Wednesday, April 17, 2019

DOJ Antitrust Division May Be Off-Base on T-Mobile/Sprint Merger

Here is a MEDIA ADVISORY that I distributed a short while ago:

The following statement may be attributed to Free State Foundation President Randolph May:

"I was disappointed to read the report in today’s Wall Street Journal that the T-Mobile-Sprint merger may be encountering resistance from the Department of Justice’s Antitrust Division. If this is true, it is problematic because I fear that the Antitrust Division may be relying on an outdated static view of the relevant market rather than one that reflects today’s market dynamics. The T-Mobile/Sprint combination will likely make the wireless market even more competitive by creating a stronger third place competitor behind Verizon and AT&T. Increasingly, it looks like a standalone Sprint will play a diminishing role as a competitive check. 

But I fear the DOJ staff may be making a more fundamental mistake by not appreciating the extent to which wireless companies now compete in a larger broadband market that includes both wireline and wireless companies using various technology platforms. Clearly, wireless and wireline broadband services increasingly are substitutable — including for streaming video services at an exponentially growing rate — and 5G deployment will only accelerate this convergence trend that has uprooted the old legacy market definitions.

The Antitrust Division made a mistake in the AT&T/Time Warner case in not taking a realistic view of recent marketplace changes that should have alleviated its supposed competitive concerns. I hope it doesn’t make the same mistake with T-Mobile/Sprint because it is hung up on applying an outdated view of the marketplace dynamics."