Top US Antitrust Official Uncertain of Need For Four Wireless Carriers (reuters.com) 123
An anonymous reader shares a report: The head of the U.S. Justice Department's antitrust division, Makan Delrahim, declined on Friday to support the Obama administration's firm backing of the need for four U.S. wireless carriers. Asked about T-Mobile's plan to buy Sprint for $26 billion, Delrahim declined to reiterate the view of President Barack Obama's enforcers, who had said that four wireless carriers were needed. Instead, Delrahim told reporters, "I don't think there's any magical number that I'm smart enough to glean." He also said the department would look at the companies' arguments that the proposed merger was needed for them to build the next generation of wireless, referred to as 5G, but that they had to prove their case.
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since 5G deplyment needs sprint and t mobile to merge
I for one can't wait for 6G , where sprint would then be divided and merged with att / verizon
and then 7G when att and verizon would merge
all hail the Ma Bell
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You only need one controlled by the government - and you will have a three year waiting period for a subscription.
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so... business as usual.
The 1980's called... (Score:5, Insightful)
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That's already happening. Look at Hell$outh and AT&T. Ditto Pacific Bell, Nevada Bell, Southwestern Bell, etc..
Re: The 1980's called... (Score:2)
SBC bought AT&T and elected to use the AT&T name as it is globally known.
SBC also bought Pac-Bell and Bell South and recently ( past few years ) sold off SNET.
What needs to happen now is they need to get rid of the old guard mgmt types making poor decisions that were absorbed during the mergers.
Personally, at a minimum, we need more than one choice in everything. Electric provider, wireless, internet, etc.
In fact, the more the merrier.
Technically Correct - The Best Kind of Correct (Score:2)
I don't think there's any magical number that I'm smart enough to glean.
This is a technically true statement. It's pretty much impossible to know what specific number of carriers would magically create the optimal amount of competition.
Whatever the optimal number or range might be, though, it sure as hell isn't less than four.
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Because history has shown repeatedly that corporations will screw consumers if let to their own devices?
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History has shown that government repeatedly screws its own citizens if left to its own devices.
The problem isn't Government or Corporations, it is people will screw each other over if left to their own devices. There is plenty of literature that explores this in detail. Making simplistic statements of blame is easy. Finding a solution that isn't "We must do something. This is something. Therefore we must do it" is not easy.
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people will screw each other over if left to their own devices
If not otherwise incentivised, this is true. The goal of government/civilisation is to incentivise those behaviours that are good for both the individual and the collective... which, oddly enough, is exactly what Nash found provides the optimal outcomes for both.
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Man cannot rule himself, what makes us think he can rule others?
There is no man worthy to rule over others. Some men are better than others, however all fall short. History is filled with stories of "good men" ruling for so long that they no longer are good, but bent by the desire of power and fame. The best men live quiet unassuming lives, who rise up during times of need to become better than they actually are. This is the reality of our own weakness. Those that think they can cure this are sorely mistake
"Natural Monopolies" (Score:2)
The term "Natural Monopoly" [google.com] refers to a business with very high natural barriers to entry. A condition which lends itself to monopoly or even oligopoly. And the resultant monopolistic or oligopolistic pricing.
Industries like utilities, airlines, communications, railways are natural monopolies. [google.com]
"Hormesis" is a medical term. [nih.gov] It means something that in low doses is beneficial and high doses is harmful. Regulation may be the same way, as it is for beneficial drugs.
Some folks need the world to be digital - all o
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history and the present has continued to show that ANY GROUP WITH TOO MUCH POWER - acts badly.
applies to government and big business. hell, even applies to religion.
ANY thing that gets too big and powerful should be broken up. ...but we stopped caring about a 'fair world' a long long time ago ;(
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That will result in one carrier, sky-high prices, terrible service, and barriers-to-entry that prevent any competitors from entering the market.
Have you learned nothing from history?
Re:Technically Correct - The Best Kind of Correct (Score:5, Insightful)
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Or you could let companies go out of business, thus reducing the competition. It's not the government's job to decide how many competitors is healthy. A fair compromise is enough regulation to ensure that the biggest don't gobble up the smaller ones in order to stifle competition and create a monopoly. In this case, it looks like the regulator is asking the right questions. Is this deal essential for the smallest two carriers to have the financial health to deploy competitive technology. Can they compe
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Or if the two smaller can't compete, maybe the two bigger ones need to be split up.
