The Beneficent Monopolist
Allen P. Grunes
Maurice E. Stucke
University of Tennessee College of Law
March 26, 2014
Competition Policy International, April 2014, Forthcoming
University of Tennessee Legal Studies Research Paper No. 239
In examining Comcast's proposed acquisition of Time Warner Cable (TWC), we assess three of the arguments Comcast likely will make to the Department of Justice and FCC. Comcast will likely argue that its acquisition of TWC is unlikely to lessen competition because: (a) the broadband market is becoming more competitive: Google has introduced Google Fiber in a number of markets, and mobile broadband offered by wireless providers like AT&T and Sprint is competitive with fixed broadband; (b) Netflix and traditional media companies have sufficient clout to negotiate with Comcast and the government should not intervene on their behalf; and (c) the “wide array of FCC and antitrust rules and conditions from the NBCUniversal transaction in place . . . more than adequately address any potential vertical foreclosure concerns in the area of video programming.”
We argue that notwithstanding Comcast’s and TWC’s assertions, combining two monopolies does not yield better service, lower retail prices, more innovation, and greater choices for consumers. Nor should the DOJ and FCC simply extend the prior behavioral remedies to this merger. Behavioral remedies are a poor substitute for market competition. Comcast and TWC have not overcome the presumption of illegality for this merger and are unlikely to do so. As was the case with AT&T/T-Mobile, DOJ should just say no.
Number of Pages in PDF File: 16
Keywords: Antitrust, Monopoly, Monopsony, Broadband, Cable, Mergers, Buyer PowerAccepted Paper Series
Date posted: March 28, 2014 ; Last revised: April 8, 2014
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