STEPHEN MOORE: How To Make Sure US Dominates 21st Century Telecommunications

Trump’s announcement and Executive Order to ensure that the U.S. dominates the AI revolution was a welcome America First policy directive. That mostly means keeping the government out of the way.

But an equally vital industry for our economic and national security interests is telecommunications – which is also going through warp speed technology changes.

Here too, the government needs to keep its hands off.  No subsidies. No lawsuits. Minimal regulations.

This is why the latest $34.5 billion blockbuster merger between telecom titans Charter and Cox communications should get the green light from federal regulators.

Some of the antitrust lawyers at the Federal Trade Commission and the Justice Department worry this marriage would give Charter-Cox too much market share allowing them to raise prices on consumers.

But companies like Cox that provide Internet and TV services over cable transmissions are soon to be outdated by the next generation of fiber, satellite, fixed wireless, and mobile broadband services.

Customers are already “cutting the cable cord” in favor of more efficient and less expensive streaming video services and other digital alternatives.

The synergies and economies of scale advantages driving this merger make sense by adding the 13 million Cox TV subscribers to the nearly 3 million Charter subscribers plus their combined 33.5 million broadband customers.Is that too much market concentration?

Comcast serves around 40 million customers in the U.S., with an additional 11 million customers internationally. Verizon serves cable subscribers and approximately 146 million mobile subscribers.

AT&T is another big player in this market with tens of millions of customers of its own. AT&T is moving aggressively into satellite technologies and 5G to deliver calls, data and video. Both AT&T and Verizon have a market cap of well over $100 billion. That compares to less than $50 billion for the Charter-Cox union. In other words, competitors aren’t going to be bullied out of the market by  Charter-Cox – especially in the lucrative mobile communications arena.

What is ironic is that back in the 1980s AT&T was forced by the government to break itself up because of alleged market power, and now we could have federal regulators blocking a merger that would bring new competition to AT&T (and other big kids on the block, Comcast and Verizon).

As for the Charter-Cox potential dominance in cable, sorry but that’s a declining industry.

Within a decade or so, cable will be as outdated as a Blockbuster store. If the Trump regulators block the merger, they would be declaring stay put in your narrow cable TV lane. They might as well be telling Cox and Charter to “lead from behind.”

As for consumer welfare, Charter’s CEO Chris Winfrey notes that Cox’s 6 million customers will gain overnight access to Charter’s nationwide low pricing structure and its nationwide customer service.

Mergers like this one make companies more competitive, make money for millions of American shareholders, and make U.S. companies scalable to compete with Europe, Japan and China rivals.

Gail Slater, the assistant attorney general for the Antitrust Division of the United States, recently said she intends to focus on mergers that decrease competition. “If you’re violating the antitrust laws, we’re going to take a hard look. If you’re not violating the antitrust laws, we’re going to get the hell out of the way.”

Those are words to live by.

Stephen Moore is a co-founder of Unleash Prosperity and a former senior economic advisor to Donald Trump.  Moore also does consulting work with the telecom industry, and that includes Cox, AT&T and Verizon. 

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the 🏢Daily Caller News Foundation.

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