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If they can't compete because the service is capital intensive, splitting the big ones up and reducing the capital they have to invest will just stagnate the product and make things worse for the consumer. You can't just apply an ideology that's anti big business without understanding the actual market mechanics and cost structure. You need to actually do research and make reasoned, evidence based decisions.
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Or you could give all the power to the political elite who then decide what people want and will get. At least with a capitalist market, consumers ultimately decide if a company is selling something they want or not. Change happens when companies don't produce what people desire. In a Socialist economy, people have no choice, products stagnate and innovation dies. You're back to the Feudal days when the crown owned everything and gave crumbs to the peasants.
Re:Technically Correct - The Best Kind of Correct (Score:4, Interesting)
How about we let the market decide, and not the government, mmkay?
Because the wireless business requires a lot of infrastructure, has network effects, and has huge barriers to entry. Free of regulation, it will coalesce into a single monopoly provider.
But 4 isn't necessarily better than 3. Currently we have two strong companies (Verizon and AT&T) and two weak (T-Mobile and Sprint). Competition may be better with three strong companies.
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As a Canadian I can tell you 3 is worse than 4. In provinces like Ontario, they have 5 or 6 carriers and their prices are 2/3 of what we pay in Alberta with 4 carriers. (I don't count the 'discount' carriers because they are owned by the big 3)
This is true, it's the same in BC, with 3 carriers we get raped whereas the Provinces with more carriers get at least a 1/3rd price reduction.
Currently there is a fourth carrier attempting to enter the market, suddenly the main carriers can offer lower prices, and get line ups around the block of customers trying to get the deals. Otherwise they claim the best data only deal they can do is $30 for 1/2 a GB a month.
The solution down there is for T-Mobile and Sprint to share infrastructure if they can't affor
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This is a technically true statement. It's pretty much impossible to know what specific number of carriers would magically create the optimal amount of competition.
Whatever the optimal number or range might be, though, it sure as hell isn't less than four.
Those two statements are in direct contradiction with each other. If it's impossible to know what specific number of carriers are needed, then you cannot possibly know it has to be four or more...
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Your objection is nonsensical. It’s impossible to know how many planets exist in the universe, yet I can unequivocally affirm it is not less than four.
You can be unable to state a number yet be assured it must be bounded in some way.
Assured of what? (Score:3, Insightful)
You can be unable to state a number yet be assured it must be bounded in some way.
I cannot know the number.
Therefore, how can I presume to know the correct BOUNDS for the number as well?
I am pretty sure the number is bounded at two, without two there is no competition. Any number larger than that is probably better - how much better, you cannot say.
Why the hell does anyone think four is a better number than three, in a field that relies so much on coverage and vast costs of developing and maintaining same?
Re:Assured of what? (Score:4, Informative)
I cannot know the number.
Therefore, how can I presume to know the correct BOUNDS for the number as well?
That is not logical.
There are many, many examples from both science and math where we know the bounds without knowing the specific number.
Graham's Number [wikipedia.org] is an obvious example, but there are many others.
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Turns out it was 14, and you were running a fever.
GOT YA MOTHERFUCKER
Do not think that is correct (Score:1)
Simple, there's been relatively little competition with only 4 carriers, so we know that it's unlikely that there will be more competition with fewer competitors.
Two competitors combining into one means they have much better ability to yield actual competition. For too long it has sure looked like there was kind of an unspoken working between Verizon and AT&T to keep rates up...
Thank you for not being a pedantic asshole who thinks because there is some case somewhere where the no bounds but not limits
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I would say the lower bound is three to make it possible for the largest company to not have an absolute majority of the market share.
In any case, this is a very good question to ask, if you believe in the zero-one-infinity rule [wikipedia.org]. Some people say the rule applies only to software but I think it applies to code of any kind (e.g. legal). For example, at what interest rate does a loan become usury?
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If it's impossible to know what specific number of carriers are needed, then you cannot possibly know it has to be four or more...
Of course you can. There are some number of employees in my office building. I probably couldn't guess the exact number, or even come within 50, but I know that it's a lot more than four.
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But how many employees are needed...?
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Speaking strictly to the logic of the statements, they are not contradictory; it is possible to not know what value N has while being aware of some values that it is definitely not. For example: I don't know the number of grains of sand on the beach but I know it's not less than 12.
