Two key lawmakers recently introduced legislation that would authorize the Justice Department to use wiretaps to investigate and prosecute criminal antitrust conspiracies. Somehow I cannot not see Big Brother listening in on a day in the life of Ivan Seidenberg, whose Verizon Communication’s Inc. wants to gobble up MCI Inc. for a $6.75 billion. That’s a tad less than Qwest Communications International Inc.’s apparently less desirable $8 billion bid for the No. 2 long-distance carrier.
But why eavesdrop on Ivan when there are truly bad guys still on the loose. Moreover, it would be totally inconsistent with official Washington, which-in the words of telecom analyst Scott Cleland-has become a “blinking green light” for telecom consolidation.
But maybe there’s something to this latest wiretap business. The authors of the antitrust wiretap bill are the same two U.S. lawmakers who want to put the proposed Verizon-MCI merger under the microscope on Capitol Hill.
“More and more we appear to be moving toward a world in which consumers will face one dominant local telephone company, which bundles its local service with long-distance service, high-speed Internet and wireless service,” said Sens. Mike DeWine (R-Ohio) and Herb Kohl (D-Wis.), the chairman and ranking minority member, respectively, of the Senate Judiciary subcommittee on antitrust, competition policy and consumer rights.
The Consumer Federation of America and Consumers Union want Congress to hold hearings on the Verizon-MCI deal and on the planned $16 billion union of SBC Communications Inc. and AT&T Corp.
The Communications Workers of America has called on federal and state regulators to address issues raised in Sprint Corp.’s $36 billion offer for Nextel Communications Inc.
Congress, consumer groups and unions have shaped the telecom debate in the past. But do not expect them to change the course of current events. Circumstances have changed. Telecom consolidation is now an economic inevitability.
Consolidation is a fait accompli. The implications are less clear, however. How are government lawyers making sense of all this? Is this a case of analog antitrust analysis in a digital world, one in which technological disruption and convergence make predictions about competitive markets today and in the future fancy guesswork?
Also, what is the meaning of intermodal competition if the modes of competition are owned by one, two or three telecom behemoths? FCC Chairman Michael Powell’s successor will have to wrestle with that one.
Fed Chairman Alan Greenspan considers global bond markets a collective conundrum. Perhaps more confounding is the shifting telecom landscape. How will policymakers respond? More importantly, what will it mean for the American consumer?
