One of the factors that makes the Net Neutrality fight so urgent is how little competition there is in the telcoms sector; it — like the whole modern economy is dominated by a few giant, top-heavy firms that are gobbling one another at speed.
What’s more, Trump, the Republican Congress and especially FCC Chairman Ajit Pai love monopolies and only object to them when they harm their personal fortunes.
So it’s particularly terrible news that the proposed T-Mobile/Sprint merger is back on, after being scuppered by Sprint’s owners, the Japanese investment fund Softbank. Softbank has reportedly come around on how much control they want to maintain post-merger, and so we’re now being teed up for a wireless sector with even less competition.
The argument has long been that combining the two companies will create a more effective competitor for AT&T and Verizon. But that’s generally not how competition, or the telecom sector, works. Reducing the total number of competitors almost always results in less incentive to compete. Even with T-Mobile’s disruptive habits, the wireless sector already doesn’t really try too hard to seriously compete on price. And part of the reason Sprint and T-Mobile have struggled is AT&T and Verizon’s monopoly dominance of fiber-based cellular backhaul, something that won’t change just because of M&A mania.As they hunt for possible regulatory approval, Sprint and T-Mobile have previously tried to play on Donald Trump’s facts-optional job creation claims, insisting the deal will somehow, magically, be a boon for employment. But analysts that rely on actual facts and hard data (remember them?) have argued the deal will be mammoth job killer:
The Competition-Killing Sprint, T-Mobile Merger Nobody Asked For Is Back On The Menu [Karl Bode/Techdirt]