So for your assertion that we can't know it's less than 4, we have to assume that 3 or 2 might actually be the number. (0 or 1 results in no competition at all, which I think we can agree is less than optimal, no?) So, what reaso
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We already know four is not a good number (Score:2)
So, what reason do you have to believe that a market with 3 carriers would have the optimal amount of competition?
We already know four is too many; otherwise they would not be seeking to merge.
We already know four is too many; otherwise the size of Sprint + T-Mobile together would not be smaller than either AT&T or Verizon.
We already know four is too many; just logically considering the costs of maintaining coverage across the entire US for four separate carriers.
Four is obviously too many. I am pretty
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Why would they not want to merge? Optimal competition for the consumer is not optimal for the supplier; all suppliers really want to be a monopoly.
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In Canada, the Provinces with only 3 telcos pay at least a 1/3rd more then Provinces with 4+ telcos (not counting the bargain ones that are owned by one of the big 3).
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Wrong. It is entirely possible for both to be true.
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This is the same level of idiocy as the last time [slashdot.org] You tried to use math and logic. You tried to claim if you can't know something it must be 50/50.
Shows the reasoning ability of mods here as it's currently modded 4 informative...
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I love that I live in your head for free!
Hi there. Looks like I'm your new room mate. I'll just set my stuff over here.
Thank you for just being you (Score:2)
You can always manage to bring a smile to my face, that in itself is all the rent I need. Plus there's plenty of space, well maybe a tiny bit less now, but still plenty.
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We might be better off with three strong carriers than with two strong ones and two weak ones. It's not like Sprint was much of a competitor for Verizon/AT&T.
Also don't discount that a fourth carrier may reappear. Comcast has recently entered the wireless business as a MVNO. Comcast is sitting on a big chunk of spectrum that can be used for wireless if they choose to build it out.
Verizon, AT&T, T-sprint, Comcast is probably a better set of four competitors.
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1 = monopoly
2 = duopoly
3 = oligopoly
4+ = at least some competition. And no, MVNOs don't count, because they rely on the above.
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4 seems to be a good bare minimum.
Often for companies
#1 and #2 are often in tight competition with each other and swapping over who is #1. They both a big user base, and normally will copy each others tricks sometimes to the consumer benefits, but is it mostly just revenue increasing tricks.
#3 is often a bit out in the distance. A well known brand, but often trying some new things to set themselves apart. However will often place themselves in parity in terms of price as #1 and #2
#4 is way behind, but is o
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I don't claim to know the magic number, either. I don't even claim to know that it isn't less than four. Parts of me would agree that a higher number is better, parts of me would think a lower number is better.
What I really don't understand, however, is how the same people who will point to the European model of a single company owning and maintaining last-mile infrastructure for wireline ISPs as a model for telecom Utopia will scream bloody murder when any hint of consolidation actually happens.
Or is it on
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The trick is to have the infrastructure run as an utility, whether government owned or regulated private company. As there is no competition, it has to be regulated.
Then you can have lots of private companies using the infrastructure and competing with each other, on a level playing field.
Canada has some Data for You (Score:2)
It's pretty much impossible to know what specific number of carriers would magically create the optimal amount of competition.
It's possible if you have the appropriate data. Canada only has three big carriers: Bell, Rogers and Telus and it also has some of the highest mobile phone charges in the western world. While they will happily claim that this is due to the low population density if you look at a coverage map [comparecellular.com] you can see that vast swathes of the country have no service which somewhat undermines this along with the fact that rates in Australia are also much lower than Canada despite a similar population density.
So the dat
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And in Canada, the Provinces with more carriers have lower prices. For example, Saskatchewan, which still has a government owned carrier, has much lower prices then the neighbouring Provinces that have similar population densities and terrain.
Less than four is bad. (Score:2)
It's pretty much impossible to know what specific number of carriers would magically create the optimal amount of competition.
But as I understand it:
* 1: is obviously a problem. He gets to set his price to extract maximum profit from the customer base - and usually does.
* 2: Market forces encourage the two players to split the customer base evenly and keep the prices high. No collusion required.
* 3: Though the most profitable would be (as always) to split things about evenly and
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I say it’s technically correct because clearly he’s not smart enough to glean the correct answer (or at least a minimum)
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CDMA and GSM (Score:2)
Right now in the United States there are two CDMA carriers (VZW, Sprint) and two GSM carriers (AT&T, TMO) and the various MVNOs that resell their services.
