Showing 9 of 24 Publications by Thomas W. Hazlett

No ‘Cozy Triopoly’

Scholarship In the US wireless communications market, antitrust regulators blocked so-called four-to-three mergers—mergers of two of the four largest competitors—in 2011 and 2014. But authorities did . . .

In the US wireless communications market, antitrust regulators blocked so-called four-to-three mergers—mergers of two of the four largest competitors—in 2011 and 2014. But authorities did allow then-No. 3 carrier T?Mobile to acquire then-No. 4 Sprint in February 2020, after T?Mobile agreed to several conditions. The merger was, and remains, the subject of intense debate over its effects on consumers.

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Telecommunications & Regulated Utilities

A Government Veto on Speech at the Supreme Court

Popular Media A case pending at the U.S. Supreme Court stems from the efforts a multitude of federal agencies made to remove certain viewpoints from public view. . . .

A case pending at the U.S. Supreme Court stems from the efforts a multitude of federal agencies made to remove certain viewpoints from public view. In other words, they sought to abridge freedom of speech—you know, that thing that the First Amendment explicitly bans.

Read the full piece here.

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Innovation & the New Economy

Net Neutrality Is Back. The Internet Has Been Fine Without It.

Popular Media The Federal Communications Commission has voted on yet another round of net neutrality rules. Its vote Thursday reprises the 2015 rules, which resuscitated the 1934 . . .

The Federal Communications Commission has voted on yet another round of net neutrality rules. Its vote Thursday reprises the 2015 rules, which resuscitated the 1934 Communications Act for modern, high-speed broadband networks. The agency decided, by a partisan split of 3-2, to end the “abdication of authority over broadband in 2017” and the ensuing years of “no federal oversight.”

Read the full piece here.

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Telecommunications & Regulated Utilities

Tom Hazlett on the Benefits of Mergers

Presentations & Interviews ICLE Academic Affiliate Thomas Hazlett was a guest on CNBC’s Squawk Box to discuss his recent Wall Street Journal op-ed arguing that mergers often have . . .

ICLE Academic Affiliate Thomas Hazlett was a guest on CNBC’s Squawk Box to discuss his recent Wall Street Journal op-ed arguing that mergers often have consumer benefits. Video of the clip is embedded below.

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Antitrust & Consumer Protection

Competitive Effects of T-Mobile/Sprint: Analysis of a ‘4-to-3’ Merger

Scholarship Abstract Mergers in mobile markets are of keen interest to policy makers and scholars. Because carrier networks are subject to pronounced economies of scale and . . .

Abstract

Mergers in mobile markets are of keen interest to policy makers and scholars. Because carrier networks are subject to pronounced economies of scale and scope and given that communications regulators create substantial barriers to entry by limiting spectrum allocations for mobile services, wireless services generally exhibit relatively high levels of industrial concentration. Hence, antitrust authorities often struggle with the tradeoff between enhanced scale economies and enhanced market power. Between 2012 to 2016, for instance, four E.U. nations (Austria, Ireland, Germany, and Italy) consummated “4-to-3” mobile mergers while two such combinations were blocked (in Denmark and the U.K.). In the U.S., 4-to-3 transactions were blocked by regulators in 2011 and again in 2014, but a recent merger — between the No. 3 (T-Mobile) and No. 4 (Sprint) carriers was approved in February 2020. This combination remains a subject of intense debate. We examine post-merger evidence of retail mobile subscription prices, network investment, service quality, market shares, and industry profits in the U.S. mobile communications industry. We conclude that the data are consistent with the thesis that the T-Mobile/Sprint merger produced consumer gains. This outcome is particularly interesting given that the government remedy imposed to mitigate potential anti-competitive merger effects, the creation of a new fourth network (DISH), has produced no plausible pro-competitive impact.

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Antitrust & Consumer Protection

T-Mobile Proves That Mergers Can Benefit Consumers

Popular Media The government has become increasingly suspicious of major mergers over the past decade, under both political parties. The Justice Department under Donald Trump sued to . . .

The government has become increasingly suspicious of major mergers over the past decade, under both political parties. The Justice Department under Donald Trump sued to prevent AT&T from buying Time Warner. The Federal Trade Commission under President Biden is continuing a case the Trump administration initiated against Meta, parent of Facebook, to force the firm to cough up Instagram and WhatsApp, which it swallowed during the Obama years. In January, JetBlue Airways’ plans to merge with Spirit Airlines and Amazon’s plans to acquire iRobot were deterred under regulatory pressure.

Read the full piece here.

