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February 8th, 2016 12:37 pm
Dish Network Becoming a Crony Capitalist Serial Offender
Posted by Print

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.

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