Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
Contact for Interviews:
Richard Morrison, 202.331.2273
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SBC Communication Inc.’s offer to buy AT&T, announced today, is a pro-competitive development in a rapidly changing industry. In an environment where cable, telephone and wireless companies all compete against each other, the combination of these two providers is the natural progression of a communications market working for consumers.
While some critics will no doubt fall back on the same antitrust and consumer welfare rhetoric used to attack every other industry merger, the bigger news is why this sale should not incur strict regulatory scrutiny – intermodal competition. The increasing ability of consumers to substitute different modes – landline telephone, wireless, Voice over IP – for another means an expanding marketplace that transcends the public utility model of the telecommunications industry. Network integration, such as we will see in a combined SBC/AT&T, is a requirement in order to compete effectively with other communications networks.
This merger may be just the beginning of the changes we need to see in the telecom world of higher bandwidth and digital content delivery. As we revisit the 1996 telecom act, there may be even more shakeups. Regulators need to reassess the role of antitrust in the modern tech world and allow market institutions rather than yesterday’s regulatory policy to guide tomorrow's tech world.