This question has been on the minds of U.S. policymakers for centuries as they monitor industry’s relentless pursuit of scale, profit, and market share. As the national economy matured, Louis Brandeis famously railed against the “curse of bigness,” a sentiment that informed the development of the modern administrative state, which was created to police economic activity across many sectors. Over time, the rise of “big business” in just about every segment of the economy resulted in wariness among some of the potential for the unchecked growth of corporate power. This, in turn, shaped dystopian views of a future where megacorporations wield outsize influence to, for instance, use robots to privatize policing or replace the nation’s water supply with an energy drink.
Concern for uncontrolled corporate self-aggrandizement has reignited, with some feeling that the Trump administration will be more tolerant of consolidation. This seems especially true in the tech and telecom space, where several proposed mega-mergers – notably AT&T-T-Mobileand Comcast-Time Warner Cable – were squashed by Obama-era officials, while major tech transactions, like the purchase of Instagram and WhatsApp by Facebook, were waved through without much fuss. With a current focus in the nation’s capital on reversing many Obama-era regulations, whether the U.S. tech and telecom sector will enter a merger Wild West is an open issue.
For the last few months, the tech news has been littered with speculation about all sorts of potential transactions. Some are rehashes of deals that fell through under Obama. At the top of that list was the long-discussed purchase of T-Mobile by Sprint, a combination that many see as more likely to garner approval in light of lucrative overtures made by SoftBank, which controls Sprint.
Other rumors speak of similarly ambitious possibilities. Comcast, for example, had been rumored as a potential suitor of T-Mobile, a transaction that would have represented the first serious step by a cable company into the wireless space. A recent partnership between Comcast and Charter to jointly explore opportunities for collaboration with Sprint might have dampened that acquisition enthusiasm for the time being. But those discussions led Sprint to propose a straight-up merger with Charter, a transaction that the cable company has turned down.
Perhaps the most outlandish rumor was that of Verizon considering the acquisition of Charter. After months of innuendo from Verizon top brass, the New York Post reported in May that Charter rejected an initial offer. Verizon also floated CBS, Comcast, and Disney as other potential merger targets. At a minimum, these musings underscore that Verizon would rather invest in just about anything other than FiOS, its fiber-optic broadband service. Indeed, that Verizon has targeted Charter in particular is notable because the two companies compete head-to-head in a number of markets, including New York City, where Verizon has been accused of failing to meet FiOS deployment obligations.