It's official that SBC is acquiring AT&T, at least between the parties. Now comes the excruciating process of the government setting the merger tax.

Of course, there is no such thing as an explicit merger tax. And furthermore, a transaction where uber-regulator Reed Hundt opines: "[t]he odds are that regulators will welcome this new SBC-AT&T as a champion of American communications, both domestically and internationally" seems to be on track for approval. That said,

the FCC's merger authority (done under the guise of license transfers and the capacious "public interest" review) is an invitation to "taxation by regulation." SBC is a veteran of playing these extortionary games, having merged with Ameritech when FCC merger review amounted to a meretricious game of "whatta' you gonna' give me?" with only the most remote relation to true competition policy concerns.

From a pure antitrust perspective -- the lens of the DOJ and FTC -- this merger does not appear to present any apparent problems. As I said, the antitrust analysis will focus on the horizontal aspects of the merger in the enterprise market. The vertical aspects (in the LD market) seem unproblematic at first glance because this is a market in decline and indeed only exists because of legacy regulatory mandates in any event. Of course, a core problem here for antitrust regulators is trying to figure out what are the relevant markets in the first place. In these markets defined by Schumpeterian dynamism, regulators might do better to forbear and deal with any problems post hoc, when it will be more clear what the relevant markets are (or were).