Justice Department Doesn't Understand Market Competition: Let the Merger with AT&T and T-Mobile Pass!

With the Justice Department's recent vow to block the AT&T/T-Mobile merger from happening, you would think the Justice Department had nothing better to do.  Alas, it feels that it has to regulate yet another aspect of our daily lives.

The reason for worry [from critics] is because this merger would cause AT&T to have 129 million customers, which would make it the largest cell phone provider in America.  This franticness makes it sound as if this merger is going to end competition in the cell phone industry in this country.  The fact of the matter is that it won't.  Verizon Wireless alone has 106 million customers as of date.  In addition to Verizon, AT&T would still have to compete with smaller providers, which still makes up a sizable percent of the market.  This point cannot be stressed enough.  If someone is fed up with AT&T, it's not as if they are stuck with AT&T for eternity.  They can always go to a competitor.  And if AT&T agitates enough customers, they will soon find out that they are out the business.

Also, if the Justice Department is complaining that T-Mobile wouldn't be able to operate as an independent provider that gives lower discounting, why would so many T-Mobile customers drop T-Mobile as their provider?

Furthermore, did the Justice Department even bother to ask T-Mobile how they felt?  Aside from the fact that a merger requires mutual consent from a majority of shareholders in both parties, it sounds like T-Mobile wants the merger to happen. On a side note, even the AFL-CIO wants it to happen, which says something unto itself.

This merger does not do anything to create a monopoly in the market.  You have two consenting companies deciding what to do with their capital, which is a slightly different way of expressing the importance of property rights.  As long as there are competitors in a market that is [relatively] free, then the number of firms in the industry does not matter.  What does matter is when the government thinks it can regulate the industry in a clairvoyant manner.  The government does not possess the knowledge to know what consumers want, which is why the central command economies of the former Soviet Union and Maoist China are no more.        

It might be difficult for the Justice Department to understand this because it views itself in the allegedly benevolent role of "protecting competition," but the government should just let the merger happen.