Back in March, U.S. Attorney General Holder expressed sympathy and understanding of how antitrust restrictions were making it difficult for newspapers to consolidate and survive. Holder said, in response to the urging by Speaker Pelosi to give newspapers leeway to merge to combine operations, “I think it’s important for this nation to maintain a healthy newspaper industry. So to the extent that we have to look at our enforcement policies and conform them to the realities that the industry faces, that’s something that I’m going to be willing to do.”
Given this week’s news that the Department of Justice’s Antitrust Division has begun a “review” of “large telecom carriers” to see whether they have “abused” their so called market power, it seems that the AG has lost his sympathy – at least for the wireless industry.
Why such a malleable view of antitrust, loosening up on one industry while pressuring another? What is the principle at stake? Is the policy to prop up ailing industries while handicapping our most innovative companies? Or in fact is there no principle involved, and these decisions are merely being guided by insider influence?
The right answers here are fairly straightforward – we should allow newspapers to compete without arbitrary impediments such as restraints on mergers, ownership caps, or discriminatory taxes based solely on business model rather than product delivered.
Similarly, we should let companies battle it out in the communications marketplace. When the largest carriers claim less than 30% market share, with dozens of competing service providers offering hundreds of plans, the notion that consumers are being harmed is ludicrous.
The dust up about mobile phone service is a story of one small company that has not achieved the economies of scale to make the kinds of exclusive deals that their larger competitors are able to make – that they somehow believe they have a right to make. But what the small company has is political connections, and an army of pro-regulatory “consumer” groups. So, instead of focusing on efforts and resources to succeed in the marketplace, they seek to use government as a weapon to hinder and restrain their competition.
Most troubling, however, is that this new antitrust inquiry into wireless communications fits a pattern of recent government tax, trade and regulatory policies that, either purposely or accidentally, raise the costs and the risks of innovation.
That’s no principle to follow.