Mergers in the mobile telecommunications industry are of keen interest to policymakers and scholars. This sector often experiences high concentration levels, driven by pronounced economies of scale and scope, alongside substantial regulatory barriers to entry created by radio spectrum allocations. Hence, antitrust authorities frequently struggle with the tradeoff between the benefits of enhanced synergies and the potentially adverse effects of increased market power. This tension results in varied outcomes from regulatory agencies when approving (or blocking) mergers. Between 2012 and 2016, for instance, four E.U. nations (Austria, Ireland, Germany, and Italy) allowed the consummation of “4-to-3” mobile telecommunications transactions, while the U.K. and Denmark blocked similar combinations. In the U.S., the Federal Communications Commission (FCC) rejected “4-to-3” mergers in 2011 and 2014, yet approved the T-Mobile acquisition of Sprint in April 2020—a decision that continues to spur debate. This Article examines the T-Mobile/Sprint post-merger evidence of retail mobile subscription prices, network investment, service quality, market share, and industry profits in the U.S. mobile communications industry. Our findings suggest that the T-Mobile/Sprint merger has led to consumer benefits, challenging arguments claiming negative impacts due to the carriers’ consolidation.

For the past decade, U.S. communications policymakers have been debating the need for net-neutrality regulation of " dominant " communications carrier platforms. One of the reasons advanced for regulating these carriers derives from a fear that carriers could reduce competition in the production and distribution of video media through their ownership of media companies, but is there any evidence supporting the notion that vertically integrated communications companies have successfully used such a strategy? This paper provides evidence from the financial markets that carrier integration into video production has not redounded to the benefit of these companies' stockholders. In fact, this integration appears to reduce the value that investors place on such carriers, a result that suggests that the difficulties in managing a large, vertically integrated media and communications company more than offset any benefits (if any) that may derive from anticompetitive behavior induced by vertical integration.

Mergers in mobile markets are of keen interest to policy makers and scholars. Because carrier networks are subject to pronounced economies of scale and scope and given that communications regulators create substantial barriers to entry by limiting spectrum allocations for mobile services, wireless services generally exhibit relatively high levels of industrial concentration. Hence, antitrust authorities often struggle with the tradeoff between enhanced scale economies and enhanced market power. Between 2012 to 2016, for instance, four E.U. nations (Austria, Ireland, Germany, and Italy) consummated "4-to-3" mobile mergers while two such combinations were blocked (in Denmark and the U.K.). In the U.S., 4-to-3 transactions were blocked by regulators in 2011 and again in 2014, but a recent merger -- between the No. 3 (T-Mobile) and No. 4 (Sprint) carriers was approved in February 2020. This combination remains a subject of intense debate. We examine post-merger evidence of retail mobile subscription prices, network investment, service quality, market shares, and industry profits in the U.S. mobile communications industry. We conclude that the data are consistent with the thesis that the T-Mobile/Sprint merger produced consumer gains. This outcome is particularly interesting given that the government remedy imposed to mitigate potential anti-competitive merger effects, the creation of a new fourth network (DISH), has produced no plausible pro-competitive impact.

The growth of the large, “dominant” digital platforms – as well as increases in national concentration of U.S. industries and average profit margins, and a decline in labor’s share of national income – have prompted calls for a stronger antitrust policy. The Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ) have recently responded with a more vigorous attack on mergers and have launched monopolization cases against Amazon, Apple, Facebook, and Google; two of these suits specifically seek divestitures as remedies. The early results of the more aggressive merger policy are not favorable, and the likelihood that court-ordered divestitures would be effective in increasing competition is low if the results of previous monopolization cases are a relevant guide. In addition, two pieces of legislation have been proposed in the U.S. Congress to curb the power of the large, dominant digital platforms. Neither of these proposals addresses the source of the platforms’ dominant positions; they would merely constrain the ability of these platforms to exploit their market positions. One of these bills, however, would require the largest platforms to interconnect with other businesses and, potentially, their rivals. This is a proposal that could result in all of the problems that a similar policy in telecommunications created two decades ago.

The growth of large digital platforms has caused some observers to claim that merger policy has been too lax to protect consumer welfare, stating a predicate for antitrust policy reform.We address this by exploring the relative importance of past mergers to the current value of the five largest platforms (Google, Amazon, Facebook, Apple, and Microsoft).We find that mergers have not been as important to these platforms' size compared with other large technology companies.Even so, it could be argued that the mergers engaged in by these platforms have harmed efficiency.Listing the combinations often used to advance this view, we find that such mergers cited by reform advocates have often been associated with competitive or benign outcomes rather than with adverse effects associated with creation of a monopoly.Further analysis (and government litigation) will likely inform this perspective.

Rewheel, a Finnish consultancy, periodically issues reports that it portrays as international competitiveness comparisons of retail prices for mobile wireless services across the globe. However, these comparisons are not accurate representations of the state of competition in the mobile wireless world. In these reports, Rewheel assigns providers and countries international ranks and labels competitive/non-competitive. While the internet is a fabulous means of communications, the Digital Fuel Monitor by Rewheel/research is a prime example of online misinformation. To curb the spread of false information, social media platforms have started applying warning labels to content they believe the facts do not support. Still, far too many false claims have attracted attention because separating fact from fiction often requires specific expertise. Given the many theoretical and practical flaws and errors contained in the Rewheel study, the authors find it of no value when comparing prices internationally or establishing the level of competition in a country. A warning label informing readers about the lack of intellectual rigor and the misleading and incorrect nature of the Rewheel study’s results is appropriate and recommended.

