On the whole, it’s broadband market failure


What’s a snowball’s chance in Washington?

Telecoms mega-deals (or have we upgraded to giga-deals?) are snowballing: four in four months. First Comcast and Time-Warner, then Comcast and Charter, AT&T and DirecTv and now Sprint and T-Mobile. Each new merger – of companies or markets – looks to the previous ones for justification. If Comcast is bulking up, AT&T needs to as well. A bigger AT&T, in turn, requires that Sprint and T-Mobile combine forces, or so they say.

There is logic in their argument. It takes a giant to challenge a giant. At least comprehensively – independent ISPs and community networks are thin on the ground and are usually poorly positioned to compete for video subscribers, let alone provide telephone service.

I made – or tried to make – that point regarding the AT&T/DirecTv deal, with little success. And rightly so, given the latest developments. A bulked up AT&T would be a useful counterweight to a consolidated Comcast, but if the end result is a situation where less than a handful of dominant companies cosily divide the U.S. up into duopolistic fiefs, then that’s a market failure.

Taken as a whole, what’s on the table now represents a dramatically less competitive U.S. telecoms market, and there’s no reason to think that we’ve seen the last of the mega-deals. Considering each proposal in isolation invites a cascade effect, where approval of one increases pressure to approve the others. The FCC and justice department should review these deals as a package, and not one by one.