Antitrust Regulation in the Telecom Industry

The blockbuster acquisition of Bell South by AT&T is a lesson in the folly of myopic antitrust regulation.  In 1997, the chair of the Federal Communications Commission, Reed E. Hundt, killed a deal between AT&T and SBC saying it would be "unthinkable" under antitrust laws.  Last year AT&T and SBC merged without opposition and now the combined AT&T/SBC is anxious to purchase BellSouth.  The new company will have the largest market share in three telecommunications markets -- the land line phone market, the DSL market and the cell phone market -- that are otherwise fast consolidating..  Mr. Hundt says the FCC should "bless the deal."  The telecom market moves so fast that it is very risky to speculate about the permanence of current market advantage and dangerous for the government to use antitrust enforcement to ossify such speculation into permanent market structure regulations through judicial consent decrees.