If you haven’t seen the recent news, AT&T is pushing to buy Time Warner. This is a merger between two major telecommunications companies, but because they aren’t exactly direct competitors, there’s a good chance the merger will succeed. To understand just what this means, let’s take a closer look at competition, antitrust and how they all come together in this issue.
State of Antitrust
Antitrust laws and policy exist to protect consumers. If monopolies aren’t regulated, the principles of a free market fall apart. Innovation and development stagnate while prices soar, and ultimately people are forced into overpaying for inferior products or services. It’s been a major issue for over a century, and there have been some good wins in that time.
There have also been extreme cases of mismanagement. In modern times, a few major industries have found ways to dodge antitrust regulation and created major markets where no legitimate competition is taking place. In some of these markets, the government has actually supported these movements.
This is a major issue in the country that requires immediate and firm action. Destroying the major monopolies of today can do wonders for the country’s future.
Telecommunications
The most obvious example of these problems is with cable companies. In most of the country, these companies intentionally avoid direct competition, and the results have followed predictions. The U.S. lags substantially when it comes to internet availability and quality. Almost everyone is overpaying, and there is no relief in sight.
Because the companies aren’t directly competing, their business models fervently search for ways to justify price hikes, rather than ways to increase their customer base. This is the embodiment of antitrust practice, and in this industry it threatens to cripple America, technologically.
As if in proclamation of just how much these companies don’t care, Time Warner is once again trying to merge with another major provider, and because the buyer isn’t a cable company, there is a real chance of success.
A merger between AT&T and Time Warner is pretty obviously bad for Americans, despite the propaganda you might hear otherwise. The largest providers of internet in the country are Comcast, AT&T, Time Warner, CenturyLink, Charter, Verizon, Cox, Optimum, Frontier and Suddenlink, in that order. For the number two and three providers to merge is to create a monopoly.
In this case it would be more of a monopoly expansion, but it doesn’t really change the issue. This is a dangerous merger that further stifles competition in an already underwhelming industry.
Clinton
Since the issues are obvious, you might assume that regulators are all but laughing at the proposal. In reality, the deal has a lot of momentum, and there is no clear regulatory opposition. It will be reviewed and processed, but without a clear voice of leadership, there is a good chance the deal will succeed.
Hillary Clinton herself has remarked on the deal, and her response was as null as you might expect. She very politically said that the case should be watched. There is no outcry, and as such no mandate to prevent these companies from abusing the situation.
This is a politician with a pretty strong track record of supporting less than upstanding business practices. Don’t expect her presidency to oppose the merger.
Trump
Trump has already gone on record with unmistakable criticism against this merger. He recognizes the risks of the situation and just how bad the merger is for free markets. And really, this exemplifies why so many have supported his run from the start.
A legitimate business mind in Washington can provide a voice that has been lacking for too long. The country needs a hard antitrust stance, and this is the first politician in decades who is ready to provide exactly that. The competitive market ideals that he wants to push can revitalize the economy from the slow crawl the last eight years have seen.
You can say what you want about his flaws as a candidate, but his ability to directly address issues gives you a clear idea of his policies and goals, and more than anything else, he wants to push for a better American economy.
Breaking the Mold
You don’t really need all of this to realize that the telecommunications industry is in a bad place. Are you happy with your internet service? How about your cable provider? Illicit practices have been tolerated and even promoted for far too long.
There is a cure for this epidemic, and you know exactly what it is. So, there’s one more issue to keep in mind when you cast your vote on November 8th.
Regards,
Ethan Warrick
Editor
Wealth Authority
