The merger or the market?

[Commentary] For the third time in less than a decade, AT&T is merging again. In the wake of the announcement, there is rampant speculation on whether it’s unconscionable or inevitable. However, whether or not the $85 billion merger rises to the level of an outright rejection or just strong conditions, there is still a far more profound problem, which is not the merger, but the market itself. Four massive firms (AT&T, Verizon, Comcast and Charter) now totally dominate the digital communications landscape. Preventing any further consolidation of distribution is a no brainer, but that will still not address the underlying problem. Public policy cannot force firms to compete and the prospects of a new distribution network entering the market are slim to none. Breaking up the dominant firms requires decades of litigation and may not succeed.

Our only option is to ensure these mammoth network operators cannot use their power over the pipes to stymie competition for the content and applications that ride over them. However, the Federal Communications Commission has four active and nearly complete proceedings that will further that goal and the proposed AT&T Time Warner transaction makes completing them all the more critical: Set Top Boxes, Zero rating, Privacy, and Business Data Services.

[Dr. Mark Cooper is the Director of Research at the Consumer Federation of America.]