By John C Abell
The opinions expressed are his own.
The proposed AT&T/T-Mobile merger is shaping up to be an iconic business case saga and a judicial milestone. Who would have thought that nearly 40 years after the U.S. Department of Justice convinced a judge to break up “Ma Bell” that the DoJ might be able to convince another judge to tell that same company you can’t get too big again?
But of course AT&T can get big again, and become so dominant again that it is a feared monopoly that must be dealt with — if it should be so lucky. But getting there will take build, not buy.
Getting so large that you could control a market to the real or potential peril of the consuming public happened a lot in the industrial age, with railroads and oil, and even the movie business, which was ordered in 1948 to divest itself of theaters. But that was at a snail’s pace. These days eyebrows are raised by the Microsofts and Apples and Googles of the world who manage, in what seems like a blink of an eye, to provide goods or services so many people want that competitors have a hard time keeping up.
Unlike the industrial age, it seems like anyone with the right idea and execution (and garage) can do it. Who could have imagined Apple would become the most significant handset maker in the world. Frankly, who could have imagined Apple at all? Or that Google would come up with mobile phone software that now sets the pace? Or even that Microsoft, when it decided it wanted to, would choke investor-beloved Netscape to death in no time flat?
Mergers can be a fast way of taking the lead or getting back on track. But they seem better suited for a zero-sum game, as when Sirius and XM radio tied up so satellite radio wouldn’t die because there wasn’t really room for two players at that stage of the tech’s evolution. Or when Thomson and Reuters combined to become as big as Bloomberg had become.