Nate Karren: Cox-Charter Merger an Opportunity to Restore Common Sense in Antitrust

During his "Build America" speech in July, Federal Communications Commission Chairman Brendan Carr promised to return the Commission to common-sense decision-making. The ongoing merger between Cox Enterprises and Charter Communications is an easy opportunity to do just that.

After recent years of the FCC, Department of Justice, and Federal Trade Commission practicing antitrust enforcement detached from real-world economics, businesses need reassurance that they can pursue pro-consumer mergers without fear of inconsistent prosecution. By approving the merger without delay, Chairman Carr can demonstrate a clean break with misguided merger enforcement. The Cox-Charter merger is an easy win.

For the last 50 years, the Consumer Welfare Standard has been the benchmark for antitrust. By placing consumers firmly as the north star, the DOJ and FTC—and FCC in telecommunications cases—have approved or blocked mergers and acquisitions to reduce prices, increase output, and encourage innovative new products and services. But with a string of lawsuits targeting big tech companies between 2020 and 2024, antitrust officials made it clear their priorities had shifted. The Consumer Welfare Standard was out, trustbusting without a cause was in.

But approving a merger as high-profile as Cox and Charter can shift federal gears back towards consumer-focused decision-making. Not only does the deal benefit consumers, but it defangs the major issues antitrust regulators might throw at it—all of which boil down to crying “monopoly.”

Nipping that core myth in the bud right away, such a merger would not create a monopoly. According to FCC data, Cox and Charter have little to no service area overlap, meaning that, except for in very few areas, consumers wouldn’t see any change in the quantity of internet service providers available to them. And while their combined subscriber count would certainly overtake Comcast’s, the merger would not reduce competition.

In fact, the merger demands that antitrust authorities realign their definition of competition with reality. During the last several years, antitrust officials litigated using overly narrow market definitions, as was the case in the FTC lawsuit against Meta. But the Cox-Charter merger demonstrates that Cox and Charter aren’t just in competition with Comcast and other cable providers, but with disruptors from completely different industries. Internet service providers offering connections over fiber, fixed wireless, and low-earth-orbit satellite don’t fit a narrow market definition for “cable carrier,” but compete with them anyway.

On the entertainment side of the cable industry, Cox and Charter face streaming services like Netflix and YouTube, which have collectively captured 44.8 percent of the TV market. These challengers pose a real threat to traditional cable TV as they don’t have to worry about high fixed costs like infrastructure, and can deliver exactly what consumers want to watch—no expensive channel bundles needed.

Treating competition within each industry as siloed ignores the reality of converging markets. If the DOJ, FTC, and FCC insisted on using narrowly tailored market definitions before, the Cox-Charter merger shows all too clearly how such a practice is out of touch.

As for consumer prices, the Cox-Charter merger would lower them. For starters, Charter plans to use its estimated $500 million in post-merger savings to upgrade infrastructure. That alone would mean real savings as subscribers would be getting better quality service than what they currently pay for.

The merger also offers promotional pricing plans, letting Cox subscribers switch from paying $80 per month to $50 per month without any reduction in internet speeds for a year, before returning to regular prices. This translates into short-term savings with no long-term price increases. If antitrust authorities are concerned about monopolies for the sake of consumers’ wallets, it’s clear there is no case here.

With benefits for consumers, robust competition for providing home internet service, and a frightening recent track record for poor antitrust enforcement, the DOJ, FTC, and FCC should treat the Cox-Charter merger as an opportunity to bring back the consumer welfare standard. When considering the new reality of broadband competition and the benefits this merger can bring, it should be a no-brainer for common-sense decision-makers.

Nate Karren is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, follow us on X @ConsumerPal. This Expert Opinion is exclusive to Broadband Breakfast.

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