Desirable Economic Cooperation Among Hihg-Technology Industries: A Look at Telephone and Cable

Saturday, January 1st, 1994 at 12:00 am by Joseph A. Pantoja
Joseph A. Pantoja, Desirable Economic Cooperation Among Hihg-Technology Industries: A Look at Telephone and Cable, 1994 Colum. Bus. L. Rev. 617

Converging technologies have brought about the interaction of television, telephone and computer and the emergence of interactive multimedia. Leading firms in the telephone, cable, computer and entertainment industries are joining forces, seeking synergistic combinations of their businesses, in anticipation of this new market. However, there currently exist barriers to extensive collaboration among firms in different industries — collaboration that may be vital to the development of this information superhighway.

This Note argues that current antitrust policy as applied to the telecommunications industry need not be modified in order to deal with the changing face of competition in high technology industries. The antitrust regime is particularly tolerant of collaborative research and development efforts and, in the merger context, should be flexible enough to adapt to the exigencies of the high technology markets. However, outdated restrictions on the permissible activities of the cable and telephone industries should be removed, or at the very least, substantially modified, if we are to expect these two industries to build upon each other’s strengths and realize the huge potential for cost economies. Part I discusses the current pace of technological advances and the wave of deal-making between giant industries, including telephone and cable. Part I also discusses the expectations of the federal government and the private sector as regards the building of the information highway and addresses the potential for cooperation between these two camps. Part II addresses the claim that antitrust law and its enforcement is to blame for the lagging international competitiveness of American high-technology firms. Part III focuses on possible gains and losses that may result from allowing collaboration between the cable and telephone industries and argues for the deregulation of these industries.

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CLS Student