Scholar Disputes NATE Report That Infrastructure Market Isn't Competitive
International Center for Law & Economics Senior Scholar Eric Fruits on Wednesday criticized a NATE report by the Brattle Group, which found that the U.S. infrastructure market is a “monopsony” dominated by three mobile network operators (see 2507280064). “While the Brattle Group report effectively documents the business challenges some tower contractors face, its diagnosis of monopsony and market failure [is] incorrect,” he said in a post.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
A market with a few dominant buyers isn’t a monopsony, Fruits wrote. “It’s an oligopsony. To say this is a semantic quibble misses a fundamental distinction: a monopsonist faces no competing buyers, while a firm in an oligopsony market competes against several.”
U.S. antitrust law doesn’t prohibit a market from having a few large players, Fruits said. “There’s a sizable body of empirical evidence that a market with three major [mobile network operators] is no less (or not much less) competitive than one with four or more.” He also noted that the market is already being addressed, with NATE members negotiating new agreements with AT&T, Verizon and T-Mobile (see 2507140033).
NATE President Todd Schlekeway said the rebuttal to the report “reads less like independent analysis and more like a knee-jerk defense by Verizon, AT&T, and T-Mobile -- who are clearly rattled as scrutiny grows over their dominance and stranglehold of the wireless infrastructure market.” The reaction “only reinforces the Brattle report’s core message: the current marketplace is unsustainable, and small and mid-sized contractors are being squeezed out by the Big 3’s overwhelming buyer power,” he said in an email.
“The idea that the ‘market is solving the problem,’ because working groups and negotiations are underway misses the point,” Schlekeway added. The talks “were triggered by sustained pressure -- from contractors, from NATE, and from data-driven research like the Brattle Group report.”