AT&T and economics of monopoly

AT&T and economics of monopoly

For almost the entire 20th century, AT&T was proof that the only sustainable monopolies are those granted and enforced by government. The telecommunications industry was supposedly deregulated in 1984, when AT&T was broken up. But a new lawsuit from the US justice department reflects a mindset reminiscent of 1913, when Washington first set the terms for the industry and made AT&T a powerful monopoly.

The government’s antitrust lawyers recently challenged the acquisition by AT&T of T-Mobile, another wireless provider. They sued in the name of increasing competition, but this instead signals that Washington again prefers industrial policy to markets. No one in the Obama administration wants to admit to century-old thinking, but how else to explain its lawyers-know-better approach to an industry as dynamic as wireless?

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L Gordon Crovitz is a columnist for The Wall Street Journal

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