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Antitrust & Consumer Protection

From ‘Open Skies’ to Traffic Jams in 12 GHz: A Short History of Satellite Radio Spectrum

Scholarship Abstract As an industry, communications satellites have traced a wobbly trajectory. Envisioned to bring revolutionary advances to telecommunications services in the U.S. Communications Satellite Act . . .

Abstract

As an industry, communications satellites have traced a wobbly trajectory. Envisioned to bring revolutionary advances to telecommunications services in the U.S. Communications Satellite Act of 1962, the marketplace did open via Comsat, a public-private partnership. But the sluggish pace was revealed a decade later when progress increased substantially with the Open Skies policy. Free entry collapsed costs for wide area distribution of broadcasting services, launching the U.S. cable television industry (disrupting the TV broadcasting triopoly) in the 1980s and then direct-to-subscriber satellite TV (challenging the new incumbent cable operators) in the 1990s. In ensuing decades, however, fortunes reversed. Satellite phone and broadband service providers—Iridium, Teledesic, Motient, Intelsat and many others—financially crashed and burned. Yet another reversal may now be in evidence, however: satellites in service have increased more than three-fold in the past decade. Spasms of technological progress, including gains in small device electronics, are driving market change: “While some [satellites] are the size of a bus and weighing over 6,000 pounds, they can also be as small as a lunchbox,” noted a 2018 Aspen Institute report. “Constellations can now be composed of hundreds or even thousands of satellites.” The new mega-constellations are creating a crowded sky. With demand for orbital slots and complementary radio bands dramatically intensifying, new policy formulations are being floated. We outline possible innovations in spectrum property rights.

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Telecommunications & Regulated Utilities

Maybe Google Is Popular Because It’s Good?

Popular Media In July 2001, a dozen Google techies pondered their mission mantra. In essence, they aimed “to organize the world’s information and make it universally accessible and . . .

In July 2001, a dozen Google techies pondered their mission mantra. In essence, they aimed “to organize the world’s information and make it universally accessible and useful.” However, their ambition was celestial. They grasped for a moniker.

The network of networks was expanding exponentially in every direction, with websites stacking up data everywhere. The informational jumble was messier than a teenager’s bedroom floor.

Read the full piece here.

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Antitrust & Consumer Protection

Evaluating the CBRS Experiment

Scholarship Abstract In 2015, the FCC established the Citizens Broadband Radio Service (CBRS) for sharing the 3.5 GHz Band (3550-3700 MHz) among federal and non-federal users . . .

Abstract

In 2015, the FCC established the Citizens Broadband Radio Service (CBRS) for sharing the 3.5 GHz Band (3550-3700 MHz) among federal and non-federal users in the United States. This rulemaking created an experiment in a novel three-tier rights structure: strong protections for incumbents, including government radar systems; Priority Access Licenses (PALs) granting exclusive rights to high bidders in an FCC auction, in part of the band and subject to avoiding interference with incumbents; and Generalized Authorized Access (GAA) for unlicensed users, subject to avoiding interference with both PALs and incumbents. The first commercial deployments in this band were approved in 2019 for GAA devices, and an auction of PALs completed in 2020 generated $4.5 billion in revenues.

It is now timely to evaluate this experiment and glean lessons for applications to other spectrum bands, such as the neighboring 3.1-3.45 GHz band or portions of the upper mid-band spectrum 7-24 GHz. In fact, a number of perspectives on CBRS have been recently published. In this paper we review these developments and suggest related policy questions that should be considered when evaluating the use of CBRS-style allocation rules in future bands.

The CBRS policy involves several different innovations, seeking to accomplish multiple objectives. One can evaluate this approach from a technical point of view, as an experiment to show that dynamic sharing can provide multiple tiers of commercial access to a band of spectrum while protecting incumbent users. The approach involves coordinated access via a cloud-based Spectrum Access System (SAS) and an Environmental Sensing Capability (ESC) to monitor incumbent users of the band, with requirements standardized through the Wireless Innovation Forum (WInnForum) and implementations certified by the FCC. From an economic and policy point of view, this type of dynamic sharing is asserted to reduce the costs and delays involved in making additional spectrum available for commercial use, as it seeks to avoid relocating incumbents. Of course, costs and benefits should be observed, not simply assumed, and the process undertaken should be compared to those associated with the relevant policy alternatives.

CBRS adopted the PAL and GAA tiers for commercial access in an attempt to provide spectrum that could not only support deployments by traditional wireless providers, but also enable new uses of the spectrum by non-traditional entities. How well the spectrum can support these uses, and whether this type of approach leads to an economically efficient mix of uses, provides another economic and policy lens through which this system can be evaluated. This paper explores the technical implementation of the CBRS spectrum sharing approach, and then attempts to appraise the economic welfare results of the novel allocation policy.

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Telecommunications & Regulated Utilities