  A T-Mobile/Sprint merger and its 5G deployment would also mean billions in new private infrastructure investment and countless new jobs.  In contrast, the absence of a T-Mobile/Sprint merger would mean slower deployment of a 5G nationwide network, and the absence of a market competitor of greater scale.  Ultimately that means consumers would lose.

There is simply no point in needless delay or contentiousness when the House Judiciary and Energy & Commerce Committees convene on February 13.  The proposed Sprint/T-Mobile merger offers only benefits to American consumers compared to the existing status quo.  The Committees must recognize that reality, lest we pay an unnecessary price in terms of slower 5G, fewer consumer choices, fewer jobs, less investment and less market competition.

 

June 13th, 2018 at 3:59 pm
Let the AT&T/Time Warner Ruling Be a Lesson Against Needless Federal Market Interference
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Hopefully this will serve as a deterrent lesson to the U.S. Department of Justice, and the federal government more generally.

Yesterday, Federal Judge Richard Leon delivered his decision rejecting the Justice Department’s misguided lawsuit to prevent AT&T and Time Warner from merging.  The government had no business even bringing the suit, as the merger poses no threat of consumer harm.  To the contrary, as noted in today’s Wall Street Journal by Michael D. Smith and Rahul Telang, it promises more choices and greater market competition for American consumers.  Because the merger was “vertical” in nature, rather than a “horizontal” merger of direct market competitors, federal bureaucrats would only inflict harm by delaying or denying its fruition:

[T]he unique characteristics of digital markets have allowed a small number of internet giants – among them Amazon, Google, Netflix and Facebook – to dominate their industries and forestall entry by competitors.  These companies have put serious money into customer connections, data analytics and back-end systems, and these investments scale very well.  Netflix has penetrated more than half of U.S households.  Google and Facebook control almost three-quarters of online advertising.  Amazon does nearly half of all online retail sales.  These are astonishing numbers.

Now that these tech giants have established their downstream power in the distribution business, they are beginning to amass upstream power by getting into the content-creation business…  Given the dominance of Silicon Valley’s internet giants, it makes no sense to prevent AT&T and Time Warner from merging.  These companies aren’t trying to join forces because they want to take control of a dying industry;  they want to be allowed to compete in a new one.”

The American economy has accelerated since President Trump’s election as a consequence of his deregulatory and tax-cutting agenda, and that same logic should apply to the realm of market mergers between mutually bargaining parties.

As one example, Comcast recently announced a bid for certain assets of 21st Century Fox.  In the same way as described above regarding the AT&T/Time Warner merger, Comcast’s acquisition would greatly benefit consumers.  The film and television businesses have never been more competitive, dynamic or creatively rich, and consumers possess more entertainment choices than ever before.  Free markets work, and federal bureaucrats have zero business interfering in this matter.

As Judge Leon noted in his decision, federal government decisions to interfere come at great cost:

The government has had this merger on hold now since October of 2016 when it launched its investigation.  In that 18-plus month period, the companies have twice extended the break-up date to accommodate the government’s litigation of this case.  During that same period, the video programming and distribution industry has continued to evolve at a breakneck pace.  The cost to the defendants and the government to investigate, litigate and try this case has undoubtedly been staggering – easily in the tens of millions of dollars.”

That same logic applies to Comcast’s proposed acquisition.  Let’s not be forced to repeat yesterday’s harsh lesson to the Justice Department, after needless waste of time and taxpayer resources in meritless litigation that only serves to harm American consumers and competitive marketplaces.

February 8th, 2016 at 12:37 pm
Dish Network Becoming a Crony Capitalist Serial Offender
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We’re not in the business of demonizing particular private enterprises.  But it is our mission to advance the principles of free markets.  And few things corrupt contemporary markets more than crony capitalism, the exploitation of government power for private purposes.  From eminent domain abuse to kneecapping competing businesses, individuals and groups who favor free markets shouldn’t remain silent when businesses engage in it.

And in the case of Dish Network, we seem to have a serial offender.

In recent weeks, we’ve rightfully criticized Dish’s shenanigans as it relates to the desperately-needed Federal Communications Commission (FCC) spectrum auction.

Unfortunately, that unseemly behavior extends to the realm of marketplace mergers between willing parties.  We believe that absent some demonstrable unfair harm or illegality, private businesses should be free to merge, split or otherwise transact as they see fit without governmental meddling.  Regulators and disagreeable parties should have to carry a burden of proof in establishing such illegality or unfair harm before telling mutually-bargaining parties what they and cannot do.

Dish Network, however, appears to believe that it should be free to engage in merger activity when it sees fit, but others should not enjoy the same freedom when that doesn’t serve Dish’s perceived interest.

Perhaps the most prominent immediate example is Dish’s opposition to the proposed merger between Time-Warner Cable and Charter Communications, where it has gone so far as to petition the FCC to block the agreement.  That maneuver parallels its previous opposition to the Time-Warner/Comcast merger, which CFIF supported in the face of needless federal meddling.  Dish also considered it appropriate to oppose the AT&T/DirecTV merger.

But note something peculiar.  Several years prior, Dish itself sought to merge with DirecTV.  Similarly, Dish sought to merge with T-Mobile back in 2015, and in 2013 it asked the FCC to refrain from interfering with the Sprint/Softbank Stake merger, because its own desire to acquire Clearwire depended upon that particular merger going forward.  And in 2011, Dish sought a $2 billion purchase of Hulu, despite maligning the same company less than one year earlier.

Again, we hold no particular animosity toward Dish as an entity, and no opinion regarding the quality of its service.  But we do have a problem with a company inserting itself into merger negotiations between third parties, characterizing mergers as harmful to the marketplace and imploring regulators to interfere with other parties’ private interactions, only to turn around and seek the very same types of mergers when it anticipates some individualized benefit.

That is the definition of crony capitalism, and it should be opposed by government officials and American citizens alike.

February 28th, 2014 at 10:11 am
Video – Comcast-Time Warner Merger: Antitrust Hysteria
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In this week’s Freedom Minute, CFIF’s Renee Giachino discusses the irrational antitrust hysteria by critics of Comcast’s proposed purchase of Time Warner Cable and explains why their concerns are baseless in fact and reality.

December 6th, 2013 at 9:14 am
Podcast: Is Over-Regulation Impacting Transportation Safety?
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In an interview with CFIF, Marc Sribner, Research Fellow at the Competitive Enterprise Institute, discusses transportation safety and security, vehicle automation and self-driving, and airline merger and antitrust nonsense, all in the context of government over-regulation.

Listen to the interview here.

November 10th, 2009 at 5:41 pm
E.U. Antitrust Navel-Gazers Target Oracle/Sun Agreement
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As the worldwide economic downturn drags on, why are European regulators arbitrarily stifling Oracle’s acquisition of Sun Microsystems, causing harm to the latter’s business?  One would think we’d want to encourage beneficial mergers during these lean times. right?

Apparently not in the sclerotic European Commission (EC).  After notoriously blocking such other synergistic mergers as General Electric and Honeywell, EC bean-counters are formally objecting to the Oracle/Sun agreement.  Even the suddenly-activist Obama Justice Department had already approved the deal and said it wouldn’t harm competition, but it apparently troubles the European status quo too much for Euro tastes.  As a result, Sun’s sales have plummeted some 25%, and Oracle could ultimately be forced to abandon the deal and pay a $260 million breakup penalty. Oracle’s software focus doesn’t even compete with Sun in the consumer marketplace, and the agreement was reached back in April.

Meanwhile, EC bureaucrats navel-gaze, and consumers again pay the price.