Allowing TMO and Sprint to merge would create a new company that has the infrastructure and means to offer both GSM and CDMA. Such an achievement is literally beyond the ability of either VZW or AT&T to fund on their own, and would be in contrast to their goals to fund an eventual 5G (once there is a 5G standard...). So in terms of "creating co
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Except the merged company would have no need to keep and maintain legacy CDMA service. They’d reporpuse the spectrum for somethig else.
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At least for several years they do - in order to not send the Sprint customers running to Verizon and BYOD.
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Sprint killed off iDEN without a tear.
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With the network going to LTE the distinction between wireline and non-wireline networks is dissipating. CDMA/GSM are not significant characteristics for the future.
Next Year's Headline (Score:3)
Next Year's Headline: "Top US Antitrust Official Uncertain of Need For Three Wireless Carriers"
Re:Next Year's Headline (Score:4)
Carrying this to it's obvious and inevitable conclusion:
2020's headline: Top US Antitrust Official Uncertain of Need for Two Wireless Carriers
2021's headline: Top US Antitrust official uncertain of need for more than one telecom company
2021's headline: Top US Antitrust official uncertain of need for antitrust oversight
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would be to seize those leases and rebid them as 5 year leases, so that there's a possibility of competition emerging.
That would be a horrible idea, and speed up the obsolescence of equipment that's already happening at too fast a pace.
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Nah, SEPARATE the towers from the carriers.
GM/Ford/Chrysler do not own the roads. Why should cell companies?
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Already done.
The carriers, by and large, already don't own many towers. There might be a few legacy locations where they still do, but companies like American Tower and Crown Castle own the vast majority of them at this point, and the carriers just lease space on them for their antennas. Anyone with a spectrum license and money for the antennas/base stations can rent some position on most any tower.
https://www.fool.com/investing... [fool.com]
Now, if you mean that cell carriers shouldn't own spectrum licenses, that's a
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I'd love to go back to the days where I drive a county over and have to pay $0.89 a minute to roam (or in todays terms, $0.89/MB), wouldn't you?
Pfft. (Score:2)
Apples to fucking oranges but we had three serious auto manufacturers in this country (until recently) and if that had been enough competition, Fifth Ave wouldn't be lined with Benz's and the driveways of informed buyers wouldn't be filled with Toyotas.
Four isn't nearly enough (Score:5, Interesting)
Four isn't nearly enough.
Fonseca, Miguel A., and Hans-Theo Normann. "Explicit vs. tacit collusion—The impact of communication in oligopoly experiments." European Economic Review 56, no. 8 (2012): 1759-1772.
The money quote from the paper: "...the n=4 oligopolies exhibited the highest frequency of explicit cartels...".
I completely believe that Makan Delrahim isn't smart enough to know how many competitors are required before a functional market emerges, but plenty of other people are smart enough. Funnily enough, the problem has been studied.
You can use facts to prove anything (Score:2)
The correct number ... (Score:1)
Lets see the incumbent carriers argue for their continued existence. And then extend their logic to the other three.
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Fuck off, slaver.
You come over here and say that to my face. Only travel on privately owned roads.
Flamebait article (Score:1, Troll)
The implication of the headline, given the current administration, is that this guy backs monopolies. But he really made a completely reasonable statement, and it is being presented in such a way as to fan the flames of those who are afraid of Trump. There is no story here.
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Thanks Trump PR team
I don't find his statement reasonable at all (Score:2)
Basically, He's not a leader, that's Trump. He's a bureaucrat. His job is to implement what the leadership tells him to do, and he just admitted h
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Thing is, it's his _job_ to know what that number is.
There is no single magical number. Certainly we need competition. Is it 2? or 3? or 5? The article is fearmongering, look:
Bill Baer, a former head of the antitrust division, had told the New York Times in 2014: “It’s going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of American consumers.”
Delrahim didn't say the number was 3, or that he was going to reduce the number at all. Attack these people when they do say stupid things, but this isn't one of them. This is crying wolf.
We elected a Republican (Score:4, Insightful)
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one word: religion
I've said it many times before, so I won't repeat myself.
its entirely about religion and how they implant bullshit into your mind at early age.
remove that and you will see mankind, as a whole, double in intelligence almost overnight.
eh (Score:2)