16
Of course, if the Commission had assessed market power,
it would have needed to define the relevant market, to
understand the extent to which providers of different speeds
and different services compete with each other. When
defining markets for purposes of assessing competition, the
Department of Justice and Federal Trade Commission use the
“small but significant and non-transitory increase in price”
(“SSNIP”) test. The test tries to determine whether a market
actor can benefit from a hypothetical increase in price,
indicating market power. U.S. Department of Justice and the
Federal Trade Commission, Horizontal Merger Guidelines 9
(2010) (“Horizontal Merger Guidelines”).
But the
Commission did not conduct such a test, and we cannot say
how it would come out.
Because broadband competition is geographically
specific, simple market share data at a national level are of
limited value. But firms that provide service to large numbers
of consumers, albeit not everywhere, seem likely to rank as
potential competitors quite broadly. With these limits in
mind, we can look at U.S. subscriber numbers for each of the
firms in the market, Leichtman Research, About 645,000 Add
Broadband
in
the
Third
Quarter
of
2015,
http://www.leichtmanresearch.com/press/111715release.html,
and construct a Herfindahl–Hirschman Index, which in fact is
1,445 points. This level is in the Department of Justice’s
Range for “Unconcentrated Markets”—that is, markets where
no firm has market power. Horizontal Merger Guidelines at
18-19. I report below the data used to construct the index. In
fact, this number is biased upward (and thus biased toward
finding market power), since the data for several smaller
companies are grouped as if for only one, making it seem as if
there is more concentration than there in fact is.
Similarly, the Commission scoffs at what it regards as
low turnover in customers’ use of mobile service providers,
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