Thursday, October 12, 2006

Ma Bell Is Back

FCC puts off AT and T-BellSouth merger vote

I don't get it. Some years ago, the US Government forced AT and T to break up into some half-dozen or so smaller companies because it was a monopoly. Over the past couple of years, most of the telecommunication providers which resulted from the split have merged to become what is now, ironically enough, the new AT and T. With the purchase of BellSouth, AT&T will be almost as large as it was when it was forced to split up. If AT and T controlled too much of the telecommunications industry back then, isn't it perhaps going to be too big now?

I am very leery of all the merging, or "consolidating" as it is termed. Instead of being good for consumers, when companies merge together to control large blocks of a particular industry, competition goes away and prices go up.

To be sure, there are many reasons gas prices have skyrocketed in the past year or so, but is it just a coincidence that the oil companies have merged themselves into an oligarchy just before this happened? What about the cable TV industry? Has your cable bill gone down because of consolidation in that arena? Mine sure hasn't. I'd like to see an example where consolidation actually led to lower prices for consumers. (Don't show me a bunch of examples where a large company was created from mergers or acquisitions and moved all its manufacturing overseas - those don't count.)

I am normally against government intervention in business. However, one of the federal government's constitutional duties is to regulate interstate commerce. Perhaps this might be one of those areas where a little regulation is in order.

PS - the ampersand ("and" symbol) is not allowed in Blogger - for reasons I completely understand. Thus my spelling "AT and T" in this posting.

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