How Competitive Is the Wireless Industry?

Over the past 20 years, large communications companies grew by leaps and bounds through mergers and acquisitions. Until last year, the Department of Justice blocked only one such merger on antitrust grounds. That incident was the proposed merger of WorldCom and Sprint in 2000 which was blocked, ironically, allegedly because the merger would lessen competition in the long-distance market, a market that certainly does not exist today.

It is difficult to look at the structure of the communications industry in the United States and not see substantial opportunities for restructuring through further mergers and acquisitions. Last year the Department of Justice blocked the merger of AT&T and T-Mobile with relatively narrow definitions of markets and competitors. Does the DOJ position presage difficulties for future mergers and acquisitions of communications companies? Or was the AT&T — T-Mobile decision an aberration, and not likely to be repeated?

Hudson Institute's Center for the Economics of the Internet hosted a discussion with Senior Fellow Harold Furchtgott-Roth on competition in the wireless industry.

Bryan Tramont, Adjunct Law Professor in Catholic University of America's Communications Law Institute and Senior Adjunct Fellow, University of Colorado, Boulder, moderated the discussion. Tramont is the managing partner of Wilkinson Barker and Knauer and the former Chief of Staff of the Federal Communications Commission (FCC).

Harold Furchtgott-Roth, Director of Hudson's Center for the Economics of the Internet, served as a commissioner of the FCC from 1997 through 2001. In that capacity, he served on the Joint Board on Universal Service. He is one of the few economists to have served as a federal regulatory commissioner, and the only one to have served on the Federal Communications Commission. He founded Furchtgott-Roth Economic Enterprises in 2003, and from 2001-2003 Furchtgott-Roth was a visiting fellow at the American Enterprise Institute, where he wrote A Tough Act to Follow, a book about the difficulties implementing the Telecommunications Act of 1996.

Before his appointment to the FCC, Furchtgott-Roth was Chief Economist for the House Committee on Commerce and a Principal Staff Member on the Telecommunications Act of 1996. Earlier in his career, he was a Senior Economist with Economists Incorporated and a Research Analyst with the Center for Naval Analyses.