Recent calls for using the antitrust laws to break up the large Internet giants are misplaced for a number of reasons. First, similar efforts against oil, tobacco, motion-picture, and telecommunications monopolies have not proved to be beneficial to economic welfare. Second, the failure to break up Microsoft using Section2 has not proved to be a mistake: competition in operating systems and Internet browsers has flourished recently. Finally, a Section2 case against Amazon, Facebook, or Google could not succeed if it focused on the digital advertising market. Even in a case based on market power on the other side of their platforms, a structural remedya break-upwould not improve economic welfare in the long run.

Predicting what future changes in technology may occur is often an impossible endeavor. Designing effective regulatory policies around changing technologies is even more difficult, as it requires understanding how those changes may alter market conditions that often render such policies obsolete or even counterproductive. This report draws on a sizable history of past regulatory and antitrust interventions whose results demonstrate that:

More than a year after a court invalidated its "net neutrality" rules on broadband Internet service providers (ISPs), the Federal Communications Commission (FCC) decided to extend public-utility (Title II) regulation on broadband services. This paper uses traditional event analysis of the movements in the values of major communications and media companies' equities at key moments in the FCC's path to this decision to estimate the financial market's assessment of the likely effects of regulation on ISPs, traditional media companies, and new digital media companies. The results are surprising: the markets penalized only three large cable companies to any extent, and even these effects appear to have been short-lived. The media companies, arguably the intended beneficiaries of the regulations, were unaffected.

Dear Chairman Wheeler:Congratulations on your confirmation as Chairman of the Federal Communications Commission. As economists who study and write about communications policy and regulation, we agree with your comment during your confirmation hearing that “the role of the FCC has evolved from acting in the absence of competition to dictate the market, to promoting and protecting competition with appropriate oversight.” The economic evidence on this point is clear: in all but a few areas, communications networks no longer have the characteristics of natural monopolies, and should no longer be regulated as public utilities. Indeed, the convergence of the communications sector into the dynamic, intensely competitive Internet ecosystem is now virtually complete.We write because we believe these economic facts have important implications for some of the key challenges facing you and the Commission in the months and years ahead.

In the last few years, consumers have found it increasingly easy to access content through the internet that they would previously have obtained from broadcasters, through cable television or satellite television, or on CDs, DVDs, and printed materials. In addition, they have access to a wide variety of user-generated content and social-networking sites to occupy time that once might have been devoted to traditional media. Despite these dramatic changes in access to media, however, most people still obtain much of their entertainment and information from rather traditional sources, such as cable and broadcast television networks, newspapers, magazines, or their online affiliates. But the owners of these media are now justifiably worried that this traditional environment is about to be disrupted, perhaps in a dramatic fashion.

Policies mandating unbundling of copper telecommunications networks have now been in place for more than 15 years, and it is thus becoming possible to study their long-run effects. This paper reviews the existing evidence on the effects of copper unbundling, and presents new empirical results based on regression analyses of broadband penetration in OECD countries from 2001 to 2010. The results show that the long-run effect of copper unbundling on household broadband penetration rates is negative, a finding which is consistent with previous research, including with research suggesting that copper unbundling has slowed the deployment of FTTP infrastructures, especially in Europe. Based on an analysis of the similarities and differences between the unbundling of copper networks and fiber networks, the paper concludes that mandated unbundling of fiber networks would likely deter deployment of Next Generation Access networks (NGAs).

Recent economic growth has been led by high-technology industries (See Jorgenson, Ho & Stiroh (2005) for a summary of the research on the recent acceleration of productivity growth). Many firms in these industries have achieved a dominant market position, thereby attracting the attention of competition authorities, often resulting in major monopolization cases. Unfortunately, this attention has not resulted in improved market outcomes. In this paper, we evaluate the effect of Section 2 Sherman Act cases brought against IBM, AT&T, and Microsoft. We conclude that these cases had limited effect on consumer welfare because they did not stimulate entry or innovation. In these industries, competition authorities cannot expect to promote simply an expansion of output and lower commodity prices; rather they should focus their remedies on promoting innovation—new products that replace or compete with the dominant firm’s products.

In the authors' shared opinion, the economic evidence does not support the regulations proposed in the Commission’s Notice of Proposed Rulemaking Regarding Preserving the Open Internet and Broadband Industry Practices (the “NPRM”). To the contrary, the economic evidence provides no support for the existence of market failure sufficient to warrant ex ante regulation of the type proposed by the Commission, and strongly suggests that the regulations, if adopted, would reduce consumer welfare in both the short and long run. To the extent the types of conduct addressed in the NPRM may, in isolated circumstances, have the potential to harm competition or consumers, the Commission and other regulatory bodies have the ability to deter or prohibit such conduct on a case-by-case basis, through the application of existing doctrines and procedures. Hence, the approach advocated in the NPRM is not necessary to achieve whatever economic benefits may be associated with prohibiting harmful discrimination on the Internet.