Don't read National Review. Really. Do not:
Douglas Holtz-Eakin: “Monopoly … duopoly … reckless consolidation.” This is just a sampling of the inflamed rhetoric that pervades the public discussion and official comment to federal agencies regarding the proposed merger of AT&T and T-Mobile. But rhetoric goes only so far. Thankfully, consumers will benefit most when this merger is judged by the merits: competition, access, and the quality of the most vibrant wireless market in the world.... The DOJ’s “Horizontal Merger Guidelines” lay out a formula (the Hirschman-Herfindahl Index) for determining the state of competition and whether a monopoly exists. In this index, a value of 10,000 denotes a complete monopoly, while a value of zero indicates infinite competition. In the case of 1970s-era Ma Bell, the HH index was almost 8,000 (one of many reasons it was eventually split up by regulators). This merger, if successful, wouldn’t result in an index value even half as high as Ma Bell’s, especially when taking into account the varied Internet and local options for communications...
Ummm... A three-firm oligopoly--which is a highly-concentrated market by anybody's standards--gets you a Herfindahl index of 3267. Anything more concentrated than a four-firm oligopoly is usually called "highly concentrated." To be unconcentrated I would like to see at least eight firms out there--and to be highly competitive the benchmark is usually 100 firms.
A Herfindahl index of 4000 is extraordinarily high.
Who is the audience for this piece? I mean, you can argue that the Herfindahl index is irrelevant because competition is moving very fast as technology changes and we actually want dynamic creative-destruction oligopolies here. But you cannot argue that 4000 is not an extraordinarily high Herfindahl index, can you?
Who is the audience for this piece?