Is Communications-Company Ownership of Video Content a Threat to Competition?

For the past decade, U.S. communications policymakers have been debating the need for net-neutrality regulation of “dominant” communications carrier platforms. One of the reasons advanced for regulating these carriers derives from a fear that carriers could reduce competition in the production and distribution of video media through their ownership of media companies, but is there any evidence supporting the notion that vertically integrated communications companies have successfully used such a strategy? This paper provides evidence from the financial markets that carrier integration into video production has not redounded to the benefit of these companies’ stockholders. In fact, this integration appears to reduce the value that investors place on such carriers, a result that suggests that the difficulties in managing a large, vertically integrated media and communications company more than offset any benefits (if any) that may derive from anticompetitive behavior induced by vertical integration.