The Wall Street Journal's Holman Jenkins argues this morning that President Obama should poach a few regulatory dance moves from Richard Nixon, of all people, and push the Justice Department to settle their lawsuit against AT&T and allow the merger with T-Mobile to go forward.

Jenkins doesn't have a whole lot of love for antitrust policy in general (he calls it “a field of cynical bureaucratic discretion masquerading as lawfulness”). But in pushing the AT&T deal he uncorks a real whopper:

For ITT, substitute AT&T: Wireless does not tend toward monopoly or excessive profits. The industry's real shortage right now is a shortage of customers. To put a finer point on it, the bandwidth demands of existing customers are growing by leaps and bounds, but the number of customers isn't growing, and neither is their willingness to pay higher prices.

I'm not sure if Jenkins has been paying attention to the U.S. wireless market, but over the past ten years it's done little but consolidate. He also might want to look northward to Canada, where the wireless market is completely dominated by just three companies; or southward to Mexico, where they are having no small amount of difficulty dislodging the Telcel monopoly; or across the Atlantic to Spain, where Telefonica, Vodafone, and Orange control 90 percent of the wireless market.

And if there's a reason wireless profits don't meet the “excessive” distinction, that's because they have to spend lots of money building and maintaining vast infrastructure networks -- which also happens to be the reason why telecommunications markets trend towards monopolies. As the New York Times explained a couple of weeks ago:

In telecommunications, the market concentration itself is not surprising. The telephone business, after all, has long been one of the classic examples of an industry that exhibits the forces that lead toward “natural monopolies,” or at least oligopolies. Those forces include high fixed costs -- the investment needed to build out networks -- and the efficiencies that come from providing services to millions of customers.

Put simply: providing wireless service is prohibitively expensive, which discourages competition and encourages consolidation. According to a Columbia University study, the U.S. had the second-largest jump worldwide in wireless market concentration (measured by the Herfindahl-Hirschman Index, or HHI) over the past ten years, behind only Brazil. And as wireless market analyst Craig Moffett told Bloomberg Television this past March, this is the natural economic tendency:

MOFFETT: You go all the way back to the history of the telecommunications business, and I mean way back. So in 1913, Theodore Vail of what was then American Telephone and Telegraph struck a deal with the U.S. government acknowledging that the telephone network was a natural monopoly business. And it really stayed as a natural monopoly business from 1913 all the way until 1984. They broke up long distance in '84 and then they broke up the local exchange in 1996 with the '96 Telecom Act and I would argue in the last 25 years or so since deregulation started, what we've seen is an influx of a lot of new competition and then the reassertion, if you will, of the natural economic laws that are pushing right back to where we were before 1984, which is back to concentration and monopoly again. [retrieved via Nexis]

So if we're to believe Jenkins' claim that “wireless does not tend toward monopoly,” he should probably explain why there are wireless monopolies and oligopolies all over the place.