Finding All That's Wrong About Wright Compromise
Turns out some folks in the Justice Department aren't the only ones finding "Problems with the New Wright Amendment Deal" reached by the Dallas and Fort Worth mayors two months back. This week, nine antitrust experts--including SMU law professor Shubha Ghosh, who edits the AntitrustProf Blog--sent a missive to congressional leaders in which they warned them that the compromise, which will cause a reduction of the number of gates at Love Field, "will result in higher fares and reduced service for Dallas-Fort Worth fliers," reports the Dallas Business Journal. Says the seven-page letter: "The proposed agreement and legislation confers few, if any benefits to consumers, while producing significant anticompetitive effects." So, take that, Kay Bailey Hutchison.
Also among those who signed the missive is Darren Bush, a former attorney in the Justice Department's antitrust division. In fact, he's sort of leading the charge: Three weeks ago, he published an essay on the Web site of the American Antitrust Institute, a Washington, D.C.-based nonpartisan nonprofit, in which the University of Houston Law Center prof blasted the deal as having "little for consumers to rejoice about." Writes Bush:
"The agreement clearly exhibits enormous potential costs to consumers while showing them little, if any, benefit. Therefore, Congress should approach such proposed pieces of legislation with a jaundiced eye... Without access to gates at Love Field, there will not be any competition once the Wright Amendment meets its end. Instead, fares will likely increase on many routes, particularly nonstop passenger service whose origin or destination is the Dallas/Ft. Worth area. Competition cannot exist if potential competitors are thwarted from entering certain routes due to the demolition of gates... Moreover, as Southwest forgoes other opportunitie due to gate constraints, consumers will lose the benefit of reduced fares to and from those destinations, too."
Meanwhile, the DBJ's doing the best reporting on the Wright Amendment; haven't seen mention of the critics' criticism in The Dallas Morning News since, oh, this editorial in Dallas' Only Daily damning any antitrust concerns as wanh-wanh politics. So says the paper that bought and shut down the Dallas Times Herald. Got it. --Robert Wilonsky