Charter–Cox Merger Is a Competitive Deal Too Good to Pass Up

It isn’t clear whether the US Department of Justice and the Federal Communications Commission will approve the proposed $34.5 billion merger Charter Communications Inc. and Cox Communications Inc. shareholders overwhelmingly supported last month. What’s clear is that they should. The deal is consistent with this administration’s antitrust objectives and protects US workers and competition—not Big Tech companies.

The Charter–Cox merger aims to combine two of the country’s leading broadband and cable providers—which have virtually no overlapping service areas—across several regions.

Per Charter, the deal aims to forge a stronger marketplace competitor capable of increasing overall fiber-optic network expansion while delivering multi-gigabit internet speeds and increasing investments in underserved rural communities. By combining their resources, the merged Charter–Cox expects to realize approximately $500 million in annual cost synergies, increasing consumer offerings in regions that need it most without reducing direct competition in any single local market.

Because Charter has an all-US workforce, this would also onshore jobs and increase the combined firm’s ability to compete with the major telecom companies such as Verizon and major streaming platforms such as Netflix. That sounds like a deal President Donald Trump would be proud to have made himself.

Section 7 Test

Under US merger law, the operative question isn’t the combined firm’s size, but whether the merger “may substantially lessen competition,” per Section 7 of the Clayton Act. This standard has long required an effects-based inquiry: In United States v. General Dynamics Corp., the US Supreme Court rejected reliance on market shares alone, holding that courts must weigh “structure, history, and probable future” of the industry.

In United States v. Baker Hughes, the US Court of Appeals for the DC Circuit reaffirmed—in an opinion by then-Judge Clarence Thomas—that statistics aren’t a substitute for evidence of anticompetitive effects.

The Charter–Cox merger is an instance when simply pointing to the combined size is a misleading distraction. Charter and Cox are both large companies, but they don’t meaningfully compete with one another. That’s why the detailed evidence must be evaluated using the careful, effects-based, legal analysis those precedents established.

These precedents are also guiding contemporary policy on the Hill.

Utah Sen. Mike Lee (R), the chair of the Judiciary Committee’s Subcommittee on Antitrust, has raised a recurring concern about Section 7—while it’s a critical authority for protecting consumer welfare, antitrust enforcers are often too quick to invoke it. As he put it, “the only people that benefit from uncertainty in antitrust law are antitrust lawyers.”

In response to this problem, he introduced legislation. His critique underscores the need for merger review to adhere to clear, evidence-based, and balanced analysis. The DOJ and the FCC should take this same careful approach when analyzing Charter–Cox’s Section 7 viability.

Expanding Relevant Markets

The deal also passes muster because we are now at the point where the relevant market for telecom services has broadened—and traditional regional cable and internet providers are fighting for an increasingly small piece of the pie. Myopic focus on the consolidation of cable ignores the dramatic evolution of this market, which has significantly expanded beyond cable.

Traditional cable providers have lost significant market share to streaming platforms such as Netflix, Disney+, and Amazon Prime Video. As such, cable subscription rates have declined steadily, with the pay-TV industry losing roughly 20 million subscribers in the last five years alone. And courts have recognized the importance of analyzing dynamic, evolving markets.

In United States v. AT&T/Time Warner, the DC Circuit upheld AT&T’s acquisition of Time Warner’s suite of content and cable channels by emphasizing that rapid technological change and innovation must be considered when evaluating competitive effects. This followed its decision in US v. Microsoft, which emphasized that competition must account for innovation and dynamic change over market share snapshots.

Applying this reasoning here means the Charter–Cox merger can’t be judged solely by its effect on traditional cable but must be evaluated in the context of broader consumer choice and innovation across multiple platforms. Even if this deal could increase Charter and Cox’s market power compared with other cable companies, the combined firm would face competition from and be better positioned to compete against streamers and over-the-top providers.

Similarly, customers unhappy with the combined firm’s broadband offerings could switch to Starlink or any of the wireless internet options contemporaneously amassing market share.

Protecting Competition

Critics might concede this merger should pass Section 7 scrutiny but argue it still implicates competition by suggesting Charter and Cox may be future rivals. But that implies that either Charter or Cox would be incentivized to lay a redundant cable line in each other’s territory.

That speculation falls short of the proof of “objective evidence regarding the firm’s available feasible means of entry, including its capabilities and incentives” required by DOJ’s own merger guidelines.

Moreover, as Baker Hughes recounts, credible efficiencies may rebut presumptions of illegality by showing they enhance and protect competition, not competitors. The Charter–Cox combination affords similar possibilities.

Here, rural buildout economies, technology integration, and mobile bundling leverage all suggest pro-competitive outcomes.

Finally, while the Biden-era antitrust enforcers made the egregious misstep of breaking from the longstanding consumer welfare standard—the standard stating antitrust policy should prioritize consumers’ well-being above all else—the judgment of courts has been clear: Consumer welfare still remains the heartbeat of US antitrust law.

That judgment counsels toward approval of this deal. This is a case in which non-overlapping footprints, network investment, and enhanced competitor leverage suggest better outcomes for consumers—not the other way around.

Through Charter–Cox’s approval, enforcers can reinforce foundational principles: large size without overlap doesn’t equate to harm, potential competition claims require objective evidence of strong probabilities, efficiencies can justify scale, dynamic markets require dynamic analysis, and consumer welfare remains paramount.

Critics may rush to brand this merger as “big cable getting bigger.” But that mentality misunderstands both the Clayton Act’s mandate and today’s competitive market dynamics. Approval here would affirm antitrust remains rooted in statutory text, economics, and evidence—not myopic presumptions of “bigness.” That would protect everyone—big and small.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Robert Luther III is an associate professor of law at the Antonin Scalia Law School at George Mason University where he teaches and writes on Congress, the courts, and the presidency.

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