IPcentral Weblog
  The DACA Blog

Thursday, October 20, 2005

Merger Extortions in California
(previous | next)

Anna-Maria Kovacs's invaluable regulatory report details California's de facto merger taxes on the SBC-ATT and Verizon-MCI mergers:

· The companies have agreed to increase corporate philanthropy to low income and underserved communities in California over five years, SBC by $47 million and Verizon by $20 million. Both companies have also agreed to increase supplier diversity and to provide technical assistance to minority businesses. · The companies would be required to help increase broadband deployment in the state by contributing a total of $60 million to the California Emerging Technology Fund.

I am second-to-no one in my admiration of Commissioner Kennedy and her contributions to sane state regulatory strategy, but this can only be evaluated as a dismaying compromise and a bad example of taxation by regulation.

What's more, it creates a terrible incentive system for states reviewing mergers. The California demands, and inevitable capitulation by the merging companies, show that it pays to be the hold-out state, the tantrum-throwing state, the state that demands the most tribute. I'll hazard a guess that none of the some $120 million pledged for approval of the mergers has anything to do with addressing expected competitive harm from the mergers, or anything else having to do with the act of merging itself. An extra-legal merger tax, plain and simple.

posted by Ray Gifford @ 12:07 PM | Wireline

Share |

Link to this Entry | Printer-Friendly

Post a Comment:

Blog Main
RSS Feed  
Recent Posts
  EFF-PFF Amicus Brief in Schwarzenegger v. EMA Supreme Court Videogame Violence Case
New OECD Study Finds That Improved IPR Protections Benefit Developing Countries
Hubris, Cowardice, File-sharing, and TechDirt
iPhones, DRM, and Doom-Mongers
"Rogue Archivist" Carl Malamud On How to Fix Gov2.0
Coping with Information Overload: Thoughts on Hamlet's BlackBerry by William Powers
How Many Times Has Michael "Dr. Doom" Copps Forecast an Internet Apocalypse?
Google / Verizon Proposal May Be Important Compromise, But Regulatory Trajectory Concerns Many
Two Schools of Internet Pessimism
GAO: Wireless Prices Plummeting; Public Knowledge: We Must Regulate!
Archives by Month
  September 2010
August 2010
July 2010
June 2010
  - (see all)
Archives by Topic
  - A La Carte
- Add category
- Advertising & Marketing
- Antitrust & Competition Policy
- Appleplectics
- Books & Book Reviews
- Broadband
- Cable
- Campaign Finance Law
- Capitalism
- Capitol Hill
- China
- Commons
- Communications
- Copyright
- Cutting the Video Cord
- Cyber-Security
- Digital Americas
- Digital Europe
- Digital Europe 2006
- Digital TV
- E-commerce
- e-Government & Transparency
- Economics
- Education
- Electricity
- Energy
- Events
- Exaflood
- Free Speech
- Gambling
- General
- Generic Rant
- Global Innovation
- Googlephobia
- Googlephobia
- Human Capital
- Innovation
- Intermediary Deputization & Section 230
- Internet
- Internet Governance
- Internet TV
- Interoperability
- IP
- Local Franchising
- Mass Media
- Media Regulation
- Monetary Policy
- Municipal Ownership
- Net Neutrality
- Neutrality
- Non-PFF Podcasts
- Ongoing Series
- Online Safety & Parental Controls
- Open Source
- PFF Podcasts
- Philosophy / Cyber-Libertarianism
- Privacy
- Privacy Solutions
- Regulation
- Search
- Security
- Software
- Space
- Spectrum
- Sports
- State Policy
- Supreme Court
- Taxes
- The FCC
- The FTC
- The News Frontier
- Think Tanks
- Trade
- Trademark
- Universal Service
- Video Games & Virtual Worlds
- VoIP
- What We're Reading
- Wireless
- Wireline
Archives by Author
PFF Blogosphere Archives
We welcome comments by email - look for a link to the author's email address in the byline of each post. Please let us know if we may publish your remarks.

The Progress & Freedom Foundation