News broke this weekend that AT&T intends to acquire DirecTV for nearly $50 billion. No one was surprised. The deal had leaked in advance, making its final announcement something approaching a formality.
And on the riff of that pronouncement, Sen. Al Franken went on CNN to decry the propsal, also discussing Comcast-Time Warner Cable deal that was announced recently. The senator’s views are as surprising as the proposed deals (not at all) but are worth hearing.
Senator Franken is a thorn in the side of large companies looking to combine. His view is plain: Less competition leads to higher prices for his constituents, not to mention less innovation and the like.
Every large merger claims that economies of scale will lead to price relief for consumers. I leave the validity of that argument for you to determine. The case for the mergers is generally made in legal and dollar terms. Here’s the other view: