AT&T and the Big Three of Phone Service

I am sure that by now everyone has heard of AT&T's proposed purchase of T-Mobile. Well this is not going down as smoothly as AT&T would have hoped. This is an enormous deal with many implications on the cell-phone service market. If this deal were to go through, AT&T would become the nation's largest service provider, and the three biggest service providers (AT&T, Verizon, and Sprint) would control 90% of the market (sounds like an oligopoly to me).

This is screaming out to the Justice Department because it may give AT&T too much control over other service providers. It would also hurt the consumer because the big three would have much more control over prices (since it is an oligopoly) and it would be safe to assume that they are not going to lower prices. For these reasons the Justice Department is going to look very closely at this deal to make sure it does not hurt the consumer too much. There is absolutely no way that the government will allow this to happen, and I agree completely. There is no way that AT&T's proposed deal will not end up hurting the consumers; AT&T and the other members of the oligopoly would have too much control over prices. Are there any ways this deal could benefit the consumer?

Obama supports repeal of health insurance antitrust exemption

I thought this might be relevant to those of us in Econ, because it deals with antitrust laws. Basically, the health insurance industry is exempt from some of the antitrust regulations. This exemption has been in place since the end of World War II. It was instated in order to allow new competition in the health care industry and lower consumer costs.

The health care bill passed in the House would have repealed this, but the one in the Senate would not have.

Today, White House Press Secretary Robert Gibbs said:

"At its core, health reform is all about ensuring that American families and businesses have more choices, benefit from more competition and have greater control over their own health care," Gibbs said.

"Repealing this exemption is an important part of that effort. Today, there are no rules outlawing bid rigging, price fixing and other insurance company practices that will drive up health care costs and often drive up their own profits as well."

Advocates of the repeal argue that the current exemption has allowed health care companies to divide the country into "local monopolies"

Opponents of the repeal, however, point to the state regulations still must follow. They believe that a complete repeal is unnecessary.

Obama's plan also calls for the secretary of Health and Human Services to work with a seven-member board made up of doctors, economists and consumer and insurance representatives to review the recent premium hikes.

I'm pretty undecided on this issue, and I don't have a lot of background information. Will this really make a huge difference in health care? I agree that insurers shouldn't be exempt from antitrust laws, but I don't really understand the difference this would make. Would premiums drastically go down? What do you think? Will this make a big difference on the insurance market? Is it just Obama's latest battle against privatized health care?