I just read a column by leftist and perennial NY Democrat primary candidate Zephyr Teachout in which she says that mergers like the one between AT&T and Time Warner are "crushing American democracy". Never one to take a reasoned view of any economic development when an apocalyptic one is available, Teachout says this merger, among other things, made the telecom industry much more concentrated. It is also, according to Teachout, just the latest exemplar of evil corporate titans and their shareholders raping American consumers for ever higher profits. She's wrong.
Look, some mergers are anti-competitive; that cannot be doubted. Teachout's jeremiad, however, truly misses the point and isn't even close to being correct.
Let's start with the idea that this merger results in the telecom industry being much more concentrated. There are a few different parts to the telecom industry. First we have cell phones. Time Warner doesn't provide those services, so that part of the business cannot become more concentrated as a result of the merger. Second, we have the old land line business. These services come either over the internet with VOIP or through the old land lines themselves. Again, Time Warner was not in that business, so again there's no increase in concentration. Third, there is internet access services provided by cable and fiber optic companies for the most part. It shouldn't come as a surprise, but Time Warner isn't in that business either. In other words, Teachout doesn't know what she is talking about. Time Warner used to be in those business, but it spun Time Warner Cable off with all those businesses years ago. Indeed, Teachout mentions dealing with Spectrum in her column, probably not understanding that Spectrum (which used to be Time Warner Cable) is unrelated to the merger with AT&T.
Time Warner is in the content business. It has a movie studio. AT&T doesn't. Time Warner has cable news channels; again AT&T doesn't. There's much more, but the point is that with very minor exceptions, the two companies are in different businesses. That is why it is billed as a vertical merger and why it passed muster with the court.
Some people, like Teachout, claim that the new content obtained by AT&T in the merger will be given some sort of priority over the content from competitors. There are regulatory structures that would prevent that, though. There are also antitrust laws that would do the same. The fact that a company could act illegally in violation of the antitrust laws do not mean, however, that the company cannot exist. That's roughly the equivalent of saying that a man with known violent tendencies should be put to death because he has a propensity towards committing murder. To use an old favorite of the left, that's no who we are.
There needs to be vigorous enforcement of the anti-Trust laws. It's interesting that this latest case was brought by the Trump Administration. Do you remember how many times the Obama administration went to court to block a merger? You don't because it was not something that happened. Hopefully, the Obama days of talking about things but never doing anything have ended on the antitrust enforcement front. Vigorous enforcement should not include crazy complaints or dissemination of misinformation though. Teachout is just wrong.
Look, some mergers are anti-competitive; that cannot be doubted. Teachout's jeremiad, however, truly misses the point and isn't even close to being correct.
Let's start with the idea that this merger results in the telecom industry being much more concentrated. There are a few different parts to the telecom industry. First we have cell phones. Time Warner doesn't provide those services, so that part of the business cannot become more concentrated as a result of the merger. Second, we have the old land line business. These services come either over the internet with VOIP or through the old land lines themselves. Again, Time Warner was not in that business, so again there's no increase in concentration. Third, there is internet access services provided by cable and fiber optic companies for the most part. It shouldn't come as a surprise, but Time Warner isn't in that business either. In other words, Teachout doesn't know what she is talking about. Time Warner used to be in those business, but it spun Time Warner Cable off with all those businesses years ago. Indeed, Teachout mentions dealing with Spectrum in her column, probably not understanding that Spectrum (which used to be Time Warner Cable) is unrelated to the merger with AT&T.
Time Warner is in the content business. It has a movie studio. AT&T doesn't. Time Warner has cable news channels; again AT&T doesn't. There's much more, but the point is that with very minor exceptions, the two companies are in different businesses. That is why it is billed as a vertical merger and why it passed muster with the court.
Some people, like Teachout, claim that the new content obtained by AT&T in the merger will be given some sort of priority over the content from competitors. There are regulatory structures that would prevent that, though. There are also antitrust laws that would do the same. The fact that a company could act illegally in violation of the antitrust laws do not mean, however, that the company cannot exist. That's roughly the equivalent of saying that a man with known violent tendencies should be put to death because he has a propensity towards committing murder. To use an old favorite of the left, that's no who we are.
There needs to be vigorous enforcement of the anti-Trust laws. It's interesting that this latest case was brought by the Trump Administration. Do you remember how many times the Obama administration went to court to block a merger? You don't because it was not something that happened. Hopefully, the Obama days of talking about things but never doing anything have ended on the antitrust enforcement front. Vigorous enforcement should not include crazy complaints or dissemination of misinformation though. Teachout is just wrong.
1 comment:
Just like the ignoramus Jim Acosta, she does not understand simple english. They are to busy Talking to SHUT UP, Listen and do Real Research. Just another person for people to TUNE OUT and OFF. Stupidity in educated people is primarily exibited by SELF IMPORTANCE not knowledge!
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