Charter-Cox Merger Review And The Rule Of Law

Forbes

5 hours ago

Charter Communications and Cox Communications, two broadband and cable providers, are seeking merger approval from the Department of Justice and Federal Communications Commission. Biden antitrust enforcers — which often relied on static market share snapshots to pursue antitrust claims, failing to consider broader market dynamics — might have sued to block this deal, only to be later overruled by the courts, which was a common occurrence during the Biden Administration. However, with the Trump administration restoring traditional antitrust norms grounded in law, precedent, and full-market analysis, the Charter-Cox deal should have a clear path forward.
Why Specifics Matter
Charter and Cox operate broadband services in largely distinct territories. Charter serves 41 states, focusing mainly on suburban and urban markets, while Cox's footprint is largely concentrated in areas that Charter hardly services, such as Arizona, Kansas, Oklahoma, and the City of Las Vegas. This geographic separation indicates the merger will not eliminate direct competition.
Moreover, today, broadband competition extends well beyond cable providers. Fixed wireless, fiber entrants, and 5G networks have significantly diversified consumer choice. As for cable, an outsized number of American families have ceased paying for it. There were 68.7 million cable TV subscribers in 2024, compared to 98.7 million in 2016.
Add it all up, and it becomes clear that the scale created by this merger will strengthen the combined company's ability to innovate and compete against streaming platforms and wireless alternatives rapidly reshaping the market.
Modern Economically-Based Case Analysis Supports Approval
Prior to the mid-1970s, the U.S. Supreme Court routinely upheld federal government merger challenges, viewing virtually any merger as anticompetitive, without regard to close factual or economic analysis.
In General Dynamics(1974), however, a merger between two competing coal companies, the High Court applied a more nuanced approach. It recognized that the acquired firm did not have sufficient uncommitted coal reserves to be a significant future competitive force, and therefore its acquisition did not pose a substantial competitive threat.
Although the Supreme Court has not reviewed mergers since the mid-1970s (Congress repealed a law mandating direct appeals of mergers from lower courts to the Supreme Court), it has applied a fact-based, economically-sensitive approach in non-merger antitrust cases. Federal judges have taken this approach to heart in key merger analyses.
The district court in FTC v. Steris Corp. (2015) emphasized that speculation about potential future competition does not suffice to block a deal without concrete evidence. Charter and Cox are not current competitors in overlapping markets, and no credible evidence suggests this merger will harm consumer choice or raise prices.
Efficiency claims also should matter as Supreme Court Justice (then appeals court judge) Brett Kavanagh stressed in FTC v. Whole Foods Market and United States v. Anthem. The Charter-Cox deal is fully consistent with this principle because it is projected to provide $500 million in annual savings, which will enable substantial investment in rural broadband and next-generation network upgrades.
Though he did not author merger cases as an appeals court judge, in his other antitrust opinions Supreme Court Justice (and former antitrust professor) Neil Gorsuch showed dedication to the 'underlying economic efficiency rationale that undergirds modern mainstream antitrust analysis.'
Furthermore, the merger should pass muster under Brown Shoe, the Supreme Court's multifactor test for assessing whether a transaction may substantially lessen competition. Although its factors are characterized as 'overinclusive, underinclusive, or irrelevant' by the leading antitrust treatise writer, Professor Herbert Hovenkamp, Brown Shoe is still referenced in current federal merger guidelines and thus cannot be ignored.
The Brown Shoe factors center around eliminating existing rivalry, raising entry barriers, and accelerating harmful concentration. None of these are present in Charter-Cox, given the companies' minimal overlap, the influx of new broadband competitors, and the absence of any evidence that consumer choice or pricing would be harmed.
Past approvals of transactions such as AT&T/DirecTV and Comcast/NBCUniversal underscore that agencies have recognized the benefits of increased scale when paired with clear consumer advantages. Those deals involved greater overlap and more complex competition issues than Charter-Cox, and yet they were approved, albeit with conditions to preserve competition. This deal presents none of those overlap concerns while offering tangible public-interest benefits, including accelerated broadband expansion and improved service quality.
Statutes Mean What They Say — and They Matter Here
The Clayton Act only allows the DOJ and FTC to challenge mergers when there is evidence that they may substantially lessen competition, which does not appear to be the case here.
Further, Congress has empowered agencies to review mergers, but those powers are not unchecked.
The Communications Act asks that the FCC approve license transfers if they serve the 'public interest, convenience, and necessity.' The Charter-Cox merger includes commitments to expand fiber infrastructure and improve broadband access, especially in underserved rural areas, directly advancing the FCC's statutory mandate to promote widespread, reliable, high-speed internet service.
Judicial and Congressional Checks on Agency Overreach
Courts require agencies to provide reasoned, evidence-supported analyses, and they don't hesitate to override agency decisions when necessary.
Congress also plays a vital oversight role over federal enforcement through the House and Senate Judiciary and Commerce Committees. This legislative check preserves the constitutional separation of powers and guards against regulatory overreach.
Conclusion
Agencies respecting statutory boundaries and basing their decisions on economic evidence is important, because it is how companies and consumers gain the predictability needed to plan investments that drive innovation and infrastructure. On the other hand, when agencies ignore these limits, the merger approval process turns into a politicized one, where power is shifted from markets to government negotiators.
When federal merger enforcement decisions become unpredictable, the rule of law erodes, and regulatory uncertainty deepens.
The Trump administration thus far has indicated that it seeks to enhance predictability by reinstituting a commonsense fact-based economically-centered merger review policy. Here's hoping that it will demonstrate its commitment to such an approach by fully assessing the hard facts and recognizing the factors that support the Charter-Cox deal.