Hawley Calls For Ban On Large Corp Mergers, Chip Shortage Coming For Routers, Big Telecom Breakup

April 12, 2021 – Senator Josh Hawley, R-MO, shared with Axios a new proposal that would bar corporate giants from acquisitions and strengthen century-old antitrust laws.

“This country and this government shouldn’t be run by a few mega-corporations,” Hawley told Axios. The Republican Party “has got to become the party of trust-busting once again. You know, that’s a part of our history.”

Though he is among the Senate’s most conservative members, him attacking corporate power is not out of place when read with Senators Elizabeth Warren’s or Bernie Sanders’ agenda.

The “Trust-Busting for the Twenty-First Century Act” would include banning mergers and acquisitions by firms with a market cap over $100 billion. The threshold for prosecution under existing federal antitrust laws would be lowered, emphasizing the protection of competition instead of replacing consumer harm standards. Companies would also be required to forfeit all their profits resulting from monopolistic conduct that lose federal antitrust lawsuits. And the Federal Trade Commission would have new power to designate and regulate “dominant digital firms” in online markets.

If enacted, Hawley’s call to regulate mergers would affect far more than Silicon Valley. Its rules on mergers would also cover dozens of corporate giants in virtually every economic sector of the country.

If anyone is confused about the Republican “party of business” proposal being tough on business from one of its own kind, the Senator offered two responses: “’Trust-busting’ was a Republican concept originally, under Progressive-Era GOP president Teddy Roosevelt,” and “strong antitrust laws are ultimately about the sanctity of competition, and Republicans ought to embrace that.”

Axios reported that while his ideas might win some support from other populist Republicans, the broader party would need a sea-change in thinking to embrace it. Democrats, meanwhile, are likely to prefer their own bills, reported Axios.

Chip shortage could hit routers next

According to sources who spoke with Bloomberg, wireless routers “are poised to be the next piece of hardware to feel the effects of a global chip shortage currently disrupting the availability of the latest generation CPUs, GPUs, and game consoles.”

Internet service providers are already feeling the crunch in supply, with the sources stating ISPs are looking at delays for broadband router orders that will last up to 60 weeks—twice as long as the previous lead time.

PC Gamer reports that it has not seen any signs of chip shortages affecting standalone consumer routers for the of Wi-Fi 6 (802.11ax) and Wi-Fi 5 (802.11ac) models on shopping sites Amazon and Newegg, but warned things could turn on a dime, as other hardware has.

In some parts of the world, including Canada, carriers have complained that next-generation modems have been in short supply because of the chip shortage.

The reason behind the shortages? A series of unfortunate events, really. Karsten Gewecke, senior vice president of Zyxel, a major player in the router market, said the COVID-19 pandemic affected its supply chains. One of Zyxel’s manufacturing facilities in China temporarily stopped when COVID first hit over a year ago, and has been spotty ever since.

The situation has worsened due to increased consumer demand for broadband hardware as more people are working from home. And for a triple whammy: “Zyxel routers are among the cargo on Ever Given, the Evergreen-owned container ship that got stuck in the Suez Canal and has now been detained,” reported PC Gamer.

Gewecke said ISPs could run out of router inventory in the next several months due to these events.

Does big telecom need a break-up?

First it was big tech, and now big telecom is coming under scrutiny for its concentrated market power, as “too big to trust” accusations are leveled against internet service providers (ISPs).

The overwhelming majority of connections are now controlled by a cartel, just a few companies dubbed “Big Telecom” — AT&T, Verizon, CenturyLink, Comcast, and Charter, reports telecom veteran Bruce Kushnick on Medium. Often, in addition to controlling broadband access, these companies have a bundled package that also includes phone and cable TV services.

Kushnick argued that in the United States, bundled service packages are 5-20 times more expensive than most of Europe, averaging $215/month compared to Europe’s $23-50/month. He said that “Many countries have wireless services for $35 with 1000 GB or more, what he called “truly unlimited.” The US price is about $90 with an ‘unlimited’ plan of 50GB, whose speed is throttled after that threshold.