Pre-emptive Regulation of Vertical Integration Could Harm Consumers

Former Nixon Administration official Bruce Owen has released papers arguing that pre-emptive regulation of vertical integration could harm, rather than help, consumer welfare because integration is not predictive of future market problems.

The author points to two current issues to illustrate the possible negative effects of pre-emptive regulation:

1. Owen states that the Federal Communications Commission's network neutrality initiative would signal the investment community that "nothing done by a regulator can be taken as given," creating market uncertainty with no identified consumer benefit.
2. With respect to the proposed Comcast-NBCU merger, Owen is critical of the FCC's general opposition to vertical integration between content suppliers and distributors. He suggests that "vertical integration has the potential to increase welfare by various means," and that "multi-channel video distribution and Internet access is no longer a monopoly of cable systems."